Green Giant (GGEI) 10-Q 7 Aug 15 2015 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Jun. 30, 2015	Aug. 07, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Trading Symbol	HGSH
Entity Registrant Name	CHINA HGS REAL ESTATE INC.
Entity Central Index Key	1,158,420
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		45,050,000

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2015	Sep. 30, 2014
Current assets:
Cash	$ 3,784,384	$ 1,125,545
Restricted cash	1,783,501	$ 1,589,887
Advances to vendors	223,745
Cost and earnings in excess of billings	11,479,614	$ 12,332,396
Real estate property development completed	4,452,559	6,050,263
Real estate property under development	122,564,553	140,313,127
Other current assets	237,488	1,409,367
Total current assets	144,525,844	162,820,585
Property, plant and equipment, net	832,824	889,497
Real estate property development completed, net of current portion	2,312,716	2,572,215
Security deposits for land use right	3,273,965	3,249,549
Real estate property under development, net of current portion	141,714,322	128,516,074
Due from local government for real estate property development completed	2,370,939	3,165,644
Total Assets	295,030,610	301,213,564
Current liabilities:
Bank loan - current portion	11,458,879	12,998,197
Short-term loans - other	13,090,951	15,290,753
Accounts payable	31,984,471	57,317,877
Other payables	14,770,664	13,777,853
Construction deposits	382,838	367,133
Billings in excess of cost and earnings	7,785,747	2,960,452
Customer deposits	20,876,258	31,100,334
Shareholder loan	3,903,701	5,465,743
Accrued expenses	4,958,910	3,801,567
Taxes payable	15,153,949	12,579,071
Total current liabilities	124,366,368	155,658,980
Long-term bank loan, less current portion	1,636,983	6,499,098
Deferred tax liabilities	4,389,695	2,992,459
Customer deposits, net of current portion	6,704,214	3,829,870
Construction deposits, net of current portion	1,011,910	1,004,364
Total liabilities	$ 138,109,170	$ 169,984,771
Commitments and Contingencies
Stockholders' equity
Common stock, $0.001 par value, 100,000,000 shares authorized, 45,050,000 shares issued and outstanding June 30, 2015 and September 30, 2014	$ 45,050	$ 45,050
Additional paid-in capital	17,759,349	17,759,349
Statutory surplus	12,845,197	12,845,197
Retained earnings	116,440,388	91,834,708
Accumulated other comprehensive income	9,831,456	8,744,489
Total stockholders' equity	156,921,440	131,228,793
Total Liabilities and Stockholders' Equity	$ 295,030,610	$ 301,213,564

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2015	Sep. 30, 2014
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	45,050,000	45,050,000
Common stock, shares outstanding	45,050,000	45,050,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME [Abstract]
Real estate sales	$ 26,014,516	$ 28,854,104	$ 60,138,945	$ 92,902,437
Less: Sales tax	1,655,046	1,746,835	3,892,435	5,700,706
Cost of real estate sales	9,347,052	17,538,690	27,702,998	58,077,310
Gross profit	15,012,418	9,568,579	28,543,512	29,124,421
Operating expenses
Selling and distribution expenses	211,558	154,007	804,700	522,273
General and administrative expenses	427,363	557,779	1,636,889	1,684,253
Total operating expenses	638,921	711,786	2,441,589	2,206,526
Operating income	$ 14,373,497	8,856,793	$ 26,101,923	26,917,895
Interest income		3,401		12,406
Interest expense	$ (22,540)	(17,793)	$ (54,300)	(53,973)
Income before income taxes	14,350,957	8,842,401	26,047,623	26,876,328
Provision for income taxes	641,368	681,130	1,441,943	2,099,030
Net income	13,709,589	8,161,271	24,605,680	24,777,298
Other comprehensive income (loss)
Foreign currency translation adjustment	306,940	124,287	1,086,967	(408,017)
Comprehensive income	$ 14,016,529	$ 8,285,558	$ 25,692,647	$ 24,369,281
Basic and diluted income per common share
Basic	$ 0.30	$ 0.18	$ 0.55	$ 0.55
Diluted	$ 0.30	$ 0.18	$ 0.55	$ 0.55
Weighted average common shares outstanding
Basic	45,050,000	45,050,000	45,050,000	45,050,000
Diluted	45,075,821	45,125,144	45,089,819	45,125,144

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities
Net income	$ 24,605,680	$ 24,777,298
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Deferred tax provision	1,369,997	1,681,415
Depreciation	63,137	54,933
Changes in assets and liabilities:
Restricted cash	(181,039)	(375,470)
Due from local government for real estate property development completed	815,661	(3,174,981)
Advances to vendors	(222,972)	109,130
Cost and earnings in excess of billings	942,175	(4,732,899)
Real estate property development completed	1,915,343	9,297,037
Real estate property under development	6,547,520	(87,987,018)
Other current assets	1,178,377	(290,275)
Accounts payables	(25,674,976)	2,728,118
Other payables	886,212	8,432,511
Billings in excess of cost and earnings	4,786,440	3,575,124
Customer deposits	(7,585,864)	10,913,504
Construction deposits	12,902	4,793
Accrued expenses	1,126,826	179,365
Taxes payable	2,471,784	4,085,999
Net cash provided by (used in) operating activities	13,057,203	(30,721,416)
Cash flow from financing activities
Proceeds from shareholder loan	10,500,816	7,577,486
Repayment of shareholder loan	$ (12,084,829)	(1,906,593)
Proceeds from bank loan		8,147,834
Repayment of bank loan	$ (6,525,285)	(1,629,567)
Proceeds from short-term loans-other	9,787,928	$ 15,335,854
Repayment of short-term loans-other	(12,094,617)
Net cash (used in) provided by financing activities	(10,415,987)	$ 27,525,014
Effect of changes of foreign exchange rate on cash	17,623	(8,816)
Net decrease in cash	2,658,839	(3,205,218)
Cash, beginning of period	1,125,545	5,878,101
Cash, end of period	3,784,384	2,672,883
Supplemental disclosures of cash flow information:
Interest paid	1,355,741	1,143,784
Income taxes paid	$ 102,337	$ 291,776

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	9 Months Ended
	Jun. 30, 2015
ORGANIZATION AND BASIS OF PRESENTATION [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION China HGS Real Estate, Inc. (“China HGS” or the “Company” or “we”, “us”, “our”), through its subsidiaries and variable interest entity (“VIE”), engages in real estate development, and the construction and sales of residential apartments, parking space and commercial properties in Tier 3 and Tier 4 cities and counties in China. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended June 30, 2015 and 2014 are not necessarily indicative of the results that may be expected for the full year. The information included in this Form 10-Q should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2014 .

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Jun. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The unaudited condensed consolidated financial statements include the financial statements of China HGS Real Estate Inc. (the “Company” or “China HGS”), China HGS Investment Inc. (“HGS Investment”), Shaanxi HGS Management and Consulting Co., Ltd. (“Shaanxi HGS”) and its variable interest entity (“VIE”), Shaanxi Guangsha Investment and Development Group Co., Ltd. (“Guangsha”). All inter-company transactions and balances between the Company and its subsidiaries have been eliminated upon consolidation. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, and disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates are used for, but not limited to, the assumptions and estimates used by management in recognizing development revenue under the percentage of completion method, the selection of the useful lives of property and equipment, provision necessary for contingent liabilities, fair values, revenue recognition, taxes, budgeted costs, share-based compensation and other similar charges. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates. Fair value of financial instruments The Company follows the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures. It clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2-Inputs are unadjusted 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, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3-Inputs are unobservable inputs which reflect the reporting entity's own assumptions or what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the accompanying condensed consolidated balance sheets for cash, restricted cash, advances to vendors, security deposits for land use rights, other current assets, accounts payable, other payables, customer deposits, accrued expenses and taxes payable approximate their fair value based on the short-term maturity of these instruments. The fair value of the long term customer, construction and security deposits approximate their carrying amounts because the deposits are received in cash. The carrying value of the long term bank loan approximates fair value because it has a variable rate of interest based on market. Revenue recognition Percentage of Completion method Real estate sales for the long term real estate projects are recognized under percentage completion method in accordance with the provisions of ASC 360-20-40D “Sale of Condominium Units”. Revenue and profit from the sales of long term development properties is recognized by the percentage of completion method on the sale of individual units when all the following criteria are met: a. Construction is beyond a preliminary stage. b. The buyer is committed to the extent of being unable to require a refund except for non-delivery of the unit or interest. c. Sufficient units have already been sold to assure that the entire property will not revert to rental property. d. Sales prices are collectible. e. Aggregate sales proceeds and costs can be reasonably estimated. If any of the above criteria is not met, proceeds shall be accounted for as deposits until the criteria are met. Under the percentage of completion method, revenues from condominium units sold and related costs are recognized over the course of the construction period, based on the completion progress of a project. In relation to any project, revenue is determined by calculating the ratio of incurred costs, including land use rights costs and construction costs, to total estimated costs and applying that ratio to the contracted sales amounts. Cost of sales is recognized by determining the ratio of contracted sales during the period to total estimated sales value, and applying that ratio to the incurred costs. Current period amounts are calculated based on the difference between the life-to-date project totals and the previously recognized amounts. Any changes in significant judgments and/or estimates used in determining construction and development revenue could significantly change the timing or amount of construction and development revenue recognized. Changes in total estimated project costs or losses, if any, are recognized in the period in which they are determined. Full accrual method Revenue from the sales of short term development properties, where the construction period is expected to be 18 months or less is recognized by the full accrual method at the time of the closing of an individual unit sale. This occurs when title to or possession of the property is transferred to the buyer. A sale is not considered consummated until (a) the parties are bound by the terms of a contract, (b) all consideration has been exchanged, (c) any permanent financing for which the seller is responsible has been arranged, (d) all conditions precedent to closing have been performed, (e) the seller does not have substantial continuing involvement with the property, and (f) the usual risks and rewards of ownership have been transferred to the buyer. Further, the buyer's initial and continuing investment is adequate to demonstrate a commitment to pay for the property. The Company provides “mortgage loan guarantees” only with respect to buyers who make down-payments of 30 50 For municipal road construction projects, fees are generally recognized by the full accrual method at the time the projects are completed. Foreign currency translation The Company's financial information is presented in U.S. dollars. The functional currency of the Company's operating subsidiaries is Renminbi (“RMB”), the currency of the PRC. The financial statements of the Company have been translated into U.S. dollars in accordance with ASC 830-30 “Translation of Financial Statements”. The financial information is first prepared in RMB and then is translated into U.S. dollars at year-end exchange rates as to assets and liabilities and average exchange rates as to revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income in stockholders' equity. For nine months ended June 30, September 30, 2015 2014 2014 Period end RMB : USD exchange rate 6.1088 6.1564 6.1547 Period average RMB : USD exchange rate 6.1300 6.1366 6.1425 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 U.S. dollars at the rates used in translation. Cash Cash includes cash on hand and demand deposits in accounts maintained with commercial banks within the PRC. The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company maintains bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured. Restricted Cash The restricted cash is required by the banks as collateral for mortgage loans given to the home buyers before obtaining the certificates of ownership of the properties as collateral. In order to provide the banks with the certificates of ownership, the Company is required to complete certain procedures with the Chinese government, which normally takes six to twelve months. Because the banks provide the loan proceeds to the Company without obtaining certificates of ownership as loan collateral during this six to twelve months' period, the mortgage banks require the Company to maintain, as restricted cash, 5 10 Advances to vendors Advances to vendors consist of balances paid to contractors and vendors for services and materials that have not been provided or received and generally relate to the development and construction of residential and commercial units in the PRC. Advances to vendors are reviewed periodically to determine whether their carrying value has become impaired. Historically, the Company has not experienced any losses as a result of these advances. Security deposits for land use rights Security deposits for land use rights consist of a deposit held by the PRC government for the purchase of land use rights in Hanzhong City. The deposit will be reclassified to real estate property under development upon the transfer of legal title. Real estate property development completed and under development Real estate property consists of finished residential unit sites, commercial offices and residential unit sites under development. The Company leases the land for the residential unit sites under land use right leases with various terms from the PRC government. The cost of land use rights is included in the development cost and allocated to each project. Real estate property development completed and real estate property under development are stated at the lower of cost or fair value. Expenditures for land development, including cost of land use rights, deed tax, pre-development costs, and engineering costs, exclusive of depreciation, are capitalized and allocated to development projects by the specific identification method. Costs are allocated to specific units within a project based on the ratio of the sales area of units to the estimated total sales area of the project (or phase of the project) multiplied by the total cost of the project (or phase of the project). Cost of amenities transferred to buyers is allocated to specific units as a component of total construction cost. The amenity cost includes landscaping, road paving, etc. Once the projects are completed, the amenities are under control of the property management companies. Real estate property development completed and real estate property under development are reclassified on the balance sheet into current and non-current portions based on the estimated date of construction completion and sales. The real estate property development completed classification is based on the estimated date that each property is expected to be sold within the Company's normal operating cycle of the business and the Company's sales plan. Real estate property development completed is classified as a current asset if the property is expected to be sold within the normal operating cycle of the business. Otherwise, it is classified as a non-current asset. Real estate property under development is classified as a current asset, if the property is reasonably expected to be completed within the Company's normal operating cycle of the business. Otherwise, it is classified as a non-current asset. The majority of real estate projects the Company has completed in the past was multi-layer or sub-high-rise real estate projects. The Company considers its normal operating cycle is 12 months. In accordance with ASC 360, “Property, Plant and Equipment” (“ASC 360”), real estate property development completed and under development are subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying amount of the assets is not recoverable and exceeds fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the assets. The Company reviewed all of its real estate projects for future losses and impairment by comparing the estimated future undiscounted cash flows for each project to the carrying value of such project. For the three and nine months ended June 30, 2015 and 2014, the Company did not recognize any impairment for real estate property under development and completed. Capitalization of Interest Interest incurred during and directly related to real estate development projects is capitalized to the related real estate property under development during the active development period, which generally commences when borrowings are used to acquire real estate assets and ends when the properties are substantially complete or the property becomes inactive. Interest is capitalized based on the interest rate applicable to specific borrowings or the weighted average of the rates applicable to other borrowings during the period. Interest capitalized to real estate property under development is expensed as a component of cost of real estate sales when related units are sold. All other interest is expensed as incurred. Impairment of long-lived assets In accordance with ASC 360, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset's expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There has been no impairment of long-lived assets to date. Customer deposits Customer deposits consist of amounts received from customers relating to the sale of residential units in the PRC. In the PRC, customers will generally obtain permanent financing for the purchase of their residential unit prior to the completion of the project. The lending institution will provide the funding to the Company upon the completion of the financing rather than the completion of the project. The Company receives these funds and recognizes them as a liability until the revenue can be recognized. Property warranty The Company provides its customers with warranties which cover major defects of building structure and certain fittings and facilities of properties sold. The warranty period varies from two five 2 Construction Deposits Construction deposits are the warranty deposits the real estate contractors provide to the Company upon signing the construction contracts. The Company can use such deposits to reimburse customers in the event of customer claims due to construction defects. The remaining balance of the deposits are returned to the contractors when the terms of the after-sale property warranty expires, which normally occurs within two to five years after the date of the deposit. Share-based compensation The Company accounts for share-based compensation in accordance with ASC Topic 718, Compensation - Stock compensation, which requires that share-based payment transactions be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, or vesting period. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in the subsequent period if actual forfeitures differ from initial estimates. Forfeiture rate is estimated based on historical and future expectation of employee turnover rate and are adjusted to reflect future change in circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense was recorded only for those stock options and common stock awards that are expected to vest. Income taxes The Company utilizes ASC 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740-10-25 prescribes a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There are no uncertain tax positions as of June 30, 2015 and September 30, 2014. The Company is a corporation organized under the laws of the State of Florida. However, all of the Company's operations are conducted solely by its subsidiaries in the PRC. No income is earned in the United States and the management does not repatriate any earnings outside the PRC. As a result, the Company did not generate any U.S. taxable income for the three and nine months ended June 30, 2015, and 2014, respectively. As of June 30, 2015, the tax years ended December 31, 2009 through December 31, 2014 for the Company's PRC entities remain open for statutory examination by PRC tax authorities. The parent Company China HGS Real Estate Inc.'s tax years ended September 30, 2012 through September 30, 2014 remains open for statutory examination by U.S. tax authorities. Land appreciation tax (“LAT”) In accordance with the relevant taxation laws in the PRC, the Company is subject to LAT based on progressive rates ranging from 30 60 The whole project must be completed before the LAT obligation can be assessed. Accordingly, the Company should record the liability and the total related expense at the completion of a project unless the tax authorities impose an assessment at an earlier date. The methods to implement this tax law vary among different geographic areas. Hanzhong implements this tax rule by requiring real estate companies prepay the LAT based upon customer deposits received. The tax rate in Hanzhong is 1 0.5 Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. Interest expense related to the cost of real estate sales in the amount of $110,331 Comprehensive income In accordance with ASC 220-10-55, comprehensive income is defined as all changes in equity except those resulting from investments by owners and distributions to owners. The Company's only components of comprehensive income during the three and nine months ended June 30, 2015 and 2014 were net income and foreign currency translation adjustments. Basic and diluted earnings per share The Company computes earnings per share (“EPS”) in accordance with the ASC 260, “Earnings per share”, which requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Advertising expenses Advertising costs are expensed as incurred. For the three and nine months ended June 30, 2015, the Company recorded advertising expenses of $ 42,720 196,763 41,870 109,139 Concentration risk The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and potential trade accounts receivable. All of the Company's cash is maintained with state-owned banks within the People's Republic of China of which no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts. The Company is dependent on third-party sub-contractors, manufacturers, and distributors for all construction services and supply of construction materials. For the three months ended June 30, 2015, four suppliers accounted for 22 20 19 16 25 22 10 10 Recent Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update 2015-11: Simplifying the Measurement of Inventory. This update requires inventory to be measured at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. This update will be effective for the Company for all annual and interim periods beginning after December 15, 2016. The amendments in this update should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company does not expect this update will have a material impact on the presentation of the Company's condensed consolidated financial statements. Simplifying the Presentation of Debt Issuance Costs. The update simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. For public companies, this update will be effective for interim and annual periods beginning after December 15, 2015, and is to be applied retrospectively. Early adoption is permitted. The Company does not expect the adoption of this guidance will have a material effect on the Company's condensed consolidated financial statements.

REAL ESTATE PROPERTY DEVELOPMEN

REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT	9 Months Ended
	Jun. 30, 2015
REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT [Abstract]
REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT	NOTE 3. REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT The following summarizes the components of real estate property development completed and under development as of June 30, 2015 and September 30, 2014: June 30, 2015 September 30, 2014 Development completed Hanzhong City Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) $ 1,647,876 $ 1,793,362 Hanzhong City Nan Dajie (Mingzhu Xinju) 1,497,687 1,605,886 Yang County Yangzhou Pearl Garden 3,619,712 4,609,585 Hanzhong City Central Plaza - 613,645 Real estate property development completed 6,765,275 8,622,478 Less: Real estate property completed –short-term 4,452,559 6,050,263 Real estate property completed –long-term $ 2,312,716 $ 2,572,215 Under development: Hanzhong City Oriental Pearl Garden (c) $ 55,784,765 $ 60,298,669 Hanzhong City Mingzhu Garden-Mingzhu Beiyuan (a) 61,765,721 73,351,415 Yang County Yangzhou Pearl Garden (b) 5,014,041 6,663,043 Yang County Yangzhou Palace 40,036,935 31,600,896 Hanzhong City Shijin Project 7,929,173 7,870,052 Hanzhong City Liangzhou Road and related projects (d) 90,551,334 86,050,259 Hanzhong City Hanfeng Beiyuan East (e) 566,355 419,762 Hanzhong City Beidajie 72,929 36,555 Yang County East 2 nd 2,557,622 2,538,550 Real estate property under development 264,278,875 268,829,201 Less: Short-term portion 122,564,553 140,313,127 Real estate property under development –long-term $ 141,714,322 $ 128,516,074 (a) The Company recognized $ 6,965,666 14,952,186 3,622,726 15,658,144 (b) The Company recognized $ 200,654 2,275,636 1,548,838 4,873,974 (c) The Company recognized $ 1,940,411 8,559,833 10,619,372 25,893,520 (d) In September 2013, the Company entered into an agreement (“Liangzhou Agreement”) with the Hanzhong local government on the Liangzhou Road reformation and expansion project (Liangzhou Road Project”). Pursuant to the agreement, the Company is contracted to reform and expand the Liangzhou Road, a commercial street in downtown Hanzhong City, with a total length of 2,080 meters and width of 30 meters and to resettle the existing residences in the Liangzhou road area. The government's original road construction budget was approximately $ 33 As of June 30, 2015, the actual costs incurred by the Company was $ 90,551,334 86,050,259 Nil 1,734,874 (e) In September 2012, the Company was approved by the Hanzhong local government to construct four municipal roads with a total length of approximately 1,192 meters. The project was deferred and then restarted during the year ended September 30, 2014. As of June 30, 2015, the local government was still in the process of assessing the budget for these projects. (f) The Company was engaged by the Yang County local government to construct the East 2nd Ring Road with a total length of 2.15km and a budgeted price of approximately $ 27.5 168 5.25 6.40 As of June 30, 2015 and September 30, 2014, land use rights included in real estate property under development totaled $ 49,102,724 50,066,081

SECURITY DEPOSITS FOR LAND USE

SECURITY DEPOSITS FOR LAND USE RIGHTS	9 Months Ended
	Jun. 30, 2015
SECURITY DEPOSITS FOR LAND USE RIGHTS [Abstract]
SECURITY DEPOSITS FOR LAND USE RIGHTS	NOTE 4. SECURITY DEPOSITS FOR LAND USE RIGHTS In May 2011, the Company entered into a development agreement with the Hanzhong local government. Pursuant to the agreement, the Company will prepay the development cost of $ 19,594,683 (RMB 119,700,000 3,273,965 20,000,000 3,249,549 or RMB 20,000,000

BANK LOAN

BANK LOAN	9 Months Ended
	Jun. 30, 2015
BANK LOAN [Abstract]
BANK LOAN	NOTE 5. BANK LOAN On August 23, 2013, the Company entered into a project finance loan agreement (the “Loan Agreement”) with China Construction Bank, Hanzhong Branch (the “Bank”) for a working capital loan (the “Loan”). The Loan has a three-year term in the principal amount of $ 24,554,741 150,000,000 6.46 5 real estate properties in the Mingzhu Beiyuan project 61,765,721 73,351,415 June 30, 2015 September 30, 2014 China Construction Bank Loan $ 13,095,862 $ 19,497,295 Less: current maturities of long-term bank loan 11,458,879 12,998,197 Bank loan – long term $ 1,636,983 $ 6,499,098 The weighted average interest rate of the loan was 6.46 216,515 822,843 (2014 - $ 395,287 751,854 Repayment in Repayment in August 20, 2015 6,547,930 40,000,000 February 10, 2016 4,910,949 30,000,000 August 20, 2016 1,636,983 10,000,000 Total 13,095,862 80,000,000

SHORT-TERM LOANS-OTHER

SHORT-TERM LOANS-OTHER	9 Months Ended
	Jun. 30, 2015
SHORT-TERM LOANS-OTHER [Abstract]
SHORT-TERM LOANS-OTHER	NOTE 6. SHORT-TERM LOANS-OTHER As of June 30, 2015, the Company has the following other short term loans: June 30, 2015 September 30, Loan A (i) $ 8,180,003 $ 15,290,753 Loan B (ii) 4,910,948 - Short-term loans - other $ 13,090,951 $ 15,290,753 (i) On April 9, 2014 one 16,369,827 100,000,000 10 245,227 961,501 175,993 175,993 (ii) On May 6, 2015, the Company renewed a credit agreement with a financial institution. On May 22, 2015 4,910,948 30,000,000 20 six 50 82,418 532,898 Nil

CUSTOMER DEPOSITS

CUSTOMER DEPOSITS	9 Months Ended
	Jun. 30, 2015
CUSTOMER DEPOSITS [Abstract]
CUSTOMER DEPOSITS	NOTE 7. CUSTOMER DEPOSITS Customer deposits consist of amounts received from customers for the pre-sale of residential units in the PRC. The detail of customer deposits is as follows: June 30, 2015 September 30, Customer deposits by real estate projects Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) $ 9,323,952 $ 15,386,758 Hanzhong City Oriental Pearl Garden 8,973,604 12,541,634 Liangzhou road and related projects 1,623,396 1,980,600 Yang County Palace 5,080,818 1,849,270 Yangzhou Pearl Garden 2,578,702 3,171,942 Total 27,580,472 34,930,204 Including: Customer deposits -short-term 20,876,258 31,100,334 Customer deposits - long-term $ 6,704,214 $ 3,829,870 Customer deposits are typically 10 20 30 50 six twelve

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Jun. 30, 2015
RELATED PARTY TRANSACTIONS [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 8. RELATED PARTY TRANSACTIONS June 30, 2015 September 30, Shareholder loan – USD loan (a) $ 1,810,000 $ 1,810,000 Shareholder loan – RMB loan (b) 2,093,701 3,655,743 Total $ 3,903,701 $ 5,465,743 a. The Company has a one year loan agreement (“USD Loan Agreement”) with Mr. Xiaojun Zhu, the Chairman, CEO and major shareholder, pursuant to which the Company borrowed $1,810,000 to make a capital injection into Shaanxi HGS, the Company's subsidiary. The interest rate for the loan is 4 18,100 54,300 18,100 54,300 b. On June 30, 2014, Shaanxi Guangsha Investment and Development Group Co., Ltd. (the “Guangsha”), the Company's PRC operating subsidiary, entered into a loan agreement with the Chairman (the “Shareholder RMB Loan Agreement”), pursuant to which Guangsha is able to borrow from Mr. Zhu in order to support the Company's Liang Shan Road construction project development and the Company's working capital needs. The Loan Agreement has a one-year term at an interest rate, which is equal to the China RMB loan annual benchmark rate of 6.15 The loan was renewed during the nine months ended June 30, 2015 with the same term. During the nine months ended June 30, 2015, the Company received approximately 10.5 12.1 7.6 1.9 87,726 282,957 114,249 224,253 which is capitalized in the development cost of Liangzhou road project accompanying condensed consolidated balance sheets as of June 30, 2015 and September 30, 2014.

STOCK OPTIONS

STOCK OPTIONS	9 Months Ended
	Jun. 30, 2015
STOCK OPTIONS [Abstract]
STOCK OPTIONS	NOTE 9. STOCK OPTIONS In January 2010, the Company's Board of Directors granted stock options to three 34,000 20 80 10 2.60 24,000 10,000 On August 22, 2012, the Company's Board of Directors granted stock options to two new independent directors to repurchase up to an aggregate of 120,000 2.37 94.4 66.7 The assumptions used in calculating the fair value of options granted using the Black-Scholes option pricing model are as follows: Options granted in August 2012 Risk-free interest rate 0.19 % Expected life of the options 3 Expected volatility 148 % Expected dividend yield 0 % Fair value $ 8,400 The Company uses the Black-Scholes option-pricing model, which incorporates various assumptions including volatility, expected life and interest rates to determine fair value. The Company's expected volatility assumption is based on the historical volatility of Company's stock. The expected life assumption is primarily based on the simplified method due to the Company's limited option exercise behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. During The following table summarizes the stock option activities of the Company: Number of options Weighted Average Exercise Price Weighted Average Remaining Life in Years Grant Date Fair Value Outstanding, September 30, 2014 140,000 $ 2.39 0.89 $ 44,207 Granted - - - - Forfeited (10,000 ) - - (22,693 ) Exercised - - - - Outstanding, June 30, 2015 130,000 $ 2.57 0.15 $ 21,514 Exercisable, June 30, 2015 120,000 $ 2.36 0.19 $ 20,815 The Company recorded $Nil stock-based compensation expense for the three and nine months ended June 30, 2015 and 2014, respectively.

TAXES

TAXES	9 Months Ended
	Jun. 30, 2015
TAXES [Abstract]
TAXES	NOTE 10. TAXES (A) Business sales tax The Company is subject to a 5 15,153,949 10,410,449 B) Corporate income taxes (“CIT”) The Company's PRC subsidiaries and VIE are governed by the Income Tax Law of the People's Republic of China concerning the privately run enterprises, which are generally subject to income tax at a statutory rate of 25 However, as approved by the local tax authority of Hanzhong City, the Company's CIT was assessed annually at a pre-determined fixed rate as an incentive to stimulate the local economy and encourage entrepreneurship. The local income tax rate in Hanzhong is 2.5 1.25 Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference. The following table reconciles the statutory rates to the Company's effective tax rate for the three and nine months ended June 30, 2015 and 2014: Three months ended Nine months ended 2015 2014 2015 2014 Chinese statutory tax rate 25.0 % 25.0 % 25.0 % 25.0 % Exemption rendered by local tax authorities (21.1 )% (17.3 )% (19.5 )% (17.2 )% Effective tax rate 3.9 % 7.7 % 5.5 % 7.8 % Income tax expense for the three and nine months ended June 30, 2015 and 2014 is summarized as follows: Three months ended Nine months ended 2015 2014 2015 2014 Current tax provision $ 5,778 $ 102,919 $ 71,946 $ 417,615 Deferred tax provision 635,590 578,211 1,369,997 1,681,415 Income tax provision $ 641,368 $ 681,130 $ 1,441,943 $ 2,099,030 The parent Company China HGS Real Estate, Inc. is incorporated in the United States. Net operating loss carry forwards for United States income tax purposes amounted to approximately 378,000 324,000 June 30, 2015 September 30, 2014 Deferred tax assets Deferred tax assets from net operating loss carry-forwards for parent company $ 128,551 $ 110,089 Valuation allowance $ (128,551 ) $ (110,089 ) Deferred tax assets: - - Deferred tax liability Revenue recognized based on percentage of completion $ 4,389,695 $ 2,992,459 Deferred tax liability- long term $ 4,389,695 $ 2,992,459 The valuation allowance increased $ 6,154 18,462 Three months ended Nine months ended June 30, 2015 2014 2015 2014 Beginning Balance $ 122,397 $ 97,781 $ 110,089 $ 85,473 Current period additions 6,154 6,154 18,462 18,462 Ending Balance $ 128,551 $ 103,935 $ 128,551 $ 103,935 (C) LAT Since January 1, 1994, LAT has been applicable at progressive tax rates ranging from 30 60 0.5 1.0 667,864 165,089 (D) Taxes payable consisted of the following: June 30, 2015 September 30, 2014 CIT $ 860,834 $ 884,685 Business tax 12,653,260 10,410,449 Other tax and fees 1,639,855 1,283,937 Total taxes payable $ 15,153,949 $ 12,579,071

CONTINGENCY AND COMMITMENTS

CONTINGENCY AND COMMITMENTS	9 Months Ended
	Jun. 30, 2015
CONTINGENCY AND COMMITMENTS [Abstract]
CONTINGENCY AND COMMITMENTS	NOTE 11. CONTINGENCY AND COMMITMENTS As an industry practice, the Company provides guarantees to PRC banks with respect to loans procured by the purchasers of the Company's real estate properties for the total mortgage loan amount until the completion of obtaining the “Certificate of Ownership” of the properties from the government, which generally takes six to twelve months. Because the banks provide loan proceeds without getting the “Certificate of Ownership” as loan collateral during this six to twelve months' period, the mortgage banks require the Company to maintain, as restricted cash, 5 10 Total operating lease commitments for rental of office of the Company's PRC subsidiaries as of June 30, 2015 is as follows: Twelve months ending Minimum lease payment June 30, 2016 $ 20,188 June 30, 2017 29,608 Years after - Total minimum payments required $ 49,796

SUMMARY OF SIGNIFICANT ACCOUN17

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Jun. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Principles of consolidation	Principles of consolidation The unaudited condensed consolidated financial statements include the financial statements of China HGS Real Estate Inc. (the “Company” or “China HGS”), China HGS Investment Inc. (“HGS Investment”), Shaanxi HGS Management and Consulting Co., Ltd. (“Shaanxi HGS”) and its variable interest entity (“VIE”), Shaanxi Guangsha Investment and Development Group Co., Ltd. (“Guangsha”). All inter-company transactions and balances between the Company and its subsidiaries have been eliminated upon consolidation.
Use of estimates	Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, and disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates are used for, but not limited to, the assumptions and estimates used by management in recognizing development revenue under the percentage of completion method, the selection of the useful lives of property and equipment, provision necessary for contingent liabilities, fair values, revenue recognition, taxes, budgeted costs, share-based compensation and other similar charges. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates.
Fair value of financial instruments	Fair value of financial instruments The Company follows the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures. It clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2-Inputs are unadjusted 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, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3-Inputs are unobservable inputs which reflect the reporting entity's own assumptions or what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the accompanying condensed consolidated balance sheets for cash, restricted cash, advances to vendors, security deposits for land use rights, other current assets, accounts payable, other payables, customer deposits, accrued expenses and taxes payable approximate their fair value based on the short-term maturity of these instruments. The fair value of the long term customer, construction and security deposits approximate their carrying amounts because the deposits are received in cash. The carrying value of the long term bank loan approximates fair value because it has a variable rate of interest based on market.
Revenue recognition	Revenue recognition Percentage of Completion method Real estate sales for the long term real estate projects are recognized under percentage completion method in accordance with the provisions of ASC 360-20-40D “Sale of Condominium Units”. Revenue and profit from the sales of long term development properties is recognized by the percentage of completion method on the sale of individual units when all the following criteria are met: a. Construction is beyond a preliminary stage. b. The buyer is committed to the extent of being unable to require a refund except for non-delivery of the unit or interest. c. Sufficient units have already been sold to assure that the entire property will not revert to rental property. d. Sales prices are collectible. e. Aggregate sales proceeds and costs can be reasonably estimated. If any of the above criteria is not met, proceeds shall be accounted for as deposits until the criteria are met. Under the percentage of completion method, revenues from condominium units sold and related costs are recognized over the course of the construction period, based on the completion progress of a project. In relation to any project, revenue is determined by calculating the ratio of incurred costs, including land use rights costs and construction costs, to total estimated costs and applying that ratio to the contracted sales amounts. Cost of sales is recognized by determining the ratio of contracted sales during the period to total estimated sales value, and applying that ratio to the incurred costs. Current period amounts are calculated based on the difference between the life-to-date project totals and the previously recognized amounts. Any changes in significant judgments and/or estimates used in determining construction and development revenue could significantly change the timing or amount of construction and development revenue recognized. Changes in total estimated project costs or losses, if any, are recognized in the period in which they are determined. Full accrual method Revenue from the sales of short term development properties, where the construction period is expected to be 18 months or less is recognized by the full accrual method at the time of the closing of an individual unit sale. This occurs when title to or possession of the property is transferred to the buyer. A sale is not considered consummated until (a) the parties are bound by the terms of a contract, (b) all consideration has been exchanged, (c) any permanent financing for which the seller is responsible has been arranged, (d) all conditions precedent to closing have been performed, (e) the seller does not have substantial continuing involvement with the property, and (f) the usual risks and rewards of ownership have been transferred to the buyer. Further, the buyer's initial and continuing investment is adequate to demonstrate a commitment to pay for the property. The Company provides “mortgage loan guarantees” only with respect to buyers who make down-payments of 30 50 For municipal road construction projects, fees are generally recognized by the full accrual method at the time the projects are completed.
Foreign currency translation	Foreign currency translation The Company's financial information is presented in U.S. dollars. The functional currency of the Company's operating subsidiaries is Renminbi (“RMB”), the currency of the PRC. The financial statements of the Company have been translated into U.S. dollars in accordance with ASC 830-30 “Translation of Financial Statements”. The financial information is first prepared in RMB and then is translated into U.S. dollars at year-end exchange rates as to assets and liabilities and average exchange rates as to revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income in stockholders' equity. For nine months ended June 30, September 30, 2015 2014 2014 Period end RMB : USD exchange rate 6.1088 6.1564 6.1547 Period average RMB : USD exchange rate 6.1300 6.1366 6.1425 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 U.S. dollars at the rates used in translation.
Cash	Cash Cash includes cash on hand and demand deposits in accounts maintained with commercial banks within the PRC. The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company maintains bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured.
Restricted Cash	Restricted Cash The restricted cash is required by the banks as collateral for mortgage loans given to the home buyers before obtaining the certificates of ownership of the properties as collateral. In order to provide the banks with the certificates of ownership, the Company is required to complete certain procedures with the Chinese government, which normally takes six to twelve months. Because the banks provide the loan proceeds to the Company without obtaining certificates of ownership as loan collateral during this six to twelve months' period, the mortgage banks require the Company to maintain, as restricted cash, 5 10
Advances to vendors	Advances to vendors Advances to vendors consist of balances paid to contractors and vendors for services and materials that have not been provided or received and generally relate to the development and construction of residential and commercial units in the PRC. Advances to vendors are reviewed periodically to determine whether their carrying value has become impaired. Historically, the Company has not experienced any losses as a result of these advances.
Security deposits for land use rights	Security deposits for land use rights Security deposits for land use rights consist of a deposit held by the PRC government for the purchase of land use rights in Hanzhong City. The deposit will be reclassified to real estate property under development upon the transfer of legal title.
Real estate property development completed and under development	Real estate property development completed and under development Real estate property consists of finished residential unit sites, commercial offices and residential unit sites under development. The Company leases the land for the residential unit sites under land use right leases with various terms from the PRC government. The cost of land use rights is included in the development cost and allocated to each project. Real estate property development completed and real estate property under development are stated at the lower of cost or fair value. Expenditures for land development, including cost of land use rights, deed tax, pre-development costs, and engineering costs, exclusive of depreciation, are capitalized and allocated to development projects by the specific identification method. Costs are allocated to specific units within a project based on the ratio of the sales area of units to the estimated total sales area of the project (or phase of the project) multiplied by the total cost of the project (or phase of the project). Cost of amenities transferred to buyers is allocated to specific units as a component of total construction cost. The amenity cost includes landscaping, road paving, etc. Once the projects are completed, the amenities are under control of the property management companies. Real estate property development completed and real estate property under development are reclassified on the balance sheet into current and non-current portions based on the estimated date of construction completion and sales. The real estate property development completed classification is based on the estimated date that each property is expected to be sold within the Company's normal operating cycle of the business and the Company's sales plan. Real estate property development completed is classified as a current asset if the property is expected to be sold within the normal operating cycle of the business. Otherwise, it is classified as a non-current asset. Real estate property under development is classified as a current asset, if the property is reasonably expected to be completed within the Company's normal operating cycle of the business. Otherwise, it is classified as a non-current asset. The majority of real estate projects the Company has completed in the past was multi-layer or sub-high-rise real estate projects. The Company considers its normal operating cycle is 12 months. In accordance with ASC 360, “Property, Plant and Equipment” (“ASC 360”), real estate property development completed and under development are subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying amount of the assets is not recoverable and exceeds fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the assets. The Company reviewed all of its real estate projects for future losses and impairment by comparing the estimated future undiscounted cash flows for each project to the carrying value of such project. For the three and nine months ended June 30, 2015 and 2014, the Company did not recognize any impairment for real estate property under development and completed.
Capitalization of Interest	Capitalization of Interest Interest incurred during and directly related to real estate development projects is capitalized to the related real estate property under development during the active development period, which generally commences when borrowings are used to acquire real estate assets and ends when the properties are substantially complete or the property becomes inactive. Interest is capitalized based on the interest rate applicable to specific borrowings or the weighted average of the rates applicable to other borrowings during the period. Interest capitalized to real estate property under development is expensed as a component of cost of real estate sales when related units are sold. All other interest is expensed as incurred.
Impairment of long-lived assets	Impairment of long-lived assets In accordance with ASC 360, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset's expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There has been no impairment of long-lived assets to date.
Customer deposits	Customer deposits Customer deposits consist of amounts received from customers relating to the sale of residential units in the PRC. In the PRC, customers will generally obtain permanent financing for the purchase of their residential unit prior to the completion of the project. The lending institution will provide the funding to the Company upon the completion of the financing rather than the completion of the project. The Company receives these funds and recognizes them as a liability until the revenue can be recognized.
Property warranty	Property warranty The Company provides its customers with warranties which cover major defects of building structure and certain fittings and facilities of properties sold. The warranty period varies from two five 2
Construction Deposits	Construction Deposits Construction deposits are the warranty deposits the real estate contractors provide to the Company upon signing the construction contracts. The Company can use such deposits to reimburse customers in the event of customer claims due to construction defects. The remaining balance of the deposits are returned to the contractors when the terms of the after-sale property warranty expires, which normally occurs within two to five years after the date of the deposit.
Share-based compensation	Share-based compensation The Company accounts for share-based compensation in accordance with ASC Topic 718, Compensation - Stock compensation, which requires that share-based payment transactions be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, or vesting period. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in the subsequent period if actual forfeitures differ from initial estimates. Forfeiture rate is estimated based on historical and future expectation of employee turnover rate and are adjusted to reflect future change in circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense was recorded only for those stock options and common stock awards that are expected to vest.
Income taxes	Income taxes The Company utilizes ASC 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740-10-25 prescribes a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There are no uncertain tax positions as of June 30, 2015 and September 30, 2014. The Company is a corporation organized under the laws of the State of Florida. However, all of the Company's operations are conducted solely by its subsidiaries in the PRC. No income is earned in the United States and the management does not repatriate any earnings outside the PRC. As a result, the Company did not generate any U.S. taxable income for the three and nine months ended June 30, 2015, and 2014, respectively. As of June 30, 2015, the tax years ended December 31, 2009 through December 31, 2014 for the Company's PRC entities remain open for statutory examination by PRC tax authorities. The parent Company China HGS Real Estate Inc.'s tax years ended September 30, 2012 through September 30, 2014 remains open for statutory examination by U.S. tax authorities.
Land appreciation tax ("LAT")	Land appreciation tax (“LAT”) In accordance with the relevant taxation laws in the PRC, the Company is subject to LAT based on progressive rates ranging from 30 60 The whole project must be completed before the LAT obligation can be assessed. Accordingly, the Company should record the liability and the total related expense at the completion of a project unless the tax authorities impose an assessment at an earlier date. The methods to implement this tax law vary among different geographic areas. Hanzhong implements this tax rule by requiring real estate companies prepay the LAT based upon customer deposits received. The tax rate in Hanzhong is 1 0.5
Reclassification	Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. Interest expense related to the cost of real estate sales in the amount of $110,331
Comprehensive income	Comprehensive income In accordance with ASC 220-10-55, comprehensive income is defined as all changes in equity except those resulting from investments by owners and distributions to owners. The Company's only components of comprehensive income during the three and nine months ended June 30, 2015 and 2014 were net income and foreign currency translation adjustments.
Basic and diluted earnings per share	Basic and diluted earnings per share The Company computes earnings per share (“EPS”) in accordance with the ASC 260, “Earnings per share”, which requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
Advertising expenses	Advertising expenses Advertising costs are expensed as incurred. For the three and nine months ended June 30, 2015, the Company recorded advertising expenses of $ 42,720 196,763 41,870 109,139
Concentration risk	Concentration risk The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and potential trade accounts receivable. All of the Company's cash is maintained with state-owned banks within the People's Republic of China of which no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts. The Company is dependent on third-party sub-contractors, manufacturers, and distributors for all construction services and supply of construction materials. For the three months ended June 30, 2015, four suppliers accounted for 22 20 19 16 25 22 10 10
Recent Accounting Pronouncements	Recent Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update 2015-11: Simplifying the Measurement of Inventory. This update requires inventory to be measured at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. This update will be effective for the Company for all annual and interim periods beginning after December 15, 2016. The amendments in this update should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company does not expect this update will have a material impact on the presentation of the Company's condensed consolidated financial statements. Simplifying the Presentation of Debt Issuance Costs. The update simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. For public companies, this update will be effective for interim and annual periods beginning after December 15, 2015, and is to be applied retrospectively. Early adoption is permitted. The Company does not expect the adoption of this guidance will have a material effect on the Company's condensed consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUN18

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Jun. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Currency Exchange Rate	For nine months ended June 30, September 30, 2015 2014 2014 Period end RMB : USD exchange rate 6.1088 6.1564 6.1547 Period average RMB : USD exchange rate 6.1300 6.1366 6.1425

REAL ESTATE PROPERTY DEVELOPM19

REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT (Tables)	9 Months Ended
	Jun. 30, 2015
REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT [Abstract]
Components of Real Estate Property Completed and under Development	June 30, 2015 September 30, 2014 Development completed Hanzhong City Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) $ 1,647,876 $ 1,793,362 Hanzhong City Nan Dajie (Mingzhu Xinju) 1,497,687 1,605,886 Yang County Yangzhou Pearl Garden 3,619,712 4,609,585 Hanzhong City Central Plaza - 613,645 Real estate property development completed 6,765,275 8,622,478 Less: Real estate property completed –short-term 4,452,559 6,050,263 Real estate property completed –long-term $ 2,312,716 $ 2,572,215 Under development: Hanzhong City Oriental Pearl Garden (c) $ 55,784,765 $ 60,298,669 Hanzhong City Mingzhu Garden-Mingzhu Beiyuan (a) 61,765,721 73,351,415 Yang County Yangzhou Pearl Garden (b) 5,014,041 6,663,043 Yang County Yangzhou Palace 40,036,935 31,600,896 Hanzhong City Shijin Project 7,929,173 7,870,052 Hanzhong City Liangzhou Road and related projects (d) 90,551,334 86,050,259 Hanzhong City Hanfeng Beiyuan East (e) 566,355 419,762 Hanzhong City Beidajie 72,929 36,555 Yang County East 2 nd 2,557,622 2,538,550 Real estate property under development 264,278,875 268,829,201 Less: Short-term portion 122,564,553 140,313,127 Real estate property under development –long-term $ 141,714,322 $ 128,516,074 (a) The Company recognized $ 6,965,666 14,952,186 3,622,726 15,658,144 (b) The Company recognized $ 200,654 2,275,636 1,548,838 4,873,974 (c) The Company recognized $ 1,940,411 8,559,833 10,619,372 25,893,520 (d) In September 2013, the Company entered into an agreement (“Liangzhou Agreement”) with the Hanzhong local government on the Liangzhou Road reformation and expansion project (Liangzhou Road Project”). Pursuant to the agreement, the Company is contracted to reform and expand the Liangzhou Road, a commercial street in downtown Hanzhong City, with a total length of 2,080 meters and width of 30 meters and to resettle the existing residences in the Liangzhou road area. The government's original road construction budget was approximately $ 33 As of June 30, 2015, the actual costs incurred by the Company was $ 90,551,334 86,050,259 Nil 1,734,874 (e) In September 2012, the Company was approved by the Hanzhong local government to construct four municipal roads with a total length of approximately 1,192 meters. The project was deferred and then restarted during the year ended September 30, 2014. As of June 30, 2015, the local government was still in the process of assessing the budget for these projects. (f) The Company was engaged by the Yang County local government to construct the East 2nd Ring Road with a total length of 2.15km and a budgeted price of approximately $ 27.5 168 5.25 6.40

BANK LOAN (Tables)

BANK LOAN (Tables)	9 Months Ended
	Jun. 30, 2015
BANK LOAN [Abstract]
Component of Short Term Debt	June 30, 2015 September 30, 2014 China Construction Bank Loan $ 13,095,862 $ 19,497,295 Less: current maturities of long-term bank loan 11,458,879 12,998,197 Bank loan – long term $ 1,636,983 $ 6,499,098
Schedule of Repayment of Loan	Repayment in Repayment in August 20, 2015 6,547,930 40,000,000 February 10, 2016 4,910,949 30,000,000 August 20, 2016 1,636,983 10,000,000 Total 13,095,862 80,000,000

SHORT-TERM LOANS-OTHER (Tables)

SHORT-TERM LOANS-OTHER (Tables)	9 Months Ended
	Jun. 30, 2015
SHORT-TERM LOANS-OTHER [Abstract]
Schedule of Other Short-term Loans	June 30, 2015 September 30, Loan A (i) $ 8,180,003 $ 15,290,753 Loan B (ii) 4,910,948 - Short-term loans - other $ 13,090,951 $ 15,290,753 (i) On April 9, 2014 one 16,369,827 100,000,000 10 245,227 961,501 175,993 175,993 (ii) On May 6, 2015, the Company renewed a credit agreement with a financial institution. On May 22, 2015 4,910,948 30,000,000 20 six 50 82,418 532,898 Nil

CUSTOMER DEPOSITS (Tables)

CUSTOMER DEPOSITS (Tables)	9 Months Ended
	Jun. 30, 2015
CUSTOMER DEPOSITS [Abstract]
Customer Deposits from Pre-Sale of Residential Units	June 30, 2015 September 30, Customer deposits by real estate projects Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) $ 9,323,952 $ 15,386,758 Hanzhong City Oriental Pearl Garden 8,973,604 12,541,634 Liangzhou road and related projects 1,623,396 1,980,600 Yang County Palace 5,080,818 1,849,270 Yangzhou Pearl Garden 2,578,702 3,171,942 Total 27,580,472 34,930,204 Including: Customer deposits -short-term 20,876,258 31,100,334 Customer deposits - long-term $ 6,704,214 $ 3,829,870

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	9 Months Ended
	Jun. 30, 2015
RELATED PARTY TRANSACTIONS [Abstract]
Schedule of Shareholder Loan	June 30, 2015 September 30, Shareholder loan – USD loan (a) $ 1,810,000 $ 1,810,000 Shareholder loan – RMB loan (b) 2,093,701 3,655,743 Total $ 3,903,701 $ 5,465,743 a. The Company has a one year loan agreement (“USD Loan Agreement”) with Mr. Xiaojun Zhu, the Chairman, CEO and major shareholder, pursuant to which the Company borrowed $1,810,000 to make a capital injection into Shaanxi HGS, the Company's subsidiary. The interest rate for the loan is 4 18,100 54,300 18,100 54,300 b. On June 30, 2014, Shaanxi Guangsha Investment and Development Group Co., Ltd. (the “Guangsha”), the Company's PRC operating subsidiary, entered into a loan agreement with the Chairman (the “Shareholder RMB Loan Agreement”), pursuant to which Guangsha is able to borrow from Mr. Zhu in order to support the Company's Liang Shan Road construction project development and the Company's working capital needs. The Loan Agreement has a one-year term at an interest rate, which is equal to the China RMB loan annual benchmark rate of 6.15 The loan was renewed during the nine months ended June 30, 2015 with the same term. During the nine months ended June 30, 2015, the Company received approximately 10.5 12.1 7.6 1.9 87,726 282,957 114,249 224,253 which is capitalized in the development cost of Liangzhou road project accompanying condensed consolidated balance sheets as of June 30, 2015 and September 30, 2014.

STOCK OPTIONS (Tables)

STOCK OPTIONS (Tables)	9 Months Ended
	Jun. 30, 2015
STOCK OPTIONS [Abstract]
Assumptions used in Calculating Fair Value of Options Granted	The assumptions used in calculating the fair value of options granted using the Black-Scholes option pricing model are as follows: Options granted in August 2012 Risk-free interest rate 0.19 % Expected life of the options 3 Expected volatility 148 % Expected dividend yield 0 % Fair value $ 8,400
Stock Option Activities	Number of options Weighted Average Exercise Price Weighted Average Remaining Life in Years Grant Date Fair Value Outstanding, September 30, 2014 140,000 $ 2.39 0.89 $ 44,207 Granted - - - - Forfeited (10,000 ) - - (22,693 ) Exercised - - - - Outstanding, June 30, 2015 130,000 $ 2.57 0.15 $ 21,514 Exercisable, June 30, 2015 120,000 $ 2.36 0.19 $ 20,815

TAXES (Tables)

TAXES (Tables)	9 Months Ended
	Jun. 30, 2015
TAXES [Abstract]
Reconciliation of Statutory Rates to Effective Tax Rate	Three months ended Nine months ended 2015 2014 2015 2014 Chinese statutory tax rate 25.0 % 25.0 % 25.0 % 25.0 % Exemption rendered by local tax authorities (21.1 )% (17.3 )% (19.5 )% (17.2 )% Effective tax rate 3.9 % 7.7 % 5.5 % 7.8 %
Schedule of Components of Income Tax Expense (Benefit)	Three months ended Nine months ended 2015 2014 2015 2014 Current tax provision $ 5,778 $ 102,919 $ 71,946 $ 417,615 Deferred tax provision 635,590 578,211 1,369,997 1,681,415 Income tax provision $ 641,368 $ 681,130 $ 1,441,943 $ 2,099,030
Components of Deferred Taxes	June 30, 2015 September 30, 2014 Deferred tax assets Deferred tax assets from net operating loss carry-forwards for parent company $ 128,551 $ 110,089 Valuation allowance $ (128,551 ) $ (110,089 ) Deferred tax assets: - - Deferred tax liability Revenue recognized based on percentage of completion $ 4,389,695 $ 2,992,459 Deferred tax liability- long term $ 4,389,695 $ 2,992,459
Summary of Valuation Allowance	Three months ended Nine months ended June 30, 2015 2014 2015 2014 Beginning Balance $ 122,397 $ 97,781 $ 110,089 $ 85,473 Current period additions 6,154 6,154 18,462 18,462 Ending Balance $ 128,551 $ 103,935 $ 128,551 $ 103,935
Taxes payable	June 30, 2015 September 30, 2014 CIT $ 860,834 $ 884,685 Business tax 12,653,260 10,410,449 Other tax and fees 1,639,855 1,283,937 Total taxes payable $ 15,153,949 $ 12,579,071

CONTINGENCY AND COMMITMENTS (Ta

CONTINGENCY AND COMMITMENTS (Tables)	9 Months Ended
	Jun. 30, 2015
CONTINGENCY AND COMMITMENTS [Abstract]
Schedule Of Future Minimum Rental Payments	Twelve months ending Minimum lease payment June 30, 2016 $ 20,188 June 30, 2017 29,608 Years after - Total minimum payments required $ 49,796

SUMMARY OF SIGNIFICANT ACCOUN27

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Currency Exchange Rate) (Details)	9 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Period end RMB : USD exchange rate	6.1088	6.1564	6.1547
Period average RMB : USD exchange rate	6.1300	6.1366	6.1425

SUMMARY OF SIGNIFICANT ACCOUN28

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Significant Accounting Policies [Line Items]
Uncertain tax positions	$ 0		$ 0		$ 0
Reclassification adjustment amount				$ 110,331
Advertising Expense	$ 42,720	$ 41,870	$ 196,763	$ 109,139
Percentage Of Contract Cost Withholds			2.00%
Supplier One [Member] | Project Expenditure [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	22.00%		25.00%	10.00%
Supplier Two [Member] | Project Expenditure [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	20.00%		22.00%
Supplier Three [Member] | Project Expenditure [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	19.00%		10.00%
Supplier Four [Member] | Project Expenditure [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	16.00%
Hanzhong [Member]
Significant Accounting Policies [Line Items]
Land appreciation tax rate			1.00%
Yang Country [Member]
Significant Accounting Policies [Line Items]
Land appreciation tax rate			0.50%
Minimum [Member]
Significant Accounting Policies [Line Items]
Percentage of down payments to total purchase price of property to receive mortgage loan guarantees			30.00%
Percentage Of Mortgage Proceeds As Security			5.00%
Land appreciation tax rate			30.00%
Warranty Period	2 years
Maximum [Member]
Significant Accounting Policies [Line Items]
Percentage of down payments to total purchase price of property to receive mortgage loan guarantees			50.00%
Percentage Of Mortgage Proceeds As Security			10.00%
Land appreciation tax rate			60.00%
Warranty Period	5 years

REAL ESTATE PROPERTY DEVELOPM29

REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT (Components Of Real Estate) (Details) - USD ($)		Jun. 30, 2015	Sep. 30, 2014
Real Estate Properties [Line Items]
Real estate property development completed		$ 6,765,275	$ 8,622,478
Less: Real estate property completed short-term		4,452,559	6,050,263
Real estate property completed long-term		2,312,716	2,572,215
Real estate property under development		264,278,875	268,829,201
Less: Short-term portion		122,564,553	140,313,127
Real estate property under development -long-term		141,714,322	128,516,074
Hanzhong City Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) [Member]
Real Estate Properties [Line Items]
Real estate property development completed		1,647,876	1,793,362
Hanzhong City Nan Dajie (Mingzhu Xinju) [Member]
Real Estate Properties [Line Items]
Real estate property development completed		$ 1,497,687	1,605,886
Hanzhong City Central Plaza [Member]
Real Estate Properties [Line Items]
Real estate property development completed			613,645
Hanzhong City Oriental Pearl Garden [Member]
Real Estate Properties [Line Items]
Real estate property under development	[1]	$ 55,784,765	60,298,669
Hanzhong City Mingzhu Garden-Mingzhu Beiyuan [Member]
Real Estate Properties [Line Items]
Real estate property under development	[2]	61,765,721	73,351,415
Yang County Yangzhou Pearl Garden [Member]
Real Estate Properties [Line Items]
Real estate property development completed		3,619,712	4,609,585
Real estate property under development	[3]	5,014,041	6,663,043
Yang County Yangzhou Palace [Member]
Real Estate Properties [Line Items]
Real estate property under development		40,036,935	31,600,896
Hanzhong City Shijin Project [Member]
Real Estate Properties [Line Items]
Real estate property under development		7,929,173	7,870,052
Hanzhong City Liangzhou Road and related projects [Member]
Real Estate Properties [Line Items]
Real estate property under development	[4]	90,551,334	86,050,259
Hanzhong City Hanfeng Beiyuan East [Member]
Real Estate Properties [Line Items]
Real estate property under development	[5]	566,355	419,762
Hanzhong City Beidajie [Member]
Real Estate Properties [Line Items]
Real estate property under development		72,929	36,555
Yang County East 2nd Ring Road [Member]
Real Estate Properties [Line Items]
Real estate property under development	[6]	$ 2,557,622	$ 2,538,550
[1]	The Company recognized $1,940,411 and $8,559,833 of development cost in the cost of real estate sales under the percentage of completion method for the three and nine months ended June 30, 2015 (2014- $10,619,372 and $25,893,520), respectively.
[2]	The Company recognized $6,965,666 and $14,952,186 of development cost in cost of real estate sales under the percentage of completion method for the three and nine months ended June 30, 2015 (2014 - $3,622,726 and $15,658,144), respectively.
[3]	The Company recognized $200,654 and $2,275,636 of development cost in cost of real estate sales under the percentage of completion method for the three and nine months ended June 30, 2015 (2014- $1,548,838 and $4,873,974), respectively.
[4]	In September 2013, the Company entered into an agreement (“Liangzhou Agreement”) with the Hanzhong local government on the Liangzhou Road reformation and expansion project (Liangzhou Road Project”). Pursuant to the agreement, the Company is contracted to reform and expand the Liangzhou Road, a commercial street in downtown Hanzhong City, with a total length of 2,080 meters and width of 30 meters and to resettle the existing residences in the Liangzhou road area. The government's original road construction budget was approximately $33 million in accordance with the Liangzhou Agreement. The Company, in return, is being compensated by the local government to have an exclusive right on acquiring at least 394.5 Mu land use rights in a specified location of Hanzhong City. The Liangzhou Road Project's road construction started at the end of 2013. During fiscal 2014, the original scope and budget on the Liangzhou road reformation and expansion project was extended, because the local government included more area and resettlement residences into the project, which resulted in additional investments from the Company. In return, the Company is authorized by the local government to develop and manage the commercial and residential properties surrounding the Liangzhou Road project. The Company's development cost incurred on Liangzhou Road Project is treated as the Company's deposit on purchasing the related land use rights, as agreed by the local government. As of June 30, 2015, the actual costs incurred by the Company was $90,551,334 (September 30, 2014 - $86,050,259) and the incremental cost related to residence resettlement was approved by the local government. The Company determined that the Company's Investment in Liangzhou Road Project in exchange for interests in future land use rights is a barter transaction with commercial substance. For the three and nine months ended June 30, 2015, the Company received government's subsidies in the amount of $Nil and $1,734,874 or its Shanty Area Reform Project surrounding Liang Zhou Road located in Hantai District, Hanzhong City, respectively, and the Company recorded the subsidies to offset against the development cost of Liangzhou Road Project.
[5]	In September 2012, the Company was approved by the Hanzhong local government to construct four municipal roads with a total length of approximately 1,192 meters. The project was deferred and then restarted during the year ended September 30, 2014. As of June 30, 2015, the local government was still in the process of assessing the budget for these projects.
[6]	The Company was engaged by the Yang County local government to construct the East 2nd Ring Road with a total length of 2.15km and a budgeted price of approximately $27.5 million (or RMB168 million), which was approved by the local Yang County government in March 2014. The local government is required to repay the Company's project investment costs within 3 years with interest at the interest rate based on the commercial borrowing rate with the similar term published by China Construction Bank (June 30, 2015 - 5.25% and September 30, 2014 - 6.40%). The local government has approved a refund to the Company by reducing local surcharges or taxes otherwise required in the real estate development.

REAL ESTATE PROPERTY DEVELOPM30

REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT (Narrative) (Details) ¥ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2015CNY (¥)	Jun. 30, 2014USD ($)	Sep. 30, 2014USD ($)
Real Estate Properties [Line Items]
Land use right included in real estate property under development	$ 49,102,724		$ 49,102,724			$ 50,066,081
Hanzhong City Mingzhu Garden-Mingzhu Beiyuan [Member]
Real Estate Properties [Line Items]
Construction and Development Costs, Total	6,965,666	$ 3,622,726	14,952,186		$ 15,658,144
Yang County Yangzhou Pearl Garden [Member]
Real Estate Properties [Line Items]
Construction and Development Costs, Total	200,654	1,548,838	2,275,636		4,873,974
Hanzhong City Oriental Pearl Garden [Member]
Real Estate Properties [Line Items]
Construction and Development Costs, Total	1,940,411	$ 10,619,372	8,559,833		$ 25,893,520
Hanzhong City Liangzhou Road [Member]
Real Estate Properties [Line Items]
Budgeted Price For Municipal Roads			33,000,000
Actual Construction And Development Costs Incurred	$ 90,551,334		90,551,334			$ 86,050,259
East 2nd Ring Road [Member]
Real Estate Properties [Line Items]
Budgeted Price For Municipal Roads			$ 27,500,000	¥ 168
Debt Instrument, Interest Rate, Stated Percentage	5.25%		5.25%			6.40%
Liang Zhou Road [Member]
Real Estate Properties [Line Items]
Proceeds From Government Subsidies			$ 1,734,874

SECURITY DEPOSITS FOR LAND US31

SECURITY DEPOSITS FOR LAND USE RIGHTS (Narrative) (Details)	Jun. 30, 2015USD ($)	Jun. 30, 2015CNY (¥)	Sep. 30, 2014USD ($)	Sep. 30, 2014CNY (¥)	May. 31, 2011USD ($)	May. 31, 2011CNY (¥)
Other Assets Current [Line Items]
Security deposits for land use right	$ 3,273,965		$ 3,249,549
Development agreement with local government [Member]
Other Assets Current [Line Items]
Expected prepayment for development cost					$ 19,594,683	¥ 119,700,000
Security deposits for land use right	$ 3,273,965	¥ 20,000,000	$ 3,249,549	¥ 20,000,000

BANK LOAN (Components of Bank L

BANK LOAN (Components of Bank Loan) (Details)	Jun. 30, 2015USD ($)	Jun. 30, 2015CNY (¥)	Sep. 30, 2014USD ($)
BANK LOAN [Abstract]
China Construction Bank Loan	$ 13,095,862	¥ 80,000,000	$ 19,497,295
Less: current maturities of long-term bank loan	11,458,879		12,998,197
Bank loan - long term	$ 1,636,983		$ 6,499,098

BANK LOAN (Schedule of Repaymen

BANK LOAN (Schedule of Repayment of Bank Loan) (Details)	9 Months Ended
	Jun. 30, 2015USD ($)	Jun. 30, 2015CNY (¥)	Sep. 30, 2014USD ($)
Debt Instrument [Line Items]
Loans payable to bank	$ 13,095,862	¥ 80,000,000	$ 19,497,295
Loan Payable On August 20, 2015 [Member]
Debt Instrument [Line Items]
Loans payable to bank	$ 6,547,930	40,000,000
Debt instrument, maturity date	Aug. 20, 2015
Loan Payable On February 10, 2016 [Member]
Debt Instrument [Line Items]
Loans payable to bank	$ 4,910,949	30,000,000
Debt instrument, maturity date	Feb. 10, 2016
Loan Payable On August 20, 2016 [Member]
Debt Instrument [Line Items]
Loans payable to bank	$ 1,636,983	¥ 10,000,000
Debt instrument, maturity date	Aug. 20, 2016

BANK LOAN (Narrative) (Details)

BANK LOAN (Narrative) (Details) - Loan Agreement [Member]	3 Months Ended		9 Months Ended
	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015CNY (¥)	Sep. 30, 2014USD ($)
Debt Instrument [Line Items]
Debt instrument, principal amount	$ 24,554,741		$ 24,554,741		¥ 150,000,000
Debt instrument, stated interest rate	6.46%		6.46%		6.46%
Debt instrument, pledged asset			real estate properties in the Mingzhu Beiyuan project
Debt instrument, pledged asset value	$ 61,765,721		$ 61,765,721			$ 73,351,415
Debt instrument, weighted average interest rate	6.46%		6.46%		6.46%	6.46%
Debt instrument, capitalized interest expense	$ 216,515	$ 395,287	$ 822,843	$ 751,854

SHORT-TERM LOANS-OTHER (Schedul

SHORT-TERM LOANS-OTHER (Schedule of Other Short-term Loans) (Details) - USD ($)		Jun. 30, 2015	Sep. 30, 2014
Short-term loans - other		$ 13,090,951	$ 15,290,753
Loan A [Member]
Short-term loans - other	[1]	8,180,003	$ 15,290,753
Loan B [Member]
Short-term loans - other	[2]	$ 4,910,948
[1]	On April 9, 2014, the Company entered into a working capital finance agreement (the "Finance Agreement") with a local investment company in Hanzhong. The Finance Agreement has a one year term and a maximum principal amount of $16,369,827 (RMB 100,000,000) at a fixed interest rate of 10%. The loan is for working capital purpose and guaranteed by the Company's Chairman and CEO. For the three and nine months ended June 30, 2015, total interest was $245,227 and $961,501 (2014 - $175,993 and $175,993), which was capitalized in to the development cost of Liangzhou road project.
[2]	On May 6, 2015, the Company renewed a credit agreement with a financial institution. On May 22, 2015, the Company borrowed $4,910,948 (RMB 30,000,000) at a fixed interest rate of 20% per year for a six months period and the rate may up-float 50% if the loan proceeds were not used for the intended borrowing purpose. The loan was for the construction of Oriental Pearl Garden real estate project and guaranteed by the Company's Chairman and CEO. For three and nine months ended June 30, 2015, total interest was $82,418 and $532,898 (2014 - $Nil), which was capitalized in the development cost of Oriental Pearl Garden real estate project.

SHORT-TERM LOANS-OTHER (Narrati

SHORT-TERM LOANS-OTHER (Narrative) (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Sep. 30, 2014USD ($)	Jun. 30, 2015CNY (¥)
Finance Agreement with a local investment company in Hanzhong [Member]
Short-term Debt [Line Items]
Debt instrument, issuance date			Apr. 9, 2014
Debt instrument, term			1 year
Debt instrument, principal amount	$ 16,369,827		$ 16,369,827			¥ 100,000,000
Debt instrument, interest rate, stated percentage	10.00%		10.00%			10.00%
Debt instrument, capitalized interest expense	$ 245,227	$ 175,993	$ 961,501	$ 175,993
Credit Agreement with a financial institution [Member]
Short-term Debt [Line Items]
Debt instrument, issuance date			May 22, 2015
Debt instrument, term			6 months
Debt instrument, principal amount	$ 4,910,948		$ 4,910,948			¥ 30,000,000
Debt instrument, interest rate, stated percentage	20.00%		20.00%			20.00%
Debt instrument, interest rate, up-float percentage	50.00%		50.00%			50.00%
Debt instrument, capitalized interest expense	$ 82,418		$ 532,898

CUSTOMER DEPOSITS (Customer Dep

CUSTOMER DEPOSITS (Customer Deposits From Pre-Sale Of Residential Units) (Details) - USD ($)	Jun. 30, 2015	Sep. 30, 2014
Customer deposits by real estate projects
Total	$ 27,580,472	$ 34,930,204
Including: Customer deposits -short-term	20,876,258	31,100,334
Customer deposits - long-term	6,704,214	3,829,870
Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) [Member]
Customer deposits by real estate projects
Total	9,323,952	15,386,758
Hanzhong City Oriental Pearl Garden [Member]
Customer deposits by real estate projects
Total	8,973,604	12,541,634
Liangzhou road and related projects [Member]
Customer deposits by real estate projects
Total	1,623,396	1,980,600
Yang County Palace [Member]
Customer deposits by real estate projects
Total	5,080,818	1,849,270
Yangzhou Pearl Garden [Member]
Customer deposits by real estate projects
Total	$ 2,578,702	$ 3,171,942

CUSTOMER DEPOSITS (Narrative) (

CUSTOMER DEPOSITS (Narrative) (Details) - Jun. 30, 2015	Total
Minimum [Member]
Deposit Liabilities [Line Items]
Percentage of customer deposit of unit price for cash purchase	10.00%
Percentage of down payments to total purchase price of property to receive mortgage loan guarantees	30.00%
Mortgage loan guarantee period	6 months
Maximum [Member]
Deposit Liabilities [Line Items]
Percentage of customer deposit of unit price for cash purchase	20.00%
Percentage of down payments to total purchase price of property to receive mortgage loan guarantees	50.00%
Mortgage loan guarantee period	12 months

RELATED PARTY TRANSACTIONS (Nar

RELATED PARTY TRANSACTIONS (Narrative) (Detail)		Jun. 30, 2015USD ($)	Jun. 30, 2015CNY (¥)	Sep. 30, 2014USD ($)	Sep. 30, 2014CNY (¥)
Related party transaction [Line Items]
Due To Related Parties Current		$ 3,903,701		$ 5,465,743
Shareholder USD Loan Agreement [Member]
Related party transaction [Line Items]
Due To Related Parties Current	[1]	$ 1,810,000		$ 1,810,000
Shareholder RMB Loan Agreement [Member]
Related party transaction [Line Items]
Due To Related Parties Current | ¥	[2]		¥ 2,093,701		¥ 3,655,743
[1]	The Company has a one year loan agreement (“USD Loan Agreement”) with Mr. Xiaojun Zhu, the Chairman, CEO and major shareholder, pursuant to which the Company borrowed $1,810,000 to make a capital injection into Shaanxi HGS, the Company's subsidiary. The interest rate for the loan is 4% per annum and the loan originally matured on July 19, 2014. The Company entered into the amendments to the USD Loan Agreement to extend the term until July 31, 2016. The Company recorded interest of $18,100 and $54,300 for the three months and nine months ended June 30, 2015 (2014 - $18,100 and $54,300), respectively. The Company has not yet paid this interest and it is recorded in accrued expenses in the accompanying condensed consolidated balance sheets as of June 30, 2015 and September 30, 2014.
[2]	On June 30, 2014, Shaanxi Guangsha Investment and Development Group Co., Ltd. (the “Guangsha”), the Company's PRC operating subsidiary, entered into a loan agreement with the Chairman (the “Shareholder RMB Loan Agreement”), pursuant to which Guangsha is able to borrow from Mr. Zhu in order to support the Company's Liang Shan Road construction project development and the Company's working capital needs. The Loan Agreement has a one-year term at an interest rate, which is equal to the China RMB loan annual benchmark rate of 6.15% as of June 30, 2015 and September 30, 2014. The loan was renewed during the nine months ended June 30, 2015 with the same term. During the nine months ended June 30, 2015, the Company received approximately 10.5 million loan from Mr. Zhu and repaid $12.1 million ( 2014 - $7.6 million and 1.9 million). The Company recorded interest of $87,726 and $282,957 for the three and nine months ended June 30, 2015 (2014 - $114,249 and $224,253), respectively, which is capitalized in the development cost of Liangzhou road project. The Company has not paid this interest and it is recorded in accrued expenses in the accompanying condensed consolidated balance sheets as of June 30, 2015 and September 30, 2014.

RELATED PARTY TRANSACTIONS (Add

RELATED PARTY TRANSACTIONS (Additional Information) (Detail) - USD ($)		3 Months Ended		9 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Related party transaction [Line Items]
Interest (expense)		$ 22,540	$ 17,793	$ 54,300	$ 53,973
Due To Related Parties Current		3,903,701		3,903,701		$ 5,465,743
Proceeds from loan				10,500,816	7,577,486
Repayments of loan				12,084,829	1,906,593
Shareholder USD Loan Agreement [Member]
Related party transaction [Line Items]
Interest (expense)		18,100	18,100	54,300	54,300
Due To Related Parties Current	[1]	$ 1,810,000		$ 1,810,000		$ 1,810,000
Debt instrument, interest rate, stated percentage		4.00%		4.00%
Shareholder's RMB Loan Agreement [Member]
Related party transaction [Line Items]
Interest (expense)		$ 87,726	$ 114,249	$ 282,957	224,253
Debt instrument, interest rate, stated percentage		6.15%		6.15%		6.15%
Proceeds from loan				$ 10,500,000	7,600,000
Repayments of loan				$ 12,100,000	$ 1,900,000
[1]	The Company has a one year loan agreement (“USD Loan Agreement”) with Mr. Xiaojun Zhu, the Chairman, CEO and major shareholder, pursuant to which the Company borrowed $1,810,000 to make a capital injection into Shaanxi HGS, the Company's subsidiary. The interest rate for the loan is 4% per annum and the loan originally matured on July 19, 2014. The Company entered into the amendments to the USD Loan Agreement to extend the term until July 31, 2016. The Company recorded interest of $18,100 and $54,300 for the three months and nine months ended June 30, 2015 (2014 - $18,100 and $54,300), respectively. The Company has not yet paid this interest and it is recorded in accrued expenses in the accompanying condensed consolidated balance sheets as of June 30, 2015 and September 30, 2014.

STOCK OPTIONS (Assumptions Used

STOCK OPTIONS (Assumptions Used In Calculating Fair Value Of Options Granted) (Details) - 1 months ended Aug. 31, 2012 - USD ($)	Total
STOCK OPTIONS [Abstract]
Risk-free interest rate	0.19%
Expected life of the options	3 years
Expected volatility	148.00%
Expected dividend yield	0.00%
Fair value	$ 8,400

STOCK OPTIONS (Stock Option Act

STOCK OPTIONS (Stock Option Activities) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
Number of Options
Outstanding at beginning of period	140,000
Granted
Forfeited	(10,000)
Exercised
Outstanding at end of period	130,000	140,000
Exercisable at end of period	120,000
Weighted Average Exercise Price
Outstanding at beginning of period	$ 2.39
Granted
Forfeited
Exercised
Outstanding at end of period	$ 2.57	$ 2.39
Exercisable at end of period	$ 2.36
Weighted Average Remaining Life in Years
Outstanding	1 month 24 days	10 months 20 days
Exercisable at end of period	2 months 8 days
Grant Date Fair Value
Outstanding at beginning period	$ 44,207
Granted
Forfeited	$ (22,693)
Exercised
Outstanding at end of period	$ 21,514	$ 44,207
Exercisable at end of period	$ 20,815

STOCK OPTIONS (Narrative) (Deta

STOCK OPTIONS (Narrative) (Details) - USD ($) None in scaling factor is -9223372036854775296	1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 31, 2012	Jan. 31, 2010	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, exercise price
Stock Based Compensation
Stock Option Plan 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted		34,000
Stock options exercisable on the grant date, percentage		20.00%
Stock options become exercisable over the next eight quarters, percentage		80.00%
Stock option exercisable, quarterly percentage		10.00%
Stock options, exercise price		$ 2.60
Stock options, forfeited			10,000		10,000		24,000
Stock Option Plan 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	120,000
Stock options, exercise price	$ 2.37
Stock options, vested percentage			94.40%		94.40%		66.70%

TAXES (Reconciliation Of Statut

TAXES (Reconciliation Of Statutory Rates To Effective Tax Rate) (Details)	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
TAXES [Abstract]
Chinese statutory tax rate	25.00%	25.00%	25.00%	25.00%
Exemption rendered by local tax authorities	(21.10%)	(17.30%)	(19.50%)	(17.20%)
Effective tax rate	3.90%	7.70%	5.50%	7.80%

TAXES (Components of Income Tax

TAXES (Components of Income Tax Expenses) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
TAXES [Abstract]
Current tax provision	$ 5,778	$ 102,919	$ 71,946	$ 417,615
Deferred tax provision	635,590	578,211	1,369,997	1,681,415
Income tax provision	$ 641,368	$ 681,130	$ 1,441,943	$ 2,099,030

TAXES (Components Of Deferred T

TAXES (Components Of Deferred Taxes) (Details) - USD ($)	Jun. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Sep. 30, 2013
Deferred tax assets
Deferred tax assets from net operating loss carry-forwards for parent company	$ 128,551		$ 110,089
Valuation allowance	$ (128,551)	$ (122,397)	$ (110,089)	$ (103,935)	$ (97,781)	$ (85,473)
Deferred tax assets:
Deferred tax liability
Revenue recognized based on percentage of completion	$ 4,389,695		$ 2,992,459
Deferred tax liability- long term	$ 4,389,695		$ 2,992,459

TAXES (Movement of valuation al

TAXES (Movement of valuation allowance) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
TAXES [Abstract]
Beginning Balance	$ 122,397	$ 97,781	$ 110,089	$ 85,473
Current period additions	6,154	6,154	18,462	18,462
Ending Balance	$ 128,551	$ 103,935	$ 128,551	$ 103,935

TAXES (Taxes Payable) (Details)

TAXES (Taxes Payable) (Details) - USD ($)	Jun. 30, 2015	Sep. 30, 2014
TAXES [Abstract]
CIT	$ 860,834	$ 884,685
Business tax	12,653,260	10,410,449
Other tax and fees	1,639,855	1,283,937
Total taxes payable	$ 15,153,949	$ 12,579,071

TAXES (Narrative) (Details)

TAXES (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Income Taxes [Line Items]
Business sales tax, rate			5.00%
Business sales tax	$ 12,653,260		$ 12,653,260		$ 10,410,449
Income tax at statutory tax rate	25.00%	25.00%	25.00%	25.00%
Net operating loss carry forwards	$ 378,000		$ 378,000		324,000
Land appreciation tax payable	667,864		667,864		$ 165,089
Valuation allowance, period additions	$ 6,154	$ 6,154	$ 18,462	$ 18,462
Minimum [Member]
Income Taxes [Line Items]
Land appreciation tax rate			30.00%
Maximum [Member]
Income Taxes [Line Items]
Land appreciation tax rate			60.00%
Hanzhong [Member]
Income Taxes [Line Items]
Local income tax rate			2.50%
Land appreciation tax rate			1.00%
Yang Country [Member]
Income Taxes [Line Items]
Local income tax rate			1.25%
Land appreciation tax rate			0.50%

CONTINGENCY AND COMMITMENTS (Sc

CONTINGENCY AND COMMITMENTS (Schedule Of Future Minimum Rental Payments) (Details)	Jun. 30, 2015USD ($)
CONTINGENCY AND COMMITMENTS [Abstract]
June 30, 2016	$ 20,188
June 30, 2017	$ 29,608
Years after
Total minimum payments required	$ 49,796

CONTINGENCY AND COMMITMENTS (Na

CONTINGENCY AND COMMITMENTS (Narrative) (Details)	9 Months Ended
	Jun. 30, 2015
Minimum [Member]
Commitments And Contingencies [Line Items]
Percentage of mortgage proceeds as security	5.00%
Maximum [Member]
Commitments And Contingencies [Line Items]
Percentage of mortgage proceeds as security	10.00%