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NTPC aims at 8,000-9,000 MW capacity takeover

Written By komp limpulima on Minggu, 31 Agustus 2014 | 21.03

NTPC is looking at power plants which have achieved financial closure or coal linkage, but were facing financial issues to start generation and cost less than greenfield power plants.

Power major NTPC  said it is aiming at 8,000-9,000 MW capacity takeover in stressed power plants but the recent Supreme Court ruling on coal mines may have an impact on the move.

"We have received 34 applications aggregating 55,000 MW generation. But, on a realistic basis, we expect to acquire plants worth 8,000-9,000 MW capacity after due diligence," NTPC chairman and managing director Arup Roy Choudhury said on the sidelines of the annual conclave on environment and energy organised by The Bengal Chamber.

"However, we have to look into the impact from the ruling of the Supreme Court on coal mines," he said. "If due to the recent Supreme Court order, sourcing coal or holding a coal block becomes an issue for such power plants, then we must strike off such assets from our takeover list," Choudhury said.

Also read:  NTPC may revise Katwa power capacity to 1980MW

NTPC is looking at power plants which have achieved financial closure or coal linkage, but were facing financial issues to start generation and cost less than greenfield power plants. "If cost is more than greenfield why should we go for it?

There should be some financial advantage," Choudhury said. NTPC had set up a sub-committee to look into the stressed power plant takeover. Meanwhile, NTPC said projects worth 22,000 MW are under execution and another 8,000-10,000 MW under pipeline.

NTPC stock price

On August 22, 2014, NTPC closed at Rs 137.70, down Rs 1.65, or 1.18 percent. The 52-week high of the share was Rs 168.80 and the 52-week low was Rs 110.90.


The company's trailing 12-month (TTM) EPS was at Rs 12.91 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 10.67. The latest book value of the company is Rs 104.08 per share. At current value, the price-to-book value of the company is 1.32.


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CCI clears Wipro GE Healthcare-GE India Technology deal

The Commission observed that while Wipro GE is engaged in manufacturing and distributing various medical equipment and solutions including life sciences equipment and devices, GE India Technology is into multi-disciplinary research and development in various technologies such as bio-technology.

The Competition Commission has approved medical equipment firm Wipro GE Healthcare's proposed deal to acquire GE group's assets related to bio-technology and life sciences.

According to the Competition Commission of India (CCI) "the proposed combination is not likely to have appreciable adverse effect on competition in India". Under the deal, Wipro GE would acquire assets of GE India Technology Centre -- part of US-headquartered conglomerate General Electric group -- used in the research areas of bio-technology and life sciences.

Also read: Piramal, Navin Fluorine to form healthcare JV

The Commission observed that while Wipro GE is engaged in manufacturing and distributing various medical equipment and solutions including life sciences equipment and devices, GE
 India Technology is into multi-disciplinary research and development in various technologies such as bio-technology.   '

"Accordingly, it is observed that there is no horizontal overlap between the businesses of Wipro GE and GE India Technology Centre Ltd," CCI said in an order released today. Further, CCI noted that "the proposed combination would facilitate vertical integration of the businesses of Wipro GE as it would enable Wipro GE to sell equipment as well as provide related research and other support services in biotech and life-sciences areas".

"It is also observed that GE India Technology Centre renders 100 per cent of its services to the affiliates of GE group across the world, including India," CCI said. "Therefore, this vertical integration is unlikely to result in any appreciable adverse effect on competition," the fair trade regulator added. The 'Asset Purchase Agreement' was entered between the two companies on July 7, 2014 following which they had approached the competition commission for approval in the same month.


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PM's visit to US may boost NTPC's geo-thermal project

Geo-thermal technology involves utilisation of heat from rocks and fluids in the earth's crust to generate electricity.

The country's first geo-thermal project by power major  NTPC may get a boost with the proposed visit of Prime Minister Narendra Modi to the US.

NTPC chairman and managing director Arup Roy Choudhury said they are contemplating cooperation from the US to harness the geo-thermal project for which it has already signed a memorandum of understanding with the Chhattisgarh government.

"We may need to send a team to the US to identify agencies for collaboration. But this will be taken at the government level after the Prime Minister's visit to the US. "At present, the geo-thermal project is at an exploratory stage and the DPR is being prepared," Choudhury said on the sidelines of The Bengal Chamber-organised environment and energy conclave here today.

Also read: NTPC may revise Katwa power capacity to 1980MW

Discussions on the Indo-US cooperation for harnessing India's geo-thermal potential is expected to take place with Prime Minister Narendra Modi's visit to the US. NTPC first signed a MoU with the Chhattisgarh Renewable Energy Development Agency to set up the project at Tattapani. It signed the second MOU in January this year with the Geological Survey of India for preparation of a detailed project report.

Geo-thermal technology involves utilisation of heat from rocks and fluids in the earth's crust to generate electricity. Speaking about exploring renewables, Choudhury said NTPC is laying emphasis on developing a solar portfolio and had invited tender for 1,000 MW of solar power project. "We have already invited tender for 100 MW.

We are talking to states like Madhya Pradesh, Andhra Pradesh and Rajasthan, who are keen on developing solar energy parks," Choudhury said. NTPC aims to set up 3,000 MW of solar power project over the next 3-3.5 years. He, however, made clear that the company has put thermal power projects worth 22,000 MW under execution and 8,000-10,000 MW is under pipeline.

Choudhury said prima facie it is not affected by the recent Supreme Court order on allocation of coal blocks and its coal mining operations will proceed.

NTPC stock price

On August 22, 2014, NTPC closed at Rs 137.70, down Rs 1.65, or 1.18 percent. The 52-week high of the share was Rs 168.80 and the 52-week low was Rs 110.90.


The company's trailing 12-month (TTM) EPS was at Rs 12.91 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 10.67. The latest book value of the company is Rs 104.08 per share. At current value, the price-to-book value of the company is 1.32.


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UP sugar mills to boycott meeting for fixing cane area

UP Sugar Mills Association (UPSMA) has decided not to participate in the meeting as it has given notice to the state government that they will not start crushing operations next season till the cane prices are not linked to sugar price

Private sugar millers in Uttar Pradesh have decided to 'boycott' a meeting called by the state government to fix area from where they will source cane for making sweetener in the next season starting October.

UP Sugar Mills Association (UPSMA) has decided not to participate in the meeting as it has given notice to the state government that they will not start crushing operations next season till the cane prices are not linked to sugar price.

Also read: Govt hits out at UP sugar mills for non-payment to farmers  

Earlier this month, cash-starved private sugar mills in UP had threatened to shut down operations in the 2014-15 season if the state government does not link cane price with sugar realisation like some other states.

The UP state government has called district wise meetings beginning September 10 for fixing cane area for all the sugar mills in the state. "In view of suspension notice given and maintenance staff having been withdrawn, it does not make any sense to participate in the meetings for cane reservation for 2014-15 sugar season," the UPSMA said in a statement.

Expressing 'surprise' over the meeting called by the state government, the association said: "It is unreasonable to talk about cane reservation when basic issue of rationalised cane pricing policy is yet to be resolved."

Faced with cash-crunch, the private sugar mills in the state have been demanding linking of sugarcane price with sugar rates and announcement of financial assistance of Rs 9 per quintal for payment of cane price for 2013-14 season.

"Calling the suspension notice a threat by the sugar mills is not only unfair but also ignoring the realty and the gravity of the situation. The sugar mills in UP have been continuously losing money in last few years, have not been able to cane price to the farmers on time and several of them have become sick and/or defaulters of banks across the country," the statement added.

The UPSMA has also appealed to both state and centre governments to quickly intervene and resolve the issue for adoption of rationalised cane pricing policy so that the maintenance work can start and bank loans could be arranged to ensure mills could plan to start their crushing operations.

Meanwhile, the Uttar Pradesh government today decided to provide an additional rebate of Rs 6 per quintal to the sugar mills on clearing cane dues to farmers latest by September 30.


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Indian Bank to revise interest rates on FCNR (B) deposits

"For FCNR (B) deposits, in USD, the revised interest rate has been revised to 2.34 percent (from 2.36) for deposits of one year and above but less than two years", the Chennai-based bank said in a statement

Public sector  Indian Bank will revise its interest rates on the foreign currency non-resident (banking) term deposits from tomorrow.

"For FCNR (B) deposits, in USD, the revised interest rate has been revised to 2.34 percent (from 2.36) for deposits of one year and above but less than two years", the Chennai-based bank said in a statement.

For deposits of two years and above but less than three years, interest rates have been revised to 2.71 percent from the existing 2.76 percent. Interest rates have been revised to 3.64 percent for deposits of three years and above but less than four years from the existing 3.71 percent, it said.

For deposits of four years and above but less than five years, interest rates have been revised to 4 percent from existing 4.11 percent. Interest rates have been fixed at 4.27 percent for deposits upto five years only from the existing 4.40 percent, the statement said.

Indian Bank stock price

On August 22, 2014, Indian Bank closed at Rs 136.65, down Rs 7.2, or 5.01 percent. The 52-week high of the share was Rs 198.90 and the 52-week low was Rs 60.50.


The company's trailing 12-month (TTM) EPS was at Rs 22.56 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 6.06. The latest book value of the company is Rs 298.40 per share. At current value, the price-to-book value of the company is 0.46.


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New powers to fast-track prosecution, refunds: Sebi chief

Written By komp limpulima on Jumat, 29 Agustus 2014 | 21.03

Armed with new powers to clamp down on illegal money-pooling schemes and other defaults, Sebi today said offenders can no longer ignore its orders and drag on the cases for years as the new law would fast-track action against them and ensure refund of money to investors.

These additional powers, as also setting-up of a special Sebi court, would ensure that fraudsters do not go scot-free and the regulator is be able to initiate recovery proceedings against them and even conduct search and seizure operations at defaulters' premises, Sebi chief U K Sinha said.

There should be a sea-change from the earlier occasions when offenders would tend to "ignore orders from Sebi" and the legal cases would drag on for years without recovery of any money, Sinha told PTI in an interview.

"The cases have gone for 10-15 years and there no money has been recovered. So except for a little bit of 'naming and shaming' for individual or a company, it did not have much impact on them," he said.

After clearance from Parliament earlier this month, the government has notified the Securities Laws Amendments Act, which empowers capital markets watchdog Sebi to take action against all unregulated money-pooling schemes involving Rs 100 crore or more.

The new Act gives Sebi authority to pass orders for attachment of properties, arrest and detaining of defaulters in prison and for disgorgement of ill-gotten money.

It also gives Sebi access to call data records, or any other information from any entity during investigations, while it can now conduct search and seizure operations after permission from a special Sebi Court to be set up soon.

"The new Act clearly defines what can be a Collective Investment Scheme and therefore falls under Sebi jurisdiction. This would make it very difficult for operators of such schemes to circumvent the regulations," Sinha said.

The recovery and disgorgement powers would help in facilitating refund of money to investors, he added.

Sinha said the special court should be set up soon as a process in this regard has already been initiated and the regulator has taken up the matter with the government and the Mumbai High Court.

The new powers have been given against the backdrop of a large number of illicit money-pooling schemes, involving funds worth thousands of crores, coming to fore in past couple of years, including Saradha and other scams in West Bengal.

Sebi was given temporary powers in July 2013 through an ordinance, which was promulgated thrice before lapsing last month.

"Sebi is a creature of Parliament. Like many other parts of the world, in India also, regulatory action has originated after a crisis. Unfortunately, this has been a trend not only in India but almost all parts of the world," Sinha said.

He gave example of the Dodd-Frank Act of the USA, which was put in place after economic crisis of 2008, as also of the Great Depression resulting into new banking laws in 1930s.

"What I am saying is that it is such a dynamic area and there are so many 'unknown unknowns' that the entire political system and the regulatory system often have a lag and we become wiser after an event," said Sinha, who became Sebi Chairman in February 2011. He got a two-year extension in February 2014 after the expiry of his initial three-year term.

Sinha said the last major amendments to the Sebi Act took place in 2002 after the Ketan Parekh IPO scam.

He said: "Right now the area of focus which we have in Sebi is particularly with regard to investor-protection and with regard to the development and the regulation of the market.

"These are the three mandates given to us by the Act. On matters of investment protection, the best way to describe would be to through the latest amendment that happened in the Sebi Act."

Explaining key aspects of the new Act, Sinha said: "It defines Collective Investment Scheme with a legal presumption that if somebody is raising Rs 100 crore or more they will be covered under CIS scheme definition."

The Sebi Chairman further said that the new Act also gives the regulator powers for recovery of penalties.

"Earlier we used to pass orders against offenders and then they decided that they will ignore Sebi, so we had to go and file a case in a civil court for recovery.

"Now, we have been given power to recover like income tax and revenue officer can recover. Now, we can also recover that is also going top help us. In the short term, since the ordinance in July, we have already recovered a reasonable amount of money. Rs 20 crore we have recovered. Our recovery pendency used to be very high earlier," Sinha said.

The Sebi chief also said that there often is a general public outcry that "you (Sebi) have penalised the person but I as a small depositor have lost money". To address such concerns, Sebi has now been given power of disgorgement of ill-gotten money from offenders and such funds can be restituted to the concerned investors if they are identifiable.

On the provision for having a special court, Sinha said that the Sebi Act provides for taking civil action against defaulters.

"We can find for prosecution in a criminal court. But, we have cases which have not come up for hearing for over 12 years. So now there will be designated courts now," he said.

On power for search and seizure, Sinha said there were expectations -- and the Ordinance also provided for that -- that power will be given to Sebi Chairman to order such operations.

"But what the Parliament has done is - instead of giving powers to Sebi Chairman - it has to go a designated court in Mumbai and that court will be able to give orders for search and seizure.

"Earlier the law was that If I have to launch a raid at 20 places, I had to go to 20 different courts and convince each one of them. Obviously, it was cumbersome and it used to lead to delay and even leakage.

"So, they have arrived at a workable solution and we will be able to work on this. Now, we can go to this designated court in Mumbai with our evidence and produce our evidence before them. I will tell them I want to search and seizure in 10 parts of the country, so the court would be empowered to grant such permission," Sinha said.

When asked as to how long it could take to get such permissions, Sinha said it has to be "immediate" as such operations would not be effect if there is any delay.

"We will have to develop our own system so that when we approach the court, we are fully armed with necessary information to satisfy the court.

"Our expectation would that it (permission) should be immediate because even if there is a delay of say 4-5 days, it will be of no use," Sinha said.


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NDA completes 100 days: Coal auction still a concern?

Whatever be the verdict of the Supreme Court on September 1, auction of coal blocks, an increase in coal imports will only lead to a spike in electricity tariff. The government will have a tough time striking a balance to achieve rational electricity tariff and deliver on its promise of 24x7 power supply.

Continuing with the theme of 100 days agenda of the NDA-led government, the Supreme Court's order on coal block allocation has added to the uncertainty surrounding the sector. This is just one of the many challenges facing the coal minister Piyush Goyal. CNBC-TV18's Anshu Sharma briefs with the details of achievements and the road ahead.

Clubbing the coal and power ministries was one of the best ideas to push the infra agenda of the NDA government. The new minister's mission is to enhance coal production, bring in transparent policies to attract private investments.

So far, Piyush Goyal has managed to get few power projects inaugurated by the Prime Minister Narendra Modi across India, which were initiated by the UPA govt. Goyal has visited 9 states and has had meetings with 8 states in the capital to iron out issues of power and coal sector but a real change is yet to be seen.

However, Goyal's plans could suffer a huge setback as the Supreme Court verdict may derail government's plan to fast-track policy making or attract investment when the domestic industry dependent on coal is bleeding red.

Piyush Goyal had earlier said, "We welcome supreme court order, we will look at auctioning of coal blocks."

If the government looks at auctioning coal blocks, it will have to start amending laws under Coal Mines Nationalisation Act, bring in a tough coal regulator and rework bid document for auctions. The recent response to coal block auction was tepid industry will have to be taken in confidence before auction is kick-started.

Whatever be the verdict of the Supreme Court on September 1, auction of coal blocks, an increase in coal imports will only lead to a spike in electricity tariff. The government will have a tough time striking a balance to achieve rational electricity tariff and deliver on its promise of 24x7 power supply.


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Jindal Stainless' net worth falls 92%

With erosion of 92 percent of its four-year peak net worth pushing it into "potentially sick" unit category, Jindal Stainless is working on a plan to monetise some assets for paring debt.

The company has been incurring losses since 2012, which at the end of fiscal ending March 31, 2014, had eroded peak net worth of previous four years of Rs 2,252.89 crore by 92 percent.

As per provisions of the Sick Industrial Companies (Special Provisions) Act of 1985, the company now falls under "potentially sick" category, which as mandated by law will be informed to its shareholders at the AGM on September 22.

In a AGM notice to shareholders, Jindal Stainless  listed five major reasons for the erosion in net worth including weak demand on economic slowdown and exceptional surge in imports of stainless steel from China due to "unfavourable duty structure".

"The company has been rigorously working on a comprehensive plan of asset monetisation cum business reorganisation scheme which would entail monetisation of identified assets of the company through demerger/slump sale," it said.

The gain, it said, would improve net worth resulting in better credit worthiness and also entail substantial reduction in the debt level and thus would assist the company in deleveraging and in ensuring term-loan viability of the company.

"The company expects to increase the capacity utilisation at its Jajpur Stainless Steel plant which in turn is expected to reduce its cost and thus improve its profitability," the company said.

An industrial firm is categorised as "potentially sick", under the Sick Industrial Companies (Special Provisions) Act, 1985, if its accumulated losses at the end of any financial year result in an erosion of 50 percent or more of peak net worth during the immediately preceding four years.

The net worth of Jindal Stainless, the largest stainless steel maker in India, fell to Rs 185.85 crore as on March 31, 2014 from its peak of Rs 2,252.89 crore four years ago. As per the rule, the company is required to report the fact to Board of Industrial and Financial Restructuring (BIFR).

The company has been incurring losses since 2012. It had reported Rs 103.90 crore loss in 2011-12, Rs 820.82 crore loss in 2012-13 and Rs 1,390.09 crore loss in 2013-14.

With three million tonnes per annum crude stainless steel production, India ranks as the third largest producer and second largest consumer of stainless steel. Over the last five years, imports from China have gone up by around 700 percent. Apart from dumping activities, large-scale circumvention of import duties is also rampant, said company Chairman and Managing Director Ratan Jindal in the company's annual report.

Jindal Stainless said higher input prices that came in the way of the company for ramping up its operation in Odisha and sharp depreciation of rupee against American dollar also had an adverse effect on the profitability, resulting in net worth erosion.

Jindal Stainles stock price

On August 22, 2014, Jindal Stainless closed at Rs 44.65, down Rs 1.8, or 3.88 percent. The 52-week high of the share was Rs 64.40 and the 52-week low was Rs 31.45.


The latest book value of the company is Rs 4.09 per share. At current value, the price-to-book value of the company was 10.92.


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Ceat to use fund raising to finance ongoing projects

Ceat has plans to invest around Rs 300 crore in the Bangladesh project, while some portion of the raised capital would also be put in the Halol plant, which is currently undergoing expansion.

Tyre maker Ceat , which plans to raise up to Rs 500 crore through issue of securities, will use majority of the fund to finance expansion of its ongoing projects in Bangladesh and Gujarat.

Around Rs 300 crore will be invested in the Bangladesh projec t, while some portion of the raised capital would also be put in the Halol plant, which is currently undergoing expansion.

"The company has two large projects - there is one in Bangladesh, which is already underway where we will be investing about Rs 300 crore and the second is a project in Halol where we are adding some passenger-car radial capacity that is about Rs 650 crore expansion. Some of the funds raised will be used for that," Ceat Ltd Managing Director Anant Goenka told PTI.

Some amount would be used for further expansion plans, opportunities that could come up in the next six-eight months' time as well, he added. The company's board had earlier this week approved to raise an amount not exceeding Rs 500 crore through further issue of securities including equity shares or Foreign Currency Convertible Bonds or American Depository Receipts.

As per the board approval, the firm can also raise capital via convertible debentures, non convertible debentures, preference shares convertible into equity shares or any other equity linked securities, by way of one or more public or  private offerings, including qualified institutions placement.

The Mumbai-headquartered company, which produces tyres, tubes and flaps, said it is still to work out the exact amount to be raised through the issue of securities.

Ceat shares were trading at Rs 587.40apiece on the BSE, down 0.11 per cent from previous close.

Ceat stock price

On August 22, 2014, Ceat closed at Rs 587.40, down Rs 0.65, or 0.11 percent. The 52-week high of the share was Rs 731.00 and the 52-week low was Rs 97.50.


The company's trailing 12-month (TTM) EPS was at Rs 67.35 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 8.72. The latest book value of the company is Rs 277.70 per share. At current value, the price-to-book value of the company is 2.12.


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4 auto manufacturers to invest Rs 11,510 cr in Maharashtra

Ahead of the Assembly elections, Maharashtra government today signed four agreements with leading auto companies, involving an investment of Rs 11,510 crore.

The agreements were signed with domestic auto majors Tata Motors ,  Mahindra and Mahindra and Bajaj Auto , and German luxury car major Volkswagen, following the government restoring VAT set-off claims to gross sales.

Chief Minister Prithviraj Chavan, state industries minister Narayan Rane, M&M chairman Anand Mahindra, Tata Motors executive director for commercial vehicles Ravi Pishrody and Volkswagen executive director Pankaj Gupta were present on the occasion.

Under the agreements, Tata Motors and Mahindra will invest Rs 4,000 crore each, Bajaj will pump in Rs 2,000 crore while Volkswagen will invest Rs 1,510 crore in existing facilities.

In April 2011, the state amended the VAT Act to make tax set-off claim applicable on net sales and not on gross sales. Auto industry complained that this took away the competitive advantage of the Chakan-Talegaon auto hub. Some companies had even threatened to pull out their investments from the state. Under the tweaked norms and the state's industrial mega project policy announced in June 2005, large auto investors and also non-auto sector investors with an investment of Rs 1,500 crore or more are entitled for VAT set-off claim on gross sales. However, the claim will not exceed 12.5 percent of the total eligible VAT refund in a year.

"It was an error of judgement at that time," Chavan said, adding that the tweaking of VAT norms will help the industry. "We have already invested Rs 4,000 crore in the Chakan plant so far and are looking at investing an additional Rs 4,000 crore during next seven years," Mahindra said.

Of the four projects, three will be in Pune district and one in Waluj in Aurangabad. Total investment of all four projects together will result in employment opportunities for 6,270 people, the government said.

While Mahindra's Rs 4,000 crore investment to expand capacity at the Chakan plant will create 2,500 jobs, Tata Motors' investment of Rs 4,000 crore will create 1,200 jobs. Volkswagen will invest Rs 1,510 crore to manufacture diesel engines and related parts of backward integration at the Chakan plant, creating 570 jobs.

Bajaj Auto's Rs 2,000 crore investment will come in two phases for capacity expansion from 22,80,000 to 33,60,000 units in first phase and from 33,60,000 to 38,40,000 units in second phase at Waluj. On completion of the project, it would create 2,000 jobs.

M&M has plans to increase its vehicle manufacturing capacity in Chakan to 4,50,000 units over the next 18 months, from the present 3,20,000. Mahindra & Mahindra, which currently employs 4,000 people
in the state, also plans to recruit another 2,000. The Chavan government had signed some 32 agreements with the private companies, including Tata, Mercedes, Bosche, Shree Uttam Steel, among others, entailing an investment of Rs 23,850 crore in February, just days before the UPA government announced general elections.

Under the 2005 industrial mega project policy, the state has so far approved 415 mega projects with assured investment of Rs 3,23,902 crore with the potential to generate 3.63 lakh jobs, the government said.


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