Management Report

The types of activities performed by the Joint Stock Company “Brivais vilnis” (“the Company”) are processing and canning of fish and fish products, wholesale of food products, including fish, shellfish and mollusc, and other commercial activities classified nowhere else.

Year 2015 was the 24^th year of operation since the Company was transformed into a Joint Stock Company.

We are a leader in product quality, we do not use genetically modified raw materials and synthetic food additives in the production.

In 2015 the Company produced a total of 14.1 million cans of various types (148) of canned fish products, including 6.0 million cans of sprat. 13.3 million cans were sold for EUR 7.2 million that is 44% less compared to the previous year.

Impact on decrease of sales volumes of the Company had the economic embargo stated by the Russia, depreciation of the Russian ruble and devaluation of the Ukrainian hryvnia, especially, embargo on import of canned fish stated by the Russia, Kazakhstan and Belarus in June, 2015.

The financial result of the year 2015 is loss of EUR 760 605.  

The financial result of the Company was impacted by creation of fiscal year write-off and doubtful debts provisions of EUR 520 thousand.

The Board of the Company plans to cover losses of reporting year from the profit of next years.

The Company`s goal is to continue work on search of additional markets in Mexico, France, USA, Egypt and Iran in 2016 and to continue work on introduction of new types of packaging. We are planning intensive visiting of international exhibitions.

As from December, 2015 the Company temporarily stopped the production in order to realize the stock of produced canned fish. The Company restarted the production in the end of January, 2016 in order to ensure fulfilment of orders to customers. The most of terminated employees started the work in the Company in January and February again.

In the beginning of 2016 the Company produced about 60 000 cans per day. Expenses are reduced to the level that the Company can work with a small profit in such a regime. At the same time is continued the work on development of new markets. The Company is ready to increase its export volumes to Ukraine and the Central Asian countries, as soon as the economic situation in these regions will improve and the purchasing capacity of people will increase.

During the preparation of the annual report there became aware the fact that representatives of the Russian Federal Veterinary and Phytosanitary Monitoring Service plane to visit factories in Latvia in May, 2016 and to prepare inspection of them. Such an action could mean that Latvian companies probably would be allowed to restart the export to the Russian Federation.

At the end of reporting year liabilities of the Company are bigger than current assets for EUR 455 091, but short-term liabilities are less than current assets for EUR 1 332 227. To the March 31, 2016 liabilities of the Company are bigger than current assets for EUR 460 810 and short-term liabilities are less than current assets for EUR 1 326 508. Taking into account the above mentioned, the Board of the Company believes that the Company will be able to pay with short-term creditors in 2016.

On behalf of the Board:

Arnolds Babris

Chairman of the Board

April 29, 2016