Media announcement

Regarding the mention of Victoria Group Company in connection with an investigation into the company HIP "Azotara" from Pancevo, we find it necessary to present the following facts:

The relevant cooperation of Victoria Group and Azotara Pancevo was related solely to the wheat loan, not to trade.

Victoria Logistic Company received from Azotara Pancevo a written request for a loan of 100,000 tons of wheat, on March 3rd 2010.
Based on this requirement, on March 17th 2010, a "Contract on commodity loan for mercantile wheat, yield 2009" was drawn up, on the basis of which Victoria Logistic lent Azotara Pancevo a total of 75,000 tons of wheat. The set deadline for returning the loan was 25/12/2010. Azotara Pancevo has fulfilled its contractual obligations towards Victoria Logistic, also in commodities.

Victoria Group buys and stores from 100 to 300 thousand tons of wheat annually. A part of these goods is stored in Victoria Group’s own silos, and other parts in silos under lease. By lending the wheat, and even without claiming interest from the borrowers, as in the case of the loan to the Directorate for Commodity Reserves, Victoria Logistic reduced the costs of leasing silos for storing wheat in the given period.

Even though this was a commodity loan, based on the principle "one kilogram borrowed - one kilogram returned", and it was not related to sales, the Law on VAT requires for the price of the subject goods to be stated, and at the time, at purchase cost, this price was 12 dinars per kilogram. The price of 12 dinars per kilogram matched the market prices of wheat at the time of signing the Contract.

Regarding the recent media mentions of the company Victoria Group in the context of subsidized fertilizers, we find it necessary to draw attention to the following facts:

Fertil factory, a member of Victoria Group, participated in a total of four qualifications that the Serbian government announced for the producers of mineral fertilizers on the Ordinance on subsidizing fertilizers for the period from 2008 to 2010.

Qualifications are being announced publically, and are opened for participation for all the companies that meet the basic requirements, in terms of quality of fertilizers and of available quantities.
After determining that the interested producer of mineral fertilizers meets the requirements, that company is considered to be qualified to offer their fertilizers, in the quantities determined by producers themselves, in the Commodity Market of Novi Sad.

After the fertilizers are offered in the Commodity Market, farmers who are entitled to state subsidies, have the freedom to choose from which producer will they procure the goods, depending on the conditions in the producers’ offers.
Due to the fact that several companies participated in tenders, often the total amount of subsidized fertilizers exceeds the demands, so the producers, thereby Victoria Group as well, many a time do not sell the entire amount for which they applied.

After completion of the sale in the Commodity Market of Novi Sad, and only after executing the relevant controls in terms of legitimacy of the end-users of subsidized fertilizers, the state pays the funded amount to the producer. In the case of qualifications in 2008, due to the sudden depreciation of Serbian dinar, Victoria Group recorded a loss of 2.5 million euros.
Fertil, the factory that produces mineral fertilizers, a member of Victoria Group since 2006, continues to record outstanding results in the market, regardless of the present policy on subsidies, which has been modified several times over the past six years.

Fertil factory sells between 200,000 to 300,000 tons of mineral fertilizers annually.

In total, from all four qualifications across a three year period (2008/2009/2010), Fertil has sold approximately 300,000 tons of mineral fertilizers (an average of 75,000 tons per qualification). The same quantities were sold by the factory in this period through regular trade, on the domestic and international markets.

Last year alone, without government subsidies for fertilizers, the factory sold more than 295,000 tons.

Victoria Group operates under very strict standards, and the transparency of its operations and corporate data enable verifications at any time. The company can provide documented evidence to support these facts.

Fao any additional information, please contact the Corporate Communications department of Victoria Group.