1. APPENDIX II - Deceptive Action taken by the WOFE regarding
Filing of its SAIC Documents
In evaluating HOGS’ SAIC filings, GeoInvesting took the most comprehensive approach
possible, evaluating the financials of both the individual subsidiaries as well as of the parent
company (“WOFE”).
Specifically, we obtained SAIC data for 11 of 14 of Zhongpin’s 2009 subsidiaries and 11 of 13
of the company’s 2008 subsidiaries. Several, including the biggest subsidiary, were audited.
Please see Appendix IV for why we are completely confident that the subsidiaries we don’t have
information for are immaterial to our discussion.
The ownership structure of HOGS is similar to that of many US listed Chinese companies.
There is a parent company (“WOFE”) which has no substantial business operations. Instead, the
WOFE is the legal entity that aids in capital raising activities and may be entitled to receive cash
flows such as dividends from its subsidiaries.
The 2010 Form 10-K explains this in detail. (WOFE explained)
“As a result of such agreements, HZFC (WOFE), which is a wholly owned indirect
subsidiary of our company, is entitled to 100% of any cash dividends declared and
paid by Henan Zhongpin and to vote all outstanding shares of capital stock of Henan
Zhongpin in any action by the shareholders of Henan Zhongpin.
On May 20, 2005, Henan Zhongpin Food Co., Ltd. (“HZFC”) was established in China
for the sole purpose of holding the capital stock of [the operating company] Henan
Zhongpin and its subsidiaries. The owners of Henan Zhongpin formed HZFC with an
initial investment of 16,000,000 Renminbi (“RMB”) ($1,932,367).”
In China, the annual inspections are performed by various PRC government agencies (SAIC,
SAT, SAFE, Customs and others). Those agencies require the financial statements of the WOFE
to complete their inspections. The WOFE is therefore required to file its own audited
financial statements with the SAIC. In the case of HOGS, its WOFE submitted only
consolidated financial statements and not its own, making it impossible for the agencies to
complete their inspections. Furthermore, as we stated, HOGS’ SEC documents clearly state that
the WOFE only exists to receive cash flows, such as potential dividends, from its subsidiaries so
it has no meaningful operations. Thus, the WOFE’s true financial statements (which should not
be consolidated) should not reflect meaningful revenues or net income.
However, we cannot find the WOFE’s financial statement, but only a consolidated financial
statement. Furthermore, the WOFE claimed the financial data of the consolidated financial
statement (total assets, total liability, revenue and net income) as its own data in the SAIC report.
Apparently, this is wrong and unacceptable.
We understand that it would be much more convenient to amend/compromise one filing (the
parent/WOFE) than to coordinate the amendment of many (13 or 14 in HOGS’ case)

2. subsidiaries. What is particularly noteworthy with HOGS’ SAIC filings is that while the
consolidated net incomes of the company’s operating subsidiaries do not come close to
matching the SEC filings, the financial statements of the WOFE do in fact match what was
filed with the SEC. So, it seems the consolidated net income reported by the WOFE is
dramatically greater than the sum of its operating subsidiaries. That is simply not possible and
makes little accounting sense since consolidation would result in less cumulative net income, not
more. That’s because related party balances are eliminated in consolidation which reduces
consolidated net income. Furthermore, the WOFE, as clearly stated in SEC filings, has no
meaningful operations. It basically exists to receives cash flows, such as potential dividends,
from its subsidiaries. Where then, are the true financial statements of your WOFE?
Given this odd set of circumstances we can only conclude that HOGS’ management amended
(i.e., falsified) the filings of its WOFE apparently for no other purpose but to ensure the
financial statements reported to the SAIC were consistent with what was filed with the
SEC.