<PAGE>

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

          (Mark One)

          /x/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
          OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
          For the fiscal year ended December 31, 1997
                                          OR

          /  / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
          OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                       For the transition period from       to

                            Commission file number 1-4923

                              WESTMINSTER CAPITAL, INC.
              (Exact name of the Registrant as Specified in its Charter)

              Delaware                                         95-2157201
     (State or Other Jurisdiction of
          Incorporation or Organization)    (I.R.S. Employer Identification No.)

     9665 Wilshire Boulevard, M-10, Beverly Hills, California          90212
          (Address of Principal Executive Offices)                   (Zip Code)

          Registrant's Telephone Number, Including Area Code: (310) 278-1930

          Title of Each Class
          Common Stock,                Name of Each Exchange on which Registered
          $1.00 Par Value Per Share                    Pacific Stock Exchange

             Securities registered pursuant to Section 12(g) of the Act:
                                         NONE

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.  /X/

The aggregate market value of the voting stock held by non affiliates of the
Registrant, based upon the closing sale price on the Pacific Stock Exchange of
its common stock on March 16, 1998 was approximately $8,577,606.  For purposes
of the foregoing calculation, certain persons that have filed reports on
Schedule 13D with the Securities and Exchange Commission with respect to the
beneficial ownership of more than 5% of the Registrant's outstanding voting
stock and directors and executive officers of the Registrant have been excluded
from the group of stockholders deemed to be non affiliates of the Registrant.

The number of shares of common stock, $1.00 par value per share, of the
Registrant outstanding as of March 16, 1998, was 7,834,607.

<PAGE>

                              WESTMINSTER CAPITAL, INC.
                              ANNUAL REPORT ON FORM 10-K
                         FOR THE YEAR ENDED DECEMBER 31, 1997

                                       CONTENTS

<TABLE>
<CAPTION>
PART I
     <S>        <C>                                                          <C>
     ITEM 1.    BUSINESS                                                     3

     ITEM 2.    PROPERTIES                                                   8

     ITEM 3.    LEGAL PROCEEDINGS                                            8

     ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                HOLDERS                                                     10

PART II

     ITEM 5.    MARKET FOR THE CORPORATION'S COMMON EQUITY AND
                RELATED STOCKHOLDER MATTERS                                 11

     ITEM 6.    SELECTED FINANCIAL DATA                                     12

     ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS               13

     ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                 19

     ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                ON ACCOUNTING AND FINANCIAL DISCLOSURE                      43

PART III

     ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE
                CORPORATION                                                 44

     ITEM 11.   EXECUTIVE COMPENSATION                                      44

     ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                AND MANAGEMENT                                              44

     ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS              44

PART IV.

     ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
                REPORTS ON FORM 8-K                                         44

Index of Exhibits                                                           48
</TABLE>

<PAGE>

                                        PART I

ITEM 1.   BUSINESS

     THROUGHOUT THIS ANNUAL REPORT, WESTMINSTER CAPITAL, INC. (THE
"CORPORATION") MAKES FORWARD LOOKING STATEMENTS REGARDING VARIOUS ASPECTS OF ITS
BUSINESS AND AFFAIRS, INCLUDING STATEMENTS IN ITEM 3 -"LEGAL PROCEEDINGS"
REGARDING THE MERITS OF CLAIMS AND DEFENSES IN LITIGATION AND STATEMENTS IN ITEM
7 -"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" ABOUT FUTURE REVENUES AND INCOME OF GLOBAL TELECOMMUNICATIONS LTD,
THE ADEQUACY OF COLLATERAL FOR A LOAN IN DEFAULT AND THE FUTURE CASH NEEDS OF
THE CORPORATION.  THESE FORWARD LOOKING STATEMENTS INVOLVE SUBSTANTIAL RISKS AND
UNCERTAINTIES.  THE ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED
IN THE FORWARD LOOKING STATEMENTS.  STATEMENTS ABOUT CLAIMS AND DEFENSES IN
LITIGATION MAY TURN OUT TO BE INCORRECT BECAUSE ALL OF THE FACTS THAT WILL BE
PRESENTED AT TRIAL ARE NOT KNOWN NOW, CERTAIN ASPECTS OF THE APPLICABLE LAW MAY
BE UNCERTAIN AND THE JUDGEMENT OF THE JUDGE OR JURY IS SUBJECTIVE AND INCAPABLE
OF BEING PREDICTED ACCURATELY.  STATEMENTS ABOUT FUTURE EARNINGS AND REVENUES
AND THE ADEQUACY OF CASH RESOURCES FOR FUTURE NEEDS ARE UNCERTAIN BECAUSE OF THE
UNPREDICTABILITY OF FUTURE EVENTS AFFECTING SUCH STATEMENTS.  STATEMENTS ABOUT
THE ADEQUACY OF REAL ESTATE COLLATERAL INVOLVE PREDICTIONS AS TO WHAT A BUYER
WILL BE WILLING TO PAY FOR THE PROPERTY IN THE FUTURE, WHICH CANNOT BE KNOWN
WITH CERTAINTY.

GENERAL

     Westminster Capital, Inc. ("the Corporation") owns all or a substantial
interest in several operating businesses and also engages in the secured lending
business.  The Corporation owns a 100% interest in a company which provides
group purchasing of goods and services for new car dealers (See "Westland
Associates" below), and a majority interest in a telephone company serving
military personnel (See "Telephone Company," below).  At December 31, 1997, the
Corporation owned a substantial interest in a home delivery shopping company
which was sold on February 26, 1998 (See "Pink Dot," below).  The Corporation
also engages in lending activity, originating or purchasing secured loans that
generally do not exceed thirty-six months in duration.  The Corporation invests
its assets not employed in its operations in securities available-for-sale.
These securities consist principally of U.S. Government securities, but to a
limited extent include investments in common and preferred stocks, warrants, and
convertible debentures.

     The Corporation intends to pursue the acquisition of one hundred percent or
substantial interests in additional operating businesses.  However, no
assurances can be given that the Corporation will be able to identify attractive
opportunities, or if it does, that it will be able to complete acquisitions on
acceptable terms.  As the Corporation acquires interests in other operating
businesses or originates or purchases loans, it intends to liquidate securities
available-for-sale as may be necessary to consummate acquisitions or fund loans.

     The Corporation is a Delaware corporation formed in 1959.  The executive
office of the Corporation is located at 9665 Wilshire Boulevard, Suite M-10,
Beverly Hills, California 90212 and its telephone number is (310) 278-1930.


                                          3
<PAGE>

WESTLAND ASSOCIATES

     On November 12, 1997, the Corporation acquired 100% of the common stock of
Westland Associates, Inc. ("Westland Associates").  Westland Associates was
founded in 1957 and provides group purchasing of goods and services for new car
dealers in California, Arizona, and Nevada.  Westland Associates sells to more
than 600 dealers and has relationships with over 120 vendors.  Included on
Westland Associates' list of vendors are nationally recognized companies such as
Reynolds & Reynolds, Safety-Kleen, Sherwin Williams and National Sanitary.

     Westland Associates reviews new products, negotiates competitive pricing
for its dealers, and assists in the introduction of new products to its dealers.
For most vendors, Westland Associates also acts as the accounts receivable
agency.  Products are shipped directly to dealers by the vendors and Westland
Associates is billed by the vendors for the items ordered by the dealers.
Westland Associates then consolidates all of the vendor bills and sends a single
statement to each dealer.

     The acquisition of Westland Associates has been accounted for using the
purchase method of accounting and the consolidated financial statements include
Westland Associates' financial position as of December 31, 1997 and its results
of operations from the date of the acquisition through December 31, 1997 on a
consolidated basis. See Note 6 of Notes to Consolidated Financial Statements for
additional information relating to the acquisition of Westland Associates.


TELEPHONE COMPANY

     Pursuant to contracts with four military bases, Global Telecommunications
Systems, LTD ("Global Telecommunications") operates telephone network systems to
serve officers and enlisted personnel with local and long distance telephone
service.  Global Telecommunications installed and owns the switches, wiring and
individual telephone equipment at each of the bases, and maintains and operates
that equipment with its personnel.  Telephone system revenue is generated
through the use of the system by the individual military personnel who are
subscribers.  Revenue is partially offset by time charges from the long distance
telephone provider to Global Telecommunications.

     The Corporation acquired a limited partnership interest in Global
Telecommunications in October, 1993. All four systems were completed and have
been operating since 1994.  Under the Global Telecommunications partnership
agreement the Corporation is entitled to 75% of the partnership distributions
(which is proportional to its investment). The consolidated financial statements
include this investment on a consolidated basis.

     During 1997, Global Telecommunications received notice of cancellation from
the Navy regarding the closure of the Miramar base in California.  Although the
U.S. Marines will be occupying the Miramar base in the future, that service
branch has decided to use the services of another telephone company.  The
Corporation is currently in negotiations with the Navy for compensation for
discontinuance of business or transfer of assets.  Global Telecommunications is
continuing to service the Miramar base in 1998 until the other telephone company
is in place.


                                          4
<PAGE>

See Management's Discussion and Analysis of Financial Condition and Results of
Operations for further information on the Miramar base closure.


PINK DOT

     Pink Dot, Inc. ("Pink Dot") provides home delivery service of grocery,
delicatessen, bakery, salad bar, pasta bar, liquor, video and non-prescription
pharmacy items through company-owned stores.  Pink Dot accepts orders from
customers by telephone, fax, or the Internet and delivers the orders within 30
minutes.  Pink Dot charges a delivery fee in addition to the price of the goods
delivered.

     Pink Dot opened its first store in 1988 and its second store in 1995 in the
west Los Angeles area.  Following the opening of the second store, Pink Dot and
the Corporation entered into a Loan and Stock Purchase Agreement in November,
1995, which was amended in September, 1996.  Under the agreement, the
Corporation provided $3,000,000 in financing to Pink Dot to open additional
stores in the Los Angeles area and to establish infrastructure necessary for the
growth of Pink Dot.  The financing consisted of loans of $2,500,000 and an
investment of $500,000 in common stock representing 40% of the issued and
outstanding shares of Pink Dot.  In July 1997, the Corporation committed to loan
an additional $1 million to Pink Dot, of which $415,000 had been advanced at
December 31, 1997.  The consolidated financial statements include this
investment on the equity method.

     The Corporation recorded a loss of $686,000 in 1997 in connection with its
40% equity investment in Pink Dot.  As this loss exceeded the carrying amount of
the Corporation's investment account and goodwill related to Pink Dot, the
carrying amount of the loans receivable from Pink Dot was reduced by $391,000.

     On February 26, 1998, the Corporation sold its 40% investment in Pink Dot
to the owner of the other 60% of the common stock of Pink Dot for a purchase
price of $6,000,000.  The purchase price is evidenced by the buyer's promissory
note in the principal amount of $6,000,000 that is due and payable on May 27,
1998 together with accrued interest.  The note is secured by a pledge of 100% of
the issued and outstanding stock of Pink Dot.

     The sale of the Corporation's investment in Pink Dot was pursuant to an
Option and Stock Purchase Agreement dated November 10, 1997.  The agreement gave
the Corporation the right to purchase the remaining common stock of Pink Dot
prior to March 10, 1998 for a purchase price of $7,000,000, and further provided
that, in the event that the Corporation elected not to purchase the remaining
common stock of Pink Dot, the Corporation would be obligated to sell and the
majority owner of Pink Dot would be obligated to purchase the Corporation's
interest in Pink Dot for $6,000,000.

     In connection with the sale of the Corporation's investment in Pink Dot,
the loans outstanding to Pink Dot in the principal amounts of $2,500,000 and
$415,000, plus accrued interest, have been replaced by two new promissory notes,
in the amounts of $2,802,640, and $436,193, respectively.  Both notes provide
for the payment of monthly interest commencing 30 days after February 26, 1998
and are due in their entirety in March 2000.  Both of the replacement notes are
secured by all of the tangible and intangible assets of Pink Dot.


                                          5
<PAGE>

LOANS

     The Corporation originates and, from time to time, purchases loans that are
secured by real estate, personal property or other collateral.  In connection
with each loan proposal, the Corporation considers the value and quality of the
real estate or other collateral available to secure the loan compared to the
loan amount requested, the proposed interest rate and repayment terms and the
quality of the borrower.  The Corporation holds the loans it originates or
purchases in its portfolio to maturity or earlier payoff.

     At December 31, 1997, the Corporation's loans outstanding consisted of
loans secured by automobile leases in the amount of $132,000, net of the
discount at which the loans were purchased, loans secured by trust deeds or
mortgages in the amount of $1,543,000 including loan fees, loans secured by real
estate and other collateral in the principal amount of $5,306,000, and an
unsecured loan in the amount of $100,000.  In addition, during 1997, the
Corporation originated a loan secured by real estate in the amount of $2,142,000
and two unsecured loans which totalled $70,000, all of which were repaid prior
to December 31, 1997.

     The loans secured by automobile leases were purchased in 1995 for a
purchase price of $3,551,000 net of a discount of $742,000.  The remaining
average maturity of these loans was approximately four months at December 31,
1997. The loans secured by trust deeds or mortgages outstanding at December 31,
1997, include notes of $1,050,000 and $520,000 that originated in 1996 and that
were originally due in 1998, but that were in default as of December 31, 1997.
The Corporation commenced foreclosure proceedings in October 1997 on the loan in
the principal amount of $1,050,000, and commenced foreclosure proceedings on the
loan in the principal amount of $520,000 in February of 1998.  See "Legal
Proceedings" for further information concerning foreclosure proceedings for the
loan of $1,050,000.

     The loans secured by other collateral as of December 31, 1997, include a
$1,900,000 note due in July 1999, bearing interest at 15% per annum which is
secured in part by real estate, and a note with a remaining principal balance of
$132,000 as of December 31, 1997 that was paid off in January 1998.  As of
December 31, 1997, there were also two loans secured by other collateral due
from Pink Dot.  One of these loans was in the principal amount of $2,500,000
with a variable rate of interest equal to the lesser of Bank of America's "prime
rate" or 10%.  The other loan was in the principal amount of $415,000 with an
interest rate of 8%. See "Pink Dot" above, for further details on the Pink Dot
loans.

     A short-term loan secured by a second trust deed in the amount of $225,000
was made in June 1997 but went into default in August 1997.  The loan was
foreclosed in December 1997 and, as a result, the Corporation became the owner
of the collateral, a single-family residence located in Newport Beach,
California.  The residence was subject to a first mortgage in the amount of
$655,000, which the Corporation paid off in January 1998.  It is the
Corporation's intention to sell this property during 1998.


CONVERTIBLE LOANS

     During 1997, the Corporation executed two convertible loan agreements.  The
first agreement is with Touch Controls, Inc., ("Touch Controls"), and provides
for a secured


                                          6
<PAGE>

convertible loan of up to $800,000, that is convertible into a 50% ownership
interest in Touch Controls.  The promissory note bears interest at a variable
rate of interest equal to the "prime rate" of Wells Fargo Bank, compounded
monthly, is due on September 1, 1999, and is secured by certain personal
property of Touch Controls. Touch Controls is using the loan proceeds to expand
its sales and marketing activities, finance accounts receivable and for product
refinement.  As of December 31, 1997, there were initial advances of $300,000
made in connection with the secured convertible promissory note; and at February
28, 1998 advances totalled $400,000.  The loan is convertible at any time prior
to maturity.  If the entire $800,000 has not yet been advanced at the time of
the conversion, the Corporation is required to advance the remaining amount of
the commitment in order to convert.

     Touch Controls, headquartered in Oceanside, California, is a privately-held
company that specializes in the design, development and manufacture of enhanced
infrared touch displays and workstations for industrial and public access
environments.  Touch Controls' products provide a simple and intuitive
man/machine interface with the customers' personal computer and/or operating
system in a wide range of industries and applications.  Touch Controls'
customers are end users, original equipment manufacturers and a select number of
systems integrators.

     The second convertible loan was made to Physician Advantage LLC ("Physician
Advantage") and provides for a secured convertible loan of up to $2,000,000 of
which $270,000 is convertible into a 55% ownership interest in Physician
Advantage.  The loan bears interest at a variable rate equal to the "prime rate"
plus one percent per annum, compounded monthly.  The principal balance and all
unpaid accrued interest are due in 24 equal monthly installments beginning on
November 20, 2000. Advances on the loan are conditioned on Physician Advantage's
ability to maintain certain numbers of physician-customers and certain levels of
net income before taxes. As of December 31, 1997, the Corporation had advanced
$450,000.  At February 28, 1998, advances to Physician Advantage totalled
$550,000.

     Physician Advantage, located in Encino California, was formed in November
1997, to carry on the business of providing group purchasing services for
physicians started in September 1996 by Access Managed Care, Inc., now a wholly
owned subsidiary of Physician Advantage.  Physician Advantage has an exclusive,
five year contract with a major national hospital operator ("Hospital
Operator"), pursuant to which the Hospital Operator will identify for Physician
Advantage the Hospital Operator's staff physicians and Physician Advantage will
solicit them to purchase medical supplies, office supplies and other products
and services.  The Hospital Operator has arranged for Physician Advantage to use
the Hospital Operator's vendors of medical supplies and office supplies and
offer those products to all physicians who purchase through Physician Advantage
at the same discounts the Hospital Operator enjoys with those suppliers, which
are not otherwise available to physicians.  Physician Advantage also has
contracts with other physician affinity groups, such as preferred provider
organizations and health maintenance organizations to offer group purchasing
services to their member-physicians.  Physician Advantage is in the early stages
of operations.  It is in the process of enrolling physicians to use its group
purchasing services and has advised the Corporation that approximately 10,000
physicians were enrolled at February 28, 1998.  Physician Advantage will not
maintain inventories or handle billing or collections, but will monitor
transactions between the physicians and the vendors and will be paid a rebate
related to the volume of business that is done.  Because of the early stage of
Physician Advantage's operations, its revenues through February 28, 1998 have
been minimal.


                                          7
<PAGE>

SECURITIES AVAILABLE-FOR-SALE

     The Corporation invests its assets not employed in its operations in
securities available-for-sale.  These securities consist principally of U.S.
Government securities, but also include investments in common and preferred
stocks, warrants, and convertible debentures.  The Corporation does not actively
engage in investing in equity securities, but from time to time makes
investments as opportunities arise which the Corporation believes are consistent
with its operations.  Certain of the equity securities owned by the Corporation
were received by it as additional compensation for loans extended by the
Corporation.

INVESTMENTS IN LIMITED PARTNERSHIPS THAT INVEST IN SECURITIES

     The Corporation has invested in limited partnerships that invest in
securities. Each of the partnerships seeks to achieve returns through
investments in equity and debt securities following identified strategies.  The
Corporation invests in limited partnerships based on their past performance, the
past performance of their general partners, and diversification of identified
strategies.

EMPLOYEES

     As of December 31, 1997, the Corporation had 27 salaried employees
(including nine Global Telecommunications employees and 14 Westland Associates
employees).  Two of the Corporation's employees are executive officers.

ITEM 2.  PROPERTIES

     The executive office of the Corporation is located at 9665 Wilshire
Boulevard, Suite M-10, Beverly Hills, California 90212, telephone (310)
278-1930.  The Corporation's executive office is leased for a five year term
ending in October, 2002.  As of December 31, 1997, the Corporation's
wholly-owned subsidiary, Westland Associates, owned and occupied an 11,000
square-foot facility in Santa Fe Springs, California used for office and
warehouse space.  This facility was subsequently sold on March 11, 1998.
Westland Associates entered into a lease agreement for a five year term
commencing in April 1998 for a facility in Anahiem, California which will serve
as its new headquarters.

ITEM 3.  LEGAL PROCEEDINGS

     During 1997, the Corporation received $950,000 in net proceeds from a
settlement of claims asserted on behalf of the Corporation and similarly
situated parties, in a class action against Drexel Burnham Lambert Inc.
("Drexel"), Michael Milken ("Milken") and other related parties in an action
filed in the Los Angeles County Superior Court in 1989 ("Drexel Litigation").
The action involved claims of various violations of federal and state securities
laws by Drexel, Milken and the other parties.  The $950,000 represents a
recovery of approximately $1.45 million, less court directed attorneys' fees of
approximately $500,000.  From 1993 through 1996, the Corporation received
approximately $22.3 million in net proceeds, which represents a recovery of
approximately $34.4 million, less court directed attorneys' fees of
approximately $12.1 million.


                                          8
<PAGE>

     A wholly-owned subsidiary of the Corporation is a party to litigation
entitled Bures v. Silver Ridge Apartments, Ltd. filed in March, 1993 pending in
the Eighth Judicial District Court of Clark County, Nevada.  The case relates to
an apartment house project which was sold in October, 1993 by the Corporation's
wholly-owned subsidiary, as successor general partner.  The prior general
partner had conveyed a security interest in its partnership interest to the
Corporation's wholly-owned subsidiary.  After a default on the secured
obligation, the Corporation's wholly-owned subsidiary exercised its rights as a
secured creditor, and, as a result, the partnership interest was acquired by the
Corporation's wholly-owned subsidiary, which became the successor general
partner. The plaintiff, who is a creditor of  the prior general partner, alleges
that he acquired a 69% interest in the partnership prior to the sale of the
project as a result of judgment enforcement proceedings against the prior
general partner.  The Corporation believes that the judicial enforcement
proceedings brought by the plaintiff were improper and had no legal effect on
the ownership of the general partnership interest and that the security interest
held by the Corporation's wholly-owned subsidiary was senior in priority to the
interest claimed by the plaintiff.  The plaintiff is seeking an order declaring
that he is the general partner of the partnership and entitled to possession of
its property, a judgment quieting title to general and limited partnership
interests representing a 69% interest in the partnership and other relief
determined by the court to be appropriate.  No trial date has been set for the
matter in State District Court but such a date may be set at any time prior to
May, 1998.  The Corporation believes that the claims asserted are without merit
and intends to vigorously contest the case.

     In November 1996, the Corporation made a loan of $1,050,000 ("Defaulted
Note") to a borrower and took as security for the loan a mortgage on certain
real property ("Default Collateral"), title to which was held by a trust of
which the borrower was trustee.  On October 9, 1997, the Corporation commenced
foreclosure proceedings on the Default Collateral, in an action entitled
Westminster Capital, Inc. v. Susan Wagner Trenham, individually, and Susan
Wagner Trenham, as Trustee, in the Court of Common Pleas, County of Berkeley,
South Carolina, seeking to sell the Default Collateral and apply the proceeds of
sale to pay the principal and unpaid interest on the Defaulted Note.  On January
2, 1998, certain beneficiaries of the trust that holds title to the Default
Collateral filed a Motion to Intervene seeking to prevent the foreclosure,
alleging that the Corporation acted improperly in lending money to the borrower,
individually, and accepting as security real property owned by the trust of
which the borrower was the trustee.  The Motion to Intervene is pending before
the court.  If the court allows the beneficiaries to intervene, there will be a
full hearing of the beneficiaries' allegations.

     In a separate action filed January 2, 1998 entitled Joseph Read, Paul Read,
Sephra Read and Leah Read Barkowitz, as beneficiaries of the Read Family Trust
v. Susan Wagner Trenham, individually, and Susan Wagner Trenham, as trustee of
the Read Family Trust, and Westminster Capital, Inc., filed in the Court of
Common Pleas, County of Berkeley, South Carolina, the beneficiaries assert
causes of action similar to those set forth in the Motion to Intervene in the
foreclosure action initiated by the Corporation.  The beneficiaries of the trust
allege that the borrower, as trustee, did not have authority to enter into the
trust and that the Corporation acted improperly in allowing the loan funds to be
advanced to the trustee personally, as the borrower. On January 13, 1998, the
beneficiaries filed a motion to consolidate the foreclosure proceedings with the
case initiated by the beneficiaries.  That motion is pending.


                                          9
<PAGE>

     In accepting the Default Collateral as security for the Defaulted Note, the
Corporation relied on the trust documents granting the borrower absolute
authority to mortgage the Default Collateral and obtained title insurance for
the mortgage it received.  The Corporation believes that it acted properly in
dispersing the loan proceeds to the borrower.  The Corporation intends to pursue
vigorously its right to the Default Collateral.  The title insurance company
which insured the mortgage has appeared in the pending actions to defend on the
issue of the trustee's lack of authority.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY
          HOLDERS
NONE


EXECUTIVE OFFICERS OF REGISTRANT

     Pursuant to General Instruction G(3) of Form 10-K, the following
information is included as an unnumbered item in Part I of the Report in lieu of
being included in the Proxy Statement for the Annual Meeting of Stockholders to
be held on June 4, 1998.

     The following table sets forth certain information with respect to the
executive officers of the Corporation:

<TABLE>
<CAPTION>
   Name                            Age       Position
   ----                            ---       --------
    <S>                            <C>       <C>
   William Belzberg                65        Chairman of the Board
                                             Chief Executive Officer

   Keenan Behrle                   55        Executive Vice President
                                             Chief Financial Officer
</TABLE>

     The term of office of the officers may be terminated at any time by the
Board of Directors.

     Mr. William Belzberg has served as Chairman of the Board of Directors of
the Corporation since 1977.  Mr. Belzberg was also President and Chief Executive
Officer of the Corporation in 1987 and 1988 and has served as Chief Executive
Officer since September, 1990.

     Mr. Keenan Behrle became Executive Vice President and Chief Financial
Officer of the Corporation in February, 1997.  From November, 1993 to February,
1997, Mr. Behrle was engaged in real estate development activities for his own
account.  From 1991 to November, 1993, Mr. Behrle was President and Chief
Executive Officer of Metropolitan Development, Inc., a real estate development
company located in Los Angeles, California.  Mr. Behrle has been a director of
the Corporation since 1985.


                                          10
<PAGE>

                                       PART II


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

     The Corporation's common stock is traded on the Pacific Stock Exchange
under the symbol "WI." The following table sets forth the range of high and low
sales prices for the common stock of the Corporation for the periods indicated,
as reported by the Pacific Stock Exchange.

<TABLE>
<CAPTION>
                                              High            Low
                                              ----            ---
       1997
       ----
       <S>                              <C>             <C>
       First Quarter                     $   2 5/8       $  2 1/8
       Second Quarter                       2 5/16        1 13/16
       Third Quarter                         2 3/8          2 1/4
       Fourth Quarter                        2 1/2          2 1/4

       1996
       ----
       First Quarter                     $  2 3/16       $  1 5/8
       Second Quarter                       2 1/16          1 7/8
       Third Quarter                        2 1/16        1 15/16
       Fourth Quarter                            2          1 3/4
</TABLE>

     The Corporation had approximately 995 holders of record of its common stock
as of March 9, 1998.

     The Corporation has not paid cash dividends since 1989 and intends to
retain all excess cash resulting from its business operations, if any, for
future acquisitions and investments.


                                          11
<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA


                               SELECTED FINANCIAL DATA
                     (dollars in thousands except per share data)

<TABLE>
<CAPTION>

                                                        1997           1996           1995           1994           1993
                                                        ----           ----           ----           ----           ----
<S>                                                  <C>            <C>            <C>            <C>            <C>
FINANCIAL DATA:
Total assets                                         $34,870        $33,212        $28,199        $29,473        $27,311
Cash and cash
   equivalents                                         1,738          2,310          1,715            845         23,257
Loans receivable, net                                  7,081          4,636          2,513            716          1,410
Securities available-
   for-sale                                           18,405         22,502         21,747         25,402              -
Telephone systems, net                                   834          1,080          1,333          1,579            546
Total liabilities                                      8,902          7,745          5,099          7,990          4,015
Shareholders' equity                                  25,968         25,467         23,100         21,483         23,296
                                                 -------------------------------------------------------------------------
                                                 -------------------------------------------------------------------------

EARNINGS DATA:
Total revenues                                       $ 7,996        $ 5,234        $ 4,596        $ 6,706       $ 17,250
Interest income                                        2,026          2,228          1,467          1,139            219
Loan fees                                                639            751            320             75            -
Lawsuit settlement, net                                  950            813          1,209          3,528         16,819
Telephone system revenue                               1,444          1,528          1,522          1,102             14
Gain (loss) on sale
   of securities                                         332             (3)            15            -              -
Gain on sale of loans                                    -              -              -              -              150
Loss from equity investment                             (686)          (169)           -              -              -
Refund of litigation costs                               -              -              -              757            -
Income (loss) from
   continuing operations                               1,371          1,571          1,308         (1,608)        12,844
(Loss) from discontinued
   operations                                            -              -              -              -             (410)
Net income (loss)                                      1,371          1,571          1,308         (1,608)        12,434
                                                 -------------------------------------------------------------------------
                                                 -------------------------------------------------------------------------

PER SHARE DATA:
Net income (loss) per share
  from continuing operations                           $ .17          $ .20          $ .17          $(.21)         $1.64
Net (loss) per share from
  discontinued operations                                -              -              -              -            $(.05)
Net income (loss) per
  share                                                $ .17          $ .20          $ .17          $(.21)         $1.59
Book value per share
  (end of period)                                      $3.31          $3.25          $2.96          $2.75          $2.98
Weighted average diluted
  shares outstanding                                   7,866          7,822          7,840          7,815          7,815
Cash dividends per share                                 -              -              -              -              -
                                                 -------------------------------------------------------------------------
                                                 -------------------------------------------------------------------------
</TABLE>

                                          12
<PAGE>

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


     At December 31, 1997, the Corporation's principal assets consisted of a
100% ownership interest in the capital stock of Westland Associates, a company
which performs group purchasing of goods and services for new car dealers in
California, Arizona, and Nevada (See "Business - Westland Associates"); a
majority ownership interest in Global Telecommunications, a limited partnership
engaged in constructing and operating local and long distance telephone services
for military residential quarters (See "Business-Telephone Company"); a
substantial ownership interest in a home delivery shopping company (See
"Business-Pink Dot"); loans, the majority of which are secured by real estate,
personal property or other collateral; securities available-for-sale; limited
partnerships that invest in securities; and cash and cash equivalents.

     The Corporation's primary sources of income during the year ended
December 31, 1997 included interest earned on its loan portfolio, interest on
securities available-for-sale, unrealized gains on limited partnerships that
invest in securities, loan fees, gains on sales of securities, income from
Global Telecommunications, and income from lawsuit settlements.  The
Corporation's wholly-owned subsidiary, Westland Associates, generated a loss
of $54,000 from the date of its acquisition by the Corporation on November
12, 1997 through December 31, 1997, and the Corporation's equity investment
in Pink Dot generated a loss of $686,000 during the year ended December 31,
1997.

RESULTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

     Revenues for the year ended December 31, 1997 were $7,996,000 as
compared to $5,234,000 for the year ended December 31, 1996.  The increase in
revenues resulted primarily from the Corporation's acquisition of Westland
Associates on November 12, 1997, which generated revenues of $2,711,000
during the period from the date of the acquisition through December 31, 1997.
 In addition, there were gains on sales of securities of $332,000 in the
current year versus a loss of $3,000 in the prior year; there were unrealized
gains on limited partnerships that invest in securities of $529,000 in the
current year with no such gains recorded in the prior year; and there was an
increase of $137,000 in lawsuit settlement recoveries in the current year.
Partially offsetting these favorable impacts on revenues were a $517,000
greater loss recorded on the Corporation's equity investment in Pink Dot in
the current year, a $112,000 decrease in loan fees, a $112,000 decrease in
interest on securities available-for-sale and money market funds, a $90,000
decrease in interest on loans, an $84,000 decrease in telephone system
revenue, and a decrease of $35,000 in other income.

     The revenues of $2,711,000 generated by Westland Associates, reported under
the caption of "Sales to auto dealers" in the consolidated financial statements,
were offset by direct costs of $2,539,000, reported under the caption of "Cost
of sales to auto dealers".  As a result, Westland Associates generated gross
profit before operating expenses of $172,000.


                                          13
<PAGE>

     The $332,000 gain on sale of securities in the current year resulted from a
gain of $186,000 on the sale of a convertible debenture, gains of $146,000 on
sales of stock, and gains of $100,000 from the sales of certain of the
Corporation's U.S. government and agency securities.  These gains were partially
offset by the recording of a permanent impairment write-down of $100,000 on an
equity security.  In the prior year, gains of $147,000 on the sale of various
securities were more than offset by the recording of a permanent impairment
write-down of $150,000 on an equity security.

     During 1997, the Corporation recorded unrealized gains on limited
partnerships that invest in securities of $529,000 with no such gains recorded
in 1996.  These limited partnerships invest in equity and debt securities and
the Corporation records gains and losses on these investments based upon the
equity method of accounting.

     The increase of $137,000 in lawsuit settlement recoveries reflects receipt
of $950,000, net of court related legal costs, from the Drexel Litigation during
the year ended December 31, 1997, as compared to $813,000, net of court related
legal costs, received during the year ended December 31, 1996.  While additional
settlement payments may be received in the Drexel Litigation over time, the
timing of payments is not determinable and amounts that might be received may
not be as great as amounts previously received.

     The Corporation recorded a loss of $686,000 in 1997 in connection with its
40% equity investment in Pink Dot as compared to a loss of $169,000 in 1996.  As
this loss exceeded the carrying amount of the Corporation's investment account
and goodwill related to Pink Dot, the carrying amount of the loans receivable
from Pink Dot was reduced by $391,000.  In February 1998, the Corporation sold
its 40% interest in Pink Dot to the majority owner of Pink Dot and received a
secured promissory note due May 27, 1998 in the principal amount of $6,000,000
as payment.   See "Business - Pink Dot" for further details on the sale of Pink
Dot.

     Loan fees of $639,000 in the current year included a fee of $350,000
received in connection with the early payoff of a loan in October 1997 and a fee
of $187,000 received in connection with a financing accommodation that was
repaid in January 1997.  Loan fees of $751,000 in the prior year included fees
of approximately $700,000 that actually related to fees due in 1995 and 1994 but
that were not recognized as income until 1996 because of severe delinquency
problems and doubt as to ultimate collectibility.

     Interest on loans decreased from $1,184,000 in 1996 to $1,094,000 in 1997.
Although the balance of loans receivable increased significantly from December
31, 1996 to December 31, 1997, the amount of interest earned by the Corporation
during 1996 was higher than in 1997 primarily because the effective interest
rates on certain loans outstanding in 1996 were significantly higher than
interest rates on loans outstanding during 1997.  In addition, a significant
portion of the loans that were outstanding as of December 31, 1997 were funded
during the latter part of 1997.

     Interest on securities available-for-sale and money market funds decreased
from $1,044,000 during 1996 to $932,000 during 1997.  Although the amortized
cost of U.S. government and agency securities held by the Corporation increased
from $16,723,000 as of December 31, 1996 to $17,387,000 as of December 31, 1997,
the average monthly balance of such securities held decreased from $19,380,000
in 1996 to $16,084,000 in 1997.


                                          14
<PAGE>

     The $84,000 decline in telephone system revenues resulted primarily from a
temporary loss of some of the military personnel while residential quarters were
being rebuilt by the Navy at two of the bases served by Global
Telecommunications.  Future revenues and income realized by the Corporation in
connection with its 75% interest in Global Telecommunications may be reduced as
Global Telecommunications has received notice of cancellation from the Navy
regarding its closure of the Miramar base.  Although the U.S. Marines will be
occupying the Miramar base, that service branch has decided to use the services
of another long distance telephone carrier.  The Corporation is currently in
negotiations with the Navy for compensation for discontinuance of business or
transfer of assets.  Global Telecommunications will continue to service the
Miramar base in 1998 until the other telephone company is in place.  Revenues
for the Miramar base were $478,000 and $618,000 for the years ended December 31,
1997 and 1996, respectively.  Income before income taxes for the Miramar base
was $58,000 and $147,000 for the years ended December 31, 1997 and 1996,
respectively.

     Although Global Telecommunication's revenues declined from 1996 to 1997,
its expenses remained relatively unchanged due to the fact that the most
significant decline in revenues occurred at a base where long distance royalties
are not incurred.

     General and administrative expenses increased  $366,000 from $1,424,000 in
1996 to $1,790,000 in 1997. The major portion of this increase, or $225,000,
resulted from the Corporation's acquisition of Westland Associates.  The
remaining $141,000 of the increase resulted from the Corporation's increased
operating activities and the corresponding need to increase its overhead.

     The Corporation's effective tax rate increased from 34% in 1996 to 40% in
1997.  The increase in the effective tax rate was due to increased taxable
interest income in 1997 as compared to 1996 because the Corporation held
tax-free state and municipal securities for a portion of 1996 and did not during
any of 1997.

     Net income for the year ended December 31, 1997 was $1,371,000 as compared
to $1,571,000 for the year ended December 31, 1996.  Both basic and diluted
earnings per share were $0.17 for the year ended December 31, 1997 as compared
to $0.20 for the year ended December 31, 1996.  The lower earnings per share in
1997 reflects the lower net income in 1997, as well as higher weighted average
shares outstanding in 1997.

FOR THE YEARS  ENDED DECEMBER 31, 1996 AND 1995

     Revenues for the year ended December 31, 1996 were $5,234,000 as compared
to $4,596,000 for the year ended December 31, 1995.  This increase resulted
primarily from an increase of $566,000 in interest on loans, a $431,000 increase
in loan fees, and a $195,000 increase in interest on securities
available-for-sale and money market funds.  These increases in revenues were
partially offset by a decrease of $396,000 in the amount received from the
Drexel Litigation, and a loss of $169,000 in 1996 from the Corporation's equity
investment in Pink Dot, with no such loss occurring in 1995 as the Corporation's
investment in Pink Dot occurred in 1996.


                                          15
<PAGE>

     Interest on loans increased in 1996 as compared to 1995 because of a
significant increase in average loans outstanding.  Loan fees increased
primarily as a result of recognizing $700,000 of previously unrecognized loan
fees in 1996.  Although these fees were due in 1995 and 1994, they were not
recognized as income in those years because of severe delinquency problems and
doubt as to ultimate collectibility.  Interest on securities available-for-sale
and money market funds increased in 1996 as the Corporation sold its state and
municipal securities in April, 1996 and invested the funds in higher yielding
(pre-tax) U.S. government and agency securities.

     In 1996, the Corporation received $813,000, net of court directed legal
costs, from the Drexel Litigation as compared to $1,209,000, net of court
directed legal costs, in 1995.  The loss of $169,000 in 1996 from the
Corporation's equity investment in Pink Dot resulted from the Corporation's
share of Pink Dot's loss from the date of its investment.  The loss was
attributable to the opening of additional stores in 1996 which had not yet
reached a break-even point.

     General and administrative expenses decreased from $1,460,000 in 1995 to
$1,424,000 in 1996. All expense categories included in general and
administrative expenses were comparable from year to year.

     The Corporation's effective tax rate increased from 24% in 1995 to 34% in
1996.  The higher effective tax rate in 1996 was due to a lower proportion of
tax free state and municipal securities outstanding in 1996 as compared to 1995.

     Net income for the year ended December 31, 1996 was $1,571,000 as compared
to $1,308,000 for the year ended December 31, 1995.  Both basic and diluted
earnings per share were $0.20 for the year ended December 31, 1996 as compared
to $0.17 for the year ended December 31, 1995.

LOANS RECEIVABLE AND PAST DUE LOANS

     The Corporation's loans receivable balance at December 31, 1997 was
$7,081,000 as compared to $4,636,000 at December 31, 1996.  The increase in
loans receivable outstanding was due primarily to the funding during 1997 of
loan commitments that were in existence as of December 31, 1996 and to the
origination of new commitments and loans during 1997.  Loan fundings during 1997
were $8,302,000, while principal collected during the year was $5,519,000.  Loan
originations occur as opportunities arise which management of the Corporation
believes to be attractive after considering the proposed terms, including yield,
duration, collateral coverage and qualifications of the borrower.  For further
information on loan collateral, see Note 5 of Notes to Consolidated Financial
Statements.

     At December 31, 1997, certain loans were in default as to the payment of
principal and interest.  Once a loan goes into default, the Corporation
continues to accrue interest on the loan but records a loss reserve for any of
these additional interest accruals.  When necessary, the Corporation also
records reserves for impaired principal, as well as previously accrued interest.

     The Corporation commenced foreclosure proceedings in October 1997 on a loan
secured by real estate in the amount $1,050,000 plus accrued interest of $66,000
as of December 31, 1997.  Management believes that the real estate collateral
will be sufficient to cover the principal and interest owing on this loan, and
as a result, should not incur any losses in excess of the


                                          16
<PAGE>

interest reserve recorded on this loan.  See "Legal Proceedings" for additional
information on the foreclosure of this loan.

     A second loan in the amount of $520,000 went into default in October 1997
but was brought current in January 1998.  This same loan again went into default
in February 1998.   Foreclosure proceedings have been initiated and management
believes that the real estate collateral held by the Corporation should be
sufficient to cover the principal and any interest owing on the loan.

     A third loan in the amount of $225,000 plus accrued interest of $12,000
went into default in August 1997.  This loan was foreclosed on December 15, 1997
and the Corporation became the owner of the collateral, a single-family
residence subject to a first mortgage in the amount of $655,000.  The
Corporation paid off the first mortgage in January 1998.  The debtor was asked
to vacate the residence, but refused to do so.  As a result, the Corporation has
initiated an unlawful detainer action.  When full possession of the residence is
obtained by the Corporation, the residence will be listed for sale.  In addition
to reserves recorded in connection with interest accrued subsequent to the
default on this loan, the Corporation had recorded additional reserves which
resulted in a net amount of principal and interest owing at the time of the
foreclosure of $178,000.  Management does not anticipate incurring any further
losses in connection with this transaction.

     The Corporation had loans receivable from Pink Dot as of December 31, 1997
in the principal amounts of $2,500,000 and $415,000.  Due to the fact that the
Corporation's share of Pink Dot's loss for 1997 exceeded the Corporation's
investment account and goodwill related to Pink Dot, the carrying amount of
these loans was reduced by $391,000.

LIQUIDITY

     The Corporation's cash and cash equivalents decreased by $572,000 during
the year ended December 31, 1997.  The Corporation's sources of cash during 1997
were $1,851,000 from operating activities and $2,968,000 from the net change in
its investment security portfolio in that sales of securities of $34,759,000
exceeded purchases of securities of $31,791,000.  The Corporation's primary uses
of cash during 1997 were $2,783,000 in connection with its loans receivable, in
that loan originations of $8,302,000 were higher than principal collected on
loans of $5,519,000; a $1,200,000 payment of a liability to a broker for
securities purchased that was outstanding as of December 31, 1996; and
$1,269,000 for the purchase of Westland Associates.  In addition to having
$1,738,000 of cash and cash equivalents on hand as of December 31, 1997, the
Corporation also held U.S. government and agency securities with a market value
of $17,407,000.

     In April 1997, the Corporation's line of credit in the amount of
$10,000,000 expired and management elected not to renew it because the
Corporation's liquidity is strong without the line, no part of the line had been
drawn upon during its entire term, and the lender required certain fees to renew
the line.  Management believes financing can be obtained on suitable terms if
additional liquidity is needed.


                                          17
<PAGE>

     The Corporation continues to seek investments in or acquisitions of other
business.  No assurances can be given that any further acquisitions or
investments will be made or, if made, that they will be profitable.

     In the opinion of management, the Corporation has sufficient cash and
liquid assets to fund its growth and operating plans for the foreseeable future.

INFLATION

     The Corporation cannot accurately determine the precise effects of
inflation.  However, it does not believe that inflation has had a material
impact on its results of operations

NEW ACCOUNTING STANDARDS

     In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130 ("SFAS No. 130"), REPORTING COMPREHENSIVE
INCOME.  SFAS No. 130 is effective for fiscal years beginning after December 15,
1997.  This Statement established standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements.  Comprehensive income is defined as "the change in equity
[net assets] of a business enterprise during a period from transactions and
other events and circumstances from non-owner sources.  It includes all changes
in equity during a period except those resulting from investments by owners and
distributions to owners".  The Corporation will adopt the reporting requirements
of SFAS No. 130 during 1998 and the impact on the Corporation of the adoption of
this new accounting standard is considered immaterial to the Corporation's
financial statements.

     Also in June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 131 ("SFAS No. 131"),
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION.  SFAS No.
131 is also effective for fiscal years beginning after December 15, 1997.  This
Statement requires that public business enterprises report certain information
about operating segments in complete sets of financial statements of the
enterprise and in condensed financial statements of interim periods to
shareholders.  It also requires that public business enterprises report certain
information about their products and services, the geographic areas in which
they operate, and their major customers.  The Corporation will adopt the
reporting requirements of SFAS No. 131 in 1998 and the impact of the adoption of
this new accounting standard is the potential redefinition of the Corporation's
segments.

YEAR 2000

     The inability of computers, software and other equipment utilizing
microprocessors to recognize and process data fields containing a 2 digit year
is commonly referred to as the Year 2000 Compliance issue.  As the Year 2000
approaches, some systems may be unable to accurately process certain
information.

     The Corporation does not anticipate any significant costs associated with
Year 2000 software requirements for the Corporation or the companies for
which the Coporation holds a significant investment.


                                          18
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Westminster Capital, Inc.
Beverly Hills, California


We have audited the accompanying consolidated statement of financial condition
of Westminster Capital, Inc. and its subsidiaries (the "Corporation") as of
December 31, 1997 and the related consolidated statements of operations,
shareholders' equity, and cash flows for the year then ended.  These financial
statements are the responsibility of the Corporation's management.  Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of the Corporation for the years ended
December 31, 1996 and December 31, 1995 were audited by other auditors whose
report, dated March 1, 1997, expressed an unqualified opinion on those
statements.

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 amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Westminster Capital, Inc. and its
subsidiaries as of December 31, 1997 and the results of their operations and
their cash flows for the year then ended in conformity with generally accepted
accounting principles.



/s/ Deloitte & Touche LLP


Los Angeles, California
March 11, 1998


                                          19
<PAGE>

INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Shareholders
Westminster Capital, Inc.
Beverly Hills, California:

We have audited the accompanying consolidated statements of financial condition
of Westminster Capital, Inc. and subsidiaries (the "Corporation") as of December
31, 1996, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the years in the two-year period ended
December 31, 1996.  These consolidated financial statements are the
responsibility of the Corporation'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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Westminster Capital,
Inc. and subsidiaries as of December 31, 1996, and the results of their
operations and their cash flows for each of the years in the two-year period
ended December 31, 1996 in conformity with generally accepted accounting
principles.




/s/ KPMG Peat Marwick LLP

Los Angeles, California
March 1, 1997




                                          20
<PAGE>

WESTMINSTER CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>

 ASSETS                                                           1997                1996
---------------------------------------------------------------------------------------------
 <S>                                                       <C>                 <C>
 Cash and cash equivalents                                 $ 1,738,000         $ 2,310,000
 Securities available-for-sale, at fair value               18,405,000          22,502,000
 Investments in limited partnerships
   that invest in securities                                 2,314,000           1,660,000
 Loans receivable, net                                       7,081,000           4,636,000
 Accounts receivable                                         1,002,000             225,000
 Income tax refunds receivable                               1,954,000           1,954,000
   Less: allowance for doubtful receivable                  (1,954,000)         (1,954,000)
                                                     ----------------------------------------
 Income tax refunds receivable, net                              -                   -
 Accrued interest receivable                                   801,000             422,000
 Real estate acquired through foreclosure                      833,000               -
 Telephone systems, net                                        834,000           1,080,000
 Property and equipment, net                                   710,000              48,000
 Goodwill, net                                                 881,000             278,000
 Other assets                                                  271,000              51,000
                                                     ----------------------------------------
 TOTAL ASSETS                                              $34,870,000         $33,212,000
                                                     ----------------------------------------
                                                     ----------------------------------------

 LIABILITIES AND
 SHAREHOLDERS' EQUITY
---------------------------------------------------------------------------------------------

 LIABILITIES:

 Accounts payable                                          $   669,000         $    77,000
 Accrued expenses                                            1,915,000           1,029,000
 Mortgage payable                                              655,000               -
 Due to broker                                                   -               1,200,000
 Income taxes                                                5,366,000           5,085,000
 Minority interest in limited partnership                      297,000             354,000
                                                     ----------------------------------------
 TOTAL LIABILITIES                                           8,902,000           7,745,000
                                                     ----------------------------------------

 SHAREHOLDERS' EQUITY:

 Common stock, $1 par value: 30,000,000 shares
   authorized: 7,835,000 shares issued
   and outstanding in 1997 and 1996                          7,835,000           7,835,000
 Capital in excess of par value                             55,943,000          55,943,000
 Accumulated deficit                                       (37,823,000)        (39,194,000)
 Unrealized holding gains on securities
   available-for-sale, net of taxes                             13,000             883,000
                                                     ----------------------------------------
 TOTAL SHAREHOLDERS' EQUITY                                 25,968,000          25,467,000
                                                     ----------------------------------------
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                $34,870,000         $33,212,000
                                                     ----------------------------------------
                                                     ----------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.

                                       21
<PAGE>

WESTMINSTER CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE YEARS ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>

REVENUES:                                                    1997           1996           1995
---------                                                    ----           ----           ----
<S>                                                  <C>            <C>            <C>
Interest on loans                                    $  1,094,000   $  1,184,000   $    618,000
Loan fees                                                 639,000        751,000        320,000
Interest on securities available-
   for-sale and money market funds                        932,000      1,044,000        849,000
Unrealized gains on limited partner-
   ships that invest in securities                        529,000          -              -
Gain (loss) on sale of securities
   available-for-sale                                     332,000         (3,000)        15,000
Lawsuit settlement, net                                   950,000        813,000      1,209,000
Telephone system revenue                                1,444,000      1,528,000      1,522,000
Sales to auto dealers                                   2,711,000          -              -
Loss from equity investment                              (686,000)      (169,000)         -
Other income                                               51,000         86,000         63,000
                                                   -----------------------------------------------
Total Revenues                                          7,996,000      5,234,000      4,596,000
                                                   -----------------------------------------------
EXPENSES:
Telephone time charges                                    733,000        725,000        723,000
Cost of sales to auto dealers                           2,539,000          -              -
Other telephone system charges                            605,000        614,000        636,000
General and administrative                              1,790,000      1,424,000      1,460,000
                                                   -----------------------------------------------
Total Expenses                                          5,667,000      2,763,000      2,819,000
                                                   -----------------------------------------------
INCOME BEFORE INCOME
TAXES AND MINORITY INTEREST                             2,329,000      2,471,000      1,777,000

INCOME TAX PROVISION                                     (932,000)      (840,000)      (420,000)

MINORITY INTEREST IN INCOME
OF CONSOLIDATED PARTNERSHIP                               (26,000)       (60,000)       (49,000)
                                                   -----------------------------------------------

NET INCOME                                           $  1,371,000   $  1,571,000   $  1,308,000
                                                   -----------------------------------------------
                                                   -----------------------------------------------

Net Income Per Common Share:
  Basic                                                      $.17           $.20         $  .17
  Diluted                                                     .17            .20            .17
                                                   -----------------------------------------------
                                                   -----------------------------------------------

Weighted Average Shares Outstanding:
  Basic                                                 7,835,000      7,818,000      7,815,000
  Diluted                                               7,866,000      7,822,000      7,840,000
                                                   -----------------------------------------------
                                                   -----------------------------------------------
</TABLE>

   See accompanying notes to consolidated financial statements


                                       22
<PAGE>

 WESTMINSTER CAPITAL, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE THREE YEARS ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
                                                                                                  UNREALIZED HOLDING
                                                                                                   GAINS (LOSSES)
                                                                  CAPITAL IN                        ON SECURITIES
                                                    COMMON         EXCESS OF       ACCUMULATED    AVAILABLE-FOR-SALE,
                                                      STOCK       PAR VALUE         DEFICIT          NET OF TAXES
                                              -----------------------------------------------------------------------
<S>                                             <C>           <C>                <C>             <C>
BALANCE, JANUARY 1, 1995                        $  7,815,000  $  55,946,000     $ (42,073,000)        $  (205,000)
Net income                                             -              -             1,308,000               -
Change in unrealized holding gains on
   securities available-for-sale, net of taxes         -              -                 -                 309,000
                                              -----------------------------------------------------------------------
BALANCE, DECEMBER 31, 1995                         7,815,000     55,946,000       (40,765,000)            104,000

Net income                                             -              -             1,571,000               -
Change in unrealized holding gains
   on securities available-for-sale,
   net of taxes                                        -              -                 -                 779,000
Exercise of stock options                             20,000         (3,000)            -                   -
                                              -----------------------------------------------------------------------
BALANCE, DECEMBER 31, 1996                         7,835,000     55,943,000       (39,194,000)            883,000

Net income                                             -              -             1,371,000               -
Change in unrealized holding gains
   on securities available-for-sale,
   net of taxes                                        -              -                 -                (870,000)
                                              -----------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997                      $  7,835,000  $  55,943,000     $ (37,823,000)        $    13,000
                                              -----------------------------------------------------------------------
                                              -----------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.


                                        23
<PAGE>

WESTMINSTER CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>

                                                             1997           1996           1995
                                                             ----           ----           ----
<S>                                                   <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                            $ 1,371,000    $ 1,571,000    $ 1,308,000
Adjustments to reconcile net income to net
   cash provided by (used in) operating activities:
Provision for loan losses and doubtful receivables         92,000         50,000         30,000
Depreciation, amortization and accretion, net              33,000         40,000        264,000
(Gain) loss on sales of securities available
   for sale                                              (332,000)         3,000        (15,000)
Unrealized (gains) on limited partnerships that
   invest in securities                                  (529,000)         -              -
Loss from equity investment                               686,000        169,000          -
Change in assets and liabilities net of effects
   from purchase of Westland Associates:
Decrease (increase) in accounts receivable                159,000         46,000        (64,000)
(Increase) decrease in accrued interest receivable       (422,000)       100,000         89,000
Net change in income taxes                                835,000        840,000        456,000
(Increase) decrease in other assets                       (93,000)        (2,000)         2,000
Net change in accounts payable                           (197,000)      (104,000)       116,000
Net change in accrued expenses                            305,000        302,000     (3,640,000)
Net change in minority interest                           (57,000)      (111,000)       (30,000)
                                                     ---------------------------------------------
NET CASH PROVIDED BY (USED IN)
   OPERATING ACTIVITIES                                 1,851,000      2,904,000     (1,484,000)
                                                     ---------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of securities                               (31,791,000)   (43,321,000)   (15,999,000)
Proceeds from maturities of securities                      -          2,010,000      5,519,000
Proceeds from sales of securities                      34,759,000     41,659,000     14,456,000
Purchases of limited partnership interests               (125,000)    (1,660,000)         -
Loan originations and purchases                        (8,302,000)    (7,760,000)    (4,687,000)
Principal collected on loans receivable                 5,519,000      6,046,000      3,065,000
Net change in due to broker                            (1,200,000)     1,200,000          -
Proceeds from exercise of options                           -             17,000          -
Payment for purchase of Westland Associates            (1,269,000)         -              -
Purchase of equity investment                               -           (500,000)         -
Purchase of telephone systems and office
   equipment                                              (14,000)         -              -
                                                     ---------------------------------------------
NET CASH (USED IN) PROVIDED BY INVESTING
   ACTIVITIES                                          (2,423,000)    (2,309,000)     2,354,000
                                                     ---------------------------------------------
NET CHANGE IN CASH AND CASH
EQUIVALENTS                                              (572,000)       595,000        870,000
CASH AND CASH EQUIVALENTS, BEGINNING
   OF PERIOD                                            2,310,000      1,715,000        845,000
                                                     ---------------------------------------------
CASH AND CASH EQUIVALENTS, END OF
   PERIOD                                             $ 1,738,000    $ 2,310,000    $ 1,715,000
                                                     ---------------------------------------------
                                                     ---------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                          24
<PAGE>

WESTMINSTER CAPITAL, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1997
(See Independent Auditors' Report)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

The consolidated financial statements of Westminster Capital, Inc. (the
"Corporation") include the accounts of the Corporation and its wholly owned
subsidiaries, Westland Associates, Inc., Westminster Finance, Inc., FarWest
Financial Insurance Agency, Silver Ridge Apartments, G.P., Inc. and Silver Ridge
Apartments, L.P., Inc.  Both Silver Ridge Apartments G.P., Inc. and Silver Ridge
Apartments L.P., Inc. have been inactive since 1993 and FarWest Financial
Insurance Agency has been inactive since 1991.  The consolidated financial
statements also include the accounts of Global Telecommunications, a limited
partnership in which the Corporation has a 75% limited partnership interest.
All material intercompany accounts and transactions have been eliminated in
consolidation.  References to the Corporation may include one or more of its
wholly owned subsidiaries.

On September 23, 1996, the Corporation acquired a 40% interest in Pink Dot, Inc.
("Pink Dot"), a home delivery shopping company.  The Corporation accounts for
this investment under the equity method of accounting.  Under the equity method
of accounting, income or loss is recognized in the Corporation's Statements of
Operations based on its proportionate share of Pink Dot's income or loss. On
February 26, 1998, the Corporation sold its 40% interest in Pink Dot (see Note
20).

On November 12, 1997, the Corporation acquired 100% of the common stock of
Westland Associates, Inc. (Westland Associates), a corporation that provides
group purchasing of goods and services for new car dealers in California,
Arizona and Nevada.  The acquisition has been accounted for using the purchase
method of accounting.

CASH AND CASH EQUIVALENTS - Cash and cash equivalents are short-term, highly
liquid investments with original maturities of three months or less.  They are
readily convertible to cash and are so near maturity that no significant risk of
changes in value exists because of changes in interest rates.

SECURITIES AVAILABLE-FOR-SALE -  The Corporation classifies its securities as
held to maturity securities, trading securities and available-for-sale
securities, as applicable.  The Corporation did not hold any held to maturity
securities or trading securities at December 31, 1997 or 1996.

Securities available-for-sale are carried at estimated fair value.  The
Corporation classifies investments as available-for-sale when it determines that
such securities may be sold at a future date or if there are foreseeable
circumstances under which the Corporation would sell such securities.


                                          25
<PAGE>

Changes in the estimated fair value of  securities available-for-sale are
included in shareholders' equity as unrealized holding gains or losses, net of
the related tax effect.  Declines in the fair value of individual securities
available-for-sale below their cost that are other than temporary are
written-down to their estimated fair value with the resulting write-down
included in net income as realized losses.  Realized gains or losses on
available-for-sale securities are computed on a specific identification basis.
Amortized premiums and accreted discounts are included in interest income using
the interest method.

INVESTMENTS IN LIMITED PARTNERSHIPS THAT INVEST IN SECURITIES - The Corporation
has invested in limited partnerships that invest in securities.  Each of these
partnerships seeks to achieve returns through investments in equity and debt
securities following identified strategies.  Gains or losses on these
investments are recorded based upon the equity method of accounting.

WARRANTS - In connection with the funding of loans and purchase of securities,
the Corporation has received warrants to purchase common stock of the debtor.
Certain warrants are not assigned a value as no estimated fair value is readily
obtainable.  Such warrants are recorded at their estimated fair value when a
market is established.

PURCHASE DISCOUNT ON AUTOMOBILE LEASING PORTFOLIO - The discount received on the
purchase of the automobile leasing portfolio is recognized in income over the
lives of the loans using a method which approximates the interest method.

LOANS RECEIVABLE - Loans receivable are carried at the amount funded, less
principal payments received, adjusted for net deferred loan fees and allowances
for loan losses.  Loans are identified as impaired when it is deemed probable
that the borrower will be unable to meet the scheduled principal and interest
payments under the terms of the loan agreement.  Impairment is generally
measured based upon the estimated fair value of the collateral.  Allowances for
loan losses is increased by charges to income and decreased by charge-offs (net
of recoveries).  The accompanying financial statements require the use of
management estimates to calculate allowances for loan losses.  These estimates
are inherently uncertain and depend on the outcome of future events.
Management's estimates are based upon identified losses on impaired loans;
previous loan loss experience; current economic conditions; the value of the
collateral; and other relevant factors.  Management believes the level of the
allowances at December 31, 1997 are adequate to absorb losses inherent in the
loan portfolio.

REAL ESTATE ACQUIRED THROUGH FORECLOSURE - Real estate acquired through
foreclosure is recorded at estimated fair value at the time of the foreclosure.
Any subsequent operating expenses or income, reduction in estimated values, and
gains or losses on disposition of such property are included in current
operations.

LONG-LIVED ASSETS - The Corporation evaluates the recoverability of the carrying
value of property and equipment and intangible assets in accordance with the
provisions of Statement of Financial Accounting Standards No. 121, ACCOUNTING
FOR THE IMPAIRMENT OF LONG-LIVED ASSETS TO BE DISPOSED OF.  The Corporation
considers historical performance and anticipated future results


                                          26
<PAGE>

in its evaluation of potential impairment.  Accordingly, when indicators of
impairment are present, the Corporation evaluates the carrying value of these
assets in relation to the operating performance of the business and future and
undiscounted cash flows expected to result from the use of these assets.
Impairment losses are recognized when the sum of future cash flows are less than
the assets'carrying value.  No such impairment losses have been recognized to
date.

TELEPHONE SYSTEMS - Telephone systems are stated at cost less accumulated
depreciation.  Depreciation is computed on the straight-line method over the
estimated useful lives of the assets which is seven years.  Telephone system
revenue is recognized on the accrual basis for charges incurred on a monthly
basis.

PROPERTY AND EQUIPMENT - In connection with the Corporation's purchase of
Westland Associates on November 12, 1997, the historical cost basis of Westland
Associates' land and building were adjusted to their estimated fair value
through a purchase accounting adjustment.  The adjustment that was recorded
resulted in an increase in the carrying value of the land and building of
approximately $482,000, which was based upon an escrow and subsequent sale of
the land and building on March 11, 1998.

All other components of property and equipment are stated at cost, less
accumulated depreciation.  Provisions for depreciation are made using
straight-line and accelerated methods over the estimated useful lives of the
assets.

GOODWILL - Goodwill represents the excess of the purchase price over the
estimated fair value of net assets associated with investments using the
purchase and equity methods of accounting.  Goodwill is amortized on a
straight-line basis over a ten year period and is evaluated periodically for
other than temporary impairment.  During this evaluation, management takes into
consideration the value of the recorded goodwill and any event or circumstances
that might have diminished fair value.  Should such an assessment indicate
permanent impairment, the net book value would be adjusted accordingly.  In
connection with the Corporation's acquisition of Westland Associates on November
12, 1997, goodwill of $887,000 was recorded - see Note 6.  Accumulated
amortization of goodwill was $44,000 and $7,000 at December 31, 1997 and 1996,
respectively.  See Note 9 regarding the write-off of goodwill related to Pink
Dot in 1997.

LOAN FEES - Loan fees are deferred net of direct incremental loan origination
costs.  Net deferred fees are accreted into income using the interest method or
straight line method if not materially different.  Loan fees due at the maturity
of a loan are also deferred and accreted to income, unless collectibility is in
doubt, in which case they are then recognized on the cash basis.

REVENUE RECOGNITION (WESTLAND ASSOCIATES) - Westland Associates, the
Corporation's wholly-owned subsidiary, recognizes revenue when its vendors
drop-ship products directly to its dealers.

INCOME TAXES - The Corporation joins with its subsidiaries in filing
consolidated federal income and state franchise tax returns.  In the tax
returns, taxable income or loss is consolidated with the taxable income or loss
of the subsidiaries.


                                          27
<PAGE>

Under the asset and liability method of accounting for income taxes, income tax
expense (benefit) is recognized by establishing deferred tax assets and
liabilities for the estimated future tax consequences attributable to the
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which
those temporary differences are expected to be recovered or settled.  The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.  The Corporation's
evaluation of the realizability of deferred tax assets includes consideration of
the amount and timing of future reversals of existing temporary differences.

STOCK OPTION PLAN - Prior to January 1, 1996, the Corporation accounted for its
stock option plan in accordance with the provision of Accounting Principles
Board ("APB") Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and
related interpretations.  As such, compensation expense would be recorded on the
date of grant only if the current market price of the underlying stock exceeded
the exercise price.  On January 1, 1996, the Corporation adopted Statement of
Financial Accounting Standards No. 123 ("SFAS No. 123"), ACCOUNTING FOR
STOCK-BASED COMPENSATION, which encourages but does not require entities to
recognize as expense over the vesting period the fair value of all stock-based
awards on the date of grant.  Alternatively, SFAS No. 123 allows entities to
continue to apply the provisions of APB Opinion No. 25 and provide pro forma net
income and pro forma income per share disclosures for employee stock option
grants issued in 1995 and future years as if the fair-value-based method defined
in SFAS No. 123 had been applied.  The Corporation has elected to continue to
apply the provisions of APB Opinion No. 25 and provide the pro forma disclosure
requirements of SFAS No. 123.

USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

RECLASSIFICATIONS - Certain reclassifications were made to prior year
consolidated financial statements to conform to current year presentation.

2.   YEAR 2000

Management does not anticipate any significant costs associated with Year 2000
software requirements.

3.   SECURITIES AVAILABLE-FOR-SALE

Securities available-for-sale are carried at estimated fair value.  The
amortized cost and estimated fair value of securities available-for-sale at
December 31, 1997 and 1996 are as follows (in thousands):

<TABLE>
<CAPTION>
<S><C>

                                                                GROSS          GROSS



                                        28
<PAGE>

<CAPTION>
                                                             Unrealized      Unrealized     Estimated
                                      Amortized Cost            Gains          Losses      Fair Value
                                     ------------------------------------------------------------------
<S>                                  <C>                     <C>            <C>            <C>
1997:
U.S. Treasury and Agency
  Securities                             $  17,387             $    20          $  --      $  17,407
Equity and Debt Securities                     991                  52            (45)           998
    Total                                $  18,378             $    72          $ (45)     $  18,405

1996:
U.S. Treasury and Agency
  Securities                             $  16,723             $    35          $  --      $  16,758
Equity and Debt Securities                   4,307               1,437             --          5,744
    Total                                $  21,030             $ 1,472          $  --      $  22,502
</TABLE>

Unrealized holding gains on securities available-for-sale of $13,000 at
December 31, 1997 and $883,000 at December 31, 1996 are net of taxes of $14,000
and $589,000, respectively.

Maturities of U.S. Treasury and Agency Securities were as follows at
December 31, 1997 (in thousands):

<TABLE>
<CAPTION>
                                           Amortized           Fair
                                             Cost              Value
                                       ---------------   ---------------
<S>                                    <C>               <C>
Due within one year                        $ 8,884           $ 8,885

Due after one year through
  five years                                 8,503             8,522

                                       ---------------   ---------------
                                          $ 17,387          $ 17,407
                                       ---------------   ---------------
                                       ---------------   ---------------
</TABLE>

Gross unrealized gains include the value ascribed to warrants which have a
readily determinable value, whether detached or attached to securities.
Gross gains and (losses) of $432,000 and ($100,000) were realized on sales in
1997, $221,000 and ($224,000) in 1996, and $16,000 and ($1,000) in 1995,
respectively. During 1997, the market value of one non-tradeable security
declined below its cost to a level that was considered to be other than
temporary.  A resulting write-down of $100,000 was recorded by the
Corporation, which is included in the caption "gain (loss) on sale of
securities available-for-sale" on the Consolidated Statement of Operations
for the year ended December 31, 1997. During the year ended December 31,
1996, the Corporation recorded a permanent impairment write-down of $150,000
on an equity security. The Corporation determines the cost of securities sold
using the specific identification method in computing realized gains or
losses.

4.  INVESTMENTS IN LIMITED PARTNERSHIPS THAT INVEST IN SECURITIES

The Corporation has invested in limited partnerships that invest in securities.
Gains or losses on these investments are recorded based upon the equity method
of accounting which approximates

                                          29
<PAGE>

fair value.  During the year ended December 31, 1997, the Corporation recorded
unrealized gains of $529,000 in connection with these investments in the
Consolidated Statements of Operations.  No such gains were recorded during the
years ended December 31, 1996 and 1995.

5.  LOANS RECEIVABLE

The composition of the Corporation's loans receivable at December 31, 1997 and
1996 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                       1997        1996
                                                       ----        ----
          <S>                                        <C>          <C>
          Loans secured by automobile
            leases, net of discount                  $   132     $   742
          Loans, net of loan fees, secured
            by trust deeds or mortgages                1,543       1,892
          Loans secured by other collateral            5,306       2,002
          Unsecured loans                                100         -
                                                 --------------------------
          Total                                      $ 7,081     $ 4,636
                                                 --------------------------
                                                 --------------------------
</TABLE>

The loans secured by automobile leases represent a portfolio of loans purchased
by the Corporation in 1995.  The purchase price was $3,551,000 net of discount
of $742,000.  The remaining average maturity of the portfolio was approximately
four months at December 31, 1997.  At December 31, 1997 all loans secured by
automobile leases were performing in accordance with their contractual terms.

The loans secured by trust deeds or mortgages as of December 31, 1997, include
notes of $1,050,000 and $520,000 that originated in 1996 and that were
originally due in 1998, but that were in default as of December 31, 1997.

The loans secured by other collateral as of December 31, 1997, include a
$2,500,000 note and a $415,000 note representing advances made to Pink Dot, Inc.
(Pink Dot), a home delivery shopping company, in which the Corporation had a 40%
equity investment at December 31, 1997.  The $2,500,000 note bears interest at
the lesser of the prime rate or 10% and is due in December 2001.  The $415,000
note bears interest at the rate of 8% and is due in July 1999.  Each of these
notes is subject to accelerated payment terms upon the occurrence of certain
events.  Due to the fact that the Corporation's share of Pink Dot's loss for
1997 exceeded the Corporation's investment account and goodwill related to Pink
Dot, the carrying amount of these loans was reduced by $391,000.  Both of these
notes were replaced by new notes on February 26, 1998 (see Note 20).

Additional loans secured by other collateral as of December 31, 1997, include a
$1,900,000 note, a portion of which is secured by real estate, which bears
interest at the rate of 15% per annum that is due in July 1999 and a note with a
remaining principal balance of $132,000 as of December 31, 1997 that was paid
off in January 1998.  In addition, there is a $450,000 note that is part of a
$2,000,000 loan commitment, a portion of which is convertible into 55% of the


                                          30
<PAGE>

debtor's common stock, and a $300,000 note that is part of an $800,000 loan
commitment that is convertible into 50% of the debtor's common stock.

The unsecured note of $100,000 that was outstanding as of December 31, 1997 was
in default as to the payment of interest as of that date.  The principal balance
and accrued interest was subsequently paid in February 1998.

A loan is impaired when it is probable that the Corporation will be unable to
collect all principal and accrued interest due according to the contractual
terms of the loan agreement. The average balance of impaired loans and
interest income recognized on impaired loans were $1,670,000 and $213,000,
respectively for the year ended December 31, 1997. The components of impaired
loans and accrued interest at December 31, 1997 and 1996 are as follows (in
thousands):

<TABLE>
<CAPTION>

                                                       1997           1996
                                                   ------------   -------------
          <S>                                      <C>            <C>
          Impaired loans and
            accrued interest                          $1,744           $  -
          Less: valuation allowances                     (31)             -

                                                   ------------   -------------
          Net carrying value of
            impaired loans and
            accrued interest                          $1,713           $  -
                                                   ------------   -------------
</TABLE>

Activity in the valuation allowance for all loans and accrued interest for the
years ended December 31, 1997 and 1996 is summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                       1997           1996
                                                   ------------   -------------
          <S>                                      <C>            <C>
          Balance at January 1                          $  -           $  -
          Additions                                       31              -
          Direct write-downs                               -              -

          Balance at December 31                       $  31           $  -
</TABLE>

6.   PURCHASE ACCOUNTING ADJUSTMENTS

As discussed in Note 1, the Corporation purchased 100% of the common stock of
Westland Associates on November 12, 1997.  The acquisition was accounted for
under the purchase method of accounting.  The following table summarizes the
fair value of assets and liabilities of Westland Associates as of the date of
the acquisition and the computation of the excess of the purchase price over the
fair value of the net assets acquired (in thousands):

<TABLE>
<CAPTION>
                                                    Fair Value of
                                                   Assets Acquired
                                                   and Liabilities
                                                       Assumed
                                                 -----------------
<S>                                              <C>
Accounts receivable, net                              $  936


                                          31
<PAGE>

<CAPTION>

Property and equipment, net                              663
Other assets                                             173

                                                 -----------------
Total assets                                           1,772
                                                 -----------------

Accounts payable                                         789
Accrued expenses and other liabilities                   581
Deferred income taxes                                     20

                                                 -----------------
Total liabilities                                      1,390
                                                 -----------------

Fair value of net assets acquired                        382

Purchase price                                         1,269

                                                 -----------------
Excess of purchase price over the fair value
   of net assets acquired                             $  887
                                                 -----------------
                                                 -----------------
</TABLE>

The excess of the purchase price over the fair value of the net, assets
acquired, goodwill, is being amortized using the straight-line method over 10
years.

In connection with the Corporation's purchase of Westland Associates, employment
agreements were executed with Westland Associates' president and another key
employee.  The agreements run for terms of 24 months and 12 months,
respectively, and call for compensation levels equal to the levels that were
paid to each of them prior to the acquisition of Westland Associates by the
Corporation.

7.  TELEPHONE SYSTEMS, NET

The following is a summary of telephone systems, net, at December 31, 1997 and
1996 (in thousands):

<TABLE>
<CAPTION>
                                                       1997           1996
                                                       ----           ----
          <S>                                    <C>                <C>
          Telephone systems                          $ 1,740        $ 1,740
            Less accumulated depreciation               (906)          (660)
                                                 ---------------------------
          Telephone systems, net                     $   834        $ 1,080
                                                 ---------------------------
                                                 ---------------------------
</TABLE>

Depreciation expense of telephone systems was approximately $246,000, $253,000
and $246,000 for the years ended December 31, 1997, 1996 and 1995, respectively.
During 1997, the telephone company received notice of cancellation at one of the
military bases at which it operates a telephone system.  While the telephone
company continues to provide service at that military base until a successor
telephone company begins operations, the telephone company is currently in
negotiations with the military for compensation for discontinuation of its
business or transfer of its assets.


                                          32
<PAGE>

8.  PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                           December 31,
                                                  -------------------------
                                                        1997          1996
     <S>                                          <C>                 <C>
     Building                                           $395          $  -
     Land                                                255             -
     Furniture and equipment                              71             43
     Automobiles                                          28             29
                                                  -------------------------
                                                         749             72

     Less: Accumulated depreciation                      (39)           (24)
                                                  -------------------------

                                                        $710            $48
                                                  -------------------------
                                                  -------------------------
</TABLE>

In connection with the Corporation's acquisition of 100% of the common stock of
Westland Associates on November 12, 1997, the Corporation acquired the following
property and equipment, which was recorded at estimated fair value (in
thousands):

<TABLE>
<CAPTION>
     <S>                            <C>
     Building                       $ 395
     Land                             255
     Furniture and equipment           13
                                    -----
          Total                     $ 663
                                    -----
                                    -----
</TABLE>

Depreciation expense related to property and equipment was approximately
$15,000, $12,000, and $13,000 for the years ended December 31, 1997, 1996 and
1995, respectively.  For the year ended December 31, 1997, depreciation expense
related to Westland Associates' property and equipment was recorded from the
date of the acquisition through December 31, 1997.

9.  EQUITY INVESTMENT

On September 23, 1996, the Corporation acquired a 40% interest in Pink Dot, Inc.
("Pink Dot"), a home delivery shopping Corporation for $500,000.  The excess of
the cost of the investment over 40% of equity at the date of investment was
recorded as goodwill and was being amortized over a ten year period. The
Corporation recorded a loss of $686,000 in 1997 in connection with its 40%
equity investment in Pink Dot. As a result, the investment account and goodwill
related to Pink Dot were reduced to zero by adjustments of $46,000 and $249,000,
respectively.  As this loss exceeded the carrying amount of the Corporation's
investment account and goodwill related to Pink Dot, the carrying amount of the
loans receivable from Pink Dot was reduced by $391,000.  See Note 20 in regard
to the Corporation's sale of its 40% interest in Pink Dot in February 1998.


                                          33
<PAGE>

The summarized assets and liabilities of Pink Dot on December 31, 1997 and
December 31, 1996 were as follows (in thousands):

<TABLE>
<CAPTION>
                                           December 31, 1997   December 31, 1996
                                              (unaudited)        (unaudited)

                                         ------------------  -------------------
          <S>                            <C>                 <C>
          Total assets                           $ 3,056             $ 2,300
                                         ------------------  -------------------
                                         ------------------  -------------------

                                         ------------------  -------------------
          Total liabilities                      $ 4,520             $ 1,985
                                         ------------------  -------------------
                                         ------------------  -------------------
          Total liabilities and
          shareholders' equity                   $ 3,056             $ 2,300
                                         ------------------  -------------------
                                         ------------------  -------------------
</TABLE>

Included in liabilities at December 31, 1997 are $2,500,000 and $415,000 notes
payable to the Corporation.

For the year ended December 31, 1997, Pink Dot had revenues of $9,493,000 and
costs and expenses of $11,217,000, resulting in a pre-tax loss of $1,724,000.

10.   REAL ESTATE ACQUIRED THROUGH FORECLOSURE

In December 1997, the Corporation acquired a single-family residence located in
Newport Beach, California in connection with a foreclosure on a defaulted loan
that was secured by a second trust deed on the property.  The principal and
accrued interest owing to the Corporation at the time of the foreclosure, net of
reserves, was $178,000.  The property was acquired subject to a first mortgage
in the amount of $655,000, which the Corporation paid off in January 1998.  It
is the Corporation's intention to sell the property during 1998.

11. INCOME TAXES

The Corporation made no income tax payments during 1997, 1996 or 1995, except
for the minimum state franchise tax.

The provision for income taxes for the years ended December 31, 1997, 1996, and
1995 includes the following ( in thousands):

<TABLE>
<CAPTION>
                                                1997       1996        1995
                                                ----       ----        ----
      <S>                                  <C>            <C>        <C>
      Current tax provision                   $  -       $  -        $  -

      Deferred tax provision
        Federal                                  716        610         255
        State                                    216        230         165
                                           ----------------------------------
      Total provision for income taxes        $  932     $  840      $  420
                                           ----------------------------------
                                           ----------------------------------
</TABLE>


                                          34
<PAGE>

The Corporation's deferred tax receivables resulting from the utilization of net
operating loss carryforwards are offset in future years by deferred tax
payables.  The Corporation's tax net operating loss carryforwards at December
31, 1997 of approximately $8,600,000 and $2,000,000 for federal and state
purposes, respectively, expire at various dates through 2012 for federal income
tax purposes and through 2002 for state income tax purposes.

The income tax provision reflects effective rates of 40%, 34%, and 24% for the
years ended December 31, 1997, 1996, and 1995 on income before income taxes,
respectively.  The income tax provision differed from the amounts computed by
applying the statutory federal income tax rate of 34% to the income before
income taxes for the following reasons (in thousands):

<TABLE>
<CAPTION>
                                                      1997      1996     1995
--------------------------------------------------------------------------------
 <S>                                                 <C>       <C>      <C>
 Tax expense at statutory Federal income tax rate    $  792    $  840   $  588
 California franchise tax, net of Federal benefit       126       144      109
 State and municipal securities interest                  -      (148)    (289)
 Minority interest                                      (10)      (24)     (17)
 Other, net                                              24        28       29
--------------------------------------------------------------------------------
                                                     $  932    $  840   $  420
--------------------------------------------------------------------------------
</TABLE>

At December 31, 1997 and 1996 the Corporation had cumulative deferred taxes
payable of $5,366,000 and $5,085,000, respectively.  The Corporation had no
current taxes payable at December 31, 1997 and 1996.  Tabulated below are the
significant components of the net deferred tax liability at December 31, 1997
and 1996 (in thousands):


<TABLE>
<CAPTION>
                                                             1997        1996
                                                        ------------------------
<S>                                                     <C>           <C>
Components of the deferred tax asset:
  Net operating loss carryforward                         $  3,124    $  3,793
  State taxes                                                  595         516
  Loan fee income                                               39          28
  Equity in Pink Dot                                           416         109
  Other                                                        212          69
                                                        ------------------------

  Deferred tax asset                                         4,386       4,515
                                                        ------------------------

Components of the deferred tax liability:
  Legal settlements                                         (9,307)     (9,011)
  Unrealized gains on limited partnerships
   that invest in securities                                  (227)         -
  Unrealized holding gains on
   securities available-for-sale                               (14)       (589)
  Purchase adjustment-Westland Associates                     (204)         -
                                                        ------------------------

                                          35
<PAGE>

Deferred tax liability                                      (9,752)     (9,600)

                                                        ------------------------
Net deferred tax liability                                $ (5,366)   $ (5,085)
                                                        ------------------------
                                                        ------------------------

Net state deferred tax liability                          $ (1,707)   $ (1,639)
Net federal deferred tax liability                          (3,659)     (3,446)
                                                        ------------------------
                                                         $  (5,366)   $ (5,085)
                                                        ------------------------
                                                        ------------------------
</TABLE>

In evaluating the realizability of its deferred tax assets, management has
considered the turnaround of deferred tax liabilities during the periods in
which those temporary differences become deductible.  Additionally, the
Corporation has not considered income from future operations in evaluating
realizability of its deferred tax assets.

Subsequent to December 31, 1997, the Franchise Tax Board of the State of
California ("FTB") submitted a settlement agreement to the Corporation proposing
a settlement of the Corporation's claims for refund in the amounts of $2,959,619
for the income year ended December 31, 1987 and $412,119 for the income year
ended December 31, 1988, and on February 23, 1998, the Corporation signed the
settlement agreement, indicating its willingness to accept the proposed
settlement.

Under procedures of the FTB for settlement of refund claims, the settlement is
not binding on the state until the office of the Attorney General of the State
of California and the executive board of the FTB each makes an independent
review of the claim for refund and the bases for the proposed settlement and
accepts the proposed settlement agreement.  While the Corporation has signed the
proposed settlement agreement, no assurance can be given that the settlement
will be accepted by the office of the Attorney General or the executive board of
the FTB.

Under the terms of the proposed settlement agreement, the State of California
would refund 50% of the amounts claimed for refund by the Corporation plus
interest on those amounts from the date the taxes were originally paid.  The
settlement agreement calculates the amount of taxes and interest through June
30, 1997 to be refunded as $4,051,407.  If the settlement is approved,
additional interest will be due calculated from July 1, 1997 to the date the
settlement is accepted by the Attorney General and the executive board of the
FTC, computed at the rate of 9% compounded daily.

In 1992, the Corporation established a valuation allowance of 50% of the refund
claims plus accrued interest, adjusting the carrying value of the claims to
$1,954,000 at December 31, 1992 to reflect the uncertainties attributable to the
FTB's objections to the refund claims.  In the fourth quarter of 1994, the
Corporation received preliminary audit results from the FTB which proposed to
deny the refund claims.  Due to uncertainties and the length of time the
Corporation recognized it would take to resolve the matter, the Corporation
established an additional provision for unresolved tax issues of $1,954,000
during 1994, effectively fully reserving the refund claims.


                                       36
<PAGE>

12.  SUPPLEMENTAL CASH FLOW INFORMATION

The tax effect of unrealized (losses) gains on securities available-for-sale for
the years ended December 31, 1997, 1996 and 1995 was ($575,000), $519,000, and
$207,000, respectively.

In connection with the Corporation's purchase of 100% of the common stock of
Westland Associates on November 12, 1997 for a purchase price of $1,269,000,
liabilities were assumed as follows:

<TABLE>
<CAPTION>
     <S>                                              <C>
     Fair value of assets acquired and goodwill        $2,659,000
     Cash paid for the common stock                    (1,269,000)
                                                       ----------
     Liabilities assumed                               $1,390,000
                                                       ----------
                                                       ----------
</TABLE>

In connection with a loan foreclosure on December 15, 1997, the Corporation
acquired real estate, net of a first mortgage payable, in the amount of
$178,000.  Including the mortgage payable of $655,000, the real estate was
recorded at a carrying value of $833,000.

See Note 1 for the Corporation's accounting policy in regards to cash and cash
equivalents.

13. LAWSUIT SETTLEMENT

During 1997, the Corporation received $950,000 in net proceeds from the
settlement of claims asserted on behalf of the Corporation against Drexel
Burnham Lambert, Inc. and Michael Milken and other related parties.  In 1996 and
1995, the Corporation received $813,000 and $1,209,000, respectively in net
proceeds from the same settlement.

14. NET INCOME PER COMMON SHARE

Net income per common share is computed in accordance with Statement of
Financial Accounting Standards No. 128 ("SFAS No. 128"), EARNINGS PER SHARE, and
is calculated on the basis of the weighted  average number of common shares
outstanding during each period plus the additional dilutive effect of common
stock equivalents.  The dilutive effect of outstanding stock options is
calculated using the treasury stock method.  As a result of the income per share
methods required to be disclosed by the Corporation under SFAS No. 128, the
Statement also requires disclosure of a reconciliation from Basic Net Income Per
Common Share to Diluted Net Income Per Common Share for the years ended
December, 31 1997, 1996 and 1995 as follows:

<TABLE>
<CAPTION>

                                                                                   WEIGHTED
                                                                    NET            AVERAGE         NET INCOME
                                                                   INCOME           SHARES         PER SHARE
                                                                 ----------    ----------------  --------------
<S>                                                             <C>           <C>              <C>
DECEMBER 31, 1997

BASIC NET INCOME PER COMMON SHARE


                                      37
<PAGE>

Income available to common stockholders                          $1,371,000      7,835,000          $0.17

Dilutive effect of common equivalents shares of
  stock options                                                                     31,000

DILUTED NET INCOME PER COMMON SHARE
Income available to common stockholders                          $1,371,000      7,866,000          $0.17

DECEMBER 31, 1996

BASIC NET INCOME PER COMMON SHARE
Income available to common stockholders                          $1,571,000      7,818,000          $0.20

Dilutive effect of common equivalents shares of
  stock options                                                                      4,000

DILUTED NET INCOME PER COMMON SHARE
Income available to common stockholders                          $1,571,000      7,822,000          $0.20

DECEMBER 31, 1995

BASIC NET INCOME PER COMMON SHARE
Income available to common stockholders                          $1,308,000      7,815,000          $0.17

Dilutive effect of common equivalents shares of
  stock options                                                                     25,000

DILUTED NET INCOME PER COMMON SHARE
Income available to common stockholders                          $1,308,000      7,840,000          $0.17
</TABLE>

15. STOCK OPTION PLAN

During 1997, the Corporation's Board of Directors adopted the 1997 Stock
Incentive Plan (the "1997 Plan").  The 1997 Plan is subject to shareholder
approval at the 1998 annual meeting of shareholders and replaces the 1986
Incentive Stock Option Plan and the 1986 Non-statutory Stock Option Plan
(collectively "1986 Plan"), both of which expired in 1996.  An aggregate of one
million shares of the Corporation's common stock may be issued under the 1997
Plan.

During 1997, the Executive Vice President and Chief Financial Officer was
granted an option to purchase up to 100,000 shares of common stock under the
1997 Plan at a price of $2.37 per share.  The option is exercisable in five
equal annual installments commencing in February 1998.  The option expires in
2002.


                                       38
<PAGE>

During 1995, the Chairman of the Board and Chief Executive Officer was granted
an option to purchase up to 250,000 shares of common stock under the 1986 Plan
at $1.99 per share, which is equal to 110% of the market price on the date of
grant as specified in that plan.  The option is exercisable in four equal annual
installments commencing with the first anniversary of the grant date.  The
option expires five years from the date of grant. At December 31, 1997, the
option was exercisable as to 125,000 shares.

During 1995, five outside Directors of the Corporation were granted options to
purchase up to 10,000 shares each under the 1986 Plan at $1.8125 per share,
which is equal to the market price on the date of grant as specified in that
plan.  The options are exercisable in four equal annual installments commencing
with the first anniversary of the grant date.  The options expire five years
from the date of grant.  During 1997, 10,000 of these options were cancelled.
At December 31, 1997, these options were exercisable as to an aggregate of
20,000 shares.

The per share weighted-average fair value of stock options granted during 1997
and 1995 was $1.17 and $0.85, respectively, on the date of grant using the Black
Scholes option-pricing model with the following weighted-average assumptions:
expected dividend yield 0%, risk-free interest rate of 6.25%, expected
volatility of 47%, and an expected life of 5 years.

The Corporation applies APB Opinion No. 25 in accounting for stock option plans
and, accordingly, no compensation cost has been recognized for its stock options
in the consolidated financial statements.  Had the Corporation determined
compensation cost based on the fair value at the grant date for its stock
options under SFAS No. 123, the Corporation's net income would have been reduced
to the pro forma amounts indicated below (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                        1997        1996         1995
                                                        ----        ----         ----
   <S>                        <C>                     <C>         <C>          <C>
   Net income                 As reported             $1,371      $1,571       $1,308
                              Pro forma                1,323       1,548        1,285

   Net income per share
     (diluted)                As reported               $.17        $.20         $.17
                              Pro forma                  .17         .20          .17
</TABLE>

Stock option activity during the periods indicated is as follows:

<TABLE>
<CAPTION>
                                                                              Weighted Average
                                               Number of         Option         Option Price
                                                 Shares          Price           Per Share
                                             --------------  --------------  ----------------
   <S>                                       <C>             <C>             <C>
   Balance at December 31, 1995                 350,000       $.88 - 1.99          $1.81
   Granted                                          --                --             --
   Exercised                                    (20,000)              .88            .88
   Cancelled                                    (30,000)              .88            .88


                                      39
<PAGE>

<CAPTION>

   <S>                                       <C>             <C>             <C>
   Expired                                          --                --             --
                                             --------------  --------------  ----------------

   Balance at December 31, 1996                 300,000       1.81 - 1.99           1.96
   Granted                                      100,000              2.37           2.37
   Exercised                                        --                --             --
   Cancelled                                    (10,000)             1.81           1.81
   Expired                                          --                --             --
                                             --------------  --------------  ----------------

   Balance at December 31, 1997                 390,000     $ 1.81 - 2.37        $  2.07
                                             --------------  --------------  ----------------
                                             --------------  --------------  ----------------
</TABLE>

At December 31, 1997, the weighted-average remaining contractual life of
outstanding options was 2.87 years.

At December 31, 1997 and 1996, the number of options exercisable was 145,000 and
75,000 respectively, and the weighted-average exercise price of those options
was $1.96.

16. COMMITMENTS AND CONTINGENCIES

The Corporation had outstanding loan commitments at December 31, 1997 totaling
$2.6 million.  At December 31, 1996, outstanding loan commitments were $1
million.

The Corporation has filed an action to foreclose a mortgage held by the
Corporation as security for a $1,050,000 loan that is in default.  The mortgage
is on real property, title to which is held in the name of a trust of which the
borrower is trustee.  Certain beneficiaries of the trust have filed a Motion to
Intervene in the foreclosure action and have filed a separate lawsuit seeking to
prevent the foreclosure, alleging that the trustee did not have authority to
enter into the trust and that the Corporation acted improperly in lending money
to the borrower, individually, and accepting as security real property owned by
the trust.  The Corporation believes, based on the trust documents, that the
trustee had absolute authority to grant the mortgage and the Corporation
obtained title insurance for the mortgage.  The Corporation intends to pursue
vigorously its right to foreclose the mortgage.  The title insurer is defending
on the issue of the authority of the trustee to enter into the trust.

The Corporation is a defendant in various other lawsuits arising from the normal
course of business.  Management believes, based upon the opinion of legal
counsel, that the ultimate resolution of the pending litigation will not have a
material effect upon the financial condition or results of operations of the
Corporation.

17. LEASE COMMITMENTS

Aggregate minimum lease commitments under long-term operating leases as of
December 31, 1997 are as follows (table in thousands):

<TABLE>
<CAPTION>
               <S>                                  <C>
               1998                                 $97
               1999                                  91


                                          40
<PAGE>

<CAPTION>

               <S>                                  <C>
               2000                                  75
               2001                                  75
           2002 and thereafter                       62
                                             ----------

                                                   $400
                                             ----------
                                             ----------
</TABLE>

Minimum lease payments for the Corporation's corporate offices are under a
non-cancelable operating lease which expires in October 2002 and which provides
for a stated nominal rent increase in the thirty-first month of the lease.  The
Corporation recorded  $78,548, $62,365, and $67,784 in rent expense for the
years ended December 31, 1997, 1996, and 1995, respectively.

18. FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial Accounting Standards Board Statement No. 107 requires disclosures of
fair value information about financial instruments, whether or not recognized in
the balance sheet, for which it is practicable to estimate that value.  Fair
value amounts represent estimates of value at a point in time.  Significant
estimates regarding economic conditions, loss experience, risk characteristics,
and other factors are used in estimating fair value.  These estimates can be
subjective in nature and involve matters of judgment.  Changes in the
assumptions could have a material impact on the amounts disclosed.  The methods
and assumptions for determining fair value of the Corporation's financial
instruments are as follows:

CASH AND CASH EQUIVALENTS
The carrying amount is a reasonable estimate of fair value.

SECURITIES AVAILABLE-FOR-SALE
Fair value has been determined based on quoted market prices, when available.
If a quoted market price is not available, recent market trading prices or the
value at which interests may currently be redeemed are used to estimate fair
value.

INVESTMENTS IN LIMITED PARTNERSHIPS THAT INVEST IN SECURITIES
The fair value of investments in limited partnerships that invest in securities
is estimated based upon the underlying value of the securities which the limited
partnerships invest in.

LOANS RECEIVABLE, NET
Loans held by the Corporation are performing in accordance with their
contractual terms, with the exception of two loans secured by real estate in the
amounts of $1,050,000 and $520,000, which were in default as of December 31,
1997 and an unsecured loan in the amount of $100,000 that was also in default as
of December 31, 1997 (but which was repaid in full in February 1998).  Based on
the type of loans, interest rate characteristics, credit risk, collateral,
subsequent payments received, and maturity, the carrying value of the loans has
been determined to be a reasonable estimate of fair value.

MORTGAGE PAYABLE
The carrying amount approximates fair value because of the short life of this
instrument.


                                          41
<PAGE>

19. NEW ACCOUNTING STANDARDS

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130 ("SFAS No. 130"), REPORTING COMPREHENSIVE
INCOME.  SFAS No. 130 is effective for fiscal years beginning after December 15,
1997.  This Statement establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements.  Comprehensive income is defined as "the change in equity
[net assets] of a business enterprise during a period from transactions and
other events and circumstances from non-owner sources.  It includes all changes
in equity during a period except those resulting from investments by owners and
distributions to owners".  The Corporation will adopt the reporting requirements
of SFAS No. 130 during 1998 and the impact on the Corporation of the adoption of
this new accounting standard is considered immaterial to the Corporation's
financial statements.

Also in June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131 ("SFAS No. 131"), DISCLOSURES ABOUT
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION.  SFAS No. 131 is also
effective for fiscal years beginning after December 15, 1997.  This Statement
requires that public business enterprises report certain information about
operating segments in complete sets of financial statements of the enterprise
and in condensed financial statements of interim periods to shareholders.  It
also requires that public business enterprises report certain information about
their products and services, the geographic areas in which they operate, and
their major customers.  The Corporation will adopt the reporting requirements of
SFAS No. 131 in 1998 and the impact of the adoption of this new accounting
standard is the potential redefinition of the Corporation's segments.

20. SUBSEQUENT EVENTS

On February 26, 1998, the Corporation sold the 40% of the issued and outstanding
stock of Pink Dot owned by the Corporation to the majority owner of Pink Dot
("the buyer") for a purchase price of $6,000,000.   The purchase price is
evidenced by the buyer's promissory note ("Purchase Note") in the principal
amount of $6,000,000 due and payable on May 27, 1998 together with interest at
the rate of 9% per annum accruing from March 28, 1998 to the due date.  The
Purchase Note is secured by a pledge by the buyer of 100% of the issued and
outstanding common stock of Pink Dot.

In connection with the sale of the Corporation's Pink Dot stock, two outstanding
promissory notes payable to the Corporation by Pink Dot were replaced by two new
promissory notes ("Replacement Notes").  One promissory note in the original
principal amount of $2,500,000 together with accrued but unpaid interest through
February 26, 1998 in the amount of $302,640, was replaced by a Replacement Note
in the principal amount $2,802,640.  The second promissory note in the nominal
original principal amount of $1,000,000, of which $415,000 had been advanced
through February 26, 1998, together with accrued and unpaid interest in the
amount of $21,193, was replaced with a Replacement Note in the principal amount
of $436,193.  The Replacement Note in the principal amount of $2,802,640 bears
interest at the "Prime Rate" of Bank of America, not to exceed 10% per annum,
and the Replacement Note in the principal amount $436,193 bears interest at the
rate of 8% per annum.  Both Replacement Notes provide


                                          42
<PAGE>

for payment of interest monthly commencing March 28, 1998 and provide for
payment of the entire principal balances on March 26, 2000.  Both Replacement
Notes are secured by all tangible and intangible assets of Pink Dot.

On March 11, 1998, the Corporation's wholly-owned subsidiary, Westland
Associates, sold its land and building for a purchase price of $650,000.  No
gain or loss will be recognized on the sale of these assets in 1998 as the land
and building were recorded at their estimated fair values at the date of the
Corporation's purchase of Westland Associates, which was November 12, 1997,
through the purchase accounting adjustments that are described in Note 6.

21. QUARTERLY SUMMARY OF OPERATIONS (UNAUDITED)

The following quarterly summary of operations is unaudited.  In the opinion of
the Corporation's management, all adjustments, consisting only of normal
recurring adjustments necessary for a fair presentation of the interim periods
presented, have been included (in thousands, except per share data):

<TABLE>
<CAPTION>
                                    1st            2nd            3rd            4th
                                    Qtr.           Qtr.           Qtr.           Qtr.          Total
                                 --------       --------       --------        --------       -------
<S>                              <C>            <C>            <C>             <C>           <C>
Year Ended 12/31/97
-------------------
Total revenues                    $1,681         $  831         $1,112         $4,372         $7,996
Total expenses                       726            694            678          3,569          5,667
Income before income taxes
  and minority interest              955            137            434            803          2,329
Net income                           555             78            244            494          1,371
Diluted earnings per share          0.07           0.01           0.03           0.06           0.17


Year Ended 12/31/96
-------------------
Total revenues                    $1,711         $1,256           $978         $1,289         $5,234
Total expenses                       714            671            606            772          2,763
Income before income taxes
  and minority interest              997            585            372            517          2,471
Net income                           639            394            214            324          1,571
Diluted earnings per share          0.08           0.05           0.03           0.04           0.20
</TABLE>

The increase in revenues and expenses in the fourth quarter of 1997 were the
result of the Corporation's acquisition of Westland Associates on November 12,
1997.  From the date of the acquisition to December 31, 1997, Westland
Associates generated revenues of $2,711,000 and incurred costs and expenses of
$2,765,000.

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

The Corporation reported changes in its independent auditors in Form 8-K's that
were filed on May 5, 1997 and August 19, 1997.


                                          43
<PAGE>

                                       PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE
          CORPORATION

Incorporated by reference to the Corporation's definitive Proxy Statement for
its 1998 Annual Meeting of Stockholders pursuant to instruction G(3) to
Form 10-K.


ITEM 11.  EXECUTIVE COMPENSATION

Incorporated by reference to the Corporation's definitive Proxy Statement for
its 1998 Annual Meeting of Stockholders pursuant to instruction G(3) to Form
10-K.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT

Incorporated by reference to the Corporation's definitive Proxy Statement for
its 1998 Annual Meeting of Stockholders pursuant to instruction G(3) to
Form 10-K.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated by reference to the Corporation's definitive Proxy Statement for
its 1998 Annual Meeting of Stockholders pursuant to instruction G(3) to
Form 10-K.


                                       PART IV


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

(a)(1) The following financial statements are included in Item 8:

     Consolidated Statements of Financial
       Condition as of December 31, 1997 and 1996
     Consolidated Statements of Operations
       for the Three Years Ended December 31, 1997
     Consolidated Statements of Shareholders'
       Equity for the Three Years Ended December 31, 1997
     Consolidated Statements of Cash Flows
       for the Three Years Ended December 31, 1997
     Notes to Consolidated Financial Statements



                                          44
<PAGE>

           for the Three Years Ended December 31, 1997

(a)(2) Financial Statement Schedules

           All schedules are omitted as the required information is
inapplicable or is presented in the consolidated financial statements or
related notes.

(b)  Reports of Form 8-K

           No reports were filed on Form 8-K during the fourth quarter of
1997.

(c)  Exhibits

           See "Index to Exhibits."

                                          45
<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.

                                   WESTMINSTER CAPITAL, INC.


March 27, 1998                     By:  /s/ William Belzberg
                                       ---------------------
                                       William Belzberg,
                                       Chairman of the Board
                                       Chief Executive Officer


                                   By:  /s/ Keenan Behrle
                                       ---------------------
                                       Keenan Behrle,
                                       Executive Vice President,
                                       Chief Financial Officer, and
                                       Principal Accounting Officer



                                          46
<PAGE>

     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.


SIGNATURES                    CAPACITY                                  DATE


/s/William Belzberg           Chairman of the Board              March 27, 1998
----------------------        of Directors and
William Belzberg              Chief Executive Officer


/s/Keenan Behrle              Director                           March 27, 1998
----------------------
Keenan Behrle


/s/Hyman Belzberg             Director                           March 27, 1998
----------------------
Hyman Belzberg


/s/Samuel Belzberg            Director                           March 27, 1998
----------------------
Samuel Belzberg


/s/Gerald E. Finnell          Director                           March 27, 1998
----------------------
Gerald E. Finnell


/s/Barbara C. George          Director                           March 27, 1998
----------------------
Barbara C. George


/s/Monty Hall                 Director                           March 27, 1998
----------------------
Monty Hall


/s/Lester Ziffren             Director                           March 27, 1998
----------------------
Lester Ziffren



                                          47
<PAGE>

                                  INDEX OF EXHIBITS

EXHIBIT
NO.                 SEQUENTIALLY NUMBERED DESCRIPTION


2.1   Option and Stock Purchase Agreement dated November 10, 1997 between the
      Corporation and William Toro (filed as Exhibit 2.1 to the Registrant's
      Report on Form 8-K dated March 5, 1998 and incorporated herein by this
      reference).

2.2   Amendment to Option and Stock Purchase Agreement dated December 16, 1997
      between the Corporation and William Toro (filed as Exhibit 2.2 to the
      Registrant's Report on Form 8-K dated March 5, 1998 and incorporated
      herein by this reference).

2.3   Secured Promissory Note in the amount of $6,000,000 dated February 26,
      1998 between the Corporation and William Toro (filed as Exhibit 2.3 to
      the Registrant's Report on Form 8-K dated March 5, 1998 and incorporated
      herein by this reference).

2.4   Stock Purchase Agreement dated as of September 30, 1997 between the
      Corporation and the shareholders of Westland Associates, Inc., a
      California corporation.

3.1   Certificate of Incorporation of the Registrant as amended through July
      12, 1992 (filed as Exhibit 3.1 to the Registrant's Annual Report on Form
      10-K for the year ended December 31, 1994 and incorporated herein by this
      reference).

      Certificate of amendment of Certificate of Incorporation of the
      Registrant dated July 13, 1992 (filed as Exhibit 3.1 to the Registrant's
      Annual Report on Form 10-K for the year ended December 31, 1994 and
      incorporated herein by this reference).

3.2   By-Laws of the Registrant as amended in their entirety effective April 4,
      1995 (filed as Exhibit 4.4 to the Registrant's Post Effective Amendment
      No. 1 to Form S-8 filed on June 23, 1995 as Registration No. 33-21177 and
      incorporated herein by this reference).

10.1  Sales Agreement between The Sumitomo Bank of California and Purchasers
      dated August 17, 1995 (filed as Exhibit 10.1 to the Registrant's Annual
      Report on Form 10-K for the year ended December 31, 1995 and incorporated
      herein by this reference).

10.2  1986 Incentive Stock Option Plan and 1986 Nonstatutory Stock Option Plan
      (filed as Exhibit 4.1 to the Registrants' Post Effective Amendment No.1
      to Form S-8 filed on June 23, 1995 as Registration No. 33-21177 and
      incorporated herein by this reference).

10.3  Form of Stock Option Agreement (filed as Exhibit 4.2 to the Registrants'
      Post Effective Amendment No.1 to Form S-8 filed on June 23, 1995 as
      Registration No. 33-21177 and incorporated herein by this reference).


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<PAGE>

10.4  Restated and Amended Limited Partnership Agreement for Global
      Telecommunications Systems, Ltd. dated December 31, 1993 (filed as
      Exhibit 10.4 to the Registrant's Annual Report on Form 10-K for the year
      ended December 31, 1993 and incorporated herein by this reference).

10.5  Loan and Stock Purchase Agreement dated November 20, 1995 between the
      Corporation and Pink Dot, Inc., a California Corporation ("Pink Dot")
      (filed as Exhibit 10.5 to the Registrant's Annual Report on Form 10-K for
      the year ended December 31, 1996 and incorporated herein by this
      reference).

10.6  Amendment to Loan and Stock Purchase Agreement dated September 20, 1996
      between the Corporation and Pink Dot (filed as Exhibit 10.6 to the
      Registrant's Annual Report on Form 10-K for the year ended December 31,
      1996 and incorporated herein by this reference).

10.7  Convertible Secured Note Purchase Agreement dated November 20, 1997
      between the Corporation and Physician Advantage LLC, Michael H. Burnam
      and Sheldon A.E. Rosenthal.

10.8  Loan Agreement dated September 23, 1997 between the Corporation and Touch
      Controls, Inc., a California Corporation.

10.9  Secured Convertible Promissory Note dated September 23, 1997 between the
      Corporation and Touch Controls, Inc., a California Corporation.

10.10 1997 Stock Incentive Plan.

16.1  Letter from KPMG as of May 9, 1997 (filed as an Exhibit to the
      Registrant's Report on Form 8-K dated May 5, 1997 and incorporated herein
      by this reference).

21    Subsidiaries of Registrant.

23.1  Independent Auditors' Consent - Deloitte & Touche LLP

23.2  Independent Auditors' Consent - KPMG Peat Marwick LLP

27.1  Financial Data Schedule for the year ended December 31, 1997.

27.2  Financial Data Schedule for the fiscal years ended December 31, 1996 and
      1995, the three months ended March 31, 1996, the six months ended June
      30, 1996 and the nine months ended September 30, 1996.

27.3  Financial Date Schedule for the three months ended March 31, 1997, the
      six months ended June 30, 1997 and the nine months ended September 30,
      1997.



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