DIRECTORS’ REPORT:

Your Directors have pleasure in presenting the Fifteenth Annual Report of your Company with Audited Accounts for the year ended 31st March, 2008.

PERFORMANCE:

The Performance of the Company for the period ended 31st March, 2008 is briefly set out below:

DIVIDEND:

MANAGEMENT DISCUSSION & ANALYSIS:

REVIEW OF OPERATIONS:

Your Company has maintained the income level (Rs.138.45 Lakhs) at almost same as the previous year (Rs.140.51 Lakhs). The Company has geared up its operations in Leased Assets, Stock on Hire, Loans and Advances & Investments to retain its status as NBFC. Accordingly the Company’s Income from the said Operation has gone up substantially.

Surplus Assets were disposed for Rs.14.60 Lakhs during 1st Week of April, 2008. This will improve cash flow.

Consequent on the Provision of Additional facilities provided to our Tenants, the company has revised the rentals / hire charges for amenities resulting in optimum relaisation of the rental income.

WEBSITE:

Performance particulars of the Company can be ascertained by the share holders / public from website, www.afslindia.com

DEMATERIALISATION:

Out of 60,00,000 Equity shares, 40,38,713 Equity shares i.e.67.31% of company’s paid up capital has been Dematerialized up to 31st March 2008. Balance 19,61,287 shares i.e. 32.69% are in Physical form.

Your Director’s would like to inform you that your Company’s shares are shifted from ff ‘ Z ’ category and included in ‘ B ’ category in B.S.E. during February 2008.

FUTURE PROSPECTS:

The strategy designed few years ago is being continued with caution; the disbursements being restricted to existing as well as well known worthy / good clients.

Your Company is intending to expand its activities under the fast growing commodities trading in future to augment the income of the Company.

Your company continues in Insurance Sector business without Risk Participation.

ECONOMY MEASURES:

The Company has put into effect economy measures consistent with the need to continue the operations on a moderate scale with efficiency and promptness.

RISKS AND CONCERNS:

Your Company is exposed to normal industry risk factor such as Interest rate volatility, economic cycle and credit risk. Your Company manages these risks by adopting prudent business and risk management policies.

ADEQUACY OF INTERNAL CONTROL:

Your Company has got adequate system of internal controls and the management ensures adherence to all internal control practices and procedures. The Audit Committee critically reviews periodically the adequacy of internal controls and suggests control measure for further improvement / transparency.

FIXED DEPOSITS:

The Company does not hold any deposits from the public or others as at 31 March, 2008 and hence, the company does not have any unpaid deposit or interest.

DIRECTORS:

Mr.K.V.Aiyappan, Director and Mr.L.V.Anantram, Director retiring by rotation, being eligible have offered themselves for reappointment

At the Board Meeting held on 23/04/2008, Mr.P.Sankaran, Executive Director has been re-appointed for a period of one year w.e.f.: 19-06-2008 on the terms and conditions as detailed in the Special resolution placed for shareholder’s approval.

CORPORATE GOVERNANCE REPORT:

A Certificate from the auditor of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this Report.

RESPONSIBILITY STATEMENT OF THE BOARD OF DIRECTORS:

In terms of provisions of Section 217(2AA) of the Companies Act, 1956, (Act) your Directors confirm that:

1. In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.


2. Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period.


3. Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.


4. Directors had prepared the annual accounts on a going concern basis.

1. Since none of the employees are in receipt of such remuneration for being included in the statement under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, the information in this regard is nil.


2. The provisions of Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 requiring disclosure of particulars regarding Conservation of Energy in Form A and Technology Absorption in Form B prescribed by the Rules do not apply to your Company, as it does not carry on manufacturing activities.


3. The Company had no foreign exchange inflow and outflow.

AUDITOR:

Your Company’s Auditor Mr. K C Sthalasayanam, Chartered Accountant holds office till the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment. Your Directors recommend his re-appointment.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their gratitude to you as shareholders for your continued support. They are thankful to your Company’s Clients, Bankers, Reserve Bank of India, FIHPA, SIHPA, SEBI, MSE, BSE and other Government Agencies for their valuable assistance.

They also wish to convey their appreciation to the employees whose dedicated service has enabled your Company to function satisfactorily in a difficult business climate.

On behalf of the Board