<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                               ------------------







                                    FORM 10-Q

(Mark One)

|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: 811-854

                              IIC Industries, Inc.
-------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

            Delaware                                      13-567594
---------------------------------             ---------------------------------
(State of Other Jurisdiction of                     (IRS Identification
 Incorporation or Organization)                           Number)

420 Lexington Avenue; New York, N.Y.                       10170
 ---------------------------------            ---------------------------------
(Address of Principal Executive Offices)                 (Zip Code)


Registrant's Telephone Number, Including Area Code: (212) 297-6132

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 1,423,368 shares of common
stock outstanding at April 30, 1997.


<PAGE>



                              FINANCIAL INFORMATION



FINANCIAL STATEMENTS


                                                                           Page

              Consolidated Balance Sheets
              at March 31, 1997
              and December 31, 1996                                           3

              Consolidated Statements of Income
              for the Three Months Ended March 31,
              1997 and March 31, 1996                                         5

              Consolidated Statement of Cash Flows
              for the Three Months Ended March 31,
              1997 and March 31, 1996                                         6

              Notes to Consolidated Financial
              Statements                                                      7

                                      -2-
<PAGE>



                      IIC Industries, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
                (dollar amounts in thousands, except share data)

<TABLE>
<CAPTION>





                                                        March 31,   December 31,
                     ASSETS                                1997         1996
                                                        -----------  ---------
<S>                                                       <C>           <C>
CURRENT ASSETS
    Cash and cash equivalents                             $ 18,955      $ 17,211
    Accounts receivable, net                                42,753        43,400
    Advances to subcontractors                                 282           282
    Inventories (Note C)                                    53,177        61,178
    Other current assets                                     5,600        10,561
                                                          --------      --------

         Total current assets                              120,767       132,632

RESTRICTED CASH                                              4,017         8,356

PROPERTY AND EQUIPMENT, NET                                 32,429        33,630

INVESTMENTS IN AND ADVANCES TO AFFILIATES                   23,821        26,525

OTHER INVESTMENTS                                              547           555

OTHER ASSETS                                                 4,460         1,858
                                                          --------      --------

                                                          $186,041      $203,556
                                                          ========      ========



</TABLE>








The accompanying notes are an integral part of these statements.


                                      -3-
<PAGE>


                      IIC Industries, Inc. and Subsidiaries

                     CONSOLIDATED BALANCE SHEETS (continued)
                                   (unaudited)
                (dollar amounts in thousands, except share data)



<TABLE>
<CAPTION>

                                                         March 31,      December 31,
     LIABILITIES AND STOCKHOLDERS' EQUITY                  1997             1996
                                                       -----------       ---------

<S>                                                     <C>             <C>
CURRENT LIABILITIES 
    Accounts payable                                    $  25,298       $  20,554
    Bank loans                                             26,967          35,750
    Current maturities of long-term debt                       47              88
    Accrued expenses and other payables                    12,044          18,083
    Advances from customers                                 7,991          10,693
                                                        ---------       ---------

         Total current liabilities                         72,347          85,168

LONG-TERM DEBT, less current portion                        2,098           2,160

DUE TO AFFILIATES                                           1,922           1,850

OTHER LIABILITIES AND DEFERRED
    CREDITS                                                 5,262           5,854

MINORITY INTEREST IN SUBSIDIARIES                          18,360          20,494
                                                        ---------       ---------

                                                           99,989         115,526

CONTINGENCIES (Note D)

STOCKHOLDERS' EQUITY
    Common stock, $1.00 par value per share;
       authorized 1,800,000 shares; issued
       1,585,806 shares                                     1,586           1,586
    Additional paid-in capital                             22,941          22,941
    Retained earnings                                      92,350          92,053
    Foreign translation adjustment                        (28,100)        (25,825)
    Less treasury stock - at cost (162,438 shares)         (2,725)         (2,725)
                                                        ---------       ---------

                                                           86,052          88,030
                                                        ---------       ---------

                                                        $ 186,041       $ 203,556
                                                        =========       =========
</TABLE>


The accompanying notes are an integral part of these statements.

                                      -4-
<PAGE>


                      IIC Industries, Inc. and Subsidiaries

                        CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
                (dollar amounts in thousands, except share data)

<TABLE>
<CAPTION>



                                                             Three months ended March 31,
                                                                 1997              1996
                                                                 ----              ----

<S>                                                       <C>               <C>    
Net sales                                                 $    60,441       $    59,498
Cost of sales                                                  48,354            45,540
                                                          -----------       -----------

         Gross profit                                          12,087            13,958

Selling, general and administrative expenses                   11,321            11,661
                                                          -----------       -----------

         Operating income                                         766             2,297
                                                          -----------       -----------

Other income (expenses)
    Interest income                                               540               945
    Equity in (loss) earnings of affiliates                      (516)              427
    Foreign currency loss (Note B)                                (87)             (408)
    Gain on sale of noncurrent assets, net                      1,501                72
    Interest expense                                           (1,709)             (915)
    Other, net                                                    291               160
                                                          -----------       -----------


         Income before income taxes and
             minority interest                                    786             2,578

Income taxes                                                     (753)             (511)
                                                          -----------       -----------

         Income before minority interest                           35             2,067

Minority Interest                                                 262              (313)
                                                          -----------       -----------

         NET INCOME                                       $       297       $     1,754
                                                          ===========       ===========

Net income per common share                                    $ 0,21       $      1.23
                                                          ===========       ===========

Weighted average number of common shares outstanding        1,423,368         1,423,368
                                                          ===========       ===========
</TABLE>



The accompanying notes are an integral part of these statements.



                                      -5-
<PAGE>



                      IIC Industries, Inc. and Subsidiaries


                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

                          (dollar amounts in thousands)


<TABLE>
<CAPTION>



                                                               Three months ended March 31,

                                                                     1997           1996
                                                                     ----           ----


<S>                                                                <C>            <C>
Net cash provided by operating activities                          $  4,803       $  9,478
                                                                   --------       --------

Cash flows from investing activities
    Purchase of property and equipment                                 (900)        (1,806)
    Purchase of investments                                             (79)        (2,729)
    Proceeds on disposal of property and equipment                      113             22
    Proceeds on disposal of investments                                   3            375
    Restricted cash                                                   4,339            408
                                                                   --------       --------
         Net cash provided by (used in) investing activities          3,476         (3,730)
                                                                   --------       --------

Cash flows from financing activities
    Issuance of long-term debt                                           30             26
    Net payments of short-term bank loans                            (6,232)        (6,505)
                                                                   --------       --------
         Net cash used in financing activities                       (6,202)        (6,479)

Effect of exchange rate on cash                                        (333)          (410)
                                                                   --------       --------
         Net increase (decrease) in cash and cash equivalents
           during the period                                          1,744         (1,141)
Cash and cash equivalents at beginning of period                     17,211         19,414
                                                                   --------       --------
Cash and cash equivalents at end of period                         $ 18,955       $ 18,273
                                                                   ========       ========
Supplemental disclosure of cash flow information:
    Cash paid during the period for
       Interest                                                    $  1,361       $  1,039
       Income taxes                                                     828          1,574
</TABLE>





The accompanying notes are an integral part of these statements.

                                      -6-
<PAGE>



                      IIC Industries, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)



NOTE A - BASIS OF PRESENTATION

     The consolidated financial statements included herein which have been
     prepared by the Company, without audit, pursuant to the rules and
     regulations of the Securities and Exchange Commission, include the
     accounts of IIC Industries Inc. and all material majority-owned
     subsidiaries (collectively the "Company"). All material intercompany
     transactions and balances have been eliminated. Certain information and
     footnote disclosures normally included in financial statements prepared
     in accordance with generally accepted accounting principles have been
     condensed or omitted pursuant to such rules and regulations.

     In the opinion of management, the consolidated financial statements
     contain all adjustments which are those of a normal recurring accrual
     nature and disclosures necessary to present fairly the financial
     position of the Company as of March 31, 1997 and December 31, 1996 and
     the results of operations and cash flows for the three months ended
     March 31, 1997 and March 31, 1996.


NOTE B - FOREIGN CURRENCY TRANSLATION

     Investor Rt ("Investor"), a majority-owned subsidiary, uses the local
     currency, the Hungarian forint, as its functional currency and translates
     all assets and liabilities at year-end exchange rates, all income and
     expense accounts at average rates and records adjustments resulting from
     the translation in a separate component of shareholders' equity.

     The Israel Tractors and Equipment Company Limited ("Israel Tractor"), a
     wholly-owned subsidiary, uses the US dollar as the functional currency,
     since the dollar is the currency in which most of the significant
     business of Israel Tractor is conducted, or to which it is linked. Balton
     C.P. Limited ("Balton"), a majority-owned subsidiary, uses the US dollar
     as the functional currency, since the African subsidiaries operate in
     hyperinflationary economies. These subsidiaries translate monetary assets
     and liabilities at historical rates. Income and expense accounts are
     translated at the rate of exchange prevailing at the date of transaction,
     except that depreciation is translated at historical rates. Adjustments
     resulting from the translation of these entities are included in results
     of operations.

     Transactions arising in a foreign currency are translated into the
     functional currency at the rate of exchange effective at the date of the
     transaction and gains or losses are included in results of operations.


                                      -7-
<PAGE>


                      IIC Industries, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                   (unaudited)



NOTE C - INVENTORIES
<TABLE>
<CAPTION>

     Inventories are as follows:

                                            March 31,            December 31,
                                               1997                    1996
                                               ----                    ----

          <S>                               <C>                    <C>      
          Raw materials                     $15,059                  $23,127
          Work-in-progress                      489                      452
          Finished goods                     37,629                   37,599
                                             ------                   ------

                                            $53,177                  $61,178
                                            =======                  =======
</TABLE>


NOTE D - CONTINGENCIES

     The Company has given a guarantee to the bankers of Balton amounting to
     $1.6 million. The guarantee is in respect of various outstanding letters
     of credit given by the bankers of certain of Balton's creditors. The
     Company has also agreed to indemnify a co-guarantor for any losses
     accumulating to $510,000.

     Balton has given guarantees to third parties in the amount of
     approximately $1,250,000.

     Investor and certain subsidiaries are potentially liable with respect to
     certain guarantees of debt and other financial instruments of other
     related and nonrelated companies to the extent of approximately $9.4
     million.


NOTE E - INVESTMENT IN AFFILIATE

     At March 31, 1997, the Company's effective ownership percentage of
     Danubius, Rt. ("Danubius"), a publicly traded company, was approximately
     30% at a cumulative cost of approximately $25 million. Danubius owns a
     number of hotels in Hungary and specializes in spa facilities.



                                      -8-
<PAGE>



                      IIC Industries, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                   (unaudited)





NOTE E (continued)

     Accordingly, the Company accounted for this investment under the equity
     method at March 31, 1997. Under this method, the investment is carried at
     cost plus the Company's share of earnings or losses less distributions.
     Since the Company's share of the underlying net assets of Danubius
     exceeded the cost at the various purchase dates, the excess of the fair
     value of the net assets acquired over the cost is amortized over a period
     of forty years.


     The following is summarized financial information of Danubius (in
     thousands), which was prepared in accordance with international
     accounting standards. There were no significant differences between
     international accounting standards and generally accepted accounting
     standards in the United States:
<TABLE>
<CAPTION>


                       March 31, 1997   March 31, 1996
                       --------------   --------------


<S>                              <C>           <C>
Current assets              $ 21,388      $ 24,372
Noncurrent assets            148,421       122,081
Current liabilities           11,478         4,538
Noncurrent liabilities        25,491        11,004
Stockholders' equity         132,840       130,911




                 Three Months ended   Three Months ended
                     March 31, 1997       March 31, 1996
                     --------------       --------------


Sales                      $ 17,920       $ 12,225
Operating income             (2,342)         1,175
Net income                   (1,897)         1,289

</TABLE>




                                      -9-
<PAGE>





                 Management's Discussion and Analysis of
              Financial Condition and Results of Operations

General

     The Company is presently operated as a holding company with subsidiaries
in three principal operating geographic areas: (1) Investor RT, a Hungarian
holding company ("Investor" or "Investor Group"), which through its
subsidiaries, engages in a variety of commercial activities in Hungary; (2)
The Israel Tractors and Equipment Company Limited ("Israel Tractor"), an
Israeli corporation, which distributes tractors and related heavy machinery in
Israel and (3) Balton C.P. Limited, an English holding company with African
subsidiaries ("Balton CP") engaged in trading activities in several African
countries.

     Substantially all of the Company's revenues are derived from foreign
operations. As such, its income is significantly affected by fluctuations in
currency exchange rates and by currency controls. Most of the countries where
the Company operates such as Hungary and several African countries do not have
freely convertible currencies and their currencies have been subject to
devaluations in recent years. In particular, during 1996, the income from the
Company's Hungarian and African subsidiaries was significantly reduced by
losses arising from foreign exchange transactions due to significant currency
devaluations against the U.S. dollar. The Hungarian currency which is not
freely convertible and which floats against a basket of two currencies (the
U.S. Dollar and the European Currency Unit) underwent devaluations against the
U.S. Dollar at the rate of 21% during 1996. Since the beginning of 1997, the
Hungarian currency has been further devalued by approximately 9% against the
U.S. Dollar. Since the functional currency for Investor is the Hungarian
Forint, these devaluations have resulted in certain currency translation
adjustments directly impacting stockholders' equity. See Notes A(8) and P of
Notes to Registrant's Consolidated Financial Statements on Form 10-K for the
year ended December 31, 1996.

     The Company may be subject to tax in some or all of the foreign countries
in which it has operations. However, foreign taxes imposed on the Company's
income may qualify as a foreign income tax and therefore be eligible for
credit against the Company's United States income tax liability subject to
certain limitations set out in the Internal Revenue Code of 1986, as amended
(or alternatively, for deduction against income in determining such
liability). The limitations set out in the Code include, among others,
computation rules under which foreign tax credits allowable with respect to
specific classes of income cannot exceed the United States federal income
taxes otherwise payable with respect to each class of income. Foreign income
taxes exceeding the credit limitation for the year of payment or accrual can
be carried back for two taxable years and forward for five taxable years, in
order to reduce United States federal income taxes, subject to the credit
limitations applicable in each of such years. Other restrictions on the
foreign tax credit include a prohibition on the use of the credit to reduce
liability for the United States corporate alternative minimum taxes by more
than 90%.


                                      -10-
<PAGE>


The  Company  has  three  primary  areas  of  operation   with  respect  to  its
subsidiaries:
     (a)      Investor and its subsidiaries in Hungary
     (b)      Israel Tractor in Israel
     (c)      Balton CP and its subsidiaries in Nigeria, Ghana, Zambia, 
              Tanzania, Kenya and Uganda.


     The Company has five principal business segments:
     (a)      vehicle sales and service
     (b)      export/import and processing/storage of agricultural products
     (c)      the distribution of tractors and other heavy equipment
     (d)      the sale of agricultural, communications and electrical equipment
     (e)      other industries including retail and wholesale consumer products
              and Hungarian corporate.

Results of Operations
<TABLE>
<CAPTION>

              The table  below sets forth for fiscal  quarters  ended  March 31,
1997 and 1996 certain  information  with respect to the results of operations of
the Company and its principal subsidiaries.


Three Months              Net Sales              Gross Profit          Income (Loss)      Net Income (Loss)
-------------             ---------              ------------          before Income      -----------------
Ended                                                                    Taxes and
March 31, 1997                                                       Minority Interests
                                                                     ------------------
                       Amount         %         Amount         %       Amount      %       Amount       %
                       ------        ---        ------        ---      ------     ---      ------       --
                   (In thousands)           (In thousands)         (In thousands)      (In thousands)
                                                                               
<S>                      <C>         <C>            <C>        <C>        <C>    <C>        <C>       <C>

IIC Industries Inc.            --       --              --       --         $17     2.2         $15       4.7
(parent company)

Israel Tractors &         $20,761     34.3          $5,251     43.4         864   109.9         502     169.5
Equipment Co.
(Israel)

Balton CP Group            11,775     19.5           3,601     29.8         908   115.5         299     101.0
(Africa)

Investor RT                27,905     46.2           3,235     26.8      (1,003) (127.6)      (519)   (175.2)
Group (Hungary)            ------     ----           -----     ----      ------- -------      -----   -------


                          $60,441    100.0         $12,087    100.0        $786   100.0        $297     100.0
                          =======    =====         =======    =====        ====   =====        ====     =====


Three Months              Net Sales              Gross Profit                             Net Income (Loss)
Ended                     ---------              ------------          Income (Loss)      -----------------
March 31, 1996                                                         before Income
                                                                         Taxes and
                                                                     Minority Interests
                                                                     ------------------
                       Amount         %         Amount         %       Amount      %       Amount       %
                       ------         -         ------         -       ------      -       ------       -
                   (In thousands)           (In thousands)           (In  thousands)   (In thousands)

                                                                     
IIC Industries Inc.            --       --              --       --         $93     3.6         $90       5.1
(parent company)

Israel Tractors &         $22,630     38.0          $5,705     40.9       1,453    56.4       1,251      71.3
Equipment Co.
(Israel)

Balton CP Group             7,296     12.3           2,470     17.7         264    10.2          75       4.3
(Africa)

Investor RT                29,572     49.7           5,783     41.4         768    29.8         338      19.3
Group (Hungary)            ------     ----           -----     ----         ---    ----         ---      ----

                          $59,498    100.0         $13,958    100.0      $2,578   100.0      $1,754     100.0
                          =======    =====         =======    =====      ======   =====      ======     =====

</TABLE>
                                      -11-

<PAGE>

Consolidated Results of Operations

     Net Sales. Net Sales on a consolidated basis for the fiscal quarter ended
March 31, 1997 increased by approximately $943,000 as compared to the
comparable period in 1996.

     Gross Profit. Gross Profit on a consolidated basis for the fiscal quarter
ended March 31, 1997 decreased by approximately $1.9 million or approximately
13.4%, to approximately $12.1 million, or approximately 20% of Net Sales, from
approximately $14 million, or approximately 23.5% of Net Sales, in the
corresponding period in 1996. This decrease was mainly attributable to depressed
market conditions, and reductions of margins in the Investor group, primarily
in the agricultural sector. Furthermore, the legacy of the irregular activities
of the previous management of Agrimill who were removed from their posts in
February 1997 contributed to the decrease. Agrimill operates in the
agricultural sector of the Investor group. (See Note O to the Notes of the
1996 Consolidated Financial Statements.

     Operating income. Operating income on a consolidated basis for the first
fiscal quarter of 1997 decreased by approximately $1.5 million, or
approximately 67%, to $766,000, or approximately 1.3% of net sales, from
approximately $2.3 million, or approximately 3.9% of Net Sales for the
corresponding period in 1996. This decrease was principally due to the reasons
stated in the gross profit section.

     Interest income. Interest income decreased for the quarter by $405,000,
or approximately 43%, to $540,000 due to the investment of its cash by Interag
in shares in Danubius Hotel & Spa Rt. (the "Hotel Company" or the "Danubius").

     Interest expense. Interest expense in the quarter increased by $794,000,
or approximately 87%, to approximately $1.7 million due to an increase in bank
loans.

     Income before Income Taxes and Minority Interest. Income before Income
Taxes and Minority Interest in the fiscal quarter decreased by approximately
$1.8 million, or approximately 70%, to $786,000 in the quarter (representing
approximately 1.3% of Net Sales for that period) from approximately $2.6
million for the corresponding period in 1996 (representing 4.3% of Net Sales
for that period).

     Minority Interests. Minority Interests in the quarter decreased by
$575,000 thousand as a result of losses in the Investor Group.

     Net Income. Net Income for the quarter decreased by $1.46 million (or
approximately 83%) to approximately $297,000 (representing approximately 0.5%
of Net Sales for that period) from approximately $1.75 million for the
corresponding period in 1996 (representing approximately 2.9% of Net Sales for
that period).



                                      -12-
<PAGE>


<TABLE>
<CAPTION>

     The table  below sets forth for the three  months  ended March 31, 1997 and
1996  certain  information  with  respect to the  results of  operations  of the
Company and its five principal business segments.

                          Three Months Ended March 31, 1997                  Three Months Ended March 31, 1996
                                               Income (Loss) before                           Income (Loss) before
                                                 Income Taxes and                              Income Taxes and
                               Net Sales          Minority Interest        Net Sales            Minority Interest
                               ---------       --------------------        ---------          --------------------
                                                  
                            Amount       %        Amount        %      Amount         %          Amount          %
                          (In thousands)     (In thousands)       (In thousands)           (In thousands)
                                     
-----------------------------------------------------------------------------------------------------------------------
<S>                          <C>        <C>         <C>       <C>       <C>        <C>            <C>            <C>
Vehicle sales and            $ 2,179      3.6        $(31)     (3.9)    $ 2,238       3.8            $83            3.2
distribution (Investor)                                                                            

Export and import of          25,413     42.1       (2,014)  (256.3)     26,366      44.3            736           28.6
agricultural products         
(Investor)

Other Industries                 313      0.5        1,059     134.7        968       1.6             42            1.6
(Investor)                                        

Tractors and heavy            20,761     34.3          864     110.0     22,630      38.0          1,453           56.4
equipment
(Israel Tractor)

Agricultural,                 11,775     19.5          908     115.5      7,296      12.3            264           10.2
communications and                              
electrical equipment
(Balton CP)
                            --------    ----     -------       ----     -------     -----         ------           ----
                                                                                                             
                             $60,441    100.0         $786     100.0    $59,498     100.0         $2,578          100.0
                           =========    =====        =====     =====    =======     =====         ======          =====
                                                                                                              
</TABLE>



         Investor

     The operations of three of the Company's segments are conducted in
Hungary through Investor. Investor's business is significantly affected by
general conditions in Hungary. General economic difficulties have contributed
to a recession in Hungary, which has had a negative effect on Investor's
business. With such conditions, despite management's actions in reducing
overhead costs and closing unprofitable operations, Investor has shown a loss
for the quarter.

     Vehicle Sales and Service Segment

     o   Net Sales for the three months ended March 31, 1997 decreased by
         approximately $59,000, or approximately 2.6%, as compared to the
         corresponding period in 1996.

     o   There was a Loss before Minority Interests and Income Taxes for the
         three months ended March 31, 1997 of $31,000 as compared to a profit
         of $83,000 in the corresponding period in 1995.

     The decrease in Net Sales and the decrease in Income before Income Taxes
and Minority Interests was primarily due to increased competition throughout
the motor trade business.


                                      -13-
<PAGE>

     Export/Import and Processing/Storage of Agricultural Products Segment

     o   Net Sales for the three months ended March 31, 1997 decreased by
         approximately $950,000, or 3.6%, as compared to the corresponding
         period in 1996. The decrease in Net Sales was primarily due to
         difficult market conditions and lack of export opportunities.

     o   Income before Income Taxes and Minority Interest for the three months
         ended March 31, 1997 decreased by approximately $2.8 million to a net
         loss of $2,014,000. This decrease was primarily due to depressed
         conditions in the domestic and export markets, a reduction of margins
         due to fierce competition, and the legacy of the irregular activities
         of the previous management who were only removed from their posts in
         the middle of February. (See Note O to 1996 Consolidated Financial
         Statements).


     Other Industries

     o   Net Sales for the quarter ended March 31, 1997 decreased by
         approximately $655,000, or approximately 67.6%, as compared to the
         corresponding period in 1996. This decrease was due to the disposal
         of businesses in late 1996.

     o   Income before Income Taxes and Minority Interest was approximately
         $1.06 million for the three months ended March 31, 1997, compared to
         income of approximately $42,000 for the three months ended March 31,
         1996. The increase arose primarily due to the sale of land and
         investments.


         Israel Tractor: Tractors and Heavy Equipment Segment

     o   Net Sales for the three months ended March 31, 1997 decreased by $1.9
         million, or approximately 8.3% as compared to the corresponding
         period in 1996. This decrease was due to a reduction in demand for
         the Company's products.

     o   Income before Income Taxes and Minority Interest for the three months
         ended March 31, 1997 decreased by $589,000 or approximately 40.5% as
         compared to the corresponding period in 1996 as a result of lower
         trading activity.


         Balton CP: Agricultural, Communications and Electrical Equipment 
         Segment

     o   Net Sales for the three months ended March 31, 1997 increased by
         approximately $4.5 million, or approximately 61%, as compared to the
         corresponding period in 1996. This was due to increased demand for
         the Company's products and the consolidation of Dizengoff W.A.
         Nigeria, that was previously accounted for under the equity method.


                                      -14-
<PAGE>

     o   Income before Income Taxes and Minority Interests for the three
         months ended March 31, 1997 increased by approximately $644,000, or
         approximately 244% as compared to the corresponding period in 1995.
         This increase was due to the increase in sales.


Liquidity and Capital Resources

     The Company has financed its operations through funds generated
internally and through cash and cash equivalents available at the beginning of
1997. At March 31, 1997, IIC Industries Inc., the parent company (the "Parent
Company"), and its wholly-owned Israel Tractor subsidiary, had working capital
of $38.3 million, including cash and cash equivalents of $12.8 million. Cash
of subsidiaries that are not wholly-owned (including the Investor Group and
the Balton CP Group) is generally not available for use by the Parent Company
or other subsidiaries (except to the extent paid to the Parent Company as
reimbursement for general overhead paid by the Parent Company or as management
fees) other than in the form of dividends, if and when declared. Dividends to
the Parent Company from its Israel Tractor subsidiary are subject to a
withholding tax of 15% to 25%. The Parent Company does not expect to receive
cash dividends or other distributions in the foreseeable future from any of
its subsidiaries.

     At March 31, 1997, Investor and Israel Tractor had outstanding short-term
indebtedness of approximately $22.9 million and $2.7 million, respectively.

     At March 31, 1997, Investor , Israel Tractor, and Balton had unused lines
of short-term credit of $18.4 million, $2.4 million and $2.5 million,
respectively .

     During the first quarter of 1997, Investor and Balton made capital
expenditures of $312,000 and $438,000, respectively, for the purchase of
equipment and vehicles and improvements to property. Such expenditures were
made from internally generated funds.

     At March 31, 1997, the Company had no significant capital commitments.

Inflation

     Inflation has been a persistent aspect of the Hungarian economy in recent
years, although the annual rate of inflation has been predictable and has
therefore been taken into account by the government and private businesses.
Inflation has contributed to the devaluation of the Hungarian currency and has
therefore had an effect on Investor's financial condition.


                                      -15-

<PAGE>

     Inflation in Israel was moderate in 1996 and during the first quarter of
1997, and therefore did not significantly affect operations in that country.
Furthermore, the devaluation of the Israeli shekel against the U.S. Dollar for
the first three months of 1997 was an annual rate of 10.4%.

     Significant rates of inflation persisted in the African countries where
Balton CP operates, triggering significant devaluations of local currencies.


                                      -16-
<PAGE>


                               OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       No reports on Form 8-K were filed during the period covered by this 
       report.

       EXHIBIT NO.            DESCRIPTION

          27                  Financial Data Schedule






    

                                  -17-
<PAGE>

                                   SIGNATURES


     In accordance with 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

                                            IIC INDUSTRIES, INC.



                                            By: /s/ Fortunee F. Cohen
                                               --------------------------
                                               Fortunee F. Cohen, Secretary