MANAGEMENT REPORT

August 31, 2017

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 2017 is the 26^th year of operation since the Company was transformed into a Joint Stock Company.

In the 1^st half of 2017 the Company produced a total of 5.8 million cans of various types (143) of fish products, including 2.4 million cans of sprat. 5.9 million cans were sold for EUR 3.1 million.

The financial result of the 1^st half of 2017 is a loss of EUR 490 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. In the fishing industry, the price dumping and the struggle for the market are taking place.

Net turnover of the 1^st half of 2017 is EUR 3.1 million.

Result of the 1^st half of 2017:                  

Gross profit 5 594EUR.

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 and South America.

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 this autumn, the Company plans to issue some new products, including sprats in brine without preservatives. The new products will be available also on domestic market, but the Company will focus on the export, as we see more potential in foreign markets.

At the end of 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 August, the Company restarted 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