UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-K

                    ANNUAL REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Fiscal Year Ended September 30, 1995
                          Commission File Number 1-8893


                            ROYAL PALM BEACH COLONY,
                               LIMITED PARTNERSHIP
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            DELAWARE                                    59-2501059
---------------------------------        ---------------------------------------
 (State or other jurisdiction            (I.R.S. Employer Identification Number)
of incorporation or organization)


      2501 S. Ocean Drive
      Hollywood, Florida                                   33019
----------------------------------------                 ----------
(Address of principal executive offices)                 (Zip Code)


       Registrant's telephone number, including area code: (305) 927-3080


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

                                                    Name of Each Exchange
         Title of Each Class                         on which Registered
         -------------------                        ---------------------
      Limited Partnership Units                    American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE
<PAGE>
Indicate by checkmark  whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                            YES [ X ]      NO [ ]

Indicate by checkmark if disclosure of delinquent filers pursuant to item 405 of
Regulation S-K (ss. 229.405 of this chapter) is not contained  herein,  and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information statement incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K. [XX]

The  aggregate   market  value  of  the  limited   partnership   units  held  by
non-affiliates  of Registrant  computed by reference to the closing price of the
Units on the  American  Stock  Exchange at December  31, 1995 was  approximately
$1,722,770. The Exchange halted trading in Partnership Units on January 16, 1995
pending review of this Report. See Item I.
<PAGE>
                                     PART I


Item 1. Business

(a) GENERAL DEVELOPMENT OF BUSINESS

Royal  Palm  Beach  Colony,   Limited  Partnership  (the  "Partnership"  or  the
"Registrant")   was  organized  under  the  Delaware   Revised  Uniform  Limited
Partnership  Act. The  Partnership  is a successor  to Royal Palm Beach  Colony,
Inc.,  (the  "Predecessor  Company") a Florida  corporation  organized  in 1963.
Pursuant to a Plan of Complete Liquidation (the "Plan"), the Predecessor Company
transferred  all of its  assets,  subject  to  all  of its  liabilities,  to the
Partnership  in exchange for a number of  partnership  units  ("Units")  exactly
equal to the  number  of  shares  of  common  stock of the  Predecessor  Company
outstanding on July 11, 1985 (the "Effective  Date"). On the Effective Date, the
Units were  distributed to the former holders of common stock of the Predecessor
Company  on the  basis of one (1) Unit for  each  share of  common  stock of the
Predecessor Company. The Partnership, as a successor to the Predecessor Company,
has registered its Units under Section 12 (b) of the Securities  Exchange Act of
1934. Under the Amended Agreement of Limited Partnership of the Registrant,  the
term of the Partnership  expires December 31, 2005, unless extended by vote of a
majority of the partnership units.

AMERICAN STOCK EXCHANGE  LISTING On January 16, 1996 the American Stock Exchange
halted  trading in the  Partnership's  Units pending filing of this Form 10K and
review thereof by the Exchange.  The Exchange also advised the Partnership  that
it did not currently meet the Exchange's listing standards and that no assurance
could be given that trading in the units would resume.  Management believes that
a market for the Partnership's  Units may develop  over-the-counter if the Units
are not permitted to trade on the Exchange,  but there can be no assurance  that
such market will develop.

Results of Liquidation Activities

The Partnership's  principal business has been to operate, manage and dispose of
the assets which were transferred to it on the Effective Date by the Predecessor
Company.

Since  the  Effective  Date  of  the  Predecessor  Company's  liquidation,   the
Partnership has engaged in a program of asset disposition  resulting in the sale
of assets for an aggregate gross consideration of $65,116,575. As of January 31,
1996, the Partnership had distributed an aggregate of $29,156,000,  or $6.50 per
Unit,  to the  general  and  limited  partners.  See  Item 5 --  Market  for the
Registrant's   Common   Equity  and  Related   Stockholder   Matters  --  "Prior
Distributions."


<PAGE>
As  of  September  30,  1995,  the  Partnership's   remaining  assets  consisted
principally of; (1) mortgages  having aggregate  principal  balances of $285,801
and  which  are  included  in the  balance  sheet  in the item  "Mortgage  Notes
Receivable"  (net of deferred  profit of $49,648 -- see Note 2 to the  financial
statements);  (2) a 165 acre  tract of land in the  Village  of Royal Palm Beach
(the  "Village"),  (a portion of which is now under  development:  see Item 2 --
Properties  --  "Village of Royal Palm  Beach"),  which land was  reacquired  in
January,  1992 by foreclosure of a mortgage and which is included in the balance
sheet at $3,767,818  (this tract is hereinafter  referred to as the  "Crestwood"
tract),  (3) unsold land in Palm Beach County,  Florida which is included in the
balance sheet at its book value of $487,582,  (4) a tract of land in the Village
reacquired by foreclosure in 1993 and included in the balance sheet at $287,197,
(5)  contingent  receivables  relating to a prior sale of utility  assets with a
maximum  future  undiscounted  value of  $5,945,000  (which  amount,  other than
$432,800 earned as of September 30, 1995 but not paid to the  Partnership  until
January,  1996, has not been included in the balance sheet due to its contingent
nature -- see Note 11 to the Financial  Statements),  and (6) cash in the amount
of $83,902.  Through January 31, 1996, there had been no material changes in the
Partnership's real estate assets.


Factors Affecting Future Operations and Distributions

The  availability  of cash for  distribution  in the future  will  depend upon a
variety of factors not currently determinable.

(1)  Recent Efforts to Resume Active Business Activities

In early 1992, a large portion of the Partnership's  remaining land consisted of
the undeveloped 165 acre "Crestwood" Tract described above,  which had been sold
during the  process  of the  Partnership's  liquidation  but  reacquired  by the
Partnership  in 1992 when the  purchaser  was unable to service the interest and
amortization  payments  to  the  Partnership  on  a  $5,039,952  purchase  money
mortgage.  Management's attempts to remarket the Crestwood Tract on a bulk basis
were  unsuccessful.  Management  perceived that due to changes in the market for
real estate in  southern  Florida,  the  Crestwood  Tract  would  continue to be
difficult to market at acceptable  prices.  Among other factors  depressing  the
local market was the  "overhang" of large  undeveloped  tracts which were on the
market as the result of bank insolvencies.

Management  also  concluded  that the market for  developed  land -- defined for
purposes of this discussion as buildable lots which have been properly zoned and
developed  with  grading,  roads  and  utility  lines  brought  to the  property
boundaries -- was tightening,  with local and national builders  competing for a
shrinking supply of such developed land. With the liquidation of the Partnership
having  progressed to the point at which the major portion of the  Partnership's
assets had been  liquidated,  management  began to consider  the most  effective
means  to  maximize  unitholder  value  with  respect  to  the  balance  of  the
Partnership's assets.

After study, management concluded that the Partnership's  continuing liquidation
should proceed along two tracks.
<PAGE>
First,  it was  determined  that  unitholder  values could most  effectively  be
increased if some or all of the Crestwood Tract were  temporarily  withheld from
sale and selectively developed.  In the judgment of management,  the prospective
incremental  increase in selling  prices of developed  land over  amounts  which
might reasonably be anticipated from the sale of the land in its raw state would
substantially  exceed the cost of developing such land, and warranted investment
of a  portion  of the  Partnership's  cash  assets  in  development  activities.
Management  therefore  commenced the development of one portion of the Crestwood
Tract,  consisting  of 178 lots zoned for  single  family  housing,  in order to
enhance  its sale value.  Management's  decision  to  commence  development  was
influenced,  in part, by an appraisal  obtained in 1992 of the  Crestwood  Tract
which  indicated  that such tract had a then  current  fair market  value in the
approximate amount of $4,500,000 and could have a significantly  higher value if
rezoning and re-permitting work were accomplished. Management was further of the
opinion that the  Crestwood  Tract would have an  indefinite  but  substantially
higher value if developed with roads and a utility infrastructure. See Item 2 --
Properties -"Village of Royal Palm Beach."

Second,  management  concluded  that generally  strengthening  conditions in the
south Florida real estate market might present an opportunity to the Partnership
to  capitalize  on its status as a  publicly  traded  entity.  In early 1994 the
Partnership retained a private consultant to determine whether unitholder values
could further be enhanced by utilizing the Partnership's cash and remaining land
as a vehicle for the  resumption of active  business  operations,  either in the
land development  business or by expanding its activities into home building and
other  real  estate-related   fields.   Management  also  wished  to  obtain  an
independent  review of its assumption that the market value of the Partnership's
units  might be  enhanced  over  time were the  Partnership  to  convert  from a
liquidating to an active business mode.

Management also concluded that its decision to develop portions of its remaining
Palm Beach  County real  estate  would be  consistent  either with a decision to
proceed  with  the  Partnership's  complete  liquidation,   to  resume  business
operations,  or to complete its  liquidation  by acquiring and  distributing  to
unitholders  the  securities  of another  entity in  connection  with a business
combination.  It therefore proceeded with the development plans described above,
and at  the  same  time  explored  the  business  and  tax  implications  of the
resumption  of business  activities  and/or  business  combination  with another
entity.  The progress of such land development,  and financing recently obtained
therefor,  is  discussed  under Item 2 --  Properties  -- "Village of Royal Palm
Beach."

Management ultimately concluded that the most logical course for the Partnership
to follow would involve the addition of home building operations. In furtherance
of this  objective,  the  Partnership,  during  the  summer of 1994,  retained a
locally  recognized  consultant  to the home  building  industry to assist it in
identifying  possible  affiliations  in south Florida.  After several  potential
affiliations  were identified,  a memorandum of understanding  was executed with
Regency Homes,  Inc., a prominent,  privately-owned  South Florida home builder.
The  memorandum   envisioned  a  business   combination  in  which  the  Regency
shareholders,   and  the  Partnership  would  have  acquired  62.5%  and  37.5%,
respectively  (later  modified  to 60% and 40%,  respectively)  of a new entity,
followed by  distribution  of the  Partnership's  shares to its  unitholders and
liquidation of the Partnership.  However, after protracted negotiations over the
terms of the agreement and several downward  modifications of Regency's original
earnings projections, negotiations with Regency were suspended in early December
1995 and terminated in late December, 1995.
<PAGE>
While management  continues to explore the possibility of a business combination
with an operating  business,  the Partnership is proceeding with the liquidation
of the its remaining assets, and, in connection therewith, continuing to develop
the residential lots in the Crestwood tract. The status of such dispositions and
development is discussed in Item 2 below.

(2)  Cash Available for Distribution

Whether or not the Partnership  resumes active business  activities,  management
intends  to  continue  to  invest  in  the   development   of  portions  of  the
Partnership's  remaining  land in Palm Beach  County as a means of  achieving  a
higher  return  upon  sale.  Because  of the cash  requirements  for  such  land
development  activities in 1995,  together with cash  expenditures in connection
with the proposed  transaction  with Regency  Homes,  Inc. and normal  operating
expenses,  no cash was available for  distribution  in 1995 and it is considered
doubtful that cash will be available  for  distribution  in 1996.  See Item 7 --
Management  Discussion  and  Analysis of Financial  Condition  -- Liquidity  and
Capital  Resources.  If the  Partnership  ultimately  determines  to  carry  its
liquidation  to  conclusion,   the  timing  of  the  resumption  of  liquidating
distributions  will depend  largely upon its ability to dispose of its remaining
land, developed or undeveloped, and future collections of contingent receivables
relating  to a prior  sale of a  utility  plant.  See  Item 2 --  Properties  --
"Utility  Contingent  Receivable"  for a discussion of other  factors  affecting
future  distributions.  If management  determines  that the  Partnership  should
continue in business,  the form in which the Partnership does business,  and the
form in which present  unitholders hold an equity  position,  could also change.
Management is unable to predict the distribution policy of the Partnership if it
resumes active business  activities or the  distribution  policy of any business
entity which might result from the combination of the  Partnership  with another
entity.  However,  management  considers  it  more  likely  than  not  that  the
Partnership  will  complete  its  liquidation  without  engaging  in a  business
combination with another entity.


(b) Financial Information About Industry Segments

Not applicable.

(c) Narrative Description Of The Business

Regulation

Development and sales  operations of the Partnership or by potential  purchasers
of real estate from the Partnership  have been subject to regulation by a number
of local,  state and  federal  agencies  concerning  the  nature  and  extent of
improvements,  and compliance with zoning  regulations,  building codes,  health
requirements and environmental protection.  The Partnership believes that it has
been in substantial  compliance with all such laws and regulations  which affect
its properties  and that it has developed the properties to the extent  required
by contract or law. If such laws or regulations are amended, in particular those
concerning environmental protection,  the cost of compliance could be increased.
Reference is made to the discussion concerning the impact of land use regulatory
issues affecting salability of certain properties remaining in Palm Beach County
in Item 2 -- Properties -- "Acreage in the Vicinity of the Village."
<PAGE>
Competition

The real estate business conducted by the Partnership is highly competitive. The
Partnership's  sales  of  its  remaining  land  will  compete  with  surrounding
developments,  and  with  owners  of  tracts  of  land  in the  area  of all its
properties.  There  are  substantial  tracts  of  vacant  land  and  land  under
development  in the general  area of most of the  Partnership's  remaining  real
estate. These competitive considerations could affect the decisions of potential
purchasers of the Partnership's remaining properties.

The Partnership  has  historically  marketed its properties  through direct mail
advertising to major brokers and  developers,  advertisements  in major regional
newspapers and direct contacts  between officers of the Managing General Partner
and real estate developers and brokers.  The Partnership is currently  marketing
its remaining  properties  through local real estate  brokers,  including  Randy
Rieger, who also served as interim Vice President and Chief Operating Officer of
the  Partnership's  managing general partner between September 1995 and February
1996. See Item 13 -- "Certain Relationships and Related Transactions."


Impact of General Economic Conditions

The  development  and sale of real estate occurs within a historically  cyclical
market, and is significantly influenced by general economic conditions. Sales of
housing units and sales of tracts to builders are  particularly  affected by the
costs and  availability of mortgage  financing and the rise and fall of interest
rates in general.  Interest  rates have moved in a narrow  range during the past
year, and declined slightly in December 1995. If significant  increases occur in
the future, the real estate market could suffer as a result.


Personnel

As of January 31, 1996, Stein Management Company,  Inc. ("Steinco") the Managing
General Partner, employed 3 persons.

Office Facilities

The  Partnership's  executive  headquarters  are located at 2501 S. Ocean Drive,
Hollywood, Florida 33019. The premises are owned by an affiliate of Hasam Realty
Limited  Partnership  ("Hasam L.P."), a general partner of the Partnership,  and
are being made available to the Partnership as an accommodation without charge.



<PAGE>
Item 2.  Properties

Palm Beach County, Florida

The Company originally owned approximately 28,000 acres in Palm Beach County, in
southeastern  Florida,  approximately  4,200 of which  were  located  within the
Village.

The Village of Royal Palm Beach

The village, an incorporated municipality, is approximately eight miles from the
Palm Beach International  Airport and eleven miles west of Palm Beach. Two major
area highways,  Southern  Boulevard and Okeechobee Road, lead directly from Palm
Beach  through West Palm Beach to the Village.  The Village has a population  of
approximately  16,000  and  is  primarily  residential.  The  Village  has  been
developed  in  accordance  with a master  plan and  includes  schools,  shopping
facilities, community recreation areas, and its own police and fire departments.

Although the Partnership had previously sold all of its land in the Village,  it
reacquired in 1992, through  foreclosure of a defaulted purchase money mortgage,
the  165  acre  Crestwood  Tract  of  undeveloped  land  in  the  Village.  When
reacquired,  the  Crestwood  Tract was zoned and  preliminary  approval had been
obtained for the development of 172 single-family  homesites (the "Single Family
Tract")  and 625  multi-family  units.  The  Crestwood  Tract is  bisected  by a
principal  Village  road and has  access  to all  utilities,  but was  otherwise
undeveloped  with the  exception  of the  existence  of  portions  of a drainage
system.

Commercial Tract within the Crestwood Tract

In order to  enhance  the value  and  salability  of the  Crestwood  Tract,  the
Partnership  has obtained the rezoning of a 28 acre portion of the  multi-family
zoned  property in the Crestwood  Tract to permit the  Partnership to offer such
portion for sale as a shopping center site. The  Partnership  expects to receive
site-plan  approval in mid-1996.  The  Partnership  has executed an agreement to
sell this portion to an unaffiliated shopping center developer  ("Purchaser") in
four phases.  The first phase relates to an 11.8 acre tract to be sold for $3.00
per square  foot  (approximately  $1,542,024  subject to final  survey),  with a
closing subject to soil testing, availability of sufficient utility connections,
environmental  matters,  final site-plan  approval by June, 1996 and approval of
the premises by a major  supermarket  chain as a site for a new supermarket.  In
addition,  the  Purchaser  has an  inspection  period ending in May, 1996 during
which  Purchaser can terminate the agreement if it determines  that the property
is not suitable for  Purchaser's  purposes.  All  conditions  to closing must be
satisfied and the closing must occur ("First Closing") on or before December 31,
1996. The Purchaser's only liability for failure to close will be its loss of an
initial  deposit  of  $15,000,  plus  additional  deposits  aggregating  $55,500
required if the inspection  period expires,  the supermarket  chain approves the
site, and the Purchaser does not terminate the agreement.
<PAGE>
The second and third  phases  consist of two  parcels  which are  covered by the
rezoning  process  referred to above and adjoin the shopping center site, but as
to which  building  permits are not expected to be available  for  approximately
four years. As to such parcels,  the Partnership has agreed,  during a five-year
period following the First Closing,  to accord an option to Purchaser to acquire
the  parcels,  with the price to be paid  dependent  on the terms upon which the
Purchaser  leases or sells such parcels to an unaffiliated  third party. In such
event the Purchaser will pay to the partnership,  (i) in the event of a lease, a
sum equal to the five times the average annual rental under the lease,  and (ii)
in the event of a sale,  50% of the net proceeds of the sale;  provided that the
partnership  is not required to accept less than $3.50 per square  foot.  If the
Partnership  obtains  an  unsolicited  offer to lease or  purchase  the  parcels
("Third Party Offer") which the Partnership desires to accept, the Purchaser may
exercise a right of first refusal in which case the Partnership  must accept (i)
in the event of a lease,  a sum equal to five times the average annual rental to
be paid during the first five years of the proposed lease, and (ii) in the event
of a sale, 50% of the net proceeds the Partnership would have received under the
Third Party Offer.

The fourth  phase  relates  to a 14-acre  parcel as to which  rezoning  from the
current  multi-family  to commercial use is not considered  feasible for several
years.  The  Purchaser  has been  granted an option  ending four years after the
First  Closing to acquire  this parcel at $3.50 per square  foot  (approximately
$2,129,000  subject to survey).  The  Partnership is entitled to make an earlier
sale of  this  parcel,  commencing  two  years  after  the  First  Closing,  for
multi-family  residential  purposes only, and for a price which is less than the
option  price,  subject to the  Purchaser's  right of first  refusal at the same
price.

Randy Rieger,  who became  vice-president of the Partnership's  managing general
partner in  September,  1995 for an interim  period  following  the death of its
President,  is  entitled  to a  commission  of 10% of the  net  proceeds  to the
Partnership on all of the above-described transactions. See Item 13.

In addition,  as a result of  management's  decision to develop  portions of the
Crestwood Tract,  the Partnership has replanned the  configuration of the entire
tract.  This project  included a redesign of the Single  Family  Tract,  and the
Partnership  has now received  final plat approval to increase to 198 the number
of lots which may be developed in the Single  Family  Tract.  "Development,"  as
such term is  applied to  single-family  lots,  entails  the  completion  of all
necessary  zoning,  land  use,   environmental  and  other  required  regulatory
procedures,  the  installation of roads and utility  connections to each lot and
the provision of drainage facilities.

The Partnership has recently  completed the off-site utility  infrastructure for
the entire Crestwood Tract. The cost of such construction approximated $975,000.
This construction was financed with the proceeds of a $975,000 construction loan
from  Union  Bank of  Florida,  ("Union  Bank  Loan " -- See  Item 13  -"Certain
Relationships and Related Transactions").  See Item 7 -Management Discussion and
Analysis -- "Liquidity." Under the terms of the Union Bank Loan, the Partnership
is paying  interest at a rate equal to 2% above the bank's prime  lending  rate.
The Union Bank's  aggregate  commitment in respect of the  Residential  Tract is
$2,175,000.  The Union Bank Loan,  which is secured by a first  mortgage  on the
1978 undeveloped homesites,  is due in full on July 1, 1997. Individual lots may
be released from the mortgage upon sale upon a prepayment of $20,000 per lot.
<PAGE>
The Partnership is developing the residential lots in three phases, of which the
first phase,  comprising  32 lots,  is currently  being  developed  with on-site
improvements. financed by $350,000 in additional borrowings under the Union Bank
Loan.  Four of the  residential  lots  in the  first  phase  have  already  been
purchased by Regency Homes, Inc. for the sum of $35,000 per lot, and the balance
of 28 lots are  subject to an option in favor of Regency at $36,000  per lot for
the 14 remaining waterfront lots and $30,000 for the 14 remaining "dry" lots (an
additional  $924,000  if all options are  exercised).  In order to preserve  the
option,  Regency must  purchase a minimum of three lots per month  commencing in
May,  1996.  The  agreement  with Regency  Homes,  Inc. was unrelated to and not
contingent  upon the  merger  described  in Item 1 -- Recent  Efforts  to resume
Active Business Operations.

The Partnership  proposes to finance  on-site  development of the balance of the
Single Family Tract,  anticipated to cost in the range of $1.9 million, with the
balance of the  borrowing  available  under the Union Bank Loan and public  bond
financing  through the Indian Trail Water  Control  District  (the  "District"),
which  the  Partnership   anticipates   will  produce  net  available  funds  of
approximately  $1,000,000.  Union Bank is not obliged to fund the balance of its
commitment  unless bond issue  proceeds of a minimum of $1,000,000 are realized.
The  District  has  adopted  the  Partnership's  proposed  development  plan,  a
court-appointed  commission  has  reported  favorably  upon  such  plan  and the
District has authorized the initiation of procedures  with a view to issuance of
the  bonds.  The  Partnership  intends  to seek  issuance  of the  bonds  during
mid-spring of 1996. The District's ability to sell such bonds will be subject to
financial  market and other  variable  factors which cannot be predicted at this
time.  The  Partnership's  ability to proceed with on-site  development of these
sites would be adversely  affected if such bank and/or bond financing  proves to
be unavailable.  The additional  financing  anticipated from Union Bank could be
deferred or said bank's obligation to make further advances could expire without
further funding if the Partnership does not sell at least 20 single-family  lots
in first 32-lot phase on or before May, 1996. In turn, the Partnership's ability
to meet this schedule depends upon the rate at which Regency Homes,  Inc., which
holds  options  on these  lots,  is able to sell and  construct  homes  thereon.
Regency  has the right to defer  additional  purchases  until  May 1996  without
losing its options.  Management  believes that the market for homes on such lots
is currently strong.

In March, 1993 the Partnership  reacquired a separate tract of five acres in the
Village  by  accepting  a deed in  lieu  of  foreclosure  on a  mortgage  with a
principal  balance of $300,000 (See Item 7 --"Foreclosure  Transactions").  This
parcel is bordered by a golf course and a principal  Village  road, is zoned for
approximately  100 multi-family  residential units and is being offered for sale
in its present state without further development.

Included in Property  Held For Sale at  September  30, 1995 is the net  carrying
value of a mortgage note  receivable  having a net carrying value of $137,614 on
which foreclosure  action has been commenced.  Management is of the opinion that
the realizable value of the underlying property is in excess of the current book
value of the mortgage.
<PAGE>
Utility Contingent Receivable

In 1983 the Partnership's  Predecessor Company sold to the Village of Royal Palm
Beach a water and sewage treatment system servicing the Village. Pursuant to the
agreement  of  sale  ("Utility  Contract"),  the  Predecessor  company  received
$2,510,000  on  closing,  and was  entitled  to future  payments to a maximum of
$10,900,000 as future connections,  measured by consumption increases, were made
to the system over a period  ending  August,  2001.  As of  September  30, 1995,
$5,708,000 had not been received or earned.  The Utility  Contract also provided
for contingent  extension  periods  aggregating  not more than three  additional
years to compensate for possible  future  governmental  building  moratoriums or
water use restrictions.  The Partnership's  consultants have advised it that the
term has been  extended  through  2003 as a result of water  usage  restrictions
imposed by the South  Florida  Water  Management  District  in 1990 and 1991 and
moratorium  actions  taken by the  Village of Royal Palm Beach in 1985 and 1986.
The Utility Contract also calls for payments to the Partnership  equal to 25% of
any  "Guaranteed   Revenues"   (payment  by  developers  to  secure   guaranteed
allocations of plant capacity)  collected by the Village to a maximum payment of
$500,000,  of which  $262,657 has already been  received.  It is not possible to
predict the amount or timing of future  revenues to the  Partnership  under this
program.

To date, the Partnership has received the following Utility Contract payments:
<TABLE>
<CAPTION>
                                           Amount Received Based On
                                       ---------------------------------
Fiscal Year Ended                      Consumption            Guaranteed
September 30,                           Increases              Revenues
-----------------                      -----------            ----------
<S>                                      <C>                   <C>  
1984                                     $919,000
1985                                      830,000
1986                                      637,000
1987                                      859,000
1988                                      240,000             $ 30,000
1989                                      761,000               45,000
1990                                          -0-               35,000
1991                                      293,000               21,000
1992                                      357,000               37,000
1993                                      168,000               47,000
1994                                       58,000               27,000
1995*                                     413,000               20,000
                                       ----------             --------
Total                                  $5,535,000             $262,000
                                       +=========             ========
</TABLE>
----------------------------------
*Paid in January, 1996.


<PAGE>
The  Utility   Contract  with  extensions   management   believes  have  already
accumulated  will expire in 2003,  subject to extensions of up to one additional
year.  The ability of the  Partnership to realize the maximum price is dependent
upon the rate at which the population in the Village grows,  and levels of water
consumption  which in turn depends upon  economic,  social and climatic  factors
which cannot be predicted.  Historically,  water  consumption  tends to increase
based upon increases in population.  During most of fiscal 1990, however, due to
drought  conditions  existing in most Southern Florida,  the South Florida Water
Management District imposed mandatory water usage  restrictions.  The imposition
of these  restrictions  resulted in a decrease in aggregate water consumption in
the area from which the  Partnership's  receipts are projected while  population
was increasing.

Management  believes  that  there  remain  sufficient  potential  new home water
hookups in the area served by the utility to enable the  Partnership  to realize
the  maximum  remaining  $5,708,000  in  contingent  payments  under the Utility
Contract.  There can be no assurance that the rate of new  construction or water
consumption in such area will be sufficient to enable the Partnership to receive
the full  amount or even a  substantial  portion of such  payments  prior to the
expiration of the contingent payment term.


Acreage in the Vicinity of the Village

Substantially all of the property previously owned by the Predecessor Company in
Palm  Beach  County  outside  of  the  Village  limits,  originally  aggregating
approximately  23,800 acres,  was sold under the  Predecessor  Company's  retail
installment  sales  program,  which  terminated  prior to the  inception  of the
Partnership.  The Partnership  currently  retains a tract of  approximately  483
acres,  and  additionally   holds   approximately  206  one-acre  lots,  located
approximately eight miles northwest of the Village.

The 206 lots have been  improved with graded  unpaved  access roads and drainage
facilities. The Partnership has not sold any of these lots. The timing of future
sales of these lots,  the manner in which they may be developed and the ultimate
realizable  prices for these lots are dependent upon a complex and  interrelated
number of factors arising out of governmental regulations concerning permissible
land use.

Palm Beach  County has  adopted  land  development  regulations  under which new
development  will not be permitted  unless adequate public  facilities  (such as
roads) will be in place  concurrently with the impacts of such development.  The
Indian  Trail Water  Control  District  ("District")  is  currently  preparing a
revised  drainage plan which would result in an exemption for such 206 lots from
further  compliance  with such  concurrency  requirements  and  would  allow the
issuance of building  permits for  single-family  residences on such lots.  Such
plan has  been  opposed  by  other  governmental  agencies,  however,  and it is
uncertain  whether the plan will be adopted.  If the plan is not approved  these
lots may not be usable  for  residential  purposes.  Further,  even  assuming  a
favorable  result,  the  administrative  process leading to the  availability of
building permits cannot be expected to be completed  before  mid-1998.  However,
management  is of the opinion that the  realizable  value of these lots,  in the
aggregate, is in excess of its current book value of $132,754.
<PAGE>
The 483-acre  tract had been  reserved for use by the  District,  in part,  as a
water  retention  area  for such  revised  drainage  plan.  The  Partnership  is
presently  evaluating possible  alternative uses of this tract, which contains a
significant amount of wetlands.  Since the use of this land is also dependent on
the  extension of roads,  and  development  activity on this tract may meet with
opposition  from  governmental  agencies  concerned  with  wildlife and wetlands
preservation,  it is not possible to estimate the realizable value of this land.
However,  management is of the opinion that its realizable value is in excess of
its current book value of $213,421.

Elsewhere  in the  vicinity  of the Village the  Partnership  previously  held a
disputed claim to approximately 24 acres of undeveloped land. This claim had not
originally  been  accorded  value on the  Partnership's  balance  sheet  and was
considered  to have little or no value.  During  1994,  in  connection  with the
resolution of this claim with adjoining land owners,  and in order to give value
to such claim, the Partnership  relinquished a portion of its claim,  acquired 5
adjoining acres for $141,879,  and executed a joint  development  agreement with
one of such adjoining landowners relating to the Partnership's  acreage and such
landowner's acreage (comprising approximately 22 acres in the aggregate of which
the Partnership now owns  approximately 12 acres). The Partnership and the joint
developer  have recently  entered into an agreement to sell the entire  combined
parcel for a price of $1.90 per square  foot,  subject  to survey,  which  would
result  in a gross  selling  price of  approximately  $1,820,808  of  which  the
Partnership's share would be approximately  $927,500. The sale is subject to the
purchaser's  ability to have the premises  rezoned for use as a shopping center,
approval of the  premises  as a site for a  supermarket  by a major  supermarket
chain,  and the issuance of all  necessary  building and other  permits,  with a
closing date (subject to all of the  foregoing) no later than June 30, 1997. The
agreement is also subject the ability of the  Partnership  to cause the owner of
an  adjoining  residence,  which is not  owned by the  Partnership  or its joint
developer,  to sell such residence to the purchaser.  There is no assurance that
such permits  will be  obtained,  nor can the  Partnership  predict  whether the
rezoning process, which involves proceedings before several governmental bodies,
or the sale of the aforesaid  residence,  could be completed or obtained  within
the required time frame.


Hernando County, Florida

The Predecessor Company originally owned approximately  17,600 acres in Hernando
County,  Florida,  located 56 miles from Tampa,  with 13 miles of road  frontage
along U.S.  Highway 19, a major area highway.  In 1994 the Partnership sold a 14
acre  tract  in this  area  for  $125,000.  The  Partnership  presently  retains
approximately 20 acres in this area with negligible value.


<PAGE>
Lake County,  Florida

The Predecessor  Company  originally  owned  approximately  12,300 acres in Lake
County,  Florida,  located in  Central  Florida  on the  outskirts  of the Ocala
National Forest  approximately 39 miles from Ocala and 6 miles from Deland. Lake
County is  predominantly  rural with a population of  approximately  14,000.  At
September 30, 1992, the Partnership  owned no property in Lake County;  however,
in March of 1993 the  Partnership  accepted a deed in lieu of  foreclosure  on a
mortgage on a 1400 acre  portion of this  property  with a principal  balance of
$706,000. See Item 7 -- "Foreclosure Transactions." Approximately 1,000 acres of
this  property  which  are  remote,  undeveloped  and  may be  unsuited  for any
development,  were sold by the Partnership for a cash price of $350,000 in June,
1993. The balance of the tract was sold in 1994 in two  transactions  for prices
aggregating  $360,000,  of which  $248,000 was  represented  by a purchase money
mortgage  payable over a five year term. In November 1995 this mortgage having a
principal  balance of $222,471  and  deferred  profit of  $48,958,  was sold for
$170,000.

Item 3. Pending Legal Proceedings.

There are no pending  legal  proceedings,  other  than  routine  and  immaterial
litigation incidental to its business, to which the Partnership is a party or to
which its property is subject.


Item 4.  Submission of Matters to a Vote of Security Holders

Not applicable.
<PAGE>
                                     PART II


Item 5. Market for the Registrant's Common Equity and
        Related Stockholder Matters

The Partnership's Units are listed on the American Stock Exchange. The following
table sets  forth,  for the fiscal  periods of the  Partnership  indicated,  the
reported high and low closing prices for the Partnership's  Units as reported on
the American  Stock  Exchange.  See Item 1 -- Business - American Stock Exchange
Listing.

The  Partnership's  Units were held by approximately 700 holders of record as of
December 31, 1995. Based on its tax records,  including  beneficial  owners, the
Partnership believes that there are a total of approximately 1,500 unit holders.
<TABLE>
<CAPTION>
Fiscal Year Ended September 30, 1995

                Quarter             High             Low
                -------             ----             ---
<S>                                 <C>              <C>
                First               15/16            3/4
                Second              1                13/16
                Third               2                13/16
                Fourth              1-11/16          1-3/8

<CAPTION>
Fiscal Year Ended September 30, 1994

                Quarter             High             Low
                -------             ----             ---
<S>                                 <C>              <C>
                First               1-1/16           3/4
                Second              1-3/16           7/8
                Third               1-1/16           7/8
                Fourth              7/8              13/16
</TABLE>

Prior Distributions

The  Partnership  Agreement  requires the Managing  General  Partner to consider
quarterly whether the Partnership has Cash Available for Distribution in respect
of the  Partnership  Units,  and to make  distributions  unless the costs of the
distribution would be disproportionately  high in relation to the Cash Available
for Distribution.  "Cash Available for Distribution" in general means the excess
cash held by the  Partnership  over  anticipated  expenditures  and reserves for
anticipated  or contingent  liabilities.  The  Partnership is not a party to any
agreements  which would  restrict its ability to make future  distributions.  No
distributions  were  made  since  December  of 1992,  in  light of  management's
judgment  that   Partnership  cash  should  be  conserved  and  applied  to  the
development  activities discussed in Item 2, and, more recently, in light of the
negotiations  held in 1995  with a view to the  resumption  of  active  business
operations  as discussed in Item 1. It is unlikely  that  distributions  will be
made during fiscal 1996, although management, in reviewing the Partnership's use
of cash,  will  consider  the tax  effect  on  partners  in the  event  that the
Partnership  generates  taxable income from its development and sale activities.
See Item 1 -- "Factors Affecting Future Operations and Distributions."
<PAGE>
At the inception of the Partnership, its assets were assigned a tax basis in the
hands of the  Partnership  based  upon the net fair  market  value of the assets
transferred  from the  Predecessor  Company as  determined  by  reference to the
aggregate  market  value of the  Units at the time of  original  issuance.  Each
Unit's  pro rata  share of such net fair  market  value  resulted  in a  capital
account of $6.31 per Unit, which also became the original tax basis of each Unit
in the hands of the original Unitholders. As a result of taxable income and loss
and   distributions   since  inception,   the  capital  account  and  tax  basis
attributable  to each  Unit  which  has  remained  in the  hands of an  original
Unitholder  has been  reduced to $2.04 as of  September  30,  1995.  Each person
acquiring a Unit after  inception  has a tax basis in such Unit equal to the net
price paid therefor. Such basis is thereafter increased by such Unit's allocable
share of the  Partnership's  income  and  decreased  by the  allocable  share of
taxable loss and by any cash distributions  made. A distribution itself is not a
taxable  event  except  to  the  extent  that  the   distribution   reduces  the
Unitholder's basis below zero.

Section  17-607(a) of the  Delaware  Revised  Uniform  Limited  Partnership  Act
provides generally that a limited partnership shall not make a distribution to a
partner if, after giving  effect to the  distribution,  all  liabilities  of the
partnership  exceed the fair value of its assets. A limited partner who receives
such a distribution is liable to the limited partnership for the amount thereof,
but  only if such  limited  partner  knew at the time of the  distribution  that
distribution  violated  said  Section  17-607(a).  No  claim  based  on any such
wrongful distribution may be made more than three years after such distribution.
In the normal course of events,  however,  the Managing General Partner does not
anticipate  that the liabilities of the  Partnership  immediately  following any
future  distribution will ever exceed the fair value of its net assets. See also
"Factors Affecting Future Operations and Distributions" under Item 1.

The Partnership has declared and paid the following liquidating distributions:
<TABLE>
<CAPTION>
          Payment Date                                  Amount Per Unit
          ------------                                  ---------------
<S>                                                         <C>  
          April 15, 1986                                    $ .25
          August 15, 1986                                     .35
          December 15, 1986                                   .40
          January 15, 1988                                    .50
          July 15, 1988                                       .50
          January 15, 1989                                    .50
          July 17, 1989                                      1.00
          September 29, 1989                                  .75
          March 30, 1990                                      .75
          July 31, 1990                                       .50
          August 30, 1991                                     .50
          December 15, 1991                                   .25
          December 16, 1992                                   .25
                                                             ----
                                                             6.50
</TABLE>
<PAGE>
Item 6.  Selected Financial Data

The following is a summary of selected  financial  data (in thousands of dollars
except  as to per unit  amounts)  as of and for the  periods  ended on the dates
indicated:
<TABLE>
<CAPTION>
                                                     Fiscal Years Ended September 30,
                                 ---------------------------------------------------------------------
                                   1995            1994            1993          1992           1991
                                 -------         -------         -------        -------        -------
<S>                              <C>             <C>             <C>            <C>            <C>    
Selected Income
Statement Data

Revenues ................        $   497         $   832         $ 1,717        $ 1,510        $ 3,649

Net income (loss) .......           (787)           (554)            773            398          1,395

Income (loss) per unit ..           (.18)           (.12)            .17            .09            .31

Selected Balance
Sheet Data

Total assets ............          5,425           4,650           5,090          5,361          6,409

Mortgage notes payable ..          1,511            --              --             --             --

Partners' equity ........          3,060           3,847           4,401          4,750          5,473

Cash distributions
   per unit .............            -0-             -0-             .25            .25            .50
</TABLE>

Since the Partnership's sole business has been the disposition of its assets and
the distribution of proceeds to its  Unitholders,  results in any period are not
comparable with any other period and are not indicative of the results which may
be anticipated in any future period. See Item 5 Prior Distributions (relating to
prior returns of capital)
<PAGE>
Item 7. MANAGEMENT`S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

During the fiscal year, the  Partnership  incurred  substantial  expenses in the
planning and  development  of its  properties in  additional  to normal  ongoing
administrative  costs,  but had no sales.  The time lag between  development and
ultimate  sale resulted in a  substantial  net cash outflow  during the year. In
addition,  receipts from mortgage  payments declined as purchase money mortgages
completed interest and amortization  schedules.  During the year,  however,  the
Partnership made net borrowings of $1,510,513.  As a result,  the  Partnership's
cash  balances  declined  from  $543,000  at  September  30,  1994 to $84,000 at
September 30, 1995.

         During the current  fiscal year, and based upon  management's  judgment
that ordinary operating expenses will not increase, the Partnership  anticipates
that cash flow and liquidity requirements will be satisfied by current cash, the
bank  financing  described  in Item 2 --  Properties  --  "Village of Royal Palm
Beach",  land sales and contingent  utility  receipts  described under Item 2 --
Properties -- "Utility Contingent  Receipts," and, in the event of a deferral of
land sales beyond currently anticipated dates, additional financing arrangements
which management believes will be available from, or guaranteed by, Hasam Realty
Limited Partnership,  a general partner of the Partnership,  or an institutional
lender.

Affect of Land Sales on Future Cash Flow

Assuming that the Partnership continues to liquidate,  total net cash flow which
might become available for distribution  remains  unpredictable due to uncertain
conditions in the South  Florida real estate  market in which the  Partnership's
remaining real estate is located,  and the competitive factors described in Item
1 -- Business --  "Competition."  These  conditions  will continue to affect the
realizable value of the  Partnership's  remaining land,  including  decisions by
parties  holding options on the  Partnership's  land to exercise such options in
whole or in part. See Item 2.

Certain of the  Partnership's  land in Palm Beach County located  outside of the
Village  of Royal  Palm  Beach  (see Item 2 --  Properties  --  "Acreage  in the
Vicinity  of the  Village")  has  been the  subject  of  substantial  regulatory
concerns  relating to land use issues,  and the salability of such land has been
adversely  affected by doubts  concerning  the future  availability  of building
permits. At the inception of the Partnership,  such land, in the aggregate,  was
assigned  appraised or estimated values  aggregating  approximately $1.7 million
and is carried on the Partnership's  balance sheet at $346,000.  The Partnership
has obtained a recent appraisal of this property  indicating a fair market value
of  $1,020,000;  however,  there can be no assurance  that the property could in
fact be sold  for  such  amount,  or as to the  length  of time  which  might be
required to effect its sale. While the Partnership  believes that all or a major
portion of such land  could  ultimately  be sold,  aggregate  realizable  values
cannot  be  estimated.  It  also  remains  possible,  on the  other  hand,  that
continuing  development  and  possible  future  road  building  activity  in the
vicinity  of this land could have a  favorable  impact on the value of the land,
although such impact is entirely  speculative.  For a discussion of the land use
issues  which could  affect  future  development  of this  acreage see Item 2 --
Properties -- "Acreage in the Vicinity of the Village."
<PAGE>
As indicated in Item 2, the  Partnership  has determined to develop  portions of
its remaining  properties in order to enhance their ultimate selling price. Such
development will continue whether or not the Partnership continues to liquidate,
contingent  upon  the  availability  of  financing,  as  discussed  in Item 2 --
Properties  --  "Village of Royal Palm  Beach."  Management  believes  that such
financing  would be available on  commercially  acceptable  terms.  As indicated
under Item 1 -- "Factors  Affecting Future Operations and  Distributions," it is
unlikely, in view of management's decision to continue development activities as
an aid to the enhancement of ultimate liquidation  proceeds,  that distributions
to partners will be made during fiscal 1996.

Foreclosure Transactions

Included in property  held for sale at  September  30, 1991 was the net carrying
value of one mortgage note  receivable in default which was  considered to be an
in substance  foreclosure.  The in substance  foreclosure  had been  recorded by
reclassifying the net carrying value of the receivable,  $1,612,785,  consisting
of a mortgage  note  receivable of $5,039,952  less related  deferred  profit of
$3,427,167 to property  held for sale.  During 1992 the  underlying  property on
this  mortgage  note  receivable,  referred  to  previously  in this  report  as
"Crestwood,"  was  reacquired by  acceptance  of a deed in lieu of  foreclosure.
Reacquisition  costs  amounted to  approximately  $132,000  and are  included in
property held for sale. The Crestwood  Tract is described in detail under Item 2
-Properties -- "Village of Royal Palm Beach."

Included in property  held for sale at  September  30, 1992 is the net  carrying
value of two mortgage notes receivable in default which were considered to be in
substance foreclosures, as follows:

(a) A mortgage having a principal  balance of $137,614,  secured by land in Palm
Beach County,  Florida. This property is described under Item 2 -- Properties --
"Palm  Beach  County."  The  Partnership  recorded  this  transaction  as  an in
substance  foreclosure at September 30, 1995 by  reclassifying  the net carrying
value of the receivable  ($65,064),  consisting of a mortgage note receivable of
$137,614  less related  deferred  profit of $72,550,  to property held for sale.
Management believes that the fair market value of this property is excess of its
carrying.

(b)  The   property   securing  the  other   mortgage  in  default,   comprising
approximately  5  acres  in the  Village  (described  in  item  2 --  Properties
-"Village of Royal Palm Beach") was reacquired by the  Partnership by acceptance
of a deed in lieu of foreclosure in March 1993.  The  Partnership  recorded this
transaction   as  an  in  substance   foreclosure   at  September  30,  1992  by
reclassifying the net carrying value of the receivable,  $300,000 less costs, to
property held for sale. The Partnership has obtained a recent  appraisal of this
property  indicating a fair market value of $400,000;  however,  there can be no
assurance that the property could in fact be sold for such amount,  or as to the
length of time which might be required to effect its sale.

Environmental Matters

There are no  environmental  contingencies  in respect of the Partnership or its
properties.  Use of all of the Partnership's properties is subject to compliance
with state and county land use regulations  relating to  environmental  matters,
which the  Partnership  takes  into  account  in  considering  the values of its
properties.  See Item 1 -- Business  -"Factors  Affecting Future  Operations and
Distributions"  and  "Regulation"  and Item 2 --  Properties  -- "Acreage in the
Vicinity of the Village."
<PAGE>
Results of Operations

<TABLE>
<CAPTION>
Revenues
                                              Fiscal Years Ended September 30,
                                      ----------------------------------------------
                                         1995              1994              1993
                                      ----------        ----------        ----------
<S>                                   <C>               <C>               <C>       
Sales of land, net ...........               -0-        $  520,000        $  350,000

Recognized profit on
  installment and cost
  recovery sales (a) .........            31,000            18,000           958,000
 Interest income (b) .........            32,000            67,000           184,000
Sale of utility system (c) ...           432,000            86,000           215,000
Other (d) ....................             2,000           141,000            10,000
                                      ----------        ----------        ----------
Total revenues ...............        $  497,000        $  832,000        $1,717,000
                                      ==========        ==========        ==========
</TABLE>

a) Recognized  profit on installment  and cost recovery sales  decreased in 1995
and 1994 as collections of the Partnership's  mortgage notes receivable  related
to sales reported on the installment and cost recovery basis were decreased.

b) Interest  income  decreased from 1993 to 1994 as the  Partnership's  mortgage
notes receivable decreased, and again in 1995 for the same reason.

c) As discussed in Note 11 to the financial statements, income recognized on the
sale of the utility system varies with water consumption and other factors.

d) Other income in 1994 includes $119,000  recovered as a litigation  settlement
for breach of contract against a third party.

Cost of sales

Cost of sales relates to the sales of land as discussed above.  This item varies
as a result of dissimilar profit margins and income  recognition  methods on the
various sales of land and buildings as discussed above.

Selling, administrative and other expenses

Selling,  general and  administrative  expenses,  have not varied  significantly
during the last three years. In addition,  in 1995 the Company incurred $405,261
in costs  related  to a  proposed  merger,  as to which  negotiations  have been
terminated.

Provision for doubtful accounts

In 1993 it was determined that an allowance for doubtful collections of $131,250
was no  longer  required.  In 1994 a  provision  for  doubtful  accounts  and an
allowance  for  doubtful  accounts  of  $48,500  was  recorded.  In  1995 it was
determined  that an allowance for doubtful  collections of $48,500 was no longer
required.
<PAGE>
Depreciation and property taxes

The  reduction  in this item from 1993 to 1994  relates to the sales of property
resulting in lower levels of property owned. The increase in this item from 1994
to 1995 relates to  assessments  of penalties  and interest on  delinquent  1994
taxes not yet paid.


Item 8. Financial Statements and Supplementary Data

The financial  statements  and the  supplementary  data are listed under Item 14
herein.


Item 9. Disagreements with Accountants on Accounting and Financial Disclosure

                                      None
<PAGE>
                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

The following information is provided with respect to the directors and officers
of each general partner of the Registrant.(l)
<TABLE>
<CAPTION>
                                            Present Position
                                            With  the  Registrant
Name                            Age         and other positions
----                            ---         ---------------------
<S>                             <C>         <C>   
Irving Cowan                    __          Chairman and President of Steinco (1)(*)

Randy Rieger (**)               __          Vice President  and  Chief
                                            Operating Officer of Steinco,
                                            September 1995 through February 1996;
                                            President of RTL Realty, Inc.
                                            and Royal T Land, Inc.,
                                            privately held real estate
                                            consultants and brokers
                                            for over five years

David  B.  Simpson              57          Director and Vice President(*) of Steinco;
attorney currently                          in private practice and counsel
                                            to the Partnership; partner,
                                            Holtzmann, Wise & Shepard,
                                            Counsel to Partnership,
                                            September 1991 to August 1993;
                                            Partner, Dow, Lohnes and Albertson,
                                            Counsel to Partnership July, 1988 to
                                            June, 1991

Dr. Ernest Sayfie               65          Director of Steinco; Physician in
                                            private practice

Herbert Tobin                   55          Director, and Secretary and Treasurer(*)
                                            of Steinco

Jack Friedland                  70          Member, Friedco,
                                            L.C.(l); Private Investor

Leonard Friedland               73          Member, Friedco,
                                            L.C.(l); Private Investor

Harold Friedland                65          Member, Friedco,
                                            L.C.(l); Private Investor

Marjorie Cowan                  55          Member, Friedco,
                                            L.C.(l); Private Investor
</TABLE>
<PAGE>
(1)  The general  partners are Stein Management  Company,  Inc. and Hasam Realty
     L.P. The general partner of Hasam L.P. is Friedco,  L.C., a Florida limited
     liability  company.  Friedco,  L.C. is managed by its four  members,  Jack,
     Harold and Leonard  Friedland and Marjorie Cowan,  who are are brothers and
     sister. Irving Cowan is the husband of Marjorie Cowan.

(*)  Elected to this position on February 14, 1996.

(**) Mr.  Reiger,  who was elected on an interim  basis  following  the death in
     September, 1995, of Martin Katz, President of the managing general partner,
     resigned  following  the  election  of  the  officers  referred  to in  the
     preceding note. See Item 13.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the  Securities  Exchange Act of 1934 requires the officers and
directors of the general partners of the  Partnership,  and persons who own more
than ten percent of the  Partnership's  Units,  to file reports of ownership and
changes  in  ownership  with the  Securities  and  Exchange  Commission  and the
American Stock Exchange.  Such officers,  directors and greater than ten-percent
Unitholders  are required by SEC  regulations  to furnish the  Partnership  with
copies of all Section 16(a) forms they file.

No such forms were furnished to the Partnership during fiscal 1995. Based solely
on the foregoing the Partnership  believes that during fiscal 1995, no purchases
or sales of units were made requiring  compliance with applicable  Section 16(a)
filing requirements.

Item 11.  Executive Compensation

During fiscal 1995 the only executive  officer of the Managing  General  Partner
whose annualized compensation exceeded $60,000 was Martin J. Katz, who served as
Steinco's  President  and Chief  Executive  and  Operating  Officer  and  earned
$101,923  in  cash   compensation   and  $14,275  in  insurance   benefits,   or
reimbursements  and other personal  benefits.  Mr. Katz died in September  1995.
Death  benefits of $35,779  payable to Mr. Katz's estate have been accrued as of
September 30, 1995.

All  officers  and  Directors,  as a group (4 persons)  earned  $114,423 in cash
compensation and $14,275 in other benefits.

The Partnership Agreement provides that the Partnership will provide and pay for
all payroll  and other costs of Steinco in  connection  with the  employment  of
personnel,  and the costs of office  space,  outside  clerical and  professional
assistance,  equipment, and other facilities which are ordinary and necessary to
the  conduct  and  management  of the  Partnership's  affairs.  The  Partnership
reimbursed Steinco  approximately $45,000 in the fiscal year ended September 30,
1994 for such  expenses.  Steinco's  sole  function is to serve as the  Managing
General Partner and it does not conduct any other operations.

Other than the foregoing,  the Managing  General  Partner is not entitled to any
compensation  in  respect  of  the  discharge  of  its  obligations   under  the
Partnership Agreement. Hasam L.P., the other General Partner, is not entitled to
compensation  of any nature under the  Partnership  Agreement but is entitled to
reimbursement  for such expenses as it may reasonably  incur in the discharge of
its ordinary and necessary  obligations as a General  Partner.  No such expenses
were reimbursed in the fiscal year ended September 30, 1995.
<PAGE>
Item 12.  Security Ownership of Certain Beneficial Owners and Management

The following  table sets forth as of December 15, 1995  information  concerning
(i) all persons who are known to the  Registrant to be the  beneficial  owner of
more  than 5% of the  Units  and  (ii)  the  beneficial  ownership  of  Units of
directors and officers of each General Partner of the Registrant.
<TABLE>
<CAPTION>
                                              Amount Beneficially                     Percent of
Name  and  Address                                  Owned (a)                           Class
------------------                            -------------------                     ----------
<S>                                              <C>                                  <C>  
Harold Friedland                                 1,093,561 (1)                          24.4%
636 Old York Road #210
Jenkintown, PA 19046

Jack Friedland                                   1,155,834  (1)  (2)                    25.8%
111  Regatta  Drive
Jupiter,  FL  33477

Leonard Friedland                                1,170,196  (1)  (3)                    26.1%
6530  Allison  Road
Miami Beach, FL 33131

Marjorie Cowan                                   1,057,929  (1)  (4)                    23.6%
3725 S.  Ocean  Dr.
Hollywood,  FL  33019

Samuel Friedland
Family Foundation                                  637,417                              14.2%
2501 S.  Ocean  Dr.
Hollywood,  FL  33019

Hasam Realty Limited
Partnership                                         75,000                               1.7%
2501 S.  Ocean  Dr.
Hollywood,  FL  33019

Stein Management Company                            20,093                            Less  than  1%
2501 S. Ocean  Drive
Hollywood,  FL  33019

David  B. Simpson                                    1,460                            Less  than  1%
2 University Plaza  #109
Hackensack, N. J. 07601

Dr.  Ernest  Sayfie                                    150                            Less  than  1%
3001 S.  Ocean  Dr.
Hollywood,  FL  33019

All officers and directors                       2,361,972                              52.7%
 as a group (See footnotes)
</TABLE>
<PAGE>
(a)  Includes  all  units as to which  owner  holds  sole or  shared  voting  or
     investment power.

(1)  Includes 637,417 units owned by the Samuel Friedland Family  Foundation and
     75,000  units  owned by Hasam  Realty  Limited  Partnership,  of which this
     individual may be deemed a controlling person.

(2)  Does not include 2,500 units owned Jack Friedland's wife.

(3)  Does not include 2,500 units owned by Leonard Friedland's ex-wife.

(4)  Does not include 96,900 units owned by Mrs. Cowan's husband,  Irving Cowan.
     Includes  16,993  units owned by a trust for a minor child of which Mr. and
     Mrs.  Cowan are  trustees;  Includes  21,708  Units owned  jointly with Mr.
     Cowan.

Item 13.  Certain Relationships and Related Transactions

Borrowing From General Partner

In June, 1995, the Company borrowed $500,000 from Hasam Realty, L.P. for general
working  capital  purposes,  secured  by  a  first  mortgage  on  the  Crestwood
commercial property referred to in Item 2. In January, 1996, Hasam agreed to add
to principal  $22,249 of interest  accrued  through January 31, 1996 and unpaid.
The loan (including said amount added to principal) is payable in full on August
31, 1996 and bears  interest at a rate equal to two percent over the Prime Rate,
defined as the highest  fluctuating  rate of interest  per annum as published by
the Wall Street  Journal.  Management  believes that the terms of this borrowing
are fair and reasonable, and at least as favorable as the terms which could have
been obtained from an unaffiliated institutional lender.

Indian Trail Water Control District

The Indian Trail Water Control District, a public entity whose seven supervisors
included  Martin J. Katz  until his death in  September,  1995 and to which Jack
Friedland  has recently been  elected,  has prepared a drainage and  reclamation
plan covering a portion of the Company's  acreage in the vicinity of the Village
of Royal Palm Beach.  In  addition,  the  Partnership  is  negotiating  with the
District  for the  issuance  of bonds to finance a portion of the  Partnership's
acreage in the Village.  Reference is made to Item 2 - Properties  -- Palm Beach
County  -"The  Village of Royal Palm Beach" and  "Acreage in the Vicinity of the
Village."

Herbert Tobin,  a Director of Steinco,  is a director of Union Bank of Florida,,
which made a land development loan to the Partnership in 1994. See Item 2.

Randy  Rieger  was  elected on an interim  basis as a Vice  President  and Chief
Operating Officer of Stein Management Company,  Inc., the Partnership's managing
general  partner,  in September 1995,  shortly  following Mr. Katz's death.  Mr.
Rieger had been active as a real estate broker,  directly and through affiliated
companies,  in the south Florida real estate market for many years. Prior to his
election Mr.  Rieger was serving as a  consultant  to the  Partnership  under an
arrangement pursuant to which he was paid consulting fees and additional amounts
applicable to future brokerage  commissions.  In the fiscal year ended September
30, 1995, Mr. Rieger was paid $75,100 under such arrangement,  of which $ 57,600
was paid as  consulting  fees and $17,500  was  applicable  to future  brokerage
commissions  which may be earned in connection  with sales of the  Partnership's
real estate assets.  Mr. Rieger,  through  affiliated  companies,  had also been
engaged  as the  Partnership's  exclusive  broker in  respect  of a  substantial
portion of its real estate assets, and will be entitled to substantial brokerage
commissions in the event that certain real estate sales currently under contract
relating to a shopping center site are consummated.  See Item 2 -- Properties --
"The Village of Royal Palm Beach." The Company has compensated Mr. Rieger at the
rate of $12,300 per month, and is negotiating with Mr. Rieger concerning revised
brokerage  arrangements.  Mr.  Rieger  resigned  following  the  election of new
officers on February  14, 1996;  however,  it is intended  that Mr.  Rieger will
continue to serve the  Partnership  as a consultant,  on terms  presently  being
negotiated. See Item 10.

General Partners

The general  partners do not receive any  compensation  for serving as such. See
Item 11 -- "Executive Compensation."
<PAGE>
                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

          (a)  The following documents are filed as a part of this report:

               1. Financial Statements:

                  Independent Auditor's Report

                  Royal Palm Beach Colony, Limited Partnership Financial
                  Statements:

                  Balance sheets as of September 30, 1995 and 1994.

                  Statements  of income for the years ended  September 30, 1995,
                  1994 and 1993.

                  Statements of partners'  equity for the years ended  September
                  30, 1995, 1994 and 1993.

                  Statements  of cash flows for the years  ended  September  30,
                  1995, 1994 and 1993.


               2. Financial Statement Schedules:

Schedule IX    Valuation and qualifying accounts

Schedule X     Supplementary Income Statement Information


Schedules  other than those listed above have been omitted  because they are not
applicable or the required  information is shown in the financial  statements or
notes thereto.


          (b)  Reports on Form 8-K

               None.
<PAGE>
          (c)  Exhibits

NOTE:  All  references  in this table of  exhibits to  "Registration  Statement"
relate to the Registration Statement of the Registrant on Form S-14 (file Number
2-96374) as  originally  filed with the  Securities  and Exchange  commission on
March 12, 1985,  as  supplemented  by Amendment  No. 1 filed May 23, 1985 and as
effective on June 10, 1985.

3(a)  Certificate  and  Agreement  of  Limited  Partnership  of Royal Palm Beach
Colony,   L.P.  filed  as  Exhibit  3(d)  to  the  Registration   Statement  and
incorporated herein by reference.

3(b) Restated  certificate  and Agreement of Limited  Partnership  of Royal Palm
Beach  Colony,  L.P.  included as Appendix B to the  Registration  Statement and
incorporated herein by reference.

3(c) Amended  Certificate  and Agreement of Limited  Partnership  off Royal Palm
Beach Colony,  L.P. (filed May 21, 1985 with the Secretary of State of Delaware)
changing name to Royal Palm Beach Colony, Limited Partnership.  Filed as Exhibit
3(g) to Amendment  Number One to the  Registration  Statement  and  incorporated
herein by reference.

3(d)  Restated  Certificate  and  Agreement  of  Limited  Partnership  (revised)
included as Appendix B to  Amendment  No. 1 to the  Registration  Statement  and
filed July 11, 1985 with the  Secretary  of State of Delaware  and  incorporated
herein by reference.

3(e) Restated  Certificate of Limited Partnership dated December 16, 1986. Filed
as Exhibit 3(e) to Report on Form 10-K for the fiscal year ended  September  30,
1986 and incorporated herein by reference.

3(f) Amended and Restated  Agreement of Limited  Partnership  dated December 16,
1986.  Filed as Exhibit  3(f) to Report on Form 10-K for the  fiscal  year ended
September 30, 1986 and incorporated herein by reference.

3(g)  Amendment No. 1 to Amended and Restated  Agreement of Limited  Partnership
dated  December 30,  1986.  Filed as Exhibit 3(g) to Report on Form 10-K for the
fiscal year ended September 30, 1986 and incorporated herein by reference.

3(h) Second  Amended  and  Restated  Certificate  of Limited  Partnership  dated
December 30, 1986.  Filed as Exhibit 3 (h) to Report on Form 10-K for the fiscal
year ended September 30, 1986 and incorporated herein by reference.


<PAGE>
          (c)  Exhibits -- continued


4(a) Form of Unit  Certificate  issued to Limited  Partners and Assignees of the
Partnership.   Filed  as  Exhibit  4  (a)  to  the  Registration  Statement  and
incorporated herein by reference.

4(b) Loan Agreement  between Royal Palm Beach Colony,  Limited  Partnership  and
Union Bank of Florida dated October 6, 1994, pertaining to loan in the amount of
$975,000.  Filed as Exhibit  4(b) to the report on Form 10-K of the fiscal  year
ended September 30, 1994 and incorporated herein by reference.

4(c) Promissory Note: $27,247.83, Registrant to Hasam Realty Limited Partnership
dated June 29, 1995.

4(d) Promissory Note: $27,247.83, Registrant to Hasam Realty Limited Partnership
relating to accrued interest on note described in Exhibit 4 (c).

4(e)  Agreement  between  Registrant and Gerald M. Higier dated December 1, 1995
relating to purchase of 10.8 acre commercial tract.

4(f) Agreement between Registrant and Gerald M. Higier dated in 1995 relating to
sale of 24 acres.
<PAGE>
                                   SIGNATURES



Pursuant  to the  requirements  of  Section 13 and 15(d) of the  Securities  and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                            ROYAL PALM BEACH COLONY,
                                               LIMITED PARTNERSHIP

                                        By: Stein Management Company, Inc.
                                            Managing General Partner


Date: February 14, 1996                 By: /s/David B. Simpson
                                            ------------------------------------
                                            David B. Simpson, Vice President


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Name                             Title                                     Date
----                             -----                                     ----
<S>                              <C>                                       <C>

/s/Irving Cowan
------------------------         Chairman, President and Director,         February 14, 1996
Irving Cowan                     Stein Managment Company, Inc.
                                 

/s/David B. Simpson
------------------------         Vice President and Director, Stein        February 14, 1996
David B. Simpson                 Management Company, Inc.

/s/Ernest Sayfie
------------------------         Director,  Stein  Management              February 14, 1996
Ernest Sayfie                    Company,  Inc.

/s/Herbert Tobin
------------------------         Director,  Stein  Management              February 14, 1996
Herbert Tobin                    Company,  Inc.
</TABLE>
<PAGE>













                            ROYAL PALM BEACH COLONY,

                              LIMITED PARTNERSHIP

                              FINANCIAL STATEMENTS

                   YEARS ENDED SEPTEMBER 30, 1995, 1994, 1993
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

Partners
Royal Palm Beach Colony, Limited Partnership
Hollywood, Florida

We have  audited the  accompanying  balance  sheets of Royal Palm Beach  Colony,
Limited  Partnership  as of  September  30,  1995  and  1994,  and  the  related
statements of operations,  partners' equity and cash flows for each of the three
years in the period ended September 30, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about 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.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Royal Palm Beach  Colony,
Limited  Partnership  as of September 30, 1995 and 1994,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
September 30, 1995, in conformity with generally accepted accounting principles.

The accompanying  financial statements for 1995 have been prepared assuming that
the Partnership will continue as a going concern. As discussed in Note 14 to the
financial statements,  in anticipation of a proposed merger which was ultimately
terminated,  the  Partnership  suspended  land sales  during  fiscal  1995 which
resulted in  insufficient  cash resources to meet its obligations as they become
due.  Management's  plans in regard to these matters are also  described in Note
14. These conditions raise substantial doubt about the Partnership's  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.
<PAGE>
Partners
Royal Palm Beach Colony, Limited Partnership


As described in Note 1, the primary  business  purpose of the Partnership is the
operation, management and orderly disposition of its assets and the distribution
of the proceeds therefrom to unitholders.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements taken as a whole. The schedules listed in item 14(a) 2 are
presented  for  purposes  of  complying   with  the   Securities   and  Exchange
Commission's  rules and are not part of the basic  financial  statements.  These
schedules have been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly state in all material
respects the financial  data required to be set forth therein in relation to the
basic financial statements taken as a whole.


LEFCOURT, BILLIG, SARBEY, TIKTIN & YESNER, P.A.


Coral Gables, Florida
January 8, 1996,  except for the third paragraph of Note 5, as to which the date
is January 31, 1996
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                                 BALANCE SHEETS

                           SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
                                                              1995              1994
                                                           ----------        ----------
<S>                                                        <C>               <C>       
ASSETS

Cash ..............................................        $   83,902        $  543,243
Mortgage notes and other receivables (Note 2):
    Mortgage notes receivable .....................           236,153           383,215
    Other .........................................           435,883           147,153
Property held for sale (Note 3) ...................         4,607,661         3,444,824
Other assets (Note 4) .............................            61,891           131,434
                                                           ----------        ----------
                                                           $5,425,490        $4,649,869
                                                           ==========        ==========
LIABILITIES AND PARTNERS' EQUITY

Liabilities:
    Mortgage notes payable, bank (Note 5) .........        $1,010,513              --
    Mortgage note payable, general partner (Note 5)           500,000              --
    Accounts payable and other liabilities (Note 6)           840,402        $  542,966
    Estimated costs of development of land sold ...            14,441           259,420

Commitment and subsequent events (Notes 2, 3 and 5)

Partners' equity:
     4,485,504 units authorized and outstanding ...         3,060,134         3,847,483
                                                           ----------        ----------

                                                           $5,425,490        $4,649,869
                                                           ==========        ==========
</TABLE>

                       See notes to financial statements.
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                           Years ended September 30,
                                              ---------------------------------------------------
                                                  1995                1994               1993
                                              -----------         -----------         -----------
<S>                                           <C>                 <C>                 <C>        
Revenues (Notes 13 and 14) ...........        $   497,651         $   831,773         $ 1,717,276
                                              -----------         -----------         -----------

Costs and expenses:
   Cost of sales .....................               --               439,195             188,674
   Selling, general and
     administrative expenses (Note 10)            807,505             804,930             770,777
   Terminated merger costs (Note 7) ..            405,261                --                  --
   Provision for doubtful
     accounts ........................            (48,500)             48,500            (131,250)
   Depreciation and
     property taxes ..................            120,734              92,941             116,210
                                              -----------         -----------         -----------
                                                1,285,000           1,385,566             944,411
                                              -----------         -----------         -----------
Net income (loss) ....................        ($  787,349)        ($  553,793)        $   772,865
                                              ===========         ===========         ===========

Net income (loss) per unit ...........        ($     0.18)        ($     0.12)        $      0.17
                                              ===========         ===========         ===========

Weighted average number of
   units outstanding .................          4,485,504           4,485,504           4,485,504
                                              ===========         ===========         ===========
</TABLE>


                       See notes to financial statements.
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                         STATEMENTS OF PARTNERS' EQUITY
<TABLE>
<CAPTION>
                                                  Partnership         General            Limited               Total
                                                     Units            Partner            Partners             Equity
                                                   ---------        -----------         -----------         -----------
<S>                                                <C>              <C>                 <C>                 <C>        
Balance, September 30, 1992 .............          4,485,504        $   168,804         $ 4,580,983         $ 4,749,787

Partnership distributions ($.25 per unit)               --              (23,773)         (1,097,603)         (1,121,376)

Net income ..............................               --               16,384             756,481             772,865
                                                   ---------        -----------         -----------         -----------

Balance, September 30, 1993 .............          4,485,504            161,415           4,239,861           4,401,276

Net loss ................................               --              (11,740)           (542,053)           (553,793)
                                                   ---------        -----------         -----------         -----------

Balance, September 30, 1994 .............          4,485,504            149,675           3,697,808           3,847,483

Net loss ................................               --              (16,691)           (770,658)           (787,349)
                                                   ---------        -----------         -----------         -----------

Balance, September 30, 1995 .............          4,485,504        $   132,984         $ 2,927,150         $ 3,060,134
                                                   =========        ===========         ===========         ===========

</TABLE>

                       See notes to financial statements.
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                              Years ended September 30,
                                                 ---------------------------------------------------
                                                     1995                1994                1993
                                                 -----------         -----------         -----------
<S>                                              <C>                 <C>                 <C>        
Cash flows from operating activities:
   Cash received:
     Collections on land sales
        and receivables .................        $   161,428         $   469,393         $ 2,031,927
     Interest income ....................             77,207              56,051             181,095
     Sale of utility system .............             85,800             215,050             389,000
     Other cash received ................             14,985             106,021               7,250
                                                 -----------         -----------         -----------
                                                     339,420             846,515           2,609,272
                                                 -----------         -----------         -----------
Cash expended:
   Selling, general and
     administrative, property
     taxes and other expenses ...........            845,097             991,682             835,284
   Interest paid
     (net of amounts capitalized) .......              4,750
   Acquisition of property held for sale              18,766             123,552                --
   Improvements to property held for sale          1,439,903             597,404             305,471
                                                 -----------         -----------         -----------
                                                   2,308,516           1,712,638           1,140,755
                                                 -----------         -----------         -----------
Net cash provided by (used in)
   operating activities .................         (1,969,096)           (866,123)          1,468,517
                                                 -----------         -----------         -----------
Cash flows from investing activities:
   Purchase of property and equipment ...               (758)            (11,387)             (4,940)
                                                 -----------         -----------         -----------
Net cash used in investing activities ...               (758)            (11,387)             (4,940)
                                                 -----------         -----------         -----------
Cash flows from financing activities:
   Proceeds from mortgage notes payable:
     Bank ...............................          1,010,513                --                  --
     General partner ....................            500,000
   Distributions to unitholders .........               --                  --            (1,121,376)
                                                 -----------         -----------         -----------
   Net cash provided by (used in)
     financing activities ...............          1,510,513                --            (1,121,376)
                                                 -----------         -----------         -----------

Net increase (decrease) in cash .........           (459,341)           (877,510)            342,201

Cash at beginning of year ...............            543,243           1,420,753           1,078,552
                                                 -----------         -----------         -----------

Cash at end of year .....................        $    83,902         $   543,243         $ 1,420,753
                                                 ===========         ===========         ===========

(continued)
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                      STATEMENTS OF CASH FLOWS (CONTINUED)
<CAPTION>

Reconciliation of net income (loss) to net cash provided by (used in) operating activities:

                                                              Years ended September 30,
                                                 ---------------------------------------------------
                                                     1995                1994                1993
                                                 -----------         -----------         -----------
<S>                                              <C>                 <C>                 <C>        
Net income (loss) .......................        ($  787,349)        ($  553,793)        $   772,865
                                                 -----------         -----------         -----------

Adjustments to reconcile net income
   to net cash provided by (used in)
     operating activities:

   Depreciation and amortization ........              4,334               3,599               2,394
   Provision for doubtful accounts ......            (48,500)             48,500            (131,250)
   Sundry ...............................              4,227                --                  --

Change in assets and liabilities:
   Increase in:
     Mortgage notes and
        other receivables ...............           (158,232)               --                  --
     Property held for sale .............         (1,097,773)           (485,947)           (131,739)
     Other assets .......................               --               (28,696)            (30,158)
     Accounts payable and
        accrued liabilities .............            297,436             191,670              72,180
     Estimated costs of development
        of land sold ....................               --                  --                 4,942
   Decrease in:
     Mortgage notes and
        other receivables ...............               --                36,356             909,283
     Other assets .......................             61,740                --                  --
     Estimated cost of development
        of land sold ....................           (244,979)            (77,812)               --
                                                 -----------         -----------         -----------

Total adjustments .......................         (1,181,747)           (312,330)            695,652
                                                 -----------         -----------         -----------

Net cash flow provided by
   (used in) operating activities .......        ($1,969,096)        ($  866,123)        $ 1,468,517
                                                 ===========         ===========         ===========
</TABLE>
Supplemental information concerning investing and financing activities:
In  connection  with the 1995  recording of an in substance  foreclosure  of the
property  described  in  Note 3,  the  Partnership  recorded  the  property  and
concurrently  reduced its mortgage notes receivable by the carrying value of the
receivable, $65,064, in fiscal year 1995.

                       See notes to financial statements.
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                  YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993



1.   Organization and summary of significant accounting policies:

     The  primary   business  purpose  of  the  Partnership  is  the  operation,
     management and orderly  disposition of its assets and the  distribution  of
     the  proceeds  therefrom  to  unitholders.  The  general  partners  of  the
     Partnership  are Hasam  Realty  Limited  Partnership  and Stein  Management
     Company,  Inc.  ("Steinco").  Steinco is the Managing General Partner which
     employs the  management and clerical  employees  necessary to carry out the
     operation of the Partnership.  Steinco is reimbursed by the Partnership for
     related expenses.

     A summary of the Partnership's accounting principles is as follows:

     Land sales:
         Land  sales  are  accounted  for  under  the  accrual  method  when the
         purchaser has made an adequate  down  payment,  generally 20% to 25% of
         the  purchase  price,  the  Partnership  has no  substantial  remaining
         obligations  with respect to the property,  and  collectibility  of the
         receivable is reasonably predictable. Otherwise, either the installment
         or the cost  recovery  method is used.  Under the  installment  method,
         portions  of profit are  recognized  as cash  payments  are made by the
         buyer.  Under the cost recovery  method no profit is  recognized  until
         cash payments by the buyer,  including  interest and principal,  exceed
         the seller's cost of the property sold.

     Sale of Utility System:
         The Partnership  recognizes profit on the 1983 sale of a Utility System
         in the years in which increases in consumption  generate amounts due to
         the Partnership. (See note 11).

     Cash:
         The  partnership  considers  all highly  liquid debt  investments  with
         maturities of three months or less to be cash equivalents.

     Mortgage notes receivable:
         Mortgage  notes  receivable  represent  amounts  due  from  the sale of
         properties  and in  certain  cases have been  reduced  by the  deferred
         profit  which is being  recognized  under  the  installment  method  of
         accounting. The Partnership evaluates the carrying amount of delinquent
         mortgage  notes  receivable  to  determine  that such  amount is not in
         excess of the estimated fair market value of the underlying land.

     Property held for sale:
         Property  held for sale is stated at the lower of cost or estimated net
         realizable  value. The cost of property held for sale includes original
         purchase price,  cost of land  development and development  period real
         estate taxes and interest.
<PAGE>
     Property and equipment:
         Property and  equipment  are stated at cost.  Depreciation  is computed
         over the  estimated  useful  lives of the  assets on the  straight-line
         method for financial reporting purposes and accelerated methods for tax
         reporting purposes.

     Net income (loss) per unit:
         Net income (loss) per unit is calculated  based on the weighted average
         number of units outstanding during the year.

     Concentrations of credit risk:
         Assets which subject the Partnership to  concentrations  of credit risk
         consist  primarily of cash and property held for sale. The  Partnership
         places  its  temporary  cash   investments  with  high  credit  quality
         institutions.  At times, such investments may exceed the FDIC insurance
         limit. The Partnership's  property held for sale is located in Florida.
         The  Partnership's  ability  to  sell  its  property  is  substantially
         dependent upon the Florida real estate economic sector.

     Use of estimates:
         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that affect the  reported  amounts  and  disclosures.
         Actual results could differ from those estimates.
<PAGE>
2.   Mortgage notes and other receivables:

     Mortgage notes receivable consist of the following:
<TABLE>
<CAPTION>
                                                            September 30,
                                                     --------------------------
                                                        1995             1994
                                                     ---------        ---------
<S>                                                  <C>              <C>      
Mortgage notes receivable ....................       $ 285,801        $ 584,842
Less:
   Deferred profit ...........................         (49,648)        (153,127)
   Allowance for doubtful collection .........            --            (48,500)
                                                     ---------        ---------
                                                     $ 236,153        $ 383,215
                                                     =========        =========
</TABLE>

     Mortgage  notes  receivable at September 30, 1995 consisted of two notes in
     the amounts of $60,194 and $225,607,  respectively. On October 27, 1995 the
     first note was  collected in full. On November 24, 1995 the second note was
     sold for $170,000, such amount approximating the carrying value of the note
     at the date of sale.

     Other receivables consist of the following:
<TABLE>
<CAPTION>
                                                             September 30,
                                                       -------------------------
                                                         1995             1994
                                                       --------         --------
<S>                                                    <C>              <C>     
Utility receivable (Note 11) .................         $432,800         $ 85,800
Accrued interest receivable ..................            2,833           48,124
Other ........................................              250           13,229
                                                       --------         --------
                                                       $435,883         $147,153
                                                       ========         ========
</TABLE>

3.   Property held for sale:

     Included  in  property  held  for  sale at  September  30,  1995 is the net
     carrying  value  of  a  mortgage  note  receivable  in  default  which  was
     considered to be an in substance foreclosure. The underlying property is in
     the  process of being  reacquired  through  foreclosure.  The in  substance
     foreclosure  was recorded by  reclassifying  the net carrying  value of the
     receivable of $65,064, consisting of a mortgage note receivable of $137,614
     less related deferred profit of $72,550, to property held for sale.

     The Partnership  has contracted to develop certain  property held for sale.
     The amount of the contract is approximately  $306,000, of which $21,000 has
     been incurred and is included in accounts payable at September 30, 1995.
<PAGE>
4.   Other assets:

     Other assets consist of the following:
<TABLE>
<CAPTION>
                                                             September 30,
                                                       -------------------------
                                                         1995             1994
                                                       --------         --------
<S>                                                    <C>              <C>     
Furniture and equipment, net of
   accumulated depreciation ..................         $  8,184         $ 15,987
Prepaid expenses .............................           53,707          115,447
                                                       --------         --------

                                                       $ 61,891         $131,434
                                                       ========         ========
</TABLE>

5.   Mortgage notes payable:

     Mortgage notes payable - bank
         On October 6, 1994 the  Partnership  entered into a
         construction/development loan agreement whereby the
         Partnership  borrowed $975,000 at 2% over the prime
         rate (10.75% at September 30, 1995).  Interest only
         is payable  monthly  and,  as  modified on June 26,
         1995 (see below), the loan matures on July 1, 1997.
         Property held for sale with a cost of approximately
         $2,530,000  is  collateral  for  this  loan and the
         additional borrowings described below.                       $  975,000

         On June 26, 1995,  the  Partnership  entered into a
         modification  of the above loan  agreement  whereby
         the Partnership may borrow, under the same terms as
         above, up to an additional $1,200,000 provided that
         the Partnership receives at least $1,000,000 from a
         proposed  municipal  bond  offering  of the  Indian
         Trail Water Control District, the proceeds of which
         are  to  be  used  to   develop   water  and  sewer
         facilities.  Should  the  proposed  municipal  bond              35,513
         offering  not provide  these  additional  proceeds,          ----------
         additional borrowings are limited to $350,000.               $1,010,513
                                                                      ==========

<PAGE>
     Mortgage note payable - general partner:
         On June 29, 1995 the Partnership  borrowed $500,000
         from its general partner for working  capital.  The
         terms of the  mortgage  call for  monthly  interest
         payments  at a rate of 2%  over  prime  (10.75%  at
         September 30, 1995) with the outstanding  principal
         balance  due  upon   maturity  at  June  29,  1996.
         Property held for sale with a cost of approximately
         $640,000 is  collateral  for this loan. No payments
         of interest have been made since August 1995 and on
         January  31, 1996 the  general  partner  waived the
         default for nonpayment of interest and extended the
         due date of the mortgage to August 31, 1996.                 $  500,000
                                                                      ==========

     Interest is capitalized for property being developed. All other interest is
     charged to operations as incurred. During the year ended September 30, 1995
     interest of $106,235  was  incurred of which  $89,605 was  capitalized  and
     $16,630 was charged to operations.

6.   Accounts payable and other liabilities:

     Accounts payable and other liabilities consist of the following:
<TABLE>
<CAPTION>
                                                            September 30,
                                                     ---------------------------
                                                       1995               1994
                                                     --------           --------
<S>                                                  <C>                <C>     
Accounts payable .........................           $555,547           $388,162
Accrued liabilities:
  Property taxes .........................            107,352            106,764
  Other ..................................             83,703             48,040
Due to landowner .........................             93,800
                                                     --------           --------
                                                     $840,402           $542,966
                                                     ========           ========
</TABLE>

     Property  taxes related to calendar 1994, and which were due March 31, 1995
     in the approximate  amount of $145,000,  are delinquent and are included in
     accounts payable at September 30, 1995.

     Due to landowner  represents  reimbursement  due for  development  costs in
     connection  with common  areas.  Payments of $18,800 and $75,000 are due on
     February 15, 1996 and June 30, 1996, respectively,  with interest at 8% per
     annum.
<PAGE>
7.   Terminated merger costs:

     During fiscal year 1994 management  determined that the Partnership  should
     add home building operations to its business. After a potential affiliation
     was   identified   at  the  beginning  of  fiscal  1995,  a  memorandum  of
     understanding   was   executed   for  the   purpose  of   merging   with  a
     privately-owned  South  Florida home  builder.  However,  after  protracted
     negotiations,  the attempt to merge was terminated in December 1995.  Costs
     incurred  during the year ended  September  30, 1995,  in  connection  with
     terminated  merger,  amounted  to  approximately  $405,000  and  have  been
     expensed in the 1995 statement of  operations.  Such costs include fees for
     financial,  capital  and  real  estate  consultants  and  attorneys'  fees.
     Subsequent to September 30, 1995 approximately  $66,000 of additional costs
     were incurred.

8.   Income taxes:

     The Partnership is not subject to income taxes.  Instead,  the partners are
     required  to  include  in  their  income  tax  returns  their  share of the
     Partnership's income or loss, as adjusted to reflect the effects of certain
     transactions which are accorded different  accounting treatment for federal
     income tax  purposes.  Pursuant to the Tax Reform Act of 1986,  the Company
     changed  its fiscal  year end,  September  30, to a  calendar  year end for
     income tax purposes.

     Since the Partnership  has not completed  accounting for its operations for
     the period October 1, 1995 through  December 31, 1995, it has estimated its
     taxable  loss  for  the  calendar  year  based  upon  annualization  of its
     operations for the nine months ended  September 30, 1995,  after  adjusting
     for non-recurring items. Exclusive of taxable income or loss generated by a
     December 1995 sale of land in the amount of $140,000  (pending cost of sale
     allocations), it is presently estimated that the Partnership's tax loss for
     calendar year 1995 will approximate $300,000.

     The  following  analysis  summarizes  the  major  differences  between  the
     financial reporting and income tax basis of the partners' equity account at
     September 30, 1995.
<PAGE>
<TABLE>
<S>                                                    <C>           <C>        
Partners' equity, financial reporting basis ........                 $ 3,060,134
  Add items recorded for tax purposes only:
  Step-up in basis of property .....................   $17,000,000
  Less:  Cost of sales - step-up as adjusted
    for unamortized additional capitalized
    inventory costs ................................    11,495,211
                                                       -----------
                                                         5,504,789
                                                       -----------
  Add items not deducted for tax purposes:
    Deferred profit - financial reporting basis ....        49,648
    Accrued liabilities ............................        95,772
    Terminated merger costs ........................       375,630
    Commissions ....................................        74,226
                                                       -----------              
                                                           595,276     6,100,065
                                                       -----------   -----------
Partners' equity, income tax basis .................                 $ 9,160,199
                                                                     ===========
</TABLE>

9.   Related party transactions:

     The Partnership  reimbursed Steinco approximately $45,000 and $154,000, for
     payroll and related expenses for fiscal years 1994 and 1993, respectively.

10.  Lease information:

     The  Partnership  occupies  its office  facility in a building  owned by an
     entity related by common  ownership.  The Partnership does not pay any rent
     at this  office  facility.  Other  long-term  operating  leases on real and
     personal properties are not considered material.

11.  Other transactions:

     A  subsidiary  of  the  Company,   Royal  Palm  Beach   Utilities   Company
     ("Utilities"),   previously  sold  to  the  Village  of  Royal  Palm  Beach
     ("Village")  all  of  its  assets,  consisting  of a  water  treatment  and
     distribution system and a sanitary sewer collection, treatment and disposal
     system located in the Village. The sale requires payments to be received by
     Utilities as future  connections  (as measured by increases in consumption)
     are added to the system. Should consumption not increase sufficiently,  the
     Partnership would not receive the full sale amount. The maximum proceeds to
     Utilities, was approximately $13,410,000,  of which, under the terms of the
     sale,  approximately  $5,708,000  had not yet been received as of September
     30,  1995.  In  addition,  the  Partnership  had the right to receive up to
     $500,000,  of which  $262,657  has already  been  received,  as the Village
     collects  guaranteed  revenues from  developers.  Since future increases in
     consumption  and  payment of  guaranteed  revenues  cannot be assured  and,
     therefore,  the extent of future  payments to the Partnership is uncertain,
     the Partnership  accounts for this transaction  utilizing the cost recovery
     method of accounting.  The Partnership  has previously  fully recovered its
     cost and recognizes profit on the sale as increases in consumption generate
     amounts  due to the  Partnership.  Revenues  related to the sale of utility
     system of $432,800,  $85,800,  $215,000  were  recognized  for fiscal years
     1995, 1994 and 1993, respectively.
<PAGE>
12.  Comparative quarterly financial information (unaudited):
<TABLE>
<CAPTION>
                                      First         Second       Third        Fourth
                                     quarter       quarter      quarter      quarter       Full year
                                     --------      --------     --------     --------      ----------
<S>                                 <C>           <C>          <C>          <C>           <C>         
1995:
Revenues                             $ 19,758      $ 36,840     $ 10,666     $430,387      $  497,651
Costs and expenses                    215,640       282,400      338,582      448,378       1,285,000
                                     --------      --------     --------     --------      ----------

Net loss                            ($195,882)    ($245,560)   ($327,916)   ($ 17,991)    ($  787,349)
                                     ========      ========     ========     ========      ==========

Net loss per unit                       ($.04)        ($.06)       ($.07)       ($.01)          ($.18)
                                         ====          ====         ====         ====            ====  

1994:
Revenues                             $145,468      $ 70,504     $390,362     $225,439      $  831,773
Costs and expenses                    202,220       329,583      499,026      354,737       1,385,566
                                     --------      --------     --------     --------      ----------

Net loss                            ($ 56,752)    ($259,079)   ($108,664)   ($129,298)    ($  553,793)
                                     ========      ========     ========     ========      ==========

Net loss
  per unit                              ($.01)        ($.06)       ($.02)       ($.03)          ($.12)
                                         ====          ====         ====         ====            ====  

1993:

Revenues                             $800,297      $308,233     $376,203      $232,543     $1,717,276
Costs and expenses                    170,767       119,964      375,538       278,142        944,411
                                     --------      --------     --------     --------      ----------

Net income (loss)                    $629,530      $188,269     $    665    ($ 45,599)     $  772,865
                                     ========      ========     ========     ========      ==========

Net income (loss) per unit               $.14          $.04         $.00        ($.01)           $.17
                                         ====          ====         ====         ====            ====  
</TABLE>

     Year  end  adjustments  at  September  30,  1995  principally  include  the
     write-off of terminated merger costs of approximately  $220,000,  which had
     previously been capitalized.

     Year  end  adjustments  at  September  30,  1994  principally  include  the
     reporting of a third quarter land sale on the installment basis whereas the
     accrual method had previously been used. At year end, management determined
     that the installment method of accounting was more appropriate.  The effect
     of this adjustment was to increase the 1994 loss by approximately $61,000.
<PAGE>
13.  Revenues:

     Revenues consist of the following:
<TABLE>
<CAPTION>
                                               Years ended September 30,
                                        ----------------------------------------
                                           1995           1994           1993
                                        ----------     ----------     ----------
<S>                                     <C>            <C>            <C>       
Land revenues:
   Gross sales of land ............           --       $  581,575     $  350,000
   Less profit deferred
      until principal
        collections are
          received ................           --           61,395           --
                                                       ----------     ----------
   Net sales of land ..............           --          520,180        350,000

   Recognized profit on
      installment and cost
        recovery sales ............     $   30,929         18,316        958,135
Interest income ...................         31,916         66,814        184,284
Sale of utility system
   (Note 11) ......................        432,800         85,800        215,000
Other .............................          2,006        140,663          9,857
                                        ----------     ----------     ----------
                                        $  497,651     $  831,773     $1,717,276
                                        ==========     ==========     ==========
</TABLE>
     Sales to a different  single  purchaser each year represented 60%, and 100%
     of total sales for fiscal years 1994, and 1993, respectively.

     In fiscal  year  1994,  other  revenue  principally  consists  of  $119,000
     received as a litigation  settlement  against an unrelated  third party for
     breach of contract. The third party failed to reimburse the Partnership for
     the costs  incurred in building a road. The  Partnership  received the full
     amount due of $119,000 prior to final judicial determination.

14.  Liquidity:

     During  the  year  ended  September  30,  1995,  the  Partnership  incurred
     substantial  expenses in the  development  of its properties in addition to
     normal ongoing  administrative  costs and costs incurred in connection with
     the terminated  merger  described in Note 7. In anticipation of adding home
     building operations through the proposed merger, management made a decision
     to suspend  land sales  activity  pending the  outcome of the merger.  This
     suspension of land sales resulted in insufficient cash resources  available
     for the Partnership to meet its obligations as they become due.

     Since the  termination of the merger in December 1995, the  Partnership has
     resumed land sales  efforts and has entered into sales  contracts for which
     closings are pending.  However,  there is no assurance  that such  closings
     will occur, or that their timing will coincide with the Partnership's  cash
     requirements.   Management  believes  that  shortfalls  in  cash  flow  are
     temporary  and that the  Partnership  will be able to  arrange  short  term
     financing  sufficient to fund ongoing operations.  The success of the sales
     efforts or  obtaining  additional  borrowings  is  necessary  to enable the
     Partnership  to  meet  its  current  obligations  and  continue  as a going
     concern.
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                 SCHEDULE IX - VALUATION AND QUALIFYING ACCOUNTS

                  YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
                                                              Column C-
                                                       -------------------------
                                                          (1)            (2)
                                       Column B-        Charged        Charged                           Column E-
                                      Balance at           to             to                             Balance at
             Column A                 beginning         costs and       other            Column D-         end of
            Description                of period        expenses       accounts          deductions        period
---------------------------           -----------      ----------     ----------       --------------   ------------
<S>                                     <C>                  <C>                    <C>                 <C>
Deferred profit:
               1993                     1,068,184                                   (B)  ($  958,135)   $    110,049


               1994                       110,049                                   (A)       61,395
                                                                                    (B)  (    18,316)
                                                                                    (E)  (         1)        153,127


               1995                       153,127                                   (B)  (    30,929)
                                                                                    (C)  (    72,550)         49,648
Allowance for
doubtful accounts:
               1993                       131,250                                   (D)  (   131,250)              0


               1994                             0            48,500                                           48,500


               1995                        48,500                                   (D)  (    48,500)              0
</TABLE>

(A) Deferred  profit on current year sales
(B) Recognized  profit on installment and cost recovery sales
(C) Deferred profit on receivable - the underlying property was recorded as an
    in substance foreclosure (See Note 3 to Financial Statements)
(D) Recovery of reserved receivable
(E) Rounding
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

             SCHEDULE X - SUPPLEMENTAL INCOME STATEMENT INFORMATION

                  YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
<TABLE>
<CAPTION>

                                                       September 30,
                                            ------------------------------------
                                              1995          1994          1993
                                            --------      --------      --------
<S>                                         <C>           <C>           <C>     
1. Maintenance and repairs ...........      $      0      $    580      $    822
                                            ========      ========      ========

2. Taxes, other than payroll
   and income taxes ..................      $119,201      $ 92,267      $118,614
                                            ========      ========      ========

3. Advertising .......................      $    600      $  2,500      $  4,363
                                            ========      ========      ========
</TABLE>