<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>form10k.txt
<DESCRIPTION>10K COMMAND 03/31/2001
<TEXT>

                                  FORM 10-K

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND
EXCHANGE ACT OF 1934

                   For the fiscal year ended March 31, 2001

|_|   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 0-18684

                         COMMAND SECURITY CORPORATION

            (Exact name of registrant as specified in its charter)

            New York                                    14-1626307
 (State or other jurisdiction of                    (I.R.S. Employer
  incorporation or organization)                   Identification No.)

 Lexington Park, Lagrangeville, New York                   12540
 (Address of Principal executive offices)                (Zip Code)

Registrant's telephone number, including area code:  (845) 454-3703

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

                                 Common Stock

     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 |_|

         Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definite proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K |_|

         As of June 15, 2001, the aggregate market value of the voting stock
held by non-affiliates of the registrant (3,786,954), based on the last sales
price of $0.73 on that date, was approximately $2,764,476.

         As of June 15, 2001, the registrant had issued and outstanding
6,287,343 shares of common stock.

                                      1

<PAGE>

                         Command Security Corporation

                          ANNUAL REPORT ON FORM 10-K

                   For the Fiscal Year Ended March 31, 2001

                              TABLE OF CONTENTS

                                    PART I

1. Business

2. Properties

3. Legal Proceedings

4. Submission of Matters to a Vote of Security Holders

                                   PART II

5. Market for the Registrant's Common Stock and Related Stockholder Matters

6. Selected Financial Data

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

7A.Quantitative and Qualitative Disclosures about Market Risk

8. Financial Statements and Supplementary Data

9. Changes in and Disagreements with Accountants on Accounting and Financial
   Disclosures.

                                  PART III

10. Directors and Executive Officers of the Registrant

11. Executive Compensation

12. Security Ownership of Certain Beneficial Owners and Management

13. Certain Relationships and Related Transactions

                                   PART IV

14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K

                                      2

<PAGE>

                                    PART I

                               ITEM 1. BUSINESS

         Command Security Corporation ("Company") is a corporation formed
under the laws of the State of New York on May 9, 1980. It principally
provides uniformed security services from its eighteen operating offices in
New York, Massachusetts, New Jersey, Illinois, California, Pennsylvania,
Connecticut, Florida and Georgia to commercial, financial, industrial,
aviation and governmental clients in the United States, Canada and the UK.

         The Company provides its security services to a wide range of
industries which the Company has categorized into three groups - guard
services, aviation services and support services. The latter includes any
revenue from administrative service agreements, back office support to police
departments and an investigations division based in the New York region.

          The guard service division includes governmental and
quasi-governmental clients such as cities and statewide institutions and
industrial and commercial clients such as retail chains and health care
institutions. Guard services represented approximately 57% (or $40.3 million)
of the Company's revenue for the fiscal year ended March 2001. Security
services include providing uniformed guards for access control, theft
prevention, surveillance, vehicular and foot patrol and crowd control. In
1998, the Company began developing and implementing a national network of
independent security guard companies to service clients with ATM sites
throughout the United States. The Company offers these services in 47 states,
Canada and the UK through approximately 200 affiliates. This network enables
the Company to provide a statewide coverage to current and potential clients.

         Approximately 43% (or $30.9 million of the Company's revenue for the
fiscal year ended March 2001) was generated from the aviation services
division. This division provides uniformed guard services to airport and
airport related clients including boarding security and baggage handling
services in accordance with Air Transportation Association and Federal
Aviation Administration standards.

         The support services division accounted for 1% (or $0.4 million) of
the 2001 revenues and encompasses back office support to police departments,
an investigations division based in the New York region and administrative
service clients. The latter are where the Company provides a computerized
scheduling and information system and programs, as well as accounts
receivable financing and insurance resources. Accounts receivable financing
is secured by the administrative service company's clients accounts
receivable, customer lists, contracts, all other assets and the personal
guarantee of the owner(s) of the administrative service company. Neither the
sales revenue generated by the administrative service client nor the
associated expenses are accounted for within the Company's operations.
Financed receivables are included in the Company's accounts receivable
figures.

         The Company employs approximately 80 employees indirectly
attributable to guard and aviation services including supervisors and
dispatchers, another approximately 100 administrative employees, including
the executive staff, and approximately 2,920 hourly guards. As of March 31,
2001, the Company did not have any administrative service agreements whereby
it was the employer of record for Internal Revenue Service reporting
purposes.

         Management believes there is heightened attention to security
matters due to the ongoing threat of criminal and terrorist activities. As a
result of such attention, management further believes that the urban
commercial centers served by the Company, including New York, Los Angeles,
Miami and Chicago, provide an opportunity for increased market participation
and growth.

Operations

         As a licensed watchguard and patrol agency, the Company's guard
services division furnishes guards to its security service customers to
protect people or property and to prevent the theft of property. In this
regard, the Company principally conducts business by providing guards and
other personnel who are, depending on the particular requirements of the
customer, uniformed or plain-clothed, armed or unarmed, and who patrol in
marked radio cars or stand duty on the premises at stationary posts such as
fire stations, reception areas or video monitors. The Company's guards
maintain contact with headquarters or supervisors via car radio or hand-held
radios. In addition to the more traditional tasks associated with access
control and theft prevention, guards respond to emergency situations and
report to appropriate authorities for fires, natural disasters, work
accidents and medical crises.  The Company also provides private investigation
services.

                                      3

<PAGE>

         The Company provides guard services to many of its industrial and
commercial customers on a 24-hour basis, 365 days per year. For these
customers, guards are on hand to provide plant security, access control,
personnel security checks and traffic and parking control and to protect
against fire, theft, sabotage and safety hazards. The remaining customers
include retail establishments, hospitals, governmental units and promoters of
special events. The services provided to these customers may require armed as
well as unarmed guards. The Company also provides specialized vehicle patrol
and inspection services and personal protection services to key executives
and high profile personalities from time to time.

         The Company's aviation services division provides a variety of
uniformed services for domestic and international air carriers including
pre-board passenger screeners, checkpoint security supervisors, wheelchair
escorts, skycaps, baggage handlers and uniformed guards for cargo security
areas.

         Under the law of negligence, the Company can be liable for acts or
omissions of its agents or employees performed or occurring in the course of
their employment. The nature of some of the services provided by the Company
(e.g. crowd control and armed guard services) potentially exposes it to risks
of liability for employee conduct. The Company currently maintains general
liability insurance in the amount of $1.0 million per occurrence and umbrella
liability insurance in the amount of $50 million per occurrence and $50
million in the aggregate, which it believes is suitable and at a level
customary for the industry for a business of its size.

         To ensure that adequate protection requirements have been
established prior to commencing service to a customer, the Company evaluates
the customer's site and prepares a recommendation for any needed changes to
existing security programs or services. Surveys typically include an
examination and evaluation of perimeter controls, lighting, personnel and
vehicle identification and control, visitor controls, electronic alarm
reporting systems, safety and emergency procedures, key controls and security
force manning levels. While surveys and recommendations are prepared by the
Company, the security plan and coverage requirements are determined by the
customer. Operational procedures and individual post orders are reviewed
and/or rewritten by the Company to meet the requirements of the security plan
and coverage determined by the customer.

         In order to provide a high level of service without incurring large
overhead expenses, the Company establishes offices close to its customers and
delegates responsibility and decision making to its local managers. The
Company emphasizes the role of its managers by assigning to each one
responsibility for service and encourages them to get involved with the sales
effort alongside the sales personnel. The Company believes that in most
situations the combination of both service responsibility and a significant
involvement in sales in a single individual results in better supervision and
quality control and greater responsiveness to customer concerns.

         The Company generally renders its security guard services pursuant
to a standard form security services agreement which specifies the personnel
and/or equipment to be provided by the Company at designated locations and
the rates therefor, which typically are hourly rates per person. Rates vary
depending on base, overtime and holiday time worked, and the term of
engagement. The Company assumes responsibility for a variety of functions
including scheduling each customer site, paying all guards and providing
uniforms, equipment, instruction, supervision, fringe benefits, bonding and
workers' compensation insurance. These security services agreements also
provide customers with flexibility by permitting reduction or expansion of
the guard force on relatively short notice. The Company is responsible for
preventing the interruption of security services as a consequence of illness,
vacations or resignations. In most cases the customer also agrees not to hire
any security personnel used by the Company for at least one year after the
termination of the engagement. Each security services agreement may be
terminated by the customer, typically with no prior notice or short notice
(usually 30 days). In addition, the Company may terminate an agreement
immediately upon default by the customer in payment of monies due thereunder
or if there is filed by or against the customer a bankruptcy petition or if
any other act of bankruptcy occurs.

         The Company has its own proprietary computerized scheduling and
information system. The scheduling of guards, while time-consuming, is a most
important function of any guard company. Management believes the system
substantially reduces the time a manager must spend on scheduling daily guard
hours and allows the Company to fulfill customer needs by automatically
selecting those guards that fit the customer's requirements.

Employee Recruitment and Training

         The Company believes that the quality of its guards is essential to
its ability to offer effective and reliable service, and it believes
diligence in their selection and training produces the level of performance
required to maintain customer satisfaction and internal growth.

                                      4

<PAGE>

         The Company's policy requires that all selected applicants for
Company guard positions undergo a detailed pre-employment interview and a
background investigation covering such areas as employment, education,
military service, medical history and, subject to applicable state laws,
criminal record. In certain cases the Company employs psychological testing
and, where permitted, uses pre-employment polygraph examinations. Personnel
are selected based upon physical fitness, maturity, experience, personality,
stability and reliability. Medical examinations and substance abuse testing
may also be performed. Prerequisites for all Company guards include a good
command of the English language and the ability to communicate well and write
a comprehensive and complete report. Preference is given to applicants with
previous experience, either as a military or a civilian security-police
officer.

         The Company trains accepted applicants in three phases:
Pre-assignment; On-the-job; and Refresher. The Company's training programs
utilize current curricula and audio-visual materials. Pre-assignment training
explains the duties and powers of a security guard, report preparation,
emergency procedures, general orders, regulations, grounds for discharge,
uniforms, personal appearance and basic post responsibilities. On-the-job
assignment training covers specific duties as required by the post and job
orders. Ongoing refresher training is given on a periodic basis as determined
by the local area supervisor and manager.

         Command treats all employees and applicants for employment without
unlawful discrimination as to race, creed, color, national origin, sex, age,
disability, marital status or sexual orientation in all employment-related
decisions.

Significant Customers

         No individual client accounted for more than 10% of the Company's
gross revenue in 2001, although in 2000, British Air accounted for $6,027,000
or 10% of the Company's gross. During fiscal 1999 there was no individual
client accounting for 10% or more of revenue.

Competition

         Competition in the security service business is intense. It is based
primarily on price and the quality of service provided, the scope of services
performed, name recognition and the extent and quality of security guard
supervision, recruiting and training. As the Company has expanded its
operations it has had to compete more frequently against larger national
companies, such as Pinkerton's, Burns International Security Services, Wells
Fargo Guard Services (all now owned by Securitas) and The Wackenhut
Corporation, which generally have substantially greater financial resources,
personnel and facilities than the Company. These competitors also offer a
range of security and investigative services which are at least as extensive
as, and directly competitive with, those offered by the Company. In addition,
the Company competes with numerous regional and local organizations which
offer substantially all of the services provided by the Company. Although
management believes that, especially with respect to certain of its markets,
the Company enjoys a favorable competitive position because of its emphasis
on customer service, supervision and training and is able to compete on the
basis of the quality of its service, personal relationships with customers
and reputation, there can be no assurance that it will be able to maintain
its competitive position in the industry.

Government Regulation

         The Company is subject to city, county and state firearm and
occupational licensing laws that apply to security guards and private
investigators. In addition, many states have laws requiring training and
registration of security guards, regulating the use of badges and uniforms,
prescribing the use of identification cards or badges, and imposing minimum
bond, surety or insurance standards. The Company may be subjected to
penalties or fines as the result of licensing irregularities or the
misconduct of one of its guards or investigators from time to time in the
ordinary course of its business. Management believes the Company is in
material compliance with all applicable laws and regulations.

         The Federal Aviation Administration has recently proposed a rule
requiring certification of screening companies including the Company's
Aviation Safeguard Division. The proposed rule has two objectives: procedures
for certification of screening companies used by airlines and airport
authorities as well as other requirements to enhance airport screening such
as training and testing requirements. Implementing these changes will
increase the Company's expenditures and require a higher technical staffing
level. The Company is expected to pass these costs to the air carriers
through pricing amendments.

                                      5

<PAGE>

Employees

         The Company employs approximately 80 employees indirectly
attributable to guard services including supervisors and dispatchers, another
approximately 100 administrative employees including the executive staff, and
approximately 2,920 hourly guards. As of March 31, 2001, the Company did not
have any administrative service agreements whereby it was the employer of
record for Internal Revenue Service reporting purposes.

         The Company's business is labor intensive and, as a result, is
affected by the availability of qualified personnel and the cost of labor.
Although the security guard industry is characterized by high turnover, the
Company believes its experience compares favorably with that of the industry.
The Company has not experienced any material difficulty in employing suitable
numbers of qualified security guards, although, when labor has been in short
supply, it has been required to pay higher wages and incur overtime charges.

         Approximately 57% of the Company's employees hired for guard service
customers do not belong to a labor union. The Company's New York City
employees, and its employees at Los Angeles International Airport, who
together represent approximately 43% of the Company's employees for guard
service customers, work under collective bargaining agreements with the
following unions: Allied International Union; and Special & Superior Officers
Benevolent Association. Most of the Company's New York City and Chicago
competitors also are unionized. The Company has experienced no work stoppages
attributable to labor disputes. The Company believes that its relations with
its employees are satisfactory. Guards and other personnel supplied by the
Company to its customers are employees of the Company, even though they may
be stationed regularly at the customer's premises.

Service Marks

         The Company believes itself to be the owner of the service marks
"Command Security Corporation", "CSC" and "CSC Plus" design for security
guard, detective, private investigation services and security consulting
services. On February 22, 1994, the service mark assignment was recorded with
the U.S. Patent and Trademark Office, Registration No. 1,823,346. The Prior
registration number was No. 1,662,089.

         The Company also believes itself to be the owner of the trademark
"Smartwheel" for the computer program for use in dispatching and tracking
small vehicles such as carts and wheelchairs at transportation terminals. The
trademark was acquired as part of United Security Group, Inc. acquisition. On
May 23, 1995 the trademark was registered with the U.S. Patent and Trademark
Office, Registration No. 1894956. In addition, the Company believes itself to
be the owner of the service marks "STAIRS" and "Smart Guard." The respective
registration dates and numbers are September 15, 1992; No. 1,715,363 and
December 19, 1992; No. 1,742,892.

                                      6

<PAGE>

                              ITEM 2. PROPERTIES

         As of March 31, 2001, the Company owned and used in connection with
its business approximately 75 vehicles.

         As of March 31, 2001, the Company did not own any real property. It
occupies executive offices at Route 55, Lexington Park, Lagrangeville, New
York, of approximately 6,600 square feet with a base annual rental of
$105,600 under a five-year lease expiring September 30, 2003. The Company
also occupies the following offices:


Location                                    When        Square     Base Annual
                                           Opened       Footage       Rent

Los Angeles International Airport
380 World Way, Box N-28
Los Angeles, CA                           8/15/96          647     $17,236

5801 E. Slauson Avenue G-160
Los Angeles, CA                           11/9/94        1,689     $22,295

7841 Balboa Ave.
San Diego, CA                              2/8/00          395      $6,000

8939 S Sepulveda Blvd., Suite 201
Los Angeles, CA                            3/1/00        1,422     $22,188

1470, Barnum Avenue, Suite 304
Bridgeport, CT                            11/1/00        1,500     $17,520

55, Airport Road, Suite 203
Hartford, CT                               7/1/00        2,640     $31,060

2777 Summer Street, Suite 302
Stamford, CT                              3/13/95          915     $21,960

8181 North West 36th St., Unit 21A
Miami, FL                                  6/1/98          300     $12,461

800 Virginia Avenue, Suite 53
Ft. Pierce, FL                             8/1/97          400      $8,181

1040 Bay View Drive, Suite 526
Ft. Lauderdale, FL                         7/1/00          400      $6,996

Miami Int'l. Airport, Concourse A,
  2nd level
Miami, FL                                  7/1/99          189      $9,554

954 South Main Street, Suite 120
Conyers, GA                                5/1/98          900      $9,375

10 West 35th Street, Suite 11F3-4
Chicago, IL                                3/1/99        1,059     $18,681

21 Cummings Park, Suite 224
Woburn, MA                                3/15/99          198      $3,941

The Poughkeepsie Plaza Mall
Poughkeepsie, NY                           9/1/83          920     $12,000

331 Park Avenue South, 10th Floor
New York, NY                              11/1/91        3,400     $60,300

331 Park Avenue South, 11th Floor
New York, NY                               2/1/93        3,400     $60,300

300 Hamilton Avenue, Suite 300
White Plains, NY                          8/15/96        1,538     $28,453

505 Main Street, Suite  2
Williamsville, NY                          5/1/93          680      $5,700

JFK International Airport
175-01 Rockaway Boulevard, Jamaica, NY     4/1/97        1,700     $69,600

1237 Central Avenue, Suite 201
Albany, NY                               10/19/93          400      $4,800

2144 Doubleday Avenue
Ballston Spa, NY                           4/1/93          800     $12,840

52 Oswego Road
Baldwinsville, NY                          6/1/98          120      $1,500


                                      7

<PAGE>

Location                                    When        Square    Base Annual
                                           Opened       Footage       Rent


3366 Parke Avenue, Office 210
Wantagh, NY                                3/1/00        1,000     $12,420

55 Park Avenue, Apartment 1NW
New York, NY                               5/1/98          300      $7,200

2222 Morris Avenue
Union, NJ                                  2/1/98        2,250     $23,100

3 Werner Way, Office 324
Lebanon, NJ                               3/12/01           97     $14,040

1349 W. Cheltenham Avenue, Unit 203
Melrose Park, PA                           2/1/01          600      $7,800

124 Chestnut Street, Suite 5
Philadelphia, PA                         11/25/96          500      $8,460

613 West Hartford Street, 2nd Floor
Milford, PA                                6/1/00        1,200     $14,400


The Company believes its properties are adequate for its current needs.

                                      8

<PAGE>

                          ITEM 3. LEGAL PROCEEDINGS

         The nature of the Company's business subjects it to claims or
litigation alleging that it is liable for damages as a result of the conduct
of its employees or others. Except for such litigation incidental to its
business, other claims or actions that are not material and the lawsuits
described below, there are no pending legal proceedings to which the Company
is a party or to which any of its property is subject.

         In November 2000, the Company settled a major litigation issue
characterized as a stockholder derivative action. On or about December 4,
1997, an outside shareholder and four of the Company's directors (Sands, P.
Kikis, Saunders, and T. Kikis) commenced an action in the Supreme Court of
the State of New York, County of New York (Index No. 606166/97) against the
other four directors (Vassell, Robinett, Nekos and Miller), the Company's
outside corporate and securities counsel and the Company itself. The claims
against the Company's outside corporate and securities counsel were dismissed
and the balance of the suit has been settled by the parties pursuant to a
stipulation and agreement filed with the Court and approved by the Judge.
This settlement involved the purchase of shares by Reliance Security Group
plc, from plaintiff directors and affiliates and the resignation from the
Board of Directors of the Company of those directors.

         The Company's Certificate of Incorporation and the Business
Corporation Law of New York provide for indemnification of officers and
directors with respect to damages and legal fees incurred in connection with
lawsuits against them arising by reason of serving the Company. Due to the
fact that certain members of the board have chosen to participate as
plaintiffs in this lawsuit, the Company's insurance carrier has disclaimed
coverage with respect to the defense and indemnity of Command based on an
exclusion from coverage.

         In May, 1996, a complaint was filed in Queens County Civil Court by
three former employees alleging emotional distress, anguish, mental distress
and injury to their professional reputation due to retaliatory discharge and
related matters. Plaintiffs each seek $2 million for compensatory damages and
$2 million in punitive damages in addition to payment of overtime wages of
$25,000. The Company's customer, also a defendant and a former employer, has
engaged counsel representing all defendants. On November 27, 1998, the Kings
County Supreme Court ruled on a motion dismissing three counts concerning
contractual allegations but allowed the remaining nine counts to proceed to
findings and this case continues in litigation. At this time the Company is
unable to estimate the possible loss, if any, that may be incurred as a
result of this action. The ultimate outcome may or may not have a material
impact on the Company's financial position or results of operations.

         The nature of the Company's business as a supplier of personnel
services lends itself to employment related claims on a regular basis. The
Company has been named in several employment related claims, including claims
of sexual harassment by current and former employees, some of which are
currently under investigation by Federal and State agencies, including the
New York State Division of Human Rights. At this time the Company is unable
to determine the impact on the financial position and results of operations
that these claims may have should the investigation conclude that they are
valid.

         In August, 1997, a complaint was filed in Los Angeles County
Superior Court by six former employees alleging discrimination, wrongful
termination, breach of employment contract and intentional infliction of
emotional distress. The complaint alleges that plaintiffs have suffered
damages in excess of $1 million. After filing the complaint, the plaintiffs,
through counsel, agreed to submit the dispute to binding arbitration and a
request for dismissal, without prejudice, was filed with the Court. To date,
the plaintiffs have failed to proceed with the binding arbitration and the
company is of the opinion that the action is terminated.

         In August of 1998, the Company was informed that the US Department
of Transportation, the Federal Aviation Authority and the United States
Attorneys' Office for the Southern District of Florida were conducting a
criminal investigation of certain activities at the Miami office of its
Aviation Safeguards Division. The investigation concerned the official
certifications of employee background investigations made by the Company's
Aviation Safeguards division through its branch manager. Aviation Safeguards
of Florida, Inc., the Company subsidiary involved, did not contest the
charges and in March 2000 it agreed to pay a fine and restitution and to
submit to supervision by the District Court for two years. All payments are
completed at this time and the subsidiary has cooperated fully with the
Court's supervision.

                                      9

<PAGE>

         ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company held its Annual Meeting of Shareholders on March 16,
2001. Three of the Company's Directors were elected to two-year terms at the
Annual Meeting of Shareholders. The following sets forth the number of votes
cast for or withheld from each of the three directors.

Name                    For         Against          Withheld

Geoffrey Haslehurst  3,388,370       2,650           74,076

Kenneth Allison      3,387,220       3,800           74,076

Graeme Halder        3,378,170      12,650           74,076

     The following Directors continued in their term of office until the
Company's next Annual Meeting of Shareholders: Gregory Miller, Peter J Nekos
and William C. Vassell

         The only other item of business of the Company's Annual Meeting of
Shareholders was to ratify the selection of D'Arcangelo & Co., LLP to serve
as the Company's auditors for the fiscal year ending March 31, 2001. The
proposal was passed by the following vote: For - 3,422,190, Against - 22,350,
Abstain - 20,056.

                                     10

<PAGE>

                                   PART II

         ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
                             STOCKHOLDER MATTERS

         Due to the fact that the Company's stock had been trading below
$1.00 since approximately May of 2000, the Company received notification from
NASDAQ that its stock would be delisted effective October 25, 2000. The
Company's stock is now quoted in the OTC Bulletin Board Service, under the
symbol "CMMD." The Company intends to continue to comply with all capital
reporting requirements of the Securities and Exchange Commission.

         The following table sets forth, for the calendar periods indicated,
the high and low sales price for the Common Stock as reported by the NASDAQ
Stock Market, Inc. and the OTC Bulletin Board Service for each full quarterly
period within the two most recent fiscal years.

         Period (1)                           Last Sales Price

                                                High    Low

         2000
         First Quarter                          1.437   0.937
         Second Quarter                         1.093   0.687
         Third Quarter                          1.125   0.625
         Fourth Quarter                         1.375   0.718


         2001
         First Quarter                          1.000   0.625
         Second Quarter                         0.815   0.563
         Third Quarter                          0.844   0.500
         Fourth Quarter                         0.906   0.625

(1)  Reflects fiscal years ended March 31 of the year indicated.


         The above quotations do not include retail mark-ups, markdowns or
commissions and represent prices between dealers and not necessarily actual
transactions. The past performance of the Company's securities is not
necessarily indicative of future performance.

         As of June 15, 2001 there were approximately 170 holders of record
of the Company's common stock. Management believes there are approximately
1,000 beneficial holders of the Company's common stock.

         The last sales price of the Company's common stock on June 15, 2001,
was $0.73.

         The Company has never paid cash dividends on its common stock.
Payment of dividends on common stock, if any, will be within the discretion
of the Company's Board of Directors and will depend, among other factors, on
approval of its principle lender, earnings, capital requirements and the
operating and financial condition of the Company. At present, the Company's
anticipated capital requirements are such that it intends to follow a policy
of retaining earnings, if any, in order to finance, in part, the development
of its business.

                                     11

<PAGE>
                         COMMAND SECURITY CORPORATION

                       ITEM 6. SELECTED FINANCIAL DATA

         The financial data included in this table have been derived from the
financial statements as of and for the years ended March 31, 2001, 2000,
1999, 1998, and 1997, which have been audited by independent certified public
accountants. The information should be read in conjunction with "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" and
with the financial statements and related notes included in the Report.

<TABLE>

<CAPTION>

                                                                                Statement of Operations

                                                                                  Years ended March 31


In $ Thousands                                      2001            2000            1999           1998           1997

<S>                                               <C>            <C>             <C>           <C>             <C>
Revenue                                              71,320         59,246          57,642        51,797          49,237
Gross Profit                                         11,531         10,003           9,716         7,340           8,444
Administrative service revenue                          274            554             913         1,451           1,471
Operating Profit / (Loss)                               328            315             877       (2,915)           1,268
Net Income / (Loss)                                    (439)          (310)            (15)       (4,013)            450
Income /(Loss) per common share                        (.08)          (.07)           (.02)         (.62)            .05
Weighted average number of common shares
  shares outstanding                              6,287,343      6,535,581       6,658,143     6,689,352       6,955,548

All of the above statistics are in $ thousand except for Income / (Loss) per
common share and weighted average number of common shares outstanding which
are expressed in $ and number respectively.

</TABLE>

<TABLE>

<CAPTION>

                                                              Balance Sheet Data as of  March 31

In $ Thousands                                       2001            2000            1999          1998           1997

<S>                                                  <C>            <C>             <C>           <C>            <C>
Working Capital / (deficiency)                        1,874            750             200        (1,123)           1,413
Total Assets                                         17,991         15,348          16,188        17,697          23,189
Short-term debt <F1>                                  8,489          7,717           7,558         7,994           8,818
Long-term debt <F2>                                   1,801            588             472           531           1,284
Redeemable convertible preferred stock                    0              0               0             0           1,744
Stockholders' equity                                  1,712          2,191           3,119         3,134           5,731

<FN>

<F1> The Company's short-term debt includes the current maturities of
     long-term debt, obligations under capital leases and short term
     borrowings. See Notes 6, 7 and 14 of "Notes to the Financial
     Statements".

<F2> The Company's long-term debt includes the long-term portion of
     obligations under capital leases.

</FN>

</TABLE>

                                     12

<PAGE>

                ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATION

                   For the three years ended March 31, 2001

      Management's discussion and Analysis should be read in conjunction
              with the Financial Statements and related notes.

      In this discussion, the words"Company", "we", "our" and "us" refer
                      to Command Security Corporation.

OVERVIEW

      Command Security Corporation is a provider of uniformed security
services from its eighteen operating offices throughout the United States.
Historically, we have grown by acquisition but the current focus is to build
our branch network by organic growth. This is to be achieved through a team
of business development managers who have been recruited and trained to sell
premium quality services at strong margins. We are currently able to provide
national coverage through our network of subcontractors that we use to
service our national ATM and retail customers.

RESULTS OF OPERATIONS

Earnings

      2001 was a difficult year for us, due to the continuing uncertainty
over the stockholder derivative suit that distracted us from the task of
managing and developing the ongoing business. Although the suit was
successfully settled in November 2000 leaving the new management team to
develop the business as it wishes, the nature and length of the dispute had
an adverse impact on both the actual results and our ability to improve
trends within the business.

      Our results for 2000 were also affected by the one-time charge on the
Tower Air bad debt which meant we suffered a loss of $309,710 compared to a
loss for 1999 of $15,399.

Revenue

      Revenue for 2001 grew by $12,074,513 to $71,320,440. The major
components of this increase were $8,227,000 from additional accounts within
the commercial aviation industry, $971,000 increase in revenue from the
servicing of ATM sites through our network of independent contractors and
$3,086,000 from additional guard service contracts. The latter was a
combination of new business and rate reviews on current customers offset by
terminated accounts whilst the increase in aviation revenue was due to
additional new contracts at existing airports and growth on other contracts.

      Revenue for 2000 increased to $59,245,927, a rise of $1,603,886
compared to $57,642,041 in 1999. The increase was primarily due to additional
accounts within the airline industry ($4,830,000), additional revenue from
the servicing of new ATM sites ($764,000) and non-recurring revenue from the
liquidation of a long haul trucking concern (approximately $790,000). These
increases were offset by $5,033,000 of contract cancellations and
terminations net of new starts from general commercial accounts especially in
New York City, Long Island and California.

Gross Profit

      Gross profit increased by $1,528,244 in 2001 from $10,002,866 to
$11,531,110 which was 16.2% of revenue compared to 16.9% in 2000. Gross
profit increased by approximately $2,039,000 as a result of the revenue
growth mentioned above. However, this increase was offset by an increase in
the cost of sales of $510,372. This rise was primarily due to higher payroll
costs ($793,983 - mainly in the aviation division following the loss of the
high margin Tower Air contract), increased vehicle expenses ($153,479) and
higher sub-contractor costs ($366,426). These rises were offset by a reduced
insurance expense ($271,991 - the benefit of an improved experience on
historical losses both on worker's compensation and general liability), a
$310,000 accrual on a disputed administrative service client in 2000 which
did not recur in 2001 and uniform charges ($139,964).

                                     13

<PAGE>

    The gross profit in the previous year was up by $286,448 from
$9,716,418 to $10,002,866. The increase in gross profit was a result of the
$1,603,886 rise in revenue with the conversion of revenue remaining at 16.9%
for both years. The gross profit increase of $286,448 was due to a
combination of the revenue growth mentioned above which had a $433,748 impact
offset by a cost of sales increase of $147,300. The latter was mainly due to
the $310,000 accrual mentioned above, an increase in uniform expenses
($161,600) and car depreciation and expense increases ($148,000) due to an
increase in the number of vehicles servicing customers and inflationary fuel
rises. In addition, there was a rise in worker's compensation estimated
losses incurred at client premises of $67,000. All these factors were offset
by a $546,500 decrease in labor costs due to termination of lower margin
accounts and new and temporary business at improved margins, a $125,000
reduction in general liability self-insurance reserves provision, $62,600
decrease in union benefit costs due to recognition withdrawal by a service
union and a $25,600 decrease in payroll related taxes due to favorable
unemployment insurance rates and increased use of subcontractors.

      One area of relative uncertainty within the gross margin calculation is
insurance which is largely dependent upon the result of past actions. We
insure against general liability claims and lawsuits through a general
liability insurance policy with a third-party insurance carrier. The policy
has a limit of $1,000,000 per occurrence while the Company retains the risk
for the first $25,000 for each occurrence ($50,000 prior to October 1, 2000)
and an additional limit of $10,000,000 in the aggregate. We have an excess
general liability insurance policy covering up to $50,000,000 in the
aggregate ($30,000,000 prior to October 1, 1999). The general liability
insurance reserve is based upon existing claims, actuarial computations and
the timing of reported claims which are all factored to estimate losses
incurred but not yet reported to the Company.

      We also have a worker's compensation insurance policy where the premium
is based on incurred losses as determined at the end of coverage plus the
basic insurance amounts. The worker's compensation basic premium is
determined by the insurance carrier and includes its overhead costs and
insurance premium. For the 2000 and 1999 years, the charge for estimated
losses was based upon industry standard payouts. In 2001, however, we have
used our own historical payout profile for which we now have an adequate
history. The impact on the charge in the 2001 year was not significantly
different than previous years as a result of this change.

Administrative Service Revenue

         The Company provides payroll and billing services and accounts
receivable financing through contracts with administrative service clients
for a percentage of the revenue or gross profit generated from their
business. The Company owns the accounts receivable and, depending on the
individual contract, may be the employer of record of the guards who provide
the services to the customers of the administrative service client. Whenever
contracted as the employer of record, the legal liability for tax
withholdings including FICA and unemployment insurance taxes is borne by the
Company. Additionally, the Company is responsible for worker's compensation
and general liability claims for damages that result from the employees'
conduct and/or negligence. The administrative service client manages its
internal operations including sales and marketing of its guard contracts. The
caption "Administrative Service Revenue" represents the income earned on the
Administrative Service Agreements as well as income earned on back-office
support to police departments for off-duty police services.

         Administrative Service revenue decreased by $279,919 to $274,277 for
2001, compared to $554,196 the previous year. The decrease was due to the
termination by mutual consent of an administrative service agreement in May,
2000 as part of a final settlement regarding disputed Company charges.
Revenue had also declined in 2000 from $913,498 in 1999 to $554,196 due to
the loss of two service agreements and the conversion of another from an
"employer of record" contract to a "non-employer of record" which earns a
lower rate.

          Costs associated with the administrative service revenue are
primarily clerical and administrative in nature and are not readily
segregated from the Company's total general and administrative costs. An
experienced industry professional has recently been recruited to develop the
administrative service client program. In addition, two further police
department contracts were secured during 2001 to provide back office support.
This brings the total police departments being supported to three at the end
of 2001.

General and Administrative Expenses

       General and administrative expenses rose by $1,897,094 to $10,099,333
in 2001 from $8,202,239 the prior year. This increase was primarily due to
higher office and administrative salaries of $1,046,047 which were a
consequence of additional personnel to manage the increased volumes and wage
increases and costs related to the employment contract of the CFO. Other
cost increases were incurred on telephone ($141,901), commission payments on
new sales ($49,032), increased costs of health insurance ($68,866) and
conferences and related travel expenses which were incurred to promote new
business ($168,156). Administrative auto expenses rose by $43,267 primarily
as a result of additional vehicles and higher fuel charges and professional
fees increased by $104,857. Other general administrative costs, including
office supplies, dues and subscriptions, rent and utilities, increased by
approximately $275,000 due to the increased level of business in fiscal 2001.

                                     14

<PAGE>

      General and administrative expenses in the previous year had risen by
$114,488 from $8,087,751 in 1999 to $8,202,239 in 2000. The major areas of
increase were $268,900 in office and administrative salaries due to expansion
in Florida and corporate charges after a reduction of $154,000 for a stock
compensation settlement related credit. Recruitment advertising rose by
$80,600 due to a tightened labor market and increase in new business and
there was a $23,000 increase in health insurance costs due to the termination
of partially self-insured health insurance program and other costs of
approximately $83,000. These increases were offset by a reduction in
professional fees of around $371,000 due to legal and compliance-related
consulting fees incurred in 1999 in connection with the Miami airport
employee background verification matter disclosed in Item 3 "Legal Proceedings."

Amortization of Intangibles

         A charge of $297,440 in 2001 was $879,008 less than 2000 due to
intangible assets from earlier acquisitions being fully amortized. These
included the acquisition of ISS International Service System, Inc. and McVey
Security Inc. The charge for 2000 of $1,176,448 was a reduction of $104,239
from the prior year due mainly to the full amortization of United Security
Group and Madison Detective Services, Inc. acquisitions.

Provision for Doubtful Accounts

         The provision for doubtful accounts fell by $445,633 in 2001 due to
the Tower Air write off in 2000 of $738,117. The increase in 2001, excluding
the Tower Air write-off, was due to a provision against a previous
administrative service client of $100,982 and a provision of $140,213
relating to a debt due from a customer in New York that remains outstanding
at the year end and for which a law suit has been instigated and approximates
to 25% of the total debt due. The provision for doubtful accounts for 2000
had increased by $602,021 over the charge in 1999 of $367,916 because of the
Tower Air issue mentioned above.

         We periodically evaluate the requirements for providing for credit
losses. A review of the creditworthiness of customers is undertaken as well
as prior payment performance, the age of the receivables and our overall
historical loss experience.

Bad Debt Recoveries

         There were no bad debt recoveries in 2001. In 2000, bad debt
recoveries decreased by $209,467 to $106,578 from $316,045 in 1999. This
decrease was principally due to a $250,000 unusual bad debt recovery in 1999
from a former administrative service client in Texas.

Stockholder Derivative Suit Costs

         A consequence of the stockholder derivative suit was additional
professional fees and distraction from the management of our business. Not
all costs can be readily identified but the charge of $431,445 in 2001
related to specific professional fees and settlement costs that were a direct
consequence of the shareholder suit. This suit was settled in November 2000
following the purchase by Reliance Security Group plc ("Reliance") of the
plaintiff's shares. Although no charges were identified in 2000, there were
costs of $273,527 in 1999 that were directly due to the stockholder
derivative suit.

Line of Credit Termination Fee

         A one-time charge of $125,000 was incurred during 2001 relating to a
fee payable to CIT Group Business/Credit Inc. following termination of the
revolving loan and security agreement in November 2000. No such termination
charge occurred in either 2000 or 1999.

Interest Income

         Interest income reduced by $58,160 to $114,373 in 2001 due to the
reduced activity on administrative service clients. The income of $172,533 in
2000 had also benefited from collection of interest from a non-employer of
record ("NEOR") service client that prior to August 1998 was contracted as an
employer of record ("EOR") administrative service client where interest fee
structure is excluded from the contract. The reduction in 2001 was also due
to the termination of this administrative service client in May 2000.

Interest Expense

         An interest expense of $956,352 in 2001 was $107,492 higher than
that incurred in 2000. This was primarily due to higher average rates
throughout the year and higher average borrowings on the combination of the
revolver and term loans. This was a consequence of the higher revenue levels
and the impact in the months following the switch from CIT to LaSalle due to
the change in location for submitted funds. The charge of $848,860 in 2000
was $143,358 lower than the 1999 charge of $992,218. This was due to higher
average borrowing levels during 1999 offset by slightly lower average
interest rates and higher interest charges on capital leases and other
borrowings.

                                     15

<PAGE>

Equipment Dispositions

         The $14,429 gain on equipment dispositions represents proceeds from
the sale of older equipment and vehicles in excess of book value. This
compared with a small gain in 2000 of $912 and a loss of $51,831 in 1999.

LIQUIDITY AND CAPITAL RESOURCES

         We pay our guard employees and those of our administrative service
clients on a weekly basis, while customers generally pay for services within
60 days of billing. In order to fund our payroll and operations, we have a
commercial revolving loan arrangement which up until November 2000 was with
CIT Group/Business Credit, Inc. ("CIT").

In November 2000, we entered into a three-year agreement with LaSalle
Business Credit Inc., ("LaSalle") under a loan and security agreement (the
"agreement"). The agreement provides for borrowings up to 85% of eligible
accounts receivable to a maximum of $15 million. LaSalle also provided a term
loan of $3 million which is to be repaid in equal monthly installments of
$100,000 through June 2003. The outstanding balance under the revolver and
term loans can be made up of a combination of Prime loans and LIBOR loans
although the maximum outstanding LIBOR loans at any one time must not exceed
three. The revolving loans bear interest at prime on the prime rate loans and
LIBOR plus 2% on the LIBOR loans. The equivalent rates on the term loans are
prime and LIBOR plus 2.5%. At the end of the 2001 fiscal year, we had
borrowed $6,823,985 representing approximately 81% of our maximum borrowing
capacity.

         Long term debt (including current maturities) increased by
$2,349,108 primarily due to the new LaSalle term loan which was $2,600,000 at
the 2001 year end. Other movements were a reduction in amounts due to CIT and
Capital Resource Company of $191,667 and $57,674 respectively which were both
repaid in full at the time of the LaSalle funding in November 2000. Debt on
vehicles rose slightly from $452,938 in 2000 to $469,386 in 2001.

         Our capital lease obligations reduced by $114,670 from $391,713 in
2000 to $277,043 in 2001. No new capital leases were taken out during the
year and the reduction was due to repayments on the amount outstanding as at
2000. Total required principal repayments on long term debt and capital lease
obligations for the year to March 2002 are approximately $1,546,000 compared
to $524,000 for the prior year. The increase is primarily due to the payments
required on the LaSalle term loan.

         The Company and its Board of Directors were party to a legal
proceeding characterized as a derivative action that was resolved in
connection with the Reliance transaction through a settlement in November
2000. The Company agreed to pay certain transaction-related expenses, to
reimburse for certain directors' related legal costs and incurred
professional fees in connection with the settlement. Accordingly, the Company
incurred charges of $431,445 during 2001.

         Our operations for 2001 resulted in an operating profit of $327,865
compared to $315,016 in 2000. The 2001 result was lower than the operating
profit achieved in 1999 of $877,434, primarily due to the costs of the
stockholder derivative suit and the CIT termination fee. As a result of the
term loan from LaSalle, working capital increased from $749,710 in 2000 to
$1,874,303 in 2001. Proceeds from the term loan were also used to finance
increased levels of accounts receivable. Accounts receivable have increased
due to increased volume as well as additional aviation and ATM related
accounts which may have delayed billing pending receipt of additional
information from customers and subcontractors. We experienced a cash
overdraft (defined as checks drawn in advance of future deposits) of
$1,039,698 compared to $184,772 at 2000. Cash balances and book overdrafts
can fluctuate materially from day to day depending upon such factors as
collections, timing of billing and payroll dates and are covered by advances
from the revolving loan as checks are presented for payment.

         Effective July, 2000, we suspended payment of preferred stock
dividends until we re-establish sufficient reserves through future earnings.
As of March 31, 2001, we owed our preferred stockholders $122,022 and
dividends will continue to accumulate at the rate of $40,674 per quarter.

        Due to the fact that our stock had been trading below $1.00 since
approximately May of 2000, we received notification from NASDAQ that our
stock would be delisted from the NASDAQ Small Cap Market and effective
October 25, 2000 our stock is now quoted in the OTC Bulletin Board Service.
We intend to continue to comply, however, with all applicable reporting
requirements of the Securities and Exchange Commission.

                                     16

<PAGE>

OUTLOOK

         This outlook section contains a number of forward-looking
statements, all of which are based upon current expectations. Actual results
may differ materially and are qualified by the section below entitled "Forward
Looking Statements."

         The current year represents our first real opportunity for many
years to grow and develop our business free from the diversion of the
stockholder derivative suit. We now have a major shareholder who is an
industry expert and who shares our vision of providing a quality service at
the right price. Reliance is now our largest shareholder and brings to the
table seasoned industry professionals who have joined our Board, and our new
CFO. Having secured the agreement with LaSalle to fund future growth, it is a
great opportunity for us to significantly develop our business throughout the
United States. In addition, we have some exciting developments within our ATM
and retail businesses including expansion of global alliances, most notably
with Reliance in the UK. The uncertainty within the security industry
following many acquisitions, most notably Burns and Pinkerton by Securitas
and Argenbright by Securicor, has left many long term customers of our
competitors more willing to consider new vendors.

         Our outlook on revenues is largely dependent upon the success of our
new sales teams which we have now taken on in all divisions. These sales
teams will assist us to win new contracts in excess of any terminations that
may occur. We will be looking to secure additional business within our branch
network as well as at additional category X airports and our higher value
added services should benefit from increased regulation of the airports
currently being proposed by the FAA.

         A review of the true profitability of certain contracts may result
in a reduction in revenues in the short term as we look to improve rates at
our more marginal contracts. We are also looking at an aggressive rate review
program to improve margins to fund increased management input to our
contracts. These actions may have the consequence of causing increased
terminations in the short run.

         We expect margins to stabilize at around 16% although this will be
affected by the health of the economy. The strength of the economy and the
levels of unemployment have a major impact on our ability to recruit and
retain the right quantity and quality of personnel to service our contracts.
This has a consequential impact on overtime and wage rates generally which
are often dictated by the customer during the tender process. The margin will
also be affected by the mix of our business and on our ability to sell and
manage higher value services at improved margins.

         The new sales force in both the guard and aviation service divisions
will have a negative impact on short term profitability. This should be
offset in the medium term by new business wins. There will be a positive
impact on interest from the reduction in prime and LIBOR rates which occurred
in the early part of 2001.

FORWARD LOOKING STATEMENTS

         Certain of the statements contained in this Management's Discussion
and Analysis of Financial Condition and Results of Operations section of the
Form 10K and in particular this report including those under the heading
"Outlook," contain forward-looking statements that are based on current
expectations, estimates, forecasts and projections about the industry in
which the Company operates, Management's beliefs, and assumptions made by
Management. In addition, other written or oral statements that constitute
forward-looking statements may be made by or on behalf of the Company. While
we believe these statements are accurate, our business is dependent upon
general economic conditions and various conditions specific to our industry.
Future trends and these factors could cause actual results to differ
materially from the forward-looking statements that have been made. These
statements are not guarantees of future performance and involve certain
risks, uncertainties and assumptions that are difficult to predict.
Therefore, the actual outcomes and results may differ materially from what is
expressed or forecast in such forward-looking statements. The Company
undertakes no obligation to update publically any forward-looking statements,
whether as a result of new information, future events or otherwise.

         As provided for under the Private Securities Litigation Reform Act
of 1995, the Company wishes to caution shareholders and investors that the
following important factors, among others, could cause the Company's actual
results and experience to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking statements in
this report.

Competition

         The Company's assumptions regarding projected results depend largely
upon the Company's ability to retain substantially all of the Company's
current clients. Retention is affected by several factors including but not
limited to, the quality of the services provided by the Company, the quality
and pricing of comparable services offered by competitors, continuity of
Management and continuity of non-management personnel. There are several
major national competitors with resources far greater than those of the
Company which therefore, have the ability to provide service, cost and
compensation incentives to clients and employees which could result in a loss
of such clients and/or employees. It is uncertain whether these competitors'
status after the acquisitions discussed above, will result in a gain or loss
of clients and/or employees to the Company.

                                     17

<PAGE>

Cost Management

         The Company's ability to realize its projections will be largely
dependent upon its ability to maintain margins, which in turn will be
determined in large part by Management's control over costs. To a significant
extent, certain costs are not within the control of Management and margins
may be adversely affected by such items as litigation expenses, fees incurred
in connection with extraordinary business transactions, inflation, labor
unrest, increased payroll and related costs.

The Reliance Transaction

         With regard to the Company's relationship with Reliance, the
Company's reconstituted Board of Directors and its new personnel, there can be
no assurance that they will have a positive impact on the Company's earnings
for an extended period, if at all.

Collection of Accounts Receivable

         Management has no reasonable basis to believe that a default in
payment of Accounts Receivable by the Company's security guard customers or
administrative service clients will occur except as stated in Item 7
"Management's Discussion and Analysis of Financial Condition and Results of
Operation - Provision for Doubtful Accounts." However, any such default by a
significant client due to bankruptcy or otherwise, would have a material
adverse impact on the Company's liquidity, results of operations, and
financial condition.

Officers and Directors Potential to Control Matters Requiring
  Stockholder Approval

         Our executive officers, directors and 5% or greater stockholders
currently own beneficially 2,500,389 shares or approximately 40% (excluding
any shares issuable upon exercise of warrants) and at a future date have the
potential through the exercise of warrants and options, to beneficially own
approximately 7,763,460 shares or approximately 67% of the outstanding shares
of the Company's common stock. These stockholders, acting together may be
able to effectively control matters requiring approval by stockholders,
including the election or removal of directors and the approval of mergers or
other business combination transactions. This concentration of ownership
could have the effect of delaying or preventing a change in our control or
otherwise discouraging a potential acquirer from attempting to obtain control
of us, which in turn could have an adverse effect on the market price of our
common stock or prevent our stockholders from realizing a premium over the
market price for their shares of common stock.

         These are representative of the factors that could affect the
outcome of the forward-looking statements. In addition, such statements could
be affected by general industry and market conditions and growth rates,
general United States and non-United States economic conditions, including
interest rate and currency exchange rate fluctuations and other factors.
Additional detailed information concerning a number of factors that could
cause actual results to differ materially from the information contained
herein is readily available in the Company's most recent reports on Forms
10-K, 10-Q and 8-K and any amendments thereto (all as filed with the
Securities and Exchange Commission from time to time).

                                     18

<PAGE>

        ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
                                    RISK.

         During the fiscal year ended March 31, 2001, the Company did not
hold a portfolio of securities instruments for either trading or for other
purposes.

         The Company is exposed to market risk in connection with changes in
interest rates, primarily in connection with outstanding balances under its
revolving line of credit and term loan with LaSalle Business Credit, Inc.
Based on the Company's interest rate at March 31, 2001, and average
outstanding balances during the fiscal year then ended, a 1% change in the
prime lending rate and LIBOR rates would impact the Company's financial
position and results of operations by approximately $92,000 over the next
fiscal year.

             ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 See ITEM 14, "EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES,
                          AND REPORTS ON FORM 8-K."

            ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                   ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

                                     19

<PAGE>

                                   PART III

         ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The Company's by-laws require that the Board of Directors be divided
into two classes. The first class consists of directors Geoffrey P.
Haslehurst, Kenneth Allison and Graeme R. Halder. The second class consists
of William C. Vassell, Peter J. Nekos, Carl E. Painter and Gregory J.
Miller. The terms of the directors in the first class will expire at the
annual meeting of shareholders in 2002 or until their successors have been
elected and qualified. The terms of the directors in the second class will
expire at the annual meeting of shareholders in 2001 or until their
successors are elected and qualified. Each director's term is for two years.
A classified board makes it more difficult for shareholders to change the
majority of directors. Depending on the number of people in each class it
could take two (2) annual meetings to replace a majority of the Board. This
provision is applicable to every election of directors after the initial
classification.

          The following table provides information concerning each person who
was an executive officer or director of the Company as of June 15, 2001.

Name                    Age      Title

William C. Vassell       42      Chairman of the Board,
                                   President and Chief Executive Officer

Gregory J. Miller        41      Director

Peter J. Nekos           73      Director

Geoffrey P. Haslehurst   42      Director

Kenneth Allison          56      Director

Graeme R. Halder         38      Chief Financial Officer and Director

Carl E. Painter          55      Director

Eugene U. McDonald       51      Sr. Vice President Guard Operations

Martin Blake             47      Vice President Aviation Services

William Dunn             48      Corporate Secretary, General Counsel

         William C. Vassell is currently President and Chief Executive
Officer and has been Chairman of the Board since 1983. Mr. Vassell had been
Chairman of the Board, President and Chief Executive Officer of the Company
since 1983, when the Company repurchased the remaining 50% of its
then-outstanding common stock (he became a 50% owner of the Company in 1980).
In connection with the Company's acquisition of United Security Group Inc.
("United"), Mr. Vassell resigned from the offices of President and Chief
Executive Officer on February 24, 1995, and retained his position as Chairman
of the Board. He has been a director of the Company since 1980, and has been
a member of the Executive Committee since March 1995. He was reappointed as
President and Chief Executive Officer on November 13, 2000 in conjunction
with the Reliance transaction. Mr. Vassell is active in various industry and
trade associations. He twice was Chairman of the Mid-Hudson Chapter of the
American Society for Industrial Security (the nationally recognized security
association), and he is a Certified Protection Professional within the
Society. He is also a director of the Associated Licensed Detectives of New
York State and a member of the Committee of National Security Companies.

         Gregory James Miller has been a director of the Company since
September 1992. Since 1987 he has served as General Counsel for Goldline
Connectors, Inc., a Connecticut-based electronics manufacturer, and sits on
its board of directors. Mr. Miller also serves "of counsel" to Benenson &
Kates, in New York, handling labor law and contract negotiations for security
guard clients, and has handled various legal matters for the Company since
1985. Mr. Miller is currently employed by Goldline Connectors, Inc. He has a
Bachelors Degree from Kalamazoo College, and a Juris Doctor Degree from New
York Law School, where he was an Editor of the Journal of Human Rights.

                                     20

<PAGE>

          Peter J. Nekos has been a director of the Company since March 1991.
Mr. Nekos is a certified public accountant. From July 1984 to June 1986 he
was a partner of Nekos & Kilduff, an accounting firm located in New Rochelle,
New York. He operated his own accounting firm in Mamaroneck, New York from
July 1986 until September 1996. At present he operates an office in Valhalla,
New York.

     Geoffrey P. Haslehurst has been a director of the Company since November
2000. Mr. Haslehurst has been Group Financial Director for Reliance Security
Group plc since 1996. Prior to joining Reliance, he was Group Financial
Director for Laura Ashley Holdings plc.

     Kenneth Allison has been a director of the Company since November 2000.
Mr. Allison has been managing director of Reliance Security Services Limited
since 1996 and a member of the Board of Directors of Reliance Security Group
plc since 1998. Mr. Allison also serves as Chairman of Reliance Group's
Reliance Security Services (Scotland) Limited and Project Security Limited
Company. Prior to joining Reliance, Mr. Allison was the managing director of
the European food logistics division at Christian Salvesen plc.

         Graeme R. Halder has been a director of the Company and its Chief
Financial Officer since January 2001. Mr. Halder is qualified as a Chartered
Accountant in the United Kingdom and worked from 1987 to 1988 with Touche
Ross at their London office. In 1988, he moved to the Corporate head office
of Granada Group plc where he worked for eight years culminating in a
position as Finance Director of Granada Hospitality which had $2 billion of
revenue and $3 billion in assets. Granada is involved in retail, hotels and
catering. His final role at Granada Group plc was to spearhead the
integration of the accounting systems of several companies following the $6
billion acquisition of Forte plc in 1996. He moved to Reliance Security Group
plc in 1996 as Finance Director of the guard division before moving to the
United States to take up his current position as Chief Financial Officer of
Command.

         Carl E. Painter has been a director of the Company since April 2001.
Mr. Painter was most recently Chairman, President and Chief Executive Officer
of BICC Cables Corporation which was a leading manufacturer of electrical
cables in the United States and Canada with revenues in excess of $750
million. BICC Cables was a subsidiary of the London based BICC Group. In
1984, Mr. Painter was a co-founder of Cablec Corporation, a company formed to
complete the management buy-out of the power cable business of the Phelps
Dodge Cable & Wire Company. At the time of the MBO, revenues were $50
million. By 1989, revenues had increased to over $500 million as a result of
internal growth and several acquisitions and the company was acquired by the
BICC Group. During his time with the company, Mr. Painter held positions in
manufacturing, sales, marketing and general management and led a number of
acquisitions and the integration process following the acquisitions. He
served as a director on the main board of the BICC Group and was a director
on the board of Phillips Cables, Ltd., a Canadian subsidiary. He was also a
director for the National Electrical Manufacturers Association, the trade
association for the U.S. electrical industry. Mr. Painter received a Bachelor
of Science degree in electrical engineering from Lehigh University in 1968
and an MBA degree from the Harvard Business School in 1975. He served four
years as a Flight Officer in the U.S. Navy.

         Eugene U. McDonald has more than twenty seven years of experience in
the security business. He joined the Company in October of 1992 as Vice
President of Corporate Services, and in 1995, he took over the position of
Senior Vice President-Operations. Mr. McDonald has held senior management
positions with Globe Security (1973-1990) and Burns International Security
Services (1990-1992). He has extensive direct personal experience with the
handling of specialized security personnel for cleared facilities as
evidenced by his duties as Group Vice President of Energy Services for Globe
Security. He is active in the American Nuclear Society, Institute of Nuclear
Materials Management, American Society for Industrial Security and the
Connecticut Police Chiefs Association.

         Martin C. Blake, Jr. has over twenty-seven years of experience in
aviation security services. Prior to joining the company in 1995, Mr. Blake
retired as a Major in the United States Air Force, where he served in a
variety of senior management positions. Mr. Blake's last assignment was as
the Program Manager for Electronic Security Systems, Electronic Systems
Division. In this capacity he managed a $20 million annual program
responsible for global marketing, procurement, and deployment of electronic
security systems. He was responsible for integrating security systems and
programs at international airports in Germany, Turkey, and the United
Kingdom. Previously, Mr. Blake was the Director of Security at the Department
of Defense's largest classified air flight facility, incorporating over 1,200
square miles of restricted air space. Establishing aviation security programs
for major aircraft defense contractors was an integral responsibility of his
position. Mr. Blake also served as the Security Program Manager for Air Force
space programs, including security for the Space Shuttle and expendable space
launch vehicles. He also led the effort to integrate a shared automated entry
control system for use at Cape Canaveral, Kennedy Space Center, and the
Johnson Space Center.

                                     21

<PAGE>

         William Dunn is the Secretary and General Counsel for Command
Security Corporation. He began working with the Company in 1997 and became
General Counsel in 1998, and Secretary in 2000. Mr. Dunn's duties include
managing litigation, licensing and compliance, contracts, and
employment-related issues. Prior to his association with Command, Mr. Dunn
was with the New York City Police Department for 22 years managing
investigations and legal matters in several areas. He also worked for the
United States Department of Agriculture in an investigative and adjudicative
position. Mr. Dunn graduated from City University of New York and New York
Law School. He has been a member of the New York Bar since 1988. He has also
been a member and associate of several Bar and Law enforcement organizations.

           SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Each director and executive officer of the Company who is subject to
Section 16 of the Securities Exchange Act of 1934, and each other person who
beneficially owns more than 10% of the Company's common stock, is required by
Section 16(a) of that Act to report to the Securities and Exchange Commission
by a specified date his or her ownership of and transactions in the Company's
common stock. Copies of such reports on Forms 3, 4, and 5 must also be
provided to the Company. Based solely on a review of Forms 3, 4 and 5 and any
amendments thereto, and written representations to the Company with respect
to the fiscal year ended March 31, 2001, the Company is not aware of any
person who, at any time during the fiscal year ended March 31, 2001, was a
director, officer or beneficial owner of more than ten percent (10%) of the
Company's common stock and who failed to file reports required by Section
16(a) of the Securities Exchange Act of 1934, as amended, during the fiscal
year ended March 31, 2001, except that: (i) Messrs. Blake, Dunn and McDonald
were late in filing a Form 3; and (ii) Ms. Miller was late in filing a Form
4.

                                     22

<PAGE>

                       ITEM 11. EXECUTIVE COMPENSATION

     The following table sets forth for the fiscal year ended March 31, 2001,
all plan and non-plan compensation paid to, earned by, or awarded to William
C. Vassell, President, Chairman of the Board and Chief Executive Officer,
Graeme R. Halder, Chief Financial Officer, Eugene U. McDonald, Senior Vice
President -- Operations, and Martin C. Blake, Jr., Vice-President - Aviation,
Franklyn H. Snitow, Former Acting President and Chief Executive Officer, and
Nathan Nelson, Former Chief Financial Officer and Executive Vice President.
No other executive officer of the Company received total annual salary and
bonus in excess of $100,000 for the fiscal year ended March 31, 2001 and,
therefore, compensation for such other executive officers is not disclosed.

<TABLE>

                          SUMMARY COMPENSATION TABLE
                   FOR THE FISCAL YEAR ENDED MARCH 31, 2001

<CAPTION>

                                           Annual Compensation                      Long-Term Compensation


                               Fiscal                          Other                    Shares
                                Year                           Annual                  Underlying
Name and Principal             Ended                           Salary                   Warrants
Position                       March 31     Annual Salary   Compensation  Bonus       Granted

<S>                            <C>          <C>              <C>           <C>       <C>
William C. Vassell<F1>
President,
Chairman of the Board
and Chief Executive Officer
                               1999         $175,000             <F2>            0           0
                               2000         $153,846             <F2>            0           0
                               2001         $162,500             <F2>            0   1,217,444<F1>

Graeme R. Halder<F3>
Chief Financial Officer
                               2001          $30,000         $179,356<F4>  $13,800      75,000<F5>

Eugene U. McDonald
Senior Vice President -
Operations
                               1999         $112,116             <F2>      $20,000
                               2000         $131,000             <F2>      $11,297
                               2001         $105,000             <F2>      $26,338      50,000<F5>

Martin C. Blake, Jr.
Vice President-
 - Aviation
                               1999         $114,539             <F2>      $62,991           0
                               2000         $116,074             <F2>      $12,900           0
                               2001         $119,678             <F2>      $94,058      50,000<F5>

Franklyn H. Snitow<F6>
Former Acting President and
Chief Executive Officer
                               2000         $      0             <F2>            0           0
                               2001         $      0             <F2>            0           0

Nathan Nelson<F7>
Former Chief Financial Officer
and Executive Vice President
                               2000         $103,384             <F2>            0           0
                               2001         $100,331             <F2>            0           0

<FN>

<F1> In November, 2000, Mr. Vassell was granted two warrants covering
     1,217,444 shares of the Company's common stock in connection with the
     Reliance transaction. The first warrant issued to Mr. Vassell in
     connection with the Reliance transaction covers 204,485 shares at an
     exercise price of $1.25 per share and became exercisable on November 12,
     2000, but it cannot be exercised until after the exercise by Reliance of
     a warrant issued to it, and then only in the same proportion as to which
     Reliance has exercised its warrant. This warrant expires on November 12,
     2005. The second warrant issued to Mr. Vassell in connection with the
     Reliance transaction covers 1,012,159 shares at an exercise price of
     $1.25 per share. It is not exercisable until November 12, 2001, and then
     only to the extent as follows (i) with respect to one-third of the
     warrant shares if the Company's earnings satisfy certain "Confidential
     Performance Targets" (defined below under Item 11 - "Employment
     Agreements and Warrants and Termination of Employment and Change of
     Control Agreement - William C. Vassell") for the fiscal year ended March
     31, 2002; (ii) with respect to two-thirds of the warrant shares if the
     Company's earnings satisfy the Confidential Performance Targets for the
     fiscal year ended March 31, 2003; and (iii) with respect to all of the
     warrant shares if the Company's earnings satisfy the Confidential
     Performance Targets for the fiscal year ended March 31, 2004. This
     warrant expires on November 12, 2005.

<F2> All perquisites and other personal benefits, securities or property
     do not exceed either $50,000, or 10% of the total annual salary and
     bonus of the executive officer. All perquisites and other personal
     benefits, securities or property are properly indicated in the
     "Other Annual Salary Compensation" column, as they all fit into the
     categories set forth in Item 402 of Regulation S-K.

<F3> Mr. Halder became Chief Financial Officer of the Company as of
     January 1, 2001. Since becoming Chief Financial Officer in January
     of 2001, Mr. Halder earned actual compensation in the amount of
     $30,000. Pursuant to an arrangement with Reliance, Mr. Halder
     provided certain services (which equaled Mr. Halder's compensation
     by Reliance) to the Company in 2000. The cost of those services,
     $56,478, was reimbursed by the Company to Reliance in 2001.

<F4> Pursuant to the Employment Agreement entered into between Mr.
     Halder and the Company as of January 1, 2001, Mr. Halder received
     perquisites and other personal benefits in excess of either $50,000
     or 10% of his total annual salary and bonus. Mr. Halder received
     $13,856 for reimbursement of moving costs between the UK and the
     US, $6,740 for health cover, $3,877 for the use of a fully expensed
     vehicle, $34,279 towards the cost of rental accommodation in the US
     offset by $5,746 received on the rental of his UK property and
     $27,363 in private school tuition for his two eldest children. His
     employment agreement also covers him for the tax consequences of
     his move to the States including any taxable benefit on the above
     costs and this is estimated at $42,509.

<F5> Covered by a warrant issued pursuant to the Company's 2000 Stock
     Option Plan at an exercise price of $0.75 per full share. The
     warrant may become exercisable May 1, 2004, provided certain
     Confidential Performance Targets, as defined below, are satisfied.
     See Option Grants in Fiscal Year 2001, below.

<F6> Mr. Snitow resigned as Acting President and Chief Executive Officer
     in November of 2000. Mr. Snitow was not compensated as an officer
     of the Company, however, Mr. Snitow's law firm was paid legal fees
     of $20,743 during the fiscal year ended March 31, 2001. During the
     fiscal years ended March 31, 2000 and March 31, 1999, Mr. Snitow's
     law firm received $45,662 and $72,500, respectively.

<F7> Mr. Nelson resigned as Chief Financial Officer and Executive Vice
     President of the Company in November 2000.

</FN>

</TABLE>

                                     23
<PAGE>

Stock Options/Warrants

         The Company granted stock warrants pursuant to its 2000 Stock Option
Plan during the fiscal year ended March 31, 2001 to three of the Company's
executive officers and two other officers. The warrants granted to Messrs.
Halder, McDonald, and Blake are noted in the table above and its annotations.
The Company granted two stock warrants in connection with the Reliance
Transaction to Mr. Vassell, the Company's Chief Executive Officer, during the
fiscal year ended March 31, 2001. The warrants granted to Mr. Vassell are
noted in the table above and its annotations. There were no tandem or
free-standing stock appreciation rights granted to any person during the
fiscal year ended March 31, 2001.

                                     24

<PAGE>

<TABLE>

         The following table sets forth information with respect to stock
options/warrants granted to the executive officers listed on the Summary
Compensation Table above during the fiscal year ended March 31, 2001.

<CAPTION>

                                                Option Grants in Fiscal Year 2001

                        Number of
                        Securities      Percent of
                        Underlying     Total Granted   Exercise              Potential Realizable Value
                     Options/Warrants   to Employees   Price Per              at Assumed Annual Rates of
                        Granted<F1>     in Fiscal Year    Share   Expiration  Stock Price Appreciation
                           (#)             Year(%)                  Date         for Option Term <F2>

Name                                                                        5%               l0%

<S>                  <C>               <C>             <C>       <C>        <C>              <C>
William C. Vassell     204,485<F3>     14.5%           $ 1.25    11/12/05   $  (59,871)      $  (8,612)
                     1,012,965<F4>     71.7%           $ 1.25    11/12/05   $ (296,583)      $ (42,633)

Graeme R. Halder        75,000          5.3%           $ 0.75     1/31/11   $   35,375       $  89,648

Martin C. Blake, Jr.    50,000          3.5%           $ 0.75     1/31/11   $   23,584       $  59,765

Eugene U. McDonald      50,000          3.5%           $ 0.75     1/31/11   $   23,584       $  59,765

<FN>

<F1>  The number of options/warrants granted to executive officers in the
     fiscal year ended March 31, 2001 was 1,412,444. 195,000 of those
     options were granted under the 2000 Stock Option Plan. Those
     options expire ten years after the date of the grant and vest upon
     the Company's Board of Directors determination in 2004 that the
     Confidential Performance Targets (defined below under Item 11 -
     "Employment Agreements and Warrants and Termination of Employment
     and Change of Control Agreement - William C. Vassell") have been
     satisfied or are waived. All of the options fully vest upon a
     change of control.

<F2>  Potential realizable value is based on the assumption that the
     Company's common stock appreciates at the annual rate shown,
     compounded annually, from the date of grant until expiration of
     each warrant or option term. These numbers are calculated based on
     SEC requirements and do not reflect our projection or estimate of
     future stock price growth. Potential realizable values are computed
     by multiplying the number of shares of common stock subject to a
     given option by the fair market value of the common stock on the
     date of grant, assuming that the aggregate stock value derived from
     that calculation compounds at the annual 5% or 10% rate shown in
     the table for the entire term of the option and subtracting from
     that result the aggregate option exercise price. Actual realizable
     value, if any, will be dependent on the future price of the common
     stock on the actual date of exercise, which may be earlier than the
     stated expiration date.

<F3>  This warrant issued to Mr. Vassell in connection with the Reliance
     transaction covers 204,485 shares at an exercise price of $1.25 per
     share and became exercisable on November 13, 2000. It cannot be
     exercised until after the exercise by Reliance of a warrant issued
     to it, and then only in the same proportion as to which Reliance
     has exercised its warrant. This warrant expires on November 12,
     2005.

<F4>  This warrant issued to Mr. Vassell in connection with the Reliance
     transaction covers 1,012,159 shares at an exercise price of $1.25
     per share, not exercisable until November 12, 2001, and then only
     to the extent as follows (i) with respect to one-third of the
     warrant shares if the Company's earnings satisfy certain
     Confidential Performance Targets, as defined above, for the fiscal
     year ended March 31, 2002; (ii) with respect to two-thirds of the
     warrant shares if the Company's earnings satisfy the Confidential
     Performance Targets for the fiscal year ended March 31, 2003; and
     (iii) with respect to all of the warrant shares if the Company's
     earnings satisfy the Confidential Performance Targets for the
     fiscal year ended March 31, 2004. This warrant expires on November
     12, 2005.

</FN>

</TABLE>

                                     25

<PAGE>

Employment Agreements and Warrants and Termination of Employment and
  Change of  Control Agreement

William C. Vassell

        The Company entered into an Employment Agreement with Mr. Vassell dated
as of September 12, 2000. The Agreement went into effect when the Reliance
transaction was consummated on November 13, 2000. The Agreement provides that
Mr. Vassell be employed as the Company's Chairman of the Board of Directors,
Chief Executive Officer and President. The contract will end on the earlier
of the third anniversary of the effective date or the date on which Mr.
Vassell's employment is terminated under the Agreement. Unless either party
gives ninety (90) days notice to the other party prior to an anniversary of
the effective date, the Agreement shall be automatically extended for one
year on such anniversary date. Mr. Vassell's base salary shall be $175,000
per annum for the first employment period, $225,000 for the second employment
period and $250,000 thereafter.

         Mr. Vassell shall be eligible to receive incentive compensation
commencing with the fiscal year ended March 31, 2001. He shall receive
incentive compensation equal to 20% of his base salary if the Company's
earnings before taxes for that year equal or exceed certain Confidential
Performance Targets. Said Confidential Performance Targets are set forth in a
confidential letter agreement between Mr. Vassell and the Company, dated
September 12, 2000. Said Letter Agreement references the Company's
confidential Business Plan dated March 13, 2000 and approved by the Company's
Board of Directors in November, 2000 following the Reliance Transaction. For
each percentage increase in earnings before taxes above the stated targets,
the incentive compensation will be increased by three percentage points of
the base salary up to a maximum incentive compensation equal to 50% of base
salary. Mr. Vassell also received two warrants which are described in
"Security Ownership of Certain Beneficial Owners and Management" and in the
annotations to the table above. Mr. Vassell's employment may be terminated by
the Board with or without cause or by Mr. Vassell in the event of a material
breach by the Company or Reliance of the Shareholders' Agreement dated
September 12, 2000, a material diminution in his duties and/or authority
under the Employment Agreement, or a relocation of the Company's headquarters
more than fifty (50) miles away from its his current location. Any such
diminution, relocation or other uncured breach is referred to as constructive
discharge. Mr. Vassell may also terminate his employment upon one hundred
eighty (180) days notice or under certain circumstances following a change in
control.

         In the event Mr. Vassell is terminated for cause or he terminates
other than for constructive discharge or following a change of control, death
or disability, the Company shall have no further obligation except to pay
those accrued obligations arising prior to the date of termination. In the
event the Company terminates Mr. Vassell without cause or Mr. Vassell
terminates as a result of constructive discharge, the Company will have no
obligation to Mr. Vassell other than to pay all accrued obligations such as
salary and benefits, the payment of the balance of his base salary for the
year of termination, plus incentive compensation under certain circumstances.

         The Employment Agreement provides that Mr. Vassell shall be subject
to a Confidentiality Agreement with respect to any confidential or
proprietary information, knowledge or data relating to the Company. In
addition, for one (1) year following termination of his employment for any
reason, Mr. Vassell shall not solicit for employment or employ any person who
is a senior executive or branch manager of the Company, solicit any customer
of the Company or provide to any customer of the Company services of the type
offered by the Company as of the date of such termination except under
certain circumstances.

         The Employment Agreement goes on to provide Mr. Vassell with
extensive indemnification with respect to any action taken or omission
occurring after the effective date of the contract. Such indemnification
provisions provide for advancement of expenses and costs.

         Pursuant to the Employment Agreement which expired in July 2000, Mr.
Vassell served as Chairman of the Board of the Company and received an annual
salary of $175,000 in fiscal years ended March 31, 1999 and March 31, 2000.
The Board determined that as of April 1, 1999, Mr. Vassell's salary would be
$150,000 annually. Mr. Vassell was also entitled to an annual bonus equal to
5% of the Company's pre-tax profit for each fiscal year exclusive of (a)
capital gains and losses; (b) the annual bonus; and (c) federal state and
local income and franchise taxes for that year ("Pre-Tax Operating Profit")
from $.5 million to $1.0 million, and 2% of all Pre-Tax Operating Profit in
excess of $1.0 million. Mr. Vassell was provided with the use of a
Company-owned automobile and reimbursement for automobile insurance and
operating expenses.

         In September of 1992, the Company entered into a Compensation
Continuation Agreement with Mr. Vassell. This Agreement provides that, if,
within specified periods of a change of control of the Company (as defined in
the Agreement) Mr. Vassell's employment is terminated by the Company without
cause (as defined in said Agreement), or if Mr. Vassell terminates his
employment for good reason (as defined in the Agreement), Mr. Vassell will be
paid 2.99 times the greater of his annual compensation as in effect on the
date of the Agreement or the highest annual compensation for any of the three
(3) years preceding the termination. All awards previously granted under any
performance incentive plan, the actual payment of which may be deferred, will
be vested as a result of the change of control and all options and warrants
held by Mr. Vassell will become immediately exercisable. Currently, the
aggregate amount payable to Mr. Vassell upon his termination in the event of
a change in control would be 2.99 times his total compensation of
approximately $175,000 for the fiscal year ended March 31, 2001, or
approximately $525,000.

                                     26

<PAGE>

Graeme R. Halder

         The Company entered into an Employment Agreement with Mr. Graeme R.
Halder as of January 1, 2001. The Agreement provides that Mr. Halder will be
employed as the Company's Chief Financial Officer and report to Mr. Vassell.
The contract contemplates a three (3) year term but may be terminated by
either party prior thereto. Mr. Halder's base salary is $138,000 and he will
be eligible to receive up to an additional fifty percent (50%) of his base
salary based on performance. The contract indicates that Mr. Halder will be
considered for a 75,000 share option and, accordingly, in February, 2001, he
was issued an option covering 75,000 shares pursuant to the Company's
Incentive Stock Option Plan. The perquisites offered to Mr. Halder include a
Tax Equalization Agreement, an automobile, a $13,800 disturbance allowance
per annum, the reasonable costs of private education for his two eldest
children, a $6,000 per annum air travel allowance and reimbursement of moving
costs between the United States and the United Kingdom.

Franklyn H. Snitow

         The Company had an agreement pursuant to an engagement letter and an
Indemnification Agreement with Mr. Snitow, the Company's former Acting
President and Chief Executive Officer. In accordance with the engagement
letter, Mr. Snitow was compensated at the rate of $300.00 per hour, plus
reimbursable expenses, based on his hourly billing to the Company. The
Indemnification Agreement between the Company and Mr. Snitow provided for the
maximum indemnification permitted under New York law, and the Company's
Certificate of Incorporation and By-Laws. The inclusion of the foregoing
information is intended to comply with Section 725(d) of the New York
Business Corporation Law.

Martin C. Blake, Jr.

         The Company has executed an Employment Agreement with Mr. Blake
dated as of March 20, 2000. The Agreement went into effect on April 1, 2000
and supercedes a prior Employment Agreement dated January 1, 1998. The
Agreement provides that Mr. Blake be employed as the Company's Vice President
and General Manager of the Company's Aviation Safeguards Division (AVSA). The
contract will end on the earlier of the third anniversary of the date of the
Agreement or the date on which Mr. Blake's employment is terminated under the
Agreement. Mr. Blake's base salary is $120,000 per annum. He is also eligible
to receive a performance related bonus. The perquisites offered to Mr. Blake
include an automobile and reimbursement for all out-of-pocket business
expenses.

         In the event Mr. Blake is terminated for cause, the Company shall
have no further obligation except to pay those accrued obligations arising
prior to the date of termination. In the event the Company terminates Mr.
Blake's employment without cause or Mr. Blake terminates his employment, the
Company is obligated to provide six (6) months of health insurance and pay a
lump sum severance amount of $70,000 for termination in the first year,
$75,000 for termination in the second year, or $80,000 for termination in the
third year of the Agreement.

         The Agreement further provides that Mr. Blake will execute the
Company's standard form of Confidentiality and Non-Compete Agreement pursuant
to which, for one year following termination of his employment for any
reason, he will not engage in any employment or business in competition with
the Company. For one additional year he will not solicit any AVSA clients or
potential clients or hire or influence Company employees to leave the
Company.

                                     27

<PAGE>

Other Agreements

         Other than pursuant to the Employment Agreement and the Compensation
Continuation Agreement for Mr. Vassell, the employment agreements with
Messrs. Halder and Blake, there is no compensation plan or arrangement for
the benefit of any person named in the Summary Compensation Table that would
result from the resignation, retirement or other termination of such person's
employment.

         Other than the compensation described above, there are no long-term
incentive plans for the persons named in the Summary Compensation Table. In
November 1999, the Company adopted a qualified Retirement Plan which became
effective beginning calendar year 1999, and provided for elective employee
deferrals and discretionary employer contributions to non-highly compensated
participants. The Plan does not allow for employer matching of elective
deferrals. For the period ended March 31, 2001, no discretionary amounts have
been accrued or paid.

Board of Directors' Compensation

    No executive officer receives any additional compensation for serving as
a director, except in the case of Former Director Franklyn H. Snitow who was
compensated at the rate of $300 per hour in accordance with an engagement
letter between Mr. Snitow and the Company. Directors who are not employees of
the Company, and excluding Mr. Snitow, received a meeting fee of $1,000 for
each meeting attended, and all directors were reimbursed for expenses
incurred in attending Board meetings. Directors Gregory J. Miller and Peter
J. Nekos receive $1,000 per month in connection with services they provide to
the Company in their capacity as members of the audit committee. Mr. Nekos
also received $4,375 in connection with services he provided to the Company as
Interim Chief Financial Officer prior to the engagement of Mr. Halder. With
the exception of former Director Peter T. Kikis, no other directors who are
not also executive officers received any plan or non-plan compensation from
the Company during the last three fiscal years.

Limited Directors' Liability

    Pursuant to the New York Business Corporation Law, the Company's
Certificate of Incorporation, as amended, eliminates to the fullest extent of
such Law the liability of the Company's Directors, acting in such capacity,
for monetary damages if they should fail through negligence or gross
negligence to satisfy their duty of exercising proper business judgment in
discharging their duties, but not for acts or omissions in bad faith, or
involving intentional misconduct or amounting to a knowing violation of law
or under other limited circumstances.

                                     28

<PAGE>

   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding the
number and percentage of common stock (being the Company's only voting
securities) beneficially owned by (i) each person who owns of record (or is
known by the Company to own beneficially) 5% or more of the Company's common
stock or as to which he has the right to acquire within sixty (60) days of
June 15, 2001, (ii) each director and executive officer and (iii) all of said
beneficial owners, officers and directors as a group, as of June 15, 2001.
Except as indicated below, the address for each director and executive
officer is the Company's principal office at Lexington Park, Route 55,
Lagrangeville, New York 12540.

         Other than as set forth in the following table, the Company is not
aware of any person (including any "group" as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934) who owns more than 5% of the
common stock of the Company.

<TABLE>

<CAPTION>

                                   Amount and Nature
                                     Of Beneficial
Name                                  Ownership<F1>                Percent of Class<F2>

<S>                                <C>                             <C>
William C. Vassell                 2,283,744<F3>                   30.43%<F2>

Peter J. Nekos                        12,500<F4>                   <F13>

Gregory J. Miller                     10,000<F5>                   <F13>

Geoffrey P. Haslehurst                23,500<F6>                   <F13>

Kenneth Allison                       23,500<F6>                   <F13>

Carl E. Painter                            0                       <F13>

Graeme R. Halder                      75,000<F7>                    1.18%

Martin C. Blake, Jr.                  50,000<F8>                   <F13>

Eugene U. McDonald                    51,250<F9>                   <F13>

William Dunn                          21,000<F10>                  <F13>

Reliance Security Group plc        5,212,966<F11>                  69.32%<F2>
Boundary House
Cricketfield Road
Uxbridge, Middlesex UB81QG

Norman H. Pessin                     354,500<F12>                   5.6%<F2>
605 Third Avenue
19th Floor
New York, NY 10158

All Officers and                   2,550,494<F2> <F3> <F4>         33.04%<F2>
Directors as a Group                        <F5> <F6> <F7>
(10 Persons)                                <F8> <F9> <F10>
                                            <F11> <F12>

<FN>

<F1> The Company has been advised that all individuals listed have the sole
     power to vote and dispose of the number of shares set forth opposite
     their names except as indicated.

<F2> Percent of class for each shareholder is calculated as if all shares
     underlying Preferred Stock, options and warrants included in the table
     for such shareholder are outstanding. The number of outstanding shares
     of common stock is 6,287,343. The percent of class for all executive
     officers and directors as a group is calculated as if all shares
     underlying Preferred Stock, options and warrants held by any
     shareholders included in the group are outstanding. The denominator for
     the group calculation is 7,719,787.

<F3> The shares included under the beneficial ownership of Mr. Vassell
     include 204,485 shares at an exercise price of $1.25 per share, covered
     by a warrant not exercisable until November 12, 2001, and then only to
     the extent of the exercise by Reliance of a warrant issued to it. Also
     included are 1,012,959 shares at an exercise price of $1.25 per share,
     covered by a warrant not exercisable until November 12, 2001 under which
     one-third of the shares become exercisable if the Company's earnings
     satisfy certain Confidential Performance Targets (defined above in Item
     11 - "Employment Agreements and Warrants and Termination of Employment
     and Change of Control Agreement - William C. Vassell") for the year
     ending March 31, 2002,. This Warrant becomes exercisable with respect to
     the two-thirds of the shares covered by it if the Company's earnings
     satisfy the Confidential Performance Targets for the year ended March
     31, 2003. All of the shares covered by the warrant become exercisable if
     the Company's earnings satisfy the Confidential Performance Targets for
     the year ended March 31, 2004. Also included are 250,000 shares held in
     escrow pursuant to an Escrow Agreement between Mr. Vassell and Reliance
     dated November 12, 2000. Mr. Vassell shares voting and dispository power
     over 16,300 shares with his wife.

<F4> Includes 10,000 shares underlying a warrant currently exercisable.

<F5> Includes 10,000 shares underlying a warrant currently exercisable.

<F6> Messrs. Haslehurst and Allison are currently officers of Reliance
     Security Group plc and hold the shares and warrants of Reliance in an
     indirect capacity.

<F7> Includes 75,000 shares covered by a warrant issued pursuant to the
     Company's 2000 Stock Option Plan and not exercisable until May 1, 2004.

<F8> Includes 50,000 shares covered by a warrant issued pursuant to the
     Company's 2000 Stock Option Plan and not exercisable until May 1, 2004.

<F9> Includes 50,000 shares covered by a warrant issued pursuant to the
     Company's 2000 Stock Option Plan and not exercisable until May 1, 2004.

<F10>Includes 20,000 shares covered by a warrant issued pursuant to the
     Company's 2000 Stock Option Plan and not exercisable until May 1, 2004.

<F11>The shares included under the beneficial ownership for Reliance include
     1,382,339 shares of common stock and 12,325.35 shares of preferred stock
     convertible into 1,232,535 shares of Common Stock. Also included are two
     currently exercisable warrants, one for 150,000 shares at an exercise
     price of $1.03125 per full share and the second for 150,000 shares at an
     exercise price of $1.875 per full share; and a warrant covering
     2,298,092 shares, at an exercise price of $1.25 per share, underlying a
     warrant not exercisable until November 12, 2001. This last warrant
     provides that in case the Vassell warrants shall vest and become
     exercisable in accordance with their terms at any time after the date
     the warrants were first issued, then the number of warrant shares
     issuable upon exercise of the warrant shall be proportionally adjusted
     so that Reliance after such vesting shall be entitled to receive such
     number of warrant shares equal to twenty percent (20%) of the
     outstanding common stock taking into account the exercise of all stock
     options, warrants and rights to acquire shares of common stock
     outstanding on the date hereof, conversion of all shares of the
     Company's preferred stock outstanding on the date hereof, and exercise
     of the warrant and that portion of the Vassell warrants vested on such
     date.

<F12>The shares included under the beneficial ownership for Norman H. Pessin
     include 294,500 personally owned by Mr. Pessin and 60,000 shares
     beneficially held by a SEP IRA Account for the benefit of Mr. Pessin.
     This information is based upon a filing with the Securities and Exchange
     Commission on Form 13D dated October 26, 2000.

<F13>Less than 1 percent of class.

</FN>

</TABLE>

                                     29

<PAGE>

           ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Reliance Transaction

         On or about December 4, 1997, an outside shareholder and four of the
Company's former directors (Sands, P. Kikis, Saunders and T. Kikis) commenced
an action in the Supreme Court of the State of New York, County of New York
(Index No. 606166/97) against the other four directors (Vassell, Robinett,
Nekos and Miller), the Company's outside corporate and securities counsel and
the Company itself in a lawsuit characterized as a derivative action. The
claims against the Company's outside corporate and securities counsel were
dismissed and the entire case was settled in November, 2000. The complaint
alleged that one or more of the defendant-directors engaged in improper
activities, including ultra-vires acts, breach of fiduciary duty, fraud
against the Company, constructive fraud and waste of corporate assets.

         In order to settle the litigation, the Company and the plaintiffs
entered into a Stock Purchase Agreement on September 12, 2000 with Reliance
Security Group plc ("Reliance"), whereby Reliance agreed to the purchase of
all the common shares owned by the plaintiffs. All of the common shares,
preferred shares and options owned by the plaintiff directors represented
approximately 38% of the outstanding common stock of the Company on a fully
diluted basis. The plaintiffs agreed to terminate their lawsuit, relinquish
their seats on the Board and terminate a shareholder agreement to which they
were a party. As an inducement to Reliance to complete the transaction, the
Company agreed to issue Reliance a five year warrant to purchase up to 20% of
the Company's then outstanding stock on a fully diluted basis (approximately
2.3 million shares) at $1.25 per share. The Company also agreed to pay
certain transaction related expenses, to reimburse for certain directors'
related legal costs and incurred professional fees in connection with the
settlement and accordingly has incurred charges of $431,445 during the year
ended March 31, 2001. The transaction constituted a change of control and
thus required shareholder approval. A special shareholder meeting was held on
November 13, 2000 and the transaction was approved.

                                     30

<PAGE>

The Stock Purchase Agreement

         The Stock Purchase Agreement provided for Reliance to purchase from
the sellers all of their interests in the Company. This amounted to 1,382,339
shares of common stock, 12,325.82 shares of Series A Preferred Stock which
are convertible into 1,232,582 shares of common stock and warrants covering
300,000 shares of common stock. The purchase price was $2.20 per share of
common stock and common stock equivalent. The purchase price for the warrants
will be $2.20 per share of common stock issuable upon exercise of each
warrant, less the exercise price. The aggregate purchase price for these
securities was approximately $6 million.

         The Stock Purchase Agreement also contained several conditions to
closing including but not limited to the issuance of the Reliance Warrant
described above, the issuance of the Vassell Warrants covering a total of
1,217,444 shares or approximately 10.6% of the Company's outstanding common
stock on a fully diluted basis, the termination of the 1995 Shareholder
Agreement, and the Company's Board of Directors having been reconstituted
based on the resignations of Messrs. Snitow, Robinett, Thomas Kikis, Peter
Kikis, Saunders and Sands, and the Board having been reduced to seven (7)
members consisting of Messrs. Vassell, Miller, Nekos, Haslehurst, Halder,
Allison and a director to be mutually agreed upon by Mr. Vassell and Reliance
(Mr. Painter).

The Reliance Warrant

         The Company issued Reliance a warrant in conjunction with the
Reliance transaction covering 2,298,092 shares or 20% of the Company's
outstanding common stock on a fully diluted basis taking into account the
exercise of all stock options, warrants and rights to acquire shares of
common stock outstanding on the date of the warrant, conversion of all shares
of preferred stock outstanding on the date of the warrant, and the exercise
of the warrant itself. The warrant exercise price is $1.25 per share. Due to
the closing bid price for the Company's stock of $.81 as of October 11, 2000,
the Warrant had nominal value at the time of issuance. The warrant expires in
five years and may not be exercised for one year from the date of its
issuance. The warrant is subject to the usual and customary anti-dilution
provisions. Any shares issued pursuant to exercise of the warrant are covered
by a Registration Rights Agreement which provides for a piggyback
registration during the five year period following consummation of the
Reliance transaction and one demand registration statement during the same
time period.

                                     31

<PAGE>

The Vassell Warrants

         In accordance with the Employment Agreement offered to William C.
Vassell in conjunction with the Reliance transaction, Mr. Vassell received,
among other things, two nonqualified incentive stock options which are
referenced herein as the Vassell Warrants. The first warrant covers 204,485
shares or 2% of the outstanding common stock of the Company on a fully
diluted basis taking into account the exercise of all stock options, warrants
and rights to acquire shares of common stock outstanding on the date of the
warrant, conversion of all shares of preferred stock on the date of the
warrant and exercise of the warrant. This calculation specifically excludes
the second warrant issued to Mr. Vassell, described below. The warrant
exercise price is $1.25 per share. Due to closing bid price for the Company's
stock of $.81 as of October 11, 2000, the Warrant had nominal value at the
time of issuance. The warrant expires in five years and may not be exercised
for one year from the date of its issuance. The warrant is subject to the
usual and customary anti-dilution provisions and may not be exercised until
after the exercise by Reliance of the Reliance warrant and only to the extent
of the exercise of the Reliance warrant.

         A second warrant issued to Mr. Vassell in accordance with his
Employment Agreement covers 1,012,959 shares which is such number of shares
of common stock which, when taken together with all shares of common stock
and options, warrants and rights to acquire shares of common stock held by
Mr. Vassell on the date of the warrant, is equal to approximately 20% of the
outstanding common stock on a fully diluted basis taking into account the
exercise of all stock options, warrants and rights to acquire shares of
common stock outstanding on the date of the warrant, conversion of all shares
of preferred stock outstanding on the date of the warrant and exercise of the
warrant. The terms of this warrant are the same as the warrant referenced
above except that the number of shares covered by it are subject to the
Company's performance. Due to the closing bid price for the Company's stock
of $.81 as of October 11, 2000, the Warrant had nominal cash value at the
time of issuance. One-third of the shares covered by the warrant become
exercisable if the Company's earnings satisfy certain Confidential
Performance Targets (defined above in Item 11 - "Employment Agreements and
Warrants and Termination of Employment and Change of Control Agreement -
William C. Vassell") for the year ended March 31, 2002. The warrant becomes
exercisable with respect to two-thirds of the shares covered by the warrant
if the Company's earnings satisfy the Confidential Performance Targets for
the year ended March 31, 2003 exceed projected earnings before taxes for that
year. All of the shares covered by the warrant become exercisable if the
Company's earnings satisfy the Confidential Performance Targets for the year
ended March 31, 2004. This warrant is also subject to the usual and customary
anti-dilution provisions.

The Shareholders' Agreement

         The Company, William C. Vassell and Reliance entered into a
Shareholder's Agreement dated September 12, 2000, as part of the Reliance
transaction. Pursuant to the terms of the Agreement, Mr. Vassell and Reliance
agreed to vote all of their shares of common stock in accordance with the
provisions contained therein. These provisions include: the establishment of
a Board composed of seven directors; and an agreement that Mr. Vassell and
Reliance each shall designate three individuals to be nominated to serve as
directors of the Company and that the Company shall have at least one
independent director jointly selected by Mr. Vassell and Reliance.

     The initial designees of Mr. Vassell to the Board were William C.
Vassell, Gregory J. Miller and Peter J. Nekos. The initial designees of
Reliance to the Board were Geoffery P. Haslehurst, Kenneth Allison and Graeme
R. Halder. The initial independent director is Mr. Carl Painter. Any vacancy
in the Board of Directors will be filled by the party which under the
provisions of the Shareholders' Agreement, is entitled to designate such
director.

         The Agreement provides for the establishment of the Confidential
Performance Targets in accordance with Mr. Vassell's employment agreement.
Upon a deviation from the Confidential Performance Targets for such fiscal
year by more than 20%, Reliance may ask for a vote of the Board to terminate
Mr. Vassell's employment. If such vote is obtained, Mr. Vassell shall resign
as Chairman of the Board, President and Chief Executive Officer of the
Company and cause his Board designees to resign from their positions.
Notwithstanding these terms, in no event will Mr. Vassell be required to
resign prior to the first anniversary of the effective date of his Employment
Agreement.

         If Mr. Vassell resigns under such circumstances, the parties will be
released from any obligation to vote their shares to elect as members of the
Board those individuals designated under the Agreement. Furthermore, the
parties have agreed that Mr. Vassell may, for a period of ninety (90) days
after the date of his resignation or termination of employment under certain
circumstances offer to sell to Reliance all of his shares and any of his
warrants or options to purchase any shares of the common stock of the Company
at a purchase price determined by Mr. Vassell. Reliance shall then have
forty-five (45) days from receipt of such notice to accept the terms of Mr.
Vassell's offer to sell. If the offer is rejected or lapses, Mr. Vassell
shall have the right to purchase from Reliance all of its shares and the
Reliance warrant at the price specified in Mr. Vassell's offer.

         The Shareholders' Agreement further subjects the holdings of the
parties to a right of first refusal with respect to future sales of their
shares. The Company provides certain representations and warranties to
Reliance which are standard for a transaction of this nature.

                                     32

<PAGE>

         The Company agreed on November 13, 2000 to pay former director Peter
T. Kikis up to $135,000 for services rendered in connection with the Reliance
transaction and his evaluation and negotiations with respect to unsuccessful
transactions prior to the Reliance transaction.

         As a further inducement to Reliance to proceed with the Reliance
transaction, Mr. Vassell agreed to the establishment of an escrow fund with
respect to 250,000 shares of his common stock. Provided the Company's
earnings before interest, taxes, depreciation and amortization for the twelve
month period ending September 30, 2001 meet or exceed a certain Confidential
Performance Target, the escrowed shares will be released to Mr. Vassell. In
the event the Confidential Performance Target is not met, the escrow agent
will be directed to release the escrowed shares to Reliance. Voting control
with respect to the shares covered by the Escrow Agreement remain with Mr.
Vassell unless the shares are delivered to Reliance in accordance with the
agreement.

                                     33

<PAGE>

                                   PART IV

         ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT
                      SCHEDULES AND REPORTS ON FORM 8-K

(A) (1) Financial statements filed as part of this report:

                                                       Page No.

         Independent auditor's report                    F-1

         Balance Sheets - March 31, 2001 and 2000        F-2

         Statements of Operations - years ended          F-3
         March 31, 2001, 2000, and 1999

         Statements of changes in stockholders' equity   F-4
         years ended March 31, 2001, 2000, and 1999

         Statements of cash flows - years ended          F-5 - F-7
         March 31, 2001, 2000, and 1999

         Notes to Financial Statements                   F-8 - F-20

    (2) Financial statement schedule filed
        as part of this report:

         Valuation and qualifying accounts - years
         ended March 31, 2001, 2000, 1999                F-21


         All other schedules are omitted since the required information is
not present or is not present in amounts sufficient to require submission of
the schedule, or because the information required is included in the
financial statements and notes thereto.

3.1      Amended & Restated Articles       Incorporated by reference to
         3.3 of the form 10-K for the      Exhibit of Incorporation
         fiscal year ending March
         31, 1993 (the "1993 10-K")

3.2      By-Laws                           Incorporated by reference to Exhibit
                                           3.3 of the Form 10-K for the fiscal
                                           year ended March 31, 1991 (the "1991
                                           10-K")

3.3      Amendments to By-Laws             Incorporated by reference to Exhibit
                                           3.3 of the Form 10-K/A for the fiscal
                                           year ended March 31, 1994
                                           (the "1994 10-K/A")

3.4      Certificate of Amendment of       Incorporated by reference to Exhibit
         Certificate of Incorporation      3.4 of the Eighth Amendment to the
                                           Registration Statement filed on Form
                                           S-1, File No. 33-75336 (the "S-1").

                                     34

<PAGE>

4.1    Specimen Stock Certificate          Incorporated by reference to Exhibit
                                           4.A to amendment #1 to Registrant's
                                           Registration Statement on Form S-18,
                                           file number 33, 35007-NY (the "S-18")

4.2    Reclassified as Exhibit
       10.37

4.3    Reclassified as Exhibit
       10.38

4.4    Reclassified as Exhibit
       10.39

4.5    Reclassified as Exhibit
       10.40

4.6    Warrant (50,000) to the CIT         Incorporated by reference to Exhibit
       Group/Credit Finance                4.2 of the Form 8-K filed on
                                           March 13, 1996

4.7    Specimen Series A Preferred         Incorporated by reference to Exhibit
       Certificate                         Stock 4.2 of the Third Amendment
                                           to the S-1.

10.1   Form of Amendment to Employment     Incorporated by reference to Exhibit
       Agreement for William C.            10.1 of the 10-K for the fiscal year
       Vassell dated April 8, 1991         ended March 31, 1992 (the "1992
                                           10-K")


10.2   Amended and Restated                Incorporated by reference to Exhibit
       Employment Agreement for William C. 10.3 of the 1992 10-K
       Vassell dated June 18, 1991

10.3   Amendment #1 to Amended &           Incorporated by reference to Exhibit
       Restated Employment                 10.5 to the 1993 10-K
       Agreement for William C.Vassell
       dated September 25, 1992

10.4   Form of Amendment to                Incorporated by reference to Exhibit
       Employment Agreement for Gordon     10.2 of the 1992 10-K
       Robinett dated April 8, 1991

10.5   Amended and Restated                Incorporated by reference to Exhibit
       Employment Agreement for            10.4 of the 1992 10-K
       Gordon Robinett dated June 18,
       1991

10.6   Amendment #1 to Amended             Incorporated by reference to Exhibit
       Restated Employment &               10.6 of the 1993 10-K
       Agreement for Gordon Robinett
       dated September 25, 1992

                                     35

<PAGE>

10.7   Form of Warrant Agreement           Incorporated by reference to Exhibit
       and Warrant for William C.          10.3 of the 1991 10-K
       Vassell (175,000 shares)
       and Gordon Robinett (60,000 shares)

10.8   Form of Warrant Agreement           Incorporated by reference to Exhibit
       dated May 15, 1992                  10.7 to the 1992 10-K
       for William C. Vassell
       (125,000 shares), Gordon Robinett
       (60,000 shares) and Peter J. Nekos
       (10,000 shares)

10.9   Compensation Continuation           Incorporated by reference to Exhibit
       Agreement for William               10.9 of the 1993 10-K
       C. Vassell dated September
       25, 1992

10.10  Consulting Agreement with           Incorporated by reference to Exhibit
       Robert Ellin dated                  10.10 of the 1992 10-K
       December 2, 1992

10.11  Warrant Agreement for               Incorporated by reference to Exhibit
       William C. Vassell                  10.16 of the Form 10-K for fiscal
       (500,000)                           year ended March 31, 1994 (the "1994
                                           10-K")

10.12  Franchise Offering                  Incorporated by reference to Exhibit
       Prospectus dated                    10.11 of the 1993 10-K
       December 1, 1992

10.13  Warrant Agreement and               Incorporated by reference to Exhibit
       Warrant for Stuart James            4.B of S-18
       Company, Inc.

10.14  Form of Second Amendment to         Incorporated by reference to Exhibit
       May 15, 1992 Warrant                10.13 in 1994 10-K
       Agreement and Warrant
       Certificate for William
       C. Vassell and Gordon Robinett

10.15  Form of Third Amendment to          Incorporated by reference to Exhibit
       April 8, 1991 Warrant               10.14 in the 1994 10-K
       Agreement and Warrant
       Certificate for William C.
       Vassell and Gordon Robinett

10.16  Form of Third Amendment to          Incorporated by reference to Exhibit
       May 15, 1992 Warrant Agreement      10.15 in the 1994 10-K
       and Warrant Certificate for
       William C. Vassell and Gordon
       Robinett

10.17  Placement Agent Agreement           Incorporated by reference to Exhibit
                                           1.1 of the Form 8-K filed October 17,
                                           1993

10.18 Registration Agreement               Incorporated by reference to Exhibit
                                           4.1 to the Form 8-K filed October 17,
                                           1993

                                     36

<PAGE>

10.19  Form of Warrant for Private     Incorporated by reference to Exhibit
       Placement                       4.2 to the Form 8-K filed October 27,
                                       1993

10.20  Warrant Agreement               Incorporated by reference to Exhibit
       (Placement Agreement)           4.3 to the Form 8-K filed October 27,
                                       1993

10.21  William C. Vassell Indemnity    Incorporated by reference to Exhibit
       Agreement                       10.17 of the 1994 10-K

10.22  Plan of Acquisition,            Incorporated by reference to Exhibit
       Reorganization, Liquidation     2 of the Form 8-K filed October 27,
       or Succession of ISS            1993
       International Service Systems,
       Inc.

10.23  Amendment to ISS Purchase       Incorporated by reference to Exhibit
       Agreement                       10.23 of the 1994 10-K/A

10.24  Plan of Acquisition,            Incorporated by reference to Exhibit
       Reorganization, Liquidation     2 of the Form 8-K filed November 12,
       or Succession of Madison        1993

10.25  Purchase and Sale Agreement     Incorporated by reference to Exhibit
       dated February 24, 1996, for    2.1 of the Form 8-K filed March 24,
       the acquisition of United       1996
       Security Group Inc.

10.26  Placement Agent Agreement       Incorporated by reference to Exhibit
       dated February 24, 1996,        10.26 the Third Amendment
       between to the Company Sands    to the Form S-1.
       Brothers & Co., Ltd. with
       Amendment as of March 24,
       1996

10.27  Shareholders Voting Agreement   Incorporated by reference to Exhibit
       dated March 8, 1996, by all     10.27 of the S-1.
       Third Amendment to the
       directors in their capacities
       as Shareholders

10.28  Amendment No. 2 to Amended and  Incorporated by reference to Exhibit
       Restated Employment Agreement   10.28 of the Third Amendment to the
       for William C. Vassell dated    S-1
       February 24, 1996

10.29  Amendment No. 2 to Amended and  Incorporated by reference to Exhibit
       Restated Employment Agreement   10.29 of the Third Amendment to the
       for Gordon Robinett dated       S-1
       February 24, 1996

10.31  Form of Warrant (250,000) to    Incorporated by reference to Exhibit
       Sands Brothers & Co., Ltd.      10.31 of the Third Amendment to the
                                       S-1

10.32  Warrant Reduction Agreement     Incorporated by reference to Exhibit
       (275,000) William C. Vassell    10.32 of the Third Amendment to the
                                       S-1

                                     37

<PAGE>

10.34  Loan and Security Agreement     Incorporated by reference to Exhibit
       with CIT Group/Credit Finance,  4.7 of the S-1.
       Third Amendment to the Inc.

10.35  Term Loan Agreement with        Incorporated by reference to Exhibit
       Deltec Development Corp.        4.8 of the Third Amendment to the S-1

10.36  Promissory Note to William C.   Incorporated by reference to Exhibit
       Vassell ($85,000) dated August  10.36 of the form 10-K for the
       22, 1994                        fiscal year ending March 31, 1995
                                       (the "1995 10-K")

10.37  Notes Payable - ISS             Incorporated by reference as Exhibit
                                       4.2 to the 1994 10-K/A

10.38  Bank Note - September 1, 1992   Incorporated by reference as Exhibit
       maturity                        4.2 to the l994 l0-K/A

10.39  Bank Note - November 1, 1997    Incorporated by reference as Exhibit
       maturity                        4.4 of the 1994 10-K/A

10.40  Mehlich Notes                   Incorporated by reference as Exhibit
                                       4.5 of the 1994 10-K/A

11.00  Computation of Income Per       Incorporated by reference to Exhibit
       of Common Stock  Share.         11 annexed to Financial Statements.

99.2   Placement Agent Agreement       Incorporated by reference to Exhibit
       dated February 24, 1995         1.1 to the Form 8-K/A dated February
                                       24, 1995

99.3   Amendment to Exhibit C to the   Incorporated by reference to Exhibit
       Placement Agent Agreement       1.2 to the Form 8-K dated March 24, dated
       March 24, 1995                  1995

99.4   Agreement with John B.          Incorporated by reference to Exhibit
       Goldsborough                    99.3 to the Fourth Amendment to the
                                       S-1

99.5   Warrant Standstill Agreement    Incorporated by reference to Exhibit
       from William C. Vassell         99.4 to the Fourth Amendment to the
                                       S-1

99.6   Shareholders Voting Agreement   Incorporated by reference to Exhibit
       dated March 8, 1995 99          to the Form 8-K dated March 24, 1995

99.7   Letter to Company from          Incorporated by reference to Exhibit
       D'Arcangelo & Co. L.L.P.        99.7 to the Form 8-K dated February 9,
       dated February 28, 1994.        1996

99.8   Letter to Company from          Incorporated by reference to Exhibit
       Coopers & Lybrand L.L.P.        99.8 to the Form 8-K dated February 9,
       dated February 7, 1996          1996.
       confirming  termination
       of engagement.

                                     38

<PAGE>

99.9   Letter to Company from          Incorporated by reference to Exhibit
       Coopers & Lybrand, L.L.P.       99.9 to the Form 8-K dated February 9,
       dated February 9, 1996.         1996.

99.10  Letter (revised) to Commission  Incorporated by reference to Exhibit
       from Coopers & Lybrand L.L.P.   99.10 to the Form 8-K/A
       filed March11, 1996.            dated March 8, 1996.

99.11  Press Release dated June 25,    Incorporated by reference to Exhibit 1997
       re: FYE 1997 results            99.11 to the 1997 10-K.

99.12  Press Release dated               Incorporated by reference to Exhibit
          June 29, 1999                  99.12 to the 10-K for year
                                         ended March 31, 1999.

99.13     Stock Purchase Agreement       Incorporated by reference to Exhibit
                                         99.13 of the Form 8-K
                                         filed September 27, 2000.

99.14     Reliance Warrant               Incorporated by reference to Exhibit
                                         99.14 of the Form 8-K
                                         filed September 27, 2000.

99.15     Vassell Warrant                Incorporated by reference to Exhibit
                                         99.15 of the Form 8-K
                                         filed September 27, 2000.

99.16     Vassell Warrant                Incorporated by reference to Exhibit
                                         99.16 of the Form 8-K
                                         filed September 27, 2000.

9.17      Kikis Voting Agreement         Incorporated by reference to Exhibit
                                         99.17 of the Form 8-K
                                         filed September 27, 2000.

99.18     Sands Voting Agreement         Incorporated by reference to Exhibit
                                         99.18 of the Form 8-K
                                         filed September 27, 2000.

99.19     Shareholders' Agreement        Incorporated by reference to Exhibit
                                         99.19 of the Form 8-K
                                         filed September 27, 2000.

99.20     Vassell Employment Agreement   Incorporated by reference to Exhibit
                                         99.20 of the Form 8-K
                                         filed September 27, 2000.

99.21     Stipulation                    Incorporated by reference to Exhibit
                                         99.21 of the Form 8-K
                                         filed September 27, 2000.

99.22     Registration Rights Agreement  Incorporated by reference to Exhibit
                                         99.22 of the Form 8-K
                                         filed September 27, 2000.

99.23     Audit Committee of the         E-1
          Board of Directors
          Charter and Powers

99.24     Halder Employment Agreement    E-2

99.25     2000 Stock Option Plan         E-3

99.26     Halder Warrant                 E-4

99.27     Blake Warrant                  E-5

                                     39

<PAGE>

99.28     Dunn Warrant                   E-6

99.29     McDonald Warrant               E-7

(b)   Reports on Form 8-K

        (i) Report on Form 8-K dated April 16, 1996 Item 7 (c) - Exhibit
            Press release dated April 15, 1996

       (ii) Report on Form 8-K dated September 10, 1996 Item 7(c) - Exhibits
            Press release dated August 19, 1996 Press release dated September
            05, 1996 Press release dated September 09, 1996

      (iii) Report on Form 8-K dated September 26, 1996 Item 7(c) - Exhibit
            Press release dated September 17, 1996

       (iv) Report on Form 8-K dated November 13, 1996 Item 7(c) - Exhibits
            Press release dated October 23, 1996 Press release dated November
            06, 1996

        (v) Report on Form 8-K dated November 19, 1996 Item 7(c) - Exhibit
            Press release dated November 13, 1996

       (vi) Report on Form 8-K dated February 14, 1997 Item 7(c) - Exhibits
            Press release dated February 07, 1997 Press release dated
            February 10, 1997

      (vii) Report on Form 8-K dated August 15, 1997 Item 7(c) - Exhibits
            Press release dated August 11, 1997

     (viii) Report on Form 8-K dated September 11, 1997 Item 7(c) - Exhibits
            Press release dated September 10, 1997

       (ix) Report on Form 8-K dated November 19, 1997 Item 7(c) - Exhibits
            Press release dated November 19, 1997

        (x) Report on Form 8-K dated December 18, 1997 Item 5

       (xi) Report on Form 8-K dated July 8, 1998 (item 7(c) - Exhibits Press
            Release dated July 7, 1998.

      (xii) Report on Form 8-K dated July 29, 1998 Item 7(c) - Exhibits Press
            Release dated July 17, 1998.

     (xiii) Report on Form 8-K dated September 15, 1998 Item 7(c) Press
            release dated August 17, 1998.

      (xiv) Report on Form 8-K dated December 1, 1998 Item 7(c) Press release
            dated November 30, 1998.

       (xv) Report on Form 8-K dated July 1, 1999 Item 7(c) Press release
            dated July 20, 1999.

      (xvi) Report on Form 8-K dated August 24, 1999 Item 7(c) Press release
            dated August 27, 1999.

     (xvii) Report on Form 8-K dated October 6, 1999 Item 7(c) Press release
            dated October 6, 1999 and October 12, 1999.

    (xviii) Report on Form 8-K dated November 1, 1999 Item 7(c) Press release
            dated November 1, 1999.

     (xix)  Report on Form 8-K dated November 11, 1999 Item 7(c) Press release
            dated November 11, 1999.

                                     40

<PAGE>

      (xx)  Report on Form 8-K dated February 15, 2000 Item 7(c) Press release
            dated February 15, 2000.

      (xxi) Report on Form 8-K dated March 3, 2000 Item 7(c) Press release
            dated March 3, 2000.

     (xxii) Report on Form 8-K dated June 30, 2000 Item 7(c) Press release
            dated June 30, 2000.

    (xxiii) Report on Form 8-K dated August 22, 2000 Item 7(c) Press release
            dated August 21, 2000.

     (xxiv) Report on Form 8-K dated September 12, 2000 Item 7(c) Press release
            dated September 12, 2000.

      (xxv) Report on Form 8-K dated November 10, 2000 Item 7(c) Press releases
            dated November 10, 2000 and November 14, 2000.

     (xxvi) Report on Form 8-K dated February 14, 2001 Item 7(c) Press release
            dated February 14, 2001.

    (xxvii) Report on Form 8-K dated April 18, 2001 Item 7(c) Press release
            dated April 17, 2001.

                                     41

<PAGE>

                                   PART IV

         ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT
                      SCHEDULES AND REPORTS ON FORM 8-K

(A) (1) Financial statements filed as part of this report:

                                                                    Page No.

          Independent auditor's report                            F-1

          Balance sheets - March 31, 2001 and 2000                F-2

          Statements of operations - years ended
          March 31, 2001, 2000 and 1999                           F-3

          Statements of changes in stockholders' equity -
          years ended March 31, 2001, 2000 and 1999               F-4

          Statements of cash flows - years ended
          March 31, 2001, 2000 and 1999                           F-5 -   F-6

          Notes to financial statements                           F-7 -   F-19

    (2) Financial statement schedule filed as part of this report:

          Valuation and qualifying accounts - years ended
          March 31, 2001, 2000 and 1999                           F-20


      All other schedules are omitted since the required information is not
      present or is not present in amounts sufficient to require submission
      of the schedule, or because the information required is included in the
      financial statements and notes thereto.

<PAGE>
                         COMMAND SECURITY CORPORATION

                             FINANCIAL STATEMENTS
                     (and Independent Auditor's Report )

                                 YEARS ENDED
                           MARCH 31, 2001 AND 2000

<PAGE>

Independent Auditor's Report
on the Financial Statements

To the Board of Directors
  and Stockholders of
Command Security Corporation

We have audited the accompanying balance sheets of Command Security
Corporation as of March 31, 2001 and 2000, and the related statements of
operations, changes in stockholders' equity and cash flows for each of the
three years in the period ended March 31, 2001. Our audits also included the
financial statement schedule listed in the index at Item 14(a). These
financial statements and the schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and the schedule based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Command Security Corporation
as of March 31, 2001 and 2000, and the results of its operations and its cash
flows for each of the three years in the period ended March 31, 2001, in
conformity with accounting principles generally accepted in the United
States. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.

May 25, 2001
Poughkeepsie, New York

                                     F-1

<PAGE>

<TABLE>

Command Security Corporation

Balance Sheets
March 31, 2001 and  2000

<CAPTION>

ASSETS

                                                                                                   2001                   2000
<S>                                                                                         <C>                    <C>
Current assets:
 Restricted cash                                                                            $   466,403            $       -0-
 Accounts receivable from guard service customers, less allowance for
   doubtful accounts of $562,945 and $1,258,187, respectively                                14,101,319             10,018,827
 Accounts receivable from administrative service client customers, less
   allowance for doubtful accounts of $32,840 and $30,059, respectively                         391,650              1,892,657
 Prepaid expenses                                                                               353,922                221,439
 Other receivables, less allowance for doubtful accounts
   of $2,246 and $8,717, respectively                                                           308,842                365,137

     Total current assets                                                                    15,622,136             12,498,060

Furniture and equipment at cost, net                                                          1,230,178              1,340,331
Intangible assets, net                                                                          352,656                460,063
Restricted cash                                                                                 244,620                799,993
Other assets                                                                                    540,925                249,524

     Total assets                                                                           $17,990,515            $15,347,971

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Cash overdraft                                                                             $ 1,039,698            $   184,772
 Current maturities of long-term debt                                                         1,441,080                410,603
 Current maturities of obligations under capital leases                                         104,773                113,752
 Short-term borrowings                                                                        6,942,779              7,192,515
 Accounts payable and accrued expenses                                                        4,132,346              3,328,028
 Preferred dividends payable                                                                        -0-                 40,674
 Due to administrative service clients                                                           87,157                478,006
                                                                                                      -
     Total current liabilities                                                               13,747,833             11,748,350

Self-insurance reserves                                                                         730,374                820,693
Long-term debt, net                                                                           1,628,307                309,676
Obligations under capital leases, net                                                           172,270                277,961

                                                                                             16,278,784             13,156,680

Commitments and contingencies (Notes 13 and 14)

Stockholders' equity:
 Preferred stock, convertible Series A, $.0001 par value per share, 1,000,000
   shares authorized, 12,325 shares
   issued and outstanding, liquidation value of $2,033,682                                    2,033,682              2,033,682
 Common stock, $.0001 par value per share, 20,000,000 shares
   authorized, issued 6,287,343 and 6,508,143, respectively                                         629                    651
 Paid-in capital                                                                              8,619,286              8,886,140
 Accumulated Deficit                                                                         (8,941,866)            (8,502,980)

                                                                                              1,711,731              2,417,493
 Common stock in treasury, at cost, 220,800 shares in 2000                                          -0-               (226,202)

                                                                                              1,711,731              2,191,291


 Total liabilities and stockholders' equity                                                 $17,990,515            $15,347,971


</TABLE>

See accompanying notes and auditor's report

                                     F-2

<PAGE>

<TABLE>

Command Security Corporation
Statements of Operations

<CAPTION>

Years Ended March 31, 2001, 2000 and 1999

                                                                            2001                2000                1999

<S>                                                                     <C>                 <C>                 <C>
Guard service revenue                                                   $71,320,440         $59,245,927         $57,642,041
Cost of guard service revenue                                            59,789,330          49,243,061          47,925,623

    Gross profit                                                         11,531,110          10,002,866           9,716,418

Administrative service revenue                                              274,277             554,196             913,498
                                                                         11,805,387          10,557,062          10,629,916

Operating expenses:
 General and administrative expenses                                     10,099,333           8,202,239           8,087,751
 Amortization of intangibles                                                297,440           1,176,448           1,280,687
 Provision for doubtful accounts and notes                                  524,304             969,937             367,916
 Bad debt recoveries                                                            -0-            (106,578)           (316,045)
 Stockholder derivative suit related expenses                               431,445                 -0-              273,527
 Line of credit termination fee                                             125,000                 -0-                 -0-
 Loss on value of intangible assets                                             -0-                 -0-              58,646

                                                                         11,477,522          10,242,046           9,752,482

    Operating income                                                        327,865             315,016             877,434

Other income/(expense)
 Interest income                                                            114,373             172,533             151,216
 Interest expense                                                          (956,352)           (848,860)           (992,218)
 Insurance rebates                                                           60,799              15,689                 -0-
 Gain/(loss) on equipment dispositions                                       14,429                 912             (51,831)
 Other income                                                                   -0-              35,000                 -0-

                                                                           (766,751)           (624,726)           (892,833)

    Loss before
      income tax expense                                                   (438,886)           (309,710)            (15,399)

Income tax expense                                                              -0-                 -0-                 -0-

    Net loss                                                               (438,886)           (309,710)            (15,399)

Preferred stock dividends                                                   (40,674)           (177,851)           (150,643)

Net loss applicable to common stockholders                              $  (479,560)        $  (487,561)        $  (166,042)

Loss per share of common stock                                          $      (.08)        $      (.07)        $      (.02)

Weighted average number of common
 shares outstanding                                                       6,287,343           6,535,581           6,658,143

</TABLE>

See accompanying notes and auditor's report

                                     F-3

<PAGE>

<TABLE>

Command Security Corporation

Statements of Changes in Stockholders' Equity
Years Ended March 31, 2001, 2000 and 1999

<CAPTION>

                                                                                                      Common
                                       Preferred     Common        Paid-In         Accumulated        Stock In
                                         Stock       Stock          Capital          Deficit          Treasury          Total

<S>                                  <C>            <C>           <C>              <C>               <C>               <C>
Balance at March 31, 1998            $1,883,039     $    801      $9,431,505       $(8,177,871)      $   (3,000)       $3,134,474

Retirement of common
    stock in treasury                                   (135)         (2,865)                             3,000               -0-

Preferred stock dividends               150,643                     (150,643)                                                 -0-

Net loss                                                                               (15,399)                           (15,399)

Balance at March 31, 1999             2,033,682          666       9,277,997        (8,193,270)             -0-         3,119,075

Return of escrowed
 common stock                                            (15)       (214,006)                                            (214,021)

Purchase of treasury stock                                                                             (226,202)         (226,202)

Preferred stock dividends                                           (177,851)                                            (177,851)

Net loss                                                                              (309,710)                          (309,710)

Balance at March 31, 2000             2,033,682          651       8,886,140        (8,502,980)        (226,202)        2,191,291

Retirement of common
    stock in treasury                                    (22)       (226,180)                           226,202

Preferred stock dividends                                            (40,674)                                             (40,674)

Net loss                                                                              (438,886)                          (438,886)

Balance at March 31, 2001            $2,033,682     $    629      $8,619,286       $(8,941,866)      $      -0-        $1,711,731

</TABLE>

See accompanying notes and auditor's report

                                     F-4

<PAGE>

<TABLE>

Command Security Corporation

Statements of Cash Flows
Years Ended March 31, 2001, 2000 and 1999

<CAPTION>

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

                                                                           2001                2000                1999
<S>                                                                     <C>                <C>                 <C>
OPERATING ACTIVITIES
   Net loss                                                             $  (438,886)       $   (309,710)       $    (15,399)
    Adjustments to reconcile net loss to net
    cash provided by/(used in) operating activities:
      Depreciation and amortization                                         894,792           1,695,458           1,720,197
      Provision for doubtful accounts and
        notes receivable, net of recoveries                                 524,304             863,359              51,871
      (Gain)/loss on equipment dispositions                                 (14,429)               (912)             51,831
      Loss on value of intangible assets                                        -0-                 -0-              58,646
      Self-insurance reserves                                               369,144             448,291             572,833
      Stock compensation settlement                                             -0-            (154,021)                -0-
      Changes in operating assets and liabilities:
          Accounts receivable                                            (3,004,807)         (1,313,963)           (322,530)
          Prepaid expenses                                                   27,179             215,285             460,896
          Other receivables                                                  41,085             (41,226)             38,995
          Other assets                                                       98,528             279,569             (71,944)
          Accounts payable and accrued expenses                             344,855            (831,214)         (1,005,756)
          Due to administrative service clients                            (384,731)            (89,597)            105,971
             Net cash provided by/(used in)
               operating activities                                      (1,542,966)            761,319           1,645,611

INVESTING ACTIVITIES
   Purchase of equipment                                                   (226,368)           (158,168)           (101,372)
   Purchase of intangible assets                                           (190,033)            (12,000)            (45,735)
   Proceeds from equipment dispositions                                      54,487              24,041               2,278
   Notes purchased                                                         (167,185)                -0-                 -0-
   Issuance of note by administrative service client                        (80,769)                -0-              (5,000)
   Principal collections on notes receivable                                 44,575                 -0-              62,394
            Net cash used in investing activities                          (565,293)           (146,127)            (87,435)

FINANCING ACTIVITIES
   Net borrowings/(payments) on line of credit                             (332,776)            212,878             326,955
   Proceeds from other borrowings                                         2,875,000                 -0-                 -0-
   Repayments on other short and long-term debt                          (1,092,873)           (689,447)         (1,237,369)
   Repayments on capital lease obligations                                 (114,670)            (82,486)            (75,397)
   Cash overdraft                                                           854,926             184,772            (449,895)
   Purchase of treasury stock                                                   -0-            (226,202)                -0-
   Payment of preferred stock dividends                                     (81,348)           (137,177)                -0-
            Net cash provided by/(used in)
            financing activities                                          2,108,259            (737,662)         (1,435,706)

Net increase/(decrease) in cash and cash equivalents                            -0-            (122,470)            122,470

Cash and cash equivalents, beginning of year                                    -0-             122,470                 -0-

Cash and cash equivalents, end of year                                  $       -0-       $         -0-        $    122,470

</TABLE>

See accompanying notes and auditor's report

                                     F-5

<PAGE>

Command Security Corporation

Statements of Cash Flows, Continued
Years Ended March 31, 2001, 2000 and 1999

1.    SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

          Cash paid during the period for:

                           2001                2000                 1999

          Interest      $ 882,569          $  848,860           $  997,779
          Income Taxes        -0-                 -0-                  -0-

2.    SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES

        For the years ended March 31, 2001, 2000 and 1999, the Company
        purchased equipment with direct installment and lease financing of
        $597,352, $701,662, and $247,043, respectively. These amounts have
        been excluded from the statements of cash flows.

        The Company generally obtains short-term financing to meet its
        insurance needs. For the years ended March 31, 2001, 2000 and 1999,
        $322,621, $122,644, $107,099, respectively, have been borrowed for
        this purpose.These borrowings have been excluded from the statements
        of cash flows.

        For the year ended March 31, 1999, the Company accrued accumulated
        dividends of $150,643 and issued 913 additional shares of its Series
        A convertible preferred stock to its preferred stockholders. This
        charge to paid-in capital and credit to preferred stock has been
        excluded from the statement of cash flows.

        In January, 2001, the Company refinanced a note receivable from an
        administrative service client. The balance of the note refinanced of
        $78,839 along with net charges of $20,392 have been excluded from the
        statement of cash flows

        In November, 2000, the Company refinanced its line of credit and term
        loan with LaSalle Business Credit, Inc.("LaSalle"). The principal
        balance on the previous line of credit with CIT Group/Credit Finance,
        Inc. ("CIT") at the time of refinancing was $7,898,547. The statement
        of cash flows presents only the net change for the period between
        both lending arrangements. As part of the lending arrangement, the
        Company received a $3,000,000 term loan, replacing a term loan with
        CIT, originally for $500,000 and a remaining balance of $125,000.
        Proceeds from the term loan are shown net of the CIT term loan
        satisfied. As part of the refinancing, the Company also purchased the
        remaining balances of two notes of an administrative service client
        and a customer list purchaser that the Company had previously
        guaranteed. Cash used for this purpose is shown in the accompanying
        statement of cash flows under cash flows from investing activities.

        In December, 1999, the Company entered into an agreement modifying a
        stock compensation arrangement entered into in November, 1993, and
        canceling 150,000 shares of the Company's common stock held in
        escrow. The resultant charges to common stock and paid-in capital and
        credits to accrued expenses have been excluded from the statement of
        cash flows.

        In August, 1999, the Company purchased certain guard service accounts
        and related equipment and supplies for a total consideration of
        $30,000. The Company paid $12,000 and issued a note for $18,000. The
        non-cash portion has been excluded from the purchase of accounts and
        issuance of notes in the statement of cash flows.

        In June, 1998, the Company purchased certain guard service accounts
        and related equipment and supplies for a total consideration of
        $222,098. The Company paid $55,525 and issued two notes for $55,525
        and $111,049, respectively. The second note was subsequently reduced
        by $31,015 as a retention adjustment. The non-cash portions have been
        excluded from the purchase of accounts and issuance of notes in the
        statement of cash flows.

See accompanying notes and auditor's report

                                     F-6

<PAGE>

Command Security Corporation

Notes to Financial Statements
March 31, 2001, 2000 and 1999

1.    Business Description and Summary of Accounting Policies

        The following is a description of the principal business activities
       and significant accounting policies employed by Command Security
       Corporation.

          Principal business activities

             Command Security Corporation (the Company) is a uniformed
             security guard service company operating in New York,
             Connecticut, California, Florida, Georgia, Illinois and New
             Jersey. In addition, the Company also provides other security
             guard companies (administrative service clients) and police
             departments in various states with administrative services, such
             as billing, collection and payroll, for a percentage of the
             related gross revenue.

          Estimates

             The preparation of financial statements in conformity with
             generally accepted accounting principles requires management to
             make estimates and assumptions that affect the reported amounts
             of assets and liabilities and disclosure of contingent assets
             and liabilities at the date of the financial statements and the
             reported amounts of revenue and expenses during the reporting
             period. Such estimates include provisions for uncollectible
             accounts and notes receivable and reserves for general liability
             and workers' compensation claims, among others. Actual results
             could differ from those estimates.

          Revenue recognition

             The Company records revenue as services are provided to its
             customers and to its administrative service clients. Revenue
             consists primarily of security guard services which are
             typically billed at hourly rates. These rates may vary depending
             on base, overtime and holiday time worked. Revenue for
             administrative services provided to other guard companies are
             based on a percentage of the administrative service client's
             revenue and are recognized as billings for the related guard
             services are generated. Costs associated with the Company's
             guard service revenue consist of direct and indirect payroll and
             related expenses, subcontract costs, vehicle and other costs
             directly related to the guard service revenue generated. Costs
             related to the administrative service revenue are primarily
             clerical and administrative in nature and are not readily
             segregated from the Company's total general and administrative
             costs.

             In December, 1999, the Staff of the Securities and Exchange
             Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"),
             "Revenue Recognition in Financial Statements". Management
             believes that the Company's practices and policies are in
             compliance with SAB 101.

          Cash and cash equivalents

             For purposes of the cash flows statements, the Company defines
             cash and cash equivalents as operating cash (non restricted) and
             investments with maturities of three months or less.

          Furniture and equipment

             Furniture and equipment are stated at cost. Depreciation is
             accumulated using the straight-line method over the estimated
             useful lives of the equipment ranging from three to seven years.

          Intangible assets

             Intangible assets are stated at cost and consist primarily of
             customer lists which are being amortized on a straight-line
             basis over five years. The life assigned to customer lists
             acquired is based on management's estimate of the attrition
             rate. The attrition rate is estimated based on historical
             contract longevity and management's operating experience. Any
             possible impairment is evaluated annually based on anticipated
             undiscounted future cash flows and actual customer attrition in
             accordance with the provisions of SFAS 121.

                                     F-7

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

1.    Business Description and Summary of Accounting Policies, continued

        Advertising costs

          The Company expenses advertising costs as incurred. Amounts
          incurred for recruitment and general business advertising were
          $184,697, $214,142, and $133,553 for the years ended March 31,
          2001, 2000 and 1999, respectively.

        Reserve for doubtful accounts

          The Company periodically evaluates the requirement for providing
          for credit losses on its accounts receivables. Criteria used by
          management to evaluate the adequacy of the allowance for doubtful
          accounts include, among others, the creditworthiness of the
          customer, prior payment performance, the age of the receivables and
          the Company's overall historical loss experience.

        Income/(loss) per common share

          Under the requirements of Financial Accounting Standards Board
          Statement No. 128 (SFAS 128), "Earnings Per Share," the dilutive
          effect of potential common shares, if any, is excluded from the
          calculation for basic earnings per share. No diluted earnings per
          share are presented because the effect of assumed issuance of
          common shares in connection with warrants and stock options
          outstanding and preferred stock conversions was antidilutive.

        Accounting for stock options

          Financial Accounting Standards Board Statement No. 123 (SFAS 123)
          provides companies with a choice to follow the provisions of SFAS
          123 in the determination of stock-based compensation expenses or to
          continue with the provisions of APB 25, "Accounting for Stock
          Issued to Employees." The Company will continue to follow APB 25
          and will provide pro forma disclosures as required by SFAS 123.
          SFAS 123 did not have an impact on the Company's financial
          condition or results of operations for the periods presented.
          Stock-based compensation issued to non employees are accounted for
          based on the fair value and nature of goods and/or services
          received.

2.       Furniture and Equipment

          Furniture and equipment at March 31, consist of the following:

                                                 2001             2000

           Transportation equipment          $ 1,392,073        $ 1,394,723
           Security equipment                    582,075            594,563
           Office furniture and equipment      2,128,993          1,987,073

                                               4,103,141          3,976,359
           Accumulated depreciation           (2,872,963)        (2,636,028)

                                             $ 1,230,178        $ 1,340,331

        Depreciation expense for the years ended March 31, 2001, 2000 and
        1999, was $597,352, $519,010, and $439,510, respectively, and
        includes amortization of assets purchased under capital lease
        arrangements (see Note 14).

                                     F-8

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

3.       Intangible Assets

        Intangible assets at March 31, consist of the following:

                                                     2001                2000

            Customer lists                      $   547,284         $ 3,675,390
            Borrowing costs                         190,034              50,000
            Covenant not to compete                     -0-             180,000
            Goodwill                                 34,007              34,007
                                                    771,325           3,939,397
            Accumulated amortization               (418,669)         (3,479,334)

                                                $   352,656         $   460,063

         Amortization expense for the years ended March 31, 2001, 2000 and
         1999, was $297,440, $1,176,448, and $1,280,687, respectively. During
         the year ended March 31, 2001 and 2000, the Company removed fully
         amortized customer lists with an initial cost of $3,128,105 and
         $2,012,342, respectively, from its accounts. During the year ended
         March 31, 1999, the Company removed a customer list with a cost of
         $83,780 and related accumulated amortization of $25,134 from its
         accounts and recognized an impairment loss of $58,646 on its
         purchased customer list due to lack of retention in one of its
         branches. Management believed that the future expected cash flows
         would not be sufficient to recover the remaining unamortized costs
         associated with this list.

4.       Restricted Cash

        Restricted cash represents deposits for the benefit of the Company's
       insurance carrier as collateral for workers compensation claims. The
       Company's insurance carrier released $466,403 from the restrictions in
       June, 2001.

5.       Accounts Payable and Accrued Expenses

          Accounts payable and accrued expenses at March 31, consist of the
            following:

                                                             2001         2000

           Trade accounts payable                     $ 1,097,298 $    669,552
           Payroll and related expenses                 2,021,922    1,526,877
           Insurance                                      589,398      594,608
           Sales tax                                       48,139       70,189
           Accrued interest payable                        73,783          -0-
           Accrued professional fees                       60,000      152,000
           Accrued loss contingencies
             and settlements                               42,000       75,000
           Liabilities assumed in acquisitions                -0-       79,000
           Other                                          199,806      160,802

                                                      $ 4,132,346  $ 3,328,028

          As of March 31, 2001 and 2000, the Company has accrued $42,000 and
          $75,000, respectively, for loss contingencies and settlements in
          connection with certain legal proceedings and labor claims where
          either a monetary settlement has been reached or management has
          determined that it is probable that a liability has been incurred.

                                    F-9

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

6.       Short-Term Borrowings

          Short-term borrowings at March 31, consist of the following:

<TABLE>

<CAPTION>

                                                                                                  2001                  2000

<S>                                                                                        <C>                   <C>
           Bank line of credit                                                             $ 6,823,985           $ 7,156,761
           Various insurance financing arrangements,
           interest ranging from 7.72% to 11.27%                                               118,794                35,754

                                                                                           $ 6,942,779           $ 7,192,515


          In November, 2000, the Company entered into a three year agreement
          with LaSalle Busines Credit, Inc. ("LaSalle") under a loan and
          security agreement (the "agreement"), providing for a line of
          credit of up to 85% of eligible accounts receivable, as defined in
          the agreement, but in no event in excess of $15 million. At March
          31, 2001, the Company had used $6,823,985 of this line,
          representing approximately 81% of its maximum borrowing capacity.
          Interest is payable at LIBOR plus 2% (7.233%)on the first
          $5,000,000 and at prime (8%) on the excess, or $1,823,985, at March
          31, 2001. The line is collateralized by customer accounts
          receivable and substantially all other assets of the Company.

          The Company terminated its previous agreement with CIT
          Group/Business Credit, Inc. ("CIT"), which provided for financing
          based on 85% of eligible accounts receivable, as defined, but in no
          event in excess of $10 million. Interest was payable monthly at
          1.5% over prime. The line was collateralized by customer accounts
          receivable and substantially all other assets of the Company. The
          agreement was scheduled to expire in February, 2001, and, in
          accordance with the terms of the CIT agreement, the Company paid a
          $125,000 early termination fee.

</TABLE>

7.       Long-Term Debt

          Long-term debt at March 31, consists of the following:

<TABLE>

<CAPTION>

                                                                                                  2001                  2000

<S>                                                                                    <C>                      <C>
           Capital Resource Company, (two notes and four notes)
           due October, 2000 and June, 2001, interest at 14%, unsecured                $           -0-          $     57,674

           CIT Group/Business Credit, Inc., due February 1, 2002
           interest at prime plus 1.5% <F1>                                                        -0-               191,667

           LaSalle Business Credit, Inc., due May, 2003, interest at LIBOR
           plus 2.5% (8.016%) on the first $2,000,000 and at prime (8%) on
           the remaining
           $600,000 at March 31, 2001 <F2>                                                   2,600,000                   -0-

           Various installment loans due at various dates
           through February, 2004, with interest ranging
           from 10.6% to 12.75% <F3>                                                           469,387               470,938

                                                                                             3,069,387               720,279
           Current maturities                                                               (1,441,080)             (410,603)

                                                                                           $ 1,628,307           $   309,676

<FN>

         <F1>     Term loan from CIT Group/Business Credit, Inc., payable in
                 monthly installments of $8,333 plus interest at prime plus
                 1.5% per annum, was collateralized with security pledged
                 under the revolving loan and security agreement and paid off
                 in connection with the refinancing with LaSalle
                 (see Note 6).

         <F2>     Term loan from LaSalle Business Credit, Inc., payable in
                 monthly installments of $100,000 plus interest per above,
                 adjusted monthly. Collateralized with security pledged under
                 the revolving loan and security agreement (see Note 6).

         <F3>     Payable to General Motors Acceptance Corporation and Ford Motor
                 Credit Corporation. The notes are collateralized by automobiles
                 and security equipment.

</FN>

</TABLE>

                                    F-10

<PAGE>

Command Security Corporation

Notes to Financial Statements
March 31, 2001, 2000 and 1999

         The aggregate amount of required principal payments of long-term
         debt is as follows:

          Year ending:       March 31, 2002          $ 1,441,080
                             March 31, 2003            1,365,719
                             March 31, 2004              262,588

                                                     $ 3,069,387

8.       Stockholders' Equity

         Changes in the number of equity shares of the Company's preferred
         and common stock for the years ended March 31, 2001, 2000 and 1999,
         are as follows:

                                            Preferred   Common    Treasury
                                             Stock      Stock       Stock

          Balance at March 31, 1998         11,412     8,013,543   1,355,400

          Preferred stock dividend
            shares issued                      913

          Retirement of common
            stock in treasury                         (1,355,400) (1,355,400)

          Balance at March 31, 1999         12,325     6,658,143         -0-

          Return of escrowed common stock               (150,000)

          Purchase of treasury stock                                 220,800

          Balance at March 31, 2000         12,325     6,508,143     220,800

          Retirement of treasury stock                  (220,800)   (220,800)

          Balance at March 31, 2001         12,325     6,287,343         -0-


9.       Retirement Plans

         In November, 1999, the Company adopted a qualified retirement plan
         providing for elective employee deferrals and discretioary employer
         contributions to non-highly compensated participants. The plan does
         not allow for employer matching of elective deferrals. For the
         years ended March 31,2001 and 2000, no discretionary amounts have
         been accrued or paid.

                                    F-11

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

10.      Concentration of Risk

         Geographic concentrations of credit risk with respect to trade
         receivables are primarily in the New York Metropolitan area
         consisting of 43% and 45% of total receivables as of March 31, 2001
         and 2000, respectively. The remaining trade receivables consist of a
         large number of customers dispersed across many different geographic
         regions. During the years ended March 31, 2001, 2000 and 1999, the
         Company generated 43%, 38% and 31%, respectively, of its revenue
         from the commercial airline industry. Trade receivables due from the
         commercial airline industry comprised 37% and 31% of net receivables
         as of March 31, 2001 and 2000, respectively. The Company's remaining
         customers are not concentrated in any specific industry.

         During the years ended March 31, 2000 and 1999, 56%, and 53% of
         administrative service revenue, respectively, was earned from one
         administrative service client. The contract with this administrative
         service client terminated in May, 2000.

         The Company maintains its cash accounts in commercial banks.
         Accounts at each bank are guaranteed by the Federal Deposit
         Insurance Corporation (FDIC) up to $100,000. At March 31, 2001, bank
         balances exceeded insured balances by approximately $341,000.

11.      Significant Customers

         During the year ended March 31, 2000, one customer accounted for
         approximately $6,027,000, or 10%, of revenue. During the years ended
         March 31, 2001 and 1999, no customers accounted for 10% or more of
         revenue.

12.      Self-Insurance

         For the years from March 1, 1997 to February 29, 2000, the Company
         provided a partially self-insured health insurance program to all
         eligible administrative personnel. There was a maximum loss of
         $30,000 per year per employee and an aggregate amount per year,
         based on the number of participants, that the Company could be
         responsible for. A stop-loss insurance policy covered all claims in
         excess of the above amounts. As of March 1, 2000, the Company is
         providing traditional fully insured coverage to its employees. The
         previous partially self-insured plan provided for a three month
         extension of benefit period following termination to provide for
         claim submission of losses incurred prior to the termination date.
         Claims submitted during the benefit extension period, net of refunds
         of previously paid claims in excess of the self-insured limits, were
         negligible. Amounts accrued for health insurance under the partially
         self-insured plan and included in general and administrative
         expenses were $326,817, and $328,938 for the policy years ended
         February 29, 2000, and February 28, 1999, respectively, and were
         based on the maximum aggregate for each year presented.

         The Company has an insurance policy covering workers' compensation
         claims in most states that the Company performs services. Annual
         premiums are based on incurred losses as determined at the end of
         the coverage period, subject to a minimum and maximum premium.
         Estimated accrued liabilities are based on the Company's historical
         loss experience and the ratio of claims paid to the Company's
         historical payout profiles for the year ended March 31, 2001. For
         the years ended March 31, 2000 and 1999, the Company based its
         estimated losses on industry payout profiles. Charges for estimated
         workers' compensation related losses incurred and included in cost
         of sales were $1,802,379, $1,584,916, and $1,465,603 for the years
         ended March 31, 2001, 2000 and 1999, respectively. Had the Company
         used its own historical payout profile for the years ended March 31,
         2000 and 1999, the charges for workers' compensation related losses
         would not have differed by a material amount.

                                    F-12

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

12.      Self-Insurance, continued

         The nature of the Company's business also subjects it to claims or
         litigation alleging that it is liable for damages as a result of the
         conduct of its employees or others. The Company insures against such
         claims and suits through general liability policies with third-party
         insurance companies. Such policies have limits of $1,000,000 per
         occurrence and $10,000,000 in the aggregate. In addition, the
         Company has obtained an excess general liability insurance policy
         that covers claims for an additional $50,000,000 in the aggregate
         ($30,000,000 prior to October 1, 1999). The Company retains the risk
         for the first $25,000 per occurrence ($50,000 for claims based on
         losses incurred prior to October 1, 2000). Charges for general
         liability self-insurance expense of $369,144, $448,291, and
         $572,833, are included in cost of sales for the years ended March
         31, 2001, 2000 and 1999, respectively. Estimated accrued liabilities
         are based on specific reserves in connection with existing claims as
         determined by third party risk management consultants and actuarial
         factors to provide for estimated losses incurred but not yet
         reported.

         Cumulative amounts estimated to be payable by the Company with
         respect to pending and potential claims for all years in which the
         Company is liable under its health, general liability risk retention
         and workers' compensation policies have been accrued as liabilities.
         Such accrued liabilities are necessarily based on estimates; thus,
         the Company's ultimate liability may exceed or be less than the
         amounts accrued. The methods of making such estimates and
         establishing the resultant accrued liability are reviewed
         continually and any adjustments resulting therefrom are reflected in
         current earnings.

13.      Contingent Liabilities

         The nature of the Company's business is such that there is a
         significant volume of routine claims and lawsuits that are issued
         against it, the vast majority of which never lead to substantial
         damages being awarded. The Company maintains general liability,
         casualty and workman's compensation insurance coverage that it
         believes is appropriate to the relevant level of risk and potential
         liability. Some of the claims brought against the Company could
         result in significant payments, however, the exposure to the Company
         under general liability is limited to the first $50,000 for cases
         before October 1, 2000, and $25,000 for cases after that date. The
         only potential impact would be on future premiums, which may be
         adversely effected by a poor claims history.

         In addition to such cases, the Company has been named as a defendant
         in several uninsured employment related claims which are currently
         before various courts, the EEOC or various state and local agencies.
         The Company has instituted policies to minimize these occurrences
         and monitors those that do occur. At this time the Company is unable
         to determine the impact on the financial position and results of
         operation that these claims may have should the investigations
         conclude that they are valid. Certain cases have been cited by the
         Company in past documents because of their complexity, the large
         size of the demand or to illustrate the nature of some of these
         employment related cases, for example in May, 1996, a complaint was
         filed in Queens County Civil Court by three former employees
         alleging emotional distress, anguish, mental distress and injury to
         their professional reputation due to retaliatory discharge and
         related matters. Plaintiffs each seek $2 million for compensatory
         damages and $2 million in punitive damages in addition to payment of
         overtime wages of $25,000. The Company's customer, also a defendant
         and a former employer, has engaged counsel representing all
         defendants. On November 27, 1998, the Kings County Supreme Court
         ruled on a motion dismissing three counts concerning contractual
         allegations but allowed the remaining nine counts to proceed to
         findings. At this time the Company is unable to estimate the
         possible loss, if any, that may be incurred as a result of this
         action. The ultimate outcome may or may not have a material impact
         on the Company's financial position or results of operations.

                                    F-13

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

13.      Contingent Liabilities, continued

           On or about December 4, 1997, an outside shareholder and four of
           the Company's directors (Sands, P. Kikis, Saunders and T. Kikis)
           commenced an action in the Supreme Court of the State of New York,
           County of New York (Index No. 606166/97) against the other four
           directors (Vassell, Robinett, Nekos and Miller), the Company's
           outside corporate and securities counsel and the Company itself in
           a lawsuit characterized as a derivative action. The claims against
           the Company's outside corporate and securities counsel have since
           been dismissed. The complaint alleges that one or more of the
           defendant-directors engaged in improper activities, including
           ultra-vires acts, breach of fiduciary duty, fraud against the
           Company, constructive fraud and waste of corporate assets. These
           claims have been settled as part of the Reliance transaction cited
           in the following paragraph.

           On September 12, 2000, the Company entered into an agreement in
           connection with the purchase by Reliance Security Group plc
           ("Reliance") , whereby Reliance purchased of all the common shares
           owned by the plaintiff outside stockholder and all common shares,
           preferred shares and options owned by the plaintiff directors
           which represent approximately 38% of the outstanding common stock
           of the Company on a fully diluted basis. As a result the
           plaintiffs terminated their lawsuit, relinquished their seats on
           the Board and terminated a shareholder agreement to which they
           were a party. As an inducement to Reliance to complete the
           transaction, the Company issued of a five year warrant to purchase
           up to 20% of the Company's then outstanding stock on a fully
           diluted basis (approximately 2.3 million shares) at $1.25 per
           share. The Company paid certain transaction related expenses,
           reimbursed certain directors' related legal costs and incurred
           professional fees in connection with the settlement. These
           expenses amounted to $431,445 and are included with operating
           expenses in the accompanying statements of operations for the year
           ended March 31, 2001. The transaction constituted a change of
           control and thus required shareholder approval. A special
           shareholder meeting was held on November 13, 2000 and the proposal
           was approved, resulting in the termination of the plaintiff's
           lawsuit and the shareholder agreement to which they were a party.

14.      Lease Commitments

           The Company is obligated under various operating lease agreements
           for office space, equipment and auto rentals. Rent expense under
           operating lease agreements approximated $646,700, $564,900, and
           $569,200, for the years ended March 31, 2001, 2000 and 1999,
           respectively.

           The Company leases certain equipment and vehicles under agreements
           which are classified as capital leases. Most equipment leases have
           purchase options at the end of the original lease term. Cost and
           related accumulated depreciation of leased capital assets included
           in furniture and equipment at March 31, 2001, are $648,744 and
           $298,552 and at March 31, 2000, $730,163 and $246,852,
           respectively.

           The future minimum payments under long-term noncancellable capital
           and operating lease agreements are as follows:

                                                    Capital        Operating
                                                     Leases         Leases

             Year ending:   March 31, 2002         $  134,730    $   400,605
                            March 31, 2003            107,491        265,252
                            March 31, 2004             55,480        142,852
                            March 31, 2005             37,023         42,846
                            March 31, 2006              3,183          4,727

                                                      337,907    $   856,282

                            Amounts representing
                              interest                (60,864)

                                                   $  277,043

                                    F-14

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

15.    Stock Option Plan and Warrants

         In November, 2000, the Company's Board of Directors and stockholders
         approved the adoption of a qualified stock option plan. Under the
         option plan, substantially all employees are eligible to receive
         options to purchase up to an aggregate of 500,000 shares at an
         exercise price which cannot be less than the fair market value of
         the shares on the date the options are granted. A previous similar
         plan allowing for the purchase of up to 107,500 shares expired in
         May, 2000. In February, 2001, options to purchase 225,000 shares of
         common stock have been issued. These options are exercisable at any
         time after April 30, 2004, and before January 31, 2011, at $.75
         per share and are further restricted based on the achievement of
         certain financial results of the Company for the years ending March
         31, 2002 through 2004.

         The Company issued warrants to its former Treasurer to purchase
         107,500 shares of its common stock at an exercise price of $5 per
         share. In July, 1996, the exercise price of these warrants was
         adjusted to $2.50 and the expiration date extended to July, 2000,
         when the warrants expired.

         On April 8, 1991, as amended on June 18, 1991, the Board of
         Directors approved the issuance to each of the Company's President
         (now also Chairman of the Board) and former Treasurer, for $100, a
         five-year warrant to purchase 175,000 and 60,000 shares of common
         stock, respectively, at an exercise price of $3.375 per share, the
         market value at the time of the grant. The warrants vested on March
         31, 1992. The exercise price was adjusted to $3.25, fair value on
         date of adjustment, and the expiration date extended to April, 1998,
         during fiscal 1994. The warrant extended to the Chairman of the
         Board expired in April, 1998. The exercise price for the warrant
         extended to the former Treasurer was adjusted again in July, 1996,
         to $2.50 per share and the expiration date extended to July, 2000,
         when the warrant expired.

         In May 1992, the Board of Directors approved the issuance to the
         Company's Chairman, former Treasurer and Board member a five year
         warrant to purchase 125,000, 60,000 and 10,000 shares of common
         stock, respectively, at an exercise price of $3.88 per share, the
         fair market value at the time of the grant. The exercise price was
         adjusted to $3.25, the fair value on date of adjustment, and the
         expiration date extended to May, 1999, during fiscal 1994. The
         warrants issued to the Chairman and Board member expired in May,
         1999. The exercise price for the warrant extended to the former
         Treasurer was adjusted again in July, 1996, to $2.50 per share and
         the expiration date extended to July, 2000, when the warrant
         expired.

         The Company entered into a consulting agreement dated November 1,
         1993, under which the Company agreed to issue stock or warrants in
         exchange for consulting services. The aggregate value of such stock
         or warrants to be granted will not exceed $300,000. The Company
         fully expensed the consulting fee by October, 1994. During the
         fiscal year ended March 31, 1994, the Company issued warrants for
         200,000 shares and in July, 1994 issued additional warrants for
         100,000 shares. The warrants expired in July, 1997, however, the
         Company had reserved 150,000 shares of common stock to provide the
         consultant with up to $300,000 of compensation. During the year
         ended March 31, 1999, $85,979 was paid in cash, reducing the stock
         to be released to a value not to exceed $214,021. In December, 1999,
         the Company entered into an agreement to pay an additional $60,000
         to the consultant as full settlement of any and all claims of the
         consultant in connection with this agreement. Consequently, the
         150,000 shares of the Company's common stock held in escrow were
         canceled.

         On December 16, 1993, the Company granted to the Chairman of the
         Board a five-year warrant for 500,000 shares of common stock at an
         exercise price of $3.75, the fair value at time of grant, for
         services rendered in connection with the ISS acquisition. On March
         31, 1995, the Chairman relinquished and waived his right to purchase
         275,000 shares underlying this warrant. The warrant for the
         remaining 225,000 shares expired in December, 1998.

         On February 24, 1995, the Company issued warrants for 250,000 shares
         of common stock to a firm owned by a member of the Company's Board
         of Directors and warrants for 50,000 shares of common stock to a
         lender who provided the Company's working capital line of credit
         until November, 2000, respectively, in connection with the financing
         for the acquisitions of the security guard business of United
         Security Group Inc. The warrants issued to the firm expired in
         February, 1998. The warrants issued to the lender were exercisable
         at $2.10 per share and expired in November, 2000.

                                    F-15

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

15.    Stock Option Plan and Warrants, continued

         On October 4, 1996, the Company issued warrants for 35,000, 150,000,
         10,000 and 10,000 shares of common stock to the
         Company's then Chief Financial Officer and three Board members,
         respectively. The warrant for 35,000 shares was canceled due to the
         termination of the former Chief Financial Officer's employment. The
         remaining warrants are exercisable at $1.875 and expire on September
         30, 2001.

         On November 25, 1996, warrants to purchase 50,000 shares of common
         stock were subscribed to for $500 by the Company's public relations
         firm. The warrants are exercisable at $2.25 per share and expire in
         November, 2001.

         On November 11, 1999, the Company authorized the issuance of
         warrants to purchase 150,000 shares of common stock to a former
         Board member in recognition of services to the Company, at an
         exercise price of $1.031 per share, the fair market value at the
         time of the grant. The warrants expire in November, 2004.

         In November, 2000, the Company issued warrants to purchase 2,298,092
         shares of common stock to Reliance in connection with the settlement
         of the derivative action described in Note 13. The warrants are
         exercisable at $1.25 per share at anytime after November 13, 2001,
         expiring November 13, 2005.

         In November, 2000, the Company also issued warrants and incentive
         stock options to the Chairman of the Board and current President to
         purchase 204,485 and 1,012,959 shares of common stock, respectively,
         exercisable at $1.25 per share after November 13, 2001, and expiring
         November 13, 2005. The warrants are exercisable only after the
         exercise by Reliance of its warrants and only to the extent of the
         Reliance exercise. The options are exercisable with respect to
         one-third of the shares covered for each of the years ending March
         31, 2002 through 2004, and are further restricted based on the
         achievement of certain financial results of the Company for the
         years ending March 31, 2002 through 2004.

         Certain of the option and warrant agreements contain anti-dilution
         adjustment clauses.

         The following is a summary of activity related to all Company stock
         option and warrant arrangements:

<TABLE>

<CAPTION>

                                                       Options                          Warrants

                                             Exercise         Number of          Exercise         Number of
                                              Price           Shares              Price           Shares

<S>                                       <C>                 <C>              <C>                <C>
           Outstanding at March 31, 1998  $2.25 - $2.50<F1>   160,000         $1.87 - $3.75       960,000

           Expired                                                             3.25 -  3.75      (400,000)

           Outstanding at March 31, 1999   2.25 -  2.50       160,000          1.87 -  3.25       560,000

           Issued                                                                      1.03       150,000
           Expired                                 2.25       (52,500)                 3.25      (135,000)

           Outstanding at March 31, 2000           2.50       107,500          1.03 -  2.50       575,000

           Issued                           .75 -  1.25     1,237,959                  1.25     2,502,577
           Expired                                 2.50      (107,500)         2.10 -  2.50      (205,000)

           Outstanding at March 31, 2001  $ .75 - $1.25     1,237,959         $1.03 - $2.25     2,872,577

<FN>

           <F1>Adjusted

</FN>

</TABLE>

                                    F-16

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

16.      Stock Option Plan and Warrants, continued


         At March 31, 2001, there were 1,237,959 and 2,872,577 options
         and warrants outstanding, respectively, exercisable at prices
         ranging from $.75 to $2.25, and 4,385,536 shares reserved for
         issuance under all stock arrangements.

         Significant option and warrant groups outstanding at March 31, 2001,
         and the related weighted average exercise price and life information
         are as follows:

                                                         Weighted   Weighted
                                Options/    Options/     Average    Average
                Range of        Warrants     Warrants    Exercise   Remaining
            Exercise Price    Outstanding Exercisable     Price     Life (years)

            $           .75     225,000         -0-     $   .750     9.84
             1.031 -  1.250   3,665,536     150,000        1.241     4.29
             1.875 -  2.250     220,000     220,000        1.960      .54

            $  .75 - $2.250   4,110,536     370,000       1.2535      .70

         As disclosed in Note 1, the Company continues to follow the
         provisions of APB 25, "Accounting for Stock Issued to Employees,"
         when determining the value of stock based compensation. Accordingly,
         no compensation expense has been recognized for its stock based
         compensation. If the Company had used the fair value method of
         accounting for stock based compensation, there would have been no
         significant effect on the net income or loss of the Company for the
         years ended March 31, 2001, 2000 or 1999. The weighted fair value of
         options and warrants granted during the years ended March 31, 2001
         and 2000, were $.03 and $.10 per equivalent share, respectively.
         There were no options or warrants issued during the year ended March
         31, 1999. For the years ended March 31, 2001 and 2000, the fair
         value was estimated using the exercise price on the date of the
         grant and the following assumptions: risk free interest rate of
         4.30% and 5.35%, volatility of 53.76% and 62.49% and a dividend
         yield of 0.00% for each year, respectively.

17.      Preferred Stock

         The Board of Directors has been authorized to issue preferred stock
         in series and to fix the number, designation, relative rights,
         preferences and limitations of each series of such preferred stock.
         Of the 1,000,000 shares authorized for issuance, 12,325 have been
         designated as Series A Convertible Preferred Stock ("Series A").

         The Series A shareholders are entitled to receive annual dividends
         equal to 8% of the liquidation value of their shares, payable by the
         issuance of additional Series A stock until such time as all amounts
         due on the Deltec debt have been paid in full and then in cash
         thereafter. The $1.5 million Deltec indebtedness was repaid in full
         in February, 1999. During the year ended March 31, 1999, 913 Series
         A shares have been issued, representing dividends accrued through
         February 24, 1999. Upon liquidation or redemption the Series A
         shareholders are entitled to $165 per share. The Company has
         suspended payment of preferred dividends as of July 1, 2000, until
         it can re-establish sufficient surplus in accordance with applicable
         regulations. Total dividends in arrears as of March 31, 2001, were
         $122,022, or $.02 per common share.

         Any holder of Series A shares may at any time convert their shares
         into common stock of the Company at a conversion ratio of 100 shares
         of common stock for each share of Series A stock.

                                    F-17

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

18.      Income Taxes

       Income tax expense/(benefit) for the years ended March 31 consists
       of the following:

                             2001              2000          1999
  Current:
    Federal                  $    -0-          $     -0-     $     -0-
    State and local               -0-                -0-           -0-

                                  -0-                -0-           -0-

  Deferred:
   Federal                        -0-                -0-           -0-
   State and local                -0-                -0-           -0-

                                  -0-                -0-           -0-

     Income tax
       expense/(benefit)     $    -0-          $     -0-      $    -0-

       The differences (expressed as a percentage of pretax income)
       between the statutory Federal income tax rate and the effective
       income tax rate as reflected in the accompanying statements of
       operations are as follows:

                                              2001    2000    1999

         Statutory federal income tax rate    34.0    34.0    34.0
         State and local income taxes,
           net of federal benefit              9.8     9.8     9.8
         Valuation allowences and reserves   (38.4)  (38.4)  (20.7)
         Permanent differences                (5.4)   (5.4)  (23.1)

         Effective tax rate                    0.0%    0.0%    0.0%

       The significant components of deferred tax assets and liabilities
       as of March 31, 2001 and 2000, are as follows:

                                           2001                 2000
         Current deferred tax assets:
           Accounts receivable             $      98,054        $     72,507
           Accrued expenses                      106,140             139,424

                                                 204,194             211,931
           Valuation allowance                  (204,194)           (211,931)

            Net current deferred tax asset $         -0-        $        -0-

         Non-current deferred tax assets/
         (liabilities):
           Equipment                       $     (54,756)       $    (48,811)
           Intangible assets                     897,047             982,898
           Self-insurance                        314,130             352,898
           Net operating loss carryover        2,490,827           2,192,112

                                               3,647,248           3,479,097
           Valuation allowance                (3,647,248)         (3,479,097)
             Net non-current deferred
             tax asset                     $         -0-        $        -0-

     The valuation allowance increased by $160,414, $53,550, and $14,962 during
     the years ended March 31, 2001, 2000 and 1999, respectively. Federal and
     State net operating loss carry-overs were approximately $5,512,000 and
     $5,897,000, respectively, at March 31, 2001. They begin to expire in
     2010.

                                    F-18

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

19.      Administrative Service Agreements

         The Company has entered into agreements with various security guard
         companies (administrative service clients) whereby the Company
         administers the billing, collection and payroll functions and the
         administrative service clients administer the operations of the
         respective guard contracts. Under these arrangements, the Company
         receives title to all the receivables generated and is obligated to
         pay the administrative service clients' guards and related expenses.
         The transfer of receivables are accounted for as a sale/purchase in
         accordance with SFAS No. 125, relating to transfers and servicing of
         financial assets. Under some arrangements the Company may for
         Internal Revenue reporting, workers compensation, general liability
         and disability insurance coverage purposes become the employer of
         record for all applicable guard personnel. Where the Company
         provides insurance resources, such costs are allocated to the
         administrative service clients based on payroll. All contracts
         contain renewal provisions based on the volume of business generated
         by the respective service companies. Although title to the
         receivables generated belong to the Company, the rights to service
         the guard contracts are retained by the service company.

         The Company records the billings for administrative service clients
         contracts in accounts receivable with a corresponding liability,
         "due to administrative service clients," net of the Company's
         administrative fees and payroll and related expenses paid by the
         Company, at the time the services are provided to the administrative
         service clients' customers. Receivables not collected are charged
         back to the administrative service clients generally after 90 days.
         The administrative fees charged to the administrative service
         clients, which are based on either a percentage of guard revenue or
         gross profit, are recognized as "administrative service revenue" on
         the Company's statements of operations.

         The Company may extend operating loans to these administrative
         service clients. As of March 31, 2001, the Company had one loan
         outstanding with a balance of $174,000, providing for monthly
         payments of $3,000 plus interest at 14 % per annum.

         The following is a summary of the administrative service clients'
         activities for the years ended March 31, 2001, 2000 and 1999,
         respectively, the components of which have been excluded from the
         Company's financial statements:
<TABLE>

<CAPTION>

                                                                              2001                2000                    1999
<S>                                                                         <C>                <C>                    <C>
            Employer of record administrative service revenue
               Administrative service clients' guard service revenue        $       -0-        $566,190               $ 7,528,163
               Cost of revenue                                                      -0-        (444,664)               (5,612,727)
               Gross profit                                                         -0-         121,526                 1,915,436
               Administrative service clients' share of gross profit                -0-         (87,634)               (1,468,608)

                                                                                    -0-          33,892                   446,828
            Non employer of record administrative service revenue               274,277         520,304                   466,670

               Administrative service revenue                               $   274,277        $554,196               $   913,498


</TABLE>

20.      Fair Value

         The fair value of the Company's long-term notes receivable is based
         on the current rates offered by the Company for notes of the same
         remaining maturities. The fair value of the Company's long-term debt
         is based on the borrowing rates currently available to the Company
         for loans with similar terms and average maturities. At March 31,
         2001 and 2000, the fair value of long-term notes receivable and
         long-term debt approximates their carrying amounts.

                                    F-19

<PAGE>

Command Security Corporation

Notes to Financial Statements, Continued
March 31, 2001, 2000 and 1999

21.      Acquisitions

           During the years ended March 31, 2000 and 1999, the Company
           acquired two security guard businesses, consisting principally of
           customer lists, for approximately $30,000 and $181,000,
           respectively, payable in cash and notes. The Company accounted for
           these acquisitions using the purchase method. The financial
           statements include the operations of these businesses from the
           acquisition date. The customer lists are being amortized over a
           five year period, the estimated economic lives of the lists.

22.      Related Party Transactions

           In connection with providing security guard services to one of its
           multi-national clients, the Company has engaged Reliance Security
           Group plc, a significant stockholder (see Note 13), as a
           subcontractor for these services. Included in cost of sales for
           the year ended March 31, 2001, are $52,510 charged by Reliance for
           these services. This amount, as well as advances by Reliance in
           connection with the cost of providing the Company with financial
           oversight services of $140,000 are included with current
           liabilities as of March 31, 2001. These amounts do not provide for
           interest and are expected to be paid in the ordinary course of
           business.

           A director of Deltec International SA, the parent of Deltec
           Development Corporation, the former subordinated debt lender to
           the Company, was also a member of the Board of Directors of the
           Company until November, 2000. Interest paid in connection with the
           Deltec debt amounted to $32,813 for the year ended March 31, 1999.
           The debt was paid in full in February, 1999. Expenses of $16,000,
           $20,800, and $20,800 were paid on behalf of this director as
           compensation for services rendered for the years ended March 31,
           2001, 2000 and 1999, respectively.

23.      Reclassifications

           Certain 2000 amounts have been reclassified to conform with the
           2001 presentation. These reclassifications had no impact on
           financial condition or results of operations.

24.      Quarterly Results (unaudited)

           Summary data relating to the results of operations for each
           quarter for the years ended March 31, 2001 and 2000, follows:

<TABLE>

<CAPTION>
                                                                     Three Months Ended
                                            June 30           Sept. 30            Dec. 31           March 31

<S>                                      <C>                <C>                <C>                <C>
            Fiscal year 2001
               Guard service revenue     $16,117,665        $18,322,148        $18,836,792        $18,043,835
               Gross profit                2,681,553          2,932,147          3,099,764          2,817,646
               Net income/(loss)              70,107           (421,912)           (75,261)           (11,820)
               Net income/(loss)
                 per common share (basic)       .005               (.07)              (.02)             (.002)

            Fiscal year 2000
               Guard service revenue      13,402,632         15,217,897         15,322,437         15,302,961
               Gross profit                2,468,437          2,860,228          2,503,814          2,170,387
               Net income/(loss)             189,434            550,969             49,846         (1,099,959)
               Net income/(loss)
                 per common share (basic)        .02                .07                .01               (.17)

             The second quarter 2001 loss includes stockholder derivative
             suit related expenses of $373,746. The fourth quarter 2000 loss
             includes a bad debt charge of $738,117 due to the bankruptcy of
             a major client.

</TABLE>

                                    F-20

<PAGE>

<TABLE>

                         COMMAND SECURITY CORPORATION
                SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS

<CAPTION>

                                                                   Against
                                                                   Amounts                                Uncollectible
                                         Balance at  Charged to     Due to       Charged                    Accounts       Balance
                                         Beginning   Costs and  Administrative  to Other                     Writte        at End of
                                         of Period    Expenses  Service Clients Accounts     Recoveries       Off           Period

<S>                                      <C>         <C>        <C>             <C>          <C>         <C>            <C>
Year  ended March 31, 2001:

  Deducted from asset accounts:
      Allowance for doubtful accounts
        receivable - current maturities  $1,288,246  $ 417,656  $   32,840      $   5,407    $           $1,148,364     $   595,785

      Allowance for doubtful notes
        receivable - current maturities       8,717                                               6,471                       2,246

      Allowance for other doubtful
        receivables - current maturities        -0-     113,119                                             113,119             -0-

      Allowance for doubtful notes
        and long-term receivables,
        net of current maturities               -0-                                                                             -0-

Year  ended March 31, 2000:

Deducted from asset accounts:
      Allowance for doubtful accounts
        receivable - current maturities     701,325     969,937                   106,972<F1>    71,970     418,018       1,288,246

      Allowance for doubtful notes
        receivable - current maturities     267,790                                34,408        34,608     258,873           8,717

      Allowance for other doubtful
        receivables - current maturities    987,192                                                         987,192             -0-

      Allowance for doubtful notes and
        long-term receivables,
        net of current maturities               -0-                                                                             -0-

Year  ended March 31, 1999:

Deducted from asset accounts:
      Allowance for doubtful accounts
        receivable - current maturities     716,347     309,348    (36,143)                                 288,227         701,325

      Allowance for doubtful notes
        receivable - current maturities     273,715                 88,447                       60,448      33,924         267,790

      Allowance for other doubtful
        receivables - current maturities  1,024,319      58,568    (88,447)       250,000<F2>   255,597       1,651         987,192

      Allowance for doubtful notes
        and long-term receivables,
        net of current maturities               -0-                                                                              -0-

<FN>

        <F1> Represents sales tax refund claims ($85,823) and expense accrual
             reduction ($21,149).

        <F2> Represents cash received for item previously removed from accounts.

</FN>

</TABLE>

See auditor's report

                                    F-21

<PAGE>

                                  SIGNATURES

      PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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.

                                  COMMAND SECURITY CORPORATION

                                  By: /s/ William C. Vassell
                                  -------------------------------------
                                  William C. Vassell
                                  President, Chairman and Chief
                                  Executive Officer

Date: July 2, 2001

      PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED.

/s/ William C. Vassell           President, Chairman and         July 2, 2001
-----------------------------    Chief Executive Officer
William C. Vassell

/s/ Graeme R. Halder
-----------------------------    Chief Financial Officer         July 2, 2001
Graeme R. Halder

/s/ Gregory J. Miller
-----------------------------    Director                        July 2, 2001
Gregory J. Miller


-----------------------------    Director                        July 2, 2001
Carl E. Painter

/s/ Peter J. Nekos
-----------------------------    Director                        July 2, 2001
Peter J. Nekos


-----------------------------    Director                        July 2, 2001
Geoffrey P. Haslehurst


-----------------------------    Director                        July 2, 2001
Kenneth Allison

/s/ Eugene U. McDonald           Sr. Vice President              July 2, 2001
----------------------------     Guard Operations
Eugene U. McDonald

/s/ Martin C. Blake              Vice President                  July 2, 2001
----------------------------     Aviation Service
Martin C. Blake

/s/ William Dunn                 Corporate Secretary             July 2, 2001
-----------------------------    General Counsel
William Dunn
</TEXT>
</DOCUMENT>
