REDtone Asia (RTAS) 10-K/A 16 Sep 15 2015 FY Annual report (amended) Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	May. 31, 2015	Nov. 30, 2014
Document and Entity Information:
Entity Registrant Name	REDtone Asia Inc
Document Type	10-K
Document Period End Date	May 31, 2015
Amendment Flag	false
Entity Central Index Key	1,341,319
Current Fiscal Year End Date	--05-31
Entity Common Stock, Shares Outstanding	282,315,356
Entity Public Float		$ 16,938,921
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	FY
Trading Symbol	rtas

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	May. 31, 2015	May. 31, 2014	May. 31, 2013
Current assets
Cash and cash equivalents	$ 5,062,576	$ 2,991,276	$ 3,681,851
Inventories	3,951	3,974
Accounts receivable	825,790	2,898,976
Tax recoverable		23,372
Other receivables and deposits	361,780	1,083,269
Assets held for sale		1,713,011
Total current assets	6,254,097	8,713,878
Property, plant and equipment, net	3,803,404	1,451,894
Intangible assets, net	1,777,171	1,939,613
Goodwill	377,171	610,386
Total assets	12,211,843	12,715,771
Current liabilities
Deferred income	794,435	743,793
Accounts payable	781,362	2,798,373
Accrued expenses and other payables	883,459	582,240
Amount due to Non-controlling interest	2,033,852	148,791
Taxes payable	656,242	671,125
Liabilities related to assets held for sale		56,861
Total current liabilities	5,149,350	5,001,183
Deferred tax liabilities		4,780
Total liabilities	5,149,350	5,005,963
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	(3,289,447)	(3,272,950)
Retained earnings	2,141,129	2,172,842
Accumulated other comprehensive income	836,582	891,021
Total stockholders' equity	7,443,389	7,546,038	9,738,274
Non-controlling interests	(380,896)	163,770
Total equity	7,062,493	7,709,808	$ 9,738,274
Total liabilities and stockholders' equity	$ 12,211,843	$ 12,715,771

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares	May. 31, 2015	May. 31, 2014
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

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Continuing operations
Revenue	$ 8,423,788	$ 6,176,820
Other income and gains	117,179	149,588
Service costs	(6,908,020)	(2,955,367)
Personnel cost	(827,606)	(752,868)
Depreciation expense	(541,142)	(484,432)
Amortization expense	(321,033)	(137,452)
Administrative and other expenses	(1,165,708)	(806,221)
(Loss)/income before provision for income taxes	(1,222,542)	1,190,068
(Provision for income taxes)/income tax income	(68,002)	104,362
Net (loss)/income before non-controlling interest	(1,290,544)	1,294,430
Share of loss by non-controlling interest	351,862	27,435
Net (loss)/income	(938,682)	1,321,865
Discontinued operations
Net loss	(104,018)	(244,237)
Gain on disposal of discontinued operations	1,010,987
Net income/(loss) for the year	906,969	(244,237)
Net (loss)/income for the year
Net (loss)/income before non-controlling interest	(383,575)	1,050,193
Non-controlling interest	351,862	27,435
Net (loss)/income for the year	(31,713)	1,077,628
Other comprehensive (loss)/income
Loss on foreign currency translation of continuing operations	(71,601)	(4,876)
Share of other comprehensive income by non-controlling interest	4,089	(1,810)
Other comprehensive loss attributable to shareholders of the Company	(67,512)	(6,686)
Gain on foreign currency translation of discontinued operations	17,162	7,962
Total other comprehensive (loss)/income	(50,350)	1,276
Total comprehensive (loss)/income
Attributable to continuing operations	(1,006,194)	1,315,179
Attributable to discontinued operations	924,131	(236,275)
Total comprehensive (loss)/income	$ (82,063)	$ 1,078,904
Earnings per share, basic and diluted
continuing operations	$ 0	$ 0
discontinued operations	$ 0	$ 0
Weighted average number of shares	282,315,325	282,315,325

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY - USD ($)	Common Stock	Additional paid in capital	Amount due from a related company	Retained earnings	Other comprehensive income	Total stock-holders' equity	Non controlling interests	Total
Equity Balance, beginning of period, Value at May. 31, 2013	$ 28,232	$ 7,726,893		$ 1,095,214	$ 887,935	$ 9,738,274		$ 9,738,274
Equity Balance, beginning of period, Shares at May. 31, 2013	282,315,356
Non-controlling interest arising from acquisition of subsidiary							$ 193,015	193,015
Amount due from a related party recognized as an offset against equity			$ (3,272,950)			(3,272,950)		(3,272,950)
Net income for the year				1,077,628		1,077,628	(27,435)	1,050,193
Foreign currency translation adjustments					3,086	3,086	(1,810)	1,276
Equity Balance, end of period, Value at May. 31, 2014	$ 28,232	7,726,893	(3,272,950)	2,172,842	891,021	7,546,038	163,770	7,709,808
Equity Balance, end of period, Shares at May. 31, 2014	282,315,356
Non-controlling interest arising from acquisition of subsidiary							(196,893)	(196,893)
Increase in amount due from a related company			(16,497)			(16,497)		(16,497)
Net income for the year				(31,713)		(31,713)	(351,862)	(383,575)
Foreign currency translation adjustments					(54,439)	(54,439)	4,089	(50,350)
Equity Balance, end of period, Value at May. 31, 2015	$ 28,232	$ 7,726,893	$ (3,289,447)	$ 2,141,129	$ 836,582	$ 7,443,389	$ (380,896)	$ 7,062,493
Equity Balance, end of period, Shares at May. 31, 2015	282,315,356

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Cash flows from continuing operating activities
Net (loss)/income before non-controlling interest	$ (1,290,544)	$ 1,294,430
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Amortization expense	321,033	137,452
Depreciation expense	541,142	484,432
Deferred tax	(4,759)	(15,071)
Provision for doubtful accounts		141,289
Changes in operating assets and liabilities:
Decrease/(increase) in accounts receivable	2,073,186	(501,009)
Decrease/(increase)in inventories	23	(9)
Decrease/(increase) in other receivables and deposits	721,489	(795,539)
Decrease/(increase) in tax recoverable	23,372	(49)
Decrease in deferred income	50,642	(96,947)
(Decrease) in accounts payable	(2,017,011)	(887,585)
(Decrease) in tax payables	(14,883)	(46,959)
Increase in accrued liabilities and other payables	301,219	88,807
Net cash provided by/(used in) continuing operating activities	704,909	(196,758)
Net cash (used in) discontinued operating activities	(113,811)	(114,149)
Net cash (used in)/provided by operating activities	591,098	(310,907)
Cash flows from investing activities - continuing operations
Purchase of property, plant and equipment	(1,692,890)	(221,053)
Purchases of intangible assets	(161,400)	(81,450)
(Increase)/decrease in amount due from a related company	(16,497)	29,351
Net cash (used in) acquisition of interest in subsidiaries	(103,874)	(245,655)
Proceeds from disposal of subsidiaries	4,565,935
Net cash provided by/(used in) continuing investing activities	2,591,274	(518,807)
Net cash flows (used in) discontinued investing activities	(1,590,743)
Net cash (used in)/provided by investing activities	1,000,531	(518,807)
Cash flows from continuing financing activities
Decrease in amount due to discontinued operations	(1,375,268)
Capital contributed by non-controlling interests	64,599
Increase in amount due to related parties	148,993	32,473
Net cash (used in)/provided by continuing financing activities	$ (1,161,676)	$ 32,473
Net cash flows from discontinued financing activities
Net cash (used in)/provided by financing activities	$ (1,161,676)	$ 32,473
Net increase/(decrease) in cash and cash equivalents
Continuing operations	2,134,507	(683,092)
Discontinued operations	(1,704,554)	(114,149)
Net increase/(decrease) in cash and cash equivalents	429,953	(797,241)
Effect of exchange rate changes on cash and cash equivalents
Continuing operations	(63,207)	(7,483)
Discontinued operations	17,162	4,301
Effect of exchange rate changes on cash and cash equivalents	(46,045)	(3,182)
Cash and cash equivalents at beginning of year
Continuing operations	2,991,276	3,681,851
Discontinued operations	1,687,392	1,797,240
Cash and cash equivalents at beginning of year	4,678,668	5,479,091
Less: cash and cash equivalents included in beginning assets held for sale	(1,687,392)
Cash and cash equivalents of continuing operations at beginning of year	2,991,276	5,479,091
Cash and cash equivalents at end of year
Continuing operations	5,062,576	2,991,276
Discontinued operations (included in assets held for sale)		1,687,392
Cash and cash equivalents at end of year	5,062,576	$ 4,678,668
Supplementary information - continuing operations
Cash paid for income taxes	$ 42,639
Cash paid for interest

Note 1 - Organization and Princ

Note 1 - Organization and Principal Activities	12 Months Ended
	May. 31, 2015
Notes
Note 1 - Organization and Principal Activities	NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES REDtone Asia, Inc. and subsidiaries (the “Company”) are a group of companies in The People’s Republic of China (“PRC”). The principal activities of the Company are that of a Telecommunications provider for mobile, fixed and international gateway services. REDtone provides a wide range of telecommunication services, including prepaid and postpaid discounted call services to corporate customers and consumers as well as prepaid mobile air-time top-up. The Company also offers prepaid shopping card services. The Company’s major subsidiaries during the years are illustrated as follows: Name Domicile and date of incorporation Effective ownership Principal activities Redtone Telecommunication (China) Limited (“Redtone China”) Hong Kong May 26, 2005 100% Investment holding Redtone Telecommunications (Shanghai) Limited (“Redtone Shanghai”) The PRC July, 26, 2005 100% Provides technical support services to group companies Shanghai Hongsheng Net Telecommunication Company Limited (“Hongsheng”) 1, 2 The PRC November 29, 2006 100% Marketing and distribution of discounted call services to PRC consumer market Shanghai Huitong Telecommunication Company Limited (“Huitong”) 2 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”) 2 The PRC March 21, 2008 100% Marketing and distribution of products on the internet Nantong Jiatong Investment Consultant Co., Ltd (“Nantong Jiatong”) 2, 3 The PRC May 17, 2011 100% Investment holding Shanghai QianYue Business Administration Co., Ltd. ("QBA") 1, 2 The PRC December 12, 2008 100% Provision of prepaid shopping-card services in the PRC Shanghai Xin Chang Information Technology Company Limited (“Xin Chang”) 2 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”) 2, 4 The PRC July 16, 2014 49.8% Investment holding Shanghai YuGuang Automobile Inspection Technology Co., Ltd (“YuGuang”) 2, 4 The PRC July 17, 2014 59.8% Investment holding Taizhou Haitai Motor Vehicle Inspection Co, Ltd. (“Haitai”) 2, 4 The PRC October 31, 2013 30.5% Investment holding Feng Cheng Motor Vehicle Inspection Co., Ltd. (“FengCheng”) 2, 4 The PRC November 30, 2012 30.5% Provision of services for motor vehicle technical and emission inspection 1 - Disposed of during the year 2 - Variable interest entities 3 - Deregistered during the year 4 - Acquired/incorporated during the year Nantong Jiatong, Hongsheng and QBA were disposed of July 25, 2014 Prior to disposal of Hongsheng, the Company transferred its equity interest in Xin Chang to Huitong. The statutory registration was completed in September 2014. YuZhong, YuGuang, Haitai and FengCheng are new subsidiaries during the year. See also Footnote 5.

Note 2 - Principles of Consolid

Note 2 - Principles of Consolidation	12 Months Ended
	May. 31, 2015
Notes
Note 2 - Principles of Consolidation	NOTE 2 – PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements for the years ended May 31, 2015 and 2014 include the accounts of the Company, the Company’s subsidiaries and VIEs (see Note 1). The consolidated financial statements are prepared in accordance with generally accepted accounting principles used in the United States of America, and all significant intercompany balances and transactions have been eliminated. The functional currency for the majority of the Company’s operations is the Renminbi (“RMB”), while the reporting currency is the US Dollar.

Note 3 - Summary of Significant

Note 3 - Summary of Significant Accounting Policies	12 Months Ended
	May. 31, 2015
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. Provision for doubtful accounts for the years ended May 31, 2015 and 2014 amounted to $nil and $141,289, respectively. (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 continuing operations for the years ended May 31, 2015 and 2014 amounted to $541,142 and $484,432, respectively. Depreciation expense attributable to discontinued operations for the years ended May 31, 2015 and 2014 amounted to $3,689 and $182,797, respectively. (e) Intangible assets IT license and software and operating license and 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 continuing operations for the years ended May 31, 2015 and 2014 amounted to $321,033 and $137,452, respectively. Amortization expense attributable to discontinued operations for the years ended May 31, 2014 and 2013 amounted to $nil and $nil, 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 years ended May 31, 2015 and 2014. (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: o o o o Revenue recognition policy for each of the major products and services: 1. Discounted call services for consumer (EMS) as follow: o 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 o 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: o Collaboration with CTT – the revenue recognize is the commission earned from distributing the discounted call services to corporate customer; and o 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. Discontinued prepaid shopping-card services – revenue recognized is the commission earned. (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 May 31, 2015 and 2010, 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: May 31, 2015 May 31, 2014 Year end RMB : US$ exchange rate 0.1612 0.1621 Average yearly RMB : US$ exchange rate 0.1614 0.1629 Year end HK$ : US$ exchange rate 0.1290 0.1290 Average yearly HK$ : US$ exchange rate 0.1290 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 March 31, 2015 through the date these financial statements were issued.

Note 4 - Disposal of Subsidiari

Note 4 - Disposal of Subsidiaries and Discontinued Operation	12 Months Ended
	May. 31, 2015
Notes
Note 4 - Disposal of Subsidiaries and Discontinued Operation	NOTE 4 – DISPOSAL OF SUBSIDIARIES AND DISCONTINUED OPERATION On July 25, 2014, the Company entered into an agreement to dispose of its entire equity interest in Hongsheng, a VIE subsidiary, to Guotai Investment Holdings Limited at a total cash consideration of approximately $4.54 million . Pursuant to the agreement, Hongsheng shall transfer all its operations, assets and liabilities other than investment in QBA prior to the completion of the above transaction. Therefore, the entire arrangement is to dispose of the shell of Hongsheng together with the entire interest in QBA. As of the disposal date, QBA’s assets and liabilities are summarized as follows: July 25, 2014 May 31, 2014 Assets Cash and cash equivalents $2,969,661 $1,687,392 Inventories 6,708 6,669 Accounts receivable 525 522 Other receivables and deposits 8,892 8,841 Property, plant and equipment, net 5,937 9,587 Total assets 2,991,723 1,713,011 Liabilities Accounts payable 29,699 32,701 Accrued expenses and other payables 17,462 24,160 Total current liabilities 47,161 56,861 Net assets of QBA 2,944,562 1,656,150 The assets of QBA as of May 31, 2014 are classified as assets held for sale and liabilities in the consolidated balance sheet. The results of QBA during the year (up to date of disposal) are summarized as follows: From June 1, 2014 to July 25, 2014 Year ended May 31, 2014 Revenue $3 $63,849 Other income and gains 164 97,390 Service costs - (14,354 Personnel cost (93,580) (157,777) Depreciation expense (3,689) (182,797) Administrative and other expenses (6,916) (50,548) Net loss (104,018) (244,237) The results of QBA for the nine months ended February 28, 2015 and 2014, respectively, are reported as discontinued operations in the condensed consolidated statement of income and comprehensive income. The gain on disposal of QBA is analyzed as follows: Consideration received 4,565,936 Less: Net assets of QBA (2,944,563) Less: Goodwill arising in the acquisition of QBA (610,386) Gain on disposal 1,010,987

Note 5 - Acquisition of A Subsi

Note 5 - Acquisition of A Subsidiary	12 Months Ended
	May. 31, 2015
Notes
Note 5 - Acquisition of A Subsidiary	NOTE 5 – ACQUISITION OF A SUBSIDIARY On July 16, 2014, Huitong, Mao Hong, a director and nominee shareholder of certain VIEs, and Wei Gang, an independent third party jointly incorporated YuZhong and the founders owned 49.8%, 25.1% and 25.1% of equity interests in YuZhong, respectively. On July 17, 2014, Huitong and YuZhong jointly incorporated YuGuang. Huitong and YuZhong owns 20% and 80% of equity interests in YuGuang, respectively. On September 11, 2014, YuGuang entered into an agreement with Zhou Jin Shan and Chen Xiu Lan to acquire 51% equity interest in Taizhou Haitai Motor Vehicle Inspection Co, Ltd. (“Haitai”) from Zhou Jin Shan at a consideration of RMB652,800. Haitai is principally engaged in the provision of motor vehicle inspection service in the PRC. The acquisition was completed in January 2015. As of the date of acquisition, Haitai has 51% equity interest in FengCheng. FengCheng is principally engaged in the provision of services for motor vehicle technical and emission inspection. Haitai and FengCheng was collectively known as “Haitai Group”. The car inspection Center that still under construction in progress. Management has assessed the fair value of the assets and liabilities of Haitai Group as of the acquisition date, and is analyzed as follows: Assets Construction in progress $1,100,243 Other receivables and deposits 101,036 Cash and cash equivalents 1,132 1,202,411 Liabilities Accrued expenses and other payables 1,736,068 1,736,068 Net assets acquired (533,657) Net assets shared by YuGuang (272,165) Cash consideration 105,006 Goodwill 377,171 Reconciliation of net cash used in acquisition Cash consideration paid 105,006 Less: cash acquired from the transaction (1,132) Net cash used in acquisition 103,874 On January 22, 2014, the Company acquired 56% equity interest in Xin Chang. Consideration of $245,655 was paid upon signing of the Acquisition Agreement; while another $489,900 to be paid to Xin Chang as an operating fund in batches based on Xin Chang’s financial needs as determined by the Company. The results of Xin Chang for the year are analyzed as follows: 2015 2014 (post acquisition) Revenue $1,910,175 $650,217 Other income 5,131 - Cost of services (1,663,261) (599,433) Personnel cost (155,784) (47,230) Depreciation expense (44,021) (893) Amortization expense (183,016) (9,090) Administrative and other expenses (183,394) (55,926) Net loss for the period (314,170) (62,355)

Note 6 - Cash & Cash Equivalent

Note 6 - Cash & Cash Equivalents	12 Months Ended
	May. 31, 2015
Notes
Note 6 - Cash & Cash Equivalents	NOTE 6 - CASH & CASH EQUIVALENTS As of the balance sheet dates, cash & cash equivalents are summarized as follows: 2015 2014 Cash and bank $800,821 $494,552 Time deposits 4,261,755 2,496,724 Total $5,062,576 $2,991,276 As of the balance sheet dates, the time deposits had a maturity term of less than three months.

Note 7 - Other Receivables and

Note 7 - Other Receivables and Deposits	12 Months Ended
	May. 31, 2015
Notes
Note 7 - Other Receivables and Deposits	NOTE 7 – OTHER RECEIVABLES AND DEPOSITS Other receivables and deposits as of the year end dates were summarized as follows: 2015 2014 Deposits $292,985 $119,400 Temporary advance - 810,625 Other receivables 68,795 153,244 Total $361,780 $1,083,269 The temporary advance was fully collected during the year.

Note 8 - Property, Plant and Eq

Note 8 - Property, Plant and Equipment	12 Months Ended
	May. 31, 2015
Notes
Note 8 - Property, Plant and Equipment	NOTE 8 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of the balance sheet dates are summarized as follows: 2015 2014 At cost: Computer and software $147,213 $102,023 Telecommunication equipment 5,473,624 5,297,796 Furniture, fixtures and equipment 57,976 61,887 Motor vehicles 167,175 126,133 Leasehold improvement 32,556 35,319 Construction in progress 2,502,332 - 8,380,876 5,623,158 Less: Accumulated depreciation (4,577,472) (4,171,264) Property, plant and equipment, net $3,803,404 $1,451,894 Depreciation expense attributable to continuing operations for the years ended May 31, 2015 and 2014 amounted to $541,142 and $484,432, respectively. Depreciation expense attributable to discontinued operations for the years ended May 31, 2015 and 2014 amounted to $3,689 and $182,797, respectively.

Note 9 - Intangible Assets

Note 9 - Intangible Assets	12 Months Ended
	May. 31, 2015
Notes
Note 9 - Intangible Assets	NOTE 9 – INTANGIBLE ASSETS Intangible assets as of the balance sheet dates are summarized as follows: 2015 2014 At cost: Operating concession $592,934 $438,670 Customer base 80,593 81,450 IT license and software 2,281,786 2,276,992 2,955,313 2,797,112 Less: Accumulated depreciation (1,178,142) (857,499) Intangible assets, net $1,777,171 $1,939,613 Amortization expense attributable to continuing operations for the years ended May 31, 2015 and 2014 amounted to $321,033 and $137,452, respectively. Amortization expense attributable to discontinued operations for the years ended May 31, 2014 and 2013 amounted to $nil and $nil, respectively.

Note 10 - Goodwill

Note 10 - Goodwill	12 Months Ended
	May. 31, 2015
Notes
Note 10 - Goodwill	NOTE 10 – GOODWILL Goodwill as of the balance sheet dates were summarized as follows: 2015 2014 Arising from the acquisition of QBA $- $610,386 Arising from the acquisition of Haitai Group 377,171 - 377,171 610,386 Haitai Group was acquired during the year, See also Footnote 5. QBA was disposed of during the year. See also Footnote 4.

Note 11 - Amount Due From_(to)

Note 11 - Amount Due From/(to) Related Parties	12 Months Ended
	May. 31, 2015
Notes
Note 11 - Amount Due From/(to) Related Parties	NOTE 11 – AMOUNT DUE FROM/(TO) RELATED PARTIES Amount due from a related company as of the balance sheet dates were summarized as follows: 2015 2014 Fellow subsidiary: REDtone Technology Sdn. Bhd. $3,289,447 $3,272,950 The amount represents advances to the related company. As of the balance sheet dates, the amount is unsecured, non-interest bearing and is no fixed term of repayment. Amount due to a related company as of the balance sheet dates were summarized as follows: 2015 2014 Fellow subsidiary: REDtone Telecommunications Sdn Bhd $160,420 $148,791 Non-controlling interests 1,873,432 - 2,033,852 148,791 The amounts due to the related parties are unsecured, non-interest bearing and has no fixed repayment date.

Note 12 - Accrued Expenses and

Note 12 - Accrued Expenses and Other Payables	12 Months Ended
	May. 31, 2015
Notes
Note 12 - Accrued Expenses and Other Payables	NOTE 12 – ACCRUED EXPENSES AND OTHER PAYABLES Accrued expenses and other payables as of the balance sheet dates were summarized as follows: 2015 2014 Accrued expenses $344,094 $345,869 Other payables 539,365 236,371 Total $883,459 $582,240

Note 13 - Deferred Income

Note 13 - Deferred Income	12 Months Ended
	May. 31, 2015
Notes
Note 13 - Deferred Income	NOTE 13 – 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 14 - Taxes Payable

Note 14 - Taxes Payable	12 Months Ended
	May. 31, 2015
Notes
Note 14 - Taxes Payable	NOTE 14 – TAXES PAYABLE Taxes payable at the balance sheet dates are summarized as follows: 2015 2014 Income tax payable $487,044 $456,922 Business tax and other tax payables 169,198 214,203 Total $656,242 $671,125 Business tax represents PRC sales tax imposed upon the Company’s services provided in the PRC. Tax rates range from 3% to 5% 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.

Note 15 - (Income Tax Income)_P

Note 15 - (Income Tax Income)/Provision for Income Taxes	12 Months Ended
	May. 31, 2015
Notes
Note 15 - (Income Tax Income)/Provision for Income Taxes	NOTE 15 – (INCOME TAX INCOME)/PROVISION FOR INCOME TAXES 2015 2014 Current income tax in PRC and Hong Kong $72,761 $22,819 Overprovision in prior year - (112,110) Deferred income tax income (4,759) (15,071) Total $68,002 $(104,362) On April 29, 2014, RTSH obtained a tax benefit 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. Accordingly, provision for income tax of $112,110 for the period from January 1, 2013 to May 31, 2013 that included in last year’s income tax expenses was reversed as an income tax income during the year. A reconciliation of the expected tax with the actual tax expense is as follows: 2015 2014 Income before provision for income taxes $(1,222,542) $1,190,068 Expected PRC income tax expense at statutory tax rate of 25% (305,636) 297,517 Different tax rate for PRC/Hong Kong local authority 9,649 29,058 Expenses not deductible for tax 241,114 24,566 Income not subject to tax (34,449) (301,875) Overprovision in prior year - (112,110) Utilization of tax loss brought forward (105) (69,447) Tax loss not provided for deferred tax 157,429 27,929 Total $68,002 $(104,362) (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.

Note 16 - Variable Interest Ent

Note 16 - Variable Interest Entities ("vies")	12 Months Ended
	May. 31, 2015
Notes
Note 16 - Variable Interest Entities ("vies")	NOTE 16 – VARIABLE INTEREST ENTITIES (“VIEs”) On April 30, 2007, the Company entered into the loan agreements with Mao Junbao (“MJ”) and Mao Hong (“MH ”) for the establishment of Huitong and on April 30, 2007, an equity pledge agreement which provides that MJ and MH would pledge all their equities in Huitong to Redtone Shanghai. During the year, Huitong acquired YuZhong, YuGuang, Haitai and FengCheng, as subsidiaries of the Company. See also Footnote 5. On November 30, 2006, the Company entered into loan agreements with Huang Bin (“HB”) and MH for the establishment of Hongsheng and on November 30, 2006, an equity pledge agreement which provides that HB and MH will pledge all their equities in Hongsheng to the Company and Redtone Shanghai. The agreement also provides that control of Hongsheng by the Company shall take effect from June 1, 2007. On May 24, 2011, Hongsheng had entered into the Nominee Agreement among Wang Jianping and Xu Lanying provided that Hongsheng would commission Wang Jianping and Xu Lanying to establish Nantong Jiatong and the nominee shareholders of Nantong Jiatong is Wang Jianping and Xu Lanying. On May 24, 2011, the Company entered into the loan Agreement with Nantong Jiatong to extend a loan of RMB22,000,000 for the additional capital injection into Hongsheng for establishment of QBA, an equity pledge agreement entered by and amongst the Company, Nantong Jiatong and Hongsheng, provided that Nantong Jiatong would pledge all its equities in Hongsheng to the Company. Hongsheng and QBA were disposed on July 25, 2014. All equity interests in subsidiaries held by these companies were transferred to Huitong before disposal. All related loans under the above arrangements were settled before disposal. 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 (QBA included in comparative amounts): 2015 2014 Assets Cash and cash equivalents $482,559 $1,888,407 Inventories 3,951 10,643 Accounts receivable 825,790 2,899,498 Tax recoverable - 23,372 Other receivables and deposits 332,497 1,037,508 Goodwill 372,019 617,454 Property, plant and equipment, net 2,845,078 108,371 Intangible assets, net 443,700 495,020 Total assets (not include amount due from intra-group companies) 5,305,594 7,080,273 Liabilities Deferred income 794,435 779,960 Accounts payable 760,409 2,810,592 Accrued expenses and other payables 1,163,356 452,527 Taxes payable 23,005 68,484 Total current liabilities 2,741,205 4,111,563 The results of VIEs (including QBA) are as follows, and are included in the consolidated statements of income of the Company: 2015 2014 Revenue $7,343,342 $5,892,122 Other income and gains 969,671 28,144 Service costs (Not including service costs payable to intra-group companies) (6,889,162) (2,950,016) Personnel cost (519,808) (751,568) Depreciation expense (65,088) (208,186) Amortization expense (209,926) (20,402) Administrative and other expenses (684,006) (446,061) Income before provision for income taxes (Not including service costs payable to intra-group companies) (54,977) 1,544,033 Income tax income/(provision for income taxes) (40,002) (18,996) Net income (94,979) 1,525,037 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 May 31, 2015 and 2014. 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.

Note 17 - Segmental Analysis

Note 17 - Segmental Analysis	12 Months Ended
	May. 31, 2015
Notes
Note 17 - Segmental Analysis	NOTE 17 – SEGMENTAL ANALYSIS Information of the Company’s business segment is as follows:- 2015 2014 Revenues from: Telecommunications $8,423,788 $6,176,820 Motor vehicle technical and emission inspection - - 8,423,788 6,176,820 Segment profit/(loss) from: Telecommunications $(923,817) $1,190,068 Motor vehicle technical and emission inspection (298,725) - (1,222,542) 1,190,068 Depreciation and amortization expenses: Telecommunications $862,175 $621,884 Motor vehicle technical and emission inspection - - 862,175 621,884 Segment assets: Telecommunications $10,596,934 $12,715,771 Motor vehicle technical and emission inspection 3,423,415 - Eliminations (1,808,506) - 12,211,843 12,715,771 Capital expenditure Telecommunications $246,575 $221,053 Motor vehicle technical and emission inspection 1,446,315 - 1,692,890 221,053

Note 18 - Capital Commitments

Note 18 - Capital Commitments	12 Months Ended
	May. 31, 2015
Notes
Note 18 - Capital Commitments	NOTE 18 – CAPITAL COMMITMENTS Capital commitment that related to the Company’s car inspection business is as follows:- 2015 2014 Contracted but not provided for property, plant and equipment - within 1 year $2,785,647 $-

Note 19 - Related Party Transac

Note 19 - Related Party Transaction	12 Months Ended
	May. 31, 2015
Notes
Note 19 - Related Party Transaction	NOTE 19 – RELATED PARTY TRANSACTION 2015 2014 REDtone MEX Sdn Bhd - Revenue $43,216 $-

Items (Policies)

Items (Policies)	12 Months Ended
	May. 31, 2015
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. Provision for doubtful accounts for the years ended May 31, 2015 and 2014 amounted to $nil and $141,289, respectively.
(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 continuing operations for the years ended May 31, 2015 and 2014 amounted to $541,142 and $484,432, respectively. Depreciation expense attributable to discontinued operations for the years ended May 31, 2015 and 2014 amounted to $3,689 and $182,797, respectively.
(e) Intangible assets	(e) Intangible assets IT license and software and operating license and 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 continuing operations for the years ended May 31, 2015 and 2014 amounted to $321,033 and $137,452, respectively. Amortization expense attributable to discontinued operations for the years ended May 31, 2014 and 2013 amounted to $nil and $nil, 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 years ended May 31, 2015 and 2014.
(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: o o o o Revenue recognition policy for each of the major products and services: 1. Discounted call services for consumer (EMS) as follow: o 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 o 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: o Collaboration with CTT – the revenue recognize is the commission earned from distributing the discounted call services to corporate customer; and o 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. Discontinued prepaid shopping-card services – revenue recognized is the commission earned.
(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 May 31, 2015 and 2010, there were no dilutive securities outstanding.
(l) Use of estimates	(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: May 31, 2015 May 31, 2014 Year end RMB : US$ exchange rate 0.1612 0.1621 Average yearly RMB : US$ exchange rate 0.1614 0.1629 Year end HK$ : US$ exchange rate 0.1290 0.1290 Average yearly HK$ : US$ exchange rate 0.1290 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 March 31, 2015 through the date these financial statements were issued.

(d) Property, Plant and Equipme

(d) Property, Plant and Equipment: Property, Plant and Equipment, Estimated Useful Lives (Tables)	12 Months Ended
	May. 31, 2015
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

(n) Foreign Currency Translatio

(n) Foreign Currency Translation: Foreign Currency Transactions, Description (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Foreign Currency Transactions, Description	May 31, 2015 May 31, 2014 Year end RMB : US$ exchange rate 0.1612 0.1621 Average yearly RMB : US$ exchange rate 0.1614 0.1629 Year end HK$ : US$ exchange rate 0.1290 0.1290 Average yearly HK$ : US$ exchange rate 0.1290 0.1290

Note 4 - Disposal of Subsidia29

Note 4 - Disposal of Subsidiaries and Discontinued Operation: QBA's Assets, Liabilities, and Results (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
QBA's Assets, Liabilities, and Results	As of the disposal date, QBA’s assets and liabilities are summarized as follows: July 25, 2014 May 31, 2014 Assets Cash and cash equivalents $2,969,661 $1,687,392 Inventories 6,708 6,669 Accounts receivable 525 522 Other receivables and deposits 8,892 8,841 Property, plant and equipment, net 5,937 9,587 Total assets 2,991,723 1,713,011 Liabilities Accounts payable 29,699 32,701 Accrued expenses and other payables 17,462 24,160 Total current liabilities 47,161 56,861 Net assets of QBA 2,944,562 1,656,150 The assets of QBA as of May 31, 2014 are classified as assets held for sale and liabilities in the consolidated balance sheet. The results of QBA during the year (up to date of disposal) are summarized as follows: From June 1, 2014 to July 25, 2014 Year ended May 31, 2014 Revenue $3 $63,849 Other income and gains 164 97,390 Service costs - (14,354 Personnel cost (93,580) (157,777) Depreciation expense (3,689) (182,797) Administrative and other expenses (6,916) (50,548) Net loss (104,018) (244,237)

Note 4 - Disposal of Subsidia30

Note 4 - Disposal of Subsidiaries and Discontinued Operation: Gain on disposal of QBA (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Gain on disposal of QBA	Consideration received 4,565,936 Less: Net assets of QBA (2,944,563) Less: Goodwill arising in the acquisition of QBA (610,386) Gain on disposal 1,010,987

Note 5 - Acquisition of A Sub31

Note 5 - Acquisition of A Subsidiary: Schedule of Fair Value of Assets and Liabilities of Haitai (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Fair Value of Assets and Liabilities of Haitai	Assets Construction in progress $1,100,243 Other receivables and deposits 101,036 Cash and cash equivalents 1,132 1,202,411 Liabilities Accrued expenses and other payables 1,736,068 1,736,068 Net assets acquired (533,657) Net assets shared by YuGuang (272,165) Cash consideration 105,006 Goodwill 377,171 Reconciliation of net cash used in acquisition Cash consideration paid 105,006 Less: cash acquired from the transaction (1,132) Net cash used in acquisition 103,874

Note 5 - Acquisition of A Sub32

Note 5 - Acquisition of A Subsidiary: Operating Results of Xin Chang (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Operating Results of Xin Chang	The results of Xin Chang for the year are analyzed as follows: 2015 2014 (post acquisition) Revenue $1,910,175 $650,217 Other income 5,131 - Cost of services (1,663,261) (599,433) Personnel cost (155,784) (47,230) Depreciation expense (44,021) (893) Amortization expense (183,016) (9,090) Administrative and other expenses (183,394) (55,926) Net loss for the period (314,170) (62,355)

Note 6 - Cash & Cash Equivale33

Note 6 - Cash & Cash Equivalents: Schedule of Cash and Cash Equivalents (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Cash and Cash Equivalents	As of the balance sheet dates, cash & cash equivalents are summarized as follows: 2015 2014 Cash and bank $800,821 $494,552 Time deposits 4,261,755 2,496,724 Total $5,062,576 $2,991,276

Note 7 - Other Receivables an34

Note 7 - Other Receivables and Deposits: Schedule of Other Receivables and Deposits (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Other Receivables and Deposits	Other receivables and deposits as of the year end dates were summarized as follows: 2015 2014 Deposits $292,985 $119,400 Temporary advance - 810,625 Other receivables 68,795 153,244 Total $361,780 $1,083,269

Note 8 - Property, Plant and 35

Note 8 - Property, Plant and Equipment: Property, Plant and Equipment (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Property, Plant and Equipment	Property, plant and equipment as of the balance sheet dates are summarized as follows: 2015 2014 At cost: Computer and software $147,213 $102,023 Telecommunication equipment 5,473,624 5,297,796 Furniture, fixtures and equipment 57,976 61,887 Motor vehicles 167,175 126,133 Leasehold improvement 32,556 35,319 Construction in progress 2,502,332 - 8,380,876 5,623,158 Less: Accumulated depreciation (4,577,472) (4,171,264) Property, plant and equipment, net $3,803,404 $1,451,894

Note 9 - Intangible Assets_ Sch

Note 9 - Intangible Assets: Schedule of Intangible Assets (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Intangible Assets	Intangible assets as of the balance sheet dates are summarized as follows: 2015 2014 At cost: Operating concession $592,934 $438,670 Customer base 80,593 81,450 IT license and software 2,281,786 2,276,992 2,955,313 2,797,112 Less: Accumulated depreciation (1,178,142) (857,499) Intangible assets, net $1,777,171 $1,939,613

Note 10 - Goodwill_ Schedule of

Note 10 - Goodwill: Schedule of Goodwill (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Goodwill	Goodwill as of the balance sheet dates were summarized as follows: 2015 2014 Arising from the acquisition of QBA $- $610,386 Arising from the acquisition of Haitai Group 377,171 - 377,171 610,386

Note 11 - Amount Due From_(to38

Note 11 - Amount Due From/(to) Related Parties: Due From Related Party (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Due From Related Party	Amount due from a related company as of the balance sheet dates were summarized as follows: 2015 2014 Fellow subsidiary: REDtone Technology Sdn. Bhd. $3,289,447 $3,272,950 The amount represents advances to the related company. As of the balance sheet dates, the amount is unsecured, non-interest bearing and is no fixed term of repayment. Amount due to a related company as of the balance sheet dates were summarized as follows: 2015 2014 Fellow subsidiary: REDtone Telecommunications Sdn Bhd $160,420 $148,791 Non-controlling interests 1,873,432 - 2,033,852 148,791

Note 12 - Accrued Expenses an39

Note 12 - Accrued Expenses and Other Payables: Schedule of Accrued Expenses and Other Payables (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Accrued Expenses and Other Payables	Accrued expenses and other payables as of the balance sheet dates were summarized as follows: 2015 2014 Accrued expenses $344,094 $345,869 Other payables 539,365 236,371 Total $883,459 $582,240

Note 14 - Taxes Payable_ Schedu

Note 14 - Taxes Payable: Schedule of Taxes Payable (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Taxes Payable	Taxes payable at the balance sheet dates are summarized as follows: 2015 2014 Income tax payable $487,044 $456,922 Business tax and other tax payables 169,198 214,203 Total $656,242 $671,125

Note 15 - (Income Tax Income)41

Note 15 - (Income Tax Income)/Provision for Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Components of Income Tax Expense (Benefit)	2015 2014 Current income tax in PRC and Hong Kong $72,761 $22,819 Overprovision in prior year - (112,110) Deferred income tax income (4,759) (15,071) Total $68,002 $(104,362)

Note 15 - (Income Tax Income)42

Note 15 - (Income Tax Income)/Provision for Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Effective Income Tax Rate Reconciliation	A reconciliation of the expected tax with the actual tax expense is as follows: 2015 2014 Income before provision for income taxes $(1,222,542) $1,190,068 Expected PRC income tax expense at statutory tax rate of 25% (305,636) 297,517 Different tax rate for PRC/Hong Kong local authority 9,649 29,058 Expenses not deductible for tax 241,114 24,566 Income not subject to tax (34,449) (301,875) Overprovision in prior year - (112,110) Utilization of tax loss brought forward (105) (69,447) Tax loss not provided for deferred tax 157,429 27,929 Total $68,002 $(104,362)

Note 16 - Variable Interest E43

Note 16 - Variable Interest Entities ("vies"): Schedule of Consolidated VIEs (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Consolidated VIEs	The total consolidated VIE assets and liabilities reflected on the Company’s balance sheet are as follows (QBA included in comparative amounts): 2015 2014 Assets Cash and cash equivalents $482,559 $1,888,407 Inventories 3,951 10,643 Accounts receivable 825,790 2,899,498 Tax recoverable - 23,372 Other receivables and deposits 332,497 1,037,508 Goodwill 372,019 617,454 Property, plant and equipment, net 2,845,078 108,371 Intangible assets, net 443,700 495,020 Total assets (not include amount due from intra-group companies) 5,305,594 7,080,273 Liabilities Deferred income 794,435 779,960 Accounts payable 760,409 2,810,592 Accrued expenses and other payables 1,163,356 452,527 Taxes payable 23,005 68,484 Total current liabilities 2,741,205 4,111,563 The results of VIEs (including QBA) are as follows, and are included in the consolidated statements of income of the Company: 2015 2014 Revenue $7,343,342 $5,892,122 Other income and gains 969,671 28,144 Service costs (Not including service costs payable to intra-group companies) (6,889,162) (2,950,016) Personnel cost (519,808) (751,568) Depreciation expense (65,088) (208,186) Amortization expense (209,926) (20,402) Administrative and other expenses (684,006) (446,061) Income before provision for income taxes (Not including service costs payable to intra-group companies) (54,977) 1,544,033 Income tax income/(provision for income taxes) (40,002) (18,996) Net income (94,979) 1,525,037

Note 17 - Segmental Analysis_ S

Note 17 - Segmental Analysis: Schedule of Segment Reporting Information, by Segment (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Segment Reporting Information, by Segment	2015 2014 Revenues from: Telecommunications $8,423,788 $6,176,820 Motor vehicle technical and emission inspection - - 8,423,788 6,176,820 Segment profit/(loss) from: Telecommunications $(923,817) $1,190,068 Motor vehicle technical and emission inspection (298,725) - (1,222,542) 1,190,068 Depreciation and amortization expenses: Telecommunications $862,175 $621,884 Motor vehicle technical and emission inspection - - 862,175 621,884 Segment assets: Telecommunications $10,596,934 $12,715,771 Motor vehicle technical and emission inspection 3,423,415 - Eliminations (1,808,506) - 12,211,843 12,715,771 Capital expenditure Telecommunications $246,575 $221,053 Motor vehicle technical and emission inspection 1,446,315 - 1,692,890 221,053

Note 18 - Capital Commitments_

Note 18 - Capital Commitments: Capital Commitments (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Capital Commitments	2015 2014 Contracted but not provided for property, plant and equipment - within 1 year $2,785,647 $-

Note 19 - Related Party Trans46

Note 19 - Related Party Transaction: Schedule of Related Party Transactions (Tables)	12 Months Ended
	May. 31, 2015
Tables/Schedules
Schedule of Related Party Transactions	2015 2014 REDtone MEX Sdn Bhd - Revenue $43,216 $-

Note 1 - Organization and Pri47

Note 1 - Organization and Principal Activities (Details) - May. 31, 2015	Total
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 Hongsheng Net Telecommunications Company Limited
Domicile and Date of Incorporation	The PRC November 29, 2006
Effective Ownership	100.00%
Principal Activities	Marketing and distribution of discounted call services to PRC consumer market
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 products on the internet
Nantong Jiatong Investment Consultant Co Ltd
Domicile and Date of Incorporation	The PRC May 17, 2011
Effective Ownership	100.00%
Principal Activities	Investment holding
Shanghai Qian Yue Business Administration Co Ltd
Domicile and Date of Incorporation	The PRC December 12, 2008
Effective Ownership	100.00%
Principal Activities	Provision of prepaid shopping-card 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	Provision of services for motor vehicle technical and emission inspection

(c) Accounts receivable and oth

(c) Accounts receivable and other receivables (Details) - USD ($)	May. 31, 2015	May. 31, 2014
Details
Allowance for Doubtful Accounts Receivable	$ 0	$ 141,289

(d) Property, Plant and Equip49

(d) Property, Plant and Equipment: Property, Plant and Equipment, Estimated Useful Lives (Details)	12 Months Ended
	May. 31, 2015
Computer Equipment
Property, Plant and Equipment, Useful Life	5 years
Furniture and Fixtures
Property, Plant and Equipment, Useful Life	5 years
Vehicles
Property, Plant and Equipment, Useful Life	5 years
Leasehold Improvements
Property, Plant and Equipment, Useful Life	5 years
Technology Equipment
Property, Plant and Equipment, Useful Life	10 years

(d) Property, Plant and Equip50

(d) Property, Plant and Equipment (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Depreciation expense	$ 541,142	$ 484,432
Discontinued Operations
Depreciation expense	$ 3,689	$ 182,797

(e) Intangible assets (Details)

(e) Intangible assets (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Amortization expense	$ 321,033	$ 137,452
Discontinued Operations
Amortization expense	$ 0	$ 0
IT license and software and operating license
Intangible Asset, useful life	20 years
Customer base
Intangible Asset, useful life	3 years

(g) Accounting for the impairme

(g) Accounting for the impairment of long-lived assets (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Details
Impairment of Long-Lived Assets Held-for-use	$ 0	$ 0

(n) Foreign Currency Translat53

(n) Foreign Currency Translation: Foreign Currency Transactions, Description (Details)	May. 31, 2015	May. 31, 2014
China, Yuan Renminbi
Foreign Currency Exchange Rate, Translation	0.1612	0.1621
China, Yuan Renminbi | Average Yearly
Foreign Currency Exchange Rate, Translation	0.1614	0.1629
Hong Kong, Dollars
Foreign Currency Exchange Rate, Translation	0.1290	0.1290
Hong Kong, Dollars | Average Yearly
Foreign Currency Exchange Rate, Translation	0.1290	0.1290

Note 4 - Disposal of Subsidia54

Note 4 - Disposal of Subsidiaries and Discontinued Operation (Details) $ in Thousands	Jul. 25, 2014USD ($)
Guotai Investment Holdings Limited
Cash Consideration	$ 4,540

Note 4 - Disposal of Subsidia55

Note 4 - Disposal of Subsidiaries and Discontinued Operation: QBA's Assets, Liabilities, and Results (Details) - USD ($)	2 Months Ended	12 Months Ended
	Jul. 25, 2014	May. 31, 2015	May. 31, 2014	May. 31, 2013
Assets
Cash and Cash Equivalents			$ 1,687,392	$ 1,797,240
Assets held for sale			1,713,011
Liabilities
Liabilities related to assets held for sale			56,861
Net (loss)/income for the year		$ (31,713)	1,077,628
Shanghai Qian Yue Business Administration Co Ltd
Assets
Cash and Cash Equivalents	$ 2,969,661		1,687,392
Inventories	6,708		6,669
Accounts Receivable	525		522
Other receivables and deposits	8,892		8,841
Property, Plant and Equipment, net	5,937		9,587
Assets held for sale	2,991,723		1,713,011
Liabilities
Accounts Payable	29,699		32,701
Accrued expenses and other payables	17,462		24,160
Liabilities related to assets held for sale	47,161		56,861
Net assets of QBA	2,944,562	$ 2,944,563	1,656,150
Revenue	3		63,849
Other Income	164		97,390
Service costs	0		(14,354)
Personnel cost	(93,580)		(157,777)
Depreciation expense	(3,689)		(182,797)
Administrative and other expenses	(6,916)		(50,548)
Net (loss)/income for the year	$ (104,018)		$ (244,237)

Note 4 - Disposal of Subsidia56

Note 4 - Disposal of Subsidiaries and Discontinued Operation: Gain on disposal of QBA (Details) - Shanghai Qian Yue Business Administration Co Ltd - USD ($)	12 Months Ended
	May. 31, 2015	Jul. 25, 2014	May. 31, 2014
Consideration received	$ 4,565,936
Less: Net assets of QBA	(2,944,563)	$ (2,944,562)	$ (1,656,150)
Less: Goodwill arising in the acquisition of QBA	(610,386)
Gain (Loss) on Disposition of Assets	$ 1,010,987

Note 5 - Acquisition of A Sub57

Note 5 - Acquisition of A Subsidiary (Details)	Jan. 22, 2014USD ($)	May. 31, 2015CNY (¥)
Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Effective Ownership		30.50%
Feng Cheng Motor Vehicle Inspection Co., Ltd.
Effective Ownership		30.50%
Shanghai Xin Chang Information Technology Company Limited
Effective Ownership		56.00%
Shanghai Xin Chang Information Technology Company Limited | Tranch 1
Business Combination, Consideration Transferred	$ 245,655
Shanghai Xin Chang Information Technology Company Limited | Tranch 2
Business Combination, Consideration Transferred	$ 489,900
Shanghai Yuzhong Financial Information Service Co Ltd
Effective Ownership		49.80%
Shanghai Yuzhong Financial Information Service Co Ltd | Huitong
Ownership % of VIE		49.80%
Shanghai Yuzhong Financial Information Service Co Ltd | Mao Hong
Ownership % of VIE		25.10%
Shanghai Yuzhong Financial Information Service Co Ltd | Wei Gang
Ownership % of VIE		25.10%
Shanghai Yuzhong Financial Information Service Co Ltd | YuGuang
Ownership % of VIE		80.00%
Shanghai Yuguang Automobile Inspection Technology Co Ltd
Effective Ownership		59.80%
Shanghai Yuguang Automobile Inspection Technology Co Ltd | Huitong
Ownership % of VIE		20.00%
Shanghai Yuguang Automobile Inspection Technology Co Ltd | Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Ownership % of VIE		51.00%
VIE Acquisition cost | ¥		¥ 652,800
Haitai | Feng Cheng Motor Vehicle Inspection Co., Ltd.
Ownership % of VIE		51.00%

Note 5 - Acquisition of A Sub58

Note 5 - Acquisition of A Subsidiary: Schedule of Fair Value of Assets and Liabilities of Haitai (Details) - USD ($)	Jan. 31, 2015	May. 31, 2015	May. 31, 2014
Other receivables and deposits		$ 68,795	$ 153,244
Total assets		12,211,843	12,715,771
Liabilities
Total liabilities		5,149,350	5,005,963
Goodwill		377,171	610,386
Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Construction in progress	$ 1,100,243
Other receivables and deposits	101,036
Cash and cash equivalents	1,132
Total assets	1,202,411
Liabilities
Accrued expenses and other payables	1,736,068
Total liabilities	1,736,068
Net assets acquired	(533,657)
Cash consideration	105,006
Goodwill	377,171	$ 377,171	$ 0
Cash consideration paid	105,006
Less: cash acquired from the transaction	(1,132)
Net cash used in acquisition	103,874
Taizhou Haitai Motor Vehicle Inspection Co, Ltd. | Shanghai Yuguang Automobile Inspection Technology Co Ltd
Liabilities
Net assets acquired	$ (272,165)

Note 5 - Acquisition of A Sub59

Note 5 - Acquisition of A Subsidiary: Operating Results of Xin Chang (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Revenue	$ 8,423,788	$ 6,176,820
Other income and gains	117,179	149,588
Service costs	6,908,020	2,955,367
Depreciation expense	541,142	484,432
Amortization expense	321,033	137,452
Administrative and other expenses	1,165,708	806,221
Net loss for the period	(31,713)	1,077,628
Shanghai Xin Chang Information Technology Company Limited
Revenue	1,910,175	650,217
Other income and gains	5,131	0
Service costs	(1,663,261)	(599,433)
Personnel cost	(155,784)	(47,230)
Depreciation expense	(44,021)	(893)
Amortization expense	(183,016)	(9,090)
Administrative and other expenses	(183,394)	(55,926)
Net loss for the period	$ (314,170)	$ (62,355)

Note 6 - Cash & Cash Equivale60

Note 6 - Cash & Cash Equivalents: Schedule of Cash and Cash Equivalents (Details) - USD ($)	May. 31, 2015	May. 31, 2014	May. 31, 2013
Details
Cash and bank	$ 800,821	$ 494,552
Time deposits	4,261,755	2,496,724
Cash and cash equivalents	$ 5,062,576	$ 2,991,276	$ 3,681,851

Note 7 - Other Receivables an61

Note 7 - Other Receivables and Deposits: Schedule of Other Receivables and Deposits (Details) - USD ($)	May. 31, 2015	May. 31, 2014
Details
Deposits	$ 292,985	$ 119,400
Temporary Advance	0	810,625
Other receivables	68,795	153,244
Total	$ 361,780	$ 1,083,269

Note 8 - Property, Plant and 62

Note 8 - Property, Plant and Equipment: Property, Plant and Equipment (Details) - USD ($)	May. 31, 2015	May. 31, 2014
At cost:
Property, Plant and Equipment, Gross	$ 8,380,876	$ 5,623,158
Less: Accumulated depreciation	(4,577,472)	(4,171,264)
Property, Plant and Equipment, Net, Total	3,803,404	1,451,894
Computer Equipment
At cost:
Property, Plant and Equipment, Gross	147,213	102,023
Technology Equipment
At cost:
Property, Plant and Equipment, Gross	5,473,624	5,297,796
Furniture and Fixtures
At cost:
Property, Plant and Equipment, Gross	57,976	61,887
Vehicles
At cost:
Property, Plant and Equipment, Gross	167,175	126,133
Leasehold Improvements
At cost:
Property, Plant and Equipment, Gross	32,556	35,319
Construction in progress
At cost:
Property, Plant and Equipment, Gross	$ 2,502,332	$ 0

Note 8 - Property, Plant and 63

Note 8 - Property, Plant and Equipment (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Depreciation expense	$ 541,142	$ 484,432
Discontinued Operations
Depreciation expense	$ 3,689	$ 182,797

Note 9 - Intangible Assets_ S64

Note 9 - Intangible Assets: Schedule of Intangible Assets (Details) - USD ($)	May. 31, 2015	May. 31, 2014
At cost:
Operating concession	$ 592,934	$ 438,670
Customer Base	80,593	81,450
IT Licenses and Software	2,281,786	2,276,992
Less: Accumulated amortization	(1,178,142)	(857,499)
Intangible assets, net	$ 1,777,171	$ 1,939,613

Note 9 - Intangible Assets (Det

Note 9 - Intangible Assets (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Amortization expense	$ 321,033	$ 137,452
Discontinued Operations
Amortization expense	$ 0	$ 0

Note 10 - Goodwill_ Schedule 66

Note 10 - Goodwill: Schedule of Goodwill (Details) - USD ($)	May. 31, 2015	Jan. 31, 2015	May. 31, 2014
Goodwill	$ 377,171		$ 610,386
Shanghai Qian Yue Business Administration Co Ltd
Goodwill	0		610,386
Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Goodwill	$ 377,171	$ 377,171	$ 0

Note 11 - Amount Due From_(to67

Note 11 - Amount Due From/(to) Related Parties: Due From Related Party (Details) - USD ($)	May. 31, 2015	May. 31, 2014
Amount due from a related company	$ 3,289,447	$ 3,272,950
Amount due to Non-controlling interest	2,033,852	148,791
REDtone Technology Sdn. Bhd.
Amount due from a related company	3,289,447	3,272,950
Redtone Telecommunications Sdn Bhd
Amount due to Non-controlling interest	160,420	148,791
Non-controlling interests
Amount due to Non-controlling interest	$ 1,873,432	$ 0

Note 12 - Accrued Expenses an68

Note 12 - Accrued Expenses and Other Payables: Schedule of Accrued Expenses and Other Payables (Details) - USD ($)	May. 31, 2015	May. 31, 2014
Details
Accrued expenses	$ 344,094	$ 345,869
Other payables	539,365	236,371
Accrued expenses and other payables	$ 883,459	$ 582,240

Note 14 - Taxes Payable_ Sche69

Note 14 - Taxes Payable: Schedule of Taxes Payable (Details) - USD ($)	May. 31, 2015	May. 31, 2014
Details
Income tax payable	$ 487,044	$ 456,922
Business tax and other tax payable	169,198	214,203
Total	$ 656,242	$ 671,125

Note 14 - Taxes Payable (Detail

Note 14 - Taxes Payable (Details) - CHINA	12 Months Ended
	May. 31, 2015
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	25.00%
Minimum
Business sales tax rate	3.00%
Maximum
Business sales tax rate	5.00%

Note 15 - (Income Tax Income)71

Note 15 - (Income Tax Income)/Provision for Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Details
Current - PRC income tax and Hong Kong	$ 72,761	$ 22,819
Overprovision in prior year	0	(112,110)
Deferred income tax income	(4,759)	(15,071)
Total	$ 68,002	$ (104,362)

Note 15 - (Income Tax Income)72

Note 15 - (Income Tax Income)/Provision for Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Details
Income before provision for income taxes - continuing operations	$ (1,222,542)	$ 1,190,068
Expected PRC income tax expense at statutory tax rate of 25%	(305,636)	297,517
Different tax rate for PRC/Hong Kong local authority	9,649	29,058
Expenses not deductible for tax	241,114	24,566
Income not subject to tax	(34,449)	(301,875)
Overprovision in prior year	0	(112,110)
Utilization of tax loss brought forward	(105)	(69,447)
Tax loss not provided for deferred tax	157,429	27,929
Total	$ 68,002	$ (104,362)

Note 16 - Variable Interest E73

Note 16 - Variable Interest Entities ("vies"): Schedule of Consolidated VIEs (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014	May. 31, 2013
Assets
Cash and cash equivalents	$ 5,062,576	$ 2,991,276	$ 3,681,851
Inventories	3,951	3,974
Tax recoverable		23,372
Other receivables and deposits	361,780	1,083,269
Goodwill	377,171	610,386
Property, plant and equipment, net	3,803,404	1,451,894
Intangible asset, net	1,777,171	1,939,613
Liabilities
Accounts payable	781,362	2,798,373
Total current liabilities	5,149,350	5,001,183
Revenue	8,423,788	6,176,820
Other income and gains	117,179	149,588
Service costs (Not including service costs payable to intra-group companies)	6,908,020	2,955,367
Personnel cost	827,606	752,868
Depreciation expense	541,142	484,432
Amortization expense	321,033	137,452
Administrative and other expenses	1,165,708	806,221
Income tax	68,002	(104,362)
Net Income	(351,862)	(27,435)
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure
Assets
Cash and cash equivalents	482,559	1,888,407
Inventories	3,951	10,643
Accounts receivable	825,790	2,899,498
Tax recoverable	0	23,372
Other receivables and deposits	332,497	1,037,508
Goodwill	372,019	617,454
Property, plant and equipment, net	2,845,078	108,371
Intangible asset, net	443,700	495,020
Total assets assets (not include amount due from intra-group companies)	5,305,594	7,080,273
Liabilities
Deferred income	794,435	779,960
Accounts payable	760,409	2,810,592
Accrued expenses and other payables	1,163,356	452,527
Taxes payables	23,005	68,484
Total current liabilities	2,741,205	4,111,563
Revenue	7,343,342	5,892,122
Other income and gains	969,671	28,144
Service costs (Not including service costs payable to intra-group companies)	(6,889,162)	(2,950,016)
Personnel cost	(519,808)	(751,568)
Depreciation expense	(65,088)	(208,186)
Amortization expense	(209,926)	(20,402)
Administrative and other expenses	(684,006)	(446,061)
Income before provision for income taxes (Not including service costs payable to other intra-group companies)	(54,977)	1,544,033
Income tax	(40,002)	(18,996)
Net Income	$ (94,979)	$ 1,525,037

Note 17 - Segmental Analysis_74

Note 17 - Segmental Analysis: Schedule of Segment Reporting Information, by Segment (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Revenue	$ 8,423,788	$ 6,176,820
Income before provision for income taxes - continuing operations	(1,222,542)	1,190,068
Depreciation, Depletion and Amortization, Nonproduction	862,175	621,884
Total assets	12,211,843	12,715,771
Purchase of property, plant and equipment	1,692,890	221,053
Telecommunications
Revenue	8,423,788	6,176,820
Income before provision for income taxes - continuing operations	(923,817)	1,190,068
Depreciation, Depletion and Amortization, Nonproduction	862,175	621,884
Total assets	10,596,934	12,715,771
Purchase of property, plant and equipment	246,575	221,053
Motor vehicle technical and emission inspection
Revenue	0	0
Income before provision for income taxes - continuing operations	(298,725)	0
Depreciation, Depletion and Amortization, Nonproduction	0	0
Total assets	3,423,415	0
Purchase of property, plant and equipment	1,446,315	0
Eliminations
Total assets	$ (1,808,506)	$ 0

Note 18 - Capital Commitments75

Note 18 - Capital Commitments: Capital Commitments (Details) - USD ($)	May. 31, 2015	May. 31, 2014
Details
Contracted but not provided for property, plant and equipment within 1 year	$ 2,785,647	$ 0

Note 19 - Related Party Trans76

Note 19 - Related Party Transaction: Schedule of Related Party Transactions (Details) - USD ($)	12 Months Ended
	May. 31, 2015	May. 31, 2014
Details
Revenue from REDtone MEX Sdn Bhd	$ 43,216	$ 0