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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO. AS/AO/-07/2014]

UNDER SECTION 15-I OF SECURITES AND EXCHANGE BOARD OF INDIA ACT,
1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND
IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES 1995

In respect of:
M/s. Asian Films ProductionandDistributionLimited.
(CIN-L92410GJ1995PLC028341)
12, 362, Shyam Complex, Office No.306, Kanchan Chambers, Thakorvas,
Nr. New Madhupura, O/S Delhi Gate, Ahmedabad (Gujarat)-380004
___________________________________________________________________

FACTS OF THE CASE IN BRIEF

1. Securities and Exchange Board of India (hereinafter referred to as SEBI) vide
Circulars No. CIR/OIAE/2/2011 dated June 03, 2011, CIR/OIAE/1/2012 dated
August 13, 2012, and CIR/OIAE/1/2013 dated April 17, 2013, had directed all
listed companies to obtain the SEBI Complaints Redressal System (SCORES)
authentication and also redress the pending investor grievances within the
stipulated time period.

2. SEBI observed that M/s. Asian Films Production and Distribution
Limited.(hereinafter referred to as"AFPDL"/"Noticee"/ "the company") had
neither obtained the SCORES authentication nor redressed the grievance of
investor(s) within the stipulated time specified by Board and failed to submit
Action Taken Report (ATR) in this regard, and thereby had failed to comply with
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the aforesaid SEBI Circulars. The shares of the company are listed at
Ahmedabad Stock Exchange (ASE).

3. Based on the aforesaid observations, it was alleged that by failing to obtain
SCORES authentication/submit ATR and to redress the pending investor
grievances within the stipulated time, the Noticee has violated the aforesaid
SEBI Circulars No. CIR/OIAE/1/2011 dated June 03, 2011, CIR/OIAE/1/2012
dated August 13, 2012 and CIR/OIAE/1/2013 dated April 17, 2013. The alleged
violation, if established, makes the Noticee liable for monetary penalty under
Sections 15C and, 15HBof the Securities and Exchange Board of India Act,
1992 (hereinafter referred to as 'SEBI Act').

APPOINTMENT OF ADJUDICATING OFFICER

4. Vide order dated November 09, 2012, ShriSudeep Mishra, Deputy General
Manager was appointed as Adjudicating Officer under Section 15-I of the
Securities and Exchange Board of India Act, 1992 (hereinafter referred to as
the"SEBI Act") read with Rule 3 of the Securities and Exchange Board of India
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer)
Rules, 1995 (hereinafter referred to as the "Rules"), to inquire into and adjudge
under Section 15C and 15HBof the SEBI Act, for alleged failure to obtain the
SCORES authentication, failure to redress the grievance of investor(s) within the
stipulated time specified by Board and failure to submit Action Taken Report
(ATR) in this regard.

5. Subsequently, the matter was transferred to the undersigned and I was
appointed as Adjudicating Officer under Section 15-I of the SEBI Act, 1992 read
with Rule 3 of the Rules, 1995 vide order dated September 23, 2013, to inquire
into and adjudge under Section 15C and 15HBof the SEBI Act, for the alleged
non-redressal of investor grievancesand failurein obtaining SCORES
authentication/submit ATR.
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SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

6. Earlier the then adjudicating officer issued Show Cause Notice no.
WRO/AO/SM/2526/2013 dated June 04, 2013 (hereinafter referred to as "SCN")
which was served on the Noticee by Registered Post in terms of the provisions
of Rule 4 of the Rules requiring the Noticee to show cause as to why an inquiry
should not be held against the Noticee and why penalty, if any, should not be
imposed on the Noticee under Section 15C and 15HB of the SEBI Act for the
alleged non-redressal of investor grievances/submit ATR and failed to obtain
SCORES authentication in spite of being called upon by SEBI in writing to do
so.The allegations against the Company as mentioned in the SCN, are
produced hereunder;

(a) It was stated that SEBI vide Circular No. CIR/OIAE/2/2011 dated June 03,
2011 and SEBI Circular No. CIR/OIAE/1/2012 dated August 13, 2012 and
Circular No. CIR/OIAE/1/2013 dated April 17, 2013, informed that investor
grievances are now being redressed online through the SCORES system.
In terms of these circulars, on receipt of the authentication details from the
company, a user account is to be created on the SCORES system to
enable the investor grievances to be forwarded to the company. A
reference was invited to SEBI circular dated April 17, 2013 addressed to
all companies whose securities are listed on stock exchanges (through
stock exchanges) that failure to obtain SCORES user ID and password
within 30 days of this circular would not only be deemed as non redressal
of investor grievances but also indicate willful avoidance of the same. It
was mentioned that as on the date of the notice, the company has not
provided details for creation of user account on SCORES.

(b) SCN stated that there were nine (9) investor complaints pending against
the company in SCORES system and the company has also not provided
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Action Taken Report (ATR) duly supported by documentary evidence in
respect of pending investor complaint.

(c) In view of the above, it was alleged that the Noticee / Company has failed
to obtain the SCORES authentication / furnish ATR and failed to resolve
the investor's grievances, which are in violation of Section 15C and 15HB
of the SEBI Act. The provisions of Section 15C and 15HB of the SEBI Act
are produced hereunder;

7. Despite receipt of the SCN, the Noticee had not filed any reply/written
submissions to the allegations mentioned in the aforesaid SCN. Considering
facts of the case, it was decided to conduct an enquiry in the matter and
therefore an opportunity of personal hearing was granted to the Noticee before
me on November 15, 2013. The intimation of the same was sent to the Noticee
vide letter dated November 11, 2013, however, the hearing which was
scheduled on November 15, 2013, rescheduled to November 22, 2013, on a
reason that the public holiday was declared at SEBI on November 15, 2013.
The hearing took place before me onNovember 22, 2013 at 02: 30 p.m. The
Noticee was represented by ShriHarnish Shah-Advocate (Authorised
Representative (AR) of the Noticee). During the hearing, AR sought 2 weeks
time to file its submissions to the allegations mentioned in the aforesaid SCN.

8. Since the reasonable time was lapsed and no reply was received from the
Noticee, it was once again called for personal hearing before me on December
24, 2013. The intimation of the same was sent to the Noticee vide letter dated
December 09, 2013. The hearing took place before me on December 24, 2013
at 11: 30 a. m. The Noticee was once again represented by ShriHarnish Shah-
Advocate (Authorized Representative (AR) of the Noticee). During the hearing,
AR made oral submissions before me and requested to give 2 weeks time for
filing written submissions in the matter.

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9. In the meantime, it was observed from the current status of SCORES that there
were 4 investors complaints pending in January 06, 2014 and therefore
supplementary SCN dated January 07, 2014 was issued to the Noticee
enclosing copy of the investors complaints pending against the company in
SCORES. It was further mentioned that the Noticee has not filed any ATR duly
supported by any documentary evidence in respect of pending investors
complaints.

10. The Noticee was also advised to file reply if any, on the allegations in the
aforesaid SCN within a period of 15-days from the date of the receipt of SCN.
Since, no reply was received from the Noticee, it was decided conduct an
Inquiryin the matter. A letter dated January 28, 2014 was received from the
Noticee. Accordingly, the Noticee was called for hearing before me on February
28, 2014. The Noticee was represented by ShriHarnish Shah-Advocate
(Authorized Representative (AR) of the Noticee). The Noticee reiterated its
earlier submissions in the matter and handed over copy of their further reply
dated February 25, 2014 during the hearing. The written and oral submissions
made by the Noticee are mainly to the following effect:

i. During the hearing, AR submitted that all the complaints are emerged
from amalgamation of M/s. Galaxy Appliances Ltd.(which is a former
name of our company Asian Films Productions & Distribution Ltd.) and
three other listed companies namely M/s. Tristar Enterprise Ltd., M/s.
Abuja Shipyard Software Ltd. and M/s. Gujarat Project and Profins Ltd.
(formerly M/s. Hindustan Credit Capital Ltd.) pursuant to an order passed
by Honble High Court of Gujarat on June 24, 1999. The copy of the
same was enclosed.

ii. AR also submitted that all the complainants are shareholders of the
transferor company. The complainants had approached our company for
share certificates of our company after a period of more than 10 years
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from the date of amalgamation. Since the old records of transferor
companies were not readily available, this is necessary for resolution of
complaints. There was no any malafide intention for not resolving
complaints. Presently all efforts are being made to resolve the pending
complaints.

iii. The Noticee vide letters dated January 28, 2014 and February 25, 2014,
reiterated its submissions already submitted during the hearing on
December 24, 2013 and February 28, 2014 and further informed that all
pending complaints have been resolved. A printout from SCORES
showing nil pendency was also provided as evidence.

CONSIDERATION OF EVIDENCE AND FINDINGS

11. I have taken into consideration the facts and circumstances of the case and the
Material made available on record.

12. The issues that arise for consideration in the present case are:

a) Whether the Noticee by delayin obtaining SCORES authentication, delay
in submission of ATR and by failing to redress the investor grievances has
violated the aforesaid SEBI Circulars?

b) Does the violation, if any, on the part of the Noticee attract monetary
penalty Under Sections 15C and 15HB of the SEBI Act?

c) If so, what would be the monetary penalty that can be imposed taking into
Consideration the factors mentioned in Section 15J of the SEBI Act?

13. It is observed from the available records that as on the date of issuance of SCN
(dated June 04, 2013) there were 9 investor complaints pending against the
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Noticee and the details of the same were provided to the Noticee along with the
SCN. In this regard, the Noticee submitted and reiterated that all the
complainants are shareholders of the company.The complainants had
approached the company for share certificates after a period of more than 10
years from the date of amalgamation. Since the old records of transferor
companies were not readily available, this is necessary for resolution of
complaints. There was no any malafide intention for not resolving complaints.

14. In this regard, I am of the view that the Noticee was under an obligation to
activate SCORES authentication/submit ATR and redress the pending investors
complaints within the stipulated time as directed by SEBI vide its aforesaid
Circulars No. CIR/OIAE/2/2011 dated June 03, 2011, CIR/OIAE/1/2012 dated
August 13, 2012, and CIR/OIAE/1/2013 dated April 17, 2013. SEBI had vide
letters dated October 11, 2011, November 22, 2011, January 16, 2012,
February 22, 2012 and February 29, 2012 issued letters to the Noticee informing
about these circulars issued by SEBI and need for necessary compliance of the
same. Since the letters sent at the companys address were returned
undelivered thus an email was sent at its email id asianfilmsprod@gmail.com on
October 12, 2012. However, the Noticee failed to comply with the same as
directed. In fact as per SEBI records, SCORES ID was also generated much
later on April 02, 2013. Therefore, the contentions made by the Noticee are not
acceptable to me.

15. It is also observed from SCORES on January 06,2014 that there were 4
investors complaints were pending and accordingly supplementary SCN was
issued to the Noticee on January 07, 2014 asking the Noticee to resolve the
said 4 complaints. In this regard, the Noticee submitted that all complaints are
resolved. However, as I observed from SCORESthere was delay in submission
of ATR in SCORES and resultant resolution of the complaints as directed by
SEBI on various occasions as discussed above.

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16. It is observed from the records that SEBI had advised the Noticee to furnish the
authentication details for implementation of SCORES within a specific time
period as per the format/annexure enclosed with the said Circulars (in both hard
copy and soft copy) and toresolve the investors grievances in SCORES. It was
also stipulated that failure on the part of the company to update the ATR in
SCORES, would be treated as non-redressal of investors' complaints.

17. It is also observed that SEBI sought information from the Company regarding
SCORES authentication and reference of SEBI Circular No. CIR/OIAE/2/2011
dated June 03, 2011 was drawn into the notice of Company, wherein it was
categorically stipulated that all the companies which are listed on any Stock
Exchange (s), should view complaints pending against them and submit ATR
along with supporting documents electronically in SCORES. It was also
stipulated that failure on the part of the company to update the ATR in
SCORES, would be treated as non-redressal of investor's complaints.

18. Further, a reference of another SEBI Circular No. CIR/OIAE/1/2012 dated
August 13, 2012 was drawn to the notice of Company, wherein it was stipulated
that all companies whose securities are listed on the Stock Exchanges, are
required to obtain SCORES authentication by September 14, 2012. It was also
stipulated therein that all companies against whom complaints are pending on
SCORES, are also required to take appropriate necessary steps within 7 days of
receipt of complaints, so as to resolve complaints within 30 days of its receipt
and also keep the complainant duly informed of the action taken thereon.

19. Available records also reveal that SEBI also issued a Public Notice dated
January 13, 2013 in the newspapers against those companies whose securities
are traded on the stock exchange but not obtained SCORES authentication, and
advised them to obtain SCORES authentication within 7 days. The name of the
Noticee / Company is also appeared in the said Public Notice. It is further
observed from the records that SEBI vide Circular No. CIR/OIAE/1/2013 dated
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April 17, 2013 also advised the listed companies to obtain SCORES
authentication within one month from the date of said Circular.It also advised for
filing ATRs and Redressal of grievances of investors within 30 days of receipt of
complaint.

20. It is also pertinent to note that keeping in view the importance of speedy
redressal of investors grievances, SEBI has introduced a SEBI Complaints
Redress System, known as SCORES for this purpose. Being a listed company,
the Noticee was under obligation to activate SCORES authentication/ submit
ATR and also redress the investors grievances within specified time as directed
by SEBI. It shows that the Noticee has a very casual approach towards the legal
compliances as directed by SEBI.

21. In view of the above and also taking into account the available material on
records, I am of the opinion that the Noticee had failed to abide by the directives
issued by SEBI vide Circulars No. CIR/OIAE/1/2012 dated August 13, 2012 and
No. CIR/OIAE/1/2013 dated April 17, 2013, and thereby violated Sections 15C
and 15HB of the SEBI Act and had delayed in obtaining the SCORES
authentication, delayed the Redressal of the grievance of investor(s) and had
failed to submit the ATRs within the stipulated time. Therefore, the alleged
violation of the provisions of the aforesaid SEBI Circulars by the Noticee as
specified in the SCN (s) stand established.

22. Therefore, the allegation of failure to activate SCORES authentication/non-
submission of action taken report and failure to redress investors grievances
within stipulated time is established against the Noticee. The Honble Supreme
Court of India in the matter of SEBI Vs. Shri Ram Mutual Fund held that once
the violation of statutory regulations is established, imposition of penalty
becomes sine qua non of violation and the intention of parties committing such
violation becomes totally irrelevant. Once the contravention is established then
the penalty is to follow.
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23. Thus, it can be concluded on the basis of the material available on record that
the Noticee has not resolved the pending investor grievances within stipulated
time in spite of being called upon by SEBI in writing to do so. Italso delayed in
obtaining SCORES authentication and delayed the submission of ATR. This
makes the noticee liable for the penalty under Sections 15C and 15HB of the
SEBI Act. The text of the said provision is reproduced below:

15C.Penalty for failure to redress investors' grievances.-

If any listed company or any person who is registered as an intermediary, after
having been called upon by the Board in writing, to redress the grievances of
investors, fails to redress such grievances within the time specified by the
Board, such company or intermediary shall be liable to a penalty of one lakh
rupees for each day during which such failure continues or one crore rupees,
whichever is less.



15HB Penalty for contravention where no separate penalty has been
provided.
Whoever fails to comply with any provision of this Act, the rules or the regulations
made or directions issued by the Board thereunder for which no separate
penalty has been provided, shall be liable to a penalty which may extend to one
crore rupees.]
24. While determining the quantum of monetary penalty, it is important to consider
the factors stipulated in section 15J of SEBI Act, which reads as under:-

15J - Factors to be taken into account by the adjudicating officer

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While adjudging quantum of penalty under section 15-I, the adjudicating
officer shall have due regard to the following factors, namely:-

a. the amount of disproportionate gain or unfair advantage, wherever
quantifiable, made as a result of the default;
b. the amount of loss caused to an investor or group of investors as a result of
the default;
c. the repetitive nature of the default.

25. I observe that from the material available on record it is difficult to quantify the
amount of gain or unfair advantage accrued to the Noticee or the extent of loss
suffered by the investors as a result of the delay to activate/ obtain SCORES
authentication and delay in submission of ATRand delay in redressal of
investors grievances within the stipulated time.




ORDER

27. In view of the above, after considering all the facts and circumstances of the
case and exercising the powers conferred upon me under Section15 I of the
SEBI Act and Rule 5 of the Adjudication Rules, I impose a penalty of
`1,00,000/- (Rupees one lakh only) under the provisions of Section 15 C of the
SEBI Act for delay in redressal investor grievances within stipulated time and
`1,00,000/- (Rupees one lakh only) under the provisions of Section 15 HB of the
SEBI Act for delay in obtaining SCORES authentication & delay in submission
of ATR by the Company, thereby resulting into consolidated penalty of
`2,00,000 (`Two Lacs Only). I am of the view that the said penalty would
commensurate with the aforesaid failure committed by the Company.

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28. The penalty shall be paid by way of Demand Draft drawn in favour of SEBI
Penalties Remittable to Government of India payable at Ahmedabad within 45
days of receipt of this order. The said demand draft shall be forwarded to the
Deputy General Manager (OIAE), Securities and Exchange Board of India,
Western Regional Office-II, Unit No. 002, Ground floor, Sakar-I, Near
Gandhigram railway Station, Ashram Road, Ahmedabad380009.

29. In terms of the provisions of Rule 6 of the Securities and Exchange Board of
India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating
Officer) Rules 1995, copy of this order is being sent to the Noticee and also to
the Securities and Exchange Board of India Mumbai.


Date: October 31, 2014 (Achal Singh)
Place: Indore AdjudicatingOfficer
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