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 September 30, 1997

                                       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 [_]        No [X]

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 November  12, 1997 was
5,674,749.




<PAGE>




                         FIRST SOUTH AFRICA CORP., LTD.

                                    FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 1997


PART 1.    FINANCIAL INFORMATION                                            PAGE

Item 1.     First South Africa Corp., Ltd.
            Consolidated Balance Sheets - Unaudited                           3

            Consolidated Statements of Income for the three months
            ended September 30, 1997 and 1996 - Unaudited                     4

            Consolidated Statements of Cash Flows for the three months
            ended September 30, 1997 and 1996 - Unaudited                     5

            Consolidated Statements of Changes in Stockholder's
            Investment for the period June 30, 1997 to September 30, 1997     6

            Notes to the Consolidated Financial Statements                 7-11

Item 2.     Management's Discussion and Analysis of Financial
            Condition and Results of Operation                            12-15


PART II.    OTHER INFORMATION


Item 6.     Exhibits and Reports on Form 8-K                                 16



SIGNATURES                                                                   17







                                        2

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                      UNAUDITED CONSOLIDATED BALANCE SHEETS





                                     ASSETS
                                                    September 30,     June 30,
                                                         1997           1997
                                                          $              $
                                                     -----------    -----------
CURRENT ASSETS
      Cash on hand                                    15,709,781     19,889,111
      Trade accounts receivable                       12,233,595     12,000,224
      Less: Allowances for bad debts                    (625,591)      (696,279)
                                                     -----------    -----------
                                                      11,608,004     11,303,945
      Inventories (net)                                8,217,416      7,219,960
      Prepaid expenses and other current assets        1,318,041        934,263
      Deferred charges (net)                             763,046        838,439
                                                     -----------    -----------
                TOTAL CURRENT ASSETS                  37,616,288     40,185,718

Property, plant and equipment                         17,060,233     16,197,605
Less: Accumulated depreciation                        (5,346,616)    (4,849,396)
                                                     -----------    -----------
                                                      11,713,617     11,348,209
Intangible assets (net)                               16,663,164     12,620,822
Other assets                                              79,091         42,730
                                                     -----------    -----------
                                                      66,072,160     64,197,479
                                                     ===========    ===========




                                        3

<PAGE>

                         FIRST SOUTH AFRICA CORP., LTD.

                      UNAUDITED CONSOLIDATED BALANCE SHEETS

                    LIABILITIES AND STOCKHOLDERS' INVESTMENT\
<TABLE>
<CAPTION>
                                                            September 30,     June 30,
                                                                1997           1997
                                                                 $              $
                                                            -----------    -----------
<S>                                                           <C>            <C>      
CURRENT LIABILITIES
      Bank overdraft payable                                       --             --
      Current portion of long term debt                       1,505,759      1,673,712
      Trade accounts payable                                  7,630,538      6,755,823
      Other provisions and accruals                           2,667,183      3,184,428
      Other taxes payable                                       281,138        654,653
      Income tax payable                                      1,739,168      1,721,079
                                                            -----------    -----------
                TOTAL CURRENT LIABILITIES                    13,823,786     13,989,695

Long term debt                                               13,690,750     13,341,758
Deferred income taxes                                           239,496        358,446
                                                            -----------    -----------
                                                             27,754,032     27,689,899
                                                            -----------    -----------
Minority shareholders' investment                            13,445,605     13,287,566

STOCKHOLDERS' INVESTMENT

Capital stock:

      A class common stock, $0.01 par value - authorized
      23,000,000 shares, issued and outstanding
      3,780,315 shares                                           37,803         35,361

      B class common stock, $0.01 par value - authorized
      2,000,000 shares, issued and outstanding
      1,822,500 shares                                           18,711         18,691

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

      Capital in excess of par                               24,658,766     22,891,093

Retained earnings                                             3,791,691      2,803,065
Foreign currency translation adjustments                     (3,634,448)    (2,528,196)
                                                            -----------    -----------
                                                             66,072,160     64,197,479
                                                            ===========    ===========
</TABLE>


                                        4

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME FOR
               THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996


<TABLE>
<CAPTION>
                                                             1997           1996
                                                              $              $
                                                         -----------    -----------
<S>                                                       <C>            <C>       
Revenues                                                  21,461,433     11,690,884
                                                         ===========    ===========
Operating expenses
      Cost of sales                                       12,698,212      6,213,717
      Selling, general and administrative costs            7,316,524      4,254,284
                                                         -----------    -----------
                                                          20,014,736     10,468,001
                                                         -----------    -----------
Operating income                                           1,446,697      1,222,883
Other income                                                 243,082        199,910
Interest income/( expense)                                   175,741       (215,087)
                                                         -----------    -----------
Income from consolidated companies before income taxes     1,865,520      1,207,706
Provision for taxes on income                               (446,193)      (378,571)
                                                         -----------    -----------
                                                           1,419,327        829,135
Minority interest in consolidated subsidiary companies      (430,701)          --
                                                         -----------    -----------
Net income                                                   988,626        829,135
                                                         ===========    ===========
Basic earnings per share                                        0.18           0.18

Fully diluted earnings per share                                0.17           0.18
Weighted average number of shares outstanding
      Basic earnings per share                             5,495,119      4,679,356

      Fully diluted earnings per share                     7,337,754      4,679,356

</TABLE>



                                        5

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

               UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
                THE THREE MONTHS ENDED 30 SEPTEMBER 1997 AND 1996


<TABLE>
<CAPTION>
                                                                                 1997           1996
                                                                                   $             $
                                                                              -----------    -----------
<S>                                                                               <C>            <C>    
Cash flows from operating activities:
      Net income                                                                  988,626        829,135
      Adjustments to reconcile net income to net cash
       provided by operating activities:
                Depreciation and amortization
                Deferred income taxes                                             594,612        334,878
                Net loss on sale of assets                                       (111,706)       (11,688)
                Effect of changes in current assets and current liabilities        20,162           --
                Minority interest in consolidated subsidiary companies         (1,665,749)       904,731
                                                                                  430,701           --
                                                                              -----------    -----------
Net cash provided by operating activities                                         256,646      2,057,056
                                                                              -----------    -----------
Cash flows from investing activities:

      Additions to property, plant and equipment                                 (681,483)      (144,745)
      Proceeds on disposal of property, plant and equipment                        18,083           --
      Additional purchase price payments                                       (2,886,407)          --
      Other assets acquired                                                      (147,487)       (44,854)
      Acquisitions of subsidiaries (net of cash of $33,856)                    (2,238,196)    (2,673,865)
                                                                              -----------    -----------
Net cash used in investing activities                                          (5,935,490)    (2,863,464)
                                                                              -----------    -----------
Cash flows from financing activities:

      Net (repayments)/borrowings in bank overdrafts                              (10,217)     2,049,273
      Borrowings of long term debt                                                308,179      1,365,585
      Reduction in deferred debt issue costs                                       46,000           --
      Repayments in short term debt                                              (165,041)    (2,002,662)
      Proceeds on stock issues                                                  1,770,130           --
                                                                              -----------    -----------
Net cash provided in financing activities                                       1,949,051      1,412,196
                                                                              -----------    -----------
Effect of exchange rate changes on cash                                          (449,537)         4,931
Cash (used) generated by operations                                            (4,179,330)       610,719
Cash on hand at beginning of period                                            19,889,111      4,682,035
                                                                                             -----------
Cash on hand at end of period                                                  15,709,781      5,292,754
                                                                              ===========    ===========

</TABLE>


                                        6

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

     UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' INVESTMENT


<TABLE>
<CAPTION>
                                           Capital stock                                       Foreign
                                            First South      Capital in                        currency
                                           Africa Corp.,     excess of         Retained        translation
                                               Ltd.             par            earnings        adjustments          Total
                                                 $               $                $                 $                 $
                                            -----------      -----------      -----------      -----------       -----------
<S>                                              <C>          <C>               <C>             <C>               <C>       
Balance at June 30, 1997                         54,052       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             --           1,023,689
Translation adjustment                             --               --               --         (1,106,252)       (1,106,252)
                                            -----------      -----------      -----------      -----------       -----------
Balance at September 30, 1997                    56,514       24,658,766        3,791,691       (3,634,448)       24,907,586
                                            ===========      ===========      ===========      ===========       ===========


</TABLE>


                                        7

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

1.    PRINCIPLE ACTIVITIES OF THE GROUP

      The principle activities of the group include the following:

      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.

      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.

2.    ORGANIZATION

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

      On July 1, 1997 the Company  acquired  100% of the common  stock of Fifers
      Bakery  (Proprietary)  Limited for an aggregate  net  purchase  price of $
      1,844,890.  The 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 First South African Holdings Corp. (Pty) Ltd. in the acquisition.


                                                                Fifers Bakery
                                                                   (Pty)
                                                                    Ltd
                                                                     $
                                                                 ---------
Acquisition costs
      Stock issued in lieu of cash                                 699,434
      Cash consideration (net of debt ceded to holding company)  1,145,456
                                                                 ---------
Purchase price to be allocated                                   1,844,890
                                                                 =========
Summary allocation of purchase price
      Current assets                                               565,354
      Property, plant and equipment                                461,560
      Other assets                                                  33,238
      Goodwill                                                   1,796,136
                                                                 ---------
Total assets acquired                                            2,856,288
                                                                 ---------

      Current liabilities                                          425,390
      Long term debt                                               154,685
      Deferred income taxes                                          4,161
      Debt ceded to holding company                                427,162
                                                                 ---------
Total liabilities assumed                                        1,011,398
                                                                 ---------
                                                                 1,844,890
                                                                 =========



                                        8

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996


3.    SUMMARY OF ACCOUNTING POLICIES

      The consolidated  financial  statements should be read in conjunction with
      the consolidated financial statements included with the Company's Form 10K
      which  has  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 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
      Earnings  per share on common  shares is based on net income and  reflects
      dilutive  effects of any stock  options and  warrants  which exist at year
      end.

      Intangible assets
      Goodwill,  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.

      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:

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

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

      o     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".


                                        9

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996


3.    SUMMARY OF ACCOUNTING POLICIES (continued)

      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  tp  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  September  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 from April through August 1997.

      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.




                                       10

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996


4.    INVENTORIES

      Inventories consist of the following:


                                                  September 30,        June 30,
                                                      1997              1997
                                                        $                 $
                                                   ----------        ----------
Finished goods                                      4,576,602         4,032,523
Work in progress                                      109,113           532,144
Raw materials and ingredients                       2,931,945         2,365,213
Supplies                                            1,034,383           716,081
                                                   ----------        ----------
Inventories (Gross)                                 8,652,043         7,645,961
Less: Valuation allowances                           (434,627)         (426,001)
                                                   ----------        ----------
Inventories (Net)                                   8,217,416         7,219,960
                                                   ==========        ==========


5.    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 September 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
      had taken place on July 1, 1996.


                                                                     July 1, to
                                                                   September 30,
                                                                        1996
                                                                          $
                                                                    -----------
Revenues                                                             19,393,376
                                                                    ===========
Net income before minority interest in consolidated subsidiaries      1,273,192
Minority interest in consolidated subsidiary companies                 (243,250)
                                                                    -----------
Net income                                                            1,029,942
                                                                    -----------
Basic earnings per share                                                   0.19
Weighted average number of shares in issue                            5,495,119


6.  COMMITMENTS

      The  Company is  required to make  additional  contingent  payments to the
      former  owners  of  certain  companies  that it has  acquired  based  on a
      multiple of pre tax earnings.  These  payments are to be made by the issue
      of stock and cash  over the next two to three  years.  Under  its  various
      acquisition   agreements,   the  Company   anticipates   having  to  spend
      approximately  $2.25 million in cash for its contingent  payments over the
      next 12 months  as well as  approximately  $1.85  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


                                       11

<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

      various  operations.  Excess cash will also be utilized to fund additional
      acquisitions.  The Company  anticipates  that any longer  term  contingent
      acquisition  payments  will be funded out of  operating  cash flows of the
      acquired entities.


7.  SUBSEQUENT EVENTS

      On October 31, 1997, First South Africa Corp., Ltd. a Bermuda  corporation
      (the  "Company"),  consummated  the private  placement  and sale of 15,000
      Increasing Rate Senior Subordinated  Convertible Debentures of the Company
      due October 31, 2001 (the "Debentures"), at a purchase price of $1,000 per
      Debenture, to two offshore investors including BT Global Credit Limited as
      the lead  investor  (the  "Offering")  pursuant to an  exemption  from the
      registration  requirements of the Securities Act of 1933, as amended, (the
      "Act") under  Regulation S  promulgated  thereunder.  The  Debentures  are
      subject to the terms of an Indenture dated October 29, 1997 by and between
      the Company and the American Stock  Transfer & Trust Company,  as Trustee.
      Interest  payable on the  Debentures  is 4% per annum for the year  ending
      October  31,  1998,  4.5% per annum for the two years  ending  October 31,
      2000, and 5% per annum for the year ending October 31, 2001,  payable on a
      quarterly  basis. In the event the Debentures shall not have been redeemed
      or converted  pursuant to the terms thereof and the Indenture prior to the
      due date, the Company shall pay each  registered  holder of the Debentures
      an additional amount equal to 22.25% of the principal amount of Debentures
      held by each such registered holder.

      The Debentures are  convertible at any time (subject to prior  redemption)
      into shares of Common Stock at the initial  conversion  price of $9.50 per
      share of Common  Stock,  subject  to  adjustment  in certain  events.  The
      Debentures  are  redeemable  after one year if the Company's  Common Stock
      trades at more than  $14.25 per share,  subject to  adjustment  in certain
      events,  during an agreed upon period of time (30 consecutive  market days
      ending  on the  market  day  prior  to the  date on which  the  notice  of
      redemption  is first  given).  The  redemption  value of the  debenture is
      122.25% of the principal amount.

      The Company has paid Bankers Trust Company  ("BTC") a fee equal to 4.5% of
      the  total  offering  amount  and  has  agreed  to  reimburse  BTC for its
      reasonable legal expenses with respect to such transaction up to an amount
      of $50,000.
















                                       12

<PAGE>



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

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

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

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

The average  annual rate of inflation  in South Africa in the period  commencing
September 30, 1996 and ending September 30, 1997 was approximately 8.6 %

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



                                   Three Months             Three Months
                                 ended Sept. 30,          ended Sept. 30,
                                       1996                     1997
                                 ---------------          ---------------
                                    $1 = R4.59               $1 =R4.66
      Depreciation of                                           1.5%







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<PAGE>



As the Company's results are reported in U.S. dollars, but revenues and earnings
are primarily  generated in South African Rand, the local inflation rate and the
depreciation  of the South African Rand against the US dollar for the periods in
question are important to further the understanding of the Company's results. In
general,  if the rate of  depreciation  of the  South  African  Rand to the U.S.
dollar for any  comparable  period is  greater  than the South  African  rate of
inflation for that same period then the Company would have had to generate local
revenues and earnings in excess of the South African  inflation rate in order to
maintain dollar parity.  For the three months ended  September 30, 1997,  versus
the comparable period in 1996, the depreciation of the South African Rand to the
dollar  equaled 1.5% while the annual rate of inflation  was 8.6%.  In order for
the Company to report  dollar  growth in revenues  and earnings it would need to
have generated  growth of 1.5% through its local South African  operations.  The
results, therefore, for the period indicated above as reflected in U.S. dollars,
is less than  inflation  adjusted  South  African  Rand for revenue and earnings
growth.

Three  Months  Ended  September  30, 1996  Compared to Three  Months Ended
September 30, 1997

Sales  for the  three  months  ended  September  30,  1997  increased  83.6%  to
$21,461,433  from  $11,690,884  for the  comparable  period  in  1996.  In local
currency this reflects a net increase after inflation of 76.5%. This increase is
primarily due to the  acquisitions the Company has completed since September 30,
1996.  Results  for the three  months  ended  September  30,  1996  reflect  the
operations of L.S.  Pressings,  Starpak,  Europair,  Piemans  Pantry and Astoria
Bakery alone.

For the three months ended  September 30, 1997,  the Company's  processed  foods
operations contributed approximately 66.9% of the Company's sales versus 56% for
the comparable  period in 1996. The Company's air conditioning and refrigeration
operations  contributed  approximately 16.3% of sales for the three months ended
September 30, 1997 versus 21.9% for the comparable period in 1996. The Company's
packaging  operations  contributed  approximately  11.4% of sales  for the three
months ended September 30, 1997 versus 12.2% for the comparable  period in 1996.
The Company's fastener  operations  contributed  approximately 5.3% of sales for
the three months ended  September 30, 1997 versus 10% for the comparable  period
in 1996. Sales in all business segments  increased.  The overall increase can be
explained  in some  segments  by  additional  acquisitions,  but in general  the
overall  increase  can be  attributed  to  increasing  demand for the  Company's
products  as the  middle-class  base of  consumers  continues  to grow as  South
Africa's transition to more broad based economic participation moves forward. In
addition,  the  Company's  subsidiaries  have  continued to purchase  additional
manufacturing capacity to take advantage of this demand.

Cost of  goods  sold  for  the  three  months  ended  September  30,  1997  were
$12,698,212,  or 59.2 % of sales versus  $6,213,717 or 53.1%, for the comparable
period in 1996. For the three months ended  September 30, 1997 the cost of goods
for the Company's  processed food operations were approximately 56.2% versus 48%
in the comparable  period in 1996.  Cost of sales for the air  conditioning  and
refrigeration operations were approximately 61.2% versus 60.1% in the comparable
period in 1996. Cost of sales for the packaging  operations  were  approximately
73.1%  versus  58% in the  comparable  period  in 1996.  Cost of  sales  for the
fastener  operations  were  approximately  58.8% versus 60.6% in the  comparable
period in 1996.The  overall increase in the percentage of cost of goods sold can
therefore be primarily explained by increases in the cost of goods ratios in the
processed  food and  packaging  operations.  The  processed  foods cost of goods
percentage  is in line with its full  fiscal  1997  ratio.  The  increase in the
packaging  operations' cost of goods is due primarily to the poor performance of
one  company in this  segment as well as a new  acquisition  that  traditionally
generates lower gross margins than those  generated by the packaging  operations
owned by the Company during the three months ended September 30, 1996.

Sales,  general and  administrative  costs increased  to$7,316,524 for the three
months ended  September 30, 1997 from  $4,254,284 for the  comparable  period in
1996 or  34.1% of sales  versus  36.4% of  sales.  For the  three  months  ended
September 30, 1997 SG and A expenses for the Company's processed food operations
were approximately 34.2% versus 40.3% in the comparable period in 1996. SG and A
expenses  for  the  air   conditioning   and   refrigeration   operations   were
approximately  30%  versus  31.3% in the  comparable  period  in 1996.  SG and A
expenses for the packaging  operations were  approximately 33% versus 18% in the
comparable  period in 1996. SG and A expenses for the fastener  operations  were
approximately  19% versus 20.9% in the comparable  period in 1996. The Company's
corporate SG and A expenses were approximately $329,000 or 1.5% of sales for the
three months ended September 30, 1997 versus  approximately  $316,000 or 2.7% of
sales for the comparable  period in 1996. The overall decrease in the percentage
SG and A expenses can  therefore  be primarily  explained by decreases in the SG
and A ratios in the Company's processed foods operations.

Interest  received was $175,741  for the three months ended  September  30, 1997
versus an interest  expense of $215,087 for the  comparable  period in 1996. The
interest  income for for the 1997 period is primarily  attributable  to interest
earned on the Company's


                                       14

<PAGE>



cash balances in its processed foods businesses.  In addition,  during the three
months ended September 30, 1997, the Company  incurred a net interest expense of
approximately  $250,000 for  interest on the 9%  convertible  debentures  issued
between April and August 1997.

Other income for the three months ended  September 30, 1997 was $243,082  versus
$199,909 in the comparable  period in 1996. This is primarily made up of rebates
and discounts earned by the Company's operating subsidiaries.

Net profit for the three month period ended September 30, 1997 was $988,626 or a
gain of $.18 a share as  compared to a net profit of $829,135 or $.18 a share in
the  comparable  period in 1996 During the period ended  September  30, 1997 the
Company's  net  earnings  included a provision  of $430,701 for the 30% minority
interests in its publicly  traded  subsidiary  First SA Food Holdings,  Ltd. For
purposes  of its  earning  per  share  calculation  for the three  months  ended
September  30, 1997,  the Company had  5,495,119  shares  outstanding ( includes
84,751  shares  to  be  issued  in  fulfilment  of  acquisition  agreements  and
contingent  acquisition  payments  entered into during the past three months) as
opposed to 4,679,356 for the comparable period in 1996.


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

In January 1996, the Company raised  approximately $9 million after all fees and
expenses  from its initial  public  offering.  In May 1997,  the Company  raised
approximately  $9.2  million  in net  proceeds  from the  issuance  of 10,000 9%
convertible  debentures.  Such  debentures  mature  on  June  15,  2004  and are
convertible  any time prior to  maturity  at $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.  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 September 30, 1997, shows cash on hand of
$15,7 million with working  capital of $23,8  million.  As of September 30, 1997
the Company had a total debt of $15,196.519 of which amount $10 million  related
to the  Company's 9%  subordinated  convertible  debentures , with the remainder
being bank debt. Of the bank debt,  $1,505,759  was  classified as current.  The
Company currently has approximately $3.4 million available in bank credit lines,
which lines are unsecured and renewable on an annual basis.

Cash flows provided by operating activities for the three months ended September
30, 1997 and September 30, 1996,  totaled $256,646 and $2,057,056  respectively.
Cash flows used in investing activities for the three months ended September 30,
1997 and September 30, 1996 totaled $5,935,490 and $2,863,464 respectively.  For
the three  months  ended  September  30, 1997  $2,238,196  was  utilized for the
acquisition  of  subsidiaries  and  $2,886,407  for  additional  purchase  price
payments.  In the  comparable  period  in  1996  $2,673,865  was  used  for  the
acquisition  of  subsidiaries.  Net cash  provided by financing  activities  was
$1,949,051,  during the three months ended  September 30, 1997 while  $1,412,196
was provided in the  corresponding  period in the prior year.  This  increase is
primarily attributable to proceeds of warrants exercised during the quarter.

The Company's operating  subsidiaries generally collect their receivables within
65 to 90 days and reserve approximately 5% for doubtful accounts.  Historically,
the  companies'  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 September 30, 1997, the Company had cash of  approximately  $15.7 million.
Under its various  acquisition  agreements,  the Company  anticipates  having to
spend  approximately  $2.25 million in cash for its contingent payments over the
next 12 months as well as  approximately  $1.85  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,  through Swiss Bank  Corporation,
purchased a 12-month  option to acquire the  equivalent  of $10 million in South
African  rand at the strike  price of R5.50 to the  dollar.  This option has the
effect of hedging $10 million of the  Company's  fiscal  1998  earnings,  in the
event the exchange rate of the South African rand falls below this strike price.
The cost of such option was  approximately  $133,000 and is being amortized over
the length of the option.

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.


                                       15

<PAGE>





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.

On October 31,  1997,  the Company  raised an  additional  $15 million  from the
placement of senior subordinated convertible debentures (see Note 7 of the Notes
to the Unaudited  Consolidated  Financiala Statements for the Three Months Ended
September  30, 1997 and September  30, 1996 - Subsequent  Events).  The proceeds
from this offering will be used primarily to fund additional acquisitions.

"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,
political risks, risks related to currency exchange,  economic risks, government
regulatory  considerations,   absence  of  substantive  disclosure  relating  to
acquisitions,  risks related to  operations of he Company's  direct and indirect
subsidiaries,  possible fluctuations in operating results,  competition,  labour
relations,  dependence on key personnel,  control by insiders, potential adverse
effect of redemption of warrants,  shares  eligible for future sales,  potential
anti-takeover  effects of preferred  stock,  and limited rights of  shareholders
under Bermuda law. The Company  undertakes no obligation to release publicly the
result of any revisions to these forward-looking  statements that may be made to
reflect  events  or  circumstances  after  the date  hereof  or to  reflect  the
occurrence of unanticipated events.


PART II.     OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

    (a)   Exhibits - None

    (b)   Reports of Form 8-K


The Company filed a Current Report on Form 8-K, the date of which was August 28,
1997, disclosing certain sales of equity securities pursuant to Regulation S.




                                       16

<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: November 12, 1997


                                             FIRST SOUTH AFRICA CORP., LTD.




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



                                       17