Note 1 - Organization and Principal Activities

12 Months Ended

Apr. 30, 2016

Notes

Note 1 - Organization and Principal Activities

NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES

REDtone Asia, Inc. and subsidiaries (the "Company") are a group of companies in The People's Republic of China ("PRC"). The principal activities of the Company are that of a Telecommunications provider for mobile, fixed and international gateway services. REDtone provides a wide range of telecommunication services, including prepaid and postpaid discounted call services to corporate customers and consumers as well as prepaid mobile air-time top-up. The Company also offers prepaid shopping card services.

The Company's major subsidiaries during the years are illustrated as follows:

Name	Domicile and date of incorporation	Effective ownership	Principal activities
Redtone Telecommunication (China) Limited (“Redtone China”)	Hong Kong May 26, 2005	100%	Investment holding
Redtone Telecommunications (Shanghai) Limited (“Redtone Shanghai”)	The PRC July, 26, 2005	100%	Provides technical support services to group companies
Shanghai Huitong Telecommunication Company Limited (“Huitong”)1	The PRC March, 26, 2007	100%	Marketing and distribution of IP call and discounted call services in the PRC
Shanghai Jiamao E-Commerce Company Limited (“Jiamao”) 1	The PRC March 21, 2008	100%	Marketing and distribution of IP call and discounted call services in the PRC
Shanghai Xin Chang Information Technology Company Limited (“Xin Chang”) 1	The PRC January 13, 2006	56%	Marketing and distribution of IP call and discounted call services in the PRC
VMS Technology Limited	Hong Kong September 14, 1998	100%	Trading of discounted call related equipment and provision of related services
RT Communications Ltd	BVI February 24, 2010	100%	Investment holding
Shanghai YuZhong Financial Information Service Co., Ltd (“YuZhong”)1	The PRC July 16, 2014	49.8%	Investment holding
Shanghai YuGuang Automobile Inspection Technology Co., Ltd (“YuGuang”)1	The PRC July 17, 2014	59.8%	Investment holding
Taizhou Haitai Motor Vehicle Inspection Co, Ltd. (“Haitai”)1	The PRC October 31, 2013	30.5%	Investment holding
Feng Cheng Motor Vehicle Inspection Co., Ltd. (“FengCheng”)1	The PRC November 30, 2012	30.5%	Dormant

¹ - Variable interest entities

Nantong Jiatong, Hongsheng and QBA were disposed of July 25, 2014. The corresponding results for years ended May 31, 2015 (up to disposal date) was reported as discontinued operations. See also Footnote 4.

Prior to disposal of Hongsheng, the Company transferred its equity interest in Xin Chang to Huitong. The statutory registration was completed in September 2014.

YuZhong, YuGuang, Haitai and FengCheng are new subsidiaries in previous financial year. See also Footnote 5.