REDtone Asia (RTAS) 10-Q 20 Oct 15 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	3 Months Ended
	Aug. 31, 2015shares
Document and Entity Information:
Entity Registrant Name	REDtone Asia Inc
Document Type	10-Q
Document Period End Date	Aug. 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 Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	rtas

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Aug. 31, 2015	May. 31, 2015
Current assets
Cash and cash equivalents	$ 4,825,663	$ 5,062,576
Inventories	3,843	3,951
Accounts receivable	345,842	825,790
Other receivables and deposits	606,166	361,780
Total current assets	5,781,514	6,254,097
Property, plant and equipment, net	3,631,099	3,803,404
Intangible assets, net	1,726,031	1,777,171
Goodwill	377,171	377,171
Total assets	11,515,815	12,211,843
Current liabilities
Deferred income	1,175,807	794,435
Accounts payable	105,477	781,362
Accrued expenses and other payables	886,477	883,459
Amount due to a related company	1,883,140	2,033,852
Taxes payable	725,389	656,242
Total current liabilities	4,776,290	5,149,350
Deferred tax liabilities	(4,623)
Total liabilities	4,771,667	5,149,350
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	(3,244,393)	(3,289,447)
Retained earnings	1,949,941	2,141,129
Accumulated other comprehensive income	646,250	836,582
Total stockholders' equity	7,106,923	7,443,389
Non-controlling interests	(362,775)	(380,896)
Total equity	6,744,148	7,062,493
Total liabilities and stockholders' equity	$ 11,515,815	$ 12,211,843

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Aug. 31, 2015	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

Condensed Consolidated Statemen

Condensed Consolidated Statements Of Income And Comprehensive Income - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Continuing operations
Revenue	$ 1,858,442	$ 2,177,315
Other income and gains	71,230	81,449
Service costs	(1,432,146)	(1,697,535)
Personnel cost	(162,101)	(213,455)
Depreciation expense	(147,875)	(126,583)
Amortization expense	(39,974)	(39,980)
Administrative and other expenses	(230,936)	(192,787)
Loss before provision for income taxes	(83,360)	(11,576)
Income tax income	(99,811)	3,688
Net loss before non-controlling interest	(183,171)	(7,888)
Share of results by non-controlling interest	(8,017)	(6,236)
Net loss from continuing operations	(191,188)	(14,124)
Discontinued operations
Net loss		(104,018)
Gain on disposal of subsidiaries		1,010,987
Net income from discontinued operations		906,969
Net (loss)/ income for the year
Net (loss)/ income before non-controlling interest	(183,171)	899,081
Share of results by non-controlling interest	(8,017)	(6,236)
Net (loss)/ income for the year	(191,188)	892,845
Other comprehensive income
(Loss)/ Gain on foreign currency translation of continuing operations	(190,332)	3,795
Share of other comprehensive income by non-controlling interest	10,104	982
Other comprehensive (loss)/ income attributable to shareholders of the Company	(180,228)	4,777
Gain on foreign currency translation of discontinued operations		17,162
Total other comprehensive (loss)/ income	(180,228)	21,939
Total comprehensive (loss)/income
Attributable to continuing operations	(371,416)	(9,347)
Attributable to discontinued operations		924,131
Total comprehensive (loss)/ income	$ (371,416)	$ 914,784
(Loss)/earnings per share, basic and diluted
continuing operations
discontinued operations
Weighted average number of shares	282,315,356	282,315,356

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Cash flows from continuing operating activities
Net loss before non-controlling interest	$ (183,171)	$ (7,888)
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Amortization expense	39,974	39,980
Depreciation expense	147,875	126,583
Deferred tax income	(4,783)	(3,688)
Changes in operating assets and liabilities:
Decrease in accounts receivable	479,948	1,579,327
Decrease/(Increase) in inventories	108	(431)
(Increase)/Decrease in other receivables and deposits	(244,386)	778,930
Increase in tax recoverable		(136)
Increase/(Decrease) in deferred income	381,372	(75,812)
Decrease in accounts payable	(675,885)	(1,822,451)
Increase/(Decrease) in tax payables	69,147	(34,385)
Increase in accrued liabilities and other payables	3,018	143,585
Net cash provided by continuing operating activities	13,217	723,614
Net cash used in discontinued operating activities		(113,811)
Net cash provided by operating activities	13,217	609,803
Cash flows from investing activities - continuing operations
Purchase of property, plant and equipment	(77,924)	(133,287)
Decrease/(increase) in amount due from a related company	45,054	(10,393)
Proceeds from disposal of subsidiaries		4,565,935
Net cash (used in)/provided by continuing investing activities	(32,870)	4,422,255
Net cash used in discontinued investing activities		(1,590,743)
Net cash (used in)/provided by investing activities	(32,870)	2,831,512
Cash flows from continuing financing activities
Decrease in amount due to discontinued operations		(1,375,268)
Decrease in amount due to related companies	(150,712)	(6,398)
Net cash used in continuing financing activities	(150,712)	(1,381,666)
Net cash used in financing activities	(150,712)	(1,381,666)
Net (decrease)/increase in cash and cash equivalents
Continuing operations	(170,365)	3,764,203
Discontinued operations		(1,704,554)
Net (decrease)/increase in cash and cash equivalents	(170,365)	2,059,649
Effect of exchange rate changes
Continuing operations	(66,548)	(8,046)
Discontinued operations		17,162
Effect of exchange rate changes	(66,548)	9,116
Cash and cash equivalents at beginning of period
Continuing operations	5,062,576	2,991,276
Discontinued operations		1,687,392
Cash and cash equivalents at beginning of period	5,062,576	4,678,668
Less: Cash and cash equivalents included in assets held for sale		(1,687,392)
Cash and cash equivalents of continuing operations at beginning of period	5,062,576	2,991,276
Cash and cash equivalents at end of period
Continuing operations	$ 4,825,663	$ 6,747,433
Discontinued operations
Cash and cash equivalents of continuing operations at end of period	$ 4,825,663	$ 6,747,433
Supplementary information - continuing operations
Cash paid for income taxes
Cash paid for interest

Note 1 - Organization and Princ

Note 1 - Organization and Principal Activities	3 Months Ended
	Aug. 31, 2015
Notes
Note 1 - Organization and Principal Activities	NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES REDtone Asia, Inc. and subsidiaries (the “Company” or “REDtone”) is 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 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 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 fiscal year ended May 31, 2015 2 - Variable interest entities 3 - Deregistered during the fiscal year ended May 31, 2015 4 - Acquired/incorporated during the fiscal year ended May 31, 2015 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 fiscal year ended May 31, 2015. See also Footnote 5.

Note 2 - Principles of Consolid

Note 2 - Principles of Consolidation	3 Months Ended
	Aug. 31, 2015
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 August 31, 2015 and 2014 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 August 31, 2015, the results of its operations and cash flows for the three months ended August 31, 2015 and 2014. The results of operations for the three months ended August 31, 2015 are not necessarily indicative of the results for a full year period.

Note 3 - Summary of Significant

Note 3 - Summary of Significant Accounting Policies	3 Months Ended
	Aug. 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. (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 three months period ended August 31, 2015 and 2014 amounted to $147,875 and $126,583, respectively. Depreciation expense attributable to discontinued operations for the three months period ended August 31, 2015 and 2014 amounted to $nil and $3,689, respectively. (e) Intangible assets IT licenses and software and operating license and are generally amortized on a straight-line basis over the expected periods of benefit, 20 years. Customer base is 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 three months period ended August 31, 2015 and 2014 amounted to $39,974 and $39,980, respectively. There is no amortization expense attributable to discontinued operations for both periods. (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 August 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: 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. 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 August 31, 2015 and 2014, 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: August 31, 2015 May 31, 2015 August 31, 2014 Period end RMB : US$ exchange rate 0.1568 0.1612 0.1631 Average period RMB : US$ exchange rate 0.1622 0.1614 0.1623 Period end HK$ : US$ exchange rate 0.1290 0.1290 0.1290 Average period HK$ : US$ exchange rate 0.1290 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 August 31, 2015 through the date these financial statements were issued.

Note 4 - Disposal of Subsidiari

Note 4 - Disposal of Subsidiaries and Discontinued Operation	3 Months Ended
	Aug. 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 Assets Cash and cash equivalents $2,969,661 Inventories 6,708 Accounts receivable 525 Other receivables and deposits 8,892 Property, plant and equipment, net 5,937 Total assets 2,991,723 Liabilities Accounts payable 29,699 Accrued expenses and other payables 17,462 Total current liabilities 47,161 Net assets of QBA 2,944,562 The results of QBA during the period (up to date of disposal) are summarized as follows: From June 1, 2014 to July 25, 2014 Revenue $3 Other income and gains 164 Service costs - Personnel cost (93,580) Depreciation expense (3,689) Administrative and other expenses (6,916) Net loss (104,018) The results of QBA for the three months ended August 31, 2014 is 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	3 Months Ended
	Aug. 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”. 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 As of August 31, 2015, the car inspection center was still under construction in progress, and therefore did not generate revenue for the period ended August 31, 2015 and 2014, respectively. Expenses incurred by the newly acquired subsidiaries for the three months ended August 31, 2015 and 2014 were $24,863 and $nil respectively.

Note 6 - Cash & Cash Equivalent

Note 6 - Cash & Cash Equivalents	3 Months Ended
	Aug. 31, 2015
Notes
Note 6 - Cash & Cash Equivalents	NOTE 6 - CASH AND CASH EQUIVALENTS As of the balance sheet dates, cash and cash equivalents are summarized as follows: August 31, 2015 May 31, 2015 Cash and bank $658,012 $800,821 Time deposits 4,167,651 4,261,755 Total $4,825,663 $5,062,576 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	3 Months Ended
	Aug. 31, 2015
Notes
Note 7 - Other Receivables and Deposits	NOTE 7 – OTHER RECEIVABLES AND DEPOSITS Other receivables and deposits as of the dates were summarized as follows: August 31, 2015 May 31, 2015 Deposits $457,887 $292,985 Other receivables 148,279 68,795 Total $606,166 $361,780

Note 8 - Property, Plant and Eq

Note 8 - Property, Plant and Equipment	3 Months Ended
	Aug. 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: August 31, 2015 May 31, 2015 At cost: Computer and software $187,734 $147,213 Telecommunication equipment 5,354,219 5,473,624 Furniture, fixtures and equipment 56,536 57,976 Motor vehicles 162,622 167,175 Leasehold improvement 31,965 32,556 Construction in progress 2,434,188 2,502,332 8,227,264 8,380,876 Less: Accumulated depreciation (4,596,165) (4,577,472) Property, plant and equipment, net $3,631,099 $3,803,404 Depreciation expense attributable to continuing operations for the three months ended August 31, 2015 and 2014 amounted to $147,875 and $126,583, respectively. Depreciation expense attributable to discontinued operations for the three month period ended August 31, 2015 and 2014 amounted to $nil and $3,689, respectively.

Note 9 - Intangible Assets

Note 9 - Intangible Assets	3 Months Ended
	Aug. 31, 2015
Notes
Note 9 - Intangible Assets	NOTE 9 – INTANGIBLE ASSETS Intangible assets as of the balance sheet dates are summarized as follows: August 31, 2015 May 31, 2015 At cost: Operating concession $576,787 $592,934 Customer base 78,398 80,593 IT license and software 2,282,671 2,281,786 2,937,856 2,955,313 Less: Accumulated depreciation (1,211,825) (1,178,142) Intangible assets, net $1,726,031 $1,777,171 Amortization expense attributable to continuing operations for the three months ended August 31, 2015 and 2014 amounted to $39,974 and $39,980, respectively. There is no amortization expense attributable to discontinued operations for both periods.

Note 10 - Goodwill

Note 10 - Goodwill	3 Months Ended
	Aug. 31, 2015
Notes
Note 10 - Goodwill	NOTE 10 – GOODWILL Goodwill as of the balance sheet dates were summarized as follows: August 31, 2015 May 31, 2015 Arising from the acquisition of Haitai Group $377,171 $377,171

Note 11 - Amount Due From_(to)

Note 11 - Amount Due From/(to) Related Companies	3 Months Ended
	Aug. 31, 2015
Notes
Note 11 - Amount Due From/(to) Related Companies	NOTE 11 – 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: August 31, 2015 May 31, 2015 Fellow subsidiary: REDtone Technology Sdn. Bhd. $3,244,393 $3,289,447 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 2015. Amount due to a related company as of the balance sheet dates were summarized as follows: August 31, 2015 May 31, 2015 Fellow subsidiary: REDtone Telecommunications Sdn Bhd $160,479 $160,420 Non-controlling interests 1,722,661 1,873,432 1,883,140 2,033,852 The amount due to the related company is unsecured, non-interest bearing and has no fixed repayment date.

Note 12 - Accrued Expenses and

Note 12 - Accrued Expenses and Other Payables	3 Months Ended
	Aug. 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: August 31, 2015 May 31, 2015 Accrued expenses $325,593 $344,094 Other payables 560,884 539,365 Total $886,477 $883,459

Note 13 - Deferred Income

Note 13 - Deferred Income	3 Months Ended
	Aug. 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	3 Months Ended
	Aug. 31, 2015
Notes
Note 14 - Taxes Payable	NOTE 14 – TAXES PAYABLE Taxes payable at the balance sheet dates are summarized as follows: August 31, 2015 May 31, 2015 Income tax payable $575,324 $487,044 Business tax and other tax payables 150,065 169,198 Total $725,389 $656,242 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

Note 15 - Income Tax Income	3 Months Ended
	Aug. 31, 2015
Notes
Note 15 - Income Tax Income	NOTE 15 – INCOME TAX INCOME Three months ended August 31, 2015 Three months ended August 31, 2014 Current income tax in PRC and Hong Kong $104,594 $- Deferred tax income (4,783) (3,688) Total $99,811 (3,688) 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. A reconciliation of the expected tax with the actual tax expense is as follows: Three months ended August 31, 2015 Three months ended August 31, 2014 Income before provision for income taxes $(83,360) $(11,576) Expected PRC income tax expense at statutory tax rate of 25% (20,840) (2,894) Different tax rate for PRC/Hong Kong local authority (64,767) 2,393 Expenses not deductible for tax 186,538 4,768 Income not subject to tax - (41,867) Utilization of tax loss brought forward (14,253) (121) Tax loss not provided for deferred tax 13,133 34,033 Total $99,811 $(3,688) (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 16 - Variable Interest Ent

Note 16 - Variable Interest Entities ("VIEs")	3 Months Ended
	Aug. 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: August 31, 2015 May 31, 2015 Assets Cash and cash equivalents $246,227 $482,559 Inventories 3,843 3,951 Accounts receivable 345,842 825,790 Other receivables and deposits 575,934 332,497 Goodwill 372,019 372,019 Property, plant and equipment, net 2,817,254 2,845,078 Intangible assets, net 419,835 443,700 Total assets (not include amount due from intra-group companies and related parties) 4,780,954 5,305,594 Liabilities Deferred income 1,175,807 794,435 Accounts payable 84,516 760,409 Accrued expenses and other payables 355,314 1,163,356 Taxes payable 38,904 23,005 Total liabilities (include amount due to intra-group companies and related parties) 1,654,541 2,741,205 The results of VIEs (QBA is included in comparative figures) are as follows, and are included in the consolidated statements of income of the Company: Three months ended August 31, 2015 Three months ended August 31, 2014 Revenue $1,047,442 $2,128,629 Other income and gains 1,523 1,014,223 Service costs (Not including service costs payable to intra-group companies) (1,431,953) (1,697,342) Personnel cost (63,427) (265,689) Depreciation expense (25,409) (11,956) Amortization expense (12,192) (12,197) Administrative and other expenses (103,364) (168,234) Income before provision for income taxes (Not including service costs payable to intra-group companies) (587,380) 987,434 Provision for income taxes (36,464) - Net income (623,844) 987,434 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 August 31, 2015. 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 - Capital Commitments

Note 17 - Capital Commitments	3 Months Ended
	Aug. 31, 2015
Notes
Note 17 - Capital Commitments	NOTE 17 – CAPITAL COMMITMENTS Capital commitment that related to the Company’s car inspection business is as follows: August 31, 2015 May 31, 2015 Contracted but not provided for property, plant and equipment - within 1 year $ 2,709,789 $ 2,785,647

Note 3 - Summary of Significa23

Note 3 - Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Aug. 31, 2015
Policies
(a) Economic and political risk	(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	(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 continuing operations for the three months period ended August 31, 2015 and 2014 amounted to $147,875 and $126,583, respectively. Depreciation expense attributable to discontinued operations for the three months period ended August 31, 2015 and 2014 amounted to $nil and $3,689, respectively.
(e) Intangible assets	(e) Intangible assets IT licenses and software and operating license and are generally amortized on a straight-line basis over the expected periods of benefit, 20 years. Customer base is 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 three months period ended August 31, 2015 and 2014 amounted to $39,974 and $39,980, respectively. There is no amortization expense attributable to discontinued operations for both periods.
(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 August 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: 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. 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 August 31, 2015 and 2014, 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: August 31, 2015 May 31, 2015 August 31, 2014 Period end RMB : US$ exchange rate 0.1568 0.1612 0.1631 Average period RMB : US$ exchange rate 0.1622 0.1614 0.1623 Period end HK$ : US$ exchange rate 0.1290 0.1290 0.1290 Average period HK$ : US$ exchange rate 0.1290 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 August 31, 2015 through the date these financial statements were issued.

Note 3 - Summary of Significa24

Note 3 - Summary of Significant Accounting Policies: (d) Property, Plant and Equipment: Property, Plant and Equipment, Estimated Useful Lives (Tables)	3 Months Ended
	Aug. 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

Note 3 - Summary of Significa25

Note 3 - Summary of Significant Accounting Policies: (n) Foreign Currency Translation: Foreign Currency Transactions, Description (Tables)	3 Months Ended
	Aug. 31, 2015
Tables/Schedules
Foreign Currency Transactions, Description	August 31, 2015 May 31, 2015 August 31, 2014 Period end RMB : US$ exchange rate 0.1568 0.1612 0.1631 Average period RMB : US$ exchange rate 0.1622 0.1614 0.1623 Period end HK$ : US$ exchange rate 0.1290 0.1290 0.1290 Average period HK$ : US$ exchange rate 0.1290 0.1290 0.1290

Note 4 - Disposal of Subsidia26

Note 4 - Disposal of Subsidiaries and Discontinued Operation: QBA's Assets, Liabilities, and Results (Tables)	3 Months Ended
	Aug. 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 Assets Cash and cash equivalents $2,969,661 Inventories 6,708 Accounts receivable 525 Other receivables and deposits 8,892 Property, plant and equipment, net 5,937 Total assets 2,991,723 Liabilities Accounts payable 29,699 Accrued expenses and other payables 17,462 Total current liabilities 47,161 Net assets of QBA 2,944,562 The results of QBA during the period (up to date of disposal) are summarized as follows: From June 1, 2014 to July 25, 2014 Revenue $3 Other income and gains 164 Service costs - Personnel cost (93,580) Depreciation expense (3,689) Administrative and other expenses (6,916) Net loss (104,018)

Note 4 - Disposal of Subsidia27

Note 4 - Disposal of Subsidiaries and Discontinued Operation: Gain on disposal of QBA (Tables)	3 Months Ended
	Aug. 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 Sub28

Note 5 - Acquisition of A Subsidiary: Schedule of Fair Value of Assets and Liabilities of Haitai (Tables)	3 Months Ended
	Aug. 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 6 - Cash & Cash Equivale29

Note 6 - Cash & Cash Equivalents: Schedule of Cash and Cash Equivalents (Tables)	3 Months Ended
	Aug. 31, 2015
Tables/Schedules
Schedule of Cash and Cash Equivalents	As of the balance sheet dates, cash and cash equivalents are summarized as follows: August 31, 2015 May 31, 2015 Cash and bank $658,012 $800,821 Time deposits 4,167,651 4,261,755 Total $4,825,663 $5,062,576

Note 7 - Other Receivables an30

Note 7 - Other Receivables and Deposits: Schedule of Other Receivables and Deposits (Tables)	3 Months Ended
	Aug. 31, 2015
Tables/Schedules
Schedule of Other Receivables and Deposits	Other receivables and deposits as of the dates were summarized as follows: August 31, 2015 May 31, 2015 Deposits $457,887 $292,985 Other receivables 148,279 68,795 Total $606,166 $361,780

Note 8 - Property, Plant and 31

Note 8 - Property, Plant and Equipment: Property, Plant and Equipment (Tables)	3 Months Ended
	Aug. 31, 2015
Tables/Schedules
Property, Plant and Equipment	Property, plant and equipment as of the balance sheet dates are summarized as follows: August 31, 2015 May 31, 2015 At cost: Computer and software $187,734 $147,213 Telecommunication equipment 5,354,219 5,473,624 Furniture, fixtures and equipment 56,536 57,976 Motor vehicles 162,622 167,175 Leasehold improvement 31,965 32,556 Construction in progress 2,434,188 2,502,332 8,227,264 8,380,876 Less: Accumulated depreciation (4,596,165) (4,577,472) Property, plant and equipment, net $3,631,099 $3,803,404

Note 9 - Intangible Assets_ Sch

Note 9 - Intangible Assets: Schedule of Intangible Assets (Tables)	3 Months Ended
	Aug. 31, 2015
Tables/Schedules
Schedule of Intangible Assets	Intangible assets as of the balance sheet dates are summarized as follows: August 31, 2015 May 31, 2015 At cost: Operating concession $576,787 $592,934 Customer base 78,398 80,593 IT license and software 2,282,671 2,281,786 2,937,856 2,955,313 Less: Accumulated depreciation (1,211,825) (1,178,142) Intangible assets, net $1,726,031 $1,777,171

Note 10 - Goodwill_ Schedule of

Note 10 - Goodwill: Schedule of Goodwill (Tables)	3 Months Ended
	Aug. 31, 2015
Tables/Schedules
Schedule of Goodwill	Goodwill as of the balance sheet dates were summarized as follows: August 31, 2015 May 31, 2015 Arising from the acquisition of Haitai Group $377,171 $377,171

Note 11 - Amount Due From_(to34

Note 11 - Amount Due From/(to) Related Companies: Due From Related Party (Tables)	3 Months Ended
	Aug. 31, 2015
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: August 31, 2015 May 31, 2015 Fellow subsidiary: REDtone Technology Sdn. Bhd. $3,244,393 $3,289,447 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 2015. Amount due to a related company as of the balance sheet dates were summarized as follows: August 31, 2015 May 31, 2015 Fellow subsidiary: REDtone Telecommunications Sdn Bhd $160,479 $160,420 Non-controlling interests 1,722,661 1,873,432 1,883,140 2,033,852

Note 12 - Accrued Expenses an35

Note 12 - Accrued Expenses and Other Payables: Schedule of Accrued Expenses and Other Payables (Tables)	3 Months Ended
	Aug. 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: August 31, 2015 May 31, 2015 Accrued expenses $325,593 $344,094 Other payables 560,884 539,365 Total $886,477 $883,459

Note 14 - Taxes Payable_ Schedu

Note 14 - Taxes Payable: Schedule of Taxes Payable (Tables)	3 Months Ended
	Aug. 31, 2015
Tables/Schedules
Schedule of Taxes Payable	Taxes payable at the balance sheet dates are summarized as follows: August 31, 2015 May 31, 2015 Income tax payable $575,324 $487,044 Business tax and other tax payables 150,065 169,198 Total $725,389 $656,242

Note 15 - Income Tax Income_ Sc

Note 15 - Income Tax Income: Schedule of Components of Income Tax Expense (Benefit) (Tables)	3 Months Ended
	Aug. 31, 2015
Tables/Schedules
Schedule of Components of Income Tax Expense (Benefit)	Three months ended August 31, 2015 Three months ended August 31, 2014 Current income tax in PRC and Hong Kong $104,594 $- Deferred tax income (4,783) (3,688) Total $99,811 (3,688)

Note 15 - Income Tax Income_ 38

Note 15 - Income Tax Income: Schedule of Effective Income Tax Rate Reconciliation (Tables)	3 Months Ended
	Aug. 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: Three months ended August 31, 2015 Three months ended August 31, 2014 Income before provision for income taxes $(83,360) $(11,576) Expected PRC income tax expense at statutory tax rate of 25% (20,840) (2,894) Different tax rate for PRC/Hong Kong local authority (64,767) 2,393 Expenses not deductible for tax 186,538 4,768 Income not subject to tax - (41,867) Utilization of tax loss brought forward (14,253) (121) Tax loss not provided for deferred tax 13,133 34,033 Total $99,811 $(3,688)

Note 16 - Variable Interest E39

Note 16 - Variable Interest Entities ("VIEs"): Schedule of Consolidated VIEs (Tables)	3 Months Ended
	Aug. 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: August 31, 2015 May 31, 2015 Assets Cash and cash equivalents $246,227 $482,559 Inventories 3,843 3,951 Accounts receivable 345,842 825,790 Other receivables and deposits 575,934 332,497 Goodwill 372,019 372,019 Property, plant and equipment, net 2,817,254 2,845,078 Intangible assets, net 419,835 443,700 Total assets (not include amount due from intra-group companies and related parties) 4,780,954 5,305,594 Liabilities Deferred income 1,175,807 794,435 Accounts payable 84,516 760,409 Accrued expenses and other payables 355,314 1,163,356 Taxes payable 38,904 23,005 Total liabilities (include amount due to intra-group companies and related parties) 1,654,541 2,741,205 The results of VIEs (QBA is included in comparative figures) are as follows, and are included in the consolidated statements of income of the Company: Three months ended August 31, 2015 Three months ended August 31, 2014 Revenue $1,047,442 $2,128,629 Other income and gains 1,523 1,014,223 Service costs (Not including service costs payable to intra-group companies) (1,431,953) (1,697,342) Personnel cost (63,427) (265,689) Depreciation expense (25,409) (11,956) Amortization expense (12,192) (12,197) Administrative and other expenses (103,364) (168,234) Income before provision for income taxes (Not including service costs payable to intra-group companies) (587,380) 987,434 Provision for income taxes (36,464) - Net income (623,844) 987,434

Note 17 - Capital Commitments_

Note 17 - Capital Commitments: Capital Commitment Related to Company's Car Inspection Business (Tables)	3 Months Ended
	Aug. 31, 2015
Tables/Schedules
Capital Commitment Related to Company's Car Inspection Business	August 31, 2015 May 31, 2015 Contracted but not provided for property, plant and equipment - within 1 year $ 2,709,789 $ 2,785,647

Note 1 - Organization and Pri41

Note 1 - Organization and Principal Activities (Details)	3 Months Ended
	Aug. 31, 2015
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

Note 3 - Summary of Significa42

Note 3 - Summary of Significant Accounting Policies: (d) Property, Plant and Equipment: Property, Plant and Equipment, Estimated Useful Lives (Details)	3 Months Ended
	Aug. 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

Note 3 - Summary of Significa43

Note 3 - Summary of Significant Accounting Policies: (d) Property, Plant and Equipment (Details) - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Depreciation expense	$ 147,875	$ 126,583
Discontinued Operations
Depreciation expense	$ 0	$ 3,689

Note 3 - Summary of Significa44

Note 3 - Summary of Significant Accounting Policies: (e) Intangible assets (Details) - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Amortization expense	$ 39,974	$ 39,980
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

Note 3 - Summary of Significa45

Note 3 - Summary of Significant Accounting Policies: (g) Accounting for the impairment of long-lived assets (Details) - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Details
Impairment of Long-Lived Assets Held-for-use	$ 0	$ 0

Note 3 - Summary of Significa46

Note 3 - Summary of Significant Accounting Policies: (n) Foreign Currency Translation: Foreign Currency Transactions, Description (Details)	Aug. 31, 2015	May. 31, 2015	Aug. 31, 2014
China, Yuan Renminbi
Foreign Currency Exchange Rate, Translation	0.1568	0.1612	0.1631
China, Yuan Renminbi | Average Yearly
Foreign Currency Exchange Rate, Translation	0.1622	0.1614	0.1623
Hong Kong, Dollars
Foreign Currency Exchange Rate, Translation	0.1290	0.1290	0.1290
Hong Kong, Dollars | Average Yearly
Foreign Currency Exchange Rate, Translation	0.1290	0.1290	0.1290

Note 4 - Disposal of Subsidia47

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 Subsidia48

Note 4 - Disposal of Subsidiaries and Discontinued Operation: QBA's Assets, Liabilities, and Results (Details) - USD ($)	2 Months Ended	3 Months Ended
	Jul. 25, 2014	Aug. 31, 2015	Aug. 31, 2014	May. 31, 2014
Assets
Cash and Cash Equivalents				$ 1,687,392
Liabilities
Net (loss)/ income for the year		$ (191,188)	$ 892,845
Shanghai Qian Yue Business Administration Co Ltd
Assets
Cash and Cash Equivalents	$ 2,969,661
Inventories	6,708
Accounts Receivable	525
Other receivables and deposits	8,892
Property, Plant and Equipment, net	5,937
Assets held for sale	2,991,723
Liabilities
Accounts Payable	29,699
Accrued expenses and other payables	17,462
Liabilities related to assets held for sale	47,161
Net assets of QBA	2,944,562		$ 2,944,563
Revenue	3
Other Income	164
Service costs	0
Personnel cost	(93,580)
Depreciation expense	(3,689)
Administrative and other expenses	(6,916)
Net (loss)/ income for the year	$ (104,018)

Note 4 - Disposal of Subsidia49

Note 4 - Disposal of Subsidiaries and Discontinued Operation: Gain on disposal of QBA (Details) - Shanghai Qian Yue Business Administration Co Ltd - USD ($)	3 Months Ended
	Aug. 31, 2014	Jul. 25, 2014
Consideration received	$ 4,565,936
Less: Net assets of QBA	(2,944,563)	$ (2,944,562)
Less: Goodwill arising in the acquisition of QBA	(610,386)
Gain (Loss) on Disposition of Assets	$ 1,010,987

Note 5 - Acquisition of A Sub50

Note 5 - Acquisition of A Subsidiary (Details)	3 Months Ended
	Aug. 31, 2015USD ($)	Aug. 31, 2015CNY (¥)	Aug. 31, 2014USD ($)
Revenue	$ 1,858,442		$ 2,177,315
Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Revenue	0		0
Operating Expenses	$ 24,863		$ 0
Shanghai Yuzhong Financial Information Service Co Ltd | Huitong
Ownership % of VIE	49.80%	49.80%
Shanghai Yuzhong Financial Information Service Co Ltd | Mao Hong
Ownership % of VIE	25.10%	25.10%
Shanghai Yuzhong Financial Information Service Co Ltd | Wei Gang
Ownership % of VIE	25.10%	25.10%
Shanghai Yuzhong Financial Information Service Co Ltd | YuGuang
Ownership % of VIE	80.00%	80.00%
Shanghai Yuguang Automobile Inspection Technology Co Ltd | Huitong
Ownership % of VIE	20.00%	20.00%
Shanghai Yuguang Automobile Inspection Technology Co Ltd | Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Ownership % of VIE	51.00%	51.00%
VIE Acquisition cost | ¥		¥ 652,800

Note 5 - Acquisition of A Sub51

Note 5 - Acquisition of A Subsidiary: Schedule of Fair Value of Assets and Liabilities of Haitai (Details) - USD ($)	Jan. 31, 2015	Aug. 31, 2015	May. 31, 2015
Other receivables and deposits		$ 148,279	$ 68,795
Total assets		11,515,815	12,211,843
Liabilities
Total liabilities		4,771,667	5,149,350
Goodwill		377,171	377,171
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	$ 377,171
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 6 - Cash & Cash Equivale52

Note 6 - Cash & Cash Equivalents: Schedule of Cash and Cash Equivalents (Details) - USD ($)	Aug. 31, 2015	May. 31, 2015	Aug. 31, 2014	May. 31, 2014
Details
Cash and bank	$ 658,012	$ 800,821
Time deposits	4,167,651	4,261,755
Cash and cash equivalents	$ 4,825,663	$ 5,062,576	$ 6,747,433	$ 2,991,276

Note 7 - Other Receivables an53

Note 7 - Other Receivables and Deposits: Schedule of Other Receivables and Deposits (Details) - USD ($)	Aug. 31, 2015	May. 31, 2015
Details
Deposits	$ 457,887	$ 292,985
Other receivables	148,279	68,795
Other Receivables, Net, Current, Total	$ 606,166	$ 361,780

Note 8 - Property, Plant and 54

Note 8 - Property, Plant and Equipment: Property, Plant and Equipment (Details) - USD ($)	Aug. 31, 2015	May. 31, 2015
At cost:
Property, Plant and Equipment, Gross	$ 8,227,264	$ 8,380,876
Less: Accumulated depreciation	(4,596,165)	(4,577,472)
Property, Plant and Equipment, Net, Total	3,631,099	3,803,404
Computer Equipment
At cost:
Property, Plant and Equipment, Gross	187,734	147,213
Technology Equipment
At cost:
Property, Plant and Equipment, Gross	5,354,219	5,473,624
Furniture and Fixtures
At cost:
Property, Plant and Equipment, Gross	56,536	57,976
Vehicles
At cost:
Property, Plant and Equipment, Gross	162,622	167,175
Leasehold Improvements
At cost:
Property, Plant and Equipment, Gross	31,965	32,556
Construction in progress
At cost:
Property, Plant and Equipment, Gross	$ 2,434,188	$ 2,502,332

Note 8 - Property, Plant and 55

Note 8 - Property, Plant and Equipment (Details) - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Depreciation expense	$ 147,875	$ 126,583
Discontinued Operations
Depreciation expense	$ 0	$ 3,689

Note 9 - Intangible Assets_ S56

Note 9 - Intangible Assets: Schedule of Intangible Assets (Details) - USD ($)	Aug. 31, 2015	May. 31, 2015
At cost:
Operating concession	$ 576,787	$ 592,934
Customer Base	78,398	80,593
IT Licenses and Software	2,282,671	2,281,786
Less: Accumulated amortization	(1,211,825)	(1,178,142)
Intangible assets, net	$ 1,726,031	$ 1,777,171

Note 9 - Intangible Assets (Det

Note 9 - Intangible Assets (Details) - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Amortization expense	$ 39,974	$ 39,980
Discontinued Operations
Amortization expense	$ 0	$ 0

Note 10 - Goodwill_ Schedule 58

Note 10 - Goodwill: Schedule of Goodwill (Details) - USD ($)	Aug. 31, 2015	May. 31, 2015	Jan. 31, 2015
Goodwill	$ 377,171	$ 377,171
Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Goodwill	$ 377,171	$ 377,171	$ 377,171

Note 11 - Amount Due From_(to59

Note 11 - Amount Due From/(to) Related Companies: Due From Related Party (Details) - USD ($)	Aug. 31, 2015	May. 31, 2015
Amount due from a related company	$ 3,244,393	$ 3,289,447
Amount due to a related company	1,883,140	2,033,852
REDtone Technology Sdn. Bhd.
Amount due from a related company	3,244,393	3,289,447
Redtone Telecommunications Sdn Bhd
Amount due to a related company	160,479	160,420
Non-controlling interests
Amount due to a related company	$ 1,722,661	$ 1,873,432

Note 12 - Accrued Expenses an60

Note 12 - Accrued Expenses and Other Payables: Schedule of Accrued Expenses and Other Payables (Details) - USD ($)	Aug. 31, 2015	May. 31, 2015
Details
Accrued expenses	$ 325,593	$ 344,094
Other payables	560,884	539,365
Accrued expenses and other payables	$ 886,477	$ 883,459

Note 14 - Taxes Payable_ Sche61

Note 14 - Taxes Payable: Schedule of Taxes Payable (Details) - USD ($)	Aug. 31, 2015	May. 31, 2015
Details
Income tax payable	$ 575,324	$ 487,044
Business tax and other tax payable	150,065	169,198
Total	$ 725,389	$ 656,242

Note 14 - Taxes Payable (Detail

Note 14 - Taxes Payable (Details) - CHINA	3 Months Ended
	Aug. 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_ 63

Note 15 - Income Tax Income: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Details
Current - PRC income tax and Hong Kong	$ 104,594	$ 0
Deferred income tax income	(4,783)	(3,688)
Total	$ 99,811	$ (3,688)

Note 15 - Income Tax Income_ 64

Note 15 - Income Tax Income: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Details
Income before provision for income taxes - continuing operations	$ (83,360)	$ (11,576)
Expected PRC income tax expense at statutory tax rate of 25%	(20,840)	(2,894)
Different tax rate for PRC/Hong Kong local authority	(64,767)	2,393
Expenses not deductible for tax	186,538	4,768
Income not subject to tax	0	(41,867)
Utilization of tax loss brought forward	(14,253)	(121)
Tax loss not provided for deferred tax	13,133	34,033
Total	$ 99,811	$ (3,688)

Note 16 - Variable Interest E65

Note 16 - Variable Interest Entities ("VIEs"): Schedule of Consolidated VIEs (Details) - USD ($)	3 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	May. 31, 2015	May. 31, 2014
Assets
Cash and cash equivalents	$ 4,825,663	$ 6,747,433	$ 5,062,576	$ 2,991,276
Inventories	3,843		3,951
Other receivables and deposits	606,166		361,780
Goodwill	377,171		377,171
Property, plant and equipment, net	3,631,099		3,803,404
Intangible asset, net	1,726,031		1,777,171
Liabilities
Accounts payable	105,477		781,362
Total current liabilities	4,776,290		5,149,350
Revenue	1,858,442	2,177,315
Other income and gains	71,230	81,449
Service costs (Not including service costs payable to intra-group companies)	1,432,146	1,697,535
Personnel cost	162,101	213,455
Depreciation expense	147,875	126,583
Amortization expense	39,974	39,980
Administrative and other expenses	230,936	192,787
Income tax	99,811	(3,688)
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure
Assets
Cash and cash equivalents	246,227		482,559
Inventories	3,843		3,951
Accounts receivable	345,842		825,790
Other receivables and deposits	575,934		332,497
Goodwill	372,019		372,019
Property, plant and equipment, net	2,817,254		2,845,078
Intangible asset, net	419,835		443,700
Total assets assets (not include amount due from intra-group companies)	4,780,954		5,305,594
Liabilities
Deferred income	1,175,807		794,435
Accounts payable	84,516		760,409
Accrued expenses and other payables	355,314		1,163,356
Taxes payables	38,904		23,005
Total current liabilities	1,654,541		$ 2,741,205
Revenue	1,047,442	2,128,629
Other income and gains	1,523	1,014,223
Service costs (Not including service costs payable to intra-group companies)	(1,431,953)	(1,697,342)
Personnel cost	(63,427)	(265,689)
Depreciation expense	(25,409)	(11,956)
Amortization expense	(12,192)	(12,197)
Administrative and other expenses	(103,364)	(168,234)
Income before provision for income taxes (Not including service costs payable to other intra-group companies)	(587,380)	987,434
Income tax	(36,464)	0
Net Income	$ (623,844)	$ 987,434

Note 17 - Capital Commitments66

Note 17 - Capital Commitments: Capital Commitment Related to Company's Car Inspection Business (Details) - USD ($)	3 Months Ended	12 Months Ended
	Aug. 31, 2015	May. 31, 2015
Details
Contracted but not provided for property, plant and equipment	$ 2,709,789	$ 2,785,647