Diana Huang – Investor Relations Manager Zhilin Li – President, CEO and Interim CFO Sam Hsing – Corporate Vice President

Ladies and gentlemen, thank you for standing by and welcome to the Fiscal Year 2015 China Pharma Holdings, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] Please note, this conference is being recorded today 31, March 2016. I would now like to turn the call over to your speaker today Ms. Diana Huang. Please go ahead ma’am.

Thank you operator. Good morning ladies and gentlemen and good evening to those of you joining us from China. Welcome to China Pharma Holdings’ fiscal year 2015 earnings conference call. I am Diana Huang, the company’s Investor Relations Manager. Speaking on the call today are China Pharma’s President and CEO and Interim CFO Ms. Zhilin Li; and Corporate Vice President, Mr. Sam Hsing. In addition, I will provide translation during the Q&A session of the call. The Company’s earnings press release issued earlier this morning is available on our website at www.chinapharmaholdings.com. I would like to remind our listeners that on this call management's prepared remarks contain forward-looking statements, which are subject to risks and uncertainties and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today due to such risks as market and customer acceptance and demand for our products, our ability to market our product, the impact of competitive products and pricing, the ability to develop and launch new products on a timely basis, the regulatory environment including government regulation in the PRC, our ability to obtain the requisite regulatory approvals to commercialize our products, fluctuations in operating results including spending for Research and Development and sales and marketing activities, and other risks detailed from time-to-time in our filings with the SEC. In addition, any projections as to the Company's future performance represent management's estimates as of today, March 31, 2016. China Pharma assumes no obligation to update those projections in the future as market conditions change. Now, it is my pleasure to turn the call over to China Pharma’s CEO and Interim CFO, Ms. Li to make her opening remarks in Chinese, which will be then translated by Sam. Afterwards, Sam will continue translating Ms. Li’s detailed discussion of the Company's fiscal year 2015 financial results.

[Foreign Language]

Thank you, Diana, and good morning, everyone. I would like to thank each of you for joining us today, and for your continued support of China Pharma. China's healthcare reform was deepened in 2015. Under the industrial reform and modification background guided by the government policies, we actively completed the new GMP upgrading for the majority of our current production facilities, and aggressively promoted our sales to regain our original market shares. Due to the fact that we only received new GMP certificate for the injectable production lines at our new manufacturing facility in November 2014, we missed drug bidding in several province prior to November 2014. Those missed bidding negatively impacted our market shares previously secured in those provinces, and dragged our sales in 2015. Nevertheless, we continued concentrating on enhancing our fundamentals. In January and December 2015, we completed the upgrading and received new GMP certificates for the tablet and capsule production lines, and cephalosporin production lines at our old factories, respectively. The upgrading of these oral solution production lines was completed before the deadline, which positioned us to better meet market demand. Although there was no immediate reversal of the sales trends in 2015 due to the special characteristics of the pharmaceutical industry, we strongly believe that our current operations and the financial position will allow us to secure the foundation for steady business growth in the future. I’ll now read the rest of the Ms. Li’s prepared remarks in English. Now, I would like to review our fiscal year 2015 financial results and balance sheet information. Revenues for the year ended December 31, 2015 were $20.4 million, a decrease of 8.1% from the revenue of the $22.1 million for the year ended December 31, 2014. This decrease was primarily due to the missed bidding in certain provinces back in 2014 despite our efforts in promoting sales to regain our market shares during 2015. We had a decrease in the sales estimates between the time when raw materials were purchased and the time when the sales performance is realized for certain products. We assessed the fair value of our raw material and determined that certain inventory was slow moving or obsolete. Based on the developed estimates as of the December 31, 2015 and 2014, we recognized an additionally inventory obsolescence expense of the $3.1 million and $2.3 million for the years ended December 31, 2015 and 2014, respectively. Gross profit for the year ended December 31, 2015 was $1.5 million, compared to $2.7 million in 2014. Our gross profit margin in 2015 was 7.2% compared to 12.1% in 2014. Without the effect of inventory obsolescence, management estimates that our gross profits would have been approximately 22.5% in 2015 and 22.2% in 2014. Selling, general and administrative expenses in 2015 were $6.2 million, or 30.4% of sales, compared to $5.1 million, or 22.9% of sales, in 2014. The increase was mainly due to the additional marketing, consulting and product promotional efforts in certain PRC provinces. For the year ended December 31, 2015, the Company's research and development expense was $1 million, compared to $2.8 million in 2014. The change in research and development expenses was mainly due to the costs related to testing of the new production lines in 2014. As a result, the expenses related to such activities were higher in 2014. For the year ended December 31, 2015, the Company's bad debt expense was $10.1 million, compared to a bad debt expense of the $31.4 million in 2014. In the restatements of the Annual Report for the year ended December 31, 2014, the 2014 Restatement, we reviewed our policy for bad debt allowance for accounts receivable and therefore significantly increased the bad debt expense in 2014. During 2015, we also recognized bad debt expense of $4.2 million related to advances to suppliers based on an evaluation of the realizability of the payment. Net loss for the year 2015 was $15.4 million, or $0.35 per basic and diluted share, compared to net loss of $39.6 million, or minus $0.91 per basic and diluted shares for the year 2014. The decrease in net loss was mainly due to the decrease in bad debt expense. Turning to the balance sheets. As of the December 31, 2015, the Company had cash and cash equivalents of $6.2 million compared to $5.3 million as of the December 31, 2014. Our accounts receivable balance decreased to $5.9 million as of December 31, 2015 from $13.9 million as of the December 31, 2014. The decrease was mainly due to the bad debt expense of $7.4 million in 2015. Our gross receivable and allowance reserve decreased due to the bad debt write-off of the $21.3 million in 2015. For the year ended December 31, 2015, cash flow from operating activities was $3.4 million, as compared to $6.2 million in 2014. Overall, we will continue focusing on our business developments and promote our sales and believe that this will support the fair evaluation of our shareholder’s interest in the future. With that, we will now open the call out to the question. Operator?

On behalf of the entire China Pharma team, we would like to thank you for your interest in the company and the participation on this call. For any of you traveling to China, we always welcome and encourage any visitors from our shareholders, potential investors and analysts. This concludes China Pharma’s fiscal year 2015 earnings call.

Thank you.

Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect. Thank you.