---

UNITED
STATES

SECURITIES
AND EXCHANGE
COMMISSION

Washington,D.C.20549





---

FORM
10-K/A

AmendmentNo.1



(MarkOne)



|S | ANNUAL REPORT PURSUANT TO SECTION 13OR 15(d)OFTHE SECURITIESEXCHANGE ACT OF1934
|- | -------------------------------------------------------------------------------







For the
fiscalyear endedSeptember30,2011



OR





|£ | TRANSITION REPORT PURSUANT TO SECTION 13OR 15(d)OFTHE SECURITIESEXCHANGE ACT OF1934
|- | -----------------------------------------------------------------------------------





For
the transition period
from ________to___________



Commissionfile number
001-34864





---

CHINA
HGS REAL ESTATE INC.

(Exactnameofregistrantasspecifiedinitscharter)



|Florida                      | 33-09610          
|---------------------------- | ------------------
|(Stateorotherjurisdictionof  | (I.R.S.Employer   
|incorporationororganization) | IdentificationNo.)



|6
    Xinghan Road, 19th Floor, Hanhong City        |               
|--------------------------------------------------- | --------------
|Shanxi
    Province, PRC                            | 723000        
|(Address
    ofprincipal
    executive
    offices) | (zip
    code)



+86
91 6262 2612

(Registrants’telephonenumber,including
area code)

(Formername,formeraddress
andformerfiscal
year,ifchangedsincelastreport)



SecuritiesregisteredpursuanttoSection12(b)oftheAct:



|Titleofeachclass                   |  | Nameofeachexchangeonwhichregistered
|---------------------------------- |  | -----------------------------------
|CommonStock,$0.001parvaluepershare |  | TheNasdaqStockMarket LLC           



SecuritiesregisteredpursuanttoSection12(g)oftheAct:

NONE





---

Indicate
bycheck
markifthe
registrant
isawell-known
seasoned
issuer,
asdefined
inRule
405of
theSecurities
Act.	Yes ̈Nox



Indicate
bycheck
markifthe
registrant
isnot
required
tofilereportspursuant
toSection13or
Section15(d)
ofthe
Act.	Yes ̈Nox



Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)ofthe
SecuritiesExchangeActof1934during
thepreceding12months
(orforsuchshorterperiodthattheregistrant
wasrequiredt o file suchreports),
and(2)hasbeensubject
tosuchfilingrequirementsforthepast90days.	YesxNo ̈







Indicatebycheckmarkwhethertheregistranthassubmittedelectronically
andpostedonitscorporateWebsite,ifany,every InteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulation
S-T (§232.405ofthischapter)
during
the preceding12months
(orforsuchshorterperiodthattheregistrant
wasrequiredtosubmitandpostsuchfiles).	YesxNo ̈









IndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulation
S-Kisnotcontained
herein,and will
notbecontained,tothebestofregistrant’sknowledge,
indefinitiveproxyorinformation
statementsincorporatedbyreference
in PartIIIofthisForm10-Korany
amendmenttothisForm10-K.	£



Indicatebycheckmarkwhethertheregistrantisa largeacceleratedfiler,anacceleratedfiler,a non-acceleratedfiler,ora smallerreportingcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler”and“smaller
reportingcompany”in Rule12b-2oftheExchangeAct.



|LargeAcceleratedFiler  ̈ | AcceleratedFiler  ̈       
|----------------------- | -------------------------
|                        |                          
|Non-Accelerated Filer ̈  | SmallerReporting Companyx



Indicate
bycheck
markwhether
theregistrant
isa shell
company
(asdefined
inRule12b-2ofthe
Exchange
Act).	Yes
 ̈Nox



The
aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based upon the closing
price of a share of the registrant’s common stock on March 31, 2011, the last business day of the Company's second fiscal
quarter, as reported by the NASDAQ Stock Market on that date, was approximately $34,739,200. This calculation does not reflect
a determination that certain persons are affiliates of the registrant for any other purpose.



AsofJanuary27,2012,45,050,000sharesofcommonstockoftheregistrant
wereoutstanding.





---

















EXPLANATORY
NOTE



ThisAmendment
No. 1 (“AmendmentNo. 1”)totheAnnualReportonForm10-KofChina HGS Real EstateInc.(together
withitssubsidiaries
and VIE, the“Company,”“we,”“our”or“us”)forthefiscalyearendedSeptember30,2011asfiled withtheSECon December 23,2011(the“2011Annual
Report”),
isbeingfiledtoincludeintheAnnual
Reporttheinformation
requiredbyPartIII (Items10,11,12,13and14)ofForm10-K and updates to the Exhibit
Index.



This
Amendment
No. 1 doesnotaffect any other portionofthe 2011Annual Report.Additionally, except asspecifically referenced herein, thisAmendment
No. 1 doesnotreflectanyevent occurring
after December 23, 2011,
thefiling dateof
the2011
Annual Report.















TABLEOFCONTENTS







|PARTIII                                                                                      
|---------------------------------------------------------------------------------------------
|                                                                                             
|Item10.Directors,ExecutiveOfficersandCorporateGovernance                                     
|                                                                                             
|Item11.ExecutiveCompensation                                                                 
|                                                                                             
|Item12.Security Ownership ofCertainBeneficialOwnersandManagement andRelatedStockholderMatters
|                                                                                             
|Item13.CertainRelationshipsandRelatedTransactions, andDirector Independence                  
|                                                                                             
|Item
14.Principal
Accounting
Feesand Services                                                
|                                                                                             
|PARTIV                                                                                       





|Item15.Exhibits and Financial Statement Schedules | 10
|------------------------------------------------- | --
|Signatures                                        | 12











Special Note Regarding Forward-Looking Statements



We make forward-looking statements in this Amendment No. 1 based
on the beliefs and assumptions of our management and on information currently available to us. Forward-looking statements include
information about our possible or assumed future results of operations which are preceded by, followed by or that include the words
“believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates”
or similar expressions.



Forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those expressed in these forward-looking statements, including
the risks and uncertainties described below and other factors we describe from time to time in our periodic filings with the U.S.
Securities and Exchange Commission (the “SEC”). We therefore caution you not to rely unduly on any forward-looking
statements. The forward-looking statements in this report speak only as of the date of this Amendment No. 1, and we undertake no
obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.  These
forward-looking statements include, among other things, statements relating to:



| | · | our ability to expand in 2012;
| | - | ------------------------------



| | · | our ability to obtain additional land use rights at favorable prices;
| | - | ---------------------------------------------------------------------



| | · | the market for real estate in Tier 3 and 4 cities and counties;
| | - | ---------------------------------------------------------------



| | · | our ability to obtain additional capital in future years to fund our planned expansion; or
| | - | ------------------------------------------------------------------------------------------



| | · | economic, political, regulatory, legal and foreign exchange risks associated with our operations.
| | - | -------------------------------------------------------------------------------------------------



USE OF CERTAIN DEFINED TERMS



Except as otherwise indicated by the context, references in this
report to:



“we,” “us,”
“China HGS,” “the Company” or “our Company” are references to China HGS Real Estate Inc. and
its subsidiaries and variable interest entities;



“China Agro” is a reference
to China Agro Sciences Corp., a Florida corporation formerly known as M-GAG Development Corporation and our corporate predecessor;



“China” and “PRC”
are a reference to the People’s Republic of China;



“NASDAQ” is a reference
to the NASDAQ Stock Market LLC;



“RMB” is a reference
to Renminbi, the legal currency of China;



“U.S. dollar,” “$”
and “US$” are a reference to the legal currency of the United States;



“SEC” is a reference
to the United States Securities and Exchange Commission;



“Securities Act” is
a reference to the Securities Act of 1933, as amended; and



“Exchange Act” is a
reference to the Securities Exchange Act of 1934, as amended;



PARTIII



ITEM
10.DIRECTORS,
EXECUTIVE
OFFICERS
ANDCORPORATE
GOVERNANCE.



Directors



The Board of Directors is presently composed
of five (5) members: Xiaojun Zhu, Shenghui Luo, Gordon H. Silver, H. David Sherman, and Yuankai Wen. Mr. Zhu serves as Chairman
of the Board of Directors. The Board of Directors has determined that Gordon H. Silver, H. David Sherman, and Yuankai Wen are independent
directors within the meaning set forth in the NASDAQ listing rules and as required by the rules and regulations of the SEC, as
currently in effect.



Below
youwillfind
a tabularsummary
ofour
entireBoard,
theirage
asofSeptember
30,2011
and theyear
theywereeach
elected.



1









|Name             |  | Age |  | Position                                                                                 |  | Director Since
|---------------- |  | --- |  | ---------------------------------------------------------------------------------------- |  | --------------
|Xiaojun Zhu      |  | 45  |  | President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of |  | 2009          
|                 |  |     |  | Directors                                                                                |  |               
|Shenghui Luo     |  | 43  |  | Director                                                                                 |  | 2010          
|Gordon H. Silver |  | 64  |  | Director                                                                                 |  | 2010          
|H. David Sherman |  | 63  |  | Director                                                                                 |  | 2010          
|Yuankai Wen      |  | 65  |  | Director                                                                                 |  | 2010          



Thefollowingparagraphsprovideinformation
abouteachdirector,
includingallpositionsheorsheholds,hisorher principal occupation and business experience for the past five years, and the names
of other publicly-held companies of which he or she currently serves as a director or has served as a director during the past
five years.



Xiaojun
Zhu,the President, Chief Executive Officer, and Chairman of the Board of Directors of China HGS, began his entrepreneurial
career in 1995 by creating a privately-run real estate company in Hanzhong, Shaanxi Province. With more than 20 years’ experience,
Mr. Zhu is considered to be one of China’s most influential business leaders in the real estate industry. In October 2005,
Mr. Zhu received the “Top 100 Management Elites in China’s Building Industry 2005” award by the Chinese Academy
of Management Science. Mr. Zhu also received the “Innovative Shaanxi - Person of the Year 2007” award and the “Outstanding
Socialism Builder of Shaanxi Province in 2008” award. In August 2009, Mr. Zhu joined China Agro as Chairman and Chief Executive
Officer. In 2007, before joining China Agro, Mr. Zhu served as the Chairman and General Manager of Shaanxi Guangsha Investment
and Development Group Co., Ltd. From 1995 to 2007, Mr. Zhu was the Chairman and General Manager of Hanzhong Guangsha Real Estate
Development Co, Ltd., a real estate development company. From 1992 to 1995, prior to starting his own business, Mr. Zhu served
as a Vice General Manager in the real estate-based subsidiary of Hanjiang Building Material Group Corporation. From 1985 to 1988,
Mr. Zhu studied at Shaanxi Metallurgy College. As the founder of the Company, Mr. Zhu is acknowledged to be one of China's leading
business executives in the real estate industry and is able to provide the Board with an understanding of the Company's business
as well as provide expert perspective on industry trends and opportunities. Mr. Zhu's experience with the Company from its founding
also offers the Board insight to the evolution of the Company, including from execution, cultural, operational, competitive and
industry points of view.



Gordon
H. Silver has served as a director since January 2010. Since June 2006 Mr. Silver has been a director of J.I. Kislak, Inc.,
a well-established private company which invests in, manages, and brokers the sale of commercial real estate properties located
in Miami Lakes, Florida. He also previously served as a Managing Director and a Senior Managing Director of Putnam Investments
from 1987 to April 2004, a mutual fund company in the United States, located in Boston, Massachusetts. Mr. Silver received his
MBA and JD degrees from Harvard University in 1972, and a Bachelor of Arts degree in Government from Cornell University in 1968.
Mr. Silver's years of experience in the investment world and in the management of a real estate management and investment firms
have exposed him to a broad range of issues affecting businesses, including a number of businesses in our industry. In particular,
Mr. Silver's experience provides the board and management with knowledge and perspective on the Company's daily operating challenges.



H. David
Sherman has served as a director since January 2010. Mr. Sherman is a U.S. Certified Public Accountant. Since 1985, Mr.
Sherman has been a Professor at Northeastern University, College Business Administration. Mr. Sherman is also a director and Chair
of the Audit Committee for Kingold Jewelry (NASDAQ – KGJI) and was a director and Chairman of the Audit Committee of China
Growth Alliance, Ltd., a business acquisition company formed to acquire an operating business China. From 1997 through 2006, Mr.
Sherman was an Adjunct Professor at Tufts Medical School, Department of Public Health. He was an Academic Fellow at the Securities
and Exchange Commission from 2004 through 2005. Mr. Sherman received his Doctorate and MBA from Harvard Business School, and a
Bachelor of Arts degree in Economics from Brandeis University. Mr. Sherman's experience as a U.S. Certified Public Accountant and
his experience in other finance and audit committee roles have provided him with broad experience in finance including accounting
and financial reporting. This experience has led our Board of Directors to determine that he is an "audit committee financial
expert" as that term is defined in Item 407(d)(5) of Regulation S-K under the Exchange Act. In addition, as a former Academic
Fellow at the Securities and Exchange Commission, he has expertise and a knowledge and understanding of SEC accounting and reporting
issues.



Yuankai
Wen has served as a director since January 2010. Since 1998, Mr. Wen has served as the Chairman of Beijing Neolinde Management
Training Center. From 1997 to 1998, he was also Chairman of Beijing Neolinde Management Consulting Co. From 1994 through 1997,
Mr. Wen was a Vice President of Roosevelt China Investment Co., an investment firm. Mr. Wen received his Bachelors degree in Chemistry
from Nanjing University. He was also a visiting scholar of Physical and Chemical Biology Institute, University of Paris in France.
Mr. Wen's experience as Chairman of the Beijing Neolinde Management Graining Center and as Chairman of the Beijing Neolinde Management
Consulting Co. has provided him with broad leadership and executive experience. Moreover, his management experience in China provides
him with a perspective on Chinese business operations.



2







Shenghui
Luo has served as a director since January 2010. Ms. Luo joined Shaanxi Guangsha Investment and Development Group Co.,
Ltd., the Company’s subsidiary, in 1997. From 2000 through March 2009, Ms. Luo served as Vice Director of the Finance Department
of Shaanxi Guangsha Investment and Development Group Co., Ltd. In March 2009, Ms. Luo was appointed a Manager of the Finance Department
of Shaanxi Guangsha Investment and Development Group Co., Ltd. Ms. Luo received her Bachelors degree in Accounting from Shaanxi
Finance College. As a result of Ms. Luo's service as a member of the Company's finance department, she developed an extensive understanding
of the Company's business. In addition, her knowledge and experience in finance and accounting provides her with a broad understanding
of the Company's financial reporting obligations both locally and in the U.S.



Family Relationships



No family relationships exist among our directors,
executive officers, or persons nominated or chosen by us to become directors or executive officers.



Involvement in Certain Legal Proceedings



To the best of our knowledge, none of
our directors or executive officers have been convicted in a criminal proceeding, excluding traffic violations or
similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that
resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for
matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Certain
Relationships and Related Transactions, and Director Independence,” none of our directors, director nominees or executive officers
has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are
required to be disclosed pursuant to the rules and regulations of the SEC.



Codeofethics



On January 22, 2010, the Board of Directors adopted
a Code of Conduct which sets forth the standards by which the Company’s employees, officers and directors should conduct
themselves. The Company will disclose any amendment to the Code of Conduct or waiver of a provision of the Code of Conduct that
applies to the Company’s Chief Executive Officer, Chief Financial Officer and any other principal financial officer, and
any other person performing similar functions and relates to certain elements of the Code of Conduct, including the name of the
officer to whom the waiver was granted.



Committees of the Board of Directors



The Board of Directors has the following standing
committees: Audit, Compensation, and Nominating and Corporate Governance. The Board of Directors has adopted written charters for
each of these committees. All members of the committees appointed by the Board of Directors are non-employee directors and the
Board of Directors has determined that all such members are independent under the applicable rules and regulations of NASDAQ and
the SEC, as currently in effect. In addition, all directors who served on a committee during any portion of fiscal year 2011 were
independent under the applicable rules and regulations of NASDAQ and the SEC during such director’s period of service.



The following chart details the membership of
each standing committee as of January 27, 2012 and the number of meetings each committee held in fiscal year 2011.



3







|NameofDirector               |  | Audit |  | Compensation |  | Nominating
        &
        Corporate
        Governance | 
|---------------------------- |  | ----- |  | ------------ |  | --------------------------------------------------------- | 
|Gordon H.Silver              |  | M     |  | M            |  | C                                                         | 
|H.David Sherman              |  | C     |  | M            |  | M                                                         | 
|YuankaiWen                   |  | M     |  | C            |  | M                                                         | 
|NumberofMeetingsinFiscal2011 |  | 4     |  | 1            |  | 1                                                         | 

M=Member

C=Chair



ExecutiveOfficers



Our executive officer and his age as of January 27,
2012 are as follows:



|Name        | Ages | Position                                                                                          
|----------- | ---- | --------------------------------------------------------------------------------------------------
|Xiaojun Zhu | 45   | President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors



Mr. Zhu’s background and business experience is
described above under “ — Directors”



AuditCommittee



The Audit Committee
oversees our accounting, financial reporting and audit processes; appoints, determines the compensation of, and oversees, the independent
registered public accountants; pre-approves audit and non-audit services provided by the independent registered public accountants;
reviews the results and scope of audit and other services provided by the independent registered public accountants; reviews the
accounting principles and practices and procedures used in preparing our financial statements; oversees the Company’s internal
audit function; and reviews our internal controls.



The Audit Committee
works closely with management and our independent registered public accountants. The Audit Committee also meets with our independent
registered public accountants without members of management present, on a quarterly basis, following completion of our independent
registered public accountants’ quarterly reviews and annual audit and prior to our earnings announcements, to review the
results of their work. The Audit Committee also meets with our independent registered public accountants to approve the annual
scope and fees for the audit services to be performed.



The Board of
Directors has determined that H. David Sherman is an “audit committee financial expert” as defined by SEC rules, as
currently in effect.



Section
16(A)Beneficial
OwnershipReportingCompliance



Section 16(a)of
theSecurities
Exchange Actof1934,
asamended, requires
theCompany’s officers
anddirectors
andpersons whoownmorethan10%of theCompany’s
common stocktofile reportsofownership andchanges inownership withtheSecurities
andExchange Commission, andtheNASDAQ.
SECrules require reporting persons
tosupply theCompany withcopiesof
these reports. Basedsolely onitsreview ofthe
copiesof such reportsreceived
andwritten representations from reporting persons,
the Company believes that with respect
tofiscal 2011allreporting persons
timely filedthe required reports,
except that a Form 4 disclosing receipt of stock options in March 2011 has not yet been filed by our director Yuankai Wen and
when made will not be timely filed.





4







ITEM
11.EXECUTIVE
COMPENSATION.



Compensation of Executive Officers



The following executives of the Company received compensation
in the amounts set forth in the chart below for the fiscal years ended September 30, 2010 and 2011. All compensation listed is
in US dollars. No other item of compensation was paid to any officer or director of the Company other than reimbursement of expenses.





|Name and Principal Position                                       |  | Year |      |  | Salary ($) (1) |  |        | Bonus ($) |  |  | All Other  Compensation ($) |     |  | Totals ($) | 
|----------------------------------------------------------------- |  | ---- | ---- |  | -------------- |  | ------ | --------- |  |  | --------------------------- | --- |  | ---------- | 
|Xiaojun Zhu, Chief Executive Officer, Chief Financial Officer and |  |      | 2011 |  |                |  | 14,223 |           |  |  | 300,000                     | (2) |  |            | 
|Chairman of the Board                                             |  |      | 2010 |  |                |  | 6,615  |           |  |  | -                           |     |  |            | 





|(1) | Mr. Zhu is paid in Renminbi. His annual salary was 92,987 RMB for fiscal 2011 and 45,120 RMB for fiscal 2010. The amounts reflected
in this column have been converted to U.S. dollars at the exchange rate of 6.5377RMB to the U.S. dollar for 2011 and 6.82135RMB
to the U.S. dollar for 2010.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Earned in fiscal 2011, although payment has been deferred and is expected during 2012.
|--- | --------------------------------------------------------------------------------------

|(3) | The Company owns a motor vehicle which is available for Mr. Zhu’s use for business purposes. The value of this perquisite
is less than $10,000.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------



Option
Grants Table.Therewereno
individualgrantsof stockoptionsto
purchaseourcommonstockmadeto
theexecutiveofficernamedin theSummaryCompensation Tablein fiscal2011 and2010.



AggregatedOption ExercisesandFiscal Year-EndOptionValue Table.Therewereno
stockoptionsexercisedduringfiscal2011 and2010by theexecutiveofficernamedin
theSummaryCompensation Table.



Long-Term
IncentivePlan (“LTIP”)AwardsTable.Therewerenoawardsmadetothenamedexecutiveofficerinfiscal2011 and2010underany LTIP.



Compensation of Directors



Thefollowing tablesprovideinformation abouttheactualcompensation earnedbynon-employeedirectorswhoservedduringfiscal2011.



|Name             |  | Fee earned or paid in cash ($) |        |  | Option Awards (1) ($) |  
|---------------- |  | ------------------------------ | ------ |  | --------------------- | -
|Gordon H. Silver |  | $                              | 24,000 |  |                       | $
|H. David Sherman |  | $                              | 36,000 |  |                       | $
|Yuankai Wen (2)  |  | $                              | 15,296 |  |                       | $



|(1) | These amounts reflect the value determined by the Company for accounting purposes for these awards and do
not reflect whether the recipient has actually realized a financial benefit from the award (such as by exercising stock options).
This column represents the compensation expense for fiscal year 2011 for stock options. Pursuant to SEC rules, the amounts shown
exclude the impact of estimated forfeitures related to service-based vesting conditions. No stock option awards were forfeited
by any of our non-employee directors in fiscal year 2011. For additional information, see Note 11 of our financial statements in
the 2011 Annual Report.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(2) | Mr.Wenreceivesannualcompensation intheamountof100,000RMB.  Theamountsetforthinthiscolumnisbasedonanexchange rateof6.5377RMBtotheU.S.dollar,theaverageexchange rate during 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



5







Board Leadership Structure and Role in Risk Oversight



One person currently holds the positions of
principal executive officer and chairman of the Board of Company. The Board does not have a policy on whether or not the roles
of the Chief Executive Officer and Chairman should be separate.  Instead, the Company’s By-Laws provide that the directors
may designate a Chairman of the Board from among any of the directors.  Accordingly, the Board reserves the right to vest
the responsibilities of the Chief Executive Officer and Chairman in the same person or in two different individuals depending on
what it believes is in the best interest of the Company.   The Board has determined that the consolidation of these roles
is appropriate because it allows Mr. Zhu to bring a wider perspective to the deliberations of the Board on matters of corporate
strategy and policy.  The Board believes that there is no single Board leadership structure that would be most effective in
all circumstances and therefore retains the authority to modify this structure to best address the Company’s and the Board’s
then current circumstances as and when appropriate.



The Company’s management is responsible
for identifying, assessing and managing the material risks facing the business. The Board and, in particular, the Audit Committee
are responsible for overseeing the Company’s processes for assessing and managing risk.  Each of the Chief Executive
Officer and Chief Financial Officer, with input as appropriate from other appropriate management members, report and provide relevant
information directly to either the Board and/or the Audit Committee on various types of identified material financial, reputational,
legal, operational, environmental and business risks to which the Company is or may be subject, as well as mitigation strategies
for certain salient risks.  In accordance with NASDAQ requirements and as set forth in its charter, the Audit Committee periodically
reviews and discusses the Company’s business and financial risk management and risk assessment policies and procedures with
senior management, the Company’s independent auditor.  The Audit Committee reports its risk assessment function to the
Board.  The roles of the Board and the Audit Committee in the risk oversight process have not affected the Board leadership
structure. Although the board has not formally designated a lead independent director, Mr. Sherman, the chairman of the audit
committee, has led the meetings of the audit committee which include at least a majority of the independent directors and at which
matters appropriate for consideration at executive sessions of the board of directors were discussed.



6







ITEM
12.SECURITY
OWNERSHIPOFCERTAINBENEFICIAL
OWNERSANDMANAGEMENT
ANDRELATED
STOCKHOLDER
MATTERS



The
following table sets
forth information regarding
the beneficial ownership
of our Common
Stock as of
January 27, 2012
as to (i)
each person who
is known by
us to own
beneficially more than
5%of ouroutstanding CommonStock,(ii)eachof theexecutiveofficersandotherpersonsnamedin
theSummaryCompensation Table,(iii)eachdirectorandnomineefordirector,and(iv)all directorsandexecutive officers
as a group. Except
as otherwise indicated
in the footnotes,
all information with
respect to share
ownership and voting
and investment power
has been furnished
to us by
the persons listed. Except
as otherwise indicated
in the footnotes,
each person listed
has sole voting
power with respect
to the shares
shown as beneficially
owned. Unless otherwise
indicated, the address
of each listedshareholderisc/o ChinaHGSReal EstateInc., 6XinghanRoad,19th Floor,HanzhongCity,ShaanxiProvince,PRC 723000.



|Name and Address of Beneficial Owner                        |  | Amount and nature of beneficial ownership |            |  | Percentage of the class | 
|----------------------------------------------------------- |  | ----------------------------------------- | ---------- |  | ----------------------- | 
|5% Holders                                                  |  |                                           |            |  |                         | 
|Rising Pilot, Inc. (a British Virgin Islands company)(3)    |  |                                           | 14,000,000 |  |                         | 
|Directors and Officers                                      |  |                                           |            |  |                         | 
|Mr. Xiaojun Zhu(4)                                          |  |                                           | 29,800,000 |  |                         | 
|Shenghui Luo                                                |  |                                           | 1,680,000  |  |                         | 
|Gordon H. Silver(5)                                         |  |                                           | 19,200     |  |                         | 
|H. David Sherman(6)                                         |  |                                           | 19,200     |  |                         | 
|Yuankai Wen(7)                                              |  |                                           | 16,000     |  |                         | 
|All directors and executive officers as a group (5 persons) |  |                                           | 31,534,400 |  |                         | 

* less than 1%



|(1) | Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock owned by such person. The number of shares beneficially owned includes Common Stock that such individual has the right to acquire as of January 27, 2012 or within 60 days thereafter, including through the exercise of stock options.                
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(2) | Percentage of beneficial ownership is based upon 45,050,000 shares of Common
    Stock outstanding as of January 27, 2012. For each named person, this percentage includes Common Stock that such person has
    the right to acquire either currently or within 60 days of January 27, 2012, including through the exercise of an option;
    however, such Common Stock is not deemed outstanding for the purpose of computing the percentage owned by any other
    person.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(3) | Mr. Xiaojin Zhu has voting and dispositive control over securities held by Rising Pilot, Inc.                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(4) | Includes 15,800,000 shares of Common Stock owned by Mr. Zhu directly and 14,000,000 shares owned through Rising Pilot, Inc.                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(5) | Includes stock options to purchase 19,200 shares of Common Stock exercisable as of January 27, 2012 or within 60 days thereafter.                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(6) | Includes stock options to purchase 19,200 shares of Common Stock exercisable as of January 27, 2012 or within 60 days thereafter.                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(7) | Includes stock options to purchase 16,000 shares of Common Stock exercisable as of January 27, 2012 or within 60 days thereafter.                                                                                                                                                                                                                                                                                                                                             



7







ITEM
13.CERTAINRELATIONSHIPS
ANDRELATED
TRANSACTIONS,
ANDDIRECTORINDEPENDENCE



CertainRelationships
andRelatedTransactions



The
Audit Committee is responsible for reviewing, approving or ratifying all material transactions between us and any related person.
Related persons can include any of our directors or executive officers, certain of our shareholders, and any of their immediate
family members. This obligation is set forth in our Audit and Finance Committee Charter. Although we do not have a formal written
policy with respect to our Audit Committee’s policies and procedures for reviewing related party transactions, in evaluating
such transactions, the Audit Committee members apply the same standards of good faith and fiduciary duty they apply to their general
responsibilities as a committee of the board and as individual directors. In any transaction involving a related party, our Audit
Committee considers all available material facts and circumstances of the transaction, including: (i) the direct and indirect interests
of the related party; (ii) if the related party is a director (or immediate family member of a director or an entity with which
a director is affiliated), the impact such transaction would have on the director’s independence; (iii) the risks, costs
and benefits to us; and (iv) whether any alternative transactions for comparable purposes are available. Our Audit Committee then
makes a determination as to whether the proposed terms of the transaction are in the best interests of the Company and otherwise
consistent with arm’s length dealings with unrelated third-parties.



The following
related party transactions were incurred in the fiscal year ended September 30, 2011:



|(A) | On March 16, 2011, the Company entered into a land use rights transfer agreement with Hanzhong Guangsha Real Estate Development Limited (“Hanzhong”), an entity controlled by Mr. Xiaojun Zhu, for land use rights covering GFA 44,000 square meters. Pursuant to the agreement, Hanzhong agreed to transfer certain land use rights for a total price of $12,509,380 (RMB80,000,000) based on an independent valuation report. The Company paid the purchase price in full.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(B) | On June 16, 2011, Guangsha entered into an RMB loan agreement (“RMB Loan Agreement”) with Mr. Xiaojun Zhu, the majority shareholder and Chairman of the Board of Directors. Pursuant to the RMB Loan Agreement, Guangsha borrowed RMB32, 000,000 ($4,950,878) from Mr. Xiaojun Zhu to partially fund a deposit for a land use rights bid. The loan was interest-free until July 15, 2011 and had an annual interest rate of 15% thereafter. As the Company did not acquire the land use rights, the bid deposit was fully refunded to the Company in July 2011. In July and August, 2011, the Company fully repaid the RMB32, 000,000 ($4,950,878) owed to Mr. Xiaojun Zhu under the RMB Loan Agreement. As of September 30, 2011, the Company still had an accrued interest expense of $59,641 owed to Mr. Xiaojun Zhu.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(C) | On June 28, 2011, the Company entered into a one-year loan agreement (“USD Loan Agreement”) with Mr. Xiaojun Zhu, pursuant to which the Company borrowed $1,810,000 from Mr. Xiaojun Zhu to make a capital injection into Shaanxi HGS, the Company’s subsidiary. The interest rate for the loan is 4% per annum. The Company recorded an interest expense of $18,100 for the year ended September 30, 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Director
Independence



At theBoard’s meeting inSeptember 2011,the Board determined
thatallofour
Directors,
exceptMr.ZhuandMs.
Luo, are independent asrequired bythe NASDAQ
listing rules. Inaddition, underapplicablerulesandregulations,
andasdetermined by
theBoard,
allofthemembers ofthe
AuditandFinance, Compensation andOrganizational
Development,
andGovernance
and Nominating
committees
are“independent” directors
as “independence”
isdefined bythe
NASDAQ
listing rules. During fiscal 2011, theindependent directors met
5 times in
meetings at which noother directors werepresent.



8







ITEM
14.PRINCIPALACCOUNTING
FEESANDSERVICES



Friedman
LLPservedastheCompany’sindependent
registered
publicaccountingfirmforfiscalyear2011 and 2010. Fees (includingreimbursements
forout-of-pocketexpenses)paidtoFriedman LLPforservices
infiscal2011and2010were
asfollows:



|                   |  | 2011 |         |  | 2010 |  
|------------------ |  | ---- | ------- |  | ---- | -
|Audit Fees         |  | $    | 190,000 |  |      | $
|Audit-Related Fees |  |      |         |  |      |  
|Tax Fees           |  |      |         |  |      |  
|All Other Fees     |  |      |         |  |      |  
|Total              |  | $    | 190,000 |  |      | $



“Audit
Fees” consisted of fees for the audit of our annual financial statements, review of the financial statements included in
our quarterly reports on Form 10-Q and services that are normally provided by the independent registered public accountants in
connection with statutory and regulatory filings or engagements for those fiscal years. This category also includes advice on audit
and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements, statutory
audits required by non-U.S. jurisdiction, the preparation of an annual “management letter” on internal control matters
and assurance services provided in connection with the assessment and testing of internal controls with respect to Section 404
of the Sarbanes-Oxley Act of 2002.



“Audit-Related
Fees” consisted of assurance and related services by Friedman LLP that are reasonably related to the performance of the audit
or review of our financial statements and are not reported above under “Audit Fees.”



“Tax
Fees” consisted of professional services rendered by Friedman LLP for tax compliance and tax planning. The services for the
fees disclosed under this category include tax return preparation and technical tax advice.



Theaboveamountsrelatetoservices providedintheindicatedfiscalyears,irrespectiveofwhentheywerebilled.TheAudit Committeeconsideredthecompatibility
ofnon-audit
services
byFriedman
LLP withthemaintenanceofthat
firm’s
independence
anddetermined,ineachcase,thatatalltimes,Friedman LLP remainedindependent.



The
Audit Committee Charter establishes a policy governing our use of Friedman LLP for audit and non-audit services. Under the Charter,
the Audit Committee is required to pre-approve all audit and non-audit services performed by the Company’s independent registered
public accountants in order to ensure that the provision of such services does not impair the public accountants’ independence.
The Audit Committee pre-approves certain audit and audit-related services, subject to certain fee levels. Any proposed services
that are not a type of service that has been pre-approved or that exceed pre-approval cost levels require specific approval by
the Audit Committee in advance. The Audit Committee has approved all audit and audit-related services to be performed by Friedman
LLP in 2011.



9







Part
IV



ITEM 15Exhibits
and Financial Statement Schedules



|Exhibit
        No. |  | Title of Document                                                                                                                                                                                             
|------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1                 |  | Articles of Incorporation (1)                                                                                                                                                                                 
|3.2                 |  | Articles of incorporation of the registrant as amended with the Secretary of State of Florida on October 8, 2009(2)                                                                                           
|3.3                 |  | Bylaws (1)                                                                                                                                                                                                    
|10.1                |  | Share Exchange Agreement by and between the Company, China HGS Investment, Inc., and Rising Pilot, Inc. dated August 21, 2009 (3)                                                                             
|10.2*               |  | Entrusted Management Agreement, dated as of September 18, 2009, by and among the Company, Mr. Xiaojun Zhu and his management staff (English translation) (4)                                                  
|10.3*               |  | Independent Director Agreement between China HGS Real Estate Inc. and H. David Sherman (2)                                                                                                                    
|10.4*               |  | Independent Director Agreement between China HGS Real Estate Inc. and Gordon Silver (2)                                                                                                                       
|10.5*               |  | Independent Director Agreement between China HGS Real Estate Inc. and Yuankai Wen (2)                                                                                                                         
|10.6*               |  | Form of Indemnification Agreement (2)                                                                                                                                                                         
|10.7*               |  | Form of Nonstatutory Stock Option Agreement (5)                                                                                                                                                               
|10.8                |  | Residential Apartment Bulk Purchasing Agreement dated May 28, 2011 between Hanzhong Municipal Public Security Bureau and Shaanxi Guangsha Investment and Development Group Co., Ltd. (English translation) (6)
|10.9                |  | Residential Apartment Bulk Purchasing Agreement dated June 8, 2011 between Hanzhong Municipal Bureau of Justice and Shaanxi Guangsha Investment and Development Group Co., Ltd. (English translation) (7)     
|10.10*              |  | RMB Shareholder Loan Agreement by and between Shaanxi Guangsha Investment and Development Group Co., Ltd. and Mr. Xiaojin Zhu, dated June 16, 2011, as extended on July 16, 2011 (English translation) (8)    
|10.11*              |  | USD Shareholder Loan Agreement by and between the Company and Mr. Xiaojun Zhu dated July 28, 2011(English translation) (8)                                                                                    
|10.12*              |  | Land Use Rights Transfer Agreement between Shaanxi Guangsha Investment and Development Group Co., Ltd. and Hanzhong Guangxia Real Estate Development Limited dated March 16, 2011 (English translation) (9)   
|10.13*              |  | Loan Agreement by and between Shaanxi Guangsha Investment and Development Group Co. and Mr. Xiaojun Zhu dated November 14, 2011 (English translation) (9)                                                     
|14                  |  | Code of Conduct (10)                                                                                                                                                                                          
|21                  |  | List of subsidiaries of the Registrant (11)                                                                                                                                                                   
|31.1**              |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer                                                                                                                 
|32.1**              |  | Section 1350 Certification of Chief Executive Officer and Chief Financial Officer                                                                                                                             
|101.INS***          |  | XBRL Instance Document                                                                                                                                                                                        
|101.SCH***          |  | XBRL Taxonomy Extension Schema                                                                                                                                                                                
|101.CAL***          |  | XBRL Taxonomy Extension Calculation Linkbase                                                                                                                                                                  
|101.DEF***          |  | XBRL Taxonomy Extension Definition Linkbase                                                                                                                                                                   



10







|101.LAB*** |  | XBRL Taxonomy Extension Label Linkbase       
|---------- |  | ---------------------------------------------
|101.PRE*** |  | XBRL Taxonomy Extension Presentation Linkbase



|*   | Represents management contract or compensatory plan or arrangement.
|--- | -------------------------------------------------------------------
|**  | Filed herewith                                                     
|*** | Filed with the 2011 Annual Report.                                 





(1) Incorporated herein by reference to
the SB-2 Registration Statement filed on August 31, 2001.

(2) Incorporated by reference to Exhibit
3.2 to registrant’s quarterly report on Form 10-Q filed on August 16, 2010.

(3) Incorporated herein by reference to
the current report on Form 8-K filed on August 21, 2009.

(4) Incorporated herein by reference to
the current report on Form 8-K filed on September 18, 2009.

(5) Incorporated herein by reference to
Exhibit 10.1 to the current report on Form 8-K filed on March 17, 2011.

(6) Incorporated herein by reference to
Exhibit 10.1 to the current report on Form 8-K filed on June 3, 2011.

(7) Incorporated herein by reference to
Exhibit 10.1 to the current report on Form 8-K filed on June 14, 2011.

(8) Incorporated by reference to registrant’s
quarterly report on Form 10-Q filed on August 15, 2011.

(9) Incorporated herein by reference to
the current report on Form 8-K filed on December 23, 2011.

(10) Incorporated herein by reference to
the current report on Form 8-K filed on January 22, 2010.

(11) Incorporated by reference to Exhibit
21 to registrant’s annual report on Form 10-K filed on December 29, 2010.



11







SIGNATURES



Pursuant to the requirements of Section 13 or
15(d) of the Securities and Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned
thereunto duly authorized.





|                        | CHINA HGS REAL ESTATE INC.
|----------------------- | --------------------------
|                        |                           
|Date:  January 27, 2012 | By:                       
|                        |                           
|                        |                           
|                        |                           
|                        |                           



Pursuant to the requirements of the Securities
and Exchange Act of 1934, this Report has been signed below by the following person on behalf of the Registrant and in the capacities
and on the dates indicated.



|Date:      January 27, 2012 | By:    | /s/ Xiaojun Zhu                          
|--------------------------- | ------ | -----------------------------------------
|                            | Name:  | Xiaojun Zhu                              
|                            | Title: | President, Chief Executive Officer, Chief
|                            |        | Financial Officer and Chairman of the    
|                            |        | Board of Directors (Principal Executive  
|                            |        | Officer and Principal Financial and      
|                            |        | Accounting Officer)                      
|                            |        |                                          
|Date:      January 27, 2012 | By:    | /s/ Shenghui Luo                         
|                            | Name:  | Shenghui Luo                             
|                            | Title: | Director                                 
|                            |        |                                          
|Date:      January 27, 2012 | By:    | /s/ Gordon H. Silver                     
|                            | Name:  | Gordon H. Silver                         
|                            | Title: | Director                                 
|                            |        |                                          
|Date:      January 27, 2012 | By:    | /s/ H. David Sherman                     
|                            | Name:  | H. David Sherman                         
|                            | Title: | Director                                 
|                            |        |                                          



12