Pursuant to Clause 49 of Listing Agreement, the Management Discussion and Analysis Report is as under:

(i) Industrial Structure and development

The Entertainment industry has witnessed large number of new comers in all segments of business. This has lead to a healthy competition in the Industry. Your Company's has increased its scope of activities to the most important areas of Film Industry viz., film production, distribution and exhibition. The film exhibition is done through multiplexes which also helps the Company in asset creation. With its focus on the main part of the entertainment industry, and with the new wave technology of 3D Serials besides the conventional film making and exhibition, the Company plans to secure a premier place in the Industry.

Strengths

· GV Films Limited has built a strong brand over the years and one of the reputed production houses in Tamil Nadu, with strong industry standing and relationship with artistes.

· Internet film rights of about 6000 films of different languages

· Apart from the experience in areas of exhibition, the Company has several years of experience in film production and distribution.

· The Company has rich experience in content selection and deep understanding of different film generics and therefore it is well placed to exploit each film available in the market.

· Member of Tamil Film Producer's Council.

Weaknesses

· Being a corporate structure with set values and governance, at times it is difficult to compete with the industry practices..

High level of expenditure involved in creation/acquisition of content and development of artistes, astronomical remuneration to the production team and the uncertainty of the success of the film.

(ii) Opportunities and Threats

Opportunities

· Home Video segment becoming more profitable with increasing shift from VCDs to DVDs.

· Partnership with Drushya for web casting Internet Rights of 6000 films titles in various Indian Languages and the reduction in domestic bandwidth rate by 70% may increase the download of films through Internet.

· Has changed focus to low budget films where the risk involved is minimal.

· "GV Sonic, a brand launched by the company to release films songs, cassettes and CD in audio industry.

Threats

· Further drop in sales volume due to spread of radio, cheap VCDs and MP3 pirated discs.

· International business weakening further due to piracy and parallel import

· Video and Audio Piracy, which has become high resulting in loss of revenues.

(iii) Segment-wise or product-wise performance

The Company is into entertainment business and hence there are no segment wise performance is reported.

(iv) Outlook, risks and concerns

Over the last year, the Company has shown a progressive trend in performance and expects the same to continue.

The future of the Indian Entertainment Industry looks very positive and we expect good growth in the film industry. The success rate of films in the current year is relatively higher and factors like reduced Entertainment Tax in Tamil Nadu and stern and effective steps taken by the Government to tackle the problem of video piracy have also helped the Film Industry to a very great extent. Thanks to rapidly decreasing internet connectivity costs and increase in connectivity speeds, the potential for webcasting of the films is good. As the company has a large library of films for which it possesses internet rights, it stands to gain in this scenario.

(v) Internal control systems and their adequacy

The company has regular internal audit system covering all key processes and has in place adequate internal control.

(vi) Financial performance visa vis operational performance

The top-line and bottom-line both have shown an absolute three digit growth in percentage wise and this attributes to the concurrent performances all division, viz., production, distribution, exihibition, etc.

(vii) Material developments in Human Resources

During the year, the Company recruited some high niche professionals into the top level management. The employee strength of the Company is suitable to the present on-going projects and management. The Company enjoys a harmonious relationship with its employees in all aspects and cadre.