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GeoInvesting Rebuttal to the Shareholder Letter published by CGPI

On March 15, 2011 CGPI published a letter to its shareholders. In this letter, CGPI summarized key issues raised by GeoInvesting
and gave ��facts�� regarding those issues. In addition to its letter to shareholders, CGPI also sent GeoInvesting a ��Cease & Desist
Demand�� letter via its attorney at the law firm of Richardson & Patel, LLP. In this letter, CGPI demanded through its attorney that
GeoInvesting immediately and forever take down a grossly inaccurate and misleading report located on the GeoInvesting web site.
What follows are (1) issues and ��facts�� (CGPI Response) summarized in CGPI��s letter to shareholders, (2) our responses, (3) a
written transcript (see supplement 1) of a conversation our assigned person had with the officers at the Funeral House and Cemetery
Management Center of Chongqing Civil Affairs Bureau on March 3, 2011 and (3) an additional written transcript of a second
conversation on March 25, 2011 (See Supplement 2) with the officers at the Funeral House and Cemetery Management Center of
Civil Affairs Bureau including a recording of the conversation.

Issue 1 CGPI Response

The Company��s cemetery license has been revoked and/or is The funeral service operation license issued to Foguang by the
expired. Chongqing Civil Administration Bureau in 2005 has never been
revoked or suspended.

GEO Rebuttal to CGPI Response:

As we stated in the original report, in addition to the online information we obtained from the Chognqing Civil Administration Bureau,
our assigned person also called the Chongqing Civil Administration Bureau on three separate occasions regarding this issue. Our
second call to the bureau dated March 3rd 2011 was made immediately after CGPI publicly submitted a letter it says was written
by the bureau claiming the company��s cemetery license was current. Based on the information we collected, we concluded that

the Company��s cemetery license had been revoked and/or expired.

An English transcript of the conversation on March 3, 2011 between our assigned person and an officer of Chongqing Civil
Administration Bureau is enclosed along with an additional transcript with a recording dated March 25th 2011.


The revenue of Guiyuan Cemetery is incurred under the financial The correct translation of its legal name is Guiyuan Industrial Co.,
book of Guiyuan Cemetery Company, rather than Foguang��s. Ltd. (��Guiyuan Industrial��) not Guiyuan Cemetery Company. It
has nothing to do with the cemetery development business, nor
does it have the permit of cemetery plot sales. It only provides
property management services for Foguang while Foguang
operates and owns a cashier��s office that collects 100% of the
money from all plot sales. In the event that the assigned person
from the author visited Company��s sales center on the cemetery
site on January 8th Saturday, our cashier��s office was closed.
However due to the assigned person��s repeated request to transact
on that day which was Saturday, our sales accommodated his
request by issuing him an ineffective issuer��s copy (not
recipient��s copy and asked him to get Foguang sealed copy when
pay in full) of the receipt and stamped with a seal of Guiyuan
Industrial only insisted by the assigned person, and Guiyuan
Industrial does open its office during the weekends. Guiyuan
Industrial does not have access to the books and records of
Foguang. The cash is collected and paid to Foguang on the next
business day and the transaction is then recorded in Foguang��s

GEO rebuttal to CGPI Response:

On the day we purchased cemetery plots, the sales representative had a book of sealed receipts from Guiyuan Cemetery Company (��
��й�԰ʵҵ��޹�˾) and filled out several sealed receipts. After that, the sales representative gave those receipts to our assigned

www.geoinvesting.com

person. We do not know the internal transaction (if there was one) between Foguang and Guiyuan Company (��й�԰ʵҵ��
��˾). We only know that Guiyuan Company received the money, issued the receipts and is not mentioned in SEC filings.


We question that there is a Guiyuan Cemetery I in Changshou The plot of land referred to as ��Guiyuan I�� in our filings is the
District which was developed before 2002 and sold out already. Qinglongshan Cemetery project located in Fulin district of
At the same time, it is impossible that Guiyuan Cemetery II Chongqing, on approximately 66,660 square meters of land. Prior
started its business before 2002, rather than around 2005. to 2002, the Qinglongshan Cemetery was operated by a state
owned entity called Fulin Funeral Home which is part of the Civil
Administration Bureau. In 2002, Fulin Funeral Home outsourced
the development of the Qinglongshan Cemetery to Foguang, and
it was operated by Foguang until 2006 when all plots were sold
out. The plot of land referred to as ��Guiyuan II�� in our filings is
the land adjacent to Longqiao Lake that we started developing in
2005. We have comprised approximately 667,000 square meters
of land upon which we plan to develop cemetery plots, of which
approximately 79,373 square meters, or approximately 12%, has
have been in development to date.


In the SEC documents, CGPI clearly claimed that ��Foguang��s first cemetery development project is the Chongqing Guiyuan Cemetery
I (�� Guiyuan I ��), located in Changshou District of Chongqing on approximately 66,660 square meters of land.�� Now, CGPI said that
Guiyuan I is the Qinglongshan Cemetery located in Fulin district of Chongqing.

From the website of Qinglongshan Cemetery located in Fulin district, (http://www.flgm.gov.cn/index.asp) Qinglongshan Cemetery
was approved by Chongqing Civil Affairs Bureau on Dec. 20, 2005. We also found that the cemetery license of Qinglongshan
Cemetery license is held by a company called Chongqing Fulin Qinglongshan Cemetery Co., Ltd., not by Foguang.


(http://tieba./f?kz=942709596). We did not find any information to support claims Foguang has any relationship with
Qinglongshan Cemetery Co., Ltd.

Furthermore, before 2005, no subsidiary of CGPI obtained the required cemetery license for the claimed ��Guiyuan I�� cemetery.


It appears unreasonable for CGPI to have sold the claimed We have developed and sold 18,108 plots in our Guiyuan II
numbers of plots mentioned in its SEC documents. project The average selling price was approximately $4,400 in our
fiscal year ended March 31, 2009, $5,400 in our fiscal year ended
March 31, 2010, and $6,800 in the nine months ended December
31, 2010. . Our sales records have been audited by PMB Helin
Donovan, LLP for the years ending March 31, 2009 and 2010,
with an interim review performed on subsequent periods through
December 31, 2010. We would be happy to host any investor who
wishes to walk through the property and count the plots.


We suggest that investors quickly visit Guiyuan Cemetery to count the constructed plots.

In our supportive documents, we showed that by Jan of 2011, there only Foyuan, Xiaoyuan and Tianyuan were the constructed
cemeteries. Based on the observation of our assigned person, the approximate number of constructed plots is around 2,500,
which includes around 560 plots of Foyuan (20*28); around 560 plots of Xiaoyuan (20*28) and around 1,380 plots of
Tianyuan(20*69). Furthermore, the sales representative told our assigned person that there were around 6,000 constructed plots (this
number is much higher than the number of constructed plots counted by our assigned person), in which 1,800 are already sold.

Therefore, we regarded that it is not feasible for CGPI to sell 18,108 plots in Guiyuan II.



As previously stated in our SEC filings and in our January 26,
The cemetery license held by the Company does not belong to 2011 corporate update, China Redstone, through our operating
Foguang. subsidiary Chongqing Foguang Tourism Development Co. Ltd.
(��Foguang��), obtained a license on December 21, 2005 from the
Chongqing Civil Administration Bureau to develop and operate
cemeteries in Chongqing, China (see Exhibit 1). The license
effective date was June 23, 2004. After applying for and obtaining
approval to change the name of the project from Changshou
Longqiao Cemetery to Chongqing Guiyuan (��Guiyuan��), the
Changshou Civil Administration Bureau issued a new funeral
service operation license to replace the old one on August 22,
2006 (see Exhibit 2). The new one��s effective date, however,
remained as the old one��s June 23, 2004.
On July 14, 2008, the Chongqing Civil Administration Bureau
posted a notice stating that it would start to review and reissue a
new license to all existing cemetery license holders. The first
group included 39 funeral parlors and 61 cemeteries, which did
not include Foguang. The entities such as Foguang who were not
on the initial list could continue to operate legally under their
current license while the Chongqing Civil Administration Bureau
worked through the initial group of 100 entities. On March 3,
2010, the Chongqing Civil Administration Bureau posted an
update on the reissue process as follows:
1. All holders of licenses issued prior to 2008 should return their
current licenses and receive a new license.
2. All holders of the licenses issued prior to 2008 who have not
replaced their licenses should pick up a replacement application
form from the Civil Administration Bureau.
Subsequent to the notice, Foguang submitted its replacement
application form and contacted the Chongqing Civil
Administration Bureau to ascertain when its license would be.



We already explained the details of this issue in the first report.

Based on the information given by CGPI, ��Chongqing Civil Administration required all holders of licenses issued prior to 2008 who
have not replaced their licenses to obtain a replacement application form from the Civil Administration Bureau.�� As this stipulation
was announced on March 3, 2010, why did Foguang only submit the reassurance application on Feb. 23, 2011? (Exhibit 3.2 -
Reassurance Application of CGPI)

It is interesting that the date (Feb. 23, 2011) on which Foguang claims it submitted the reassurance application coincided exactly
after our telephone conference with the management team and HC International IR of CGPI, rather than immediately after the
above mentioned March 3, 2010 announcement by Chongqing Civil Administration Bureau.


If there is any revenue of sales of plots generated after July 14th, As stated above, Foguang has maintained a valid cemetery
2008 (at least after July 14, 2010), the revenue should be regarded operations license from the Chongqing Civil Administration
as illegal revenue. Bureau since December 21, 2005. All revenues generated to date
are valid under both Chinese and US GAAP.


The rebuttal is the same as the rebuttal to Issue 5.



These prices for plots purchased by the investigator are Redstone offers a range of cemetery plots which have broad range
substantially lower than the average sale price (USD 6,500) per in prices depending upon size, location, view, access, and other
plot claimed by CGPI in press releases. factors. Please refer to (Exhibit 4 -Plot Inventory) for further
sic -
Minimal size, almost no landscaping, average Fengshui, no free
-Small size, average landscaping, average
-Medium size, average landscaping, good
-Large size, nice landscaping, top Fengshui,
potential decoration space For the period April 1, 2010 through
January 31, 2011, Redstone has sold 5,786 plots at an average
price of $6,975. During the past several years we have witnessed
several competitors selling out of their property. By combining
this along with meaningful appreciation in most asset classes
across China, Redstone has been able to enjoy consistent price
increases across its product
offering since the inception of our cemetery. The average selling
price was approximately $4,400 in our fiscal year ended March
31, 2009, $5,400 in our fiscal year ended March 31, 2010, and
$6,800 in the nine months ended December 31, 2010.. Included in
our 10-K filing for fiscal 2010 we included a pricing chart. This
clearly shows that price points of $1,500 -$7,500 (including
single and double graves) represented 82% of total sales.


The price range provided by the sales representative is available in the supportive document we originally published. The prices in the
price range are also substantially lower than CGPI��s claimed prices. A price range of the Peach Glove Cemetery ��԰��Ĺ�� (the
only legal cemetery in Changshou District) is also provided in our supportive documents. This range is the price range of Peach
Glove Cemetery ��԰��Ĺ��, which is also much lower than the claimed price of CGPI.



The land (339,444 m2) the Company claims it has to build future As explained in our business update on January 26, 2011, the
cemetery plots may be the Longqiao Lake on which not any plot 339,444 square meters is the land which is adjacent to the lake
can stand. and part of our key cemetery property, not the Longqiao Lake.
(Please see Exhibit 5 and Exhibit 6 showing the land on the land
transfer agreement).


As we stated in the report, we copied the files from the Land & Resource Bureau of Changshou District. Exhibit 5 does not explain
where the land is and where the borders of the land are. Exhibit 6 contains the meeting minutes that we already included in our
supportive documents. We content that these documents (Exhibit 5 and Exhibit 6 of CGPI) cannot invalidate our finding.



The calculation of the intangible assets calculated by CGPI based We have obtained land use rights to develop and operate cemetery
on the ��approximately 210,000 plots that can be developed and operations on 339,444 square meters of land. upon receipt of the
sold from the 339,444 square meters of land�� may be misleading. land use rights in 2005, the Company obtained an independent
If our finding is accurate, the intangible assets of the Longqiao Land Assessment Report (see Exhibit 7) from a certified valuator,
Lake for the cemetery business of CGPI will become substantially which valued the land at RMB 90.97 million (approximately
less than what is disclosed in SEC documents. $13.8 million using the December 31, 2010 exchange rate of
6.592 RMB/USD). This report was the source for the original cost
basis of the land. The Company performs annual reviews of all
long-lived assets, including land use rights, for impairment. Based
on our reviews, no impairment has occurred with respect to these
land use rights.


The rebuttal to issue 9 is the same as the rebuttal to issue 8.



The leased land, where the cemetery does exist, is illegally leased Foguang has legally leased 381,794 square meters of land from
from the government of Jiangnan Town as the lease agreement the government of Jiangnan county.
and the principle activities on the leased land violate the PRC On December 11, 2003, the Changshou CHURD approved the
laws. Topographic Chart (see Exhibit 8) of Longqiao Lake Cemetery
and noted at the right bottom corner of the chart that Loangqiao
Lake Cemetery could be developed within the red circle area. The
red circle includes all the lands belong to the Chongqing
Municipality Changshou District Jiangnan County Longqiao Lake
and Qianfo Group 6. On January 29, 2008, Foguan and
Chongqing Municipality Changshou District Jiangnan County
Longqiao Lake and Qianfo Group 6 reached the Rural Land
Operation Right Transfer Agreement (see Exhibit 9). In the
Agreement, the villagers transferred their Land Contractual
Management Rights of 381,794 square meters to Foguang.
According to Article 32 and 34 under the PRC Law on Land
Contract in Rural Areas, the villagers have the right to lease their
Land Contractual Management Rights to Foguang who is then
authorized to utilize the land for the development of Guiyuan
Cemetery (aka Longqiao Lake Cemetery) Project. The usage of
the leased land was converted to that of the construction land by
government planning bureau (see Exhibit 10). Under PRC Law,
the usage nature of a land is decided and regulated by government
planning bureau according to the need of development instead of
individuals or civil entities.


For this issue, we suggest investors do the internet research in Chinese on different search engines, such as, Google and/or Baidu. The
key words are ��ء� (agricultural land), ��Ƿ�� (illegal), ��Ĺ��(cemetery) and ��ռ�á�(occupy). Investors can find many useful
resources to support our conclusions regarding this issue.


All documents provided by CGPI refer to the planning (construction planning and/or land planning) of the cemetery.

In the conversation between our assigned person and the officer of Chongqing Civil Administration Bureau, the officer also mentioned
that the reason that Guiyuan Cemetery does not have a current cemetery license is because of ��Land��.


Based on the PRC law, to purchase any land collectively owned In PRC Law, the usage nature of a land is decided and regulated
by farmers, the government shall nationalize the land at first and by government planning bureau according to the need of
transfer to the company after the nationalization. Furthermore, the development instead of individuals or civil entities. On January
government of Chongqing City published a rule called Cemetery 15, 2004, Changshou District Commission of Housing and Urban
and Funeral Management Rules of 1998, which clearly states that Rural Development (��CHURD��) issued the No. 83 of Year 2003
a cemetery shall not occupy agricultural land and/or forest (article official construction land planning permission certificate (see
20) Exhibit 10) which shows: the land-use project name: Longqiao
Lake Cemetery, Land-use area: 1,333,400 square meters, refer to
the Notice of Approval of The Location Selection and
Topographic Chart for location and scope.


The rebuttal to issue 11 is the same as the rebuttal to issue 10.



In 2007, Chinese media also broadly reported the illegal During the construction process of the Guiyuan project in 2005
construction of Guiyuan Cemetery on the agricultural land and the company hired an independent contractor to clear some forest
other relevant Allegations. Furthermore, The Land and Resource area, but the contractor did not obtain the appropriate ��tree
Bureau of Chongqing District also fined (nominal) the removal�� permit. The Land and Resource Bureau of Chongqing
construction of Guiyuan Cemetery in 2005 and required District ordered the contractor to stop work, pay a nominal fine,
Foguang/Guiyuan to stop the construction. and obtain the proper permits. Once the proper permits were
obtained they were able to resume work. This was a simple
oversight by the contractor, who was responsible for obtaining the
permit, and was corrected immediately. This incident had no
impact on the status of our cemetery license or our ability to
develop and sell cemetery plots from that point forward.


We recommend that retail investors utilize a translator to translate the media reports that can be found online. The media reports are
as follows:

1. http://wszc.ws.online.cq.cn/fc/news/list.asp?id=401

2. http://news.xinhuanet.com/house/2007-08/08/content_6491168.htm

3. http://xamsg.focus.cn/news/2007-08-08/347618.html



The company may have constructed the tourism business plan to This allegation is false. As disclosed above, we made a strategic
increase the chances of raising money from investors. We also decision to divest the tourism project, which has nothing to do
believe that CGPI may be attempting to recover its investment in with the development of Longqiao Lake Cemetery Park, in order
order to raise money to purchase land use rights and operate to focus on its successful main business, rather than enter into a
legally. new industry altogether in which we do not have core
competency. The sale of this project has nothing to do with land
use rights, as the land use rights have been properly obtained as
described above. We have properly classified the related assets as
held for sale on its balance sheet for all periods after the
determination was made to discontinue the project, and have
made timely and appropriate disclosures about the change in
plans. We are currently taking bids for the project and initial
findings show that we should be able to recover the full costs
incurred to date.


Our assumption regarding why CGPI abandoned the tourism project was only our opinion. Even so, it has little to do with the major
issues at hand. From the conversation with the government officer of Chongqing Civil Administration Bureau, we understand that the
outstanding problem for Guiyuan Cemetery is the ��Land��.

Disclosure: No positions in CGPI


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3 25-2011 GeoInvesting Rebuttal to CGPI Letter to Shareholders

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3 25-2011 GeoInvesting Rebuttal to CGPI Letter to Shareholders