SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 [FEE REQUIRED]

        For the fiscal year ended June 30, 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 0-27494

                         FIRST SOUTH AFRICA CORP., LTD.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

          Bermuda                                         N/A
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

             Clarendon House, Church Street, Hamilton HM CX, Bermuda
             -------------------------------------------------------
             (Address of Principal Executive Offices with Zip Code)

       Registrant's telephone number, including area code (441) 295-1422)

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

    Title of each class               Name of each exchange on which registered

         None                                        None

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

                          Common Stock, $.01 par value
                       ----------------------------------
                                ("Common Stock")

                           Class A Redeemable Warrants
                       ----------------------------------
                              ("Class A Warrants")

                           Class B Redeemable Warrants
                       ----------------------------------
                              ("Class B Warrants")

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 [_]




<PAGE>



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 Registrants  knowledge,  in definitive  proxy or information  statements
incorporated  by reference in Part III of this Form 10-K or any amendment to the
Form 10-K. [_]

State the aggregate market value of the voting stock held by  non-affiliates  of
the Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold,  or the average bid and asked  prices of such
stock,  as of a specified date within 60 days prior to the date of filing.  (See
definition of affiliate in Rule 405, 17 CFR 230.405).

The   aggregate   market  value  of  the   Registrants   Common  Stock  held  by
non-affiliates of the Registrant as of September 30, 1997, was $21,175,157.

Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date.

As of September 25, 1997 there were 3,694,498 shares of the Registrant's  Common
Stock outstanding and 1,822,500 shares of the Registrant's Class B Common Stock.



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PART 1
ITEM 1.  DESCRIPTION OF BUSINESS

           The  Company was  organized  to  acquire,  own and operate  seasoned,
closely  held  companies  in South  Africa  with  annual  sales in the  range of
approximately $5 to $50 million.  The Company has acquired through FSAH,  twelve
businesses  based in South Africa that are as a group  engaged in the  following
industry segments:

           1.        Packaging equipment and materials.
           2.        Metal washers used in the fastener industry.
           3.        Air conditioning and refrigeration machinery components.
           4.        Processed foods.

           Upon  completion of its initial public  offering in January 1996, the
Company acquired  Starpak (Pty) Limited,  which is engaged in the manufacture of
high quality plastic packaging machinery;  L.S. Pressing (Pty) Limited, which is
engaged in the  manufacture  of washers for use in the  fastener  industry;  and
Europair  Africa (Pty) Ltd.,  which is engaged in the  manufacture and supply of
air conditioning products. In April 1996, L.S. Pressings acquired the assets and
business of Paper & Metal Industries,  a small manufacturer of rough washers for
use in the fastener  industry.  In April 1996,  Europair acquired the assets and
business of  Universal  Refrigeration,  an agent and  supplier of  refrigeration
products.  In June 1996,  FSAH  acquired  Piemans  Pantry,  a  manufacturer  and
distributor  of high quality meat pies. In October 1996,  FSAH acquired  Astoria
Bakery and Astoria Bakery Lesotho,  manufacturers and distributors of speciality
baked breads and confectionary  products. In November 1996, the Company acquired
the assets of Alfapak  (Pty) Ltd.,  a  manufacturer  of plastic film and printed
plastic bags.  In November  1996,  Europair  acquired the assets and business of
First  Strut (Pty) Ltd, a  manufacturer  of  electrical  trunking  conduits.  In
January 1997, FSAH acquired Seemann's,  a manufacturer and distributor of a wide
range of processed meat products.  In April 1997, FSAH acquired the business and
assets of Gull Foods, a manufacturer of value-added prepared foods. In May 1997,
the Company acquired  Pakmatic  Company (Pty),  Ltd., a distributor of automatic
process and  packaging  machinery.  In June 1997,  FSAH  transferred  all of the
shares of  Piemans  Pantry,  Astoria,  Seemanns  and Gull  Foods to FSA Food and
completed (i) the initial public offering in South Africa of 5,000,000  ordinary
shares of common stock of FSA Food,  which shares are listed on the Johannesburg
Stock  Exchange,  (ii) an  institutional  private  placement  in South Africa of
20,000,000  ordinary  shares  of common  stock of FSA Food,  and (iii) a private
placement of 12,500,000 ordinary shares of common stock to management and staff.
As of August 11, 1997,  FSAH owned 70% of the issued and  outstanding  shares of
FSA Food.

           FSAH manages the Company's business  interests in South Africa.  FSAH
monitors  the  operational   performance  of  its  subsidiaries  and  seeks  out
prospective   acquisition  candidates  in  businesses  that  complement  or  are
otherwise  related  to  the  Company's  existing  acquisitions,   and  in  other
businesses that may be identified by the Company's management.

HISTORY

           The Company was founded in September 1995 in response to management's
perception of a growing global  interest in South Africa as an emerging  market.
The Company believes that the recent relaxation of trade and financial sanctions
and the  reintegration  of South Africa into the world  economic  community  may
increase the  opportunity  for improved  growth in the South African  economy in
general and more  particularly in the industry  segments in which the Company is
engaged. See Note 18 of the Notes to the Consolidated  Financial Statements with
respect to certain  financial  information  relating to industry segments of the
Company.



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STRATEGY

           The Company  intends to  continue to focus its efforts on  businesses
related to  infrastructure  development  and  consumer  goods  that the  Company
believes   are  well   situated  to  benefit   from  South   Africa's   on-going
transformation  into an active  participant  in the  global  market  place.  The
Company's  strategy  is to expand and  improve  its  current  operations  in the
industry sectors in which its operating  subsidiaries are currently engaged, and
in other related industry sectors, by acquiring mid-size, closely held companies
in  South  Africa  that  operate  efficiently,   profitably  and  have  seasoned
management. The Company believes that it can acquire these types of companies at
lower  multiples of earnings  than  comparable  companies  would  command in the
United  States.  The Company seeks to benefit from the  combination  of business
factors  that South  Africa has to offer,  which  includes a skilled work force,
effective and expanding infrastructure and increasing access to foreign markets.
The Company may also  consider  investments  in  businesses  that are located in
other  countries,  or are  engaged  in other  industries,  and in South  African
companies,  the securities of which are publicly traded, that meet the Company's
price and quality  requirements.  The Company has and will  continue to identify
potential acquisition candidates through the industry contacts of management and
the managements of its  subsidiaries,  as well as through other general business
sources.  To  date,  the  Company  has  financed  its  acquisitions   through  a
combination of cash, issuance of shares of stock of FSAH or the Company and debt
financing.  The Company  anticipates  that it will  continue  to follow  similar
financing strategies in its future acquisitions.

DESCRIPTION OF BUSINESSES IN EACH OF THE COMPANY'S INDUSTRY SEGMENTS

VALUE ADDED SPECIALTY FOODS
PIEMANS PANTRY

           Piemans  Pantry was  acquired  by the  Company in June 1996.  Piemans
Pantry  manufactures,  sells and distributes quality meat,  vegetarian and fruit
pies,  both in the baked and frozen,  unbaked form.  The business  manufactures,
markets and distributes from its  headquarters in Krugerdorp,  Gauteng and has a
regional sales office in KwaZulu-Natal.  Piemans Pantry strives to emphasize the
highest  standards of quality  control and  consistency  of product.  It's major
customers are  independent  retail baker shops,  pie shop  franchises,  in-store
bakeries, national bread bakery groups, institutional cafeterias and convenience
stores. Piemans Pantry's sales are conducted through its own employees,  as well
as  through  distributors/agents.   Approximately  60%  of  Piemans'  sales  are
internally  generated with the remainder through agents.  During the last fiscal
year the Spar Group (a cooperative of  independent  supermarkets)  accounted for
19% of the  Piemans  Pantry's  sales,  while the London Pie Company (a pie store
franchise chain)  contributed 15% of Piemans Pantry's sales. In the previous two
fiscal years, no customer accounted for more than 20% of Piemans Pantry's sales.

           Piemans Pantry competes on the basis of quality. It faces competition
from a number of  manufacturers,  primarily  those supplying to the lower end of
the market.  Piemans Pantry believes that it has only one significant competitor
and that its market share is currently around 20%. Piemans Pantry's  business is
slightly  stronger in the months of July through October as well as in December.
However,  these increases are not significant to make this a seasonal  business.
Piemans Pantry manufactures to order on a daily basis.  Backlog is therefore not
counted, nor is it relevant in the analysis of Piemans Pantry's business.

           Piemans  Pantry's  principal  suppliers  for its pastry  and  filling
ingredients are both local and foreign companies.  All suppliers except one have
immediate alternative sources. Piemans Pantry selects its suppliers on the basis
of  quality  and  price  and to  date  it has  had no  difficulty  in  obtaining
sufficient supplies.



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ASTORIA BAKERY

           Astoria  Bakery  manufactures,  sells  and  distributes  high  margin
specialty breads such as special rye breads in the Republic of South Africa from
its bakery in  Randburg.  Its major  customer  is  Woolworths,  a leading  South
African high-end retail chain, accounting for approximately 65% of sales. In the
previous  two  fiscal  years,  Woolworths  accounted  for  approximately  57% of
Astoria's sales.  Astoria strives to emphasize the highest  standards of quality
as well as uniqueness of product in its specialty  lines.  It faces  competition
from a number of manufacturers,  however, Astoria believes that it dominates the
market for specialty breads in Gauteng.

           In  addition,   Astoria  Bakers  Lesotho   manufactures,   sells  and
distributes  staple bread to the Lesotho market,  from its bakers in Maseru, the
capital of Lesotho. In Lesotho,  Astoria has one major competitor who has 40% of
the Lesotho bread market.  Astoria also has approximately 40% of this market and
the balance is controlled by in-store bakeries.

GULL FOODS

           Gull  Foods  manufactures  and sells a wide  range of  prepared  food
products.  Gull's product line includes over 150 products ranging from hamburger
patties,  prepared  sandwiches,  salads,  prepared pastas,  pizzas, and flavored
breads.  Gull manufactures and markets from its headquarters in Bronkhorstpruit,
a small town east of Pretoria.  It strives to emphasize the highest  standard of
quality in all its product lines.  Its major  customer is  Woolworths,  (a large
South  African  department  store chain) which in Gull's last three fiscal years
has  accounted  for  approximately  86% of  Gull's  revenues.  Gull's  remaining
business  is  derived  from  sales to the  airline  and  institutional  catering
industries.

           Gull  competes  on the  basis of  quality  and range of  product.  It
believes that it does not face direct  competition  in the Gauteng area of South
Africa and has a number of smaller  competitors  who supply to Woolworths in the
South African Cape.  All of the products sold to Woolworths  are marketed  under
the Woolworths  label.  Gull  generally sees an increase in its business  during
November and December,  as well as a seasonal increase during the Easter period.
However,  these increases are not  significant  enough to make Gull a seasonable
business.

           Gull  sells  its  products  to order and  therefore  does not carry a
backlog.  Gull's  suppliers  are all  located  in South  Africa.  All of  Gull's
suppliers have immediate  alternative sources. Gull selects its suppliers on the
basis of quality and price and to date has had no difficulty  obtaining adequate
supplies.

SEEMANNS

           Seemanns  manufactures,  sells,  and  distributes  a  wide  range  of
processed meat products including products typically found in retail butcheries,
as  well  as  high  margin   processed  and  smoked  meat   products.   Seemanns
manufactures,  markets and distributes  from its  headquarters  in Randburg.  It
strives to emphasize  the highest  standard of quality in all its product  lines
and has  become a well  known  brand  name in its  specialty  areas.  Its  major
customers are its own retail outlets,  accounting for  approximately  35% of its
revenues,  as well as the  Pick n' Pay  Group,  one of  South  Africa's  largest
supermarket chains,  which accounted for approximately 35% of Seemanns' sales in
Seemanns fiscal year ending  February 28, 1997. In the previous two years,  Pick
n' Pay  accounted  for more than 10% but less than 20% of  Seemanns'  sales.  In
addition,  Seemanns sells to a number of institutional  catering  organizations,
restaurant chains, and other institutional  customers.  Seemanns competes on the
basis of quality and range of product. It faces competition from retail butchery
chains, as well as supermarket groups. As a manufacturer, Seemanns believes that
it has established a strong niche in the


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market for high quality smoked and processed  meat products in the  Johannesburg
area.  Seemanns  generally sees an increase in its business  during November and
December,  as well as a seasonal  increase  during the Easter  period.  However,
these  increases  are not  significant  enough  to make  Seemanns  a  seasonable
business.

           Seemanns  carries  significant  amounts of raw meat inventory,  as it
purchases  supplies on a market  related  basis.  When raw  materials are cheap,
Seemanns  typically  uses its  strong  cash  resources,  to stock  pile  meat at
favorable  prices.  On  the  manufacturing  side  however,  Seemanns  sells  its
processed  meats on a daily  basis and  therefore  does not carry a  significant
backlog of orders. Seemanns' principal suppliers are mostly local. All suppliers
have immediate alternative sources.  Seemanns selects its suppliers on the basis
of  quality  and  price  and to date has had no  difficulty  obtaining  adequate
supplies.

PLASTIC PACKAGING MACHINERY
STARPAK

           Starpak  manufactures  high quality plastic  packaging  machinery and
does business under the name of Levy and Smith. Starpak's operations are located
in  Johannesburg  with  service  offices  in  Durban  and Cape  Town.  Machinery
manufactured by Starpak is generally used by  manufacturers  to provide low cost
and high quality  packaging for a broad spectrum of consumer goods. Its machines
are  used  in   industries   such  as  food,   baking,   beverages,   cosmetics,
pharmaceuticals,  chemicals,  motor oils, printing,  hardware and general trade.
Starpak markets its products directly and through independent sales agents. Over
96% of Starpak's  sales are generated  through its in-house sales force.  During
the last fiscal year,  no one customer  accounted for more than 10% of Starpak's
annual sales.  Prior to such time, Albany Bakeries,  which developed a new bread
packaging product, and the Premier Group, which purchased a wide range of bakery
packaging  equipment,  accounted for more than 10% of Starpak's  annual sales in
the previous two fiscal years.

           Starpak competes on the basis of quality.  Starpak faces  competition
from major  competitors  whose machines are frequently less expensive,  although
Starpak  believes  that they are of lower  quality  than  machines  produced  by
Starpak.  To the best of its  knowledge,  management  estimates  that the  total
market for shrink packaging  machinery in South Africa in 1996 was approximately
$11,100,000.  Of this total market, Starpak has an estimated 46% share, with the
remainder of the market being  serviced by a number of small  packaging  machine
manufacturing  companies.  In the  past,  Starpak  has  experienced  a  seasonal
down-turn in its business during the period  commencing  mid-December and ending
at the end of  February.  This  down-turn  appears to be due to the main  summer
holidays in South Africa that occur during such period.  The most active  period
for  receipt  of orders  has  historically  been from July to the  beginning  of
December.   As  of  July  31,  1997,   Starpak's  backlog  of  firm  orders  was
approximately $920,784 compared to approximately $975,074 as of July 31, 1996.

           Although Starpak's  principal  suppliers are foreign companies,  each
principal  supplier is represented  locally in South Africa and to date, Starpak
has not experienced  material  difficulties  or delays in obtaining  products or
supplies.  Almost all local  suppliers  are on  thirty-day  terms,  while  items
purchased  directly  from  overseas  suppliers  require  irrevocable  letters of
credit. Motors, which comprise approximately 5% of the cost of the machines, are
imported directly from non-African  sources.  Other products obtained by Starpak
from  its  suppliers  include  electronic  controllers,  pneumatics,  overloads,
contractors, switches and Teflon tape.

AIR CONDITIONING AND REFRIGERATION
EUROPAIR

           Europair manufactures and supplies products, parts and accessories to
the heating, ventilation and air conditioning industry ("HVAC") in South Africa.
Europair's operations are located in Johannesburg with branch offices in Durban,
Cape Town, Port Elizabeth, East London, Nelspruit and Petersburg. Europair seeks


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to provide a single source of components and accessories for original  equipment
manufacturers,  contractors  and  duct  shops in South  Africa  and  neighboring
countries. Its products include grilles, flexible ducting, flanging, insulation,
humidifiers,  fire dampers and other accessory products for the air conditioning
industry.  Europair markets its products  primarily  through its sales personnel
directly  to air  conditioning  and  building  contractors  as well as to  other
agents.

           Europair  believes  it is  unique in South  Africa in its  increasing
capacity as a full-range  supplier to the HVAC industry and believes it does not
currently  compete  directly  with any supplier that offers as  comprehensive  a
range of products.  Europair does, however, have a number of competitors in each
of its product groups.  Increasingly,  the threat of competition is presented by
less expensive  imports,  although such imports are sometimes  lower quality and
the  importers  are  generally  unable to stock a broad  range of  products.  As
Europair is in the air conditioning and refrigeration  business it experiences a
seasonality that corresponds with the summer months in the Southern  hemisphere.
Typically,  sales  are  higher  in  the  months  of  October  through  February.
Europair's  firm order  backlog  does not  represent  a material  portion of its
annual sales.

           Europair  relies  on local  suppliers  to  provide  it with  aluminum
extrusions,  aluminum  foil,  fiberglass  and other  insulation  material,  fire
dampers,  steel and wire in the  manufacturing  of  Europair's  products and for
inclusion in other products sold by Europair. The principal foreign suppliers of
Europair provide it with humidifiers, glue, air valves, vinyl, polyester, access
doors and fans. Ordinarily,  Europair does not experience material difficulty in
procuring  the raw materials  required for its  production  processes.  Aluminum
prices are, however,  commodity driven and change frequently. The Durban factory
experienced  a  substantial  inventory  shortage  with  respect to its  aluminum
requirements  in October  and  November  1994 due to a  countrywide  shortage of
aluminum.  In response to such shortage Europair has accumulated and maintains a
substantial stockpile of aluminum.

UNIVERSAL REFRIGERATION

           Universal Refrigeration has been renamed Europair  Refrigeration,  it
is a wholly owned subsidiary of Europair engaged as an agent in the distribution
and supply of various  refrigeration  related products.  Its sales are generated
through Europair's existing national sales network.

FASTENER INDUSTRY
L.S. PRESSINGS

           L.S.  Pressings  and  its  subsidiary,   Paper  &  Metal  Industries,
manufacture  washers  for supply to  distributors  of nuts and bolts who in turn
distribute  L. S.  Pressing  products  to end users in  various  industries  and
markets. L.S. Pressings'  operations are located in Johannesburg.  L.S Pressings
manufactures a full range of washers to metric, capital imperial as well as U.S.
specifications.  In  addition,  it  manufactures  special  size  washers to suit
customers specific requirements. Washers are manufactured from mild steel, black
(heat tempered) steel,  copper,  brass, fiber and various plastics.  Washers are
used in numerous industries,  including  automotive,  electrical,  furniture and
construction  industries.  They are also used for sealing purposes, water piping
and as a non-conductive  element.  L.S.  Pressings has no sales  representatives
with  orders  being  placed  directly  by  customers.  Substantially  all of the
customers are distributors who resell the washers to end users.

           L.S.  Pressings  believes that it is the single  largest  supplier of
washers in the South African  market,  although a number of competitors  compete
with L.S. Pressings in particular niches. L.S. Pressings' strongest  competition
is from  importers of standard  size washers  manufactured  in Taiwan.  However,
importers of  Taiwanese  washers  generally do not offer a "one-stop"  source of
supply and L.S.  Pressings  believes it competes  successfully  with  respect to
pricing. As a result, the importers have not had a substantial impact on


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L.S.  Pressings'  sales although there can be no assurance that this will remain
the case. L.S.  Pressings  believes that no other South African  manufacturer of
washers  offers  a  comparable  range  of  products.  L.S.  Pressings  typically
manufactures  to order  and  delivers  within  approximately  10 days of  order.
Backlog  numbers are therefore not  significant  for L.S.  Pressings and tend to
vary widely.  However,  as of July 31, 1997, L.S.  Pressings' firm order backlog
was $46,758 as compared with $43,377 on July 31, 1996.

           All of L.S.  Pressings'  suppliers are local  companies.  In the last
year there has been a shortage of scrap  metal in South  Africa,  although  L.S.
Pressings  has  had no  material  problems  obtaining  scrap  required  for  its
operations.  Spring washers, which comprise approximately 10% of L.S. Pressings'
annual sales, are manufactured using a different process to that adopted by L.S.
Pressings.   As  a  result,   L.S.  Pressings   purchases  spring  washers  from
locally-represented  suppliers.  Apart  from  the  month  of  December  when its
factories are closed, there is no particular seasonality to these businesses.

REGULATION

           The Company's South African business operation is subject to a number
of  laws  and  regulations  governing  the  use  and  disposition  of  hazardous
substances,  air and  water  pollution  and other  activities  that  effect  the
environment.  The Company's management believes that each of its subsidiaries is
in substantial  compliance with applicable South African law and the regulations
promulgated  under such law and that no violation of any such law or  regulation
by any such company has occurred  which would have a material  adverse effect on
the financial condition of the Company.

EMPLOYEES

           As of September  25, 1997,  in addition to its  President who devotes
substantially all of his business time to the Company,  the Company had only one
full-time salaried employee. "See Management Employment Agreements".  As of such
date, FSAH had only four full-time  salaried  employees.  The Company intends to
add employees as necessary to meet management and other  requirements  from time
to time.  On July 1,  1996,  FSAH  entered  into an  employment  agreement  with
Cornelius J. Roodt to act as its Managing Director. See "Management-  Employment
Agreements".  As of September  25, 1997,  the Company's  operating  subsidiaries
employed approximately 2,500 people.

ITEM 2.
PROPERTIES

           The Company's  principal  executive  offices are located at Clarendon
House, Church Street, Hamilton, HM 11, Bermuda, which space is made available to
the Company  pursuant  to a corporate  services  agreement  entered  into with a
corporate  services company in Bermuda..  The Company's U.S.  subsidiary,  First
South African  Management Corp.  (FSAM) has its principal  executive  offices at
2665 South  Bayshore  Drive,  Suite 702,  Coconut Grove,  Florida 33133.  FSAM's
offices consist of approximately  2,000 square feet of office space in an office
section of Coconut Grove, Florida,  which FSAM occupies pursuant to a three-year
lease  agreement  (expiring  in 1999) with a monthly  rental of  $2,600.  FSAH's
principal  executive  offices are located in the facilities of Europair in South
Africa.

           Starpak  and L.S.  Pressings  operate  out of a  facility  made up of
adjacent  buildings owned by Levy & Smith Properties  (Proprietary)  Limited,  a
wholly-owned  subsidiary  of  Starpak.  The  facility  has a total  lot  size of
approximately  30,000 square feet. The facility has three floors at 85% coverage
equal to a total of 76,500  square feet.  The Company  anticipates  that it will
require  additional space and is considering the rental of additional space at a
nearby  location.  Starpak  also has  branches  in Durban and Cape  Town,  South
Africa.


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           Europair  operates  from  premises  and  facilities  that  it owns in
Gauteng and from leased premises in KwaZulu-Natal,  Western Cape and the Eastern
Cape. Pursuant to an option granted by the Company,  Mr. Bruce Thomas (the Chief
Executive Officer of Europair) has acquired Europair's premises for $890,868 and
entered into a ten year lease  (expiring in 2006) with  Europair with respect to
such  premises  for an initial  rental  rate of  $110,111  per  annum.  Europair
believes  this  property  is  well  suited  to  Europair's  operations  and  can
accommodate relatively large increases in manufacturing and storage.  Europair's
other leased properties are located in Durban, Cape Town and Port Elizabeth.

           Piemans Pantry  operates from premises and facilities that it owns in
Krugersdorp.  The  facility  has two floors  with a total size of 38,000  square
feet. In addition,  Piemans Pantry rents a retail  facility in  Krugersdorp,  as
well as an office space in KwaZulu-Natal.

           Paper & Metal Industries rents two adjacent industrial  properties in
Germiston, Gauteng. The total size of the facility is 8,975 square feet. Paper &
Metal have a two year lease  (expiring  in 1998) at  approximately  $34,744  per
annum.

           Astoria leases  approximately 20,000 square feet of space in Randberg
for which it pays an annual rental amount of approximately $100,000 (pursuant to
a lease expiring in 2006).  Astoria also leases  approximately 6,000 square feet
in Lesotho for which it pays an annual  rental  amount of  approximately  $7,000
(pursuant to a lease expiring in 2006).

           Gull  operates  from  premises  and  facilities   that  it  rents  in
Bronkhorstspruit.  Such  premises  include  approximately  52,000 square feet of
space. Rental cost is approximately  $44,000 per annum with a lease term of five
years.  In addition,  Gull rents a small  manufacturing  and retail  facility of
approximately 4,000 square feet in downtown  Johannesburg.  Rental cost of these
premises is approximately $8,000 per annum with a lease term of five years.

           Seemanns  operates  from  premises  and  facilities  that  it owns in
Randburg.  These premises include the retail outlet and comprises  approximately
44,000 square feet.

ITEM 3.
LEGAL PROCEEDINGS

           Neither the Company  nor any of its  subsidiaries  are subject to any
material legal proceedings.

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

           On  January  24,  1996 , the  Company's  Common  stock and Units were
listed for  quotation  on the  SmallCap  Market on the Nasdaq  System  under the
symbols FSACF and FSAUF,  respectively.  The following table sets forth, for the
periods indicated the high and low bid prices for the Common Stock and Unites as
reported by Nasdaq.  Quotation  reflect prices between  dealers,  without retail
mark-up,  mark down or  commissions  and may not  necessarily  represent  actual
transactions.


                       High Bid                       Low Bid
                       --------                       -------
Common Stock
------------
1996
3rd Quarter            $  4.75                       $ 2.88
4th Quarter            $  6.00                       $ 3.00



                                        9

<PAGE>



                                           High Bid                     Low Bid
                                           --------                     -------
                                      
1997                                  
1st Quarter                               $  6.50                       $ 4.50
2nd Quarter                               $  5.75                       $ 4.00
3rd Quarter                               $  7.38                       $ 3.50
4th Quarter                               $  8.75                       $ 4.63
                                      
1998                               
1st Quarter(through September 24, 1997)   $  8.69                       $ 7.13

Units
1996
3rd Quarter                               $  6.50                       $ 5.38
4th Quarter                               $ 10.00                       $ 5.25

1997
1st Quarter                               $  9.72                       $ 6.75
2nd Quarter                               $ 11.00                       $ 8.25
3rd Quarter                               $  9.75                       $ 6.75
4th Quarter                               $ 14.13                       $ 6.38

1998
1st Quarter(through September 24, 1997)   $ 13.75                       $10.00

Class A Warrants
1996
3rd Quarter                               $ 3.00                        $1.50
4th Quarter                               $ 2.87                        $1.58

1997
1st Quarter                               $ 3.00                        $2.25
2nd Quarter                               $ 5.00                        $2.75
3rd Quarter                               $ 2.38                        $1.25
4th Quarter                               $ 3.88                        $1.06

1998
1st Quarter(through September 24, 1997)   $ 3.875                       $2.00

Class B Warrants
1996
3rd Quarter                               $ 1.62                        $ .62
4th Quarter                               $  .88                        $ .62

1997
1st Quarter                               $ 1.25                        $ .25
2nd Quarter                               $ 1.50                        $ .63
3rd Quarter                               $ 1.50                        $ .59
4th Quarter                               $ 1.94                        $ .39

1998
1st Quarter(through September 24, 1997)   $ 1.875                      $ 1.00



                                       10

<PAGE>



           The Company  has not  declared  or paid any  dividends  on the Common
Stock and does not intend to declare or pay any dividends on the Common Stock in
the foreseeable  future.  The Company  currently intends to reinvest earnings in
the development  and expansion of its business.  The declaration of dividends in
the future  will be at the  election of the Board of  Directors  and will depend
upon earnings,  capital  requirements and the financial position of the Company,
general economic conditions and other relevant factors.

           As  of  September   24,   1996,   there  were   approximately   1,430
shareholders, both of record and beneficial, of the Company's Common Stock.

           In January,  1997, the Company entered into a stock option  agreement
with Barretto Pacific  Corporation ("BPC") pursuant to which the Company granted
BPC an option to purchase  25,000 shares of Common Stock at an exercise  private
of $3.75 per share. Such option shall expire 180 days after the effectiveness of
the  Registration  Statement on Form S-1 with respect to the registration of the
Company's  Debentures (as defined in the following  paragraph) and certain other
securities  of the Company as filed on August 13, 1997.  Such option was granted
in  consideration  of certain  services  rendered  by BPC for the  Company.  The
Company   believes  that  such  transaction  is  exempt  from  the  registration
provisions of the Act in reliance on Section 4(2) of the Securities Act of 1933,
as amended (the "Act").

           In April 1997 through August, 1997 the Registrant completed a private
placement of 10,000  senior  Subordinated  Convertible  Debentures  due June 15,
2004.  The  Registrant  believes that such private  placement is exempt from the
registration  provisions of the Act in reliance upon Regulation D and Regulation
S promulgated under the Act. Value Investing Partners,  Inc. earned a commission
equal to $700,000,  a  non-accountable  expense  allowance equal to $100,000 and
will receive 10 year warrants to purchase  135,000  shares of Common Stock at an
exercise price of $6.00 per share with respect to such private  placement.  (See
Item  12  "Certain   Relationships  and  Related   Transactions  -  FSAC  Escrow
Agreements,"  for a description  of the issuance of additional  shares of Common
Stock in May 1997. The Company believes that such transaction is exempt from the
registration provisions of the Act in reliance on Section 4(2) of the Act.)




                                       11

<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA

SELECTED HISTORICAL AND PRO FORMA
CONDENSED COMBINED FINANCIAL DATA

           The following selected financial data for Starpak and L.S. Pressings,
the Company's predecessor, as of and for the periods presented have been derived
from the combined audited  financial  statements of Starpak and L.S.  Pressings.
The  unaudited  financial  data,  in the  opinion  of  management,  contain  all
adjustments  (consisting only of normal and recurring adjustments) necessary for
a fair  presentation  of such data.  The results of the interim  periods are not
necessarily  indicative of the results of a full year. All of the financial data
set forth below should be read in  conjunction  with the  information  appearing
under the caption  "Management's  Discussion and Analysis of Financial Condition
and Results of Operations."

<TABLE>
<CAPTION>
                                                  SELECTED FINANCIAL INFORMATION

                                        Predecessor Company (1)    March 1, 1995             The  Company
                                        -----------------------    -------------             ------------
                                      Years ended February 28,      to June 30,     July 1, 1995         July 1, 1996
                                      --------------------------    -----------     -------------        ------------
                                                                        1995       to June 30, 1996     to June 30, 1997
                                                                        ----       -----------------    ----------------
                                         1993          1994        1995
Statement of Operations Data               $            $            $            $            $              $
                                        -------       -------      -------     -------     ----------      ---------
<S>                                   <C>           <C>          <C>         <C>           <C>            <C>       
Net sales..........................   6,256,667     6,851,457    8,826,856   3,297,507     14,911,097     66,575,931
Total operating expenses...........   5,818,092     6,414,144    8,179,083     292,806     19,833,942(3)  61,134,362
Operating income...................     438,575       437,313      647,773     334,701     (4,922,845)     5,441,569
Interest paid......................     223,314       180,960      152,163      18,801        856,733(4)     858,067
Net income before tax and minority
    interests......................     269,251       321,319      536,440     359,045     (5,248,942)     8,379,511(5)
Net Income after tax...............     138,839       207,916      313,882     213,829     (5,737,560)     6,683,165

</TABLE>

<TABLE>
<CAPTION>
                                                      Predecessor Company (1)
                                                            February 28,
                                                                                June
                                                                                 30,                      June 30,1997
                                         1993          1994          1995       1996
Balance Sheet Data                         $             $             $          $                            $
                                        -------       -------      -------     -------     ----------      ---------
<S>                                    <C>           <C>         <C>          <C>                          <C>       
Total assets.......................    3,976,769     3,976,974   5,161,709    23,604,994                   64,197,149
Long term liabilities..............    1,140,244     1,112,391   1,123,665     2,361,372                   13,341,758
Net working capital................    1,177,250     1,194,931   1,366,602     4,624,417                   26,196,023
Stockholders' equity...............    1,527,356     1,580,826   1,828,656    12,792,376                   23,220,014
</TABLE>

-----------

(1)  Represents the combined results for Starpak and L.S.  Pressings,  which are
     deemed to be the predecessor of the Company due to the Common ownership and
     control of such entities. The Company's fiscal year end is June 30.

(2)  No dividends were declared or paid during the periods presented.

(3)  Includes a one time non cash escrow shares charge of $6,314,000  related to
     the  release of 1.1  million  shares  under the terms of an Earnout  Escrow
     Agreement between the Company,  certain shareholders and the Underwriter of
     the Company's Initial Public Offering.

(4)  Includes  a non cash  charge of  $396,000  relating  to costs  incurred  in
     connection with a November 1995 Bridge Note Financing.

(5)  Includes a net gain of  $3,327,478  on the sale of  investment  in First SA
     Food Holdings, Ltd., L.C. As well as a minority interest of $35,224.

                                       12
<PAGE>




                         PRO FORMA FINANCIAL INFORMATION

The pro-forma  information has been prepared  assuming that the acquisitions had
taken place and that operations had commenced on July 1, 1995.

The pro-forma  information does not purport to be indicative of the results that
would have been  obtained if the  acquisitions  had occurred at the beginning of
the period, nor is it indicative of future results.

                   PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
               FOR THE YEARS ENDED JUNE 30, 1996 AND JUNE 30, 1995
                                   (unaudited)


                                                   Proforma (Unaudited)
                                                   --------------------
                                                 Year ended     Year ended
                                                  June 30,       June 30,
                                                    1997           1996
                                                     $              $
                                                 -----------    -----------

Revenues                                          78,596,647     71,374,856
                                                 -----------    -----------

Operating  expenses
   Cost of sales                                  46,006,407     42,259,173
   Selling, general and administrative costs      26,575,103     23,636,005
   Non cash escrow share charge                         --       6 ,314,000
                                                 -----------    -----------
                                                  72,581,510     72,209,178
                                                 -----------    -----------
Operating (loss)/income                            6,015,137       (834,323)

Other income                                       3,904,884        872,766
Interest expense                                    (823,912)   (1,524 ,287
                                                 -----------    -----------
(Loss)/income before income taxes and minority     9,096,109     (1,485,844)
    interests
Provision for taxes on income                    (1,834, 833)    (2,049,047)
                                                 -----------    -----------
Minority interest in consolidated subsidiary
   companies                                        (135,224)          --
                                                 -----------    -----------
Net (loss)/income                                  7,136,979     (3,534,891)
                                                 ===========    ===========






                                       13

<PAGE>



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

Introduction

           The Company was  incorporated  in September 1995 to acquire,  own and
operate closely held companies in South Africa with annual sales in the range of
approximately $5 million to $50 million.  In this regard,  the Company,  through
its South  African  subsidiaries  has acquired  twelve South  African  companies
(collectively, the "Acquisitions" engaged in the following industry segments.

           1.         Packaging equipment and materials through Starpak, Alfapak
                      and Pakmatic
           2.         Metal  washers  used in the fastener  industry  through LS
                      Pressings and Paper and Metal.
           3.         Air conditioning and  refrigeration  machinery  components
                      though Europair Refrigeration and First Strut.
           4.         Processed foods through  Piemans  Pantry,  Astoria Bakery,
                      Seemanns and Gull Foods.

           See  "Business"  and "Certain  Transactions."  The Company has funded
itself  since  inception  primarily  through  stockholders'  loans  and  capital
contributions and the Bridge Financing of Notes and Warrants and the proceeds if
its Initial Public  Offering  completed in January 1996, as well as the issuance
of subordinated  convertible  debentures.  The Company  anticipates that it will
derive  revenues  primarily  through  income  generated  from the  operations of
acquired operating companies in South Africa.

           The annual  rate of  inflation  in South  Africa for the  periods set
forth below was as follows:


     Fiscal Year 1996             Fiscal Year 1997
     ----------------             ----------------
           6.9%                          8.8%

           The average rate for the South  African Rand against the U.S.  dollar
for the periods under discussion were as follows:


                                 Fiscal Year 1996         Fiscal Year 1997
                                 ----------------         ----------------
                                    $1 = R3.85               $1 =R4.53
      Depreciation of                                          17.7%

           As the Company's results are reported in U.S.  dollars,  but revenues
and earnings are primarily  generated in South African Rand, the local inflation
rate and the  depreciation  of the South  African Rand against the US dollar for
the periods in  question  are  important  to further  the  understanding  of the
Company's results.  In general, if the rate of depreciation of the South African
Rand to the U.S.  dollar for any  comparable  period is  greater  than the South
African rate of inflation  for that same period then the Company  would have had
to generate local revenues and earnings in excess of the South African inflation
rate in order to maintain dollar parity. For the period ended June 30, 1997, the
depreciation  of the South  African Rand to the dollar  equaled  17.7% while the
annual rate of  inflation  was 8.8%.  In order for the Company to report  dollar
growth in revenues and earnings it would need to have  generated  growth of over
8.9% in inflation  adjusted numbers through its local South African  operations.
The  results,  therefore,  for the period  indicated  above as reflected in U.S.
dollars,  is in excess of inflation  adjusted South African Rand for revenue and
earnings growth.



                                       14

<PAGE>



Results of Operations

           This  discussion  should  be read in  conjunction  with the  Selected
Historical  and Pro Forma Combined  Financial Data and the financial  statements
and notes thereto appearing elsewhere in this document. In this discussion, "Pro
Forma"  includes all the combined  results for the Company's  acquisitions  that
have been  consummated  since the Company's  Initial Public Offering in January.
The "Pro Forma"  results may not be  representative  of the actual  results that
would have been achieved had such events  actually  occurred at the beginning of
the periods indicated.





                                       15

<PAGE>




                      FIRST SOUTH AFRICA CORPORATION, LTD.
                                     Bermuda
                                Listed on NASDAQ

<TABLE>
<CAPTION>

================================================================================
First South Africa                First South African Holdings
 Management Corp.                         South Africa
     Delaware
--------------------------------------------------------------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                              First SA Food Holdings
                                              Listed on Johannesburg
                                                  Stock Exchange

                                                  Specialty Food                                           Air Conditioning and
                      Fasteners                    Manufacturing                  Packaging                    Refrigeration

                   L.S. Pressings                 Piemans Pantry*                  Starpak                       Europair
                Acquired January 1996           Acquired June 1996          Acquired January 1996          Acquired January 1996
             Purchase price: $1,900,905     Purchase price: $9,200,000    Purchase price: $838,545      Purchase price: $1,029,206

                    Paper & Metal                 Astoria Bakery*                  Alfapak                Europair Refrigeration
                 Acquired April 1996            Acquired July 1996         Acquired November 1996           Acquired April 1996
              Purchase price: $380,000      Purchase price: $4,400,000    Purchase price: $300,000       Purchase price: less than
                                                                                                                 $100,000
                                              Seemanns Meat Products*             Pakmatic                      First Strut
                                              Acquired November 1996         Acquired April 1997            Acquired July 1996
                                            Purchase price: $5,300,000    Purchase price: $1,228,000      Purchase price: $600,000
                                                    Gull Foods*
                                               Acquired January 1997
                                             Purchase price: $9,000,000
</TABLE>

*          These acquisitions include contingent payments based on a multiple of
           future earnings. The purchase prices reflected for these acquisitions
           include the Company's  current estimate of the total price to be paid
           after all contingent payments are made.



                                       16

<PAGE>



           Due to the lack of comparative prior financial periods,  and in order
to provide a  meaningful  reference  point in the  Management's  Discussion  and
Analysis,  comparative  twelve  month pro forma  results have been added for the
periods  ended  June 30,  1997 and 1996  respectively.  These pro forma  results
include the results for all of the Company's acquisitions,  including those made
after January 24, 1996.  Attention is drawn to the  Management's  Discussion and
Analysis for the Pro Forma periods  mentioned  above.  This section provides the
most meaningful analysis of the Company's performance on a broader time scale.


                                           Proforma (Unaudited)
                                                Year Ended           Year Ended
                                               June 30, 1997       June 30, 1996

Costs of sales ...................................  58.0%              59.2% 
Gross profit .....................................  41.5%              40.8%
Selling, general and administrative expenses .....  33.8%              33.1%
Interest expense .................................   1.0%               2.1%
Operating income (pre non cash escrow charge) ....   7.7%               7.7%
Other income (net of other expenses) .............   5.0%               1.2%
Income before income taxes( pre non cash escrow                       
    charge) ......................................  11.4%               6.8%
Income before income taxes .......................  11.4%              (2.1%)
                                                              

           Pro Forma Twelve Months Ended June 30, 1997
           Compared to Pro Forma Twelve Months Ended June 30, 1996

           Pro-forma sales for the 12 months ended June 30, 1997 increased 10.1%
to  $78,596,647  from  $71,374,856  for the period ended June 30, 1996. In local
currency,  this  increase was equal to  approximately  28% which  reflects a net
growth after  inflation of  approximately  19%. For the year ended June 30, 1997
the Company's processed foods operations contributed  approximately 65.7% of the
Company's  sales  versus  67.7% for 1996.  Air  conditioning  and  refrigeration
segment for 1997 contributed  approximately  15.8% of sales versus 12% for 1996.
The packaging  equipment  segment for 1997  contributed  approximately  12.9% of
sales versus 12.8% for 1996.  While the  fastener  segment for 1997  contributed
approximately 5.6% of sales versus 7.5% for 1996. Sales in all business segments
increased,  except  for  the  fastener  segment.  The  overall  increase  can be
attributed to increasing  demand for the Company's  products as the middle class
base of consumers  continues to grow as South Africa continues its transition to
more broad based economic participation. In addition, the Company's subsidiaries
have continued to purchase additional  manufacturing  capacity to take advantage
of this demand.

           Pro-forma cost of goods sold were $46,006,407 and $42,259,173 for the
twelve months ended June 30, 1997 and 1996 respectively.  This represented 58.5%
of sales  for the  twelve  months  ended  June 30,  1997  versus  59.2 % for the
corresponding  period in 1996.  For the year ended June 30,  1997 the  pro-forma
cost of goods for the Company's processed foods operations was approximately 56%
versus 58% for 1996. Air  conditioning  and  refrigeration  segment for 1997 was
approximately 66% versus 60% for 1996. The packaging  equipment segment for 1997
was  approximately  59% versus 56% for 1996. While the fastener segment for 1997
was approximately 62% versus 60% for 1996. The overall decrease can therefore be
primarily  explained  by  improved  productivity  in the food  companies  due to
increased automation.

           Pro-forma  sales,  general  and  administrative  costs  increased  to
$26,575,103  from $23,636,005 for the twelve months ended June 30, 1997 and 1996
respectively. This represented 33.8% of sales for the twelve


                                       17

<PAGE>



months  ended June 30, 1997  versus  33.1% for the  corresponding  period a year
earlier.  For the  year  ended  June  30,  1997  the SG and A  expenses  for the
Company's  processed foods  operations was  approximately  34.5% of sales versus
34.4% for 1996. Air conditioning and refrigeration for 1997 was 30% versus 33.5%
in 1996.  The  packaging  equipment  segment for 1997 was 29.2%  versus 31.6% in
1996.  While the fastener segment for 1997 was 14.1% versus 13.2% for 1996. This
increase is primarily  attributable to the Company's net corporate expenses. The
Company was formed in September 1995 and completed its Initial  Public  Offering
in January of 1996.  As a result the  pro-forma  results  for fiscal 1996 do not
reflect a full charge for the Company's corporate overhead.  During fiscal 1996,
the Company expended approximately $400,000 in corporate overhead, while in 1997
this number  increased to  approximately  $1.4 million.  In addition,  under the
terms  of  certain  executive  employment   agreements,   the  Company  recorded
approximately  $300,000  in  bonuses  related  to the gain on the sale of 30% of
First SA Food Holdings, Ltd., as part of its general SG&A expense.

           Pro-forma  Interest  expenses  decreased to 823,912 during the twelve
months ended June 30, 1997 from  $1,524,827 for the twelve months ended June 30,
1996.  Most of this decrease can be attributed to a non-cash  charge of $396,000
that the Company took in connection with its November 1995 private  placement of
Bridge Notes. In addition some of the Company's operating subsidiaries generated
interest on net cash  balances  which  reduced the  Company's  consolidated  net
interest.

           Proforma  other  income was  $3,904,884  and  $872,766 for the twelve
months ended June 30, 1997 and 1996,  respectively.  This  increase is primarily
attributable to a net gain of $3,327,478 on the sale of the Company's investment
in First SA Food Holdings Ltd. In June 1997,  the Company  completed the Initial
Public  Offering of 5,000,000  ordinary shares of common stock of its subsidiary
First SA Food  Holdings,  which  shares  are  listed on the  Johannesburg  Stock
Exchange;  an  institutional  private  placement in South  Africa of  20,000,000
ordinary  shares  of  common  stock of FSA  Food,  and a  private  placement  of
12,500,000  ordinary  shares of common  stock to  management  and  staff.  As of
September 30, 1997 the Company owned 70% of First SA Food.

           The Company recorded a non-cash escrow share charge of $6,314,000 for
the year ended June 30,  1996.  This charge  relates to the release of 1,100,000
shares of Class B Common Stock from an Earnout Escrow Agreement that the Company
entered  into with the  underwriter  of its  January  24,  1996  Initial  Public
Offering. Under the terms of this agreement,  1,100,000 shares were deposited in
escrow  subject to the Company  achieving  certain  pre-tax  Pro Forma  earnings
results. As the pro forma results for June 30, 1996 met the earnout requirements
of this  agreement,  the Company  took this one time  non-cash  charge which was
calculated by multiplying  1,100,000 shares by the then current bid price of the
Company's  Common  Stock.  The  $6,314,000  charge was  reflected as  additional
Capital in Excess of Par in the June 30, 1996 Balance Sheets.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - PREDECESSOR COMPANY.

           The annual rate of inflation in South Africa for the period set forth
below was as follows:


         1993                    1994                   1995
         ----                    ----                   ----
         13.9%                   9.7%                   8.6%



                                       18

<PAGE>



           The average rate for the South  African Rand against the U.S.  dollar
for the periods under discussion were as follows:


      Fiscal Year 1993          Fiscal Year 1994       Fiscal Year 1995
      ----------------          ----------------       ----------------
         $1 = R2.90                $1 = R3.32             $1 = R3.53
      Depreciation of                14.48%                  6.3%

           Based on these  figures,  in  evaluating  the  comparable  sales  and
expense  numbers for the companies in question for the period ended February 28,
1995  versus the period  ended  February  28,  1994,  approximately  3.5% of the
increase in sales and expenses can be  attributed  to the net effect of the rate
of inflation of South  Africa.  The calendar  year figures are provided with the
fiscal year  figures as set forth above to provide an  effective  comparison  of
inflation figures for the periods in question.

           Results of Operations

           This  discussion  should  be read in  conjunction  with the  Selected
Historical  and Pro Forma Combined  Financial Data and the financial  statements
and notes thereto  appearing  elsewhere in this Prospectus.  In this discussion,
"Historical" reflects the combined historical financial data of Starpak and L.S.
Pressings.  Prior to the Company's  Initial Public Offering,  such entities were
each  principally  owned by FSA Stock  Trust,  a  principal  stockholder  of the
Company,  and are therefore  treated as the Company's  predecessor.  "Pro Forma"
assumes the consummation of this Offering and the acquisition of Europair.

COMBINED RESULTS FOR STARPAK AND L.S. PRESSINGS

<TABLE>
<CAPTION>
                                   Period from March 1. 1995
 As Percentage of Sales                to June  30, 1995    1995        1994         1993
-----------------------                -----------------    ----        ----         ----
                                                           Fiscal Year Ended February 28,
                                                           ------------------------------
<S>                                             <C>         <C>          <C>         <C>  
Costs of sales................................. 57.0%       57.3%        65.9%       66.0%
Gross profit................................... 43.0%       42.7%        34.1%       34.0%
Selling, general and administrative expenses... 32.8%       35.4%        27.7%       27.0%
Interest expense...............................   .05%       1.7%         2.6%        3.6%
Operating income............................... 10.1%        7.3%         6.4%        7.0%
Other income (net of other expenses)...........  1.3%        0.5%         0.9%        0.9%
Income before income taxes..................... 10.9%        6.1%         4.7%        4.3%
</TABLE>

           Twelve Months Ended February 28, 1995 Compared to Twelve Months Ended
           February 28, 1994

           Historical  sales for the  twelve  months  ended  February  28,  1995
increased  28.8% to $8,826,856 from $6,851,457 for the period ended February 28,
1994. As adjusted for inflation, historical sales volume increased approximately
25%.  The  increase  included  a 48%  increase  in sales of L.S.  Pressings  (or
approximately  45% volume  increase) and a .05%  decrease (a 3% volume  increase
adjusting  for  inflation)  in the sales of Starpak.  The overall  growth in the
volume  of  sales  of  the  companies  can  be  primarily  attributable  to  the
improvement  in  macro-economic  conditions in South Africa  following the April
1994 elections, as described above.

           The Historical  cost of goods sold were $5,058,749 and $4,513,384 for
the  twelve  months  ended  February  28,  1995  and  1994,  respectively.  This
represented  57.3% of sales for the twelve months ended February 28, 1995 versus
65.9% for the  corresponding  period a year earlier.  Decreases in cost of goods
sold were  experienced in both Starpak and L.S.  Pressings and can be attributed
primarily  to more  efficient  production  that  resulted  from the  increase in
revenues, as both companies have relatively fixed manufacturing  overhead costs.
In addition,  labor costs as a percentage of sales were reduced, as there were a
number of work


                                       19

<PAGE>



stoppages in support of political causes prior to the elections which negatively
impacted on the cost of sales for the year ended February 28, 1994.

           Historical sales,  general and administrative  costs increased 64% to
$3,120,334  from  $1,900,760  for the twelve months ended  February 28, 1995 and
1994, respectively.  This represented 35.4% of sales for the twelve months ended
February  28, 1995 versus  27.7% for the  corresponding  period a year  earlier.
These  increases  were  experienced  in both  companies  and  can be  attributed
primarily to increased  expenditures in  administrative  personnel as well as an
increase of $213,280 in management profit sharing bonuses which resulted from an
increase in operating profits.

           Historical  interest  expenses declined to $152,163 during the twelve
months  ended  February  28,  1995 from  $180,960  for the twelve  months  ended
February 28, 1994. This decrease can be attributed primarily to a decline in the
average  level of  borrowings  during  the year.  However,  in order to  support
expansion,  the companies  increased their investment in fixed assets during the
last quarter of the fiscal year. As a result, despite the lower average level of
borrowings during the year, the aggregate  interest-bearing debt at February 28,
1995 was  $1,180,000  while the  corresponding  balance at February 28, 1994 was
$1,070,000.

           Historical other income was $40,830 and $64,966 for the twelve months
ended February 28, 1995 and 1994,  respectively.  The decrease can be attributed
primarily to a decline in other  income  earned by Starpak due to the release of
bad debt provisions in 1994, as well as a loss on the disposal of fixed assets.

           During  fiscal  1995  the  South  African  tax  authorities   lowered
corporate  income  taxes from 40% to 35%.  This has resulted in a 5% increase in
net income for the company for the year ended  February  28, 1995 as compared to
the corresponding period in 1994.

           Twelve Months Ended February 28, 1994 compared to Twelve Months Ended
           February 28, 1993.

           Historical  sales for the  twelve  months  ended  February  28,  1994
increased 9.5% to $6,851,457  from  $6,256,667 for the period ended February 28,
1994. The increase  included a 3.7% increase in volume sales of L.S.  Pressings,
and a 9.3% increase in the volume sales of Starpak.

           Historical  cost of goods sold were $4,513,384 and $4,128,047 for the
twelve months ended February 28, 1994 and 1993,  respectively.  This represented
65.9% of sales for the twelve  months  ended  February 28, 1994 versus 66.0% for
the corresponding period in the prior year.

           Historical  sales,  general and  administrative  costs  increased  to
$1,900,760  from  $1,690,045  for the twelve months ended  February 28, 1994 and
1993, respectively.  This represented 27.7% of sales for the twelve months ended
February 28, 1994 versus 27.0% for the corresponding period in the prior year.

           Historical  interest  expenses declined to $180,960 during the twelve
months  ended  February  28,  1994 from  $223,314  for the twelve  months  ended
February 28, 1993. This decrease can be attributed primarily to a decline in the
level of borrowings. The reduction in interest expense for the fiscal year ended
February  28,  1994  relative  to fiscal  year ended  February  28, 1993 was due
principally to a reduction in interest  rates,  as the prime  borrowing rate was
reduced from 20.25% at February 28, 1993 to 15.25% at February 28, 1994.

           Historical other income was $64,996 and $53,990 for the twelve months
ended February 28, 1994 and 1993, respectively.



                                       20

<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

           In January 1996, the Company raised  approximately  $9 million in net
proceeds  after all fees and expenses from its Initial Public  Offering.  In May
1997,  the Company  raised  approximately  $9.2 million in net proceeds from the
issuance of 10,000 9% convertible debentures. Such debentures mature on June 15,
2004 and are  convertible  any time  prior to  maturity  at a price of $6.00 per
share. In June 1997, the Company's  subsidiary,  First SA Food Holdings,  raised
approximately $16.5 million in cash through the placement of its shares in South
Africa. Of this amount,  approximately  $5.5 million was retained by First South
African Holdings,  while the remainder was retained by FSA Foods.  Proceeds from
these offerings have been and will continue to be primarily utilized to fund the
Company's acquisitions as well as to provide a certain amount of working capital
to its South African subsidiaries.

           As of June 30, 1997, the Company had cash of $19,889,111 with working
capital  of  $26,196,023.  As of June  30,  1996,  the  Company  had a total  of
$15,015,170  in debt,  of which amount $10 million  related to the  Company's 9%
subordinated  convertible  debentures with the remainder being bank debt. Of the
bank debt,  $1,673,712  was  classified  as current.  The Company  currently has
$3,537,000  available  in bank  credit  lines,  which  lines are  unsecured  and
renewable on an annual basis.

           Cash flows provided by operating activities for the period ended June
30, 1997 totaled  $2,730,571.  Cash flows used in investing  activities  for the
period  ended June 30,  1997  totaled  $920,272  of which the  Company  realized
$16,479,827 on the disposal of its investment in First SA Food Holdings Ltd. The
Company expended  $11,431,059 on the acquisition of subsidiaries,  $1,801,032 on
the  acquisition  of recipes  and other  intellectual  property,  and  purchased
$2,142,954 in net addition to property, plant and equipment of its subsidiaries.
Net cash  provided by  financing  activities  generated  $11,759,220  during the
period ended June 30, 1997.

           As of June  30,  1997,  the  Company  had cash of  approximately  $20
Million.  Under the various  acquisition  agreements,  the  Company  anticipates
having to spend  approximately $3.2 million in cash for its contingent  payments
over the next 12 months as well as  approximately  $2.2  million  in stock.  The
Company  anticipates  that this cash and operating cash flows will be sufficient
to fully fund these  payments as well as fund the capital  expenditures  for its
various  operations.  Excess  cash  will  also be  utilized  to fund  additional
acquisitions.  In this  regard,  the Company  entered into a letter of intent to
acquire Fifers Bakery, a specialty confectionary manufacturer.  Such acquisition
is  anticipated  to close by the end of October  1997.  The Company  will expend
approximately  $1.6  million on closing to acquire  this  company.  The  Company
anticipates that any longer term contingent  acquisition payments will be funded
out of operating cash flows of the acquired entities.

           The  Company's   operating   subsidiaries   generally  collect  their
receivables  within 65 - 90 days and  reserve  approximately  5.8% for  doubtful
accounts. Historically, the companies' operating and capital needs have been met
by internal cash flow and outside bank borrowing. It is management's belief that
capital  expenditures  for the  foreseeable  future  can  continue  to be met by
internal  cash flow and bank  borrowing.  The Company's  operating  subsidiaries
engage  in  certain  hedging  transactions  with  respect  to  certain  overseas
purchases in order to lock in a specified  exchange  rate. In addition,  in July
1997, the Company,  through Swiss Bank Corporation,  purchased a 12 month option
to acquire the  equivalent  of $10 million in South  African  Rand at the strike
price of R5.50 to the Dollar.  This option has the effect of hedging $10 million
of the  Company's  fiscal 1998  earnings,  in the event the exchange rate of the
South  African Rand falls below this strike  price.  The cost of such option was
approximately $133,000 and is being amortized over the length of the option.



                                       21

<PAGE>



           The Company  intends to continue to pursue an aggressive  acquisition
strategy in South Africa and anticipates  utilizing a substantial portion of its
cash  balances and  operating  earnings to fund this strategy to the extent that
suitable acquisition candidates can be identified.

           The  Company  may be required  to incur  additional  indebtedness  or
equity financing in connection with future  acquisitions.  There is no assurance
that  the  Company  will be able  to  incur  additional  indebtedness  or  raise
additional  equity  to  finance  future  acquisitions  on  terms  acceptable  to
management, if at all.




                                       22

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                          INDEX TO FINANCIAL STATEMENTS


First South Africa Corp., Ltd.

Report of the independent auditors

Consolidated  Balance  Sheets at June 30,  1997
and 1996

Consolidated Statements of Income for the years
ended June 30, 1997 and 1996,  the period March
1 to June 30, 1995 and the year ended  February
28, 1995

Pro-forma Consolidated Statements of Income for
the  years   ended  June  30,   1997  and  1996
(Unaudited)

Consolidated  Statements  of Cash Flows for the
years ended June 30, 1997 and 1996,  the period
March 1 to June 30,  1995  and the  year  ended
February 28, 1995

Consolidated    Statement    of    Changes   in
Stockholders'   Investment   for   the   period
February 28, 1994 to June 30, 1997

Notes to the Consolidated  Financial Statements
for the years ended June 30, 1997 and 1996, the
period  March 1 to June  30,  1995 and the year
ended February 28, 1995




                                       23

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                       REPORT OF THE INDEPENDENT AUDITORS




 To the Board of Directors
 of First South Africa Corp., Ltd.


           In our opinion,  the accompanying  consolidated balance sheet and the
related  consolidated  statement  of  income,  of cash  flow and of  changes  in
stockholders' investment present fairly, in all material respects, the financial
position of First South Africa Corp., Ltd. and its subsidiaries at June 30, 1997
and 1996, and the results of their operations and their cash flows for the years
ended June 30, 1997 and 1996,  the period  March 1 to June 30, 1995 and the year
ended  February  28,  1995 in  conformity  with  generally  accepted  accounting
principles  in  the  United   States.   These   financial   statements  are  the
responsibility of the Company's management;  our responsibility is to express an
opinion on these  financial  statements  based on our audits.  We conducted  our
audits of these  statements  in  accordance  with  generally  accepted  auditing
standards in the United  States which 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,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.





Price Waterhouse
Sandton, South Africa
September 19, 1997


                                       24

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                     ASSETS
                                                          June 30,       June 30,
                                                            1997           1996
                                                             $               $
                                                       -----------    -----------
<S>                                                     <C>             <C>      
Current assets
           Cash on hand                                 19,889,111      4,682,035
           Trade accounts receivable                    12,000,224      5,833,542
           Less: Allowances for bad debts                 (696,279)      (402,333)
                                                       -----------    -----------
                                                        11,303,945      5,431,209
           Inventories (net)                             7,219,960      2,510,868
           Prepaid expenses and other current assets       934,263       451, 551
           Deferred charges (net)                          838,439           --
                                                       -----------    -----------
                     Total current assets               40,185,718     13,075,663
Property, plant and equipment                           16,197,605      9,000,334
Less: Accumulated depreciation                          (4,849,396)    (2,119,912)
                                                       -----------    -----------
                                                        11,348,209      6,880,422
Intangible assets (net)                                 12,620,822      3,363,923
Other assets                                                42,730         84,768
Loan to shareholder                                           --          126,668
Deferred income taxes                                         --           73,550
                                                       -----------    -----------
                                                        64,197,479     23,604,994
                                                       ===========    ===========
</TABLE>




                                       25

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                    LIABILITIES AND STOCKHOLDERS' INVESTMENT
<S>                                                                <C>            <C>      

Current liabilities
           Bank overdraft payable                                       --          745,724
           Current portion of long term debt                       1,673,712      2,101,799
           Trade accounts payable                                  6,755,823      2,162,257
           Other provisions and accruals                           3,184,428      1,923,371
           Other taxes payable                                       654,653           --
           Income tax payable                                      1,721,079      1,518,095
                                                                 -----------    -----------
                     Total current liabilities                    13,989,695      8,451,246
                                                                 -----------    -----------

Long term debt                                                    13,341,758      2,361,372
Deferred income taxes                                                358,446           --
                                                                 -----------    -----------

                                                                  27,689,899     10,812,618
                                                                 -----------    -----------

Minority shareholders' investment                                 13,287,566           --

Stockholders' investment

Capital stock:

           A class common stock, $0.01 par value - authorized
           23,000,000 shares, issued and outstanding
           3,536,115 shares                                           35,361         22,000

           B class common stock, $0.01 par value - authorized
           2,000,000 shares, issued and outstanding
           1,822,500 shares                                           18,691         19,701

           Preferred stock, $0.01 par value, - authorized
           5,000,000 shares, issued and outstanding nil shares          --             --

           Capital in excess of par                               22,891,093     18,518,986
                                                                 -----------    -----------
Retained earnings                                                  2,803,065     (3,880,100)
Foreign currency translation adjustments                          (2,528,196)    (1,888,211)
                                                                 -----------    -----------
                                                                  64,197,479     23,604,994
                                                                 ===========    ===========
</TABLE>


                                       26

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                       Year ended     Year ended       March 1,      Year ended
                                                        June 30,       June 30,       to June 30,   February 28,
                                                          1997           1996            1995           1995
                                                           $              $                $             $
                                                       -----------    -----------    -----------    -----------
<S>                                                     <C>            <C>             <C>            <C>      
Revenues                                                66,575,931     14,911,097      3,297,507      8,826,856
                                                       -----------    -----------    -----------    -----------
Operating expenses
           Cost of sales                                37,869,755      8,385,511      1,881,686      5,058,749
           Selling, general and administrative costs    23,264,607      5,134,431      1,081,120      3,120,334
           Non cash compensation charge                       --        6,314,000           --             --
                                                       -----------    -----------    -----------    -----------
                                                        61,134,362     19,833,942      2,962,806      8,179,083
                                                       -----------    -----------    -----------    -----------
Operating income/(loss)                                  5,441,569     (4,922,845)       334,701        647,773
Gain on disposal of subsidiary stock                     3,327,478           --             --             --
Other income                                               468,531        539,636         43,145         40,830
Interest expense                                          (858,067)      (865,733)       (18,801)      (152,163)
                                                       -----------    -----------    -----------    -----------
Income/(loss) from consolidated companies
before income taxes and minority interests               8,379,511     (5,248,942)       359,045        536,440
Provision for taxes on income                           (1,572,049)      (488,618)      (145,216)      (222,558)
                                                       -----------    -----------    -----------    -----------
                                                         6,807,462     (5,737,560)       213,829        313,882
Minority interest in consolidated subsidiary
companies                                                 (135,224)          --             --             --
                                                       -----------    -----------    -----------    -----------
Net income/(loss) from consolidated companies            6,672,238     (5,737,560)       213,829        313,882
Equity in net earnings of affiliated companies              10,927           --             --             --
                                                       -----------    -----------    -----------    -----------
Net income/(loss)                                        6,683,165     (5,737,560)       213,829        313,882
                                                       ===========    ===========    ===========    ===========
Basic earnings/(loss) per share                              $1,30        ($3,03)    $       .39    $       .57

Fully diluted earnings per share                             $1,22        ($1,39)    $       .39    $       .57
Weighted average number of shares outstanding
       Basic earnings per share                          5,139,855      1,893,463        547,890        547,890
       Fully diluted earnings per share                  5,594,912      1,893,463        547,890        547,890
</TABLE>



                                       27

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                   PRO-FORMA CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                           Year ended     Year ended
                                                            June 30,       June 30,
                                                              1997           1996
                                                          -----------    -----------
<S>                                                        <C>            <C>       
Revenues                                                   78,596,647     71,374,856
                                                          -----------    -----------
Operating expenses
           Cost of sales                                   46,006,407     42,259,173
           Selling, general and administrative costs       26,575,103     23,636,005
           Non cash compensation charge                          --        6,314,000
                                                          -----------    -----------
                                                           72,581,510     72,209,178
                                                          -----------    -----------
Operating income/(loss)                                     6,015,137       (834,322)
Gain on disposal of subsidiary stock                        3,327,478           --
Other income                                                  577,406        872,766
Interest expense                                             (823,912)    (1,524,287)
                                                          -----------    -----------
Income/(loss) from consolidated companies before income
 taxes and minority interests                               9,096,109     (1,485,843)
Provision for taxes on income                              (1,834,833)    (2,049,047)
                                                          -----------    -----------
                                                            7,261,276     (3,534,890)
Minority interest in consolidated subsidiary companies       (135,224)          --
                                                          -----------    -----------
Net income/(loss) from consolidated companies               7,126,052     (3,534,890)
Equity in net earnings of affiliated companies                 10,927           --
                                                          -----------    -----------
Net income/(loss)                                           7,136,979     (3,534,890)
                                                          ===========    ===========
Basic earnings/(loss) per share                                 $1,34        ($0,66)

Fully diluted earnings per share                                $1,25           --
Weighted average number of shares outstanding
       Basic earnings per share                             5,345,208      5,345,208
       Fully diluted earnings per share                     5,800,266           --
</TABLE>

The pro-forma  information has been prepared  assuming that all acquisitions had
taken place on July 1, 1995.

The pro-forma  information does not purport to be indicative of the results that
would have been  obtained if the  acquisitions  had occurred at the beginning of
the period, nor is it indicative of future results.


                                       28

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                Year ended     Year ended      March 1,      Year ended
                                                                 June 30,       June 30,      to June 30,   February 28,
                                                                   1997           1996           1995           1995
                                                                     $             $               $             $
                                                               -----------    -----------    -----------    -----------
<S>                                                              <C>           <C>               <C>            <C>    
Cash flows from operating activities:

           Net income/(loss)                                     6,683,165     (5,737,560)       213,829        313,882
           Adjustments to reconcile net income/(loss) to net
           cash provided by operating activities:
                     Non-cash compensation charge                     --        6,314,000           --             --
                     Depreciation and amortization               2,011,354        395,757         50,678         92,746
                     Deferred income taxes                         349,543        (90,559)          --          (69,295)
                     Net (gain)/loss on sale of assets            (198,473)       (22,523)         1,320         19,636
                     Net gain on sale of investment in
                         First SA Food Holdings Limited         (3,327,478)          --             --             --
                     Effect of changes in current assets
                         and current liabilities                (2,922,764)        10,185        (94,090)       (23,012)
                     Minority interest in consolidated
                         subsidiary companies                      135,224           --             --             --
                     Assets acquired at a discount                    --            7,307           --             --
                                                               -----------    -----------    -----------    -----------
Net cash provided by operating activities                        2,730,571        876,607        171,737        333,957
                                                               -----------    -----------    -----------    -----------
Cash flows from investing activities:

           Proceeds on disposal of investment in First
               SA Food Holdings Limited                         16,479,827           --             --             --
           Additions to property, plant and equipment           (3,325,153)      (453,768)      (166,124)      (327,039)
           Proceeds on disposal of property, plant and
               equipment                                         1,182,199           --             --             --
           Additional purchase price payments                   (2,023,835)          --             --             --
           Other assets acquired                                   (42,676)      (704,117)       (16,502)        22,053
           Decrease in loans to related companies                   80,969        145,823           (280)        45,241
           Acquisitions of subsidiaries (net of cash
               of $985,410)                                    (11,431,059)    (4,498,043)          --             --
                                                               -----------    -----------    -----------    -----------
Net cash used in investing activities                              920,272     (5,510,105)      (182,906)      (259,745)
                                                               -----------    -----------    -----------    -----------
</TABLE>


                                       29

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                       Year ended     Year ended      March 1,      Year ended
                                                        June 30,       June 30,      to June 30,   February 28,
                                                          1997           1996           1995           1995
                                                            $             $               $             $
                                                      -----------    -----------    -----------    -----------
<S>                                                    <C>               <C>            <C>            <C>     
Cash flows from financing activities:

           Net (repayments)/borrowings in bank
               overdrafts                              (1,155,094)       135,941        119,473        (26,269)
           Borrowings of long term debt                10,601,298           --           93,202         93,618
           Repayments of long term debt                  (985,630)    (1,525,613)          --             --
           Increase in deferred debt issue costs         (853,683)          --             --             --
           Repayments in loans from related parties          --         (880,034)          --             --
           Borrowings in loans from related parties          --             --             --           30,473
           Borrowings in loans from stockholders             --          137,656           --             --
           Borrowings in short term debt                  689,682      1,954,673           --           81,972
           Repayments in short term debt                 (921,810)          --             --             --
           Proceeds on stock issues                     4,384,458      9,197,446           --             --
                                                      -----------    -----------    -----------    -----------
Net cash provided in financing activities              11,759,221      9,020,069        212,675        179,794
                                                      -----------    -----------    -----------    -----------
Effect of exchange rate changes on cash                  (202,988)      (448,787)        (9,783)       (16,573)
                                                      -----------    -----------    -----------    -----------
Cash generated by operations                           15,207,076     3,937, 784        191,723        237,433
Cash on hand at beginning of period                     4,682,035        744,251        552,528        315,095
                                                      -----------    -----------    -----------    -----------
Cash on hand at end of period                          19,889,111      4,682,035        744,251        552,528
                                                      ===========    ===========    ===========    ===========
</TABLE>


                                       30

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

          CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS INVESTMENT

[Part 1 of 2]
<TABLE>
<CAPTION>
                                              Capital stock                Capital stock  
                                               First South   Capital in     LS Pressings  
                                              Africa Corp.,   excess of         (Pty)     
                                                   Ltd.          par            Ltd.      
                                                    $             $               $       
                                               -----------   -----------    -----------   
<S>                                                    <C>     <C>             <C>        
Balance at February 28, 1994                          --            --          460,978   
Net income                                            --            --             --     
Translation adjustment                                --            --             --     
                                               -----------   -----------    -----------   
Balance at February 28, 1995                          --            --          460,978   
Net income                                            --            --             --     
Translation adjustment                                --            --             --     
                                               -----------   -----------    -----------   
Balance at June 30, 1995                              --            --          460,978   
Issuance of stock to acquire predecessor
Starpak and LS Pressings                               150     1,208,628       (460,978)  
Issuance of stock to acquire subsidiary
  companies                                             98     1,840,365           --     
Other stock issues                                      28       260,024           --     
Proceeds on First South Africa Corp, Ltd. 
  stock issues                                      41,425     9,896,646           --     
Share issue expenses written off                      --      (1,000,677)          --     
Escrow stock released                                 --       6,314,000           --     
Subsidiary assets acquired at a discount              --            --             --     
Net loss                                              --            --             --     
Translation adjustment                                --            --             --     
                                               -----------   -----------    -----------   
Balance at June 30, 1996                            41,701    18,518,986           --     

    Issuance of stock to FSAH escrow agent          11,915          --             --     
   Issuance of stock to acquire subsidiaries           190     4,357,228           --     
        Proceeds on warrants exercised                 246       159,879           --     
       Stock issue expenses written off               --        (145,000)          --     
            Net income for the year                   --            --             --     
            Translation adjustment                    --            --             --     
                                               -----------   -----------    -----------   

</TABLE>

[Part 2 of 2]
<TABLE>
<CAPTION>
                                             Capital stock    Capital in                    Foreign
                                                Starpak     excess of par                  currency
                                                 (Pty)      Starpak (Pty)   Retained      translation
                                                  Ltd.           Ltd.        earnings     adjustments           Total
                                                    $              $            $              $                  $
                                              -----------    -----------    -----------    -----------    -----------
<S>                                                <C>          <C>          <C>            <C>           <C>
Balance at February 28, 1994                        1,010        746,790      1,322,442       (950,394)       580,826
Net income                                           --             --          313,882           --          313,882
Translation adjustment                               --             --             --          (66,052)        66,052
                                              -----------    -----------    -----------    -----------    -----------
Balance at February 28, 1995                        1,010        746,790      1,636,324     (1,016,446)     1,828,656
Net income                                           --             --          213,829           --          213,829
Translation adjustment                               --             --             --          (24,488)       (24,488)
                                              -----------    -----------    -----------    -----------    -----------
Balance at June 30, 1995                            1,010        746,790      1,850,153     (1,040,934)     2,017,997
Issuance of stock to acquire predecessor
Starpak and LS Pressings                           (1,010)      (746,790)          --             --             --
Issuance of stock to acquire subsidiary
  companies                                          --             --             --             --        1,840,463
Other stock issues                                   --             --             --             --          260,052
Proceeds on First South Africa Corp, Ltd. 
  stock issues                                       --             --             --             --        9,938,071
Share issue expenses written off                     --             --             --             --       (1,000,677)
Escrow stock released                                --             --             --             --        6,314,000
Subsidiary assets acquired at a discount             --             --            7,307           --            7,307
Net loss                                             --             --       (5,737,560)          --       (5,737,560)
Translation adjustment                               --             --             --         (847,277)      (847,277)
                                              -----------    -----------    -----------    -----------    -----------
Balance at June 30, 1996                             --             --       (3,880,100)    (1,888,211)    12,792,376

    Issuance of stock to FSAH escrow agent           --             --             --             --           11,915
   Issuance of stock to acquire subsidiaries         --             --             --             --        4,357,418
        Proceeds on warrants exercised               --             --             --             --          160,125
       Stock issue expenses written off              --             --             --             --         (145,000)
            Net income for the year                  --             --        6,683,165           --        6,683,165
            Translation adjustment                   --             --             --         (639,985)      (639,985)
                                              -----------    -----------    -----------    -----------    -----------

</TABLE>

                                       31

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995

<TABLE>
<CAPTION>
                          Capital stock             Capital stock  Capital stock Capital in                Foreign
                           First South  Capital in  LS Pressings     Starpak    excess of par             currency
                          Africa Corp.,  excess of      (Pty)         (Pty)     Starpak (Pty) Retained   translation
                               Ltd.         par         Ltd.           Ltd.        Ltd.       earnings   adjustments      Total
                                $            $            $              $             $           $          $             $
                           ----------   ----------   ----------   ----------   ----------   ----------   ----------    ----------
<S>             <C> <C>        <C>      <C>                                                  <C>         <C>           <C>       
BALANCE AT JUNE 30, 1997       54,052   22,891,093          --           --           --     2,803,065   (2,528,196)   23,220,014
                           ==========   ==========   ==========   ==========   ==========   ==========   ==========    ==========
</TABLE>



                                       32

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995

1.       PRINCIPAL ACTIVITIES OF THE GROUP

         The principal activities of the group include the following:

         ENGINEERING INTERESTS
         The  business  of   manufacturing,   servicing  and  selling  packaging
         machines,   receiving  commission  income,   receiving  rental  income,
         manufacture  of washers for use in the fastener  industry,  manufacture
         and supply of air-conditioning products.

         FOOD INTERESTS
         The  manufacture,  sale and distribution of both ready to eat and ready
         for bake off pastry related food products,  the  manufacture,  sale and
         distribution of high margin  speciality  breads and staple breads,  the
         manufacture  and sale of a wide range of prepared food products and the
         manufacture,  sale and  distribution  of a wide range of processed meat
         products.


2.       ORGANIZATION

         First South Africa Corp., Ltd. (the "Company") was founded on September
         6, 1995.  The purpose of the Company is to acquire and operate in South
         African companies.

         The  following  subsidiaries/businesses  acquired,  were  accounted for
         using the purchase  method of  accounting.  The assets and  liabilities
         were recorded at fair market value as determined by management:

<TABLE>
<CAPTION>

                                                                             PURCHASE
                                                                               PRICE
                                                                           CONSIDERATION
         SUBSIDIARY/BUSINESS                             DATE ACQUIRED          $

<S>                                                            <C>           <C>      
Astoria Bakery CC and Astoria Bakery Lesotho (Pty) Ltd.   July 1, 1996       2,344,123
First Strut (Pty) Ltd.                                    July 1, 1996         175,836
Seemann's Quality Meat Products (Pty) Ltd. and
Hammer Street Investments CC                              November 1, 1996   2,989,077
Gull Foods CC and Trek Biltong CC                         January 1, 1997    5,288,629
Pakmatic Company (Pty) Ltd. and
Pakmatic Spares and Service (Pty) Ltd.                    March 1, 1997        924,379
                                                                            ----------
                                                                            11,722,044
                                                                            ==========
</TABLE>

         The  purchase  consideration  has been  decreased to give effect to the
         debt  ceded  to  the  holding   company  in  the   acquisition  of  all
         subsidiaries/businesses  with the  exception  of Gull Foods CC and Trek
         Biltong CC, which has no debt ceded to the holding company.




                                       33

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995





2.       ORGANIZATION (continued)


<TABLE>
<CAPTION>
                                                                       Combined   
                                                                       purchase
                                                                    consideration
                                                                    and allocation
                                                                          $
                                                                    --------------
<S>                                                                   <C>      
Acquisition costs                                             
         Stock issued in lieu of cash                                 3,685,866
         Cash consideration (net of debt ceded to holding company)    7,897,235
         Other direct expenses                                          138,943
                                                                     ----------
 Purchase price to be allocated                                      11,722,044
                                                                     ==========
Summary allocation of purchase price
         Current assets                                               6,138,945
         Property, plant and equipment                                3,974,294
         Recipes and other intellectual property                      7,131,434
         Goodwill                                                       694,108
                                                                     ----------
Total assets acquired                                                17,938,781
         Current liabilities                                          4,055,918
         Long term debt                                               1,387,301
         Deferred income taxes                                           79,093
         Debt ceded to holding company                                  694,425
                                                                     ----------
Total liabilities assumed                                             6,216,737
                                                                     ----------
         Excess of assets over liabilities assumed                   11,722,044
                                                                     ==========
</TABLE>

         The  Company is  required  to make  additional  payments  to the former
         owners based on a multiple of pre-tax  earnings.  These payments are to
         be made by the  issue  of  stock  and  cash  over the next two to three
         years.  In fiscal 1997,  the Company paid  $2,023,835 in cash and stock
         under these contingent consideration arrangements.




                                       34

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


3.       SUMMARY OF ACCOUNTING POLICIES

         The consolidated  financial statements have been prepared in accordance
         with U.S. generally accepted accounting  principles and incorporate the
         following significant accounting policies.

         Consolidation
         First  South  Africa  Corp.,  Ltd.,  consolidates  its  majority  owned
         subsidiaries.   The  consolidated   financial  statements  include  the
         accounts  of the  company,  First  South  Africa  Corp.,  Ltd.  and its
         subsidiaries.  Minority  interests  have been taken into  account  when
         determining  the net income due to the Company.  Material  intercompany
         transactions have been eliminated on consolidation.

         Accounting estimates
         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  at the date of the  financial  statements,  disclosure  of
         contingent  liabilities  at the financial  statement  date and reported
         amounts of revenue and expenses  during the  reporting  period.  Actual
         results could differ from those estimates.

         Earnings per share
         Earnings per share on common shares is based on net income and reflects
         dilutive  effects of any stock options and warrants which exist at year
         end.

         Intangible assets
         Goodwill  resulting from  acquisitions,  recipes and other intellectual
         property,  and trademarks are being  amortised on a straight line basis
         over  a  period  of  twenty  to  twenty  five   years.   If  facts  and
         circumstances  were to indicate  that the carrying  amount of goodwill,
         recipes and other  intellectual  property  is  impaired,  the  carrying
         amount would be reduced to an amount representing the discounted future
         cash flows to be generated by the operation.

         Also  included  in  intangible  assets are non  competition  agreements
         relating to the  Europair  acquisition  which are being  amortized on a
         straight line basis over the six year term of the agreements.

         The company has adopted Statement of Financial Accounting Standards No.
         121 ("SFAS 121")  "Accounting  for the impairment of Long-Lived  Assets
         and for  Long-Lived  Assets  to be  Disposed  Of".  No  impairments  in
         long-lived assets has taken place.

         Foreign currency translation
         The functional  currency of the  underlying  companies is that of South
         African Rands.  Accordingly,  the following rates of exchange have been
         used for translation purposes:

         *        Assets and  liabilities  are  translated  into  United  States
                  Dollars using the exchange rates at the balance sheet date.

         *        Common stock and capital in excess of par are translated  into
                  United  States  Dollars  using  historical  rates  at  date of
                  issuance.




                                       35

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995



3.       SUMMARY OF ACCOUNTING POLICIES (continued)

         *        Revenue, expenses, gains and losses are translated into United
                  States Dollars using the weighted  average  exchange rates for
                  each year.

         The resultant translation  adjustments are reported in the component of
         shareholders'  investment  designated as "Foreign currency  translation
         adjustment".

         Foreign assets and liabilities
         Transactions  in  foreign  currencies  arise as a result  of  inventory
         purchases from foreign countries and intercompany  funding transactions
         between  the   subsidiaries   and  First  South  Africa   Corp.,   Ltd.
         Transactions  in  foreign  currencies  are  accounted  for at the rates
         ruling on transaction  dates.  Exchange gains and losses are charged to
         the income  statement  during  the  period in which they are  incurred.
         Foreign assets and  liabilities of the group which are not  denominated
         in United States  Dollars are converted  into United States  Dollars at
         the exchange  rates ruling at the financial year end or at the rates of
         forward  cover  purchased.  Forward  cover is  purchased  to hedge  the
         currency exposure on foreign liabilities.

         Inventories
         Inventories  are valued at the lower of cost and net realizable  value,
         using both the first-in,  first-out and the weighted  average  methods.
         The  value  of   work-in-progress   and  finished   goods  includes  an
         appropriate portion of manufacturing overheads. A valuation reserve has
         been established to reduce the values of certain identified inventories
         (determined  to be obsolete or otherwise  impaired) to their  estimated
         net realizable values (market or selling price less costs to dispose).

         Property, plant and equipment
         Land  is  stated  at  cost  and  is  not  depreciated.   Buildings  are
         depreciated on the straight line basis over  estimated  useful lives of
         20 years.

         Plant and  equipment,  and motor  vehicles  are  written off over their
         estimated useful lives of 5 to 10 years.

         Income taxes
         Income tax expense is based on reported  earnings  before income taxes.
         Deferred  income taxes  represent  the impact of temporary  differences
         between the amounts of assets and liabilities  recognized for financial
         reporting  purposes  and  such  amounts  recognized  for tax  purposes.
         Deferred taxes are measured by applying currently enacted tax laws.

         Fair value of financial instruments
         As at June 30 1997, the carrying value of accounts receivable, accounts
         payable and  investments  approximate  their fair value.  The  carrying
         value of long term debt  approximates  fair value,  as the debt,  other
         than  convertible  debentures,  interest  rates  are keyed to the prime
         lending rate.  The  convertible  debentures are believed to approximate
         fair market due to their recent issuance in June 1997.




                                       36

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995

3.       SUMMARY OF ACCOUNTING POLICIES (continued)


         Revenues
         Revenues comprise net invoiced sales of washers, manufactured packaging
         machines,  spares and service charges, food products,  air conditioning
         systems,  fans and related  accessories,  and rental  income.  Combined
         revenues  exclude  sales to group  companies.  The  company  recognizes
         revenues on an accrual basis.


         Revenues are stated net of  allowances  granted to customers  and trade
         discounts.  Returns of defective  products are offset against revenues.
         Due to the low  incidence of warranty  returns,  where  warranties  are
         provided to customers,  the warranty costs are charged to cost of goods
         sold as and when incurred.

         Gain on disposal of subsidiary stock
         Subsidiary  stock disposed of during the period is recognized as a gain
         in the  statement  of  income  and  is  separately  disclosed  as a non
         operating gain.


4.       INVENTORIES

         Inventories consist of the following:


                                                    June 30,      June 30,
                                                     1997          1996
                                                       $             $
                                                  ----------    ----------
                  Finished goods                   4,032,523     2,077,679  
                  Work in progress                   532,144       272,377
                  Raw materials and ingredients    2,365,213       501,562
                  Supplies                           716,081        93,055
                                                  ----------    ----------
                  Inventories (Gross)              7,645,961     2,944,673
                  Less:  Valuation allowances       (426,001)     (433,805)
                                                  ----------    ----------
                   Inventories (Net)               7,219,960     2,510,868
                                                  ==========    ==========

5.       DEFERRED CHARGES

         Represents  the  debt  issue  costs  of the 9%  convertible  debentures
         amounting to $853,683.  This charge is being  amortized over the tenure
         of the debenture  issue (Refer note 9). The charge for the current year
         is $15,244.



                                       37

<PAGE>


                             FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995

6.       PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment consists of the following:


                                                      June 30,       June 30,
                                                        1997           1996
                                                         $               $
                                                    -----------    -----------
             Land and buildings                       2,650,410      2,713,473 
             Plant and equipment                     10,376,002      3,463,121
             Vehicles                                 3,153,985      1,789,905
             Capital work in progress                    17,208      1,033,835
                                                    -----------    -----------
             Total cost                              16,197,605      9,000,334
             Accumulated depreciation                (4,849,396)    (2,119,912)
                                                    -----------    -----------
             Net book value                          11,348,209      6,880,422
                                                    ===========    ===========
             Depreciation charge                      1,481,824        345,884
                                                    ===========    ===========
                                      
         Certain  assets of the  company  are  encumbered  as  security  for the
         liabilities of the group (Refer note 9).

7.       INTANGIBLE ASSETS

         Intangible assets consist of the following:


                                                        June 30,       June 30,
                                                          1997           1996
                                                           $               $
                                                     -----------    -----------
                Recipes                               11,264,035      2,858,011
                Trademarks                               359,521           --
                Goodwill arising from acquisitions     1,099,475        414,610
                Non competition agreements               331,575        115,842
                                                     -----------    -----------
                Total cost                            13,054,606      3,388,463
                Accumulated amortization                (433,784)       (24,540)
                                                     -----------    -----------
                                                      12,620,822      3,363,923
                                                     ===========    ===========

                                       38
<PAGE>
       
                             FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


8.       BANK OVERDRAFT FACILITIES

         The group has  general  short term  banking  facilities  of  $3,537,000
         available.  These  facilities  bear interest at the prime lending rate,
         which is currently  20,25%,  and are repayable on demand.  The terms of
         these facilities are generally less than twelve months,  the facilities
         are  secured  by a cession  over  book  debts,  and have no  covenants,
         renewable annually.

9.       SHORT AND LONG TERM DEBT

<TABLE>
<CAPTION>
                                                        June 30,       June 30,
                                                          1997           1996
                                                            $              $
                                                     -----------    -----------
<S>                      <C>                          <C>                    
                Long term debt
                         9% Convertible debentures    10,000,000           --
                        Mortgage loans                 1,025,406      1,508,870
                        Equipment notes                3,990,064      1,904,980
                        Unsecured notes                     --          125,214
                                                     -----------    -----------
                                                      15,015,470      3,539,064
                 Less:  Current portion               (1,673,712)    (1,177,692)
                                                     -----------    -----------
                         Total long term debt         13,341,758      2,361,372
                                                     ===========    ===========
                Short term debt
                Current portion of long term debt      1,673,712      1,177,692
                Trade finance loan                          --          924,107
                                                     -----------    -----------
                                                       1,673,712      2,101,799
                                                     ===========    =========== 
</TABLE>
        

         9% Convertible debentures
         Convertible  debentures issued in June 1997 are unsecured,  senior, and
         subordinated,  bearing interest at 9% per annum, payable quarterly. The
         debentures  are  convertible  into  shares of common  stock at any time
         prior to maturity at a price of $6,00 per share (fair  market  value at
         debenture issue date).  The debentures may be redeemed at the option of
         the Company  from June 15, 1999  through  June 14, 2003 at a redemption
         premium  ranging  from 109% to 102.5% of face value,  depending  on the
         redemption date.

         The debentures  have  mandatory  sinking fund payments due in two equal
         installments  totaling  67% of the  outstanding  fair value on June 15,
         2002 and June 15,  2003,  with the balance of the issue due at maturity
         on June 15, 2004.

         The  Company  has filed an S-1  Registration  Statement  for the shares
         issuable upon conversion.




                                       39
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995

9.       SHORT AND LONG TERM DEBT (continued)

         The following covenants are in existence:

         *        A restriction has been placed on the ability of the Company to
                  pay any dividends and to repurchase stock.

         *        A restriction has been placed on transactions with affiliates,
                  whereby all transactions  must be no less favorable than those
                  on normal commercial terms.

         *        The   Company   may  not   adopt   any  plan  of   liquidation
                  (bankruptcy).

         Mortgage loans
         Mortgage loans are  collateralized  by first and second  mortgage bonds
over property with a net book value of $2,504,855.  These loans are repayable in
equal monthly  instalments  of $18,909 and equal annual  instalments  of $17,684
over  periods  ranging  from five to twenty  years  and bear  interest  at rates
ranging from 14,5% to 18,59%.  Generally  these interest rates are linked to the
prime lending rate which is currently at 20,25%.

         Equipment notes
         Equipment notes are collateralized  over movable assets with a net book
value of  $3,611,203.  These  loans are  generally  repayable  in equal  monthly
instalments  over a maximum  period of five years.  These loans bear interest at
rates ranging from 7% to 1,75% above the prime lending rate,  which is currently
20,25%.

         The  following is a schedule of repayments of long term debt by year of
repayment:


          Year ended June 30,                                  $
           1998                                            1,673,712
           1999                                            1,903,670
           2000                                              646,655
           2001                                              329,237
           Thereafter                                     10,462,196


10.      RETAINED EARNINGS

         Included in retained  earnings is an amount of $7,307 which  represents
         the excess of assets acquired over liabilities  assumed in the purchase
         of the assets and liabilities of operating entities. This amount is not
         distributable until such time as the assets so acquired are disposed.

11.      OPERATING LEASES

         The group has several  operating leases over land and buildings.  These
         leases  generally  expire  within  the next five  years.  These  leases
         generally  contain renewal options at the fair market value at the date
         of renewal.



                                       40
<PAGE>

                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995

         In  most  cases,  management  expects  that  in the  normal  course  of
         business, leases will be renewed or replaced by other leases.

         The following is a schedule of future minimum rental payments  required
         under operating  leases that have initial or remaining  non-cancellable
         lease terms in excess of one year as of June 30, 1997:


           Year ended June 30,                        $
           1998                                    634,295
           1999                                    685,880
           2000                                    614,060
           2001                                    573,914
           Thereafter                              631,270

         The following  schedule  shows the  composition of total rental expense
         for all operating leases except those with terms of a month or less:


                             Year ended   Year ended     March 1,    Year ended
                              June 30,     June 30,     to June 30, February 28,
                                1997         1996          1995         1995
                                 $            $              $           $
           Minimum rentals    614,450      415,815        25,562       78,730
                              =======      =======        ======       ======


12.      GAIN ON DISPOSAL OF SUBSIDIARY STOCK

         During 1997,  the Company  formed First SA Food Holdings  Limited ("FSA
         Food") to own all of its food interest companies.

         In June 1997,  the Company sold an  effective  30% interest in FSA Food
         through  a private  placement  and  subsequent  public  listing  on The
         Johannesburg Stock Exchange.

         The gain on disposal  recognized  in the Statement of Income is made up
         as follows:


                                                                  Year ended
                                                                   June 30,
                                                                     1997
                                                                      $
                                                                  -----------
           Proceeds received                                       16,479,827
           Less: Net carrying value of shares of FSA Food         (13,152,349)
                                                                  -----------

           Net gain on sale of investment in subsidiary company     3,327,478
                                                                  ===========



                                       41
<PAGE>

                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


13.      OTHER INCOME

         Other  income  includes  profit on  disposal of assets,  proceeds  from
         insurance claims and commissions received.


                              Year ended   Year ended   March 1,    Year ended
                               June 30,     June 30,   to June 30,  February 28,
                                 1997         1996        1995        1995
                                  $             $           $           $
                                -------     -------     -------     -------
 Profit on disposal of assets   198,473        --          --          --
 Insurance claims and                                            
     commissions received       270,058     539,696      43,145      40,830
                                -------     -------     -------     -------
                                468,531     539,696      43,145      40,830
                                =======     =======     =======     =======
                                                                  

14.      INCOME TAXES

         Income taxes are accounted for under  Statement of Financial  Standards
         No.  109  "Accounting  for  Income  Tax"  ("SFAS  109"),  an asset  and
         liability  method.  SFAS 109 requires the  recognition  of deferred tax
         assets and  liabilities  for the expected  future tax  consequences  of
         temporary  differences  between the tax bases and  financial  reporting
         bases of the company's  assets and liabilities.  In addition,  SFAS 109
         requires the  recognition  of future tax benefits such as net operating
         loss  carryforwards,  to the extent realization of such benefit is more
         likely than not.




                                       42
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995

14.        INCOME TAXES (continued)

         The provision for income taxes charged to continuing  operations was as
         follows:

<TABLE>
<CAPTION>
                                  Year ended  Year ended     March 1,    Year ended
                                   June 30,    June 30,    to June 30,  February 28,
                                     1997        1996          1995         1995
                                      $            $            $            $
                                   ---------   ---------    ---------   ---------
<S>                                <C>           <C>          <C>         <C>    
Current:
   South African normal taxation   1,161,998     848,006      145,216     291,858
   Foreign normal taxation            62,345        --           --          --
                                   ---------   ---------    ---------   ---------
          Total current taxes      1,224,343     848,006      145,216     291,858
                                   ---------   ---------    ---------   ---------
Deferred:
   South African normal taxation     347,706    (359,388)        --       (69,300)
                                   ---------   ---------    ---------   ---------
         Total deferred taxes        347,706    (359,388)        --       (69,300)
                                   ---------   ---------    ---------   ---------
Provision for taxes on income      1,572,049     488,618      145,216     222,558
                                   =========   =========    =========   =========
</TABLE>

         Deferred  tax  liability/(asset)  at  June  30,  is  comprised  of  the
         following:



                                                          June 30,     June 30,
                                                            1997         1996
                                                             $             $
                                                           --------    --------
               Property, plant and equipment                765,624     346,961 
               Prepaid expenditure                            7,036      12,245
                                                           --------    --------
                          Gross deferred tax liabilities    772,660     359,206
                                                           --------    --------
               Accruals                                    (371,148)   (372,447)
               Deposits received on equipment sales         (42,813)    (60,309)
               Assessable losses                               (253)       --
                                                           --------    --------
                          Gross deferred tax assets        (414,214)   (432,756)
                                                           --------    --------
               Net deferred tax liability/(asset)           358,446     (73,550)
                                                           ========    ========




                                       43
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


14.        INCOME TAXES (continued)

           The provision  for taxes on income  differs from the amount of income
           tax  determined by applying the  applicable  South African  statutory
           income tax rate to pre-tax  income from  continuing  operations  as a
           result of the following differences:

           The Company reflects a taxable income of $8,892,317 after eliminating
           expenditure  of $512,806  which is not  allowable for tax purposes as
           this represents  expenditure  incurred in Bermuda,  where no taxation
           laws are in existence. After eliminating the disallowable expenditure
           incurred in Bermuda, the tax rate reconciliation is as follows:

<TABLE>
<CAPTION>
                                       Year ended    Year ended   March 1,     Year ended
                                        June 30,      June 30,   to June 30,  February 28,
                                          1997          1996        1995          1995
                                           %             %            %             %
                                          ------      ------      ------     ------
<S>                                         <C>         <C>         <C>        <C>  
South African statutory tax rate            35.0        35.0        35.0       35.0 
Disallowable expenditures                    1.3         0.7         5.0        1.0
Creation/utilization of assessable losses    3.2        (1.0)         --         --
Non taxable income - profit on sale of                                      
   investment                              (12.9)         --          --         --
Non taxable income                          (1.1)         --          --         --
Foreign tax rate differential               (0.9)         --          --         --
Tax rate adjustment                           --          --          --        1.0
Transitional levy                             --          --          --       (2.0)
Capital allowances                          (6.5)       (2.0)         --         --
 Other                                      (0.4)         --          --        6.0
                                          ------      ------      ------     ------
                                            17.7        32.7        40.0       41.0
                                          ======      ======      ======     ======
</TABLE>



                                       44
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


15.        CASH FLOWS

           The changes in assets and liabilities consist of the following:

<TABLE>
<CAPTION>
                                                     Year ended     Year ended      March 1,       Year ended
                                                      June 30,       June 30,      to June 30,    February 28,
                                                        1997           1996           1995            1995
                                                          $              $              $              $
                                                     -----------    -----------    -----------    -----------
<S>                                                   <C>              <C>              <C>          <C>      
(Increase)/decrease in trade accounts                 (2,788,051)      (756,684)        36,382       (989,374)
  receivable                                          (3,158,181)       146,179       (357,614)        13,759
(Increase)/decrease in inventories
(Increase)/decrease in prepaid expenses and             (368,252)      (134,650)      (146,445)        15,906
  other current assets                                    (9,990)          --             --             --
Increase in income taxes prepaid                       1,872,035        360,265         91,094         97,479
Increase in trade accounts payable
Increase/(decrease) in other provisions and            1,096,189        (38,785)       127,573        659,078
  accruals                                               656,088           --             --             --
Increase in other taxes payable                         (222,602)       433,860        154,920        180,140
                                                     -----------    -----------    -----------    -----------
(Decrease)/increase in income taxes payable
                                                      (2,922,764)        10,185        (94,090)       (23,012)
                                                     ===========    ===========    ===========    ===========
 Supplemental disclosure of cash flow information:
Acquisition of subsidiaries is reconciled to
  the purchase consideration of the
   subsidiaries/businesses as follow:
Purchase consideration of subsidiaries/
  businesses                                         (11,722,044)    (4,502,789)          --             --
Add: Debts assumed                                      (694,425)          --             --             --
Less:Cash acquired                                       985,410          4,746           --             --
                                                     -----------    -----------    -----------    -----------
                                                     (11,431,059)    (4,498,043)          --             --
                                                     ===========    ===========    ===========    ===========
Interest paid                                            858,067        865,733         18,801        152,163
                                                     ===========    ===========    ===========    ===========

Taxes paid/(refunded)                                  1,513,166       (239,962)        (9,704)       118,834
                                                     ===========    ===========    ===========    ===========
</TABLE>




                                       45
<PAGE>

                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


16.        EMPLOYMENT BENEFITS

           The group  participates in various  retirement  benefit funding plans
           and health plans for the benefit of its employees.

           All of the retirement  benefit funds are defined  contribution  plans
           and by nature of the funds  there can be no unfunded  obligations  or
           responsibility  on the employer.  The only obligation of the group is
           the  contribution to these plans which generally ranges from 6% to 9%
           of the employees' annual earnings.

           Amounts  charged to pension costs and  contributed  by the Company to
           the funds were as follows:


                Year ended      Year ended       March 1,       Year ended
                 June 30,        June 30,       to June 30,    February 28,
                   1997            1996            1995            1995
                    $                $               $              $
Pension costs   497,788          99,028          37,440          84,438
                =======         =======         =======         =======
                                                        

           The group and  employees  participate  in various  health plans which
           provide  medical cover for employees on an annual basis.  Neither the
           health  plan nor the group are  liable  for post  retirement  medical
           costs. The  contributions to the health plan are borne equally by the
           employee and the group except for a few salaried  employees where the
           Company is responsible for 100% of the contribution.  The Company has
           no  liability  for   employees'   medical  costs  in  excess  of  the
           contributions to the health plan.

           Amounts  charged to health plan costs and  contributed by the Company
           were as follows:


                   Year ended      Year ended       March 1,       Year ended
                    June 30,        June 30,       to June 30,    February 28,
                      1997            1996            1995            1995
                       $                $               $              $
Health plan costs   336,706         242,186          42,366         123,233
                    =======         =======         =======         =======



                                       46
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995

17.        PROFIT SHARE

           Management  receive an annual bonus,  determined at the discretion of
           the  board of  directors.  The  amounts  paid to  management  were as
           follows:


                    Year ended     Year ended       March 1,     Year ended
                     June 30,       June 30,      to June 30,   February 28,
                       1997           1996            1995          1995
                         $             $               $             $
Profit share bonus   390,284        140,828            --         294,307
                     =======        =======        =======        =======
                                                           

18.        BUSINESS SEGMENT INFORMATION

           The  Company's  operations  have been  classified  into four business
           segments:  packaging machinery,  fastener industry,  air conditioning
           and  refrigeration  components  and  processed  foods.  The packaging
           machinery  segment includes the manufacture,  import and distribution
           of  packaging   machinery.   The  fastener   industry   includes  the
           manufacture and  distribution of fasteners.  The air conditioning and
           refrigeration components segment includes the manufacture, import and
           distribution of air conditioning and refrigeration  related products.
           The processed foods segment includes the manufacture,  processing and
           distribution  of food related  products for resale to wholesalers and
           retailers.

           Summarized  financial  information by business  segment for the years
           ending June 30,  1997 and 1996 is  presented.  (Information  prior to
           this date if not available)


                                                     Year ended      Year ended
                                                    June 30, 1997  June 30, 1996
                                                          $              $
                                                    -----------    -----------
Net sales:
    Packaging machinery                               7,838,872      5,102,597
    Fastener industry                                 4,399,591      4,458,636
    Air conditioning and refrigeration components    12,409,404      3,778,976
    Processed foods                                  41,928,064      1,570,888
                                                    -----------    -----------
                                                     66,575,931     14,911,097
                                                    -----------    -----------

Operating income:
    Packaging machinery                                 605,948        364,695
    Fastener industry                                   685,873        826,086
    Air conditioning and refrigeration components       355,408        297,049
    Processed foods                                   4,782,675        137,483
    Corporate                                          (988,335)    (6,548,158)
                                                    -----------    -----------
                                                      5,441,569     (4,922,845)
                                                    -----------    -----------



                                       47
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995

                                                    Year ended    Year ended
                                                   June 30, 1997 June 30, 1996
                                                         $             $
                                                    ----------   ----------
Total assets:
    Packaging machinery                              4,979,316    2,660,370
    Fastener industry                                2,846,135    2,649,505
    Air conditioning and refrigeration components    4,041,505    3,491,366
    Processed foods                                 41,037,271    6,085,800
    Corporate                                       11,293,252    8,717,953
                                                    ----------   ----------
                                                    64,197,479   23,604,996
                                                    ----------   ----------

Depreciation and amortization:
    Packaging machinery                                183,376      150,797
    Fastener industry                                   76,223       65,440
    Air conditioning and refrigeration components      282,276       95,371
    Processed foods                                  1,311,669       56,692
    Corporate                                          157,810       27,457
                                                    ----------   ----------
                                                     2,011,654      395,757
                                                    ----------   ----------

Capital expenditure:
    Packaging machinery                              1,103,386       96,617
    Fastener industry                                   43,362       89,532
    Air conditioning and refrigeration components      508,018      133,217
    Processed foods                                  1,652,677       45,201
    Corporate                                           17,710        9,396
                                                    ----------   ----------
                                                     3,325,153      453,768
                                                    ----------   ----------


19.        EMPLOYMENT AGREEMENTS

           The Company  has  entered  into  employment  agreements  with two key
           employees.  In terms of the  agreements the two employees will devote
           substantially  all of their  business  time to the group and  receive
           annual  salaries of $180,000  and  $150,000  per annum.  The salaries
           payable will not increase until thirteen  months after the closing of
           the offering.  The Company intends to pay the key employees an annual
           incentive bonus based on pre-tax profits.  The option prices of $5.00
           per share of Common  Stock of the Company and 13.05 Rand per share of
           First South  Africa  Holdings  (Proprietary)  Limited  Class B Common
           Stock  granted  in  connection  with  various  employment  agreements
           represent  the price of the  respective  shares of stock on the grant
           dates.


                                       48
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


20.        STOCK OPTION PLAN

           The board of directors  have adopted the Company's  1995 Stock Option
           Plan. The Stock Option Plan provides for the grant of i) options that
           are intended to qualify as incentive stock options  ("Incentive Stock
           Options")  within  the  meaning  of  Section  422 of the  code to key
           employees  and ii) options not so intended to qualify  ("Nonqualified
           Stock  Options") to key employees  (including  directors and officers
           who are employees of the Company,  and to directors  and  consultants
           who are not  employees).  The total  number of shares of common stock
           for which  options  may be  granted  under the Stock  Option  Plan is
           350,000 shares.

           The  Stock  Option  Plan is to be  administered  by the  Compensation
           Committee of the board of directors.  The committee  shall  determine
           the terms of the options exercised, including the exercise price, the
           number of shares  subject to the option and the terms and  conditions
           of  exercise.  No options  granted  under the Stock  Option  Plan are
           transferable  by the  optionee  other than by the will or the laws of
           descent and  distribution  and each option is exercisable  during the
           lifetime  of  the  optionee  only  by  such  optionee  or  his  legal
           representatives.

           The exercise price of Incentive  Stock Options granted under the plan
           must be at least equal to the fair market value of such shares on the
           date of the  grant  (110%  of fair  market  value  in the  case of an
           optionee  who owns or is deemed  to own more  than 10% of the  voting
           rights of the outstanding  capital stock of the Company or any of its
           subsidiaries).  The  maximum  term for each  Incentive  Stock  Option
           granted is ten years (five years in the case of an optionee  who owns
           or is  deemed  to own  more  than  10% of the  voting  rights  of the
           outstanding capital stock of the Company or any of its subsidiaries).
           Options shall be exercisable at such times and in such instalments as
           the committee shall provide in the terms of each  individual  option.
           The maximum  number of shares for which options may be granted to any
           individual in any fiscal year is 210,000.

           The Stock Option Plan also contains an automatic option grant program
           for the  non-employee  directors.  Each person who is a  non-employee
           director of the Company  following an annual meeting of  shareholders
           will  automatically  be  granted an option  for an  additional  5,000
           shares of common  stock.  Each grant will have an exercise  price per
           share equal to the fair market value of the common stock on the grant
           date and will have a term of five years measured from the grant date,
           subject to earlier  termination  if an optionee's  service as a board
           member is terminated for cause.



                                       49
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


20.        STOCK OPTION PLAN (continued)

           The company has granted options to purchase  925,000 shares of common
           stock under the Plan as described in the table set forth below:

<TABLE>
<CAPTION>

                                    OPTIONS GRANTED      PER SHARE
                                                       EXERCISE PRICE    EXPIRATION DATE          EXERCISABLE
<S>                          <C>         <C>                <C>                  <C> <C>                     
Stock options granted during 1996        75,000             $5,00        January 24, 2001         Immediately

                                        150,000             $5,00                                  On the seventh
                                                                                              anniversary subject
                                                                                               to earlier vesting

                                                                                                   On the seventh
                                        150,000             $3,00                             anniversary subject
                                                                                               to earlier vesting

Stock options granted during 1997        25,000             $3,75                                     Immediately
                                        500,000             $4,75                                         250,000
                                                                                                     Immediately,
                                                                                              250,000 on June 24,
                                                                                                            1999.
                                         25,000             $3,75                                     Immediately
                                        925,000
                                        =======

           Options exercisable at June 30, 1997 totalled 555,000.
</TABLE>


                                       50
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


21.        WARRANTS OUTSTANDING

           In  connection  with the  initial  public  offering,  consummated  in
           January 1996, the Company issued  2,300,000  units.  Each unit issued
           consisted  of one  share of  common  stock,  one  redeemable  Class A
           warrant  and  one  redeemable  Class  B  warrant.  In  addition,   an
           additional  100,000 warrants were issued to the underwriter  pursuant
           to the underwriting  agreement.  Concurrently with the initial public
           offering the selling security holder offered 650,000 selling security
           holder  warrants,  650,000  selling  security holder Class B warrants
           issuable upon exercise of the selling  security  holder  warrants and
           1,300,000  shares of common  stock  issuable  upon  exercise of these
           selling  security holder warrants and selling security holder Class B
           warrants. These selling security holder warrants are identical to the
           Class A warrants,  except that there are certain restrictions imposed
           upon the transferability of these warrants.

           In  consideration  for the  debenture  offering  the  Company  issued
           warrants over 135,000  shares of common stock at an exercise price of
           $6.00 per share, the fair market price at date of issuance.

           Class A warrants over 24,635 shares were exercised  during the fiscal
           year resulting in proceeds to the Company of $160,125.

           Warrants outstanding at June 30, 1997 were as follows:

<TABLE>
<CAPTION>
                        Number of
Warrant                  warrants   Exercise price     Expiry date           Entitlement
-------                  --------   --------------     -----------           -----------
<S>                      <C>            <C>                 <C>            <C>                        
Class A Redeemable       2,925,365      $6.50       January 24, 2001    One share of common
                                                                        warrants
                                                                        stock and one Class B
                                                                        warrant
Class B Redeemable       5,250,000      $8.75       January 24, 2001    One share of common
warrants                                                                stock

Debenture warrants         135,000      $6.00       July 31, 2007       One share of common
                                                                        stock
                                                                        
</TABLE>

           The Class A warrants are  redeemable  beginning  January 24, 1997, or
           earlier at the option of the Company with the  underwriters  consent,
           at a redemption  price of $0.05 per Class A warrant,  if the "closing
           price" of the  Company's  common stock trades at an average  price in
           excess of $9.10 per share for any  consecutive 30 trading day period,
           ending  within  15 days of the  notice  of  redemption.  All  Class A
           warrants are to be redeemed if any are to be redeemed.

           The Class B warrants are  redeemable  beginning  January 24, 1997, or
           earlier at the option of the Company with the  underwriters  consent,
           at a redemption  price of $0.05 per Class A warrant,  if the "closing
           price" of the  Company's  common stock trades at an average  price in
           excess of $12.25 per share for any consecutive 30 trading day period,
           ending  within  15 days of the  notice  of  redemption.  All  Class B
           warrants are to be redeemed if any are to be redeemed.

           The Company  subsequent to year end, has indicated  that it will make
           an offer to its  warrant  holders to redeem all Class A Warrants  and
           Class B Warrants under the following terms and conditions:


                                       51
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


21.        WARRANTS OUTSTANDING (continued)

           *          Two shares of common  stock for three  Class A and Class B
                      Warrants surrendered
           *          One share of common  stock in  exchange  for three Class A
                      Warrants
           *          One  share of  common  stock in  exchange  for six Class B
                      Warrants

22.        FIRST SOUTH AFRICAN HOLDINGS ESCROW AGREEMENT

           The FSAH Escrow  Agreement  was executed  prior to the closing of the
           offering  and provided  for the  concurrent  issuance and delivery of
           729,979 shares of Class B common stock to the FSAH escrow agent.  The
           FSAH Escrow Agreement is intended to provide security for the holders
           of First South African  Holdings (Pty) Ltd Class B common stock,  who
           are  residents in South Africa and are  prohibited  in terms of South
           African law from holding shares in a foreign company. The FSAH Escrow
           Agreement  provides  that  the  parties  to this  agreement  that are
           holders  of FSAH Class B common  stock  will not sell such  shares of
           stock,  but may tender the shares to the FSAH  escrow  agent  against
           payment  therefore by the escrow agent,  which payment may consist of
           the  proceeds  obtained  from the sale of an equal  number of Class B
           common stock of the Company,  provided  that the proceeds of the sale
           will be  delivered  to the  holder  of the  Class B  common  stock in
           exchange for the shares in FSAH. These shares will be tendered to the
           Company and they will be immediately converted to FSAH Class A common
           stock.

           Since the  consummation  of the Company's  initial public offering in
           January  1996,  the Company has entered  into FSAC Escrow  Agreements
           with the FSAH escrow agent, FSAH and certain  principal  shareholders
           of the Company's subsidiaries which were acquired since January 1996.
           The terms of the FSAC Escrow Agreement are  substantially  similar to
           the terms of the FSAH  Escrow  Agreement,  except  that only the FSAH
           Escrow  Agreement  provided for the issue of shares of Class B common
           stock to the FSAH  escrow  agent  while  the FSAC  Escrow  Agreements
           provide  for the issue of shares of common  stock to the FSAH  escrow
           agent which  correspond to the issuances of FSAH Class B common stock
           by FSAH.

           A further  1,191,840  shares of common  stock were issued to the FSAH
           escrow agent in terms of FSAC Escrow  Agreements  entered into during
           the  fiscal  year in  connection  with the  acquisitions  of  Piemans
           Pantry, Astoria Bakery,  Seemanns' Quality Meat Products,  Gull Foods
           and First Strut.

           The FSAC escrow agreement is intended to provide security for certain
           holders of FSAH Class B stock who are  residents  of South Africa and
           who are subject to exchange  controls which prevent them from holding
           shares in a foreign company. In closing acquisitions of South African
           entities it follows that the South African residents are not entitled
           to FSAC  common  stock  in lieu of cash  consideration  paid  for the
           business.  Therefore  a  vehicle  has been  created  where  the South
           African  residents are issued FSAH Class B common stock, FSAH being a
           registered  South African entity,  in lieu of FSAC common stock.  The
           disposal  of  FSAH  Class B  common  stock  by  these  South  African
           residents  may only be made to the FSAC Escrow Agent who in turn will
           dispose of the FSAC common stock held by it in escrow,  who will then
           pass the  disposal  proceeds  on to the  holders  of the FSAH Class B
           common stock in exchange for their FSAH B Class shares.

           The accounting treatment is as follows:


                                       52
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     FOR THE YEARS ENDED JUNE 30, 1997 AND 1996, THE PERIOD MARCH 1, TO JUNE
                              30, 1995 AND THE YEAR
                             ENDED FEBRUARY 28, 1995


22.        FIRST SOUTH AFRICAN HOLDINGS ESCROW AGREEMENT (continued)

           Previous vendors of companies acquired are issued FSAH B Class shares
           at the closing market price of the FSAC common stock,  denominated in
           Dollars and converted to South African Rands at the average spot rate
           ruling, on the effective date of closing the acquisition agreements.

           Concurrently  with this  transaction a similar  amount of FSAC common
           stock is issued to the FSAC Escrow Agent.

           The  FSAH  B  Class   shares  so  issued   are  not   eliminated   on
           consolidation,  but rather,  form part of the issued capital stock of
           FSAC and the non cash  proceeds  of these  issues  are  disclosed  as
           capital and capital in excess of par in the  Statement  of Changes in
           Stockholders equity. Thereby giving full effect to the issues of FSAH
           B Class shares as if they were FSAC common stock issues.

           Therefore  the  shares  are  issued  at  fair  market  value  and  no
           additional charges/gains are needed in the Statement of Income.

23.        CONTINGENT LIABILITIES

           South  African  Secondary Tax on Companies at 12,5 percent is payable
           on all future dividends declared out of distributable reserves.

24.        EVENTS SUBSEQUENT TO BALANCE SHEET DATE

           Effective July 1, 1997 the Company completed  negotiations to acquire
           Fifers  Bakery  (Proprietary)  Limited  ("Fifers"),  subject  to  the
           satisfactory outcome of a due diligence investigation to be performed
           by Price  Waterhouse.  Fifers will fit into the Company's  Bakery and
           Confectionery  interests  under First SA Food  Holdings  Limited,  in
           which the Company holds an effective 70% interest.







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

           NONE.




                                       53
<PAGE>



PART III
ITEM. 10
DIRECTORS AND EXECUTIVE OFFICERS

      The  officers  and  directors  of the  Company,  their  ages  and  present
positions held with the Company are as follows:


  Name                    Age          Positions with the Company
  ----                    ---          --------------------------

Michael Levy              51       Chairman of the Board of Directors

Clive Kabatznik           40       Chief Executive Officer, President, Chief 
                                   Financial Officer, Controller and Director

Tucker Hall               41       Secretary

Charles S. Goodwin        58       Director

John Mackey               56       Director

Cornelius J. Roodt        38       Director


      The  following is a brief  summary of the  background of each director and
executive officer of the Company:

      Michael Levy is a co-founder  of the Company and has served as Chairman of
the Board of Directors since the Company's  inception.  Since 1987, Mr. Levy has
been the Chief  Executive  Officer and  Chairman  of the Board of Arpac L.P.,  a
Chicago-based manufacturer of plastic packaging machinery.

      Clive  Kabatznik  is a  co-founder  of the  Company  and has  served  as a
director and its President  since its inception and as its Vice Chairman,  Chief
Executive  Officer and Chief  Financial  Officer since October 1995.  Since June
1992,  Mr.  Kabatznik  has  served as  President  of  Colonial  Capital,  Inc. a
Miami-based  investment  banking  Company that  specializes  in advising  middle
market companies in areas concerning mergers,  acquisitions,  private and public
agency funding and debt  placements.  From 1989 to 1992,  Mr.  Kabatznik was the
President  of Biltmore  Capital  Group,  a  financial  holding  Company  that he
co-founded that controlled a registered NASD  broker-dealer.  From 1981 to 1986,
Mr. Kabatznik was the Chief Financial Officer of the Learning Annex, Inc., which
he co-founded. Mr. Kabatznik was born in South Africa.

      Tucker Hall has been the  Secretary of the Company since its inception and
is an employee of Codan Services Limited, an affiliated company of Conyers, Dill
& Pearman, Bermuda counsel to the Company, and has been employed by such Company
as a manager since 1989.

      Charles S. Goodwin has been a director for the Company since its inception
and has  been  Managing  Director  and  Chief  Executive  Officer  of  Tessellar
Investment, Ltd., a money management firm operating from Cape Cod, Massachusetts
since 1985. Mr. Goodwin was Senior Vice President and Director of  International
Research of Arnhold & S.  Bleichroeder,  Inc., an  institutional  brokerage firm
from 1983 to 1984.  During the period 1971 to 1983,  Mr.  Goodwin was a Director
and Vice President of Warburg Pincus  Capital Corp.,  EMW Ventures;  Senior Vice
President and Director of Research for Warburg Pincus Counsellors, and a Partner
and Managing Director of E.M. Warburg Pincus & Co., an investment counseling and
venture capital firm. Mr. Goodwin is the author of "The Third World Century" and
"A  Resurrection  of the  Republican  Ideal"  published by  University  Press of
America,  Lanham,  Md. in 1994 and 1995  respectively.  Mr. Goodwin received his
Bachelor of Arts in Russian  History from Harvard College in 1961 and his Master
of Business  Administration - International Finance from the Columbia University
Graduate School of Business in 1965.



                                       54
<PAGE>


      John Mackey is the Chairman of the Board of QTI,  Inc.,  a  privately-held
global  trading  firm doing  business in Africa,  Asia and in the United  States
since  1992.  Mr.  Mackey has also been a member of the Board of Advisors of the
Leukemia Society of America since 1987, and a member of the Board of Advisors of
the Syracuse  University  Business School since 1990. Mr. Mackey played football
for 10  seasons  in the  National  Football  League  and was  elected to the Pro
Football  Hall of Fame in 1992.  Mr.  Mackey has been a director  of the Company
since January 1996.

      Cornelius J. Roodt has been a director of the Company since December 1996.
Mr. Roodt was appointed  Managing  Director and Chief Financial Officer of FSAH,
on July 1, 996. Mr. Roodt is  responsible  for  overseeing all the activities of
FSAH's  operations  in South  Africa.  From 1994 to 1996 Mr.  Roodt was a senior
partner at Price Waterhouse  Corporate Finance,  South Africa. From 1991 to 1994
he was an audit partner at Price Waterhouse,  South Africa. Prior to that he was
a partner at the accounting firm of Wichahn Meyernel in South Africa.


OTHER KEY EMPLOYEES

      Samuel S. Smith,  41. Mr. Smith is a joint  Managing  Director of Starpak.
Mr. Smith has been employed by Starpak and its predecessor since 1976. Mr. Smith
is responsible for the technical  operations of Starpak which include conceptual
design  of  machinery,  management  of the  factory  and  production  processes,
commissioning and installation of machinery at customers' premises.

      Rhona L. Kabatznik, 61. Ms. Kabatznik is a General Manager and Director of
L.S. Pressings.  Ms. Kabatznik's  responsibilities  include production and sales
administration.  Ms.  Kabatznik  is the  mother  of  Clive  Kabatznik,  the Vice
Chairman,  President  and Chief  Executive  Officer of the Company,  and a first
cousin of Michael Levy, the Chairman of the Company's Board of Directors.

      Raymond  Shaftoe,  45. Mr. Shaftoe has been a joint  Managing  Director of
Starpak since 1986 and has been employed by Starpak since 1980.  Mr. Shaftoe has
also  served on the Board of  Directors  of  Starpak  since  1986.  His  current
responsibilities  include  supervision  of the sales and  marketing of Starpak's
products, administration and product development.

      Bruce Thomas,  44. Mr. Thomas is the Chief Executive  Officer of Europair.
He has held  this  position  since  1991 and was the  principal  shareholder  of
Europair until its sale to the Company. Prior to that he was the Chief Financial
Officer for  Europair and held that  position  from 1976.  His  responsibilities
include the  management of Europair,  product  development,  sales and financial
oversight.

      John Welch, 48. Mr. Welch is the founder and Managing  Director of Piemans
Pantry, a company he established in 1982. His  responsibilities  include overall
supervision of all aspects of the business.

      Wolfgang  Burre,  55. Mr.  Burre is the founder of Astoria.  He is a fifth
generation  master  baker and is  responsible  for overall  corporate  strategy,
product development and quality control. Mr. Burre traditionally has devoted 50%
of his time to Astoria and will continue to do so.

      Each of the above key employees,  other than Bruce Thomas,  John Welch and
Wolfgang  Burre has  entered  into a  three-year  service  contract  with  their
respective  companies,  commencing March 1, 1995. Bruce Thomas and Europair have
executed a Management Agreement which shall be in effect for a three year period
commencing  January 24, 1996.  John Welch and Michael Morgan have entered into a
two year employment agreement with


                                       55
<PAGE>


Piemans Pantry commencing March 1, 1996. Wolfgang Burre has agreed to enter into
a three year employment agreement to be effective as of July 1, 1996.

      Mark  Jericevich,  51. Mark Jericevich was the founder of Seemanns and has
been a Managing Director since Seemanns' inception in 1983.

      Matthew Jericevich, 27. Matthew Jericevich has been a Managing Director of
Seemanns since November 1996. For the past five years Mr.  Jericevich has held a
number of marketing and production  positions at Seemanns.  Mark  Jericevich and
Matthew Jericevich are jointly  responsible for overall corporate  strategy,  as
well as all financial and operational issues at Seemanns.

      Mark  Jericevich  and  Matthew  Jericevich  have  entered  into three year
service contracts with Seemanns, commencing November 1, 1996.

      Ian Store, 44. Mr. Store is a Managing Director and founder of Gull Foods.
Mr. Store is responsible for all production and operational  management at Gull,
and  together  with Alan James,  is jointly  responsible  for overall  corporate
strategy.

      Alan James, 45. Mr. James is a Managing  Director and founder of Gull. Mr.
James is responsible for Gull's marketing and sales efforts.

      Ian Store and Alan James have entered  into three year  service  contracts
with Gull Foods, commencing January 1, 1997.

      All directors of the Company hold office until the next annual  meeting of
shareholders or until their  successors are elected and qualified.  The officers
of the Company are elected by the Board of Directors at the first  meeting after
each annual meeting of the Company's  shareholders,  and hold office until their
death,  until  they  resign or until they have been  removed  from  office.  The
Company has no  executive  committee.  Pursuant to the  Underwriting  Agreement,
dated January 24, 1996 by and among the Company,  FSA Stock Trust and D.H. Blair
and  executed  with  respect  to  certain  provisions  thereof  by Messrs  Clive
Kabatznik  and Michael  Levy,  the Company is required to nominate a designee of
D.H. Blair of its initial public offering to the Board of Directors for a period
of five years from the date of the  completion of the Offering.  D.H.  Blair has
not yet selected such a designee.

COMMITTEES OF THE BOARD

      The  Board  has  an  Audit   Committee  (the  "Audit   Committee")  and  a
Compensation  Committee (the "Compensation  Committee").  The Audit Committee is
composed  of Clive  Kabatznik,  Charles  Goodwin  and  John  Mackey.  The  Audit
Committee is responsible for recommending annually to the Board of Directors the
independent  auditors  to  be  retained  by  the  Company,  reviewing  with  the
independent  auditors  the  scope  and  results  of  the  audit  engagement  and
establishing  and  monitoring  the  Company's  financial  policies  and  control
procedures.  The Compensation  Committee is composed of Charles Goodwin and John
Mackey.  These  persons are  intended to be  Non-Employee  Directors  within the
meaning of Rule 16b-3(b)(3)(i)  promulgated under the Securities Exchange Act of
1934 (the Securities  Exchange Act). The  responsibilities  of the  Compensation
Committee are described below under the heading Stock Option Plan.


                                       56
<PAGE>


EXECUTIVE COMPENSATION

      Except  for Mr.  Levy,  directors  of the  Company  do not  receive  fixed
compensation  for their  services as  directors  other than  options to purchase
5,000 shares under the Company's  stock option plan. Mr. Levy receives an annual
service fee of $30,000 and options to  purchase  5,000  shares of the  Company's
Common  Stock for every year of service as a director of the  Company.  However,
directors  will  be  reimbursed  for  their  reasonable  out-of-pocket  expenses
incurred in connection with their duties to the Company.

      The  following  summary   compensation  table  sets  forth  the  aggregate
compensation  paid or accrued  by the  Company  to its Chief  Executive  Officer
during  the  Period  from July 1, 1996  through  June 30,  1997.  Apart from Mr.
Kabatznik,  whose annual salary is $180,000, no executive officer of the Company
received compensation in excess of $100,000 during such period.







                                       57

<PAGE>




                                 SUMMARY COMPENSATION TABLE

                                                                     LONG-TERM
                                        ANNUAL                     COMPENSATION
                                      COMPENSATION
                                    YEAR       SALARY    BONUS     STOCK OPTIONS
Clive Kabatznik, President          1997     $180,000   $195,142     255,000(1)
     and Chief Executive Officer    1996     $135,000                205,000(2)
                                                      
(1)   Includes (i) options granted under the Stock Option Plan to purchase 5,000
      shares of Common Stock at an exercise  price of $3.75 per share,  and (ii)
      options  granted by the Board of Directors to purchase  250,000  Shares of
      common  Stock at an  exercise  price of $4.75 per share (of which  125,000
      were immediately  exercisable and 125,000 would become exercisable on June
      24, 1999, if Mr. Kabatznik is still employed by the Company on such date).
(2)   See " - Stock Option Plan."

EMPLOYMENT AGREEMENTS

           FSAM has entered into an Employment  Agreement with Clive  Kabatznik,
the Vice Chairman,  President and Chief Executive  Officer of the Company and of
FSAM.   Under  the  terms  of  such  agreement,   Mr.   Kabatznik  shall  devote
substantially  all of his business  time,  energies and abilities to the Company
and its  subsidiaries  and receives an annual  salary of $180,000 and options to
purchase  55,000 shares of Common Stock at an exercise price of $5.00 per share.
In  addition,  Mr.  Kabatznik  has been granted  additional  options to purchase
150,000 shares of Common Stock of the Company at the exercise price of $5.00 per
share,  exercisable  after the  seventh  anniversary  following  the grant date,
provided that vesting of such options will be accelerated as follows: (i) 50,000
options  will be  exercisable  on such  earlier  date that the Company  realizes
earnings  per share of $.75 or more on a fiscal year basis,  (ii) an  additional
50,000  options  will be  exercisable  on such  earlier  date  that the  Company
realizes  earnings per share of $1.00 or more on a fiscal year basis,  and (iii)
an additional  50,000  options will be exercisable on such earlier date that the
Company realizes earnings per share of $1.50 or more on a fiscal year basis. The
options  referred  to in (i) and (ii)  above  have  vested  as a  result  of the
Company's  realization of the applicable  earnings per share  requirements.  The
Company intends, during the term of Mr. Kabatznik's employment agreement, to pay
Mr.  Kabatznik an annual  incentive  bonus of five percent of the Minimum Pretax
Income (as provided in Mr. Kabatznik's  employment  agreement) above $4,000,000,
as shall be reported in the  Company's  audited  financial  statements  for each
fiscal year in which Mr. Kabatznik is employed,  exclusive of any  extraordinary
earnings or charges  which would  result from the release of the Earnout  Escrow
Shares.

           FSAM has entered  into a  consulting  agreement  with  Michael  Levy,
pursuant  to which Mr.  Levy  serves as a  consultant  to FSAM.  The term of the
agreement  is for a period of three years until  January 31,  1999.  Mr.  Levy's
compensation for such consulting services is $60,000 per annum.

           FSAH has entered  into an  Employment  Agreement  with  Cornelius  J.
Roodt, the Managing  Director and Chairman of the Board of FSAH. Under the terms
of such  agreement,  Mr.  Roodt shall devote  substantially  all of his business
time,  energies  and  abilities  to the Company and its  subsidiaries  and shall
receive an annual salary of $150,000 and options to purchase  150,000  shares of
FSAH Class B Stock at an  exercise  price of Rand 13.05 per share.  Mr.  Roodt's
salary under his Employment  Agreement  shall be reviewed on an annual basis. In
addition,  the 150,000  shares of FSAH Class B Stock are  exercisable  after the
fifth  anniversary  following  the grant  date,  provided  that  vesting of such
options will be accelerated  as follows:  (i) 50,000 options will be exercisable
on such  earlier  date that the Company  realizes  earnings per share of $.75 or
more  on a  fiscal  year  basis,  (ii)  an  additional  50,000  options  will be
exercisable on such earlier date that the Company realizes earnings per share of
$1.00 or more on a fiscal year basis,  and (iii) an  additional  50,000  options
will be exercisable on such earlier date that the Company realizes  earnings per
share of $1.50 or more on a fiscal  year basis.  The options  referred to in (i)
and (ii) above have vested


                                       58
<PAGE>



as a result of the Company's  realization of the  applicable  earnings per share
requirements.  The Company  intends,  during the term of Mr. Roodt's  employment
agreement,  to pay Mr.  Roodt an annual  incentive  bonus of four percent of the
Minimum Pretax Income (as provided in Mr. Roodt's  employment  agreement)  above
$5,000,000,  as shall be reported in the Company's audited financial  statements
for  each  fiscal  year  in  which  Mr.  Roodt  is  employed,  exclusive  of any
extraordinary  earnings or charges  which  would  result from the release of the
Earnout Escrow Shares.

STOCK OPTION PLAN

           The  Board  of   Directors   of  the  Company  has  adopted  and  the
shareholders  (prior to the  Company's  initial  public  offering)  approved the
Company's  1995 Stock Option Plan (the "Stock  Option  Plan").  The Stock Option
Plan  provides  for the grant of (i)  options  that are  intended  to qualify as
incentive stock options  (Incentive Stock Options) within the meaning of Section
422 of the Code to key  employees  and (ii)  options not  intended to so qualify
(Nonqualified Stock Options) to key employees  (including directors and officers
who are employees of the Company),  and to directors and consultants who are not
employees.  The total number of shares of Common Stock for which  options may be
granted under the Stock Option Plan is 350,000 shares.

           The  Stock  Option  Plan is to be  administered  by the  Compensation
Committee of the Board of Directors.  The Committee shall determine the terms of
options exercised, including the exercise price, the number of shares subject to
the option and the terms and conditions of exercise. No option granted under the
Stock Option Plan is transferable by the optionee other than by will or the laws
of descent and distribution  and each option is exercisable  during the lifetime
of the optionee only by such optionee or his legal representatives.

           The exercise price of Incentive Stock Options granted under the Stock
Option Plan must be at least  equal to the fair  market  value of such shares on
the date of grant (110% of fair market value in the case of an optionee who owns
or is deemed to own stock  possessing  more than 10% of the voting rights of the
outstanding capital stock of the Company (or any of its subsidiaries).  The term
of each option granted pursuant to the Stock Option Plan shall be established by
the Committee, in its sole discretion;  provided, however, that the maximum term
for each Incentive Stock Option granted pursuant to the Stock Option Plan is ten
years (five years in the case of an optionee  who owns or is deemed to own stock
possessing  more than 10% of the total combined  voting power of the outstanding
capital stock of the Company (or any of its subsidiaries).  Options shall become
exercisable  at such  times  and in such  installments  as the  Committee  shall
provide in the terms of each individual option. The maximum number of shares for
which options may be granted to any individual in any fiscal year is 210,000.

           The Stock Option Plan also contains an automatic option grant program
for the non-employee  directors.  Each  non-employee  director of the Company is
automatically  granted an option for 5,000 shares of Common  Stock.  Thereafter,
each person who is a  non-employee  director of the Company  following an annual
meeting  of  shareholders  will  be  automatically  granted  an  option  for  an
additional 5,000 shares of Common Stock.  Each grant will have an exercise price
per share equal to the fair market  value of the Common  Stock on the grant date
and will have a term of five  years  measured  from the grant  date,  subject to
earlier termination if an optionee's service as a Board member is terminated for
cause.

           The Company has granted options to purchase  750,000 shares of Common
Stock:



                                       59
<PAGE>


<TABLE>
<CAPTION>
                                                                OPTIONS GRANTED


                                                                                          POTENTIAL REALIZABLE VALUE AT
                                              PERCENT OF TOTAL                                       ASSUMED
                                              OPTIONS GRANTED                                         ANNUAL
                                                     TO           PER SHARE                    RATE OF STOCK PRICE
                                 OPTIONS        EMPLOYEES IN      EXERCISE    EXPIRATION     APPRECIATION FOR OPTION
                                 GRANTED      FISCAL YEAR (1)       PRICE        DATE                  TERM
                                 -------     -----------------     -------      ------                -----
                                                                                                   5%           10%
                                                                                              -----------   -----------
<S>                                <C>              <C>             <C>             <C>      <C>           <C>        
Michael Levy...................    5,000            .66%            $5.00           (2)      $      6,900  $    15,273
                                   5,000            .66%             3.75           (2)             5,200       11,500
                                                                                
Clive Kabatznik................  205,000          27.33%             5.00           (3)         1,547,571    1,363,332
                                   5,000            .66%             3.75           (2)             5,200       11,500
                                 250,000          33.33%             4.75           (4)           328,084      724,981
                                                                                
Laurence M. Nestadt............    5,000            .66%             5.00           (2)             6,900       15,273
                                                                                
Charles S. Goodwin.............    5,000            .66%             5.00           (2)             6,900       15,273
                                   5,000            .66%             3.75           (2)             5,200       11,500
                                                                                
John Mackey....................    5,000            .66%             5.00           (2)             6,900       15,273
                                   5,000            .66%             3.75           (2)             5,200       11,500
                                                                                
Cornelius J. Roodt.............    5,000            .66%             3.75           (2)             5,200       11,500
                                 250,000          33.33%             4.75           (4)           328,084      724,981
</TABLE>

---------------
(1)  The numbers have been rounded for the purpose of this table.
(2)  Options  granted  will  expire  five  years from the date  granted  and are
     immediately exercisable.
(3)  55,000 options granted will expire five years from the date granted; 50,000
     additional options will be exercisable following the seventh anniversary of
     the grant date and until the tenth  anniversary  of such  date,  subject to
     accelerated vesting upon the Company's  realization of certain earnings per
     share targets;  100,000 additional options are currently  exercisable until
     the tenth anniversary of the date of grant.
(4)  Non-plan  options to purchase 250,000 shares of Common Stock at an exercise
     price of $4.75  granted by the Board of Directors to each of Mr.  Kabatznik
     and Mr. Roodt in the fourth  quarter of fiscal year 1997 (of which  125,000
     were  immediately  exercisable and 125,000 will become  exercisable on June
     24, 1999, if the optionee is still employed by the Company on such date).


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

           The following  table sets forth certain  information  as to the stock
ownership of (i) each person known by the Company to be the beneficial  owner of
more than five percent of the  Company's  Common Stock or Class B Common  Stock,
(ii) each director of the Company,  (iii) each named executive  officer and (iv)
all executive officers and directors as a group.



                                       60
<PAGE>


<TABLE>
<CAPTION>
                              AMOUNT AND NATURE OF
                              BENEFICIAL OWNERSHIP(1)

                                                                                    PERCENTAGE OF
NAME AND ADDRESS OF                            CLASS B COMMON      PERCENTAGE OF       VOTING
BENEFICIAL SHAREHOLDER          COMMON STOCK    STOCK (2)(3)        OWNERSHIP(3)      POWER(3)
----------------------          ------------    ------------        ------------      --------
<S>                              <C>              <C>         <C>       <C>              <C>  
Michael Levy.................... 1,201,837(4)     1,300,116(5)(6)       45.3%            60.1%
9511 West River Street
Schiller Park, IL 60176

Clive Kabatznik.................   285,000(7)       190,000             9.9%            10.4%
2665 S. Bayshore
Suite 702
Coconut Grove, FL 37137

FSA Stock Trust.................        0           953,660(5)(8)       17.3%            37.2%
9511 West River Street
Schiller Park, IL  60176

Charles S. Goodwin..............    10,000(4)             0              *               *
801 Old Post Road
Cotuit, MA 02635

John Mackey.....................    10,000(4)             0              *               *
1198 Pacific Coast Highway
Seal Beach, CA 90470

Cornelius J. Roodt                 130,000(9)             0             2.3%             1.0%
P.O. Box 4001
Kempton Park, South Africa

All executive officers and       1,636,837(10)    1,490,116            54.3%            69.4%
directors as a group (5 persons)
</TABLE>

---------------

*    Less than 1%

(1)  Beneficial  ownership is calculated in accordance with Rule 13d-3 under the
     1934 Act.

(2)  Except as otherwise  indicated,  each of the parties listed has sole voting
     and  investment  power with  respect to all shares of Class B Common  Stock
     indicated below.

(3)  For the  purposes  of this  calculation,  the Common  Stock and the Class B
     Common  Stock are treated as a single  class of Common  Stock.  The Class B
     Common Stock is entitled to five votes per share,  whereas the Common Stock
     is entitled to one vote per share.

(4)  Includes  10,000  shares of Common Stock  issuable upon exercise of options
     that are immediately exercisable.



                                       61
<PAGE>



(5)  For  purposes of Rule 13d-3 under the  Exchange  Act,  such  individual  or
     entity is deemed to be the beneficial  owner of the shares held pursuant to
     the terms of the FSAH Escrow Agreement,  although such individual or entity
     disclaims ownership of such shares under South African law.

(6)  Includes (i) 570,137  shares of Class B Common Stock owned by the FSA Stock
     Trust,  (ii)  383,523  shares  of Class B Common  Stock  issued to the FSAH
     Escrow Agent pursuant to the terms of the FSAH Escrow Agreement,  for which
     the FSA Stock  Trust may be deemed the  beneficial  owner and for which Mr.
     Levy has been  granted a voting  proxy and (iii)  36,452  shares of Class B
     Common Stock  issued to the FSAH Escrow Agent  pursuant to the terms of the
     FSAH Escrow  Agreement,  which shares correspond to a like number of shares
     of FSAH Class B Stock which was  purchased  by Mr. Levy upon the closing of
     the Europair acquisition.  Also includes 310,004 additional shares of Class
     B Common Stock issued to the FSAH Escrow Agent, for which Mr. Levy has been
     granted a voting proxy and (i) 489,474 shares of Common Stock issued to the
     FSAH Escrow Agent in connection with the Piemans Pantry  acquisition,  (ii)
     186,407  shares  of  Common  Stock  issued  to the  FSAH  Escrow  Agent  in
     connection  with the Astoria  acquisition,  (iii) 258,066  shares of Common
     Stock  issued by the  Company to the Escrow  Agent in  connection  with the
     Seemanns  acquisition,  (iv)  238,660  shares of Common Stock issued by the
     Company to the Escrow Agent in connection with the Gull Foods  acquisition,
     with  respect to which the FSAH  Escrow  Agent has  granted an  irrevocable
     proxy to Mr.  Levy and (v)  19,230  shares  of Common  Stock  issued by the
     Company to the Escrow Agent in  connection  with the  acquisition  of First
     Strut (Pty) Ltd.  Mr.  Levy's wife is the  trustee,  and his wife and their
     children are the beneficiaries,  of the FSA Stock Trust. Mr. Levy disclaims
     ownership  of all  shares  held  by the  FSA  Stock  Trust,  as well as the
     additional shares held by the FSAH Escrow Agent for which he has been given
     a voting proxy. See "Certain Transactions."

(7)  Includes  285,000  shares of Common Stock issuable upon exercise of options
     that are immediately exercisable.

(8)  Includes (i) 570,137  shares of Class B Common Stock owned by the FSA Stock
     Trust and (ii)  383,523  shares of Class B Common  Stock issued to the FSAH
     Escrow  Agent  pursuant  to the  terms of the FSAH  Escrow  Agreement.  See
     Certain Transactions - FSAH Escrow Agreement.

(9)  Includes  130,000  shares of Common Stock issuable upon exercise of options
     that are immediately exercisable.

(10) Represents  shares  issuable upon exercise of options that are  immediately
     exercisable.  Does not include  300,000  shares  issuable  upon exercise of
     options not exercisable within 60 days.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          In connection  with the Company's  organization in September 1995, the
Company sold 1,212,521  shares of Class B Common Stock to Clive  Kabatznik,  the
President  and Chief  Executive  Officer of the Company for a purchase  price of
$.01 per share,  which amount was paid by Mr.  Kabatznik in the form of advances
made by him to pay for certain expenditures of the Company. In October 1995, Mr.
Kabatznik transferred 1,002,521 of such shares, which included 670,137 shares to
Mrs.  Stephanie  Levy as Trustee of the FSA Stock  Trust,  97,210  shares to the
Stopia Trust,  97,210 shares to the 2 RAS Trust,  93,307 to the Presspack Trust,
24,657  shares to the Two Year Trust and  20,000  shares to Henry  Rothman.  The
transferees have paid Mr. Kabatznik $.01 per share for each of such shares.


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<PAGE>


FSAM MANAGEMENT AGREEMENT

          The Company and FSAM have entered into a Management Agreement pursuant
to which FSAM will provide certain management and administrative services to the
Company for an annual fee of $48,000,  and reimbursement of FSAM's costs,  other
than out-of pocket expenses,  at an amount equal to cost plus 10$ (including the
costs of employees)  incurred in providing such  management  and  administrative
services to the Company.  The costs of such services that may be requested  from
time to time by the Company  pursuant to the Management  Agreement are at a rate
that could reasonably be expected to be charged by an unaffiliated  third party.
The  services to be provided  by FSAM to the company  under the FSAM  management
Agreement  include  general  business  management and  administrative  services,
shareholder relation services,  financial services and accounting services.  The
Management  Agreement will expire on December 31, 2005, unless sooner terminated
on 90 days advance notice by either party.

STARPAK ACQUISITION

          In January 1996, pursuant to the terms of an agreement executed by the
FSA Stock  Trust,  Raymond  Shaftoe,  Steven  Smith and FSAH,  as  amended  (the
"Starpak  Agreement"),  the  previous  shareholders  of Starpak sold 100% of the
equity shares of Starpak (the  "Starpak  Stock") to FSAH in exchange for 167,709
shares of FSAH Class B Stock.

          The 167,709  shares of FSAH Class B Stock  delivered  to the  previous
Starpak  shareholders  may be tendered to the FSAH Escrow Agent against  payment
therefor by the FSAH Escrow Agent, which payment may be made through the sale by
the FSAH Escrow  Agent of an equal  number of shares of Class B Common  Stock of
the Company (which shares will  automatically  convert to Common Stock upon such
sale) and delivery of the net proceeds thereof pursuant to the terms of the FSAH
Escrow Agreement. See "Certain Transactions - FSAH Escrow Agreement."

L.S. PRESSINGS ACQUISITION

          In January 1996, pursuant to the terms of an agreement executed by the
FSA Stock Trust,  Rhona Kabatznik,  Raymond  Shaftoe,  Samuel Smith and FSAH, as
amended,  (the "L.S. Pressings  Agreement"),  the previous  shareholders of L.S.
Pressings  sold 100% of the equity  shares of such company (the "L.S.  Pressings
Stock") to FSAH in exchange for 380,181 shares of FSAH Class B Stock.

          The 380,181  shares of FSAH Class B Stock  delivered  to the  previous
L.S.  Pressings'  shareholders  may be tendered to the FSAH Escrow Agent against
payment  therefor by the FSAH Escrow  Agent,  which  payment may be made through
sale by the FSAH  Escrow  Agent of an equal  number  of shares of Class B Common
Stock of the Company  (which  shares will be  automatically  converted to Common
Stock upon such sale) and delivery of the net proceeds  thereof  pursuant to the
terms of the FSAH Escrow Agreement.

          In September 1995, prior to the execution of the Starpak Agreement and
the L.S.  Pressings  Agreement,  Michael Levy  transferred  all of his shares in
Starpak and L.S.  Pressings to the FSA Stock Trust,  which shares constitute all
of the shares of Starpak and L.S. Pressings sold to the Company by the FSA Stock
Trust.

FSAH ESCROW AGREEMENT

          The FSAH Escrow Agreement,  executed in January 1996, provided for the
concurrent  issuance  and  delivery by the Company of 729,979  shares of Class B
Common Stock to the FSAH Escrow Agent. The FSAH


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<PAGE>



Escrow  Agreement is intended to provide  security  for certain  holders of FSAH
Class B Stock,  who are  residents of South Africa and are  prohibited  by South
African law from holding shares in a foreign company.  The FSAH Escrow Agreement
provides  that the  parties to such  Agreement  that are holders of FSAH Class B
Stock will not sell such shares of stock  except as provided in such  Agreement.
Specifically, the FSAH Escrow Agreement provides that the FSAH Class B Stock may
be tendered to the FSAH Escrow Agent against payment therefor by the FSAH Escrow
Agent,  which payment may consist of the proceeds  obtained from the sale by the
FSAH Escrow  Agent of an equal  number of shares of Class B Common  Stock of the
Company,  provided  that the  proceeds  of such sale shall be  delivered  to the
holder in exchange for his or her shares of FSAH Class B Stock. Upon the sale by
the FSAH  Escrow  Agent of any  shares  of Class B Common  Stock of the  Company
pursuant to the FSAH Escrow Agreement, the FSAH Escrow Agent will deliver to the
Company  the  equivalent  number  of shares of FSAH  Class B Stock  tendered  in
connection therewith.  Such shares of FSAH Class B Stock will then automatically
convert  into  shares  of FSAH  Class A Stock  and  will be held by the  Company
together  with the other shares of FSAH Class A Stock owned by the Company.  The
Company has granted  certain  piggyback  registration  rights to the FSAH Escrow
Agent on behalf of the holders of the shares of FSAH Class B Stock held pursuant
to the FSAH  Escrow  Agreement.  Such  shares  of Class B Common  Stock  will be
automatically  converted  to Common  Stock of the Company  upon the sale of such
shares  by the FSAH  Escrow  Agent  pursuant  to the  terms  of the FSAH  Escrow
Agreement.  Such shares of Class B Common Stock will be  controlled by the terms
of the FSAH Escrow  Agreement.  Michael Levy has paid the purchase price of $.01
per share for each of the shares of Class B Common  Stock held  pursuant  to the
FSAH Escrow  Agreement  and the FSAH Escrow Agent has granted to Michael Levy an
irrevocable  proxy to vote each of such shares of Class B Common  Stock prior to
the sale or  forfeiture  of such  shares,  as the case may be. The Company  owns
25,000,000  shares  of FSAH  Class A Stock,  or  approximately  97% of the total
outstanding  shares of FSAH, and the remaining  shares are held by the following
persons in the amounts set forth below:



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<PAGE>




                                                     FSAH Class B Stock
                                                     ------------------

FSA Stock Trust ...................................   383,523 shares
Global Capital ....................................   50,000 shares
Bruce Thomas ......................................   80,000 shares
Samuel Smith ......................................   58,766 shares
Raymond Shaftoe ...................................   58,766 shares
Rhona Kabatznik ...................................   62,472 shares
Michael Levy ......................................   36,452 shares
                                                      --------------
       Total ......................................   729,979 shares
                                                      ==============




FSAC ESCROW AGREEMENTS

           Since the  consummation  of the Company's  IPO in January  1996,  the
Company has entered  into the FSAC Escrow  Agreements  which are  comprised of a
number of additional  agreements  with the FSAH Escrow  Agent,  FSAH and certain
principal  shareholders of the Company's  subsidiaries which were acquired since
January 1996. The terms of the FSAC Escrow Agreements are substantially  similar
to the terms of the FSAH  Escrow  Agreement,  except  that only the FSAH  Escrow
Agreement  provided  for the  issuance of shares of Class B Common  stock to the
FSAH  Escrow  Agent while each of the FSAC Escrow  Agreements  provided  for the
issuance of shares of Common stock to the FSAH Escrow Agent which  correspond to
the following issuances of FSAH Class B Stock by FSAH:


ADDITIONAL SHARES ISSUED IN CONNECTION WITH THE PIEMAN'S PANTRY 
ACQUISITION(1)

Heinz Andreas................................................  220,262 shares
John Welch ..................................................  220,262 shares
Michael Morgan...............................................   48,950 shares
                                                               --------------
                     Total     ..............................  489,474 shares
                                                               ==============

ADDITIONAL SHARES ISSUED IN CONNECTION WITH THE ASTORIA 
ACQUISITION(2)

Wolfgang Burre...............................................  186,407 shares

--------
1    The Company has issued an additional  489,474 shares of Common Stock to the
     FSAH Escrow Agent  pursuant to the terms of certain FSAC Escrow  Agreements
     by and among the Company,  the FSAH Escrow Agent,  and each of Mr. Andreas,
     Mr. Morgan and Mr. Welch in connection with the Pieman's acquisition.
2    The Company has issued an additional  258,066 shares of Common Stock to the
     FSAH Escrow Agent pursuant to the terms of a certain FSAC Escrow  Agreement
     by and among  the  Company,  the FSAH  Escrow  Agent  and each of Mr.  Mark
     Jericevich and Mr. Matthew Jericevich, respectively, in connection with the
     Seemanns Acquisition.


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<PAGE>



ADDITIONAL SHARES ISSUED IN CONNECTION WITH THE SEEMANN'S 
ACQUISITION(3)

Mark Jericevich..............................................  129,033 shares
Matthew Jericevich...........................................  129,033 shares
                                                               --------------
                     Total     ..............................  258,066 shares
                                                               ==============

ADDITIONAL SHARES ISSUED IN CONNECTION WITH GULL FOODS 
ACQUISITION(4)

Trek Biltong.................................................  238,660 shares

ADDITIONAL SHARES ISSUED IN CONNECTION WITH THE 
ACQUISITION OF FIRST STRUT (PTY) LTD.(5)

The Coch Family Trust........................................  19,230 shares

           The rights and preferences  accruing to holders of FSAH Class A Stock
and holders of FSAH Class B Stock are  substantially  identical  except that (i)
FSAH is required to pay  dividends to holders of FSAH Class B Stock  equivalent,
on a pro rata  basis,  to the  dividends  paid by the  Company to holders of its
Common Stock,  (ii) payment of the above dividends on FSAH Class B Stock must be
made no later than three business days subsequent to payment of dividends by the
Company on its Common Stock,  (iii) accrued dividends on FSAH Class B Stock must
be paid  prior to payment of any  declared  dividends  on FSAH Class A Stock and
(iv)  any  shares  of  FSAH  Class  B  Stock  acquired  by the  Company  will be
automatically converted to shares of FSAH Class A Stock upon such acquisition.

J. LEVY LOAN

           In 1986, Mr. J. Levy,  Michael  Levy's father,  extended to Starpak a
loan in the principal amount of R600,000 (which equaled  approximately  $300,000
at the  prevailing  exchange  rate at the time of the  loan),  which  loan bears
interest at 1% per annum below the prime bank overdraft rate and is secured by a
second  mortgage  on certain  property  owned by Starpak  having a book value of
$767,180.  The original  loan  contained no fixed terms of  repayment.  Upon the
closing of the Offering, the terms of the loan were amended as follows: the loan
bears interest at 1% below the prime bank overdraft rate  (currently  19.25% per
annum)  and is  repayable  over a period of 30  months.  The first  twenty  four
monthly installments are $5,563 each, inclusive of principal and interest, the

--------
3    The Company has issued an additional  238,660 shares of Common Stock to the
     FSAH Escrow Agent pursuant to the terms of a certain FSAC Escrow  Agreement
     by and among the  Company,  the FSAH  Escrow  Agent,  and Trek  Biltong  in
     connection with the Gull Foods Acquisition.
4    The Company has issued an additional  186,407 shares of Common Stock to the
     FSAH Escrow Agent in connection  with the Astoria  Acquisition  pursuant to
     the terms of a certain FSAC Escrow Agreement by and among the Company,  the
     FSAH Escrow Agent and Mr. Burre.
5    The Company has issued an  additional  19,230 shares of Common Stock to the
     FSAH Escrow Agent pursuant to the terms of a certain FSAH Escrow  Agreement
     by and among the Company the FSAH Escrow Agent,  First Strut (Pty) Ltd. and
     Michael Levy in connection with the acquisition of First Strut (Pty) Ltd.


                                       66
<PAGE>


first of which was paid on October  30,  1995.  The  balance  outstanding  after
twenty four months will be repayable in six equal monthly installments.

MICHAEL LEVY LOAN AND MANAGEMENT FEES

           During the period  commencing  March 1, 1995 and ending  January  15,
1996, Michael Levy received certain  non-interest bearing loans from Starpak and
L.S.  Pressings in the  aggregate  amount of $47,000.  Mr. Levy shall repay such
amount by September  30, 1997.  Mr. Levy has  received no  non-interest  bearing
loans from the Company (or any of its  subsidiaries)  since January 15, 1996. In
the years ended February 28, 1995 and 1994,  Starpak and L.S. Pressings paid Mr.
Levy management fees of $83,570 and $93,670, respectively.


                                       67
<PAGE>



PART IV

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

           (A) 1. Financial Statements

     The following financial  statements of the Company are included as required
to be filed by Item 8:

     FIRST SOUTH AFRICA CORP., LTD.
         Report of the independent auditors

         Consolidated Balance Sheets at June 30, 1996 and 1995

         Consolidated  Statements  of Income for the year ended June
         30,  1996,  four  months  ended June 30, 1995 and the years
         ended February 28, 1995 and 1994

         Pro forma Consolidated  Statements of Income for the years
         ended  June  30,  1996 and  1995  (Unaudited)  

         Consolidated  Statements  of Cash  Flows for the year
         ended June 30, 1996,  four months ended June 30, 1995
         and the years ended February 28, 1995 and 1994.

         Consolidated  Statements of Changes in  Stockholders'
         Investment  for the period  February 28, 1993 to June
         30, 1996.

         Notes to the Consolidated Financial Statements for the year
         ended June 30,  1996,  four months  ended June 30, 1995 and
         the years ended February 28, 1995 and 1994.

           2.  Financial Statement Schedules:

                     All   schedules   have  been  omitted  since  the  required
      information is included in the consolidated  financial statements or notes
      thereto.

           3.  Exhibits:

           Exhibit Number
           --------------

      3.1     Memorandum of Association of the Registrant
      3.2     Bye-Laws of the Registrant
      4.1     Form of Bridge Note
      4.2     Form of Warrant Agreement
      4.3     Form of Unit Purchase Option
      4.4(1)  Indenture dated April 25, 1997 between the Company and 
              American Stock Transfer & Trust Company (as Indenture
              Trustee)
      4.5(2)  Form of Debenture
      4.6(2)  Form of Placement Warrant
      4.7(2)  Stock Option Agreement
      10.1   Starpak Acquisition Agreements
      10.2   Starpak Escrow Agreement
      10.3   L.S. Pressings Acquisition Agreements
      10.4   L.S. Pressings Escrow Agreement
      10.5   Europair Acquisition Agreements
      10.6   Europair Escrow Agreement
      10.7   Form of Escrow Agreement regarding the Earnout Escrow Shares


                                       68
<PAGE>


         10.8     Form of FSAH Escrow Agreement

         10.9     Form of Employment Agreement of Clive Kabatznik

         10.10    Form of FSAM Management Agreement

         10.11    Form of Consulting Agreement with Michael Levy

         10.12    Form of Consulting Agreement with Global Capital Limited

         10.13    1995 Stock Option Plan

         10.14    Form of Addendum to Starpak Acquisition Agreement

         10.15    Form of Addendum to L.S. Pressings Acquisition Agreement

         10.16    Form of Addendum to Europair Acquisition Agreement

         10.17(3) Pieman's Pantry Acquisition Agreements


         10.18(4) Form of Astoria Sale of Business Agreement

         10.19(5) Form of Gull Foods Sale of Business Agreement

         10.20(6) Form of Employment Agreement of Cornelius Roodt

         11.1(6)  Calculations of Earnings Per Share

         21.1     Subsidiaries of the Registrant

         23.1(6)  Consent of Price Waterhouse

         27.1(6)  Financial Data Schedule

         99.1(6)  Acquisition Schedule

      -------------

(1)  Incorporated by reference is the Company's Current Report on Form 8-K filed
     on September 10, 1997 (Exhibit 4.1)

(2)  Incorporated by reference is the Company's  Registration  Statement on Form
     S-1 (No. 333-33561)

(3)  Incorporated  by  reference  is the  Company's  Current  Report on Form 8-K
     (Exhibit  1) (filed on June 14,  1996) as amended  on Form 8-K/A  (filed on
     August 16, 1996).

(4)  Incorporated  by  reference  is the  Company's  Current  Report on Form 8-K
     (Exhibit 1) (filed on November 7, 1996) as amended on Form 8-K/A  (filed on
     March 14, 1997).

(5)  Incorporated by reference is the Company's  Current Report on Form (Exhibit
     1) (filed on May 8, 1997) as amended on Form 8-K/A (filed on July 3, 1997).

(6)  Filed herewith.

     All  other  Exhibits  have  been   previously   filed  with  the  Company's
     Registration  statement  on Form S-1, as amended (No.  33-99180),  which is
     incorporated by reference.

     (B) Reports on Form 8-K

The Registrant filed Current Reports on Form 8-K with the Commission.

On May 8, 1997,  the following item was reported by the Company on the Form 8-K:
On April 24, 1997, the Company through its wholly owned subsidiary  corporation,
First South African Holdings (Pty) Ltd.,  acquired all of the outstanding  stock
and assets of Gull Foods CC.

The following  financial  statements of the Company were included as required to
be filed on Form 8-K:



                                       69
<PAGE>



      FIRST SOUTH AFRICA CORP., LTD.

           Pro forma Consolidated Balance Sheet (unaudited)

           Pro forma Consolidated Statements of Income (unaudited)

           Notes to Pro forma Consolidated Balance Sheet and Statements
                of Income (unaudited)

      PIEMANS PANTRY AND SURFS UP INVESTMENTS (PROPRIETARY) LIMITED

          Unaudited Combined Balance sheets at May 31, 1996

          Unaudited  Combined  Statement of Income for the Quarter Ended May 31,
          1996 and 1995

          Notes to the Unaudited Combined  Financial  Statements for the Quarter
          Ended May 31, 1996

          Unaudited Combined  Statements of Cash Flows for the Quarter Ended May
          31, 1996 and 1995

          Audited  Combined Balance Sheets at February 29, 1996 and February 28,
          1995

          Audited Combined Statements of Income for the Years Ended February 29,
          1996, February 28, 1995 and 1994

          Audited Combined Statements of Cash Flows for the Years Ended February
          29, 1996, February 28, 1995 and 1994

          Audited Combined Statements of Changes in Stockholders Investments for
          the Years Ended February 29, 1996, February 28, 1995 and 1994

          Notes to the Combined Annual Financial  Statements for the Years Ended
          February 29, 1996, February 28, 1995 and 1994




                                       70
<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 in the City of Coconut
Grove, State of Florida, on the 26th day of September, 1997.

                                         FIRST SOUTH AFRICA CORP., LTD.


                                         BY:      /s/ Clive Kabatznik
                                                    Clive Kabatznik
                                                    President

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

    Signature                      Title                          Date
    ---------                      -----                          ----


/s/ Michael Levy           Chairman of the Board of         September 26, 1997
Michael Levy               Directors

/s/ Clive Kabatznik        President, Vice Chairman,        September 26, 1997
Clive Kabatznik            Chief Executive Officer, Chief
                           Financial Officer, Director and
                           Controller

/s/ Charles  S. Goodwin    Director                         September 26, 1997
Charles S. Goodwin

/s/ John Mackey            Director                         September 26, 1997
John Mackey

/s/ Cornelius Roodt        Director                         September 26, 1997
Cornelius Roodt




                                       71