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, 2003


|_|   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 24, 2003, the aggregate market value of the voting stock
held by non-affiliates of the registrant (3,904,559 shares), based on the
last sales price of $0.95 on that date, was approximately $3,709,331.

         As of June 24, 2003, the registrant had issued and outstanding
6,287,343 shares of common stock.

<PAGE>

                         Command Security Corporation

                          ANNUAL REPORT ON FORM 10-K
                   For the Fiscal Year Ended March 31, 2003


                              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

14.  Controls and Procedures

15.  Principal Accountant Fees and Services


                                   PART IV

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

<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 twenty one operating offices in
New York, Massachusetts, New Jersey, Illinois, California, Pennsylvania,
Connecticut, Maryland, Oregon and Florida to commercial, financial,
industrial, aviation and governmental clients in the United States.

         The Company files registration statements, periodic and current
reports, proxy statements and other materials with the Securities and
Exchange Commission (SEC). Any materials the Company files with the SEC may
be read or copied at the SEC's Public Reference Room at 450 Fifth Street, NW,
Washington, DC 20549. Information on operation of the Public Reference Room
may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a
website at www.sec.gov that contains reports, proxy and information
statements and other information regarding issuers that file electronically
with the SEC, including the Company's filings.

         The Company's internet address is www.commandsecurity.com. The
Company's annual report on Form 10-K, its quarterly reports on Form 10-Q as
well as Command press releases are made available on the website as soon as
reasonably practicable after they are electronically filed with or furnished
to the SEC. All such filings on the website are available free of charge.

         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 and back office support to
police departments.

         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 32% (or $30.2 million)
of the Company's revenue for the fiscal year ended March 2003. Security
services include providing uniformed guards for access control, theft
prevention, surveillance, vehicular and foot patrol and crowd control.

         Approximately 68% (or $64.1 million of the Company's revenue for the
fiscal year ended March 2003) was generated from the aviation services
division. This division provides uniformed guard services to airport and
airport related clients including general security and baggage handling
services. In November, 2002, all of our contracts for pre-board screening at
airports were federalized, resulting in the loss of these revenues.

         The support services division accounted for less than 1% (or $0.3
million) of the 2003 revenues and encompasses back office support to 3 police
departments and an administrative service client. The latter are where the
Company provides a computerized scheduling and information system and
programs, as well as accounts receivable financing. Accounts receivable
financing is secured by the administrative service company's client's
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 46 employees indirectly attributable to guard
and aviation services including supervisors and dispatchers, another 114
administrative employees, including the executive staff, and 2,867 hourly
guards.

         Management believes there is continued heightened attention to
security matters due to the events of September 11 and 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, continue to provide an
opportunity for increased market participation and growth. In addition, the
creation of the Homeland Security department opens up the potential of
significant additional contracts for the private security sector.

<PAGE>

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 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 and governmental units. 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
aircraft security, access control, wheelchair escorts, skycaps, baggage
handlers and uniformed guards for cargo security areas. In November 2001, the
US Government made the decision to federalize the pre-board screening process
at US airports and in February 2002, the Federal Aviation Administration
(FAA) took over responsibility for managing the contracts with private
security companies. Completion of the federalization process was achieved by
the US Government set deadline of November 2002. The termination of this
contract has had a significant adverse impact on the Company's revenues and
earnings. The Company has replaced a portion of the lost revenue with
alternative services to the airline industry, such as document verification
and screened baggage services and has secured new work at three further
airports - San Jose (California), Baltimore-Washington (Maryland) and
Portland (Oregon).

         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) exposes it to risks of
liability for employee conduct. The Company currently maintains general
liability insurance for its security guard division in the amount of $5
million per occurrence with $25,000 retained risk per occurrence. For its
aviation division it maintains a $25 million per occurrence general liability
policy with $10,000 retained risk per occurrence.

         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 required 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 sales. The Company believes that in most
situations the combination of responsibility for both service and sales in a
single individual, results in better supervision and quality control and
greater responsiveness to customer needs.

         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, training, equipment, supervision, fringe benefits 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.

<PAGE>

         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.

         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
can 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 other than the FAA accounted for more than 10%
of the Company's gross revenue in 2003, 2002 or 2001. For the fiscal year
2003, the FAA accounted for approximately 30% of the Company's total gross
revenues for providing pre-board screening services prior to federalization
in November 2002.

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 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 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.

<PAGE>

         In the light of the September 11 tragedy, the US Government passed a
bill in November 2001, outlining their proposal to federalize the pre-board
screening process at all US airports. The process of federalization has been
completed, the impact of which is discussed above in "Item 1. Business" and
"Operations". Also see "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations"

Employees

         The Company employs 46 employees indirectly attributable to guard
services including supervisors and dispatchers, another 114 administrative
employees including the executive staff, and 2,867 hourly guards.

         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 do not belong to a
labor union. Some of the Company's employees in the following locations are
members of unions: the New York City branch, the Philadelphia Airport office,
the Chicago Illinois branch, the JFK and La Guardia airport branches and the
Los Angeles International Airport office. Together, the unionized employees
account for 43% of the Company's employees and work under collective
bargaining agreements with the following unions: Allied International Union,
Allied Services Division of the Transportation Communications International
Union and Special & Superior Officers Benevolent Association. Many of the
Company's New York City, Los Angeles and Chicago competitors are also
unionized. Presently the Company is negotiating with a Union that wishes to
represent the Company's employees at Baltimore-Washington International
Airport. 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.

<PAGE>

ITEM 2. PROPERTIES

         As of March 31, 2003, the Company owned and used in connection with
its business approximately 60 vehicles.

         As of March 31, 2003, 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
$112,200 under a five-year lease expiring September 30, 2003. The Company
also occupies the following offices:

------------------------------------------------------------------------------
                                                  When      Square  Base Annual
Location                                         Opened     Footage    Rent
------------------------------------------------------------------------------

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

5759 Rickenbacker Road
Commerce, CA                                     11/1/01    2,650     $29,328

7841 Balboa Ave.
San Diego, CA                                     2/8/00      395      $6,699

8939 S Sepulveda Blvd., Suite 201
Los Angeles, CA                                   3/1/00    1,422     $23,712

8939 S. Sepulveda Blvd., Suite 422
Los Angeles, CA                                  11/1/01      575     $12,432

San Jose Int'l Airport,
1661 Airport Boulevard
Terminal C, San Jose, CA                          7/1/02       91      $6,006

1470, Barnum Avenue, Suite 304
Bridgeport, CT                                   11/1/00    1,500     $17,801

55, Airport Road, Suite 503
Hartford, CT                                      7/1/00    2,640     $35,000

55, Airport Road, 1st Floor
Hartford, CT                                     7/15/01    1,078     $28,020

2777 Summer Street, Suite 302
Stamford, CT                                     3/13/95    1,850     $44,400

8181 North West 36th St., Unit 21A
Miami, FL                                         6/1/98      300     $12,780

800 Virginia Avenue, Suite 53
Ft. Pierce, FL                                    8/1/97      400      $8,421

4901 NW 17th Way Suite 504
Ft. Lauderdale, FL                                7/1/00    1,642     $28,945

Miami Int'l. Airport, Concourse A, 2nd Level
Miami, FL                                         7/1/99      262     $13,165

10 West 35th Street, Suite 11F3-4
Chicago, IL                                       3/1/99    1,059     $18,450

21 Cummings Park, Suite 224
Woburn, MA                                       3/15/99      198      $4,216

780 Elkridge Landing Road, Suite 220
Linthicum Heights, MD                            9/20/02      635      $8,700

2222 Morris Avenue
Union, NJ                                         2/1/98    2,250     $25,200

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

17 Battery Place, Suite 223
New York, NY                                      4/8/02    6,080    $131,760

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     $75,600

2144 Doubleday Avenue
Ballston Spa, NY                                  4/1/93      800     $13,488
<PAGE>

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

La Guardia Int'l Airport United Hanger #2,
Room 328, Flushing, NY                           11/1/02      225      $3,912

575 Madison Avenue, #188
New York, NY                                      7/1/02      167     $42,000

700 NE Airport Way, Suite B2420
Portland, OR                                     12/1/02      817     $28,603

29 Bala Avenue, Suite 103
Bala Cynwyd, PA                                   3/1/02      575     $13,029

2 International Plaza, Suite 242
Philadelphia, PA                                  9/1/01    1,277     $30,012

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


                          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.

         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 in
various courts at various stages of adjudication and 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.

         An audit of the Company's FAA contract for pre-board screening
services was completed during December 2002. Based on initial audit findings
of the Defense Contract Audit Agency (DCAA), the TSA has indicated that
approximately $5.2 million of the billing was not supported by the Company's
accounting books and records and consequently the FAA has held back $2.9
million of payment on final invoices until the audit is resolved. The Defense
Contract Management Agency (DCMA) has indicated in informal discussions that
they lack an understanding of the base wage rate charged to them as part of
the rate per hour charge. Management has provided a detailed explanation of
the basis of the rates charged and is in continued discussion with the
Federal agencies concerning acceptance of the rate structure. Management's
estimate of the potential adverse financial impact of the ultimate outcome of
this audit in light of these discussions, along with other potential amounts
due on other outstanding audits such as that by the New York State Attorney
General's Office relative to the provision of services to New York State
under the Office of General Services (OGS) requirements, is currently in the
range of $1.6 million to $2.8 million. Management intends to vigorously
pursue its position that the billings rendered to the FAA are justified and
is reviewing its options including arbitration and/or litigation. The Company
has established allowances and reserves of $1.6 million in connection with
the FAA and OGS audits during the year ended March 31, 2003. Allowances in
connection with the FAA audit have been recorded as a reduction of revenue
whereas the loss provision in connection with the OGS audit has been included
in general and administrative expenses.


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

         The Company held its Annual Meeting of Shareholders on April 29,
2003. 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

Ken Allison                  4,466,296            271,300          131,350
Neil French                  4,463,696            273,900          131,350
Graeme R. Halder             4,545,046            271,300           52,600

         The following Directors continued in their term of office until the
Company's next Annual Meeting of Shareholders: Gregory J. Miller, Peter J.
Nekos, Carl E. Painter 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, 2003. The proposal was passed by the following
vote: For - 4,474,746, Against - 265,800, Abstain - 128,400.

<PAGE>

                                   PART II


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

         The Company's stock is quoted on 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 OTC
Bulletin Board Service, for each full quarterly period within the two most
recent fiscal years.

                                                Last Sales Price
Period (1)
                                                  High     Low

2002
First Quarter                                     0.880   0.700
Second Quarter                                    0.920   0.580
Third Quarter                                     0.820   0.430
Fourth Quarter                                    1.290   0.470

2003
First Quarter                                     1.890   0.850
Second Quarter                                    1.740   1.250
Third Quarter                                     1.470   1.050
Fourth Quarter                                    1.250   0.720

(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 24, 2003 there were approximately 200 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 24, 2003,
was $0.95.

         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.

Equity Compensation Plan Information

         See Item 12 "Security Ownership of Certain Beneficial Owners and
Management".

<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, 2003, 2002,
2001, 2000, and 1999, 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                                   2003            2002            2001           2000           1999
------------------------------------------- ---------------- -------------- --------------- ------------- ---------------
<S>                                         <C>              <C>            <C>             <C>           <C>
Revenue                                              94,315         84,162          71,595        59,800          58,555
Gross Profit                                         19,558         13,805          11,805        10,557          10,630
Operating Income                                      3,266          1,752             328           315             877
Net Income / (Loss)                                   1,327          2,376            (439)         (310)            (15)
Income /(Loss) per common share                        0.14           0.38           (0.08)        (0.07)          (0.02)
Weighted average number of
 common shares                                    6,287,343      6,287,343       6,287,343     6,635,581       6,658,143
------------------------------------------- ---------------- -------------- --------------- ------------- ---------------
</TABLE>

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>

<CAPTION>

                                                              Balance Sheet Data as of  March 31
------------------------------------------- ---------------- -------------- --------------- ------------- ---------------
In $ Thousands                                       2003        2002            2001           2000           1999
------------------------------------------- ---------------- -------------- --------------- ------------- ---------------
<S>                                         <C>              <C>            <C>             <C>           <C>
Working Capital                                       3,591          1,525           1,874           750             200
Total Assets                                         20,707         26,317          17,991        15,348          16,188
Short-term debt <F1>                                  9,248         13,570           8,489         7,717           7,558
Long-term debt <F2>                                      88            291           1,801           588             472
Stockholders' equity                                  4,967          4,087           1,712         2,191           3,119
------------------------------------------- ---------------- -------------- --------------- ------------- ---------------

<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 15 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>

<PAGE>

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

               For the three years ended March 31, 2003

         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.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The preparation of consolidated financial statements in conformity
with accounting principles generally accepted in the United States requires
us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues, expenses and related disclosure of contingent
assets and liabilities. We believe the following critical accounting policies
affect our more significant judgments and estimates used in the preparation
of our consolidated financial statements. Actual results may differ from
these estimates under different assumptions and conditions.

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. Costs associated with the Company's guard service revenue consist of
direct and indirect payroll and related expenses, subcontractor costs,
vehicle and other costs directly related to the guard service revenue
generated.

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.
Individual accounts are charged off as management deems them as
uncollectible.

OVERVIEW

      Command Security Corporation is a provider of uniformed security
services from our twenty one operating offices throughout the United States.
The biggest change to our business occurred in the 2003 fiscal year, with the
federalization of pre-board screening services by the US Government at all US
airports. This process was completed in November 2002 and resulted in the
loss of significant revenues for the Company. Although we replaced part of
this lost revenue during fiscal year 2003, the war in Iraq and the SARS
epidemic has adversely affected the airline industry and hence demand for our
services which currently accounts for approximately 58% of total revenues. In
reaction to the many challenges facing the Airline industry currently, we
have had to cut back our cost base to ensure we remain profitable, including
the reduction in our sales force in the Guard Division. We have switched the
focus of our sales effort to our local branch managers who have been
incentivized to secure new business at strong margins. We have invested some
of the money saved from these cost cuts in developing potential opportunities
provided by the creation of the Department of Homeland Security. Security
should remain a key area of focus for the US Government and this should
provide opportunities for private security companies such as Command to win
profitable Government contracts over the medium term.

      An audit of the Company's FAA contract for pre-board screening services
was completed during December 2002. Based on initial audit findings of the
Defense Contract Audit Agency (DCAA), the TSA has indicated that
approximately $5.2 million of the billing was not supported by the Company's
accounting books and records and consequently the FAA has held back $2.9
million of payment on final invoices until the audit is resolved. The Defense
Contract Management Agency (DCMA) has indicated in informal discussions that
they lack an understanding of the base wage rate charged to them as part of
the rate per hour charge. Management has provided a detailed explanation of
the basis of the rates charged and is in continued discussion with the
Federal agencies concerning acceptance of the rate structure. Management's
estimate of the potential adverse financial impact of the ultimate outcome of
this audit in light of these discussions, along with other potential amounts
due on other outstanding audits such as that by the New York State Attorney
General's Office relative to the provision of services to New York State
under the Office of General Services (OGS) requirements, is currently in the
range of $1.6 million to $2.8 million. Management intends to vigorously
pursue its position that the billings rendered to the FAA are justified and
is reviewing its options including arbitration and/or litigation. The Company
has established allowances and reserves of $1.6 million in connection with
the FAA and OGS audits during the year ended March 31, 2003. Allowances in
connection with the FAA audit have been recorded as a reduction of revenue
whereas the loss provision in connection with the OGS audit has been included
in general and administrative expenses.

<PAGE>

RESULTS OF OPERATIONS

Earnings

      The major change in the 2003 fiscal year was the federalization of
pre-board screening services by the US Government. This process started in
November 2001 with the announcement of the plan to federalize pre-board
screening at all US airports by November 2002. Our contracts with the
commercial airlines to provide such services were taken over by the FAA (and
consequentially by the newly formed TSA) in February 2002. Volumes and rates
remained very strong throughout this period of change, helping us to produce
net income in 2003 of $1,326,736 (net of the $1.6 million allowance in
connection with the FAA and OGS audits). Our results post completion of
federalization have been adversely effected by the many challenges facing the
Aviation industry which have affected their revenues and hence demand for our
services. In addition to weak revenues, we have suffered from the filing for
bankruptcy protection by US Airways and United Airlines during the 2003
fiscal year and Air Canada and Hawaiian Airlines in April 2003. Full
provision for the balances due from the latter two airlines has been charged
in the fiscal year 2003 (see "Provision for Doubtful Accounts" below).

      2002 was also a difficult year following resolution of the stockholder
derivative suit that had distracted management throughout most of the 2001
fiscal year. The closure of our National Accounts Division and the turmoil in
the airline security industry following the September 11 tragedy created many
challenges. Ultimately, however, the heightened focus on aviation security in
the US had a positive impact on our results in the second half of fiscal year
2002. Overall, we produced a strong result for 2002 achieving net income of
$2,375,760 (inclusive of a $1.3 million reduction in valuation reserves for
deferred tax assets).

      In 2001, the distraction and cost of the stockholder derivative suit
contributed to a loss of $438,886.

Revenue

      Revenue for 2003 grew by $10,152,660 to $94,314,515 net of an allowance
of $1 million for any adjustment from the result of the FAA audit. The major
components of this increase were $17,333,000 from additional accounts within
the commercial airline industry reflecting increased volumes and rates
following the September 11 tragedy. This increase was offset by a reduction
in revenues in both our Guard Division ($2,549,000) and our National Accounts
Division ($4,350,000) following its closure in March 2002. The fall in Guard
Division revenues was a combination of terminated accounts (some of which
were due to an aggressive policy of improving margins on under performing
contracts) offset by new business and rate reviews from current customers.
The benefit of this was reflected in a significant improvement in gross
margins (see Gross Profit below).

      Revenue for 2002 increased to $84,161,855, a rise of $12,567,138
compared to $71,594,717 in 2001. The increase was primarily due to
$15,814,000 from additional accounts within the commercial aviation industry
and a $716,000 increase in revenue from our National Accounts Division prior
to its closure in March 2002. These increases were offset by a reduction of
$3,887,000 in our guard service contract revenue. This was a combination of
terminated accounts partly offset by some new business wins.

Gross Profit

      Gross profit increased by $5,752,201 in 2003 from $13,805,455 (16.4% of
revenue) to $19,557,656 (20.7% of revenue). The improvement in the gross
profit margin was due to three primary factors. Firstly, increased focus on
airport security in light of the September 11 tragedy resulted in higher
volumes, wages rates and margins to provide a better-qualified security
officer. The management infrastructure to support the additional volumes was
largely in place, thus improving margins. Secondly, although Guard division
revenues have dropped, this largely reflects lower margin business being
terminated and replaced by higher margin contracts. Finally, management's
efforts to improve safety procedures and awareness generally have resulted in
improved workers compensation claims experience. The amount and number of
reported claims is expected to level off going forward.

      The gross profit in the previous year was up by $2,000,068 from
$11,805,387 (16.5% of revenue) to $13,805,455 (16.4% of revenue). Significant
movements in individual cost lines within direct costs consisted of an
improvement in the direct labor percentage, offset by increased general
liability insurance premiums and unemployment insurance costs as well as an
increase in the cost of sub-contractors. This was largely reflective of the
change in relative volumes within these divisions.

      One area of relative uncertainty within the gross profit 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. Such
policies have limits of $5 million per occurrence in the guard division and
$25 million in the aviation division. Previous to December 2001, we had
limits of $1 million per occurrence and $10 million in the aggregate. Prior
to October 1, we also had an excess general liability insurance policy that
covered claims for an additional $50 million in the aggregate. The impact of
the September 11 tragedy meant that this umbrella coverage was no longer
available to the Company at the time of policy renewal (October 1, 2003). We
retain the risk for the first $25,000 per occurrence ($50,000 prior to
October 1, 2000). The general liability insurance reserve is based upon
existing claims, actuarial computations and the timing of reported claims.
These are all factored in to estimate losses incurred but not yet reported to
the Company.

<PAGE>

      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. We estimate accrued losses based on historical loss
experience and the ratio of claims paid to our historical payout profiles.

General and Administrative Expenses

         General and administrative expenses increased by $2,161,974 from
$11,471,406 (13.6% of revenue) in 2002 to $13,633,380 (14.5% of revenue) in
2003, primarily as a result of the increased revenues. The most significant
cost movement was administrative salaries, largely reflecting the opening of
new Aviation branches at San Jose (California), Baltimore-Washington
(Maryland) and Portland (Oregon) airports. In addition, there was an increase
in infrastructure required to manage the administration on the FAA contract
and to generally support the pre-board screening services provided. The
provision for the expected settlement with the New York Attorney General on
the OGS audit of $600,000 was also charged to general and administrative
expenses.

         General and administrative expenses rose by $1,074,633 to
$11,471,406 in 2002 from $10,396,773 the prior year. This increase was
primarily due to the cost of the sales force ($903,000), higher telephone
charges due to an upgrade in our communications infrastructure ($75,000) and
the start up costs on new contracts, primarily in the aviation division which
impacted travel and hotel costs ($129,000). These increases were partly
offset by a reduction in professional fees ($159,000), health insurance
charges ($112,000) and the cost of conferences ($68,000).

Provision for Doubtful Accounts

         The provision for doubtful accounts increased by $2,078,151 to
$2,659,830 in 2003 due to additional Chapter 11 bankruptcies in the aviation
industry. The charges for these bankruptcies include amounts that were owed
from US Airways, United Airlines, Air Canada, National Airlines and Hawaiian
Airlines, all of which filed during the 2003 fiscal year.

         The provision for doubtful accounts in 2002 rose by $57,375 to
$581,679 due to additional write-offs following a review of older debts which
were not considered recoverable. In addition, we also suffered from some
small Chapter 11 bankruptcies in the aviation division.

         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.

Stockholder Derivative Suit Costs

         The stockholder derivative suit was settled in November 2000 and no
costs were therefore incurred in 2003. A consequence of this suit in earlier
years 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.

Line of Credit Termination Fee

         A one-time charge of $125,000 was incurred during fiscal year 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 was incurred in either 2003 or 2002.

Interest Income

         Interest income in fiscal year 2003 decreased slightly to $89,499
from $93,201, a reduction of $3,702. The majority of interest income arises
from charges to our administrative service client. Interest income decreased
by $21,172 to $93,201 in 2002 compared to $114,373 in 2001. This decrease was
due to the repayment in June 2001 of part of the Restricted Cash balance,
which earns interest offset in part by increased charges to administrative
service clients.

Interest Expense

         Interest expense of $561,035 in 2003 was $219,120 less than the 2002
charge of $780,155. The reduction was due to lower interest rates and a
reduced average revolver balance, as well as the repayment of the term loan
by December 2002. The reduced revolver balance reflected the benefit of the
operating profit earned in the year. The charge of $780,155 in 2002 was
$176,197 less than that incurred in 2001 due primarily to the 50% reduction
in the Prime rate from March 2001 to March 2002 offset by higher average
borrowings as a consequence of increased revenue levels.

<PAGE>

Equipment Dispositions

         The $17,203 gain on equipment dispositions represents proceeds from
the sale of older equipment and vehicles in excess of book value. This
compared with gains in 2002 and 2001 of $10,344 and $14,429 respectively.

Income Tax Benefit

         In March, 2002, due to increased revenue and earnings as a result of
additional accounts and changes in the airport security industry (following
the September 11 tragedy) along with the contract with the FAA to continue to
provide pre-board screening, we determined that it was more likely than not
that we would be able to utilize a substantial part of our net operating loss
carryovers for Federal and State income tax purposes. We, therefore, reduced
our deferred tax asset valuation allowance in fiscal 2002 by $1.3 million.
This tax benefit was, indeed utilized in fiscal 2003. While we still have
approximately $773,000 in loss carry forwards available, we will not
recognize further tax benefits until we achieve sustained profitability.


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
75 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 original agreement provided 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 was to be repaid in equal monthly
installments of $100,000 through June 2003. The outstanding balance under the
revolver and term loans could 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 bore interest at prime on the prime
rate loans and LIBOR plus 2% on the LIBOR loans. The equivalent rates on the
term loans were prime and LIBOR plus 2.5%.

         Due to the losses incurred in the early part of the fiscal year 2002
and the growth in revenues over the 3rd quarter of that year, we required a
$250,000 over advance in December 2001, which expired at the end of January
2002. A consequence of this request was that an amendment to the original
agreement was made effective January 8, 2002. This resulted in a reduction in
the maximum amount of borrowings from eligible accounts receivable to $12
million from $15 million previously. In addition, we no longer had the
ability to have part of the outstanding balance as LIBOR loans and the
interest rates from that date were increased to Prime plus 0.5% on the
revolver loans and Prime plus 0.75% on the term loans. The term loan provided
by LaSalle, which was previously to be repaid at $100,000 per month over 30
months was repaid at $150,000 per month from April 2002 onwards. The term
loan was paid in full in December 2002. On March 14, 2002, a second amendment
was made to the agreement to increase the eligible accounts receivable
maximum borrowings back up to the original $15 million. This was necessary to
fund the continued increase in revenues over the last quarter of the 2002
fiscal year.

         At the end of the 2003 fiscal year, we had borrowed $8,805,838
representing approximately 88% of our maximum borrowing capacity. Long-term
debt (including current maturities) decreased by $1,634,474 primarily due to
repayment of the LaSalle term loan in the 2003 fiscal year.

         Our capital lease obligations reduced by $113,110 from $224,212 in
2002 to $111,102 in 2003. We entered into new capital lease agreements during
the year for equipment purchases of $29,355 and the reduction was due to
repayments in excess of these additions. Total required principal repayments
on long term debt and capital lease obligations for the year to March 2004
are approximately $202,000 compared to $1,747,000 for the prior year.

         Any settlement reached with the OGS is expected to be paid over time
and should not therefore have a significant adverse impact on the liquidity
of the Company. The non-payment by the FAA of $2.9 million in billing has
already become ineligible for borrowing purposes under the LaSalle revolver
agreement and any settlement below this amount will have a favorable impact
on future liquidity.

<PAGE>

         Our operations for 2003 resulted in an increase in operating profit
of $1,514,022 to $3,266,392 compared to $1,752,370 in 2002, primarily due to
revenue growth in the Aviation Division. The 2002 operating profit was higher
than that achieved in 2001 of $327,865, primarily due to increased revenues
as a consequence of the September 11 tragedy and improved cost controls. As a
result of the operating profit earned, offset by the term loan repayment
requirements to LaSalle, working capital increased by $2,065,721 from
$1,525,104 in 2002 to $3,590,825 in 2003. We experienced a cash overdraft
(defined as checks drawn in advance of future deposits) of $1,081,068 as at
March 2003 compared to $2,063,361 as at March 2002. 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.

         Due to the losses sustained in previous years we were not required
to pay any income taxes on our profit to the US Treasury and most States in
fiscal 2003. We still have Federal tax loss carryovers of $773,000 to offset
future taxable income along with other benefits as a result of timing
differences for reporting expenses for tax purposes. We expect to pay minimal
income taxes for fiscal 2004.

         Effective July, 2000, we had suspended payment of preferred stock
dividends until we could re-establish sufficient reserves through future
earnings. With the profit achieved in the 2002 fiscal year, we were able to
repay all dividends in arrears on our preferred stock in April 2002. As of
March 31, 2003, we owed our preferred stockholders $81,349 which represents
the dividend payable for the quarters ended December 2002 and March 2003.

        The Company's stock is quoted on the OTC Bulletin Board Service. We
comply with all applicable reporting requirements of the Securities and
Exchange Commission.


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".

         Although the results for 2003 were strong, it was a challenging year
overall with the federalization of our pre-board screening contract and the
difficult operating conditions for the airline industry. We continue to
review our cost base in the light of these issues to ensure we maintain a
level of profitability going forward. We currently have annualized revenues
of around $65 million which is slightly lower than our earlier predictions of
approximately $70 million due to the negative impact on the airline industry
(and hence demand for our services) of the Iraq war, SARS and the weak US
economy.

         Our outlook on revenues depends upon the ability of our branch
managers to sell new business in addition to maintaining current contracts
and the improvement in the financial condition of the airline industry. The
latter is under tremendous pressure to reduce their cost base and this
ultimately puts pressure on our ability to maintain revenues and margin.

         We expect margins to be approximately 16% to 17%, although this will
be affected by the health of the economy. The relative weakness 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. These rates are often dictated by the customer during the bid
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
pressure on the airline industry to reduce their cost base could also
adversely affect our margin as outlined above.

         We do not envision any significant change in the level of branch
expenses. We have a network of branches that are generally not yet at
critical mass and can therefore benefit from additional revenue at the right
margin without incurring significantly more cost. We do not, therefore, see
the need to open many more branches during the fiscal year 2004.

         We were adversely affected by some significant airline bankruptcies
during fiscal 2003, including US Airways, United Airlines, Air Canada and
Hawaiian Airlines. Although we do not expect this trend to continue, the
airline industry generally continues to struggle with the weak US economy and
the lingering affects of the Iraq war and the SARS epidemic. On-going
revenues have not been adversely impacted by these bankruptcies since we
continue to provide similar levels of service post bankruptcy to all these
airlines.

<PAGE>

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 publicly 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.

Regulation

         The Company's management assumes that the current regulation and
federalization of pre-board screening services provided by the Company will
not be expanded into other areas such as general security and baggage
handling at aviation facilities. Such increased regulation or federalization
would have a material adverse impact on the Company's results of operations
and financial condition.

Airline Industry

         Several of the Company's aviation clients filed for bankruptcy
protection during fiscal year 2003. The aviation industry continues to
struggle with various challenges including the cost of security and decreased
volumes due to SARS and the threat of terrorism. Additional bankruptcy
filings by aviation and non-aviation clients would have a material adverse
impact on the Company's liquidity, results of operations and financial
condition.

Potential Regulatory Litigation

         Please refer to Item 7. Management's Discussion and analysis of
Financial Condition and Results of Operations Overview", where there is
description of the Company's separate negotiations with the TSA and the New
York State Office of General Services (OGS). Management believes it has
adequately addressed these matters with appropriate adjustments and/or
reserves as reflected in the financial statements filed with this form 10-K.
However, there can be no assurance that the revenue adjustment made in
connection with the TSA dispute or reserves taken in connection with the OGS
matter will be adequate. Furthermore, in the unlikely event the Company is
unable to resolve the dispute with the OGS, it is possible that its license
to operate in New York could be suspended or terminated. An additional
revenue adjustment and/or reserves and the suspension of the license would
have a material adverse effect on the Company's results of operations and its
liquidity and capital resources.

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, regulatory limitations, 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.

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 and increased
pressure on its customers to cut their 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.

<PAGE>

Collection of Accounts Receivable

         Management has no reasonable basis to believe that default in
payment of accounts receivable by the Company's security guard customers or
administrative service clients will occur. 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.

Catastrophic Events

         The Company is exposed to potential claims for catastrophic events,
such as a hijacked airplane, based upon allegations that the Company failed
to perform its services in accordance with contractual or industry standards.
The Company's insurance coverage limits are currently $5 million per
occurrence for guard services and $25 million in the aviation division. The
former umbrella coverage of $50 million is no longer available to the Company
at commercially reasonable rates following the September 11 tragedy.

Officers and Directors Potential to Control Matters Requiring Stockholder
Approval

         Our executive officers, directors and 5% or greater stockholders
currently own beneficially 2,382,784 shares or approximately 38% (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 7,916,710 shares or approximately 70% of the outstanding shares
of the Company's common stock. These stockholders, acting together would 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 economic conditions, including interest 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).

<PAGE>

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

         During the fiscal year ended March 31, 2003, 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 with LaSalle Business Credit, Inc. Based on the
Company's interest rate at March 31, 2003 and average outstanding balances
during the fiscal year then ended, a 1% change in the prime lending rate
would impact the Company's financial position and results of operations by
approximately $74,000 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.

<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 Neil French, 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 second class will expire at the annual meeting of
shareholders in 2003 or until their successors have been elected and
qualified. The terms of the directors in the first class will expire at the
annual meeting of shareholders in 2004 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 14, 2003.

Name                       Age      Title
-------------------        --      -------------------------------------
William C. Vassell         44      Chairman of the Board, President and
                                   Chief Executive Officer

Gregory J. Miller          43      Director

Peter J. Nekos             75      Director

Neil French                52      Director

Kenneth Allison            58      Director

Graeme R. Halder           40      Chief Financial Officer and Director

Carl E. Painter            57      Director

Martin Blake               49      Vice President Aviation Services

William Dunn               50      Corporate Secretary, General Counsel

         William C. Vassell is the Company's President, Chief Executive
Officer and Chairman of the Board. 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.

<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. He is Chair of the Company's Audit Committee.

         Neil French was appointed as a director to replace and finish the
term of Geoffrey P. Haslehurst who voluntarily resigned in January 2003. Neil
French was appointed Group Finance Director of Reliance Security Group plc in
April 2001. A graduate of Edinburgh University, he is an experienced public
company finance director having held that position with Perry Group plc and
APV plc. Prior to that, he held several senior finance positions with Lex
Services plc. He is a member of the Company's Audit Committee.

         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.

         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.

         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.

<PAGE>

Audit Committee

     The Audit Committee was comprised of Messrs. Haslehurst, Miller and
Nekos (Chair) as of March 31, 2002. As of January 2003, Mr. French assumed
Mr. Haslehurst's duties on the Audit Committee. Messrs. Nekos and Miller are
independent directors and it is believed that Mr. Nekos' credentials satisfy
the requirements of a financial expert.

Code of Ethics

         The Company holds its executive officers to the highest ethical
standards and its currently drafting a Code of Ethics. A draft is in the
process of being submitted to the Board of Directors for review. Once
completed, this Code of Ethics will also be published on the Company's
website.


           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 on management's knowledge of the holdings and
transactions of reporting persons, a review of Forms 3, 4 and 5 and any
amendments thereto, and a review of written representations to the Company
with respect to the fiscal year ended March 31, 2003, the Company is not
aware of any person who, at any time during the fiscal year ended March 31,
2003, 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, 2003.

<PAGE>


                       ITEM 11. EXECUTIVE COMPENSATION

         The following table sets forth for the fiscal year ended March 31,
2003, all plan and non-plan compensation paid to, earned by, or awarded to
William C. Vassell, Chairman of the Board and Chief Executive Officer, Graeme
R. Halder, Chief Financial Officer, Martin C. Blake, Jr., Vice-President -
Aviation and William J. Dunn, General Counsel. 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, 2003 and, therefore, compensation for such
other executive officers is not disclosed.

<TABLE>
                                                SUMMARY COMPENSATION TABLE
                                              FOR THE FISCAL YEAR ENDED MARCH 31, 2003

<CAPTION>
                                               Annual Compensation                            Long-Term
                                                                                              Compensation

                                                                                              Shares
                           Fiscal Year                         Other 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
President, Chairman
of the Board & Chief
Executive Officer
                           2001          $162,500              <F2>                   0       1,217,444<F1>
                           2003          $193,268              <F2>            $ 45,000               0
                           2003          $233,654              <F2>            $ 50,000<F5>           0

Graeme R. Halder
Chief Financial Officer
                           2001          $ 30,000              $179,356        $ 13,800          75,000<F4>
                           2002          $163,083              $120,320        $ 29,256               0
                           2003          $260,834              $172,287<F3>    $ 25,000<F5>           0

Martin C. Blake, Jr.
Vice President-
 - Aviation
                           2001          $119,678              <F2>            $ 94,058          50,000<F4>
                           2002          $119,678              <F2>            $114,312               0
                           2003          $187,417              <F2>            $150,000               0

William J. Dunn
General Counsel
& Secretary                2001          $ 76,860              <F2>                   0          20,000<F4>
                           2002          $ 81,034              <F2>                   0               0
                           2003          $ 90,000              <F2>            $ 10,000               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. The shares became exercisable on
     November 12, 2000, but 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 exercisable only to the
     following extent: (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> Pursuant to the Employment Agreement entered into between Mr. Halder and
     the Company as of January 1, 2001, and as superceded by one effective
     from August 20, 2001, Mr. Halder received perquisites and other personal
     benefits in excess of either $50,000 or 10% of his total annual salary
     and bonus. The new agreement included substituting the payment of rental
     on a US property with a mortgage allowance. Mr. Halder received $7,500
     towards the cost of rental accommodation and a mortgage allowance of
     $94,754 offset by $16,628 received on the rental of his UK property,
     $7,753 for the use of a fully expensed vehicle and $36,330 in private
     school tuition for his eldest two children. His employment agreement
     also covers him for the tax consequences of his move to the United
     States including any taxable benefit on the above costs and this is
     estimated at $42,578.

<F4> 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 are satisfied.

<F5> The Compensation Committee is currently reviewing a request for
     discretionary bonus payments to be made to Mr. Vassell and Mr. Halder in
     the amounts of $50,000 and $25,000 respectively. As of the date of
     filing of this 10K these bonuses have not been approved or paid.

</FN>

</TABLE>

<PAGE>

Stock Options/Warrants

     The Company did not grant any stock warrants pursuant to its 2000 Stock
Option Plan during the fiscal year ended March 31, 2003.


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 Employment
Agreement provides that Mr. Vassell be employed as the Company's Chairman of
the Board of Directors, Chief Executive Officer and President. The Employment
Agreement 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
Employment Agreement. Unless either party gives ninety (90) days notice to
the other party prior to an anniversary of the effective date, the Employment
Agreement shall be automatically extended for one (1) 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. Pursuant to the Reliance transaction and the Employment
Agreement, the Compensation Continuation Agreement entered into between the
Company and Mr. Vassell was terminated as of September 2000.

         Mr. Vassell became eligible to receive incentive compensation
commencing with this fiscal year ended March 31, 2003. Pursuant to this
incentive compensation, he is eligible to receive incentive compensation
equal to 20% of his base salary if the Company's earnings before taxes for a
given 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.

<PAGE>

         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.

Graeme R. Halder

         The Company entered into an Employment Agreement with Mr. Graeme R.
Halder that was effective from August 20, 2001. This superceded the prior
agreement that was effective from January 1, 2001. The Agreement provides
that Mr. Halder will be employed as the Company's Chief Financial Officer and
will report to Mr. Vassell. The contract will end on the earlier of the third
anniversary of the effective date of the agreement or the date on which Mr.
Halder's employment is terminated by the Company. In the event of termination
without cause, Mr. Halder is entitled to 12 months base salary. His base
salary will be $146,280 per annum, which will be reviewed at each anniversary
date and he will be eligible to receive up to an additional fifty percent
(50%) of his base salary based on performance. 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 and a $6,000 per annum air travel allowance. The
Company also pays him a mortgage allowance towards his US property which is
offset by rental income received on his property in the UK.

Martin C. Blake, Jr.

         The Company has executed an Employment Agreement with Mr. Blake
dated as of March 1, 2003. The Agreement went into effect on March 1, 2003
and superceded a prior Employment Agreement dated March 20, 2000 and as
amended on March 20, 2002. The Agreement provides that Mr. Blake be employed
as the Company's Vice President and General Manager of the Company's Aviation
Division. 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 $150,000 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, the Company is obligated to provide twelve
(12) months of health insurance and pay a lump sum severance amount of
$150,000.

         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 of the Company's
aviation clients or potential clients or hire or influence Company employees
to leave the Company.

<PAGE>

Other Agreements

         Other than pursuant to the Employment Agreement and the Compensation
Continuation Agreement for Mr. Vassell and 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, 2003, no discretionary amounts have
been accrued or paid.

Board of Directors' Compensation

         No executive officer receives any additional compensation for
serving as a director. Directors who are not employees of the Company or the
Reliance Security Group received a meeting fee of $2,500 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. Miller
received fees of $450 for various legal services he provided to the Company
during the year at the rate of $225 per hour. 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. In recognition of their service
as Directors, Messrs. Nekos and Painter, and Miller were each granted a
warrant covering 10,000 shares of the Company's Common Stock exercisable at
$0.82 per share in February 2002. The warrants expire on February 28, 2005.

     In July 2002, an Independent Committee of Directors was established to
consider various options available to the Company to maximize shareholder
value. The Committee comprised of Gregory J. Miller (Chair), Peter J. Nekos
and Carl E. Painter. Fees received for fulfilling their duties on this
Committee were $49,230, $13,000 and $15,625 respectively. The Independent
Committee met extensively over several months. Mr. Miller, as Chair of the
Committee, billed the Company at an agreed rate per day while Mr. Nekos and
Mr. Painter billed based on hours worked at an agreed rate per hour.

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.

<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 14, 2003, (ii) each director and executive officer and (iii) all of said
beneficial owners, officers and directors as a group, as of June 14, 2003.
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.

                               Amount and Nature
                               Of Beneficial
Name                           Ownership(1)               Percent of Class(2)
-----                          -----------------          -------------------
William C. Vassell             2,283,744(3)               30.43%(2)

Peter J. Nekos                    12,500(4)                 (13)

Gregory J. Miller                 10,000(5)                 (13)

Carl E. Painter                   10,000(6)                 (13)

Kenneth Allison                   23,500(7)                 (13)

Graeme R. Halder                  75,000(8)                1.18%

Martin C. Blake, Jr.              50,000(9)                 (13)

William Dunn                      21,000(10)                (13)

Reliance Security Group plc    5,297,966(11) (2)          53.15%(2)
Boundary House
Cricketfield Road
Uxbridge, Middlesex UB81QG

All Officers and               7,533,710(2) (3) (4)       66.37%(2)
Directors as a Group                    (5) (6) (7)
(9 Persons)                             (8) (9) (10)
                                        (11) (12)

(1)      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.

(2)      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.

(3)      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. Mr. Vassell
         shares voting and dispository power over 16,300 shares with his
         wife.

<PAGE>

(4)      Includes 10,000 shares covered by a warrant issued March 1, 2002
         and which expires on February 28, 2005.

(5)      Includes 10,000 shares covered by a warrant issued March 1, 2002
         and which expires on February 28, 2005.

(6)      Includes 10,000 shares covered by a warrant issued March 1, 2002
         and which expires on February 28, 2005.

(7)      Mr. Allison is currently an officer of Reliance Security Group plc
         and in addition to the 23,500 shares listed, he may be deemed to
         hold the 5,297,966 shares and warrants of Reliance in an indirect
         capacity.

(8)      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.

(9)      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.

(10)     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.

(11)     The shares included under the beneficial ownership for Reliance
         include 1,367,339 shares of common stock and 12,325.35 shares of
         preferred stock convertible into 1,232,535 shares of Common Stock.
         Also included is a currently exercisable warrant for 150,000 shares
         at an exercise price of $1.03125 per share and a warrant covering
         2,298,092 shares, at an exercise price of $1.25 per share which is
         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 warrants 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. Also included are 250,000 shares held in escrow
         pursuant to an Escrow Agreement between Mr. Vassell and Reliance
         dated November 12, 2000.

(12)     The denominator for the group calculation is 11,350,414 and includes
         the shares warrants held by Reliance Security Group plc. The
         numerator of 7,533,710 does not include 250,000 shares of common
         stock included in Mr. Vassell's beneficial ownership since these
         shares are also included in Reliance's beneficial ownership.

(13)     Less than 1 percent of class.


<TABLE>

Equity Compensation Plan Information

<CAPTION>
----------------------------------------------------------------------------------------------
Plan category                 Number of            Weighted-average     Number of
                              securities to        exercise price       securities
                              be issued upon       of outstanding       remaining
                              exercise of          options, warrants    available for
                              outstanding          and rights           future issuance
                              options, warrants                         under equity
                              and rights                                compensation plans
                                                                        (excluding securities
                                                                        reflected in
                                                                        column (a) )

                              (a)                  (b)                  (c)

<S>                           <C>                  <C>                  <C>
Equity compensation
 plans approved by
 security holders             1,392,444            1.19                 275,000

Equity compensation
 plans not approved
 by security holders            280,000            0.91                     -0-

Total                         1,672,444            1.14                 275,000
----------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ATM UK Contract

         In March 2001, the Company entered into a contract to provide
security services to a bank services provider in the UK. Following a review
of the potential sub-contractors in the UK market, discussions were held with
2 potential suppliers. The contract was subsequently awarded to Reliance
Security Group, a major shareholder of the Company. The contract was
negotiated at arms length at competitive rates and was a profitable contract
for the Company until the end of the contract in January 2002. Revenue on
this contract in the 2002 fiscal year totaled $1,279,845, while
sub-contractor costs were $1,143,717. No such revenue or costs were incurred
in the 2003 fiscal year.


ITEM 14. CONTROLS AND PROCEDURES

         As required by Rule 13a-15 under the Exchange Act, within the 90-day
period prior to the filing date of this report, the Company carried out an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. This evaluation was carried out under the
supervision and with the participation of the Company's management, including
the Company's Chief Executive Officer and Chief Financial Officer. Based upon
that evaluation, the Company's Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective. There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect these internal
controls subsequent to the date of their evaluation.

         Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed by the
Company in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by
the Company in the reports it files or submits under the Exchange Act is
accumulated and communicated to the Company's management, including the
Company's Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.

         ITEM 15. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Following are the aggregate fees billed by our principal accountants
for professional services rendered for each of the last two fiscal years:

                                                     2003              2002

Audit fees                                          $94,932          $84,314
Audit related fees                                       -0-              -0-
Tax fees                                             28,408           15,194
All other fees                                        2,730 (1)           -0-

(1)      Accounting research and consultation

         None of the audit services performed were performed by persons other
than the principal accountant's full-time permanent employees. The engagement
of the principal accountants was approved by the Company's audit committee
before the engagement was formalized. Said approval covered all services
provided by the accountants.

<PAGE>

                                   PART IV


ITEM 16. 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, 2003 and 2002...............    F-2

         Statements of Operations - years ended.................    F-3
         March 31, 2003, 2002, and 2001

         Statements of changes in stockholders' equity..........    F-4
         years ended March 31, 2003, 2002, and 2001

         Statements of cash flows - years ended.................    F-5 - F-6
         March 31, 2003, 2002, and 2001

         Notes to Financial Statements..........................    F-7 - F-20

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

         Valuation and qualifying accounts - years ended........    F-21
         March 31, 2003, 2002, 2001


         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 Exhibit
                                      of Incorporation 3.3 of the form 10-K
                                      for the 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 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").

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

<PAGE>

4.5   Reclassified as Exhibit 10.40

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

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

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

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

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

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

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

10.7  Form of Warrant Agreement and   Incorporated by reference to Exhibit
      Warrant for William C. Vassell  10.3 of the 1991 10-K
      (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 C.        10.9 of the 1993 10-K
      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 year
      (500,000)                       ended March 31, 1994 (the "1994 10-K

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

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

10.14 Form of Second Amendment to     Incorporated by reference to Exhibit
      May 15, 1992 Warrant Agreement  10.13 in 1994 10-K
      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

<PAGE>

10.16 Form of Third Amendment to      Incorporated to Exhibit 10.15
      May 15, 1992 Warrant Agreement  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

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 2
      Reorganization, Liquidation     of the Form 8-K filed October 27, 1993
      or Succession of ISS
      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 2
      Reorganization, Liquidation     of the Form 8-K filed November 12, 1993
      or Succession of Madison

10.25 Purchase and Sale Agreement     Incorporated by reference to Exhibit 2.1
      dated February 24, 1996, for    of the Form 8-K filed march 23, 1996
      the acquisition of United
      Security Group Inc.

10.26 Placement Agent Agreement       Incorporated by reference to Exhibit
      dated February 24, 1996,        10.26 to the Third Amendment to the
      between the Company and         Form S-1
      Sands 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 Third Amendment to the
      directors in their capacities   S-1
      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      Incorporated by reference to Exhibit
      and Restated Employment         10.29 of the Third Amendment to the
      Agreement for Gordon            S-1
      Robinett dated 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 the Third Amendment to the S-1

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

<PAGE>

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         10.36 of the form 10-K for the fiscal
      August 22, 1994                 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
      Share of Common Stock           11 annexed to Financial Statements.

27.00 Financial Data Schedule

99.1  Certifications

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 1.2
      Placement Agent Agreement       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 99
      dated March 8, 1995             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

99.9  Letter to Company from Coopers  Incorporated by reference to Exhibit
      & Lybrand,L.L.P. dated          99.9 to the Form 8-K dated February 9,
      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 March
      dated March 8, 1996.            11, 1996.

<PAGE>

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 June 29,    Incorporated by reference to Exhibit
      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.

99.17 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 Board    Incorporated by reference to Exhibit
      of Directors Charter and Powers 99.23 of the Form 10-K filed July 3,
                                      2001.


99.24 Halder Employment Agreement     Incorporated by reference to Exhibit
                                      99.24 of the Form 10-K filed July 3,
                                      2001.

99.25 2003 Stock Option Plan          Incorporated by reference to Exhibit
                                      99.25 of the Form 10-K filed July 3,
                                      2001.

99.26 Halder Warrant                  Incorporated by reference to Exhibit
                                      99.26 of the Form 10-K filed July 3,
                                      2001.

99.27 Blake Warrant                   Incorporated by reference to Exhibit
                                      99.27 of the Form 10-K filed July 3,
                                      2001.

99.28 Dunn Warrant                    Incorporated by reference to Exhibit
                                      99.28 of the Form 10-K filed July 3,
                                      2001.

99.29 McDonald Warrant                Incorporated by reference to Exhibit
                                      99.29 of the Form 10-K filed July 3,
                                      2001.

<PAGE>

99.30 Press Release dated June 23,
      2003

(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, 2002.

      (xvi)    Report on Form 8-K dated August 24, 1999 Item 7(c)
               Press release dated August 27, 2002.

      (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.

<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.

      (xxviii) Report on Form 8-K dated April 8, 2002 Item 7(c) Press
               Release dated April 1, 2002.

      (xxix)   Report on Form 8-K dated June 12, 2002 Item 7(c) Press
               Release dated June 12, 2002.

<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

                                      /s/ William C. Vassell
                                      -----------------------------
                                      William C. Vassell
                                      President, Chairman and Chief
                                      Executive Office

Date: June 24, 2003


      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.

                                                                    Date

                               President, Chairman and
/s/ William C. Vassell         Chief Executive Officer          June 24, 2003
----------------------
William C. Vassell

                               Chief Financial Officer,
/s/ Graeme R. Halder           Director                         June 24, 2003
----------------------
Graeme R. Halder

/s/ Gregory J. Miller          Director                         June 24, 2003
----------------------
Gregory J. Miller

/s/ Peter J. Nekos             Director                         June 24, 2003
----------------------
Peter J. Nekos

/s/ Neil French                Director                         June 24, 2003
----------------------
Neil French

/s/ Kenneth Allison            Director                         June 24, 2003
----------------------
Kenneth Allison

/s/ Carl E. Painter            Director                         June 24, 2003
----------------------
Carl E. Painter

<PAGE>

               Certification (pursuant to Rule 13a-14 of the
                Securities Exchange Act of 1934, as amended)

         I, William C. Vassell certifying individual, certify that:

         1. I have reviewed the annual report on Form 10-K of Command
Security Corporation;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this annual report;

         3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this annual
report;

         4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:

         a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and

         c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

         5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent function):

         a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's' auditors any material weakness in internal controls; and

         b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

         6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

Date:  June 24, 2003

/s/ William C. Vassell
----------------------------
William C. Vassell
Principal Executive Officer

<PAGE>

               Certification (pursuant to Rule 13a-14 of the
                Securities Exchange Act of 1934, as amended)

         I, Graeme Halder certifying individual, certify that:

         1. I have reviewed the annual report on Form 10-K of Command
Security Corporation;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this annual report;

         3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this annual
report;

         4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:

         a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and

         c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

         5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent function):

         a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's' auditors any material weakness in internal controls; and

         b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

         6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

Date:  June 24, 2003

/s/ Graeme R. Halder
----------------------------
Graeme R. Halder
Principal Financial Officer


<PAGE>

                                                                 Exhibit 99.1

                          CERTIFICATION PURSUANT TO
                           18 U. S. C. SECTION 1350
                            AS ADOPTED PURSUANT TO
                SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Annual Report on Command Security
Corporation (the "Company") on Form 10-K for the period ended March 31, 2003
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, William C. Vassell, Chairman of the Board of Directors,
President and Chief Executive Officer of the Company, certify, pursuant to 18
U. S. C. section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report
fully complies with the requirements of section 13 (a) or 15 (d) of the
Securities Exchange Act of 1934, and (2) The information contained in the
Report fairly presents, in all material respects, the financial condition and
result of operations of the Company.

Date: June 24, 2003                            By: /s/ William C. Vassell
                                                   ----------------------
                                                   William C. Vassell,
                                                   President, CEO and
                                                   Chairman of the Board

<PAGE>

                                                                 Exhibit 99.1

                          CERTIFICATION PURSUANT TO
                           18 U. S. C. SECTION 1350
                            AS ADOPTED PURSUANT TO
                SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Annual Report on Command Security
Corporation (the "Company") on Form 10-K for the period ended March 31, 2003
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Graeme Halder, Chief Financial Officer of the Company, certify,
pursuant to 18 U. S. C. section 1350, as adopted pursuant to section 906 of
the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The
Report fully complies with the requirements of section 13 (a) or 15 (d) of
the Securities Exchange Act of 1934, and (2) The information contained in the
Report fairly presents, in all material respects, the financial condition and
result of operations of the Company.

Date: June 24, 2003                            By: /s/ Graeme Halder
                                                   -----------------------
                                                   Graeme Halder,
                                                   Chief Financial Officer

<PAGE>

                                                                Exhibit 99.30

FOR IMMEDIATE RELEASE

CONTACT: William C. Vassell     Donald Radcliffe
         Chairman & President   Radcliffe & Associates, Inc.
         Tel: (845) 454-3703    Tel: (212) 605-0201

                         COMMAND SECURITY REPORTS
                          FISCAL YEAR END RESULTS

             o Record fiscal year revenue, up 12.4%
             o Operating profit of $3.3 million
             o Shareholders' equity increased to $5.0 million

Lagrangeville, New York *** June 23, 2003 *** Command Security Corporation
(OTCBB: CMMD) announced today its results for the year ended March 31, 2003.
For the fiscal year ended March 31, 2003 revenues increased to $94.3 million
from the $84.2 million reported in the prior fiscal year. The increase was
primarily due to contracts received from the FAA for screening services prior
to the Federal takeover of these contracts, offset by the loss of guard
contracts which had inadequate margins and the closure of the unprofitable
national accounts division in fiscal year 2002.

For the fiscal year ended March 31, 2003 net income before tax was $2.8
million compared to $1.1 million in the prior fiscal year. After taxes of
$1.5 million and preferred dividends of $.4 million, net income applicable to
common shareholders was $.9 million or $.14 per basic common share. For the
prior fiscal year, income before tax was $1.1 million increased by a tax
benefit of $1.3 million resulting in net income of $2.4 million or $.38 per
basic common share.

During the quarter ended March 31, 2003 the Company lost ($2.2) million or
($.36) per basic common share compared to net income of $2.3 million or $.37
per basic common share in the same period of the prior fiscal year. The loss
for the quarter is primarily attributable to an additional charge for the FAA
and OGS audits of $0.9 million and a bad debt expense charge of $1.3 million
due mainly to several major airline bankruptcies including Air Canada and
Hawaiian Airlines.

Commenting on the results, Chairman and President William C. Vassell said,
"Although the fourth quarter result was disappointing with several
significant one-time costs, 2003 overall was a solid year for Command. We
substantially improved our balance sheet as demonstrated by the current ratio
increasing to 1.24 from 1.07 at the end of our prior fiscal year.
Shareholders' equity has increased to $5.0 million."

Mr. Vassell added, "Our existing revenues currently are in excess of $65
million annualized which is lower than our earlier expectations of over $70
million, primarily due to the adverse impact of the Iraq war and SARS on the
airline industry which effected demand for our services and the weak economy.
However, we are starting to see some recovery over recent weeks. During
fiscal 2003 we added three additional airports providing services other than
screening, which should also generate additional revenues as the economy
picks up. We are working to secure new contracts from the Department of
Homeland Security. We also believe we are well positioned to pursue airport
screening contracts in November 2004, when private contractors may begin to
once again perform these services. In the meantime we have implemented a
further cost reduction program to offset the drop in expected revenues. We
expect to be around breakeven in this current fiscal first quarter of 2004
and we look to the future with confidence as the recent cost cuts take
effect".

<PAGE>

<TABLE>
                                              COMMAND SECURITY CORPORATION

<CAPTION>

                                   Three Months Ended           Fiscal Year Ended
                                        March 31,                    March 31,

                               2003            2002            2003            2002

<S>                            <C>             <C>             <C>             <C>
Revenue                        $17,603,676     $24,794,783     $94,314,515     $84,161,855
Operating (Loss)/Income         (1,969,979)      1,229,474       3,266,392       1,752,379
(Loss)/Income before tax        (2,059,749)      1,046,397       2,812,059       1,075,760
Income tax benefit/(expense)      (152,035)      1,300,000      (1,485,323)      1,300,000

Net (Loss)/Income               (2,211,784)      2,346,397       1,326,736       2,375,760
Preferred Dividend                 (40,674)              0        (447,416)             --
(Loss)/Income applicable
  to common shareholders       $(2,252,458)    $ 2,346,397     $   879,320     $ 2,375,760

(Loss)/Income per share
  of Common stock
    Basic                      $(     0.36)    $      0.37     $      0.14     $      0.38

    Diluted                            N/A     $      0.31     $      0.14     $      0.32

Weighted average of common
  shares outstanding
    Basic                        6,287,343       6,287,343       6,287,343       6,287,343

    Diluted                            N/A       7,524,868       6,358,342       7,524,868

</TABLE>

About Command

Command Security Corporation provides security services through company-owned
offices in New York, New Jersey, California, Illinois, Connecticut, Florida,
Massachusetts, Pennsylvania, Maryland and Oregon.

         Statements in this press release other than statements of historical
fact are "forward-looking statements." Such statements are subject to certain
risks and uncertainties including the demand for the Company's services,
litigation, labor market, and other risk factors identified from time to time
in the Company's filings with the Securities and Exchange Commission that
could cause actual results to differ materially from any forward looking
statements. These forward-looking statements represent the Company's judgment
as of the date of this release. The Company disclaims, however, any intent or
obligation to update these forward-looking statements.

<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, 2003 and 2002, 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, 2003. 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 of America. 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, 2003 and 2002, and the results of its operations and its cash
flows for each of the three years in the period ended March 31, 2003, in
conformity with accounting principles generally accepted in the United States
of America. 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.

/s/  D'Arcangelo & Co., LLP

May 16, 2003
Poughkeepsie, New York


                                     F-1

<PAGE>

<TABLE>

Command Security Corporation
Balance Sheets
March 31, 2003 and 2002

<CAPTION>

                                                                                                   2003                   2002

<S>                                                                                         <C>                    <C>
ASSETS
Current assets:
Accounts receivable from guard service customers, less allowance for
  doubtful accounts of $2,361,674 and $359,015, respectively                                $16,813,792            $21,280,638
Accounts receivable from administrative service client customers, less
  allowance for doubtful accounts of $70,663 and $24,095, respectively                         713,603                648,826
Prepaid expenses                                                                               821,300                498,203
Other receivables                                                                              330,930                388,066
                                                                                            -----------            -----------
   Total current assets                                                                      18,679,625             22,815,733

Furniture and equipment at cost, net                                                            837,814              1,195,422
Intangible assets, net                                                                           75,322                195,910
Restricted cash                                                                                 256,308                253,548
Deferred income taxes                                                                                -0-             1,300,000
Other assets                                                                                    858,236                556,110
                                                                                            -----------            -----------

   Total assets                                                                             $20,707,305            $26,316,723
                                                                                            ===========            ===========


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Cash overdraft                                                                              $ 1,081,068           $  2,063,361
Current maturities of long-term debt                                                            133,983              1,626,065
Current maturities of obligations under capital leases                                           67,819                120,532
Short-term borrowings                                                                         9,046,106             11,823,022
Accounts payable and accrued expenses                                                         4,571,729              5,492,855
Due to administrative service clients                                                           188,095                164,794
                                                                                            -----------            -----------
   Total current liabilities                                                                 15,088,800             21,290,629

Self-insurance reserves                                                                         563,815                647,935
Long-term debt, net                                                                              44,596                186,988
Obligations under capital leases, net                                                            43,283                103,680
                                                                                            -----------            -----------
                                                                                             15,740,494             22,229,232
                                                                                            -----------            -----------

Commitments and contingencies (Notes 14 and 15)

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, 6,287,343 shares issued and outstanding                                               629                    629
Paid-in capital                                                                               8,171,870              8,619,286
Accumulated deficit                                                                          (5,239,370)            (6,566,106)
                                                                                            -----------            -----------
                                                                                              4,966,811              4,087,491
                                                                                            -----------            -----------

   Total liabilities and stockholders' equity                                               $20,707,305            $26,316,723
                                                                                            ===========            ===========

</TABLE>

See accompanying notes and auditor's report


                                     F-2

<PAGE>

<TABLE>

Command Security Corporation
Statements of Operations
Years Ended March 31, 2003, 2002 and 2001

<CAPTION>

                                                                               2003                2002                2001

<S>                                                                     <C>                 <C>                 <C>
Revenue                                                                 $94,314,515         $84,161,855         $71,594,717
Cost of revenue                                                          74,756,859          70,356,400          59,789,330
                                                                        -----------         -----------         -----------
    Gross profit                                                         19,557,656          13,805,455          11,805,387
                                                                        -----------         -----------         -----------

Operating expenses:
   General and administrative expenses                                   13,633,380          11,471,406          10,396,773
   Provision for doubtful accounts and notes                              2,659,830             581,679             524,304
   Bad debt recoveries                                                       (1,946)                 -0-                 -0-
   Stockholder derivative suit related expenses                                  -0-                 -0-            431,445
   Line of credit termination fee                                                -0-                 -0-            125,000
                                                                        -----------         -----------         -----------
                                                                         16,291,264          12,053,085          11,477,522
                                                                        -----------         -----------         -----------

    Operating income                                                      3,266,392           1,752,370             327,865
                                                                        -----------         -----------         -----------

Other income/(expense)
   Interest income                                                           89,499              93,201             114,373
   Interest expense                                                        (561,035)           (780,155)           (956,352)
   Insurance rebates                                                             -0-                 -0-             60,799
   Gain on equipment dispositions                                            17,203              10,344              14,429
                                                                        -----------         -----------         -----------

                                                                           (454,333)           (676,610)           (766,751)
                                                                        -----------         -----------         -----------

    Income/(loss) before income
      tax benefit/(expense)                                               2,812,059           1,075,760            (438,886)

Income tax benefit/(expense)                                             (1,485,323)          1,300,000                  -0-
                                                                        -----------         -----------         -----------

    Net income/(loss)                                                     1,326,736           2,375,760            (438,886)

Preferred stock dividends                                                  (447,416)                 -0-            (40,674)
                                                                        -----------         -----------         -----------

Net income/(loss) applicable to common stockholders                     $   879,320         $ 2,375,760         $  (479,560)
                                                                        ===========         ===========         ===========

Income/(loss) per share of common stock
   Basic                                                                $       .14         $       .38         $      (.08)
                                                                        ===========         ===========         ===========
   Diluted                                                                      .14         $       .32                 n/a
                                                                        ===========         ===========         ===========

Weighted average number of common
 shares outstanding
   Basic                                                                  6,287,343           6,287,343           6,287,343
                                                                        ===========         ===========         ===========
   Diluted                                                                6,358,342           7,524,868                 n/a
                                                                        ===========         ===========         ===========

</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, 2003, 2002 and 2001

<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, 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

Net income                                                                              2,375,760                     2,375,760
                                         ----------        ------      ----------     -----------      ---------     ----------

Balance at March 31, 2002                 2,033,682           629       8,619,286      (6,566,106)            -0-     4,087,491

Preferred stock dividends                                                (447,416)                                     (447,416)

Net income                                                                              1,326,736                     1,326,736
                                         ----------        ------      ----------     -----------      ---------     ----------

Balance at March 31, 2003                $2,033,682        $  629      $8,171,870     $(5,239,370)     $      -0-    $4,966,811
                                         ==========        ======      ==========     ===========      =========     ==========

</TABLE>

See accompanying notes and auditor's report


                                     F-4

<PAGE>

<TABLE>

Command Security Corporation
Statements of Cash Flows
Years Ended March 31, 2003, 2002 and 2001

<CAPTION>

                                  INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

                                                                             2003                  2002                2001

<S>                                                                    <C>                  <C>                 <C>
OPERATING ACTIVITIES
  Net income/(loss)                                                    $1,326,736           $ 2,375,760         $  (438,886)
    Adjustments to reconcile net income/(loss) to net
    cash provided by/(used in) operating activities:
    Depreciation and amortization                                         612,591               702,963             894,792
    Provision for doubtful accounts and
     notes receivable, net of recoveries                                2,657,884               581,679             524,304
    Gain on equipment dispositions                                        (17,203)              (10,344)            (14,429)
    Deferred income taxes                                               1,300,000            (1,300,000)                 -0-
    Self-insurance reserves                                               124,249               241,247             369,144
    Changes in operating assets and liabilities:
      Accounts receivable                                               1,744,185            (8,018,174)         (3,004,807)
      Prepaid expenses                                                    347,572               371,947              27,179
      Other receivables                                                  (170,765)              (70,011)             41,085
      Other assets                                                       (103,848)              335,805              98,528
      Accounts payable and accrued expenses                            (1,210,844)            1,036,823             344,855
      Due to administrative service clients                                23,301                77,637            (384,731)
                                                                       ----------           -----------         -----------
        Net cash provided by/(used in)
           operating activities                                         6,633,858            (3,674,668)         (1,542,966)
                                                                       ----------           -----------         -----------


INVESTING ACTIVITIES
   Purchase of equipment                                                 (139,185)             (230,855)           (226,368)
   Purchase of intangible assets                                           (1,975)                   -0-           (190,033)
   Proceeds from equipment dispositions                                    53,323                45,436              54,487
   Notes purchased                                                             -0-                   -0-           (167,185)
   Issuance of notes by administrative service client                     (30,500)              (35,000)            (80,769)
   Principal collections on notes receivable                               57,365               132,272              44,575
                                                                       ----------           -----------         -----------
      Net cash used in investing activities                               (60,972)              (88,147)           (565,293)
                                                                       ----------           -----------         -----------


FINANCING ACTIVITIES
   Net borrowings/(payments) on line of credit                         (2,866,081)            4,846,734            (332,776)
   Proceeds from other borrowings                                              -0-                   -0-          2,875,000
   Repayments on other short and long-term debt                        (2,215,980)           (1,965,243)         (1,092,873)
   Repayments on capital lease obligations                               (142,465)             (142,339)           (114,670)
   Cash overdraft                                                        (982,293)            1,023,663             854,926
   Payment of preferred stock dividends                                  (366,067)                   -0-            (81,348)
                                                                       ----------           -----------         -----------
      Net cash provided by/(used in)
       financing activities                                            (6,572,886)            3,762,815           2,108,259
                                                                       ----------           -----------         -----------

Net change in cash and cash equivalents                                        -0-                   -0-                 -0-

Cash and cash equivalents, beginning of year                                   -0-                   -0-                 -0-
                                                                       ----------           -----------         -----------
Cash and cash equivalents, end of year                                 $       -0-          $        -0-        $        -0-
                                                                       ==========           ===========         ===========

</TABLE>

See accompanying notes and auditor's report


                                     F-5

<PAGE>

Command Security Corporation
Statements of Cash Flows, Continued
Years Ended March 31, 2003, 2002 and 2001

1.  SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

        Cash paid during the period for:
                                          2003           2002          2001

            Interest                  $578,726       $773,347      $882,569
            Income Taxes               100,000             -0-           -0-


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

        For the years ended March 31, 2003, 2002 and 2001, the Company
        purchased equipment with direct installment and lease financing of
        $29,355, $315,698 and $597,352, 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, 2003, 2002 and
        2001, $670,669, $516,228 and $322,621, respectively, have been
        borrowed for this purpose. These borrowings have been excluded
        from the statements of cash flows.

        As of March 31, 2003, the Company accrued dividends of $81,349 on
        its Series A convertible preferred stock. This charge to paid-in
        capital and credit to dividends payable has been excluded from
        the statements 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.

See accompanying notes and auditor's report


                                     F-6

<PAGE>

Command Security Corporation
Notes to Financial Statements
March 31, 2003, 2002 and 2001

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, Illinois, Massachusetts, New
              Jersey and Pennsylvania. 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
              accounting principles generally accepted in the United States
              of America 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 provisions for potential
              billing adjustments, provisions for uncollectible accounts
              receivable including allowances related to airline customers,
              valuation allowances for deferred tax assets 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, subcontractor 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.

          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 and borrowing costs which are being amortized on
              a straight-line basis over three to 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 and SFAS 144.


                                     F-7

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

1.  Business Description and Summary of Accounting Policies, continued

          Intangible assets(continued)

              In June 2001, the FASB issued SFAS 141, "Business
              Combinations." SFAS 141 addresses financial accounting and
              reporting for business combinations and supercedes APB No. 16,
              "Business Combinations" and SFAS No. 38, "Accounting for
              Preacquisition Contingencies of Purchased Enterprises." All
              business combinations in the scope of SFAS 141 are to be
              accounted for under the purchase method. SFAS 141 is effective
              June 30, 2001. The adoption of SFAS 141 did not have an impact
              on the Company's financial position, results of operations or
              cash flows.

              In June 2001, the FASB also issued SFAS 142, "Goodwill and
              Other Intangible Assets." SFAS 142 addresses financial
              accounting and reporting for intangible assets acquired
              individually or with a group of other assets (but not those
              acquired in a business combination) at acquisition. SFAS 142
              also addresses financial accounting and reporting for goodwill
              and other intangible assets subsequent to their acquisition.
              With the adoption of SFAS 142, goodwill is no longer subject to
              amortization. Rather, goodwill will be subject to at least an
              annual assessment for impairment by applying a fair value test.
              The impairment loss is the amount, if any, by which the implied
              fair value of goodwill is less than the carrying or book value.
              SFAS 142 is effective for fiscal years beginning after December
              15, 2001. Impairment loss for goodwill arising from the initial
              application of SFAS 142 is to be reported as resulting from a
              change in accounting principle. There was no impact to its
              financial position, results of operations or cash flows upon
              adoption of SFAS 142.

              In August 2001, the FASB also issued Statement of Financial
              Accounting Standards No. 144 ("SFAS 144"), "Accounting for the
              Impairment or Disposal of Long-Lived Assets." SFAS 144 is
              effective for fiscal years beginning after December 15, 2001.
              For long-lived assets to be held and used, SFAS 144 retains the
              existing requirements to (a) recognize an impairment loss only
              if the carrying amount of a long-lived asset is not recoverable
              from its discounted cash flows and (b) measure an impairment
              loss as the difference between the carrying amount and the fair
              value of the asset. SFAS 144 establishes one accounting model
              to be used for the long-lived asset to be disposed of by sale
              and revises guidance for assets to be disposed of other than by
              sale. There was no impact to its financial position, results of
              operations or cash flows upon adoption of SFAS 144.

          Advertising costs

              The Company expenses advertising costs as incurred. Amounts
              incurred for recruitment and general business advertising were
              $77,114, $131,266 and $184,697 for the years ended March 31,
              2003, 2002 and 2001, 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. Individual accounts are charged off against
              the allowance as management deems them as uncollectible.

          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 for the year ended March 31,
              2001, because the effect of assumed issuance of common shares
              in connection with warrants and stock options outstanding and
              preferred stock conversions was antidilutive.


                                     F-8

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

1.  Business Description and Summary of Accounting Policies, continued

          Accounting for stock options

              In December 2002 the Financial Accounting Standards Board
              (FASB) issued Statement No. 148, (SFAS 148), "Accounting for
              Stock-Based Compensation-Transition and Disclosure", an
              amendment of FASB Statement No. 123, to provide alternative
              methods of transition for a voluntary change to the fair value
              based method of accounting for stock-based employee
              compensation. Since SFAS 148 was adopted during the fiscal year
              ended March 31, 2003, the Company can elect to adopt any of the
              three transitional recognition provisions. The Company has
              chosen to adopt the prospective method of accounting for
              stock-based compensation.

              Prior to the adoption of SFAS 148, the Company followed the
              provisions of Financial Accounting Standards Board Statement
              No. 123 (SFAS 123) which 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 continued to follow APB 25 and provided
              pro forma disclosures as required by SFAS 123. The adoption of
              SFAS 148 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:

                                                  2003                   2002

          Transportation equipment         $ 1,048,001            $ 1,234,197
          Security equipment                   475,894                473,692
          Office furniture and equipment     1,204,210              1,105,227
                                           -----------            -----------
                                             2,728,105              2,813,116
          Accumulated depreciation          (1,890,291)            (1,617,694)
                                           -----------            -----------

          Total                            $   837,814            $ 1,195,422
                                           ===========            ===========

        Depreciation expense for the years ended March 31, 2003, 2002 and
        2001, was $490,028, $546,217 and $597,352, respectively, and includes
        amortization of assets purchased under capital lease arrangements
        (see Note 14). During the year ended March 31, 2002, the Company
        removed fully depreciated equipment with an original cost of
        $1,383,390 from its accounts. The equipment was considered obsolete.


3.  Intangible Assets

        Intangible assets at March 31, consist of the following:

                                                  2003                   2002

          Customer list                      $ 211,293              $ 404,881
          Borrowing cost                       192,009                190,034
          Goodwill                              34,007                 34,007
                                             ---------              ---------
                                               437,309                628,922

          Accumulated amortization            (361,987)              (433,012)
                                             ---------              ---------
          Total                              $  75,322              $ 195,910
                                             =========              =========

        Amortization expense for the years ended March 31, 2003, 2002 and
        2001, was $122,563, $156,746 and $297,440, respectively. During the
        years ended March 31, 2003 and 2002, the Company removed fully
        amortized customer lists with an initial cost of $193,588 and
        $142,403, respectively, from its accounts.


                                     F-9

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

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:

                                                          2003          2002

        Trade accounts payable                      $  602,096    $1,178,715
        Payroll and related expenses                 2,543,371     2,958,848
        Insurance                                      122,155       900,000
        Sales tax                                       69,114        14,971
        Accrued interest payable                        39,797        80,591
        Accrued corporate taxes                        178,000            -0-
        Accrued professional fees                       60,327        55,000
        Accrued loss contingencies and settlements     838,000       238,000
        Accrued dividend payable                        81,349            -0-
        Other                                           37,520        66,730
                                                    ----------   -----------

        Total                                       $4,571,729   $ 5,492,855
                                                    ==========   ===========

        As of March 31, 2003 and 2002, the Company has accrued $838,000 and
        $238,000, 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.


6.  Short-Term Borrowings

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

                                                  2003                   2002

        Line of credit                      $8,805,839            $11,671,919
        Various insurance financing
           arrangements, interest at
           5.92% and 6.46% for 2003,
           7.5% for 2002                       240,267                151,103
                                            ----------            -----------
         Total                              $9,046,106            $11,823,022
                                            ==========            ===========

        In November, 2000, the Company entered into a three year agreement
        with LaSalle Business 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. The agreement was
        modified in January, 2002, and again in March, 2002, to provide for a
        $250,000 overadvance and to expand the definition of eligible accounts
        receivable. At March 31, 2003, the Company had used $8,805,838 of this
        line, representing approximately 88% of its maximum borrowing
        capacity. Interest is payable at prime plus .5% (4.75% at March 31,
        2003) on the outstanding balance. 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.


                                    F-10

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

7.  Long-Term Debt

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

                                                 2003                  2002

          LaSalle Business Credit,
          Inc., due December, 2002,
          interest at prime plus .75%
          (5.5% at March 31, 2003), (a)     $      -0-          $ 1,400,000

          Various installment loans
          due at various dates
          through February, 2005,
          with interest ranging
          from 8.9% to 11.75% (b)             178,579               413,053
                                            ---------           -----------
                                              178,579             1,813,053
          Current maturities                 (133,983)           (1,626,065)
                                            ---------           -----------

          Total                             $  44,596           $   186,988
                                            =========           ===========

         (a)   Term loan from LaSalle Business Credit, Inc., initially
               payable in monthly installments of $100,000 with interest
               payable at LIBOR plus 2.5% or at prime. The note was modified
               in conjunction with the revolving line of credit modifications
               (see Note 6) resulting in required monthly payments of
               $150,000 plus interest at prime plus .75%. The note was
               collateralized with the security pledged under the revolving
               loan and security agreement (see Note 6).

         (b)  Payable to General Motors Acceptance Corporation, Ford Motor
               Credit Corporation and Chrysler. The notes are collateralized
               by automobiles and security equipment.

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

         Year ending:    March 31, 2004                  $133,983
                         March 31, 2005                    44,596
                                                         --------
         Total                                           $178,579
                                                         ========


8.  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 in cash,
        payable quarterly. Upon liquidation or redemption the Series A
        shareholders are entitled to $165 per share or $2,033,682. 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.

        The Company had suspended payment of preferred dividends as of July
        1, 2000, until it could re-establish sufficient surplus in accordance
        with applicable regulations. This was achieved and total arrears of
        $284,720, or $.05 per common share, were paid during the June 2002
        quarter. In addition, $81,347 in preferred dividends have been paid
        during the year representing the June 30 and September 30, 2002
        quarters. As of March 31, 2003, the Company has accrued dividends
        payable in the amount of $81,349, representing the dividends payable
        on Series A for the quarters ended December 31, 2002 and March 31,
        2003.


                                    F-11

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

9.  Net Income per Share

        The following is a reconciliation of the numerators and the
        denominators of the basic and diluted per-share computations for net
        income for the years ended March 31, 2003 and 2002:

                                               Income       Shares   Per-Share
                                           (Numerator) (Denominator)    Amount

          Year ended March 31, 2003
           Basic EPS                       $  879,320    6,287,343   $     .14
           Options issued March 1, 2002                     70,999
                                           ----------    ---------   =========

             Diluted EPS                   $  879,320    6,358,342   $     .14
                                           ==========    =========   =========

          Year ended March 31, 2002
           Basic EPS                       $2,375,760    6,287,343   $     .38
                                                                     =========
           Effect of dilutive shares:
              Options issued March 1, 2002                   5,025
              Convertible preferred stock                1,232,500
                                           ----------    ---------
                Diluted EPS                $2,375,760    7,524,868   $     .32
                                           ==========    =========   =========

        Convertible preferred stock outstanding during the year ended March
        31, 2003, and additional options and warrants outstanding during the
        years ended March 31, 2003 and 2002, respectively, were excluded from
        the computation of diluted EPS because the exercise price was greater
        than the average market price of the common shares.


10. Retirement Plans

        In November, 1999, the Company adopted a qualified retirement plan
        providing 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 years
        ended March 31, 2003, 2002 and 2001, no discretionary amounts have
        been accrued or paid.


11. Concentration of Risk

        Geographic concentrations of credit risk with respect to trade
        receivables are primarily in California with 47% and 40% and in the
        New York Metropolitan area with 30% and 29% of total receivables as
        of March 31, 2003 and 2002, respectively. As of March 31, 2002, 26%
        of the Company's trade receivables were due from the Federal
        Aviation Administration. The remaining trade receivables consist of
        a large number of customers dispersed across many different
        geographic regions. During the years ended March 31, 2003, 2002 and
        2001, the Company generated 68% and 55%, 46%, respectively, of its
        revenue from airport security and related services. Trade
        receivables due from the commercial airline industry comprised 70%
        and 43% of net receivables as of March 31, 2003 and 2002,
        respectively. The Company's remaining customers are not concentrated
        in any specific industry.


12. Significant Customers

        For the year ended March 31, 2003, one customer (FAA) accounted for
        approximately 30% of total revenue, consisting primarily of airport
        pre-board screening services. As discussed in Note 14, the
        contracted terminated in November 2002. For the years ended March
        31, 2002 and 2001, no customer accounted for 10% or more of revenue.


13. Self-Insurance

        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. Charges for estimated workers'
        compensation related losses incurred and included in cost of sales
        were $2,229,362, $2,195,536 and $1,802,379, for the years ended
        March 31, 2003, 2002 and 2001, respectively.


                                     F-12

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

13. 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 $5,000,000 per
        occurrence and $10,000,000 in the aggregate. (Reduced to $5,000,000
        as of October 1, 2002) on a per project basis. On the airport
        related business, as of October 1, 2002, the Company acquired a
        policy with a $25,000,000 limit per occurrence. Prior to December 1,
        2001, the Company had limits of $1,000,000 per occurrence and
        $10,000,000 in the aggregate. Prior to October 1, 2001, the Company
        also had coverage under an excess general liability insurance policy
        that covered claims for an additional $50,000,000 in the aggregate.
        The impact of the September 11, tragedy meant that this umbrella
        coverage was no longer available to the Company at an acceptable
        premium at the time of policy renewal (October 1, 2001). The Company
        retains the risk for the first $25,000 per occurrence on the
        non-aviation related policy and $10,000 on the aviation related
        policy ($50,000 for claims based on losses incurred prior to October
        1, 2000). Charges for general liability self-insurance expense of
        $124,249, $241,247 and $369,144, are included in cost of sales for
        the years ended March 31, 2003, 2002 and 2001, 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 and the timing of
        reported claims. These are all factored into estimated losses
        incurred but not yet reported to the Company.

        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 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.


14. Contingencies

        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 workers' 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. Any
        punitive damage award would not be covered by the general liability
        insurance policy. 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.

        Pursuant to Federal regulation as a result of the terrorist attacks
        on September 11, 2001, the Federal government has taken
        responsibility for pre-board screening functions effective February
        17, 2002. The Company contracted with the government to continue to
        provide these functions until the government installed the
        infrastructure to hire as direct Federal employees all persons
        acting as pre-board screeners. Such services accounted for
        approximately $4.4 million, or 48% of revenue, for the month of
        March, 2002 and $28 million or 30% of revenue for the year ended
        March 31, 2003. The contract terminated in November, 2002.

                                     F-13

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

14. Contingencies, continued

        An audit of the Company's FAA contract for pre-board screening
        services was completed during December 2002. Based on initial audit
        findings of the Defense Contract Audit Agency, the Transportation
        Security Administration has indicated that approximately $5.2
        million of billing was not supported by the Company's accounting
        records and consequently the FAA has held back $2.9 million of
        payment on final invoices until the audit is resolved. The Defense
        Contract Management Agency has indicated in informal discussions
        that they lack an understanding of the base wage rate charged to
        them as part of the rate per hour charge. Management has provided a
        detailed explanation of the basis of the rates charged and is in
        continued discussion with the Federal agencies concerning acceptance
        of the rate structure. Management's estimate of the potential
        adverse financial impact of the ultimate outcome of this audit in
        light of these discussions, along with other potential amounts due
        on other outstanding audits such as that by the New York State
        Attorney General's Office relative to the provision of services to
        New York State under the Office of General Services (OGS)
        requirements, is currently in the range of $1.6 million to $2.8
        million. Management intends to vigorously pursue its position that
        the billings rendered are justified and is reviewing its options
        including arbitration or litigation. The Company has estabilished
        allowances and reserves of $1.6 million in connection with the FAA
        and OGS audits during the year ended March 31, 2003. Allowances in
        connection with the FAA audit have been recorded as a reduction of
        revenue whereas the loss provision in connection with the OGS audit
        has been included in general and administrative expenses.


15. 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 $872,980, $736,400 and
        $646,700, for the years ended March 31, 2003, 2002 and 2001,
        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, 2003, are $666,300 and
        $468,168 and at March 31, 2002, are $683,122 and $383,651,
        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, 2004      $ 76,365       $  580,923
                            March 31, 2005        44,157          365,888
                            March 31, 2006         1,482          234,226
                            March 31, 2007            -0-         210,858
                            March 31, 2008            -0-         210,570
                            Later years               -0-         754,637
                                                --------       ----------
                                                 122,004        2,357,102
            Amounts representing interest        (10,902)              -0-
                                                --------       ----------
            Total                               $111,102       $2,357,102
                                                ========       ==========


                                     F-14

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

16. 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 and in April, 2002, an option to
        purchase 50,000 shares was cancelled due to termination of
        employment. The options are exercisable at any time after February
        1, 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.

        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.

        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 expired
        in September, 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 expired 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. The warrants are exercisable at
        $1.25 per share at anytime after November 13, 2001, expiring
        November 13, 2005.


                                     F-15

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

16. Stock Option Plan and Warrants, continued

        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.

        In March, 2002, the Company issued warrants for 10,000 shares of
        common stock to each of three of the Company's directors at an
        exercise price of $.82 per share, the fair market value at the time
        of the grant. The warrants expire in February, 2005.

        In March, 2002, the Company issued warrants for 100,000 shares of
        common stock to individuals associated with a consulting agreement
        at an exercise price of $.75. The warrants expire in March, 2005.

        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, 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

             Issued                                                                                   .82              30,000
             Expired                                                                          1.88 - 2.25            (220,000)
                                                      ------------        ---------          ------------           ---------

          Outstanding at March 31, 2002                 .75 - 1.25        1,237,959            .82 - 1.25           2,682,577

             Issued                                                                            .75                    100,000
             Expired                                    .75                 (50,000)
                                                      ------------        ---------          ------------           ---------

          Outstanding at March 31, 2003               $.75 - $1.25        1,187,959          $.75 - $1.25           2,782,577
                                                      ============        =========          ============           =========

</TABLE>

        At March 31, 2003 there were 1,187,959 and 2,782,577 options and
        warrants outstanding, respectively, exercisable at prices ranging
        from $.75 to $1.25, and 4,145,536 shares reserved for issuance under
        all stock arrangements.


                                    F-16

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

16. Stock Option Plan and Warrants, continued

        Significant option and warrant groups outstanding at March 31, 2003,
        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      275,000       100,000  $   .750         5.62
                      .82       30,000        30,000      .820         1.92
                    1.031      150,000       150,000     1.031         1.62
                    1.250    3,515,536            -0-    1.250         2.62
                           -----------   -----------

           $ .75 - $1.250    3,970,536       280,000     1.204         4.11
                           ===========   ===========

        As discussed in Note 1, the Company adopted the provisions of SFAS
        148 for the fiscal year ending March 31, 2003. Prior to year end
        2003, the Company continued 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 for the
        years ended March 31, 2002 and 2001. 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, 2002 or 2001. Beginning April
        1, 2002, the Company adopted the fair value recognition provisions of
        SFAS 123, "Accounting for Stock-Based Compensation", prospectively to
        all employee awards granted, modified or settled after April 1, 2002.
        Since there were no employee awards granted after April 1, 2002,
        there is no cost related to stock-based employee compensation
        included in the determination of net income for the year ended March
        31, 2003. If the Company had applied the fair value based method
        since the original effective date of SFAS 123 it would not have had a
        significant effect on the net income or loss of the Company for the
        years ended March 31, 2002 and 2001. The weighted fair value of
        options and warrants granted during the years ended March 31, 2002
        and 2001, were $.11 and $.03 per equivalent share, respectively. For
        the years ended March 31, 2003, 2002 and 2001, the fair value was
        estimated using the exercise price on the date of the grant and the
        following assumptions: risk free interest rate of 1.40%, 2.93% and
        4.30%, volatility of 119.0%, 93.3% and 53.8% and a dividend yield of
        0.00% for each year, respectively.


                                    F-17

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

17. Income Taxes

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

                                             2003          2002          2001
            Current:
              Federal                 $        -0-   $       -0-      $    -0-
              State and local            (185,323)           -0-           -0-
                                      -----------    ----------       -------
                                         (185,323)           -0-           -0-
                                      -----------    ----------       -------
            Deferred:
              Federal                  (1,020,000)    1,020,000            -0-

              State and local            (280,000)      280,000            -0-
                                      -----------    ----------       -------
                                       (1,300,000)    1,300,000            -0-
                                      -----------    ----------       -------
                 Income tax
                 benefit/(expense)    $(1,485,323)   $1,300,000       $    -0-
                                      ===========    ==========       =======

        The deferred tax benefit for the year ended March 31, 2002, consists
        of the decrease of a previously established allowance in connection
        with certain net operating loss carryovers.

        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:

                                                 2003       2002       2001

          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 allowance and reserves        7.0     (166.3)      38.4
          Permanent differences                   2.2        1.5        5.4
                                               ------     ------      -----
          Effective tax rate                     53.0%    (121.0)%      0.0%
                                               ======     ======      =====

        The significant components of deferred tax assets and liabilities as
        of March 31, 2003 and 2002, are as follows:

                                                           2003          2002
          Current deferred tax assets:
            Accounts receivable                    $     93,456   $    99,318
            Accrued expenses                             79,221       132,169
            Contingency reserves                        688,000            -0-
                                                   ------------   -----------
                                                        860,677       231,487
            Valuation allowance                        (860,677)     (231,487)
                                                   ------------   -----------
              Net current deferred tax asset       $         -0-  $        -0-
                                                   ============   ===========

          Non-current deferred tax
           assets/(liabilities):
            Equipment                                   (55,072)      (73,519)
            Intangible assets                           813,498       895,285
            Self-insurance                              242,440       278,612
            Workers compensation reserve               (161,058)     (160,434)

            Net operating loss carryover                332,388     2,181,819
                                                   ------------   -----------
                                                      1,172,196     3,121,763
            Valuation allowance                      (1,172,196)   (1,821,763)
                                                   ------------   -----------
              Net non-current deferred tax asset   $         -0-  $ 1,300,000
                                                   ============   ===========

        The valuation allowance decreased by $20,377 and $1,798,192 during
        the years ended March 31, 2003 and 2002, respectively, and increased
        by $160,414, during the year ended March 31, 2001. Federal net
        operating loss carry-overs were approximately $773,000 at March 31,
        2003. They begin to expire in 2010.


                                    F-18

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

18. 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. Although title to the receivables generated belong
        to the Company, the rights to service the guard contracts are
        retained by the service company. All contracts contain renewal
        provisions based on the volume of business generated by the
        respective service companies.

        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, 2003, the Company had two loan
        outstanding with balances of $102,000 and $27,135, respectively,
        providing for monthly payments of $4,000 and $1,464, including
        interest at 14 % per annum.


19. 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,
        2003 and 2002, the fair value of long-term notes receivable and
        long-term debt approximates their carrying amounts.


20. 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, as a subcontractor for these
        services. Included in cost of sales for the year ended March 31,
        2002, $1,143,717 was charged by Reliance for these services. The
        contract terminated in January, 2002 and as of March 31, 2002, there
        were no amounts owed under this arrangement.


21. Reclassifications

        Certain 2002 and 2001 income and expense items have been reclassified
        to conform to the 2003 presentation. Administrative service revenue
        of $331,854, $276,652 and $274,277 for the years ended March 31,
        2003, 2002 and 2001, respectively, have been included with total
        revenue. Amortization of intangibles of $122,563, $156,746 and
        $297,440 for the years ended March 31, 2003, 2002 and 2001,
        respectively, have been included within general and administrative
        expenses. These items are no longer considered significant enough to
        warrant separate presentation. These reclassifications had no impact
        on reported earnings.


                                     F-19

<PAGE>

Command Security Corporation
Notes to Financial Statements, Continued
March 31, 2003, 2002 and 2001

22. Quarterly Results (unaudited)

        Summary data relating to the results of operations for each quarter
        for the years ended March 31, 2003 and 2002, follows:

<TABLE>

<CAPTION>
                                                                                  Three Months Ended

                                                            June 30           Sept. 30           Dec. 31           March 31
                                                        -----------        -----------       -----------        -----------

           <S>                                          <C>                <C>               <C>                <C>
           Fiscal year 2003
            Guard service revenue                       $28,190,599        $27,385,638       $20,887,039        $17,519,385
            Gross profit                                  6,276,187          6,619,307         3,533,071          2,797,237
            Net income/(loss)                             2,149,721          1,156,623           232,176         (2,211,784)
            Net income/(loss)
              per common share (basic)                          .29                .18               .03               (.36)
              per common share (diluted)                        .28                .14               .03                n/a

           Fiscal year 2002
            Guard service revenue                        18,498,741         18,775,798        21,815,881         24,794,783
            Gross profit                                  2,562,892          3,089,807         3,387,512          4,488,592
            Net income/(loss)                              (394,220)           (34,411)          457,994          2,346,397
            Net income/(loss)
              per common share (basic)                         (.06)              (.01)              .07                .37
              per common share (diluted)                        n/a                n/a               .06                .31

</TABLE>

        The fourth quarter 2003 loss includes increases in provisions for
        contingencies in connection with the FAA and OGS audits of $900,000
        (seee footnote 14) and increases in bad debt reserves in connection
        with airline bankruptcies of $1,085,000. The fourth quarter 2002
        income includes a $1,300,000 decrease in the deferred income tax
        valuation allowance.


                                    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                Written   at End of
                                         of Period     Expenses  Service Clients  Accounts  Recoveries        Off      Period

<S>                                      <C>          <C>              <C>       <C>           <C>      <C>         <C>
Year ended March 31, 2003:
  Deducted from asset accounts:
   Allowance for doubtful accounts
     receivable - current maturities       383,110    2,659,830        62,315      114,640     1,946      785,612   2,432,337

   Allowance for billing adjustments            -0-                              1,000,000                          1,000,000

Year ended March 31, 2002:
  Deducted from asset accounts:
   Allowance for doubtful accounts
     receivable - current maturities       595,785      581,679        11,246       11,193                816,793     383,110

   Allowance for doubtful notes
     receivable - current maturities         2,246                                                          2,246          -0-

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-

</TABLE>

See auditor's report


                                    F-21