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Accounting Policies of Polyspin Exports Ltd. Company

Mar 31, 2015

1.1. Basis of preparation of financial statements:

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, and in compliance of the Accounting Standards notified under section 211(3C) of the Companies Act, 1956, which continues to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13-09-2013 of the Ministry of Corporate Affairs and the relevant provisions of the Companies Act, 1956 and Companies Act, 2013, as applicable, as adopted consistently by the Company. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

1.2. Use of Estimates:

The preparation of financial statements in accordance with the generally accepted accounting principles requires management to make judgments, estimates and assumption that affect the reported amounts of revenue, expenses, assets and liabilities at the end of the reporting period. Difference between the actual results and the estimated are recognized in the period in which the results are known/materialized.

2. Fixed Assets-Tangible & Intangible and Depreciation

2.1. Fixed Assets are stated at cost less depreciation. Cost comprises of purchase price (net of rebates and discounts), import duties, levies and any directly attributable cost of bringing the assets on its working condition for the intended use.

2.2. Cost of initial spares and tools is capitalized along with the respective assets. Expenditure directly related and incidental to construction /development and borrowing cost in para '3' are capitalized up to date the assets are ready for their intended use. Exchange differences are capitalized to the extent dealt with the respective assets.

2.3. Depreciation:

Assets are depreciated / amortized on straight line basis over their estimated useful life as below:- Useful life of Tangible and Intangible Assets:-

2.4. Depreciation is provided on a pro rata basis from the month the assets put to use during the financial year. In respect of assets sold / disposed off during the year, depreciation is not provided for the same.

3. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets.

All other borrowing costs are charged to revenue.

4. Investments:

Investments are recorded as long term investments unless they are expected to be sold within one year. Investments in subsidiaries and associates are valued at cost less any provision for impairment. Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.

5. Inventories:

5.1. Inventories are valued at lower of cost or net realizable value except for scrap and by products which are valued at net realizable value.

5.2. Cost of inventories of finished goods and work- in - process includes material cost, cost of conversion and other cost.

5.3. Stores and spares is valued at weighted average cost.

6. Foreign Currency Transaction:

6.1. Export sales are accounted at exchange rates prevailing on the date of negotiation of bills by the bankers.

6.2. Purchase of imported raw materials and components are accounted at amounts paid to discharge the related liabilities.

6.3. Foreign currency loans for acquisition of fixed assets are converted at the rate prevailing on the date of Balance Sheet. The gain or loss arising out of currency translation is adjusted in the cost of fixed assets.

6.4. Current Assets and Current Liabilities are translated at the rate prevailing on the date of Balance Sheet. The gain or loss if any, arising there from are recognized in the Profit and Loss Account.

7. Employee Benefits:

7.1. Employee benefit expenses include salary, wages, performance incentive and other perquisites. It also includes post - employment benefits such as provident fund, gratuity, pensionary benefits, etc.,

7.2. Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

7.3. Contribution payable by the Company under defined contribution schemes towards Provident Fund for the year are charged to Profit and Loss Account.

7.4. The Company has its own approved Gratuity Fund and the contributions to that fund are being made toLIC.

7.5. The Leave encashment entitlement is computed on Calendar year basis and payment made to the Employees accordingly in the succeeding January of every year. Hence, there is no outstanding liability towards Leave encashment as per Accounting Standard 15.

8. Revenue Recognition:

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

8.1. Export Sales is stated at C&F/CIF/ FOB basis.

8.2. Domestic Sales excludes Excise duty, Education cess, VAT and CST.

8.3. Dividend income is recognized when right to receive the payment is established by the Balance Sheet date.

8.4. Interest income is recognized on accrual basis.

8.5. Income from windmill:

The value of power generated at windmill is captively consumed by the company.

It is not treated as revenue but have been set off against cost of Power &Fuel.

9. Provision, Contingent liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

10. Research and Development:

No such expenditure incurred during the current year.

11. TAXES ON INCOME:

Tax expense comprises current tax and deferred tax.

11.1 Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rate and tax laws.

11.2 The Company recognizes the deferred tax liability / asset based on the accumulated timing difference using the current tax rate.

12. Government SUBSIDY /GRANT:

12.1 Interest subvention under Pre and Post shipment advance is credited to the interest and finance charges

12.2 Export incentives and incentives in the nature of subsidies / duty scrip / rebates given by the government are reckoned in revenue in the year of eligibility.

13. IMPAIRMENT OF ASSETS :AS-28

In the Opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence, no provision has made for impairment.

14. The Company has fulfilled export obligations, net foreign exchange earnings and other conditions, as applicable till date, in terms of schemes of Government of India, for 100% EOU.


Mar 31, 2014

A. Basis of preparation of financial statements:

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, and in compliance of the Accounting Standards notified under section 211(3C) of the Companies Act, 1956, which continues to be applicable in respect of Section 133 of theCompanies Act, 2013 in terms of General Circular 15/2013 dated 13-09-2013 of the Ministry of Corporate Affairs and the relevant provisions of the Companies Act, 1956 and Companies Act, 2013, as applicable, as adopted consistently by the Company. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

B. Use of Estimates:

The preparation of financial statements in accordance with the generally accepted accounting principles requires management to make judgments, estimates and assumption that affect the reported amounts of revenue, expenses, assets and liabilities at the end of the reporting period. Difference between the actual results and the estimated are recognized in the period in which the results are known / materialized.

C. Borrowing Costs :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets.

All other borrowing costs are charged to revenue.

D. Fixed Assets :

Fixed Assets are stated at cost less depreciation. Cost comprises of purchase price (net of rebates and discounts), import duties, levies and any directly attributable cost of bringing the assets on its working condition for the intended use.

E. Depreciation:

Depreciation is charged under Straight Line method.

Depreciation on Additions during the year is provided on prorata basis from the date the assets have been installed and put to use on a Straight Line method at rates and in the manner specified under Schedule XIV of the Companies Act, 1956.

F. Investments:

Investments are recorded as long term investments unless they are expected to be sold within one year. Investments in subsidiaries and associates are valued at cost less any provision for impairment. Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.

G. Inventories:

Inventories are valued at lower of cost or net realizable value except for scrap and by products which are valued at net realizable value.

Cost of inventories of finished goods and work - in - process includes material cost, cost of conversion and other cost.

Stores and spares is valued at weighted average cost.

H. Foreign Currency Transaction:

1. Export sales are accounted at exchange rates prevailing on the date of negotiation of bills by the bankers

2. Purchase of imported raw materials and components are accounted at amounts paid to discharge the related liabilities.

3. Foreign currency loans for acquisition of fixed assets are converted at the rate prevailing on the date of Balance Sheet. The gain or loss arising out of currency translation is adjusted in the cost of fixed assets.

4. Current Assets and Current Liabilities are translated at the rate prevailing on the date of Balance Sheet. The gain or loss if any, arising therefrom are recognised in the Profit and Loss Account.

I. Employee Benefits:

1. Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

2. Contribution payable by the Company under defined contribution schemes towards Provident Fund for the year are charged to Profit and Loss Account.

3. The Company has its own approved Gratuity Fund and the contributions to that fund are being made to LIC.

4. The Leave encashment entitlement is computed on Calendar year basis and payment made to the Employees accordingly in the succeeding January of every year. Hence, there is no outstanding liability towards Leave encashment as per Accounting Standard 15.

J. Revenue Recognition:

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

1. Export Sales is stated at C & F / CIF / FOB basis.

2. Domestic Sales excludes Excise duty, Education cess, VAT and CST.

3. Dividend income is recognized when right to receive the payment is established by the Balance Sheet date.

4. Interest income is recognized on accrual basis.

5. Income from windmill:

The value of power generated at windmill is captively consumed by the company.

It is not treated as revenue but have been set off against cost of Power & Fuel.

K. Provision, Contingent liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

L. Research and Development :

No such expenditure incurred during the current year.

M. TAXES ON INCOME :

Tax expense comprises current tax and deferred tax.

1. Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rate and tax laws.

2. The Company recognizes the deferred tax liability / asset based on the accumulated timing difference using the current tax rate.

N. Government SUBSIDY / GRANT :

Interest subvention under Pre and Post shipment advance is credited to the interest and finance charges

O. IMPAIRMENT OF ASSETS : AS-28

In the Opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence, no provision has made for impairment.


Mar 31, 2013

A. Basis of preparation of financial statements:

The Accounts are prepared under the historical cost convention and they materially comply with mandatory accounting standards issued by the Institute of Chartered Accountants of India. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

B. Use of Estimates:

The preparation of financial statements in accordance with the generally accepted accounting principles requires management to make judgments, estimates and assumption that affect the reported amounts of revenue, expenses, assets and liabilities at the end of the reporting period. Difference between the actual results and the estimated are recognized in the period in which the results are known / materialized.

C. Borrowing Costs :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets.

All other borrowing costs are charged to revenue.

D. Fixed Assets :

Fixed Assets are stated at cost less depreciation. Cost comprises of purchase price (net of rebates and discounts), import duties, levies and any directly attributable cost of bringing the assets on its working condition for the intended use.

E. Depreciation:

Depreciation is charged under Straight Line method.

Depreciation on Additions during the year is provided on prorate basis from the date the assets have been installed and put to use on a Straight Line method at rates and in the manner specified under Schedule XIV of the Companies Act, 1956.

F. Investments:

Investments are recorded as long term investments unless they are expected to be sold within one year. Investments in subsidiaries and associates are valued at cost less any provision for impairment. Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.

G. Inventories:

Inventories are valued at lower of cost or net realizable value except for scrap and by products which are valued at net realizable value.

Cost of inventories of finished goods and work – in – process includes material cost, cost of conversion and other cost.

Stores and spares is valued at weighted average cost.

H. Foreign Currency Transaction:

1. Export sales are accounted at exchange rates prevailing on the date of negotiation of bills by the bankers

2. Purchase of imported raw materials and components are accounted at amounts paid to discharge the related liabilities.

3. Foreign currency loans for acquisition of fixed assets are converted at the rate prevailing on the date of Balance Sheet. The gain or loss arising out of currency translation is adjusted in the cost of fixed assets.

4. Current Assets and Current Liabilities are translated at the rate prevailing on the date of Balance Sheet. The gain or loss if any, arising there from are recognised in the Profit and Loss Account.

I. Employee Benefits:

1. Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

2. Contribution payable by the Company under defined contribution schemes towards Provident Fund for the year are charged to Profit and Loss Account.

3. The Company has its own approved Gratuity Fund and the contributions to that fund are being made to LIC.

4. The Leave encashment entitlement is computed on Calendar year basis and payment made to the Employees accordingly in the succeeding January of every year. Hence, there is no outstanding liability towards Leave encashment as per Accounting Standard 15.

J. Revenue Recognition:

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

1. Export Sales is stated at C & F / CIF / FOB basis.

2. Domestic Sales excludes Excise duty, Education cess, VAT and CST.

3. Dividend income is recognized when right to receive the payment is established by the Balance Sheet date.

4. Interest income is recognized on accrual basis.

5. Income from windmill:

The value of power generated at windmill is actively consumed by the company. It is not treated as revenue but have been set off against cost of Power & Fuel.

K. Provision, Contingent liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

L. Research and Development :

No such expenditure incurred during the current year.

M. TAXES ON INCOME :

Tax expense comprises current tax and deferred tax.

1. Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rate and tax laws.

2. The Company recognizes the deferred tax liability / asset based on the accumulated timing difference using the current tax rate.

N. Government SUBSIDY / GRANT :

Interest subvention under Pre and Post shipment advance is credited to the interest and finance charges

O. IMPAIRMENT OF ASSETS : AS-28

In the Opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence, no provision has made for impairment.


Mar 31, 2012

(a) The Accounts are prepared under the historical cost concept and they materially comply with mandatory accounting standards issued by the Institute of Chartered Accountants ol India.

(b) The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

i) SALES:

Export Sales is stated at C&F/CIF/FOB basis.

ii) Fixed Assets are stated at cost less depreciation. Cost comprises of purchase price (net of rebates and discounts), import duties, levies and any directly attributable cost of bringing the assets on its working condition for the intended use.

iii) DEPRECIATION:

1) Depreciation is charged under Straight Line method.

2) Depreciation on Additions during the year is provided on a prorata basis from the date the assets have been installed and put to use on a Straight Line method at rates and in the manner specified under Schedule XIV of the Companies Act, 1956.

iv) CURRENT ASSETS:

Inventories are certified by a Director and are valued as under:

1) Raw Materials & Stores : At cost

2) Semi finished goods : At cost

3) Finished goods : Lower of cost or market price

v) All accounts receivable are unsecured and are considered good other than that have been classified as Doubtful and are subject to confirmation.

vi) RECOGNITION OF INCOME & EXPENDITURE:

1) Income & Expenditure are recognised on accrual basis.

2) Bonus to Employees is accounted on cash basis.

vii) FOREIGN CURRENCY TRANSACTION :

1) Export sales are accounted at exchange rates prevailing on the date of negotiation of bills by the bankers.

2) Purchase of imported raw materials and components are accounted at amounts paid to discharge the related liabilities.

3) Foreign currency loans for acquisition of fixed assets are converted at the rate prevailing on the date of Balance Sheet. The gain or loss arising out of currency translation is adjusted in the cost of fixed assets.

4) Current Assets and Current Liabilities are translated at the rate prevailing on the date of Balance Sheet. The gain or loss if any, arising therefrom are recognised in the Profit and Loss Account.

viii) RETIREMENT BENEFITS :

1) Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

2) Contribution payable by the Company under defined contribution schemes towards Provident Fund for the year are charged to Profit and Loss Account.

3) The Company has its own approved Gratuity Fund and the contributions to that fund are being made to LIC.

4) The Leave encashment entitlement is computed on Calendar year basis and payment made to the Employees accordingly in the succeeding January of every year. Hence, there is no outstanding liability towards Leave encashment as per Accounting Standard 15.

IX. PROVISION, CONTINGENTLIABILITIES AND CONTINGENT ASSETS :

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

X. RESEARCH AND DEVELOPMENT:

No such expenditure incurred during the current year.

XI. BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets.

All other borrowing costs are charged to revenue.

XII. TAXES ON INCOME:

Tax expenses comprises current tax and deferred tax.

a) Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rate and tax laws.

b) The Company recognizes the deferred tax liability / asset based on the accumulated timing difference using the current tax rate.

XIII.GOVERNMENTSUBSIDY/GRANT:

Interest subvention under Pre and Post shipment advance is credited to the interest and finance charges.

XIV. IMPAIRMENT OF ASSETS : AS-28

In the Opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence, no provision has made for impairment.


Mar 31, 2011

(a) The Accounts are prepared under the historical cost concept and they materially comply with mandatory accounting standards issued by the Institute of Chartered Accountants of India.

(b) The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

i) SALES:

Export Sales is stated at C&F/CIF/FOB basis.

ii) Fixed Assets are stated at cost less depreciation. Cost comprises of purchase price (net of rebates and discounts), import duties, levies and any directly attributable cost of bringing the assets on its working condition for the intended use.

iii) DEPRECIATION:

1) Depreciation is charged under Straight Line method.

2) Depreciation on Additions during the year is provided on a prorata basis from the date the assets have been installed and put to use on a Straight Line method at rates and in the manner specified under Schedule XIV of the Companies Act, 1956.

iv) CURRENTASSETS:

Inventories are certified by a Director and are valued as under:

1) Raw Materials & Stores At cost

2) Semi finished goods At cost

3) Finished goods Lower of cost or market price

v) All accounts receivable are unsecured and are considered good other than that have been classified as Doubtful and are subject to confirmation.

vi) RECOGNITION OF INCOME & EXPENDITURE:

1) Income & Expenditure are recognised on accrual basis.

2) Bonus to Employees is accounted on accrual basis. Provision of Rs.20,91,952/- have been made towards Bonus Payable for the year ended 31st March 2011.

vii) FOREIGN CURRENCY TRANSACTION:

1) Export sales are accounted at exchange rates prevailing on the date of negotiation of bills by the bankers.

2) Purchase of imported raw materials and components are accounted at amounts paid to discharge the related liabilities.

3) Foreign currency loans for acquisition of fixed assets are converted at the rate prevailing on the date of Balance Sheet. The gain or loss arising out of currency translation is adjusted in the cost of fixed assets.

4) Current Assets and Current Liabilities are translated at the rate prevailing on the date of Balance Sheet. The gain or loss if any, arising there from are recognised in the Profit and Loss Account.

viii) RETIREMENT BENEFITS :

1) Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

2) Contribution payable by the Company under defined contribution schemes towards Provident Fund for the year are charged to Profit and Loss Account.

3) The Company has its own approved Gratuity Fund and the contributions to that fund are being made to LIC. The Company has made a provision towards Gratuity for a sum of Rs. 9,85,957/- in this year on the basis of Actuarial valuation furnished by LIC.

4) The Leave encashment entitlement is computed on Calendar year basis and payment made to the Employees accordingly in the succeeding January of every year. Hence, there is no outstanding liability towards Leave encashment as per Accounting Standard 15.

IX. PROVISION, CONTINGENT LIABILITIES ANDCONTINGENTASSETS:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

X. RESEARCH AND DEVELOPMENT:

No such expenditure incurred during the current year.

XI. BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets.

All other borrowing costs are charged to revenue.

XII. TAXES ON INCOME:

Tax expenses comprises current tax and deferred tax.

a) Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rate and tax laws.

b) The Company recognizes the deferred tax liability / asset based on the accumulated timing difference using the current tax rate.

XIII.GOVERNMENTSUBSIDY/GRANT:

Interest subvention under Pre and Post shipment advance is credited to the interest and finance charges.

XIV. IMPAIRMENT OF ASSETS : AS-28

In the Opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence, no provision has made for impairment.


Mar 31, 2000

The Accounts are prepared under the historical cost concept and they materially comply with mandatory accounting standards issued by the Institute of Chartered Accountants of India.

i) SALES:

Export sales is stated at C & F or FOB basis.

ii) DEPRECIATION :

Depreciation is provided on a prorata basis from the date of the assets have been installed and put to use on a Straight Line method at rates and in the manner specified under Schedule XIV of the Companies Act, 1956.

iii) CURRENT ASSETS :

Inventories are certified by a Director and are valued as under :

1) Raw materials & stores : At cost

2) Semi finished goods : At cost

3) Finished goods , : Lower of cost or market price

iv) All accounts receivable are unsecured and are considered good.

v) Fixed assets are stated at cost less depreciation. Cost comprises of purchase price ( net of rebates and discounts ) import duties, levies and any directly attributable cost of bringing the assets in its working condition for the intended use.

vi) RECOGNITION OF INCOME & EXPENDITURE :

1) Income & Expenditure are recognised on accrual basis.

2) Bonus : Payment of Bonus is accounted on cash basis from the year 1999-2000 had it been accounted on accrual basis, the profits for the year would be lower by Rs. 5.78 Lakhs.

vii) FOREIGN CURRENCY TRANSACTION :

1) Export sales are accounted at exchange rates prevailing on the date of negotiation of bills by customers bankers.

2) Purchase of imported raw materials and components are accounted at amounts paid to discharge the related liabilities.

3) Foreign currency liabilities incurred for the retirement of Rupee term loan debts have been restated in rupee terms at the exchange rates prevailing at the year end and any loss or gain due to exchange differences arised out of such translation are charged off to profit and loss account.

viii) RETIREMENT BENEFITS:

1) The liability in respect of Gratuity is paid to LIC Group Gratuity Cash Accumulation Scheme and the contributions demanded from the LIC are accounted to expenditure.

2) Liability in respect of leave encashment will be provided as and when it is paid.

3) The Company deposits the Provident fund contribution under the Employees Provident Fund Scheme run by the Government.

ix) Preliminary and Shares Issues Expenses are written off over a period of Ten years.

x) Contingent liabilities are generally not provided for in the accounts and are shown separately in notes on accounts.

6. There are no parties in excess of Rs. 1.00 Lac is dues to small scale units for more than 30 days as on 31.03.2000.

7. The Company has generated power out of Wind Mill installed at Pazhavoor Taluk, Tirunelveli District, and the generated power was captively consumed by the Company by drawing the power from TNEB Grid. The Power and Fuel consumed is net of Rs. 18.22 Lacs being the credit given by TNEB for the transfer of power to the Grid.

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