DIRECTORS’ REPORT:

Your Directors have pleasure in presenting the Seventeenth Annual Report of your Company along with Audited Accounts for the year ended 31 March, 2010.

PERFORMANCE:

The Performance of the Company for the year ended 31 March, 2010 is briefly set out below:

DIVIDEND:

MANAGEMENT DISCUSSION & ANALYSIS:

REVIEW OF OPERATIONS:

A full year after the financial meltdown the company was able to register a moderate increase in operations resulting in an income of Rs.126.51 lakhs as against Rs.107.12 lakhs for the previous year. During the year loans totaling Rs.158.80 lakhs was given as against Rs.134.97 lakhs disbursed in the previous year which continue to support the operations of the company. In the result the status of the company as NBFC-B category showed some improvement. The management is hoping, that it will fully meet the prescribed requirements.

WEBSITE:

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

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. The Directors are confident of showing improved results during this year.

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 yearically 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, 2010 and hence, the company does not have any unpaid deposit or interest.

DIRECTORS:

Mr.K.V.Aiyappan, Mr.V.G.Sureshkumar and Mr.T.V.Srinivasan Directors retiring by rotation, being eligible have offered themselves for re-appointment.

Mr.T.S.Ramakrishnan resigned from the directorship of the company with effect from 24/04/2010 citing personal reasons. The Board places on record the good services rendered by him during his tenure.

Mr.U.K.Selvathilak has been appointed as additional director at the Board Meeting held on 24/04/2010. He holds office till the conclusion of the forthcoming Annual General Meeting. Your company received a notice under section 257 of the Companies Act, 1956 proposing his candidature as Director. The Board of Directors recommends his appointment/re-appointment.

At the Board Meeting held on 24/04/2010, Mr.P.Sankaran, Executive Director has been re-appointed for a year of one year with effect from 19/06/2010 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 year.


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.

AUDITORS:

R.Bhaskar & Co, Chartered Accountants, Chennai are recommended for appointment as Auditors of the company to assume office from the conclusion of this Annual General meeting till the conclusion of next Annual General Meeting in the place of Mr.K.C.Sthalasayanam, existing Auditor who expressed his inability to continue effective from the ensuing Annual General meeting citing personal reasons.

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