3decades

MIRA INFORM REPORT

Report No. :	499856
Report Date :	30.03.2018

IDENTIFICATION DETAILS

Name :	MILK-PRO MMC

Registered Office :	Hasan Salmani Street 4, Khatai District, Baku AZ1025

Country :	Azerbaijan

Financials (as on) :	2017 [Summarized]

Date of Incorporation :	04.06.1996

Legal Form :	Limited Liability Company

Line of Business :	Producers of Fruit Juices and Dairy Products such as Milk and Cheese.

No. of Employees :	75

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

Credit Rating

Explanation

Rating Comments

Medium Risk

Business dealings permissible on a regular monitoring basis

Maximum Credit Limit :	NEW MANAT 90,000

Status :	Moderate

Payment Behaviour :	No Complaints

Litigation :	Clear

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

Country Name

Previous Rating

(30.09.2017)

Current Rating

(31.12.2017)

Azerbaijan

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

AZERBAIJAN - ECONOMIC OVERVIEW

Prior to the decline in global oil prices since 2014, Azerbaijan's high economic growth was attributable to rising energy exports, and some non-export sectors also featured double-digit growth. Oil exports through the Baku-Tbilisi-Ceyhan Pipeline, the Baku-Novorossiysk, and the Baku-Supsa Pipelines remain the main economic driver, but efforts to boost Azerbaijan's gas production are underway. The expected completion of the geopolitically important Southern Gas Corridor between Azerbaijan and Europe will open up another source of revenue from gas exports. Declining oil prices caused a 3.1% contraction in GDP in 2016, and a 0.8% decline in 2017, highlighted by a sharp reduction in the construction sector. The economic decline has been accompanied by higher inflation and a weakened banking sector in the aftermath of the two sharp currency devaluations since 2015. Azerbaijan’s financial sector continued to struggle in 2017. In May 2017, Baku allowed the state-owed International Bank of Azerbaijan (IBA), the nation’s largest bank, to default on some of its outstanding debt and file for bankruptcy in the US.

Azerbaijan has made limited progress with market-based economic reforms. Pervasive public and private sector corruption and structural economic inefficiencies remain a drag on long-term growth, particularly in non-energy sectors, but the government has made efforts to combat corruption, particularly in customs and with the “ASAN” one-stop window concept for government services. Several other obstacles impede Azerbaijan's economic progress, including the need for more foreign investment in the non-energy sector and the continuing conflict with Armenia over the Nagorno-Karabakh region. While trade with Russia and the other former Soviet republics remains important, Azerbaijan has expanded trade with Turkey and Europe and is seeking new markets for non-oil/gas exports, mainly from the agricultural sector, for example with Gulf Cooperation Council member countries, the US, and others.

Long-term prospects depend on world oil prices, Azerbaijan's ability to implement export routes for its growing gas production, and its ability to improve the business environment and diversify the economy. In late 2016, the President approved a strategic roadmap that identified key non-energy segments of the economy for development, such as agriculture, logistics, and tourism. In October, the long-awaited Baku-Tbilisi-Kars railway, stretching from the Azerbaijani capital to Kars in north-eastern Turkey, began limited service.

Source : CIA

COMPANY REPORT

CO. NAME : MILK-PRO MMC (CORRECT)

MILK PRO LTD REQUESTED)

ADDRESS

Street : H. Salmani Street 4 (fmly Mechanic Street)

Area : Khatai District

Town : Baku AZ1025

Country : Azerbaijan

Telephone : (994 12) 480 2536 / Mobile (994 55) 223 6078 (Zaur Akhmadov)

Fax : (994 12) 480 2536

E-Mail : zaurahmad@gmail.com

Website : www.mpro.az

Trading Style : Sevimli Dad

Extended Name : Milk-Pro Mehdud Mesuliyyetli Camiyyeti

English Translation : Milk-Pro Ltd

SENIOR COMPANY PERSONNEL

Name Position

1. Bakhlul Mammad Oglu Ramazanov Managing Director

2. Zaur Akhmadov Auditor at CTC Holding ASC

Total Employees : 75

PAYMENTS

No complaints have been heard regarding payments from local suppliers or banks.

Subject is a member of CTC Holding Group of Companies, which was established in 2012. The group operates in different spheres of activity.

We consider it is acceptable to deal with subject for SMALL amounts, although it is normal accepted practice for international suppliers to deal on secured terms with Azerbaijani importers.

Opinion on maximum credit : NEW MANAT 90,000

Trade risk assessment: Normal

PRINCIPAL BANKERS

NAME : VTB BANK (AZERBAIJAN) OJSC

Branch : Khatai Avenue 38

Town : Baku AZ1008

Telephone: (994 12) 492 0080

Fax : (994 12) 437 7121

Subject formerly had an account with:

1. Yapi Kredi Bank Azerbaijan Cjsc (Fmly Kocbank Azerbaijan Jsb)

32/12, Jafar Jabbarli Street

Baku AZ1065

Telephone: (994 12) 497 7795

Fax : (994 12) 497 0276

2. Bank Respublika

Khan Shushynski Street 14/3

Baku 370106

Telephone: (994 12) 496 1200

Fax : (994 12) 496 1200

FINANCIAL INFORMATION

Private companies in Azerbaijan are not required to publish or disclose balance sheets. However, the subject interviewed offered the following information :

Sales Turnover : NEW MANAT 3,700,000 – 2015 – exact

: NEW MANAT 6,000,000 – 2016 – exact

: NEW MANAT 4,500,000 – 2017 – exact

Net Profit : NEW MANAT 44,000 – 2017 – exact

Financial year ends 31 December.

The following financial information applies to subject’s subsidiary, Goycay-Sud ASC (latest available) :

Sales Turnover : NEW MANAT 4,500,000 - 2013 - exact

: NEW MANAT 4,800,000 - 2014 – exact

: NEW MANAT 4,000,000 - 2015 – exact

Net Profit : NEW MANAT 700,000 – 2014 – exact

Financial year ends 31 December.

The following Consolidated Balance Sheets as at 31 December 2017 applies to CTC Holdinq ASC :

31/12/2017 31/12/2016

(in NEW MANAT)

Assets

Non-Current Assets

Property, plant and equipment 110,103,617 55,611,998

Intangible assets 43,500 46,500

110,147,117 55,658,498

Current Assets

Inventory 5,400,231 4,537,265

Trade and other receivables 8,842,167 3,528,781

Other current assets 208,563 281,174

Cash and cash equivalents 6,056,807 4,665,732

20,507,768 13,012,952

Total Assets 130,654,885 68,671,450

Equity and Liabilities

Equity

Share capital 1,000,000 1,000,000

Shareholder’s account 48,200,626 20,429,644

Retained earnings 55,164,607 33,489,757

Non-controlling interest (41,491) (52,137)

104,323,742 54,867,264

Non-Current Liabilities

Provisions 645,884 640,369

Bank loans and borrowings 22,800,252 10,620,000

Deferred tax liabilities 45,062 28,305

23,491,198 11,288,674

Current Liabilities

Bank loans and borrowings 1,548,961 -

Trade and other payables 1,290,984 2,515,512

2,839,945 2,515,512

Total Liabilities 26,331,143 13,804,186

Total Equity and Liabilities 130,654,885 68,671,450

Consolidated Income Statement

Revenue 45,231,034 33,658,617

Operating expenses (23,348,115) (21,723,290)

Raw materials and consumables (11,990,702) (10,460,572)

Employee benefit expenses (2,586,343) (2,134,977)

Depreciation (3,107,181) (2,452,550)

Other operating expenses (5,155,557) (6,293,377)

Finance cost (508,332) (381,814)

Profit before tax 21,882,919 11,935,327

Income tax expenses (197,423) (159,237)

Profit for the year 21,685,496 11,776,090

The following Consolidated Balance Sheets as at 31 December 2016 applies to CTC Holdinq ASC :

31/12/2016 31/12/2015

(in NEW MANAT)

Assets

Non-Current Assets

Property, plant and equipment 55,611,998 55,768,614

Intangible assets 46,500 49,500

Assets classified as held for sale - 53,129,500

55,658,498 108,947,614

Current Assets

Inventory 4,537,265 3,453,390

Trade and other receivables 3,528,781 2,624,429

Other current assets 281,174 541,470

Cash and cash equivalents 4,665,732 2,475,739

13,012,952 9,095,028

Total Assets 68,671,450 118,042,642

Equity and Liabilities

Equity

Share capital 1,000,000 1,000,000

Shareholder’s account 20,429,644 81,494,332

Retained earnings 33,489,757 21,720,417

Non-controlling interest (52,137) (58,887)

54,867,264 104,155,862

Non-Current Liabilities

Provisions 640,369 588,432

Bank loans and borrowings 10,620,000 10,822,661

Deferred tax liabilities 28,305 18,401

11,288,674 11,429,494

Current Liabilities

Trade and other payables 2,515,512 2,457,286

2,515,512 2,457,286

Total Liabilities 13,804,186 13,886,780

Total Equity and Liabilities 68,671,450 118,042,642

Consolidated Income Statement

Revenue 33,658,617 28,589,070

Operating expenses (21,723,290) (18,467,636)

Raw materials and consumables (10,460,572) (8,267,116)

Employee benefit expenses (2,134,977) (2,058,200)

Depreciation (2,452,550) (2,190,226)

Other operating expenses (6,293,377) (5,538,497)

Finance cost (381,814) (413,597)

Profit before tax 11,935,327 10,121,434

Income tax expenses (159,237) (124,749)

Profit for the year 11,776,090 9,996,685

Historical Consolidated Profit and Loss Account

Revenue : NEW MANAT 28,589,070 - 2015 - exact

: NEW MANAT 33,658,617 - 2016 - exact

: NEW MANAT 45,231,034 – 2017 – exact

Net Profit : NEW MANAT 9,996,685 - 2015 - exact

: NEW MANAT 11,776,090 - 2016 – exact

: NEW MANAT 21,674,850 – 2017 – exact

Financial year ends 31 December.

LEGAL STATUS AND HISTORY

Date Started : 4 June 1996

History : The subject company was established in Baku on 4 June 1996 on the basis of Medic-Pro company which was operating since 1991. Initially, subject’s shareholding structure was as following:

- Vladimir Vasilko 23.4%

- Murat Aliyev 23.3%

- Movsun Shykhyev 23.3%

- Azerbaijan Investment Company (AIC) 20.0%

AbdullaevGasan Street 11

Baku AZ1001

Tel: (994 12) 437 2909

Fax: (994 12) 437 2903

(state-owned company)

- European Bank for Reconstruction and Development 10.0%

One Exchange Square

London EC2A 2JN

United Kingdom

Tel: (44 20) 7338 6000

Fax: (44 20) 7338 6100

In 2015, subject’s shareholding structure changed to the present.

Tax No.: VOEN 2000049171

Authorised Capital : NEW MANAT 10,000 (decreased from NEW MANAT 23,000,000)

Paid-Up Capital : NEW MANAT 10,000 (decreased from NEW MANAT 23,000,000)

Mehdud Mesuliyyetli Cemiyyeti (limited liability company) with the following shareholders:

Shareholders Percentage

1. CTC Holdinq ASC 56.7%

Salyan Highway 14km

Karadagh District

Baku AZ1000

Telephone : (994 12) 480 2536 / 565 6190 / 565 6194

Fax : (994 12) 480 2536

E-Mail : info@ctcholding.az

Website : www.ctcholding.az

Chairman: Makhammad Nagi Oglu Nagiyev

Est.: 27 February 1997

Tax No.: VOEN 1000093201

Capital : NEW MANAT 1,000,000

Shareholders:

- Svetlana Firudin Qizi Nagiyeva 45%

- Vuqar Makhammad Oglu Nagiyev 37%

- Makhammad Nagi Oglu Nagiyev 18%

2. Movsun Shykhyev 23.3%

3. Azerbaijan Investment Company (AIC) 20.0%

Demirchi Tower, 20^th Floor

Khojali Avenue 37

Baku AZ1025

Telephone: (994 12) 488 8010

Fax : (994 12) 488 8010

(state-owned company)

Affiliated companies of the subject company :

Subsidiary

Goycay-Sud ASC

Goycay District, Industrial Area (Senaye Zonasi)

Goycay AZ2300

Telephone: (994 2027) 48750 / 48751/ 48752/ 48753 / 48754 / Mobiles (994 50) 255 7091 (Abulqasim Kerimov) / (994 50) 356 9177 / (994 50) 200 3069 (Mustafa Soltan Oglu Badalov)

Fax : (994 2027) 48750

Chairman : Mustafa Soltan Oglu Badalov

Est.: 25 September 1998

Tax No. : VOEN 6000099131

Capital : NEW MANAT 809,670

Shareholders:

- Milk-Pro MMC 67%

- Mustafa Soltan Oglu Badalov } 33%

- 11 undisclosed individuals }

Associates

Subject is a member of “CTC Holdinq” Group of Companies, which includes the following companies:

1. Nazli Bulag LLC 100%

2. CTC Turizm LLC 100%

3. Xizi Agro Park LLC 100%

4. CTC Consulting and Investment LLC 100%

Former Associate

Goycay Sudculuk Tasarrufati MMC

Goycay District, Industrial Area (Senaye Zonasi)

Goycay AZ2300

Telephone: (994 167) 48750

Fax : (994 167) 48751

Est.: 19 May 2009

Tax No.: VOEN 6000422701

Capital : NEW MANAT 500

Managing Director : Aqshin Elkhan Oglu Mammadov

Shareholders:

- Milk-Pro MMC

- Goycay Sud ATSC

(ceased trading)

ACTIVITIES

The company is involved in the following activities :

Producers of fruit juices and dairy products such as milk and cheese.

NACE Code : 1051

Imports mainly from Turkey and European countries.

Exports to Russia and Iran

Exported to Ukraine, Georgia and Kazakhstan.

FACILITIES

The Company has the following facilities :

Owned premises comprising administrative offices located at the heading address as well as a manufacturing unit and storage facilities located elsewhere in Bahar Village, Baku.

Subject formerly used the following telephone, fax and mobile numbers:

Telephone : (994 12) 490 4554 / 496 8554 / (994 55) 223 6078 (Zaur Akhmadov) / (994 50) 225 4212 (Takhir Mammedov)

Fax : (994 12) 490 1262

REGISTERED OFFICE

Hasan Salmani Street 4

Khatai District

Baku AZ1025

GENERAL INFORMATION

As of 1 January 2006 the Government of Azerbaijan redenominated NEW MANAT. One NEW MANAT equals 5,000 old NEW MANATs.

SPECIAL NOTES

You enquired on: MILK PRO LTD. Please note that the correct name is as per heading.

The telephone number which you provided: 994 12 490 4554 is no longer in use. Please note that subject's current telephone and mobile numbers are as per heading.

Interviewed: Zaur Akhmadov (Auditor at CTC Holding ASC).

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 65.04
UK Pound	1	INR 92.28
Euro	1	INR 80.62
AZN	1	INR 38.18

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	VAR

Report Prepared by :	TPT

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

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 are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

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.