REDtone Asia (RTAS) 10-Q 19 Apr 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Feb. 29, 2016shares
Document and Entity Information:
Entity Registrant Name	REDtone Asia Inc
Document Type	10-Q
Document Period End Date	Feb. 29, 2016
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	Q3
Trading Symbol	rtas

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Feb. 29, 2016	May. 31, 2015
Current assets
Cash and cash equivalents	$ 4,303,838	$ 5,062,576
Inventories	3,750	3,951
Accounts receivable	870,824	825,790
Other receivables and deposits	558,669	361,780
Total current assets	5,737,081	6,254,097
Property, plant and equipment, net	3,487,913	3,803,404
Intangible assets, net	1,633,337	1,777,171
Goodwill		377,171
Total assets	10,858,331	12,211,843
Current liabilities
Deferred income	1,271,677	794,435
Accounts payable	273,871	781,362
Accrued expenses and other payables	849,018	883,459
Amount due to a related company	1,942,625	2,033,852
Taxes payable	701,142	656,242
Total current liabilities	5,038,333	5,149,350
Deferred tax liabilities	(4,511)
Total liabilities	5,033,822	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	(3,223,971)	(3,289,447)
Retained earnings	1,346,642	2,141,129
Accumulated other comprehensive income	444,478	836,582
Total stockholders' equity	6,322,274	7,443,389
Non-controlling interests	(497,765)	(380,896)
Total equity	5,824,509	7,062,493
Total liabilities and stockholders' equity	$ 10,858,331	$ 12,211,843

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Feb. 29, 2016	May. 31, 2015
Statement of Financial Position
Common Stock, par or stated value	$ 0.0001	$ 0.0001
Common Stock, shares authorized	300,000,000	300,000,000
Common Stock, shares issued	282,315,356	282,315,356
Common Stock, shares outstanding	282,315,356	282,315,356

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($)	3 Months Ended		9 Months Ended
	Feb. 29, 2016	Feb. 28, 2015	Feb. 29, 2016	Feb. 28, 2015
Continuing operations
Revenue	$ 1,364,041	$ 1,536,250	$ 4,514,988	$ 6,097,699
Other income and gains	10,296	20,125	83,053	151,229
Service costs	(894,332)	(1,267,397)	(3,260,970)	(4,858,845)
Personnel cost	(234,699)	(250,330)	(548,191)	(626,758)
Depreciation expense	(101,380)	(133,622)	(381,320)	(391,596)
Amortization expense	(45,901)	(33,240)	(118,825)	(106,455)
Administrative and other expenses	(672,878)	(228,194)	(1,137,652)	(722,580)
Loss before provision for income taxes	(574,853)	(356,408)	(848,917)	(457,306)
Income tax (expense)/ income	2,925	(19,460)	(85,905)	(12,072)
Net loss before non-controlling interest	(571,928)	(375,868)	(934,822)	(469,378)
Share of results by non-controlling interest	158,671	20,575	140,335	46,904
Net loss from continuing operations	(413,257)	(355,293)	(794,487)	(422,474)
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 period
Net (loss)/ income before non-controlling interest	(571,928)	(375,868)	(934,822)	437,591
Share of results by non-controlling interest	158,671	20,575	140,335	46,904
Net (loss)/ income for the period	(413,257)	(355,293)	(794,487)	484,495
Other comprehensive loss
Loss on foreign currency translation of continuing operations	(130,061)	(32,761)	(392,104)	(49,512)
Share of other comprehensive income/ (loss) by non-controlling interest	13,362	(444)	23,466	470
Other comprehensive loss attributable to shareholders of the Company	(116,699)	(33,205)	(368,638)	(49,042)
Gain on foreign currency translation of discontinued operations				17,162
Total other comprehensive (loss)/ income	(116,699)	(33,205)	(368,638)	(31,880)
Total comprehensive (loss)/ income
Attributable to continuing operations	(529,956)	(388,498)	(1,163,125)	(471,516)
Attributable to discontinued operations				924,131
Total comprehensive (loss)/ income	$ (529,956)	$ (388,498)	$ (1,163,125)	$ 452,615
(Loss)/earnings per share, basic and diluted
continuing operations
discontinued operations
Weighted average number of shares	282,315,356	282,315,356	282,315,356	282,315,356

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	9 Months Ended
	Feb. 29, 2016USD ($)	Feb. 28, 2015USD ($)
Cash flows from continuing operating activities
Net loss before non-controlling interest	$ (934,822)	$ (469,378)
Adjustments to reconcile net income to net cash used in operating activities:
Amortization expense	118,825	106,455
Depreciation expense	381,320	391,596
Deferred tax income	(4,648)	(4,797)
Impairment of Goodwill	377,171
Changes in operating assets and liabilities:
(Increase)/Decrease in accounts receivable	(45,034)	681,103
Decrease/(Increase) in inventories	201	(46,652)
(Increase)/ Decrease in other receivables and deposits	(196,889)	384,372
Increase in tax recoverable		(60)
Increase in deferred income	477,242	935,590
Decrease in accounts payable	(507,491)	(1,552,228)
Increase/(Decrease) in tax payables	44,900	(44,103)
(Decrease)/ Increase in accrued liabilities and other payables	(34,441)	450,660
Net cash (used in)/ generated from continuing operating activities	(323,666)	832,558
Net cash used in discontinued operating activities		(113,811)
Net cash (used in)/ generated from operating activities	(323,666)	718,747
Cash flows from investing activities - continuing operations
Purchase of property, plant and equipment	(256,592)	(110,515)
Decrease/(increase) in amount due from a related company	65,476	(30,243)
Increase in interest in subsidiaries		(1,722,666)
Proceeds from disposal of subsidiaries		4,565,935
Net cash (used in)/provided by continuing investing activities	(191,116)	2,702,511
Net cash used in discontinued investing activities		(1,590,743)
Net cash (used in)/provided by investing activities	(191,116)	1,111,768
Cash flows from continuing financing activities
Decrease in amount due to discontinued operations		(1,375,268)
(Decrease)/Increase in amount due to related companies	(91,227)	5,580
Net cash used in continuing financing activities	(91,227)	(1,369,688)
Net cash used in financing activities	(91,227)	(1,369,688)
Net (decrease)/increase in cash and cash equivalents
Continuing operations	(606,009)	2,165,381
Discontinued operations		(1,704,554)
Net (decrease)/increase in cash and cash equivalents	(606,009)	460,827
Effect of exchange rate changes
Continuing operations	(152,729)	(165,886)
Discontinued operations		17,162
Effect of exchange rate changes	(152,729)	(148,724)
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	4,303,838	4,990,771
Cash and cash equivalents of continuing operations at end of period	$ 4,303,838	$ 4,990,771
Supplementary information - continuing operations
Cash paid for income taxes
Cash paid for interest

Note 1 - Organization and Princ

Note 1 - Organization and Principal Activities	9 Months Ended
	Feb. 29, 2016
Notes
Note 1 - Organization and Principal Activities	NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES REDtone Asia, Inc. and subsidiaries (the "Company") are a group of companies in The People's Republic of China ("PRC"). The principal activities of the Company are that of a Telecommunications provider for mobile, fixed and international gateway services. REDtone provides a wide range of telecommunication services, including prepaid and postpaid discounted call services to corporate customers and consumers as well as prepaid mobile air-time top-up. The Company also offers prepaid shopping card services. The Company's major subsidiaries during the 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 February 29, 2012 30.5% Provision of services for motor vehicle technical and emission inspection 1 2 3 4 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	9 Months Ended
	Feb. 29, 2016
Notes
Note 2 - Principles of Consolidation	NOTE 2 – PRINCIPLES OF CONSOLIDATION The unaudited interim financial statements of the Company and the Company's subsidiaries (see Note 1) for the three months and nine months ended February 29, 2016 and February 28, 2015 have been prepared pursuant to the rules & regulations of the SEC. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however the Company believes that the following disclosures are adequate to make the information presented not misleading. All significant intercompany balances and transactions have been eliminated. The functional currency for the majority of the Company's operations is in Chinese Renminbi ("RMB"), while the reporting currency is U.S. Dollar. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the Company's financial position as of February 29, 2016, the results of its operations and cash flows for the three months and nine months ended February 29, 2016 and February 28, 2015. The results of operations for the three months and nine months ended February 29, 2016 are not necessarily indicative of the results for a full year period.

Note 3 - Summary of Significant

Note 3 - Summary of Significant Accounting Policies	9 Months Ended
	Feb. 29, 2016
Notes
Note 3 - Summary of Significant Accounting Policies	NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Economic and political risk The Company's major operations are conducted in the PRC. Accordingly, the political, economic, and legal environments in PRC may influence the Company's business, financial condition, and results of operations. The Company's major operations in the PRC are subject to considerations and significant risks typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things. (b) Cash and cash equivalents The Company considers all highly liquid investments purchased with original maturities of six 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 nine months period ended February 29, 2016 and February 28, 2015 amounted to $381,320 and $391,596, respectively. Depreciation expense attributable to discontinued operations for the nine months period ended February 29, 2016 and February 28, 2015 amounted to $nil and $3,689, 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 nine months period ended February 29, 2016 and February 28, 2015 amounted to $118,825 and $106,455, 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 a goodwill impairment loss of $377,171 (2015 - Nil) recognized during the nine months ended February 29, 2016. (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 o 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 o 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 February 29, 2016 and February 28, 2015, there were no dilutive securities outstanding. (l) Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. (m) Retirement benefits PRC mandates companies to contribute funds into the national retirement system, which benefits qualified employees based on where they were born within the country. The Company pays the required payment for qualified employees of the Company. (n) Foreign currency translation The accompanying consolidated financial statements are presented in United States dollars (US$). The functional currencies of the Company are the Hong Kong dollar (HK$) and the Renminbi (RMB), respectively. Capital accounts of the financial statements are translated into United States dollars from HK$ or RMB at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the year. The translation rates are as follows: February 29, 2016 May 31, 2015 February 28, 2015 Period end RMB : US$ exchange rate 0.1530 0.1612 0.1627 Average period RMB : US$ exchange rate 0.1577 0.1614 0.1625 Period end HK$ : US$ exchange rate 0.1286 0.1290 0.1290 Average period HK$ : US$ exchange rate 0.1289 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 February 29, 2016 through the date these financial statements were issued.

Note 4 - Disposal of Subsidiari

Note 4 - Disposal of Subsidiaries and Discontinued Operation	9 Months Ended
	Feb. 29, 2016
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 nine months years ended February 28, 2015 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	9 Months Ended
	Feb. 29, 2016
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 As at February 29, 2016, the car inspection center was still under construction. The Goodwill was fully impaired and charged to operations during the period. 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 No revenue was generated for the period ended February 29, 2016 and February 28, 2015, respectively. Expenses incurred by the newly acquired subsidiaries for the nine months ended February 29, 2016 and February 28, 2015 were $66,979 and $nil respectively.

Note 6 - Cash & Cash Equivalent

Note 6 - Cash & Cash Equivalents	9 Months Ended
	Feb. 29, 2016
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: February 29, 2016 May 31, 2015 Cash and bank $317,947 $800,821 Time deposits 3,985,891 4,261,755 Total $4,303,838 $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	9 Months Ended
	Feb. 29, 2016
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: February 29, 2016 May 31, 2015 Deposits $441,599 $292,985 Other receivables 117,070 68,795 Total $558,669 $361,780

Note 8 - Property, Plant and Eq

Note 8 - Property, Plant and Equipment	9 Months Ended
	Feb. 29, 2016
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: February 29, 2016 May 31, 2015 At cost: Computer and software $186,523 $147,213 Telecommunication equipment 5,339,426 5,473,624 Furniture, fixtures and equipment 55,502 57,976 Motor vehicles 158,694 167,175 Leasehold improvement 31,418 32,556 Construction in progress 2,432,431 2,502,332 8,203,994 8,380,876 Less: Accumulated depreciation (4,716,081) (4,577,472) Property, plant and equipment, net $3,487,913 $3,803,404 Depreciation expense attributable to continuing operations for the nine months ended February 29, 2016 and February 28, 2015 amounted to $381,320 and $391,596 respectively. Depreciation expense attributable to discontinued operations for the nine months period ended February 29, 2016 and February 28, 2015 amounted to $nil and $3,689, respectively.

Note 9 - Intangible Assets

Note 9 - Intangible Assets	9 Months Ended
	Feb. 29, 2016
Notes
Note 9 - Intangible Assets	NOTE 9 – INTANGIBLE ASSETS Intangible assets as of the balance sheet dates are summarized as follows: February 29, 2016 May 31, 2015 At cost: Operating concession $562,855 $592,934 Customer base 76,505 80,593 IT license and software 2,275,418 2,281,786 2,914,778 2,955,313 Less: Accumulated depreciation (1,281,441) (1,178,142) Intangible assets, net $1,633,337 $1,777,171 Amortization expense attributable to continuing operations for the nine months ended February 29, 2016 and February 28, 2015 amounted to $118,825 and $106,455, respectively. There is no amortization expense attributable to discontinued operations for both periods.

Note 10 - Goodwill

Note 10 - Goodwill	9 Months Ended
	Feb. 29, 2016
Notes
Note 10 - Goodwill	NOTE 10 – GOODWILL Goodwill as of the balance sheet dates were summarized as follows: February 29, 2016 May 31, 2015 Arising from the acquisition of Haitai Group $- $377,171

Note 11 - Amount Due From_(To)

Note 11 - Amount Due From/(To) Related Companies	9 Months Ended
	Feb. 29, 2016
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: February 29, 2016 May 31, 2015 Fellow subsidiary: REDtone Technology Sdn. Bhd. $3,223,971 $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 2016. Amount due to a related company as of the balance sheet dates were summarized as follows: February 29, 2016 May 31, 2015 Fellow subsidiary: REDtone Telecommunications Sdn Bhd $160,000 $160,420 Non-controlling interests 1,782,625 1,873,432 1,942,625 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	9 Months Ended
	Feb. 29, 2016
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: February 29, 2016 May 31, 2015 Accrued expenses $290,357 $344,094 Other payables 558,661 539,365 Total $849,018 $883,459

Note 13 - Deferred Income

Note 13 - Deferred Income	9 Months Ended
	Feb. 29, 2016
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	9 Months Ended
	Feb. 29, 2016
Notes
Note 14 - Taxes Payable	NOTE 14 – TAXES PAYABLE Taxes payable at the balance sheet dates are summarized as follows: February 29, 2016 May 31, 2015 Income tax payable $547,294 $487,044 Business tax and other tax payables 153,848 169,198 Total $701,142 $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	9 Months Ended
	Feb. 29, 2016
Notes
Note 15 - Income Tax Income	NOTE 15 – INCOME TAX INCOME Nine months ended February 29, 2016 Nine months ended February 28, 2015 Current income tax in PRC and Hong Kong $90,553 $16,869 Deferred tax income (4,648) (4,797) Total $85,905 $12,072 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: Nine months ended February 29, 2016 Nine months ended February 28, 2015 Income before provision for income taxes $(848,917) $(457,306) Expected PRC income tax expense at statutory tax rate of 25% (212,229) (114,326) Different tax rate for PRC/Hong Kong local authority 9,861 7,586 Expenses not deductible for tax 181,279 13,933 Utilization of tax loss brought forward (29,719) (32,677) Tax loss not provided for deferred tax 136,713 137,256 Total $85,905 $12,072 (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")	9 Months Ended
	Feb. 29, 2016
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 February 29, 2006, the Company entered into loan agreements with Huang Bin ("HB") and MH for the establishment of Hongsheng and on February 29, 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: February 29, 2016 May 31, 2015 Assets Cash and cash equivalents $131,460 $482,559 Inventories 3,750 3,951 Accounts receivable 870,824 825,790 Other receivables and deposits 528,946 332,497 Goodwill - 372,019 Property, plant and equipment, net 2,867,336 2,845,078 Intangible assets, net 386,697 443,700 Total assets (not include amount due from intra-group companies and related parties) 4,789,013 5,305,594 Liabilities Deferred income 1,272,086 794,435 Accounts payable 252,976 760,409 Accrued expenses and other payables 334,121 1,163,356 Taxes payable 88,215 23,005 Total liabilities (not include amount due to intra-group companies and related parties) 1,947,398 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: Nine months ended February 29, 2016 Nine months ended February 28, 2015 Revenue $2,306,721 $4,440,095 Other income and gains 1,778 1,018,755 Service costs (Not including service costs payable to intra-group companies) (2,366,258) (3,579,001) Personnel cost (119,499) (302,545) Depreciation expense (40,244) (24,181) Amortization expense (17,359) (17,660) Administrative and other expenses (213,510) (285,996) Income before provision for income taxes (Not including service costs payable to intra-group companies) (448,371) 1,249,467 Provision for income taxes (62,578) (1) Net income (510,949) 1,249,466 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 February 29, 2016. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. As the Company is conducting certain businesses mainly through its VIEs, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss.

Note 17 - Capital Commitments

Note 17 - Capital Commitments	9 Months Ended
	Feb. 29, 2016
Notes
Note 17 - Capital Commitments	NOTE 17 – CAPITAL COMMITMENTS Capital commitment that related to the Company's car inspection business is as follows:- February 29, 2016 May 31, 2015 Contracted but not provided for property, plant and equipment - within 1 year $2,644,336 $ $2,785,647

Note 3 - Summary of Significa23

Note 3 - Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Feb. 29, 2016
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 six 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 nine months period ended February 29, 2016 and February 28, 2015 amounted to $381,320 and $391,596, respectively. Depreciation expense attributable to discontinued operations for the nine months period ended February 29, 2016 and February 28, 2015 amounted to $nil and $3,689, 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 nine months period ended February 29, 2016 and February 28, 2015 amounted to $118,825 and $106,455, 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 a goodwill impairment loss of $377,171 (2015 - Nil) recognized during the nine months ended February 29, 2016.
(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 o 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 o 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 February 29, 2016 and February 28, 2015, 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: February 29, 2016 May 31, 2015 February 28, 2015 Period end RMB : US$ exchange rate 0.1530 0.1612 0.1627 Average period RMB : US$ exchange rate 0.1577 0.1614 0.1625 Period end HK$ : US$ exchange rate 0.1286 0.1290 0.1290 Average period HK$ : US$ exchange rate 0.1289 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 February 29, 2016 through the date these financial statements were issued.

Note 1 - Organization and Pri24

Note 1 - Organization and Principal Activities: Schedule of Subsidiary (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Subsidiary	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 February 29, 2012 30.5% Provision of services for motor vehicle technical and emission inspection 1 2 3 4

Note 3 - Summary of Significa25

Note 3 - Summary of Significant Accounting Policies: (d) Property, Plant and Equipment: Schedule of useful lives plant and equipment (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of useful lives plant and equipment	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 Significa26

Note 3 - Summary of Significant Accounting Policies: (n) Foreign Currency Translation: Schedule of foreign currency translation rates (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of foreign currency translation rates	Income and expenditures are translated at the average exchange rate of the year. The translation rates are as follows: February 29, 2016 May 31, 2015 February 28, 2015 Period end RMB : US$ exchange rate 0.1530 0.1612 0.1627 Average period RMB : US$ exchange rate 0.1577 0.1614 0.1625 Period end HK$ : US$ exchange rate 0.1286 0.1290 0.1290 Average period HK$ : US$ exchange rate 0.1289 0.1290 0.1290

Note 4 - Disposal of Subsidia27

Note 4 - Disposal of Subsidiaries and Discontinued Operation: Schedule of QBA's Assets, Liabilities, and Results (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of 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 Subsidia28

Note 4 - Disposal of Subsidiaries and Discontinued Operation: Schedule of Gain on disposal of QBA (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Gain on disposal of QBA	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 Sub29

Note 5 - Acquisition of A Subsidiary: Schedule of Fair Value of Assets and Liabilities of Haitai (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Fair Value of Assets and Liabilities of Haitai	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 As at February 29, 2016, the car inspection center was still under construction. The Goodwill was fully impaired and charged to operations during the period. 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 Equivale30

Note 6 - Cash & Cash Equivalents: Schedule of Cash and Cash Equivalents (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Cash and Cash Equivalents	As of the balance sheet dates, cash and cash equivalents are summarized as follows: February 29, 2016 May 31, 2015 Cash and bank $317,947 $800,821 Time deposits 3,985,891 4,261,755 Total $4,303,838 $5,062,576

Note 7 - Other Receivables an31

Note 7 - Other Receivables and Deposits: Schedule of Other Receivables and Deposits (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Other Receivables and Deposits	Other receivables and deposits as of the dates were summarized as follows: February 29, 2016 May 31, 2015 Deposits $441,599 $292,985 Other receivables 117,070 68,795 Total $558,669 $361,780

Note 8 - Property, Plant and 32

Note 8 - Property, Plant and Equipment: Schedule of Property, Plant and Equipment (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Property, Plant and Equipment	Property, plant and equipment as of the balance sheet dates are summarized as follows: February 29, 2016 May 31, 2015 At cost: Computer and software $186,523 $147,213 Telecommunication equipment 5,339,426 5,473,624 Furniture, fixtures and equipment 55,502 57,976 Motor vehicles 158,694 167,175 Leasehold improvement 31,418 32,556 Construction in progress 2,432,431 2,502,332 8,203,994 8,380,876 Less: Accumulated depreciation (4,716,081) (4,577,472) Property, plant and equipment, net $3,487,913 $3,803,404

Note 9 - Intangible Assets_ Sch

Note 9 - Intangible Assets: Schedule of Intangible Assets (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Intangible Assets	Intangible assets as of the balance sheet dates are summarized as follows: February 29, 2016 May 31, 2015 At cost: Operating concession $562,855 $592,934 Customer base 76,505 80,593 IT license and software 2,275,418 2,281,786 2,914,778 2,955,313 Less: Accumulated depreciation (1,281,441) (1,178,142) Intangible assets, net $1,633,337 $1,777,171

Note 10 - Goodwill_ Schedule of

Note 10 - Goodwill: Schedule of Goodwill (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Goodwill	Goodwill as of the balance sheet dates were summarized as follows: February 29, 2016 May 31, 2015 Arising from the acquisition of Haitai Group $- $377,171

Note 11 - Amount Due From_(To35

Note 11 - Amount Due From/(To) Related Companies: Schedule of Due From Related Party (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of 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: February 29, 2016 May 31, 2015 Fellow subsidiary: REDtone Technology Sdn. Bhd. $3,223,971 $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 2016. Amount due to a related company as of the balance sheet dates were summarized as follows: February 29, 2016 May 31, 2015 Fellow subsidiary: REDtone Telecommunications Sdn Bhd $160,000 $160,420 Non-controlling interests 1,782,625 1,873,432 1,942,625 2,033,852

Note 12 - Accrued Expenses an36

Note 12 - Accrued Expenses and Other Payables: Schedule of Accrued Expenses and Other Payables (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Accrued Expenses and Other Payables	Accrued expenses and other payables as of the balance sheet dates were summarized as follows: February 29, 2016 May 31, 2015 Accrued expenses $290,357 $344,094 Other payables 558,661 539,365 Total $849,018 $883,459

Note 14 - Taxes Payable_ Schedu

Note 14 - Taxes Payable: Schedule of Taxes Payable (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Taxes Payable	Taxes payable at the balance sheet dates are summarized as follows: February 29, 2016 May 31, 2015 Income tax payable $547,294 $487,044 Business tax and other tax payables 153,848 169,198 Total $701,142 $656,242

Note 15 - Income Tax Income_ Sc

Note 15 - Income Tax Income: Schedule of Components of Income Tax Expense (Benefit) (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Components of Income Tax Expense (Benefit)	Nine months ended February 29, 2016 Nine months ended February 28, 2015 Current income tax in PRC and Hong Kong $90,553 $16,869 Deferred tax income (4,648) (4,797) Total $85,905 $12,072

Note 15 - Income Tax Income_ 39

Note 15 - Income Tax Income: Schedule of Effective Income Tax Rate Reconciliation (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Effective Income Tax Rate Reconciliation	A reconciliation of the expected tax with the actual tax expense is as follows: Nine months ended February 29, 2016 Nine months ended February 28, 2015 Income before provision for income taxes $(848,917) $(457,306) Expected PRC income tax expense at statutory tax rate of 25% (212,229) (114,326) Different tax rate for PRC/Hong Kong local authority 9,861 7,586 Expenses not deductible for tax 181,279 13,933 Utilization of tax loss brought forward (29,719) (32,677) Tax loss not provided for deferred tax 136,713 137,256 Total $85,905 $12,072

Note 16 - Variable Interest E40

Note 16 - Variable Interest Entities ("VIEs"): Schedule of Consolidated VIEs (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Consolidated VIEs	The total consolidated VIE assets and liabilities reflected on the Company's balance sheet are as follows: February 29, 2016 May 31, 2015 Assets Cash and cash equivalents $131,460 $482,559 Inventories 3,750 3,951 Accounts receivable 870,824 825,790 Other receivables and deposits 528,946 332,497 Goodwill - 372,019 Property, plant and equipment, net 2,867,336 2,845,078 Intangible assets, net 386,697 443,700 Total assets (not include amount due from intra-group companies and related parties) 4,789,013 5,305,594 Liabilities Deferred income 1,272,086 794,435 Accounts payable 252,976 760,409 Accrued expenses and other payables 334,121 1,163,356 Taxes payable 88,215 23,005 Total liabilities (not include amount due to intra-group companies and related parties) 1,947,398 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: Nine months ended February 29, 2016 Nine months ended February 28, 2015 Revenue $2,306,721 $4,440,095 Other income and gains 1,778 1,018,755 Service costs (Not including service costs payable to intra-group companies) (2,366,258) (3,579,001) Personnel cost (119,499) (302,545) Depreciation expense (40,244) (24,181) Amortization expense (17,359) (17,660) Administrative and other expenses (213,510) (285,996) Income before provision for income taxes (Not including service costs payable to intra-group companies) (448,371) 1,249,467 Provision for income taxes (62,578) (1) Net income (510,949) 1,249,466

Note 17 - Capital Commitments_

Note 17 - Capital Commitments: Schedule of Capital Commitments related to the Car Inspection Business (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Capital Commitments related to the Car Inspection Business	Capital commitment that related to the Company's car inspection business is as follows:- February 29, 2016 May 31, 2015 Contracted but not provided for property, plant and equipment - within 1 year $2,644,336 $ $2,785,647

Note 1 - Organization and Pri42

Note 1 - Organization and Principal Activities (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Subsidiary	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 February 29, 2012 30.5% Provision of services for motor vehicle technical and emission inspection 1 2 3 4

Note 3 - Summary of Significa43

Note 3 - Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of useful lives plant and equipment	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
Schedule of foreign currency translation rates	Income and expenditures are translated at the average exchange rate of the year. The translation rates are as follows: February 29, 2016 May 31, 2015 February 28, 2015 Period end RMB : US$ exchange rate 0.1530 0.1612 0.1627 Average period RMB : US$ exchange rate 0.1577 0.1614 0.1625 Period end HK$ : US$ exchange rate 0.1286 0.1290 0.1290 Average period HK$ : US$ exchange rate 0.1289 0.1290 0.1290

Note 4 - Disposal of Subsidia44

Note 4 - Disposal of Subsidiaries and Discontinued Operation (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of 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)
Schedule of Gain on disposal of QBA	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 Sub45

Note 5 - Acquisition of A Subsidiary (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Fair Value of Assets and Liabilities of Haitai	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 As at February 29, 2016, the car inspection center was still under construction. The Goodwill was fully impaired and charged to operations during the period. 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 Equivale46

Note 6 - Cash & Cash Equivalents (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Cash and Cash Equivalents	As of the balance sheet dates, cash and cash equivalents are summarized as follows: February 29, 2016 May 31, 2015 Cash and bank $317,947 $800,821 Time deposits 3,985,891 4,261,755 Total $4,303,838 $5,062,576

Note 7 - Other Receivables an47

Note 7 - Other Receivables and Deposits (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Other Receivables and Deposits	Other receivables and deposits as of the dates were summarized as follows: February 29, 2016 May 31, 2015 Deposits $441,599 $292,985 Other receivables 117,070 68,795 Total $558,669 $361,780

Note 8 - Property, Plant and 48

Note 8 - Property, Plant and Equipment (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Property, Plant and Equipment	Property, plant and equipment as of the balance sheet dates are summarized as follows: February 29, 2016 May 31, 2015 At cost: Computer and software $186,523 $147,213 Telecommunication equipment 5,339,426 5,473,624 Furniture, fixtures and equipment 55,502 57,976 Motor vehicles 158,694 167,175 Leasehold improvement 31,418 32,556 Construction in progress 2,432,431 2,502,332 8,203,994 8,380,876 Less: Accumulated depreciation (4,716,081) (4,577,472) Property, plant and equipment, net $3,487,913 $3,803,404

Note 9 - Intangible Assets (Tab

Note 9 - Intangible Assets (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Intangible Assets	Intangible assets as of the balance sheet dates are summarized as follows: February 29, 2016 May 31, 2015 At cost: Operating concession $562,855 $592,934 Customer base 76,505 80,593 IT license and software 2,275,418 2,281,786 2,914,778 2,955,313 Less: Accumulated depreciation (1,281,441) (1,178,142) Intangible assets, net $1,633,337 $1,777,171

Note 10 - Goodwill (Tables)

Note 10 - Goodwill (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Goodwill	Goodwill as of the balance sheet dates were summarized as follows: February 29, 2016 May 31, 2015 Arising from the acquisition of Haitai Group $- $377,171

Note 11 - Amount Due From_(To51

Note 11 - Amount Due From/(To) Related Companies (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of 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: February 29, 2016 May 31, 2015 Fellow subsidiary: REDtone Technology Sdn. Bhd. $3,223,971 $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 2016. Amount due to a related company as of the balance sheet dates were summarized as follows: February 29, 2016 May 31, 2015 Fellow subsidiary: REDtone Telecommunications Sdn Bhd $160,000 $160,420 Non-controlling interests 1,782,625 1,873,432 1,942,625 2,033,852

Note 12 - Accrued Expenses an52

Note 12 - Accrued Expenses and Other Payables (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Accrued Expenses and Other Payables	Accrued expenses and other payables as of the balance sheet dates were summarized as follows: February 29, 2016 May 31, 2015 Accrued expenses $290,357 $344,094 Other payables 558,661 539,365 Total $849,018 $883,459

Note 14 - Taxes Payable (Tables

Note 14 - Taxes Payable (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Taxes Payable	Taxes payable at the balance sheet dates are summarized as follows: February 29, 2016 May 31, 2015 Income tax payable $547,294 $487,044 Business tax and other tax payables 153,848 169,198 Total $701,142 $656,242

Note 15 - Income Tax Income (Ta

Note 15 - Income Tax Income (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Components of Income Tax Expense (Benefit)	Nine months ended February 29, 2016 Nine months ended February 28, 2015 Current income tax in PRC and Hong Kong $90,553 $16,869 Deferred tax income (4,648) (4,797) Total $85,905 $12,072
Schedule of Effective Income Tax Rate Reconciliation	A reconciliation of the expected tax with the actual tax expense is as follows: Nine months ended February 29, 2016 Nine months ended February 28, 2015 Income before provision for income taxes $(848,917) $(457,306) Expected PRC income tax expense at statutory tax rate of 25% (212,229) (114,326) Different tax rate for PRC/Hong Kong local authority 9,861 7,586 Expenses not deductible for tax 181,279 13,933 Utilization of tax loss brought forward (29,719) (32,677) Tax loss not provided for deferred tax 136,713 137,256 Total $85,905 $12,072

Note 16 - Variable Interest E55

Note 16 - Variable Interest Entities ("VIEs") (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Consolidated VIEs	The total consolidated VIE assets and liabilities reflected on the Company's balance sheet are as follows: February 29, 2016 May 31, 2015 Assets Cash and cash equivalents $131,460 $482,559 Inventories 3,750 3,951 Accounts receivable 870,824 825,790 Other receivables and deposits 528,946 332,497 Goodwill - 372,019 Property, plant and equipment, net 2,867,336 2,845,078 Intangible assets, net 386,697 443,700 Total assets (not include amount due from intra-group companies and related parties) 4,789,013 5,305,594 Liabilities Deferred income 1,272,086 794,435 Accounts payable 252,976 760,409 Accrued expenses and other payables 334,121 1,163,356 Taxes payable 88,215 23,005 Total liabilities (not include amount due to intra-group companies and related parties) 1,947,398 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: Nine months ended February 29, 2016 Nine months ended February 28, 2015 Revenue $2,306,721 $4,440,095 Other income and gains 1,778 1,018,755 Service costs (Not including service costs payable to intra-group companies) (2,366,258) (3,579,001) Personnel cost (119,499) (302,545) Depreciation expense (40,244) (24,181) Amortization expense (17,359) (17,660) Administrative and other expenses (213,510) (285,996) Income before provision for income taxes (Not including service costs payable to intra-group companies) (448,371) 1,249,467 Provision for income taxes (62,578) (1) Net income (510,949) 1,249,466

Note 17 - Capital Commitments (

Note 17 - Capital Commitments (Tables)	9 Months Ended
	Feb. 29, 2016
Tables/Schedules
Schedule of Capital Commitments related to the Car Inspection Business	Capital commitment that related to the Company's car inspection business is as follows:- February 29, 2016 May 31, 2015 Contracted but not provided for property, plant and equipment - within 1 year $2,644,336 $ $2,785,647

Note 1 - Organization and Pri57

Note 1 - Organization and Principal Activities: Schedule of Subsidiary (Details)	9 Months Ended
	Feb. 29, 2016
Shanghai Yuzhong Financial Information Service Co Ltd
Domicile and Date of Incorporation	The PRC July 16, 2014
Effective Ownership	49.80%
Principal Activities	Investment holding
Shanghai Yuguang Automobile Inspection Technology Co Ltd
Domicile and Date of Incorporation	The PRC July 17, 2014
Effective Ownership	59.80%
Principal Activities	Investment holding
Redtone Telecommunication China Limited
Domicile and Date of Incorporation	Hong Kong May 26, 2005
Effective Ownership	100.00%
Principal Activities	Investment holding
Redtone Telecommunication Shanghai Limited
Domicile and Date of Incorporation	The PRC July, 26, 2005
Effective Ownership	100.00%
Principal Activities	Provides technical support services to group companies
Shanghai 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 February 29, 2012
Effective Ownership	30.50%
Principal Activities	Provision of services for motor vehicle technical and emission inspection

Note 3 - Summary of Significa58

Note 3 - Summary of Significant Accounting Policies: (d) Property, Plant and Equipment: Schedule of useful lives plant and equipment (Details)	9 Months Ended
	Feb. 29, 2016
Computer Equipment
Property, Plant and Equipment, Useful Life	5 years
Furniture, Fixtures and Equipment
Property, Plant and Equipment, Useful Life	5 years
Motor Vehicles
Property, Plant and Equipment, Useful Life	5 years
Leasehold Improvements
Property, Plant and Equipment, Useful Life	5 years
Telecommunication Equipment
Property, Plant and Equipment, Useful Life	10 years

Note 3 - Summary of Significa59

Note 3 - Summary of Significant Accounting Policies: (d) Property, Plant and Equipment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 29, 2016	Feb. 28, 2015	Feb. 29, 2016	Feb. 28, 2015
Depreciation expense	$ 101,380	$ 133,622	$ 381,320	$ 391,596
Discontinued Operations
Depreciation expense			$ 0	$ 3,689

Note 3 - Summary of Significa60

Note 3 - Summary of Significant Accounting Policies: (e) Intangible assets (Details) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 29, 2016	Feb. 28, 2015	Feb. 29, 2016	Feb. 28, 2015
Amortization expense	$ 45,901	$ 33,240	$ 118,825	$ 106,455
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 Significa61

Note 3 - Summary of Significant Accounting Policies: (g) Accounting for the impairment of long-lived assets (Details)	9 Months Ended
	Feb. 29, 2016USD ($)
Details
Impairment of Goodwill	$ 377,171

Note 3 - Summary of Significa62

Note 3 - Summary of Significant Accounting Policies: (k) Earnings Per Share (Details) - shares	9 Months Ended
	Feb. 29, 2016	Feb. 28, 2015
Details
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0

Note 3 - Summary of Significa63

Note 3 - Summary of Significant Accounting Policies: (n) Foreign Currency Translation: Schedule of foreign currency translation rates (Details)	Feb. 29, 2016	May. 31, 2015	Feb. 28, 2015
China, Yuan Renminbi
Foreign Currency Exchange Rate, Translation	0.1530	0.1612	0.1627
China, Yuan Renminbi | Average Yearly
Foreign Currency Exchange Rate, Translation	0.1577	0.1614	0.1625
Hong Kong, Dollars
Foreign Currency Exchange Rate, Translation	0.1286	0.1290	0.1290
Hong Kong, Dollars | Average Yearly
Foreign Currency Exchange Rate, Translation	0.1289	0.1290	0.1290

Note 4 - Disposal of Subsidia64

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 Subsidia65

Note 4 - Disposal of Subsidiaries and Discontinued Operation: Schedule of QBA's Assets, Liabilities, and Results (Details) - USD ($)	2 Months Ended	3 Months Ended		9 Months Ended
	Jul. 25, 2014	Feb. 29, 2016	Feb. 28, 2015	Feb. 29, 2016	Feb. 28, 2015	Aug. 31, 2014	May. 31, 2014
Assets
Cash and Cash Equivalents							$ 1,687,392
Liabilities
Net loss		$ (413,257)	$ (355,293)	$ (794,487)	$ 484,495
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
Total assets	2,991,723
Liabilities
Accounts Payable	29,699
Accrued expenses and other payables	17,462
Disposal Group, Including Discontinued Operation, Liabilities, Current	47,161
Net assets of QBA	2,944,562					$ 2,944,563
Revenue	3
Other Income and gains	164
Service costs	0
Personnel cost	(93,580)
Depreciation expense	(3,689)
Administrative and other expenses	(6,916)
Net loss	$ (104,018)

Note 4 - Disposal of Subsidia66

Note 4 - Disposal of Subsidiaries and Discontinued Operation: Schedule of 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 on disposal	$ 1,010,987

Note 5 - Acquisition of A Sub67

Note 5 - Acquisition of A Subsidiary (Details) - USD ($)	Jul. 17, 2014	Jul. 16, 2014	Feb. 29, 2016	Feb. 28, 2015	Feb. 29, 2016	Feb. 28, 2015
Revenue			$ 1,364,041	$ 1,536,250	$ 4,514,988	$ 6,097,699
Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Revenue				$ 0	0
Operating Expenses					$ 66,979	$ 0
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 | 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%
Shanghai Yuguang Automobile Inspection Technology Co Ltd | Taizhou Haitai Motor Vehicle Inspection Co, Ltd. | China, Yuan Renminbi
VIE Acquisition cost					$ 652,800

Note 5 - Acquisition of A Sub68

Note 5 - Acquisition of A Subsidiary: Schedule of Fair Value of Assets and Liabilities of Haitai (Details) - USD ($)	Jan. 31, 2015	Feb. 29, 2016	May. 31, 2015
Assets
Other receivables and deposits		$ 117,070	$ 68,795
Total assets		10,858,331	12,211,843
Liabilities
Total liabilities		5,033,822	5,149,350
Goodwill			377,171
Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Assets
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	$ 0	$ 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 Equivale69

Note 6 - Cash & Cash Equivalents: Schedule of Cash and Cash Equivalents (Details) - USD ($)	Feb. 29, 2016	May. 31, 2015	Feb. 28, 2015	May. 31, 2014
Details
Cash and bank	$ 317,947	$ 800,821
Time deposits	3,985,891	4,261,755
Cash and Cash Equivalents, at Carrying Value, Total	$ 4,303,838	$ 5,062,576	$ 4,990,771	$ 2,991,276

Note 7 - Other Receivables an70

Note 7 - Other Receivables and Deposits: Schedule of Other Receivables and Deposits (Details) - USD ($)	Feb. 29, 2016	May. 31, 2015
Details
Deposits	$ 441,599	$ 292,985
Other receivables	117,070	68,795
Total	$ 558,669	$ 361,780

Note 8 - Property, Plant and 71

Note 8 - Property, Plant and Equipment: Schedule of Property, Plant and Equipment (Details) - USD ($)	Feb. 29, 2016	May. 31, 2015
At cost:
Property, Plant and Equipment, Gross	$ 8,203,994	$ 8,380,876
Less: Accumulated depreciation	(4,716,081)	(4,577,472)
Property, Plant and Equipment, Net, Total	3,487,913	3,803,404
Computer Equipment
At cost:
Property, Plant and Equipment, Gross	186,523	147,213
Telecommunication Equipment
At cost:
Property, Plant and Equipment, Gross	5,339,426	5,473,624
Furniture, Fixtures and Equipment
At cost:
Property, Plant and Equipment, Gross	55,502	57,976
Motor Vehicles
At cost:
Property, Plant and Equipment, Gross	158,694	167,175
Leasehold Improvements
At cost:
Property, Plant and Equipment, Gross	31,418	32,556
Construction in progress
At cost:
Property, Plant and Equipment, Gross	$ 2,432,431	$ 2,502,332

Note 8 - Property, Plant and 72

Note 8 - Property, Plant and Equipment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 29, 2016	Feb. 28, 2015	Feb. 29, 2016	Feb. 28, 2015
Depreciation expense	$ 101,380	$ 133,622	$ 381,320	$ 391,596
Discontinued Operations
Depreciation expense			$ 0	$ 3,689

Note 9 - Intangible Assets_ S73

Note 9 - Intangible Assets: Schedule of Intangible Assets (Details) - USD ($)	Feb. 29, 2016	May. 31, 2015
At cost:
Operating concession	$ 562,855	$ 592,934
Customer Base	76,505	80,593
IT Licenses and Software	2,275,418	2,281,786
Intangible assets, gross	2,914,778	2,955,313
Less: Accumulated amortization	(1,281,441)	(1,178,142)
Intangible Assets, Net (Excluding Goodwill), Total	$ 1,633,337	$ 1,777,171

Note 9 - Intangible Assets (Det

Note 9 - Intangible Assets (Details) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 29, 2016	Feb. 28, 2015	Feb. 29, 2016	Feb. 28, 2015
Amortization expense	$ 45,901	$ 33,240	$ 118,825	$ 106,455
Discontinued Operations
Amortization expense			$ 0	$ 0

Note 10 - Goodwill_ Schedule 75

Note 10 - Goodwill: Schedule of Goodwill (Details) - USD ($)	Feb. 29, 2016	May. 31, 2015	Jan. 31, 2015
Goodwill		$ 377,171
Taizhou Haitai Motor Vehicle Inspection Co, Ltd.
Goodwill	$ 0	$ 377,171	$ 377,171

Note 11 - Amount Due From_(To76

Note 11 - Amount Due From/(To) Related Companies: Schedule of Due From Related Party (Details) - USD ($)	Feb. 29, 2016	May. 31, 2015
Amount due from a related company	$ 3,223,971	$ 3,289,447
Amount due to a related company	1,942,625	2,033,852
REDtone Technology Sdn. Bhd.
Amount due from a related company	3,223,971	3,289,447
Redtone Telecommunications Sdn Bhd
Amount due to a related company	160,000	160,420
Non-controlling interests
Amount due to a related company	$ 1,782,625	$ 1,873,432

Note 12 - Accrued Expenses an77

Note 12 - Accrued Expenses and Other Payables: Schedule of Accrued Expenses and Other Payables (Details) - USD ($)	Feb. 29, 2016	May. 31, 2015
Details
Accrued expenses	$ 290,357	$ 344,094
Other payables	558,661	539,365
Accrued expenses and other payables	$ 849,018	$ 883,459

Note 14 - Taxes Payable_ Sche78

Note 14 - Taxes Payable: Schedule of Taxes Payable (Details) - USD ($)	Feb. 29, 2016	May. 31, 2015
Details
Income tax payable	$ 547,294	$ 487,044
Business tax and other tax payable	153,848	169,198
Total	$ 701,142	$ 656,242

Note 14 - Taxes Payable (Detail

Note 14 - Taxes Payable (Details) - CHINA	9 Months Ended
	Feb. 29, 2016
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_ 80

Note 15 - Income Tax Income: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 29, 2016	Feb. 28, 2015	Feb. 29, 2016	Feb. 28, 2015
Details
Current income tax in PRC and Hong Kong			$ 90,553	$ 16,869
Deferred tax income			(4,648)	(4,797)
Total	$ (2,925)	$ 19,460	$ 85,905	$ 12,072

Note 15 - Income Tax Income_ 81

Note 15 - Income Tax Income: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 29, 2016	Feb. 28, 2015	Feb. 29, 2016	Feb. 28, 2015
Details
Income before provision for income taxes	$ (574,853)	$ (356,408)	$ (848,917)	$ (457,306)
Expected PRC income tax expense at statutory tax rate of 25%			(212,229)	(114,326)
Different tax rate for PRC/Hong Kong local authority			9,861	7,586
Expenses not deductible for tax			181,279	13,933
Utilization of tax loss brought forward			(29,719)	(32,677)
Tax loss not provided for deferred tax			136,713	137,256
Total	$ (2,925)	$ 19,460	$ 85,905	$ 12,072

Note 15 - Income Tax Income (De

Note 15 - Income Tax Income (Details)	9 Months Ended
	Feb. 29, 2016
CHINA
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	25.00%
HONG KONG
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	16.50%

Note 16 - Variable Interest E83

Note 16 - Variable Interest Entities ("VIEs"): Schedule of Consolidated VIEs (Details) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 29, 2016	Feb. 28, 2015	Feb. 29, 2016	Feb. 28, 2015	May. 31, 2015	May. 31, 2014
Assets
Cash and cash equivalents	$ 4,303,838	$ 4,990,771	$ 4,303,838	$ 4,990,771	$ 5,062,576	$ 2,991,276
Inventories	3,750		3,750		3,951
Other receivables and deposits	558,669		558,669		361,780
Goodwill					377,171
Property, plant and equipment, net	3,487,913		3,487,913		3,803,404
Intangible asset, net	1,633,337		1,633,337		1,777,171
Liabilities
Accounts payable	273,871		273,871		781,362
Total liabilities (not include amount due to intra-group companies and related parties)	5,038,333		5,038,333		5,149,350
Revenue	1,364,041	1,536,250	4,514,988	6,097,699
Other income and gains	10,296	20,125	83,053	151,229
Service costs (Not including service costs payable to intra-group companies)	894,332	1,267,397	3,260,970	4,858,845
Personnel cost	234,699	250,330	548,191	626,758
Depreciation expense	101,380	133,622	381,320	391,596
Amortization expense	45,901	33,240	118,825	106,455
Administrative and other expenses	672,878	228,194	1,137,652	722,580
Provision for income taxes	(2,925)	$ 19,460	85,905	12,072
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure
Assets
Cash and cash equivalents	131,460		131,460		482,559
Inventories	3,750		3,750		3,951
Accounts receivable	870,824		870,824		825,790
Other receivables and deposits	528,946		528,946		332,497
Goodwill	0		0		372,019
Property, plant and equipment, net	2,867,336		2,867,336		2,845,078
Intangible asset, net	386,697		386,697		443,700
Total assets assets (not include amount due from intra-group companies and related parties)	4,789,013		4,789,013		5,305,594
Liabilities
Deferred income	1,272,086		1,272,086		794,435
Accounts payable	252,976		252,976		760,409
Accrued expenses and other payables	334,121		334,121		1,163,356
Taxes payables	88,215		88,215		23,005
Total liabilities (not include amount due to intra-group companies and related parties)	$ 1,947,398		1,947,398		$ 2,741,205
Revenue			2,306,721	4,440,095
Other income and gains			1,778	1,018,755
Service costs (Not including service costs payable to intra-group companies)			(2,366,258)	(3,579,001)
Personnel cost			(119,499)	(302,545)
Depreciation expense			(40,244)	(24,181)
Amortization expense			(17,359)	(17,660)
Administrative and other expenses			(213,510)	(285,996)
Income before provision for income taxes (Not including service costs payable to other intra-group companies)			(448,371)	1,249,467
Provision for income taxes			(62,578)	(1)
Net Income			$ (510,949)	$ 1,249,466

Note 17 - Capital Commitments84

Note 17 - Capital Commitments: Schedule of Capital Commitments related to the Car Inspection Business (Details) - USD ($)	9 Months Ended	12 Months Ended
	Feb. 29, 2016	May. 31, 2015
Details
Contracted but not provided for property, plant and equipment	$ 2,644,336	$ 2,785,647