Advances to Suppliers

12 Months Ended

Jun. 30, 2018

Advances to Suppliers [Abstract]

ADVANCES TO SUPPLIERS

Note 4. ADVANCES TO SUPPLIERS

	June 30,		June 30,
The Company’s advances to suppliers – third parties are as follows:	2018		2017
Deposit for ERP (1)	$	437,357	$	-
Deposit for IT infrastructure (2)		1,002,750		-
Freight fees (3)		564,365		29,960
Other		140,513		24,930
Total advances to suppliers-third parties	$	2,144,985	$	54,890

(1) On December 27, 2017, with the approval of the Board, the Company signed a contract with Tianjin Anboweiye Technology Ltd Co. (“Tianjin Anboweiye”), to develop a more complete ERP system based on the Company’s current operations and projected future growth. In March 2018, the Company paid a deposit to start phase one of the development which includes upgraded accounting and human resources modules, new order processing and customer relationship management system. The Company paid a $437,357 deposit to Tianjin Anboweiye as of June 30, 2018. The total contract price for phase one amounted to RMB 4,000,000, approximately USD 615,000. The project is currently in the planning and design stage. The Company expects the planning stage will be completed in and will start development in October 2018. The remaining balance will be settled upon completion of services in fiscal year 2021.

(2) On June 22, 2018, the Company entered into contract to improve its IT infrastructure. The total contract for the services is $1.2 million and the Company paid a deposit of $1.0 million. The contract includes four parts: $420,000 for hardware leasing of twelve months; $480,000 for onsite services and IT consulting for a two year period; $60,000 for operating system set up and $240,000 for continuing integration and with the ERP system and data management for two years. The system is expected to be installed in October 2018.

(3) The prepaid freight fee is the Company’s advances made for various shipping cost for shipments in July 2018.

	June 30,		June 30,
The Company’s advances to suppliers – related party are as follows:	2018		2017
Freight fees	$	3,414,619	$	3,333,038
Total advances to suppliers-related party	$	3,414,619	$	3,333,038

On February 18, 2017, the Company entered into a cooperative transportation agreement with a related party, Zhiyuan International Investment & Holding Group (Hong Kong) Co., Ltd. (the “Buyer” or “Zhiyuan Hong Kong”). Zhiyuan Hong Kong, which is jointly owned by the Company’s largest shareholder along 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, 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. As of June 2018, the Company has completed its services pursuant to the supplemental agreement and received a $ 575,115 service fee in June 2018. The Company also expects that the entire advance will be reimbursed by October 2018.