G V Films's philosophy on corporate governance envisages the attainment of the highest levels of transparency, accountability and equity, in all facets of its operations, and in all its interactions with its stakeholders, including shareholders, employees, the government and lenders, film artists and other members of the film production team.

G V Films is committed to achieving the highest standards of corporate governance.

G V Films believes that all its operations and actions must serve the underlying goal of enhancing overall shareholder value, over a sustained period of time.

The Company upholds its relationship with society and hence its social responsibility of environmental safety and human welfare.

BOARD OF DIRECTORS

During the year 2005-2006, Composition and category of Directors were as follows :



Attendance of each Director at the 10 Board Meetings, last Annual General Meeting and Number of other Directorship and Chairmanship/Membership of Committee of each Director in various Companies :

** Mr. VP Mani resigned from the Board on 29th November 2005
Mr. P R Ramanan resigned from the Board on 20th October 2005
Mr. V Ramasubramanian has been inducted into the Board on 23rd November 2005 and resigned on 28th December 2005
Mr. S Ramanathan has been inducted into the Board on 23rd November 2005
Mr. R Gopalan has been inducted into the Board on 28th December 2005
Ms. Manisha Koirala was appointed as Director on 29th November 2005

Number of Board Meetings held and the dates on which held.

10 Board Meetings were held during the year on the following dates:

11.04.2005, 10.05.2005, 30.07.2005, 04.10.2005, 20.10.2005,

29.11.2005, 01.12.2005, 17.01.2006, 31.01.2006, 10.02.2006,

AUDIT COMMITTEE

Pursuant to the provisions of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreements, the Company has an Audit Committee comprising of two independent Non-Executive Directors Viz., Mr.S Ramanathan as Chairman Mr. Gopalan as member and Mr.A.Venkatramani,(a Non executive Director) as member. The Audit Committee has met three times on 30.07.2005, 18.10.2005 and 29.01.2006 during the financial year under review.

The Committee is vested with following powers as per the terms of reference as prescribed under relevant provisions of the Companies Act, 1956 and Stock Exchanges Listing agreements

Powers :
a) to investigate any activity within its terms of reference.
b) to seek information from any employee.
c) to obtain outside legal and other professional information.
d) to secure attendance of outsiders with relevant expertise, if it consider necessary

Terms of Reference:
a. Overview of the Company's financial reporting process and the disclosure of its financial information.
b. Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any other services.
c. Reviewing with management the annual financial statements before submission to the board, focusing primarily on (i) any changes in accounting policies and practices, (ii) major accounting entries based on exercise of judgment by management, (iii) qualifications in draft audit report, (iv) significant adjustments arising out of audit, (v) the going concern assumption, (vi) compliance with accounting standards, (vii) compliance with Stock Exchange and legal requirements concerning financial statements and (viii) any related party transactions i.e., transactions of the company of material nature, with promoters or the management, their subsidiaries or relatives etc., that may have potential conflict with the interests of Company at large.
d. Reviewing with the management, external and internal auditors, the adequacy of internal control systems.
e. Reviewing the adequacy of internal audit functions.
f. Discussion with internal auditors any significant findings and follow up there on.
g. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.
h. Discussion with external auditors before the audit commences nature and scope of audit as well as to have post-audit discussion to ascertain any area of concern.
i. Reviewing the company's financial and risk management policies.
j. To look into the reasons for substantial defaults in the payment to the shareholders (in case of non-payment of declared dividends) and creditors.