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Spencers Retail Ltd.

BSE: 542337 Sector: Others
NSE: SPENCERS ISIN Code: INE020801028
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OPEN

110.00

HIGH

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OPEN 111.00
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VOLUME 40771
52-Week high
52-Week low
P/E
Mkt Cap.(Rs cr) 967
Buy Price 0.00
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Sell Price 0.00
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OPEN 111.00
CLOSE 112.35
VOLUME 40771
52-Week high
52-Week low
P/E
Mkt Cap.(Rs cr) 967
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Spencers Retail Ltd. (SPENCERS) - Director Report

Company director report

Dear Members

The Board of Directors ("Board") have the pleasure in presenting the FourthAnnual Report on the business and operations of the Company together with the auditedfinancial statements of the Company for the financial year ended March 31 2021.

FINANCIAL HIGHLIGHTS

The Company's financial performance (Standalone and Consolidated) for the year endedMarch 31 2021 are summarised below:

(Rs Lakhs)

Particulars Standalone Consolidated
FY2020-21 FY2019-20 FY2020-21 FY2019-20
Revenue from operations and other income 211613.21 240283.86 248146.90 267662.64
Earnings before interest expenses tax depreciation and amortisation (EBITDA) 4710.08 10881.36 6134.79 8913.17
Finance costs 6886.27 6087.09 9134.19 8195.36
Depreciation and amortisation 10616.93 10496.18 13421.03 13814.87
Loss before tax (12793.12) (5701.91) (16420.43) (13097.06)
Tax expenses - - (35.25) (18.69)
Loss after tax (12793.12) (5701.91) (16385.18) (13078.37)
Other comprehensive income /(loss) (66.56) (141.80) (65.42) (58.55)
Total comprehensive loss for the year (12859.68) (5843.71) (16450.60) (13136.92)

The financial statements have been prepared in accordance with Indian AccountingStandards (IND AS) notified under Section 133 of the Companies Act 2013("Act") as amended read with Companies (Accounts) Rules 2015.

PERFORMANCE OVERVIEW

Spencer's Retail Limited ("SRL" or "Spencer's") the retail arm ofRP-Sanjiv Goenka Group opened 14 stores {12 in SRL and 2 in Natures Basket Limited (NBL)}spanning around 1.09 lakh square feet (1.01 lakh in SRL and 0.08 lakh in NBL) of retailspace during the year. The stores cater to essentials such as groceries fresh productsgeneral merchandise personal care products apparel and accessories consumer durablesand other lifestyle products.

Spencer's has shown immense resilience in tackling the pandemic-related ongoing crisis.The financial year under review was a challenging year. We witnessed multiple intermittentlockdowns disrupting business across all our stores. The Company created a BusinessContinuity Plan and formed a dedicated committee to monitor the situation. More than 90%of our stores were operational during the lockdown which helped us to serve the nationduring such a global healthcare crisis while taking all necessary precautions. Ourfinancial results for the year reflects the impact of the intermittent lockdowns. Firstquarter sales were significantly subdued. Thereafter we witnessed significantquarter-on-quarter recovery in our business but owing to limited operating hours andrestrictions on selling of higher-margin non-essential items (apparels generalmerchandise and other non-food items) our revenues and margins were impacted. As at theend of March 31 2021 our consolidated revenue stood at Rs 242807 Lakhs.

As part of our cost-e_ciency enhancing measures during the pandemic we re-designed andre-engineered most of the contracts with our partners thereby enabling us to save costs.

While working on minimising the impact through actions above we continue with ourstrategy to focus on higher margin non-food categories. Though they were impacted sharplyduring the year they are crucial for pivoting the business model to significantprofitability.

Apart from our focus on higher margin non-food items the second piece of our strategyis to build a significant "Out of Store" business. We also made investments tostrengthen our mobile application and technology. We increased our local consumer connectusing "Stores as hubs" and via hyper local approach for our "Out ofStore" business.

DIVIDEND

In view of the accumulated losses the Board of Directors of the Company has notdeclared any dividend for the financial year ended March 31 2021. As required under theSEBI (Listing Obligation & Disclosure Requirement) Regulations 2015 ("SEBIListing Regulations") Dividend Policy of the Company has been uploaded on the websiteof the Company and can be accessed at http://www.spencersretail.com/investor.

COVID 19 PANDEMIC

Due to outbreak of COVID-19 globally and in India the Company has made an assessmentof likely adverse impact on economic environment in general and financial risks onaccount of COVID-19. The Company is in the business of organised retail which majorlydeals with essential commodities. Accordingly it has been assessed that there is no majorimpact on the business of the Company since in nation-wide partial lockdown in differentperiods during the year the business in essential commodities was not restricted and therequirement of delivery of essential commodities at doorstep had also increasedsignificantly. The Company has tied up with various service providers to make availablethe essential products to reach its customer's places aligned with its suppliers andtransporters to have a continuous supply of products and keep them available at theCompany's stores and warehouses.

MANAGEMENT DISCUSSION AND ANALYSIS

In compliance with Regulation 34(2)(e) of the SEBI Listing Regulations a separatesection on the Management Discussion and Analysis (Annexure-A) as approved by the Boardof Directors which includes detailed review of operations performance and future outlookof the Company is annexed hereto and forms a part of this report.

CORPORATE GOVERNANCE

It has been the endeavor of the Company to follow and implement best practices incorporate governance in letter and spirit. A separate Report on Corporate Governance(Annexure-B) along with Additional Shareholder's Information (Annexure-C) as prescribedunder SEBI Listing Regulations together with a certificate from Company's SecretarialAuditor confirming compliance are annexed to this report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the extract of AnnualReturn as on March 31 2021 is available on the website of the Company athttp://www.spencersretail.com/investor.

BUSINESS RESPONSIBILITY REPORT

A detailed Business Responsibility Report (Annexure-D) as required under Regulation34(2)(f) of the SEBI Listing Regulations is annexed hereto and forms a part of thisreport.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In terms of the provisions of Section 152 of the Act and Article 100 of the Articles ofAssociation of the Company Mr. Shashwat Goenka (Director Identification Number 03486121)retires by rotation and being eligible offers himself for re-appointment. Suitableresolution for re-appointment of Mr. Shashwat Goenka has been included in the Notice ofthe Fourth Annual General Meeting (AGM).

The details on Director's re-appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Directors and alsoremuneration for Key Managerial Personnel and other employees forms a part of theCorporate Governance Report of this Report.

During the year under review the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company other than sitting fees receivedby them.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence prescribed under the Act and theSEBI Listing Regulations.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment andQualification of Directors) Rules 2014 as amended names of Independent Directors of theCompany have been included in the data bank of Independent Directors maintained with theIndian Institute of Corporate Affairs.

During the year there was no change in the Key Managerial Personnel of the Company.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

During the year under review five Board meetings were held the details of which aregiven in the Corporate Governance Report forming a part of this report.

SHARE CAPITAL

As on March 31 2021 the paid up share capital of the Company post Rights Issue was Rs500660045 comprising 90132009 equity shares of Rs 5/- each and 500000 preferenceshares of Rs 100/- each. The equity shares of the Company are presently listed with theNational Stock Exchange of India Limited ("NSE") and BSE Limited("BSE").

LISTING

The Company had voluntarily delisted its equity shares from The Calcutta StockExchange Limited (‘CSE') with effect from November 23 2020 as there has been notrading in the equity shares of the Company listed on CSE. The equity shares of theCompany are continued to be listed on BSE and NSE. The Company has paid the requisitelisting fees to the Stock Exchanges up to the Financial Year 2021-22.

PUBLIC DEPOSITS

During the year under review the Company has not accepted any deposits from public /Members under Section 73 of the Act read with the Companies (Acceptance of Deposits)Rules 2014. The Company does not have any unpaid / unclaimed deposits as on March 312021

STATUTORY AUDITOR AND AUDITOR'S REPORT

As per the requirement of section 139(2) of the Act M/s. S.R. Batliboi & Co. LLPChartered Accountants (Firm Registration No. 301003E/E300005) was appointed as theStatutory Auditor of the Company for a term of five consecutive years at the Third AnnualGeneral Meeting of the Company held on August 03 2020. The Statutory Auditor hasconfirmed that they are in compliance under the provisions of the Act to continue asAuditor of the Company.

The notes on the financial statement referred to in the Auditors report are selfexplanatory and do not call for any further comments. Further the Auditor's Report doesnot contain any qualification adverse or disclaimer remark. No fraud has been reported bythe auditor.

SECRETARIAL AUDIT AND AUDITOR'S REPORT

The Board had appointed M/s. S. M. Gupta & Co. Company Secretaries (Membership No.FCS 896) to conduct Secretarial audit of the Company for the financial year2020-21.Secretarial audit of secretarial and related records of the Company was conductedby the aforesaid auditor and a copy of the secretarial audit report is annexed and forms apart of this report (Annexure-E). Secretarial Audit Report of Natures Basket Limitedmaterial unlisted subsidiary of the Company is also attached (Annexure-E1). Neither ofthe above Secretarial audit reports contains any qualifications reservations or adverseremarks or disclaimer.

SECRETARIAL STANDARDS

During the year under review the Company has complied with the applicable SecretarialStandards i.e. SS-1 and SS-2 relating to Meetings of the Board of Directors and GeneralMeetings respectively issued by the Institute of Company Secretaries of India andapproved by the Central Government pursuant to Section 118 of the Act.

RELATED-PARTY TRANSACTIONS

All the Related-Party Transactions (RPT) entered into during the financial year were atarm's length basis and were in the ordinary course of business and as per the RPT policyof the Company. Hence the provisions of Section 188 of the Act as amended are notattracted. Further all the RPTs are placed before the Audit Committee for review andapproval and prior omnibus approval was obtained for RPT which were repetitive in nature.Thus disclosure in Form AOC-2 is not required. Further there were no materialsignificant Related-Party Transaction(s) during the year under review made by the Companywith Promoters Directors Key Managerial Personnel or other designated persons which mayhave a potential conflict with the interest of the Company at large.

The policy on RPT as approved by the Board is posted on the Company's website and maybe accessed at http://www. spencersretaii.com/investor.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

During the financial year under review the Company has complied with the provisions ofSection 186 of the Act in respect of loans given and investments made. Details of Loansand Investments are given in the notes to financial statements. Further the Company hasnot given any guarantee or provided any security during the financial year.

COMMITTEES OF THE BOARD

At present the Board has five committees:

1) Audit Committee

2) Nomination and Remuneration Committee

3) Stakeholders' Relationship Committee

4) Corporate Social Responsibility Committee and

5) Risk Management Committee (Constituted on June 15 2021)

A detailed note on the composition of the Board and its committees is provided in theCorporate Governance Report section of this Report.

The Company has adopted a Code of Conduct for its Directors and senior managementpersonnel including the Managing Director and the Executive Directors. The same can beaccessed using the following https://spencersretaii.com/investor.

All Directors and senior management personnel have affirmed compliance with the Code ofConduct and Ethics for Directors and Senior Management.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) and 134(5) of the Act your Directors to the best oftheir knowledge and belief confirm that:

a) in the preparation of the accounts for the financial year ended March 31 2021 theapplicable Indian accounting standards have been followed along with proper explanationrelating to material departures if any;

b) appropriate accounting policies have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the loss of the Company for the period;

c) proper and sufficient care has been taken for the maintenance of accounting recordsin accordance with the provisions of this Act for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities and during the year underreview neither the statutory auditors nor the secretarial auditors reported to the AuditCommittee of the Board any instances of fraud committed against the Company by itsofficers or employees.

d) The annual accounts have been prepared on a going concern basis;

e) Internal financial controls laid down by the directors have been followed by theCompany and that such internal financial controls were adequate and operating effectively;and

f) Proper systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.

BOARD EVALUATION

Pursuant to the provisions of the Act SEBI Listing Regulations and Circulars andGuidance Notes issued by SEBI the Board had carried out an annual performance evaluationof its own performance the Directors individually as well as the evaluation of theworking of its Committees. At a separate meeting of Independent Directors theperformances of Non-Independent Directors the Board as a whole and the Chairman wereevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors.

CRITERIA ON BOARD DIVERSITY AND DIRECTOR ATTRIBUTES AND REMUNERATION POLICY FORDIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In terms of the provisions of Section 178(3) of the Act and Regulation 19 read withPart D of Schedule II to the SEBI Listing Regulations Nomination and RemunerationCommittee (NRC) is responsible for determining qualifications positive attributes andindependence of a Director. NRC is also responsible for recommending to the Board apolicy relating to the remuneration of the Directors Key Managerial Personnel and otheremployees. In line with this requirement the Board has adopted the Policy on Remunerationfor Directors Key Managerial Personnel and other employees.

RISK MANAGEMENT

The Company has laid out a proper mechanism to identify the elements of business andother risks and a risk management system to ensure compliance with the applicable laws andrelevant standards. Detailed discussion on risk management is covered in ManagementDiscussion and Analysis and Report on Corporate Governance which form part of the AnnualReport.

The senior management assists the Board in its oversight of the Company's Management onkey risks including strategic and operational risks as well as the guidelines policiesand processes for monitoring and mitigating such risks under the aegis of the overallbusiness risks management framework.

CORPORATE SOCIAL RESPONSIBILITY

In accordance with Section 135 of the Act and the rules made thereunder the Companyhas revised the Corporate Social Responsibility ("CSR") Policy as amended onJanuary 22 2021 by Ministry of Corporate Affairs (MCA) a brief outline of which alongwith the required disclosures is annexed (Annexure-F) as a part of this Report.

The aforesaid CSR Policy has also been uploaded on the Company's website athttp://www.spencersretail.com/investor.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the guidelines laid down under Section 177 of the Act Rules madethereunder and SEBI Listing Regulations the Company has a Whistle-blower policy (vigilmechanism) in place for reporting genuine concerns pertaining to any instances ofirregularity unethical practice and/or misconduct. The details of the said policy havebeen disclosed in the Company's website at http://www.spencersretail.com/investor. TheVigil Mechanism provides a mechanism for employees of the Company to approach the Chairmanof the Audit Committee of the Company through Company Secretary for redressal of theirgrievances. No person has been denied access to the Chairman of the Audit Committee andno such reporting took place during the year.

ANTI SEXUAL HARASSMENT POLICY

The Company has in place an anti-sexual harassment policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013 covering all employees of the Company. An internal committee hasbeen set up for this purpose. During the year there was no complaint received by thecommittee.

SUBSIDIARIES

As on March 31 2021 the Company had two wholly-owned subsidiaries Natures BasketLimited and Omnipresent Retail India Private Limited. Out of these two subsidiariesNatures Basket Limited is the material subsidiary of the Company. In terms of theprovisions of Regulation 24(1) of the SEBI Listing Regulations appointment of theIndependent Director of the Company on the Board of material subsidiaries was notapplicable to Natures Basket Limited. The Company has prepared a consolidated financialstatements for the Company and its subsidiaries in the form and manner in compliance withthe applicable Indian accounting standards and the SEBI Listing Regulations and the samehas been audited by S. R. Batliboi & Co. LLP Chartered Accountants the StatutoryAuditors of the Company.

The audited consolidated financial statements for the financial year 2020-21 forms apart of the Annual Report and shall be laid before the Members of the Company at theAnnual General Meeting. Further the Auditor's Reports of subsidiaries do not contain anyqualifications adverse or disclaimer remarks. Pursuant to the provisions of Section129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules 2014 a statementcontaining the salient features of the financial statements of the Company's subsidiariesin Form AOC-1 is attached to the financial statements of the Company. Furthermorepursuant to the provisions of Section 136 of the Act said the said financial statementsof the Company and the consolidated financial statements along with relevant documents andseparate audited accounts in respect of subsidiaries are available on the website of theCompany at http://www.spencersretail.com/investor. Shareholders desirous of obtaining theAccounts of the Company's subsidiaries may obtain the same upon request.

COST RECORDS

Neither maintenance of cost records nor audit of cost records as required under Section148 of the Act read with relevant rules made thereunder is applicable to the Company.

EMPLOYEE STOCK OPTION

The Company has formulated Spencer's Employee Stock Option Plan 2019 ("ESOPScheme") for benefit of its employees as per applicable regulations of Securities andExchange Board of India as amended from time to time and the said schemes are incompliance with SEBI (Share Based Employee Benefits) Regulations 2014 [SEBI (SBEB)Regulations] as applicable. The purpose of above ESOP Scheme is to provide the employeeswith an additional incentive in the form of options to receive the equity shares of theCompany at a future date and reward them for their continuous hard work dedication andsupport. Under the aforesaid ESOP Scheme the NRC of the Board of Directors at theirmeeting held on June 26 2020 approved the grant of 120000 options to the eligibleemployees under the Employee Stock Option Scheme. These options granted are beingimplemented through a trust viz. Spencer's Employee Benefit Trust ("Trust") inaccordance with the provisions of SEBI (SBEB) Regulations and involves the secondarymarket acquisition of the Company's equity shares by the Trust from the Stock Exchanges.Details with respect to employee stock options under the ESOP 2019 as at March 31 2021are provided in the table below:

Sl. No. Particulars Number of Equity Shares / Options
1 Total number of options outstanding at the beginning of the year Nil
2. Total number of options granted under ESOP Scheme during the year 120000
3. Options vested during the year NIL
4. Options exercised during the year NIL
5. Options lapsed or forfeited during the year NIL
6. Total number of options outstanding at the end of the year 120000

A certificate from S.R.Batliboi & Co. LLP Statutory Auditors with respect to theimplementation of the Company's Employee ESOP scheme can be accessed upon logging to theNSDL e-voting system as mentioned in the Notice of AGM.

AWARDS AND RECOGNITIONS

The Company has been a proud recipient of numerous awards and recognitions during theyear 2020-21. The significant ones amongst them are listed hereunder:

Certified as a Great Workplace by Great Place to Work Institute India

India Retail champions for Food & General Retail (Large format over 5000sq.ft.) powered by RAI at Bhartiya City Centre Winner for Apprenticeship Leader by NexusMalls Retail Awards 2020 Contracted Highest Apprentices In Retail (CHAIR) Award atNews Mall Retail Awards 2021

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY

There are no material changes and commitments affecting the financial position of theCompany that have occurred between the close of the financial year ended March 31 2021and the date of this Board's Report. The year was a year of restructuring for retailers.However the annual online shopping has increased significantly because of higher numberof people working from home due to pandemic. There was a significant drop in physicalfootfall in retail outlets owing to pandemic. Our "Out of Store" initiativesincluding E-Commerce Phone Delivery WhatsApp ordering brought many shoppers online andthus overall order position witnessed a spike. There was a change in the consumer buyingbehaviour from offine to online owing to safety offerings and better convenience. Goingforward in 2021-22 the industry is expected to stabilise and witness many businessesadopting an Omni-channel approach. Also higher number of COVID-19 cases have led toconsumers' hesitation to return to in-store shopping. This could be one of the importantfactors to empower online industry growth. However future performance will depend on whenthe pandemic fades and normalcy returns which remains uncertain. At the same time therisks and impact on the Company's different businesses will vary based on the industrytheir target markets and the nature of operations. These risks and the approach of each ofthese businesses to mitigate them have been covered in their respective sections in theManagement Discussion and Analysis which forms part of this report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS COURTS ANDTRIBUNALS

No significant and material order has been passed by the Regulators Courts andTribunals impacting the going concern status and the Company's operations in future.

CHANGE IN THE NATURE OF BUSINESS

During the year under review there was no change in the nature of the business of theCompany.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains adequate internal control systems in all areas of its operations.The services of internal and external auditors are sought from time to time as well asin-house expertise and resources. The Company believes that it has sound internal controlsystems commensurate with the nature and size of its business. The Company continuouslyupgrades these systems in line with best-in-class practices.

These reports and deviations are regularly discussed with the Management Committeemembers and actions are taken whenever necessary. The Audit Committee of the Boardperiodically reviews the adequacy of the internal control systems.

CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under sub-section (3)(m) of Section 134 of the Act readwith Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed hereto and forms partof this Report (Annexure-G).

PARTICULARS OF EMPLOYEES

As required under the provisions of Section 197 of the Act and Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014requisite particulars of the employees forms a part of this Report. However as per theprovisions of Section 136 of the Act the Annual Report and Accounts are being sent to allthe members of the Company excluding the aforesaid information. Any member interested inobtaining such particulars may write to the Company Secretary of the Company through emailon spencers.secretarial@rpsg.in.

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed hereto and forms part of this Report(Annexure-H).

INDUSTRIAL RELATIONS

Industrial relations in the Company during the year continued to be cordial. Adetailed section on the Company's Human Resource initiatives is forming part of theManagement Discussion & Analysis.

GREEN INITIATIVES

The Company supports the ‘Green Initiative' undertaken by the Ministry ofCorporate Affairs Government of India enabling electronic delivery of documentsincluding Annual Report etc. to shareholders at their e-mail address already registeredwith the Depositories ("DP") and Registrar and Transfer Agents("RTA").

To support the ‘Green Initiative' Members who have not registered their emailaddresses are requested to register the same with the Company's RTA / DP for receiving allcommunications including Annual Report Notices Circulars etc. from the Companyelectronically. Pursuant to the MCA Circulars and SEBI Circulars and in view of theprevailing situation of the Pandemic owing to the difficulties involved in dispatching ofthe physical copies of the Notice of the fourth AGM and the Annual Report of the Companyfor the financial year ended March 31 2021 including therein the Audited FinancialStatements for the financial year 2020-21 the afore-mentioned documents are being sentonly by email to the Members.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the valuable servicesrendered by the employees of the Company across all levels. The Directors would also liketo express their appreciation to bankers regulatory authorities trade supplierscustomers financial institutions and shareholders for their continued support andcooperation.

On behalf of the Board of Directors
Dr. Sanjiv Goenka
Chairman
Kolkata June 15 2021 (DIN 00074796)

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