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, 1996

                                                                  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 II, Bermuda
             (Address of Principal Executive Offices with Zip Code)

        Registrant's Telephone Number, Including Area Code: 441-295-1422


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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.           Yes [X]     No [_]


The number of shares of common  stock  outstanding  as of November  12, 1996 was
4,142,500,  consisting of 2,300,000  shares of Common Stock and 1,842,500 shares
of Class B Common Stock.




<PAGE>

                         FIRST SOUTH AFRICA CORP., LTD.

                                    FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 1996


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, 1996 and 1995 - Unaudited                    4

             Consolidated Statements of Cash Flows for the three months
             ended September 30, 1996 and 1995 - Unaudited                    5

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

             Notes to the Combined Financial Statements                    7-13

Item 2.      Management's Discussion and Analysis of Financial
             Condition and Results of Operation                           14-16


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
(UNAUDITED)


                                                September 30,     June 30,
                                                    1996           1996
                                                      $              $
                                                 -----------    -----------
ASSETS

Current assets

   Cash on hand                                    5,292,754      4,682,035

   Receivables                                     7,635,131      5,833,542

   Less: Allowances for bad debts                   (397,882)      (402,333)
                                                 -----------    -----------
                                                   7,237,249      5,431,209

Inventories (net)                                  3,780,136      2,510,868

Prepaid expenses and other current assets          1,586,463        451,551
                                                 -----------    -----------

         Total current assets                     17,896,602     13,075,663

Property, plant and equipment                     10,477,089      9,000,334

Less: Accumulated depreciation                    (2,252,136)    (2,119,912)
                                                 -----------    -----------

                                                   8,224,953      6,880,422

Goodwill                                             435,981        408,541
Recipes and other intellectual property            5,155,407      2,848,532
Other assets                                         265,264        318,286
Deferred income taxes                                 85,238         73,550
                                                 -----------    -----------

                                                  32,063,445     23,604,994
                                                 ===========    ===========

LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities


      Current portion of long term debt               99,138      2,101,799
      Bank overdraft and factoring facility        3,233,407        745,724
      Trade accounts payable                       2,772,658      2,162,257
      Other provisions and accruals                4,790,611      1,923,371
      Income taxes payable                         1,779,828      1,518,095
                                                 -----------    -----------

         Total current liabilities                12,675,642      8,451,246

      Long term debt                               5,115,962      2,361,372

         Total liabilities                        17,791,604     10,812,618

Stockholder's investment

      Common stock                                    41,748         41,701
      Capital in excess of par                    19,558,560     18,518,986
      Retained earnings                           (3,058,272)    (3,887,407)
      Foreign currency translation adjustments    (2,277,502)    (1,888,211)
      Income restricted as to distribution             7,307          7,307
                                                 -----------    -----------

                                                  32,063,445     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
SEPTEMBER 30, 1996 AND 1995


                                                 Company Predecessor(1)
                                               September      September 
                                               30, 1996       30, 1995
                                                   $              $
                                              -----------    -----------

REVENUES                                       11,690,884      2,930,544
                                              ===========    ===========

Operating expenses

Cost of sales                                   6,213,717      1,712,944

Selling, general and administrative expense     4,254,284        722,886
                                              -----------    -----------
                                               10,468,001      2,435,830

OPERATING  INCOME                               1,222,883        494,714

Other income                                      199,909           --

Interest expense                                 (215,087)       (68,956)
                                              -----------    -----------

Income before income taxes                      1,207,706        425,758

Provision for taxes on income                    (378,571)      (149,015)
                                              -----------    -----------

NET INCOME                                        829,135        276,743
                                              ===========    ===========

Net profit per share                                  .18            .33

Weighted average number
of shares outstanding                           4,679,356        842,500


--------
(1)        The  consolidated  statement  of income  for the three  months  ended
           September  30, 1995  reflects the combined  operations of Starpak and
           L.S. Pressings, the "predecessor companies" (see notes).


                                        4

<PAGE>

FIRST SOUTH AFRICA CORP., LTD

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                  Company Predecessor
                                                              September 30,  September 30,
                                                                  1996          1995
                                                                   $             $
                                                               ----------    ----------
<S>                                                             <C>           <C>
Cash flows from operating activities:

Net income                                                        829,135       276,743

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

   Depreciation                                                   230,856        58,739
   Amortization of other assets                                   104,022          --
   Deferred income taxes                                          (11,688)           23
   Effect of changes in assets and liabilities                    904,731      (309,554)
                                                               ----------    ----------

Net cash provided by operating activities                       2,057,056        25,951
                                                               ----------    ----------


Cash flows from investing activities:

Net additions to property, plant and equipment                   (144,745)     (111,458)
Other assets (acquired)/disposed                                  (44,854)       15,858
Increase in loans to related companies                               --          (3,761)
Acquisition of subsidiaries (net cash of $238,279)             (2,673,865)         --
                                                               ----------    ----------

Net cash used in investing activities                          (2,863,464)      (99,361)
                                                               ----------    ----------


Cash flows from financing activities:

Net borrowings in bank overdrafts                               2,049,273       (57,211)
Net borrowings of long term debt                                1,365,585        74,854
Net repayments in loans from related companies                       --            (584)
Net repayment in short term debt                               (2,002,662)      (31,374)
Common stock issue                                                   --          12,125
                                                               ----------    ----------
Net cash provided by financing activities                       1,412,196        (2,190)
                                                               ----------    ----------
Effect of exchange rate changes on cash                             4,931        (2,407)
                                                               ----------    ----------
Net increase/(decrease) in cash on hand                           610,719       (78,007)
Cash on hand at beginning of period                             4,682,035       744,251
                                                               ----------    ----------
Cash on hand at end of period                                   5,292,754       666,244
                                                               ==========    ==========
</TABLE>

The  consolidated  statements of cash flow for the three months ended  September
30, 1995  reflects  the  combined  cash flows of Starpak and LS  Pressings,  the
predecessor companies.


                                        5

<PAGE>

FIRST SOUTH AFRICA CORP., LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT
FOR THE PERIOD JUNE 30, 1995 TO SEPTEMBER 30, 1996


<TABLE>
<CAPTION>
                                         Capital stock
                                          First South                                  Income       Foreign
                                          Africa Corp.,  Capital in     Retained    restricted as   Currency
                                              Ltd.      excess of par   earnings         to        Translation
                                               $             $             $        distribution   Adjustments       Total
                                          -----------   -----------   -----------    -----------   -----------    -----------
<S>                                            <C>       <C>           <C>                 <C>      <C>            <C>       
Balance at June 30, 1995                       41,701    18,518,986    (3,887,407)         7,307    (1,888,211)    12,792,376
Issuance of stock to acquire subsidiary
companies                                          47     1,039,574          --             --            --        1,039,621
Net profit for the period                        --            --         829,135           --            --          829,135
Translation adjustment                           --            --            --             --        (389,291)      (389,291)
                                          -----------   -----------   -----------    -----------   -----------    -----------

Balance at September 30, 1996                  41,748    19,558,560    (3,058,272)         7,307    (2,277,502)    14,271,841
                                          ===========   ===========   ===========    ===========   ===========    ===========
</TABLE>



                                        6

<PAGE>



FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996

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

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

                                                 First Strut (Pty) Ltd
                                                           $
                                                       ---------

                Acquisition costs
                    Stock in lieu of cash                115,513
                    Cash consideration                   184,822
                                                       ---------
                Purchase price to be allocated           300,335
                                                       =========

                Summary allocation of purchase price
                    Current assets                       512,927
                    Property, plant and equipment        501,260
                                                       ---------
                Total assets acquired                  1,014,187
                                                       ---------
                    Current liabilities                  457,349
                    Long term debt                       256,503

                Total liabilities assumed                713,852
                                                       ---------
                                                         300,335
                                                       =========


                                        7

<PAGE>



FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued).

On July 1, 1996 the Company  acquired  100% of the common  stock of the business
combination  of Astoria  Bakery CC and 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.

                                                        Astoria Group
                                                              $
                                                          ---------
            Acquisition costs
                Stock in lieu of cash                       924,108
                Cash consideration                        2,772,323
                                                          ---------

            Purchase price to be allocated                3,696,431
                                                          =========

            Summary allocation of purchase price
                Current assets                            2,226,304
                Property, plant and equipment             1,053,208
                Recipes and other intellectual property   2,603,269
                Goodwill                                      7,586
                                                          ---------

            Total assets acquired                         5,890,367
                                                          ---------
                Current liabilities                       1,061,434
                Long term debt                            1,132,502
                Income restricted as to distribution        352,282
                                                          ---------

            Total liabilities assumed                     2,193,936
                                                          ---------

                                                          3,696,431
                                                          =========

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.

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
September 30, 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.

                                        8

<PAGE>



FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued).

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 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:

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

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

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

*   The  resultant  translation  adjustments  are  reported in the  component of
    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

                                        9

<PAGE>



FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued).

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 estimate useful live of 50 years.

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.



                                       10

<PAGE>



FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued).


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

As of June 30,1996 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  consist  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  September  30, 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  January 24, 1999 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.

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 September 30, 1996, and as a result of the Offering,  there were 2,300,000
Class A Warrants and 2,300,000 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.

                                       11

<PAGE>



FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued).


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 such 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
holder of the Class B Common  Stock in  exchange  for the 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 common stock.

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
stock, in terms of this escrow agreement.

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

   Inventories consist of the following

                                         September 30,    June 30,
                                             1996          1996
                                               $             $
                                          ----------    ----------

             Finished goods                2,959,528     2,077,679
             Work-in-progress                387,985       272,377
             Raw materials                   714,444       501,562
             Supplies                        132,551        93,055
                                          ----------    ----------
             Inventories (gross)           4,194,508     2,944,673
             Less: Valuation allowances     (414,372)     (433,805)
                                          ----------    ----------

             Inventories (net)             3,780,136     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.

                                                            July 1, to
                                                       September 30, 1995
                                                                $
                                                           ----------

           Revenues                                        11,419,998
                                                           ----------
           Net income                                         887,732
                                                           ----------
           Net profit per share                                  0.19
                                                           ----------
           Weighted average number of shares outstanding    4,679,356
                                                           ----------



                                       12

<PAGE>



FIRST SOUTH AFRICA CORP., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued).


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 and do
no 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.























                                       13

<PAGE>



FIRST SOUTH AFRICA CORP., LTD

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  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 and Astoria  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 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
September 30, 1995 until September 30, 1996 was approximately 7.5%

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

               Three Months Ended                Three Months Ended
               September 30, 1995                September 30, 1996
               ------------------                ------------------

                   $1 = R3.65                        $1 = R4.49


                 Depreciation of                          23%


Based on these figures,  in evaluating  the comparable  sales and income numbers
for the  Company  for the three  months  ended  September  30,  1996  versus the
comparable  periods in 1995; in the last 12 months 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 month
period  ended  September  30,  1996  versus  the  comparable  period in 1995 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 15.5% in inflation  adjusted  Rand growth in order to report
sales and profits in U.S. dollars greater than those in the comparable period in
1995.

THREE MONTHS ENDED  SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED  SEPTEMBER
30, 1995

Sales for the three  months ended  September  30, 1996 were  $11,690,884  versus
$2,930,544 for the comparable  period in 1995. This increase is primarily due to
the  acquisitions  the Company has  completed  since its Offering on January 24,
1996.  All results for the three months ended  September  30, 1995 relate to the
results of L.S.  Pressings and Starpak alone. These two companies are considered
the Company's predecessor.

Cost of  goods  sold  for  the  three  months  ended  September  30,  1996  were
$6,213,717,  or 53.1% of sales versus $ 1,712,944 or 58.4%,  for the  comparable
period  in 1995.  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  $4,254,284 for the three months
ended  September 30, 1996 or 36.4% of sales versus  $722,886 for the  comparable
period in 1995 or 24.7% of sales.  This  increase can primarily be attributed to
the  increased  ratio of sales  costs to  revenues  generated  in the  Company's
processed food

                                       14

<PAGE>



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

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 three months ended  September 30, 1996
which were not incurred in the comparable period in 1995.

Interest  expenses were  $215,087 for the three months ended  September 30, 1996
versus  $68,956 for the  comparable  period in 1995.  This increase is primarily
attributable to the increase in the Company's bank borrowings and long term debt
for the three  months  ended  September  30, 1996 as compared to the  comparable
period in 1995. 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  September 30, 1996 was $199,909  versus
$0 in the  comparable  period in 1995.  This is  primarily  made up of  interest
earned  by the  Company  and its South  African  operating  subsidiaries  on its
positive cash balances.

Net profit for the three month period ended  September 30, 1996, was $829,135 or
$.18 a share as  compared  to a net  profit of  $276,743  or $.33 a share in the
comparable period in 1995. For purposes of its earning per share calculation for
the three months ended  September  30, 1996,  the Company had  4,679,355  shares
outstanding  (including 536,855 shares to be issued in fulfilment of acquisition
agreements  entered into during the past six months)as opposed to 842,500 shares
for the comparable period in 1995.

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

The  Consolidated  Balance Sheet as at September 30, 1995, shows cash on hand of
$5,292,754  of  which  $820,356  was  held by the  operating  subsidiaries.  The
remainder  reflects cash on hand from the net proceeds of the Offering  realized
by the Company.

The  Company's  consolidated  working  capital as at  September  30,  1996,  was
$5,220,960.  As at September 30, 1996,  the Company had a total of $8,448,507 in
bank debt of which  $3,332,545  was  classified  as current of which  $3,233,407
reflected bank overdrafts  payable under the Company's  operating  subsidiaries'
working capital lines of credit.

Cash flows provided by operating activities for the three months ended September
30, 1996 and September 30, 1995, totaled  $2,057,056 and $25,951,  respectively.
Cash flows used in investing activities for the three months ended September 30,
1996 and September 30, 1995 totaled  $2,863,464 and $99,361,  respectively.  For
the three  months ended  September  30,  1996,  $2,673,865  was utilized for the
acquisition of subsidiaries.  In the comparable period in 1995, net cash used in
investing activities was primarily attributable to the purchase of assets and an
increase  in  loans  to  related  companies.  Net  cash  provided  by  financing
activities was $1,412,096  during the three months ended September 30, 1996, and
$2,190 was utilized in the corresponding period in the prior year. This increase
in the use of cash from  financing  activities is primarily  attributable  to an
increase in net borrowing of long term debt.

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 the 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  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

                                       15

<PAGE>



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

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 6.    EXHIBITS AND REPORTS ON FORM 8-K

On  August  16,  1996 the  Company  filed an  Amendment  to Form 8-K  which  was
originally filed on June 11, 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: November 14, 1996

                                     FIRST SOUTH AFRICA., LTD.


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

























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