10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

T QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: July 31, 2016

£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File No. 333-129388

REDTONE ASIA, INC. (Exact Name of Small Business Issuer as Specified in its Charter)
Nevada (State or Other Jurisdiction of Incorporation or Organization)	71-098116 (I.R.S. Tax I.D. No.)
12 Floor, Hualin Building, Caoxi Road, Xuhui District, 200235 Shanghai, PRC (Address of Principal Executive Offices)
(86) 61032230 (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒     No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐	Non-accelerated filer  ☐
Accelerated filer  ☐ (do not check if smaller reporting company)	Smaller reporting company  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐    No  ☒

State the number of shares outstanding of each of the issuer's classes of common equity, as of July 31, 2016, are as follows:

Class of Securities	Shares Outstanding
Common Stock, $0.0001 par value	282,315,356

Transitional Small Business Disclosure Format (check one): Yes ☐       No  ☒

REDtone Asia, Inc.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		2
ITEM 1.	FINANCIAL STATEMENTS	2
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION	16
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 4T.	CONTROL AND PROCEDURES	21
PART II – OTHER INFORMATION		22
ITEM 1.	LEGAL PROCEEDINGS	22
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	22
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	22
ITEM 4.	[REMOVED AND RESERVED]	22
ITEM 5.	OTHER INFORMATION	22
ITEM 6	EXHIBITS	22
SIGNATURES		22

1

PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

REDtone Asia, Inc.

As of Quarter Ended July 31, 2016 (unaudited)

TABLE OF CONTENTS

Condensed Consolidated Balance Sheet as of July 31, 2016 (unaudited) and April 30, 2016 (Audited)	3
Condensed Consolidated Statements of Operations and Comprehensive Income for the Three months ended July 31, 2016 and July 31, 2015 (unaudited)	4
Condensed Consolidated Statement of Cash Flows (unaudited) for the Three months ended July 31, 2016 and July 31, 2015 (unaudited)	5
Notes to the Condensed Consolidated Financial Statements (unaudited)	6–13

2

REDTONE ASIA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

At July 31, 2016 and April 30, 2016

	July 31, 2016 (Unaudited)			April 30, 2016 (Audited)
Assets
Current assets
Cash and cash equivalents	$	301,907		$	345,315
Fixed deposits pledged with bank		3,013,608			3,081,486
Accounts receivable		634,182			644,246
Other receivables and deposits		203,968			264,982
Other investment		720,252			941,649
Total current assets		4,873,917			5,277,678
Property, plant and equipment, net		1,033,913			1,014,560
Intangible assets, net		1,565,114			1,609,841
Total assets		7,472,944			7,902,079
Liabilities and stockholders' equity
Liabilities
Current liabilities
Deferred income		972,825			1,145,770
Accounts payable		568,694			776,356
Accrued expenses and other payables		936,771			829,495
Amount due to a related company		1,982,791			2,000,813
Taxes payable		1,008,347			972,227
Total liabilities		5,469,428			5,724,661
Equity
Common stock, US$0.0001 par value , 300,000,000 shares authorized; 282,315,356 shares issued and outstanding, respectively		28,232			28,232
Additional paid in capital		7,726,893			7,726,893
Less: Amount due from a related company		(3,202,689	)		(3,235,344	)
Retained earnings		(533,774	)		(446,139	)
Accumulated other comprehensive income		403,193			532,302
Total stockholders' equity		4,421,855			4,605,944
Non-controlling interests		(2,418,339	)		(2,428,526	)
Total equity		2,003,516			2,177,418
Total liabilities and stockholders' equity		7,472,944			7,902,079

See accompanying notes to the condensed consolidated financial statements.

3

REDTONE ASIA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

Three months ended July 31, 2016 and 2015

	Three months ended July 31, 2016 (Unaudited)			Three months ended July 31, 2015 (Unaudited)
Revenue		790,053			2,506,918
Other income and gains		1,277			14,488
Service costs		(459,505	)		(1,950,230	)
Personnel cost		(127,139	)		(159,863	)
Depreciation expense		(44,268	)		(156,424	)
Amortization expense		(39,148	)		(40,126	)
Administrative and other expenses		(203,052	)		(199,393	)
(Loss)/ Profit before provision for income taxes		(81,782	)		15,370
Income tax expense		(49,440	)		(21,662	)
Net loss before non-controlling interest		(131,222	)		(6,292	)
Share of results by non-controlling interest		43,587			(47,223	)
Net loss for the period		(87,635	)		(53,515	)
Other comprehensive loss
Loss on foreign currency translation		(129,109	)		(102,024	)
Share of other comprehensive income/ (loss) by non-controlling interest		53,845			(1,206	)
Other comprehensive loss attributable to shareholders of the Company		(75,264	)		(103,230	)
Total comprehensive loss		(162,899	)		(156,745	)
Loss per share, basic and diluted		-			-
Weighted average number of shares		282,315,356			282,315,356

See accompanying notes to the condensed consolidated financial statements.

4

REDTONE ASIA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended July 31, 2016 and 2015

	Three months ended July 31, 2016 (Unaudited)			Three months ended July 31, 2015 (Unaudited)
Cash flows from operating activities
Net loss before non-controlling interest		(131,222	)		(6,292	)
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Amortization expense		39,148			40,126
Depreciation expense		44,268			156,424
Changes in operating assets and liabilities:
Decrease/ (Increase) in accounts receivable		10,064			(51,502	)
Decrease in inventories		-			38,527
Decrease in other receivables and deposits		61,014			184,837
(Decrease)/ Increase in deferred income		(172,945	)		84,641
Decrease in accounts payable		(207,662	)		(314,819	)
Increase in tax payables		36,120			15,606
Increase in accrued liabilities and other payables		107,276			22,720
Net cash (used in)/ provided by operating activities		(213,939	)		170,268
Cash flows from investing activities
Purchase of property, plant and equipment		(85,689	)		(147,074	)
Decrease in amount due from a related company		32,655			31,667
Decrease in trust fund		221,397			167,763
Decrease in fixed deposits pledged with bank		67,878			60,705
Net cash provided by investing activities		236,241			113,061
Cash flows from financing activities
Decrease in amount due to related companies		(18,022	)		(33,967	)
Net cash used in financing activities		(18,022	)		(33,967	)
Net increase in cash and cash equivalent		4,280			249,362
Effect of exchange rate changes		(47,688)			(18,337)
Cash and cash equivalents at beginning of period		345,315			603,100
Cash and cash equivalents at end of period		301,907			834,125
Supplementary information – continuing operations
Cash paid for income taxes		-			-
Cash paid for interest		-			-

See accompanying notes to the condensed consolidated financial statements.

5

REDTONE ASIA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2016 (Unaudited)

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's major subsidiaries during the period under review 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

6

NOTE 2 – PRINCIPLES OF CONSOLIDATION

The unaudited interim financial statements of the Company and the Company's subsidiaries (see Note 1) for the three months ended July 31, 2016 and 2015 have been prepared pursuant to the rules & regulations of the SEC. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however the Company believes that the following disclosures are adequate to make the information presented not misleading. All significant intercompany balances and transactions have been eliminated. The functional currency for the majority of the Company's operations is in Chinese Renminbi ("RMB"), while the reporting currency is U.S. Dollar.

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the Company's financial position as of July 31, 2016, the results of its operations and cash flows for the three months ended July 31, 2016 and 2015.

The results of operations for the three months ended July 31, 2016 are not necessarily indicative of the results for a full year period.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Economic and political risk

The Company's major operations are conducted in the PRC. Accordingly, the political, economic, and legal environments in PRC may influence the Company's business, financial condition, and results of operations.

The Company's major operations in the PRC are subject to considerations and significant risks typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

(b) Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

(c) Accounts receivable and other receivables

Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable.

(d) Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation. The cost of maintenance and repairs is charged to the statement of operations as incurred, whereas significant renewals and improvements are capitalized. The cost and the related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of operations.

The Company provides for depreciation of property, plant and equipment principally by use of the straight-line method for financial reporting purposes. Plant and equipment are depreciated over the following estimated useful lives:

Computer and software	5 years
Furniture, fixtures and equipment	5 years
Motor vehicles	5 years
Leasehold improvements	5 years
Telecommunication equipment	10 years

Depreciation expense attributable to the operations for the three month period ended July 31, 2016 and 2015 amounted to $44,268 and $156,424, respectively.

7

(e) Intangible assets

IT license and software operating license are generally amortized on a straight-line basis over the expected periods of benefit, in 20 years. Customer base are amortized on a straight-line basis over 3 years.

The Company performs regular review of identified intangible assets to determine if facts and circumstances indicate that the useful life is shorter than the original Company policies. If such facts and circumstances exist, the Company regularly assesses the recoverability of identified intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life.

Amortization expense attributable to the operations for the three month period ended July 31, 2016 and 2015 amounted to $39,148 and $40,126, respectively.

(f) Available-for-sale investments

Investments in equity securities that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are recognized in the balance sheet at cost less impairment losses.

(g) Accounting for the impairment of long-lived assets

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

There is no impairment loss recognized during the three months ended July 31, 2016 and 2015.

(h) Income tax

Income taxes are based on pre-tax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. The Company periodically assesses the need to establish valuation allowances against its deferred tax assets to the extent the Company no longer believes it is more likely than not that the tax assets will be fully utilized.

The Company evaluates a tax position to determine whether it is more likely than not that the tax position will be sustained upon examination, based upon the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to recognize and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold, no benefit is recognized.

(i) Fair value of financial instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

8

We measure the fair value of money market funds and equity securities based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.

(j) Revenue recognition

The Company assesses appropriate revenue recognition policy for each type of operation according to ASC 605-45

Revenue represents the invoiced value of services rendered and receivable during the year. Revenue is recognized when all of the following criteria are met:

• Persuasive evidence of an arrangement exists,

• Delivery has occurred or services have been rendered,

• The seller's price to the buyer is fixed or determinable, and

• Collectability is reasonably assured

Revenue recognition policy for each of the major products and services:

1.Discounted call services for consumer (EMS) as follow:

• Collaboration with CTT – REDtone China is appointed as the sole distributor for EMS and will recognize revenue when airtime is utilized by the consumer and the revenue recognized is on net basis which is computed based on a fixed sharing ratio of the total airtime utilized by consumers after netting of direct traffic termination cost and incidental expenses. REDtone China's role for Business Collaboration with China TieTong Telecommunications (CTT) would be as "Agent" as REDtone China is the sole distributor for EMS brand owned and controlled by CTT; and

• Collaboration with other telecommunication providers – REDtone China will act as a discounted consumer call Reseller whereby REDtone China will determine the service and package specification and pricing policies whereas China Unicom acts as a passive termination partner for call traffic.  REDtone China will pay China Unicom solely based on call traffic termination by China Unicom at a prescribed rate (defined as traffic termination costs on the books of REDtone China).  In this regard, REDtone China will recognize the revenue when airtime is utilized by the consumer and the value recognized as revenue is the call charges gross value. REDtone China's role for Business Collaboration with China Unicom would be as "Principal" as China Unicom is playing a passive role as traffic termination partner while REDtone China is fully responsible for the entire management of discounted call services

As this is a prepaid product, there is an expiration date for the product sold. If the airtime is not utilized by the expiration date, which is currently one year from the activation date, it will be deemed expired and revenue will be recognized based on the remaining gross value of the expired prepaid product.

2.Discounted call services for corporate as follow:

• Collaboration with CTT – the revenue recognize is the commission earned from distributing the discounted call services to corporate customer; and

• Collaboration with other telecommunication providers –the revenue recognized is the commission earned from distributing the discounted call services to corporate customer.

3.Reload services for prepaid mobile – revenue recognized is the commission earned.

4. Collaboration with Shanghai Huili Telecommunications Co., Ltd ("Huili") – Huili will act as "intermediary agent" to resell the call traffic termination by REDtone China. Huili will pay REDtone China the termination costs on the books of REDtone China.

(k) Earnings per share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the year. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of July 31, 2016 and 2015, there were no dilutive securities outstanding.

9

(l) Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

(m) Retirement benefits

PRC mandates companies to contribute funds into the national retirement system, which benefits qualified employees based on where they were born within the country. The Company pays the required payment for qualified employees of the Company.

(n) Foreign currency translation

The accompanying consolidated financial statements are presented in United States dollars (US$). The functional currencies of the Company are the Hong Kong dollar (HK$) and the Renminbi (RMB), respectively. Capital accounts of the financial statements are translated into United States dollars from HK$ or RMB at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the year. The translation rates are as follows:

	July 31, 2016	April 30, 2016	July 31, 2015
Period end RMB : US$ exchange rate	0.1507	0.1541	0.1613
Average period RMB : US$ exchange rate	0.1517	0.1570	0.1643
Period end HK$ : US$ exchange rate	0.1289	0.1286	0.1290
Average period HK$ : US$ exchange rate	0.1289	0.1289	0.1290

On July 21, 2005, the PRC changed its foreign currency exchange policy from a fixed RMB/US$ exchange rate into a flexible rate under the control of the PRC's government.

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.

(o) Recent Accounting Pronouncements

The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during the period.  Management has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company's reported financial position or operations in the near term.

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to July 31, 2016 through the date these financial statements were issued.

NOTE 4 - CASH AND CASH EQUIVALENTS

As of the balance sheet dates, cash and cash equivalents are summarized as follows:

	July 31, 2016		April 30, 2016
Cash and bank	$	301,907	$	345,315

10

NOTE 5 – OTHER RECEIVABLES AND DEPOSITS

Other receivables and deposits as of the dates were summarized as follows:

	July 31, 2016		April 30, 2016
Deposits	$	203,968	$	264,982

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of the balance sheet dates are summarized as follows:

	July 31, 2016			April 30, 2016
At cost:
Computer and software	$	258,333		$	165,435
Telecommunication equipment		5,168,125			5,303,150
Furniture, fixtures and equipment		53,516			54,628
Motor vehicles		117,229			119,870
Leasehold improvement		120,724			115,657
		5,717,927			5,758,740
Less: Accumulated depreciation		(4,684,014	)		(4,744,180	)
Property, plant and equipment, net	$	1,033,913		$	1,014,560

Depreciation expense attributable to the operations for the three months ended July 31, 2016 and 2015 amounted to $44,268 and $156,424, respectively.

NOTE 7 – INTANGIBLE ASSETS

Intangible assets as of the balance sheet dates are summarized as follows:

	July 31, 2016			April 30, 2016
At cost:
Operating concession	$	554,289		$	566,773
Customer base		75,340			77,037
IT license and software		2,280,548			2,275,419
		2,910,177			2,919,229
Less: Accumulated depreciation		(1,345,063	)		(1,309,388	)
Intangible assets, net	$	1,565,114		$	1,609,841

Amortization expense attributable to the operations for the three months ended July 31, 2016 and 2015 amounted to $39,148 and $40,126, respectively.  

NOTE 8 – AMOUNT DUE FROM/(TO) RELATED COMPANIES

As of the balance sheet dates, amount due from a related company that included in the Company's equity accounts were analyzed as follows:

	July 31, 2016		April 30, 2016
Fellow subsidiary:
REDtone Technology Sdn. Bhd.	$	3,202,689	$	3,235,344

11

The amount represents advances to the related company. As of the balance sheet dates, the amount is unsecured, non-interest bearing and is expected to be repaid within 2016.  

 Amount due to a related company as of the balance sheet dates were summarized as follows:

	July 31, 2016		April 30, 2016
Fellow subsidiary:
REDtone Telecommunications Sdn Bhd	$	223,778	$	173,409
Related party:
Shanghai Huili Telecommunications Co., Ltd		-		28,771
Non-controlling interests		1,759,013		1,798,633
		1,982,791		2,000,813

The amount due to the related company is unsecured, non-interest bearing and has no fixed repayment date.

NOTE 9 – ACCRUED EXPENSES AND OTHER PAYABLES

Accrued expenses and other payables as of the balance sheet dates were summarized as follows:

	July 31, 2016		April 30, 2016
Accrued expenses	$	425,497	$	379,165
Other payables		511,274		450,330
Total	$	936,771	$	829,495

NOTE 10 – DEFERRED INCOME

Deferred income consists of prepaid air-time sold which is yet to be utilized. The basis of revenue recognition for discounted call services is based on actual call charges made by end users. When calls are being made, the amount will be deducted from deferred income to the statement of income, net of call costs and expenses.

NOTE 11 – TAXES PAYABLE

Taxes payable at the balance sheet dates are summarized as follows:

	July 31, 2016			April 30, 2016
Income tax payable	$	1,019,950		$	992,222
Business tax and other tax payables		(11,603	)		(19,995	)
Total	$	1,008,347		$	972,227

Business tax represents PRC sales tax imposed upon the Company's services provided in the PRC.  Tax rates range from 3% to 6% depending on the nature of the taxable activities.

Income tax represents PRC income tax. The provision for PRC income tax is based on a statutory rate of 25% of the assessable income of the PRC subsidiaries as determined in accordance with the relevant income tax rules and regulations of the PRC.

12

NOTE 12 – INCOME TAX EXPENSE

	Three months ended July 31, 2016		Three months ended July 31, 2015
Current income tax in PRC and Hong Kong	$	49,440	$	21,662
Deferred tax income		-		-
Total	$	49,440	$	21,662

On April 29, 2014, RTSH obtained a tax benefit for which the income tax for 2013 and 2014 calendar year is exempt and the income tax for 2015, 2016 and 2017 calendar year will be subject to half-rate deduction.

A reconciliation of the expected tax with the actual tax expense is as follows:

	Three months ended July 31, 2016			Three months ended July 31, 2015
(Loss)/ Profit before provision for income taxes	$	(81,782	)	$	15,370
Expected PRC income tax expense at statutory tax rate of 25%		(20,445	)		3,843
Different tax rate for PRC/Hong Kong local authority		20,476			6,657
Utilisation of tax losses brought forward		-			(47,434	)
Tax loss not provided for deferred tax		49,409			58,596
Total	$	49,440		$	21,662

 (i) All PRC subsidiaries are subject to PRC tax. The provision for PRC income tax is based on a statutory rate of 25% of the assessable income of the PRC subsidiaries as determined in accordance with the relevant income tax rules and regulations of the PRC.

(ii) Hong Kong subsidiaries are subject to Hong Kong profits tax. The provision for Hong Kong profits tax is based on a statutory rate of 16.5% of assessable profits in Hong Kong.

(iii) BVI subsidiaries are not subject to profits tax.

NOTE 13 – VARIABLE INTEREST ENTITIES ("VIEs")

On April 30, 2007, the Company entered into loan agreements with Mao Junbao ("MJ") and Mao Hong ("MH") for the establishment of Huitong. On April 30, 2007 the Company entered into an equity pledge agreement that provides that MJ and MH would pledge all their equities in Huitong to REDtone Shanghai.

Huitong acquired YuZhong, YuGuang, Haitai and FengCheng, as subsidiaries of the Company during financial year 2015.

Although the Company is not the shareholder of the above VIE subsidiaries, the Company has determined that it is the primary beneficiary of these entities, as the Company has controlling voting powers and entitled to receive the benefit from operations of these entities. Hence, these companies are identified as VIEs and are consolidated as if subsidiaries of the Company.

We did not identify any additional VIEs in which we hold a significant interest.

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The total consolidated VIE assets and liabilities reflected on the Company's balance sheet are as follows:

	July 31, 2016		April 30, 2016
Assets
Cash and cash equivalents	$	22,571	$	161,340
Accounts receivable		634,182		640,656
Other receivables and deposits		46,086		185,144
Property, plant and equipment, net		479,920		413,072
Intangible assets, net		361,940		381,670
Total assets (not include amount due from intra-group companies and related parties)		1,544,699		1,781,882
Liabilities
Deferred income		972,557		1,145,770
Accounts payable		547,752		755,461
Accrued expenses and other payables		2,095,722		2,081,052
Taxes payable		73,443		18,332
Total liabilities (not include amount due to intra-group companies and related parties)		3,689,474		4,000,615

The results of VIEs are as follows, and are included in the consolidated statements of income of the Company:

	Three months ended July 31, 2016			Three months ended July 31, 2015
Revenue	$	755,007		$	1,683,697
Other income and gains		151			(12,028	)
Service costs (Not including service costs payable to intra-group companies)		(459,397	)		(1,950,100	)
Personnel cost		(58,570	)		(93,417	)
Depreciation expense		(9,801	)		(73,168	)
Amortization expense		(11,397	)		(12,343	)
Administrative and other expenses		(123,744	)		(109,646	)
Income/ (Loss) before provision for income taxes (Not including service costs payable to intra-group companies)		92,249			(567,005	)
Provision for income taxes		(48,167	)		(19,931	)
Net income/ (loss)		44,082			(586,936	)

Under the contractual arrangements with the VIEs, the Company has the power to direct activities of the VIEs and can have assets transferred freely out of the VIEs without restrictions. Therefore, the Company considers that there is no asset of VIEs that can only be used to settle obligations of the respective VIEs, except for registered capital and PRC statutory reserves of VIEs as of July 31, 2016. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. As the Company is conducting certain businesses mainly through its VIEs, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss.

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NOTE 14 – RELATED PARTY TRANSACTION

	Three months ended July 31, 2016			Three months ended July 31, 2015
Revenue- Shanghai Huili Telecommunications Co., Ltd	$	21,449		$	586,719
Cost of Sales - Shanghai Huili Telecommunications Co., Ltd		( 23,314	)		(142,362	)
Total	$	(1,865	)	$	444,357

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ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "REDtone believes," "management believes" and similar language. The forward-looking statements are based on the current expectations of RTAS and are subject to certain risks, uncertainties and assumptions, including those set forth in the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this report. The actual results may differ materially from results anticipated in these forward-looking statements. We base the forward-looking statements on information currently available to us, and we assume no obligation to update them.

Investors are also advised to refer to the information in our filings with the Securities and Exchange Commission, specifically Forms 10-KSB, 10-QSB and 8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or historic results. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors to be an exhaustive statement of all risks and uncertainties or potentially inaccurate assumptions.

Except as otherwise indicated by the context, references in this Form 10-Q to "RTAS," "we," "us," "our," "the Registrant", "our Company," or "the Company" are to REDtone Asia, Inc., a Nevada corporation and its consolidated subsidiaries. Unless the context otherwise requires, all references to (i) "BVI" are to British Virgin Islands; (ii) "PRC" and "China" are to the People's Republic of China; (iii) "U.S. dollar," "$" and "US$" are to United States dollars; (iv) "RMB" are to Yuan Renminbi of China; (v) "RM" are to Malaysian Ringgit; (vi) "Securities Act" are to the Securities Act of 1933, as amended; and (vii) "Exchange Act" are to the Securities Exchange Act of 1934, as amended.

Business Overview

We are principally involved in the business of offering discounted call services for end users and corporate segment and paperless reload services for prepaid mobile air-time reload for end users in Shanghai covering all three major telecommunication operators namely China Mobile, China Unicom and China Telecom.

Critical Accounting Policies and Estimates

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States ("US GAAP"). US GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expenses amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

We believe the following is among the most critical accounting policies that impact our consolidated financial statements. We suggest that our significant accounting policies, as described in our condensed consolidated financial statements in the Summary of Significant Accounting Policies, be read in conjunction with this Management's Discussion and Analysis of Financial Condition and Results of Operations.

The Company has adopted a revenue recognition policy for each type of operation according to ASC 605-45.

Revenue represents the invoiced value of services rendered and receivable during the year. Revenue is recognized when all of the following criteria are met:

16

• Persuasive evidence an arrangement exists;

• Delivery has occurred or services have been rendered;

• The seller's price to the buyer is fixed or determinable; and

• Collectability is reasonably assured.

Revenue recognition policy for each of the major products and services:

1. Discounted call services for consumer (EMS) as follows:

·Collaboration with China Tie Tong Telecommunications ("CTT") – REDtone China is appointed as the sole distributor for EMS and will recognize revenue when airtime is utilized by the consumer and revenue is recognized on a net basis which is computed based on a fixed sharing ratio of the total airtime utilized by consumers after netting the direct traffic termination costs and incidental expenses. REDtone China's role for Business Collaboration with CTT is as an "Agent" as REDtone China is the sole distributor for the EMS brand owned and controlled by CTT; and

·Collaboration with other telecommunication providers – REDtone China will act as a discounted consumer call Reseller whereby REDtone China determines the service and package specification and the pricing policy whereas China Unicom acts as a passive termination partner for call traffic. REDtone China will pay China Unicom solely based on call traffic termination by China Unicom at a prescribed rate (defined as traffic termination cost on the books of REDtone China). In this regard, REDtone China will recognize revenue when airtime is utilized by the consumer and the revenue recognized is the gross value of the call charges. REDtone China's role for Business Collaboration with China Unicom is that of "Principal" as China Unicom is playing a passive role as the traffic termination partner while REDtone China is fully responsible for the entire management of the discounted call services

As this is a prepaid product, there is an expiration date for the product sold. If the airtime is not utilized by the expiration date, which is currently one year from the activation date, the product will be deemed to be expired and the revenue recognized at the time is the remaining gross value of the expired prepaid product.

2. Discounted call services for corporate consumers is as follows:

·Collaboration with CTT – the revenue recognized is the commission earned from distributing the discounted call services to corporate customers; and

·Collaboration with other telecommunication providers –the revenue recognized is the commission earned from distributing the discounted call services to corporate customers.

3. Reload services for prepaid mobile services – revenue recognized is the commission earned.

4. Collaboration with Shanghai Huili Telecommunications Co., Ltd ("Huili") – Huili will act as "intermediary agent" to resell the call traffic termination by REDtone China. Huili will pay REDtone China the termination costs on the books of REDtone China.

Recent Accounting Pronouncements

The Company does not expect that the adoption of any recent accounting pronouncements will have any material impact on its financial statements.

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Year-to-date Results of Operations

Year-to-date Results for Three-month period ended July 31, 2016 as Compared to period ended July 31, 2015

The following table summarizes the results of our operations during the three-month periods ended July 31, 2016 and July 31, 2015, and associated percentage changes for comparisons purposes.

Results of continuing operations for three-month period ended July 31, 2016 compared to 3-month period ended July 31, 2015

	Three-month period ended
	July 31, 2016			July 31, 2015			Increase/(Decrease) from previous year
Revenue		790,053			2,506,918			(1,716,865	)	-68	%
Other income and gains		1,277			14,488			(13,211	)	-91	%
Service costs		(459,505	)		(1,950,230	)		(1,490,725	)	-76	%
Personnel cost		(127,139	)		(159,863	)		(32,724	)	-20	%
Depreciation expense		(44,268	)		(156,424	)		(112,156	)	-72	%
Amortization expense		(39,148	)		(40,126	)		(978	)	-2	%
Administrative and other expenses		(203,052	)		(199,393	)		(3,659	)	-2	%
(Loss)/ Profit before provision for income taxes		(81,782	)		15,370			(97,152	)	-632	%
Income tax expense		(49,440	)		(21,662	)		27,778		128	%
Net loss before non-controlling interest		(131,222	)		(6,292	)		124,930		1986	%

Revenues. The Company generated revenue of $790,053 in the first three months of the fiscal year ending April 30, 2017, representing a 68% decrease as compared with the preceding year's corresponding quarters. The decrease in revenues was mainly due to lower consumption from the competitive market of $1,716,865.

Other income and gains.  During the first three-month period of the fiscal year ending April 30, 2017, the Company recorded other income and gains of $1,277, a decrease of $13,211, or 91%, compared with the preceding year's corresponding quarter. The decrease was due to a decrease in interest income from time deposits.

Service cost. Service costs from operations for the first three months in fiscal year 2017 of $459,505 reflected a decrease of $1,490,725 or 76% over the preceding year quarter ended April 30, 2016. The decrease in service costs was mainly due to decrease in the traffic consumption.

Personnel expenses.  The personnel expenses have decreased by 20%, or $32,724, to $127,139 for the first three months of the fiscal year ending April 30, 2017. The decrease is due to reduction in manpower due to business operation is on reducing trend.

Depreciation and amortization expenses. The decrease in depreciation expense by $112,156 or 72% is mainly due to the impairment of the properties, plant and equipment since the previous quarter of fiscal year 2016. Amortization expense is generally comparable to the corresponding period of last fiscal year.

Administrative and other operating expenses.  During the first three months of the fiscal year ending April 30, 2017, the Company recorded general and administrative expenses of $203,052, a marginal decrease of $3,659, or 2%, compared with the preceding year's corresponding quarter.

(Loss)/Profit before provision for income taxes.  For the quarter under review, the decrease in revenues has caused the net loss before provision for income taxes to be $81,782 as compared to a gain of $15,370 over the preceding year's corresponding quarter.
 

Income tax expense.  For the current quarter under review, there is an income tax expense of $49,440 compared to income tax expense of $21,662 over the preceding quarter's corresponding quarter.

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Net loss before non-controlling interest.  For the quarter under review, the dramatic drop of revenue has caused the net loss before non-controlling interest to be $131,222 as compared to a marginal loss of $6,292 over the preceding year's corresponding quarter.

Liquidity and Capital Resources.

Cash

Our cash balance at July 31, 2016 was $301,907, representing a decrease of $43,408 compared to our cash balance of $345,315 at April 30, 2016.

Cash Flow (before effect of exchange rate changes).

	July 31, 2016			July 31, 2015			+/-
Net cash (used in)/provided by operating activities	$	(213,939	)	$	170,268		(384,207	)
Net cash provided by investing activities	$	236,241		$	113,061		123,180
Net cash used in financing activities	$	(18,022	)	$	(33,967	)	(15,945	)
Net increase in cash and cash equivalents		4,280			249,362		(245,082	)

Net cash used in operations during the three months ended July 31, 2016 amounted to $213,939 as compared to net cash provided by operations of $170,268 in the same period of FY2016. The net cash used in the operating activities during the quarter under review mainly due to tight competition in PRC telecommunication industry.

Net cash provided by investing activities for the three months period ended July 31, 2016 amounted to $236,241 as compared to net cash provided by investing activities of $113,061 in the same period of FY2016. The net cash provided during the quarter is mainly due to decrease in placement in the short term trust fund.

There was net cash used in financing activities of $18,022 for the three months ended July 31, 2016.

Working Capital

We have negative working capital of $595,511 at July 31, 2016

At July 31, 2016, we had stockholders' equity of $2,003,516; total assets of $7,472,944 and total current liabilities of $5,469,428.

We do not currently anticipate any material capital expenditures for our existing operations. We do not currently anticipate purchasing or leasing any plant and equipment during approximately the next twelve (12) months.

We do not believe that inflation has had a material effect on our results of operations. However, there can be no assurances that our business will not be affected by inflation in the future.

We have no off balance sheet arrangements.

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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks arising from adverse changes in market rates and prices, such as foreign exchange fluctuations and interest rates, which could impact our results of operations and financial position. We do not currently engage in any hedging or other market risk management tools, and we do not enter into derivatives or other financial instruments for trading or speculative purposes.

Foreign Currency Exchange Rate Risk

Fluctuations in the rate of exchange between the U.S. dollar and foreign currencies in Chinese Renminbi ("RMB"), Malaysian Ringgit ("RM") and Hong Kong Dollar ("HK$") could adversely affect our financial results. We expect that foreign currencies will continue to represent a similarly significant percentage of our sales in the future. Selling, marketing and administrative costs related to these sales are largely denominated in the same respective currency, thereby mitigating our transaction risk exposure. We therefore believe that the risk of a significant impact on our operating income from foreign currency fluctuations is not substantial. However, for sales not denominated in U.S. dollars, if there is an increase in the rate at which a foreign currency is exchanged for U.S. dollars, it will require more of the foreign currency to equal a specified amount of U.S. dollars than before the rate increase. In such cases and if we price our products in the foreign currency, we will receive less in U.S. dollars than we did before the rate increase went into effect. If we price our products in U.S. dollars and competitors price their products in local currency, an increase in the relative strength of the U.S. dollar could result in our price not being competitive in a market where business is transacted in the local currency. All of our sales and expenses denominated in foreign currencies are denominated in the RMB, RM and HK$. Our principal exchange rate risk therefore exists between the U.S. dollar and these currencies. Fluctuations from the beginning to the end of any given reporting period result in the re-measurement of our foreign currency-denominated receivables and payables, generating currency transaction gains or losses that impact our non-operating income/expense levels in the respective period and are reported in other (income) expense, net in our combined consolidated financial statements. We do not currently hedge our exposure to foreign currency exchange rate fluctuations. We may, however, hedge such exposure to foreign currency exchange rate fluctuations in the future.

Interest Rate Risk

Changes in interest rates may affect the interest paid (or earned) and therefore affect our cash flows and results of operations. However, we do not believe that this interest rate change risk is significant.

Inflation

Inflation has not had a material impact on the Company's business in recent years.

Currency Exchange Fluctuations

The Company's revenues and its expenses are denominated in RMB, RM and HK$. The value of these foreign currency-to-U.S. dollars may fluctuate and is affected by, among other things, changes in political and economic conditions. Since 1994, the conversion of RMB into foreign currencies, including U.S. dollars, has been based on rates set by the People's Bank of China, which are set daily based on the previous day's inter-bank foreign exchange market rates and current exchange rates on the world financial markets. Since 1994, the official exchange rate for the conversion of RMB to U.S. dollars had generally been stable and RMB had appreciated slightly against the U.S. dollar. However, on July 21, 2005, the Chinese government changed its policy of pegging the value of RMB to the U.S. dollar. Under the new policy, RMB may fluctuate within a narrow and managed band against a basket of certain foreign currencies. Recently there has been increased political pressure on the Chinese government to decouple the RMB from the United States dollar. At the recent quarterly regular meeting of People's Bank of China, its Currency Policy Committee affirmed the effects of the reform on RMB exchange rate. Since February 2006, the new currency rate system has been operated; the currency rate of RMB has become more flexible while basically maintaining stable and the expectation for a larger appreciation range is shrinking. The Company has never engaged in currency hedging operations and has no present intention to do so.

Concentration of Credit Risk

Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed completely to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arise from financial instruments exist for groups of customers or counterparties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions as described below:

1. The Company's business is characterized by new product and service development and evolving industry standards and regulations. Inherent in the Company's business are various risks and uncertainties, including the impact from the volatility of the stock market, limited operating history, uncertain profitability and the ability to raise additional capital.

2. The Company's revenue is deriving from China and Hong Kong. Changes in laws and regulations, or their interpretation, or the imposition of confiscatory taxation, restrictions on currency conversion, devaluations of currency or the nationalization or other expropriation of private enterprises could have a material adverse effect on our business, results of operations and financial condition.

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3. If the Company is unable to derive any revenues from these countries, it would have a significant, financially disruptive effect on the normal operations of the Company.

ITEM 4T.CONTROL AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we evaluated the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls were effective as of the end of the period covered by this annual report.

(b) Changes in Internal Controls. There have been no changes in our internal controls over financial reporting during the period ended July 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

(c) Management's Report on Internal Control over Financial Reporting. Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act, as amended. The Company's internal control over financial reporting is designed to provide reasonable assurance as to the reliability of the Company's financial reporting and the preparation of financial statements in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:

• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the Company's consolidated financial statements.

Internal control over financial reporting, no matter how well designed, has inherent limitations. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, internal control over financial reporting determined to be effective can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect all misstatements. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the effectiveness of the Company's internal control over financial reporting as of July 31, 2016. In making this assessment, management used the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (1992).

Based on the Company's processes and assessment, as described above, management has concluded that, as of July 31, 2016, the Company's internal control over financial reporting was effective.

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PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

The Company may from time to time be involved in various claims, lawsuits, and disputes with third parties, actions involving allegations of discrimination, or breach of contract actions incidental to the operation of its business. The Company is not currently involved in any such litigation that it believes could have a materially adverse effect on its financial condition or results of operations.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There have been no unregistered sales of equity for the quarter ended July 31, 2016.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

There have been no material defaults for the quarter ended July 31, 2016.

ITEM 4.[REMOVED AND RESERVED]

ITEM 5.OTHER INFORMATION

The Company has evaluated for disclosure all subsequent events occurring through September 16, 2016, the date the financial statements were issued.

ITEM 6.EXHIBITS

The following exhibits are furnished as part of the Quarterly Report on Form 10-Q:

Exhibit Number	Description
31.1	Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:  September 19, 2016	REDtone Asia, Inc.	Dated:  September 19, 2016	REDtone Asia, Inc.
By:	/s/	By:	/s/
Name:	Chuan Beng Wei	Name:	Hui Nooi Ng
Title:	Chief Executive Officer	Title:	Chief Financial Officer
	(Principal Executive Officer)		(Principal Financial Officer)

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER OF

REDTONE ASIA, INC.

PURSUANT TO § 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Chuan Beng Wei, certify that:

1.  I have reviewed this quarterly report on Form 10-Q for the period ended July 31, 2016 of REDtone Asia, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:             September 19, 2016

By:/s/Chuan Beng Wei

Name:           Chuan Beng Wei

Title:             Chief Executive Officer

      (Principal Executive Officer) 

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER OF

REDTONE ASIA, INC.

PURSUANT TO § 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Hui Nooi Ng, certify that:

1.  I have reviewed this quarterly report on Form 10-Q for the period ended July 31, 2016 of REDtone Asia, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:September 19, 2016

By:/s/Hui Nooi Ng

Name:           Hui Nooi Ng

Title:             Chief Financial Officer

     (Principal Financial Officer) 

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER OF

REDTONE ASIA, INC.

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

§ 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of REDtone Asia, Inc. (the "Company") on Form 10-Q for the period ended July 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Chuan Beng Wei, Chief Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, based on my knowledge, that:

1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:September 19, 2016

By:/s/Chuan Beng Wei

Name:          Chuan Beng Wei

Title:            Chief Executive Officer

     (Principal Executive Officer) 

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER OF

REDTONE ASIA, INC.

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

§ 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of REDtone Asia, Inc. (the "Company") on Form 10-Q for the period ended July 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Hui Nooi Ng, Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, based on my knowledge, that:

1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:September 19, 2016

By:/s/Hui Nooi Ng

Name:           Hui Nooi Ng

Title:             Chief Financial Officer 

      (Principal Financial Officer) 

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

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Document and Entity Information	3 Months Ended
	Jul. 31, 2016 shares
Document and Entity Information:
Entity Registrant Name	REDtone Asia Inc
Document Type	10-Q
Document Period End Date	Jul. 31, 2016
Amendment Flag	false
Entity Central Index Key	0001341319
Current Fiscal Year End Date	--04-30
Entity Common Stock, Shares Outstanding	282,315,356
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Trading Symbol	rtas

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jul. 31, 2016	Apr. 30, 2016
Current assets
Cash and cash equivalents	$ 301,907	$ 345,315
Fixed deposits pledged with bank	3,013,608	3,081,486
Accounts receivable	634,182	644,246
Other receivables and deposits	203,968	264,982
Other investment	720,252	941,649
Total current assets	4,873,917	5,277,678
Property, plant and equipment, net	1,033,913	1,014,560
Intangible assets, net	1,565,114	1,609,841
Total assets	7,472,944	7,902,079
Current liabilities
Deferred income	972,825	1,145,770
Accounts payable	568,694	776,356
Accrued expenses and other payables	936,771	829,495
Amount due to a related company	1,982,791	2,000,813
Taxes payable	1,008,347	972,227
Total liabilities	5,469,428	5,724,661
Equity
Common stock, US$0.0001 par value , 300,000,000 shares authorized; 282,315,356 shares issued and outstanding, respectively	28,232	28,232
Additional paid in capital	7,726,893	7,726,893
Less: Amount due from a related company	(3,202,689)	(3,235,344)
Retained earnings	(533,774)	(446,139)
Accumulated other comprehensive income	403,193	532,302
Total stockholders' equity	4,421,855	4,605,944
Non-controlling interests	(2,418,339)	(2,428,526)
Total equity	2,003,516	2,177,418
Total liabilities and stockholders' equity	$ 7,472,944	$ 7,902,079

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jul. 31, 2016	May 31, 2015
Statement of Financial Position
Common Stock, par or stated value	$ 0.0001	$ 0.0001
Common Stock, shares authorized	300,000,000	300,000,000
Common Stock, shares issued	282,315,356	282,315,356
Common Stock, shares outstanding	282,315,356	282,315,356

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Condensed Consolidated Statements Of Income And Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Income Statement
Revenue	$ 790,053	$ 2,506,918
Other income and gains	1,277	14,488
Service costs	(459,505)	(1,950,230)
Personnel cost	(127,139)	(159,863)
Depreciation expense	(44,268)	(156,424)
Amortization expense	(39,148)	(40,126)
Administrative and other expenses	(203,052)	(199,393)
(Loss)/ Profit before provision for income taxes	(81,782)	15,370
Income tax expense	(49,440)	(21,662)
Net loss before non-controlling interest	(131,222)	(6,292)
Share of results by non-controlling interest	43,587	(47,223)
Net loss for the period	(87,635)	(53,515)
Other comprehensive loss
Loss on foreign currency translation	(129,109)	(102,024)
Share of other comprehensive income/ (loss) by non-controlling interest	53,845	(1,206)
Other comprehensive loss attributable to shareholders of the Company	(75,264)	(103,230)
Total comprehensive loss	$ (162,899)	$ (156,745)
Loss per share, basic and diluted
Weighted average number of shares	282,315,356	282,315,356

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Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Cash flows from operating activities
Net loss before non-controlling interest	$ (131,222)	$ (6,292)
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Amortization expense	39,148	40,126
Depreciation expense	44,268	156,424
Changes in operating assets and liabilities:
Decrease/ (Increase) in accounts receivable	10,064	(51,502)
Decrease in inventories		38,527
Decrease in other receivables and deposits	61,014	184,837
(Decrease)/ Increase in deferred income	(172,945)	84,641
Decrease in accounts payable	(207,662)	(314,819)
Increase in tax payables	36,120	15,606
Increase in accrued liabilities and other payables	107,276	22,720
Net cash (used in)/ provided by operating activities	(213,939)	170,268
Cash flows from investing activities
Purchase of property, plant and equipment	(85,689)	(147,074)
Decrease in amount due from a related company	32,655	31,667
Decrease in trust fund	221,397	167,763
Decrease in fixed deposits pledged with bank	67,878	60,705
Net cash provided by investing activities	236,241	113,061
Cash flows from financing activities
Decrease in amount due to related companies	(18,022)	(33,967)
Net cash used in financing activities	(18,022)	(33,967)
Net increase in cash and cash equivalent	4,280	249,362
Effect of exchange rate changes	(47,688)	(18,337)
Cash and cash equivalents at beginning of period	345,315	603,100
Cash and cash equivalents at end of period	301,907	834,125
Supplementary information - continuing operations
Cash paid for income taxes
Cash paid for interest

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Note 1 - Organization and Principal Activities

3 Months Ended

Jul. 31, 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's major subsidiaries during the period under review 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

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Note 2 - Principles of Consolidation

3 Months Ended

Jul. 31, 2016

Notes

Note 2 - Principles of Consolidation

NOTE 2 – PRINCIPLES OF CONSOLIDATION

The unaudited interim financial statements of the Company and the Company's subsidiaries (see Note 1) for the three months ended July 31, 2016 and 2015 have been prepared pursuant to the rules & regulations of the SEC. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however the Company believes that the following disclosures are adequate to make the information presented not misleading. All significant intercompany balances and transactions have been eliminated. The functional currency for the majority of the Company's operations is in Chinese Renminbi ("RMB"), while the reporting currency is U.S. Dollar.

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the Company's financial position as of July 31, 2016, the results of its operations and cash flows for the three months ended July 31, 2016 and 2015.

The results of operations for the three months ended July 31, 2016 are not necessarily indicative of the results for a full year period.

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Note 3 - Summary of Significant Accounting Policies

3 Months Ended

Jul. 31, 2016

Notes

Note 3 - Summary of Significant Accounting Policies

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Economic and political risk

The Company's major operations are conducted in the PRC. Accordingly, the political, economic, and legal environments in PRC may influence the Company's business, financial condition, and results of operations.

The Company's major operations in the PRC are subject to considerations and significant risks typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

(b) Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

(c) Accounts receivable and other receivables

Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable.

(d) Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation. The cost of maintenance and repairs is charged to the statement of operations as incurred, whereas significant renewals and improvements are capitalized. The cost and the related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of operations.

The Company provides for depreciation of property, plant and equipment principally by use of the straight-line method for financial reporting purposes.

Plant and equipment are depreciated over the following estimated useful lives:

Computer and software	5 years
Furniture, fixtures and equipment	5 years
Motor vehicles	5 years
Leasehold improvements	5 years
Telecommunication equipment	10 years

Depreciation expense attributable to the operations for the three month period ended July 31, 2016 and 2015 amounted to $44,268 and $156,424, respectively.

(e) Intangible assets

IT license and software operating license are generally amortized on a straight-line basis over the expected periods of benefit, in 20 years. Customer base are amortized on a straight-line basis over 3 years.

The Company performs regular review of identified intangible assets to determine if facts and circumstances indicate that the useful life is shorter than the original Company policies. If such facts and circumstances exist, the Company regularly assesses the recoverability of identified intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life.

Amortization expense attributable to the operations for the three month period ended July 31, 2016 and 2015 amounted to $39,148 and $40,126, respectively.

(f) Available-for-sale investments

Investments in equity securities that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are recognized in the balance sheet at cost less impairment losses.

(g) Accounting for the impairment of long-lived assets

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

There is no impairment loss recognized during the three months ended July 31, 2016 and 2015.

(h) Income tax

Income taxes are based on pre-tax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. The Company periodically assesses the need to establish valuation allowances against its deferred tax assets to the extent the Company no longer believes it is more likely than not that the tax assets will be fully utilized.

The Company evaluates a tax position to determine whether it is more likely than not that the tax position will be sustained upon examination, based upon the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to recognize and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold, no benefit is recognized.

(i) Fair value of financial instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

 Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

 Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

 Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

We measure the fair value of money market funds and equity securities based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.

(j) Revenue recognition

The Company assesses appropriate revenue recognition policy for each type of operation according to ASC 605-45

Revenue represents the invoiced value of services rendered and receivable during the year. Revenue is recognized when all of the following criteria are met:

• Persuasive evidence of an arrangement exists,

• Delivery has occurred or services have been rendered,

• The seller's price to the buyer is fixed or determinable, and

• Collectability is reasonably assured

Revenue recognition policy for each of the major products and services:

1. Discounted call services for consumer (EMS) as follow:

• Collaboration with CTT – REDtone China is appointed as the sole distributor for EMS and will recognize revenue when airtime is utilized by the consumer and the revenue recognized is on net basis which is computed based on a fixed sharing ratio of the total airtime utilized by consumers after netting of direct traffic termination cost and incidental expenses. REDtone China's role for Business Collaboration with China TieTong Telecommunications (CTT) would be as "Agent" as REDtone China is the sole distributor for EMS brand owned and controlled by CTT; and

• Collaboration with other telecommunication providers – REDtone China will act as a discounted consumer call Reseller whereby REDtone China will determine the service and package specification and pricing policies whereas China Unicom acts as a passive termination partner for call traffic.  REDtone China will pay China Unicom solely based on call traffic termination by China Unicom at a prescribed rate (defined as traffic termination costs on the books of REDtone China).  In this regard, REDtone China will recognize the revenue when airtime is utilized by the consumer and the value recognized as revenue is the call charges gross value. REDtone China's role for Business Collaboration with China Unicom would be as "Principal" as China Unicom is playing a passive role as traffic termination partner while REDtone China is fully responsible for the entire management of discounted call services

As this is a prepaid product, there is an expiration date for the product sold. If the airtime is not utilized by the expiration date, which is currently one year from the activation date, it will be deemed expired and revenue will be recognized based on the remaining gross value of the expired prepaid product.

2. Discounted call services for corporate as follow:

• Collaboration with CTT – the revenue recognize is the commission earned from distributing the discounted call services to corporate customer; and

• Collaboration with other telecommunication providers –the revenue recognized is the commission earned from distributing the discounted call services to corporate customer.

3. Reload services for prepaid mobile – revenue recognized is the commission earned.

4.         Collaboration with Shanghai Huili Telecommunications Co., Ltd ("Huili") – Huili will act as "intermediary agent" to resell the call traffic termination by REDtone China. Huili will pay REDtone China the termination costs on the books of REDtone China.

(k) Earnings per share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the year. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of July 31, 2016 and 2015, there were no dilutive securities outstanding.

(l) Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

(m) Retirement benefits

PRC mandates companies to contribute funds into the national retirement system, which benefits qualified employees based on where they were born within the country. The Company pays the required payment for qualified employees of the Company.

(n) Foreign currency translation

The accompanying consolidated financial statements are presented in United States dollars (US$). The functional currencies of the Company are the Hong Kong dollar (HK$) and the Renminbi (RMB), respectively. Capital accounts of the financial statements are translated into United States dollars from HK$ or RMB at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the year.

The translation rates are as follows:

	July 31, 2016	April 30, 2016	July 31, 2015
Period end RMB : US$ exchange rate	0.1507	0.1541	0.1613
Average period RMB : US$ exchange rate	0.1517	0.1570	0.1643
Period end HK$ : US$ exchange rate	0.1289	0.1286	0.1290
Average period HK$ : US$ exchange rate	0.1289	0.1289	0.1290

On July 21, 2005, the PRC changed its foreign currency exchange policy from a fixed RMB/US$ exchange rate into a flexible rate under the control of the PRC's government.

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.

(o) Recent Accounting Pronouncements

The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during the period.  Management has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company's reported financial position or operations in the near term.

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to July 31, 2016 through the date these financial statements were issued.

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Note 4 - Cash & Cash Equivalents

3 Months Ended

Jul. 31, 2016

Notes

Note 4 - Cash & Cash Equivalents

NOTE 4 - CASH AND CASH EQUIVALENTS

As of the balance sheet dates, cash and cash equivalents are summarized as follows:

	July 31, 2016	April 30, 2016
Cash and bank	$301,907	$345,315

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Note 5 - Other Receivables and Deposits

3 Months Ended

Jul. 31, 2016

Notes

Note 5 - Other Receivables and Deposits

NOTE 5 – OTHER RECEIVABLES AND DEPOSITS

Other receivables and deposits as of the dates were summarized as follows:

	July 31, 2016	April 30, 2016
Deposits	$203,968	$264,982

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Note 6 - Property, Plant and Equipment

3 Months Ended

Jul. 31, 2016

Notes

Note 6 - Property, Plant and Equipment

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of the balance sheet dates are summarized as follows:

	July 31, 2016	April 30, 2016
At cost:
Computer and software	$258,333	$165,435
Telecommunication equipment	5,168,125	5,303,150
Furniture, fixtures and equipment	53,516	54,628
Motor vehicles	117,229	119,870
Leasehold improvement	120,724	115,657
	5,717,927	5,758,740
Less: Accumulated depreciation	(4,684,014)	(4,744,180)
Property, plant and equipment, net	$1,033,913	$1,014,560

Depreciation expense attributable to the operations for the three months ended July 31, 2016 and 2015 amounted to $44,268 and $156,424, respectively.

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Note 7 - Intangible Assets

3 Months Ended

Jul. 31, 2016

Notes

Note 7 - Intangible Assets

NOTE 7 – INTANGIBLE ASSETS

Intangible assets as of the balance sheet dates are summarized as follows:

	July 31, 2016	April 30, 2016
At cost:
Operating concession	$554,289	$566,773
Customer base	75,340	77,037
IT license and software	2,280,548	2,275,419
	2,910,177	2,919,229
Less: Accumulated depreciation	(1,345,063)	(1,309,388)
Intangible assets, net	$1,565,114	$1,609,841

Amortization expense attributable to the operations for the three months ended July 31, 2016 and 2015 amounted to $39,148 and $40,126, respectively.  

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Note 8 - Amount Due From/(to) Related Parties

3 Months Ended

Jul. 31, 2016

Notes

Note 8 - Amount Due From/(to) Related Parties

NOTE 8 – AMOUNT DUE FROM/(TO) RELATED COMPANIES

As of the balance sheet dates, amount due from a related company that included in the Company's equity accounts were analyzed as follows:

	July 31, 2016	April 30, 2016
Fellow subsidiary:
REDtone Technology Sdn. Bhd.	$3,202,689	$3,235,344

The amount represents advances to the related company. As of the balance sheet dates, the amount is unsecured, non-interest bearing and is expected to be repaid within 2016.  

 Amount due to a related company as of the balance sheet dates were summarized as follows:

	July 31, 2016	April 30, 2016
Fellow subsidiary:
REDtone Telecommunications Sdn Bhd	$223,778	$173,409
Related party:
Shanghai Huili Telecommunications Co., Ltd	-	28,771
Non-controlling interests	1,759,013	1,798,633
	1,982,791	2,000,813

The amount due to the related company is unsecured, non-interest bearing and has no fixed repayment date.

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Note 9 - Accrued Expenses and Other Payables

3 Months Ended

Jul. 31, 2016

Notes

Note 9 - Accrued Expenses and Other Payables

NOTE 9 – ACCRUED EXPENSES AND OTHER PAYABLES

Accrued expenses and other payables as of the balance sheet dates were summarized as follows:

	July 31, 2016	April 30, 2016
Accrued expenses	$425,497	$379,165
Other payables	511,274	450,330
Total	$936,771	$829,495

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Note 10 - Deferred Income

3 Months Ended

Jul. 31, 2016

Notes

Note 10 - Deferred Income

NOTE 10 – DEFERRED INCOME

Deferred income consists of prepaid air-time sold which is yet to be utilized. The basis of revenue recognition for discounted call services is based on actual call charges made by end users. When calls are being made, the amount will be deducted from deferred income to the statement of income, net of call costs and expenses.

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Note 11 - Taxes Payable

3 Months Ended

Jul. 31, 2016

Notes

Note 11 - Taxes Payable

NOTE 11 – TAXES PAYABLE

Taxes payable at the balance sheet dates are summarized as follows:

	July 31, 2016	April 30, 2016
Income tax payable	$1,019,950	$992,222
Business tax and other tax payables	(11,603)	(19,995)
Total	$1,008,347	$972,227

Business tax represents PRC sales tax imposed upon the Company's services provided in the PRC.  Tax rates range from 3% to 6% depending on the nature of the taxable activities.

Income tax represents PRC income tax. The provision for PRC income tax is based on a statutory rate of 25% of the assessable income of the PRC subsidiaries as determined in accordance with the relevant income tax rules and regulations of the PRC.

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Note 12 - Income Tax Expense

3 Months Ended

Jul. 31, 2016

Notes

Note 12 - Income Tax Expense

NOTE 12 – INCOME TAX EXPENSE

	Three months ended July 31, 2016	Three months ended July 31, 2015
Current income tax in PRC and Hong Kong	$49,440	$21,662
Deferred tax income	-	-
Total	$49,440	$21,662

On April 29, 2014, RTSH obtained a tax benefit for which the income tax for 2013 and 2014 calendar year is exempt and the income tax for 2015, 2016 and 2017 calendar year will be subject to half-rate deduction.

A reconciliation of the expected tax with the actual tax expense is as follows:

	Three months ended July 31, 2016	Three months ended July 31, 2015
(Loss)/ Profit before provision for income taxes	$(81,782)	$15,370
Expected PRC income tax expense at statutory tax rate of 25%	(20,445)	3,843
Different tax rate for PRC/Hong Kong local authority	20,476	6,657
Utilisation of tax losses brought forward	-	(47,434)
Tax loss not provided for deferred tax	49,409	58,596
Total	$49,440	$21,662

 (i) All PRC subsidiaries are subject to PRC tax. The provision for PRC income tax is based on a statutory rate of 25% of the assessable income of the PRC subsidiaries as determined in accordance with the relevant income tax rules and regulations of the PRC.

(ii) Hong Kong subsidiaries are subject to Hong Kong profits tax. The provision for Hong Kong profits tax is based on a statutory rate of 16.5% of assessable profits in Hong Kong.

(iii) BVI subsidiaries are not subject to profits tax.

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Note 13 - Variable Interest Entities ("vies")

3 Months Ended

Jul. 31, 2016

Notes

Note 13 - Variable Interest Entities ("vies")

NOTE 13 – VARIABLE INTEREST ENTITIES ("VIEs")

On April 30, 2007, the Company entered into loan agreements with Mao Junbao ("MJ") and Mao Hong ("MH") for the establishment of Huitong. On April 30, 2007 the Company entered into an equity pledge agreement that provides that MJ and MH would pledge all their equities in Huitong to REDtone Shanghai.

Huitong acquired YuZhong, YuGuang, Haitai and FengCheng, as subsidiaries of the Company during financial year 2015.

Although the Company is not the shareholder of the above VIE subsidiaries, the Company has determined that it is the primary beneficiary of these entities, as the Company has controlling voting powers and entitled to receive the benefit from operations of these entities. Hence, these companies are identified as VIEs and are consolidated as if subsidiaries of the Company.

We did not identify any additional VIEs in which we hold a significant interest.

The total consolidated VIE assets and liabilities reflected on the Company's balance sheet are as follows:

	July 31, 2016	April 30, 2016
Assets
Cash and cash equivalents	$22,571	$161,340
Accounts receivable	634,182	640,656
Other receivables and deposits	46,086	185,144
Property, plant and equipment, net	479,920	413,072
Intangible assets, net	361,940	381,670
Total assets (not include amount due from intra-group companies and related parties)	1,544,699	1,781,882
Liabilities
Deferred income	972,557	1,145,770
Accounts payable	547,752	755,461
Accrued expenses and other payables	2,095,722	2,081,052
Taxes payable	73,443	18,332
Total liabilities (not include amount due to intra-group companies and related parties)	3,689,474	4,000,615

The results of VIEs are as follows, and are included in the consolidated statements of income of the Company:

	Three months ended July 31, 2016	Three months ended July 31, 2015
Revenue	$755,007	$1,683,697
Other income and gains	151	(12,028
Service costs (Not including service costs payable to intra-group companies)	(459,397)	(1,950,100)
Personnel cost	(58,570)	(93,417)
Depreciation expense	(9,801)	(73,168)
Amortization expense	(11,397)	(12,343)
Administrative and other expenses	(123,744)	(109,646)
Income/ (Loss) before provision for income taxes (Not including service costs payable to intra-group companies)	92,249	(567,005)
Provision for income taxes	(48,167)	(19,931)
Net income/ (loss)	44,082	(586,936)

Under the contractual arrangements with the VIEs, the Company has the power to direct activities of the VIEs and can have assets transferred freely out of the VIEs without restrictions. Therefore, the Company considers that there is no asset of VIEs that can only be used to settle obligations of the respective VIEs, except for registered capital and PRC statutory reserves of VIEs as of July 31, 2016. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. As the Company is conducting certain businesses mainly through its VIEs, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss.

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Note 14 - Related Party Transaction

3 Months Ended

Jul. 31, 2016

Notes

Note 14 - Related Party Transaction

NOTE 14 – RELATED PARTY TRANSACTION

	Three months ended July 31, 2016	Three months ended July 31, 2015
Revenue- Shanghai Huili Telecommunications Co., Ltd	$21,449	$586,719
Cost of Sales - Shanghai Huili Telecommunications Co., Ltd	(23,314)	(142,362)
Total	$(1,865)	$444,357

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Note 3 - Summary of Significant Accounting Policies (Policies)

3 Months Ended

Jul. 31, 2016

Policies

(b) Cash and Cash Equivalents

(b) Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

(c) Accounts receivable and other receivables

(c) Accounts receivable and other receivables

Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable.

(d) Property, Plant and Equipment

(d) Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation. The cost of maintenance and repairs is charged to the statement of operations as incurred, whereas significant renewals and improvements are capitalized. The cost and the related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of operations.

The Company provides for depreciation of property, plant and equipment principally by use of the straight-line method for financial reporting purposes.

Plant and equipment are depreciated over the following estimated useful lives:

Computer and software	5 years
Furniture, fixtures and equipment	5 years
Motor vehicles	5 years
Leasehold improvements	5 years
Telecommunication equipment	10 years

Depreciation expense attributable to the operations for the three month period ended July 31, 2016 and 2015 amounted to $44,268 and $156,424, respectively.

(e) Intangible assets

(e) Intangible assets

IT license and software operating license are generally amortized on a straight-line basis over the expected periods of benefit, in 20 years. Customer base are amortized on a straight-line basis over 3 years.

The Company performs regular review of identified intangible assets to determine if facts and circumstances indicate that the useful life is shorter than the original Company policies. If such facts and circumstances exist, the Company regularly assesses the recoverability of identified intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life.

Amortization expense attributable to the operations for the three month period ended July 31, 2016 and 2015 amounted to $39,148 and $40,126, respectively.

(f) Available-for-sale investments

(f) Available-for-sale investments

Investments in equity securities that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are recognized in the balance sheet at cost less impairment losses.

(g) Accounting for the impairment of long-lived assets

(g) Accounting for the impairment of long-lived assets

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

There is no impairment loss recognized during the three months ended July 31, 2016 and 2015.

(h) Income tax

(h) Income tax

Income taxes are based on pre-tax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. The Company periodically assesses the need to establish valuation allowances against its deferred tax assets to the extent the Company no longer believes it is more likely than not that the tax assets will be fully utilized.

The Company evaluates a tax position to determine whether it is more likely than not that the tax position will be sustained upon examination, based upon the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to recognize and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold, no benefit is recognized.

(i) Fair value of financial instruments

(i) Fair value of financial instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

 Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

 Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

 Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

We measure the fair value of money market funds and equity securities based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.

(j) Revenue Recognition

(j) Revenue recognition

The Company assesses appropriate revenue recognition policy for each type of operation according to ASC 605-45

Revenue represents the invoiced value of services rendered and receivable during the year. Revenue is recognized when all of the following criteria are met:

• Persuasive evidence of an arrangement exists,

• Delivery has occurred or services have been rendered,

• The seller's price to the buyer is fixed or determinable, and

• Collectability is reasonably assured

Revenue recognition policy for each of the major products and services:

1. Discounted call services for consumer (EMS) as follow:

• Collaboration with CTT – REDtone China is appointed as the sole distributor for EMS and will recognize revenue when airtime is utilized by the consumer and the revenue recognized is on net basis which is computed based on a fixed sharing ratio of the total airtime utilized by consumers after netting of direct traffic termination cost and incidental expenses. REDtone China's role for Business Collaboration with China TieTong Telecommunications (CTT) would be as "Agent" as REDtone China is the sole distributor for EMS brand owned and controlled by CTT; and

• Collaboration with other telecommunication providers – REDtone China will act as a discounted consumer call Reseller whereby REDtone China will determine the service and package specification and pricing policies whereas China Unicom acts as a passive termination partner for call traffic.  REDtone China will pay China Unicom solely based on call traffic termination by China Unicom at a prescribed rate (defined as traffic termination costs on the books of REDtone China).  In this regard, REDtone China will recognize the revenue when airtime is utilized by the consumer and the value recognized as revenue is the call charges gross value. REDtone China's role for Business Collaboration with China Unicom would be as "Principal" as China Unicom is playing a passive role as traffic termination partner while REDtone China is fully responsible for the entire management of discounted call services

As this is a prepaid product, there is an expiration date for the product sold. If the airtime is not utilized by the expiration date, which is currently one year from the activation date, it will be deemed expired and revenue will be recognized based on the remaining gross value of the expired prepaid product.

2. Discounted call services for corporate as follow:

• Collaboration with CTT – the revenue recognize is the commission earned from distributing the discounted call services to corporate customer; and

• Collaboration with other telecommunication providers –the revenue recognized is the commission earned from distributing the discounted call services to corporate customer.

3. Reload services for prepaid mobile – revenue recognized is the commission earned.

4.         Collaboration with Shanghai Huili Telecommunications Co., Ltd ("Huili") – Huili will act as "intermediary agent" to resell the call traffic termination by REDtone China. Huili will pay REDtone China the termination costs on the books of REDtone China.

(k) Earnings Per Share

(k) Earnings per share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the year. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of July 31, 2016 and 2015, there were no dilutive securities outstanding.

(l) Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

(m) Retirement benefits

(m) Retirement benefits

PRC mandates companies to contribute funds into the national retirement system, which benefits qualified employees based on where they were born within the country. The Company pays the required payment for qualified employees of the Company.

(n) Foreign Currency Translation

(n) Foreign currency translation

The accompanying consolidated financial statements are presented in United States dollars (US$). The functional currencies of the Company are the Hong Kong dollar (HK$) and the Renminbi (RMB), respectively. Capital accounts of the financial statements are translated into United States dollars from HK$ or RMB at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the year.

The translation rates are as follows:

	July 31, 2016	April 30, 2016	July 31, 2015
Period end RMB : US$ exchange rate	0.1507	0.1541	0.1613
Average period RMB : US$ exchange rate	0.1517	0.1570	0.1643
Period end HK$ : US$ exchange rate	0.1289	0.1286	0.1290
Average period HK$ : US$ exchange rate	0.1289	0.1289	0.1290

On July 21, 2005, the PRC changed its foreign currency exchange policy from a fixed RMB/US$ exchange rate into a flexible rate under the control of the PRC's government.

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.

(o) Recent Accounting Pronouncements

(o) Recent Accounting Pronouncements

The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during the period.  Management has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company's reported financial position or operations in the near term.

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to July 31, 2016 through the date these financial statements were issued.

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Note 3 - Summary of Significant Accounting Policies (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Property, Plant and Equipment, Estimated Useful Lives

Plant and equipment are depreciated over the following estimated useful lives:

Computer and software	5 years
Furniture, fixtures and equipment	5 years
Motor vehicles	5 years
Leasehold improvements	5 years
Telecommunication equipment	10 years

Foreign Currency Transactions, Description

The translation rates are as follows:

	July 31, 2016	April 30, 2016	July 31, 2015
Period end RMB : US$ exchange rate	0.1507	0.1541	0.1613
Average period RMB : US$ exchange rate	0.1517	0.1570	0.1643
Period end HK$ : US$ exchange rate	0.1289	0.1286	0.1290
Average period HK$ : US$ exchange rate	0.1289	0.1289	0.1290

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Note 4 - Cash & Cash Equivalents (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Schedule of Cash and Cash Equivalents

As of the balance sheet dates, cash and cash equivalents are summarized as follows:

	July 31, 2016	April 30, 2016
Cash and bank	$301,907	$345,315

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Note 5 - Other Receivables and Deposits (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Schedule of Other Receivables and Deposits

Other receivables and deposits as of the dates were summarized as follows:

	July 31, 2016	April 30, 2016
Deposits	$203,968	$264,982

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Note 6 - Property, Plant and Equipment (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Property, Plant and Equipment

Property, plant and equipment as of the balance sheet dates are summarized as follows:

	July 31, 2016	April 30, 2016
At cost:
Computer and software	$258,333	$165,435
Telecommunication equipment	5,168,125	5,303,150
Furniture, fixtures and equipment	53,516	54,628
Motor vehicles	117,229	119,870
Leasehold improvement	120,724	115,657
	5,717,927	5,758,740
Less: Accumulated depreciation	(4,684,014)	(4,744,180)
Property, plant and equipment, net	$1,033,913	$1,014,560

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Note 7 - Intangible Assets (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Schedule of Intangible Assets

Intangible assets as of the balance sheet dates are summarized as follows:

	July 31, 2016	April 30, 2016
At cost:
Operating concession	$554,289	$566,773
Customer base	75,340	77,037
IT license and software	2,280,548	2,275,419
	2,910,177	2,919,229
Less: Accumulated depreciation	(1,345,063)	(1,309,388)
Intangible assets, net	$1,565,114	$1,609,841

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Note 8 - Amount Due From/(to) Related Parties (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Due From Related Party

As of the balance sheet dates, amount due from a related company that included in the Company's equity accounts were analyzed as follows:

	July 31, 2016	April 30, 2016
Fellow subsidiary:
REDtone Technology Sdn. Bhd.	$3,202,689	$3,235,344

The amount represents advances to the related company. As of the balance sheet dates, the amount is unsecured, non-interest bearing and is expected to be repaid within 2016.  

 Amount due to a related company as of the balance sheet dates were summarized as follows:

	July 31, 2016	April 30, 2016
Fellow subsidiary:
REDtone Telecommunications Sdn Bhd	$223,778	$173,409
Related party:
Shanghai Huili Telecommunications Co., Ltd	-	28,771
Non-controlling interests	1,759,013	1,798,633
	1,982,791	2,000,813

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Note 9 - Accrued Expenses and Other Payables (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Schedule of Accrued Expenses and Other Payables

Accrued expenses and other payables as of the balance sheet dates were summarized as follows:

	July 31, 2016	April 30, 2016
Accrued expenses	$425,497	$379,165
Other payables	511,274	450,330
Total	$936,771	$829,495

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Note 11 - Taxes Payable (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Schedule of Taxes Payable

Taxes payable at the balance sheet dates are summarized as follows:

	July 31, 2016	April 30, 2016
Income tax payable	$1,019,950	$992,222
Business tax and other tax payables	(11,603)	(19,995)
Total	$1,008,347	$972,227

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Note 12 - Income Tax Expense (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Schedule of Components of Income Tax Expense (Benefit)

	Three months ended July 31, 2016	Three months ended July 31, 2015
Current income tax in PRC and Hong Kong	$49,440	$21,662
Deferred tax income	-	-
Total	$49,440	$21,662

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the expected tax with the actual tax expense is as follows:

	Three months ended July 31, 2016	Three months ended July 31, 2015
(Loss)/ Profit before provision for income taxes	$(81,782)	$15,370
Expected PRC income tax expense at statutory tax rate of 25%	(20,445)	3,843
Different tax rate for PRC/Hong Kong local authority	20,476	6,657
Utilisation of tax losses brought forward	-	(47,434)
Tax loss not provided for deferred tax	49,409	58,596
Total	$49,440	$21,662

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Note 13 - Variable Interest Entities ("vies") (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Schedule of Consolidated VIEs

The total consolidated VIE assets and liabilities reflected on the Company's balance sheet are as follows:

	July 31, 2016	April 30, 2016
Assets
Cash and cash equivalents	$22,571	$161,340
Accounts receivable	634,182	640,656
Other receivables and deposits	46,086	185,144
Property, plant and equipment, net	479,920	413,072
Intangible assets, net	361,940	381,670
Total assets (not include amount due from intra-group companies and related parties)	1,544,699	1,781,882
Liabilities
Deferred income	972,557	1,145,770
Accounts payable	547,752	755,461
Accrued expenses and other payables	2,095,722	2,081,052
Taxes payable	73,443	18,332
Total liabilities (not include amount due to intra-group companies and related parties)	3,689,474	4,000,615

The results of VIEs are as follows, and are included in the consolidated statements of income of the Company:

	Three months ended July 31, 2016	Three months ended July 31, 2015
Revenue	$755,007	$1,683,697
Other income and gains	151	(12,028
Service costs (Not including service costs payable to intra-group companies)	(459,397)	(1,950,100)
Personnel cost	(58,570)	(93,417)
Depreciation expense	(9,801)	(73,168)
Amortization expense	(11,397)	(12,343)
Administrative and other expenses	(123,744)	(109,646)
Income/ (Loss) before provision for income taxes (Not including service costs payable to intra-group companies)	92,249	(567,005)
Provision for income taxes	(48,167)	(19,931)
Net income/ (loss)	44,082	(586,936)

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Note 14 - Related Party Transaction (Tables)

3 Months Ended

Jul. 31, 2016

Tables/Schedules

Schedule of Related Party Transactions

	Three months ended July 31, 2016	Three months ended July 31, 2015
Revenue- Shanghai Huili Telecommunications Co., Ltd	$21,449	$586,719
Cost of Sales - Shanghai Huili Telecommunications Co., Ltd	(23,314)	(142,362)
Total	$(1,865)	$444,357

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Note 1 - Organization and Principal Activities (Details)	3 Months Ended
	Jul. 31, 2016
Shanghai Yuzhong Financial Information Service Co Ltd
Domicile and Date of Incorporation	The PRC July 16, 2014
Effective Ownership	49.80%
Principal Activities	Investment holding
Shanghai Yuguang Automobile Inspection Technology Co Ltd
Domicile and Date of Incorporation	The PRC July 17, 2014
Effective Ownership	59.80%
Principal Activities	Investment holding
Redtone Telecommunication China Limited
Domicile and Date of Incorporation	Hong Kong May 26, 2005
Effective Ownership	100.00%
Principal Activities	Investment holding
Redtone Telecommunication Shanghai Limited
Domicile and Date of Incorporation	The PRC July, 26, 2005
Effective Ownership	100.00%
Principal Activities	Provides technical support services to group companies
Shanghai Huitong Telecommunication Company Limited
Domicile and Date of Incorporation	The PRC March, 26, 2007
Effective Ownership	100.00%
Principal Activities	Marketing and distribution of IP call and discounted call services in the PRC
Shanghai Jiamao E Commerce Company Limited
Domicile and Date of Incorporation	The PRC March 21, 2008
Effective Ownership	100.00%
Principal Activities	Marketing and distribution of IP call and discounted call services in the PRC
Shanghai Xin Chang Information Technology Company Limited
Domicile and Date of Incorporation	The PRC January 13, 2006
Effective Ownership	56.00%
Principal Activities	Marketing and distribution of IP call and discounted call services in the PRC
VMS Technology Limited
Domicile and Date of Incorporation	Hong Kong September 14, 1998
Effective Ownership	100.00%
Principal Activities	Trading of discounted call related equipment and provision of related services
RT Communications Ltd
Domicile and Date of Incorporation	BVI February 24, 2010
Effective Ownership	100.00%
Principal Activities	Investment holding
Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Domicile and Date of Incorporation	The PRC October 31, 2013
Effective Ownership	30.50%
Principal Activities	Investment holding
Feng Cheng Motor Vehicle Inspection Co., Ltd.
Domicile and Date of Incorporation	The PRC November 30, 2012
Effective Ownership	30.50%
Principal Activities	Dormant

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Note 3 - Summary of Significant Accounting Policies: (d) Property, Plant and Equipment: Property, Plant and Equipment, Estimated Useful Lives (Details)	3 Months Ended
	Jul. 31, 2016
Computer and Software
Property, Plant and Equipment, Useful Life	5 years
Furniture, Fixtures and Equipment
Property, Plant and Equipment, Useful Life	5 years
Motor Vehicles
Property, Plant and Equipment, Useful Life	5 years
Leasehold Improvements
Property, Plant and Equipment, Useful Life	5 years
Telecommunication Equipment
Property, Plant and Equipment, Useful Life	10 years

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Note 3 - Summary of Significant Accounting Policies: (d) Property, Plant and Equipment (Details) - USD ($)	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Details
Depreciation expense	$ 44,268	$ 156,424

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Note 3 - Summary of Significant Accounting Policies: (e) Intangible assets (Details) - USD ($)	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Amortization expense	$ 39,148	$ 40,126
IT license and software and operating license
Intangible Asset, useful life	20 years
Customer base
Intangible Asset, useful life	3 years

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Note 3 - Summary of Significant Accounting Policies: (n) Foreign Currency Translation: Foreign Currency Transactions, Description (Details)	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015
China, Yuan Renminbi
Foreign Currency Exchange Rate, Translation	0.1507	0.1541	0.1613
China, Yuan Renminbi | Average Yearly
Foreign Currency Exchange Rate, Translation	0.1517	0.1570	0.1643
Hong Kong, Dollars
Foreign Currency Exchange Rate, Translation	0.1289	0.1286	0.1290
Hong Kong, Dollars | Average Yearly
Foreign Currency Exchange Rate, Translation	0.1289	0.1289	0.1290

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Note 4 - Cash & Cash Equivalents: Schedule of Cash and Cash Equivalents (Details) - USD ($)	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015	Apr. 30, 2015
Details
Cash and cash equivalents	$ 301,907	$ 345,315	$ 834,125	$ 603,100

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Note 5 - Other Receivables and Deposits: Schedule of Other Receivables and Deposits (Details) - USD ($)	Jul. 31, 2016	Apr. 30, 2016
Details
Deposits	$ 203,968	$ 264,982

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Note 6 - Property, Plant and Equipment: Property, Plant and Equipment (Details) - USD ($)	Jul. 31, 2016	Apr. 30, 2016
At cost:
Less: Accumulated depreciation	$ (4,684,014)	$ (4,744,180)
Property, plant and equipment, net	1,033,913	1,014,560
Computer and Software
At cost:
Property, Plant and Equipment, Gross	258,333	165,435
Telecommunication Equipment
At cost:
Property, Plant and Equipment, Gross	5,168,125	5,303,150
Furniture, Fixtures and Equipment
At cost:
Property, Plant and Equipment, Gross	53,516	54,628
Motor Vehicles
At cost:
Property, Plant and Equipment, Gross	117,229	119,870
Leasehold Improvements
At cost:
Property, Plant and Equipment, Gross	$ 120,724	$ 115,657

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Note 6 - Property, Plant and Equipment (Details) - USD ($)	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Details
Depreciation expense	$ 44,268	$ 156,424

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Note 7 - Intangible Assets: Schedule of Intangible Assets (Details) - USD ($)	Jul. 31, 2016	Apr. 30, 2016
At cost:
Operating concession	$ 554,289	$ 566,773
Customer Base	75,340	77,037
IT Licenses and Software	2,280,548	2,275,419
Less: Accumulated amortization	(1,345,063)	(1,309,388)
Intangible Assets, Net (Excluding Goodwill), Total	$ 1,565,114	$ 1,609,841

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Note 7 - Intangible Assets (Details) - USD ($)	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Details
Amortization expense	$ 39,148	$ 40,126

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Note 8 - Amount Due From/(to) Related Parties: Due From Related Party (Details) - USD ($)	Jul. 31, 2016	Apr. 30, 2016
Amount due from a related company	$ 3,202,689	$ 3,235,344
Amount due to a related company	1,982,791	2,000,813
Shanghai Huili Telecommunications Co., Ltd
Amount due to a related company	0	28,771
REDtone Technology Sdn. Bhd.
Amount due from a related company	3,202,689	3,235,344
Redtone Telecommunications Sdn Bhd
Amount due to a related company	223,778	173,409
Non-controlling interests
Amount due to a related company	$ 1,759,013	$ 1,798,633

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Note 9 - Accrued Expenses and Other Payables: Schedule of Accrued Expenses and Other Payables (Details) - USD ($)	Jul. 31, 2016	Apr. 30, 2016
Details
Accrued expenses	$ 425,497	$ 379,165
Other payables	511,274	450,330
Accrued expenses and other payables	$ 936,771	$ 829,495

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Note 11 - Taxes Payable: Schedule of Taxes Payable (Details) - USD ($)	Jul. 31, 2016	Apr. 30, 2016
Details
Income tax payable	$ 1,019,950	$ 992,222
Business tax and other tax payable	(11,603)	(19,995)
Total	$ 1,008,347	$ 972,227

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Note 11 - Taxes Payable (Details) - CHINA	3 Months Ended
	Jul. 31, 2016
Statutory tax rate	25.00%
Minimum
Business sales tax rate	3.00%
Maximum
Business sales tax rate	6.00%

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Note 12 - Income Tax Expense: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Details
Current - PRC income tax and Hong Kong	$ 49,440	$ 21,662
Deferred income tax income	0	0
Total	$ 49,440	$ 21,662

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Note 12 - Income Tax Expense: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Details
Income before provision for income taxes - continuing operations	$ (81,782)	$ 15,370
Expected PRC income tax expense at statutory tax rate of 25%	(20,445)	3,843
Different tax rate for PRC/Hong Kong local authority	20,476	6,657
Utilization of tax loss brought forward	0	(47,434)
Tax loss not provided for deferred tax	49,409	58,596
Total	$ 49,440	$ 21,662

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Note 13 - Variable Interest Entities ("vies"): Schedule of Consolidated VIEs (Details) - USD ($)	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015	Apr. 30, 2016	Apr. 30, 2015
Assets
Cash and cash equivalents	$ 301,907	$ 834,125	$ 345,315	$ 603,100
Other receivables and deposits	203,968		264,982
Property, plant and equipment, net	1,033,913		1,014,560
Intangible asset, net	1,565,114		1,609,841
Liabilities
Accounts payable	568,694		776,356
Total liabilities	5,469,428		5,724,661
Revenue	790,053	2,506,918
Other income and gains	1,277	14,488
Service costs	(459,505)	(1,950,230)
Personnel cost	(127,139)	(159,863)
Depreciation expense	(44,268)	(156,424)
Amortization expense	(39,148)	(40,126)
Administrative and other expenses	(203,052)	(199,393)
Provision for income taxes	49,440	21,662
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure
Assets
Cash and cash equivalents	22,571		161,340
Accounts receivable	634,182		640,656
Other receivables and deposits	46,086		185,144
Property, plant and equipment, net	479,920		413,072
Intangible asset, net	361,940		381,670
Total assets assets (not include amount due from intra-group companies)	1,544,699		1,781,882
Liabilities
Deferred income	972,557		1,145,770
Accounts payable	547,752		755,461
Accrued Liabilities and Other Liabilities	2,095,722		2,081,052
Taxes payables	73,443		18,332
Total liabilities	3,689,474		$ 4,000,615
Revenue	755,007	1,683,697
Other income and gains	151	(12,028)
Service costs	(459,397)	(1,950,100)
Personnel cost	(58,570)	(93,417)
Depreciation expense	(9,801)	(73,168)
Amortization expense	(11,397)	(12,343)
Administrative and other expenses	(123,744)	(109,646)
Income before provision for income taxes (Not including service costs payable to other intra-group companies)	92,249	(567,005)
Provision for income taxes	(48,167)	(19,931)
Net Income/(loss)	$ 44,082	$ (586,936)

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Note 14 - Related Party Transaction: Schedule of Related Party Transactions (Details) - Shanghai Huili Telecommunications Co., Ltd - USD ($)	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Revenue from Shanghai Huili Tel.	$ 21,449	$ 586,719
Cost of Sales from Shanghai Huili Tel.	(23,314)	(142,362)
Total	$ (1,865)	$ 444,357