[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________.

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [ X ] No [ ]

The aggregate market value of the voting stock of the Company held by non-affiliates of the Company cannot be calculated in a meaningful way because there is only limited trading in the class of voting stock of the Company. The aggregate market value of the Class A non-voting shares held by non-affiliates of the Company at March 17, 2003 was $284,982,000 based on the closing price of the Class A non-voting shares on the New York Stock Exchange as at March 17, 2003 of $22.50.

The number of shares of the Company’s Class A non-voting shares and Class B voting shares (being the only classes of common stock of the Company), outstanding on March 17, 2003 was 12,665,851 and 99,680 shares, respectively.

Item Number		Page
PART 1
1.	Business	2
2.	Properties	14
3.	Legal Proceedings	14
4.	Submission of Matters to a Vote of Security Holders	14

PART II
5.	Market for the Registrant’s Common Equity and Related Stockholder Matters	16
6.	Selected Financial Data	18
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
7a.	Quantitative and Qualitative Disclosures About Market Risk	28
8.	Financial Statements and Supplementary Data	30
9.	Changes in and Disagreements with Accountants and Financial Disclosure	30

PART III
10.	Directors and Executive Officers of the Registrant	31
11.	Executive Compensation	33
12.	Security Ownership of Certain Beneficial Owners and Management	40
13.	Certain Relationships and Related Transactions	42
14.	Controls and Procedures	42

PART IV
15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	43

	Signatures	44

Fahnestock Viner Holdings Inc., formerly called E.A. Viner Holdings Limited and immediately prior to that called Goldale Investments Limited (the "Company"), maintains its registered office and principal place of business at 20 Eglinton Avenue West, Suite 1110, Toronto, Ontario M4R 1K8 and its telephone number is (416) 322-1515.

The Company was originally incorporated under the laws of British Columbia. Pursuant to its Certificate and Articles of Continuation effective October 12, 1977, the Company's legal existence was continued under the Business Corporation Act (Ontario) as if it had been incorporated as an Ontario corporation.

The Company is a holding company and carries on no active business. It owns, directly or through intermediate subsidiaries, Fahnestock & Co. Inc. (formerly Edward A. Viner & Co., Inc.), a New York corporation ("Fahnestock"); Freedom Investments, Inc., a Delaware corporation ("Freedom"); Hudson Capital Advisors Inc., a New York corporation ("Hudson Capital"); Evanston Financial, Inc., a New York corporation ("Evanston"); since September 17, 2001, Josephthal & Co. Inc., a New York corporation ("Josephthal"); since November 9, 2001, Prime Charter, Ltd., a Delaware corporation ("Prime") and since January 17, 2002, Fahnestock Canada Inc., an Ontario corporation ("FCI"). Fahnestock and Freedom are sometimes collectively referred to as the "Operating Subsidiaries". Through the Operating Subsidiaries, the Company is engaged in the securities brokerage and trading business and offers investment advisory and other related financial services. Fahnestock is the principal Operating Subsidiary. Fahnestock is engaged in the securities brokerage business in the United States, operates in Toronto, Canada as an International Dealer and, through the agency of local licensed broker-dealers, operates offices in Buenos Aires, Argentina and Caracas, Venezuela. Hudson Capital was engaged in the investment advisory business in the United States until July 1999. Its business is now part of Fahnestock Asset Management, a division of Fahnestock. The business formerly conducted by Josephthal and Prime is now conducted by Fahnestock. The private client business acquired from CIBC World Markets Inc. in January 2003 is being conducted by Fahnestock under the name Oppenheimer & Co., a division of Fahnestock. The Company operates a discount brokerage business through Freedom. Freedom also services independent financial consultants.

In September 2001, through a wholly-owned subsidiary, Fahnestock acquired 91.6% of the outstanding common stock of Josephthal Group, Inc ("Josephthal Group"). In October 2001 substantially all of the remaining outstanding stock of Josephthal Group was acquired. The purchase price was $1 plus the assumption of liabilities of $23,885,000. Josephthal Group indirectly owns 100% of Josephthal, formerly a private New York-based broker-dealer founded in 1910 with approximately 265 financial consultants in 25 offices across the United States at the time of closing. The acquisition was accounted for by the purchase method. The accounts of Josephthal were converted to Fahnestock’s system in November 2001. Fahnestock acted as a clearing agent for Josephthal until December 31, 2001 when the accounts of Josephthal became accounts of Fahnestock. Josephthal made application to withdraw as a broker dealer and such application was approved. Since January 1, 2002 its business has been conducted by Fahnestock.

In November 2001, through a wholly-owned subsidiary, Fahnestock acquired 100% of the outstanding common stock of Grand Charter Group Incorporated ("Grand Charter") for a cash consideration of $2,892,000. Grand Charter owns 100% of Prime, formerly a twelve-year-old full service securities firm with approximately 110 financial consultants operating from offices in New York, New York and Boca Raton, Florida. The acquisition was accounted for by the purchase method. Effective January 1, 2002, Prime’s accounts became Fahnestock accounts. Prime ceased to be a broker-dealer effective January 22, 2002 and since January 1, 2002 its business has been conducted by Fahnestock. The business generated by the two branches associated with the Prime acquisition was cleared pursuant to an agreement with Bank of New York until November 2002 when its client accounts were converted to Fahnestock’s clearing platform.

In March 2002, through Freedom, the Company purchased the business of BUYandHOLD Securities Corporation and affiliates for cash consideration of $2,297,000. BUYandHOLD is an on-line brokerage business headquartered in Edison, NJ. The combination of the Freedom and BUYandHOLD technology platforms provides clients with a comprehensive and diversified suite of online financial services. BUYandHOLD operates as a division of Freedom. The acquisition was accounted for by the purchase method.

On January 3, 2003, the Company acquired the U.S. Private Client Division of CIBC World Markets and has agreed to acquire at a later date the U.S. Asset Management Division of CIBC World Markets for a total consideration of approximately $241 million, of which approximately $13 million was paid in cash at closing from cash on hand and the balance was paid from the proceeds of the issuance of debt instruments. The businesses will be operated as the Oppenheimer Division of Fahnestock and adds approximately 620 account executives in 18 branches located in the major financial centers of the United States. Client assets of the Private Client Division are approximately $30 billion. Assets under management in the Asset Management Division are approximately $8.5 billion. The acquisition is being accounted for by the purchase method. This transaction more than doubles the Company’s retail exposure and asset base.

In January 2003, the Company received monetary damages plus interest in the amount of $21,750,000, pursuant to an award by a National Association of Securities Dealers Dispute Resolution panel against another broker-dealer in a raiding case involving the sales force of First of Michigan Corporation, a company acquired by Fahnestock in July 1997. During the fourth quarter of 1997, approximately 20% of the "pre-raid" staff of financial consultants were hired away in a raid. These proceeds, which were received in January 2003, will be included in the Company’s results for the first quarter of 2003.

At December 31, 2002, Fahnestock employed 1,102 full-time registered representatives and approximately 652 other employees in trading, research, investment banking, investment advisory services, public finance and support positions in the United States for Fahnestock and Freedom, for a total of approximately 1,754 full-time employees. Fahnestock and Freedom are broker-dealers registered with the Securities and Exchange Commission (the "SEC") and in all other jurisdictions where their respective businesses require registration. Fahnestock, in addition to its United States operations, has three additional offices: it conducts business in Toronto, Ontario as an International Dealer and in Caracas and Buenos Aires through local broker-dealers who are licensed under the laws of Venezuela and Argentina, respectively. FCI, a wholly-owned subsidiary of the Company, was registered as an investment dealer with the Investment Dealers Association of Canada ("IDA) on January 17, 2002. The Company is in the process of selling FCI and expects to close this transaction on or about March 31, 2003, subject to the approval of the IDA.

At February 28, 2003, Fahnestock and Freedom employed 1,760 full-time registered representatives and approximately 1,123 other employees in trading, research, investment banking, investment advisory services, public finance and support positions in the United States for Fahnestock and Freedom, for a total of approximately 2,883 full-time employees.

The Operating Subsidiaries are collectively engaged in a broad range of activities in the securities brokerage business, including retail securities brokerage, institutional sales, bond trading and investment banking - offering both corporate and public finance services, underwriting, research, market making and investment advisory and asset management services. No material part of the Company's revenues, taken as a whole, are derived from a single customer or group of customers.

Fahnestock is a member of the New York Stock Exchange, Inc. ("NYSE"), the National Association of Securities Dealers, Inc. ("NASD"), the American Stock Exchange, Inc. ("AMEX"), the Chicago Stock Exchange Incorporated ("CSE"), the Chicago Board Options Exchange, Inc. ("CBOE"), the Philadelphia Stock Exchange, Inc. ("PHLX"), the New York Futures Exchange, Inc. ("NYFE"), the National Futures Association ("NFA") and the Securities Industry Association ("SIA"). In addition, Fahnestock has satisfied the requirements of the Municipal Securities Rulemaking Board ("MSRB") for effecting customer transactions in municipal securities. Freedom is a member of the NASD. Effective January 1, 2002 all of the business of Josephthal and Prime is being conducted by Fahnestock.

Fahnestock, which acts as a clearing broker and omnibus broker for Freedom, is also a member of the Securities Investor Protection Corporation ("SIPC"), which provides, in the event of the liquidation of a broker-dealer, protection for customers' accounts (including the customer accounts of other securities firms when it acts on their behalf as a clearing broker) held by the firm of up to $500,000 for each customer, subject to a limitation of $100,000 for claims for cash balances. SIPC is funded through assessments on registered broker-dealers, which may not exceed 1% of a broker-dealer's gross revenues (as defined); SIPC assessments were a flat fee of $150 in 2002, 2001 and 2000. In addition, Fahnestock has purchased protection from Aetna Casualty and Surety Company of an additional $24,500,000 per customer.

The Company’s internet address is www.fahnestock.com. The Company makes available free of charge through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.

The following table sets forth the amount and percentage of the Company's revenues from each principal source for each of the following years ended December 31.

The Company derives most of its revenues from the operations of its principal subsidiary, Fahnestock. Although maintained as separate entities, the operations of the Company's brokerage subsidiaries are closely related because Fahnestock acts as clearing broker and omnibus in transactions initiated by Freedom. Except as expressly otherwise stated, the discussion below pertains to the operations of Fahnestock.

A significant portion of Fahnestock's revenues is derived from commissions from retail and, to a lesser extent, institutional customers on brokerage transactions in exchange-listed and over-the-counter corporate equity and debt securities. Brokerage commissions are charged on both exchange and over-the-counter transactions in accordance with a schedule, which Fahnestock has formulated. Often, discounts are granted to customers, generally on large trades or to active customers. Fahnestock also provides a range of services in other financial products to retail and institutional customers, including the purchase and sale of options on the CBOE, the AMEX and other stock exchanges as well as futures on indexes listed on various exchanges.

Commission business relies heavily on the services of financial consultants with good sales production records. Competition among securities firms for such personnel is intense. Retail clients' accounts are serviced by retail financial consultants (excluding the institutional financial consultants referred to below) in Fahnestock's offices. Fahnestock's institutional clients, which include mutual funds, banks, insurance companies, and pension and profit-sharing funds, are serviced by institutional brokers. (For a discussion of regulatory matters, see "Regulation".) The institutional department is supported by the equity research department which provides coverage of a number of commercial and industrial as well as emerging growth companies and special situation investments.

Fahnestock provides a full range of securities clearance services to two non-affiliated securities firms on a fully-disclosed basis. In addition to commissions and service charges, Fahnestock derives substantial interest revenue from its securities clearing activities. See "Interest - Securities Borrowed And Loaned." Fahnestock provides margin financing for the clients of the securities firms for which it clears, with the securities firms guaranteeing the accounts of their clients. Fahnestock also extends margin credit directly to its correspondent firms to the extent that such firms hold securities positions for their own account. Because Fahnestock must rely on the guarantees and general credit of its correspondent firms, Fahnestock may be exposed to significant risks of loss if any of its correspondents or its correspondents' customers are unable to meet their respective financial commitments. See "Risk Management."

The correspondent clearing procedure for fully-disclosed accounts involves a series of steps: the correspondent broker opens an account for its customer and takes the customer's order for the purchase and sale of securities. The order is then executed by the correspondent firm or Fahnestock. Fahnestock completes the transaction by taking possession of the customer's cash, if securities are being purchased, or certificates, if securities are being sold, borrowing securities if securities are being sold, lending the customer any amounts required if the purchase is being made on margin, and making delivery to the broker for the other party to the transaction. Fahnestock or the correspondent sends the customer a written confirmation containing the details of each transaction the day after it is executed and Fahnestock sends each customer a monthly statement for the entire account. The execution, clearance, settlement, receipt, delivery and record-keeping functions involved in the clearing process require the performance of a series of complex steps, many of which are accomplished with data processing equipment.

In addition to transactions executed by Fahnestock for itself or its own customers, Fahnestock acts as agent for the accounts of other brokers. With its memberships on the various exchanges, Fahnestock attempts to utilize excess execution capacity by executing orders for other brokerage firms. Fahnestock bills such other firms at prevailing rates which are set on a basis competitive with rates charged by other brokerage firms performing similar functions.

Fahnestock acts as both principal and agent in the execution of its customers' orders in the over-the-counter market. Fahnestock buys, sells and maintains an inventory of a security in order to "make a market" in that security. (To "make a market" in a security is to maintain firm bid and offer prices by standing ready to buy or sell round lots at publicly quoted prices. In order to make a market it is necessary to commit capital to buy, sell and maintain an inventory of a security.) As of December 31, 2002, Fahnestock made approximately 700 dealer markets in the common stock or other equity securities of corporate issuers. In executing customer orders for over-the-counter securities in which it does not make a market, Fahnestock generally charges a commission and acts as agent or will act as principal by marking the security up or down in a riskless transaction, working with another firm which is a market-maker acting as principal. However, when the buy or sell order is in a security in which Fahnestock makes a market, Fahnestock normally acts as principal and purchases from or sells to its customers at a price which is approximately equal to the current inter-dealer market price plus or minus a mark-up or mark-down. The stocks in which Fahnestock makes a market also include those of issuers which are followed by Fahnestock's research department.

Trading profits or losses depend on (i) the skills of those employees engaged in market-making activities, (ii) the capital allocated to holding positions in securities and (iii) the general trend of prices in the securities markets. Trading as principal requires the commitment of capital and creates an opportunity for profits or an exposure to risk of loss due to market fluctuations. Fahnestock takes both long and short positions in those securities in which it makes a market.

The size of its securities positions on any one day may not be representative of Fahnestock's exposure on any other day because securities positions vary substantially based upon economic and market conditions, allocations of capital, underwriting commitments and trading volume. Also, the aggregate value of inventories of stocks which Fahnestock may carry is limited by the Net Capital Rule. See "Net Capital Requirements" and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources."

To a lesser extent, Fahnestock also buys and sells municipal bonds, Ginnie Maes, Unit Investment Trusts and U.S. Treasury Securities as well as other fixed income securities for its own account in the secondary market and maintains an inventory of municipal bonds and other securities and resells bonds from its inventory to dealers as well as to institutional and retail customers.

Fahnestock holds positions in its trading accounts in over-the-counter securities and in exchange-listed securities in which it does not make a market and may engage from time to time in other types of principal transactions in securities. Fahnestock has several trading departments including: a convertible bond department, a risk arbitrage department, a corporate bond dealer department, a municipal bond department, a government/mortgage backed securities department, a department that underwrites and trades U.S. government agency issues, taxable corporate bonds, UITs and a department that trades high yield securities (commonly referred to as "junk bonds"). These departments continually purchase and sell securities and make markets in order to make a profit on the inter-dealer spread. Although Fahnestock from time to time holds an inventory of securities, more typically, it seeks to match customer buy and sell orders. Fahnestock does not carry "bridge loans" (i.e., short-term loans made in anticipation of intermediate-term or long-term financing). No substantial losses relating to Fahnestock's risk arbitrage activities have been incurred.

Dividends and interest earned on securities held in inventory, cash and cash equivalents and cash and securities held in segregated accounts are treated as investment income.

Principal transactions with customers as well as market-making and other trading and investment activities, accounted for approximately 21%, 22% and 27%, respectively, of the Company’s total revenues for the fiscal years ended December 31, 2002, 2001 and 2000, respectively.

Fahnestock's principal transactions and brokerage activities expose it to credit and market risks. When Fahnestock advances funds or securities to a counterparty in a principal transaction or to a customer in a brokered transaction, it is subject to the risk that the counterparty or customer will not repay such advances. If the market price of the securities purchased or loaned has declined or increased, respectively, Fahnestock may be unable to recover some or all of the value of the amount advanced. A similar risk is also present where a customer is unable to respond to a margin call and the market price of the collateral has dropped. In addition, Fahnestock's securities positions are subject to fluctuations in market value and liquidity.

Fahnestock monitors market risks through daily profit and loss statements and position reports. Each trading department adheres to internal position limits determined by senior management and regularly reviews the age and composition of its proprietary accounts. Positions and profits and losses for each trading department are reported to senior management on a daily basis. Fahnestock may from time to time attempt to reduce market risk through the utilization of various derivative securities as a hedge to market exposure.

In its market-making activities, Fahnestock must provide liquidity in the equities for which it makes markets. As a result of this event, Fahnestock has risk containment policies in place which limit position size and monitor transactions on a minute-to-minute basis.

In addition to monitoring the credit-worthiness of its customers, Fahnestock imposes more conservative margin requirements than those of the NYSE. Generally, Fahnestock limits customer loans to an amount not greater than 65% of the value of the securities (or 50% if the securities in the account are concentrated in a limited number of issues). Particular attention and more restrictive requirements are placed on more highly volatile securities traded in the NASDAQ market. In comparison, the NYSE permits loans of up to 75% of the value of the securities in a customer's account.

For further discussion of risk management, see Item 7a, Quantitative and Qualitative Disclosures about Market Risk.

Fahnestock derives net interest income from the financing of customer margin loans and its securities lending activities. See "Customer Financing" and "Securities Borrowed and Loaned."

Customers' securities transactions are effected on either a cash or margin basis. In margin transactions, Fahnestock extends credit to the customer, collateralized by securities and/or cash in the customer's account, for a portion of the purchase price, and receives income from interest charged on such extensions of credit. The customer is charged for such margin financing at interest rates based upon the brokers’ call rate (the prevailing interest rate charged by banks on collateralized loans to broker-dealers), to which is added an additional amount of up to 2%.

In each of the last five years, financing activities conducted on behalf of its customers have provided Fahnestock with a substantial source of revenue. A substantial portion of these financing activities are undertaken in connection with Fahnestock's securities clearance business and its own retail business. See "Commissions." The amount of Fahnestock's interest revenue is affected by the volume of customer and securities borrowings and by prevailing interest rates.

The primary source of funds to finance customers' margin account borrowings are collateralized and uncollateralized bank borrowings, funds generated by lending securities on a cash collateral basis in excess of the amount of securities borrowed and free credit balances in customers' accounts. Free credit balances in customers' accounts, to the extent not required to be segregated pursuant to SEC rules, may be used in the conduct of Fahnestock's business, including the extension of margin credit. Subject to applicable regulations, interest is paid by Fahnestock on most, but not all, of such free credit balances awaiting reinvestment by customers. To the extent that the use of free credit balances reduces borrowings, interest expense is reduced.

Margin lending by Fahnestock is subject to the margin rules of the Board of Governors of the Federal Reserve System, NYSE margin requirements and Fahnestock's internal policies. By permitting customers to purchase on margin, Fahnestock takes the risk of a market decline that would reduce the value of its collateral below the customer's indebtedness before the collateral could be sold. Under applicable NYSE rules, in the event of a decline in the market value of the securities in a margin account, Fahnestock is obligated to require the customer to deposit additional securities or cash in the account so that at all times the loan to the customer for the purchase of marginable securities is no greater than 75% of the market value of such securities or cash in the account.

In connection with both its trading and brokerage activities, Fahnestock borrows securities to cover short sales, to complete transactions in which customers have failed to deliver securities by the required settlement date, and to lend securities to other brokers and dealers for similar purposes. When borrowing securities, Fahnestock is required to deposit cash or other collateral with the lender and receives a rebate (based on the amount of cash deposited) or pays a fee calculated to yield a negotiated rate of return.

When lending securities, Fahnestock receives cash or similar collateral and generally pays a rebate (based on the amount of cash deposited) to the other party to the transaction. Transactions in which stocks are borrowed or loaned are generally executed pursuant to written agreements with counterparties which require that the securities borrowed be marked to market on a daily basis and that excess collateral be refunded or that additional collateral be furnished in the event of changes in the market value of the securities. Margin adjustments are usually made on a daily basis through the facilities of various clearing houses.

Fahnestock manages the underwriting of both corporate and municipal securities, including the securitization of corporate and other obligations, and participates as an underwriter in the syndicates of issues managed by other securities firms. The corporate finance department is responsible for originating and developing transactions which include underwriting, mergers and acquisitions, private placements, valuations, financial advisory work and other investment banking matters.

The management of and participation in public offerings involve significant risks. An underwriter may incur losses if it is unable to resell at a profit the securities it has purchased. Under federal and state securities and other laws, an underwriter is subject to substantial liability for misstatements or omissions that are judged to be material in prospectuses and other communications related to underwriting.

Underwriting commitments cause a charge against net capital. Consequently, the aggregate amount of underwriting commitments at any one time may be limited by the amount of net capital available. The Company derived 8%, 4% and 3% of its revenues from underwriting in 2002, 2001 and 2000, respectively. See "Net Capital Requirements" and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources."

Fahnestock (through its Fahnestock Asset Management division) provides investment advisory services for a fee to its clients. These equity and debt management service fees are based on the value of the portfolio under management. In addition to the management fee, transactions executed for such accounts may be effected at standard rates of commission or at discounts from Fahnestock's customary commission schedule.

At December 31, 2002 Fahnestock had approximately $869 million under management. The agreements under which the portfolios are managed on behalf of institutions and other investors generally provide for termination by either party at any time.

Administration and operations personnel are responsible for the processing of securities transactions; the receipt, identification and delivery of funds and securities; the maintenance of internal financial controls; accounting functions; custody of customers' securities; the handling of margin accounts for Fahnestock and its correspondents; and general office services. Fahnestock employs approximately 200 persons in its administration and operations departments at its head office and approximately 55 persons in its administration and operations departments in Detroit.

There is considerable fluctuation during any year and from year to year in the volume of transactions Fahnestock must process. Fahnestock records transactions and posts its books on a daily basis. Operations personnel monitor day-to-day operations to assure compliance with applicable laws, rules and regulations. Failure to keep current and accurate books and records can render Fahnestock liable for disciplinary action by governmental and self-regulatory organizations.

Fahnestock executes its own and certain of its correspondents' securities transactions on all United States exchanges of which it is a member and in the over-the-counter market. Fahnestock clears all of its securities transactions (i.e., it delivers securities that it has sold, receives securities that it has purchased and transfers related funds) through its own facilities and through memberships in various clearing corporations and custodian banks.

Fahnestock believes that its internal controls and safeguards are adequate, although fraud and misconduct by customers and employees and the possibility of theft of securities are risks inherent in the securities industry. As required by the NYSE and certain other authorities, Fahnestock carries a broker's blanket insurance bond covering loss or theft of securities, forgery of checks and drafts, embezzlement, fraud and misplacement of securities. This bond provides coverage of up to an aggregate of $25,000,000 with a self-insurance retention of $250,000.

Fahnestock encounters intense competition in all aspects of the securities business and competes directly with other securities firms, a significant number of which have substantially greater resources and offer a wider range of financial services. In addition, there has recently been increasing competition from other sources, such as commercial banks, insurance companies and certain major corporations that have entered the securities industry through acquisition, and from other entities. Additionally, foreign-based securities firms and commercial banks regularly offer their services in performing a variety of investment banking functions including: merger and acquisition advice, leveraged buy-out financing, merchant banking, and bridge financing, all in direct competition with U.S. broker-dealers. These developments have led to the creation of a greater number of integrated financial services firms that may be able to compete more effectively than Fahnestock for investment funds by offering a greater range of financial services.

Fahnestock believes that the principal factors affecting competition in the securities industry are the quality and ability of professional personnel and relative prices of services and products offered. Fahnestock and its competitors employ advertising and direct solicitation of potential customers in order to increase business and furnish investment research publications in an effort to retain existing and attract potential clients. Many of Fahnestock's competitors engage in these programs more extensively than does Fahnestock.

There is substantial commission discounting by broker-dealers competing for institutional and retail brokerage business. Recently, full service firms have begun offering on-line trading services to their clients at substantial discounts to their regular pricing. Fahnestock intends to compete in this area, but it is likely to reduce profitability per transaction, unless offset by higher transaction volume. The continuation of such discounting and an increase in the incidence thereof could adversely affect Fahnestock. However, an increase in the use of discount brokerages could be beneficial to Freedom.

The securities industry in the United States is subject to extensive regulation under both federal and state laws. The SEC is the federal agency charged with administration of the federal securities laws. Much of the regulation of broker-dealers has been delegated to self-regulatory organizations such as the NASD, national securities exchanges such as the NYSE and the National Futures Association. The NYSE has been designated Fahnestock’s primary regulator with respect to securities activities and the National Futures Association has been designated Fahnestock’s primary regulator with respect to commodities activities. The CBOE has been designated Fahnestock's primary regulator with respect to options trading activities. The NASD has been designated Freedom’s primary regulator with respect to securities activities. These self-regulatory organizations adopt rules (subject to approval by the SEC or the Commodities Futures Trading Commission ("CFTC"), as the case may be) governing the industry and conduct periodic examinations of Fahnestock's and Freedom's operations. Securities firms are also subject to regulation by state securities commissions in the states in which they do business. Fahnestock is registered as a broker-dealer in 50 states and Puerto Rico. Fahnestock is also registered as an International Broker-Dealer in Canada. FCI, a subsidiary of the Company, filed an application for registration as an investment dealer with the Investment Dealers Association of Canada, which was approved on January 17, 2002. The Investment Dealers Association of Canada has been designated FCI’s primary regulator with respect to securities activities.

The regulations to which broker-dealers are subject cover all aspects of the securities business, including sales methods, trade practices among broker-dealers, the use and safekeeping of customers' funds and securities, capital structure of securities firms, record keeping and the conduct of directors, officers and employees. The SEC has adopted rules requiring underwriters to ensure that municipal securities issuers provide current financial information and imposing limitations on political contributions to municipal issuers by brokers, dealers and other municipal finance professionals. Additional legislation, changes in rules promulgated by the SEC, the CFTC and by self-regulatory organizations, or changes in the interpretation or enforcement of existing laws and rules may directly affect the method of operation and profitability of broker-dealers. The SEC, self-regulatory organizations (including the NYSE) and state securities commissions may conduct administrative proceedings which can result in censure, fine, issuance of cease and desist orders or suspension or expulsion of a broker-dealer, its officers, or employees. The principal purpose of regulating and disciplining broker-dealers is to protect customers and the securities markets rather than to protect creditors and shareholders of broker-dealers.

Fahnestock is also subject to regulation by the SEC and under certain state laws in connection with its business as an investment advisor and in connection with its research department activities.

Margin lending by Fahnestock is subject to the margin rules of the Board of Governors of the Federal Reserve System and the NYSE. Under such rules, Fahnestock is limited in the amount it may lend in connection with certain purchases of securities and is also required to impose certain maintenance requirements on the amount of securities and cash held in margin accounts. In addition, Fahnestock may (and currently does) impose more restrictive margin requirements than required by such rules. See "Customer Financing."

As registered broker-dealers and member firms of the NYSE (Fahnestock) or the NASD (Freedom), the Operating Subsidiaries are subject to certain net capital requirements pursuant to Rule 15c3-1 (the "Net Capital Rule") promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"). The Net Capital Rule, which specifies minimum net capital requirements for registered brokers and dealers, is designed to measure the general financial integrity and liquidity of a broker-dealer and requires that at least a minimum part of its assets be kept in relatively liquid form.

Fahnestock elects to compute net capital under an alternative method of calculation permitted by the Net Capital Rule. (Freedom computes net capital under the basic formula as provided by the Net Capital Rule.) Under this alternative method, Fahnestock is required to maintain a minimum "net capital", as defined in the Net Capital Rule, at least equal to 2% of the amount of its "aggregate debit items" computed in accordance with the Formula for Determination of Reserve Requirements for Brokers and Dealers (Exhibit A to Rule 15c3-3 under the Exchange Act) or $250,000, whichever is greater. "Aggregate debit items" are assets that have as their source transactions with customers, primarily margin loans. Failure to maintain the required net capital may subject a firm to suspension or expulsion by the NYSE, the SEC and other regulatory bodies and ultimately may require its liquidation. The Net Capital Rule also prohibits payments of dividends, redemption of stock and the prepayment of subordinated indebtedness if net capital thereafter would be less than 5% of aggregate debit items (or 7% of the funds required to be segregated pursuant to the Commodity Exchange Act and the regulations thereunder, if greater) and payments in respect of principal of subordinated indebtedness if net capital thereafter would be less than 5% of aggregate debit items (or 6% of the funds required to be segregated pursuant to the Commodity Exchange Act and the regulations thereunder, if greater). The Net Capital Rule also provides that the total outstanding principal amounts of a broker-dealer's indebtedness under certain subordination agreements (the proceeds of which are included in its net capital) may not exceed 70% of the sum of the outstanding principal amounts of all subordinated indebtedness included in net capital, par or stated value of capital stock, paid in capital in excess of par, retained earnings and other capital accounts for a period in excess of 90 days.

Net capital is essentially defined in the Net Capital Rule as net worth (assets minus liabilities), plus qualifying subordinated borrowings minus certain mandatory deductions that result from excluding assets that are not readily convertible into cash and deductions for certain operating charges. The Net Capital Rule values certain other assets, such as a firm's positions in securities, conservatively. Among these deductions are adjustments (called "haircuts") in the market value of securities to reflect the possibility of a market decline prior to disposition.

Compliance with the Net Capital Rule could limit those operations of the brokerage subsidiaries of the Company that require the intensive use of capital, such as underwriting and trading activities and the financing of customer account balances, and also could restrict the Company's ability to withdraw capital from its brokerage subsidiaries, which in turn could limit the Company's ability to pay dividends, repay debt and redeem or purchase shares of its outstanding capital stock. Under the Net Capital Rule broker-dealers are required to maintain certain records and provide the SEC with quarterly reports with respect to, among other things, significant movements of capital, including transfers to a holding company parent or other affiliate. The SEC may in certain circumstances restrict the Company's brokerage subsidiaries' ability to withdraw excess net capital and transfer it to the Company or to other of the Operating Subsidiaries.

The Company maintains offices at 20 Eglinton Avenue West, Toronto, Ontario, Canada for general administrative activities. Most day-to-day management functions are conducted at the executive offices of Fahnestock at 125 Broad Street, New York, New York. This office also serves as the base for most of Fahnestock's research, operations and trading, investment banking and investment advisory services, though other offices also have employees who work in these areas. Generally, the offices outside of 125 Broad Street, New York serve as bases for sales representatives who process trades and provide other brokerage services in co-operation with Fahnestock's New York office using the data processing facilities located there. Freedom conducts its business from its offices located in Edison, NJ. Management believes that its present facilities are adequate for the purposes for which they are used and have adequate capacity to provide for presently contemplated future uses.

The Company and its subsidiaries own no real property, but at December 31, 2002, occupied office space totalling approximately 589,000 square feet in 89 locations under standard commercial terms expiring between 2002 and 2013. Currently, the Company occupies office space totaling approximately 977,000 square feet in 105 locations. If any leases are not renewed, the Company believes it could obtain comparable space elsewhere on commercially reasonable rental terms.

The Operating Subsidiaries are involved in certain litigation arising in the ordinary course of business. Management believes, based upon discussion with legal counsel, that the outcome of this litigation will not have a material effect on the Company’s financial position. The materiality of legal matters to the Company’s future operating results depends on the level of future results of operations as well as the timing and ultimate outcome of such legal matters.

The Class B voting shares (the "Class B Shares"), the Company's only class of voting securities, are not registered under the Exchange Act and are not required to be registered. The Class B Shares are owned by fewer than 500 shareholders of record. Consequently, the Company is not required under Section 14 of the Exchange Act to furnish proxy soliciting material or an information statement to holders of the Class B Shares. However, the Company is required under applicable Canadian securities laws to provide proxy soliciting material, including a management proxy circular, to the holders of its Class B Shares.

Pursuant to the Company's Articles of Incorporation, holders of Class A non-voting shares (the "Class A Shares"), although not entitled to vote thereat, are entitled to receive notices of shareholders' meetings and to receive all informational documents required by law or otherwise to be provided to holders of Class B Shares. In addition, holders of Class A Shares are entitled to attend and speak at all meetings of shareholders, except class

In the event of either a "take-over bid" or an "issuer bid" (as those terms are defined in the Securities Act (Ontario)) being made for the Class B Shares and no corresponding offer being made to purchase Class A Shares, the holders of Class A Shares would have no right under the Articles of Incorporation of the Company or under any applicable statute to require that a similar offer be made to them to purchase their Class A Shares.

No matters were submitted to the Company's shareholders during the fourth quarter of the Company's 2002 fiscal year.

At the annual and special meeting of shareholders to be held on May 12, 2003, the Company will put a resolution with respect to the E.A. Viner International Co. Convertible Debenture before both the Class A non-voting and Class B shareholders.

Pursuant to an Asset Purchase Agreement dated as of December 9, 2002 between the Corporation, its wholly-owned subsidiary Viner Finance Inc., CIBC World Markets Corp. and CIBC, effective January 3, 2003 the Corporation, through Viner Finance Inc. acquired the assets and business of the U.S. Oppenheimer Private Client Division of CIBC World Markets Corp. To fund a portion of the purchase price, the Corporation’s wholly-owned subsidiary, E.A. Viner International Co., issued to CIBC (i) a $69,980,828 principal amount Variable Rate Exchangeable Debenture Due 2013 (the "First Exchangeable Debenture") and (ii) a $90,841,572 principal amount Convertible Debenture Due 2006 (the Interim Debenture"). Subject to shareholder approval, as described below, the Interim Debenture is convertible into a $90,841,572 principal amount Variable Rate Exchangeable Debenture Due 2013 (the "Second Exchangeable Debenture"). The First Exchangeable Debenture is exchangeable for 3,016,415 Class A Shares at the rate of $23.20 per share (the closing price on the NYSE for the Class A Shares on December 6, 2002). The Second Exchangeable Debenture (when issued) will be exchangeable for 3,915,585 Class A Shares, also at the rate of $23.20 per share. The First and Second Exchangeable Debentures provide for an adjustment of up to an additional issuance of 3% of the Class A Shares issuable in the event that the Debentures are exchanged, the holders of the Debentures exercise their rights to have the Class A Shares, for which the Debentures are exchanged, sold and realize a price of less than $23.20 per share. If both Debentures are fully converted CIBC would own approximately 35% of the then outstanding Class A Shares.

In accordance with the requirements of the Toronto Stock Exchange, the Interim Debenture may not be converted into the Second Exchangeable Debenture without the approval of the Class A Shareholders and Class B Shareholders voting together. Provided shareholders approve the conversion, the Convertible Debenture will be automatically converted.

Accordingly, the Class A Shareholders and Class B Shareholders are being asked to consider, and if deemed advisable, pass such resolution.

In order to pass, the resolution must be approved by a simple majority of the votes cast by the Class A and Class B Shareholders voting together.

The Company's Class A Shares are listed and traded on The New York Stock Exchange (trading symbol "FVH") and on The Toronto Stock Exchange (trading symbol "FHV.A"). The Class B Shares are not traded on any stock exchange in Canada or the United States and, as a consequence, there is only limited trading in the Class B shares. The Company does not presently contemplate listing the Class B Shares in the United States on any national or regional stock exchange or on NASDAQ.

The following tables set forth the high and low sales prices of the Class A Shares on The Toronto Stock Exchange and on The New York Stock Exchange. Prices provided are in Canadian dollars or U.S. dollars as indicated and are based on data provided by The Toronto Stock Exchange and The New York Stock Exchange.

The following table sets forth information about the shareholders of the Company as at December 31, 2002 as set forth in the records of the Company's transfer agent and registrar:

(1) The Company has been informed that 50,490 Class B shares held by Phase II Financial Limited, an Ontario corporation, are beneficially owned by A.G. Lowenthal, Chairman, CEO and a Director of the Company, a U.S. citizen and resident. See Item 12, "Security Ownership of Certain Beneficial Owners and Management".

The following table sets forth the frequency and amount of any cash dividends declared on the Company’s Class A and Class B Shares for the fiscal years ended December 31, 2002 and 2001.

Future dividend policy will depend upon the earnings and financial condition of the Operating Subsidiaries, the Company's need for funds and other factors. Dividends may be paid to holders of Class A Shares and Class B Shares (pari passu), as and when declared by the Company's Board of Directors, from funds legally available therefor.

The following paragraphs summarize certain United States and Canadian federal income tax considerations in connection with the receipt of dividends paid on the Class A and Class B Shares of the Company. These tax considerations are stated in brief and general terms and are based on United States and Canadian law currently in effect. There are other potentially significant United States and Canadian federal income tax considerations and state, provincial or local income tax considerations with respect to ownership and disposition of the Class A and Class B Shares which are not discussed herein. The tax considerations relative to ownership and disposition of the Class A and Class B Shares may vary from taxpayer to taxpayer depending on the taxpayer's particular status. Accordingly, prospective purchasers should consult with their tax advisors regarding tax considerations, which may apply to the particular situation.

Dividends on Class A and Class B Shares paid to citizens or residents of the U.S. or to U.S. corporations (including any Canadian federal income tax withheld) will be subject to U.S. federal income taxation as ordinary income to the extent paid out of the Company’s earnings and profits, determined under U.S. tax principles. Such dividends will not be eligible for the deduction for dividends received by corporations (unless such corporation owns by vote and value at least 10% of the stock of the Company, in which case a portion of such dividend may be eligible for such exclusion).

U.S. corporations, U.S. citizens and U.S. residents will generally be entitled, subject to certain limitations, to a credit against their U.S. federal income tax for Canadian federal income taxes withheld from such dividends. Taxpayers may claim a deduction for such taxes if they do not elect to claim such tax credit. No deduction for foreign taxes may be claimed by an individual taxpayer who does not itemize deductions. Because the application of the foreign tax credit depends upon the particular circumstances of each shareholder, shareholders are urged to consult their own tax advisors in this regard.

Dividends paid on Class A and Class B Shares held by non-residents of Canada will generally be subject to Canadian withholding tax. This withholding tax is levied at the basic rate of 25%, although this rate may be reduced by the terms of any applicable tax treaty. The Canada - U.S. tax treaty provides that the withholding rate on dividends paid to U.S. residents on Class A and Class B Shares is generally 15%.

On July 5, 2002 the Company announced that commencing July 9, 2002 it intended to purchase up to 620,700 Class A Shares by way of a Normal Course Issuer Bid through the facilities of The Toronto Stock Exchange and/or The New York Stock Exchange, representing approximately 5% of the outstanding Class A Shares. In fiscal 2002, through a Normal Course Issuer Bid, which expired July 4, 2002 and through the current Normal Course Issuer Bid, the Company purchased 151,400 Class A Shares at an average cost of $21.72 per share, of which 86,100 Class A non-voting shares were purchased pursuant to the Normal Course Issuer Bid that expired on July 4, 2002 and 65,300 Class A non-voting shares were purchased pursuant to the current Normal Course Issuer Bid which expires July 8, 2003. Any shares purchased by the Company pursuant to the Normal Course Issuer Bid will be cancelled. The Company may, at its option, apply to extend the program for an additional year.

The following table presents selected financial information derived from the audited consolidated financial statements of the Company for the five years ended December 31, 2002. The selected financial information should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements and notes thereto included elsewhere in this report. In 2002, the Company purchased the business of BUYandHOLD Securities Corporation. The 2002 amounts include the assets and liabilities and operating results of BUYandHOLD as of and subsequent to the period after March 12, 2002. In 2001, the Company purchased Josephthal and Prime. The 2001 amounts include the assets and liabilities and operating results of Josephthal and Prime as of and subsequent to the period after September 17, 2001 and November 9, 2001, respectively. See also Item 1, "Business" and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations".

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto which appear elsewhere in this annual report.

Critical Accounting Policies

The Company’s accounting policies are essential to understanding and interpreting the financial results reported in the consolidated financial statements. The significant accounting policies used in the preparation of the Company’s consolidated financial statements are summarized in note 1 to those statements. Certain of those policies are considered to be particularly important to the presentation of the Company’s financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain. The following is a discussion of these policies.

Valuation of Securities and Other Assets

Substantially all financial instruments are reflected in the consolidated financial statements at fair value or amounts that approximate fair value, these include cash equivalents; deposits with clearing organizations; securities owned; and securities sold but not yet purchased. Where available, the Company uses prices from independent sources such as listed market prices, or broker or dealer price quotations. In addition, even where the value of a security is derived from an independent market price or broker or dealer quote, certain assumptions may be required to determine the fair value. For instance, the Company generally assumes that the size of positions in securities that the Company holds would not be large enough to affect the quoted price of the securities if the Company were to sell them, and that any such sale would happen in an orderly manner. However, these assumptions may be incorrect and the actual value realized upon disposition could be different from the current carrying value.

Intangible Assets and Goodwill

Goodwill represents the excess cost of a business acquisition over the fair value of the net assets acquired. SFAS No. 142, "Goodwill and Other Intangible Assets," provides that goodwill is no longer amortized and the value of identifiable intangible assets must be amortized over their useful lives, unless the asset is determined to have an indefinite useful life. Intangible assets consist of goodwill related to the acquisitions of First of Michigan Corporation, Prime Charter Ltd. and Josephthal & Co. Inc. This goodwill was allocated to the private client and capital markets reporting unit pursuant to SFAS No. 142. The Company has engaged a national accounting firm to perform an independent valuation of assets acquired and liabilities assumed with respect to the acquisition of the U.S. Private Client and Asset Management Divisions of CIBC World Markets in 2003. These amounts will involve significant estimates and will be reported in the Company’s Form 10-Q for the quarterly period ending March 31, 2003.

The Company reviews its goodwill in order to determine whether its value is impaired on at least an annual basis. Goodwill is impaired when the carrying amount of the reporting unit exceeds the implied fair value of the reporting unit. In estimating the fair value of the reporting unit, the Company uses valuation techniques based on multiples of revenues, earnings, book value and discounted cash flows similar to models employed in analyzing the purchase price of an acquisition target. If the value of the goodwill is impaired, the difference between the value of the goodwill reflected on the financial statements and its current fair value is recognized as an expense in the period in which the impairment occurs.

Reserves

The Company records reserves related to legal proceedings in "other payables and accrued expenses". The determination of the amounts of these reserves requires significant judgment on the part of management. Management considers many factors including, but not limited to: the amount of the claim; the amount of the loss in the client's account; the basis and validity of the claim; the possibility of wrong doing on the part of an employee of the Company; previous results in similar cases; and legal precedents and case law as well as the timing of the resolution of such matters. Each legal proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by management. Any change in the reserve amount is recorded as a charge to results in that period. The assumptions of management in determining the estimates of reserves may be incorrect and the actual disposition of a legal proceeding could be greater or less than the reserve amount.

The Company also records reserves or allowances for doubtful accounts related to receivables from clients and financial consultants. Client loans are collateralized by securities; however, if there is a decline in the value of the collateral and the Company cannot obtain additional collateral or collect on the loan, a reserve is established. The Company also makes loans or pays advances to financial consultants. Reserves are established on these receivables if the financial consultant is no longer associated with the Company and the receivable has not been promptly repaid or if it is determined that it is probable the amount will not be collected.

The Company also estimates taxes payable and records income tax reserves. These reserves are based on historic experience and may not reflect the ultimate liability. The Company monitors and adjusts these reserves as necessary.

Fahnestock Viner Holdings Inc. is a holding company whose principal subsidiary is Fahnestock & Co. Inc. ("Fahnestock"). Fahnestock provides securities brokerage, investment banking, trust and asset management services to its clients from 89 offices across the U.S.A. and an office in Toronto, Canada and associated offices in Caracas, Venezuela and Buenos Aires, Argentina. Fahnestock is licensed to offer brokerage and other financial services in all 50 States. Client assets entrusted to the Company as at December 31, 2002 totalled approximately $17.8 billion. The Company provides investment advisory services through Fahnestock Asset Management, operating as a division of Fahnestock. Client assets under management by the asset management groups totaled $869 million at December 31, 2002. Fahnestock also engages in proprietary trading of securities. In addition, the Company operates a discount brokerage business based in Edison, NJ, through Freedom Investments, Inc.

The securities industry is highly competitive and sensitive to many factors and is directly affected by general economic and market conditions, including the volatility and price level of securities markets; the volume, size, and timing of securities transactions; the demand for investment banking services and changes in interest rates, all of which have an impact on commissions, trading and investment income as well as on liquidity. In addition, a significant portion of the Company's expenses are relatively fixed and do not vary with market activity. Consequently, substantial fluctuations can occur in the Company's revenues and net income from period to period due to these and other factors.

In addition, the Company faces competition from commercial banks and other sources as these institutions offer more investment banking and financial services traditionally only provided by securities firms. The effect of the consolidation of the securities industry of recent years means that a variety of financial services companies have merged to offer a broader spectrum of investment products and such competitors have substantially greater financial resources than the Company. The Company is also experiencing increasing regulation in the securities industry, particularly affecting the over-the-counter markets, making compliance with regulations more difficult and costly. At present, the Company is unable to predict the extent of changes, or the effect on the Company's business.

The Company's long-term plan is to continue to expand existing offices by hiring experienced professionals, thus maximizing the potential of each office and the development of existing trading, investment banking, investment advisory and other activities. Equally important is the search for viable acquisition candidates. As opportunities are presented, it is the long term intention of the Company to pursue growth by acquisition where a comfortable match can be found in terms of corporate goals and personnel and at a price that would provide the Company's shareholders with incremental value. In the near term, the Company will not be seeking additional acquisitions, but will focus its attention on the integration of recent acquisitions, including the significant acquisition in 2003 of the U.S. private client and asset management businesses of CIBC World Markets.

Results for the year reflect continued difficult conditions in the investment environment. Domestic and world events, the aftermath of terrorism, revelations of corporate misconduct and greed, accounting problems, general failures of our nation’s corporate structures to operate in the best interests of their many constituencies, and finally, a deteriorating international situation with impending war on Iraq and the potential of nuclear confrontation on the Korean peninsula substantially impacted capital markets and the Company’s results.

However, the impact of difficult business conditions provided the opportunity for expansion of the Company’s business. As a result, the Company followed two acquisitions in the latter part of 2001 with the acquisition of the business of BUYandHold Securities in March 2002.

On March 12, 2002, the Company acquired, through Freedom Investments, Inc., the business of BUYandHOLD Securities Corporation. BUYandHOLD is an online retail brokerage firm headquartered in Edison, NJ and provides its approximately 90,000 clients with a dollar-based investing platform. The acquisition added important proprietary technology, as well as revenues.

On January 3, 2003 the Company acquired the U.S. private client division and agreed at a later date to acquire the U.S. asset management business of CIBC World Markets. This business, currently operating as the Oppenheimer & Co. division of Fahnestock, will affect the results of future periods, with the addition of approximately 620 financial consultants in 18 branch offices and client assets of approximately $30 billion. This acquisition more than doubles the Company’s retail exposure and asset base and will be included in the Company’s 2003 results.

The following table and discussion summarizes the changes in the major revenue and expense categories for the past two years (in thousands of dollars).

Results for fiscal 2002 reflected continued difficult conditions in the investment environment. The combined impact of rising unemployment levels, adverse import/export flows and slowing business conditions has overcome the normal impact of record low interest rates and the prospect of lower tax rates to produce low market volumes and overall declining prices.

Revenues in fiscal 2002 increased compared to fiscal 2001 by 8% as a result of the acquisitions of Josephthal and Prime Charter in the latter part of 2001 and BUYandHOLD in March 2002. Net profit declined by 61% in fiscal 2002 compared to fiscal 2001 as a result of poor market conditions and substantial expenses associated with these recent acquisitions, including integration costs of combining facilities, severance payments associated with combining personnel and most significantly, costs of litigation for claims which preceded the Company’s acquisitions of these entities.

Total revenues for 2002 were $283,333,000 an increase of 8% over $261,261,000 in 2001. Commission income (income realized in securities transactions for which the Company acts as agent) increased 11% to $135,747,000 in 2002 from $122,272,000 in 2001. This increase was the result of the additional business generated by Josephthal, Prime Charter and BUYandHOLD, which more than offset generally lower commission levels in the weaker markets of 2002 compared to 2001. Revenues from principal transactions (revenues from transactions in which the Company acts as principal in the secondary market trading of over-the-counter equities and municipal, corporate and government bonds) increased by 3% to $58,227,000 in 2002 from $56,374,000 in 2001 due to stronger activity in the trading of fixed income securities as a result of lower interest rates and higher bond prices in 2002 compared to 2001. The Company has reduced the number of securities in which it makes markets. It may increase or decrease this number as conditions warrant. Underwriting fees increased by 108% to $22,760,000 in 2002 from $10,955,000 in 2001 related to increased participation in the issuance of closed-end funds and debt securities. Demand for these products increased in 2002 as investors sought new investment vehicles. Advisory fees increased by 8% to $26,365,000 in 2002 from $24,504,000 in 2001 primarily as a result of the acquisition of the business of BUYandHOLD in March 2002. BUYandHOLD provides a fee-based investing approach to retail investors.

Interest income in 2002 was $27,622,000, a decrease of 19% from $34,309,000 in 2001. Interest expense was $8,379,000, a decrease of 40% from $14,071,000 in 2001. This represents a decrease of 5% in net interest revenue (interest revenue less interest expense) in 2002 compared to 2001, which can be attributed to a decrease in average customer margin balances and lower interest rates in 2002 compared to 2001.

Expenses in 2002 totalled $270,416,000, an increase of 18% compared to $229,649,000 in 2001. The increase in expenses can be attributed to the acquisitions of Josephthal and Prime Charter in the latter part of 2001 and the business of BUYandHOLD in March 2002. Compensation and related costs in 2002 were $169,810,000, an increase of 14% from $148,838,000 in 2001. Compensation expense has volume-related components and increases with increases in commission business conducted in 2002 compared to 2001, as well as increased retention and severance costs and a general increase in staff levels in both acquired branch offices and in head office departments which were required to handle the business volume of the larger entity. Clearing and exchange fees in 2002 were $9,607,000, an increase of 60% from $6,012,000 in 2001. These expenses increased in 2002 compared with 2001 with increased volume and with the increased size of the sales force. In addition, until November, 2002, the business generated from the former Prime Charter branches was being cleared by a third party as was the business of BUYandHOLD until June, 2002. The cost of third party clearing is higher than the cost of clearing trades in-house. Communications expenses in 2002 were $32,066,000, an increase of 36% over $23,620,000 in 2001 reflecting additional costs of a larger branch system, after the acquisition of Josephthal and Prime Charter. Occupancy costs in 2002 were $22,908,000, an increase of 46% compared to $15,691,000 in 2001 as a result of increasing the size of the organization with the acquisition of Josephthal and Prime Charter in 2001. The increase in communications, technology and occupancy expenses reflects the additional costs associated with connecting and housing 51% more financial consultants in 15 more branch offices in 2002 compared to September 16, 2001, before the acquisitions of Josephthal and Prime Charter. Occupancy costs were also significantly impacted by costs associated with underutilized space that will be

Class A Shares:		TSE		NYSE
		HIGH	LOW	HIGH	LOW
		(Cdn. Dollars)		(U.S. dollars)

2002	1^st Quarter	$46.00	$39.40	$28.88	$24.85
	2^nd Quarter	$40.56	$32.65	$25.70	$21.26
	3^rd Quarter	$35.00	$31.55	$23.15	$20.00
	4^th Quarter	$43.86	$31.45	$28.45	$19.77

2001	1^st Quarter	$43.90	$33.25	$27.60	$22.00
	2^nd Quarter	$45.50	$37.50	$29.25	$24.75
	3^rd Quarter	$44.50	$38.00	$28.40	$24.30
	4^th Quarter	$45.30	$36.94	$28.35	$23.15

Shareholders of record having addresses in:	Number of shares	Percentage	Number of shareholders
Canada	5,141,484	41%	176
United States	7,255,491	59%	176
Other	32	-	2

Total issued and outstanding	12,397,007	100%	354

Shareholders of record having addresses in:	Number of shares	Percentage	Number of shareholders
Canada (1)	98,037	98%	122
United States	1,635	2%	66
Other	8	-	2

Total issued and outstanding	99,680	100%	190

Type	Declaration date	Record date	Payment date	Amount per share
Quarterly	January 25, 2001	February 9, 2001	February 23, 2001	$0.09
Quarterly	April 19, 2001	May 4, 2001	May 18, 2001	$0.09
Quarterly	July 19, 2001	August 3, 2001	August 17, 2001	$0.09
Quarterly	October 18, 2001	November 2, 2001	November 16, 2001	$0.09
Quarterly	January 24, 2002	February 8, 2002	February 22, 2002	$0.09
Quarterly	April 19, 2002	May 3, 2002	May 17, 2002	$0.09
Quarterly	July 18, 2002	August 2, 2002	August 16, 2002	$0.09
Quarterly	October 18, 2002	November 8, 2002	November 22, 2002	$0.09
Quarterly	January 24, 2003	February 14, 2003	February 28, 2003	$0.09

	2002	2001	2000	1999	1998
(In thousands of U.S. dollars except per share and share amounts)
Revenue	$283,333	$261,261	$316,499	$279,111	$232,781
Profit before extraordinary item	$9,321	$19,150	$40,901	$27,390	$12,447
Net profit	$9,321	$19,150	$40,901	$27,390	$12,447
Profit before extraordinary item per share (1)	$0.75	$1.55	$3.38	$2.19	$0.99
Net profit per share (1)
- basic	$0.75	$1.55	$3.38	$2.19	$0.99
- diluted	$0.73	$1.50	$3.29	$2.17	$0.96
Total assets	$1,031,226	$710,275	$697,482	$766,528	$666,763
Total current liabilities	$783,590	$468,580	$475,682	$579,141	$500,410
Subordinated indebtedness,
including current portion	-	-	-	$30	$30
Cash dividends per Class A
Share and Class B share	$0.36	$0.36	$0.31	$0.28	$0.28
Shareholders' equity	$247,636	$241,695	$221,800	$187,388	$166,323
Book value per share (1)	$19.82	$19.43	$18.34	$15.30	$13.48
Number of shares of capital stock outstanding	12,496,687	12,436,765	12,090,649	12,247,249	12,340,949

	Period to Period Change
	Increase (Decrease)
	2002 versus 2001		2001 versus 2000
	Amount	Percentage	Amount	Percentage

Revenues -
Commissions	$13,475	+11%	$(6,643)	-5%
Principal transactions, net	1,853	+3%	(28,046)	-33%
Interest	(6,687)	-19%	(29,387)	-46%
Underwriting fees	11,805	+108%	1,641	+18%
Advisory fees	1,861	+8%	2,740	+13%
Other	(235)	-2%	4,457	+53%
Total revenues	22,072	+8%	(55,238)	-17%

Expenses -
Compensation	20,972	+14%	(6,043)	-4%
Clearing and exchanges fees	3,595	+60%	(1,193)	-17%
Communications	8,446	+36%	308	1%
Occupancy costs	7,217	+46%	3,226	26%
Interest	(5,692)	-40%	(19,051)	-58%
Other	6,229	+29%	7,615	55%
Total expenses	40,767	+18%	(15,138)	-6%

Profit before taxes	(18,695)	-59%	(40,100)	-56%
Income taxes	(7,092)	-57%	(18,349)	-60%
Net profit	(11,603)	-61%	$(21,751)	-53%

	2002	%	2001	%	2000	%
(Dollars in thousands, except percentages)

Commissions	$135,747	48%	$122,272	47%	$128,915	41%
Principal transactions, net	58,227	21%	56,374	22%	84,420	27%
Interest	27,622	10%	34,309	13%	63,696	20%
Underwriting fees	22,760	8%	10,955	4%	9,314	3%
Advisory fees	26,365	9%	24,504	9%	21,764	7%
Other	12,612	4%	12,847	5%	8,390	2%

Total revenues	$283,333	100%	$261,261	100%	$316,499	100%