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, 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 May 12,  1997 was
4,142,500.



<PAGE>


                         FIRST SOUTH AFRICA CORP., LTD.

                                    FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 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 and for the six months ended 
               March 31, 1997 and 1996 - Unaudited                            4

              Consolidated Statements of Cash Flows for the 
               six months ended March  31, 1997 and
               1996 - Unaudited                                               5

              Consolidated Statements of Changes in Stockholder's
              Investment for the period June 30, 1996 to March 31, 1997       6

              Notes to the Combined 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

CONSOLIDATED BALANCE SHEETS

                                                           ACTUAL
                                                  -----------------------
                                                  March 31,      June 30,
                                                    1996           1996
                                                      $              $
                                                 -----------    -----------
                                                 (UNAUDITED) 
ASSETS

Current assets

   Cash on hand                                   2,245,322       4,682,035

   Receivables                                   11,241,016       5,833,542

   Less: Allowances for ____________               (531,110)       (402,333)
                                                 -----------    -----------
                                                  10,709,906      5,431,209


Inventories (net)                                  6,740,715      2,510,868

Prepaid expenses and other current assets          1,010,110        451,551
                                                 -----------    -----------

         Total current assets                     20,706,053     13,075,663

Property, plant and equipment                     17,918,680      9,000,334

Less: Accumulated depreciation                    (5,888,082)    (2,119,912)
                                                 -----------    -----------
                                                  12,030,598      6,880,422

Goodwill                                             165,139        408,541
Recipes and other intellectual property            9,907,666      2,848,532
Other assets                                          12,667        318,286
Deferred income taxes                                 10,619         73,550
                                                 -----------    -----------

                                                  42,832,742     23,604,994
                                                 ===========    ===========

LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities

      Current portion of long term debt            1,002,356      2,101,799
      Bank overdraft and factoring facility        2,941,899        745,724
      Trade accounts payable                       7,225,415      2,162,257
      Other provisions and accruals                6,304,376      1,923,371
      Income taxes payable                         1,599,287      1,518,095
                                                 -----------    -----------

         Total current liabilities                19,073,333      8,451,246

      Long term debt                               4,293,682      2,361,372
                                                 -----------    -----------

         Total liabilities                        23,367,015     10,812,618

Stockholder's investment

      Common stock                                    41,857         41,701
      Capital in excess of par                    22,059,698     18,518,986
      Retained earnings                             (914,818)    (3,887,407)
      Foreign currency translation adjustments    (1,728,317)    (1,888,211)
      Income restricted as to distribution             7,307          7,307
                                                 -----------    -----------

                                                  42,832,742     23,604,994
                                                 ===========    ===========

See accompanying notes to the financial statements

                                        3
<PAGE>
FIRST SOUTH AFRICA CORP., LTD

CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED
MARCH 31, 1997 AND 1996

                                             March 31, 1997  March 31, 1996
                                                   $              $

Revenues                                       18,729,799      4,186,375
                                              ===========    ===========

Operating expenses

Cost of sales                                  10,491,146      2,577,859

Selling, general and administrative expense     6,809,021      1,455,540
                                              -----------    -----------
                                               17,300,167      4,033,399

Operating  income                               1,429,632        152,976

Other income                                       88,920        104,211

Interest expense                                 (195,879)      (100,652)
                                              -----------    -----------

Income before income taxes                      1,322,673       (156,535)

Provision for taxes on income                    (176,575)       (16,715)
                                              -----------    -----------

Net Income                                      1,146,098       (139,820)
                                              ===========    ===========

Net profit per share                                 0.23          (0.12)

Weighted average number                         5,090,062      1,209,349
of shares outstanding


CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED
MARCH 31, 1997, AND 1996

                                            March 31, 1997   March 31, 1996
                                                        $              $

Revenues                                       44,536,940     13,406,104
                                              ===========    ===========

Operating expenses

Cost of sales                                  24,543,952      8,128,789

Selling, general and administrative expense    16,050,703      4,274,943
                                              -----------    -----------
                                               40,594,655     12,403,732

Operating  income                               3,942,285      1,002,372

Other income                                      599,521        269,292

Interest expense                                 (770,087)      (777,004)
                                              -----------    -----------

Income before income taxes                      3,771,719        494,660

Provision for taxes on income                    (799,130)      (296,486)
                                              -----------    -----------

Net Income                                      2,972,589       (198,174)
                                              ===========    ===========

Net profit per share                                 0.61          (0.16)

Weighted average number                         4,902,280      1,209,349
of shares outstanding

                                        4
<PAGE>

FIRST SOUTH AFRICA CORP., LTD

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS
ENDED MARCH 31, 1997 AND 1996
(UNAUDITED)

<TABLE>
<CAPTION>
                                                         ACTUAL       INCEPTION TO
                                                         March 31,      March 31,
                                                          1997           1996
                                                            $              $
                                                       -----------    -----------
<S>                                                      <C>             <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income/(loss)                                        2,972,589       (362,228)

Adjustments to reconcile net income to cash provided
 by operating activities:

   Depreciation                                          1,189,800        493,019
   Amortization of other assets                            208,524              0
   Net gain on sale of assets                              (18,012)             0
   Deferred income taxes                                  (240,635)        29,559
   Effect of changes in assets and liabilities           1,586,881        314,860
                                                       -----------    -----------

Net cash provided by operating activities                6,180,417        416,092
                                                       -----------    -----------


CASH FLOWS FROM INVESTING ACTIVITIES:

Net additions to property, plant and equipment          (2,526,740)       (86,179)
Other assets (acquired)/disposed                           287,069       (414,264)
Increase in loans to related companies                       2,891              0
Acquisition of subsidiaries (net cash of $334,405)      (7,935,813)          --
                                                       -----------    -----------

Net cash used in investing activities                  (10,172,593)      (500,443)
                                                       -----------    -----------


CASH FLOWS FROM FINANCING ACTIVITIES:

Net borrowings/(repayments) in bank overdrafts           1,867,474       (808,287)
Net borrowings of long term debt                           720,806        366,503
Net repayments in loans from related companies                --           (3,294)
Net borrowings in short term debt                       (1,099,443)       348,975
Other                                                         --                0
                                                       -----------    -----------
Net cash provided by financing activities               (1,488,837)     8,169,324
                                                       -----------    -----------
Effect of exchange rate changes on cash and assets         (66,626)       (52,583)
                                                       -----------    -----------
Net increase/(decrease) in cash on hand                 (2,436,713)     8,137,556
Cash on hand at beginning of period                      4,682,035         12,125
                                                       -----------    -----------
Cash on hand at end of period                            2,245,322      8,149,681
                                                       ===========    ===========
</TABLE>


                                        5
<PAGE>
FIRST SOUTH AFRICA CORP., LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT
FOR THE PERIOD JUNE 30, 1996 TO MARCH 31, 1997
(UNAUDITED)

<TABLE>
<CAPTION>
                                        Capital stock
                                          First South                                     Income      Foreign
                                         Africa Corp.,    Capital in      Retained      restricted    Currency
                                              Ltd.       excess of par    earnings        as to      Translation
                                               $              $              $         distribution  Adjustments       Total
                                          -----------    -----------    -----------    -----------   -----------    -----------
<S>                                            <C>        <C>              <C>               <C>      <C>            <C>       
Balance at December 31, 1996                   41,805     20,746,840     (2,060,916)         7,307    (2,653,489)    16,081,547
Issuance of stock to acquire subsidiary
companies                                          52      1,312,858           --             --            --        1,312,910
IPO Expenses written off                     (145,000)      (145,000)
Net profit for the period                        --             --        1,146,098           --            --        1,146,098
Translation adjustment                           --             --             --             --        (925,172)      (925,172)
                                          -----------    -----------    -----------    -----------   -----------    -----------

Balance at March 31, 1997                      41,857     22,059,698       (914,818)         7,307    (1,728,317)    19,465,727
                                          ===========    ===========    ===========    ===========   ===========    ===========

</TABLE>

                                        6

<PAGE>
FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997

1.    Organization
      ------------

First South Africa Corp., Ltd. (the "Company"), was incorporated on September 6,
1995.  The purpose of the Company is to  acquire,  own and operate  closely-held
companies  in South Africa with annual  sales in the range of  approximately  $5
million to $50 million.  The  predecessor to the Company was the combined entity
under common control, Starpak (Proprietary) Limited and its subsidiary companies
and LS Pressings (Proprietary) Limited.

On January 24, 1996,  subsequent to an initial public offering  ("offering") and
in terms of an agreement reached before the Offering,  the Company acquired 100%
of the common stock of the business combination of Starpak (Proprietary) Limited
and  its  subsidiary  companies  and LS  Pressings  (Proprietary)  Limited.  The
acquisition  was  accounted  for using the purchase  method of accounting at net
book value at date of acquisition.

On January 24,  1996,  also  subsequent  to the Offering and also in terms of an
agreement  reached before the Offering,  the Company acquired 100% of the common
stock of Europair  Africa  (Proprietary)  Limited for an aggregate  net purchase
price of $1,029,206. The acquisition was accounted for using the purchase method
of accounting.  The assets and liabilities  were taken over at fair market value
as determined by management.

On June 3, 1996 the Company  acquired  100% of the common  stock of the business
combination of Piemans  Pantry  (Proprietary)  Limited and Surfs-Up  Investments
Limited for an aggregate net purchase price of $5,314,045.  The  acquisition was
accounted  for  using  the  purchase  method  of  accounting.   The  assets  and
liabilities were taken over at fair market value as determined by management.

On July 1, 1996 the  Company  acquired  100% of the common  stock of First Strut
(Proprietary)  Limited for an aggregate  net  purchase  price of $ 300,335 . The
acquisition  was  accounted  for using the purchase  method of  accounting.  The
assets and  liabilities  were taken over at fair market value as  determined  by
management.

On July 1, 1996 the Company  acquired the business and assets of Astoria  Bakery
CC and  100% of the  common  stock of  Astoria  Bakery  (Lesotho)  (Proprietary)
Limited for an aggregate net purchase price of $3,696,431.  The  acquisition was
accounted  for  using  the  purchase  method  of  accounting.   The  assets  and
liabilities were taken over at fair market value as determined by management.

On November 1, 1996 the company  acquired  100% of the common  stock of Seemanns
Meat Products (Proprietary) Limited and Hammer Street Investments  (Proprietary)
Limited for an aggregate net purchase price of $3,810,054.  The  acquisition was
accounted  for  using  the  purchase  method  of  accounting.   The  assets  and
liabilities were taken over at fair market value as determined by management.

On January 1, 1997 the company acquired the business and assets of Gull Foods CC
and  100% of the  common  stock of Trek  Biltong  (Proprietary)  Limited  for an
aggregate net purchase price of $5,293,079.  The  acquisition  was accounted for
using the purchase method of accounting.  The assets and liabilities  were taken
over at fair market value as determined by management.
                                                       Gull Foods Group
                                                                $
                                                       ----------------
Acquisition costs
    Stock in lieu of cash                                  1,312,910
    Cash consideration                                     3,980,169

Purchase price to be allocated                             5,293,079

Summary allocation of purchase price
    Current assets                                         2,105,052
    Property, plant and equipment                            640,824
    Recipes and other intangibles                          3,920,291
                                                           ---------


    Total assets acquired                                  6,666,167
       Current liabilities                                 1,146,049
       Long term debt                                        227,039

    Total liabilities assumed                              1,373,088
                                                           ---------
                                                           5,293,079
                                                           =========

                                        7
<PAGE>
FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued).

2.    Principle Activities of the Group
      ---------------------------------

The principle  activities of the group include the business of  manufacturing  ,
servicing and selling packaging machines,  receiving rental income,  manufacture
of  washers  for  use  in the  fastener  industry,  manufacture  and  supply  of
air-conditioning  products, and the manufacture,  sale and distribution of ready
to eat and  ready to bake off  pastry  related  food  products,  rye bread and a
limited number of confectionery items, manufacture,  packaging, and distribution
of fresh processed meat products, and manufacture, packaging and distribution of
specialized added value food products.

3.    Summary of Significant Accounting Policies
      ------------------------------------------

Unaudited Interim Financial Statements
--------------------------------------

The accompanying unaudited consolidated financial statements of the Company have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information  and in accordance with Article 10 of Regulation
S-X.  Accordingly,  they do not include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  Financial
Statements.  In the opinion of management,  the unaudited  interim  consolidated
financial  statements  contain all  adjustments,  consisting of normal recurring
accruals,  necessary to present fairly the financial  position of the Company at
December 31, 1996,  and the results of operations and cash flows for the periods
presented.  Results for the interim  periods are not  necessarily  indicative of
results to be expected for the full year. These financial  statements  should be
read in conjunction with the financial statements and notes included in the Form
10-K for the period ended June 30, 1996.

Principles of Consolidation
---------------------------

The  consolidated  financial  statements  include the  accounts of the Company ,
First South Africa Corp., Ltd. and its subsidiaries. All subsidiaries are wholly
owned and no minority interest exist. Material  inter-company  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
effect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial  statements,  disclosure  of contingent  liabilities  at the financial
statement date and reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

Earnings Per Share
------------------

Earnings  per share for the Company on common  shares is based on net income and
reflects dilutive effects of any stock options which exist at period end.

Intangible Assets
-----------------

Goodwill  resulting  from  acquisitions,  and  recipes  and  other  intellectual
property is being  amortized on a straight line basis over a period of twenty to
twenty five years. If facts and circumstances were to indicate that

                                        8
<PAGE>
FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued).

the carrying  amount of  goodwill,  recipes and other  intellectual  property is
impaired the  carrying  amount  would be reduced to an amount  representing  the
discounted future cash flows to be generated by the operation.  Also included in
intangible  assets  are non  competition  agreements  relating  to the  Europair
acquisition  which are being  amortized on a straight line basis over a 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 Company's operating subsidiaries 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  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.

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

Derivative Financial Instruments
--------------------------------

The Company  uses  derivative  financial  instruments  to reduce its exposure to
fluctuations in foreign exchange rates by creating offsetting  positions through
the use of  derivative  financial  instruments.  The market risk  related to the
foreign  exchange option is offset by changes in the valuation of the underlying
profits being hedged.

The option premium is accounted for on the accrual basis,  and is amortized over
the option terms. The notional amount of the option is the amount bought or sold
at maturity.  Notional  amounts are  indicative  of the extent of the  Company's
involvement in the use of derivative financial instruments and are not a measure
of  the  Company's  exposure  to  credit  or  market  risk  through  its  use of
derivatives.

Foreign assets and liabilities
------------------------------

Transactions in foreign currencies arise as a result of inventory purchases from
foreign   countries  and   inter-company   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.

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 50 years.

                                        9
<PAGE>
FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued).

Buildings,  plant and equipment,  and motor vehicles are written-off  over their
estimated useful lives to each asset's residual value.

The following rates are considered appropriate:
                                             Percentage
                                             ----------

               Buildings                          2%
               Plant and equipment               10-33%
               Motor vehicles                    20%
                                  
Income Taxes
------------

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

Fair Value of Financial Instruments
-----------------------------------

As of March 31,1997 the carrying value of accounts receivable,  accounts payable
and investments approximate their fair value.

Revenues
--------

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

4.    Stockholders' Equity
      --------------------

The  authorized  capital  stock  of the  Company  consists  of an  aggregate  of
23,000,000  shares  of Common  Stock,  par value  $.01 per  share  (the  "Common
Stock"), 2,000,000 shares of Class B Common Stock, par value $.01 per share (the
"Class B Common Stock"), and 5,000,000 shares of Preferred Stock, par value $.01
per share.

As of December  31,  1996 there were  1,842,500  shares of Class B Common  Stock
outstanding and 2,300,000 shares of Common Stock.

In connection with the Offering the Company has issued Unit Purchase  Options to
the  underwriter to purchase up to 200,000 Units  comprised of 200,000 shares of
the  Company's  Common Stock and 200,000  Class A Warrants  and 200,000  Class B
Warrants.  The Unit Purchase Options are exercisable  during the two year period
commencing  three years from the date of this Prospectus at an exercise price of
$6.00  per  unit  (120%  of  the  initial  public  offering  price)  subject  to
adjustments in certain events.

Holders of the Common Stock have one vote per share on each matter  submitted to
a vote of the  shareholders and a ratable right to the net assets of the Company
upon  liquidation.  Holders of the Common Stock do not have preemptive rights to
purchase  additional shares of Common Stock or other  subscription  rights.  The
Common Stock carries no conversion rights and is not subject to redemption or to
any sinking fund provisions.

The Class B Common Stock and the Common Stock are  substantially  identical on a
share-for-share basis, except that the holders of Class B Common Stock have five
votes per share on each matter considered by shareholders and the holders of the
Common Stock have one vote per share on each matter  considered by shareholders,
and except  that the  holders  of each class will vote as a separate  class with
respect  to any  matter  requiring  class  voting by The  Companies  Act 1981 of
Bermuda.


                                       10
<PAGE>
FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued).

Each share of Class B Common Stock is automatically  converted into one share of
Common  Stock upon the death of the  original  holder  thereof,  or, the sale or
transfer of such stock to the public.

As of March 31,  1997,  and as a result of the  Offering,  there were  2,300,000
Class A Warrants and Class B Warrants outstanding.

Each Class A Warrant  entitles  the  registered  holder to purchase one share of
Common Stock and one Class B Warrant,  at an exercise price of $6.50,  until the
fifth anniversary of the date of the Offering.

Each Class B Warrant  entitles  the  registered  holder to purchase one share of
Common Stock at an exercise  price of $8.75 per share at any time after issuance
until the fifth anniversary of the date of the Offering.

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

Included in the First South  Africa  Corp.,  Ltd Class B issued  Common Stock is
1,266,835  First South  African  Holdings  (Proprietary)  Limited Class B common
shares, in terms of this escrow agreement.

5.    Inventories
      -----------

   Inventories consist of the following

                                           March 31,           June 30,
                                                1997               1996
                                                   $                  $
                                          ----------         ----------

             Finished goods                3,352,278          2,077,679
             Work-in-progress                697,030            272,377
             Raw materials                 2,424,214            501,562
             Supplies                        588,279             93,055
                                          ----------         ----------
             Inventories (gross)           7,061,801          2,944,673
             Less: Valuation allowances     (400,238)          (433,805)
                                          ----------         ----------

             Inventories (net)             6,661,563          2,510,868
                                          ==========         ==========
                                                          
6.    Pro Forma Financial Information                   
      -------------------------------

The unaudited  pro forma  financial  information  tables below has been prepared
assuming that all of the acquisitions  noted under the  Organization  section of
this Form 10-Q had taken  place and that  operations  had  commenced  on July 1,
1995.
                                                 January 1, to      July 1, to
                                                   March 31,        March 31,
                                                        1996             1996
                                                           $                $
                                                  ----------       ----------
                                    
  Revenues                                        16,074,771       50,658,928
                                                  ----------       ----------
  Net income                                         688,343        2,522,001
                                                  ----------       ----------
                                                  
  Net profit per share                                  0.13             0.49
                                                  ----------       ----------
                                                  
  Weighted average number of shares outstanding    5,176,084        5,176,084
                                   
                                       11
<PAGE>
FIRST SOUTH AFRICA CORP., LTD

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

The unaudited pro forma  financial  information  of the Company has been derived
from the historical  financial  statements of Starpak,  LS Pressings,  Europair,
Piemans  Pantry,  Surfs-Up  Investments,  First  Strut  and the  Astoria  Group,
Seemanns Meat Products and Hammer  Street  Investments  and do not purport to be
indicative  of the  results  that  would  have  been  actually  obtained  if the
acquisitions  had  occurred  on July 1,  1995  nor is it  indicative  of  future
results.

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  subsidiary,  FSAH, has acquired seven South African companies
(collectively, the "Acquisitions" engaged in the following industry segments (I)
the manufacture of high-quality  plastic  packaging  machinery  through Starpak,
(ii) the  manufacture of washers for use in the fastener  industry  through L.S.
Pressings and its subsidiary Paper and Metal  Industries,  (iii) the manufacture
and supply of air conditioning and  refrigeration  products through Europair and
its subsidiary Europair Refrigeration, and (iv) the manufacture and distribution
of processed food products through Piemans Pantry, Astoria Bakery, Seemanns Meat
Products and Gull Foods. 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 of its Initial Public Offering  completed
in January 1996. 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  since the period ended
March 31, 1996 until March 31, 1997 was approximately 9.8%

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

<TABLE>
<CAPTION>
Three Months Ended     Three Months Ended       Nine Months Ended     Nine Months Ended
    March 31, 1996         March 31, 1997          March 31, 1996        March 31, 1997
    --------------         --------------          --------------        --------------

<S>      <C>               <C>   <C>              <C>   <C>              <C>   <C> 
   $1 = R3.84              $1 = R4.49             $1 = R3.72             $1 = R4.52

   Depreciation of            16.9%                                         21.5%
</TABLE>

Based on these figures,  in evaluating  the comparable  sales and income numbers
for the Company for the three months ended March 31, 1997 versus the  comparable
periods in 1996;  the  depreciation  of the South  African Rand against the U.S.
Dollar was far higher than the South African rate of inflation. As a result, the
increase in sales and profits  for the three and six month  periods  ended March
31,  1997  versus  the  comparable  period in 1996 was  generated  through a net
increase in the sales and earnings of the Company's operating businesses.
 Based on the approximate  difference between the rate of inflation and the Rand
depreciation  against the U.S. dollar, the Company had to generate more than 7 %
in  inflation-adjusted  Rand growth for the three month  period  ended March 31,
1997 and more than 11 % in  inflation-adjusted  Rand  growth  for the nine month
period  ended  March 31,  1997,  in order to report  sales and  profits  in U.S.
dollars greater than those in the comparable periods in 1996.


                                       12

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)


Three Months Ended March 31, 1997 Compared to Three Months Ended March 31, 1996

Sales  for the  three  months  ended  March 31,  1997  were  $18,729,799  versus
$4,186,375 for the comparable  period in 1996. This increase is primarily due to
the  acquisitions  the Company has completed  since its IPO on January 24, 1996.
All results for the three  months  ended March 31, 1996 relate to the results of
L.S. Pressings, Starpak and Europair alone.

Cost of goods sold for the three months ended March 31, 1997 were $10,491,146 or
56 % of sales versus $ 2,577,859 or 61.6%,  for the  comparable  period in 1996.
This  decrease in the  percentage  of cost of goods sold is primarily due to the
lower cost of goods  percentage  associated  with the Company's  processed  food
operations.

Sales,  general and  administrative  costs were  $6,809,021 for the three months
ended  March 31, 1997 or 33.6% of sales  versus  $1,455,540  for the  comparable
period in 1996 or 34.7% of sales.

Interest expenses were $195,879 for the three months ended March 31, 1997 versus
$100,562  for  the  comparable   period  in  1996.  The  increase  is  primarily
attributable to the increase in the Company's bank borrowings and long term debt
for the nine months ended March 31, 1997 as compared to the comparable period in
1996.  The  Company's  new  acquisitions  carry  debt  primarily  related to the
financing of their plant and equipment.  In addition,  the Company's subsidiary,
First  South  African  Holdings,  borrowed  approximately  $1,100,000  which  it
utilized as a portion of its acquisition costs.

Other  income for the three  months  ended  March 31,  1997 was  $88,920  versus
$104,211 in the comparable  period in 1996. This is primarily made up of rebates
and other supplier discounts paid to the Company's operating subsidiaries.

Net profit for the three month period ended March 31, 1997, $1,146,098 or a gain
of $.23 a share as  compared  to a net loss of  $139,820  or $.12 a share in the
comparable period in 1996. For purposes of its earning per share calculation for
the three  months  ended  March 31,  1997,  the  Company  had  5,090,062  shares
outstanding  (  includes   1,033,583  shares  to  be  issued  in  fulfilment  of
acquisition  agreements  entered into during the past six  months)as  opposed to
1,209,349 for comparable period in 1996.

Nine Months Ended March 31, 1997 Compared to Nine Months Ended March 31, 1996

Sales  for the  nine  months  ended  March  31,  1997  were  $44,536,940  versus
$13,406,104 for the comparable period in 1996. This increase is primarily due to
the  acquisitions  the Company has completed  since its IPO on January 24, 1996.
All results  for the nine  months  ended March 31, 1996 relate to the results of
L.S.
Pressings, Starpak, and Europair alone.

Cost of goods sold for the six months ended March 31, 1997 were $24,543,952,  or
55.1 % of sales versus $ 8,128,789 or 60.6%, for the comparable  period in 1996.
This  decrease in the  percentage  of cost of goods sold is primarily due to the
lower cost of goods  percentage  associated  with the Company's  processed  food
operations.

Sales,  general and  administrative  costs were  $16,050,703 for the nine months
ended March 31, 1997 or 36% of sales versus $4,274,943 for the comparable period
in 1996 or 31.9% of sales.  This  increase can  primarily be  attributed  to the
increased ratio of sales costs to revenues generated in the Company's  processed
food  operations  as opposed to the  manufacturing  operations  of the Company's
predecessor,  as  well as  general  and  administrative  costs  incurred  by the
Company's  corporate  offices  during the nine months ended March 31, 1997 which
were not incurred in the comparable period in 1996.


                                       13

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Interest  expenses were $770,087 for the nine months ended March 31, 1997 versus
$777,004 for the comparable  period in 1996.  The interest  expense for the nine
months  ended March 31, 1996  includes a one time  interest  expense of $418,167
related  to the  interest  charged  to the  Company  as a result  of its  Bridge
Financing  transaction which took place in November 1995. The operating interest
expenses of the Company's  subsidiaries has increased from $358,837 to $770,087.
The increase is primarily  attributable  to the increase in the  Company's  bank
borrowings  and long  term debt for the nine  months  ended  March  31,  1997 as
compared to the comparable period in 1996. The Company's new acquisitions  carry
debt  primarily  related  to the  financing  of their  plant and  equipment.  In
addition  ,the  Company's  subsidiary,  First South African  Holdings,  borrowed
approximately  $1,100,000  which it  utilized  as a portion  of its  acquisition
costs.

Other  income for the nine  months  ended  March 31,  1997 was  $599,521  versus
$269,292 in the comparable  period in 1996. This is primarily made up of rebates
and other supplier discounts paid to the Company's operating subsidiaries.

Net profit for the nine month period ended March 31, 1997,  was  $2,972,589 or a
gain of $.61 a share as  compared  to a net loss of  $198,174 or $.16 a share in
the comparable period in 1996. For purposes of its earning per share calculation
for the nine months  ended March 31,  1997,  the  Company had  4,902,280  shares
outstanding  (  includes   1,033,583  shares  to  be  issued  in  fulfilment  of
acquisition  agreements  entered into during the past six  months)as  opposed to
1,209,349 for the comparable period in 1996.

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

The  Consolidated  Balance  Sheet as at, March 31,  1997,  shows cash on hand of
$2,245,322  of which  $2,162,918  was held by the  operating  subsidiaries.  The
remainder  reflects  cash on hand from the net proceeds  realized by the Company
from its IPO in January 1996.

The  Company's   consolidated  working  capital  as  at,  March  31,  1997,  was
$1,632,720.  As at March 31, 1997, the Company had a total of $8,237,937 in bank
debt of which $3,944,255 was classified as current of which $2,941,899 reflected
bank  overdrafts  payable under the Company's  operating  subsidiaries'  working
capital lines of credit.

Cash flows provided by operating  activities for the nine months ended March 31,
1997 and March 31, 1996,  totaled  $6,180,417 and $416,092,  respectively.  Cash
flows used in investing  activities  for the six months ended March 31, 1997 and
March 31, 1996 totaled  $10,172,593  and  $500,443,  respectively.  For the nine
months  ended March 31, 1997  $7,935,813  was utilized  for the  acquisition  of
subsidiaries.  In the  comparable  period  in 1996  net cash  used in  investing
activities  was  primarily  attributable  to the  purchase  of assets.  Net cash
provided by financing  activities was ($1,488,837)  during the nine months ended
March 31, 1997 while $8,169,324 was provided in the corresponding  period in the
prior year.  This decrease in the net cash  provided by financing  activities is
primarily attributable to the fact that the Company completed its initial public
offering in 1996 during the period in question.

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,  while the Company has primarily  utilized the net
proceeds of its initial public offering to acquire subsidiaries in South Africa.
The Company's operating  subsidiaries have budgeted  approximately  $850,000 for
capital  expenditures  during the current fiscal year ended June 30, 1997. It is
management's  belief  that  capital  expenditures  will  continue  to be  met by
internal cash flow and bank  borrowings.  The Company's  operating  subsidiaries
engage in certain hedging transactions

                                       14

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

with  respect  to certain  overseas  purchases  in order to lock in a  specified
exchange  rate.  In  addition , in May 1996,  the  Company,  through  Swiss Bank
Corporation, purchased a 12 month option to acquire the equivalent of $5 million
in South  African  Rand at the  strike  price of Five Rand to the  Dollar.  This
option  has the  effect of hedging  $5  million  of the  Company's  fiscal  1997
earnings,  in the event the exchange  rate of the South African Rand falls below
this strike  price.  The cost of such option was  approximately  $150,000 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.

PART II - OTHER INFORMATION

Item 5.    SUBSEQUENT EVENTS

On April 21, 1997,  the Company  announced  that the first  tranche of a private
placement  consisting of seven year senior subordinated  convertible  debentures
paying  interest  of 9% per  annum on a  quarterly  basis  had  been  completed.
Conversion  price is $6.00 per share and the  debentures  are callable after one
year if First South  Africa's  common stock trades at more than $9.00 per share.
The  offering,  which  expires May 31, 1997,  can raise up to $10  million.  The
placement  agent for this financing is Value Investing  Partners,  Inc. To date,
the Company has received  subscriptions  for $5.375 million of these debentures.
The Company  anticipates that it will ultimately raise between $6 million to $10
million in this debenture placement.

On April 23, 1997, the Company  announced that its wholly owned subsidiary First
SA Food Holdings (Pty) Ltd had acquired the business of Gull Foods (Pty) Ltd., a
manufacturer  of a broad range of fine quality value added prepared  foods.  The
terms of the  acquisition  call for an  initial  payment of  approximately  $3.1
million in cash and 245,000 shares of common stock.  Three additional  payments,
the value of which are contingent upon future performance shall be made over the
next  three  years.  During  its  last  fiscal  year,  Gull  generated  sales of
approximately $10.5 million.

On April 29,  1997,  the Company  announced  that its  subsidiary  First SA Food
Holdings (Pty) Ltd. comprising all its food related interests, will be listed on
the  Johannesburg  Stock  Exchange in early June 1997.  First South Africa Corp.
intends  to sell a 30% stake in this  subsidiary  and  anticipates  that it will
raise approximately $17 million.


                                       15

<PAGE>
Item 6.    EXHIBITS AND REPORTS ON FORM 8-K

The Company  filed an amended Form 8-K/A with the  Commission on March 14, 1997.
This form was an  amendment  to the Form 8-K filed on  October  24,  1996  which
stated that First South Africa Corp.,  Ltd., through its wholly owned subsidiary
corporation,  First  South  African  Holdings  (Pty) ltd.,  acquired  all of the
outstanding  stock and assets of Astoria  Bakery CC and Astoria  Bakery  Lesotho
(Pty) Ltd.

The following financial statements were filed with the above-referenced 8-K/A:

     (a)  Financial Statements of Business Acquired

          Financial  statements of Astoria Bakery CC ("ABCC") and Astoria Bakery
          Lesotho (Proprietary) Limited ("ABL"):

          (i)  Unaudited Combined Balance Sheet at June 30, 1996;
          (ii) Unaudited Combined Statements of Income for the four months ended
               June 30, 1996 and 1995;
          (iii)Unaudited  Combined  Statements of Cash Flows for the four Months
               ended June 30, 1996 and 1995;
          (iv) Notes to the Unaudited Combined Financial Statements for the four
               months ended June 30, 1996 and 1995;
          (v)  Audited Combined Balance Sheet at February 29, 1996;
          (vi) Audited  Combined  Statements  of  Income  for  the  years  ended
               February 29, 1996 and February 28, 1995;
          (vii)Audited  Combined  Statements  of Cash Flows for the years  ended
               February 29, 1996 and February 28, 1995;
          (viii)  Audited  Combined   Statements  of  Changes  in  Stockholders'
               Investment for the years ended February 29, 1996 and February 28,
               1995; and
          (ix) Notes to the Audited Combined Financial  Statements for the years
               ended February 29, 1996 and February 28, 1995.

     (b)  Pro Forma Financial Information

          Provided  herein  on pages  F-15 to F-17 are the  following  pro forma
          consolidated  financial statements for First South Africa Corp., Ltd.,
          ABCC and ABL:

          (i)  Unaudited Pro Forma Consolidated Balance Sheet at June 30, 1996;
          (ii) Unaudited Pro Forma Consolidated Statement of Income for the year
               ended June 30, 1996; and
          (iii)Notes to  Unaudited  Pro Forma  Balance  Sheet and  Statement  of
               Income for the year ended June 30, 1996.

                                       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.

Date: May 14, 1997

                             FIRST SOUTH AFRICA., LTD.


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