SECURITIES AND EXCHANGE COMMISSION                     
                            Washington, D.C.  20549
                                 FORM 10-K

           [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                 For the fiscal year ended SEPTEMBER 30, 1997

         [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                        Commission file number: 0-6867

                     LYNTON GROUP, INC.
            (Exact name of Registrant as specified in its charter)

DELAWARE                                                  13-2688055
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification Number)

9 AIRPORT ROAD
MORRISTOWN MUNICIPAL AIRPORT                               
MORRISTOWN, NEW JERSEY                                    07960
(Address of principal executive offices)                 (Zip code)

      Registrant's telephone number, including area code: (973) 292-9000

       Securities registered pursuant to Section 12(b) of the Act: NONE
          Securities registered pursuant to Section 12(g) of the Act:
                        COMMON STOCK  ($.30 PAR VALUE)

Indicate  by  check  mark  whether  the  Registrant  (1)  has filed all reports
required to be filed by Section 13 or 15(d) of the Securities  Exchange  Act of
1934  during  the  preceding  12  months  (or  for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes    X           No

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

As of December 31, 1997, the aggregate market value of the Common Stock held by
non-affiliates  of  the  Registrant  (1,075,486   shares)   was   approximately
$1,209,922  (based  upon  the  average  bid  and asked prices of such stock  on
December  18,  1997, the most recent date on which  bid  and  ask  prices  were
available). The  number  of  shares  outstanding  of the Common Stock ($.30 par
value) of the Registrant as of the close of business  on  December 31, 1997 was
6,394,872.

                    DOCUMENTS INCORPORATED BY REFERENCE



<PAGE>
                                    PART I

ITEM 1. BUSINESS

(a)  General Development of Business

Unless otherwise indicated by the context, the terms "Company"  or "Registrant"
refer to Lynton Group, Inc. and its consolidated subsidiaries.

The  Company,  operating  from  its  primary  bases in the New York and  London
metropolitan regions, performs aviation sales and services for an international
list of customers.  Services provided by the Company  include  the  management,
charter,  maintenance,  hangarage  and  refueling of corporate helicopters  and
fixed  wing  aircraft.  In  addition, the Company's  sales  operations  perform
aircraft  sales  and  brokerage   services  to  customers  located  in  markets
throughout the world.

This  report  contains  certain  forward-looking   statements  and  information
relating to the Company that are based on the beliefs  and  assumptions made by
the  Company's  management  as well as information currently available  to  the
management.  When used in this  document,  the  words  "anticipate", "believe",
"estimate",  and  "expect"  and similar expressions, are intended  to  identify
forward-looking statements.   Such  statements reflect the current views of the
Company  with  respect to future events  and  are  subject  to  certain  risks,
uncertainties  and   assumptions.   Should  one  or  more  of  these  risks  or
uncertainties materialize,  or  should  underlying assumptions prove incorrect,
actual results may vary materially from those  described herein as anticipated,
believed, estimated or expected.  The Company does  not  intend to update these
forward-looking statements.

Lynton  Group, Inc. was incorporated in the State of Delaware  in  August  1971
under the  name  of  Decair Corporation.  In June 1989, the Company changed its
name to Lynton Group,  Inc.   Prior  to  May  1989,  the  Company's  operations
consisted  primarily  of  performing  helicopter  maintenance,  management  and
charter  services  through its subsidiaries Ramapo Helicopters, Inc. ("Ramapo")
and Rockland Aviation,  Inc.  (later  renamed  Lynton  Aviation  Charter,  Inc.
("Lynton   Aviation   Charter")   and  now  known  as  LynStar  Aviation,  Inc.
("LynStar").

In May 1989, the Company acquired (the "Limited Acquisition") all of the issued
and outstanding shares of Lynton Group  Limited,  a company organized under the
laws of England ("Limited").  Limited, a London based  company founded in 1984,
is  currently  a holding company with two wholly-owned operating  subsidiaries,
Lynton Aviation  Limited ("Aviation Limited"), a wholly-owned subsidiary at the
time of the Limited  Acquisition,  and  European Helicopters Limited ("EHL"), a
40%  owned affiliate at the time of the Limited  Acquisition,  each  a  company
organized under the laws of England.  In August 1990, the Company acquired (the
"EHL Acquisition")  the  remaining  60%  of the capital stock of EHL.  Aviation
Limited is primarily involved in the sale,  management and charter of corporate
helicopters and fixed wing aircraft while EHL  is  primarily  involved  in  the
rebuilding, sale and maintenance of corporate helicopters.

Simultaneous  with  the consummation of the EHL Acquisition, Lynton Jet Centre,
Inc.  ("Lynton  Jet  Centre"),   a   wholly-owned  subsidiary  of  the  Company
incorporated in April 1990 under the laws  of the State of New Jersey, acquired
substantially all of the assets of the Linpro  Jet  Centre  (the "Jet Centre"),
including  its  ground  lease  on  a hangar facility located at the  Morristown
Municipal Airport, Morristown, New Jersey  (the "Jet Centre Acquisition").  The
Jet Centre is a fixed base operation of approximately  132,000  square  feet of
hangar  and  office  space,  and  provides  hangarage  and  fueling services to
corporate  helicopters  and  fixed  wing  aircraft at the Morristown  Municipal
Airport.  Following the acquisition, the Jet  Centre was renamed the Lynton Jet
Centre.

In  August  1990,  the Company incorporated a wholly-owned  subsidiary,  Lynton
Aviation, Inc., a New  Jersey  corporation  ("Lynton  Aviation"),  and in April
1992, incorporated a wholly-owned subsidiary, Lynton Aviation Services, Inc., a
New  Jersey  corporation  ("Lynton Services"), to provide aviation charter  and
management services and corporate  aircraft  sales  services through operations
based at the Jet Centre.

In  July  1992,  the Company sold its interest in Lynton  Aviation  Charter  to
LynStar Holdings,  Inc.,  a  New  Jersey  corporation which is 20% owned by the
Company and formed for the purpose of effecting  the  acquisition of all of the

                             2

<PAGE>
shares of capital stock of Lynton Aviation Charter.  Thereafter,  and  also  in
July 1992, Lynton Aviation Charter changed its name to LynStar Aviation, Inc.

In January 1994, the Company acquired (the "Dollar Air Acquisition") all of the
issued  and  outstanding  shares  of  Dollar  Air  Services  Limited, a company
organized under the laws of England ("Dollar Air"). At the time  of  the Dollar
Air  Acquisition,  Dollar  Air  owned  a  75%  equity  interest  in  Black Isle
Helicopters  Limited,  a  company  organized under the laws of Scotland ("Black
Isle"). In September 1994, the remaining  25% of Black Isle's capital stock was
acquired by the Company.

In March 1994, the Company incorporated Lynton  Properties,  Inc., a New Jersey
corporation and a special purpose wholly-owned subsidiary of Lynton  Jet Centre
("Lynton  Properties"),  in  order  to  effect  a  leasehold mortgage financing
transaction.

In  August  1995,  substantially all the business, assets  and  liabilities  of
Dollar Air and Black  Isle  were  transferred  to  a  newly formed company, PLM
Dollar Group Limited ("PDG"), a company organized under  the  laws of Scotland,
in  exchange  for  50%  of  the capital stock of PDG. Simultaneously  with  the
consummation of the transaction,  substantially all of the business, assets and
liabilities of P.L.M. Helicopters Limited  ("PLM")  were transferred to PDG and
the shareholders of PLM were issued the remaining 50%  of  the capital stock of
PDG.  PDG operates a fleet of 13 helicopters from bases primarily  in  Scotland
and England,  and  provides  helicopter  support  services  for  industrial and
utility applications in the United Kingdom.  In October 1997, the  Company sold
its 50% share of the capital stock in PDG to the remaining 50% shareholders  of
PDG.

In  fiscal  1997, the Company agreed to dissolve Lynton Aviation which had been
in the business  of  providing  aviation  management services to HM Industries,
Inc.,  an affiliate of HM Holdings, Inc.  Such  services  terminated  with  the
completion  of  the  Debt Discharge Transaction in November 1996. (See Part II,
Item 7 for information on the Debt Discharge Transaction.)

In  December  1997,  the  Company  acquired  through  Limited  (the  "Magec
Acquisition") all of the  issued  and  outstanding shares of Magec Aviation
Limited, a company organized under the laws  of  England  ("Magec").  Magec
provides  hangarage  and  refueling,  charter,  management, and maintenance
services for corporate aircraft from its own exclusive  terminal  at London
Luton Airport located in the London, England metropolitan area (see Note 14
to the Company's consolidated financial statements).

(b) Financial Information About Industry Segments

The  Company  primarily  operates  in  one industry segment, i.e. aviation  and
aviation related services.

(c) Narrative Description of Business

FLIGHT OPERATIONS

In the United Kingdom, the Company through  Aviation  Limited, performs charter
and management services for corporate helicopters and fixed  wing  aircraft.  A
typical management contract will require the Company to staff an aircraft  with
a  crew  and arrange for maintenance of the aircraft for a management fee.  The
Company in  turn  charters  the  aircraft  to outside customers and pays to the
owner  of  the  aircraft a percentage of the revenues  received.   The  Company
currently  operates  9  helicopters  and  4  fixed  wing  aircraft  under  such
arrangements.  Contracts for management and general services may be canceled on
a short-term  basis. Management believes that the loss of any single management
contract or charter  customer  in  the United Kingdom would not have a material
effect on the Company.

Also in the United Kingdom, PDG, which,  until  October  1997, was 50% owned by
the  Company, performs helicopter support services for the  construction,  fish
farming,  forestry, mining and oil industries and for various utilities.  These
services are  primarily  provided  to  companies  under  short  and medium term
contracts. PDG currently owns 8 aircraft and has an additional 5 aircraft under
short-term lease arrangements.  In October 1997, the Company sold its 50% share
of the capital stock in PDG to the remaining 50% shareholders of PDG.

                            3
<PAGE>
In the United States, the Company performs aircraft management services through
its subsidiaries Lynton Jet Centre and Lynton Services.

MAINTENANCE OPERATIONS

The  Company  operates  two  helicopter  maintenance  facilities  through   its
subsidiaries  EHL, located in Denham, Middlesex, outside of London, England and
Ramapo, located  at  the  Morristown Municipal Airport, Morristown, New Jersey.
The principal maintenance activities  consist  of  routine and major helicopter
maintenance, component overhaul, and aircraft parts sales.

EHL  is one of a few facilities in the United Kingdom  licensed  by  the  Civil
Aviation  Authority  ("CAA") as a Repair Station entitled to maintain, overhaul
and repair helicopters.   EHL's  maintenance  operations are based in part on a
certificate from Eurocopter Corporation for helicopters  produced by it.  These
certificates  are  of  indefinite  duration  but  are subject to  cancellation,
suspension or revocation if, in the case of the manufacturer's certificate, EHL
fails to provide satisfactory maintenance facilities  and levels of service or,
in  the  case  of  the  CAA certificate, EHL fails to meet Joint  Airworthiness
Requirements as mandated by the Joint Airworthiness Authorities of the European
Community and administered  by  the  CAA.  EHL currently meets all requirements
for both the CAA and the manufacturer's  certificates. Management believes that
the loss of any of the foregoing certificates or licenses could have a material
effect on the Company.

Ramapo  is one of numerous facilities in the  United  States  licensed  by  the
Federal Aviation  Administration  ("FAA")  as  a  Repair  Station  entitled  to
maintain,  overhaul  and repair all helicopter models with a gross weight under
12,500 pounds.  Ramapo  is also one of numerous facilities in the United States
licensed by the FAA as a  Repair  Station  entitled  to maintain and repair all
fixed  wing King-Air models manufactured by Beechcraft.   Ramapo's  maintenance
operation is based in part on certificates from Bell Helicopter/Textron for the
206 and  222  Series  helicopters  and  certificates  from  American Eurocopter
Corporation  for  the  AS350,  AS355  and  AS365  Series  helicopters.    These
certificates  are  of  indefinite  duration  but  are  subject to cancellation,
suspension  or  revocation  if, in the case of the manufacturers'  certificate,
Ramapo  fails to provide satisfactory  maintenance  facilities  and  levels  of
service or,  in  the  case  of  the  FAA  certificate, Ramapo fails to meet FAA
maintenance   and  employment  requirements.   Ramapo   currently   meets   all
requirements for  both  the  FAA  and  manufacturers' certificates.  Management
believes that the loss of any of the foregoing  certificates  or licenses would
not have a material effect on the Company.

The Company currently services and maintains approximately 36 helicopters and 5
fixed wing aircraft for individuals and corporations in the New York and London
regions.  Management believes that the loss of any single maintenance  customer
would not have a material effect on the Company.

AIRCRAFT SALES OPERATIONS

The  Company,  through  both its United States and United Kingdom subsidiaries,
performs sales and brokerage  services  related  to  the  purchase  and sale of
corporate helicopters and fixed wing aircraft between owners and buyers of such
aircraft  located  throughout the world.  The Company will generally receive  a
fixed commission or  a  percentage  of the amount of such transactions from the
buyer and/or seller of the aircraft.   The  Company also purchases aircraft for
resale in instances where it believes the aircraft  may  be resold at a profit.
For  aircraft sales transactions in which the Company acts  as  principal,  the
Company records the full sales price of the aircraft as revenue and the cost of
the aircraft  as  a charge to direct costs, resulting in a relatively low gross
margin percentage.   In  other  transactions, the Company may act strictly as a
broker and record as revenue only  the commissions on these sales transactions,
generating  a  relatively  high  gross margin  percentage.   Consequently,  the
performance  of these operations can  best  be  gauged  by  the  gross  margins
achieved for each period.  Gross margins generated by aircraft sales operations
have a material  impact  on  the  operating  results  of  the  Company and have
historically varied significantly from period to period.  The level of aircraft
sales transactions is, to a significant degree, reflective of overall  economic
conditions.

                             4

<PAGE>
FIXED BASE OPERATIONS

The Company through Lynton Jet Centre and Lynton Properties, is engaged  in the
operation  of aviation fixed base operation ("FBO") at the Morristown Municipal
Airport, Morristown,  New Jersey.  Services performed at the FBO consist of the
hangarage and refueling  of  aircraft  operated  primarily  by corporate flight
departments located in the New York/New Jersey metropolitan area,  as  well  as
refueling  of transient customers stopping at the airport.  The facility has 13
tenants with  non-cancelable operating leases with terms remaining ranging from
one to eleven years.  (see  Note  9  to  the  Consolidated Financial Statements
annexed hereto for information on the lease arrangements  between  the  Company
and  Hanson  North  America,  Inc. and Millennium America Holdings, Inc.).  The
loss of either of the largest two tenants (with leases which expire in February
2006 and June 1999 for the largest  and  second  largest  tenant, respectively)
could have a material effect on the Company.

The  Company  through  Ramapo,  operates an additional FBO business  out  of  a
hangar/office  facility  also located  at  the  Morristown  Municipal  Airport,
Morristown, New Jersey. Services performed are similar to those provided at the
Jet  Centre.  The facility has  13  tenants  of  which  5  have  non-cancelable
operating leases  with  one  year remaining on three-year terms.  The remaining
tenants  rent on a month to month  basis.  In  addition,  Ramapo  conducts  its
maintenance operation from this facility.

As a result  of  the  Magec Acquisition completed in December 1997, the Company
now operates an additional  FBO  at London Luton Airport located in the London,
England metropolitan area.

COMPETITION

The Company generally experiences  significant  competition in all areas of its
business from a number of domestic and international competitors.

The Company competes both in the United States and United Kingdom with numerous
other organizations which perform similar services  related  to the management,
charter,  and sales of corporate helicopters and fixed wing aircraft,  some  of
which are larger  than  the  Company  in  terms of the number of aircraft under
management and some of which have greater financial resources than those of the
Company.  Competition in the industry is principally  affected  by  quality  of
service and price.  The Company has, in the opinion of management, maintained a
reputation  for  excellent  service  in  the  management, charter, and sales of
aircraft  and  has  remained price competitive for  the  comparative  level  of
service.

The Company's maintenance  operations  in  the United States and United Kingdom
each  compete  with  several  other  maintenance   organizations  within  their
geographic  regions,  ranging  from  small  sole  proprietorships   to   larger
facilities,  several  of which are as large or larger than the Company in terms
of the number of helicopters  under  maintenance, several of which have greater
financial resources than those of the  Company,  and most of which compete with
the Company in its major services.  In addition, the  manufacturers  themselves
and certain corporate aircraft owners operate their own maintenance facilities.
Competition in the industry is principally based upon price and the quality  of
the  services  provided.  The Company has remained price competitive and in the
opinion of management  has  historically maintained a reputation for excellence
in its maintenance work.

The  Company's FBO operation in  the  U.S.  competes  with  one  other  FBO  at
Morristown Municipal Airport, Morristown, New Jersey, as well as numerous FBO's
located at several airports within the New York/New Jersey metropolitan region.
Competition  consists  primarily  of  obtaining  tenants  for  the facility and
attracting  transient  customers  to use the facility primarily for  refueling.
Many of the Company's competitors are  as  large or larger than the Company and
several  have  financial  resources  as  great or  greater  than  the  Company.
Competition in the industry is principally  based upon price and the quality of
accommodation  and service at the facility.  The  Company  has  remained  price
competitive with  the  other  FBO's  in  the  area  and  has, in the opinion of
management, maintained a level of accommodation and service  that is as good or
better than its competitors.

                             5

<PAGE>
BACKLOG

The Company, through Aviation Limited and EHL, have entered into  contracts  to
provide  certain aviation support services to customers.  Such contracts expire
at various  dates  in  fiscal  1998  and  have provisions which allow for early
termination on a short-term basis.

A portion of  Lynton Jet Centre's, Lynton Properties'  and  Ramapo's  operating
revenue  is  obtained  from  tenants through rental payments provided for under
non-cancelable operating leases.   The  leases typically provide for guaranteed
minimum rentals and other charges to cover certain operating costs in excess of
base amounts.

The  following  is  a  schedule  of minimum future  rentals  on  non-cancelable
operating leases, including the lease agreement with Hanson North America, Inc.
and  Millennium  America  Holdings,  Inc.  as  referenced  in  Note  9  to  the
Consolidated Financial Statements, as  of  September  30,  1997  (thousands  of
dollars):

<TABLE>
<S>                             <C>
1998                              $3,191
1999                               2,196
2000                               1,593
2001                               1,668
2002                               1,386
Thereafter                         3,118
Total                            $13,151
</TABLE>

GOVERNMENT REGULATION

The  Company is subject to the jurisdiction of the FAA in the United States and
the CAA  in the United Kingdom related to its authorization to operate aircraft
maintenance  facilities  and to operate as an air carrier.  No assurance can be
given that the authorizations mentioned above will be maintained in the future.
Management believes that the  loss  of the above mentioned authorization in the
United States would not have a material effect on the Company while the loss of
any of the United Kingdom authorizations  could  have  a material effect on the
Company.

HAZARDS AND INSURANCE

The  operation  of helicopters and fixed wing aircraft involves  a  substantial
level of risk.  Hazards  such  as  aircraft  accidents, collisions and fire are
inherent in the providing of aviation services  and  may  result  in  losses of
life, equipment and revenues.

The  Company  maintains  insurance  of types customary to the aviation services
industry and in amounts deemed adequate  by  the Company to protect the Company
and  its  property.   These  policies  include  aircraft   liability,  aviation
spares/equipment,   all   risks,  hull,  products  liability,  hangar   keepers
liability, property and casualty,  automobile  and  workers' compensation.  The
Company has not experienced significant difficulty in  obtaining  insurance and
has  not  incurred  any  insured losses in excess of its property and liability
coverage.  While the Company  believes  that its insurance coverage is adequate
for its operations, there can be no assurance  that  such insurance coverage is
now, or will be, adequate to cover any claims to which  it  may  be  subject or
that  such  levels  of  insurance  may  be  obtained at comparable rates in the
future.

ENVIRONMENTAL MATTERS

The Company's operations are subject to numerous  laws and regulations designed
to protect the environment.  The Company believes that  it is in compliance, in
all  material  respects, with applicable environmental requirements.   Although
future environmental  obligations  are  not expected to have material impact on
the consolidated results of operations or  the consolidated financial  position
of the Company,  there can be no assurance that future developments,  including
increasingly stringent environmental  laws  or  enforcement  thereof,  will not
cause the Company to incur material environmental liabilities or costs.

                             6

<PAGE>
PERSONNEL

In  addition to its principal officers, the Company, as of September 30,  1997,
has approximately  50  employees  in  the  United  States  and approximately 50
employees  in  the United Kingdom, consisting principally of managers,  pilots,
mechanics, aviation  services  personnel and administrative staff and which are
primarily employed on a full-time basis.

POST BALANCE SHEET ACQUISITIONS

In December 1997, the Company, through  Limited, acquired all of the issued and
outstanding shares of Magec Aviation Limited,  a  company  organized  under the
laws  of  England. Magec provides hangarage and refueling, charter, management,
and maintenance services for corporate aircraft from its own exclusive terminal
at London Luton  Airport  (see  Note 14 to the Company's consolidated financial
statements).

ITEM 2. PROPERTIES

The Company operates the Jet Centre business out of the Company's hangar/office
facility of approximately 132,000 square feet, owned by the Company, located at
the Morristown Municipal Airport,  Morristown,  New  Jersey,  on  a site leased
pursuant to a ground lease with an initial term expiring on  December  31, 2010
and  with options to extend the term of the lease for five additional terms  of
five years  each.   The rental payments due under the lease are generally based
upon increases in the consumer price index through the year 2020 and based upon
fair market value thereafter.   The  Company maintains its executive offices at
the Jet Centre facility.

The Company leases an additional facility  of  approximately 36,000 square feet
at the Morristown Municipal Airport, Morristown,  New  Jersey,  with an initial
term expiring on May 31, 1998, with an option to renew for an additional  three
years.  Ramapo  conducts  its  maintenance  operation  from  this  facility, in
addition to the Company's additional FBO business.

The  Company  operates  Aviation  Limited  and  EHL principally out of a hangar
facility  of  approximately 20,000 square feet located  in  Denham,  Middlesex,
which is located  outside of London.  The hangar is owned by the Company and is
located on a site leased pursuant to a ground lease, which expires in 2012.  In
addition,  the Company  leases  on  a  month-to-month  basis  office  space  of
approximately  2,000  square  feet from a company, which is wholly-owned by the
Company's Chief Executive Officer.

As a result of the Magec Acquisition  completed  in  December 1997, the Company
now operates an additional FBO out of a hangar/office facility of approximately
65,000  square  feet, at London Luton Airport located in  the  London,  England
metropolitan area.

Management believes  that  the current facilities are sufficient to operate the
Company's business at its current level.

ITEM 3. LEGAL PROCEEDINGS

Dollar Air is a defendant in  an  action pending in the United Kingdom relating
to certain actions taken by Dollar  Air  in  connection  with  its  acting as a
broker  in the sale of a certain helicopter.  In such action, the plaintiff  is
seeking  damages   in   the  approximate  amount  of  170,000  Pounds  Sterling
(approximately $250,000).   Dollar  Air  has denied the allegations therein and
the  Company  has  defended  and  intends to continue  to  defend  this  matter
vigorously.  While the Company cannot  predict  the outcome of such litigation,
it does not expect, based upon advice of counsel,  that damages will be awarded
to the full extent of plaintiff's claim.

Other than the foregoing, there are no material pending  legal  proceedings  to
which the Company is a party or to which any of its property is subject.

                             7

<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted during the fourth quarter of the fiscal year covered by
this report to a vote of security holders.

                             8

<PAGE>
                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a)  The Company's Common Stock is traded in the over-the-counter market and is
quoted  in the "pink sheets" promulgated by the National Quotation Bureau, Inc.
and is qualified for listing on the OTC Bulletin Board under the symbol "LYNG".
Until October  20,  1995,  the  Company's Common Stock was listed on the Nasdaq
Small-Cap  Market.   Trading in the  Company's  stock  has  been  sporadic  and
relatively inactive since October 20, 1995.

The following chart sets forth the range of the high and low bid quotations for
the Company's Common Stock  for each period indicated. The quotations represent
prices  between  dealers  and  do   not   include  retail  markups,  markdowns,
commissions or other adjustments and may not represent actual transactions.
BID PRICES
PERIOD                                    HIGH                 LOW
Fiscal year ended September 30, 1995:
Oct. 1, 1994 to Dec. 31, 1994            15/16                  7/8
Jan. 1, 1995 to March 31, 1995          1-7/16                15/16
April l, 1995 to June 30, 1995           1-1/8                  3/4
July 1, 1995 to Sept. 30, 1995             3/4                  1/8

Fiscal year ended September 30, 1996:
Oct. 1, 1995 to Oct. 20, 1995             3/16                  1/8

Fiscal year ended September 30, 1997:
Oct. 1, 1996 to Dec. 31, 1996              1/8                  1/8
Jan. 1, 1997 to March 31,1997              1/8                  1/8
April l, 1997 to June 30, 1997             1/8                  1/8
July 1, 1997 to Sept. 30, 1997             7/8                  1/8

(b) As of December 31, 1997, there were approximately 525 record holders of the
Company's Common Stock.

(c) The Company has never declared any cash  dividends  on its Common Stock and
does not anticipate declaring cash dividends in the foreseeable future.

ITEM 6.SELECTED FINANCIAL DATA
(000'S EXCEPT EARNINGS PER SHARE)

<TABLE>
<CAPTION>
                                Fiscal year ended September 30: (1)
                             1997       1996       1995       1994       1993
<S>                       <C>        <C>        <C>        <C>        <C>
Revenue                    $25,585    $22,786    $27,221    $27,361    $21,121
Net income   (loss)  before
 extraordinary item          1,046        119     (2,320)    (1,231)       119
Extraordinary item - gain
 (loss) related to early
 extinguishment of debt         47        287          -       (166)         -
Net income (loss)            1,092        406     (2,320)    (1,397)       119
PRIMARY EARNINGS PER SHARE:
Net income (loss) per
 common share before
 extraordinary item            .16        .06      (1.30)      (.72)      (.01)
Extraordinary item             .01        .15          -       (.09)         -
Net income (loss) per
 common share (2)              .17        .21      (1.30)      (.81)      (.01)
Working capital (deficit)   (1,051)    (2,159)    (2,748)    (3,790)    (2,210)
Total assets                26,223     24,373     23,912     31,725     25,178
Long term debt,
 net of current portion     13,529     12,873     17,411     18,332     15,378
</TABLE>

                             9
<PAGE>
(1)This  table  should  be  read  in  conjunction  with  Part  I, Item 1(a) for
information on historical acquisitions of the Company, and in conjunction  with
the Consolidated Financial Statements and related notes thereto.
(2)Adjusted for the one-for-six reverse stock split effected in June 1994.

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

RESULTS OF OPERATIONS

  The  table  below  sets  forth  operating results information for each of the
Company's operations and on a consolidated  basis  for  the  three  years ended
September 30, 1997 (thousands of dollars):

<TABLE>
<CAPTION>
                                                  Year ended September 30,
                                               1997        1996         1995
<S>                                          <C>         <C>          <C>
Flight operations revenues - historical
 operations                                   $9,004      $7,894       $6,619
   Gross margin                               $1,259        $931         $927
   Gross margin %                               14.0%       11.8%        14.0%

Flight operations revenues - Dollar Air (1)       $0          $0       $4,875
   Gross margin                                   $0          $0         $205
   Gross margin %                                0.0%        0.0%         4.2%

Maintenance operations revenues               $5,990      $6,238       $5,290
   Gross margin                                 $999        $924         $848
   Gross margin %                               16.7%       14.8%        16.0%

Aircraft sales operations revenues              $984        $834       $3,288
   Gross margin                                 $655        $466         $488
   Gross margin %                               66.6%       55.9%        14.8%

Fixed base operations revenues                $9,607      $7,820       $6,702
   Gross margin                               $3,443      $2,836       $2,678
   Gross margin %                               35.8%       36.3%        40.0%

Other net revenues                                $0          $0         $447


Consolidated revenues                        $25,585     $22,786      $27,221
Consolidated direct costs                     19,229      17,629       21,628
Consolidated gross margin                      6,356       5,157        5,593
Selling, general & administrative expenses     3,016       2,432        3,473
Depreciation                                     689         662          933
Amortization of goodwill & intangible assets     128         127          200
Writedown of goodwill                              -           -        1,338
Operating income (loss)                        2,523       1,936         (351)
Amortization of debt discount & issuance costs    77         139          139
Interest expense                               1,162       1,336        1,772
Equity in loss of jointly-owned company            -           -           58
Write-off of amount due from affiliate             -         191            -
Income  (loss)  before  tax provision and
 extraordinary item                            1,284         270       (2,320)
Income tax provision                             238         151            -
Income (loss) before extraordinary item        1,046         119       (2,320)
Extraordinary  item  -  Gain  (loss)  related
  to early extinguishment of debt                 46         287            -
Net income (loss)                             $1,092        $406      $(2,320)
</TABLE>

(1) See Note 3 to the Consolidated Financial Statements.

                             10
<PAGE>
The  following  discussions  of  results  of operations for the Company include
results of operations for United Kingdom ("UK")  subsidiaries  translated  from
pounds  sterling  ("sterling")  to U.S. dollars at the average rate of exchange
during the respective periods.  The  average  value  of  sterling  increased by
approximately  6% in fiscal 1997 compared to fiscal 1996 and 2% in fiscal  1996
compared to fiscal  1995.   The  effect  on  consolidated results of operations
resulting  from  changes in the exchange rate of  sterling  as  compared  to  a
constant exchange  rate from period to period has been to report lower revenues
and expenses for UK  subsidiaries  when  the value of sterling decreased and to
report  higher revenues and expenses for UK  subsidiaries  when  the  value  of
sterling  increased.   Fluctuations  in  the value of sterling will continue to
have an effect on the results of operations  for UK subsidiaries as reported in
U.S.  dollars  and the resulting consolidated results  of  operations  for  the
Company.

1997 COMPARED TO 1996

Revenues for fiscal  1997  increased  to $25,585,000 as compared to revenues in
fiscal 1996 of $22,786,000, an increase  of  $2,799,000 or 12.3%. This increase
consists  primarily  from  increased revenues from  the  Company's  fixed  base
operations of $1,787,000 and  UK  flight operations of $851,000 (see discussion
of each operational area below).

The Company reported operating income for fiscal 1997 of $2,523,000 as compared
to $1,936,000 in fiscal 1996, an increase  of  $587,000.   This change resulted
primarily  from  increased  operating  income  from  the Company's  fixed  base
operations and UK flight operations.

Interest  expense  for  fiscal  1997  decreased to $1,162,000  as  compared  to
$1,336,000 for fiscal 1996, a decrease  of  $174,000  or  13.0%.  This decrease
primarily represents interest paid on the reduced average level  of outstanding
borrowings.

In   fiscal  1997,  the  Company  repurchased  a  portion  of  its  10%  Senior
Subordinated Convertible Debentures due December 31, 1998 (the "Debentures") in
the principal  amount  of  $100,000  for  cash  payments  totaling $50,000. The
Company realized a gain on redemption of $47,000, net of related  debt issuance
costs, on these repurchases.  In fiscal 1996, the Company repurchased a portion
of  its  10% Senior Subordinated Convertible Debentures due December  31,  1998
(the "Debentures")  in  the  principal  amount  of  $540,000  for cash payments
totaling $162,000. The Company realized a gain on redemption of  $287,000,  net
of related debt issuance costs, on these repurchases.

The  Company  had  net  income  of  $  1,092,000 for fiscal 1997 as compared to
$406,000  for fiscal 1996, an increase in  profit  of  $686,000.   The  primary
causes for  this  increase  were  increased operating income from the Company's
fixed base operations and UK flight  operations  and  reduced interest costs on
the reduced average level of outstanding borrowings offset  by  a  reduction in
gains realized by the Company on the redemption of a portion of its Debentures,
net of related debt issuance costs.

The  Company's  ability  to  improve  earnings  is  primarily dependent on  the
enhancement of revenues and margins from its operations.   The  performance  of
each  operation  is  affected  by  different market conditions and varies as to
stability and degree of predictability.   Below  is a discussion of each of the
Company's  operating areas and the factors which have  historically,  and  will
continue, to affect performance.

FLIGHT OPERATIONS

Certain revenues and costs relating to aviation management services provided to
HM Industries, Inc. ("HM Industries") which had been provided by the Company to
HM Industries  at  cost, were included in prior years in revenues, direct costs
and selling, general  and  administrative  expenses.  These  amounts  have been
excluded  from  revenues,  direct costs and selling, general and administrative
expenses for fiscal 1996 and  results  for  the  fiscal  year  1995  have  been
reclassified to reflect their exclusion (see following table).

                             11

<PAGE>

<TABLE>
<CAPTION>
                                            1996            1995
<S>                                    <C>             <C>
Revenues excluded                           $3,985,000      $6,417,000
Direct costs excluded                        3,801,000       6,067,000
Selling,  general  and  administrative         184,000         350,000
costs excluded
Net income effect                                   $0              $0
</TABLE>

Revenues  from  flight  operations overall increased by $1,110,000 or 14.1%
for fiscal 1997 as compared  to fiscal 1996. This improvement was primarily
due to increased fixed-wing charter  revenues in the UK, partly offset by a
reduced level of helicopter charter in  the  UK.  The  performance of these
operations  has been and will continue to be primarily affected  by  demand
for both helicopter and fixed-wing charter within the UK market and between
the UK and international  destinations.  Such demand may vary significantly
from period to period.

In August 1995, substantially  all  the business, assets and liabilities of
Dollar Air was transferred to PLM Dollar Group Limited ("PDG"), in exchange
for 50% of the capital stock of PDG.  Simultaneously  with the consummation
of  this  transaction,  substantially  all  of  the  business,  assets  and
liabilities of P.L.M. Helicopters Limited ("PLM"), were  transferred to PDG
and the shareholders of PLM were issued the remaining 50%  of  the  capital
stock  of  PDG.  Accordingly, the operating results set forth above reflect
consolidated operating  results  for  Dollar  Air,  which  was  acquired in
January  1994,  through  August  31,  1995. The Company's 50% share in  the
operating results of PDG for the year ended  September 30, 1996 and the one
month ended September 30, 1995 have not been consolidated  but are recorded
as  equity in jointly-owned company. The carrying value of the  unamortized
goodwill arising on the acquisition of Dollar Air was written off in fiscal
1995  in  the amount of $1,338,000.  In fiscal 1996, the Company decided to
dispose of its interest in PDG.  Accordingly, the asset was reclassified as
investment  in  jointly-owned  company, held for resale, and therefore, the
Company's share of the gain or loss  in  the  jointly-owned  company was no
longer  recognized  under  the  equity  method of accounting. The Company's
equity in the loss of jointly-owned company  was immaterial in fiscal 1996.
In October 1997, the Company sold its 50% share of the capital stock in PDG
to the remaining 50% shareholders of PDG.

MAINTENANCE OPERATIONS

Revenues  from maintenance operations decreased  by  $248,000  or  4.0%  in
fiscal 1997 as compared to fiscal 1996, primarily due to a decreased volume
of maintenance  sales related to customer aircraft in the UK.  Gross margin
percentage from these  operations  declined  in  fiscal 1997 as compared to
fiscal  1996  due  to increased market competitiveness  in  the  helicopter
maintenance area.  Revenues  from  maintenance  operations  are affected by
both the number of hours flown per aircraft and changes made  by either the
FAA   or   CAA   to   component   parts  lives  and  inspection  intervals.
Additionally,  revenues  are dependent  upon  the  levels  of  installation
projects completed during the year.

AIRCRAFT SALES OPERATIONS

Revenues from aircraft sales  operations  increased  by  $150,000 in fiscal
1997 as compared to fiscal 1996.  Significant fluctuations  in revenues and
gross  margin  percentages  from  aircraft sales operations may occur  from
period to period based upon the role the Company takes in such transactions
in  which it is involved. For aircraft  sales  transactions  in  which  the
Company  acts as principal, the Company records the full sales price of the
aircraft as  revenue  and  the  cost  of the aircraft as a charge to direct
costs, resulting in a relatively low gross  margin  percentage.   In  other
transactions,  the  Company  may  act  strictly  as  a broker and record as
revenue  only  the  commissions on these sales transactions,  generating  a
relatively high gross  margin percentage.  Consequently, the performance of
these operations can best  be gauged by the gross margins achieved for each
period.   Gross margins generated  by  aircraft  sales  operations  have  a
material  impact   on  the  operating  results  of  the  Company  and  have
historically varied  significantly  from  period  to  period.  The level of
aircraft  sales  transactions  is, to a significant degree,  reflective  of
overall economic conditions.

                             12

<PAGE>
FIXED BASE OPERATIONS

Revenues from fixed base operations  increased  by  $1,787,000  or 22.8% in
fiscal  1997  as  compared  to  fiscal  1996.   This  change  is  primarily
attributable  to  an  increase in the level of fuel sales volume and tenant
occupancy at the Company's fixed base operations in Morristown, New Jersey.
The performance of these  operations  to a significant degree is based upon
the level of tenant occupancy with tenant  leases  ranging in term from one
year to eleven years.  High occupancy levels for such facilities in the New
York/New Jersey metropolitan area have allowed the financial performance of
these operations to consistently improve during the last several years.

1996 COMPARED TO 1995

Revenues for fiscal 1996 decreased to $22,786,000 as  compared  to revenues
in  fiscal  1995  of  $27,221,000, a decrease of $4,435,000 or 16.3%.  This
decrease consists of the  exclusion  of  revenues  of  Dollar  Air Services
Limited  ("Dollar  Air") of $4,875,000 due to its transfer into a  jointly-
owned company (see details  below),  reduced revenue from aircraft sales of
$2,454,000, the receipt in 1995 of proceeds  from  insurance  policies over
book value on aircraft involved in accidents and rendered unserviceable  of
$447,000,   offset   by   increased  revenues  from  flight  operations  of
$1,275,000, from fixed base  operations  of $1,118,000 and from maintenance
operations of $948,000, (see discussion of each operational area below).

The Company reported operating income for  fiscal  1996  of  $1,936,000  as
compared  to  an operating loss of $351,000 for fiscal 1995, an increase of
$2,287,000.  This  change  resulted  primarily from the writedown in fiscal
1995  of  the carrying value of the unamortized  goodwill  arising  on  the
acquisition  of Dollar Air amounting to $1,338,000, and increased operating
income from the  Company's  fixed base operations and UK flight operations.
In August 1995, substantially  all  the business, assets and liabilities of
Dollar  Air  were  transferred  to PLM Dollar  Group  Limited  ("PDG"),  in
exchange  for 50% of the capital stock  of  PDG  (see  details  below).  In
connection  with  this  transfer,  the  carrying  value  of the unamortized
goodwill  arising  from  the acquisition of Dollar Air was written  off  in
fiscal 1995 and amounted to  $1,338,000.  Included  in  fiscal  1995  was a
charge  of  $263,000  for the loss sustained on the sale of a Company-owned
aircraft which was sold in that year. In 1994, the Company had reclassified
this aircraft from fixed  assets  to  aircraft  held  for  resale  and  had
recorded  a  charge  of  $180,000 to reduce its carrying value to estimated
fair market value.

Interest expense for fiscal  1996  decreased  to  $1,336,000 as compared to
$1,772,000 for fiscal 1995, a decrease of $436,000 or 24.6%.  This decrease
primarily  represents  interest  paid  on  reduced  levels  of  outstanding
borrowings.

In  fiscal  1996,  the  Company  repurchased a portion of  its  10%  Senior
Subordinated   Convertible  Debentures   due   December   31,   1998   (the
"Debentures") in  the  principal  amount  of  $540,000  for  cash  payments
totaling  $162,000.  The Company realized a gain on redemption of $287,000,
net of related debt issuance costs, on these repurchases.

The Company had net income of $406,000 for fiscal 1996 as compared to a net
loss of $2,320,000 for  fiscal  1995,  an increase in profit of $2,726,000.
The primary causes for this increase were  increased  operating  income and
reduced  interest  costs  resulting  from  the transfer of Dollar Air,  the
writedown in fiscal 1995 of the carrying value  of  unamortized goodwill in
Dollar  Air, the gain on redemption of convertible debt  of  $287,000,  and
increased  operating  income for the Company's fixed base operations and UK
flight operations.

The Company's ability to  improve  earnings  is  primarily dependent on the
enhancement of revenues and margins from its operations.   The  performance
of each operation is affected by different market conditions and  varies as
to  stability and degree of predictability.  Below is a discussion of  each
of the  Company's  operating areas and the factors which have historically,
and will continue, to affect performance.

                             13

<PAGE>
FLIGHT OPERATIONS

Certain  revenues  and  costs  relating  to  aviation  management  services
provided to HM Industries,  Inc.  ("HM Industries") which had been provided
by the Company to HM Industries at  cost,  were  included in prior years in
revenues,  direct  costs and selling, general and administrative  expenses.
These amounts have been  excluded  from revenues, direct costs and selling,
general and administrative expenses  for  fiscal  1996  and results for the
fiscal  years  1995  and  1994  have  been  reclassified  to reflect  their
exclusion.

Revenues  from flight operations overall increased by $1,275,000  or  19.3%
for fiscal  1996 as compared to fiscal 1995. This improvement was primarily
due to increased  fixed-wing charter revenues in the UK, partly offset by a
reduced level of helicopter  charter  in  the  UK. The performance of these
operations has been and will continue to be primarily  affected  by  demand
for both helicopter and fixed-wing charter within the UK market and between
the  UK and international destinations.  Such demand may vary significantly
from period to period.

In August  1995,  substantially all the business, assets and liabilities of
Dollar Air was transferred to PLM Dollar Group Limited ("PDG"), in exchange
for 50% of the capital  stock  of PDG. Simultaneously with the consummation
of  this  transaction,  substantially  all  of  the  business,  assets  and
liabilities of P.L.M. Helicopters  Limited ("PLM"), were transferred to PDG
and the shareholders of PLM were issued  the  remaining  50% of the capital
stock  of PDG. Accordingly, the operating results set forth  above  reflect
consolidated  operating  results  for  Dollar  Air,  which  was acquired in
January  1994,  through  August  31, 1995. The Company's 50% share  in  the
operating results of PDG for the year  ended September 30, 1996 and the one
month ended September 30, 1995 have not  been consolidated but are recorded
as equity in jointly-owned company. The carrying  value  of the unamortized
goodwill arising on the acquisition of Dollar Air was written off in fiscal
1995 in the amount of $1,338,000. Although no assurance can  be  given, the
Company  intends  to dispose of its interest in PDG as soon as practicable.
The  Company  estimates   that  it  will  not  sustain  a  loss  upon  such
disposition. Accordingly, the  asset has been reclassified as investment in
jointly-owned company, held for  resale, and therefore, the Company's share
of  the  gain  or  loss in the jointly-owned  company  will  no  longer  be
recognized under the  equity  method of accounting. The Company's equity in
the loss of jointly-owned company was immaterial in fiscal 1996.

MAINTENANCE OPERATIONS

Revenues from maintenance operations  increased  by  $948,000  or  17.9% in
fiscal  1996  as  compared  to  fiscal  1995, primarily due to an increased
volume  of maintenance sales related to customer  aircraft.   Gross  margin
percentage  from  these  operations  declined in fiscal 1996 as compared to
fiscal  1995  due  to increased market competitiveness  in  the  helicopter
maintenance area.  Revenues  from  maintenance  operations  are affected by
both the number of hours flown per aircraft and changes made  by either the
FAA   or   CAA   to   component   parts  lives  and  inspection  intervals.
Additionally,  revenues  are dependent  upon  the  levels  of  installation
projects completed during the year.

AIRCRAFT SALES OPERATIONS

Revenues from aircraft sales  operations  decreased by $2,454,000 in fiscal
1996 as compared to fiscal 1995.  Significant  fluctuations in revenues and
gross  margin  percentages from aircraft sales operations  may  occur  from
period to period based upon the role the Company takes in such transactions
in which it is involved.  For  aircraft  sales  transactions  in  which the
Company acts as principal, the Company records the full sales price  of the
aircraft  as  revenue  and  the  cost of the aircraft as a charge to direct
costs, resulting in a relatively low  gross  margin  percentage.   In other
transactions,  the  Company  may  act  strictly  as  a broker and record as
revenue  only  the  commissions on these sales transactions,  generating  a
relatively high gross  margin percentage.  Consequently, the performance of
these operations can best  be gauged by the gross margins achieved for each
period.   Gross margins generated  by  aircraft  sales  operations  have  a
material  impact   on  the  operating  results  of  the  Company  and  have
historically varied  significantly  from  period  to  period.  The level of
aircraft  sales  transactions  is, to a significant degree,  reflective  of
overall economic conditions.

                             14

<PAGE>
FIXED BASE OPERATIONS

Revenues from fixed base operations  increased  by  $1,118,000  or 16.7% in
fiscal  1996  as  compared  to  fiscal  1995.   This  change  is  primarily
attributable  to  an  increase in the level of fuel sales volume and tenant
occupancy at the Company's fixed base operations in Morristown, New Jersey.
The performance of these  operations  to a significant degree is based upon
the level of tenant occupancy with tenant  leases  ranging in term from one
year to eleven years.  High occupancy levels for such facilities in the New
York/New Jersey metropolitan area have allowed the financial performance of
these operations to consistently improve during the last several years.

LIQUIDITY AND CAPITAL RESOURCES

At  September  30,  1997,  the  Company  had a working capital  deficit  of
$1,051,000 and stockholders' equity of $4,524,000.   The  Company  had  net
cash  provided  by operating activities of $969,000 in fiscal 1997 compared
to $1,761,000 in  fiscal 1996.  The Company had an overall decrease in cash
and cash equivalents  of $542,000 in fiscal 1997 compared to an increase of
$1,131,000 in fiscal 1996.   This  decrease  in  cash  flow  from operating
activities  is  primarily  due  to  the  effect of the increase in accounts
receivable  and  the decrease in accounts payable  and  deferred  revenues,
offset by improvements in operating profitability.

Pursuant to a Credit  Agreement,  as  amended,  entered into in August 1990
(the  "Credit  Agreement"),  HM  Holdings,  Inc., an indirect  wholly-owned
subsidiary  of  Hanson  PLC  ("HM Holdings"),  had  provided  secured  debt
financing ("the Loans") in the  aggregate  amount  of  $17,000,000  to  the
Company  and  Lynton  Jet  Centre, Inc. ("Lynton Jet Centre"). Prior to the
completion of the Debt Discharge  Transaction  (as  described  below),  the
principal amount owing to HM Holdings at September 30, 1996 under the Loans
was $6,605,923.

On  November  8,  1996,  a  Debt  Discharge Agreement  (the "Debt Discharge
Agreement")  was  entered into by and  among  Hanson  North  America,  Inc.
("Hanson North America"),   Millennium  America Inc. (formerly named Hanson
America Inc.) ("Millennium America"), and  the  Company,  Lynton Jet Centre
and   Lynton   Properties,   Inc.  ("Lynton  Properties"),  a  wholly-owned
subsidiary of Lynton Jet Centre.  Prior  thereto,  Hanson North America had
succeeded  to  HM  Holdings as lender under the Credit  Agreement  and  had
acquired certain assets  of  HM  Holdings  including  the equity securities
described below.  Pursuant to the Debt Discharge Agreement  and on November
13,  1996,  Hanson  North  America was paid the sum of $3,500,000,  and  in
consideration  thereof (plus  other  consideration  described  below),  (i)
cancelled  the Loans  and  discharged  all  obligations  under  the  Credit
Agreement except  for certain indemnification obligations stated therein to
survive termination  of  the Loans, (ii) surrendered to the Company 848,454
shares of common stock, par  value  $.30 per share (the "Common Stock"), of
the Company, (iii) surrendered Warrants to purchase an aggregate of 247,513
shares of Common Stock of the Company, and (iv) surrendered 2,000 shares of
Series D Preferred Stock of the Company (the "Debt Discharge Transaction").
The foregoing shares and Warrants represented Hanson North America's entire
equity  interest  in  the  Company.   As provided  in  the  Debt  Discharge
Agreement, the foregoing transactions were  deemed  to  have occurred as of
September 30, 1996.

In  connection  with the Debt Discharge Transaction, Hanson  North  America
also released all  security and liens under the Credit Agreement, including
its First Leasehold  Mortgage  (the "Leasehold Mortgage") and Assignment of
Rents on the Jet Centre facility  operated  by  Lynton  Jet  Centre  at the
Morristown   Municipal  Airport,  Morristown,  New  Jersey.   In  addition,
Millennium America,  which  previously  guaranteed  certain  obligations of
Lynton Jet Centre which were also secured by the First Leasehold  Mortgage,
terminated and released its interests in the Leasehold Mortgage. Millennium
America continues to guarantee certain obligations of Lynton Jet Centre  to
Massachusetts  Mutual  Life  Insurance  Company (see discussion below under
this heading).

Simultaneously with the completion of the  Debt  Discharge Transaction, and
in  order to pay Hanson North America $3,500,000 in  connection  therewith,
Lynton  Jet Centre, as borrower, entered into a Loan and Security Agreement
dated November  13,  1996  with  Finova  Capital Corporation ("Finova"), as
Lender, pursuant to which Finova made a secured  loan  to Lynton Jet Centre
in the principal amount of $4,000,000 (the "Finova Loan").

                             15
<PAGE>
The  Finova  Loan, together with interest thereon at the interest  rate  of
10.7% per annum  shall  be  repaid in 96 equal consecutive monthly payments
consisting of (a) principal and  interest  in  an  amount  that  will fully
amortize  65%  of  the Finova Loan plus (b) interest only, on the remaining
35% of the principal  balance  of  the  Finova Loan calculated at 10.7% per
annum.  The remaining unpaid principal balance  ($1,400,000)  of the Finova
Loan  shall  be  payable  on  December  1,  2004.  The Finova Loan requires
compliance with certain covenants, financial and otherwise,  as  defined in
the loan agreement, including maintaining a minimum tangible net worth  and
a  minimum earnings, before interest, taxes, depreciation and amortization,
coverage ratio by both Lynton Jet Centre as borrower and Lynton Group, Inc.
as guarantor.   At  September  30, 1997 and subsequent thereto, the Company
was in default of a covenant of  the  Finova  Loan.   On  January 13, 1998,
Finova waived this default.

In  December  1993,  the  Company  completed  an  off-shore  placement   of
$2,500,000   principal   amount  of  10%  Senior  Subordinated  Convertible
Debentures due December 31,  1998  (the  "Debentures"). The Debentures were
originally convertible into shares of the  Company's  Common  Stock  at the
option of the holder at any time prior to maturity at a price of $3.75  per
share.   The  Debentures may also be redeemed by the Company at any time or
from time to time  commencing  July 1995, at the Company's option, in whole
or  in  part at the redemption prices  (expressed  as  percentages  of  the
principal  amount) ranging from 109% to 100%.  Prior to December 31 of each
of the years from 1996 to 1998, inclusive, the Company has agreed to pay to
the trustee  for  the  Debentures,  as  a sinking fund payment, cash in the
amount of 1/3 of the aggregate principal  amount  of the issued Debentures,
provided that Debentures converted or reacquired or redeemed by the Company
may be used, at the principal amount thereof, to reduce  the  amount of any
sinking fund payment.  In fiscal 1997, the Company repurchased a portion of
its  Debentures  due December 31, 1998 in the principal amount of  $100,000
for  cash payments  totaling  $50,000.  The  Company  realized  a  gain  on
redemption  of  $47,000,  net  of  related  debt  issuance  costs, on these
repurchases.   In  fiscal  1996, the Company repurchased a portion  of  its
Debentures in the amount of  $540,000  for cash payments totaling $162,000.
The Company realized a gain on redemption  of $287,000, net of related debt
issuance costs, on these repurchases. In addition, the remaining holders of
the Debentures have been given the opportunity  to  convert  the Debentures
into  shares of Common Stock of the Company at a conversion price  of  $.33
per share.   Prior  to  completion  of  the  Debt Discharge Transaction and
refinancing  of  the  Jet  Centre  facility  described  above,  there  were
Debentures in the principal amount of $1,960,000  outstanding.  Two holders
of the Debentures, who are affiliates of the Company,  issued their consent
to  convert  the  Debentures  held  by  them  (in the principal  amount  of
$1,065,000) into 3,227,273 shares of Common Stock  (effective  at September
30,  1996). The Debentures acquired in the above transactions were  applied
against  the sinking fund obligations for December 31, 1996, 1997 and 1998.
At  December   31,  1997,  the  Company  has  satisfied  its  sinking  fund
requirement  (see   Note   4   to   the  Company's  consolidated  financial
statements).

During the period from June 30, 1995  through January 22, 1996, the Company
was not in compliance with the minimum  net  worth  requirements  under the
Debentures.   As of January 23, 1996, in connection with such requirements,
a majority of the  debenture  holders  agreed to waive any and all such net
worth requirements for fiscal 1995 and 1996 and the first quarter of fiscal
1997.  The Company was in compliance with  this  net  worth requirement for
the second, third and fourth quarters of fiscal 1997.  No assurances can be
given  as  to  the Company's ability to meet future net worth  requirements
under the Debenture  Agreement  or that additional waivers will be received
at appropriate times.

The Company expects to continue meeting  all  of  its  obligations  in  the
coming  year  by  focusing  on  its established operations. Cash flows from
these operations are expected to be sufficient to meet all of its operating
requirements and reduced debt service requirements.

Aircraft  are  financed primarily  through  short  and  medium  term  notes
payable  to  banks and financing companies and are generally collateralized
by such aircraft.   In  April  1997, the Company purchased a new helicopter
for  $1,870,000, for the sole purpose  of  selling  in  a  joint  ownership
program  the Company introduced in January 1997.  Due to a longer time than
was anticipated,  by  the  Company,  to  sell  the helicopter under a joint
ownership program, the Company has recently decided to sell the aircraft to
a  single  purchaser.  Although no assurances can  be  given,  the  Company
intends to dispose of this aircraft as soon as practicable, the proceeds of
which must be  used  to  repay  the  debt  to G.E. Capital Corporation, who
financed the purchase of the aircraft.  The  Company estimates that it will
not sustain a loss upon such disposition.

                             16
<PAGE>
The Company anticipates no material capital expenditures  will  be required
in  fiscal 1998.  However, there can be no assurance that the Company  will
not incur  substantial  costs related to the year 2000 compliance issue, as
discussed below under "Other Matters".

In June 1994, Lynton Properties issued to Connecticut Mutual Life Insurance
Company ("Connecticut Mutual")  a  $9,000,000  mortgage  note  at 6.69% due
January  3,  2006 (the "Mortgage Note") with scheduled monthly payments  of
principal and  interest.  The  Mortgage  Note  is  secured  by  a Leasehold
Mortgage and Security Agreement and an Assignment of Leases and Rents  on a
lease  between  a certain tenant and Lynton Properties relating to a hangar
and office facility located at the Lynton Jet Centre.  Massachusetts Mutual
Life Insurance Company  ("MassMutual") is an assignee of Connecticut Mutual
under this loan.  In addition,  the  obligations of Lynton Properties under
the  Mortgage Note are guaranteed by Lynton  Jet  pursuant  to  a  Guaranty
Agreement  dated  June  22, 1994, between Lynton Jet and Connecticut Mutual
(the "Jet Centre Guaranty").   Further, the obligations of Lynton Jet under
the  Jet  Centre Guaranty, other than  certain  environmental  and  related
obligations,  are,  and  continue  to be, guaranteed by Millennium America,
pursuant to a Guaranty Agreement, dated  June  22, 1994, between Millennium
America and Connecticut Mutual (the "Millennium America Guaranty").

The  Company has unused U.S. Federal net operating  loss  carryforwards  at
September  30,  1997  of  approximately  $1,260,000,  which  expire through
September 30, 2010.  As a result of the Jet Centre acquisition, the related
issuance  of a warrant to HM Holdings and the conversion of the  Debentures
and Preferred Stock into common stock referred to above, utilization of the
net operating  loss carryforwards is substantially restricted under Section
382 of the Internal  Revenue  Code  of  1986,  as  amended,  to a specified
maximum  percentage  (approximately 5.8%) of the fair market value  of  the
Company  at  the time of  the  ownership  change.   For  purposes  of  this
limitation, management  has  estimated that the value of the Company was in
excess of $3,800,000 at the time of the ownership change.

Inflation has not significantly impacted the Company's operations.

ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

EARNINGS PER SHARE

In February 1997, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share", which is effective for financial  statements,  for both interim and
annual periods, ending after December 15, 1997.  Early adoption  of the new
standard  is not permitted.  The new standard eliminates primary and  fully
dilutive earnings  per share and requires presentation of basic and diluted
earnings per share with  disclosure  of the methods used to compute the per
share amounts.

Basic earnings per share excludes dilution  and  is  computed  by  dividing
income  available  to  common  shareholders  by the weighted-average common
shares outstanding for the period.  Diluted earnings per share reflects the
weighted-average common shares outstanding plus  the  potential  effect  of
securities  or  contracts  which  are convertible to common shares, such as
options, warrants, and convertible  debt and preferred stock.  The adoption
of this standard is not expected to have  a material impact on earnings per
share of the Company.

DISCLOSURE OF INFORMATION ABOUT CAPITAL STRUCTURE

In February 1997, the FASB issued SFAS No.  129, "Disclosure of Information
about Capital Structure", which is effective  for  fiscal  years  beginning
after  December  15, 1997.  SFAS No. 129 will not change the disclosure  of
the capital structure of the Company.

REPORTING COMPREHENSIVE INCOME

In June 1997, the  FASB  issued  SFAS  No.  130,  "Reporting  Comprehensive
Income",  which is effective for fiscal years beginning after December  15,
1997.   The   Statement   addresses   the   reporting   and  displaying  of
comprehensive  income  and its components.  The adoption of  SFAS  No.  130
relates to disclosure within  the  financial statements and is not expected
to have a material effect on the Company's financial statements.

                             17
<PAGE>
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

In June 1997, the FASB issued SFAS No.  131, "Disclosures about Segments of
an Enterprise and Related Information", which is effective for fiscal years
beginning after December 15, 1997.  The Statement  changes  the  way public
companies  report  information  about  segments  of their business in their
annual  financial statements and requires them to report  selected  segment
information  in  their  quarterly reports.  Adoption of SFAS No. 131 is not
expected to have a material effect on the Company's financial statements.

OTHER MATTERS

The Company is in the process  of  identifying  operating  and  application
software  problems related to the year 2000.  While the Company expects  to
resolve  year   2000   compliance   issues   substantially  through  normal
replacement and upgrades of software, there can  be no assurance that there
will  not  be  interruption  of operations or other limitations  of  system
functionality or that the Company will not incur substantial costs to avoid
such limitations.  Any failure to effectively monitor, implement or improve
the  Company's operational, financial,  management  and  technical  support
systems  could have a material adverse effect on the Company's business and
consolidated results of operations.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial  information required by Item 8 is included elsewhere in this
report (see Part IV, Item 14).

ITEM 9. CHANGES  IN  AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

                             18

<PAGE>
                                 PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

There  is  incorporated  by  reference herein  information  which  will  be
contained in the Registrant's definitive proxy statement to be filed within
120 days of the Registrant's year  end  in  connection with the 1998 Annual
Meeting of Stockholders.

ITEM 11. EXECUTIVE COMPENSATION

There  is  incorporated  by  reference  herein information  which  will  be
contained in the Registrant's definitive proxy statement to be filed within
120 days of the Registrant's year end in  connection  with  the 1998 Annual
Meeting of Stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

There  is  incorporated  by  reference  herein  information  which will  be
contained in the Registrant's definitive proxy statement to be filed within
120  days  of the Registrant's year end in connection with the 1998  Annual
Meeting of Stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There  is incorporated  by  reference  herein  information  which  will  be
contained in the Registrant's definitive proxy statement to be filed within
120 days  of  the  Registrant's year end in connection with the 1998 Annual
Meeting of Stockholders.

                             19

<PAGE>
                                  PART IV

ITEM 14. EXHIBITS, CONSOLIDATED  FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K

(a)  (1)(2)  Consolidated  Financial  Statements  and  Financial  Statement
Schedules.

The Consolidated Financial Statements  and  Schedules filed as part of this
report  are listed in the Index to Consolidated  Financial  Statements  and
Schedules annexed hereto and made a part hereof.

(a) (3) Exhibits.

3.1     Registrant's restated certificate of incorporation (7)

3.2     Registrant's by-laws(1)

4.1     Indenture dated as of December 21, 1993 between the Registrant and
        American Stock Transfer & Trust Company, as Trustee, relating to
        Registrant's 10% Senior Subordinated Convertible Debentures due December
        31, 1998, together with form of Debenture (6)

10.1    Ground Lease for premises at Morristown Municipal Airport, Morristown,
        New Jersey (4)

10.2    Employment Agreement dated August 30, 1996 with Christopher Tennant (9)

10.3    1993 Stock Option Plan (5)

21.0    Lynton Group, Inc., parent and subsidiaries (6)

99.1    Stockholders' Agreement dated as of August 14, 1990 by and among the
        Registrant, HM Holdings, Inc. and Christopher Tennant (3)

99.2    First Amendment to Stockholders' Agreement dated December 22, 1992 by
        and among Lynton Group, Inc., HM Holdings, Inc., Brae Group, Inc., James
        Niven and Task Holdings, Inc. (2)

99.3    Note Agreement dated as of June 22, 1994 between Lynton Properties,
        Inc. and Connecticut Mutual Life Insurance Company relating to a $9.0
        million 6.69% mortgage note due January 3, 2006 (6)

99.4    Business Acquisition Agreement between Dollar Air Services Limited and
        PLM Dollar Group Limited (7)

99.5    Debt  Discharge  Agreement  dated  as  of November 8, 1996 by and among
        Hanson North America, Inc., Millennium America Inc., Lynton Group, Inc.,
        Lynton Jet Centre, Inc. and Lynton Properties, Inc. (8)

99.6    Loan  and  Security  Agreement  dated  November 13, 1996 by and between
        Lynton Jet Centre, Inc., as Borrower, and Finova Capital Corporation, as
        Lender (8)

(1) Filed  as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1991, and incorporated by reference herein.

(2) Filed as  an  exhibit to the Company's Current Report on Form 8-K, dated
December 22, 1992, and incorporated by reference herein.

                             20
<PAGE>
(3) Filed as an exhibit  to  the Company's Current Report on Form 8-K, dated
August 14, 1990, and incorporated by reference herein.

(4) Filed as an exhibit to the  Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1990, and incorporated by reference herein.

(5) Filed as an exhibit to the Company's  Annual Report on Form 10-K for the
fiscal year ended September 30, 1993, and incorporated by reference herein.

(6) Filed as an exhibit to the Company's Annual  Report on Form 10-K for the
fiscal year ended September 30, 1994, and incorporated by reference herein.

(7) Filed as an exhibit to the Company's Annual Report  on Form 10-K for the
fiscal year ended September 30, 1995, and incorporated by reference herein.

(8) Filed as an exhibit to the Company's Current Report on  Form  8-K, dated
November 13, 1996, and incorporated by reference herein.

(9) Filed as an exhibit to the Company's Annual Report on Form 10-K  for the
fiscal year ended September 30, 1996, and incorporated by reference herein.

(b) Reports on Form 8-K.

Listed  below are reports on Form 8-K filed during the last quarter of  the
period covered by this report:

None.

 (c) Exhibits.

See Item 14(a)(3) above.

(d) See Index  to  Consolidated  Financial Statements and Schedules annexed
hereto and made a part hereof.

                             21

<PAGE>
                                SIGNATURES

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

                                   LYNTON GROUP, INC.
                                   (Registrant)


                                   By: /s/Christopher Tennant
                                   Christopher Tennant,
                                   President, Chief Executive Officer

                                   Date: 1/13/98

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:

SIGNATURE                    TITLE                          DATE


/s/ Christopher Tennant      President, Chief Executive     1/13/98
Christopher Tennant          Officer, Director
                             (Principal Executive Officer)


/s/ Richard Hambro           Chairman of the Board,         1/13/98
Richard Hambro               Director


/s/ James G. Niven           Director                       1/13/98
James G. Niven


/s/ Paul R. Dupee, Jr.       Director                       1/13/98
Paul R. Dupee, Jr.


/s/ Nigel Pilkington         Director                       1/13/98
Nigel Pilkington


/s/ Paul A. Boyd             Secretary, Treasurer and       1/13/98
Paul A. Boyd                 Principal Financial Officer


/s/ Brian T. McCloskey       Corporate Controller           1/13/98
Brian T. McCloskey           (Controller)

                             22

<PAGE>
              Lynton Group, Inc. and Subsidiaries

    Index to Consolidated Financial Statements and Schedule

                      September 30, 1997






Report of Independent Certified Public Accountants               F-l
Report of Independent Auditors                                   F-2

Consolidated Financial Statements

Consolidated Balance Sheets                                      F-3
Consolidated Statements of Operations                            F-5
Consolidated Statements of Changes in Stockholders' Equity       F-7
Consolidated Statements of Cash Flows                            F-9
Notes to Consolidated Financial Statements                      F-10

Schedules

Report of Independent Certified Public Accountants              F-32
Report of Independent Auditors                                  F-33
Schedule II - Valuation and Qualifying Accounts                 F-34


Schedules other than those listed above are omitted since they are
not required, are not applicable or the information is included in
the consolidated financial statements and notes thereto.



                             23

<PAGE>









      Report of Independent Certified Public Accountants


The Board of Directors and Stockholders
Lynton Group, Inc.

We have audited the accompanying consolidated balance sheets of
Lynton Group, Inc. and subsidiaries as of September 30, 1997 and
1996 and the related consolidated statements of operations, changes
in stockholders' equity and cash flows for the years then ended.
These consolidated financial statements are the responsibility of
the Company's management.  Our responsibility is to express an
opinion on these consolidated 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 audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall consolidated financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Lynton Group, Inc. and subsidiaries at
September 30, 1997 and 1996, and the consolidated results of their
operations and their consolidated cash flows for the years then
ended, in conformity with generally accepted accounting principles.


/s/ Grant Thornton LLP


New York, New York
January 13, 1998

                                    F-1

<PAGE>







                      Report of Independent Auditors


The Board of Directors and Stockholders
Lynton Group, Inc.

We have audited the accompanying consolidated statements of operations, changes
in stockholders' equity and cash flows of Lynton Group, Inc. and subsidiaries
for the year ended September 30, 1995.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform 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 accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations and cash
flows of Lynton Group, Inc. and subsidiaries for the year ended September 30,
1995, in conformity with generally accepted accounting principles.


/s/ Ernst & Young LLP


MetroPark, New Jersey
December 21, 1995, except for the tenth and the twenty-second paragraphs of Note
4, as to which the dates are January 5, 1996 and January 23, 1996, respectively

                                      F-2

<PAGE>

                        Lynton Group, Inc and Subsidiaries

                            Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                          September 30
                                                      1997            1996
<S>                                              <C>             <C>
ASSETS (NOTES 4 AND 5)
Current assets:
Cash and cash equivalents (NOTE 1)                 $726,645        $1,268,475
Accounts receivable (net of allowance for
 doubtful accounts of $22,000 in 1997 and
 $21,000 in 1996) (NOTE 1)                        3,268,879         2,336,549
Investment in jointly-owned company held
 for resale (NOTE 3)                              1,222,620                 -
Inventories (NOTE 1)                                803,677           822,339
Prepaids, principally insurance, and
 other current assets                               214,124           396,605
Total current assets                              6,235,945         4,823,968

Property, plant and equipment (NOTE 1):
Aircraft                                          1,414,673         1,286,139
Buildings                                        14,133,096        14,068,240
Furniture and equipment                           1,352,370         1,205,295
Motor vehicles                                      379,660           344,946
Leasehold improvements                              766,136           481,799
                                                 18,045,935        17,386,419
Less accumulated depreciation and amortization    4,652,703         3,977,517
                                                 13,393,232        13,408,902

Funds held in escrow (NOTE 4)                       150,000           150,000
Aircraft held for resale (NOTE 4)                 1,870,233                 -
Investment in jointly-owned company
 held for resale (NOTE 3)                                 -         1,182,376
Long-term ground lease, less accumulated
 amortization of$416,000 in 1997 and
 $357,000 in 1996 (NOTE 1)                        1,933,861         1,992,606
Goodwill, less accumulated amortization of
 $530,000 in 1997 and $461,000 in 1996 (NOTE 1)   2,155,007         2,213,635
Other assets and deferred charges, less
 accumulated amortization of $221,000 in 1997
 and $153,000 in 1996 (NOTE 1)                      484,970           601,690
                                                $26,223,248       $24,373,177
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

                                         F-3

<PAGE>

                        Lynton Group, Inc and Subsidiaries

                            Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                          September 30
                                                      1997            1996
<S>                                             <C>                <C>
Liabilities and stockholders' equity (NOTE 5)
Current liabilities:
Current portion of capital lease
 obligations (NOTE 6)                               $38,480           $34,225
Current portion of long-term debt (NOTE 4)        1,285,364           986,506
Accounts payable                                  2,717,602         3,206,504
Accrued expenses (NOTE 11)                        1,215,747           888,972
Accrued income taxes (NOTES 1, 4 AND 7)             268,159           154,000
Advances from customers                             245,102           150,051
Deferred revenue (NOTES 1 AND 9)                  1,516,848         1,563,166
Total current liabilities                         7,287,302         6,983,424

Obligations under capital leases, less
 current portion (NOTE 6)                            69,071            34,580
Deferred revenue, less current portion
 (NOTES 1 AND 9)                                    720,000           960,000
Long-term debt, less current portion
 (NOTES 1 AND 4)                                 13,459,832        12,838,491
Deferred income taxes (NOTES 1, 4 AND 7)            163,183           157,812
Commitments and contingencies
 (NOTES 1 THROUGH 9, 12, 13 AND 14)

Stockholders' equity (NOTES 2, 8 AND 9):
Common Stock, par value $.30 a share:
 authorized 10,000,000 shares; issued
 6,394,872 shares in 1997 and 1996                1,918,462         1,918,462
Additional paid-in capital                        9,779,823         9,779,823
Accumulated deficit                              (7,141,115)       (8,233,475)
Translation adjustment (NOTE 1)                     (21,962)          (54,592)
                                                  4,535,208         3,410,218
Common stock held in Treasury at cost;
 850,454 shares in 1997 and 1996                    (11,348)          (11,348)
Total stockholders' equity                        4,523,860         3,398,870
                                                $26,223,248       $24,373,177
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

                                         F-4

<PAGE>

                        Lynton Group, Inc. and Subsidiaries

                       Consolidated Statements of Operations



<TABLE>
<CAPTION>
                                            Year ended September 30
                                     1997            1996            1995
<S>                             <C>             <C>             <C>
Net revenue (NOTES 1 AND 5):
Flight operations                 $9,004,333      $7,894,484      $11,494,202
Maintenance operations             5,990,233       6,237,913        5,290,253
Aircraft sales operations            983,723         833,781        3,287,761
Fixed base operations              9,606,813       7,820,148        6,702,505
Other                                      -               -          446,751
                                  25,585,102      22,786,326       27,221,472
Expenses:
Direct costs of operations:
Flight operations                  7,745,471       6,963,692       10,361,889
Maintenance operations             4,990,984       5,313,666        4,441,887
Aircraft sales operations            329,038         367,819        2,800,526
Fixed base operations              6,163,540       4,984,026        4,023,434
                                  19,229,033      17,629,203       21,627,736
Selling, general and
 administrative                    3,016,468       2,432,063        3,473,641
Depreciation                         689,170         661,572          932,603
Amortization of ground lease
 and goodwill                        127,646         126,960          200,280
Writedown of goodwill (NOTE 1)             -               -        1,338,302
Operating income (loss)            2,522,785       1,936,528         (351,090)

Amortization of debt discount
 and issuance costs                   77,347         139,475          139,450
Interest expense                   1,161,549       1,336,137        1,772,028
Write-off of amount due from
 affiliate (NOTE 9)                        -         191,308                -
Equity in loss of jointly-owned
 company (NOTE 3)                          -               -           57,585
Income (loss) before income tax
 provision and extraordinary
 item (NOTE 5)                     1,283,889         269,608       (2,320,153)
Income tax provision
  (NOTES 1, 4 AND 7)                 238,393         151,206                -
Income (loss) before
 extraordinary item                1,045,496         118,402       (2,320,153)
Extraordinary item-gain related
 to early extinguishment of
 debt (NOTE 4)                        46,864         287,408                -
Net income (loss)                  1,092,360         405,810       (2,320,153)

Dividends on Preferred Stocks
 (NOTE 2)                                  -               -         (214,424)
Net income (loss) attributable
 to Common Stock                  $1,092,360        $405,810      $(2,534,577)
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

                                         F-5

<PAGE>

                        Lynton Group, Inc. and Subsidiaries

                       Consolidated Statements of Operations



<TABLE>
<CAPTION>
                                            Year ended September 30
                                     1997            1996            1995
<S>                               <C>             <C>             <C>
Average number of common shares
 outstanding (NOTE 2)              6,394,872       1,961,760        1,957,177

Primary earnings per share (NOTE 1)
Income (loss) per common share
 before extraordinary item              $.16            $.06           $(1.30)
Extraordinary item (NOTE 4)              .01             .15                -
Net income (loss) per common share      $.17            $.21           $(1.30)

Fully diluted earnings per share (NOTE 1)
Income (loss) per common share
 before extraordinary item              $.16            $.09           $(1.30)
Extraordinary item (NOTE 4)              .01             .13                -
Net income (loss) per common share      $.17            $.22           $(1.30)
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

                                         F-6

<PAGE>




                  Lynton Group, Inc. and Subsidiaries

       Consolidated Statements of Changes in Stockholders' Equity

             YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
            Series C
           Convertible      Series D
         Preferred Stock Preferred Stock     Common Stock     Treasury stock
          Shares  Amount  Shares  Amount   Shares    Amount   Shares   Amount
<S>       <C>     <C>    <C>      <C>  <C>          <C>       <C>    <C>
Balance at
 9/30/94   1,000   $10    2,000    $20  1,957,177   $587,153    2,000  $(10,500)

Net loss for year ended 9/30/95

Dividends on Preferred Stocks (NOTE 2)

Translation adjustment at 9/30/95

Balance at -----   ---    -----    ---  ---------   --------    -----  ---------
 9/30/95   1,000   $10    2,000    $20  1,957,177   $587,153    2,000  $(10,500)

Issuance of shares of Common Stock related to acquisition of Dollar Air Services
 Limited (NOTE 3)                           5,000      1,500

Net income for year ended 9/30/96

Underaccrual of prior years dividends

Issuance of shares of Common Stock in exchange for Series C Preferred Stock
 (NOTE 4) (1,000)  (10)                 2,053,876    616,163

Surrender of Series D Preferred Stock (NOTE 4)
                         (2,000)   (20)

Issuance of shares of Common Stock related to redemption of convertible
 debentures (NOTE 4)                    3,227,273    968,182

Surrender of shares of Common Stock to company (NOTE 4)
                                         (848,454)  (254,536) 848,454      (848)

Discharge of debt due HM Industries, net of related taxes and costs (NOTE 4)


Translation adjustment at 9/30/96

Balance at -----   ---    -----    ---  --------- ----------  -------  -------- 
 9/30/96       0    $0        0     $0  6,394,872 $1,918,462  850,454  $(11,348)

Net income for year ended 9/30/97

Translation adjustment at 9/30/97

Balance at -----   ---    -----    ---  --------- ----------  -------  ---------
 9/30/97       0    $0        0     $0  6,394,872 $1,918,462  850,454  $(11,348)
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

                                        F-7

<PAGE>




                   Lynton Group, Inc. and Subsidiaries

 Consolidated Statements of Changes in Stockholders' Equity (Continued)

              YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
                        Additional                                  Total
                          Paid-In     Accumulated   Translation  Stockholders'
                          Capital       Deficit      Adjustment     Equity
<S>                    <C>           <C>             <C>         <C>
Balance at
 9/30/94                $8,321,055    $(6,089,708)    $(83,957)    $2,724,073

Net loss for year ended 9/30/95        (2,320,153)                 (2,320,153)

Dividends on Preferred Stocks (NOTE 2)   (214,424)                   (214,424)

Translation adjustment at 9/30/95                        3,248          3,248

Balance at              ----------    ------------    ---------      --------
 9/30/95                $8,321,055    $(8,624,285)    $(80,709)      $192,744

Issuance of shares of Common Stock related to acquisition of Dollar Air Services
 Limited (NOTE 3)            3,500                                      5,000

Net income for year ended 9/30/96         405,810                     405,810

Underaccrual of prior years dividends     (15,000)                    (15,000)

Issuance of shares of Common Stock in exchange for Series C Preferred Stock
 (NOTE 4)                 (616,153)                                         -

Surrender of Series D Preferred Stock (NOTE 4)
                                20                                          -

Issuance of shares of Common Stock related to redemption of convertible
 debentures (NOTE 4)       100,045                                  1,068,227

Surrender of shares of Common Stock to company (NOTE 4)
                           255,384                                          -

Discharge of debt due HM Industries, net of related taxes and costs (NOTE 4)
                         1,715,972                                  1,715,972

Translation adjustment at 9/30/96                       26,117         26,117

Balance at              ----------    ------------    ---------    ----------
 9/30/96                $9,779,823    $(8,233,475)    $(54,592)    $3,398,870

Net income for year ended 9/30/97       1,092,360                   1,092,360

Translation adjustment at 9/30/97                       32,630         32,630

Balance at              ----------    ------------    ---------    ----------
 9/30/97                $9,779,823    $(7,141,115)    $(21,962)    $4,523,860
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

                                        F-8

<PAGE>

                        Lynton Group, Inc. and Subsidiaries

                  Consolidated Statements of Cash Flows (NOTE 10)


<TABLE>
<CAPTION>
                                                  Year ended September 30
                                        1997           1996            1995
<S>                                 <C>             <C>           <C>
Cash flows from operating activities
Net income (loss)                    $1,092,360      $405,810      $(2,320,153)
Adjustments to reconcile net income
 (loss) to net cash provided by
 operating activities:
Depreciation and amortization           894,163       928,007        1,272,333
Equity in loss of jointly-owned company       -             -           57,585
Provision for deferred taxes                  -       151,206                -
Write-off of amount due from affiliate        -       191,308                -
Gain on early extinguishment of debt    (46,864)     (287,408)               -
Writedown of goodwill                         -             -        1,338,302
Changes in certain assets and liabilities,
 excluding effect from acquisitions
 and divestitures:
Accounts receivable                    (909,177)     (405,409)          20,510
Due (to) from affiliates                (23,153)       44,775          229,530
Inventories                              18,622       182,479          346,418
Aircraft held for resale                      -             -        1,605,635
Prepaids and other current assets       182,481       116,960          (33,799)
Accounts payable and accrued expenses   (47,968)      114,342         (923,672)
Advances from customers and deferred
 revenue                               (191,087)      319,084          285,793
Net cash provided by operating
 activities                             969,377     1,761,154        1,878,482

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures                   (652,160)     (273,263)        (425,357)
Disposal of fixed assets                 40,376        52,472        1,017,114
Net cash (used in) provided by
 investing activities                  (611,784)     (220,791)         591,757

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends on preferred stocks                 -             -         (214,424)
Redemption of senior convertible debt   (50,000)     (162,000)               -
Proceeds of borrowings from finance
 company, net of issuance costs               -     3,850,000                -
(Repayment to) borrowings of debt
 from HM Holdings, Inc.                       -    (3,500,000)         500,000
Repayment of long-term debt            (900,034)     (610,868)      (2,607,396)
Proceeds from notes payable              84,000        34,700                -
Repayment of note payable - affiliate         -             -          (68,081)
Reduction of capital lease obligations  (47,226)      (28,592)         (86,705)
Net cash used in financing activities  (913,260)     (416,760)      (2,476,606)
Effect of exchange rate changes
 on cash flow                            13,837         7,550                -
(DECREASE) INCREASE IN CASH AND CASH
 EQUIVALENTS                           (541,830)    1,131,153           (6,367)
Cash and cash equivalents,
 beginning of year                    1,268,475       137,322          143,689
Cash and cash equivalents,
 end of year                           $726,645    $1,268,475         $137,322
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

                                        F-9

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION

The  consolidated  financial  statements  include the accounts of Lynton Group,
Inc. and its directly and indirectly wholly-owned subsidiaries (the "Company"),
Lynton Jet Centre, Inc. ("Lynton Jet"); Lynton  Aviation, Inc.; Lynton Aviation
Services, Inc.; Ramapo Helicopters, Inc. ("Ramapo");  Lynton  Properties,  Inc.
("Lynton  Properties");  Lynton  Group  Limited  ("Limited");  Lynton  Aviation
Limited;  European  Helicopters  Limited  ("EHL");  Dollar Air Services Limited
("Dollar  Air")  (see Note 3); Black Isle Helicopters Limited  ("Black  Isle");
Helicopters Dollar  Interamericas  SA  and  Dollar  Air's 70% owned subsidiary,
Servicios de Helicopteros SA.  LynStar Aviation, Inc. ("LynStar"), wholly-owned
by  LynStar  Holdings,  Inc.,  which  is  20% owned by the  Company,  has  been
consolidated  as  a wholly-owned subsidiary in  the  accompanying  consolidated
financial statements.  The difference in consolidating the financial statements
of LynStar, rather  than  accounting  for  the  Company's  investment using the
equity  method  of  accounting, is immaterial to the accompanying  consolidated
financial statements.  All significant intercompany accounts  and  transactions
have been eliminated in consolidation.

PRINCIPAL BUSINESS ACTIVITY

The Company and its  subsidiaries  are  engaged primarily in the performance of
aviation sales and services in the United  States  and  the United Kingdom (see
Note  5).  Services include the charter, management and operation  of  aircraft
for corporate,  industrial  and  utility  applications  ("flight  operations");
maintenance  of  aircraft  ("maintenance  operations");  sale and brokerage  of
aircraft ("aircraft sales operations"); and hangarage and refueling of aircraft
("fixed base operations").

BASIS OF PRESENTATION

The  accompanying consolidated financial statements of the  Company  have  been
prepared  in  conformity  with  generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.

However, the Company sustained negative cash flow of approximately $542,000, in
the year ended September 30, 1997,  and  its  current  liabilities exceeded its
current assets by approximately $1,050,000 as of September 30, 1997.

The Company expects to continue meeting all of its obligations  in  the  coming
year  by  focusing on its established operations.  Further, management believes
that the cash flows from these operations will be sufficient to meet all of its
operating requirements  and  obligations  of  the  Company  and reduce its debt
service requirements.

In view of the matters discussed in the preceding paragraphs, recoverability of
a major portion of the recorded asset amounts in the accompanying  consolidated
balance  sheets  is  dependent  upon  continuing profitable operations and  the
ability of the Company to generate cash  flows sufficient to support its future

                              F-10

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


operations.  The accompanying consolidated  financial statements do not include
any adjustments relating to the recoverability  and  classification of recorded
asset amounts and classification of liabilities that might  be necessary should
the Company be unable to continue as a going concern.

REVENUE RECOGNITION

Revenues  for  maintenance and flight operations are recognized  when  services
have been performed.   Revenues  related  to aircraft sales and commissions are
recognized at the time title is transferred.  Rental revenues related to tenant
leases are recognized pursuant to the terms of the respective leases.

INVENTORIES AND AIRCRAFT HELD FOR RESALE

Inventories (principally aircraft maintenance  parts)  and  aircraft  held  for
resale and are valued at the lower of cost (first-in, first-out) or market.

PROPERTY AND EQUIPMENT

Property  and  equipment are stated at cost.  Depreciation and amortization are
computed on the  straight-line method over the estimated useful lives indicated
below.

<TABLE>
<CAPTION>
<S>                                           <C>    
Aircraft                                          10-15 years
Buildings                                            40 years
Furniture and equipment                               5 years
Motor vehicles                                        5 years
Leasehold improvements                         Term of leases
</TABLE>

GROUND LEASE, DEFERRED CHARGES AND GOODWILL

Ground lease and deferred  charges,  in  connection with the acquisition of the
assets  of  the  Linpro  Jet Centre in 1990 and  its  related  refinancing  (as
described in Note 4), are  being  amortized on a straight-line basis over terms
of forty and seven years, respectively.   The  Company  operates the Jet Centre
business  out of the Company's hangar/office facility of approximately  132,000
square feet, owned by the Company, located at the Morristown Municipal Airport,
Morristown,  New  Jersey,  on  a site leased pursuant to a ground lease with an
initial term expiring on December  31, 2010 and with options to extend the term
of the lease for five additional terms of five years each.  The rental payments
due under the lease are generally based  upon  increases  in the consumer price
index  through the year 2020 and based upon fair market value  thereafter.  The
Company  operates Aviation Limited and EHL principally out of a hangar facility
of approximately  20,000  square  feet  located  in Denham, Middlesex, which is
located outside of London.  The hangar is owned by  the  Company and is located
on a site leased pursuant to a ground lease, which expires in 2012.

Goodwill resulting from the excess of the purchase price over the net assets of
businesses  acquired  is  being  amortized  over  a  forty-year period  on  the
straight-line method.  The carrying value of the long-lived assets are reviewed
if the facts and circumstances suggest that it may be  permanently impaired, in
accordance   with  Statement  of  Financial  Accounting  Standards   No.   121,
"Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of". Such
review is based  upon  the  undiscounted  expected  future operating cash flows

                              F-11

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


derived from such businesses and, in the event such result  is  less  than  the
carrying value of the long lived assets, including goodwill, the carrying value
of  such assets would be reduced to an amount that reflects the expected future
benefit. During 1995, a writedown of $1,338,302 of goodwill originally recorded
in connection with the Dollar Air acquisition was recorded.

INCOME TAXES

The Company  applies  an  asset and liability approach to accounting for income
taxes.  Deferred income tax  assets  and  liabilities  arise  from  differences
between the tax basis of an asset or liability and its reported amount  in  the
consolidated  financial  statements.   Deferred  tax balances are determined by
using the tax rates expected to be in effect when  the  taxes  will actually be
paid or refunds received.

FOREIGN CURRENCY TRANSLATIONS

Assets  and  liabilities  of  foreign subsidiaries are translated at  rates  of
exchange in effect at the close  of  the  period.   Revenues  and  expenses are
translated at the weighted average of exchange rates in effect during the year.
The  effects  of  exchange  rate  fluctuations  on translating foreign currency
assets and liabilities into U.S. dollars are included  as  part  of the foreign
currency translation adjustment component of stockholders' equity.  Losses  and
gains  realized  from  foreign  currency  transactions  resulted in a losses of
$4,000 and $26,000 and a gain of $152,000 in 1997, 1996 and 1995, respectively,
and are included in the consolidated statements of operations.

EARNINGS PER SHARE

Net  income  (loss)  per common share is computed by dividing  the  net  income
(loss) attributable to Common Stock by the weighted average number of shares of
Common Stock and other  common  stock  equivalents outstanding during the year,
unless the effect of including such common  stock  equivalents  would  be anti-
dilutive.

Primary  earnings  per share amounts are computed based on the weighted average
number of shares actually  outstanding,  6,394,872,  1,961,760 and 1,957,177 in
1997, 1996 and 1995, respectively.

Fully  diluted earnings per share reflects the weighted-average  common  shares
outstanding  plus  the  potential  effect  of securities or contracts which are
convertible to common shares, such asoptions,  warrants,  and  convertible debt
and  preferred stock.  The number of shares used in the computations  of  fully
diluted earnings per share were 6,435,254 in 1997 and 2,260,427 in 1996.  Fully
diluted  earnings  per  share  was  not presented for 1995 because it was anti-
dilutive.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash and receivables  approximates fair value because of
their short-term nature.  The fair value of long-term  debt  is based on current
rates   at  which  the  Company  could  borrow  funds  with  similar  remaining
maturities.

                                    F-12

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

EARNINGS PER SHARE

In February  1997,  the  Financial  Accounting  Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS")  No.  128,  "Earnings  Per
Share",  which  is  effective  for  financial  statements, for both interim and
annual periods, ending after December 15, 1997.   Early  adoption  of  the  new
standard  is  not  permitted.   The  new  standard eliminates primary and fully
dilutive  earnings per share and requires presentation  of  basic  and  diluted
earnings per share with disclosure of the methods used to compute the per share
amounts.

Basic earnings  per  share excludes dilution and is computed by dividing income
available  to  common  shareholders   by  the  weighted-average  common  shares
outstanding for the period.  Diluted earnings  per share reflects the weighted-
average common shares outstanding plus the potential  effect  of  securities or
contracts  which  are convertible to common shares, such as options,  warrants,
and convertible debt and preferred stock.  The adoption of this standard is not
expected to have a material impact on earnings per share of the Company.

DISCLOSURE OF INFORMATION ABOUT CAPITAL STRUCTURE

In February 1997, the  FASB  issued  SFAS  No.  129, "Disclosure of Information
about Capital Structure", which is effective for  fiscal  years beginning after
December 15, 1997.  SFAS No. 129 will not change the disclosure  of the capital
structure of the Company.

REPORTING COMPREHENSIVE INCOME

In  June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive  Income",
which  is  effective  for  fiscal years beginning after December 15, 1997.  The
Statement addresses the reporting  and  displaying  of comprehensive income and
its components.  The adoption of SFAS No. 130 relates  to disclosure within the
financial  statements  and  is not expected to have a material  effect  on  the
Company's financial statements.

DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

In June 1997, the FASB issued  SFAS  No. 131, "Disclosures about Segments of an
Enterprise  and  Related Information", which  is  effective  for  fiscal  years
beginning after December  15,  1997.   The  Statement  changes  the  way public
companies  report information about segments of their business in their  annual
financial statements  and  requires them to report selected segment information
in their quarterly reports.  Adoption of SFAS No. 131 is not expected to have a
material effect on the Company's financial statements.

USING ESTIMATES IN FINANCIAL STATEMENTS

In  preparing  financial  statements  in  conformity  with  generally  accepted
accounting principles, management is required to make estimates and assumptions
that affect the reported amounts  of  assets and liabilities and the disclosure
of contingent assets and liabilities at  the  date  of the financial statements

                             F-13

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


and revenues and expenses during the reporting period.   Among  the significant
estimates   made   by  management  included  in  these  Consolidated  Financial
Statements are the useful  lives  of  long-lived  assets,  the  fair  value  of
financial  instruments,  the  fair  value  of  the  Company's Common Stock, the
realizable value of the investment in PDG, inventories  and  the  aircraft held
for resale, the estimated fair value of the aircraft at the end of  the  lease-
which  is guaranteed by the Company, the undiscounted expected future operating
cash flows  used in the review for testing the impairment of long-lived assets,
and  the adequacy  of  the  insurance  coverage.   Actual  results  may  differ
significantly from those estimates.

RECLASSIFICATIONS

Certain revenues and costs relating to aviation management services provided to
HM Industries, Inc. ("HM Industries") which had been provided by the Company to
HM Industries  at  cost, were included in prior years in revenues, direct costs
and selling, general  and  administrative  expenses.  These  amounts  have been
excluded  from  revenues,  direct costs and selling, general and administrative
expenses for fiscal 1996 and  results  for  the  fiscal  year  1995  have  been
reclassified to reflect their exclusion.

<TABLE>
<CAPTION>
                                                    1996                1995
<S>                                            <C>                 <C>
Revenues excluded                                $3,985,000         $6,417,000
Direct costs excluded                             3,801,000          6,067,000
Selling,   general  and  administrative
 costs excluded                                     184,000            350,000
Net income effect                                        $0                 $0
</TABLE>

CASH AND CASH EQUIVALENTS

Cash  and  cash  equivalents  include  investments  in highly liquid securities
having an original maturity date of three months or less.  All cash balances in
the  U.S.  were  covered by FDIC insurance at September  30,  1997.   Cash,  at
September 30, 1997,  includes  approximately  $472,000 on deposit in the United
Kingdom, which are not covered by depository insurance.


2.  STOCKHOLDERS' EQUITY

WARRANT

In connection with the execution of the 1990 Credit Agreement (see Note 4), the
Company  issued to HM Holdings Inc., an indirect  wholly  owned  subsidiary  of
Hanson PLC  ("HM  Holdings"),  a  Warrant  (the "Original Warrant") to purchase
996,334 shares of Common Stock.  The Original  Warrant  was  exercisable at any
time during the period in which the Loans were outstanding, and for a period of
90 days after repayment of the Loans, at an exercise price of $1,000,000 in the
aggregate.  The Original Warrant was valued at the estimated fair  market value
at  the  date of grant of the shares, to be received, less the exercise  price.
On December  22,  1992, HM Holdings exercised a portion of the Original Warrant
amounting to 848,455 shares (see Recapitalization Agreement below).

                             F-14

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


Concurrently with the  delivery  of  the  Original  Warrant,  HM  Holdings, the
Company and Christopher Tennant, a director and Chief Executive Officer  of the
Company, executed a Stockholders' Agreement that provides for certain rights of
first  refusal,  rights  of  inclusion and rights to compel sales in connection
with certain sales of securities of the Company by HM Holdings and Mr. Tennant.
The Stockholders' Agreement further provides that upon exercise of the Original
Warrant and as long as HM Holdings  beneficially  owned  at  least  25%  of the
outstanding  shares  of Common Stock of the Company, the Board of Directors  of
the Company should consist  of  nine  directors  and HM Holdings shall have the
right to nominate four directors.  In connection therewith,  Mr. Tennant agreed
in  the  Stockholders'  Agreement  to  vote his shares for the nominees  of  HM
Holdings, as directors.  In addition, HM Holdings agreed to vote its shares for
Mr. Tennant, as a director, so long as Mr.  Tennant  owned  not less than 5% of
the outstanding shares of Common Stock of the Company.

Pursuant to the Debt Discharge Agreement (see Note 4) and on November 13, 1996,
Hanson North America (as successor to HM Holdings) surrendered  to  the Company
all  its  outstanding  Warrants  to purchase an aggregate of 247,513 shares  of
Common Stock of the Company.

RECAPITALIZATION AGREEMENT

Pursuant to a Recapitalization Agreement,  dated as of December 22, 1992, among
the  Company,  Lynton Jet, HM Holdings, a director  of  the  Company,  and  two
additional investors, (i) the Company sold in aggregate to the director and two
additional investors  1,000  shares  of Series C Convertible Preferred Stock of
the Company for $1,000,000 in cash, (ii) HM Holdings (a) purchased 2,000 shares
of Series D Preferred Stock of the Company  for  $2,000,000  in  cash which was
applied  to  reduce the Company's indebtedness to HM Holdings, (b) exercised  a
portion of its  Original  Warrant  for  848,454  shares  of Common Stock of the
Company for an exercise price of $851,577 in cash which was  applied  to reduce
the Company's indebtedness to HM Holdings, and (c) was issued a New Warrant  to
purchase  up  to an additional 99,634 shares of Common Stock of the Company for
$.30 per share  at any time. The number of shares of Common Stock for which the
New Warrant and the price at which such shares were to be purchased was subject
to adjustment upon the occurrence of certain events.

Effective September  30,  1996,  Hanson  North  America  (as  successor  to  HM
Holdings)  surrendered  to the Company 2,000 shares of Series D Preferred Stock
of  the  Company as part of  the  discharge  settlement  (the  "Debt  Discharge
Agreement",  see  Note 4). The Company paid dividends on the Series D Preferred
Stock of approximately  $154,000  in  fiscal  1995.   No dividends were paid in
fiscal 1997 or fiscal 1996.

The  four  holders  of  all of the outstanding shares of Series  C  Convertible
Preferred Stock (the "Series  C  Preferred  Stock")  have  been  offered by the
Company and have agreed (effective September 30, 1996) to convert  all  of  the
Series C Preferred Stock into an aggregate of 2,053,876 shares of Common Stock.
Two  of  such  holders are James G. Niven, a director of the Company, and J. O.
Hambro Nominees  Limited,  which  may  be  deemed  to  be controlled by Richard
Hambro, a director of the Company. This transaction has  been  accounted for as
an exchange of equity instruments with no gain or loss recognized.  The Company
paid dividends on its Series C Convertible Preferred Stock aggregating  $60,000
in fiscal 1995. No dividends were paid in fiscal 1997 or fiscal 1996.

                             F-15

<PAGE>

                    Lynton Group, Inc. and Subsidiaries
   
                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995

  
3.  ACQUISITION AND TRANSFER

ACQUISITION OF DOLLAR AIR SERVICES LIMITED

Pursuant  to  a  Share  Purchase  Agreement dated January 13, 1994 (the "Dollar
Purchase Agreement") among the Company,  Limited,  a wholly-owned subsidiary of
the Company and all of the shareholders (the "Dollar  Shareholders")  of Dollar
Air,  a  company  organized  under  the  laws  of England, the Company, through
Limited,  acquired on such date all of the issued  and  outstanding  shares  of
capital stock  of Dollar Air. At the time of the Dollar Air acquisition, Dollar
Air owned a 75%  equity  interest  in  Black  Isle.   In  September  1994,  the
remaining 25% of the capital stock of Black Isle was acquired by the Company.

The  consideration  paid  related  to the above transactions was 424,000 Pounds
Sterling (approximately $642,000) (including  certain  expenses  of  the Dollar
Shareholders) paid in cash and the issuance of 71,667 shares of Common Stock of
the  Company.  An  additional 5,000 shares of Common Stock of the Company  were
issued in 1996 to complete the transaction.

TRANSFER OF DOLLAR AIR SERVICES LIMITED

In August 1995, pursuant  to  a Business Transfer Agreement with PDG, a company
organized under the laws of Scotland,  substantially  all  the business, assets
and  liabilities  of  Dollar  Air  and Black Isle were transferred  to  PDG  in
exchange  for  50%  of  the  capital stock  of  PDG.  Simultaneously  with  the
consummation of the transaction,  substantially all of the business, assets and
liabilities of P.L.M. Helicopters Limited,  a  company organized under the laws
of Scotland ("PLM") were transferred to PDG and  the  shareholders  of PLM were
issued the remaining 50% of the capital stock of PDG. PDG operates a  fleet  of
15  helicopters  from  bases  primarily  in  Scotland and England, and provides
helicopter  support services for industrial and  utility  applications  in  the
United Kingdom.  Accordingly,  the Company's net investment in PDG at September
30, 1995 was shown as investment  in  jointly-owned company in the consolidated
balance  sheet  and  the  Company's  proportionate  share  of  the  results  of
operations of PDG, since the transfer  date, were reflected in the accompanying
consolidated statement of operations under the equity method of accounting.

During fiscal 1996, the asset was reclassified  as  investment in jointly-owned
company held for resale, and therefore, the Company's share of the gain or loss
in  the  jointly-owned company will no longer be recognized  under  the  equity
method of accounting. The Company's equity in the loss of jointly-owned company
was immaterial in fiscal 1996.

In October  1997, the Company sold its 50% share of the capital stock in PDG to
the remaining  50% shareholders of PDG for approximately $1,307,000.  Under the
purchase agreement,  the  aggregate  purchase price is payable in two payments.
The first payment of approximately $323,000 was made in November 1997, with the
final payment, without interest, due on July 31, 1998.


                                    F-16

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


4.  LONG TERM DEBT

Long-term debt at September 30, 1997 and 1996 consists of the following:

<TABLE>
<CAPTION>
                                                          1997          1996
<S>                                                   <C>           <C>

Mortgage due to bank with interest at Sterling
 LIBOR rate (7.19% at September 30, 1997) plus 2.0%,
 due in monthly installments through April, 2001.       $210,866      $340,989
Mortgage Note payable to Massachusetts Mutual Life
 Insurance Company with an interest rate of 6.69% due
 in monthly installments through Janaury 3, 2006.      7,485,990     8,010,980
Mortgage Note payable to Finova Capital Corp. with an
 interest rate of 10.7% due in monthly installments
 through December 1, 2004, with a final installment
 payment of $1,400,000 due December 1, 2004.           3,820,525     4,000,000
Senior Subordinated Convertible Debentures with
 interest at 10%, payable in the amount of 1/3 of the
 aggregate principal amount prior to December 31 of
 each of the years from 1996 to 1998.                    795,000       895,000
Note payable to finance company with interest at
 Sterling LIBOR rate (7.19% at September 30, 1997)
 plus 3.5% payable in monthly installments through
 August, 2000.                                           536,597       546,035
Aircraft financing note payable to G.E. Capital
 Corporation with an interest rate of 10.0% with
 principal due every six months and interest due
 every four months through January 20, 1999, with a
 final installment payment of $1,589,698 due
 January 20, 1999.                                     1,870,233             -
Notes payable due to finance company with an
 interest rate of 10.5%, due in monthly installments
 through February, 2000.                                  25,985        31,993
                                                     $14,745,196   $13,824,997
Less:
Amount due within one year                            (1,285,364)     (986,506)
                                                     $13,459,832   $12,838,491
</TABLE>

Maturities of long-term debt for the fiscal years ending September 30 are as
follows:

<TABLE>
<CAPTION>
<S>                                                     <C>
1998                                                      $1,285,364
1999                                                       2,058,209
2000                                                       2,789,451
2001                                                       1,241,159
2002                                                       1,339,916
Thereafter                                                 6,031,097
                                                         $14,745,196
</TABLE>

Note payable due to financing company of $537,000 is collateralized by aircraft
with  an  aggregate  book  value of approximately  $788,000.  The  mortgage  of
$211,000 is collateralized by  buildings with a net book value of approximately
$664,000.  The UK debt is further  collaterized  by  a floating charge over its
assets as part of its UK banking arrangements.  The aircraft  financing note is

                             F-17

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995

   
collateralized by an aircraft with a book value of  $1,870,000,  the  proceeds,
from  the  sale  of  which,  must  be  used  to  repay the debt to G.E. Capital
Corporation.

At September 30, 1997 and 1996, the weighted average  interest  rates on short-
term borrowings was 9.7% and 9.2%, respectively.

HM HOLDINGS DEBT

Simultaneous with the acquisition of the Jet Centre in 1990 the Company entered
into  a Credit Agreement, dated August 14, 1990 ("the Credit Agreement"),  with
HM Holdings  in  order  to  provide the Company and Lynton Jet with funds to be
used in part to finance the Jet  Centre Acquisition and to finance a portion of
the ongoing working capital needs  of  the  Company  and  the  Jet Centre.  The
Credit Agreement financing consisted of term loans in the amount  of $2,000,000
and  $10,800,000  to the Company and Lynton Jet, respectively, and a  revolving
credit facility to Lynton Jet which provided for up to $4,200,000 in borrowings
(together, the "Loans").

In connection with  the  June  22, 1994 issuance of the Mortgage Note discussed
below, $8,000,000 of the net proceeds  therefrom  were applied to the repayment
of the Loans.  The Company's term loan was repaid in  full  together  with  all
principal  payments on the Lynton Jet term loan except for the final payment in
the principal  amount  of  $2,905,923 which would be due on September 30, 1997.
The  Credit  Agreement  also  provided  that  the  revolving  credit  loans  of
$3,200,000 would also be due on  September  30,  1997.  The Company recorded an
extraordinary  charge  during the year ended September 30,  1994  of  $166,000,
representing the unamortized  debt  discount  and issuance costs related to the
repaid portion of the Loans. In October 1994, HM Holdings loaned the Company an
additional $500,000 under an additional revolving  credit  facility, increasing
the  aggregate  amount  of  the revolving credit facility to $3,700,000.  As  a
result, prior to the completion of the Debt Discharge Transaction (as described
below), the principal amount  owing  to HM Holdings at September 30, 1996 under
the Loans was $6,605,923.

On  November  8,  1996,  a  Debt  Discharge  Agreement   (the  "Debt  Discharge
Agreement") was signed by and among  Hanson  North America, Inc. ("Hanson North
America"),  Millennium  America  Inc.  (formerly  named  Hanson  America  Inc.)
("Millennium America"), and the Company, Lynton Jet  and  Lynton Properties, (a
wholly-owned subsidiary of Lynton Jet). Prior thereto, Hanson North America had
succeeded to HM Holdings as lender under the Credit Agreement  and had acquired
certain assets of HM Holdings, including the equity securities described below.
Pursuant to the Debt Discharge Agreement and on November 13, 1996, Hanson North
America  was  paid  the  sum of $3,500,000, and in consideration thereof  (plus
other consideration described below and in Note 9), (i) cancelled the Loans and
discharged all obligations  under  the  Credit  Agreement  except  for  certain
indemnification obligations stated therein to survive termination of the Loans,
(ii)  surrendered to the Company 848,454 shares of Common Stock of the Company,
(iii) surrendered Warrants to purchase an aggregate of 247,513 shares of Common
Stock of  the  Company, and (iv) surrendered 2,000 shares of Series D Preferred
Stock of the Company  (the "Debt Discharge Transaction").  The foregoing shares
and Warrants represented  Hanson  North America's entire equity interest in the
Company.   As  provided  in  the  Debt  Discharge   Agreement,   the  foregoing
transactions  were deemed to have occurred at September 30, 1996, and  the  net
amount of debt  discharged ($6,605,923), less consideration given, was recorded
as a credit to Additional Paid-In Capital.

                             F-18

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


In connection with  the  Debt  Discharge Transaction, Hanson North America also
released all security and liens under the Credit Agreement, including its First
Leasehold Mortgage (the "Leasehold  Mortgage")  and  Assignment of Rents on the
Jet Centre facility operated by Lynton Jet at the Morristown Municipal Airport,
Morristown,  New  Jersey.   In addition, Millennium America,  which  previously
guaranteed certain obligations  of  Lynton  Jet  to MassMutual, which were also
secured by the First Leasehold Mortgage, terminated  and released its interests
in the Leasehold Mortgage. Millennium America continues to guarantee certain of
such obligations of Lynton Jet to MassMutual.

Interest expense related to the borrowings from HM Holdings  was  approximately
$455,000  and  $607,000  for  the  years  ended  September  30,  1996 and 1995,
respectively.

On  January  12,  1995,  in  connection with the minimum net worth requirements
under the Credit Agreement, HM  Holdings  agreed  to waive any and all such net
worth requirements for fiscal 1994, fiscal 1995 and the first quarter of fiscal
1996. On January 5, 1996, in connection with these  requirements,  HM  Holdings
agreed  to  waive any and all such net worth requirements for the remainder  of
fiscal 1996 and  the first quarter of fiscal 1997. The Company received waivers
of the interest coverage ratio requirements under the Credit Agreement for each
quarter of the fiscal  years  ended  September  30, 1995 and 1996 and the first
quarter of fiscal 1997.

FINOVA LOAN

Simultaneously with the completion of the Debt Discharge  Transaction,  and  in
order  to  pay  Hanson North America $3,500,000 in connection therewith, Lynton
Jet, as borrower, entered into a Loan and Security Agreement dated November 13,
1996 with Finova  Capital  Corporation ("Finova"), as Lender, pursuant to which
Finova made a secured loan to  Lynton Jet in the principal amount of $4,000,000
(the "Finova Loan").

The Finova Loan is collateralized  by  a security interest in substantially all
of the assets and properties of Lynton Jet,  including  a Leasehold Mortgage on
the  Jet Centre facility (excluding the portion of the facility  subject  to  a
Leasehold  Mortgage  held  by  Massachusetts Mutual Life Insurance Company). In
addition,  the obligations of Lynton  Jet  under  the  Finova  Loan  have  been
guaranteed by the Company and certain other subsidiaries of the Company.

The Finova Loan,  together  with interest thereon at the interest rate of 10.7%
per annum shall be repaid in  96  equal consecutive monthly payments consisting
of  (a)  principal and interest in an  amount  that  will  fully  amortize  65%
($2,600,000)  of the Finova Loan plus (b) interest only, on the remaining (35%)
of the principal amount ($1,400,000) of the Finova Loan calculated at 10.7% per
annum.  The remaining  unpaid  principal  (35%) of the Finova Loan, $1,400,000,
shall be payable on December 1, 2004.

The  Finova  Loan  requires compliance with certain  covenants,  financial  and
otherwise, as defined  in  the  loan agreement, including maintaining a minimum
tangible net worth and a minimum earnings, before interest, taxes, depreciation
and amortization, coverage ratio  by  both  Lynton Jet, as borrower, and Lynton
Group, Inc. as guarantor.

                             F-19

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


At September 30, 1997 and subsequent thereto,  the  Company was in default of a
covenant of the Finova Loan.  On January 13, 1998, Finova waived this default.

THE MASSMUTUAL MORTGAGE NOTE

On June 22, 1994, Lynton Properties issued to Connecticut Mutual Life Insurance
Company ("Connecticut Mutual") a $9,000,000, 6.69% mortgage note due January 3,
2006 (the "Mortgage Note") with varying scheduled monthly payments of principal
and interest. The Mortgage Note is collateralized by  a  Leasehold Mortgage and
Security Agreement and an Assignment of Leases and Rents,  each  dated June 22,
1994, on a lease between a certain tenant and Lynton Properties relating  to  a
hangar  and  office  facility  located  on  the  property  at  the  Jet Centre.
Massachusetts  Mutual  Life Insurance Company ("MassMutual") is an assignee  of
Connecticut Mutual under this loan.

In addition, the obligations  of  Lynton Properties under the Mortgage Note are
guaranteed by Lynton Jet pursuant to  a Guaranty Agreement dated June 22, 1994,
between  Lynton  Jet  and  Connecticut  Mutual  (the  "Jet  Centre  Guaranty").
Further, the obligations of Lynton Jet under  the  Jet  Centre  Guaranty, other
than  certain environmental and related obligations, are, and continue  to  be,
guaranteed  by Millennium America, pursuant to a Guaranty Agreement, dated June
22, 1994, between  Millennium  America  and Connecticut Mutual (the "Millennium
America Guaranty").  Further, Millennium  America  received  a  one-time fee of
$100,000,  in  1994, in connection with the issuance of the Millennium  America
Guaranty. MassMutual is the assignee of Connecticut Mutual.

At September 30,  1997,  1996  and  1995, the Company had $150,000 in interest-
bearing funds, accruing to the Company,  held in escrow, as additional security
to the Mortgage Note.

10% SENIOR SUBORDINATED CONVERTIBLE DEBENTURES

In December 1993, the Company completed an  off-shore  placement  of $2,500,000
principal amount of 10% Senior Subordinated Convertible Debentures due December
31, 1998 (the "Debentures"). The Debentures were convertible into shares of the
Company's  Common  Stock  at  the  option  of  the holder at any time prior  to
maturity at a price of $3.75 per share.  The Debentures may also be redeemed by
the  Company  at  any time or from time-to-time commencing  July  1995  at  the
Company's option, in  whole  or in part, at the redemption prices (expressed as
percentages of the principal amount)  set  forth below, plus accrued and unpaid
interest at the redemption date (and subject  to the right of any record holder
to receive the interest payable on the applicable interest payment date that is
on or prior to the redemption date).  If redeemed  during the periods indicated
below, the applicable redemption percentage will be:

<TABLE>
<CAPTION>
FROM                 THROUGH                PERCENTAGE
<S>                  <C>                    <C>
July 1, 1997         June 30, 1998           103%
July 1, 1998         And thereafter          100%
</TABLE>

PRIOR TO DECEMBER 31 OF EACH OF THE YEARS FROM 1996  TO  1998,  INCLUSIVE,  THE
COMPANY  HAS AGREED TO PAY TO THE TRUSTEE FOR THE DEBENTURES, AS A SINKING FUND
PAYMENT, CASH  IN  THE  AMOUNT  OF 1/3 OF THE AGGREGATE PRINCIPAL AMOUNT OF THE
ISSUED DEBENTURES, PROVIDED THAT  DEBENTURES  CONVERTED, REACQUIRED OR REDEEMED

                             F-20

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


BY  THE COMPANY MAY BE USED, AT THE PRINCIPAL AMOUNT  THEREOF,  TO  REDUCE  THE
AMOUNT  OF  ANY  SINKING  FUND  PAYMENT.  AT DECEMBER 31, 1997, THE COMPANY HAS
SATISFIED ITS SINKING FUND REQUIREMENT.

In connection therewith, the Company  paid  Value Investing Partners, Inc., the
placement  agent for such offering (the "Placement  Agent"),  a  commission  of
$225,000 representing  nine  percent  (9%) of the gross proceeds.  In addition,
the Placement Agent received from the Company warrants exercisable for a period
of ten years for the purchase of 125,000  shares  of  the  Common  Stock of the
Company  at  an  exercise  price  equal to $3.825 per share.  In addition,  the
Placement Agent was granted a right  of  first  refusal  for  a period of three
years from December 1993 with respect to any private or public  equity  or debt
placement by the Company through an underwriter or placement agent during  such
period.

During  the period from June 30, 1995 through January 22, 1996, the Company was
not in compliance  with  the  minimum  net  worth requirements of the Debenture
Agreement.  As of January 23, 1996, in connection  with  such  requirements,  a
majority of the  debenture  holders  agreed to waive any and all such net worth
requirements for fiscal 1995 and 1996.  No  assurances  can  be given as to the
Company's  ability  to meet future net worth requirements under  the  Debenture
Agreement or that additional waivers will be received at appropriate times.

In fiscal 1996, the Company  repurchased  a  portion  of  its Debentures in the
principal amount of $540,000 for cash payments totaling $162,000.  The  Company
realized  a gain on redemption of $287,000, net of related debt issuance costs,
on these repurchases. In addition, the remaining holders of the Debentures have
been given  the  opportunity  to  convert  the Debentures into shares of Common
Stock  of  the  Company at a conversion price of  $.33  per  share.   Prior  to
completion of the  Debt Discharge Transaction and refinancing of the Jet Centre
facility described above,  there  were  Debentures  in  the principal amount of
$1,960,000 outstanding.  Two holders of the Debentures, who  are  affiliates of
the  Company, issued their consent to convert the Debentures held by  them  (in
the principal  amount  of  $1,065,000)  into  3,227,273  shares of Common Stock
(effective retroactively to September 30, 1996). A charge  has been recorded to
reflect  the value of additional consideration provided by the  Company  as  an
inducement  to  the  above conversion, however, such amount was immaterial.  In
fiscal 1997, the Company  repurchased  a  portion  of  its  Debentures  in  the
principal  amount  of  $100,000 for cash payments totaling $50,000. The Company
realized a gain on redemption  of  $47,000, net of related debt issuance costs,
on these repurchases. The Debentures  acquired  in  the above transactions have
been applied against the sinking fund obligations for  December  31,  1996  and
1997.


5.  FOREIGN OPERATIONS

Following  is a summary of the consolidated financial position at September 30,
1997 and 1996  and  consolidated  results  of  operations for each of the three
years  ended September 30, 1997, 1996 and 1995 of  the  Company's  wholly-owned
foreign   subsidiary,   Limited,   located  in  the  United  Kingdom,  and  its
subsidiaries.

                                    F-21

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995



<TABLE>
<CAPTION>
                                              1997                1996
<S>                                       <C>                    <C>
Summary of financial position:
Current assets                                $4,527,148           $2,855,814
Property, plant and equipment, net             1,870,217            1,792,667
Goodwill, investment in jointly-owned
 company held for resale and other assets        250,383            1,431,855
Total assets                                  $6,647,748           $6,080,336

Current liabilities                           $4,151,903           $4,115,839
Long-term liabilities                            729,423              828,988
Equity                                         1,766,422            1,135,509
Total liabilities and equity                  $6,647,748           $6,080,336
</TABLE>

Revenues from foreign subsidiaries represented 51%, 55% and 67% of consolidated
net revenues in 1997, 1996 and 1995, respectively, and were derived from
geographic regions as specified below:

<TABLE>
<CAPTION>
                                                  Years ended September 30
<S>                       <C>                 <C>                 <C>
                               1997                1996                1995
Net revenues:
United States              $12,568,159         $10,192,128          $8,854,266
United Kingdom and other
 European countries         13,016,943          12,594,198          17,864,880
South America                        -                   -             502,326
                           $25,585,102         $22,786,326         $27,221,472

Income (Loss) before income
 tax provision and extraordinary item:
Domestic                      $527,535           $(273,537)          $(156,122)
Foreign                        756,354             543,145          (2,164,031)
                            $1,283,889            $269,608         $(2,320,153)
</TABLE>

There were no dividends from foreign subsidiaries during 1997, 1996 or 1995.


6.  COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

The Company operates the Jet Centre business out of the Company's hangar/office
facility of approximately 132,000 square feet, owned by the Company, located at
the Morristown Municipal Airport, Morristown,  New  Jersey,  on  a  site leased
pursuant to a ground lease with an initial term expiring on December  31,  2010
and  with  options to extend the term of the lease for five additional terms of
five years each.   The  rental payments due under the lease are generally based
upon increases in the consumer price index through the year 2020 and based upon
fair market value thereafter.

                             F-22

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


The Company leases an additional  facility  of approximately 36,000 square feet
at the Morristown Municipal Airport, Morristown,  New  Jersey,  with an initial
term expiring on May 31, 1998, with an option to renew for an additional  three
years.  Ramapo  conducts  its  maintenance  operation  from  this  facility, in
addition to the Company's additional FBO business.

In  addition  to  the  above  facility  leases, the Company leases automobiles,
various office equipment and the helicopter  currently being flown for the U.S.
flight operations.

Minimum future obligations under operating leases in effect at September 30,
1997 are as follows:

<TABLE>
<CAPTION>
Year Ending September 30:
<S>                                      <C>
1998                                              $   373,331
1999                                                  174,517
2000                                                  167,925
2001                                                  161,090
2002                                                  159,865
Thereafter                                          1,278,920
Total minimum lease payments                       $2,315,648
</TABLE>

Rental expense for the years ended September 30, 1997, 1996 and 1995 was
approximately $510,000, $486,000 and $456,000, respectively.

CAPITAL LEASES

Subsidiaries of the Company in the United Kingdom lease automobiles, which have
been accounted for as capital leases.  Following is a summary of property held
under capital leases:

<TABLE>
<CAPTION>
                                                   1997                  1996
<S>                                            <C>                   <C>
Motor vehicles                                   $185,489             $138,665
Less: Accumulated depreciation                    (25,897)             (35,051)
Total assets                                     $159,592             $105,610
</TABLE>

Aggregate future minimum lease payments under capital leases at September 30,
1997, by fiscal year, are as follows:

<TABLE>
<S>                                                 <C>
1998                                                 $38,480
1999                                                  40,043
2000                                                  29,028
Total minimum lease payments                         107,551
Less interest portion                                (19,605)
Present value of net minimum lease payments          $87,946
</TABLE>

                                    F-23

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


AIRCRAFT LEASE GUARANTEE

In fiscal 1994, the Company acted as broker in  an aircraft leasing transaction
between an aircraft leasing company and a customer  of  the Company.  Under the
terms  of  the transaction, the Company has guaranteed to the  leasing  company
that the Company  will  fund  any  shortfall  if  the  aircraft is sold below a
specified  sales  price at the termination of the lease.   Management  believes
that the fair market value of the aircraft at the termination of the lease will
exceed the specified  sales price, and thus no provision for such guarantee has
been made in the accompanying consolidated financial statements.

HAZARDS AND INSURANCE

The operation of helicopters  and  fixed  wing  aircraft involves a substantial
level of risk.  Hazards such as aircraft accidents,  collisions  and  fire  are
inherent  in  the  providing  of  aviation services and may result in losses of
life, equipment and revenues.

The Company maintains insurance of  types  customary  to  the aviation services
industry and in amounts deemed adequate by the Company to protect  the  Company
and   its  property.   These  policies  include  aircraft  liability,  aviation
spares/equipment,   all   risks,   hull,  products  liability,  hangar  keepers
liability, property and casualty, automobile  and  workers'  compensation.  The
Company has not experienced significant difficulty in obtaining  insurance  and
has  not  incurred  any  insured losses in excess of its property and liability
coverage.  While the Company  believes  that its insurance coverage is adequate
for its operations, there can be no assurance  that  such insurance coverage is
now, or will be, adequate to cover any claims to which  it  may  be  subject or
that  such  levels  of  insurance  may  be  obtained at comparable rates in the
future.

ENVIRONMENTAL MATTERS

The Company's operations are subject to numerous  laws and regulations designed
to protect the environment.  The Company believes that  it is in compliance, in
all  material  respects, with applicable environmental requirements.   Although
future environmental  obligations  are  not expected to have material impact on
the consolidated  results of operations or the consolidated financial  position
of the Company,  there can be no assurance that future developments,  including
increasingly stringent environmental  laws  or  enforcement  thereof,  will not
cause the Company to incur material environmental liabilities or costs.

GOVERNMENT REGULATION

The Company is subject to the jurisdiction of the FAA in the United States  and
the  CAA in the United Kingdom related to its authorization to operate aircraft
maintenance  facilities  and to operate as an air carrier.  No assurance can be
given that the authorizations mentioned above will be maintained in the future.
Management believes that the  loss  of the above mentioned authorization in the
United States would not have a material effect on the Company while the loss of
any of the United Kingdom authorizations  could  have  a material effect on the
Company.

                                    F-24

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


LITIGATION

Dollar Air is a defendant in an action pending in the United  Kingdom  relating
to  certain  actions  taken  by  Dollar Air in connection with its acting as  a
broker in the sale of a certain helicopter.   In  such action, the plaintiff is
seeking  damages  in  the  approximate  amount  of  170,000   Pounds   Sterling
(approximately  $250,000).   Dollar Air has denied the allegations therein  and
the  Company  has  defended and intends  to  continue  to  defend  this  matter
vigorously.  While the  Company  cannot predict the outcome of such litigation,
it does not expect, based upon advice  of counsel, that damages will be awarded
to the full extent of plaintiff's claim.


7.  INCOME TAXES

The Company and its wholly-owned United States subsidiaries file Federal income
tax  returns  on  a  consolidated basis.  Limited  and  its  subsidiaries  file
separate tax returns in the United Kingdom.

Deferred income taxes  recorded  in the consolidated balance sheet at September
30,  1997  and 1996 include deferred  tax  assets,  primarily  related  to  net
operating loss  carryforwards,  which  have  been  fully  offset  by  valuation
allowances.   The valuation allowances have been established equal to the  full
amount of the deferred  tax  assets, as the Company is not assured at September
30, 1997 and 1996, that it is  more likely than not that these benefits will be
realized. Deferred tax liabilities  resulted  primarily from different book and
tax basis of fixed assets in the United Kingdom.

The Company's effective tax rate differs from the U.S. statutory rate (34%) due
to the following:

<TABLE>
<CAPTION>
                                                YEAR ENDED SEPTEMBER 30
                                            1997         1996          1995
<S>                                      <C>          <C>          <C>
Expected provision (benefit) at 34%       $452,456      $91,667      $(788,852)
Foreign income taxes                             -      151,206              -
Benefit of operating losses (utilized)
 or not utilized:
 Domestic                                 (102,339)     (91,667)        53,082
 Foreign                                   (99,089)           -        735,770
Other                                      (12,635)           -              -
Total tax provision                       $238,393     $151,206             $0
</TABLE>

The  Company  has  unused  U.S.  Federal net operating  loss  carryforwards  at
September 30, 1997 of approximately  $1,260,000  which expire through September
30, 2010.  As a result of the Jet Centre acquisition  and  the related issuance
of the Original Warrant to HM Holdings (see Note 2), and the  conversion of the
Debentures into Common Stock (see Note 2), the utilization of the Company's net
operating loss carryforwards is substantially restricted under  Section  382 of
the  Internal  Revenue  Code  of  1986,  as  amended,  to  a  specified maximum
percentage (approximately 5.8%) of the fair market value of the  Company at the
time of the ownership change.  For purposes of this limitation, management  has
estimated that the value of the Company was in excess of $3,800,000 at the time
of the ownership change.

                             F-25

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


8.  EMPLOYMENT AGREEMENT/STOCK OPTIONS

The  Company  has  an  employment  agreement  with  its Chief Executive Officer
extending  through  March  31,  1998 providing for a base  salary  of  $180,000
annually, which includes rent paid  to  a  company which is wholly-owned by the
Company's Chief Executive Officer for office  space  in  London  rented  by the
Company  (see  Note  9).   The  term  of  this agreement may be extended for an
additional three years under certain conditions  relating to a merger or change
of control of the Company.

In August 1993, the Board of Directors adopted the  1993 Stock Option Plan (the
"1993 Plan") for employees, officers, consultants or  directors  of the Company
or  its  subsidiaries to purchase up to 250,000 shares of Common Stock  of  the
Company.   Options  granted  under the 1993 Plan may either be "incentive stock
options" as defined in Section  422 of the Code, or non-statutory stock options
(options which fail to qualify as  incentive  stock  options).   Any  incentive
stock options granted under the 1993 Plan shall be granted at no less than 100%
of the fair market value of the Common Stock of the Company at the time  of the
grant  and have a term of between five and ten years.  The vesting periods  for
the options  vary  under  the  1993  Plan  with a minimum vesting period of six
months.  As of September 30, 1997, options to  acquire  23,335 shares of Common
Stock have been granted under the 1993 Plan and 226,665 options  were available
for future grant.

In  addition  to  options  granted under the Plan, in August 1997, the  Company
granted non-statutory stock options to certain officers and key employees for a
total of 704,000 shares, all of which are immediately exercisable at a price of
$0.50 per share.

The Company's stock option plan  has  been  accounted for under APB Opinion 25,
and  related  Interpretations.   No  compensation   cost  has  been  recognized
applicable to the plan.  Had compensation cost for the  plan  been  determined,
based  on  fair  value  of  the options at the grant dates consistent with  the
requirements of SFAS No. 123,  "Accounting  for  Stock-Based Compensation", the
Company's  net income and earnings per share would  have  been  the  pro  forma
amounts indicated below.

<TABLE>
<CAPTION>
                                                            September 30
                                                        1997             1996
<S>                              <C>                 <C>              <C>
Net income                         As Reported       $1,092,360       $405,810
                                     Pro forma       $1,092,360       $405,780

Primary earnings per share         As Reported            $0.17          $0.21
                                     Pro forma            $0.17          $0.21

Fully diluted earnings per share   As Reported            $0.17          $0.22
                                     Pro forma            $0.17          $0.22
</TABLE>

The fair value  of  each  option  is  estimated on the date of grant, using the
Black-Scholes  options-pricing  model,  with   the  following  weighted-average
assumptions used for grants in 1997 and 1996: expected volatility of 40%; risk-
free interest rates of 6.0%; and expected lives of 2 1/2  years.

                             F-26

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


Information with respect to the 1993 Plan and other options granted, under
similar provisions, to certain directors, officers and key employees of the
Company is summarized as follows:

<TABLE>
<CAPTION>
                                 1997              1996             1995
<S>                         <C>   <C>        <C>    <C>       <C>    <C>
                                    WEIGHTED          Weighted         Weighted
                                     AVERAGE           Average          Average
                                    EXERCISE          Exercise         Exercise
                             SHARES   PRICE    Shares   Price   Shares   Price
Outstanding at beginning
 of year                     63,340   $1.54    94,176   $2.34   75,842   $2.83
Granted                     704,000    0.50     5,001    0.25   26,668    1.04
Cancelled                   (33,337)   1.78   (35,837)   3.45   (8,334)   2.74
Exercised                         -    0.00         -    0.00        -    0.00
Outstanding at end of year  734,003   $0.53    63,340   $1.54   94,176   $2.34
Exercisable at end of year  734,003   $0.53    43,340   $1.74   74,176   $2.66
Weighted average fair value
 options granted during
 the year                             $0.00             $0.01              N/A
</TABLE>

The following information applies to options outstanding at September 30, 1997:

<TABLE>
<S>                                    <C>                         <C>
Range of exercise prices                3,334 shares                 $0.25
                                      704,000 shares                 $0.50
                                        3,334 shares                 $0.80
                                       23,335 shares                 $1.50
Weighted average exercise price                                      $0.53
Weighted average remaining contractual life                     4.73 years
</TABLE>

The initial application of SFAS No. 123, for the  pro  forma disclosures of the
fair value based method, may not be representative of those future  effects  of
applying this statement.


9.  RELATED PARTY TRANSACTIONS

HANSON TRANSACTIONS

Under  the  Management Agreement with HM Industries, Inc. ("HM Industries'), an
affiliate of  HM  Holdings,  the  Company  was  obligated  to  provide complete
aviation management services, including flight scheduling, aircraft utilization
management, provision of pilots, repair and maintenance, fueling,  catering and
bookkeeping  and  accounting  through  June,  1995.  From June 30, 1995,  until
September 30, 1996 under this agreement, the Company  was  obligated to provide
fueling,  catering  and  bookkeeping  and  accounting  services. HM  Industries
reimbursed  the  Company  for actual costs of performing these  services,  less
$125,000 per annum through  June  30,  1994.   Subsequent  to June 30, 1994, in
accordance  with the amendment to the lease dated July 1, 1994,  there  was  no

                             F-27

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


deduction in  the  reimbursement  amount.  HM Industries' reimbursements to the
Company for the years ended September  30,  1996  and  1995 were $3,985,000 and
$6,417,000 respectively. These reimbursements have been excluded from revenues,
direct  costs  and  selling,  general  and  administrative  expenses   in   the
accompanying   consolidated  financial  statements.   At  September  30,  1995,
reimbursements receivable  from  HM Industries was $141,000.  No amount was due
from HM Industries at September 30, 1996.

Under the terms of an Agreement of  Lease  entered into August 1990, as amended
in July 1994 ("the Lease"), Lynton Jet has been leasing to HM Industries office
and hangar space at the Jet Centre facility in Morristown, New Jersey.

In connection with the Debt Discharge Transaction,  and  on  November  8, 1996,
Lynton  Jet  Centre  entered  into  a Second Amendment to the Lease and Partial
Assignment and Assumption of the Lease  (the  "Second  Amendment")  with Hanson
North  America  (which prior thereto had merged with HM Industries with  Hanson
North America being the surviving entity) and Millennium America Holdings, Inc.
("Millennium Holdings").  Under the terms of the Second Amendment, Hanson North
America assigned to Millennium  Holdings  an undivided one-half interest in and
to the Lease.  The Second Amendment provides  that  the term of the Lease shall
end on November 7, 2001 and that no rent is or shall  be  due for the remainder
of the term.  This rent reduction is considered additional  consideration given
under the Debt Discharge Agreement and is recorded as a reduction in the credit
to Additional Paid-In Capital, resulting from the debt discharge  (see Note 4),
and is recorded as deferred revenue, current and long-term, in the accompanying
consolidated balance sheet. The Second Amendment also provides that  if  at any
time  during  the  term  of  the  Lease,  space  sufficient  to  accommodate an
additional  aircraft  shall  become  available  at the Jet Centre facility  for
rental, Hanson North America and Millennium Holdings  shall  have  the right of
first  refusal with respect to such available space to lease such space  for  a
period of  five  years  at a predetermined annual rate. The lease also provides
for  liquidating damages payable  by  the  Jet  Centre  in  the  event  of  the
termination  of  the  lease  other  than  by  reason of default by Hanson North
America and or Millennium Holdings.

In conjunction with the Second Amendment, Lynton  Jet, Hanson North America and
Millennium Holdings entered into a Jet Fuel Agreement,  on  November  8,  1996,
whereby  Lynton  Jet  agreed  to  sell  jet  fuel  to  Hanson North America and
Millennium Holdings at the Jet Centre facility at a predetermined  price, based
on  Lynton  Jet's  actual cost of such fuel, for so long as aircraft of  Hanson
North America and Millennium Holdings are based at the Jet Centre facility.

OTHER RELATED PARTY TRANSACTIONS

The Company rents office  space  in London from a company which is wholly-owned
by the Company's Chief Executive Officer.   For  the  years ended September 30,
1997,  1996 and 1995, rental expense for this space was  $51,000,  $46,000  and
$48,000,  respectively.   At  September  30,  1995 the Company had non-interest
bearing receivables from an entity controlled by the Chief Executive Officer of
the Company in the amount of $191,308.  This amount  was  written off in fiscal
1996, pursuant to a Board of Director's resolution dated September 10, 1996.

                             F-28

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


The  Company  paid  $25,000  and $27,000 in 1996 and 1995, respectively,  to  a
company owned by one of the Company's  directors  for  management  and advisory
services rendered.  No such payments were made in fiscal 1997.

The  Company  has  recognized  an  expense of $48,000, $12,000 per non-employee
director, in 1997 for the payment of  directors  fees.   At September 30, 1997,
services  provided  by  the  Company to these directors totaling  approximately
$33,000, were applied to this  accrual.   However,  no  cash payments have been
made for any of the remaining amounts due.


10.  SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

Non-cash investing and financing activities for the years ended September 30
are as follows:

<TABLE>
<S>                                                           <C>
1997
Reclassification of investment in jointly-owned
 company held for resale from long term assets to
 current assets (see Note 3)                                    $1,222,620

Purchase of helicopter, fully financed by G.E.
 Capital Corporation                                            $1,870,233

1996
Conversion of senior subordinated convertible
 debentures for common stock                                    $1,065,000

Cancellation of debt to HM Holdings, Inc.                       $6,605,923
Payment to HM Holdings, Inc. for cancellation of debt           (3,500,000)
Deferred revenue for future rental obligation                   (1,200,000)
Unamortized debt discount                                          (35,951)
Tax impact of transaction                                          154,000
Net credit to Additional Paid-In Capital from
 discharge of debt                                              $1,715,972

1995
Transfer of assets to jointly-owned company                     $3,533,893
Liabilities assumed by jointly-owned company                    (2,275,060)
Investment in jointly-owned company                             $1,258,833
</TABLE>

Cash paid for interest and income taxes during the fiscal years were as
follows:

<TABLE>
<CAPTION>
                                   1997              1996              1995
<S>                          <C>                 <C>               <C>
Interest                        $1,085,016        $1,509,512        $1,768,959
Income taxes                       $23,643                 -                 -
</TABLE>

                             F-29

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


11.  ACCRUED EXPENSES

As of September 30, 1997 and 1996, accrued expenses are summarized as follows:

<TABLE>
<CAPTION>
                                                 1997                 1996
<S>                                          <C>                  <C>
Accrued purchases                              $182,863              $120,877
Aircraft maintenance reserves                   327,465               231,448
Payroll and payroll taxes                       182,047               200,718
Interest                                         86,222                 9,689
Sales, excise and V.A.T. taxes                   99,714                59,110
Professional fees                               116,719                92,971
Aircraft management and charter costs            45,959                38,849
Site cleanup cost                                40,000                40,000
Other                                           134,758                95,310
                                             $1,215,747              $888,972
</TABLE>


12.  EMPLOYEE BENEFIT PLANS

The  Company  has a voluntary savings plan covering substantially  all  of  its
domestic employees.   The  plan  qualifies under Section 401(k) of the Internal
Revenue Code.  Eligible employees  may  elect  to contribute up to 15% of their
salaries  to  an  investment trust.  Effective October  1,  1990,  the  Company
contributes an amount  equal to 100% of the first 4% of employee contributions.
Contributions related to  this  plan  were  $44,000,  $47,000,  and $68,000 for
fiscal 1997, 1996 and 1995, respectively.

The  Company  also has a voluntary savings plan covering eligible employees  of
its subsidiaries  in  the  United  Kingdom.   Eligible  employees  may elect to
contribute  up to 17.5% of their salaries to an investment trust.  The  Company
contributes an  amount equal to 100% of the first 4% of employee contributions.
Contributions related  to  this  plan  were approximately $51,000, $47,000, and
$68,000 for fiscal 1997, 1996, and 1995, respectively.


13. RENTAL INCOME

The Company's FBO facility, through Lynton Jet Centre and Lynton Properties, at
the Morristown Municipal Airport, Morristown,  New  Jersey, has 13 tenants with
non-cancelable operating leases with terms remaining ranging from one to eleven
years.  The loss of either of the largest two tenants (with leases which expire
in  February  2006  and  June 1999 for the largest and second  largest  tenant,
respectively) could have a material effect on the Company.

                             F-30

<PAGE>

                    Lynton Group, Inc. and Subsidiaries

                Notes to Consolidated Financial Statements

                     September 30, 1997, 1996 and 1995


The Company's additional FBO  facility,  through  Ramapo,  also  located at the
Morristown Municipal Airport, Morristown, New Jersey, has 13 tenants of which 5
have  non-cancelable  operating  leases  with  one year remaining on three-year
terms.  The remaining tenants rent on a month to month basis.

The following is a schedule, by fiscal year, of  minimum  future  rental income
under noncancellable tenant operating leases as of September 30, 1997:

<TABLE>
<S>                                                     <C>
1998                                                      $3,191,083
1999                                                       2,195,867
2000                                                       1,593,237
2001                                                       1,667,778
2002                                                       1,385,610
Thereafter                                                 3,117,623
Total minimum future rentals                             $13,151,198
</TABLE>

The above schedule includes deferred annual revenues from Hanson North  America
and  Millennium  Holdings,  through  2001,  pursuant  to  the  lease  agreement
discussed in Note 9.


14. SUBSEQUENT EVENT (UNAUDITED)

On  December  23,  1997,  the  Company  acquired,  through Limited, (the "Magec
Acquisition")  all  of  the  issued and outstanding shares  of  Magec  Aviation
Limited, a company organized under  the laws of England ("Magec") in a business
combination which will be accounted for  as  a  purchase.   The  purchase price
(including  transaction  costs)  of  approximately  $28,000,000  exceeded   the
estimated  fair  value  of  the  assets  of  Magec by $4,000,000, which will be
amortized over its expected useful life at a rate to be determined.

The purchase price allocation is based on preliminary  estimates  of  the  fair
value  of  the  assets  acquired  and  is  subject  to adjustment as additional
information  becomes available in fiscal 1998.  The results  of  operations  of
Magec will be  included  with  the results of the Company from January 1, 1998.
Assuming the acquisition has occurred  on  October  1,  1995, the Company's pro
forma (unaudited) net revenue, net income, primary and fully  diluted  earnings
per  share  for  the  years  ended  September 30, are estimated to have been as
follows:
<TABLE>
<CAPTION>
                                            1997               1996
                                             (Pro forma-unaudited)
<S>                                   <C>                 <C>
Net revenue                             $47,500,000         $41,500,000
Net income                               $1,393,000            $386,000
Primary earnings per share                    $0.11               $0.05
Fully diluted earnings per share              $0.11               $0.05
</TABLE>

The  aforementioned  pro forma (unaudited) financial information should be read
in conjunction with the related historical consolidated financial statements of
the Company and its subsidiaries,  included on pages F-3 to F-31.  Further, the
aforementioned pro forma (unaudited)  financial  information is not necessarily
indicative  of the results that would have been attained  had  the  transaction
occurred at October 1, 1995.

                                    F-31

<PAGE>











     Report of Independent Certified Public Accountants on Schedule


Lynton Group, Inc.

In connection with our audits of the consolidated financial statements of
Lynton Group, Inc. and subsidiaries as of September 30, 1997 and 1996, we have
also audited the consolidated Schedule II-Valuation and Qualifying Accounts
included in this Annual Report (Form l0-K).

In our opinion, the consolidated schedule referred to above presents fairly, in
all material respects, the information required to be stated therein.

/s/ Grant Thornton LLP


New York, New York
January 13, 1998




                                         F-32

<PAGE>







                     Report of Independent Auditors


The Board of Directors and Stockholders
Lynton Group, Inc.

In connection with our audit of the consolidated financial statements of Lynton
Group, Inc. and subsidiaries for the year ended September 30, 1995, we have
also audited the consolidated schedule included in this Annual Report (Form l0-
K).

In our opinion, the consolidated schedule referred to above presents fairly, in
all material respects, the information required to be stated therein.

/s/ Ernst & Young LLP


MetroPark, New Jersey
December 21, 1995


                                         F-33

<PAGE>



                  Lynton Group, Inc. and Subsidiaries

             Schedule II-Valuation and Qualifying Accounts

<TABLE>
<CAPTION>
                                Balance at                           Balance at 
                               Beginning of                            End of
                                  Period    Additions   Deductions     Period
<S>                              <C>       <C>          <C>         <C>
Year ended September 30, 1997:
Allowance for doubtful accounts   $21,465     $731 (1)        -        $22,196

Year ended September 30, 1996:
Allowance for doubtful accounts   $21,808        -        $(343) (1)   $21,465

Year ended September 30, 1995:
Allowance for doubtful accounts  $291,103  $15,916    $(285,211) (2)   $21,808
</TABLE>


(1)Represents effect of exchange rate differences.
(2)Represents the write-off of doubtful receivables of $285,211.

In addition,  during  fiscal 1996, the Company wrote off approximately $191,000
due from an entity controlled  by  the President and Chief Executive Officer of
the Company.

                                        F-34

<PAGE>