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Classic Filaments Ltd.

BSE: 540310 Sector: Others
NSE: N.A. ISIN Code: INE181U01018
BSE 00:00 | 05 Jul 6.25 -0.30
(-4.58%)
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6.55

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6.55

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NSE 05:30 | 01 Jan Classic Filaments Ltd
OPEN 6.55
PREVIOUS CLOSE 6.55
VOLUME 50
52-Week high 12.33
52-Week low 3.95
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.55
CLOSE 6.55
VOLUME 50
52-Week high 12.33
52-Week low 3.95
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Classic Filaments Ltd. (CLASSICFILAMENT) - Director Report

Company director report

To

The Members

Classic Filaments Limited

The Board of Directors of the Company takes pleasure in presenting the 31stAnnualReport along with the Audited Accounts for the Financial Year ended 31sl March2021.

1. FINANCIAL RESULTS:

The Financial performance of the Company for the Financial Year ended 31stMarch2021 is summarized below:

Particulars Period/ year ended 31.03.2021 Period/ year ended 31.03.2020
Total Revenue 31.67 140.96
Total expenses (40.82) (146.67)
Profit/ (loss) before tax (9.14) (5.71)
Profit/ (loss) after tax (9.14) (5.71)

2. OPERATION:

With the outbreak of COVID-19 pandemic which has emerged as a challenge for the worldhas posed the slowdown in growth and prospect for the economy across the globe. The yearsaw a challenging business environment with lower GDP growth and slowdown in consumption.This resulted into a weakening consumer sentiment and lower demand for the category inwhich we operate. The Novel Coronavirus has affected not just human health but severelyimpacted businesses and the society at large. Government has imposed countrywide lock downfrom 24th March 2020 which lasted till the end of May 2020. Thereafter thegovernment started the process of unlock in phased manner. The 1st Quarter i.e.June 2020 was widely affected by it as during lockdown period only essential businessesoperating in essential products and services were allowed to keep their operations active.As you all are aware that our Company operates in a segment which is marked asnon-essential items by the government and hence we were forced to shut down our operationsin line with the directives of government. CoVID-19 has affected the Company dynamicallyand has weakened growth. The Company is going through a very lough phase and is facinghardship in retaining its operations. However our management is in a constant endeavourget the Company back on trade. During the period ended 31st March 2021 theloss suffered by the Company amounts to Rs. 9.14 lakhs as compared to loss suffered in theprevious year 31st March 2020 which was Rs. 5.71 lakhs. As we can evaluatefrom the current situation

Company is facing a huge burden and continues to suffer the beating of the novel coronavirus as demand for the company's product is declining sharply. Management is taking allthe possible steps to revive the Company and make it competitive in a global market. Thephase which Company is going through is temporary and our management is confidence to getback in the business soon.

3. DIVIDEND AND TRANSFER TO RESERVES:.

In view of losses incurred no dividend was declared during the financial year underreview and no amount was transferred to reserves during the year under review.

4. PUBLIC DEPOSITS:

Hie Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the year under review. Hence therequirement for furnishing of details relating to deposits covered under Chapter V of theAct or the details of deposits which are not in compliance with the Chapter V of the Actis not applicable. The borrowing from a Director during the year was to the extent ofRs.1400000/- and at the end of the year it stands at Rs.3900000/-.Further in respectof amount borrowed from Director the Company received a declaration that the said amountwas not given by him out of borrowed funds.

5. REPORT ON THE PERFORMANCE OF THE SUBSIDIARIES ASSOCIATES & TOINT VENTURECOMPANIES:

The Company does not have any Subsidiary Joint Venture & Associate Company.

6. PARTICULARS OF EMPLOYEES:

During the Financial Year the Company does not have any employee who was in receipt ofremuneration exceeding Rupees One Crore and Two Lakh for the year or exceeding RupeesEight Lakhs and Fifty Thousand per month or for any part of the year.

The Company is not required to give the ratio of the remuneration of each Director tothe median remuneration of the employees of the Company and other details in terms ofSub-Section 12 of Section 197 of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as none ofthe Directors of the Company is receiving Remuneration from the Company.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Board consists of 5 Directors out of which 3 are Independent Directors including aWoman Director. During the year under review there was no Change in the Constitution ofthe Board except the following:

Onthe recommendation of Nomination and Remuneration Committee the Shareholders attheir 30' Annual General Meeting held on 30th September 2020 approvedthere-appointment of Mr. Jayanti Gaudani (DIN: 03571671) as Managing Director for a furtherperiod of 5 years.

Further also on the recommendation of Nomination and Remuneration Committee and theBoard of Directors of the Company the Shareholders at its 30th Annual GeneralMeeting held on 30th September 2020 approved the re-appointment of Mr. SubhashPatle(DIN:00369492) as Independent Director for 2nd term of 5 consecutiveyearsw.e.f. 23rd May 2020. Further no KMPs were appointed and none of the existing KMPshave resigned during the year under review.

The present tenure of Mr. Bhavesh Dholiya (DIN-07641315)and Mrs. ArunaKachchhi (DIN:07915688) IndependentDirectors of the Company will expire on August 9 2022 and August31 2022 respectively. Based on therecommendation of the Nomination andRemunerationCommiltee the Board at its Meeting held on August 6 2021 has recommended tothe shareholders asuitable resolutionfor their re-appointment for a second term offiveyears with effect from August 10 2022 and September 1 2022 respectively and for whichsuitable resolutions mentioned in the Notice of the 31st AGM.

Both Independent Directors namelyMr. Bhavesh Dholiya and Mrs. ArunaKachchhihave givenwritten declarations that they meet the criteriaof independence as laid down under Section149(6) ofthe Companies Act 2013 and Regulation 16(l)(b) of theSEBI (Listing Obligationsand Disclosure Requirements)Regulations 2015.

As per the provisions of Section 152(6) of the Companies Act 2013 Mr. Bharat Patel(DIN- 00249234) retires by rotation at the ensuing Annual General Meeting and beingeligible has offered himself for reappointment as the Director of the Company.

8. COMMITTEES OF THE BOARD:

The Board has constituted Committees pursuant to provisions of Companies Act 2013 andrules framed thereunder and as per the SEBI (LODR) Regulations 2015.

The committees of the Board are Audit Committee Stakeholders Relationship Committeeand Nomination and Remuneration Committee.

Audit Committee Meeting:

The Constitution of Audit Committee is as per the requirements of the Companies Act2013 and the SEBI (LODR) Regulations 2015.

Sr Name No. No. of Meetings held No. of Meetings attended
1. Mr. Bharat Patel 5 5
(DIN:00249234)
2. Mr. Subhash Patle (DIN: 00369492) 5 5
3. Ms. ArunaKachchhi (DIN-7915688) 5 5

Stakeholders Relationship Committee:

The Constitution of Stakeholder Relationship Committee is as per the requirements ofthe Companies Act 2013 and the SEBI (LODR) Regulations 2015.

Sr Name No. No. of Meetings held No. of Meetings attended
1. Mr. Bharat Patel (DIN:00249234) 4 4
2. Mr. Subhash Patle (DIN: 00369492) 4 4
3. Ms. ArunaKachchhi (DIN-7915688) 4 4

Nomination and Remuneration Committee Meeting:

The Constitution of Nomination and Remuneration Committee is as per the requirements ofthe Companies Act 2013 and the SEBI (LODR) Regulations 2015.

Sr Name No. No. of Meetings held No. of Meetings attended
1. Mr. Subhash Patle (DIN: 00369492) 2 2
2. Mr. Bhavesh Dholiya (DIN-07641315) 2 2
3. Ms. ArunaKachchhi (DIN-07915688) 2 2

9. NUMBER OF BOARD MEETINGS & ATTENDANCE OF DIRECTORS:

During the financial year under review the Board of Directors met 5times. BoardMeetings:

Sr Name No. No. of Meetings held No. of Meetings attended
1. Mr. Bharat Patel 5 5
(DIN:00249234)
2. Mr. Jayanti Gaudani (DIN: 03571671) 5 5
3. Mr. Subhash Patle (DIN: 00369492) 5 5
4. Mr. Bhavesh Dholiya (DIN:07641315) 5 5
5. Ms. ArunaKachchhi (DIN:07915688) 5 5

Li addition to the above and as required under Schedule IV to the Companies Act 2013l(One) Separate Meeting of Independent Directors was held on Monday 15thFebruary 2021.

10. EVALUATION OF BOARD:

Pursuant to the provisions of the Companies Act 2013 and Securities and Exchange Boardof India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations 2015(LODR) the Board has carried out the annual performance evaluation of independentdirectors. A structured questionnaire was prepared after taking inputs received from theDirectors covering various aspects of the Board's functioning such as adequacy of thecomposition of the Board and its Committees Board culture execution and performance ofspecific duties obligations and governance for the performance evaluation of Independentdirectors.The Nomination and Remuneration Committee reviewed the results of the annualperformance evaluation of Independent Directors and expressed overall satisfaction on theperformance of the Independent Directors Non-Independent Directors Chairman and theBoard as a whole (including its Committees).

11. DIRECTOR'S RESPONSIBILITY STATEMENT;

As required under Section 134 (3) (c) of the Companies Act 2013 your Directorsconfirm that:

i. In the preparation of the Annual Accounts for the year ended on 31s1March 2021 the applicable accounting standards have been followed along with properexplanation relating to material departures.

ii. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the slate of affairs of the company at the end of the financial year on 31stMarch 2021and of the Loss of the Company for that period.

iii. The Directors have taken proper and sufficient care for the maintenances ofadequate accounting records in accordance with the provision of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

iv. The Directors have prepared the Annual accounts on a going concern basis.

v. The Directors have laid down proper internal financial controls to be followed bythe company and that such financial controls are adequate and are operating effectively.

vi. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

12. DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors that they meetthe criteria of Independence as prescribed under the provisions of the Act read with theSchedule and Rules issued thereunder and the Listing Regulations. There has been nochange in the circumstances affecting their status as Independent Directors of the Companyand they have registered themselves with the Independent Director's Database maintained bythe IICA.

None of the Directors of the Company are disqualified for being appointed as Directorsas specified in Section 164(2) of the Act and Rule 14(1) of the Companies (Appointment andQualification of Directors) Rules 2014.

13. AUDITORS^

In the 28th Annual General Meeting held on Friday 28thSeptember 2018 M/ s B. Chordia & Co. Chartered Accountants Surat (FirmRegistration No. 121083W) were appointed as Statutory Auditors for a period of 5 yearsi.e. to hold the office from the conclusion of 28th Annual General Meeting tillthe conclusion of 33rd Annual General Meeting and the same had been approved bythe Shareholders at their 28th Annual General Meeting.

14. AUDITORS REPORT:

The observations / qualifications / disclaimers if any made by the Statutory Auditorsin their report for the financial year ended 31st March 2021 read with theexplanatory notes therein are selfexplanatory and therefore do not call for any furtherexplanation or comments from the Board under Section 134(3) of the Companies Act 2013.TheCompany has also received Consent and Eligibility Certificate from the said Auditors.

15. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

In terms of the information required under Clause (1) of Sub-section (3) of Section134 it is to be noted that Global pandemic Novel Coronavirus has significantly impactedthe? financial position and operating environment for the Company. Currently Company isfacing the heavy brink of the pandemic and trying to come out with the equation underwhich operations of the Company will be restored.

16. CONSERVATION OF ENERGY & TECHNOLOGY ABSORBTION:

Since the Company is not a manufacturing unit provisions of Section 134 (3)(m) of theCompanies Act 2013 read with the Companies (Accounts) Rules 2014 regardingconservation of energy technology absorption are not applicable to the Company.

17. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the period under review there were no Foreign Exchange Earnings and Outgo.

18. WEBSITE LINK OF ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act 2013 theAnnual Return is available on Company's website on https: //classicfilamentsltd.com/investor-relation/annual- return/

19. SECRETARIAL AUDIT REPORT:

Pursuant to provisions of Section 204 of the Companies Act 2013 and Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed Ms. Cherry Poddar as Secretarial Auditors of the Company for the FinancialYear ended 31st March 2021. The Company has obtained Secretarial Audit Reportwhich is annexed as "Annexure 1" to this Report.

Explanation on Remark Made by Secretarial Auditor in his Report:

The Promoters are in process of de-materialising the shares held by them.

20. ANNUAL SECRETARIAL COMPLIANCE REPORT:

As per BSE Circular LIST/COMP/12/2019-20 issued on 14thMay 2019 it wasclarified that the Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 is not applicable to those Companies who have claimed exemption underRegulation 15(2) of SEBI (LODR) Regulations 2015 and are not required to get the AnnualSecretarial Compliance Report.

21. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

As per the recommendation of the Nomination & Remuneration Committee the Board hasframed a policy for selection and appointment of Directors and Senior Management Personnelincluding criteria for determining qualifications positive attributes independence etc.of a Director. As required by Rule 5 of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the prescribed details w.r.t. Policy of Directors'Appointment is annexed as "Annexure - 2"to this report. However presently theCompany is not paying remuneration or sitting fees (if applicable) to any of theDirectors Key managerial Personnel and Senior Managerial Personnel of the Company exceptto Mrs. Ankita Shroff Company Secretary and Compliance Officer of the Company. The Policyw.r.t. the same is available on Company's website i.e.

vvvv w.cliissu'd Iainentsitd.com

22. INTERNAL AUDITORS:

According to the recommendation of the Audit Committee the Board had appointed M/s.Ravindra Dhakar & Associates Chartered Accountants Surat (FRN - 114030W) as anInternal Auditors of the Company for the Financial Year2020-21.The Internal Auditors wererequired to report to the Audit Committee of the Board after conducting comprehensiveaudit of operations of the Company.

23. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS PURSUANT TO SECTION 143(121 OFTHE COMPANIES ACT 2013:

During the year under review there were no incidences of fraud reported by Auditors.

24. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

No orders have been passed by any Regulator or Court or Tribunal which can have impacton the going concern status and the Company's operations in future. However the Companyhad received a Demand Notice on 29-01-2021 from the Asst. Commissioner of State Taximposing a penalty for wrongful availment of Input Tax Credit ascertained from July 2017to March 2020 and to pay sum of Rs. 2057352/-.The Company is defending the matterbefore the authority.

25. PARTICULARS OF LOAN. GUARANTEES OR INVESTMENT:

The particulars of loans guarantees and investments as per section 186 of the Act bythe Company have been disclosed in the financial statements.

26. CORPORATE GOVERNANCE RFPORT:

Pursuant to Regulation 15(2) of the SEBI (LODR) Regulations 2015 the provisions ofRegulation 17 to 27 and clauses (b) to (i) of Regulation 46(2) and Para C D and E ofSchedule Vare not applicable to the Company as the paid up Share Capital of the Companyis less than Rs. 10 Crores and Net worth being less than Rs. 25 Crores. Further theCompany is not required to obtain Certificate for Non-disqualification of Directors.

27. CORPORATESOCIAL RESPONSIBILITY:

The Company has not developed and implemented any Corporate Social ResponsibilityPolicy pursuant to the provisions of Section 135 of the Companies Act 2013 and relevantRules framed thereunder as the said provisions were not applicable to the Company as theCompany had incurred losses during the relevant period.

28. PAR nCULARS OF CONTRAC IS OK ARRANGEMENTS VVI1H RELATED PARTIES:

None of the transactions with related parties fall under the scope of section 188 ofthe Act. Accordingly the disclosure of related party transactions as required underSection 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for the FY2020-21 and hence does not form part of the Report. The policy on Related PartyTransactions is available on the Company's website 'www.classicfilamentsltd.com'.

29. INTERNAL FINANCIAL CONTROLS;

The Board hereby reports that the Internal Financial Controls were reviewed by theAudit Committee and there were adequate Internal Financial Controls existed in the Companywith respect to the Financial Statements for year ended on 31stMarch 2021andthe Internal Financial Controls are operating effectively.

30. RISK MANAGEMENT POLICY:

Hie Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed and also discussed at the meetings of the Audit Committee andthe Board of Directors of the Company.The Company's internal control systems arecommensurate with the nature of its business and the size and complexity of itsoperations. Significant audit observations and follow up actions thereon are reported tothe Audit Committee.

31. CAUTIONARY STATEMENT:

Statement in the Board's report describing the Company's objectives expectations orforecasts may be forward-looking within the meaning of applicable securities laws andregulations. Actual results may differ materially from those expressed in the statement.Important factors that could influence the Company's operations include global anddomestic demand and supply conditions affecting selling prices of finished goods inputavailability and prices changes in government regulations tax laws economicdevelopments within the country and other factors such as litigation and industrialrelations.

32. VIGIL MECHANISMAVHISTLE BLOWER:

The Board of Directors have set up the Whistle Blower Policy i.e. Vigil Mechanism forDirectors and Employees of the Company to report concerns about unethical behaviouractual or suspected fraud or violations of Company's Code of Conduct or Ethics Policy. Italso provides for adequate safeguards against victimization of persons who use thismechanism and direct access to the Chairperson of the Audit Committee in exceptionalcases.The detailed Vigil Mechanism Policy is available at Company's website'www.classicfilamentsltd.com'.

33. PREVENTION OF SI AL AI FIAT ASSYILNI:

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and Rules framed there under. No complaints werereceived during the year under the said policy. Further necessary steps are being takenby the Board for complying with provisions of the said Act including constitution ofInternal Complaints Committee as referred in the said Act.

34. MAINTENANCE OF COST RECORDS:

Maintenance of cost records as specified by the Central Government under sub-section(1) of section 148 of the Companies Act 2013 is not required by the Company andaccordingly such accounts and records are not required to be made and maintained.

35. SECRETARIAL STANDARD:

The Company has complied with provisions of Secretarial Standard - 1 and SecretarialStandard - 2.

36. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY ANDBANKRUPTCY CODE 2016:

During the year under review there was no application made or pending proceeding underthe Insolvency and Bankruptcy Code 2016.

37. DETAILS OF THE ANY DIFFERRENCE BETWEEN VALUATION DONE WHILE TAKING ONE TIMESETTLEMENT AND TAKING LOAN FROM TIIE BANKS OR FINANCIAL INSTITUTIQNSTIQN (FI):

During the year under review the company has neithermade any one time settlementnorhave taken any loan from the Bank or FI.

38. MANAGEMENT DISCUSSIONS & ANALYSIS REPORT;

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements based on certain assumptions andexpectations of future events. The Company therefore cannot guarantee that theseassumptions and expectations are accurate or will be realized. The Company's actualresults performance or achievements can thus differ materially from those projected inany such forward-looking statements. The Company assumes no responsibility to publiclyamend modify or revise any forward looking statements on the basis of any subsequentdevelopments information or events.

INDUSTRY

Textile Industry in general is passing through a challenging phase due to multiplicityof reasons beyond its control and trying to cope up with challenges under the grave marketcondition. However this phase is likely get over in couple of years and Company willagain gain its momentum in the time to come. Further Company is taking the futuristicview of the business and is under constant endeavor to improve the current condition inorder to perform better.

BUSINESS OVERVIEW

The turnover during the year 2020-21 has slipped to Rs. 31.67 Lakhs which wassignificantlylower than the turnover during the previous year 2019-20 which stood at Rs.140.96 Lakhs. Such a sharp decline change was attributable to inflation economicconditions and countrywide lockdown from the middle of March 2020 due global pandemicnovel coronavirus. However the decline is temporary and positive grow is expected in thecoming years.

MARKETING

The Company is planning marketing strategy in line with changing situation posed bynovel coronavirus to increase the bottom line as well as turnover.

SWOT

Our strength is our determination weakness is the low equity base opportunities aremultiples and threats are posed by the current and unprecedented economic conditions.Current situation posed by novel corona virus has changed the equations of businessconduct and operations. It has become very difficult to operate in the current marketwhich is facing drastic set back. However we are dedicated towards the Company andpresently working on the model suitable to the existing situation.

INTERNAL CONTROL

The Company has an internal control system commensurate with the size of itsoperation. Adequate records and documents were maintained as required by laws. TheCompany's audit Committee reviewed the internal control system. All efforts are being madeto make the internal control systems more effective.

SEGMENT WISE REPORTING

During the year under review the Company has achieved all sales through one segmentonly and hence segment wise break up is not available.

^LMOOXV. rILni'IUI O Li 1*1 X I CU

RISKS AND CONCERNS

In any business risks and prospects are inseparable. As a responsible management theCompany's principal endeavor is to maximize returns. The Company continues to take allsteps necessary to minimize losses through detailed studies and interaction with experts.

HUMAN RESOURCES & INDUSTRIAL RELATIONS:

The industrial relations continued to be harmonious and cordial providing an atmosphereconducive to sustenance of growth and enhancement of value for shareholders. Howeverthere are no employees in the Company.

CAUTIONARY STATEMENT

Statement in this Management's Discussion and Analysis detailing the Company'sobjectives projections estimates expectations or predictions are "forward-lookingstatements" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make a difference to the Company's operations include global and Indiandemand-supply conditions finished goods prices stock availability and prices cyclicaldemand and pricing in the Company's principal markets changes in Government regulationstax regimes economic developments within India and the countries within which the Companyconducts business and other factors such as litigations and labour negotiations.

39. ACKNOWLEDGEMENT:

The Board expresses its sincere thanks to all the employees customers suppliersinvestors lenders regulatory and government authorities for their co-operation andsupport and look forward to their continued support in tuture.

By order of Board of Directors
For CLASSIC FILAMENTS LIMITED
JAYANTI GAUDANI BIIARAT PATEL
MANAGING DIRECTOR DIRECTOR & CFO
DIN: 03571671 DIN: 00249234
Date: 06.08.2021 Place: Surat

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