MANAGEMENT REPORT

August 30, 2016

The types of activities performed by the JSC “Brivais vilnis” (the Company) are processing and canning of fish and fish products, wholesale of food products and other commercial activities classified nowhere else. On May 14, 2002 the company was registered in the Common commercial register of the Republic of Latvia.

Year 2016 is the 25^th year of operation since the Company was transformed into a Joint Stock Company.

In the 1^st half of 2016 the Company produced a total of 5.3 million cans of various types (127) of fish products, including 2.1 million cans of sprat. 5.2 million cans were sold for EUR 2.7 million.

The financial result of the 1^st half of 2016 is a loss of EUR 129 thousand. These losses are from economic activities of the Company and are related with decrease of production and sales volume and currency fluctuations in the CIS countries. Losses mainly occurred in the first quarter of 2016, as the market activity in the first months was especially low. In the second quarter, the Company balanced its articles of expenditure to earnings and it gave the desired result.

Net turnover of the 1^st half of 2016 is EUR 2.8 million.

Result of the 1^st half of 2016:                  

Gross profit (EUR)                                                                                  279 938

Gross profit (%)                                                                                           10.16

The Company’s goal is to continue transformation in accordance with the EU and third countries quality requirements, reducing production costs to enable the Company to compete and strengthen its position in existing and new market of canned fish. The Company continues work on adoption of new markets in North America, South America and the Arab countries.

The Company continued to work on development of new types of products. We are working on improvement of quality of the current assortment and introduction of new, innovative type of packaging.

In June, the Company stopped the production to carry annual repair of factory and districts out, employees could take their leaves and to realize the stock of produced canned fish. In the beginning of September, the Company will restart production of canned fish, in order to ensure fulfilment of orders.

The Company is a leader in product quality, it makes production only from natural raw materials and doesn`t use synthetic food additives and genetically modified products.

Arnolds Babris

Chairman of the Board