RELATED PARTY TRANSACTIONS AND BALANCES

12 Months Ended

Jun. 30, 2016

NOTE 20. RELATED PARTY TRANSACTIONS AND BALANCES

Sales to related parties – sales to related parties consisted of the following:

	For the years ended June 30,
	2015		2016		2016
	RMB		RMB		U.S. Dollars
Xiamen Henda Hitek Computer Network Co. Ltd	¥	1,676,036	¥	-	$	-
Xiamen Huangsheng Hitek Computer Network Co. Ltd.		752,137		-		-
Revenues from related parties	¥	2,428,173	¥	-	$	-

Purchases from related parties – purchases from related parties consisted of the following:

	For the years ended June 30,
	2015		2016		2016
	RMB		RMB		U.S. Dollars
Huanghua Heng Da Xiang Tong Manufacture Ltd	¥	862,782	¥	338,862	$	51,000
Xiamen Huangsheng Hitek Computer Network Co. Ltd.		797,587		588,894		88,631
Purchase from related parties	¥	1,660,369	¥	927,756	$	139,631

Account payable due to related parties - The Company purchased automation products and heating furnaces from Xiamen Huangsheng Hitek Computer Network Co. Ltd (Huangsheng Hitek) and Huanghua Xiang Tong, the ending balance of accounts payable due to Huangsheng Hitek as of June 30, 2015 and 2016 were both nil. On March 18, 2016, the Company terminated its equity investment in Huanghua Xiang Tong and therefore has no related-party relationship with this entity after March 18, 2016.

Leases from related parties - The Company has various agreements for the lease of office space owned by the Founders and their family members. The terms of the agreement state that the Company will continue to lease the property at a monthly rent of ¥140 thousand with annual rental expense at ¥1.68 million ($0.25 million). The one-year lease agreements between Nanjing Recon and Mr. Yin and his family member started from April 1, 2016. The one-year lease agreements between BHD and Mr. Chen Guangqiang and his family member started from January 1, 2016 and the annual lease between Recon BJ and Mr. Yin started from July 1, 2016.

Short-term borrowings from related parties - The Company borrowed ¥16,916,905 and ¥12,941,848 ($1,947,803) from the Founders and their family members as of June 30, 2015 and 2016, respectively. For the specific terms and interest rates of the borrowings, see Note 13.

Expenses paid by the owner on behalf of Recon - One owner of Nanjing Recon, Mr. Yin and the major owner of BHD, Mr. Chen paid certain operating expenses for the Company. As of June 30, 2015 and 2016, ¥1,558,738 and ¥3,144,263 ($473,225) was due to them, respectively.