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Directors Report of Abirami Financial Services (India) Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting before the Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31 st March, 2015.

S.No. CONTENTS OF THE REPORT

1 FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS, STATE OF AFFARIS: [INSERT AS PER INFORMATION FROM THE COMPANY]:

(Rs. in lakhs)

Particulars 2014-2015 2013-14

Gross Income 110.95 124.31

Profit Before Interest and Depreciation 65.95 54.79

Finance Charges 0.01 1.41

Gross Profit 65.94 53.37

Provision for Depreciation 20.66 20.14

Net Profit Before Tax 45.28 33.23

Provision for Tax 8.30 10.72

Net Profit After Tax 36.98 22.51

Surplus carried to Balance Sheet 36.98 22.51

General Information about the Company, the Board's perception of future of the company considering market competition, production constraints, government polices etc., Major events concerning the company are to be highlighted.

2 EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENT, that affect the substance and figures given in the Statement

NIL

3 Change in the Nature of Business, if any,

During the year under review, the Company has surrendered its NBFC Licence to RBI. The Company intends it pursue its other main objects.

4 DIVIDEND:

The board recommends to declare a dividend at 5% for the year under review.

5 BOARD MEETINGS:

The Board of Directors duly met 4 times during this financial year on the

following dates

28/05/2014

22/07/2014

24/10/2014

02/02/2015

6 DIRECTORS AND KEY MANANGERIAL PERSONNEL:

Details about the Appointment, Re-appointment, Change in Designation, Resignation of Directors (along with fact of resignation), Managing Directors, Whole Time Directors, KMP, Independent Directors.

Disclosure U/s.149(10) on Appointment of Independent directors for the second term by way of special resolution.

During the year Promoter Director Mr. Teckchand Hoondamal Vaswani & Independent Director Mr.J.Viswanathan have expired. & Mrs, Muthulakshmi Ganesh was appointed as a Director.

7. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL

BASIS

The declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 is enclosed. ANNEXURE I

8 COMPOSITION OF AUDIT COMMITTEE

Audit Committee consists of the following Independent Directors Mr.K.M.Narasimhan

Mr.T.V.Srinivasan

9. VIGILMECHANISM:

Whistle Blower policy: The Company has a whistle blower mechanism wherein the employees are free to report violation of laws, rules, regulations or unethical conduct to their immediate superiors or such other person as may be notified from time to time by the management. The confidentiality of those reporting violations shall be maintained and they shall not be subjected to any discriminatory practices. No person had been denied access to the Audit Committee.

10. DIRECTOR'S RESPONSIBILITY STATEMENT:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have 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 profit for company for that period;

(c) the directors have 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;

(d) the directors have prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

11 INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES/ ASSOCIATES/JV

The company has no Subsidiary / Joint Venture / Associate.

12 EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) oftheCompaniesAct,2013 and Rule 12( 1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report (FORMAT IN ANNEXURE II)

13 AUDITORS:

The Auditors, M/s R.Bhaskar & Co, Chartered Accountants, D.C.Towers, No. 17,3rd Floor, F 37 & 38, Second Avenue, Anna Nagar, Chennai - 600 102 retire at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment. As per the provisions of the Companies Act, 2013, the Auditors could be appointed for a period of One year from the conclusion of this Annual General Meeting till the conclusion of AGM to be held on 2016.

14 SECRETARIAL AUDIT: Secretarial audit report as provided by Mr. G.Porselvam Practising Company Secretary is enclosed to this Report as Annexure III

15 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

(A) Conservation of energy: NIL

(B) Technology absorption: NIL

(C) Foreign exchange earnings and Outgo NIL

16 DETAILS RELATING TO DEPOSITS, COVERING THE FOLLOWING:

The company has not Accepted / renewed any deposits during the year.

17 SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

The Company has not made any Application /Petition to any of the Regulators during the year under Review, except that the Company has submitted its Draft Scheme of De-Merger to the BSE, which is under consideration.

18 DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The company has adequate Internal Control System.

19 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company does not have any:

SECURED LOANS: NIL UNSECURED LOANS: NIL CURRENT/NON-CURRENT INVESTMENTS: NIL GUARANTEES: NIL SECURITIES EXTENDED: NIL

20 RISK MANAGEMENT POLICY:

The company has framed Risk Management policy

21 CORPORATE SOCIAL RESPONSIBILITY POLICY:

The present Net worth / turnover of the company do not require compliance with CSR

22 RELATED PARTY TRANS ACTIONS: NIL

23 FORMAL ANNUAL EVALUATION:

Statement about the manner in which the formal evaluation made by the Board of its own performance and that of its committees and individual Directors.

The company is regularly adopting its Annual Evaluation Process, and the same is being considered by the board.

24 Disclosure about Cost Audit

Applicability of Cost Auditor dose not arise.

25 LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2015- 2016 to BSE and BSE is the designated stock exchange where the shares of the company are listed.

26 CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report (ANNEXURE IV)

Certificate from the Statutory Auditors of the company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

27 INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THE COMPANY NBFC, HOUSING COMPANIES ETC.

The company has surrendered its NBFC license to RBI during the year and the disclosure in this regard is not mandated.

28 SECRETARIAL STANDARDS

Standards as was in Force is being adopted


Mar 31, 2013

The Directors have pleasure in presenting the Twentieth Annual Report of your Company with Audited Accounts for the year ended 31 March, 2013.

PERFORMANCE:

The Performance of the Company for the year ended 31 March, 2013 is briefly set out below:

(Rs.) in Lakhs

INCOME FOR THE YEAR

117.01

LESS: EXPENDITURE FOR THE YEAR 50.19

PROFIT BEFORE DEPRECIATION & TAX 66.82

LESS: DEPRECIATION 19.43

PROVISION FOR TAX & STANDARD ASSETS 6.31

PROFIT AVAILABLE FOR APPROPRIATION 41.08

ADD: OPENING BALANCE IN P&L ACCOUNT 79.95

LESS: TRANSFER TO STATUTORY RESERVES 8.21

BALANCE C/F TO P&L ACCOUNT 112.82

DIVIDEND:

Your Company has not recommended any Dividend due to insufficient profits. This may also strengthen the reserves.

FIXED DEPOSITS:

The Company does not hold any deposits from the public or others as at 31 March, 2013 and hence, the company does not have any unpaid deposit or interest.

DIRECTORS:

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

At the Board Meeting held on 02/05/2013, Mr.P.Sankaran, Executive Director has been re- appointed for a period of one year with effect from 19/06/2013 on the terms and conditions as detailed in the Special resolution placed for shareholder''s approval.

CORPORATE GOVERNANCE REPORT:

A Certificate from the auditors 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 OFTHE BOARD OFDIRECTORS:

In terms of provisions of Section 217(2AA) of the Companies Act, 1956, 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.

STATUTORYDISCLOSURES:

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

(ii) 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.

(iii) The Company had no foreign exchange inflow and outflow.

AUDITORS:

R.Bhaskar & Co, Chartered Accountants, Chennai are recommended for re-appointment as Statutory Auditors of the company to hold office from the conclusion of this Annual General meeting till the conclusion of the next Annual General Meeting.

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 continued unpredictable business climate.

On behalf of the Board

Place: Chennai - 17 L.V. ANANTRAM P. SANKARAN

Date : 02-05-2013. Director Executive Director


Mar 31, 2012

The Directors have pleasure in presenting the Nineteenth Annual Report of your Company with Audited Accounts for the year ended 31 March, 2012.

PERFORMANCE:

The Performance of the Company for the year ended 31 March, 2012 is briefly set out below:

Rs.in Lakhs

INCOME FOR THE YEAR 92.99

LESS: EXPENDITURE FOR THE YEAR 48.66

PROFIT BEFORE DEPRECIATION & TAX 44.33

LESS: DEPRECIATION 22.73

PROVISION FOR TAX & STANDARD ASSETS 8.09

PROFIT AVAILABLE FOR APPROPRIATION 13.51

ADD: OPENING BALANCE IN P&L ACCOUNT 69.14

LESS: TRANSFER TO STATUTORY RESERVES 2.70

BALANCE C/F TO P&L ACCOUNT 79.95

DIVIDEND:

Your Company has not recommended any Dividend due to insufficient profits. This may also strengthen the reserves.

MANAGEMENT DISCUSSION & ANALYSIS:

REVIEW OF OPERATIONS:

During the year your company's loan transactions totaling Rs 319.50 lakhs were disbursed as against Rs 293.56 lakhs in the previous year. None of the new borrowal accounts have fallen NPA. Your Company ventured into the Advances through factoring of receivables. The working capital finance amounted Rs 220 lakhs against receivables during the period under review. The total interest income ofRs 40.46 lakhs which included Rs 3.68 lakhs collected towards interest during the short period of four months from December 2011. The other income for the year stood at Rs 52.53 lakhs including Rs 1.10 lakhs collected as Factoring service charges. The reduction in other income for the year was mainly caused by shortfall in profit on share trading due to a very volatile market and lower rental income and amenities charges consequent to surrender of some areas by tenants.

With a view to increasing financial income your company increased the investment portfolio also to Rs 260.61 lakhs. The resultant income from these investments would augment the Company's income in the long run.

Your Company is happy to inform you that due to constant review, follow up, the company has been complying with Asset / Income pattern norms fixed by RBI for NBFC companies in the current year under review.

WEBSITE:

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

FUTURE PROSPECTS:

Your Directors are also considering further expansion of business of receivable financing, financing of commercial vehicles and construction equipments during the current year. Hence, your directors are hopeful of achieving improved results in the ensuing years.

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 measures for further improvement / transparency.

FIXED DEPOSITS:

The Company does not hold any deposits from the public or others as at 31 March, 2012 and hence, the company does not have any unpaid deposit or interest.

DIRECTORS:

Mr K V Aiyappan, Mr U.K.Selvathilak and Mr J.Viswanathan Directors retiring by rotation, being eligible have offered themselves for re-appointment.

At the Board Meeting held on 03/05/2012, Mr.P.Sankaran, Executive Director has been re- appointed for a period of one year with effect from 19/06/2012 on the terms and conditions as detailed in the Special resolution placed for shareholder's approval.

CORPORATE GOVERNANCE REPORT:

A Certificate from the auditors 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, 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.

STATUTORY DISCLOSURES:

(i) 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.

(ii) 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.

(iii) The Company had no foreign exchange inflow and outflow.

AUDITORS:

R.Bhaskar & Co, Chartered Accountants, Chennai are recommended for re-appointment as Statutory Auditors of the company to hold office from the conclusion of this Annual General meeting till the conclusion of the next Annual General Meeting.

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

Place : Chennai - 17 L.V. ANANTRAM P. SAN KARAN

Date : 03-05-2012. Director Executive Director


Mar 31, 2011

The Directors have pleasure in presenting the Eighteenth Annual Report of your Company with Audited Accounts for the year ended 31 March, 2011.

PERFORMANCE:

The Performance of the Company for the year ended 31 March, 2011 is briefly set out below:

? in Lakhs

INCOME FOR THE YEAR 110.97

LESS: EXPENDITURE FOR THE YEAR 36.54

PROFIT BEFORE DEPRECIATION & TAX 74.43

LESS: DEPRECIATION 32.61

PROVISION FOR TAX & STANDARD ASSETS 27.76

PROFIT AVAILABLE FOR APPROPRIATION 14.06

ADD: OPENING BALANCE IN P&L ACCOUNT 58.08

LESS: TRANSFER TO STATUTORY RESERVES 3.00

BALANCE C/F TO P&L ACCOUNT 69.14

DIVIDEND:

Your Company has not recommended any Dividend due to insufficient profits.

MANAGEMENT DISCUSSION & ANALYSIS:

REVIEW OF OPERATIONS:

During the year your company registered an increase in loan transactions from ^ 147.93 lakhs in the previous year to ? 293.56 lakhs in the current year. There was an increase in interest on loans from ^ 22.98 lakhs in the previous year to ? 30.93 lakhs in the current year. In spite of increase in business, the profit for the current year under review has come down to ? 41.82 lakhs from ? 43.63 lakhs in the previous year. This is mainly due to substantial reduction in profit on share trading from ? 25.05 lakhs in the previous year to ? 9.49 lakhs in the current year. Moreover, there was also decrease in rent and amenities to the extent of ?20.80 lakhs during the year 2010-11.

With a view to increasing the financial income your company increased the investments substantially to ? 233.58 lakhs. The resultant income from these operations is expected to improve Companys income in the long run.

However, your company is happy to inform you that due to strenuous efforts, your company has been able to achieve the Asset/ Income Pattern norms fixed by RBI for Non-Banking Financial Companies in the current year under review.

WEBSITE:

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

FUTURE PROSPECTS:

During the year your company sought and secured the approval of the shareholders for carrying on the business of housing finance and the scheme is in the advanced stage of processing.

Your Directors are also considering the business of receivable financing, financing of commercial vehicles and construction equipments during the current year. Hence, your directors are hopeful of achieving improved results in the ensuing years.

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, 2011 and hence, the company does not have any unpaid deposit or interest.

DIRECTORS:

Mr.L.V.Anantram, Mr.Teckchand Vaswani and Mr.P.Sankaran Directors retiring by rotation, being eligible have offered themselves for re-appointment.

Mr.A.K.Sabesan and Mr.R.Varadarajan resigned from the directorship of the company with effect from 23-07-2010 and 20-01-2011 respectively citing personal reasons. The Board places on record the good services rendered by them during their tenure as Directors.

Mr.J.Viswanathan has been appointed as additional director at the Board Meeting held on 23-07-2010. 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.

Mr.K.M.Narasimhan has been appointed as additional director at the Board Meeting held on 20-01 -2011. 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 21-04-2011, Mr.P.Sankaran, Executive Director has been re- appointed for a period of one year with effect from 19-06-2011 on the terms and conditions as detailed in the Special resolution placed for shareholders approval.

CORPORATE GOVERNANCE REPORT:

A Certificate from the Auditors 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, 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.

STATUTORY DISCLOSURES:

(i) 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.

(ii) 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.

(iii) The Company had no foreign exchange inflow and outflow.

AUDITORS:

R.Bhaskar & Co, Chartered Accountants, Chennai are recommended for re-appointment as Statutory Auditors of the company to hold office from the conclusion of this Annual General meeting till the conclusion of the next Annual General Meeting.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their gratitude to you as shareholders for your continued support. They are thankful to your Companys 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

Place: Chennai - 17 L.V. ANANTRAM P. SANKARAN

Date : 21-04-2011. Director Executive Director


Mar 31, 2010

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

PERFORMANCEt

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

Rs. in Lakhs

INCOME FOR THE YEAR 126.51

LESS : EXPENDITURE FOR THE YEAR 41.75

PROFIT BEFORE DEPRECIATION & TAX 84.76

LESS: DEPRECIATION 41.12

PROVISION FOR TAX INCLU. FBT 26.71

PROFIT AVAILABLE FOR APPROPRIATION 16.93

ADD : OPENING BALANCE IN P&L ACCOUNT 44.65

LESS : TRANSFER TO STATUTORY RESERVES 3.50

BALANCE C/F TO P&L ACCOUNT 58.08

DIVIDEND:

Your Company has nbt recommended any Dividend due to insufficient profits and to strengthen the reserves.



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 totalling 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 websije, 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 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, 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 period of one year with effect from 19/06/2010 on the terms and conditions as detailed in the Special resolution placed for shareholders 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 prepsiration 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 hid 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.

STATUTORY DISCLOSURES:

(i) 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.

(ii) 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.

(iii) The Company had no foreign exchange inflow and outflow.

AUDITORS:

R.Bhaskar & Co, (fhartered Accountants, Chennai are recommended for appoint- ment as Auditors of the company to assume office from the conclusion of this Annual General meeting til 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 wis h to place on record their gratitude to you as shareholders for your continued support. They are thankful to your Companys Clients, Bankers, Reserve Bank of Ii[dia, 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

Place: Chennai -17. L.V. ANANTRAM P. SANKARAN

Date : 24/04/2010- Director Executive Director



 
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