**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      20-F/A**





REGISTRATION
      STATEMENT PURSUANT TO SECTION 12(b) OR (g)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED





OR





x ANNUAL
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934 [FEE REQUIRED]





**For
      the fiscal year ended March 31, 2005**





OR





o TRANSITION
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934 [NO FEE REQUIRED]





For
      the
      transition period from ________ to
      ________





Commission
      file number: 2-27608





**PACIFIC
      HARBOUR CAPITAL LTD.**


(Exact
      name of Registrant as specified in its charter)





PROVINCE
      OF BRITISH COLUMBIA, CANADA


(Jurisdiction
      of incorporation or organization)





Suite
      1502 - 543 Granville Street


Vancouver,
      British Columbia, Canada V6C 1X8


(Address
      of principal executive offices)





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


NONE


(Title
      of
      each class)





Name
      of
      each exchange on which registered


Not
      applicable





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


Common
      Shares without par value





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


NONE


(Title
      of
      each class)





Indicate
      the number of outstanding shares of each of the issuer's classes of capital
      or
      common


stock
      as
      of the close of the period covered by the annual report:


7,247,703
      Common Shares without par value





1


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
o





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


Item
      17
x Item
      18
o





2


**TABLE
      OF CONTENTS**








**PART
                I**ITEM
                1
            Identity
                of Directors, Senior Management and Advisors
            4ITEM
                2
            Offer
                Statistics and Expected Timetable
            4ITEM
                3
            Key
                Information
            4ITEM
                4
            Information
                on the Company
            7ITEM
                5
            Operating
                and Financial Review and Prospects
            12ITEM
                6
            Legal
                Proceedings
            15ITEM
                7
            Directors,
                Senior Management and Employees
            16ITEM
                8
            Major
                Shareholders and Related Party Transactions
            19ITEM
                9
            Financial
                Information
            20ITEM
                10
            The
                Offer and Listing
            20ITEM
                11
            Additional
                Information
            22ITEM
                12
            Quantitative
                and Qualitative Disclosures About Market Risk
            27ITEM
                13
            Description
                of Securities Other Than Equity Securities
            27**PART
                II**ITEM
                14
            Defaults,
                Dividends Arrearages and delinquencies
            28ITEM
                15
            Material
                Modifications to the Rights of Securitiy Holders,Use
                of Proceeds
            28ITEM
                16
            Reserved
            28**PART
                III**ITEM
                17
            Reserved
            29ITEM
                18
            Financial
                Statements
            29ITEM
                19
            Exhibits
                to Form 20-F Annual Report
            29




3





The
      information contained in this Annual Report is current at September 20, 2005
      except where a different date is specified.





**Enforcement
      of Legal Remedies**





Certain
      officers, directors and persons involved with the Registrant as professional
      advisors are resident in Canada. As a result, it may be difficult to effect
      service within the United States upon such persons or to realize on any judgment
      by any court of the United States which is predicated on civil liabilities
      under
      the Securities Exchange Act of 1934, as amended (the "Exchange Act'). The
      Registrant's Canadian counsel has advised that there is doubt as to the
      enforceability in Canada, either in original actions or through enforcement
      of
      United States judgments, of liabilities predicated solely upon violations of
      the
      Exchange Act or the rules and regulations promulgated thereunder.





**Forward
      Looking Statements**





This
      Annual Report contains forward-looking statements based on the Registrant's
      current expectations about the Company and its industry. These forward-looking
      statements can be identified within text containing words such as "expect",
      "anticipate", "estimate" and other similar expressions. These forward-looking
      statements involve risks and uncertainties. The Company's actual results could
      differ materially from those anticipated in these forwardlooking statements
      as a
      result of risk factors as discussed in Item 3: Key Information and elsewhere
      in
      this report. The Registrant undertakes no obligation to publicly update any
      forward-looking statements for any reason, even if new information becomes
      available or other events occur in the future.





**PART
      I**





**ITEM
      1.**  **IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**





See
      "Item
      7 - Directors, Senior Management and Employees"





**ITEM
      2.**  **OFFER
      STATISTICS AND EXPECTED TIMETABLE**





**A.** **OFFER
      STATISTICS**





Not
      applicable





**B.** **METHOD
      AND EXPECTED TIMETABLE**





Not
      applicable





**ITEM
      3.**  **KEY
      INFORMATION**





**A.** **SELECTED
      FINANCIAL DATA**





The
      following table sets forth selected consolidated financial data for Pacific
      Harbour Capital Ltd., (hereinafter the "Company" or the "Registrant"). Insofar
      as it relates to the Company as of and for each of the years in the five year
      period ended March 31, 2005, the data has been derived from financial statements
      prepared in accordance with Canadian Generally Accepted Accounting Principles
      ("GAAP") and reconciliation between Canadian and United States GAAP (See Note
      14
      in the Consolidated Financial Statements) that have been audited by Amisano
      Hanson, Chartered Accountants of Vancouver, Canada as to the five years ended
      March 31, 2005. The data set forth below should be read in conjunction with
      the
      Company's consolidated financial statements and notes thereto and "Management's
      Discussion and Analysis of Financial Condition and Results of Operations"
      included elsewhere herein.





4





**2005**
            
            **2004**
            
            **2003**
            
            **2002**
            
            **2001***(Restated)*
            
            *(Restated)*(All
                Canadian Dollars)Operating
                DataRevene(l)
            
            $
            17,063
            
            $
            37,965
            
            $
            1,058,230
            
            $
            3,152,174
            
            $
            2,895,095Cost
                of land held for resale
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Cost
                of townhousecondominiums
                for resale
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Cost
                of convenience store goodsfor
                resale
            
            
            -
            
            
            -
            
            
            (363,561
            )
            
            (1,984,594
            )
            
            (1,715,681
            )Net
                Revenue
            
            $
            17,063
            
            $
            37,965
            
            $
            694,669
            
            $
            1,167,580
            
            $
            1,179,414Administrative
                expenses
            
            
            (420,124
            )
            
            (509,732
            
            
            (1,091,061
            )
            
            (2,653,807
            )
            
            (2,427,021
            )Gain(loss)
                on investments
              &
                Other Items
            
            
            25,415
            
            
            (1,179,067
            )
            
            -
            
            
            -
            
            
            -Severence
                Costs & Other Items
            
            
            (80,000
            )
            
            -
            
            
            323,421
            
            
            (378,401
            )
            
            (15,908
            )Net
                Income (loss)
            
            
            ($
                457,646
            )
            
            ($
                1,650,834
            )
            
            ($
                72,971
            )
            
            ($1,864,628
            )
            
            ($1,263,515
            )Earnings
                (loss) per share
            
            
            ($0.06
            )
            
            ($0.22
            )
            
            ($0.01
            )
            
            ($0.28
            )
            
            (0.18
            )Balance
              Sheet DataWorking
                Capital
            
            
            764,758
            
            
            1,201,490
            
            
            (1,299,839
            )
            
            (1,335,579
            )
            
            (954,187
            )Total
                assets (2)
            
            
            998,144
            
            
            1,609,085
            
            
            5,262,866
            
            
            6,286,021
            
            
            6,477,127Long
                term debt
            
            
            -
            
            
            -
            
            
            298,234
            
            
            1,079,520
            
            
            424,915Shareholders'
                equity
            
            
            792,310
            
            
            1,249,956
            
            
            2,900,790
            
            
            2,826,452
            
            
            4,691,080




Summary
      of
      differences between generally accepted accounting principles ("GAAP") in Canada
      and in the United States (US)




**2005**
            
            **2004**
            
            **2003**
            
            **2002**
            
            **2001***(Restated)*
            
            *(Restated)*Net
                income (loss) - Canadian GAAP
              Differences:
            
            
            ($
                457,646
            )
            
            ($
                1,650,834
            )
            
            ($
                72,971
            )
            
            ($1,864,628
            )
            
            ($1,263,515
            )Other
                deferred development costs
            
            
            -
            
            
            1,396,844
            
            
            (75,092
            )
            
            (78,680
            )
            
            (91,105
            )Write-down
                of other deferred
              Development
                costs
            
            
            -
            
            
            -
            
            
            -
            
            
            11,688
            
            
            11,408Unrealized
                gain on trading securities
            
            
            242,450
            
            
            -
            
            
            -
            
            
            -
            
            
            -Capital
                holding costs
              Expensed
                under US GAAP
            
            
            (5,780
            )
            
            (4,914
            )
            
            (14,388
            )
            
            (11,688
            )
            
            (11,408
            )Net
                income (loss) - US GAAP
            
            
            ($
                220,976
            )
            
            ($
                258,904
            )
            
            ($
                162,451
            )
            
            ($1,943,308
            )
            
            ($1,354,620
            )




**2005**
            
            **2004**
            
            **2003**
            
            **2002**
            
            **2001***(Restated)*
            
            *(Restated)*Earnings
                (loss) per share - US GAAP (l)
            
            
            ($0.03
            )
            
            ($0.03
            )
            
            ($0.02
            )
            
            ($0.30
            )
            
            ($0.22
            )Weighted
                average number of shares
              Outstanding
                under US GAAP (1)
            
            
            7,247,703
            
            
            7,247,712
            
            
            6,979,397
            
            
            6,520,172
            
            
            6,065,972Shareholder's
                equity - Canadian
            
            $
            792,310
            
            $
            1,249,956
            
            $
            2,900,790
            
            $
            2,826,452
            
            $
            4,691,080Stock
                Based Compensation
            
            
            (35,600
            )
            
            (35,600
            )
            
            -
            
            
            -
            
            
            -Other
                deferred costs, expensed
              under
                US GAAP
            
            
            -
            
            
            -
            
            
            (1,498,334
            )
            
            (1,423,242
            )
            
            (1,344,562
            )Contributed
                Surplus
            
            
            35,600
            
            
            35,600
            
            
            -
            
            
            -
            
            
            -Unrealized
                gain on trading securities
            
            
            242,450
            
            
            -
            
            
            -
            
            
            -
            
            
            -Capitalized
                holding costs, expensed
              Under
                US GAAP
            
            
            (10,694
            )
            
            (4,914
            )
            
            (101,396
            )
            
            (87,008
            )
            
            (87,008
            )Shareholders'
                equity - US GAAP
            
            $
            1,024,006
            
            $
            1,245,042
            
            $
            1,301,060
            
            $
            1,316,202
            
            $
            3,259,510





5


(1)
            Revenues
                for all periods disclosed comprised sales revenue of the corporation's
                interest in PJSJV, land sales, net vehicle lease and sale income,
                interest
                and other miscellaneous income. Under US GAAP these amounts would
                be
                considered "Other income" rather than "Revenue". There is no effect
                on
                reported net income (loss).





(2)
            Total
                assets would be reduced for the adjustments noted under "Shareholders
                Equity" resulting in the following amounts under US GAAP: 2005 -
                $
                1,229,900; 2004 - $1,604,171; 2003 - $3,663,136; 2002 - $4,775,771
                and
                2001 - $5,045,557.





**Currency
      and Exchange Rates**





In
      this
      Form 20-F all references to dollars ($) are expressed in Canadian funds unless
      otherwise noted. As of August 22, 2005, the exchange rate for conversion to
      U.S.
      Dollars was $1.2040 Canadian = $1.00 U.S. Exchange rates represent the noon
      buying rate in New York City for cable transfers in foreign currencies as
      certified for customs purposes by the Federal Reserve Bank of New York. The
      average rates presented in the table below represent the average of the exchange
      rates on the last day of each month during the calendar year for the past 5
      years. Rates quoted are the Canadian Dollar exchange for US $1.00





Year
            
            Period
                End
            
            Average
            
            High
            
            Low2005
            
            
            1.2040
            
            
            1.2302
            
            
            1.2703
            
            
            1.19462004
            
            
            1.3081
            
            
            1.3531
            
            
            1.4940
            
            
            1.26792003
            
            
            1.4716
            
            
            1.5493
            
            
            1.6050
            
            
            1.45842002
            
            
            1.5769
            
            
            1.5702
            
            
            1.6190
            
            
            1.50242001
            
            
            1.5958
            
            
            1.5490
            
            
            1.6058
            
            
            1.4895





On
      March
      31, 2005, the noon buying rate in New York City for cable transfer in Canadian
      dollars as certified for customs purposes by the Federal Reserve Bank of New
      York (the "Exchange Rate") was $1.00 U.S. = $1.2094 Canadian.





**B.** **CAPITALIZATION
      AND INDEBTNESS**





Not
      applicable





**C.**  **REASONS
      FOR THE OFFER AND USE OF PROCEEDS**





Not
      applicable





**D.** **RISK
      FACTORS**





History
      of losses and expected losses in the future:





The
      Corporation reported a loss of $1,263,515 for the year ended March 31, 2001;
      $1,864,628 for the year ended March 31, 2002; $72,971 for the year ended March
      31, 2003; $1,650,834 for the year ended March 31, 2004 and $457,646 for the
      year
      ended March 31, 2005. The Corporation expects to continue to incur losses in
      the
      near future and possibly longer. The Corporation cannot predict when it will
      achieve profitability, and if it does the Corporation may not be able to sustain
      or increase its profitability.





Availability
      of capital:





The
      Corporation may not have sufficient capital to fund its operations and
      additional capital may not be available on acceptable terms, if at all. Any
      of
      these outcomes could adversely impact the Corporation's ability to respond
      to
      competitive pressures or prevent it from conducting all or a portion of its
      planned operations. The Corporation may also require additional capital to
      develope its property and existing business or to acquire or invest in
      complimentary business or products. If the Corporation issues additional equity
      securities to raise funds, the ownership percentage of existing shareholders
      of
      the Corporation will be reduced.





6


Risk
      Factors Related to Ownership and Trading Market





Volatility
      of stock price:





Stock
      markets have recently experienced extreme price and volume fluctuations. Since
      the Company's initial public offering, the market value of its common shares
      has
      fluctuated significantly. These fluctuations are often unrelated to the
      operating performance of particular companies, including the Company. The broad
      market fluctuations may adversely affect the market price of the Company's
      common shares. This may adversely affect the ability of the Company to use
      its
      common shares as consideration in acquisition transactions. In addition, when
      the market price of a company's stock drops significantly, shareholders often
      commence securities class action lawsuits against the company. A lawsuit against
      the Company could cause it to incur substantial costs and could divert the
      time
      and attention of management and other resources.





Future
      sales of common shares:





If
      the
      Company's shareholders sell substantial amounts of common shares in the public
      market, the market price of the common shares could fall. The perception among
      investors that these sales will occur could also produce this
      effect.





General
      unforeseen and non-controllable risks:





In
      future
      years it is anticipated that the following will continue to have an effect
      on
      the results reported: the sale of the remaining parcel of land held by the
      Company's subsidiary, there would then be a gain or loss recognized on the
      sale
      of the land. At this time it is difficult to quantify such a gain or loss as
      it
      is dependent on the economic conditions in effect at the time of the sale.
      The
      Company's real estate property is subject to the risks generally associated
      with
      the ownership of real property, including liquidity, the need to meet fixed
      obligations, uncertainty regarding adverse local market conditions due to
      changes in general or local economic conditions, zoning laws, neighborhood
      characteristics, interest rates, availability of mortgage funds, availability
      of
      water and sewer services, changes in real estate property tax rates and other
      operating expenses, governmental rules and fiscal policies, acts of God (which
      may result in uninsured losses) and other factors which are beyond the control
      of the Company. The Company may be unable to resell its property at a profit
      or
      at all as a result of adverse conditions in local real estate markets or other
      factors or the imposition of regulations governing the use of the properties
      which have an adverse impact on the value of the properties. Many of these
      inherent risks may be intensified by economic recession and by other potential
      economic developments and uncertainties.





Real
      estate development is an intensely competitive and highly cyclical business,
      typically involving "boom and bust" cycles. While location is one of the most
      important factors in real estate ownership, development is also critically
      affected by the availability of financing and general economic
      conditions.





**ITEM
      4.**  **INFORMATION
      ON THE COMPANY**





**A.**  **HISTORY
      AND DEVELOPMENT ON THE COMPANY**





Pacific
      Harbour Capital Ltd.'s, principal office is located at Suite 1502 - 543
      Granville Street, Vancouver, BC, V6C 1X8 (T) 604 697-0687 (F) 604 697-0686.
      The
      Company's separate subsidiaries incorporated in British Columbia are private,
      non-reporting companies, (i.e. these companies are not publicly traded on any
      stock exchange) as are the U.S. subsidiaries, Venture Pacific Development
      Corporation (USA) and VenPac Nevada I, Inc. All references to the Company herein
      include its subsidiaries unless otherwise noted or unless the context would
      indicate otherwise. The Company's Consolidated Financial Statements for the
      fiscal year ended March 31, 2005 referred to herein also include its
      subsidiaries.





The
      Company was incorporated as Glider Resources Inc. under the Company Act (British
      Columbia) on March 18, 1986. On October 21, 2002, the Company consolidated
      the
      issued and outstanding common shares resulting in two old shares of the Company
      being consolidated into one new common share. At the same time, the authorized
      capital of the Company was increased to 100,000,000 common shares without par
      value (the "Common Shares") and 100,000,000 Preferred Shares without par value
      (the "Preferred Shares"). As of the Company's year end of March 31, 2005 there
      were 7,247,703 Common Shares issued and outstanding and no issued Preferred
      Shares.





7


All
      Common Shares of the Registrant rank equally as to dividends, voting rights
      and
      participation in assets. The Registrant's dividend policy is determined by
      the
      Board of Directors and to date, the Registrant has neither declared nor paid
      any
      dividends on its Common Shares nor does the Registrant anticipate that dividends
      will be paid in the foreseeable future. Rather, it intends to apply earnings
      to
      the expansion and development of its business.





The
      Registrant became a public company on December 3, 1987 when it undertook an
      initial public offering of its common shares in British Columbia, Canada and
      was
      listed on the Vancouver Stock Exchange ("VSE") (now the TSX Venture Exchange
      ("TSX-VE"). The Registrant's listing on the TSX-VE is as a Tier 1 Company
      trading under the symbol "PCF". In the United States the common shares are
      quoted on the Over-The-Counter Bulletin Board under the symbol
      "PCFHF".





The
      Registrant has furnished its shareholders with annual reports containing audited
      financial statements and quarterly or other interim reports containing financial
      and other information to the extent required by the British Columbia Company
      Act, the TSX-VE and the British Columbia Securities Commission ("BCSC"), and/or
      other applicable authorities and has provided the reports required by the U.S.
      Securities Exchange Act of 1934 ("1934 Act"). The Registrant is subject to
      the
      information and reporting requirements under the British Columbia Company Act
      and has filed periodic reports, proxy materials and other reports with the
      Executive Director under the British Columbia Securities Act and with the
      TSX-VE. Such reports can be inspected and copied, at the expense of the person
      requesting the report, at the TSX-VE offices at 10" Floor - 300 5th Ave. SW
      ,
      Calgary, Alta, T2P 3C4 and at the offices of the BCSC Executive Director at
      9 th Floor -
      701 W. Georgia St., Vancouver, BC, V7Y IL2, at prescribed rates.





The
      Registrant is subject to the informational requirements of the 1934 Act and
      in
      accordance therewith files reports, proxy statements and other information
      with
      the U.S. Securities and Exchange Commission ("SEC") under the 1934 Act. Such
      reports, proxy statements and other information can be inspected at the Public
      Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
      Street, N.W., Washington, D.C. 20549, and the Regional Offices of the Commission
      at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
      60661-2511. Copies of such material can also be obtained from the Public
      Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
      Street, N.W. Washington, D.C. 20549, at prescribed rates. The Commission
      maintains a World Wide Web site on the Internet at http://www.sec.gov that
      contains reports, proxy and information statements and other information
      regarding registrants that file electronically with the Commission.





Upon
      request, the Registrant will provide copies of such materials on file at the
      SEC, the TSX-VE, and the BCSC to shareholders who do not have ready access
      to
      them. Requests should be made in writing to: Pacific Harbour Capital Ltd.,
      at
      #1502 - 543 Granville Street, Vancouver, B.C., V6C 1X8.





**B.** **BUSINESS
      OVERVIEW**





Pacific
      Harbour Capital Ltd. is/was primarily engaged in the following
      businesses:





a)
            investments;
                National Direct Response Marketing Canada
                Inc.





b)
            real
                estate holdings in British Columbia, Canada and Pahrump,
                Nevada.





c)
            used
                vehicle leasing a well as sale of pre-owned vehicles through Venture
                PacificVehicle
                LeaseCorp Inc.;





d)
            50%
                joint venture in gas station and convenience
                store.





8





**a)** **INVESTMENTS**





On
      December 10, 2002, the Company entered into an investment agreement with
      National Direct Response Marketing Canada Inc., the owner and marketer of the
      Canadian Legal Will Kit, the American Legal Will Kit and other direct marketing
      products. The investment entitled the Company to invest up to $1,100,000 by
      way
      of secured convertible debentures and if fully converted would result in a
      49%
      ownership of National Direct.





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





On
      May
      11, 2004, the Company and National Direct entered into an agreement whereby
      the
      Company agreed to release National Direct from the terms of the investment
      agreement, including all related agreements, for a total consideration of
      $240,000 to be paid as follows:





-
            $220,000
                on signing of the agreement and subsequently paid on June 1, 2004;
                and




-
            $20,000
                payable in twelve equal monthly instaments of
                $1,667





As
      of
      June 30, 2004, all financial obligations under the above noted release have
      been
      met by National Direct and this matter is now finalized in its entirety.





**b)** **REAL
      ESTATE HOLDINGS:**





**STATE
      OF NEVADA, USA**





The
      Company formed two wholly-owned Nevada subsidiaries, Venture Pacific Development
      Corporation (USA), and VenPac Nevada 1, LLC. ("VenPac"). In 1997, VenPac
      acquired a 12.86 acre site and a 0.23 acre well site in Pahrump, Nevada. On
      August 28, 1998 VenPac purchased an additional 5.31 acres (10 individual lots)
      adjacent to the 12.86 acre site, for the sum of $400,000 (US$) from the Ronald
      E. and Charlotte A. Floyd 1983 Living Trust Agreement, with terms of 10% down,
      10% interest and a 10 year amortization .





The
      Company was holding the property as undeveloped while actively searching for
      a
      buyer for the property. In February 2004, the Company finalized a purchase
      offer
      of $2,500,000 U.S. for the Pahrump property. A portion of the proceeds from
      the
      sale of the property was used to pay off the secured creditors and all other
      mortgages held on the property.





**PROVINCE
      OF BRITISH COLUMBIA, CANADA**





The
      Company has a fee simple interest in a real estate property in Pemberton,
      British Columbia. Specific information regarding this property and its stage
      of
      development and operations is set forth under "Item 4.D - Plant, properties
      and
      equipment." The Company holds its real estate interest through a wholly owned
      subsidiary. The Company is currently reviewing its opportunities with respect
      to
      these land holdings as the awarding of the Whistler/Vancouver 2010 Olympics
      has
      generated substantial interest in the area to kick-start a major-development
      in
      the area





**c)**  **VEHICLE
      LEASING AND SALES**





The
      Company entered into the vehicle leasing market in September 1996 (fiscal year
      1997) in order to diversify its business activities and to increase monthly
      cash
      flows.





On
      August
      22, 1996 Venture Pacific Vehicle LeaseCorp Inc. ("LeaseCorp") a wholly-owned
      subsidiary of the Company, was formed to operate a used vehicle leasing business
      in the Lower Mainland of British Columbia ("BC"), with its main focus to
      capitalize on the untapped subprime segment of the credit market.





9


On
      January 15, 2003 the assets of Leasecorp. were sold at a price of $550,000.
      The
      sale proceeds were divided into two payments, $500,000 and $50,000, which
      represented a holdback on the purchase. The $500,000 amount was applied to
      Leasecorp.'s secured $750,000 outstanding loan, thereby reducing the loan amount
      to $250,000. On March 26 th ,
      2003,
      the remaining $50,000 holdback was distributed between the purchaser as to
      $32,024.02 and $18,101.32 which was applied to the remaining $250,000 loan,
      thereby reducing the loan to $231,898.68. Interest on this loan was being
      accrued at the rate of 12% per annum.





Proceeds
      from the sale of the Pahrump property were used to pay off this loan in its
      entirety.





**d)**  **50%
      JOINT VENTURE**





On
      May
      31, 2002, the Company sold its 50% joint venture interest in the Pemberton
      Junction Store Joint Venture located in Pemberton, British Columbia for net
      proceeds of $739,249. The Company's 50% interest generated gross sales of
      $384,460 and $20,899 income before general and administrative expenses for
      the
      year ended March 31, 2003 as compared to $2,285,890 and $301,296 for the year
      ended March 31, 2002.





**C.** **** **ORGANIZATIONAL
      STRUCTURE**





The
      Company's wholly owned subsidiaries are as follows:




-
            345384
                B.C. Ltd. ("345384")


-
            345385
                B.C. Ltd. ("345385") - This subsidiary was dissolved on October 12,
                2003.


-
            371208
                B.C. Ltd. ("371208") - This subsidiary was dissolved on February
                7,
                2003.


-
            Venture
                Pacific Development Corporation USA ("VPDC USA") - and its wholly-owned
                subsidiary VenPac Nevada 1, Inc. ("Venpac Nevada") - This charter
                has been
                allowed to lapse.


-
            Venture
                Pacific Capital Corporation ("Capital") - This subsidiary is being
                allowed
                to lapse.


-
            Venture
                Pacific Vehicle LeaseCorp Inc. ("LeaseCorp") - Subsidiary sold with
                lease
                business.





**D.** **PLANT,
      PROPERTIES AND EQUIPMENT**





**PAHRUMP,
      NEVADA - USA**





The
      Company's real estate holdings in the United States consist of an 18.4 acre
      parcel of land in Pahrump, Nevada. The first purchase of 12.86 acres and a
      0.23
      acre well site in 1997 was augmented with the purchase of 5.31 acres adjoining
      the property on August 28, 1998. The 18.4 acre site is located on the east
      side
      of Highway 160, just north of Basin Road to Lockspur Road, in the town of
      Pahrump. The township of Pahrump has a population of approximately 30,000
      residents and is located approximately 60 miles northwest of Las Vegas. It
      is
      unincorporated and there are no zoning by-laws or restrictions on the
      property.





On
      February 12, 2004 the Company announced that their wholly owned U.S. subsidiary,
      Venpac Nevada I, Inc., had completed their transaction with respect to the
      sale
      of the Pahrump, Nevada property. The land was sold for a total dollar value
      of
      $2,500,000 U.S. Less costs and the pay out of all secured creditors of the
      Company, the Company received net proceeds of $938,085.29 U.S.





**PEMBERTON,
      BRITISH COLUMBIA - CANADA**





The
      Company's real estate interest in Canada is a fee-simple interest located in
      a
      broad river valley surrounded by mountains in the Pemberton, British Columbia
      area. The Village of Pemberton enjoys a rural setting along the Sea to Sky
      Highway approximately 35 kilometers north of the ski resort municipality of
      Whister, British Columbia and 159 kilometers north of Vancouver,
      BC.





10


Pemberton
      (population approximately 1,700) benefits both from the continued development
      of
      the neighboring year-round ski resort of Whistler and its proximity to many
      natural and picturesque attractions. Skiing, hiking, golfing and fishing are
      just some of the activities available to residents and visitors, with at least
      ten recreational areas within 30 kilometers of Pemberton itself.





**RIVER
      FRONT PROPERTY - CANADA**





In
      December 1988, the Company, through its wholly owned subsidiary 345384 B.C.
      Ltd., acquired, for a purchase price of $175,000, approximately 133 acres of
      bare land located immediately north of Pemberton on the north side of Lillooet
      River.





The
      Company has elected to hold the property as undeveloped for the time being
      or to
      resell it should an acceptable offer be received.





**CARDLOCK
      FUEL DEPOT**





In
      May
      1988, the Company through its wholly owned subsidiary, 345385 B.C. Ltd. acquired
      0.93 acres of a vacant site located on Highway 99, approximately 325 meters
      from
      the Pemberton Junction Store site for a purchase price of $60,000
      Cdn.





On
      October 2, 2003 the Company announced that the property was sold for a total
      dollar value of $265,000 Cdn. A portion of the sales proceeds were used to
      make
      a lump sum payment of $50,000 to a secured credit who held a judgement against
      the Company in the amount of $250,000.





**40.5
      ACRE SITE - CANADA**





In
      September 1989, the Company, through its wholly owned subsidiary, 371208 B.C.
      Ltd., acquired an interest in 40.5 acres of bare land located in Pemberton
      for a
      purchase price of $225,000. The property is part of an Agricultural Land Reserve
      and as such was not immediately available for development. "Agricultural Land
      Reserves" were established by government legislation in April 1973 to preserve
      agricultural lands for present and future use and to protect them from
      encroachment of non-farm uses and subdivisions. Such designation greatly limits
      development potential of certain lands, but does permit one dwelling unit per
      10
      acres.





On
      January 30, 2003 the Company sold this parcel of land for $800,000 less costs
      which provided the Company with net proceeds of $766,952.61. With the proceeds
      from the sale of this property, which formed part of the security on this loan,
      the $300,000 bridge loan was repaid thereby reducing the outstanding loan amount
      back to $700,000.





**GAS
      BAR AND CONVENIENCE STORE - CANADA**





In
      July
      1988, the Company, through its wholly owned subsidiary, Pemberton Junction
      Store
      Ltd., acquired 0.6 acres of land located at the junction of Portage Road and
      Highway 99 in The Village of Pemberton. In 1990, Pemberton Junction Store Ltd.
      constructed a gasbar, car wash and 24 hour convenience store on the property.
      The development was then leased to PetroCanada Inc. on July 1, 1990, who, in
      turn, sublet it back to Pemberton Junction Store Ltd.





On
      October 23, 1992 the Company sold 50% of its interest in the development to
      341794 B.C. Ltd. ("B.C. Ltd."). On October 31, 1992 the Company entered into
      a
      Joint Venture Agreement with B.C. Ltd., forming the Pemberton Junction Store
      Joint Venture ("PJSJV"). The terms of the joint venture will continue until
      it
      is dissolved in accordance with specific provisions within the Co-owners
      Agreement, or on October 31, 2012, whichever is the earliest. By Agreement
      dated
      October 31, 1992 Nester's Market Ltd. was appointed manager of the gas bar
      and
      convenience store operations. B.C. Ltd. is a wholly owned subsidiary of Nester's
      Market Ltd. No affiliation exists between the Company, its directors, officers
      or beneficial owners and Nester's Market Ltd., and its directors, officers
      or
      beneficial owners.





The
      following table reports the sales and profits figures for the Pemberton Junction
      Store Joint Venture PJSJV for the 1999 to 2003 fiscal years.




11


**50%
                Share In:**
            
            **2003**
            
            **2002**
            
            **2001**
            
            **2000**
            
            **1999**Total
                Sales:
            
            $
            384,460
            
            $
            2,285,890
            
            $
            1,977,266
            
            $
            2,334,092
            
            $
            2,573,258Net
                Profits:
            
            
            6,677
            
            $
            66,394
            
            $
            8,434
            
            $
            14,701
            
            $
            45,462





On
      May
      31, 2002, the Company sold its remaining 50% joint venture interest in the
      Pemberton Junction Store Joint Venture located in Pemberton, British Columbia
      to
      their joint venture partner, for net proceeds of $739,249. The Company's 50%
      interest generated gross sales of $384,460 and $20,899 income before general
      and
      administrative expenses for the year ended March 31, 2003 as compared to
      $2,285,890 and $301,296 for the year ended March 31, 2002.





**ITEM
      5.**  **OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS**





**Basis
      of Presentation**





The
      consolidated financial statements for the year ended March 31, 2005 present
      the
      results from operations of the parent company, Pacific Harbour Capital Ltd.,
      and
      100% of the results of operations from all of its wholly-owned subsidiaries.
      These wholly-owned subsidiaries are:





-
            345384
                B.C. Ltd. ("345384")


-
            345385
                B.C. Ltd. ("345385") - This subsidiary was dissolved on October 12,
                2003.


-
            371208
                B.C. Ltd. ("371208") - This subsidiary was dissolved on February
                7,
                2003.


-
            Venture
                Pacific Development Corporation USA ("VPDC USA") - and its wholly-owned
                subsidiary VenPac Nevada I, Inc. ("Venpac Nevada") - This charter
                has been
                allowed to lapse.


-
            Venture
                Pacific Capital Corporation ("Capital") - This subsidiary is being
                allowed
                to lapse


-
            Venture
                Pacific Vehicle LeaseCorp Inc. ("LeaseCorp") - Subsidiary sold with
                lease
                business





These
      consolidated financial statements have been prepared in accordance with Canadian
      generally accepted accounting principles ("Canadian GAAP"), but where
      application of Canadian GAAP results in differences with financial statements
      prepared in accordance with United States generally accepted accounting
      principles ("'US GAAP"), these differences have been disclosed in Item
      3A.





The
      consolidated financial statements are denominated in Canadian dollars and have
      not been translated into United States dollars. The following discussion centers
      around the operations for the current year ended March 31, 2005 (fiscal 2005)
      with comparison to the prior year ended March 31, 2004 (fiscal
      2004).





**A.**  **OPERATING
      RESULTS**





The
      Company’s revenue from continued operations is comprised primarily of investment
      income. Revenue from existing resources decreased this year by $16,187 to
      $17,063. The decline was due to the loss of royalty and interest income from
      its
      investment in the direct marketing company.





The
      Company’s general and administrative expenses declined in the year from $505,196
      in fiscal 2004 to $420,124 in fiscal 2005, a decline of $85,072 or 17%. The
      decrease was mainly attributable to management cost cutting.





As
      part
      of management cost cutting measures, the Company received $57,500 from
      affiliated companies for rent and administrative recovery for use of the
      Company's office facility and services of administrative staff compared to
      $24,000 recovery in fiscal 2004.





Other
      expenses such as audit fees, filing fees, transfer agent fees, promotion and
      wages were also lower in the year refelcting management's commitment to reduce
      expenses.


12





Offsetting
      the decreases above, legal and profession fees increased significantly to
      $138,687 compared to $24, 176 in fiscal 2004. The increase was mainly
      attributable to legal fees incurred in connection with lawsuits with former
      management and with a former manager of the Company's subsidiary.





In
      fiscal
      2005, the Company paid $78,000 management fee to a company controlled by a
      director and officer of the Company for management services and $11,640
      consulting fee to a director for service in connection with business
      development. In addition, the Company paid $3,012 to a law firm whose partner
      is
      a director of the Company.





During
      the last fiscal year, interest expenses decreased to $nil in fiscal 2005 versus
      $85,511 in fiscal 2004. since all debts were repaid during fiscal
      2004. **** Rent
      and
      utilities had a decrease from $70,807 to $69,951 while corporate admin fees
      remained the same at $26,983 during fiscal 2004 and $26,720 during fiscal 2005.





Promotion
      and marketing expenses decreased significantly to $6,130 compared to $28,780
      in
      fiscal 2004. Bad debts decreased to $nil during fiscal 2005 from $26,306 during
      fiscal 2004 from the write-off of a receivable from the direct marketing
      company. Wages and benefits decreased from $86,150 during fiscal 2004 to $63,167
      during fiscal 2005.





Overall
      the Company reported a net loss of $457,646 or $0.06 loss per share for the
      year
      ended March 31, 2005 compared to net loss of $1,650,834 or $0.22 loss per share
      for the year ended March 31, 2004.





**B.** **LIQUIDITY
      AND CAPITAL RESOURCES**





At
      March
      31, 2005 working capital decreased by $436,732 to $764,578. The decrease was
      attributable to operting loss from operations in fiscal 2005.





For
      the
      year ended March 31, 2005, the Company had negative cash flow of $632,135 from
      operating activities compared to $751,379 negative cash outflow from 2004
      operating activities. From an operating standpoint, the Company continues to
      rely on proceeds from the sale of investments or property to remedy operating
      deficiency. The Company has no plans for any material capital expenditure in
      the
      coming year.





The
      Company did not engage in any financing activities in fiscal 2005. In comparison
      the Company repaid loans and mortages in fiscal 2004 resulting in cash outflow
      of $1,417,395 from financing activities.





In
      fiscal
      2005, the Company invested $295,101 in marketable securities and received
      proceeds of $1,075,336 from promissory note receivable and $43,522 from the
      sale
      of marketable securites. The Company also received $18,928 from amounts due
      from
      a related company.





Overall
      the Company had positive cash inflow of $204,771 for the year. Depending on
      future growth and investment activities, the Company may obtain equity or debt
      financing to support acquisition or investment activities.


13





**Estimated****Net
                Book**
            
            **Fair
                Market****Value
                as at**
            
            **Value
                as at****Name
                of**
            
            **Date
                of**
            
            **Original**
            
            **March
                31,**
            
            **March
                31,****Property**
            
            **Subsidiary**
            
            **Acquisition**
            
            **Cost**
            
            **2005**
            
            **2005
                ***Lillooet
                River
            
            
            345384
                BC Ltd.
            
            
            December1988
            
            $
            175,000
            
            $
            312,646
            
            $
            1,200,000FrontLillooet
                Water
            
            
            371208
                BC Ltd.
            
            
            September
                1989
            
            $
            225,000
            
            $
            0
            
            $
            0Front
                **Cardlock
                Fuel
            
            
            345385
                BC Ltd.
            
            
            May
                1988
            
            $
            60,000
            
            $
            0
            
            $
            0Depot
                *****Total**
            
            
            
            
            
            
            
            **$**
            **235,000**
            
            **$**
            **312,646**
            
            **$**
            **1,200,000**





*
            Note
                - values are based on recommended listing price supplied by third
                party
                real estate agents.


**
            The
                sale of this 40-acre parcel of land was completed on February 12,
                2003 for
                a total dollar value of $800,000. The Company registered an easement
                against this property to gain access to the Company's 133-acre parcel
                of
                land on the other side of the Lillooet
                River.


***
            The
                sale of this 1-1/2 acre cardlock property was completed on October
                2, 2003
                for a total dollar value of
                $265,000.





Potential
      changes in other current assets (Accounts receivable, Inventory, and Prepaid
      expense and deposits) or current liabilities (Accounts payable, Security
      deposits, Deferred revenue) are not known at this time or are not considered
      by
      management to have a significant impact on the liquidity of the
      Company.





Long-term
      assets decreased in fiscal 2004 by $4,150,397 due to the sale of the Company's
      land assets in Pharump, Nevada.





Long-term
      liabilities decreased in fiscal 2004 by $298,234 due to the repayment of the
      mortgage that was on the Pharump property.





Venture
      Pacific Vehicle LeaseCorp's loan of $1,000,000 was secured by a pledge of assets
      (land) held by three other subsidiaries of the Company (345384 B.C. Ltd., 345385
      B.C. Ltd., and 371208 B.C. Ltd.) and the Company's land holdings in Pahrump,
      Nevada. This loan was subsequently refinanced and LeaseCorp entered into a
      new
      loan agreement with Hartford Securities Ltd. ("Hartford") in the amount of
      $750,000. Hartford is owned wholly or partially by Arthur Clemiss and is located
      in Grand Cayman, British West Indies. This loan was also secured by the vehicle
      inventory held by Venture Pacific Vehicle LeaseCorp.





On
      January 15, 2003 the assets of LeaseCorp were sold for $550,000. The sale
      proceeds were divided into two payments, one for $500,000 and one for $50,000.
      The $500,000 payment was applied wholly to LeaseCorp's indebtedness to Hartford
      Securities, thereby reducing the loan amount to $250,000. 60 days after closing
      the remaining $50,000 was divided between the purchaser as to $31,898.68 for
      lease payments received by LeaseCorp during the 60-day period and $18,101.32
      to
      Hartford Securties, thereby reducing the loan to $231,898.68. Monthly interest
      at 12% per annum was being accrued on this loan and the loan was due on March
      31, 2004.





The
      mortgage on the Pahrump property for $349,395 (US$238,040) was due on August
      28,
      2008. Interest was fixed for that period at 10%. Payments are made monthly
      for
      both principal and interest over a ten year term. However, the mortgage payment
      of US$4,762 per month was due in US dollars, so that the amount recorded in
      the
      financial statements could go up or down according to changes in the exchange
      rate between Canadian and US dollars.





On
      April
      5, 1999 the Company obtained a loan in the amount of $300,000. The loan was
      due
      to Hartford Securities Ltd. On April 12, 2001 the loan was increased by $100,000
      to a total of $400,000. On February 22, 2002 the loan was increased by an
      additional $300,000 bringing the total loan payable to $700,000. On December
      1,
      2002 the loan was again increased by an additional $300,000 bringing the total
      loan payable to Hartford Securities to $1,000,000. This loan was secured by
      mortgages on the Company's Pemberton properties and the property in Pahrump,
      Nevada. This loan was due and payable by March 31 st ,
      2003
      and beared interest at 12% per annum.





14


Upon
      completion of the sale of the Company's 40-acre parcel of land held in
      Pemberton, B.C. by its wholly-owned subsidiary, 371208 BC Ltd., a portion of
      the
      above loan in the amount of $300,000 was repaid to Hartford Securities. This
      left an outstanding balance due to Hartford Securities of $700,000 plus interest
      being accrued at the rate of 12% per annum.





On
      February 12, 2004 the Company announced the completion of their transaction
      with
      respect to the sale of the Pahrump, Nevada property. A portion of the proceeds
      of this sale were applied to the Company's and Leasecorp's indebtedness to
      Hartford Securities thereby paying the loans off in their entirety. Proceeds
      from the sale of the property were also used to pay off the mortgage held on
      the
      property.




Prepared
      in accordance with US GAAP the net loss for the year ended March 31, 2005 would
      be $220,976 compared to $258,904 for the year endedMarch 31, 2004. The
      differences between Canadian and US GAAP result mainly from the treatment of
      certain costs which were deferred under Canadian GAAP but are expensed under
      US
      GAAP.





Net
      assets in accordance with Canadian GAAP were $998,144 at March 31, 2005 and
      $1,609,085 at March 31, 2004. Net assets in accordance with US GAAP would be
      $1,229,900 at March 31, 2005 and $1,604,171 at March 31, 2004. Again the reason
      for these differences under Canadian and US GAAP is the timing of expensing
      certain costs.





In
      fiscal
      1997, the Company abandoned plans to develop the parcels of land located in
      Pemberton B.C. and held by its wholly-owned subsidiaries (345384 - Lillooet
      River Front, 345385 - Cardlock Fuel Depot, 371208 - Lillooet Water Front).
      Therefore the cost of the land (original acquisition costs plus property taxes,
      carrying costs, legal fees and other costs expended) was reclassified from
      "Property held for development' 'to "Land held for resale".





The
      Company has decided not to pursue development of the remaining land parcel,
      however management feels that there are opportunities to sell the land for
      more
      than the current book value due to the proximity of Pemberton to Whistler and
      the granting of the 2010 Winter Olympics to Whistler/Vancouver and will hold
      the
      land until a reasonable offer is received.





**C.**   **RESEARCH
      AND DEVELOPMENT, PATENTS AND LICENSES, ETC.**





Not
      applicable





**D.** **TREND
      INFORMATION**





Not
      applicable





**ITEM
      6.**  **LEGAL
      PROCEEDINGS**





The
      company is currently involved with several court cases, which it plans to defend
      vigorously.





The
      first
      court case involved a former law firm engaged by the previous management. The
      law firm was claiming legal fees owing of approximately $109,000. The Company
      counter sued claiming the law firm was in breach of the court order prohibiting
      expenses of this nature. The parties involved reached a settlement prior to
      attending court and on March 8, 2005 a Mutual Release was signed by both parties
      and the payment of $35,000 by Pacific Harbour Capital Ltd.





The
      second court case involves another law firm engaged by the previous management.
      The firm claims outstanding legal fees of approximately $32,000. The Company
      is
      in the process of contesting the amount through the court and deems it
      unreasonable. This legal fee has been accrued in the financial statement in
      full.





15


The
      third
      court case involves former management of the company and a legal firm that
      was
      previously engaged by them. Former management of the company has purchased
      certain debts from this previously used law firm and is now asserting a claim
      of
      $110,067. The Company is in the process of contesting this amount through the
      court as it deems it unreasonable. $54,107 of this claim has been accrued within
      the financial statements.





The
      last
      case involved a former manager of the Company’s subsidiary, Venture Pacific
      Vehicle LeaseCorp Inc. The former manager was claiming $101,340 for breach
      of
      contract and wrongful dismissal along with $57,500 for a finders fee relating
      to
      a loan advanced to Venture Pacific LeaseCorp Inc. This case was settled in
      October 2004 and the Company paid out $80,000.





**ITEM
      7.**  **DIRECTORS,
      SENIOR MANAGEMENT AND EMPLOYEES**





The
      Directors of the Registrant are elected annually by the shareholders and hold
      office until the next annual general meeting of the shareholders or until their
      successors are duly elected and qualified, unless they resign sooner or cease
      to
      be directors in accordance with the Registrant's Articles. The Company's last
      annual general meeting was held on September 13, 2005 and the next meeting
      must
      be held within 13 months of that date as specified by the Registrant's Articles.
      The Registrant's executive officers are appointed by and serve at the pleasure
      of the Board of Directors. As of September 13, 2005, the following persons
      were
      directors and executive officers of the Company:





**A.**   **DIRECTORS**








**B.** **COMPENSATION**





The
      Company has no standard arrangement pursuant to which directors are compensated
      by the Company for their services in their capacity as directors except for
      the
      granting from time to time of stock options in accordance with the policies
      of
      the TSX Venture Exchange.





Management
      functions of the Company are substantially performed by directors or senior
      officers of the Company and not, to any substantial degree, by any other preson
      with whom the Company has contracted. Consulting fees totalling $78,000 were
      paid during the fiscal year ended March 31, 2005 to a director and officer
      of
      the Company for day-to-day management of the Company. All Management Agreements
      with previous directors and officers of the Company have been
      cancelled.





Ronald
      W.
      Downey, a former director and officer of the Company, had a contract with the
      Registrant and was compensated as an executive officer. His contract of
      employment was effective from March 1, 1998 and was to expire on December 14,
      2002 at an annual salary of $150,000. (see Form 6-K, May, 1998 filing).
      Effective February 1, 2000, the Board of Directors of the Company accepted
      Mr.
      Downey's resignation as a director and officer of the Company and all of its
      subsidiaries. Mr. Downey subsequently commenced an action against the Company
      in
      the Supreme Court of British Columbia pursuant to which he alleges wrongful
      dismissal and claims approximately $479,807 representing the aggregate salary
      due for the balance of the term of his contract.


In
      September 2002, the Company entered into a settlement agreement, approved by
      the
      Supreme Court of British Columbia, to pay Mr. Downey a judgment in the amount
      of
      $250,000. The Company granted Mr. Downey a mortgage in the amount of $250,000
      which mortgage is to be registered against the Company's properties in Nevada.


On
      February 12, 2004 the mortgage held by Mr. Downey was paid out in full from
      the
      proceeds of the sale of the Pahrump property.





No
      other
      cash or other compensation was paid to directors or executive officers during
      fiscal 2005, other than as listed above. There are no other plans in effect
      pursuant to which cash or non-cash compensation was paid or distributed to
      directors or executive officers during the most recently completed fiscal year
      or is proposed to be paid or distributed in a subsequent year.





16


No
      pension plan or retirement benefit plans have been instituted by the Company
      and
      none are proposed at this time.





**C.** **BOARD
      PRACTICES**





Each
      director of the Company is elected annually and holds office until the next
      Annual General Meeting of the members unless that person ceases to be a director
      before then.





The
      Board
      of Directors meets periodically to review significant developments affecting
      the
      Company and to act on matters requiring Board approval. Although the Board
      of
      Directors delegates specific matters to others, it reserves certain powers
      and
      functions to itself. The Audit Committee is constituted in accordance with
      requirements of the B.C. Company and Securities Law and is directed to review
      the scope, cost and results of the independent audit of the Company's books
      and
      records, the results of the annual audit with management and the internal
      accountants; and the adequacy of the Company's accounting, financial and
      operations controls; to recommend annually to the Board of Directors, the
      selection of the independent auditors; to consider proposals made by the
      Company's independent auditors for consulting work; and to report to the Board
      of Directors when so requested, on any accounting or financial
      matters.





The
      Company has an Audit Committee of which Thomas Pressello, James Heppell and
      Michael Reynolds are members.




**D.** **EMPLOYEES**





The
      Company currently employs one full time employee and two part-time employees.
      All employees are located at the Company's offices in Vancouver, B.C. Canada.
      Management elected not to replace staff as they vacated their positions and
      would instead pay consulting fees as required in an effort to reduce
      administrative expenses.





17


**E.** **SHARE
      OWNERSHIP**





The
      Corporation's securities are recorded on the books of its transfer agent in
      registered form. The majority of such shares are, however, registered in the
      name of intermediaries such as brokerage houses and clearing houses on behalf
      of
      their respective clients. The Corporation does not have knowledge of the
      beneficial owners thereof.





**Number
                Of Shares****Beneficially
                Owned,**
            
            **Principal
                Occupation****Directly
                Or Indirectly,**
            
            **And
                If Not At Present****Or
                Over Which Control**
            
            **An
                Elected Director,****Or
                Direction Is**
            
            **Occupation
                During****Name
                And Present**
            
            
            
            **Exercised
                At March 31,**
            
            **The
                Past Five (5)****Office
                Held**
            
            **Director
                Since**
            
            **2005**
            
            **Years****Thomas
                Pressello**
            
            
            December
                14, 2001
            
            
            200,500
            
            
            Businessman;
                ChiefChief
                Executive Officer,
            
            
            
            
            
            
            
            
            Executive
                Officer &President
                & Director;
            
            
            
            
            
            
            
            
            President
                of the Company.Member
                of the Audit
            
            
            
            
            
            
            
            
            Business
                Consultant (1994Committee
            
            
            
            
            
            
            
            
            to
                present) advising onstructuring
                several financialtransactions
                in mining, realestate
                and other sectors.**Michael
                Reynolds**
            
            
            July
                26, 2005
            
            
            707,000
            
            
            Businessman;Director
            
            
            
            
            
            
            
            
            Director
                of the Company.Member
                of the Audit
            
            
            
            
            
            
            
            
            Investment
                Advisor withCommittee
            
            
            
            
            
            
            
            
            Canaccord
                Capital from1986
                to January 2005**James
                Heppell**
            
            
            December
                14, 2001
            
            
            Nil
            
            
            Partner,
                President &Director
                and
            
            
            
            
            
            
            
            
            Chief
                Executive OfficerMember
                of the
            
            
            
            
            
            
            
            
            of
                Catalyst CorporateAudit
                Committee
            
            
            
            
            
            
            
            
            Finance
                Lawyers (1992to
                present)





**Adoption
      of Stock Option Plan**





The
      Company previously had two stock option plans. The first plan was approved
      by
      the Board on July 30, 1997 and by the shareholder's of the Company on September
      28, 1997 (the "1997 Plan"). The 1997 Plan reserved 830,565 common shares for
      issuance pursuant to options granted under the 1997 Plan. Since the 1997 Plan
      was established, options to purchase 830,000 common shares have been granted
      under the 1997 Plan, of which 15,000 have been exercised and 815,000 have been
      cancelled leaving nil options outstanding.





The
      second plan was approved by the Board on February 24, 2000 and by the
      shareholder's of the Company on October 3, 2000 (the "2000 Plan"). The 2000
      Plan
      reserved 1,229,144 common shares for issuance pursuant to options granted under
      the 2000 Plan. Since the 2000 Plan was established, options to purchase 770,000
      common shares have been granted under the 2000 Plan, none of which have been
      exercised and 770,000 have been cancelled leaving nil options
      outstanding.





In
      addition, the Company had previously granted 365,000 stock options outside
      the
      1997 Plan and the 2000 Plan. Of the options granted outside the 1997 Plan and
      the 2000 Plan, 15,000 have been exercised and 350,000 have been cancelled
      leaving nil options outstanding.





The
      Company adopted a new stock option plan, approved by the Board on August 15,
      2002 and by the shareholders of the Company on September 19, 2002 (the "2002
      Plan") under which the maximum number of common shares reserved for issuance
      pursuant to the grant of stock options is 2,816,111. Subsequent to the adoption
      of the 2002 Plan, the shares were consolidated on a 2:1 basis and the stock
      option plan was consolidated by the same ratio. This is approximately 20% of
      the
      current issued and outstanding shares.





18


**Summary
      of Stock Option Activity**





The
      following table summarizes all issuances of, exercise of and termination of,
      options granted under the 1997 Plan, the 2000 Plan and the 2002 Plan and under
      option agreements issued before the adoption of the above noted
      plans.




**Options
                Outstanding****Granted
                Outside Option Plans**Options
                Granted
            
            
            365,000Options
                Cancelled
            
            
            (350,000
            )Options
                Exercised
            
            
            (15,000
            )**Options
                Outstanding:**
            
            
            Nil**1997
                Plan**Plan
                Maximum
            
            
            830,565Options
                Granted Under Plan
            
            
            830,000Options
                Cancelled
            
            
            (815,000
            )Options
                Exercised
            
            
            (15,000
            )**Options
                Outstanding:**
            
            
            Nil**2000
                Plan**Plan
                Maximum
            
            
            1,229,414Options
                Granted Under Plan
            
            
            770,000Options
                Cancelled
            
            
            (770,000
            )Options
                Exercised
            
            
            0**Options
                Outstanding**
            
            
            Nil**2002
                Plan**Plan
                Maximum - Pre-Consolidation
            
            
            2,816,111Plan
                Maximum - Post Consolidation (2:1 Basis)
            
            
            1,408,055Options
                Granted Under Plan - Post Consolidation
            
            
            879,028Options
                Exercised
            
            
            NilOptions
                Cancelled
            
            
            352,014**Options
                Available for Grant - Post Consolidtion:**
            
            
            881,041





**ITEM
      8.**  **MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**





**A.** **MAJOR
      SHAREHOLDERS**





The
      following table sets forth certain information as of September 20, 2004
      concerning the beneficial ownership of the voting securities of the Registrant
      as to each corporation or person known to the management of the Registrant
      that
      is the beneficial owner of more than 10% of the 7,247,703 outstanding shares
      of
      the Registrant's Common Shares, and the Registrant's officers and directors
      as a
      group. The percentages for each listing are calculated based on the number
      of
      outstanding shares.





19


**NUMBER
                OF SHARES****NAME
                AND ADDRESS**
            
            **AT
                AUGUST 14, 2003**
            
            **PERCENTAGE****Arthur
                Clemiss**
            
            
            1,232,327(1
            )
            
            17.0
            %Soverign
                Club Villa #11607
                West Bay RoadCayman
                Islands,**Officers
                and Directors of the**
            
            
            907,500(2
            )
            
            12.52
            %**Registrant
                as a Group (3 persons)**





(1)
            Mr.
                Clemiss is a Canadian citizen, but a permanent resident of Grand
                Cayman.


(2)
            Information
                gathered from British Columbia Securities Commission
                website.





Based
      on
      the records of Computershare Trust Company of Canada, the Registrant's registrar
      and transfer agent, as at September 14, 2005 there were 7,247,703 issued and
      outstanding Common Shares and 25 registered shareholders of which 748,001 Common
      shares were held of record by 13 holders located in the United
      States.





The
      Registrant is not directly or indirectly owned or controlled by any person,
      corporation or foreign government.





The
      Registrant is unaware of any arrangements which may occur in the future to
      result in a change of control of the Registrant.





**B.**  **RELATED
      PARTY TRANSACTIONS**





Except
      as
      previously described in Item 4. D. (Property, plants and equipment), Item 5.
      B
      (Liquidity and capital resources), Item 6.13 (Compensation), Item 6. E (Share
      Ownership) and Item 10. C (Material contracts), no director, officer, security
      holder or relative or spouse of any of the foregoing, had any material interest,
      direct or indirect, in any transaction since the commencement of the Company's
      last financial year or in any proposed transaction, which, in either case,
      has
      materially affected or will materially affect the Company or any of its
      subsidiaries other than as disclosed herein.





**C.**  **INTERESTS
      OF EXPERTS AND COUNSEL**





Not
      applicable





**ITEM
      9.**  **FINANCIAL
      INFORMATION**





**A.** **CONSOLIDATED
      STATEMENTS AND OTHER FINANCIAL INFORMATION**





Please
      refer to the Corporation's Consolidated Financial Statements as at March 31,
      2005 filed on Edgar on July 29, 2005.





The
      Directors of the Company may from time to time declare and authorize payment
      of
      dividends, as they deem advisable. Subject to the rights of members, all
      dividends on shares shall be declared and paid according to the number of shares
      held. The Company has not paid any cash dividends on its Common stock
      since its incorporation and anticipates that, for the foreseeable future,
      earnings, if any, will continue to be retained for use in its
      business.





**B.** **SIGNIFICANT
      CHANGES**





Not
      applicable





**ITEM
      10.**  **THE
      OFFER AND LISTING**





**A.**  **THE
      OFFER AND LISTING DETAILS**





The
      Company has two classes of capital stock, Common Shares without par value and
      Preferred Shares without par value. The Registrant became a public company
      on
      December 3, 1987 when it undertook an initial public offering of its common
      shares in British Columbia, Canada and was listed on the Vancouver Stock
      Exchange ("VSE") (now the TSX Venture Exchange ("TSX-VE"). The Registrants
      listing on the TSX-VE is as a Tier I Company trading under the symbol "PCF".
      In
      the United States the common shares are quoted on the Over-The-Counter Bulletin
      Board under the symbol "PCFHF".





20


The
      following table sets forth, for the five fiscal years indicated, the high and
      low reported price of the Registrant's Common Shares on the TSX-VE and the
      OTC
      Bulletin Board:





**TSX
                Venture Exchange**
            
            **OTC
                Bulletin Board****(in
                Canadian $)**
            
            **(in
                US $)**Fiscal
                Year
            
            High
            
            Low
            
            High
            
            Low2005
            
            
            0.35
            
            
            0.155
            
            
            0.225
            
            
            0.1252004
            
            
            0.27
            
            
            0.10
            
            
            0.125
            
            
            0.092003
            
            
            0.50
            
            
            0.06
            
            
            0.145
            
            
            0.052002
            
            
            0.25
            
            
            0.12
            
            
            0.13
            
            
            0.0.852001
            
            
            0.25
            
            
            0.12
            
            
            0.13
            
            
            0.07





The
      following table sets forth, for the quarters in the calendar year indicated,
      the
      last two years of high and low reported prices of the Registrant's Common Shares
      on the TSX-VE and the OTC Bulletin Board:





**TSX
                Venture
                Exchange**********
            ****
            **OTC
                Bulletin
                Board**********
            ********
            ****
            ****
            ****
            **(in
                Canadian
                $)**********
            ****
            **(in
                US $)**Year
            
            Quarter
            
            High
            
            Low
            
            High
            
            Low2005
            
            
            4th
            
            
            0.25
            
            
            0.155
            
            
            0.17
            
            
            0.153rd
            
            
            0.21
            
            
            0.155
            
            
            0.225
            
            
            0.1252nd
            
            
            0.25
            
            
            0.17
            
            
            0.151
            
            
            0.1511st
            
            
            0.35
            
            
            0.21
            
            
            0.16
            
            
            0.152004
            
            
            4th
            
            
            0.27
            
            
            0.14
            
            
            0.2
            
            
            0.093rd
            
            
            0.20
            
            
            0.10
            
            
            0.1
            
            
            0.12nd
            
            
            0.16
            
            
            0.11
            
            
            0.125
            
            
            0.11st
            
            
            0.24
            
            
            0.17
            
            
            0.122
            
            
            0.122003
            
            
            4th
            
            
            0.47
            
            
            0.21
            
            
            0.16
            
            
            0.113rd
            
            
            0.50
            
            
            0.10
            
            
            0.32
            
            
            0.0512nd
            
            
            0.17
            
            
            0.06
            
            
            0.075
            
            
            0.051st
            
            
            0.15
            
            
            0.10
            
            
            0.10
            
            
            0.085




The
      following table sets forth, for the months in the calendar year indicated,
      the
      high and low reported price of the Registrant's Common Shares on the TSX-VE
      and
      the OTC Bulletin Board:





****
            
            **TSX
                Venture Exchange******
            
            **OTC
                Bulletin Board**********
            
            **(in
                Canadian $)******
            
            **(in
                US $)**********
            
            ****
            
            ****
            
            ****
            
            ****Month
            
            High
            
            Low
            
            High
            
            LowMarch
                2005
            
            
            0.24
            
            
            0.205
            
            
            0.00
            
            
            0.00February
                2005
            
            
            0.25
            
            
            0.17
            
            
            0.17
            
            
            0.15January
                2005
            
            
            0.21
            
            
            0.155
            
            
            0.00
            
            
            0.00December
                2004
            
            
            0.21
            
            
            0.155
            
            
            0.125
            
            
            0.125November
                2004
            
            
            0.21
            
            
            0.175
            
            
            0.155
            
            
            0.125October
                2004
            
            
            0.185
            
            
            0.17
            
            
            0.225
            
            
            0.144September
                2004
            
            
            0.17
            
            
            0.17
            
            
            0.00
            
            
            0.00August
                2004
            
            
            0.25
            
            
            0.22
            
            
            0.151
            
            
            0.151July
                2004
            
            
            0.21
            
            
            0.19
            
            
            0.151
            
            
            0.151June
                2004
            
            
            0.30
            
            
            0.21
            
            
            0.151
            
            
            0.15May
                2004
            
            
            0.30
            
            
            0.22
            
            
            0.16
            
            
            0.16April
                2004
            
            
            0.35
            
            
            0.25
            
            
            0.16
            
            
            0.16




21





**B.**  **PLAN
      OF DISTRIBUTION**





Not
      applicable





**C.**  **MARKETS**





The
      Common Shares are traded in Canada on the TSX Venture Exchange ("TSX-VE),
      formerly the Canadian Venture Exchange under the symbol "PCF", CUSIP #69439N105
      and in the United States are quoted on the Over-the-Counter Bulletin Board
      under
      the symbol "PCFHF".





**D.**  **SELLING
      SHAREHOLDERS**





Not
      applicable





**E.**  **DILUTION**





Not
      applicable





**F.**  **EXPENSES
      OF THE ISSUE**





Not
      applicable





**ITEM
      11.**  **ADDITIONAL
      INFORMATION**





**A.**  **SHARE
      CAPITAL AND NAME CHANGE**





At
      the
      Company's Annual General Meeting held on September 19 th ,
      2002,
      the shareholders approved a special resolution consolidating the share capital
      on the basis of one new common share without par value for every two existing
      common shares without par value.





To
      enhance the ability of the Company to secure financing in the future,
      shareholders approved an increase in the authorized capital to 100,000,000
      common shares (post consolidation) and the creation of a class of "blank cheque"
      preferred shares without par value (the "Preferred Shares") that may be issued
      in one or more series. The creation of the Preferred Shares will allow the
      directors to react quickly to market conditions and other factors and create
      a
      series of shares without the time and expense involved in calling a special
      meeting of the shareholders.





The
      rights and restrictions attached to the Preferred Shares will allow the
      directors to fix the number of shares in the series and to fix the preferences,
      special rights and restrictions, privileges, conditions and limitations
      attaching to the shares of that series, before the issuance of shares of any
      particular series.





At
      the
      same time that the share consolidation was put before the shareholders, a
      special resolution asking the shareholders to vote on a name change for the
      Company to "Pacific Harbour Capital Ltd." was also voted on and approved by
      the
      shareholders. Effective at the opening of trading on October 21, 2002, the
      common shares of Pacific Harbour Capital Ltd. commenced trading on the TSX
      Venture Exchange.





The
      following table is a summary of the provisions of the rights and restrictions
      that will attach to the Preferred Shares.




22


**Rights
                and Restrictions**
            **Preferred
                Shares**1.
            Creation
                of Series of Preferred Shares
            May
                be issued at any time in one or more series and hold special rights
                and
                restrictions as the Board determines by resolution.2.
            Voting
                Rights
            Holder
                may or may not be provided with the right to receive notice of, be
                present
                or vote at any general meeting of the shareholders of the Company,
                with
                such number of votes per Preferred Share as set out in the special
                rights
                and restrictions.3.
            Right
                to Dividends
            May
                or may not have a right to receive dividends.4.
            Payment
                of Dividends
            May
                or may not be paid in priority to the common shares.5.
            Priority
                on Liquidation
            May
                or may not have priority over holders of common shares upon distribution
                of assets.





**B.**  **MEMORANDUM
      AND ARTICLES OF ASSOCIATION**





At
      the
      September 19 th ,
      2002
      Annual General Meeting, a new form of articles was approved by the shareholders
      of the Company and adopted as the Articles of the Company in substitution for,
      and to the exclusion of, the existing Articles of the Company.





The
      British Columbia Business Corporations Act (the "Act") came into force in
      British Columbia on March 29, 2004 and requires that every company in British
      Columbia file a Transition Application containing a Notice of Articles within
      two years of the Act coming into force. The Company filed the Transition
      Application/Notice of Articles with the Registrar of Companies on April 27,
      2004
      and the Articles were amended to the extent necesssary to ensure compliance
      with
      s.438(3) of the Act.





**C.**  **MATERIAL
      CONTRACTS**





On
      March
      30, 1999 the Company obtained a loan in the amount of $300,000. The loan was
      due
      to Hartford Securities Ltd. ("Hartford") located in Grand Cayman, British West
      Indies. Subsequent to March 31, 2001 this loan was renegotiated on April 12,
      2001 and the principal amount was increased to $400,000 at a rate of interest
      of
      16% per annurn and extended to March 31, 2004. On February 22, 2002 this loan
      was increased by $300,000 bringing the total principal amount to $700,000 and
      reducing the interest rate to 12% per annum, a 4% interest rate reduction.
      On
      December 1 st ,
      2002
      this loan was increased by an addition $300,000 bridge loan bringing the total
      principal owned to Hartford to $1,000,000. In January 2003, upon completion
      of
      the sale of the Company's 40-acre parcel of land held in Pemberton, B.C. by
      its
      wholly-owned subsidiary, 371208 BC Ltd., a portion of the above loan in the
      amount of $300,000 was repaid to Hartford Securities. This left an outstanding
      balance due to Hartford Securities by Pacific Harbour Capital Ltd. of $700,000
      plus interest being accrued at the rate of 12% per annum.





Venture
      Pacific Vehicle LeaseCorp arranged mortgage-backed debt financing in an amount
      totaling $575,000 which the Company had guaranteed repayment of, and had caused
      a first and second mortgage to be granted over the three parcels of land located
      in Pemberton, British Columbia (see Item 2. Description of Property). Subsequent
      to March 31, 2001, the Company renegotiated the terms of these loans payable
      by
      the extension of repayment to August 10, 2003 at 14% per annum in the first
      year
      and 15% per annum in the second year. An additional $425,000 was advanced
      bringing the loan balance to $1,000,000 (a lump sum payment of $250,000 was
      subsequently made).





The
      Company subsequently obtained new financing for the vehicle leasing loan and
      refinanced the remaining $750,000 loan with Hartford Securities Ltd. The loan
      was secured by a promissory note and collateral mortgage on the land held for
      resale granted by three subsidiaries of the Company and was guaranteed by the
      Company at an interest rate of 12% per annum, a 3% reduction over the previous
      loan interest rate.





23


On
      January 15, 2003 the assets of LeaseCorp were sold for $550,000. The sale
      proceeds were divided into two payments, one for $500,000 and one for $50,000.
      The $500,000 payment was applied wholly to LeaseCorp's indebtedness to Hartford
      Securities, thereby reducing the loan amount to $250,000. 60 days after closing
      the remaining $50,000 was divided between the purchaser as to $31,898.68 for
      lease payments received by LeaseCorp during the 60-day period and $18,101.32
      to
      Hartford Securties, thereby reducing the loan to $231,898.68. Monthly interest
      at 12% per annum was being accrued on this loan and the loan was due on March
      31, 2004.





On
      February 12, 2004 the Company announced the completion of their transaction
      with
      respect to the sale of the Pahrump, Nevada property. A portion of the proceeds
      of this sale were applied to the Company's and Leasecorp's indebtedness to
      Hartford Securities thereby paying the loans off in their entirety.





**D.**  **EXCHANGE
      CONTROLS**





There
      are
      no laws or governmental decrees or regulations in Canada that restrict the
      export or import of capital or that affect the payment of dividends, interest
      or
      other payments to nonresident holders of the Registrant's securities other
      than
      withholding tax requirements. For a discussion of these withholding requirements
      see "Itern 7. Taxation" below.





There
      are
      no limitations under the laws of Canada, the Province of British Columbia,
      or in
      the charter or other constituent documents of the Registrant on the right of
      a
      non-resident to hold or vote the Registrant's Common Shares other than as
      provided by the Investment Canada Act (the "Act!) enacted on June 20, 1985
      and
      as further amended, by the North American Free Trade Agreement (NAFTA)
      Implementation Act (Canada) and the World Trade Organization (WTO) Agreement
      Implementation Act, which requires the prior notification and, in certain cases,
      advance review and approval by the Government of Canada of the acquisition
      by a
      "non-Canadian" of "control" of a "Canadian business," all as defined in the
      Act.
      For the purpose of the Act, "control" can be acquired through the acquisition
      of
      all or substantially all of the assets used in the Canadian business, or the
      direct or indirect acquisition of interests in an entity that carries on a
      Canadian business or which controls the entity which carries on the Canadian
      business. Under the Act, control of a corporation is deemed to be acquired
      through the acquisition of a majority of the voting shares of a corporation,
      and
      is presumed to be acquired where one-third or more, but less than a majority,
      of
      the voting shares of a corporation are acquired, unless it can be established
      that the corporation is not controlled in fact through the ownership of voting
      shares. Other rules apply with respect to the acquisition of non-corporate
      entities.





Investments
      requiring review **** and
      approval include: direct acquisitions of Canadian businesses with assets with
      a
      gross book value of $5,000,000 or more; indirect acquisitions of Canadian
      businesses with assets of $50,000,000 or more; and indirect acquisitions of
      Canadian businesses where the value of assets of the entity or entities carrying
      on business in Canada, control of which is indirectly being acquired, is greater
      that $5,000,000 and represents greater than 50% of the total value of the assets
      of all of the entities, control of which is being acquired.





Generally
      speaking, the value of the business acquisition threshold (the "Threshold")
      is
      increased from those levels outlined where the acquisition is by a member of
      NAFTA or a WTO Investor or by a non-Canadian other than a WTO Investor where
      the
      Canadian business that is the subject of the investment is immediately before
      the investment controlled by a WTO Investor. The Threshold is to be determined
      yearly in accordance with a formula set forth in the Act.





A
      WTO
      Investor includes an individual, other than a Canadian, who is a national of
      the
      WTO Member, or who has the right of permanent residence in relation to that
      WTO
      Member.





Different
      provisions and considerations apply with respect to investment to acquire
      control of a Canadian business that, as defined in the Act or
      regulations:





24


-
            engages
                in production of uranium and owns an interest in a producing uranium
                property in Canada;


-
            provides
                financial services;


-
            provides
                transportation services; and


-
            is
                a cultural business.





If
      an
      investment is reviewable, an application for review in the form prescribed
      by
      regulation is normally required to be filed with the Ministry of Industry,
      Director of Investment prior to the investment taking place and the investment
      may not be consummated until the review has been completed and ministerial
      approval obtained. Applications for review concerning indirect acquisitions
      may
      be filed up to 30 days after the investment is consummated. Applications
      concerning reviewable investments in culturally sensitive and other specified
      activities referred to in the preceding paragraph are required upon receipt
      of a
      notice for review. There is, moreover, provision for the Minister (a person
      designated as such under the Act) to permit an investment to be consummated
      prior to completion of review if he is satisfied that delay would cause undue
      hardship to the acquirer or jeopardize the operation of the Canadian business
      that is being acquired.





Upon
      review of an application for review, the Minister will then determine whether
      the investment is likely to be of "net benefit to Canada", taking into account
      the information provided and having regard to certain factors of assessment
      prescribed under the Act. Among the factors to be considered are:





-
            the
                effect of the investment on the level and nature of economic activity
                in
                Canada, including the effect on employment, on resource processing,
                on the
                utilization of parts, components and services produced in Canada,
                and on
                exports from Canada;





-
            the
                degree and significance of participation by Canadians in the Canadian
                business and in any industry in Canada of which it forms a
                part;





-
            the
                effect of the investment on productivity, industrial efficiency,
                technological development, product innovation and product variety
                in
                Canada;





-
            the
                effect of the investment with national industrial, economic and cultural
                objectives enunciated by the government or legislature of any province
                likely to be significantly affected by the investment;
                and





-
            the
                contribution of the investment to Canada!s ability to compete in
                world
                markets.





**E.**  **TAXATION**





**Canadian
      Federal Income Taxation**





The
      following discussion is a summary of the principal Canadian federal income
      tax
      considerations generally applicable to purchasers of the Company's Common Shares
      who, for purposes of the Income Tax Act (Canada) (the "Canadian Act"), deal
      at
      arm's length with the Company, hold Common Shares as capital property, are
      not
      residents of Canada at any time when holding Common Shares and do not use or
      hold and are not deemed to use or hold Common Shares in or in the course of
      carrying on business in Canada and, in the case of insurers who carry on
      insurance business in Canada and elsewhere, do not hold Common Shares that
      are
      effectively connected with an insurance business carried on in
      Canada.





This
      summary is based on the current provisions of the Canadian Act, the regulations
      thereunder and the Canada-United States Income Tax Convention (1980) (the
      "Treaty") as amended. This summary takes into account specific proposals to
      amend the Canadian Act and the regulations thereunder publicly announced by
      the
      Minister of Finance prior to the date hereof and the Company's understanding
      of
      the current published administrative and assessing practices of the Canada
      Customs and Revenue Agency (formerly Revenue Canada, Taxation). This summary
      does not take into account Canadian provincial income tax laws or the income
      tax
      laws of any country other than Canada.





25


A
      shareholder of the Company will generally not be subject to tax pursuant to
      the
      Canadian Act on a capital gain realized on a disposition of Common Shares unless
      the Common Shares are "taxable Canadian property" to the shareholder for
      purposes of the Canadian Act and the shareholder is not eligible for relief
      pursuant to an applicable bilateral tax treaty. The Common Shares will not
      be
      taxable Canadian property to a shareholder provided that the Company is listed
      on a stock exchange prescribed within the meaning of the Canadian Act and
      provided that such shareholder, or persons with whom such shareholder did not
      deal at arms length (within the meaning of the Canadian Act), or any combination
      thereof, did not own 25% or more of the issued shares of any class or series
      of
      the Company at any time within five years immediately preceding the date of
      disposition. The Company is listed on a prescribed stock exchange within the
      meaning of the Canadian Act.





Any
      dividend, including stock dividends, paid or credited, or deemed to be paid
      or
      credited, by the Company to a shareholder will be subject to Canadian
      withholding tax at the rate of 25% on the gross amount of the dividend, subject
      to the provisions of any applicable income tax convention. Pursuant to the
      Treaty, the rate of withholding tax generally will be reduced to 15% in respect
      of dividends paid to a shareholder who is a resident of the United States for
      purposes of the Treaty and further reduced to 5% if the beneficial owner of
      the
      shares is a corporation owning at least 10% of the voting shares of the
      Company.





The
      foregoing discussion of Canadian taxation is of a general and summary nature
      only and is not intended to be, nor should it be considered to be, legal or
      tax
      advice to any particular shareholder. Accordingly, prospective investors should
      consult their own tax advisors as to the tax consequences of receiving dividends
      from the Company or disposing of their Common Shares.





**United
      States Federal Taxation**





For
      federal income tax purposes, an individual who is a citizen or resident of
      the
      United States or a domestic corporation ("U.S. Taxpayee') will recognize a
      gain
      or loss on the sale of the Corporation's Common Stock equal to the difference
      between the proceeds from such sale and the adjusted cost basis in the Common
      Stock. The gain or loss will be a capital gain or capital loss if the
      Corporation's Common Stock is a capital asset in the hands of the U.S.
      Taxpayer.





For
      federal income tax purposes, a U.S. Taxpayer will be required to include in
      gross income dividends received on the Corporation's Common Stock. A U.S.
      Taxpayer who pays Canadian tax on a dividend on the Common Stock will be
      entitled, subject to certain limitations, to a credit (or alternatively, a
      deduction) against federal income tax liability. A domestic corporation that
      owns at least 10% of the voting stock of the Corporation should consult its
      tax
      advisor as to applicability of the dividends received deduction or deemed paid
      foreign tax credit with respect to dividends paid on the Corporation's Common
      Stock.





For
      any
      taxable year of the Corporation, if at least 75% of the Corporation's gross
      income is "Passive income" (as defined in the Internal Revenue Code of 1986,
      as
      amended (the "Code"), or if at least 50% of the Corporation's assets, by average
      fair market value, are assets that produce or are held for the production of
      passive income, the Corporation will be a Passive Foreign Investment Corporation
      ("PFIC"). There can be no assurance that the Corporation will not be determined
      to be a PFIC in its current or future taxable years.





If
      the
      Corporation is a PFIC for any taxable year during which a U.S. Taxpayer owns
      any
      Common Stock, the U.S. Taxpayer will be subject to special U.S. federal income
      tax rules, set forth in Sections 1291 to 1297 of the Code, with respect to
      all
      of such U.S. Taxpayer's Common Stock. For example, gifts, exchanges pursuant
      to
      corporate reorganizations and use of the Common Stock as security for a loan
      may
      be treated as taxable disposition, and a stepped-up basis upon the death of
      such
      a U.S. Taxpayer may not be available. Furthermore, in the absence of an election
      by such U.S. Taxpayer to treat the Corporation as a "qualified electing fund'
      (the "QEF election"), as discussed below, the U.S. Taxpayer would be required
      to
      (i) report any gain on disposition of any Common Stock as ordinary income rather
      than capital gain, (ii) to compute the tax liability on such gain and on certain
      distributions as if the Items had been earned pro rata over the U.S. Taxpayer's
      holding period (or a certain portion thereof) for the Common Stock, and (iii)
      would be subject to the highest ordinary income tax rate for each taxable year
      of the U.S. Taxpayer in which the Items were treated as having been earned.
      Such
      U.S. Taxpayer would also be liable for interest (which may be non-deductible
      by
      certain U.S. Taxpayers) on the foregoing tax liability as if such liability
      had
      been due with respect to each such prior year.





26


If
      the
      Corporation is a PFIC for any taxable year during which a U.S. Taxpayer owns
      any
      Common Stock, the adverse taxation of disposition gains and certain
      distributions may be avoided by any U.S. Taxpayer who makes a QEF Election
      on or
      before the due date (including extensions) for filing such U.S. Taxpayer's
      tax
      return for such taxable year. Such a U.S. Taxpayer would be taxed on dividends
      and **** capital
      gains as if the Corporation had **** never
      been a PFIC, but would also be taxed on its pro-rata share of the Corporation's
      earnings and profits for the Corporation's taxable year in which it was (or
      was
      treated as) a PFIC and which ends with or within such U.S. Taxpayer's taxable
      year, regardless of whether such amounts are actually distributed by the
      Corporation. Should such an election be made (and if the Corporation is a PFIC,
      U.S. Taxpayers are strongly urged to consider this special election), there
      are
      a number of specific rules and requirements applicable thereto, and
      such **** an
      electing U.S. Taxpayer is strongly urged to consult his own tax advisor in
      that
      regard.





The
      foregoing discussion of Canadian taxation and United States taxation is of
      a
      general and summary nature only and is not intended to be, nor should it be
      considered to be, legal or tax advice to any particular shareholder.
      Accordingly, prospective investors should consult their own tax advisors as
      to
      the tax consequences of receiving dividends from the Corporation or disposing
      of
      their Common Stock.





**H.** **DOCUMENTS
      ON DISPLAY**





Exhibits
      and documents referred to in this Form 20-F Annual Report that are not attached
      have been filed with previous Form 20-F Annual Reports. These exhibits and
      documents can be located either at the United States Securities and Exchange
      Commission, Washington, D.C. or at the Corporation's head offices at #1502
      - 543
      Granville Street, Vancouver, B.C., V6C 1X8.





**I.**  **SUBSIDIARY
      INFORMATION**





Not
      applicable





**ITEM
      12.**  **QUANTITATIVE
      INFORMATION ABOUT MARKET RISKS**





Not
      applicable





**ITEM
      13.**  **DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY SECURITIES**





Not
      applicable





27


**PART
      II**





**ITEM
      14.**  **DEFAULTS,
      DIVIDEND ARREARAGES AND DELINQUENCIES**





Not
      applicable





**ITEM
      15.**   **MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY** **HOLDERS
      AND USE OF PROCEEDS**





Not
      applicable





**ITEM
      16.**  **RESERVED**





28


**PART
      III**





**ITEM
      17.**  **FINANCIAL STATEMENTS**





The
      Corporation's financial statements are stated in Canadian Dollars and are
      prepared in accordance with Canadian Generally Accepted Accounting Principals
      (GAAP), the application of which, in the case of the Corporation, conforms
      in
      all material respects for the periods presented with the United States GAAP,
      except as discussed in the notes to the financial statements. The audit report
      of Amisano Hanson, Independent Chartered Accountants for the audited financial
      statements and notes thereto, have been previously filed on Edgar on July
      29 th ,
      2005
      and should be read in conjunction with this Form 20-F.





**ITEM
      18.**  **FINANCIAL
      STATEMENTS**





Not
      Applicable





**ITEM
      19.**  **EXHIBITS
      TO FORM 20-F ANNUAL REPORT**





Page
                No.Cover
                Sheet
            31Auditors’
                Report Dated June 10, 2005
            32Consolidated
                Balance Sheet as at March 31, 2004 and 2004
            33Consolidated
                Statements of Loss for Years EndedMarch
                31, 2005, 2004 and 2003
            34Consolidated
                Statements of Defecit for Years EndedMarch
                31, 2005, 2004 and 2003
            35Consolidated
                Statement of Cash Flows for Years EndedMarch
                31, 2005, 2004 and 2003
            36Consolidated
                Statements of Shareholders Equity For Years EndedMarch
                31, 2005, 2004 and 2003
            38Consolidated
                Statements of Income from Discontinued OperationsFor
                Years Ended March 31, 2005, 2004 and 2003
            39Consolidated
                Schedules of General and Administrative ExpensesMarch
                31, 2005, 2004 and 2003
            40Notes
                To Consolidated Financial Statements for the Years EndedMarch
                31, 2005, 2004 and 2003
            4212.1
            Certification
                of the Chief Executive Officer pursuant to 18 U.S.C.
                Section1350
                as adopted pursuant to Section 302 of the Sarbannes Oxley Actof
                2002
            5712.2
            Certification
                of the Chief Financial Officer pursuant to 18 U.S.C.
                Section1350
                as adopted pursuant to Section 302 of the Sarbannes Oxley Actof
                2002
            5813.1
            Certification
                of the Chief Executive Officer pursuant to 18 U.S.C.
                Secution1350
                as adopted pursuant to Section 906 of the Sarbannes Oxley Actof
                2002
            5913.2
            Certification
                of the Chief Executive Officer pursuant to 18 U.S.C.
                Secution1350
                as adopted pursuant to Section 906 of the Sarbannes Oxley Actof
                2002
            60





29


**SIGNATURES**





The
      registrant hereby certifies that it meets all of the requirements for filing
      on
      Form 20-F and that it has duly caused and authorized the undersigned to sign
      this annual report on its behalf.




**PACIFIC HARBOUR CAPITAL
              LTD.**Date:
              September 28, 2005
            By:
            “Thomas
              Pressello”Amended: September
              28,
              2006
            Thomas
              J. PresselloPresident,
              Chief
              Executive Officer and Director





30









**PACIFIC
      HARBOUR CAPITAL LTD.**





REPORT
      AND CONSOLIDATED FINANCIAL STATEMENTS





March
      31,
      2005 and 2004





( Stated
      in Canadian Dollars )





31


**A
                  P****ARTNERSHIP****O****F****I****NCORPORATED****P****ROFESSIONALS**
              **A****misano********H****anson****C****hartered****A****ccountants**





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To
      the
      Shareholders,


Pacific
      Harbour Capital Ltd.





We
      have
      audited the consolidated balance sheets of Pacific
      Harbour Capital Ltd. as
      at
      March 31, 2005 and 2004 and the consolidated statements of loss, deficit, cash
      flows and shareholders’ equity for the years ended March 31, 2005, 2004 and
      2003. 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, 2005 and 2004
      and the results of its operations and its cash flows for the years ended March
      31, 2005, 2004 and 2003 in accordance with Canadian generally accepted
      accounting principles.





Vancouver,
                Canada
            ***“AMISANO
                HANSON”***June
                10, 2005
            Chartered
                Accountants








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





The
      Standards of the Public Company Accounting Oversight Board (United States of
      America) require the addition of an explanatory paragraph (following the opinion
      paragraph) when there are changes in accounting principles that have a material
      effect on the comparability of the Company’s financial statements and changes in
      accounting principles that have been implemented in the consolidated financial
      statements. As discussed in Note 2 to the accompanying consolidated financial
      statements, the Company changed its method of accounting for Stock-based
      Compensation (CICA Handbook Section 3870) in the year ended March 31,
      2004.





Our
      report to the shareholders dated June 10, 2005 is expressed in accordance with
      Canadian reporting standards, which do not permit a reference to such a change
      in accounting policy in the Auditors’ Report when the change in accounting
      policy is adequately disclosed in the financial statements.








Vancouver,
                Canada
            ***“AMISANO
                HANSON”***June
                10, 2005
            Chartered
                Accountants





750
                    WEST PENDER STREET, SUITE 604
                TELEPHONE:604-689-0188VANCOUVER
                    CANADA
                FACSIMILE:  
                    604-689-9773V6C
                    2T7
                E-MAIL:        
                    AMISHAN@TELUS.NET


32





**PACIFIC
      HARBOUR CAPITAL LTD.**


CONSOLIDATED
      BALANCE SHEETS


March
      31,
      2005 and 2004


( Stated
      in Canadian Dollars )





2005
            
            2004**ASSETS**CurrentCash
                and cash equivalents
            
            $
            361,104
            
            $
            156,333Marketable
                securities - Note 3
            
            
            272,130
            
            
            -Prepaid
                expenses and deposits
            
            
            19,533
            
            
            17,084Promissory
                note receivable
            
            
            -
            
            
            840,335Land
                held for resale - Note 4
            
            
            312,646
            
            
            306,867Investment
                - Note 7
            
            
            4,999
            
            
            240,000970,412
            
            
            1,560,619Advances
                to a related company - Note 9
            
            
            -
            
            
            18,928Capital
                assets - Note 5
            
            
            27,732
            
            
            29,538$
            998,144
            
            $
            1,609,085**LIABILITIES**CurrentAccounts
                payable and accrued liabilities - Note 9
            
            $
            176,876
            
            $
            330,171Current
                liabilities of discontinued operations - Note 6
            
            
            28,958
            
            
            28,958205,834
            
            
            359,129**SHAREHOLDERS’
                EQUITY**Share
                capital - Note 8
            
            
            7,616,876
            
            
            7,616,876Contributed
                surplus - Note 8
            
            
            202,886
            
            
            202,886Deficit
            
            
            (7,027,452
            )
            
            (6,569,806
            )792,310
            
            
            1,249,956$
            998,144
            
            $
            1,609,085





Commitments
      and Contingency - Notes 8 and 12





APPROVED
                BY THE DIRECTORS:*“Tom
                Pressello”*
            Director
            
            *“Lisa
                Reynolds”*
            Director





SEE
        ACCOMPANYING NOTES
 33





**PACIFIC
      HARBOUR CAPITAL LTD.**


CONSOLIDATED
      STATEMENTS OF LOSS


for
      the
      years ended March 31, 2005, 2004 and 2003


( Stated
      in Canadian Dollars )





2005
            
            2004
            
            2003RevenuesInterest
                income - Note 9
            
            $
            17,063
            
            $
            22,873
            
            $
            7,283Royalty
                income - Note 9
            
            
            -
            
            
            10,377
            
            
            18,763Other
                income
            
            
            -
            
            
            -
            
            
            10,32217,063
            
            
            33,250
            
            
            36,368General
                and administrative expenses - Schedule II
            
            
            420,124
            
            
            505,196
            
            
            624,503Loss
                before other items
            
            
            (403,061
            )
            
            (471,946
            )
            
            (588,135
            )Other
                items:Foreign
                exchange gain (loss)
            
            
            (63,117
            )
            
            50,276
            
            
            28,785Gain
                on sale of marketable securities
            
            
            20,551
            
            
            -
            
            
            -Gain
                on settlement of accounts payable
            
            
            67,981
            
            
            -
            
            
            -Gain
                on forgiveness of debt
            
            
            -
            
            
            -
            
            
            41,299Gain
                (loss) on sale of land held for resale - Note 4
            
            
            -
            
            
            (1,119,067
            )
            
            532,122Legal
                settlement cost - Note 12
            
            
            (80,000
            )
            
            -
            
            
            -Management
                severance costs
            
            
            -
            
            
            -
            
            
            (250,000
            )Write-down
                of investment - Note 7
            
            
            -
            
            
            (60,000
            )
            
            -(54,585
            )
            
            (1,128,791
            )
            
            352,206Loss
                from continuing operations
            
            
            (457,646
            )
            
            (1,600,737
            )
            
            (235,929
            )Income
                (loss) from discontinued operations
              -
                Schedule I
            
            
            -
            
            
            (50,097
            )
            
            162,958Net
                loss for the year
            
            $
            (457,646
            )
            $
            (1,650,834
            )
            $
            (72,971
            )Basic
                and diluted loss per share from continuing
 operations
            
            $
            (0.06
            )
            $
            (0.21
            )
            $
            (0.03
            )Basic
                and diluted income (loss) per share from
              discontinued
                operations
            
            $
            (0.00
            )
            $
            (0.01
            )
            $
            0.02Basic
                and diluted loss per share for the year
            
            $
            (0.06
            )
            $
            (0.22
            )
            $
            (0.01
            )Weighted
                average number of shares outstanding
            
            
            7,247,703
            
            
            7,247,703
            
            
            6,979,397


SEE
        ACCOMPANYING NOTES





34





**PACIFIC
      HARBOUR CAPITAL LTD.**


CONSOLIDATED
      STATEMENTS OF DEFICIT


for
      the
      years ended March 31, 2005, 2004 and 2003


( Stated
      in Canadian Dollars )





2005
            
            2004
            
            2003Deficit,
                beginning of the year
            
            $
            (6,569,806
            )
            $
            (4,716,086
            )
            $
            (4,643,115
            )Change
                in accounting policy - Note 2
            
            
            -
            
            
            (202,886
            )
            
            -Net
                loss for the year
            
            
            (457,646
            )
            
            (1,650,834
            )
            
            (72,971
            )Deficit,
                end of the year
            
            $
            (7,027,452
            )
            $
            (6,569,806
            )
            $
            (4,716,086
            )





SEE
        ACCOMPANYING NOTES
 35





**PACIFIC
      HARBOUR CAPITAL LTD.**


CONSOLIDATED
      STATEMENTS OF CASH FLOWS


for
      the
      years ended March 31, 2005, 2004 and 2003


( Stated
      in Canadian Dollars )





2005
            
            2004
            
            2003Operating
                ActivitiesLoss
                from continuing operations
            
            $
            (457,646
            )
            $
            (1,600,737
            )
            $
            (235,929
            )Non-cash
                itemsAmortization
            
            
            9,006
            
            
            11,388
            
            
            7,428Finance
                fees
            
            
            -
            
            
            -
            
            
            12,250Foreign
                exchange
            
            
            (7,200
            )
            
            9,166
            
            
            (31,519
            )Gain
                on forgiveness of debt
            
            
            -
            
            
            -
            
            
            (41,299
            )Gain
                on sale of marketable securities
            
            
            (20,551
            )
            
            -
            
            
            -Gain
                on settlement of accounts payable
            
            
            (67,981
            )
            
            -
            
            
            -Loss
                (gain) on sale of land held for resale
            
            
            -
            
            
            1,119,067
            
            
            (532,122
            )Write-down
                of investment
            
            
            -
            
            
            60,000
            
            
            -Changes
                in non-cash working capital balances
              -
                Note 10
            
            
            (87,763
            )
            
            (350,263
            )
            
            143,824(632,135
            )
            
            (751,379
            )
            
            (677,367
            )Financing
                ActivitiesDecrease
                in loans payable
            
            
            -
            
            
            (1,068,000
            )
            
            (21,000
            )Repayment
                of mortgage payable
            
            
            -
            
            
            (349,395
            )
            
            (48,851
            )Decrease
                in restricted cash
            
            
            -
            
            
            -
            
            
            4,000-
            
            
            (1,417,395
            )
            
            (65,851
            )Investing
                ActivitiesAdvances
                from (to) a related company
            
            
            18,928
            
            
            (18,928
            )
            
            -Purchase
                of investment
            
            
            -
            
            
            -
            
            
            (300,000
            )Purchase
                of marketable securities
            
            
            (295,101
            )
            
            -
            
            
            -Proceeds
                on sales of marketable securities
            
            
            43,522
            
            
            -
            
            
            -Proceeds
                from promissory note receivable and
              investment
            
            
            1,075,336
            
            
            -
            
            
            -Expenditure
                on land held for development
            
            
            -
            
            
            -
            
            
            (75,092
            )Expenditure
                on land held for resale
            
            
            (5,779
            )
            
            (53,330
            )
            
            (14,388
            )Net
                proceeds from sale of land held for resale
            
            
            -
            
            
            2,492,380
            
            
            768,570Decrease
                (increase) in capital assets
            
            
            -
            
            
            320
            
            
            (47,277
            )Increase
                (decrease) in advances from discontinued
              operations
            
            
            -
            
            
            (281,003
            )
            
            568,956836,906
            
            
            2,139,439
            
            
            900,769





.../cont’d


SEE
        ACCOMPANYING NOTES


36




Continued


**PACIFIC
      HARBOUR CAPITAL LTD.**


CONSOLIDATED
      STATEMENTS OF CASH FLOWS


for
      the
      years ended March 31, 2005, 2004 and 2003


( Stated
      in Canadian Dollars )





2005
            
            2004
            
            2003Increase
                (decrease) in cash from continuing operations
            
            
            204,771
            
            
            (29,335
            )
            
            157,551Decrease
                in cash from discontinued operations
              -
                Note 6
            
            
            -
            
            
            (2,565
            )
            
            (37,514
            )Increase
                (decrease) in cash during the year
            
            
            204,771
            
            
            (31,900
            )
            
            120,037Cash
                and equivalents, beginning of the year
            
            
            156,333
            
            
            188,233
            
            
            68,196Cash
                and equivalents, end of the year
            
            $
            361,104
            
            $
            156,333
            
            $
            188,233Cash
                and equivalents, is comprised as follows:Cash
                and equivalents-
                continuing operations
            
            $
            361,104
            
            $
            156,333
            
            $
            185,668-
                discontinued operations
            
            
            -
            
            
            -
            
            
            2,565Cash
                and equivalents, end of the year
            
            $
            361,104
            
            $
            156,333
            
            $
            188,233Supplemental
                disclosure of cash flow information:Cash
                paid for:Income
                taxes
            
            $
            -
            
            $
            -
            
            $
            -Interest
            
            $
            -
            
            $
            75,989
            
            $
            78,509





Non-cash
      Transactions - Note 13


SEE
        ACCOMPANYING NOTES


37




**PACIFIC
      HARBOUR CAPITAL LTD.**


CONSOLIDATED
      STATEMENTS OF SHAREHOLDERS’ EQUITY


for
      the
      years ended March 31, 2005, 2004 and 2003


( Stated
      in Canadian Dollars )





DeficitAccumulatedCommon
                Stock
            
            
            
            During
                theIssued
            
            
            
            Contributed
            
            DevelopmentShares
            
            Amount
            
            Surplus
            
            Stage
            
            Deficit
            
            TotalBalance,
                March 31, 2002
            
            
            13,040,345
            
            $
            7,469,567
            
            $
            -
            
            $
            (435,527
            )
            $
            (4,207,588
            )
            $
            2,826,452Pursuant
                to debt settlement agreements
              -
                at $0.10
            
            
            1,040,210
            
            
            104,021
            
            
            -
            
            
            -
            
            
            -
            
            
            104,0212:1
                share consolidation
            
            
            (7,040,269
            )
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Pursuant
                to bridge loan fees
              -
                at $0.35
            
            
            35,000
            
            
            12,250
            
            
            -
            
            
            -
            
            
            -
            
            
            12,250Pursuant
                to debt settlement agreements
              -
                at $0.18
            
            
            172,435
            
            
            31,038
            
            
            -
            
            
            -
            
            
            -
            
            
            31,038Net
                loss for the year
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (72,971
            )
            
            (72,971
            )Balance,
                March 31, 2003
            
            
            7,247,703
            
            
            7,616,876
            
            
            -
            
            
            (435,527
            )
            
            (4,280,559
            )
            
            2,900,790Change
                in accounting policy - Note 2
            
            
            -
            
            
            -
            
            
            202,886
            
            
            -
            
            
            (202,886
            )
            
            -Net
                loss for the year
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,650,834
            )
            
            (1,650,834
            )Balance,
                March 31, 2004
            
            
            7,247,703
            
            
            7,616,876
            
            
            202,886
            
            
            (435,527
            )
            
            (6,134,279
            )
            
            1,249,956Net
                loss for the year
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (457,646
            )
            
            (457,646
            )Balance,
                March 31, 2005
            
            
            7,247,703
            
            $
            7,616,876
            
            $
            202,886
            
            $
            (435,527
            )
            $
            (6,591,925
            )
            $
            792,310





SEE
      ACCOMPANYING NOTES


38


Schedule
      I


**PACIFIC
      HARBOUR CAPITAL LTD.**


CONSOLIDATED
      STATEMENTS OF INCOME FROM DISCONTINUED OPERATIONS


for
      the
      years ended March 31, 2005, 2004 and 2003


( Stated
      in Canadian Dollars )





2005
            
            2004
            
            2003RevenuesConvenience
                store sales
            
            $
            -
            
            $
            -
            
            $
            384,460Interest
                income
            
            
            -
            
            
            -
            
            
            7,082Vehicle
                leases and sales, net
            
            
            -
            
            
            -
            
            
            617,972Other
                income
            
            
            -
            
            
            4,715
            
            
            12,348-
            
            
            4,715
            
            
            1,021,862Costs
                of salesConvenience
                store cost of sales
            
            
            -
            
            
            -
            
            
            363,561Amortization
                - leased vehicles
            
            
            -
            
            
            -
            
            
            231,553-
            
            
            -
            
            
            595,114Income
                before general and administrative expenses
            
            
            -
            
            
            4,715
            
            
            426,748General
                and administrative expenses - Schedule III
            
            
            -
            
            
            (54,812
            )
            
            552,643Loss
                before other items
            
            
            -
            
            
            (50,097
            )
            
            (125,895
            )Other
                itemsLoss
                on disposal of vehicle leasing assets - Note 6
            
            
            -
            
            
            -
            
            
            (200,525
            )Gain
                on disposal of convenience store assets - Note 6
            
            
            -
            
            
            -
            
            
            489,378-
            
            
            -
            
            
            288,853Income
                (loss) from discontinued operations
            
            $
            -
            
            $
            (50,097
            )
            $
            162,958





SEE
        ACCOMPANYING NOTES
 39


Schedule
      II




**PACIFIC
      HARBOUR CAPITAL LTD.**


CONSOLIDATED
      SCHEDULES OF GENERAL AND ADMINISTRATIVE EXPENSES


for
      the
      years ended March 31, 2005, 2004 and 2003


( Stated
      in Canadian Dollars )





2005
            
            2004
            
            2003Accounting
                and audit fees
            
            $
            10,375
            
            $
            15,200
            
            $
            19,800Administration
                recovery - Note 9
            
            
            (57,500
            )
            
            (24,000
            )
            
            -Amortization
                - capital assets
            
            
            9,006
            
            
            11,388
            
            
            7,428Bad
                debts - Note 9
            
            
            -
            
            
            26,306
            
            
            -Bank
                charges
            
            
            577
            
            
            1,348
            
            
            2,221Consulting
                and management fees - Note 9
            
            
            102,071
            
            
            107,500
            
            
            121,000Corporate
                administration fees
            
            
            26,720
            
            
            26,983
            
            
            55,289Filing
                fees
            
            
            7,105
            
            
            8,571
            
            
            18,365Finance
                fees
            
            
            -
            
            
            -
            
            
            12,250Interest
                - Note 9
            
            
            -
            
            
            86,511
            
            
            93,529Legal
                and professional fees - Note 9
            
            
            138,687
            
            
            24,176
            
            
            138,521Office
                and general
            
            
            30,714
            
            
            24,690
            
            
            23,664Promotion
                and advertising
            
            
            6,130
            
            
            28,780
            
            
            2,089Rent
                and utilities
            
            
            69,951
            
            
            70,807
            
            
            67,407Shareholder
                information and investor relations
            
            
            4,714
            
            
            2,584
            
            
            12,607Transfer
                agent fees
            
            
            2,748
            
            
            4,897
            
            
            7,247Travel
                and entertainment
            
            
            5,659
            
            
            3,305
            
            
            4,259Wages
                and benefits - Note 9
            
            
            63,167
            
            
            86,150
            
            
            38,827$
            420,124
            
            $
            505,196
            
            $
            624,503





SEE
        ACCOMPANYING NOTES
 40
 Schedule III


**PACIFIC
      HARBOUR CAPITAL LTD.**


CONSOLIDATED
      SCHEDULES OF GENERAL AND ADMINISTRATIVE EXPENSES FROM DISCONTINUED
      OPERATIONS


for
      the
      years ended March 31, 2005, 2004 and 2003


( Stated
      in Canadian Dollars )





2005
            
            2004
            
            2003Accounting
                and audit fees
            
            $
            -
            
            $
            -
            
            $
            874Amortization-
                capital assets
            
            
            -
            
            
            -
            
            
            4,368Bad
                debts (recovery)
            
            
            -
            
            
            (42
            )
            
            51,459Bank
                charges
            
            
            -
            
            
            220
            
            
            11,813Convenience
                store expenses
            
            
            -
            
            
            -
            
            
            6,033Interest
            
            
            -
            
            
            32,500
            
            
            108,085Legal
                and professional fees
            
            
            -
            
            
            4,633
            
            
            6,445Management
                fees
            
            
            -
            
            
            -
            
            
            2,598Office
                and general
            
            
            -
            
            
            617
            
            
            89,001Promotion
                and advertising
            
            
            -
            
            
            -
            
            
            31,293Rent,
                property taxes and utilities
            
            
            -
            
            
            -
            
            
            38,138Travel
                and entertainment
            
            
            -
            
            
            -
            
            
            4,262Vehicle
                leasing expenses
            
            
            -
            
            
            -
            
            
            27,504Wages
                and benefits
            
            
            -
            
            
            16,884
            
            
            170,770$
            -
            
            $
            54,812
            
            $
            552,643





SEE
        ACCOMPANYING NOTES
 41




**PACIFIC
      HARBOUR CAPITAL LTD.**


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


March
      31,
      2005, 2004 and 2003


( Stated
      in Canadian Dollars )




Note
              1
            Nature
                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 British
      Columbia Business Corporations Act. 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.





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 14. 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 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.





b)
            Cash
                and Cash Equivalents





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





42


Pacific
        Harbour Capital Ltd.
 Notes
        to
        the Consolidated Financial Statements
 March
        31,
        2005, 2004 and 2003
 ( Stated
        in Canadian Dollars )
        - Page
        2





Note
              2
            Significant
                Accounting Policies-
                (cont’d)





c)
            Marketable
                Securities





Marketable
      securities are carried at the lower of cost and fair market value.





d)
            Land
                Held for Resale





Land
      held
      for resale is carried at the lower of cost and net realizable 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.





e)
            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 balanceOffice
                furniture
            20%
                declining balanceSoftware
            50%
                declining balance





f)
            Investment





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





g)
            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.





h)
            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.





43


Pacific
        Harbour Capital Ltd.
 Notes
        to
        the Consolidated Financial Statements
 March
        31,
        2005, 2004 and 2003
 ( Stated
        in Canadian Dollars )
        - Page
        3





Note
              2
            Significant
                Accounting Policies-
                (cont’d)





i)
            Fair
                Value of Financial Instruments





The
      carrying values of cash and cash equivalents, promissory note receivable and
      accounts payable and accrued liabilities approximate fair value because of
      the
      short-term maturity of those instruments. Marketable securities exceed their
      stated cost as disclosed in Note 3. The fair value of investment and advances
      to
      a related company 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.





j)
            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 more likely-than-not
      to be realized.





k)
            Revenue
                Recognition





Revenue
      from royalties is recognized as it is earned and when collection is reasonably
      assured.





l)
            Stock-based
                Compensation





On
                April 1, 2003, the Company adopted the amended CICA Handbook Section
                3870
                - “Stock-based Compensation and Other Stock-based
                Payments”.





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 vesting period
                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.





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 April 1, 2003, contributed surplus and
                deficit
                increased by $202,886.





44


Pacific
        Harbour Capital Ltd.
 Notes
        to
        the Consolidated Financial Statements
 March
        31,
        2005, 2004 and 2003
 ( Stated
        in Canadian Dollars )
        - Page
        4





Note
              3
            Marketable
                Securities





At
      March
      31, 2005, the Company held the following shares of publicly traded
      companies:





March
                31,2005
                FairNumber
                of
            
            Original
            
            MarketShares
            
            Cost
            
            ValueSouthern
                Silver Exploration Corp.
            
            
            400,000
            
            $
            40,000
            
            $
            256,000Inovio
                Biomedical Corp.
            
            
            20,000
            
            
            70,966
            
            
            72,576Minterra
                Resources Corp.
            
            
            500,000
            
            
            105,000
            
            
            135,000Baja
                Mining Corp.
            
            
            76,000
            
            
            48,767
            
            
            45,600Cypress
                Development Corp.
            
            
            50,000
            
            
            7,397
            
            
            5,404$
            272,130
            
            $
            514,580





The
                Company acquired 76,000 common shares of Baja Mining Corp. which
                has a
                director in common with the
                Company.





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, 2005,
      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 ended March 31, 2005 and 2004 as follows:





2005
            
            2004Balance,
                beginning of the year
            
            $
            306,866
            
            $
            4,696,197Property
                taxes
            
            
            5,780
            
            
            26,463Other
                costs
            
            
            -
            
            
            26,867312,646
            
            
            4,749,527Less:
                land sold during the year
            
            
            -
            
            
            (4,442,660
            )Current
                portion of land held for resale
            
            $
            312,646
            
            $
            306,867





Land
      held
      for resale is classified as a current asset as it is immediately available
      for
      sale.





45


Pacific
      Harbour Capital Ltd.


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2005, 2004 and 2003


( Stated
      in Canadian Dollars )
      - Page
      5





Note
              5
            Capital
                Assets





2005
            
            
            
            2004AccumulatedCost
            
            Amortization
            
            Net
            
            NetComputer
                equipment
            
            $
            31,056
            
            $
            15,634
            
            $
            15,422
            
            $
            15,065Office
                furniture
            
            
            20,635
            
            
            9,057
            
            
            11,578
            
            
            14,473Software
            
            
            4,170
            
            
            3,438
            
            
            732
            
            
            -$
            55,861
            
            $
            28,129
            
            $
            27,732
            
            $
            29,538





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:





2005
            
            2004Accounts
                payable
            
            $
            28,958
            
            $
            28,958Current
                liabilities of discontinued operations
            
            $
            28,958
            
            $
            28,958





46


Pacific
        Harbour Capital Ltd.
 Notes
        to
        the Consolidated Financial Statements
 March
        31,
        2005, 2004 and 2003
 ( Stated
        in Canadian Dollars )
        - Page
        6





Note
              6
            Discontinued
                Operations-
                (cont’d)





Cash
      flows from discontinued operations are as follows:





2005
            
            2004
            
            2003Operating
                ActivitiesIncome
                (loss) from discontinuedoperations
            
            $
            -
            
            $
            (50,097
            )
            $
            162,958Non-cash
                items:Amortization
            
            
            -
            
            
            -
            
            
            235,921Loss
                on disposal of leasing
              vehicle
                assets
            
            
            -
            
            
            -
            
            
            200,525Gain
                on disposal of store assets
            
            
            -
            
            
            -
            
            
            (489,378
            )Deferred
                revenue
            
            
            -
            
            
            -
            
            
            (9,866
            )Changes
                in non-cash working
              capital
                balances:Accounts
                receivable
            
            
            -
            
            
            -
            
            
            10,506Inventory
            
            
            -
            
            
            -
            
            
            107,392Prepaid
                expenses and deposits
            
            
            -
            
            
            -
            
            
            3,765Accounts
                payable
            
            
            -
            
            
            (1,572
            )
            
            (127,414
            )Security
                deposits
            
            
            -
            
            
            -
            
            
            (5,290
            )-
            
            
            (51,669
            )
            
            89,119Financing
                ActivitiesIncrease
                (decrease) in loans payable
            
            $
            -
            
            
            (231,899
            )
            
            (768,101
            )Advances
                from (to) parent company
            
            
            -
            
            
            281,003
            
            
            (568,956
            )-
            
            
            49,104
            
            
            (1,337,057
            )Investing
                ActivitiesProceeds
                from disposal of assets of
              PJS
                and VPVL
            
            
            -
            
            
            -
            
            
            1,365,806Purchase
                of capital assets
            
            
            -
            
            
            -
            
            
            (1,650
            )Purchase
                of lease vehicles, net
              of
                sales
            
            
            -
            
            
            -
            
            
            (88,138
            )-
            
            
            -
            
            
            1,276,018Increase
                (decrease) in cash
            
            
            -
            
            
            (2,565
            )
            
            28,080Cash
                balance of PJS on disposal
            
            
            -
            
            
            -
            
            
            (65,594
            )Increase
                (decrease) in cash from
              discontinued
                operations
            
            $
            -
            
            $
            (2,565
            )
            $
            (37,514
            )





47


Pacific
        Harbour Capital Ltd.
 Notes
        to
        the Consolidated Financial Statements
 March
        31,
        2005, 2004 and 2003
 ( Stated
        in Canadian Dollars )
        - Page
        7





Note
              7
            Investment





On
      December 10, 2002, the Company entered into an investment agreement (the
“Agreement”) with National Direct Response Marketing Canada Inc. (“NDRM”).
      Concurrent with entering into the 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 first
      two
      debenture advances by the Company required under the Agreement totalled $300,000
      and bear interest at 8% per annum, payable quarterly. The investment also
      entitled the Company to earn royalty income based on each unit of the Canadian
      and American Legal Will Kit sold.





In
      May,
      2004, the Company and NDRM entered into a full and final release agreement
      in
      which NDRM is released from any and all possible actions and future obligations
      that may become due under the Agreement for consideration of a total of $240,000
      payable to the Company.





As
                at March 31, 2004, this investment was written down to its net recoverable
                amount of $240,000 and as at March 31, 2005, three instalments of
                $1,667
                under the Release Agreement are
                due.





Note
              8
            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 2, effective for the year ended March 31, 2004, the Company
      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 two years ended March 31, 2005, the Company recorded no
      compensation charge as no stock options were granted during these years. As
      at
      March 31, 2004 $202,886 related to amounts vested after January 1, 2002 have
      been recognized by retroactive restatement.





48


Pacific
      Harbour Capital Ltd.


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2005, 2004 and 2003


( Stated
      in Canadian Dollars )
      - Page
      8





Note
              8
            Share
                Capital-
                (cont’d)





b)
            Commitments:
                -
                (cont’d)





Stock-Based
      Compensation Plan - (cont’d)





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





2005
            
            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-$1.00Expired
            
            
            (48,000
            )
            
            $1.00Outstanding
                and exercisable at March 31, 2005
            
            
            879,028
            
            
            $0.24





On
      March
      31, 2005, there were 879,028 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
            
            ExerciseShares
            
            Price
            
            Expiry
                Date829,028
            
            $0.24
            
            November
                27, 200750,000
            
            $0.30
            
            December
                16, 2007879,028





49


Pacific
        Harbour Capital Ltd.
 Notes
        to
        the Consolidated Financial Statements
 March
        31,
        2005, 2004 and 2003
 ( Stated
        in Canadian Dollars )
        - Page
        9





Note
              9
            Related
                Party Transactions-
                Notes 3 and 7





For
      the
      years ended March 31, 2005, 2004 and 2003, 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:





2005
            
            2004
            
            2003Interest
                income
            
            $
            -
            
            $
            12,000
            
            $
            5,986Royalty
                income
            
            
            -
            
            
            10,377
            
            
            18,763$
            -
            
            $
            22,377
            
            $
            24,749Administration
                recovery
            
            $
            (57,500
            )
            $
            (24,000
            )
            $
            -Bad
                debts
            
            
            -
            
            
            20,907
            
            
            -Consulting
                and management fees
            
            
            89,640
            
            
            107,500
            
            
            121,000Interest
            
            
            -
            
            
            1,324
            
            
            2,011Legal
                and professional fees
            
            
            3,012
            
            
            907
            
            
            94,739Wages
                and benefits
            
            
            -
            
            
            32,000
            
            
            28,000$
            35,152
            
            $
            138,638
            
            $
            245,780





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





Advances
      to a related company of $Nil (2004:  $18,928) were unsecured,
      non-interest bearing and had no specific terms for repayment.





Included
      in accounts payable and accrued liabilities is $75 (2004:  $25,813)
      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
              10
            Changes
                in Non-Cash Working Capital
                Balances





2005
            
            2004
            
            2003Accounts
                receivable
            
            $
            -
            
            $
            102
            
            $
            7,995Prepaid
                expenses and deposits
            
            
            (2,449
            )
            
            1,716
            
            
            (747
            )Accounts
                payable
            
            
            (85,314
            )
            
            (112,642
            )
            
            (95,435
            )Due
                to related parties
            
            
            -
            
            
            10,561
            
            
            (17,989
            )Severance
                obligation
            
            
            -
            
            
            (250,000
            )
            
            250,000$
            (87,763
            )
            $
            (350,263
            )
            $
            143,824





50


Pacific
        Harbour Capital Ltd.
 Notes
        to
        the Consolidated Financial Statements
 March
        31,
        2005, 2004 and 2003
 ( Stated
        in Canadian Dollars )
        -
        Page10





Note
                11
            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:





2005
            
            2004Future
                income tax assetsNet
                tax losses carried forward
            
            $
            2,307,265
            
            $
            2,306,717Less:
                valuation allowance
            
            
            (2,307,265
            )
            
            (2,306,717
            )$
            -
            
            $
            -





The
      Company recorded a valuation allowance against its future income tax assets
      based on the extent to which it is more likely-than-not that sufficient taxable
      income will be realized during the carry forward periods to utilize all the
      future tax assets.





At
      March
      31, 2005, the Company and its subsidiaries have accumulated non-capital losses
      of approximately $6,592,187 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
            
            
            1,032,3822012
            
            
            476,0792013
            
            
            533,9912014
            
            
            522,0512025
            
            
            350,540$
            6,592,187





51


Pacific
        Harbour Capital Ltd.
 Notes
        to
        the Consolidated Financial Statements
 March
        31,
        2005, 2004 and 2003
 ( Stated
        in Canadian Dollars )
        - Page
        11





Note
              12
            Commitments
                and Contingency-
                Note 8





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





Year
                ended March 31, 2006
            
            $
            62,4952007
            
            
            62,495$
            124,990





During
                the year ended March 31, 2005, the Company settled a legal dispute
                with a
                former employee regarding a finder’s fee claim originating in 1998,
                including accrued interest, for
                $80,000.





Note
              13
            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.





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
              14
            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.





52


Pacific
        Harbour Capital Ltd.
 Notes
        to
        the Consolidated Financial Statements
 March
        31,
        2005, 2004 and 2003
 ( Stated
        in Canadian Dollars )
        - Page
        12





Note
                14
            Differences
                between Canadian and US Generally Accepted Accounting
                Principles


-
                (cont’d)





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.





c)
            Stock-based
                Compensation - Note 2





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 and SFAS No.
      143, 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 SFAS No. 143 and to apply this change
      under the modified prospective method with no retroactive restatement of the
      prior year in accordance with the transitional provisions of SFAS No. 148.
      The
      Company has adjusted the opening Contributed Surplus (Additional paid-in
      capital) to reflect the cumulative expense of employee stock options previously
      reported on a pro forma basis.





d)
            Comprehensive
                Income





Under
                US GAAP, securities that are acquired principally for the purpose
                of
                selling them in the near term are classified as trading securities.
                Unrealized holding gains and losses for trading securities shall
                be
                included in earnings and reported for the
                period.





53


Pacific
        Harbour Capital Ltd.
 Notes
        to
        the Consolidated Financial Statements
 March
        31,
        2005, 2004 and 2003
 ( Stated
        in Canadian Dollars )
        - Page
        13





Note
                14
            Differences
                between Canadian and US Generally Accepted Accounting
                Principles


-
      (cont’d)





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





2005
            
            2004
            
            2003Net
                loss for the year per Canadian GAAP
            
            $
            (457,646
            )
            $
            (1,650,834
            )
            $
            (72,971
            )Deferred
                costs (a)
            
            
            -
            
            
            -
            
            
            (75,092
            )Capitalized
                holding costs (b)
            
            
            (5,780
            )
            
            (4,914
            )
            
            (14,388
            )Unrealized
                gain on trading securities (d)
            
            
            242,450
            
            
            -
            
            
            -Prior
                years’ capitalized deferred and
              holding
                costs included in loss on sale of
              land
                held for resale
            
            
            -
            
            
            1,396,844
            
            
            -Net
                loss for the year per US GAAP
            
            $
            (220,976
            )
            $
            (258,904
            )
            $
            (162,451
            )Basic
                loss per share per US GAAP
            
            $
            (0.03
            )
            $
            (0.03
            )
            $
            (0.02
            )Balance
                SheetsTotal
                assets per Canadian GAAP
            
            $
            998,144
            
            $
            1,609,085
            
            $
            5,262,866Deferred
                costs (a)
            
            
            -
            
            
            -
            
            
            (1,498,334
            )Capitalized
                holding costs (b)
            
            
            (10,694
            )
            
            (4,914
            )
            
            (101,396
            )Marketable
                securities increase (d)
            
            
            242,450
            
            
            -
            
            
            -Total
                assets per US GAAP
            
            $
            1,229,900
            
            $
            1,604,171
            
            $
            3,663,136Total
                liabilities per Canadian and
              US
                GAAP
            
            $
            205,834
            
            $
            359,129
            
            $
            2,362,076Shareholders’
                EquityDeficit,
                end of the year per Canadian GAAP
            
            $
            (7,027,452
            )
            $
            (6,569,806
            )
            $
            (4,716,086
            )Deferred
                costs (a)
            
            
            -
            
            
            -
            
            
            (1,498,334
            )Capitalized
                holding costs (b)
            
            
            (10,694
            )
            
            (4,914
            )
            
            (101,396
            )Stock-based
                compensation (c)
            
            
            (35,600
            )
            
            (35,600
            )
            
            (35,600
            )Unrealized
                gain on trading securities (d)
            
            
            242,450
            
            
            -
            
            
            -Deficit,
                end of the year per US GAAP
            
            
            (6,831,296
            )
            
            (6,610,320
            )
            
            (6,351,416
            )Share
                capital per Canadian and US GAAP
            
            
            7,616,876
            
            
            7,616,876
            
            
            7,616,876Contributed
                surplus (additional paid-incapital)
            
            
            202,886
            
            
            202,886
            
            
            -Contributed
                surplus (c)
            
            
            35,600
            
            
            35,600
            
            
            35,600Shareholders’
                equity per US GAAP
            
            $
            1,024,066
            
            $
            1,245,042
            
            $
            1,301,060





54


Pacific
      Harbour Capital Ltd.


Notes
      to
      the Consolidated Financial Statements


March
      31,
      2005, 2004 and 2003


( Stated
      in Canadian Dollars )
      - Page
      14





Note
                14
            Differences
                between Canadian and US Generally Accepted Accounting
                Principles


-
      (cont’d)





2005
            
            2004
            
            2003Cash
                FlowsCash
                flows used in operating activities
              per
                Canadian GAAP
            
            $
            (632,135
            )
            $
            (751,379
            )
            $
            (677,367
            )Deferred
                costs (a)
            
            
            -
            
            
            -
            
            
            (75,092
            )Capitalized
                holding costs (b)
            
            
            (5,780
            )
            
            (4,914
            )
            
            (14,388
            )Unrealized
                gain on trading securities (d)
            
            
            242,450
            
            
            -
            
            
            -Cash
                flows used in operating activities
              per
                US GAAP
            
            
            (395,465
            )
            
            (756,293
            )
            
            (766,847
            )Cash
                flow provided by (used in) financing
              activities
                per Canadian and US GAAP
            
            
            -
            
            
            (1,417,395
            )
            
            (65,851
            )Cash
                flow provided by investing activities
              per
                Canadian GAAP
            
            
            836,906
            
            
            2,139,439
            
            
            900,769Expenditure
                on land held for
              development
                (a)
            
            
            -
            
            
            -
            
            
            75,092Expenditure
                on land held for resale (b)
            
            
            5,780
            
            
            4,914
            
            
            14,388Unrealized
                gain on marketable securities (d)
            
            
            (242,450
            )
            
            -
            
            
            -Cash
                flows provided by investing activities
              per
                US GAAP
            
            
            600,236
            
            
            2,144,353
            
            
            990,249Increase
                (decrease) in cash from
              continuing
                activities per US GAAP
            
            
            204,771
            
            
            (29,335
            )
            
            157,551Decrease
                in cash flows from discontinued
              operations
                for Canadian and US GAAP
            
            
            -
            
            
            (2,565
            )
            
            (37,514
            )Increase
                (decrease) in cash per US GAAP
            
            $
            204,771
            
            $
            (31,900
            )
            $
            120,037





55