Daphne Board of Directors Office   28th Issue    August 9, 2009

        On the August 8, 2009 afternoon, a delegation of 3 headed by Mr. Xing, vice head at the provincial FDA, visited Daphne under accompaniment of the prefectural FDA officials, on a trip of research and investigation of Daphne's production management. A work conference was held at Daphne's Conference Room 1. Totally 69 persons attended the meeting, including officials from the production management and quality regulators, and quality management persons. At the meeting, the delegation provided training on production management, quality surveillance and GMP knowledge. The meeting was chaired by Mr. Zhang, head of the prefectural FDA. Mr. Xing gave an important address.
        At first, Mr. Tang, Daphne's President, reported Daphne's production and operations. Mr. Tang said, in the first half of the year, with concern and support from the provincial and prefectural governments, Daphne implemented the central, provincial and prefectural policies calling for stimulating the internal demand, sustaining the growth and promoting development. With implementation of these polices to promote development as a priority, Daphne organized the work seriously. In the situation where the global financial crisis continued, Daphne tapped all potential to further beef up own immunity against impact of the financial crisis, which has played an important role in ensuring stable and fast growth of the economic targets. In the first half of the year, Daphne reported gross industrial output value of RMB 297 million yuan, fulfillment of 33% of the annual task; sales income of RMB 210 million yuan (a year-on-year growth); and profit of RMB 10.41 million yuan. All the economic targets are rising steadily.
        Tan Zhaoming and Xiang Changwan, VPs at Daphne, reported GMP production management, correction of problems spotted in GMP re-certification and problems with GMP production management.
Following that, Mr. Xing, vice head at the provincial FDA, made important conclusive address as follows:
        I. Successful experience of the Daphne Pharmaceutical Co., Ltd Yunnan. Since its establishment in 1994, under correct leadership of Mr. Tang, the president, Daphne worked hard and made it as a leading panax notoginseng enterprise in Wenshan. With business integrating panax notoginseng's plantation, processing, R&D and sales, Daphne made effort in business normalization and performance improvement. Now, it has grown to a leading enterprise in Wenshan, leading the prefecture in the context of output value and grabbing the fifth place in the provincial pharmaceutical industry. Daphne shares the common traits as a pharmaceutical enterprise. In the same time of accelerating business development, Daphne has done a good job in team building and sales promotion, setting up a good example for the pharmaceutical enterprises in the whole province. The normalized management practice implemented in Daphne is a good example for other pharmaceutical enterprises in the province.
        II. Existing problem. Mr. Xing pointed out that Daphne already had a good team. More effort in building the team was needed. Now, it is a good time for development of the pharmaceutical industry. As the central government pays high attention to livelihood of the public, relevant policies and legislations are increasingly tighter, pharmaceutical industrial standards are more demanding, and more production management standards are introduced, the pharmaceutical enterprises are facing the greatest ever challenges. Along with the economic development and integration with the global practice, more GMP standards are expected to come out, our enterprises are facing the options of reshuffle and restructuring. He hoped Daphne would not sit on the laurels, but step up the product lineup restructuring and bring Daphne to a higher level.
        III. Some requirements. 1. According to the result of GMP certification process, it is necessary for Daphne to strengthen education and training to enhance the consciousness of quality; 2. Daphne needs to speed up formulation and implementation of the management methods; 3. It is necessary to step up quality management, and under the premises that the quality is guaranteed, organize the production activities and address the specific problems.
        IV. Further consummation of quality management system. As the regulatory system is facing conversion, hopefully Daphne can do a good job in marketing and sales, and carefully analyze and evaluate circulation on the pharmaceutical market.
        V. Further strengthening of production management. Make sure that the production management commitments between the provincial FDA and each enterprise are implemented. A half of the year has elapsed. concrete effort is needed in this aspect.
        Finally, Mr. Zhang, head of the prefectural FDA, raised specific requirements with respect to implementation of the points contained in the speech made by Mr. Xing.