RELATED PARTY TRANSACTIONS

9 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 10 – RELATED PARTY TRANSACTIONS

Sales to and Purchases from Related Parties

The Company sells its products to and buys raw materials from Shanghai Huaye Iron&Steel Group Co., Ltd (“Shanghai Huaye”), which is under the same control as the Company, and its subsidiaries as well as the Company’s Investee (Note 8). Revenues related to these transactions are shown separately in the accompanying consolidated statements of operations. For the three months ended March 31, 2013 and 2012, purchases from these related parties totaled of $75,618,422 and $14,065,131, respectively. For the nine month ended March 31, 2013 and 2012, purchases from these related parties totaled of $221,817,578 and $111,820,655, respectively.

Due from/to Related Parties

The amounts due from related parties are non-interest bearing and were incurred in the normal course of business. Receivables from, advanced purchase deposits to, loans, payables to and advanced sales deposits from Shanghai Huaye and its subsidiaries have been netted due to the right of offset. As of March 31, 2013 and June 30, 2012, the net amounts due from Shanghai Huaye and its subsidiaries were $148,785,602 and $121,884,833, respectively.

As of March 31, 2013 and June 30, 2012, due from CRM Suzhou were $17,664,856 and nil, respectively.

The amounts charged for products to the Company by the related parties are under the same pricing, terms and conditions as those charged to third parties, and are due upon receipt. It is common for the Company with its related parties to accommodate an extension of 90 to 180 days. Amounts receivable from related parties are also due upon delivery. Advances to suppliers which are related parties, are relieved once the goods are received.

As of March 31, 2013 and June 30, 2012, due to CRM Suzhou were $13,486,508 and nil, respectively.

Letters of Credit Held by Related Parties

As of March 31, 2013 and June 30, 2012, the Company had letters of credit totaling $93,638,928 and $82,669,496, respectively, in the form of banker’s acceptance notes that are held by Shanghai Huaye and its subsidiaries in connection with purchases. As of March 31, 2013 and June 30, 2012, the Company had letters of credit totaling $13,486,508 and nil, respectively, in the form of banker’s acceptance notes that are held by CRM Suzhou in connection with purchases. The banker’s acceptance notes carry an interest-free rate, can be presented to the respective banks in 90 to 180 days from the dates they were written, are secured by cash on deposit with the respective banks and are guaranteed by related parties. These letters of credit were included in accounts payable, related parties and those held by Shanghai Huaye and its subsidiaries have been netted off with the advances to suppliers, related parties due to the right of offset.

Loans from Related Parties

As of March 31, 2013 and June 30, 2012, the Company had loans from Shanghai Huaye and its subsidiaries totaling $8,819,561 and $8,815,502, respectively; and accrued interest totaling $1,877,149 and $1,621,842, respectively. The loans from Shanghai Huaye and its subsidiaries and accrued interest have been recorded as a reduction of advances to suppliers, related parties in the accompanying condensed consolidated balance sheet as of March 31, 2013 and June 30, 2012.

Rental Expenses Incurred in respect of Related Party Lease Arrangement

The Company entered into agreements with its related parties to lease buildings from related parties, and the Company pays the related parties rental fees at a pre-determined rate. For the three months ended March 31, 2013 and 2012, the rental fees incurred in respect of the related party lease arrangements amounted to $38,205 and $93,908, respectively. For the nine month ended March 31, 2013 and 2012, the rental fees incurred in respect of the related party lease arrangements amounted to $114,286 and $281,725, respectively.