MANAGEMENT REPORT

November 30, 2017

The types of activities performed by the JSC “Brivais vilnis” 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 9 months of 2017 the Company produced a total of 8.5 million cans of various types (153) of fish products, including 3.6 million cans of sprat. In 9 months of 2017 there were sold 8.8 million cans for EUR 4.7 million. The financial result of 9 months of 2017 is a loss of EUR 679 693. These losses are from economic activities of the Company.

Net turnover for 9 months of 2017 is EUR 4 675 thousand.

Result for 9 months of 2017:                  

Gross profit (EUR)                                                                  34 thousand

Gross profit (%)                                                                       0.7

Operating results of the JSC “Brivais vilnis” compared to the previous year are less successful, the impact of the Russian embargo is still felt. Sales volumes have increased, losses have not decreased. The Company has not stopped the operation, it is working according to orders received, mainly by using the fresh local raw materials. Due to the existing market situation, we believe that the most important is to keep existing customers and work on adoption of new markets. We are visiting and participating in food fairs in Western Europe and other world. The Company has enforced its sales department.

The Company is working on development of new types of products and new lines of products, and development of new types of packaging, as well as on improvement of quality of the current assortment. We are the leader in development of innovative packaging types. The main thing that ensures our products to be special on the market of food products is that it does not contain genetically modified additives, chemical flavour enhancers and colouring agents. Canned fish products are handmade and therefore have a good quality. The world`s increasing demand is for natural food, produced without artificial additives.

The Company has the IFS certificate – an international food safety standard. We have gained the Kosher certificate of the Orthodox Union.

Arnolds Babris

Chairman of the Board