MIRA INFORM REPORT

Report Date :

30.08.2013

IDENTIFICATION DETAILS

Name :	METSO FABRICS (SHANGHAI) CO., LTD.
Registered Office :	No. 688 Baofeng Road, Xuhang Town, Jiading District, Shanghai, 201809 Pr
Country :	China
Financials (as on) :	31.12.2012
Date of Incorporation :	21.08.2006
Com. Reg. No.:	310000400525157
Legal Form :	Wholly foreign-owned enterprise
Line of Business :	Not Available
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

C

RATING		STATUS	PROPOSED CREDIT LINE
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

Status :	Ceased Operation
Payment Behaviour :	--
Litigation :	--

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
China	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

CHINA - ECONOMIC OVERVIEW

Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2012 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2011 more than 250 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development. In 2010-11, China faced high inflation resulting largely from its credit-fueled stimulus program. Some tightening measures appear to have controlled inflation, but GDP growth consequently slowed to under 8% for 2012. An economic slowdown in Europe contributed to China's, and is expected to further drag Chinese growth in 2013. Debt overhang from the stimulus program, particularly among local governments, and a property price bubble challenge policy makers currently. The government's 12th Five-Year Plan, adopted in March 2011, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future. However, China has made only marginal progress toward these rebalancing goals.

Source : CIA

Company name and address

Metso fabrics (shanghai) co., ltd.

no. 688 baofeng road, xuhang town, jiading district,

shanghai, 201809 PR CHINA (correspondence address)

TEL: 86 (0) 21-39975000 FAX: n/a

EXECUTIVE SUMMARY

INCORPORATION DATE : august 21, 2006

REGISTRATION NO. : 310000400525157

REGISTERED LEGAL FORM : Wholly foreign-owned enterprise

CHIEF EXECUTIVE : MR. Kim Olof Stenman (CHAIRMAN)

STAFF STRENGTH : 0

REGISTERED CAPITAL : eur 1,800,000

BUSINESS LINE : N/A

TURNOVER : CNY 45,470,000 (AS OF DEC. 31, 2012)

EQUITIES : CNY 860,000 (AS OF DEC. 31, 2012)

PAYMENT : NOT YET DETERMINED

MARKET CONDITION : average (AS OF DEC. 31, 2012)

FINANCIAL CONDITION : stable (AS OF DEC. 31, 2012)

OPERATIONAL TREND : fairly steady (AS OF DEC. 31, 2012)

GENERAL REPUTATION : NOT YET DETERMINED

EXCHANGE RATE : CNY 6.12 = USD 1

Adopted abbreviations:

ANS - amount not stated

NS - not stated

SC - subject company (the company inquired by you)

NA - not available

CNY - China Yuan Renminbi

Note: The (2# Workshop No. 1055 Beihe Road, Jiading Industrial Zone, Shanghai 201817 PR) and contact no. (86 0 21 51651605) were the former ones.

SC was registered as a wholly foreign-owned enterprise at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on August 21, 2006.

Company Status: Wholly foreign-owned enterprise

This form of business in PR China is defined as a legal person. It is a limited co. established within the territories of PR China with capital provided totally by the foreign investors. More than one foreign investor may jointly invest in a wholly foreign-owned enterprise. The investing party/parties solely exercise management, reap profit and bear risks and liabilities by themselves. This form of companies usually have a limited duration is extendible upon approval of Examination and Approval Authorities.

SC’s registered business scope includes designing and manufacturing special textile used for engineering, selling its owned products and providing after-sale services, wholesale, import and export, commission agent of above products and similar products, provide related support services.

SC has ceased operation since the 2^nd half of 2012 and is in the process of assets liquidation at present.

Mr. Kim Olof Stenman is registered as chairman of SC at present.

SC has no employee at present.

SC has no operating address at present, and the heading address belongs to SC’s shareholder- Metso (China) Investment Co., Ltd., and the former address of SC has been threw a lease.

http://www.metso.com/cn The website belongs to Metso, and it includes the introduction about SC and its related companies. The design is professional and the content is well organized. At present it is in Chinese, English and other versions.

SC has ceased operation since the 2^nd half of 2012 and is in the process of assets liquidation at present. SC’s managers intend to cancel the registration license of SC after completing the liquidation.

Changes of its registered information are as follows:

Date of change	Item	Before the change	After the change
2010-11	Registered capital	EUR 1,300,000	eur 1,800,000
	Company name	Tamfelt Special Textiles (Shanghai) Co., Ltd.	Metso Fabrics (Shanghai) Co., Ltd.
Unknown	Legal representative	Jani Hamalainen	Kim Olof Stenman
	Shareholder’s name	Metso Fabrics Filtration Oy (Finland)	Metso Fabrics Oy (Finland)

For the past two years there is no record of litigation.

MAIN SHAREHOLDERS:

Name % of Shareholding

Metso Fabrics Oy (Finland) 77.78

Metso (China) Investment Co., Ltd. (Finland) 22.22

Metso (China) Investment Co., Ltd. (Finland)

==================================

Registration no.: 310000400596101

Registered capital: USD 30,000,000

Legal representative: Kim Olof Stenman

l Chairman:

Mr. Kim Olof Stenman, Finnish, born in 1971, with university education, he is registered as chairman of SC at present.

Also working in Metso (China) Investment Co., Ltd., Metso Paper (Guangzhou) Co., Ltd., Metso Fabrics (Tianjin) Co., Ltd. as legal representative.

SC has ceased operation since the 2^nd half of 2012 and is in the process of assets liquidation at present.

Metso Paper Technology (Shanghai) Co., Ltd.

Metso Paper (Shanghai) Co., Ltd.

Metso Paper (Guangzhou) Co., Ltd.

Metso Paper Technology (Xi'an) Co., Ltd.

Metso Paper (China) Co., Ltd. Beijing Branch

Metso Paper (China) Co., Ltd. Shanghai Branch

Metso Fabrics (Tianjin) Co., Ltd.

Etc.

Overall payment appraisal :

( ) Excellent ( ) Good ( ) Average ( ) Fair ( ) Poor (X) Not yet determined

The appraisal serves as a reference to reveal SC's payments habits and ability to pay. It is based on the 3 weighed factors: Trade payment experience (through current enquiry with SC's suppliers), our delinquent payment and our debt collection record concerning SC.

Trade payment experience: N/A

Delinquent payment record : None in our database.

Debt collection record : No overdue amount owed by SC was placed to us for collection within the last 6 years.

The banking details are not available.

Balance Sheet

Unit: CNY’000	as of Dec. 31, 2012
Cash & bank	590
Inventory	0
Accounts receivable	670
Other Accounts receivable	60
Advances to suppliers	0
To be apportioned expense	0
Other current assets	0
	------------------
Current assets	1,320
Fixed assets net value	0
Projects under construction	0
Long term investment	0
Other assets	40
	------------------
Total assets	1,360
	=============
Short loans	0
Accounts payable	100
Advances from clients	0
Accrued payroll	300
Taxes payable	20
Other Accounts payable	80
Withdraw the expenses in advance	0
Other current liabilities	0
	------------------
Current liabilities	500
Long term liabilities	0
Other liabilities	0
	------------------
Total liabilities	500
Equities	860
	------------------
Total liabilities & equities	1,360
	=============

Income Statement

Unit: CNY’000	as of Dec. 31, 2012
Turnover	45,470
Cost of goods sold	36,480
Taxes and additional of main operation	290
Sales expense	3,620
Management expense	1,980
Finance expense	1,140
Assets impairment loss	-100
Non-operational income	220
Non-operational expense	270
Profit before tax	2,010
Less: profit tax	0
Profits	2,010

Important Ratios

=============

	As of Dec. 31, 2012
*Current ratio	2.64
*Quick ratio	2.64
*Liabilities to assets	0.37
*Net profit margin (%)	4.42
*Return on total assets (%)	147.79
*Inventory /Turnover ×365	/
*Accounts receivable/Turnover ×365	6 days
*Turnover/Total assets	33.43
* Cost of goods sold/Turnover	0.80

PROFITABILITY: AVERAGE

l The turnover of SC appears average in its line.

l SC’s net profit margin is average.

l SC’s return on total assets is good.

l SC’s cost of goods sold is average, comparing with its turnover.

LIQUIDITY: AVERAGE

l The current ratio of SC is maintained in a fairly good level.

l SC’s quick ratio is maintained in a fairly good level.

l SC has no inventory in 2012.

l The accounts receivable of SC is maintained in an average level.

l SC has no short-term loan in 2012.

l SC’s turnover is in a good level, comparing with the size of its total assets.

LEVERAGE: AVERAGE

l The debt ratio of SC is low.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Stable (As of Dec. 31, 2012).

SC has ceased operation since the 2^nd half of 2012 and now is in the process of assets liquidation. Considering the above investigation results, great caution is required in providing credit to SC and no credit dealings with SC can be recommended.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.67.70
UK Pound	1	Rs.105.14
Euro	1	Rs.90.03

INFORMATION DETAILS

Report Prepared by :

PRL

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.