SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                  For the quarterly period ended March 31, 1998

                                       OR

[_]   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

             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                                      Not Applicable
           -------                                      --------------
(State or Other Jurisdiction of                (IRS 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


         --------------------------------------------------------------
         Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report.


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 [_]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.    Yes [_]   No [_]

APPLICABLE ONLY TO CORPORATE ISSUERS:

The  number  of  shares  of  common  stock  outstanding  as of May 12,  1998 was
7,097,892.




<PAGE>

                         First South Africa Corp., Ltd.

Item 1.     Unaudited Consolidated Balance Sheets at
            March 31, 1998 and June 30, 1997                               3 - 4

            Unaudited Consolidated  Statements of Income
            for the three months and for the nine months
            ended March 31, 1998 and 1997                                  5 - 6

            Unaudited  Consolidated  Statements  of Cash
            Flows for the nine months ended  March 31,
            1998 and 1997                                                    7

            Unaudited Consolidated Statement of Changes
            in Stockholders' Investment for the period
            June 30, 1997 to March 31, 1998                                  8

            Notes to the unaudited Consolidated
            Financial Statements                                             9


Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results of
            operations                                                      18





                                       2
<PAGE>

                         FIRST SOUTH AFRICA CORP., LTD.

                     UNAUDITED CONSOLIDATED BALANCE SHEETS


                                ASSETS


                                                      MARCH 31,        JUNE 30,
                                                           1998            1997
                                                              $               $
                                                   ------------    ------------
CURRENT ASSETS
     Cash on hand                                    20,994,491      19,889,111
     Trade accounts receivable                       20,303,100      12,000,224
     Less: Allowances for bad debts                    (878,107)       (696,279)
                                                   ------------    ------------
                                                     19,424,993      11,303,945


     Inventories (net)                               13,952,413       7,219,960
     Prepaid expenses and other current assets        1,363,328         934,263
                                                   ------------    ------------

          TOTAL CURRENT ASSETS                       55,735,225      39,347,279


Property, plant and equipment                        36,171,324      16,197,605
Less: Accumulated depreciation                      (13,395,967)     (4,849,396)
                                                   ------------    ------------
                                                     22,775,456      11,348,209

Intangible assets (net)                              21,715,882      12,620,822
Deferred charges (net)                                1,616,980         838,439
Other assets                                            114,642          42,730
                                                   ------------    ------------
                                                    101,958,185      64,197,479
                                                   ============    ============



                                       3
<PAGE>



                         FIRST SOUTH AFRICA CORP., LTD.

                     UNAUDITED CONSOLIDATED BALANCE SHEETS




                    LIABILITIES AND STOCKHOLDERS' INVESTMENT
                                                                       
                                                      March 31,        June 30,
                                                           1998            1997
                                                              $               $
                                                   ------------    ------------
CURRENT LIABILITIES
     Bank overdraft payable                           4,823,514            --
     Current portion of long term debt                1,779,766       1,673,712
     Trade accounts payable                          11,787,405       6,755,823
     Other  provisions and accruals                   4,173,741       3,184,428
     Other taxes payable                                564,705         654,653
     Income tax payable                               1,748,173       1,721,079
                                                   ------------    ------------
          Total current liabilities                  24,877,304      13,989,695

Long term debt                                       32,653,136      13,341,758
Deferred income taxes                                   367,147         358,446
                                                   ------------    ------------
                                                     57,897,587      27,689,899

Minority shareholders' investment                    18,509,639      13,287,566

STOCKHOLDERS' INVESTMENT

Capital stock:

     A class common stock, $0.01 par
     value - authorized  23,000,000 shares,
     issued and outstanding 5,274,749 shares             52,747          35,361

     B class common stock, $0.01 par
     value - authorized 2,000,000 shares,
     issued and outstanding 1,822,500 shares             18,725          18,691

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

     Capital in excess of par                        26,713,755      22,891,093


Retained earnings                                     6,253,788       2,803,065
Foreign currency translation adjustments             (7,488,056)     (2,528,196)
                                                   ------------    ------------
                                                    101,958,185      64,197,479
                                                   ============    ============


                                       4
<PAGE>



                         FIRST SOUTH AFRICA CORP., LTD.

                UNAUDITED CONSOLIDATED STATEMENTS OF INCOME FOR
                 THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997

                                                              1998         1997
                                                                 $            $
                                                       -----------  -----------

Revenues                                                28,218,692   18,729,799
                                                       ===========  ===========

Operating expenses
          Cost of sales                                 16,536,884   10,491,146
          Selling, general and administrative costs      9,732,843    6,809,021
                                                       -----------  -----------
                                                        26,269,727   17,300,167

Operating income                                         1,948,965    1,429,632

Other income                                               370,949       88,920
Interest income/( expense)                                (163,901)    (195,879)

Income from consolidated companies before income taxes   2,156,013    1,322,673
Provision for taxes on income                             (688,855)    (176,575)
                                                       -----------  -----------
                                                         1,467,158    1,146,098

Minority interest in consolidated subsidiary companies     549,443         --
                                                       -----------  -----------

Net income                                                 917,715    1,146,098
                                                       ===========  ===========

Basic earnings per share                                      0.13         0.22

Fully diluted earnings per share                              0.13         0.22





                                       5
<PAGE>



                         FIRST SOUTH AFRICA CORP., LTD.

                 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME FOR
                  THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997


                                                           1998            1997
                                                              $               $
                                                    -----------     -----------
Revenues                                             85,770,957      44,536,940

Operating expenses
  Cost of sales                                      52,308,927      24,543,952
  Selling, general and administrative costs          27,475,571      16,050,703
                                                    -----------     -----------
                                                     79,784,498      40,594,655


Operating income                                      5,986,459       3,942,285


Other income                                          1,005,860         599,521
Interest income/( expense)                               93,756        (770,087)


Income from consolidated companies before
 income taxes                                         7,086,075       3,771,719
Provision for taxes on income                        (1,926,674)       (799,130)
                                                    -----------     -----------
                                                      5,159,401       2,972,589

Minority interest in consolidated
 subsidiary companies                                (1,708,678)           --
                                                    -----------     -----------

Net income                                            3,450,723       2,972,589
                                                    ===========     ===========


Basic earnings per share                                   0.55            0.61

Fully diluted earnings per share                           0.48            0.60





                                       6
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

              UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
                  THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997


<TABLE>
<CAPTION>
                                                                          1998           1997
                                                                             $              $
                                                                   -----------    -----------
<S>                                                                  <C>            <C>      
Cash flows from operating activities:

     Net income                                                      3,450,723      2,972,589
     Adjustments  to reconcile net income to net cash
      provided by operating activities:
          Depreciation and amortization                              2,632,627      1,398,324
          Deferred income taxes                                         (7,003)       240,635
          Net loss/(gain) on sale of assets                             76,810        (18,012)
          Effect of changes in current assets and
           current liabilities                                         386,100      1,586,881
          Minority interest in consolidated subsidiary companies     1,708,678           --
                                                                   -----------    -----------

Net cash provided by operating activities                            8,247,935      6,180,417
                                                                   -----------    -----------

Cash flows from investing activities:

     Additions to property, plant and equipment                     (3,444,009)    (2,526,740)
     Proceeds on disposal of property, plant and equipment              72,421           --   
     Proceeds on disposal of investment in First SA Lifestyle
      Holdings Limited                                               3,507,424           --   
     Proceeds on dilution in First SA Food Holdings Limited              5,970           --   
     Additional purchase price payments                             (3,015,118)          --   
     Other assets acquired                                            (204,553)       287,069
     Acquisitions of subsidiaries (net of cash of $563,898)        (23,489,585)    (7,935,813)
     Increase in loans to related companies                               --            2,891
                                                                   -----------    -----------

Net cash used in investing activities                              (26,567,450)   (10,172,593)

Cash flows from financing activities:

     Net borrowings in bank overdrafts                               2,496,419      1,867,474
     Borrowings of long term debt                                   15,368,342        720,806
     Reduction in deferred debt issue costs                           (958,543)          --   
     Borrowings/(repayments) in short term debt                        219,679     (1,099,443)
     Proceeds on stock issues                                        3,840,077           --   
                                                                   -----------    -----------

Net cash provided in financing activities                           20,965,974      1,488,837
                                                                   -----------    -----------


Effect of exchange rate changes on cash                             (1,541,079)        66,626
                                                                   -----------    -----------
Cash utilised by operations                                          1,105,380     (2,436,713)
Cash on hand at beginning of period                                 19,889,111      4,682,035
                                                                   -----------    -----------

Cash on hand at end of period                                       20,994,491      2,245,322
                                                                   ===========    ===========
</TABLE>



                                       7
<PAGE>



                         FIRST SOUTH AFRICA CORP., LTD.

     UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' INVESTMENT

<TABLE>
<CAPTION>
                                                           First South
                                           First South   Africa Corp.,                                      Foreign
                                         Africa Corp.,            Ltd.      Capital in                    currency
                                                  Ltd.         Class B       excess of       Retained    translation
                                          common stock    common stock             par       earnings    adjustments          Total
                                                     $               $               $              $              $              $
                                           -----------     -----------     -----------    -----------    -----------    -----------
<S>                                             <C>             <C>         <C>             <C>           <C>            <C>       
Balance at June 30, 1997                        35,361          18,691      22,891,093      2,803,065     (2,528,196)    23,220,014
                                                                         
Issuance of stock to FSAC escrow agent             847            --              --             --             --              847
Issuance of stock to acquire subsidiaries         --                20         699,414           --             --          699,434
Proceeds on warrants exercised                   1,595            --         1,068,259           --             --        1,069,854
Net income                                        --              --              --          988,626           --          988,626
Translation adjustment                            --              --              --             --       (1,106,252)    (1,106,252)
                                           -----------     -----------     -----------    -----------    -----------    -----------
                                                                         
Balance at September 30, 1997                   37,803          18,711      24,658,766      3,791,691     (3,634,448)    24,872,523
                                                                         
                                                                         
Issuance of stock to FSAC escrow agent             683            --              --             --             --              683
Issuance of stock to acquire subsidiaries        1,429              14       1,480,071           --             --        1,481,514
Warrant swap out at par value                   11,738            --           (11,738)          --             --             --
Proceeds on warrants exercised                     744            --           449,506           --             --          450,250
Proceeds on options exercised                      100            --            43,650           --             --           43,750
Net income                                        --              --              --        1,544,382           --        1,544,382
Translation adjustment                            --              --              --             --       (1,721,456)    (1,721,456)
                                           -----------     -----------     -----------    -----------    -----------    -----------
                                                                         
Balance at December 31, 1997                    52,497          18,725      26,620,255      5,336,073     (5,355,904)    26,671,646
                                                                         
                                                                         
Proceeds on options exercised                      250            --            93,500           --             --           93,750
Net income                                        --              --              --          917,715           --          917,715
Translation adjustment                            --              --              --             --       (2,132,152)    (2,132,152)
                                           -----------     -----------     -----------    -----------    -----------    -----------
                                                                         
                                                52,747          18,725      26,713,755      6,253,788     (7,488,056)    25,550,959
                                           ===========     ===========     ===========    ===========    ===========    ===========
</TABLE>


                                       8
<PAGE>



                         FIRST SOUTH AFRICA CORP., LTD.



1.   ORGANISATION AND PRINCIPLE ACTIVITIES OF THE GROUP

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

     The principle 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.

     LIFESTYLE INTERESTS
     The manufacture, sale and distribution of plastic, wooden and steel outdoor
     products aimed at the leisure market.



                                       9
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.



2.   ACQUISITIONS

     On July 1, 1997 the  Company  acquired  100% of the common  stock of Fifers
     Bakery (Pty) Ltd for an aggregate net purchase  price of  $1,844,890.  This
     acquisition was accounted for using the purchase method of accounting.  The
     assets and liabilities  were recorded at fair market value as determined by
     management.

     On October 1, 1997 the  Company  acquired an  effective  81% of, the common
     stock of SA Leisure  (Proprietary)  Limited, and the businesses of Galactex
     Outdoor   (Proprietary)   Limited  and  Republic   Umbrella   Manufacturers
     (Proprietary)  limited for an aggregate net purchase price of $ 19,924,638,
     and the common stock of Pacforce  (Proprietary)  Limited for $276,444.  The
     acquisitions  were  accounted for using the purchase  method of accounting.
     The assets and liabilities were recorded at fair market value as determined
     by management.

     On  March  1,  1998  the  Company  acquired  100% of the  common  stock  of
     Tradewinds  CC for an aggregate  net  purchase  price of  $1,014,663.  This
     acquisition was accounted for using the purchase method of accounting.  The
     assets and liabilities  were recorded at fair market value as determined by
     management.

     The purchase  consideration  has been  decreased to give effect to the debt
     ceded to the holding company in the acquisitions.



                                                                              $
                                                                      ----------
Acquisition costs
     Stock issued in lieu of cash                                      2,180,948
     Cash consideration (net of debt ceded to holding company)        20,879,687
                                                                      ----------
Purchase price to be allocated                                        23,060,635
                                                                      ==========

Summary allocation of purchase price
     Current assets                                                   18,730,117
     Property, plant and equipment                                    11,374,464
     Other assets                                                      4,967,809
     Goodwill                                                          3,445,323
                                                                      ----------
Total assets acquired                                                 38,517,713
                                                                      ==========

     Current liabilities                                               9,918,770
     Long term debt                                                    4,492,481
     Deferred income taxes                                                52,979
     Debt ceded to holding company                                       992,848
                                                                      ----------
TOTAL LIABILITIES ASSUMED                                             15,457,078
                                                                      ----------
                                                                      23,060,635
                                                                      ==========


     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 five years.

     Additional  purchase  price  payments  made during the  current  year total
     $3,015,118. This amount was allocated as follows:


Goodwill                                                              $  781,757
Recipes                                                                  853,769
Trademarks                                                             1,379,592
                                                                      ----------
                                                                       3,015,118
                                                                      ==========


                                       10
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.



2.   ACQUISITIONS (continued)

     PRO FORMA FINANCIAL INFORMATION

     The  unaudited  pro  forma  financial  information  tabled  below  has been
     prepared assuming that all of the acquisitions which occurred subsequent to
     June 30, 1996 had taken place and that  operations had commenced on July 1,
     1996, an adjustment has been made to eliminate the minority interest in the
     net income of  consolidated  subsidiaries  assuming that the disposal of an
     effective  30%  interest  in First SA Food  Holdings  Limited  and First SA
     Lifestyle Holdings Limited had taken place on July 1, 1996.



                                                      July 1 to      July 1, to
                                                      March 31,       March 31,
                                                           1998            1997
                                                              $               $
                                                    -----------     -----------
Revenues                                             93,131,373      84,934,672
                                                    ===========     ===========
Net income before minority interest in
 consolidated subsidiaries                            5,645,530       4,959,504


Minority interest in consolidated subsidiary
 companies                                           (1,788,538)     (1,119,272)
                                                    -----------     -----------

Net income                                            3,856,992       3,840,232
                                                    ===========     ===========

Basic earnings per share                                   0.61            0.61

Weighted average number of shares in issue            6,283,410       6,283,410




                                       11
<PAGE>



                         FIRST SOUTH AFRICA CORP., LTD.



3.   SUMMARY OF ACCOUNTING POLICIES

     The consolidated  financial  statements  should be read in conjunction with
     the Companies  financial  statements which have been prepared in accordance
     with US  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.

     INTERIM FINANCIAL STATEMENTS
     The unaudited interim financial  statements  reflects all adjustments which
     are, in the opinion of management, necessary for a fair presentation of the
     consolidated   financial   statements  for  an  interim  period.  All  such
     adjustments are of a normal recurring nature. The operating results may not
     be indicative of the results for a full fiscal year.

     EARNINGS PER SHARE
     The Company has adopted SFAS 128 (Earnings per Share) whereby  earnings per
     share are calculated as follows:

     Basic  Earnings per share is  calculated by dividing  income  available for
     distribution  to common  stockholders  by the  weighted  average  number of
     common shares outstanding.

     Diluted earnings per share is calculated giving full effect to all dilutive
     common shares that were outstanding during the period.

     INTANGIBLE ASSETS
     Goodwill, 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  amortised 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.



                                       12
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.



3.   SUMMARY OF ACCOUNTING POLICIES (continued)


     FOREIGN CURRENCY TRANSLATION
     The  functional  currency  of the  underlying  companies  is that of  South
     African Rand.  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.

     *    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
     stockholders'   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  recognised for financial  reporting
     purposes and such amounts  recognised 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.



                                       13
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.



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.

     Revenues  are  stated net of  allowances  granted  to  customers  and trade
     discounts. Returns of defective product 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:


                                                   March 31,           June 30,
                                                        1997               1997
                                                           $                  $
                                                 -----------        -----------
Finished goods                                     9,765,019          4,032,523
Work in progress                                   1,021,820            532,144
Raw materials and ingredients                      2,356,625          2,365,213
Supplies                                           1,018,016            716,081
                                                 -----------        -----------

Inventories (Gross)                               14,161,480          7,645,961
Less: Valuation allowances                          (209,067)          (426,001)
                                                 -----------        -----------

Inventories (Net)                                 13,952,413          7,219,960
                                                 ===========        ===========



5.   COMMITMENTS

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 five years.




                                       14
<PAGE>



6.   EARNINGS PER SHARE

      Earnings per share data is calculated as follows:


BASIC EARNINGS PER SHARE FOR THE QUARTER (1998)

Net income available to common stockholders                           917,715
                                                                    ==========

                                            Shares      Fraction    weighted
Dates outstanding                         outstanding  of period  average shares
                                          -----------  ---------  --------------

Balance at January 1, 1998                 7,072,892      1.00      7,072,892
Options converted to shares during
    the quarter                               25,000      0.01            278
                                           ---------                ---------
Weighted average shares                    7,097,892                7,073,170
                                           =========                =========




Basic earnings per share for the quarter (1997)

Net income available to common stockholders                         1,146,098
                                                                    =========

                                            Shares      Fraction    weighted
Dates outstanding                         outstanding  of period  average shares
                                          -----------  ---------  --------------

Balance at January 1, 1997                 4,938,422      1.00      4,938,422
Acquisition of subsidiaries on
    January 1, 1997                          238,663      1.00        238,663
                                           ---------                ---------
Weighted average shares                    5,177,085                5,177,085
                                           =========                =========




Diluted earnings per share for the quarter (1998) 

Net income available to common stockholders                           917,715
Add impact of assumed conversions                                     459,019
                                                                   ----------

Adjusted net income available to common stockholders                1,376,734
                                                                   ==========


Weighted average shares                                             7,073,170
Warrants and options not yet exercised                                280,216
9% convertible debentures                                           1,666,667
Increasing rate debentures                                          1,578,947
                                                                   ----------
Adjusted weighted average shares                                   10,599,000
                                                                   ==========




                                       15
<PAGE>



6.   EARNINGS PER SHARE (continued)


DILUTED EARNINGS PER SHARE FOR THE QUARTER (1997)

Net income available to common stockholders                 1,146,098
Add impact of assumed conversions                                --  
                                                            ---------

ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS        1,146,098

Weighted average shares                                     5,177,085
Warrants and options not yet exercised                         94,198
                                                            ---------

ADJUSTED WEIGHTED AVERAGE SHARES                            5,271,283
                                                            ---------



BASIC EARNINGS PER SHARE FOR THE YEAR TO DATE (1998)

Net income available to common stockholders                           3,450,723
                                                                      =========


<TABLE>
<CAPTION>

                                                        Shares      Fraction    weighted
Dates outstanding                                     outstanding  of period  average shares
                                                      -----------  ---------  --------------
<S>                                                    <C>             <C>      <C>      
July 1, 1997                                           5,359,615       1.00     5,359,615
July 1 - September 30, 1997                                                              
   Additional purchase price payments                     57,127      66.70        38,154
   Acquisition of subsidiaries                            27,624      66.70        18,450
   Warrants converted to shares during the quarter       159,425      86.20       137,394
October 1 - December 31, 1997                                                            
   Acquisition of subsidiaries on October 1, 1997        211,224      66.70       140,302
   Options converted to shares during the quarter         10,000       0.30         5,292
   Warrants converted to shares during the quarter        74,401      40.20        44,548
   Warrants swapped into shares during the quarter     1,173,476      45.98       539,564
January 1 - March 31, 1998                                                               
   Options converted to shares during the quarter         25,000       0.00            91
                                                       ---------                ---------
WEIGHTED AVERAGE SHARES                                7,097,892                6,283,410
</TABLE>




                                       16
<PAGE>




BASIC EARNINGS PER SHARE FOR THE YEAR TO DATE (1997)

Net income available to common stockholders                           2,972,589
                                                                      =========

<TABLE>
<CAPTION>
                                                        Shares      Fraction    weighted
Dates outstanding                                     outstanding  of period  average shares
                                                      -----------  ---------  --------------
<S>                                                    <C>             <C>      <C>      
July 1, 1996                                           4,475,019       1.00     4,475,019
July 1 - September 30, 1996                                                              
  Acquisition of subsidiaries on July 1, 1996            205,277       1.00       205,277
October 1 - December 31, 1997                                                            
  Acquisition of subsidiary on November 1, 1996          258,066      55.60       143,370
January 1 - March 31, 1998                                                               
  Acquisition of subsidiary on January 1, 1997           238,663      33.30        79,554
                                                       =========                =========
WEIGHTED AVERAGE SHARES                                5,177,025                4,903,220
                                                       =========                =========
</TABLE>


DILUTED EARNINGS PER SHARE FOR THE YEAR TO DATE (1998)

Net income available to common stockholders                            3,450,723
Add impact of assumed conversions                                      1,120,246
                                                                       ---------
ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS                   4,570,969
                                                                       ---------


Weighted average shares                                                6,283,410
Warrants and options not yet exercised                                   674,860
9% convertible debentures                                              1,666,667
Increasing rate debentures                                               877,193
                                                                       
ADJUSTED WEIGHTED AVERAGE SHARES                                       9,502,130
                                                                       ---------


DILUTED EARNINGS PER SHARE FOR THE YEAR TO DATE (1997)

Net income available to common stockholders                            2,972,589
Add impact of assumed conversions                                           --  
                                                                       ---------


ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS                   2,972,589


Weighted average shares                                                4,903,220
Warrants and options not yet exercised                                    82,147
                                                                       ---------


ADJUSTED WEIGHTED AVERAGE SHARES                                       4,985,367
                                                                       ---------





                                       17
<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 
          AND 1997

BACKGROUND AND HISTORY

The Company was  incorporated  in September  1995 with the intention to actively
pursue  acquisitions  fitting  a pre  defined  investment  strategy,  The  broad
strategy followed in all investment decisions is as follows:

*    Turnover is to be within the range of $5 - $50 million

*    Net income must yield a sustainable above average return on investment.

*    Growth  in  turnover  must  be  above  average  growth  rates  and  must be
     sustainable over the medium term.

*    The  industry  in which  the  target  operates  must  meet the pre  defined
     industry  sectors  identified by  management  as sectors  meeting our broad
     investment strategy.

First South Africa Corp has, through its South African  subsidiary,  First South
African Holdings (Pty) Ltd, acquired seventeen South African  subsidiaries which
have met the acquisition criteria identified above.

The Company is engaged in the following industry segments:

      1.    PROCESSED FOODS
      2.    LIFESTYLE PRODUCTS
      3.    PACKAGING EQUIPMENT AND MATERIALS
      4.    INDUSTRIAL MANUFACTURING



                                       18
<PAGE>


                          FIRST SOUTH AFRICA CORP., LTD
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997


SOUTH AFRICAN OPERATIONS

As the  Company's  results  are  reported  in U.S.  Dollars,  but  revenues  are
primarily  generated in South African Rand, the South African inflation rate and
the  depreciation of the South African Rand against the U.S Dollar are important
to the understanding of the Company's results.

In broad  terms,  If the  deterioration  of the rand is in  excess  of the South
African  inflation  rate,  then the Company would need to generate South African
revenue in excess of the South African inflation rate to maintain Dollar parity.

The average  rate for the South  African  Rand  against the U.S.  Dollar for the
periods presented in this report are as follows:



                              Three Months                  Three Months 
                              ended                         ended        
                              March 31,                     March 31,    
                              1998                          1997         
                              ------------                  ------------ 

Rate of exchange vs $1             4.97                          4.49

Depreciation                       9.3%




                              Nine Months                   Nine Months
                              ended                         ended      
                              March 31,                     March 31,  
                              1998                          1997       
                              ------------                  ------------ 

Rate of exchange vs $1             4.83                          4.56

Depreciation                       5.9%



The annual rate of inflation for South Africa was  approximately  6% as reported
by the South African Central Statistical services.


The result  reflected below is therefore  greater than inflation  adjusted South
African Rand for both revenue and earnings growth.




                                       19
<PAGE>



                          FIRST SOUTH AFRICA CORP., LTD
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997


COMPARISON TO PRIOR PERIODS


*    THREE MONTHS ENDED MARCH 31, 1998 VERSUS MARCH 31, 1997


     SALES

          Sales have increased by 51% to $28,218,692 from $18,729,799.

          This is better interpreted as a net, after inflation increase in South
          African Rand, of 54,3%.

          This  increase is  primarily  attributable  to  acquisitions  that the
          Company had completed since March 31, 1997.

          The results for the three  months  ended March 31, 1997 do not include
          the following operations:

          *    Fifers Bakery
          *    Galactex
          *    SA Leisure
          *    Republic Umbrella
          *    Pacforce

          The sales from these  companies  for the three  months ended March 31,
          1998 total $8,272,635

          The  contribution by the individual  business  segments  towards total
          sales for the three months ended March 31, is as follows:



                                        1998                1997
                                           %                   %
                                      ------              ------
Processed Foods                         51.9                67.2

Lifestyle Products                      20.8                 --

Packaging equipment and materials       11.8                 9.8

Industrial Manufacturing                15.5                23.0
                                      ------              ------
                                       100.0               100.0
                                      ======              ======

          The Dollar value of sales in each business segment have increased over
          the prior period. The overall increase can be explained by:

          *    Additional  acquisitions in the Packaging equipment and materials
               and Processed foods business segments, and by the addition of the
               Lifestyle products business segment

          *    Increase in demand for the Company's products as the middle class
               base of consumers  continues to grow as South Africa's transition
               to more broad based economic participation moves forward.

          *    Additional  capital   expenditure  on  increasing   manufacturing
               capacity  has been made to exploit the  additional  demand  being
               experienced.


                                       20
<PAGE>


                          FIRST SOUTH AFRICA CORP., LTD
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997


     COST OF SALES

     Cost of  goods  sold of  $16,536,884,  (Representing  58,6% of  sales)  has
     increased from $10,491,146  (Representing 56% of sales) for the comparative
     period in the prior year.


     The cost of goods sold by the individual  business segments as a percentage
     of sales for the three months ended March 31, is as follows:



                                        1998                1997
                                           %                   %
                                      ------              ------

Processed Foods                         56.1                53.7

Lifestyle Products                      57.6                 --

Packaging equipment and materials       64.5                56.0

Industrial Manufacturing                63.8                62.6

     The  overall  increase  in the  percentage  of cost of  goods  sold  can be
     explained by the following:

     *    PROCESSED FOODS

     The cost of goods sold in this segment is in line with the expected cost of
     goods sold percentage reflected in the full pro - forma fiscal 1997 ratio.

     *    PACKAGING EQUIPMENT AND MATERIALS

     The  acquisition of a Company that generates lower gross margins than those
     owned by the Company in the prior period.


     SELLING, GENERAL AND ADMINISTRATIVE COSTS

     Selling,  General and  Administrative  costs of  $9,732,843,  (Representing
     34,5% of sales) has increased from $6,809,021 (Representing 36,4% of sales)
     for the comparative period in the prior year.

     Included in Selling, General and administrative costs are the following non
     cash charges:



                                                        1998           1997
                                                      -------        -------
Depreciation                                          618,647        474,582
Amortisation of intangibles and other assets          357,010        208,524
                                                      -------        -------
                                                      975,657        683,106
                                                      =======        =======

Percentage of total sales                               3.46%          3.65%


     Intangibles are principally Goodwill, trademarks, Intellectual property and
     Restraint of Trade agreements.


                                       21
<PAGE>


                          FIRST SOUTH AFRICA CORP., LTD
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997


     The selling,  general and administrative  costs of the individual  business
     segments as a  percentage  of sales for the three months ended March 31, is
     as follows:

                                             1998                1997
                                                %                   %
                                           ------              ------

Processed Foods                              34.9                36.2

Lifestyle Products                           28.8                --

Packaging equipment and materials            36.7                40.2

Industrial Manufacturing                     33.1                28.2

Corporate (Percentage of total sales)         0.9                 1.6


     The  overall   decrease  in  the   percentage   of  Selling,   general  and
     administrative costs can be explained by the following:

     *    PROCESSED FOODS

          Lower overall Selling, General and Administrative expenses due to cost
          containment and more efficient operations.

     *    Packaging equipment and materials

          Lower   operating   costs  due  to  more   efficient   operations  and
          restructuring within this sector.

     *    Lifestyle Products

          Low Selling,  general and administrative costs in the Lifestyle sector
          as compared to the other  business segments has resulted in an overall
          decrease in the Company's  total Selling,  General and  Administrative
          costs as a percentage of sales.


     INTEREST EXPENSE

     Interest   expense  of  $163,901  has  decreased   from  $195,879  for  the
     comparative period in the prior year.

     Interest for the quarter ended March 31, 1998 consists of:

     *    Interest  income earned on First South Africa Corp's cash balances and
          surplus funds in the processed foods business.

     *    Interest expense incurred in the other operating business segments and
          interest expense of approximately $375,000 on the 9% and floating rate
          convertible  debentures that were issued during the months of April to
          October 1997.



                                       22
<PAGE>


                          FIRST SOUTH AFRICA CORP., LTD
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997


     OTHER INCOME

     Other income of $370,949  has  increased  from $88,920 for the  comparative
     period in the prior year.

     Other income consists primarily of rebates, discounts received, commissions
     and government incentives earned by the operating subsidiaries.

     The  significant  increase is due to  government  incentives  earned by the
     Lifestyle products segment.


     NET INCOME

     Net income from consolidated  subsidiaries of $1,467,158 has increased from
     $1,146,098,  an increase of 28%,  for the  comparative  period in the prior
     year.

     Net income of $917,715  represents  $0,13 a share as compared to $1,146,098
     representing  $0,22 per share in the comparative  period in the prior year.
     Net income for the quarter  ended March 31,  1998  included a provision  of
     $549,443 for:

     *    A 30% minority interest in the Company's  publicly traded  subsidiary,
          First SA Food Holdings limited
     *    An  18%  minority  interest  in  the  Company's  subsidiary  First  SA
          Lifestyle Holdings Limited.

     The  current  market  value  of the  Company's  70%  stake in First SA Food
     Holdings Limited is approximately $95 million.  The Company intends to spin
     off minority  interests in other subsidiary groups which will result in the
     provision for minority  interests  increasing in future periods.  This will
     continue to effect comparative earnings per share data.

     For purposes of the Company's  earnings per share  calculation  the Company
     had a weighted average 7,073,170 shares outstanding as opposed to 5,177,085
     for the comparative period in the prior year.

     The 7,073,170 shares includes an additional  1,247,877 shares issued on the
     conversion  of certain A warrants and B warrants that were  outstanding  in
     terms of a warrant swap performed during the current  fiscal year. This has
     had negative  impact  on the basic  earnings  per share calculation.


NINE MONTHS ENDED MARCH 31, 1998 VERSUS MARCH 31, 1997


     SALES

     Sales have increased by 93% to $85,770,957 from $44,536,940.

     This is better  interpreted  as a net,  after  inflation  increase in South
     African Rand, of 93%.

     This increase is primarily  attributable to  acquisitions  that the Company
     had completed since March 31, 1997.

     The  results  for the nine  months  ended March 31, 1997 do not include the
     following operations:

     *    Fifers Bakery
     *    Galactex
     *    SA Leisure
     *    Republic Umbrella
     *    Pacforce



                                       23
<PAGE>


                          FIRST SOUTH AFRICA CORP., LTD
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997



     The sales from these  companies  for the nine  months  ended March 31, 1998
     total $23,349,425.

     The  contribution by the individual  business  segments towards total sales
     for the nine months ended March 31, is as follows:



                                             1998                1997
                                                %                   %
                                           ------              ------

Processed Foods                              52.7                62.8

Lifestyle Products                           20.1                 --

Packaging equipment and materials            11.1                10.5

Industrial Manufacturing                     16.1                26.7
                                           ------              ------
                                            100.0               100.0
                                           ======              ======


     The Dollar value of sales in each business  segment have increased over the
     prior period. The overall increase can be explained by:

     *    Additional  acquisitions in the Packaging  equipment and materials and
          Processed  foods  business  segments,  and  by  the  addition  of  the
          Lifestyle products business segment

     *    Increase in demand for the Company's products as the middle class base
          of consumers  continues to grow as South  Africa's  transition to more
          broad based economic participation moves forward.

     *    Additional capital  expenditure on increasing  manufacturing  capacity
          has been made to exploit the additional demand being experienced.


     COST OF SALES

     Cost of  goods  sold of  $52,308,927,  (Representing  61,0% of  sales)  has
     increased  from   $24,543,952   (Representing   55,1%  of  sales)  for  the
     comparative period in the prior year.


     The cost of goods sold by the individual  business segments as a percentage
     of sales for the nine months ended March 31, is as follows:



                                             1998                1997
                                                %                   %
                                           ------              ------

Processed Foods                              56.2                51.5

Lifestyle Products                           61.4                 --

Packaging equipment and materials            71.3                57.7

Industrial Manufacturing                     68.8                62.5



                                       24


<PAGE>


                          FIRST SOUTH AFRICA CORP., LTD
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997



          The overall  increase in the  percentage  of cost of goods sold can be
          explained by the following:

          *    PROCESSED FOODS

          The cost of goods sold in this  segment  is in line with the  expected
          cost of goods sold percentage reflected in the full pro - forma fiscal
          1997 ratio.

          *    PACKAGING EQUIPMENT AND MATERIALS

          The  poor  performance  of one  subsidiary  and the  acquisition  of a
          company  that  generates  lower gross  margins than those owned by the
          Company in the prior period.


     SELLING, GENERAL AND ADMINISTRATIVE COSTS

     Selling,  General and  Administrative  costs of $27,475,571,  (Representing
     32,0% of sales)  has  increased  from  $16,050,703  (Representing  36,0% of
     sales) for the comparative period in the prior year.

     Included in Selling, General and administrative costs are the following non
     cash charges:



                                                            1998          1997
                                                         ---------     ---------

Depreciation                                             1,698,884       978,664

Amortisation of intangibles and other assets               933,743       419,660
                                                         ---------     ---------
                                                         2,632,627     1,398,324

Percentage of total sales                                   3.07%         3.14%


     Intangibles are principally Goodwill, trademarks, Intellectual property and
     Restraint of Trade agreements.


                                       25
<PAGE>



                          FIRST SOUTH AFRICA CORP., LTD
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997



     The selling,  general and administrative  costs of the individual  business
     segments as a percentage of sales for the nine months ended March 31, is as
     follows:



                                             1998                1997
                                                %                   %
                                           ------              ------

Processed Foods                              33.6                37.5

Lifestyle Products                           27.6                 --

Packaging equipment and materials            36.7                29.9

Industrial Manufacturing                     29.9                29.0

Corporate (Percentage of total sales)         1.1                 1.6


     The  overall   decrease  in  the   percentage   of  Selling,   general  and
     administrative costs can be explained by the following:

     *    PROCESSED FOODS

     Lower  overall  Selling,  General and  Administrative  expenses due to cost
     containment and more efficient operations.

     *    LIFESTYLE PRODUCTS

     Low Selling,  general and  administrative  costs in the Lifestyle sector as
     compared to the other business segments has resulted in an overall decrease
     in the  Company's  total  Selling,  General and  Administrative  costs as a
     percentage of sales.


     INTEREST RECEIVED/EXPENSE

     Interest  received of $93,680  has  increased  from an interest  expense of
     $770,087 for the comparative period in the prior year.

     Interest for the nine months ended March 31, 1998 consists of:

     *    Interest  income earned on First South Africa Corp's cash balances and
          surplus funds in the processed foods business.

     *    Interest expense incurred in the other operating business segments and
          interest  expense of  approximately  $1,050,000 on the 9% and floating
          rate  convertible  debentures  that  were issued during  the months of
          April to October 1997.


                                       26

<PAGE>

                          FIRST SOUTH AFRICA CORP., LTD
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997




     OTHER INCOME

     Other income of $1,050,860 has increased from $599,521 for the  comparative
     period in the prior year.

     Other income consists primarily of rebates, discounts received, commissions
     and government incentives earned by the operating subsidiaries.

     The  significant  increase is due to  government  incentives  earned by the
     Lifestyle products segment.


     NET INCOME

     Net income from consolidated  subsidiaries of $5,159,401 has increased from
     $2,972,589,  an increase of 73,6%, for the comparative  period in the prior
     year.

     Net  income  of  $3,450,723  represents  $0,55  per  share as  compared  to
     $2,972,589  representing  $0,61 per share in the comparative  period in the
     prior year.  Net income for the nine months ended March 31, 1998 included a
     provision of $1,708,678 for:

     *    A 30% minority interest in the Company's  publicly traded  subsidiary,
          First SA Food Holdings limited
     *    An  18%  minority  interest  in  the  Company's  subsidiary  First  SA
          Lifestyle Holdings Limited.

     The  current  market  value  of the  Company's  70%  stake in First SA Food
     Holdings Limited is approximately $95 million.  The Company intends to spin
     off minority  interests in other subsidiary groups which will result in the
     provision for minority  interests  increasing in future periods.  This will
     continue to effect comparative earnings per share data.

     For purposes of the Company's  earnings per share  calculation  the Company
     had a weighted  average number of shares  outstanding  of 6,283,410  shares
     outstanding as opposed to 4,903,220 for the comparative period in the prior
     year.

     The 6,283,410 shares includes an additional weighted average 584,112 shares
     issued on the  conversion  of certain A warrants  and B warrants  that were
     outstanding in terms of a warrant swap performed  during the current fiscal
     year.  This has had a  negative  impact  on the  basic  earnings  per share
     calculation.

Liquidity and Capital Resources
-------------------------------

In January 1996,  the Company  raised  approximately  $9 million in net proceeds
from its initial  public  offering.  In the months of April to August 1997,  the
Company raised  approximately  $9.2 million in net proceeds from the issuance of
$10,000,000 of 9% convertible  debentures.  Such  debentures  mature on June 15,
2004 and are  convertible  any time prior to maturity at $6.00 a 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 First SA Food Holdings. In October 1997, the
Company raised  approximately  $15.2 million from the issuance of $15,000,000 of
increasing rate debentures.  Such debentures  mature on October 30, 2001 and are
convertible  any time prior to  maturity at $9.50 a share.  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.

The  consolidated  balance  sheet as at March 31,  1998,  shows  cash on hand of
$20.99 million with working capital of $30.86 million.  As of March 31, 1998 the
Company had a total debt of $39,256,416  of which amount $25 million  related to
the Company's 9%  subordinated  convertible  debentures and its increasing  rate
convertible  debentures , with the remainder  being bank debt. Of the bank debt,
$6,603,280 was classified as current. The Company currently has approximately $3
million available in bank credit lines,  which lines are unsecured and renewable
on an annual basis.



                                       27
<PAGE>

                          FIRST SOUTH AFRICA CORP., LTD
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997


Cash flows provided by operating  activities for the nine months ended March 31,
1998 and March 31, 1997,  totaled $8,247,935 and $6,180,417  respectively.  Cash
flows used in investing  activities for the nine months ended March 31, 1998 and
March 31, 1997 totaled  $26,567,450 and $10,172,593  respectively.  For the nine
months ended March 31, 1998  $23,489,585  was utilized  for the  acquisition  of
subsidiaries  and  $3,015,118 for additional  purchase  price  payments.  In the
comparable   period  in  1997,  $7,935,813  was  used  for  the  acquisition  of
subsidiaries. Net cash provided by financing activities was $20,965,974,  during
the nine  months  ended  March 31,  1998 while  $1,488,837  was  provided in the
corresponding period in the prior year. This increase is primarily  attributable
to the proceeds of warrants  exercised  and long term debt  borrowings  incurred
during the period.

The Company's operating  subsidiaries generally collect their receivables within
65 to 90 days and reserve approximately 5% for doubtful accounts.  Historically,
the  Company's  operating  and capital needs have been met by internal cash flow
and outside bank borrowings. It is management's belief that capital expenditures
for the  foreseeable  future can  continue to be met by  internal  cash flow and
outside bank borrowings.

As of March 31, 1998, the Company had cash of approximately  $21 million.  Under
its various  acquisition  agreements,  the Company  anticipates  having to spend
approximately $3.95 million in cash for its contingent payments over the next 12
months as well as  approximately  $2 million in stock.  The Company  anticipates
that its 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.

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  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.

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.

"Safe Harbor"  Statement under the private  Securities  Litigation Reform Act of
1995: The statements  above which are not historical  facts are  forward-looking
statements that involve risks and uncertainties,  including, but not limited to,
demand for the Company's  products and market  acceptance  risks,  the effect of
economic  conditions,  the impact of competitive  products and pricing,  product
development,  commercialization and technological  difficulties,  capacity,  and
supply constraints or difficulties,  the results of financing efforts, and other
risks  detailed in the Company's  Securities  and Exchange  Commission  filings.
Although  the  Company  believes  that  the   expectations   reflected  in  such
forward-looking statements are reasonable at this time, it can give no assurance
that such  expectations  will prove to have been correct.  Actual  results could
differ materially based upon a number of factors  including,  but not limited to
the factors set forth above.


PART II.       OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits - 27.1 Financial Data Schedule.

          (b)  Reports on Form 8-K - None.






                                       28
<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.

Dated: May 14, 1998


FIRST SOUTH AFRICA CORP., LTD.



By: /s/  Clive Kabatznik
   ------------------------
     Clive Kabatznik
     Chief Executive Officer, President
     and Chief Financial Officer