<PAGE> 1
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a- 16 OR 15d- 16 of
the Securities Exchange Act of 1934
For the month of JULY, 1996
VENTURE PACIFIC DEVELOPMENT CORPORATION
(Translation of registrant's name into English)
Suite 1204 - 700 West Pender Street, Vancouver, British Columbia, CANADA V6C 1G8
(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes [ ] No [X]
[If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-______________
<PAGE> 2
VENTURE PACIFIC DEVELOPMENT CORPORATION
SUITE 1204 - 700 WEST PENDER STREET
VANCOUVER, B.C. V6C 1G8
TEL: (604) 687 - 4588
FAX: (604) 687 - 4905
TOLL FREE: 1-888-260-8888
E-MAIL: [email protected]
NOTICE OF ANNUAL GENERAL MEETING OF MEMBERS
TAKE NOTICE that the 1996 Annual General Meeting of the Members of VENTURE
PACIFIC DEVELOPMENT CORPORATION (hereinafter called the "Company") will be held
in the Boardroom, 1204 - 700 West Pender Street, Vancouver, British Columbia,
on:
THURSDAY, AUGUST 29TH, 1996
at the hour of 10:00 o'clock in the forenoon (Vancouver time) for the following
purposes:
1. to receive the Report of the Directors;
2. to receive the financial statements of the Company for its fiscal year
ended March 31st, 1996 and the report of the Auditors thereon;
3. to appoint Auditors for the ensuing year and to authorize the Directors
to fix their remuneration;
4. to determine the number of directors and to elect directors;
5. to ratify and approve any existing stock options granted to insiders of
the Company otherwise than pursuant to prior shareholder authorization
and to authorize to directors to grant stock options to insiders of the
Company and to re-negotiate any existing stock options, all at such
price or prices and upon such terms as may be acceptable to the
Vancouver Stock Exchange;
6. to transact such other business as may properly come before the
Meeting.
A shareholder entitled to attend and vote at the Meeting is entitled to appoint
a proxyholder to attend and vote in his stead. If you are unable to attend the
Meeting, or any adjournment thereof in person, please read the Notes
accompanying the Form of Proxy enclosed herewith and then complete and return
the Proxy within the time set out in the Notes. The enclosed Form of Proxy is
solicited by Management but, as set out in the Notes, you may amend it if you so
desire by striking out the names listed therein and inserting in the space
provided the name of the person you wish to represent you at the Meeting.
DATED at Vancouver, British Columbia, this _______ day of _______, 1996.
By Order of the Board Directors
------------------------
(Signed) George E. Scott
Secretary
<PAGE> 3
VENTURE PACIFIC DEVELOPMENT CORPORATION
SUITE 1204 - 700 WEST PENDER STREET
VANCOUVER, B.C. V6C 1G8
TEL: (604) 687 - 4588
FAX: (604) 687 - 4905
TOLL FREE: 1-888-260-8888
E-MAIL: [email protected]
WEB SITE: WWW.VENPAC.COM
INFORMATION CIRCULAR
As at and Dated June 30, 1996
This Information Circular accompanies the Notice of the 1996 Annual General
Meeting of Members of VENTURE PACIFIC DEVELOPMENT CORPORATION (hereinafter
called the "Company"), and is furnished in connection with a solicitation of
proxies for use at that Meeting and at any adjournment thereof.
REVOCABILITY OF PROXY
In addition to revocation in any other manner permitted by law, a proxy may be
revoked by instrument in writing executed by the member or his attorney
authorized in writing, or if the member is a corporation, by a duly authorized
officer or attorney thereof, and deposited either at the registered office of
the Company at any time up to and including the last business day preceding the
day of the Meeting, or any adjournment thereof, or, as to any matter in respect
of which a vote shall not already have been cast pursuant to such proxy, with
the Chairman of the Meeting on the day of the Meeting, or any adjournment
thereof, and upon either of such deposits. the proxy is revoked.
PERSONS OR COMPANIES
MAKING THE SOLICITATION
THE ENCLOSED PROXY IS BEING SOLICITED
BY MANAGEMENT OF THE COMPANY
Solicitations will be made by mail and possibly supplemented by telephone or
other personal contact to be made without special compensation by regular
officers and employees of the Company. The Company may reimburse members'
nominees or agents (including brokers holding shares on behalf of clients) for
the cost incurred in obtaining from their principals authorization to execute
forms of proxy. No solicitation will be made by specifically engaged employees
or soliciting agents. The cost of solicitation will be borne by the Company.
VOTING SHARES AND
PRINCIPAL HOLDERS THEREOF
The Company is authorized to issue 50,000,000 shares without par value. There is
one class of shares only. There are issued and outstanding 5,210,327 shares. At
a General Meeting of the Company, on a show of hands, every member present in
person and entitled to vote and every proxy holder duly appointed by a holder of
a share who would have been entitled to vote shall have one vote and on a poll,
every member present in person or represented by proxy shall have one vote for
each share of which such member is the registered holder.
<PAGE> 4
To the knowledge of the directors and senior officers of the Company, no person
or company beneficially owns, directly or indirectly, or exercises control or
direction over, voting securities carrying more than 10% of the outstanding
voting rights of the Company other than:
<TABLE>
<CAPTION>
NUMBER OF
NAME & ADDRESS SHARES @ June 30, 1996 PERCENTAGE
- -------------- ----------------------- ----------
<S> <C> <C>
Sunnybrook Securities Ltd. 2,185,709 41.95 %
P.O. Box 1316G
Bank of Nova Scotia Bldg.
Grand Cayman Island, B.W.I
</TABLE>
The directors have determined that all members of record as of the 22th day of
July, 1996 will be entitled to receive notice of and to vote at the Meeting.
Those members so desiring may be represented by proxy at the Meeting. The
instrument of proxy, and the power of attorney or other authority, if any, under
which it is signed or a notarially certified copy thereof, must be deposited
either at the office of the Registrar and Transfer Agent of the Company,
Montreal Trust Company, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9
or at the Head Office of the Company at Suite 1204, 700 West Pender Street,
Vancouver, British Columbia, V6C 1G8 not less than 48 hours, Saturdays and
holidays excepted, prior to the time of the holding of the Meeting or any
adjournment thereof.
ELECTION OF DIRECTORS
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. In the absence of instructions to the contrary, the shares
represented by proxy will be voted for the nominees herein listed.
MANAGEMENT DOES NOT CONTEMPLATE THAT ANY OF THE NOMINEES WILL BE UNABLE TO SERVE
AS A DIRECTOR. IN THE EVENT THAT PRIOR TO THE MEETING ANY VACANCIES OCCUR IN THE
SLATE OF NOMINEES HEREIN LISTED, IT IS INTENDED THAT DISCRETIONARY AUTHORITY
SHALL BE EXERCISED BY THE PERSON NAMED IN THE PROXY AS NOMINEE TO VOTE THE
SHARES REPRESENTED BY PROXY FOR THE ELECTION OF ANY OTHER PERSON OR PERSONS AS
DIRECTORS.
Management proposes that the number of directors for the Company be determined
at four for the ensuing year subject to such increases as may be permitted by
the Articles of the Company, and the Management nominees for the Board of
Directors and information concerning them as furnished by the individual
nominees is as follows:
<PAGE> 5
<TABLE>
<CAPTION>
Number of shares
beneficially owned
directly or indirectly, Principal occupation
or over which control and if not at present
Name and or direction is exercised an elected director,
present office Director at the date of this occupation during the
held since Information Circular past five (5) years
- ------------------ ---------- -------------------- -------------------
<S> <C> <C> <C>
GEORGE E. SCOTT September Nil Lawyer, Director
Director and 26, 1994 of a number of
Secretary reporting companies
including Voisey Bay
Resources Inc.
DENIS BENETEAU May Nil Businessman; Vice
Director 24, 1995 President, Venture
Pacific Capital
Corporation
CONRAD CLEMISS August 305,500 Businessman;
Director 24, 1995
RONALD W. DOWNEY December Nil Chief Executive Officer
President and CEO 13, 1993 and President of Venture
Pacific Development
Corporation.
</TABLE>
All of the nominees are residents of Canada.
Advance Notice of the Meeting was published pursuant to Section 135 of the
Company Act at Vancouver, B.C. on June 24, 1996.
The Company has an audit committee, the members of which are as follows:
Ronald W. Downey
Conrad Clemiss
Denis Beneteau
<PAGE> 6
EXECUTIVE COMPENSATION
FORM 41
B.C. Securities Act and Regulations
SCHEDULE "A"
EXECUTIVE COMPENSATION
(Form 41, B.C. Securities Act and Regulations)
EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------- -------------------------------------
AWARDS PAYOUTS
------------------------ -------
SECURITIES
UNDER
OPTIONS/ RESTRICTED ALL OTHER
NAME AND OTHER ANNUAL SARS(2) SHARES OR LTIP(3) COMPEN-
PRINCIPAL SALARY BONUS COMPENSATION GRANTED RESTRICTED PAYOUTS SATION
POSITION YEAR(1) ($) ($) ($) (#) SHARE UNITS ($) ($)
- --------------- ------- ------ ----- ------------ ---------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald W. 1996 $112,884 -- -- -- -- -- --
Downey(4)
President (CEO) 1995 $102,000 -- -- -- -- -- --
1994 $29,750 -- -- -- -- -- --
</TABLE>
Notes:
(1) Ended March 31.
(2) Stock appreciation rights.
(3) Long-term incentive plan.
(4) From August 11, 1994 to present.
OPTION GRANTS DURING THE MOST RECENTLY COMPLETED FISCAL YEAR
<TABLE>
<CAPTION>
MARKET
VALUE OF
SECURITIES
% OF TOTAL UNDERLYING
OPTIONS OPTIONS ON
GRANTED TO EXERCISE OR DATE OF
NAME OF EXECUTIVE OPTION EMPLOYEES IN BASE PRICE GRANT EXPIRATION
OFFICER GRANTED(#) FISCAL YEAR ($/SHARE) ($/SHARE) DATE
- ----------------- ---------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Ronald W. Downey 100,000 91% $0.62 $0.62 12/27/97
President (CEO)
</TABLE>
<PAGE> 7
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FISCAL
YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR END (#) AT FISCAL YEAR END ($)
SECURITIES ----------------- ----------------------
NAME OF ACQUIRED ON VALUE REALIZED EXERCISABLE/ EXERCISABLE/
EXECUTIVE OFFICER EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE
- ----------------- ----------- -------------- ----------------- ----------------------
<S> <C> <C> <C>
Ronald W. Downey None Nil 100,000 Nil
President (CEO)
</TABLE>
DIRECTORS
The directors of the Company have not been compensated by the Company in their
capacities as directors during the most recently completed financial year. Stock
options, however, were granted during fiscal 1996 to non-employee directors of
the Company being Denis Beneteau as to 25,000 shares at a price of $0.92 per
share exercisable on or before May 24, 1997 and Conrad Clemiss as to 25,000
shares at a price of $0.71 per share exercisable on or before August 24, 1997
- -none of which have been exercised-.
No pension plan or retirement benefit plans have been instituted by the Company
and none are proposed at this time.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
None of the directors, executive officers or senior officers of the Company, no
proposed nominee for election as a director of the Company, and no associates or
affiliates of any of them, is or has been indebted to the Company or its
subsidiaries at any time since the beginning of the Company's last completed
financial year.
APPOINTMENT OF AUDITORS
Management proposes the appointment of Deloitte & Touche, Chartered Accountants,
as Auditors of the Company for the ensuing year and that the directors be
authorized to fix their remuneration. Deloitte & Touche have been the Company's
Auditors since July, 1988.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
No insider of the Company, no proposed nominee for election as a director of the
Company and no associate or affiliate of any of the foregoing, has 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 under the headings "Executive
Compensation and Particulars of Matters to be Acted Upon".
<PAGE> 8
INTEREST OF CERTAIN PERSONS
IN MATTERS TO BE ACTED UPON
None of the directors or senior officers of the Company, no management nominee
for election as a director of the Company, none of the persons who have been
directors or senior officers of the Company since the commencement of the
Company's last completed financial year and no associate or affiliate of any of
the foregoing has any material interest, direct or indirect, by way of
beneficial ownership of securities or otherwise, in any matter to be acted upon
at the Meeting other than as disclosed under the headings "Executive
Compensation and Particulars of Matters to be Acted Upon".
PARTICULARS OF
MATTERS TO BE ACTED UPON
Stock Options
At the Meeting, the members of the Company will be asked to ratify and approve
any existing stock options granted to insiders of the Company otherwise than
pursuant to prior shareholder authorization and to authorize the directors to
grant stock options to insiders of the Company and to re-negotiate any existing
stock options, all at such price or prices and upon such terms as may be
acceptable to the Vancouver Stock Exchange.
Shareholder approval to the grant and/or re-negotiation of insiders' incentive
stock options is required pursuant to the rules of the Vancouver Stock Exchange.
In the event shareholder approval is not forthcoming, the Company will not
proceed with the grant or re-negotiation, as the case may be, of insiders'
incentive stock options. The term "insiders" is defined in the Securities Act
(British Columbia) and generally includes directors and senior officers of the
Company, the five highest paid employees and holders of greater than 10% of the
voting securities of the Company and its subsidiaries.
MANAGEMENT KNOWS OF NO OTHER MATTERS TO COME BEFORE THE MEETING OTHER THAN THOSE
REFERRED TO IN THE NOTICE OF MEETING. HOWEVER, SHOULD ANY OTHER MATTERS PROPERLY
COME BEFORE THE MEETING, THE SHARES REPRESENTED BY THE PROXY SOLICITED HEREBY
WILL BE VOTED ON SUCH MATTERS IN ACCORDANCE WITH THE BEST JUDGMENT OF THE
PERSONS VOTING THE SHARES REPRESENTED BY THE PROXY.
BY ORDER OF THE BOARD OF DIRECTORS
RONALD W. DOWNEY
DIRECTOR
<PAGE> 9
PROXY
VENTURE PACIFIC DEVELOPMENT CORPORATION
SUITE 1204 - 700 WEST PENDER STREET
VANCOUVER, B.C. V6C 1G8
TEL: (604) 687 - 4588
FAX: (604) 687 - 4905
TOLL FREE: 1-888-260-8888
E-MAIL: [email protected]
Type of Meeting: Annual General Meeting
Name of Company: Venture Pacific Development Corporation (the "Company)
Meeting Date: August 29, 1996
Meeting Time: 10:00 AM Pacific Daylight Time
Meeting Location: Suite 1204, 700 West Pender Street, Vancouver, B.C.
The undersigned Member of the Company hereby appoints, Ronald W. Downey, a
Director of the Company, or failing this person, George E. Scott, a Director of
the Company, or in the place of the foregoing, __________________________,
(Please Print the Name) as proxyholder for and on behalf of the member with the
power of substitution to attend, act and vote for and on behalf of the member in
respect of all matters that may properly come before the meeting of the members
of the Company and at every adjournment thereof, to the same extent and with the
same powers as if the undersigned member were present at the said meeting, or
any adjournment thereof.
Resolutions (for full detail of each item), please see the Notice of Meeting and
Information Circular dated June 30, 1996.
<TABLE>
<CAPTION>
For Withhold vote For Withhold vote
<S> <C> <C> <C> <C> <C>
1. To fix the Auditor's renumeration ______ ______ 5. To elect as Director Downey ______ ______
2. Determine number of Directors ______ ______ 6. To elect as Director Scott ______ ______
3. Approve Stock Options ______ ______ 7. To elect as Director Beneteau ______ ______
4. Appointment of Auditors ______ ______ 8. To elect as Director Clemiss ______ ______
</TABLE>
Affix Label Here
Name of Proxy holder
Address of Proxy holder
Number of securities represented Proxy
The undersigned member hereby revokes any proxy
previously given to attend and vote at said meeting.
Please sign here: ________________________________
Date:______________________
This proxy form is not valid unless it is signed and dated. If someone other
than the member of the Company signs this proxy form on behalf of the named
member of the Company, documentation acceptable to the Chairman of the meeting
must be deposited with this proxy form, authorizing the signing person to do
such. To be presented at the meeting, this proxy form must be received at the
office of "Montreal Trust Company" or at the head office of the Company by mail
or by fax no later than forty eight ("48") hours prior to the time of the
meeting,Saturdays and holidays excepted. The mailing address of Montreal Trust
Company is 510 Burrard Street, Vancouver, British Columbia, V6C 3B9 and its fax
number is (604) 683-3694. The address of the head office of the Company is set
out above.
<PAGE> 10
1. THIS PROXY IS SOLICITED BY THE MANAGEMENT OF THE COMPANY.
2. (i) IF THE MEMBER WISHES TO ATTEND THE MEETING TO VOTE ON THE RESOLUTIONS
IN PERSON, please register your attendance with the Company's
scrutineers at the meeting.
(ii)IF YOU HAVE YOUR SECURITIES REGISTERED IN A NAME OTHER THAN YOUR OWN
NAME AND WISH TO ATTEND THE MEETING TO VOTE ON THE RESOLUTIONS IN
PERSON, please cross off the management appointee name or names, insert
name in the blank space provided, do not indicate a voting choice by
any resolution, have the proxy form signed and dated and return the
proxy form as stated below. At the meeting a vote will be taken on each
of the resolutions as set out on this proxy form and the member's vote
will be counted at that time.
3. IF THE MEMBER CANNOT ATTEND THE MEETING BUT WISHES TO vote on the
resolutions, the member can appoint another person, who need not be a
member of the Company, to vote according to the member's instructions. To
appoint someone other than the person named, please cross off the
management appointee name or names and insert your appointed proxyholder's
name in the space provided. Where no choice on a resolution is specified by
the member, this proxy form confers discretionary authority upon the
member's appointed proxyholder.
4. IF THE MEMBER CANNOT ATTEND THE MEETING BUT wishes to vote on the
resolutions and to APPOINT ONE OF THE MANAGEMENT APPOINTEES named, please
leave the wording appointing a nominee as shown. Where no choice is or both
choices are specified by a member on a resolution shown on the proxy form,
a nominee of management acting as proxyholder will vote the securities as
if the member had specified an affirmative vote.
5. The securities represented by this proxy form will be voted or withheld
from voting in accordance with the instructions of the member and, if the
member specifies a choice with respect to any matter to be acted upon, the
securities will be voted accordingly. With respect to any amendments or
variations in any of the resolutions shown on the proxy form, or matters
which may properly come before the Meeting, the securities will be voted by
the nominee appointed as the nominee in its sole discretion sees fit.
<PAGE> 11
VENTURE PACIFIC DEVELOPMENT CORPORATION
Suite 1204 - 700 West Pender Street
Vancouver, B.C. V6C 1G8
Tel: (604) 687-4588
Fax: (604) 687-4905
Toll Free: 1-888-260-8888
E-Mail: [email protected]
TO: Registered and Non-Registered Shareholders
National Policy 41 provides shareholders with the opportunity to elect
annually to have their name added to an issuer's supplemental mailing list
in order to receive quarterly financial statements of the Company. If you
wish to receive such statements, please complete and return this form to:
Montreal Trust Company of Canada
510 Burrard Street
Vancouver, B.C.
V6C 3B9
Name:
_________________________________________________
Address:
_________________________________________________
_________________________________________________
Postal Code:
_________________________________________________
Signature:
_________________________________________________
(I certify that I am a shareholder of the Company)
Date:_________________________________________________
<PAGE> 12
ANNUAL REPORT 1996
[VENTURE PACIFIC DEVELOPMENT CORPORATION LOGO]
[GRAPHIC]
<PAGE> 13
CORPORATE PROFILE
VENTURE PACIFIC
DEVELOPMENT CORPORATION
Venture Pacific Development Corporation is a publicly traded Canadian company
with diversified interests in residential and commercial real estate
developments, and proposed gaming facilities in Canada and the northwestern
United States. The Company, based in Vancouver, B.C., has substantial
development interests in several growth areas of British Columbia, including the
community of Pemberton, 32 kilometres north of Whistler, a world renowned and
rapidly growing ski and summer resort north of Vancouver. The Company's shares
trade on the Senior (Commercial/Industrial) Board of the Vancouver Stock
Exchange under the symbol VPV, and on the Non NASDAQ Over the Counter quotation
system ("NNOTC") under the symbol VEPDF.
ANNUAL GENERAL MEETING
The 1996 Annual General Meeting of Venture Pacific Development Corporation will
be held on Thursday, August 29, 1996, at 10 a.m. (Pacific Daylight Time) at
Suite 1204 - 700 West Pender Street, Vancouver, B.C.
CONTENTS
<TABLE>
<S> <C>
Report to Shareholders 1
Operations Review 3
Management's Discussion & Analysis 5
Auditors' Report 7
Consolidated Balance Sheet 8
Consolidated Statement of (Loss) Income and Deficit 9
Consolidated Statement of Changes in Financial Position 10
Notes to Consolidated Financial Statements 11
Corporate Directory I.B.C.
</TABLE>
<PAGE> 14
PRESIDENT'S REPORT
[PHOTO]
TO OUR SHAREHOLDERS:
The past year has been one of increasing business activity for Venture Pacific
Development Corporation as we continue to build a vibrant entrepreneurial
organization motivated to grow profits and shareholder value through the
aggressive pursuit of quality development opportunities.
Your Company has been active on a number of fronts, including strategically
placed real estate projects in British Columbia, Canada's most prosperous and
fastest growing province. In addition, we have formed relationships with a
number of First Nations Bands that could lead to the establishment of gaming and
other economic development activities on First Nations' lands in Canada and the
northwestern United States. Your Company has also pursued new opportunities in
other areas.
Venture Pacific's principal objective in property development is to build
quality real estate projects in more rural centres in response to specific
opportunities relating to land availability, location and projected growth.
Whenever possible, the majority of our projects are held on a long-term basis
for income growth and capital appreciation.
During the past year, the Company carried out pre-development activities
and began construction on its Creekside Village townhouse development at
Pemberton, B.C. The community of Pemberton is a 20-minute drive north of
Whistler village where the Whistler and Blackcomb ski developments are
attracting an increasing number of permanent residents, as well as recreational
enthusiasts from around the world.
The 54-unit Creekside Village complex is scheduled for completion by the
end of 1996 and the Company is highly encouraged by pre-sales of 48 percent. The
Pemberton area is becoming increasingly attractive to people employed in the
service sector at Whistler, where accommodation is tight and extremely
expensive. Pemberton is also expected to grow as purchasers of recreational
properties and second homes seek more affordable prices within an easy commute
of Whistler, based on Sea to Sky Facts & Figures prepared by the Sea to Sky
Economic Development Commission and Markstrat Consulting Services.
In the fall of 1995, the Company formed a new corporation, Venture Pacific
Capital Corporation, to raise equity financing through a syndication structure
for our development projects. At Pemberton, the proposed development of an
80-unit Travelodge Motor Inn became the prototype for an investment opportunity
through which Venture Pacific Capital facilitates investor participation in
projects early in their development stage.
The Company now has several projects planned or underway with financing
through Venture Pacific Capital. These include three motor inns and two brew
pubs, to be located in various parts of British Columbia and in which the
Company may hold equity interests in amounts of up to 20 percent, and property
developments in the State of Texas.
Your Company continues to pursue opportunities in North America's rapidly
expanding gaming industry. Venture Pacific Development Corporation is assisting
a number of First Nations Bands in British Columbia in their efforts to obtain
licenses to establish gaming facilities on their lands. A private holding
company, BPYA 1362 Holdings Ltd. (TGN The Gaming Network Inc.) has applied to
the British Columbia Gaming Commission for a casino license. Should this
application be approved, TGN The Gaming Network would contract with Venture
Pacific Development Corporation to design, develop, finance and manage gaming
facilities in conjunction with First Nations, in accordance with provincial
gaming regulations.
1
<PAGE> 15
In New Brunswick, we are negotiating with a First Nations Band to manage a
gaming facility of 33,000 square feet. The Company is also reviewing several
proposals to purchase existing casinos in Nevada and Colorado and is
investigating a joint venture with an American corporation to manufacture video
lottery terminals and other gaming equipment in Mexico for marketing in the U.S.
and Central and South America.
On behalf of several First Nations Bands, the Company is also pursuing
business opportunities relating to the establishment of joint ventures to
develop and operate recreational and commercial enterprises, recreational
vehicle parks, motels, restaurants, retail centres, gas bars and truck stops.
On March 18, 1996, the Company announced the completion of a private
placement of 1,685,715 units at a purchase price of $0.56 per unit. Each unit
consists of one share and one share purchase warrant entitling the holder to
purchase a further share at a price of $0.56 in the first year, commencing on
January 26, 1996, and $0.65 in the second year. The private placement raised
proceeds of $944,000, of which $850,000 is being used to fund development costs
associated with the Creekside Village townhouse project at Pemberton. The
balance of $94,000 is being applied to working capital. During the fiscal year,
ended March 31, 1996, the Company's issued common shares increased to 5,210,327
from 3,244,612 at March 31, 1995.
On February 1, 1996, the Vancouver Stock Exchange approved the Company's
application for listing on the Exchange's Senior Board under the Commercial/
Industrial Section. In March 1996, the Securities and Exchange Commission in
Washington, D.C., approved the Company's request to apply for full listing on
NASDAQ in the U.S., where Venture Pacific shares already trade on the Non NASDAQ
Over the Counter (NNOTC) quotation system. An application to NASDAQ for full
listing is now being prepared.
Looking to the future, we believe that 1996 and the remaining years of the
millennium will be exciting ones for Venture Pacific and our shareholders. The
Company has a dedicated group of employees and a strong board of vigilant
directors. We are determined to build on the business momentum created through
meeting new challenges by effectively working together as a team.
We thank our employees for their efforts, and you, our shareholders, for
your continued interest and support.
/s/ RONALD W. DOWNEY
- --------------------
Ronald W. Downey
President and Chief Executive Officer
2
<PAGE> 16
OPERATIONS REVIEW
CREEKSIDE VILLAGE: AFFORDABLE HOUSING NEAR WHISTLER
Creekside Village, Venture Pacific Development Corporation's 54-unit townhouse
and condominium development in the community of Pemberton, B.C., is scheduled to
be completed in December 1996.
Located just off Highway 99, the Sea to Sky Highway linking Pemberton and
nearby Whistler with Vancouver and other cities in the Lower Mainland of British
Columbia, Creekside Village offers modern two and three bedroom accommodation at
affordable prices.
The development is within easy commuting distance of Whistler, 32
kilometres (20 miles) to the south, an international ski resort destination that
has experienced explosive growth over many years. Creekside Village offers to
service sector workers, such as those employed at the Whistler and Blackcomb
Mountain ski developments, an affordable alternative to the expensive and
limited accommodation available at Whistler. Prices start at $162,500 for a two
bedroom home, which is considerably less than similar housing at Whistler.
[GRAPHIC]
Creekside Village, being marketed by the Whistler Real Estate Company, was
48 percent pre-sold by the spring of 1996. Housing development in Pemberton was
further enhanced as a result of a decision by the Canada Mortgage and Housing
Corporation (CMHC) to increase lending limits in the village for its high-ratio
financial assistance to $175,000 from $125,000. CMHC requires first-time buyers
to supply only five percent of the purchase price to obtain 95 percent mortgage
financing.
[PHOTO]
The Company is reviewing four development scenarios for 19 acres of view
property it also owns at Pemberton. Known as "The Ridge," the site is considered
suitable for approximately 118 townhouses and single family lots. The Company is
assessing the costs of building roads and services and expects to proceed with
the development in 1997 or 1998, depending on market conditions.
Venture Pacific Development Corporation also operates the Pemberton
Junction Store as a joint venture. This profitable gas bar and convenience store
continues to benefit from increasing economic activity in Pemberton and the
spinoff generated by nearby Whistler.
HOTEL DEVELOPMENTS PROPOSED
In November 1995, Venture Pacific Development Corporation announced the signing
of a license agreement with Forte Hotels Inc. of El Cajon, California, for the
development of a Travelodge Motor Inn at Pemberton. The 80-unit motel would be
developed by the Company for a corporation in which the Company and Royco Hotels
Inc. of Calgary, Alberta, would hold an interest.
3
<PAGE> 17
[PHOTO]
The Travelodge Motor Inn is to be located on part of a 9.1 acre site zoned
commercial and could be expanded by an additional 40 rooms if market conditions
warrant. A development permit is pending. It is proposed that equity
participation will be offered to investors, subject to regulatory approval.
Developments being considered for the balance of the property include a
restaurant, retail space, a gas bar and convenience store, and future
development of approximately 48 townhomes.
Royco Hotels Inc., in association with Forte Hotels Inc., since purchased
by Hospitality Franchise Systems, Inc. of New York, is the exclusive franchisor
of Travelodge and Thriftlodge in Canada. The Company has more than 20 years
experience in providing a broad spectrum of services in the Canadian hospitality
industry, including construction and management of hotels, motels and resorts.
Future plans are to develop motor inns in a number of other British
Columbia communities, including an 80-unit Travelodge at Invermere, a resort
near Banff and Radium Hot Springs in the Canadian Rockies, and a 45-unit motor
inn at Burns Lake.
NEW COMPANY RAISES EQUITY FINANCING
Venture Pacific Capital Corporation was formed in the fall of 1995 to raise
equity financing for development projects. The proposed Travelodge Motor Inn at
Pemberton became the prototype for an investment opportunity that allows
investors to take an equity interest through syndication arrangements early in
the development stage of a project.
By the end of the 1995 fiscal year, Venture Pacific Capital Corporation was
engaged in various stages of evaluations for the following proposed projects to
support the raising of C $14.5 million through syndication; three motor inns and
two brew pubs in British Columbia, and development activities in Texas. The pubs
are being planned for Prince George and Invermere by the Buffalo Brewing
Company. The Texas properties involve the AVEX Corporation and include a 38 acre
parcel of land adjacent to the Texas Motor Speedway in Fort Worth and a 70,000
square foot office building in Dallas.
Venture Pacific Capital Corporation will also perform asset management
services in the motor inn and brew pub developments and act as financial
consultants to other groups unrelated to the Company.
FIRST NATIONS OFFER ECONOMIC DEVELOPMENT AND GAMING OPPORTUNITIES
Venture Pacific Development Corporation is pursuing economic development
opportunities with First Nations Bands in British Columbia and the northwestern
United States. The Company is exploring possible joint ventures in areas
relating to recreation and commerce, including recreational vehicle parks,
motels, restaurants and retail centres.
Venture Pacific has established relationships and proposed casino gaming
ventures with several First Nations Bands in British Columbia. The Company
continues to assist these Bands in their efforts to obtain gaming licenses from
provincial authorities. The establishment of modern gaming facilities, well
managed and properly regulated, would assist First Nations in the provision of
social benefits to their people to become economically self-sufficient.
Venture Pacific's gaming interests also include negotiations with a First
Nations Band to manage a casino in the province of New Brunswick, a proposed
joint venture with a corporation in the United States to manufacture gaming
equipment in Mexico for the U.S. and South and Central American markets, and the
possible purchase of existing casinos in Nevada and Colorado.
4
<PAGE> 18
MANAGEMENT DISCUSSION
For the year ended March 31, 1996
RESULTS OF OPERATIONS
During the year ended March 31, 1996, the Company has continued its efforts to
enhance its real estate holdings and improve its overall management strategies
and techniques. Total revenue for the year ended March 31, 1996 amounted to
$287,039 compared to $224,723 for the year ended March 31, 1995, or an increase
of twenty-eight percent (28%). The increase in revenue was largely due to an
increase in interest income from a deposit of $1,000,000 in May 1995, resulting
from the sale of the Indian Arm property, reflecting a gain of $596,398 on the
sale itself, and also an increase in revenue from the Pemberton Junction Store
Joint Venture. Net income from the Pemberton Joint Store Joint Venture ("PJSJV")
increased from $140,458 for the year ended March 31, 1995 to $162,180 for the
year ended March 31, 1996, an increase of sixteen percent (16%). The increase in
net income from the PJSJV is largely due to a combination of better management
techniques and increased sales.
Although total revenue was increased by 28% from the last fiscal year, the
management team was able to reduce expenditures by thirty-six percent (36%) from
$570,225 the previous year to $367,286 in the current year (see chart 1). The
reduction was largely due to the capitalization of part of the executives
salaries and wages, which was allocated to projects under development, gaming
facilities and property held for development. The determination of the
management team to reduce costs such as administration, consulting and legal
fees and also traveling expenses resulted in a seventy-seven percent (77%)
decrease in net loss of $345,502 in the year ended March 31, 1995 to a net loss
of $80,247 in the same period in 1996.
<TABLE>
<CAPTION>
RESULTS OF OPERATIONS
Total Revenue Total Expense Net Loss
<S> <C> <C> <C>
1996 287,039 367,286 (80,247)
1995 224,723 570,225 250,896
1994 176,979 793,640 (1,115,700)
RESULTS OF OPERATIONS
Expense items for 1996, 1995 and 1994
1996 1995 1994
<S> <C> <C> <C>
Administration 0 23,624 52,480
Consulting 0 5,697 122,858
Legal 23,270 39,066 175,295
Travel 31,442 63,386 151,957
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
As is illustrated in chart 3, as at March 31, 1995, the Company had a working
capital of $1,071,899, approximately the same as the previous year's working
capital. Current assets have increased from $1,187,754 in 1995 to $1,319,120 in
the 1996 fiscal year. The increase was mainly due to cash proceeds as explained
below. Current liabilities have increased from $116,564 in 1995 to $247,221 in
1996 due to land development cost accruals. During the 1996 fiscal year, the
Company received total cash proceeds of $1,106,400 ($162,400 from stock warrants
and $994,000 from private placements issued for cash). In addition, the Company
received $170,000 from PJSJV and $124,859 from interest and other income. Gaming
facility development cost was $56,735 for the 1996 fiscal year. $1,033,067 was
invested in land development, mainly in the 54 townhouse complex known as
Creekside Village at Pemberton. An amount of $850,000 from the private placement
was
5
<PAGE> 19
additional funding for the Creekside Village Project. Due to the receipt of
$1,000,000 in proceeds from the Indian Arm property in May 1995, the accounts
receivable was decreased from $1,026,771 in the 1995 fiscal year to $16,687 in
1996.
As indicated in table 1 and charts 4 and 5, the Company properties' fair market
value is higher than the original cost by approximately 286% and is 127% higher
than the net book value. The estimated fair market value was based on the most
recent sales of similar properties in the area and appraisal of market
conditions by management as at March 31, 1996.
<TABLE>
<CAPTION>
CHART 3
CURRENT ASSETS, LIABILITIES AND WORKING CAPITAL
Current Assets Current Liabilities Working Capital
<S> <C> <C> <C>
1996 5,177,778 362,779 1,269,089
1995 4,021,847 233,001 122,549
TABLE 1
PROPERTIES HELD FOR DEVELOPMENT - APPRECIATION ANALYSIS
DATE OF ORIGINAL NET BOOK VALUE AS ESTIMATED FAIR
PROPERTY ACQUISITION COST AT MARCH 31, 1996 MARKET VALUE
<S> <C> <C> <C> <C>
Hurley Lodge June 1988 $134,000 $ 466,694 $ 900,000
Lillooet River Front Dec. 1988 175,000 292,558 780,000
Lillooet Water Front Sept. 1989 225,000 208,644 480,000
Cardlock Fuel Depot May 1988 60,000 160,170 250,000
Pemberton Ridge Mar. 1990 250,000 310,442 850,000
-------- --------- ----------
TOTAL $844,000 $1,438,508 $3,260,000
======== ========= ==========
CHART 4
PROPERTIES HELD FOR DEVELOPMENT
Analysis
Thousands of Dollars
Estimated Fair
Original Cost Net Book Value Market Value
<S> <C> <C> <C>
Hurley 175 420 900
Lillooet River 190 230 795
Lillooet Water 210 205 450
Cardlock 30 180 220
Pemberton Ridge 220 230 820
CHART 5
PROPERTIES HELD FOR DEVELOPMENT
Thousands of Dollars
Estimated Fair
Original Cost Net Book Value Market Value
900 1,450 3,250
</TABLE>
6
<PAGE> 20
AUDITORS REPORT
To the Shareholders of
VENTURE PACIFIC DEVELOPMENT CORPORATION
We have audited the consolidated balance sheets of Venture Pacific Development
Corporation (a development stage company) as at March 31, 1996 and 1995 and the
consolidated statements of income (loss) and deficit and changes in financial
position for each of the years in the three year period ended March 31, 1996 and
cumulative from inception to March 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the Company as at March 31,
1996 and 1995 and the results of its operations and the changes in its financial
position for each of the years in the three year period ended March 31, 1996 and
cumulative from inception to March 31, 1996 in accordance with Canadian
generally accepted accounting principles applied on a consistent basis.
Vancouver, British Columbia
/s/ Deloitte & Touche
---------------------
May 16,1996 Chartered Accountants
7
<PAGE> 21
VENTURE PACIFIC DEVELOPMENT CORPORATION
(Incorporated under the Company Act of British Columbia)
(A development stage company)
CONSOLIDATED BALANCE SHEETS as at March 31,1996
(Expressed in Canadian dollars)
<TABLE>
<CAPTION>
1996 1995
----------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash and term deposits $1,269,089 $ 122,549
Accounts receivable 16,687 1,026,771
Inventory 19,048 22,923
Prepaid expenses and deposits 14,296 15,511
---------- -----------
1,319,120 1,187,754
Property held for development (Note 2) 1,773,016 1,737,659
Fixed assets (Note 3) 348,127 364,685
Deferred land development costs (Note 4) 1,033,067 84,036
Deferred gaming facility development costs (Note 5) 704,448 647,713
---------- -----------
$5,177,778 $ 4,021,847
========== ===========
LIABILITIES
CURRENT
Accounts payable $ 236,890 $ 111,940
Deferred revenue 9,375 3,750
Current portion of mortgage payable (Note 7) 956 874
---------- -----------
247,221 116,564
Mortgage payable (Note 7) 115,558 116,437
---------- -----------
362,779 233,001
---------- -----------
SHAREHOLDERS'EQUITY
Capital stock (Note 8) 7,264,692 6,158,292
Deficit (2,449,693) (2,369,446)
---------- -----------
4,814,999 3,788,846
---------- -----------
$5,177,778 $ 4,021,847
========== ===========
</TABLE>
Approved by the Directors
/s/ Ronald W. Downey /s/ Dennis Beneteau
- ------------------------- -------------------------
Director Director
8
<PAGE> 22
VENTURE PACIFIC DEVELOPMENT CORPORATION
(A development stage company)
CONSOLIDATED STATEMENT OF (LOSS) INCOME AND DEFICIT
(Expressed in Canadian dollars)
<TABLE>
<CAPTION>
CUMULATIVE FROM YEARS ENDED MARCH 31
INCEPTION TO ----------------------------------
MARCH 31, 1996 1996 1995 1994
-------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE
Interest $ 179,174 $ 53,948 $ 4,483 $ 13,374
Joint venture income (excluding
depreciation)(Note 6) 428,575 162,180 140,458 121,771
Other 157,293 70,911 79,782 41,834
-------------------------------------------------------
765,042 287,039 224,723 176,979
-------------------------------------------------------
EXPENSES
Audit and accounting 293,008 26,271 23,624 52,480
Administration fee 153,104 - 24,449 30,000
Bad debts 13,639 - 11,264 2,375
Bank charges 5,363 939 1,173 514
Consulting 421,233 - 5,697 122,858
Depreciation 81,832 22,153 23,700 26,405
Directors fees 18,200 14,000 - 1,000
Filing fees 78,065 7,144 3,173 23,573
Interest on mortgage payable 59,926 11,466 13,850 26,291
Legal fees 494,988 23,270 39,066 175,295
Office 323,252 66,353 53,444 76,687
Rent 95,179 36,456 50,333 8,389
Abandoned acquisition costs 25,002 - - 25,002
Shareholder information 30,837 2,758 4,965 3,049
Transfer agent fees 32,350 2,369 2,529 4,568
Travel and promotion 347,806 31,442 63,386 151,957
Wages and benefits 435,434 122,665 249,572 63,197
-------------------------------------------------------
2,909,218 367,286 570,225 793,640
-------------------------------------------------------
(LOSS) BEFORE UNDERNOTED ITEMS (2,144,176) (80,247) (345,502) (616,661
Gain on disposal of property
held for development, net 574,853 - 596,398 -
Gain on disposition of assets 69,941 - - -
Write-off of investments (509,126) - - (499,039
Write-off of resource property (441,185) - - -
-------------------------------------------------------
NET (LOSS) INCOME FOR THE PERIOD (2,449,693) (80,247) 250,896 (1,115,700
Deficit at beginning of period - (2,369,446) (2,620,342) (1,504,642
-------------------------------------------------------
DEFICIT AT END OF PERIOD $(2,449,693) $(2,449,693) $(2,369,446) $(2,620,342
========================================================
Net (loss) income per share - $ (0.02) $ 0.09 $ (0.57
========================================================
Weighted average number of
shares outstanding - 3,521,305 2,696,285 1,927,742
========================================================
</TABLE>
9
<PAGE> 23
VENTURE PACIFIC DEVELOPMENT CORPORATION
(A development stage company)
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
(Expressed in Canadian dollars)
<TABLE>
<CAPTION>
CUMULATIVE FROM YEARS ENDED MARCH 31
INCEPTION TO -------------------------------------
MARCH 31, 1996 1996 1995 1994
--------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net (loss) income for the period $(2,449,693) $ (80,247) $ 250,896 $(1,115,700)
Items not involving cash
Deferred revenue (29,976) - - (14,988)
Depreciation 194,751 22,153 23,700 26,405
Gain on disposition of property
held for development, net (574,853) - (596,398) -
Write-off of investments 509,126 - - 499,039
Write-off of resource property 441,185 - - -
Gain on disposition of assets (69,941) - - -
------------------------------------------------------------
(1,979,401) (58,094) (321,802) (605,244)
Changes in non-cash operating
working capital 343,510 1,145,832 (1,011,189) (32,411)
------------------------------------------------------------
(1,635,891) 1,087,738 (1,332,991) (637,655)
------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of common shares (net) 7,264,692 1,106,400 447,700 1,759,989
Proceeds of loans and mortgages 1,165,200 - - -
Repayment of loans and mortgage (1,048,768) (879) (80,670) (1,321)
------------------------------------------------------------
7,381,124 1,105,521 367,030 1,758,668
------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of fixed assets (800,115) (5,596) (6,214) (32,652)
Expenditures on property held
for development, net (2,522,104) (35,357) (24,000) (5,928)
Expenditures on resource property (441,185) - - -
Purchase of investment (10,087) - - -
Proceeds on disposal of property 1,064,862 - 1,000,000 -
Investment in and advances
to Venture Pacific
Airways Ltd. net of payable (480,000) - - (480,000)
Casino development costs, net (704,448) (56,735) (221,750) (425,963)
Expenditures on land development (1,033,067) (949,031) (84,036) -
Proceeds of disposition of assets 450,000 - - -
Repayment of note receivable - - - 107,606
------------------------------------------------------------
(4,476,144) (1,046,719) 664,000 (836,937)
------------------------------------------------------------
Increase (decrease)
in cash and term deposits 1,269,089 1,146,540 (301,961) 284,076
Cash and term deposits at
beginning of period - 122,549 424,510 140,434
------------------------------------------------------------
CASH AND TERM DEPOSITS AT
END OF PERIOD $ 1,269,089 $ 1,269,089 $ 122,549 $ 424,510
============================================================
</TABLE>
10
<PAGE> 24
VENTURE PACIFIC DEVELOPMENT CORPORATION
(A developmental stage company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian dollars)
Venture Pacific Development Corporation (the "Company"), is a public company
which was incorporated on March 18, 1986 under the Company Act of British
Columbia. Its shares are traded on the Senior Board of the Vancouver Stock
Exchange. The Company is a development stage enterprise primarily involved in
developing real estate properties and reviewing the viability of developing
casinos for various Native Indian Bands in Canada.
1. SIGNIFICANT ACCOUNTING POLICIES
a. Basis of presentation
These financial statements have been prepared in accordance with Canadian
generally accepted accounting principles which differ in some respects
from those in the United States as outlined in Note 13.
b. Basis 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.
c. Property held for development
Property held for development is carried at the lower of cost and
estimated recoverable value. The Company capitalizes all direct costs
relating to properties held for future development. In addition, certain
indirect costs including financing costs and property taxes are
capitalized. To the extent that costs are determined to exceed estimated
recoverable value they will be written down accordingly.
d. Fixed assets
Fixed assets are recorded at cost. Depreciation has been calculated using
the declining-balance method based on annual rates as follows:
<TABLE>
<CAPTION>
<S> <C>
Building 4%
Store fixtures and equipment 20%
Office furniture 20%
Computer equipment 30%
</TABLE>
e. Inventory
Inventory is valued at lower of cost and net realizable value.
f. Deferred gaming facility costs
Gaming facility costs are recorded at cost and are deferred in the
accounts. The recoverability of amounts shown for deferred gaming facility
costs is dependent upon obtaining the required agreements and necessary
financing to complete the proposed developments in Canada and the United
States. Upon the development of a gaming facility and the commencement of
operation these costs will be amortized. When deferred costs exceed
estimated net realizable value they will be written down to estimated
value. Costs relating to projects abandoned are written off when the
decision to abandon is made.
g. Cash and cash equivalents
The Company considers cash on hand, deposits in banks, and highly liquid
investments with an original maturity of three months or less as cash and
term deposits.
h. Statement of Financial Accounting Standards - No 121
The Company has formulated a policy to adopt the recommendations of
Statement of Accounting Standards No 121, Accounting for the Impairment of
Long Lived Assets and for Long Lived Assets to be Disposed of. The Company
reviews the appropriateness of the carrying value of property held for
development on a periodical basis. The Company estimates fair market value
of property held for development by reference to current transactions of
similar properties and conditions of specific real estate markets. In
circumstances where the fair market value, less disposal costs, is
exceeded by current carrying value, the Company provides for the indicated
impairment. The results of the most recent review indicated that no
impairment was required.
2. PROPERTY HELD FOR DEVELOPMENT
11
<PAGE> 25
The Company capitalized property taxes and other costs, net of incidental
revenue, to property held for development as follows:
<TABLE>
<CAPTION>
As at March 31
--------------
1996 1995
-----------------------------
<S> <C> <C>
Property taxes $13,878 $14,976
Other costs 19,861
Less; incidental revenue (13,000) (10,930)
-----------------------------
$20,739 $4,959
=============================
3. FIXED ASSETS
Net Book Value
Accumulated --------------
Cost depreciation 1996 1995
----------------------------------------------
<S> <C> <C> <C> <C>
Land $ 38,753 $ - $ 38,753 $ 38,753
Building 287,430 38,086 249,344 260,962
Store fixtures and equipment 78,419 32,642 45,777 50,276
Office furniture 17,475 6,804 10,671 10,957
Computer equipment 7,884 4,302 3,582 3,737
----------------------------------------------
$429,961 $81,834 $348,127 $364,685
==============================================
4. DEFERRED LAND DEVELOPMENT COST
As at March 31
--------------
1996 1995
------------------------
<S> <C> <C>
Legal $ 23,030 $ 4,287
Administration and consulting 233,651 14,580
Architectural and engineering 775,758 65,169
Other 628 -
------------------------
$1,033,067 $84,036
========================
5. DEFERRED GAMING FACILITY DEVELOPMENT COSTS
As at March 31
--------------
1996 1995
---------------------------
<S> <C> <C>
Consulting and Administration $356,613 $324,591
Legal 222,964 203,011
Travel 101,689 98,756
Other 23,182 21,355
---------------------------
$704,448 $647,713
===========================
</TABLE>
6. INVESTMENT IN JOINT VENTURE
Effective November 1, 1992, the Company and the purchaser of the fixed assets
contributed the fixed assets and an initial contribution of $19,500 each to
the Pemberton Junction Store Joint Venture ("PJSJV"). Each of the venturers
has a 50% interest. The joint venture agreement provides for the other venturer
to be the operator for a management fee of $50,000 per annum. The PJSJV operates
a gas station and convenience store in Pemberton, British Columbia.
The Company has proportionately consolidated in its accounts the following in
respect of its joint venture:
<TABLE>
<CAPTION>
As at March 31
--------------
1996 1995
--------------------------
<S> <C> <C>
Current assets $ 76,602 $ 79,429
Long term assets 385,634 406,043
Current liabilities (33,734) (32,184)
--------------------------
Net $428,502 $453,288
==========================
</TABLE>
Years ended March 31
12
<PAGE> 26
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Sales $ 1,973,854 $ 1,726,212 $ 1,543,853
Cost of sales (1,607,019) (1,354,651) (1,213,391)
--------------------------------------------
366,835 371,561 334,462
Expenses 223,465 251,428 235,271
--------------------------------------------
Joint venture income before depreciation 162,180 140,458 121,771
Depreciation 18,810 20,325 22,580
--------------------------------------------
Net income $ 143,370 $ 120,133 $ 99,191
============================================
7. MORTGAGE PAYABLE
As at March 31
--------------
1996 1995
-----------------------
<S> <C> <C>
Mortgage loan, with monthly principal and
interest payments of $1,027, secured by
certain fixed assets of the joint venture
and bearing interest at 10% per annum,
due December 1, 1997 $116,514 $117,311
Current portion 956 874
-------- --------
$115,558 $116,437
======== ========
</TABLE>
8. CAPITAL STOCK
a. Details of capital stock transactions from inception, March 18, 1986, to
March 31, 1996 are as follows:
<TABLE>
<CAPTION>
Number of shares Amount
<S> <C> <C>
Issued on incorporation 1,150,001 $ 107,500
-----------------------------
Balance, March 31, 1987 and 1988 1,150,001 107,500
-----------------------------
Issued for cash pursuant to a private
placement, net of commissions of $25,000 500,000 225,000
Issued for cash pursuant to a public
offering, net of commissions of $45,000 600,000 555,000
Issued for cash on the exercise of warrants 125,000 68,750
Issued for cash on the exercise of options 40,000 20,000
Issued for bonus for loans 34,800 34,800
-----------------------------
Balance, March 31, 1989 2,449,801 1,011,050
Issued for cash pursuant to a private
placement, net of finder's fee of $50,000 800,000 950,000
Issued for cash on the exercise of warrants 890,250 890,250
Issued for bonus for loans 6,024 5,000
Issued for the acquisition of a subsidiary 40,625 65,000
-----------------------------
Balance, March 31, 1990 4,186,700 2,921,300
Issued for cash on the exercise of options 50,000 25,000
Issued for bonus for loans 38,400 34,740
-----------------------------
Balance, March 31, 1991 4,275,100 2,981,040
Issued for cash 1,265,000 713,260
Issued for cash 1,250,000 200,000
Issued for resource property 25,000 11,250
Issued for settlement of debt 136,573 45,053
-----------------------------
Balance, March 31, 1992 6,951,673 3,950,603
Share consolidation 6:1 (Note 8.b.) (5,793,061) -
-----------------------------
Balance, March 31, 1993 (carried forward) 1,158,612 3,950,603
</TABLE>
13
<PAGE> 27
<TABLE>
<CAPTION>
Capital stock continued Number of shares Amount
<S> <C> <C>
Balance, March 31, 1993 (brought forward) 1,158,612 3,950,603
Issued for cash (Note 8.c.) 1,000,000 496,280
Issued for cash (Note 8.d.) 250,000 1,212,609
Issued for cash on the exercise of options 73,000 51,100
---------------------------
Balance, March 31, 1994 2,481,612 5,710,592
Issued for cash on the exercise of options 43,000 30,100
Issued for cash on the exercise of warrants 720,000 417,600
---------------------------
Balance, March 31, 1995 3,244,612 6,158,292
Issued for cash (Note 8.e.) 1,685,715 944,000
Issued for cash on the exercise of warrants 280,000 162,400
---------------------------
Balance, March 31, 1996 5,210,327 $7,264,692
===========================
</TABLE>
b. During the year ended March 31, 1993, the authorized and issued capital
stock of the Company was consolidated on the basis of one share for every six
previously held. Immediately after the consolidation, the authorized capital
was increased to 50,000,000 common shares without par value. All share
numbers elsewhere in these financial statements reflect the effect of this
consolidation.
c. During the year ended March 31, 1994, the Company issued 1,000,000 units
for net proceeds of $496,280, net of costs of $3,720. Each unit consisted
of one share and one non-transferable share purchase warrant which allowed the
holder to purchase an additional share for $0.50 on or before August 11, 1994
and at $0.58 from August 12, 1994 to August 11, 1995. These warrants expired
during the year ended March 31, 1996.
d. During the year ended March 31, 1994, the Company issued 250,000 shares
for net proceeds of $1,212,609, net of commissions and costs of $99,891.
In addition, the agent received 62,500 non-transferable warrants. Each warrant
entitled the holder to purchase one share at $5.25 on or before October 19,
1994. These warrants expired during the year ended March 31, 1995.
e. The Company completed a private placement of 1,685,715 units on March 13,
1996 at a purchase price of $0.56 per unit. Each unit consists of one share
and one share purchase warrant to purchase a further share at a price of $0.56
in the first year and $0.65 in the second year commencing January 26,
1996.
f. Stock options
i. From time to time, the Company grants incentive stock options to
officers, directors, and employees to purchase common shares of
the Company at market related prices.
Information regarding the Company's stock options is summarized
as follows:
<TABLE>
<CAPTION>
Exercise price range
Number of shares ($/share)
<S> <C> <C>
Outstanding at April 1, 1992 58,333 $1.56 - 3.30
granted 54,167 1.56
expired (54,167) 1.56
---------
Outstanding at March 31, 1993 (58,333) 1.56 - 3.30
granted 316,000 0.70 - 1.39
exercised (73,000) 0.70
expired (58,333) 1.56 - 3.30
---------
Outstanding at March 31, 1994 243,000 0.70 - 2.10
granted 70,000 1.39 - 1.50
exercised (43,000) 0.70
expired/canceled (46,500) 1.39 - 2.10
---------
Outstanding at March 31, 1995 223,500 1.39 - 2.10
granted 195,000 0.62 - 0.92
expired/canceled (166,500) 1.39 - 1.50
---------
Outstanding at March 31, 1996 252,000 0.62 - 1.39
=========
</TABLE>
ii. Options to purchase 252,000 shares are outstanding at March 31, 1996 as
follows:
14
<PAGE> 28
<TABLE>
<CAPTION>
Number of shares Exercise Price Expiry date
<S> <C> <C>
25,000 $0.62 December 27, 1996
10,000 0.62 February 8, 1997
25,000 0.92 May 24, 1997
25,000 0.71 August 24, 1997
110,000 0.62 December 27, 1997
57,000 1.39 August 11, 1998
</TABLE>
iii. Warrants to purchase 1,685,715 shares for $0.56 per share in the first
year and $0.65 in the second year commencing January 26, 1996.
9. RELATED PARTY TRANSACTIONS
Significant related party transactions and balances not disclosed elsewhere
in these consolidated financial statements include:
<TABLE>
<CAPTION>
As at March 31
--------------
1996 1995 1994
----------------------------------
<S> <C> <C> <C>
a. consulting and administration fees incurred with
companies related by directors in common $ - $25,000 $52,293
b. legal fees incurred with a firm in which a director
is a partner - 61,054 191,944
Included in accounts payable at March 31, 1996 is $nil
(1995 - 31,024) payable in respect of these services
</TABLE>
10. INCOME TAXES
The provision for income taxes differs from the amounts computed by
applying the combined Canadian federal and provincial income tax rates as
follows:
<TABLE>
<CAPTION>
As at March 31
--------------
1996 1995 1994
--------------------------------------
<S> <C> <C> <C>
Provision computed at combined Canadian
federal and provincial rate of 45.3% ($36,351) $113,656 ($505,412)
Recovery of taxes resulting from utilization
of loss carry forwards - (113,656) -
Benefit resulting from losses not recognized 36,351 - 505,412
-------------------------------------
$ - $ - $ -
=====================================
</TABLE>
As at March 31, 1996, the Company and its subsidiaries have non-capital losses
for income tax purposes of approximately $2,000,000 available to offset future
taxable income. These losses commence expiring at various dates through 2003.
The potential benefit of these losses has not been reflected in these
consolidated financial statements.
11. COMMITMENTS
i. The Company is committed to future minimum payments under operating
leases for office space as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 9,895
1998 11,694
1999 13,493
2000 15,292
2001 -
</TABLE>
ii. The Company has estimated costs to complete the properties under
development amounting to approximately $7,000,000. Of this amount,
contract commitments of approximately $5,660,000 are in place. These
costs will be financed through the proceeds of sale of these
properties or by drawing on project finance commitments of $5,879,000.
12. SEGMENTED INFORMATION
The Company operates in two industries in Canada. Substantially all assets
and operations are related to developing real estate properties, except
for those costs which have been capitalized relating to developing gaming
facilities as outlined in Note 5.
13. RECONCILIATION BETWEEN CANADIAN AND U.S. GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES
15
<PAGE> 29
These consolidated financial statements have been prepared in accordance with
Canadian generally accepted accounting principles (GAAP) which differ in some
respects from U.S. GAAP. The material differences between Canadian and U.S. GAAP
which affect the Company's results of operations and financial position are
summarized below:
<TABLE>
<CAPTION>
As at March 31
Cumulative from inception ----------------------------------------------
Result of operations to March 31, 1996 1996 1995 1994
<S> <C> <C> <C> <C>
Net loss/income for the year
Canadian GAAP ($2,449,693) ($ 80,247) $ 250,896 ($1,115,700)
Deferred casino development costs (704,448) (56,735) (221,750) (425,963)
Capitalized holding costs (156,858) (20,739) (4,959) (5,928)
----------------------------------------------------------------------
U.S. GAAP ($3,310,999) ($152,721) $ 24,187 ($1,547,591)
======================================================================
Primary loss/earning per share ($ 0.05) $ 0.01 ($ 0.86)
=============================================
Primary weighted average number
of shares outstanding 3,396,308 2,571,288 1,802,245
=============================================
Financial position
Net assets
Canadian GAAP $ 4,814,999 $3,788,846
Deferred casino development costs (704,448) (647,713)
Capitalized holding costs (156,858) (136,119)
----------------------------
U.S. GAAP $ 3,953,693 $3,005,014
============================
</TABLE>
14. COMPARATIVE FIGURES
Certain of the comparative figures have been reclassified to conform with
the current year's presentation.
16
<PAGE> 30
<TABLE>
<CAPTION>
CORPORATE DIRECTORY
<S> <C> <C>
DIRECTORS CORPORATE REGISTER REGISTRAR & TRANSFER AGENT
Ronald W. Downey AND RECORDS OFFICE Montreal Trust Company of Canada
George E. Scott 1700-1185 West Georgia Street 510 Burrard Street
Denis Beneteau Vancouver, B.C. V6E 4E6 Vancouver, B.C. V6C 3B9
Conrad Clemiss T: (604) 689-9356 T: (604) 661-9400
F: (604) 689-7030 F: (604) 683-3694
OFFICERS
Ronald W. Downey CAPITALIZATION AUDITORS
President & CEO Authorized: Deloitte & Touche
George E. Scott Common shares - 50,000,000 Chartered Accountants
Corporate Secretary Issued: Suite 2000
Common - 5,210,327 1055 Dunsmuir Street
AUDIT COMMITTEE Vancouver, B.C. V7X 1P4
Ronald W. Downey SHARE LISTINGS T: (604) 669-4466
Chairman Vancouver Stock Exchange F: (604) 685-0395
Conrad Clemiss Senior Board,
Denis Beneteau Commercial/Industrial LEGAL COUNSEL
Common - "VPV" Jeffrey T.K. Fraser Law Corporation
COMPENSATION COMMITTEE Suite 1700
George E. Scott, Non - NASDAQ 1185 West Georgia Street
Chairman Over the Counter Quotation Vancouver, B.C. V6E 4E6
Denis Beneteau System - "VEPDF" T: (604) 689-9356
Conrad Clemiss F: (604) 689-7030
TRADING SUMMARY
CORPORATE HEADQUARTERS April 1/95 - March 31/96 Boughton Peterson Yang Anderson
Suite 1204 High $1.50 2500-1055 Dunsmuir Street
700 West Pender St. Low $0.36 Vancouver, B.C. V7X 1S8
Vancouver, B.C. T: (604) 687-6789
V6C 1G8 CORPORATE COMMUNICATIONS F: (604) 683-5317
T: (604) 687-4588 Ronald W. Downey
F: (604) 687-4905 T: (604) 687-4588 Titus, Brueckner & Berry
E-Mail: [email protected] F: (604) 687-4905 Suite B-252, Scottsdale Centre
Toll Free: 1-888-260-8888 7373 North Scotttsdale Road
TO VIEW NEW WORLD WIDE WEB Scottsdale, Arizona 85253-3522
HOME PAGE: T: (602) 483-9600
Open "Browser" (Netscape) F: (602) 483-3215
Type the following address:
http://www.venpac.com
</TABLE>
[VENTURE PACIFIC DEVELOPMENT CORPORATION LOGO]
<PAGE> 31
[VENTURE PACIFIC DEVELOPMENT CORPORATION LOGO]
Suite 1204 - 700 West Pender Street, Vancouver, BC, Canada V6C 1G8
Tel: 604-687-4588 Fax: 604-687-4905 Toll Free: 1-888-260-8888
e-mail [email protected] WEB SITE www.venpac.com
PRINTED IN CANADA
<PAGE> 32
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
VENTURE PACIFIC DEVELOPMENT CORPORATION
(Registrant)
Date: July 24, 1996 By: /s/ Ronald W. Downey
Ronald W. Downey
President and Chief Executive Officer
(Signature)*
*Print the name and title of the signing officer under his signature.
<PAGE> 33
APPENDIX A
Description of Graphic and Image Material
Location: Outside and Inside of Front and Back Covers of Annual Report
Item: Venture Pacific Development Corporation Logo
Description: The Company logo is a stylized upside down triangle offset in
the botton right corner of a square box
Location: Page 1 of Annual Report
Item: Photo
Description: This is a photo of President & CEO, Ronald W. Downey
Location: Page 3 of Annual Report
Item: Graphic and Photo
Description: The graphic depicts the layout and placement of lots in the
Creekside Village townhouse and condominium complex.
The photo is a construction scene from the Creekside Village
complex with the following caption:
Foundation walls are taking sharpe at Creekside Village;
photographed on June 14, 1996.
Location: Page 4 of Annual Report
Item: Photo
Description: This is a photo of the Pemberton Junction store and gas bar with
the following caption:
Pemberton Junctionstore and gas bar, a profitable joint
venture of venture Pacific Development Corporation.
