<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997

                         Commission file number 0-24510
                                                -------

                          HOLMES PROTECTION GROUP, INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                                       06-1070719
         --------                                       ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


440 Ninth Avenue, New York, New York                      10001-1695
------------------------------------                      ----------
(Address of principal executive offices)                  (Zip Code)

                                 (212) 760-0630
               --------------------------------------------------
              (Registrant's telephone number, including area code)


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 [ ]

Number of shares of Common Stock, par value $.01 per share, outstanding as of
May 13, 1997: 5,872,537.

<PAGE>

         Certain statements in this Quarterly Report on Form 10-Q constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. All such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company, or industry results, to be
materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general economic and business conditions;
cancellation rates of subscribers; competitive factors in the industry,
including additional competition from existing competitors or future entrants to
the industry; social and economic conditions; local, state and federal
regulations; changes in business strategy or development plans; the Company's
indebtedness; availability, terms and deployment of capital; availability of
qualified personnel; and other factors detailed in the Company's Annual Report
on Form-10K for the fiscal year ended December 31, 1996.



















                                        2

<PAGE>



                 HOLMES PROTECTION GROUP, INC. AND SUBSIDIARIES
             FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
                                      INDEX

<TABLE>
<CAPTION>

PART I FINANCIAL INFORMATION                                                                          PAGE NO.
----------------------------                                                                          --------

Item 1.  FINANCIAL STATEMENTS

<S>     <C>                                                                                            <C>
         Consolidated Statements of Operations for the three-month periods ended
         March 31, 1997 and 1996..........................................................................4

         Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996...........................5

         Consolidated Statements of Cash Flows for the three-month periods ended
         March 31, 1997 and 1996..........................................................................6

         Notes to Financial Statements....................................................................7

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
         OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................................................9

PART II OTHER INFORMATION

Item 6.  EXHIBITS.........................................................................................11

         Signatures.......................................................................................12

</TABLE>
                                        3



<PAGE>

Part 1-Financial Information


Item 1. Financial Statements

                 HOLMES PROTECTION GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                (000's omitted, except earnings per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>


                                                                     Three Months Ended
                                                                March 31,           March 31,
                                                                  1997                1996
                                                                  ----                ----
REVENUES:
<S>                                                              <C>                 <C>   
     Monitoring and service                                      $ 9,327             $9,093
     Installation                                                  3,022              2,219
     Franchise royalties, product sales and other                  1,301                980
                                                                 -------             ------
          Total revenues                                          13,650             12,292
                                                                 -------             ------
COST OF SALES:
     Monitoring and service                                        4,762              4,552
     Installation                                                  1,848                972
     Franchise royalities, product sales and other                 1,125                905
                                                                 -------             ------
          Total cost of sales                                      7,735              6,429
                                                                 -------             ------
Selling general and administrative                                 5,336              3,195
Depreciation and amortization                                      2,668              2,663
Non-recurring charge                                               1,500                  -
                                                                 -------             ------
                                                                  17,239             12,287

          Income (Loss) from operations                           (3,589)                 5

Other income (expense)                                                54                 11

Interest expense, net                                               (214)              (184)
                                                                 -------             ------

Income (Loss) before income taxes                                 (3,749)              (168)

Provision (Benefit) for income taxes                              (1,125)                85
                                                                 -------             ------

          Net Income (Loss)                                     $ (2,624)            $ (253)
                                                                 =======             ======

Earnings (Loss) per common share:                               $  (0.45)            $(0.06) 
                                                                 =======             ======

Weighted Average Shares Oustanding                                 5,828              4,459
                                                                 =======             ======
</TABLE>
                            (See accompanying notes.)

                                        4


<PAGE>

                 HOLMES PROTECTION GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (000's omitted)
<TABLE>
<CAPTION>

                                                                                 March 31,      December 31,
                                                                                   1997             1996
                                                                                   ----             ----
                                                                                (Unaudited)
                                         ASSETS
CURRENT ASSETS:
<S>                                                                          <C>               <C>     
  Cash and cash equivalents                                                  $        179      $    990
  Accounts receivable, less allowance for doubtful accounts of
    $967  in 1997 and $973 in 1996                                                  6,172         5,333
  Inventories                                                                       2,585         2,795
  Prepaid expenses and other                                                        2,575         1,871
                                                                               -----------      --------
               Total current assets                                                11,511        10,989
                                                                               -----------      --------

FIXED ASSETS, net                                                                  47,686        47,198
SUBSCRIBER CONTRACTS, at cost, less accumulated amortization
    of $27,575 in 1997 and $25,137 in 1996                                         22,898        19,650
TRADENAMES, less accumulated amortization of $2,088 in 1997 and
    $2,045 in 1996                                                                  4,022         4,063
OTHER ASSETS                                                                        7,960         7,917
                                                                               -----------      --------
                                                                             $     94,077      $ 89,817
                                                                               ===========      ========

                          LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current maturities of long-term debt                                       $        562      $    364
  Accounts payable and accrued expenses                                             8,094         7,290
  Deferred revenue                                                                  3,454         2,693
  Customer deposits                                                                 2,719         2,813
                                                                               -----------      --------
               Total current liabilities                                           14,829        13,160
                                                                               -----------      --------

LONG-TERM LIABILITIES:
  Long-term debt                                                                   10,785         4,370
  Other long-term liabilities                                                         555           555
  Deferred income taxes                                                            10,137        11,337
                                                                               -----------      --------
               Total long-term liabilities                                         21,477        16,262
                                                                               -----------      --------

SHAREHOLDERS' EQUITY:
  Preferred stock, $1.00 par value; 1,000 authorized; none outstanding                  -             -
  Common stock, $0.01 par value; 12,000 authorized shares; 5,835
      issued in 1997 and in 1996                                                       58            58
  Additional paid-in capital                                                      133,251       133,251
  Accumulated deficit                                                             (75,453)      (72,829)
                                                                               -----------      --------
                                                                                   57,856        60,480
  Less- Treasury stock - 7 shares in 1997 and 1996 at cost                            (85)          (85)
                                                                               -----------      --------
               Total shareholders' equity                                          57,771        60,395
                                                                               -----------      --------
                                                                             $     94,077      $ 89,817
                                                                               ===========      ========
</TABLE>



                            (See accompanying notes.)

                                        5

<PAGE>

                 HOLMES PROTECTION GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (000's omitted)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                              Three Months Ended
                                                                         March 31,           March 31,
                                                                           1997                1996
                                                                           ----                ----
CASH FLOW FROM OPERATING ACTIVITIES:
<S>                                                                     <C>                 <C>     
     Net Income (Loss)                                                  $ (2,624)         $    (253)
     Adjustments to reconcile net income (loss) to cash provided by
       operating activities -
          Depreciation and amortization                                    2,668              2,663
          Provision for doubtful accounts                                     15                 54
          Non-recurring charge                                             1,500                  -
          Deferred income taxes                                           (1,200)                35
          Changes in operating assets and liabilities- 
             (Increase) decrease in accounts receivable                     (772)                71
             Decrease in inventories                                         247                 83
             Increase in prepaid expenses and other current assets          (698)              (183)
             Decrease in accounts payable and accrued expenses              (770)            (1,081)
             (Decrease) increase in customer deposits                        (94)               136
             Increase in deferred revenue                                    623                646
             Decrease in pension and other liabilities                      (105)              (115)
                                                                        --------           --------
             Net cash (used) provided by operating activities             (1,210)             2,056
                                                                        --------           --------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of fixed assets                                             (2,223)            (2,670)
     Acquisition of businesses, net of cash acquired                      (3,640)                 -
     Maturities of short-term investments                                      -              2,043
                                                                        --------           --------
             Net cash used by investing activities                        (5,863)              (627)
                                                                        --------           --------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from debt obligations                                        6,500                  -
     Payments on secured note and other long-term debt                         -               (659)
     Payment on other long-term debt                                        (238)                 -
     Payment on short-term borrowings                                          -               (943)
                                                                        --------           --------
             Net cash provided (used) by financing activities              6,262             (1,602)
                                                                        --------           --------
             Net decrease in  cash and cash equivalents                     (811)              (173)

CASH AND CASH EQUIVALENTS, beginning of period                               990                435
                                                                        --------           --------

CASH AND CASH EQUIVALENTS, end of period                                $    179          $     262
                                                                        ========           ========

CASH PAYMENTS FOR:
     Interest                                                           $    170          $     166
     Income taxes                                                       $    205          $     107

NON-CASH INVESTING AND FINANCING ACTIVITIES:
     Issuance of notes payable in connection with acquired businesses   $    350          $       -
</TABLE>

                            (See accompanying notes)

                                       6
          
<PAGE>



                 HOLMES PROTECTION GROUP, INC. AND SUBSIDIARIES
                      Notes to Interim Financial Statements
                                  

Note 1  Financial Statements

         The consolidated statements of operations and statements of cash flows
         for the three-month periods ended March 31, 1997 and 1996 and the
         balance sheet as of March 31, 1997 have been prepared by Holmes
         Protection Group, Inc. ("Holmes" or "the Company") without audit.
         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been condensed or omitted. These
         consolidated results should be read in conjunction with the audited
         financial statements and notes thereto included in the Company's Annual
         Report on Form 10-K, filed with the Securities and Exchange Commission.
         Results of operations for the three-months ended March 31, 1997 are not
         necessarily indicative of the operating results expected for the full
         year. Interim statements are prepared on a basis consistent with
         year-end statements.

         In the opinion of management, the unaudited interim financial
         statements furnished herein include all adjustments necessary for a
         fair presentation of the results of the operations of the Company. All
         such adjustments are of a normal recurring nature.


Note 2 Outsourcing Agreement Termination

         On March 12, 1997, the Company announced that it had reached an
         agreement in principle (the "Agreement") with PremiTech to terminate
         its outsourcing agreement effective April 1, 1997. Recent changes in
         the Company's growth strategy and the sale by PremiTech of its alarm
         monitoring business in late 1995 led both parties to re-evaluate the
         outsourcing agreement. On April 1, 1997, pursuant to the Agreement, the
         Company paid $650,000 in cash and executed a noninterest bearing
         promissory note ("Note") in the amount of $1,000,000 payable to EDS in
         twenty quarterly installments of $50,000, beginning January 1, 1998.
         The Note is secured by an irrevocable letter of credit for $1,000,000.
         In addition, the Company agreed to lease certain computer equipment for
         a three year term with an option to purchase the equipment at the end
         of the lease for the fair market value. The Company has recorded a
         pretax charge of $1,500,000 in connection with the Agreement.

Note 3 Acquisitions

         In the first quarter of 1997, the Company acquired five alarm companies
         for an aggregate purchase price of $3,640,000. These acquisitions were
         accounted for using the purchase method of accounting. Accordingly, the
         purchase price was allocated based on their estimated values and the
         results of operations of the acquired entities have been included in
         the accompanying consolidated statements of operations from the
         respective dates of the acquisition. The results of operations for
         these acquisitions were not significant to the consolidated financial
         statements of the Company.


                                        7



<PAGE>

Note 4 Recently Issued Accounting Standards

         In February 1997, the Financial Accounting Standards Board issued
         Statement of Financial Accounting Standards (SFAS) No. 128, Earnings
         Per Share. This statement establishes standards for computing and
         presenting earnings per share (EPS), replacing the presentation of
         currently required primary EPS with a presentation of Basic EPS. For
         entities with complex capital structures, the statement requires the
         dual presentation of both Basic EPS and Diluted EPS on the face of the
         statement of operations. Under this new standard, Basic EPS is computed
         based on weighted average shares outstanding and excludes any potential
         dilution; Diluted EPS reflects potential dilution from the exercise or
         conversion of securities into common stock or from other contracts to
         issue common stock and is similar to the currently required fully
         diluted EPS. SFAS 128 is effective for financial statements issued for
         periods ending after December 15, 1997, including interim periods, and
         earlier application is not permitted. When adopted, the Company will be
         required to restate its EPS data for all prior periods presented. The
         Company does not expect the impact of the adoption of this statement to
         be material to previously reported EPS amounts.



















                                        8


<PAGE>



 Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

First Quarter 1997 Compared to First Quarter 1996
-------------------------------------------------

         Revenues increased $1.4 million (11.1%) to $13.7 million in the first
quarter of 1997 from $12.3 million in the first quarter of 1996. This increase
was primarily attributable to an increase in installation revenue of $0.8
million (36.2%) from $2.2 million in the first quarter of 1996 to $3.0 million
in the first quarter of 1997. Increased revenues from the One Service business
and growth in the Company's recurring revenue base also contributed to the
increase. The Company's annual recurring revenue base increased from $35.0
million at December 31, 1996 to $36.1 million at March 31, 1997 as a result of
the Company's increased sales efforts and recurring revenues acquired during the
fourth quarter of 1996 and the first quarter of 1997. The recurring revenue base
at March 31, 1996 was $35.2 million.

Cost of sales increased $1.3 million (20.3%) to $7.7 million in the first
quarter of 1997 from $6.4 million for the comparable period of 1996, due
primarily to increased installation costs related to the growth in related
revenue and lower than anticipated margins on customer owned systems. Selling,
general, and administrative expenses increased $2.1 million (67.0%) to $5.3
million from $3.2 million for the same period of 1996. This increase is
primarily related to costs associated with increased sales, marketing and
administrative support as the Company implements its nation-wide growth strategy
including National Accounts. Depreciation and amortization expense remained
constant at $2.7 million in both the first quarter of 1997 and the first quarter
of 1996. Additionally, in the first quarter of 1997, the Company incurred a
non-recurring charge of $1.5 million related to the termination of its 
Outsourcing Agreement with PremiTech (See Note 2).

Income (Loss) from operations reflected a loss of $3.6 million for the first
quarter of 1997 compared to income of $5,000 for the first quarter of 1996,
primarily as a result of the investment the Company has made in selling and
marketing costs and the non-recurring charge, as described above.


Liquidity and Capital Resources

Three months Ended March 31, 1997

Cash and cash equivalents decreased by $0.8 million from $1.0 million to $0.2
million during the three months ended March 31, 1997. Net cash provided by
financing activities was $6.3 million, offset by cash utilized by operating
activities of $1.2 million and net cash utilized by investing activities of $5.9
million.

Net cash utilized by operating activities of $1.2 million principally consisted
of cash provided by sales of electronic security services, adjusted for non-cash
charges for depreciation and amortization, a decrease in accounts payable and
accrued expenses ($0.8 million), an increase in prepaid expenses and other
current assets ($0.7 million), and an increase in deferred revenue ($0.6
million).


                                        9


<PAGE>

Net cash used in investing activities consisted primarily of acquisition costs
and the additions to Company-owned equipment on subscribers' premises and other
fixed assets.

Net cash provided by financing activities of $6.3 million during this period
consisted of bank borrowings of $6.5 million, offset by repayments of other long
term debt obligations of $0.2 million.


Future Commitments and Cash Requirements

Liquid assets available to the Company as of March 31, 1997 included cash and
cash equivalents of $0.2 million.

On August 30, 1996, the Company entered into a new credit agreement (the "Credit
Agreement"), amended and restated on December 31, 1996 and subsequently amended
with Merita Bank Ltd. and Bank of Boston Connecticut (together, the "Banks")
pursuant to which the Banks have agreed, subject to the terms and conditions set
forth therein, to provide a two-year $25 million revolving credit facility to
the Company, the borrowings pursuant to which would automatically convert into a
five-year term loan on September 30, 1998. The Company is required to comply
with various financial covenants, tests and ratios, including those relating to
(i) ratios of total debt to EBITDA, (ii) ratios of total debt to recurring
monthly revenue, (iii) minimum debt service coverage, (iv) minimum net worth,
(v) maximum capital expenditures and (vi) maximum subscriber attrition rate (as
defined in the Agreement).  On March 31, 1997, the outstanding balance under the
Credit Agreement was $10.0 million.

On April 4, 1995, the Company entered into a ten-year, $51 million Outsourcing
Agreement with PremiTech Corporation ("Premitech"), a subsidiary of Electronic
Data Systems Corporation ("EDS"), which provided for PremiTech to assist in the
consolidation of the Company's central monitoring facilities, to manage the
Company's technological infrastructure and to perform certain of the Company's
administrative functions. On March 12, 1997, the Company reached an agreement in
principle (the "Agreement") with Premitech to terminate its Outsourcing
Agreement effective April 1, 1997. As a result, on April 1 1997, the Company
paid $650,000 in cash and executed a noninterest bearing promissory note
("Note") in the amount of $1,000,000 payable to EDS in twenty quarterly
installments of $50,000, beginning January 1, 1998. The Note is secured by an
irrevocable letter of credit for $1,000,000. In addition, the Company agreed to
lease certain computer equipment for a three year term with an option to
purchase the equipment at the end of the lease for the fair market value.









                                       10



<PAGE>



Part II - Other Information

Item 6.   Exhibits and Reports on Form 8-K

(a)      Exhibits:
               Exhibit-27  Financial Data Schedule Worksheet (For SEC Use Only).

(b)      No reports on Form 8-K were filed with the Securities and Exchange
         Commission during the quarter ended March 31, 1997.


























                                       11



<PAGE>




                                   Signatures



         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          HOLMES PROTECTION GROUP, INC.
                                          -----------------------------
                                                  (Registrant)


Date:   May 14, 1997                      /s/ George V. Flagg
                                          -------------------------------------
                                          George V. Flagg
                                          President and Chief Executive Officer




Date:  May 14, 1997                       /s/ Lawrence R. Irving
                                          -------------------------------------
                                          Lawrence R. Irving
                                          Vice President - Finance
















                                       12