Related Party Transactions

12 Months Ended

Jun. 30, 2018

Note 15. RELATED PARTY TRANSACTIONS

As of June 30, 2018 and 2017, the outstanding amounts due from related parties consist of the following:

	June 30,			June 30,
	2018			2017

Tianjin Zhiyuan Investment Group Co., Ltd.	$	2,319,993		$	1,715,130
Less: allowance for doubtful accounts		(231,999	)		-
Total	$	2,087,994		$	1,715,130

In June 2013, the Company signed a five-year global logistic service agreement with Tianjin Zhiyuan Investment Group Co., Ltd. (the “Zhiyuan Investment Group”) and TEWOO Chemical & Light Industry Zhiyuan Trade Co., Ltd. (together with Zhiyuan Investment Group, “Zhiyuan”). Zhiyuan Investment Group is owned by Mr. Zhang, the largest shareholder of the Company. In September 2013, the Company executed an inland transportation management service contract with the Zhiyuan Investment Group whereby it would provide certain advisory services and help control potential commodities loss during the transportation process. As a result of the inland transportation management services provided to Zhiyuan, the Company generated revenue of $2,059,406 (8.9% of the Company’s total revenue in 2018) and $2,746,423 (24% of the Company’s total revenue in 2017) for the years ended June 30, 2018 and 2017, respectively. The amount due from Zhiyuan Investment Group as of June 30, 2018 was $2,319,993. The Company expects that the full amount will be collected by March 2019. As of June 30, 2018, the Company provided a 10% allowance for doubtful accounts of the amount due from Zhiyuan. Subsequently, the Company entered into a supplemental service agreement with Zhiyuan to extend the service period to September 1, 2019.

As of June 30, 2018 and 2017, the outstanding amounts advances to suppliers-related party consist of the following:

	June 30,		June 30,
	2018		2017

Zhiyuan International Investment & Holding Group (Hong Kong) Co., Ltd.		3,414,619		3,333,038
Total	$	3,414,619	$	3,333,038

On February 18, 2017, the Company entered into a cooperative transportation agreement with a related party, Zhiyuan Hong Kong which is owned by the Company’s largest shareholder, jointly with China Minmetals Corporation and China Metallurgical Group Corporation, acts as the general designer, general equipment provider and general service contractor in the upgrade and renovation project of Perwaja Steel, located in Malaysia (the “Project”). The Company agreed to provide high-quality services, including the design of a detailed transportation plan as well as execution and necessary supervision of the plan at Zhiyuan Hong Kong’s demand, in consideration for which the Company will receive a 1% to 1.25% transportation fee incurred in the Project as a commission for its services rendered. On July 7, 2017, the Company signed a supplemental agreement with the Buyer, to which the Company will cooperate with Zhiyuan Hong Kong exclusively on the entire Project’s transportation needs with respect to transporting construction materials from manufacturers to the port of Malaysia and to the factory site. Pursuant to the supplemental agreement, the Company agrees to make prepayments to Zhiyuan Hong Kong for its share of packaging and transporting costs related to the Project; in return, the Company will receive 15% of the cost incurred in the Project from Zhiyuan Hong Kong as a service fee. The Company has completed its services pursuant to the supplemental agreement and received a $575,115 service fee in June 2018. The Company expects the entire advance will be reimbursed by October 2018.

In December 2016, the Company entered into a joint venture agreement with Jetta Global to form ACH Trucking Center to provide short-haul trucking transportation and logistics services to customers located in the New York and New Jersey areas. ACH Logistic Inc. (ACH Logistic) and Jetta Global are invested by the same owner and both of the companies provided freight logistic service and container trucking service to the Company. For the year ended June 30, 2017, ACH Logistic and Jetta Global provided services in the amount of $788,775 and $222,869 to the Company, respectively. As of June 30, 2017, the amount due to ACH Logistic and Jetta Global was $131,262 and $75,061, respectively. All balances were paid in 2018.