Exhibit 1

PACIFIC
HARBOUR CAPITAL LTD.

REPORT
AND CONSOLIDATED FINANCIAL STATEMENTS

March
31, 2004 and 2003

(Stated
in Canadian Dollars)



---



AUDITORS'
REPORT



To
the Shareholders,

Pacific
Harbour Capital Ltd.

We
have audited the consolidated balance sheets of Pacific Harbour Capital Ltd. as
at March 31, 2004 and 2003 and the consolidated statements of loss, deficit,
cash flows and shareholders' equity for the years ended March 31, 2004, 2003
and 2002.  These consolidated 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 generally accepted auditing
standards and the standards of the Public Company Accounting Oversight Board
(United States of America).  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 March 31, 2004
and 2003 and the results of its operations and its cash flows for the years
ended March 31, 2004, 2003 and 2002 in accordance with Canadian generally
accepted accounting principles.



Vancouver,
        Canada
      "Amisano
        Hanson"July
        2, 2004
      Chartered
        Accountants




Comments
by Auditors for U.S. Readers on Canada - U.S. Reporting Conflict

In
the United States of America, reporting standards for auditors require the
addition of an explanatory paragraph (following the opinion paragraph) when the
financial statements are affected by conditions and events that cast substantial
doubt on the Company's ability to continue as a going concern. The
accompanying consolidated financial statements have been prepared on the basis
of accounting principles applicable to a going concern, which assumes the
realisation of assets and discharge of liabilities in the normal course of
business. As discussed in Note 1 to the accompanying financial statements the
Company has not yet achieved profitable operations and has incurred substantial
losses from operations which causes substantial doubt about the Company's
ability to continue as a going concern. The accompanying financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

Our
report to the shareholders dated July 2, 2004 is expressed in accordance with
Canadian reporting standards which do not permit a reference to such events and
conditions in the auditor's report when these are adequately disclosed in the
consolidated financial statements.



Vancouver,
        Canada
      "Amisano
        Hanson"July
        2, 2004
      Chartered
        Accountants






---

PACIFIC
HARBOUR CAPITAL LTD.

CONSOLIDATED
BALANCE SHEETS

March
31, 2004 and 2003

(Stated
in Canadian Dollars)





ASSETS
      2004
      2003CurrentCash
        and cash equivalents
      $
        156,333
      $
        185,668Accounts
        receivable - Note 11
      -
      19,030Prepaid
        expenses and deposits
      17,084
      18,800Promissory
        note receivable - Note 16
      840,335
      -Land
        held for resale - Note 4
      306,867
      537,940Investment
        - Notes 7 and 16
      240,000
      300,000Current
        assets of discontinued operations - Note 6
      -
      2,5651,560,619
      1,064,003Advances
        to a related company - Note 11
      18,928
      -Land
        held for resale - Note 4
      -
      4,158,257Capital
        assets - Note 5
      29,538
      40,606$
        1,609,085
      $
        5,262,866LIABILITIESCurrentAccounts
        payable and accrued liabilities - Note 11
      $
        330,171
      $
        432,252Severance
        obligation
      -
      250,000Loans
        payable - Note 8
      -
      1,068,000Current
        portion of mortgage payable -Note 9
      -
      51,161Current
        liabilities of discontinued operations - Note 6
      28,958
      262,429359,129
      2,063,842Mortgage
        payable -Note 9
      -
      298,234359,129
      2,362,076SHAREHOLDERS'
        EQUITYShare
        capital - Note 10
      7,616,876
      7,616,876Contributed
        surplus - Note 3
      202,886
      -Deficit
      (
        6,569,806)
      (
        4,716,086)1,249,956
      2,900,790$
        1,609,085
      $
        5,262,866


Nature
and Continuance of Operations - Note 1

Commitments
- Notes 10 and 14



APPROVED
        BY THE DIRECTORS:"Thomas
        Pressello"
      
      "Lisa
        Reynolds", Director
      
      , Director




SEE
ACCOMPANYING NOTES



---

PACIFIC
HARBOUR CAPITAL LTD.

CONSOLIDATED
STATEMENTS OF LOSS

for
the years ended March 31, 2004, 2003 and 2002

(Stated
in Canadian Dollars)





2004
      2003
      2002RevenuesInterest
        income - Note 11
      $
        22,873
      $
        7,283
      $
        1,440Royalty
        income - Note 11
      10,377
      18,763
      -Other
        income
      -
      10,322
      31,16433,250
      36,368
      32,604General
        and administrative expenses - Schedule II
      454,920
      595,718
      1,226,931Loss
        before other items
      (
        421,670)
      (
        559,350)
      (
        1,194,327)Other
        items:Gain
        on forgiveness of debt
      -
      41,299
      -Gain
        (loss) on sale of land held for resale - Note 4
      (
        1,119,067)
      532,122
      -Management
        severance costs - Note 11
      -
      (
        250,000)
      (
        366,713)Write-down
        of investment - Note 7
      (
        60,000)
      -
      (
        11,688)(
        1,179,067)
      323,421
      (
        378,401)Loss
        from continuing operations
      (
        1,600,737)
      (
        235,929)
      (
        1,572,728)Income
        (loss) from discontinued operations
        -
        Schedule I
      (
        50,097)
      162,958
      (
        291,900)Net
        loss for the year
      $
        (
        1,650,834)
      $
        (
        72,971)
      $
        (
        1,864,628)Basic
        and diluted loss per share from continuing  operations
      $(       
        0.21)
      $(         
        0.03)
      $(       
        0.24)Basic
        and diluted income (loss) per share from
        discontinued
        operations
      $
        (
        0.01)
      $
        0.02
      $
        (        
        0.04)Basic
        and diluted loss per share for the year
      $
        (        
        0.22)
      $
        (        
        0.01)
      $
        (        
        0.28)Weighted
        average number of shares outstanding
      7,247,712
      6,979,397
      6,520,172




SEE
ACCOMPANYING NOTES

---

PACIFIC
HARBOUR CAPITAL LTD.

CONSOLIDATED
STATEMENTS OF DEFICIT

for
the years ended March 31, 2004, 2003 and 2002

(Stated
in Canadian Dollars)





2004
      2003
      2002Deficit,
        beginning of the year
      $
        (
        4,716,086)
      $
        (
        4,643,115)
      $
        (
        2,778,487)Change
        in accounting policy - Note 3
      (
        202,886)
      -
      -Net
        loss for the year
      (
        1,650,834)
      (
        72,971)
      (
        1,864,628)Deficit,
        end of the year
      $
        (
        6,569,806)
      $
        (
        4,716,086)
      $
        (
        4,643,115)




---

PACIFIC
HARBOUR CAPITAL LTD.

CONSOLIDATED
STATEMENTS OF CASH FLOWS

for
the years ended March 31, 2004, 2003 and 2002

(Stated
in Canadian Dollars)





2004
      2003
      2002Operating
        ActivitiesLoss
        from continuing operations
      $
        (
        1,600,737)
      $
        (
        235,929)
      $
        (
        1,572,728)Non-cash
        itemsAmortization
      11,388
      7,428
      306Finance
        fees
      -
      12,250
      -Foreign
        exchange
      9,166
      (
        31,519)
      -Gain
        on forgiveness of debt
      -
      (
        41,299)
      -Loss
        (gain) on sale of land held for resale
      1,119,067
      (
        532,122)
      -Interest
        on restricted cash
      -
      -
      (
        1,292)Management
        severance costs
      -
      -
      103,163Write-down
        of investment
      60,000
      -
      -Write
        down of land held for resale
      -
      -
      11,688Changes
        in non-cash working capital balances
        -
        Note 12
      (
        350,263)
      143,824
      450,578(
        751,379)
      (
        677,367)
      (
        1,008,285)Financing
        ActivitiesIncrease
        (decrease) in loans payable
      (
        1,068,000)
      (
        21,000)
      789,000Repayment
        of mortgage payable
      (
        349,395)
      (
        48,851)
      (
        40,173)Decrease
        in restricted cash
      -
      4,000
      53,027(
        1,417,395)
      (
        65,851)
      801,854Investing
        ActivitiesAdvances
        to a related company
      (
        18,928)
      -
      -Purchase
        of investment
      -
      (
        300,000)
      -Expenditure
        on land held for development
      -
      (
        75,092)
      (
        78,680)Expenditure
        on land held for resale
      (
        53,330)
      (
        14,388)
      (
        11,688)Net
        proceeds from sale of land held for resale
      2,492,380
      768,570
      -Decrease
        (increase) in capital assets
      320
      (
        47,277)
      -Increase
        (decrease) in advances from discontinued
        operations
      (
        281,003)
      568,956
      300,4702,139,439
      900,769
      210,102






.../Cont'd

SEE
ACCOMPANYING NOTES



---

PACIFIC
HARBOUR CAPITAL LTD.

Continued

CONSOLIDATED
STATEMENTS OF CASH FLOWS

for
the years ended March 31, 2004, 2003 and 2002

(Stated
in Canadian Dollars)





2004
      2003
      2002Increase
        (decrease) in cash from continuing operations
      (
        29,335)
      157,551
      3,671Decrease
        in cash from discontinued operations
        -
        Note 6
      (
        2,565)
      (
        37,514)
      (
        40,850)Increase
        (decrease) in cash during the year
      (
        31,900)
      120,037
      (
        37,179)Cash
        and equivalents, beginning of the year
      188,233
      68,196
      105,375Cash
        and equivalents, end of the year
      $
        156,333
      $
        188,233
      $
        68,196Cash
        and equivalents, is comprised as follows:Cash
        and equivalents
        -
        continuing operations
      $
        156,333
      $
        185,668
      $
        28,117-
        discontinued operations
      -
      2,565
      40,079Cash
        and equivalents, end of the year
      $
        156,333
      $
        188,233
      $
        68,196Supplemental
        disclosure of cash flow information:Cash
        paid for:Income
        taxes
      $
        -
      $
        -
      $
        -Interest
      $
        75,989
      $
        78,509
      $
        69,810




Non-cash
Transactions - Note 15



SEE
ACCOMPANYING NOTES



---

PACIFIC
HARBOUR CAPITAL LTD.

CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY

for
the years ended March 31, 2004, 2003 and 2002

(Stated
in Canadian Dollars)





|                                                                          |                    |                   |                  | Deficit                  |                            |                   
|------------------------------------------------------------------------- | ------------------ | ----------------- | ---------------- | ------------------------ | -------------------------- | ------------------
|                                                                          |                    |                   |                  | Accumulated              |                            |                   
|                                                                          | Common
      Stock |                   | During
      the |                          |                           
|                                                                          | Issued             |                   | Contributed      | Development              |                            |                   
|                                                                          | Shares             | Amount            | Surplus          | Stage                    | Deficit                    | Total             
|                                                                          |                    |                   |                  |                          |                            |                   
|Balance,
      March 31, 2001                                             | 12,040,345         | $
      7,469,567 | $
      -        | $
      (
      435,527) | $
      (
      2,342,960) | $
      4,691,080 
|Net
      loss for the year                                               | -                  | -                 | -                | -                        | (
      1,864,628)         | (
      1,864,628)
|                                                                          |                    |                   |                  |                          |                            |                   
|Balance,
      March 31, 2002                                             | 13,040,345         | 7,469,567         | -                | (
      435,527)         | (
      4,207,588)         | 2,826,452         
|Pursuant
      to debt settlement
      agreements
      -
      at $0.10 | 1,040,210          | 104,021           | -                | -                        | -                          | 104,021           
|2:1
      share consolidation                                             | (7,040,278)        | -                 | -                | -                        | -                          | -                 
|Pursuant
      to bridge loan fees
      -
      at $0.35                 | 35,000             | 12,250            | -                | -                        | -                          | 12,250            
|Pursuant
      to debt settlement
      agreements
      -
      at $0.18 | 172,435            | 31,038            | -                | -                        | -                          | 31,038            
|Net
      loss for the year                                               | -                  | -                 | -                | -                        | (
      72,971)            | (
      72,971)   
|                                                                          |                    |                   |                  |                          |                            |                   
|Balance,
      March 31, 2003                                             | 7,247,712          | 7,616,876         | -                | (
      435,527)         | (
      4,280,559)         | 2,900,790         
|Change
      in accounting policy - Note 3                                | -                  | -                 | 202,886          | -                        | (
      202,886)           | -                 
|Net
      loss for the year                                               | -                  | -                 | -                | -                        | (
      1,650,834)         | (
      1,650,834)
|                                                                          |                    |                   |                  |                          |                            |                   
|Balance,
      March 31, 2004                                             | 7,247,712          | $
      7,616,876 | $
      202,886  | $
      (
      435,527) | $
      (
      6,134,279) | $
      1,249,956 
|                                                                          |                    |                   |                  |                          |                            |                   



SEE
ACCOMPANYING NOTES



---

PACIFIC
HARBOUR CAPITAL LTD.

Schedule
I

CONSOLIDATED
STATEMENTS OF INCOME FROM DISCONTINUED OPERATIONS

for
the years ended March 31, 2004, 2003 and 2002

(Stated
in Canadian Dollars)





2004
      2003
      2002RevenuesConvenience
        store sales
      $
        -
      $
        384,460
      $
        2,285,890Interest
        income
      -
      7,082
      1,269Vehicle
        leases and sales, net
      -
      617,972
      795,612Other
        income
      4,715
      12,348
      36,7994,715
      1,021,862
      3,119,570Costs
        of salesConvenience
        store cost of sales
      -
      363,561
      1,984,594Amortization
        - leased vehicles
      -
      231,553
      412,259-
      595,114
      2,396,853Income
        before general and administrative expenses
      4,715
      426,748
      722,717General
        and administrative expenses - Schedule III
      (
        54,812)
      552,643
      1,014,617Loss
        before other items
      (
        50,097)
      (
        125,895)
      (
        291,900)Other
        itemsLoss
        on disposal of vehicle leasing assets - Note 6
      -
      (
        200,525)
      -Gain
        on disposal of convenience store assets - Note 6
      -
      489,378
      --
      288,853
      -Income
        (loss) from discontinued operations
      $
        (
        50,097)
      $
        162,958
      $
        (
        291,900)




SEE
ACCOMPANYING NOTES



---

PACIFIC
HARBOUR CAPITAL LTD.

Schedule
II

CONSOLIDATED
SCHEDULES OF GENERAL AND ADMINISTRATIVE EXPENSES

for
the years ended March 31, 2004, 2003 and 2002

(Stated
in Canadian Dollars)





2004
      2003
      2002Accounting
        and audit fees - Note 11
      $
        15,200
      $
        19,800
      $
        65,625Administration
        recovery - Note 11
      (
        24,000)
      -
      -Bad
        debts - Note 11
      26,306
      -
      -Amortization
        - capital assets
      11,388
      7,428
      306Bank
        charges
      1,348
      2,221
      1,977Consulting
        and management fees - Note 11
      107,500
      121,000
      143,049Corporate
        administration fees
      26,983
      55,289
      -Facilities
        and service fees - Note 11
      -
      -
      50,000Filing
        fees
      8,571
      18,365
      511Finance
        fees
      -
      12,250
      21,000Foreign
        exchange loss (gain)
      (
        50,276)
      (
        28,785)
      7,142Interest
        - Note 11
      86,511
      93,529
      67,833Legal
        and professional fees - Note 11
      24,176
      138,521
      693,336Office
        and general
      24,690
      23,664
      51,754Promotion
        and advertising
      28,780
      2,089
      2,837Rent
        and utilities
      70,807
      67,407
      39,883Shareholder
        information and investor relations
      2,584
      12,607
      5,842Transfer
        agent fees
      4,897
      7,247
      16,275Travel
        and entertainment
      3,305
      4,259
      31,692Wages
        and benefits - Note 11
      86,150
      38,827
      27,869$
        454,920
      $
        595,718
      $
        1,226,931




SEE
ACCOMPANYING NOTES



---

PACIFIC
HARBOUR CAPITAL LTD.

Schedule
III

CONSOLIDATED
SCHEDULES OF GENERAL AND ADMINISTRATIVE EXPENSES FROM DISCONTINUED OPERATIONS

for
the years ended March 31, 2004, 2003 and 2002

(Stated
in Canadian Dollars)





2004
      2003
      2002Accounting
        and audit fees
      $
        -
      $
        874
      $
        9,407Amortization
        -
        capital assets
      -
      4,368
      20,238Bad
        debts (recovery)
      (
        42)
      51,459
      80,929Bank
        charges
      220
      11,813
      30,936Consulting
        fees
      -
      -
      11,200Convenience
        store expenses
      -
      6,033
      27,036Finance
        fees
      -
      -
      43,000Interest
      32,500
      108,085
      141,607Legal
        and professional fees
      4,633
      6,445
      21,890Management
        fees
      -
      2,598
      25,000Office
        and general
      617
      89,001
      93,874Promotion
        and advertising
      -
      31,293
      79,072Rent,
        property taxes and utilities
      -
      38,138
      54,763Travel
        and entertainment
      -
      4,262
      10,098Vehicle
        leasing expenses
      -
      27,504
      7,526Wages
        and benefits
      16,884
      170,770
      358,041$
        54,812
      $
        552,643
      $
        1,014,617






---



PACIFIC
HARBOUR CAPITAL LTD.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars)





Note
1

Nature
and Continuance of Operations - Note 6



Pacific
Harbour Capital Ltd., formerly Venture Pacific Development Corporation, is a
public company, which was incorporated on March 8, 1986 under the Company Act of
British Columbia.  Its common shares are traded on the TSX Venture Exchange
and on the OTC Bulletin Board.  The Company's primary business is
investments.  During the year ended March 31 2004, the Company, through a
wholly-owned US subsidiary disposed of its principal asset, a parcel of land
located in Pahrump, Nevada.



During
the year ended March 31, 2003, a subsidiary of the Company disposed of its
assets relating to the vehicle leasing business and the Company disposed of its
50% joint venture interest in the Pemberton Junction gas station/convenience
store.  The operation of the vehicle leasing business and the joint venture
interest are presented as discontinued operations within these consolidated
financial statements.



These
consolidated financial statements have been prepared on a going concern basis.
 At March 31, 2004, the Company has not yet achieved profitable operations
and the Company has accumulated $6,557,306 of losses since inception.  The
Company's ability to continue as a going concern is dependent upon its ability
to generate profitable operations in the future or to obtain the necessary
financing to meet its obligations and repay its liabilities arising from normal
business operations when they come due.



Note
2

Significant
Accounting Policies



These
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in Canada. Differences with respect to
accounting principles generally accepted in the United States are described in
Note 17. Because a precise determination of many assets and liabilities is
dependent upon future events, the preparation of financial statements for a
period necessarily involves the use of estimates that have been made using
careful judgement. Actual results may differ from these estimates.



The
consolidated financial statements have, in management's opinion, been properly
prepared within reasonable limits of materiality and within the framework of the
significant accounting policies summarised below:



a)

Principles
of Consolidation

These
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiaries.  The Company's 50% interest in the Pemberton
Junction Store Joint Venture (Note 6) is accounted for on the proportionate
consolidation basis, whereby the consolidated accounts include 50% of the
assets, liabilities and results of operations of the joint venture.  All
inter-company transactions have been eliminated.

All
significant inter-company transactions and balances have been eliminated.





---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 2







Note
2

Significant
Accounting Policies - (cont'd)



b)

Cash
and Cash Equivalents

The
Company considers cash on hand, deposits in banks and highly liquid investments
to be cash and cash equivalents.



c)

Land
Held for Resale

Land
held for resale is carried at the lower of cost and net realisable value. The
cost of the land includes certain direct and indirect costs including property
taxes. To the extent that costs are determined to exceed net realizable value
they will be written down accordingly.



d)

Capital
Assets and Amortization

Capital
assets are recorded at cost. Amortization has been calculated using the
following annual rates and methods:

Computer
equipment

30%
declining balance

Office
furniture

20%
declining balance

Software

50%
declining balance



e)

Investment

Investment
is carried at cost. To the extent that cost exceeds net realizable value it will
be written down accordingly.

f)

Basic
and Diluted Loss per Share

Basic
earnings or loss per share are computed by dividing the loss for the year by the
weighted average number of common shares outstanding during the year. Diluted
earnings per share reflect the potential dilution that could occur if
potentially dilutive securities were exercised or converted to common stock. The
dilutive effect of options and warrants and their equivalent is computed by
application of the treasury stock method and the effect of convertible
securities by the "if converted" method. Fully diluted amounts are not
presented when the effect of the computations are anit-dilutive due the losses
incurred. Accordingly, there is no difference in the amounts presented for basic
and diluted loss per share.



g)

Foreign
Currency Translation

Monetary
assets and liabilities denominated in foreign currencies are translated into
Canadian dollars at rates of exchange in effect at the date of the consolidated
balance sheet.  Non-monetary assets, liabilities and other items recorded
in income arising from transactions denominated in foreign currencies, are
translated at rates of exchange in effect at the date of the transaction.
 Resulting exchange gains or losses are included in income when incurred.





---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 3







Note
2

Significant
Accounting Policies - (cont'd)



h)

Fair
Value of Financial Instruments

The
carrying values of cash and cash equivalents, accounts receivable, promissory
note receivable, accounts payable and accrued liabilities and severance
obligation approximate fair value because of the short-term maturity of those
instruments.  The fair value of investment, advances to a related company,
loans payable and mortgage payable also approximates their carrying amounts.
Unless otherwise noted, it is management's opinion that the Company is not
exposed to significant interest, currency or credit risks arising from these
financial instruments.



i)

Income
Taxes

The
Company accounts for income taxes by the asset and liability method.  Under
this method, current income taxes are recognized for the estimated income taxes
payable for the current period.  Future income tax assets and liabilities
are recognized for temporary differences between the tax and accounting basis of
assets and liabilities as well as for the benefit of losses available to be
carried forward to future years for tax purposes that are likely to be realized.



j)

Revenue
Recognition

Revenue
from royalties received from the sale of Legal Will Kits by National Direct
Response Marketing Canada Inc. is recognized as it is earned.



Note
3

Change
in Accounting Policy



Stock-based
Compensation Plan

On
January 1, 2004, the Company adopted the amended CICA Handbook Section 3870 - "Stock-based Compensation and Other Stock-based Payments".  This change
in accounting policy has been applied retroactively with no restatement of prior
periods presented for the consolidated statements of loss, deficit, cash flows
and shareholders' equity.



Under
this amended standard, the Company must account for compensation expense based
on the fair value of rights granted under its stock-based compensation plan.
Under this method, compensation costs attributable to share options granted to
employees, directors or officers is measured at fair value at the grant date,
and expensed over the expected exercise time with a corresponding increase to
contributed surplus.  Upon exercise of stock options, consideration paid by
the option holder, together with the amount previously recognized in contributed
surplus, is recorded as an increase to share capital.





---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 4







Note
3

Change
in Accounting Policy - (cont'd)



Stock-based
Compensation Plan - (cont'd)

Previously,
the Company accounted for stock-based compensation to employees, directors and
officers using the settlement method.  No compensation costs were recorded
in the financial statements for stock options granted as the options had no
intrinsic value at the date of grant.  Consideration paid by employees,
directors and officers on the exercise of stock options and purchase of stock is
credited to share capital.



As
a result of this change on January 1, 2004, contributed surplus and deficit
increased by $202,886.



Note
4

Land
Held for Resale



As
at March 31, 2003, the Company held three parcels of land located in Pemberton,
British Columbia in three separate subsidiary companies and a parcel of land
located in Pahrump, Nevada through a wholly-owned US subsidiary.  One of
the Pemberton land parcels was disposed of during the year ended March 31, 2003.
 During the 2004 fiscal year, the Pahrump, Nevada land parcel was disposed
of and the Company realized a loss of $1,130,553, and another Pemberton land
parcel was disposed of and the Company realized a gain of $11,486.  As at
March 31, 2004, the Company's land held for resale consists of one Pemberton
land parcel.  The Company capitalized property taxes and other costs to
these properties held for resale during the years as follows:

2004
      2003Balance,
        beginning of the year
      $
        4,696,197
      $
        760,000Property
        taxes
      26,463
      10,744Other
        costs
      26,867
      3,6444,749,527
      774,388Less:
        land sold during the year
      (
        4,442,660)
      (
        236,448)Current
        portion of land held for resale
      306,867
      537,940Add:
        reclassification
        from land held for development
        to
        land held for resale (long-term)
      -
      4,158,257Total
        land held for resale
      $
        306,867
      $
        4,696,197








---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 5







Note
5

Capital
Assets



2004
      
      
      2003AccumulatedCost
      Amortization
      Net
      
      NetComputer
        equipment
      $
        25,319
      $
        10,254
      $
        15,065
      
      $
        21,521Office
        furniture
      20,635
      6,162
      14,473
      
      17,732Software
      2,706
      2,706
      -
      
      1,353$
        48,660
      $
        19,122
      $
        29,538
      
      $
        40,606




Note
6

Discontinued
Operations



On
May 31, 2002, the Company sold its 50% interest in the Pemberton Junction Store
("PJS").  Income related to this joint venture has been disclosed as
income from discontinued operations. The Company received total proceeds of
$815,806 for its 50% joint venture interest resulting in a gain on sale of
discontinued operations of $489,378.



On
January 24, 2003 the Company sold the business and assets of its wholly owned
subsidiary, Venture Pacific Vehicle LeaseCorp Inc. ("VPVL") for $550,000 and
recorded a loss of $200,525 on the sale.  Losses related to VPVL have been
disclosed as loss from discontinued operations.



The
consolidated balance sheets include the following amounts related to
discontinued operations of PJS and VPVL:



2004
      2003Cash
        and cash equivalents
      $
        -
      $
        2,565Accounts
        receivable
      -
      -Inventory
      -
      -Prepaid
        expenses and deposits
      -
      -Current
        assets of discontinued operations
      $
        -
      $
        2,565




2004
      2003Accounts
        payable
      $
        28,958
      $
        30,530Current
        portion of loans payable
      -
      231,899Current
        liabilities of discontinued operations
      $
        28,958
      $
        262,429








---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 6







Note
6

Discontinued
Operations - (cont'd)



Cash
flows from discontinued operations are as follows:



2004
      2003
      2002Operating
        ActivitiesIncome
        (loss) from discontinued  operations
      $
        (
        50,097)
      $
        162,958
      $
        (
        291,900)Non-cash
        itemsAmortization
      -
      235,921
      432,497Loss
        on disposal of leasing vehicle
        assets
      -
      200,525
      -Gain
        on disposal of store assets
      -
      (
        489,378)
      -Deferred
        revenue
      -
      (
        9,866)
      (
        942)Changes
        in non-cash working
        capital
        balancesAccounts
        receivable
      -
      10,506
      25,179Inventory
      
      107,392
      22,461Prepaid
        expenses and deposits
      
      3,765
      (
        45)Accounts
        payable
      (
        1,572)
      (
        127,414)
      35,445Security
        deposits
      -
      (
        5,290)
      (
        1,670)(
        51,669)
      89,119
      221,025Financing
        ActivitiesIncrease
        (decrease) in loans payable
      (
        231,899)
      (
        768,101)
      425,000Advances
        from (to) parent company
      281,003
      (
        568,956)
      (
        300,470)49,104
      (
        1,337,057)
      124,530




2004
      2003
      2002Investing
        ActivitiesProceeds
        from disposal of assets of
        PJS
        and VPVL
      -
      1,365,806
      -Purchase
        of capital assets
      -
      (
        1,650)
      (
        24,779)Purchase
        of lease vehicles, net
        of
        sales
      -
      (
        88,138)
      (
        361,626)-
      1,276,018
      (
        386,405)Increase
        (decrease) in cash
      (
        2,565)
      28,080
      (
        40,850)Cash
        balance of PJS on disposal
      -
      (
        65,594)
      -Increase
        (decrease) in cash from
        discontinued
        operations
      $
        (
        2,565)
      $
        (
        37,514)
      $
        (
        40,850)








---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 7







Note
7

Investment
- Note 16



On
December 10, 2002, the Company entered into an investment agreement with
National Direct Response Marketing Canada Inc. ("NDRM").  Concurrent
with entering into this investment agreement, a director of the Company became a
director of NDRM.  NDRM is the owner and marketer of the Canadian Legal
Will Kit, the American Legal Will Kit and other direct marketing products. The
investment entitles the Company to invest up to $1,100,000 by way of secured
convertible debentures and if fully converted will result in a 49% ownership of
NDRM.



The
first two debenture advances required under the agreement total $300,000.
Subsequent advances are subject to NDRM achieving specific sales targets within
12 month and 18 month periods. The debenture bears interest at 8% per annum,
payable quarterly.  The investment also entitles the Company to earn
royalty income based on each unit of the Canadian and American Legal Will Kit
sold.



As
at March 31, 2004, this investment has been written down by $60,000 to its net
recoverable amount of $240,000 pursuant to a settlement agreement.



Note
8

Loans
Payable



2004
      2003a)
        Loan
        is secured by the land held for resale, bearing interest at 12% per
        annum and due on March 31, 2004.
      $
        -
      $
        714,000b)
        Unsecured
        loan, non-interest bearing and payable on demand.
      -
      354,000$
        -
      $
        1,068,000




Note
9

Mortgage
Payable



The
Company had a mortgage in the amount of US$238,040 bearing interest of 10% per
annum, due August 2008, secured by a deed of trust against the Pahrump land.
 On February 12, 2004, the mortgage was paid out concurrent with the sale
of the Pahrump land.



2004
      2003Principal
        balance
      $
        -
      $
        349,395Less:
        current portion
      -
      (
        51,161)$
        -
      $
        298,234








---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 8







Note
10

Share
Capital



a)

Authorized:

100,000,000
common shares without par value

100,000,000
preferred shares without par value



b)

Commitments:

Stock-Based
Compensation Plan

From
time to time, the Company grants incentive stock options to directors and
employees to purchase common shares of the Company at market related prices.



As
disclosed in Note 3, effective for the year ended March 31, 2004, the Company
has adopted the new policy to record the fair value of compensation expense on
the granting of stock options.  The fair value is determined using the
Black-Scholes model.  For the year ended March 31, 2004 the Company
recorded no compensation charge as no stock options were granted during the
year.  As at March 31, 2004 $202,886 related to amounts vested after
January 1, 2002 have been recognized by retroactive restatement.



The
following assumptions were used for the Black-Scholes model:



2004
      
      2003Weighted
        average fair value of options granted
      -
      
      $0.22-$0.41Risk
        free rates
      -
      
      3.93%Dividend
        yield
      -
      
      0.0%Expected
        volatility
      -
      
      136%-145%Weighted
        average expected stock option life
      -
      
      5
        yrs




Information
regarding the Company's outstanding stock options is summarized as follows:



Number
      Price
        RangeOutstanding
        and exercisable at March 31, 2003
      934,528
      $0.24-$1.00Cancelled
      (
        7,500)
      0.80Outstanding
        and exercisable at March 31, 2004
      927,028
      $0.24-$1.00








---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 9







Note
10

Share
Capital - (cont'd)



b)

Commitments:
- (cont'd)

Stock-Based
Compensation Plan - (cont'd)

On
March 31, 2004, there were 927,028 employee and director share purchase options
outstanding entitling the holders thereof the right to purchase one common share
for each option held as follows:



Number
        of Shares
      Exercise
        Price
      Expiry
        Date48,000
      $1.00
      March
        3, 2005829,028
      $0.24
      November
        27, 200750,000
      $0.30
      December
        16, 2007927,028




Note
11

Related
Party Transactions - Notes 7 and 16



For
the years ended March 31, 2004, 2003 and 2002 the Company earned the following
revenues from a company with a common director and was charged the following
expenses by directors or companies with common directors:



2004
      2003
      2002Interest
        income
      $
        12,000
      $
        5,986
      $
        -Royalty
        income
      10,377
      18,763
      -$
        22,377
      $
        24,749
      $
        -




Accounting
        fees
      $
        -
      $
        -
      $
        2,400Administration
        recovery
      (
        24,000)
      -
      -Bad
        debts
      20,907
      -
      -Consulting
        and management fees
      107,500
      121,000
      47,500Facilities
        and services fees
      -
      -
      50,000Interest
      1,324
      2,011
      7,665Legal
        and professional fees
      907
      94,739
      9,327Management
        severance costs
      -
      -
      366,713Wages
        and benefits
      32,000
      28,000
      -$
        138,638
      $
        245,780
      $
        483,605




These
charges were measured by the exchange amount, which is the amount agreed upon by
the transacting parties.





---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 10







Note
11

Related
Party Transactions - Notes 7 and 16 - (cont'd)



Included
in accounts receivable is $Nil (2003:  $19,030) owing from a company
with a common director with respect to unpaid interest and royalties.



Advances
to a related company of $18,928 (2003:  $Nil) are unsecured,
non-interest bearing and have no specific terms for repayment.



Included
in accounts payable and accrued liabilities is $25,813
(2003:  $28,251) owed to directors of the Company or to companies with
common directors.  These balances are unsecured, non-interest bearing and
have no specific terms for repayment.



Note
12

Changes
in Non-Cash Working Capital Balances



2004
      2003
      2002Accounts
        receivable
      $
        102
      $
        7,995
      $
        (
        5,914)Prepaid
        expenses and deposits
      1,716
      (
        747)
      (
        10,370)Accounts
        payable
      (
        112,642)
      (
        95,435)
      433,622Due
        to related parties
      10,561
      (
        17,989)
      33,240Severance
        obligation
      (
        250,000)
      250,000
      -$
        (
        350,263)
      $
        143,824
      $
        450,578




Note
13

Corporation
Income Tax Losses



Future
tax assets and liabilities are recognized for temporary differences between the
carrying amount of the balance sheet items and their corresponding tax values as
well as for the benefit of losses available to be carried forward to future
years for tax purposes that are likely to be realized.



Significant
components of the Company's future tax assets and liabilities, after applying
enacted corporate income tax rates, are as follows:



2004
      2003Future
        income tax assetsNet
        tax losses carried forward
      $
        2,306,717
      $
        1,435,861Less:
         valuation allowance
      (
        2,306,717)
      (
        1,435,861)$
        -
      $
        -




The
Company recorded a valuation allowance against its future income tax assets
based on the extent to which it is unlikely that sufficient taxable income will
be realized during the carry forward periods to utilize all the future tax
assets.





---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 11







Note
13

Corporation
Income Tax Losses - (cont'd)



At
March 31, 2004, the Company and its subsidiaries have accumulated non-capital
losses of approximately $6,234,370 which may be carried forward to reduce future
years income for Canadian and United States of America income tax purposes.
 These losses, the potential benefit of which have not been recognized in
these financial statements, expire as follows:

2007
      
      $
        477,2222008
      
      605,6202009
      
      1,341,4432010
      
      1,252,8592011
      
      1,032,3822013
      
      578,7212014
      
      566,0932025
      
      380,030$
        6,234,370




Note
14

Commitments
- Note 10



The
Company is committed to future minimum payments under an operating lease for
office space as follows:

Year
        ended March 31, 2005
      $
        62,4952006
      62,4952007
      62,495$
        187,485




Note
15

Non-cash
Transactions



Investing
and financing activities that do not have a direct impact on current cash flows
are excluded from the statement of cash flows.  The following transactions
have been excluded from the statement of cash flows:



During
the year ended March 31, 2004, the Company disposed of certain land held for
resale and consideration received included a promissory note receivable
totalling $840,335.





---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 12







Note
15

Non-cash
Transactions - (cont'd)



During
the year ended March 31, 2003:

a)

the
Company issued 1,040,210 common shares at $0.10 per share to settle accounts
payable totalling $104,021.

b)

the
Company issued 172,435 common shares at $0.15 per share to settle accounts
payable totalling $31,038.

c)

the
Company issued 35,000 common shares at $0.35 per share pursuant to bridge loan
fees totalling $12,250.



Note
16

Subsequent
Events



Subsequent
to March 31, 2004:



a)

the
Company agreed to release NRDM from the terms of the investment agreement
disclosed in Note 7 including all related agreements for total consideration of
$240,000 to be paid as follows:

-

$220,000
on signing the release;  and

-

$20,000
payable in twelve equal monthly instalments of $1,667.



b)

the
promissory note receivable at March 31, 2004 of $840,335 was repaid to the
Company.



Note
17

Differences
between Canadian and US Generally Accepted Accounting Principles



These
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles ("GAAP") in Canada which differ in
certain respects with those principles and practices that the Company would have
followed had its financial statements been prepared in accordance with GAAP in
the United States of America.



The
material differences between Canadian and US GAAP which affect the Company's
results of operations and financial position are summarized as follows:



a)

Accounting
for Start-up Activities

Under
US GAAP, the balances capitalized as deferred development costs incurred on the
land held for development would not be eligible for capitalization and would be
expensed as incurred.



b)

Accounting
for Capitalized Holding Costs

Under
US GAAP, the carrying costs of holding properties including property taxes would
not be eligible for capitalization to the properties held for resale and would
be expensed as incurred.





---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page 13







Note
17

Differences
between Canadian and US Generally Accepted Accounting Principles

-
(cont'd)



c)

Stock-based
Compensation - Note 3

The
Company grants stock options at exercise prices equal to the fair market value
of the Company's stock at the date of the grant. Pursuant to APB 25, the
compensation charge associated with non-employees options has been recorded in
reconciling items for the years ended March 31, 2003 and earlier.
 Subsequent to March 31, 2003, the Company has adopted the policy to
expense all stock option benefits in accordance with APB 25.



The
impact of these material differences on the consolidated financial statements is
as follows:

2004
      2003
      2002Net
        loss for the year per Canadian GAAP
      $
        (
        1,650,834)
      $
        (
        72,971)
      $
        (
        1,864,628)Deferred
        costs (a)
      -
      (
        75,092)
      (
        78,680)Capitalized
        holding costs (b)
      (
        4,914)
      (
        14,388)
      (
        11,688)Prior
        years' capitalized deferred and
        holding
        costs included in loss on sale of
        land
        held for resale
      1,396,844
      -
      -Write-down
        of land held for resale
      -
      -
      11,688Net
        loss for the year per US GAAP
      $
        (
        258,904)
      $
        (
        162,451)
      $
        (
        1,943,308)Basic
        loss per share per US GAAP
      $
        (
        0.03)
      $
        (
        0.02)
      $
        (
        0.30)




Balance
        Sheets
      2004
      2003Total
        assets per Canadian GAAP
      $
        1,609,085
      $
        5,262,866Deferred
        costs (a)
      -
      (
        1,498,334)Capitalized
        holding costs (b)
      (
        4,914)
      (
        101,396)Total
        assets per US GAAP
      $
        1,604,171
      $
        3,663,136Total
        liabilities per Canadian and
        US
        GAAP
      $
        359,129
      $
        2,362,076








---

Pacific
Harbour Capital Ltd.

Notes
to the Consolidated Financial Statements

March
31, 2004, 2003 and 2002

(Stated
in Canadian Dollars) - Page #







Note
17

Differences
between Canadian and US Generally Accepted Accounting Principles

-
(cont'd)



Shareholders'
        Equity
      2004
      2003
      2002Deficit,
        end of the year per
        Canadian
        GAAP
      $
        (
        6,569,806)
      $
        (
        4,716,086)
      $
        (
        4,643,115)Deferred
        costs (a)
      -
      (
        1,498,334)
      (
        1,423,242)Capitalized
        holding costs (b)
      (
        4,914)
      (
        101,396)
      (
        87,008)Stock-based
        compensation (c)
      (
        35,600)
      (
        35,600)
      (
        35,600)Deficit,
        end of the year per US GAAP
      (
        6,610,320)
      (
        6,351,416)
      (
        6,188,965)Share
        capital per Canadian and
        US
        GAAP
      7,616,876
      7,616,876
      7,469,567Contributed
        surplus per Canadian GAAP
      202,886
      -
      -Contributed
        surplus (c)
      35,600
      35,600
      35,600Shareholders'
        equity per US GAAP
      $
        1,257,542
      $
        1,301,060
      $
        1,316,202Cash
        FlowsCash
        flows used in operating activities
        per
        Canadian GAAP
      $
        (
        751,379)
      $
        (
        677,367)
      $
        (
        1,008,285)Deferred
        costs (a)
      -
      (
        75,092)
      (
        78,680)Capitalized
        holding costs (b)
      (
        4,914)
      (
        14,388)
      (
        11,688)Cash
        flows used in operating activities
        per
        US GAAP
      (
        756,293)
      (
        766,847)
      (
        1,098,653)Cash
        flow provided by (used in)
        financing
        activities per Canadian and
        US
        GAAP
      (
        1,417,395)
      (
        65,851)
      801,854Cash
        flow provided by investing
        activities
        per Canadian GAAP
      2,139,439
      900,769
      210,102Expenditure
        on land held for
        development
        (a)
      -
      75,092
      78,680Expenditure
        on land held for resale (b)
      4,914
      14,388
      11,688Cash
        flows provided by investing
        activities
        per US GAAP
      2,144,353
      990,249
      300,470Increase
        (decrease) in cash from
        continuing
        activities per US GAAP
      (
        29,335)
      157,551
      3,671Decrease
        in cash flows from discontinued
        operations
        for Canadian and US GAAP
      (
        2,565)
      (
        37,514)
      (
        40,850)Increase
        (decrease) in cash per
        US
        GAAP
      $
        (
        31,900)
      $
        120,037
      $
        (
        37,179)