8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to 13 OR 15(D)
of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) September 28, 2012

ACL Semiconductors Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-50140	16-1642709
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

Room 1701, 17/F, Tower 1

Enterprise Square, 9 Sheung Yuet Road

Kowloon Bay, Kowloon, Hong Kong

(Address of principal executive offices)  (Zip Code)

011-852- 2799-1996

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

On September 28, 2012, ACL International Holdings Limited (“ACL Holdings” or the “Purchaser”), a Hong Kong incorporated company wholly owned by ACL Semiconductors Inc. (the “Company”), entered into an Agreement of Sale and Purchase (the “SPA”), pursuant to which it will acquire (the “Acquisition”) 100% of the outstanding equity of Jussey Investments Limited (“Jussey”), a company incorporated in British Virgin Islands and which owns (i) 100% equity interest in eVision Telecom Limited (“eVision”), a Hong Kong incorporated company, and (ii) 80% equity interest in USmart Electronic Products Limited (“USmart”), a Hong Kong incorporated company, which owns 100% equity interest in Dongguan Kezheng Electronics Limited (“Kezheng”), a wholly foreign-owned enterprise (“WFOE”) organized under the laws of the People's Republic of China (the “PRC”).

Under the terms of the SPA, the Company, through ACL Holdings, will purchase from Mr. Zhiming Li, a PRC resident (the “Shareholder” or “Seller”) who owns 100% of the outstanding equity (the “Shares”) of Jussey. No prior material relationship existed between the Shareholder and the Company, any of its affiliates, or any of its directors or officers. Pursuant to the SPA, the purchase price to be paid by ACL Holdings for the Shares is approximately US$1,846,797.89 (HK$14,405,023.55) in the aggregate (the “purchase price”).  The purchase price is payable in cash in full within 5 business days after the completion of the Acquisition. A copy of the SPA is attached hereto as Exhibit 2.1.  Please refer to Item 2.01 below with respect to the description of the SPA, which description is qualified in its entirety by reference to Exhibit 2.1.

Item 2.01.   Completion of Acquisition or Disposition of Assets

On September 28, 2012, pursuant to the SPA, the Company, through ACL Holdings, completed the Acquisition and, as a result, acquired the business of USmart and eVision.   To cope with the acquisition, the Company has hired an Independent professional valuation firm to valuate the business of USmart and eVision. In addition, Jussey was introduced to the Company by Fairburn Holdings Limited, a company incorporated under the laws of British Virgin Islands (“Fairburn”). The Company expects to enter into a finder and consulting agreement with Fairburn and pay Fairburn for its services.

USmart was founded in 2006 and, through either itself or Kezheng, which has a factory located in Dongguan, PRC, provides both ODM (Original Design Manufacturing) and OEM (Original Equipment Manufacturing) services for various electronic products, such as computer and peripherals, flash storage devices and home electronic products. USmart has its own research and development (“R&D”) and production teams. With the support from eVision, the business of which is described below, USmart is capable of providing its customers with total solutions from design to manufacture. USmart also holds its own brands—USmart and VSmart, which can be used on a broad spectrum of products including covering memory storage devices, visual and audio products such as digital flat screen television, DAB (Digital Audio Broadcasting) radios, digital photo frames, and other home electronic products. In 2010, USmart began its business development in the telecommunication industry, and successfully obtained the W-CDMA (Wideband CDMA is one of the third-generation (“3G”) wireless standards) license from Intel Mobile Communications GmbH., which offers cellular platforms for global phone makers. W-CDMA baseband is adapted by China Unicom, one of the three major telecommunication carriers in the PRC.

Founded in 2011, eVision is a Hong Kong based solution house that specializes in CDMA2000 (also known as Evolution-Data Optimized or “EV-DO”) platform. CDMA2000 is one of the 3G wireless standards. This standard is adapted by China Telecom, one of the three major telecommunication carriers in China. The principal function of eVision is to provide CDMA2000 solutions to USmart. In May 2011, eVision entered into an exclusive R&D servicing agreement (the “Servicing Agreement”) with an independent third party in the PRC (the “R&D House”), a solution house that works closely with South China University of Technology and has a R&D team consisting of members with advanced academic qualifications. The R&D House holds, on behalf of eVision, a CDMA2000 software license granted by VIA Telecom Co. Ltd. According to the Servicing Agreement, the R&D House provides R&D services relating to CDMA2000 technology exclusively to eVision, and eVision holds the sole and exclusive right, title and interest to and in the aforementioned license and any R&D results/products obtained or developed by the R&D House during the term of the Servicing Agreement. eVision will also hold all the intellectual property rights that are obtained or developed by the R&D House in the course of such research.

After the Acquisition, the Company is expected to continue to operate both USmart and eVision separately, and each subsidiary will maintain it separate offices. eVision is expected to continue providing support to USmart regarding CDMA2000 3G standard, and USmart is expected to continue to focus on developing and manufacturing its 3G smartphones. By acquiring Jussey, the Company is expected to diversify its product portfolio, to evolve from a distributor to a manufacturer with R&D capacities, and to develop and have its own products and brands. With 3G baseband licenses obtained from USmart and eVision, the Company also expects to strengthen its competitive position in the telecom market. As a result of the Acquisition, the Company expects to benefit from vertical integration of its business and the newly acquired PRC-based design and manufacturing capacities.

The Company’s post-acquisition organization structure is summarized below:

The SPA contains customary representations and warranties regarding the financial condition and operations of Jussey. Under the terms of the SPA, the Shareholder has agreed to indemnify Purchaser in respect of any breach of any of the Shareholder’s warranties and in respect of any loss, liability, claim or expense incurred by the Purchaser by reason (whether direct or indirect) of any of the warranties being untrue, incorrect or misleading. No prior material relationship existed between the Shareholder and the Company, any of its affiliates, or any of its directors or officers.

After the Acquisition, the Company continues to hold 30% equity interest in ATMD (Hong Kong) Limited, a joint venture between the Company and Tomen Devices Corporation. 

Item 8.01. Other Events.

On September 28, 2012, the Company issued a press release regarding the transaction described above. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01.   Financial Statements and Exhibits.

(a) Financial Statement of Business Acquired

The audited financial statements of Jussey for the years ended March 31, 2012 and 2011 are filed herewith as Exhibit 99.2.

(b) Pro Forma Financial Information

The pro forma financial information for the Company and its subsidiaries concerning the Acquisition is filed herewith as Exhibit 99.2.

(c) Exhibits

The following exhibits are filed with this Form 8-K.

Exhibits

Exhibit No	Description
2.1	Agreement of Sale and Purchase between ACL International Holdings Limited and Zhiming Li, dated September 28, 2012
99.1	Press Release dated September 28, 2012
99.2	(a)	The audited financial statements of Jussey for the years ended March 31, 2012 and 2011, and
	(b)	The pro forma financial information for the three and six months ended June 30, 2012 of the Company and its subsidiaries concerning the Acquisition.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ACL SEMICONDUCTORS INC.
Dated: September 28, 2012
	By:	/s/ Kun-Lin Lee
		Name: Kun-Lin Lee
		Title:   Chief Financial Officer

EX-2.1

DATED the 28 day of September 2012

LI ZHIMING

and

ACL INTERNATIONAL HOLDINGS LIMITED

*******************************

AGREEMENT for SALE AND PURCHASE

Of Shares of JUSSEY INVESTMENTS LIMITED

*******************************

FUNG, WONG, NG & LAM
SOLICITORS & NOTARIES
ROOM 8, 4^th FLOOR
NEW HENRY HOUSE
10 ICE HOUSE STREET, CENTRAL
HONG KONG

Ref: RN/2016061

THIS AGREEMENT is made the 28 day of September 2012

1 Parties

1.1 LI ZHIMING (Holder of PRC Resident Card No.441421197405195933) of (“the vendor”); and

1.2 ACL INTERNATIONAL HOLDINGS LIMITED (CR No.1540016) whose registered office is situate at Room 1701, 17^th Floor, Tower 1, Enterprise Square, 9 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong (“the Purchaser”).

2 Recitals

2.1 JUSSEY INVESTMENTS LIMITED is a company registered in British Virgin Island under number 1673633 (“the Company”) and has an authorised share capital of US$50,000 divided into 50,000 shares of US$1 each of which 1 shares of US$1 each are in issue and are credited as fully paid.

2.2 The Vendor is the beneficial owner of 1 of the whole of the issued and allotted share capital in the Company (“the Sale Shares”) and the Vendor is the sole beneficial owner and registered holder of the Sale Shares.

2.3 The Vendor has agreed to sell and the Purchaser has agreed to buy all the issued shares in the Company on the terms and conditions hereinafter contained.

NOW IT IS AGREED as follows:

3 Interpretation

3.1 In this agreement (including the Recitals and the Schedules), unless the context otherwise requires, the following words and expressions shall have the following meanings:

3.1.1 “the Company” means JUSSEY INVESTMENTS LIMITED.

3.1.2 “Completion” means the completion of the sale and purchase of the Sale Shares under this agreement.

3.1.3 “the Disclosure Letter” means the letter and annexures from the Vendor to the Purchaser dated today disclosing various matters relating to the Warranties.

3.1.4 “the Last Accounts Date” means management accounts date per Schedule 2.

3.1.5 “the Sale Shares” means all the shares of US$1 each in the capital of the Company allotted and in issue at the date of this agreement.

3.1.6 “the Subsidiaries” means USMART ELECTRONIC PRODUCTS LIMITED and Dongguan Kezheng Electronics Limited (collectively “USmart”), and EVISION TELECOM LIMITED (“eVision”). Both USmart Electronic Products Limited and eVision Telecom Limited are incorporated in Hong Kong and Dongguan Kezheng Electronics Limited is registered in the PRC. The Company is the registered owner of 80% of the issued shares of USmart Electronic Products Limited and 100% of the issued shares of eVision. Dongguan Kezheng Electronics Limited is a wholly foreign-owned enterprise (“WFOE”) of USmart.

3.1.7 “the Warranties” means the representations, warranties and undertakings given by the Vendors referred to in clause 7.

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3.1.8 “the Final Consideration” means the summation of business valuation by an independent valuer for each of the Subsidiaries, net of all of their respective liabilities, multiply by their respective equity interest attributable to the Company.

3.1.9 “the PRC” means the People’s Republic of China excluding Hong Kong, Macau and Taiwan.

3.1.10 “Hong Kong” means Hong Kong Special Administrative Region of the People’s Republic of China.

3.2 In this agreement (including the Recitals and the Schedules), unless the context otherwise requires:

3.2.1 all references to statutory provisions or enactments shall include references to any amendment, modification or re-enactment of any such provision or enactment (whether before or after the date of this agreement), to any previous enactment which has been replaced or amended and to any regulation or order made under such provision or enactment;

3.2.2 references to documents “in the agreed form” are to documents in terms agreed between the parties to this agreement and signed (for the purpose of identification only) by the Vendor and the Purchaser prior to the signature of this agreement; and

3.2.3 references to the Recitals, clauses and the Schedules are respectively to the Recitals to, clauses of and the Schedules to this agreement.

4 Sale and purchase

The Vendor with full title shall sell with effect from Completion the number of the Sale Shares and the Purchaser shall purchase with effect from Completion the Sale Shares with all rights attached or accruing to them and free from all claims, charges, liens, incumbrances, options, rights of pre-emption or equities whatsoever.

5 Consideration

The Final Consideration price for the Sale Shares shall be in accordance with clause 6.3 but in any case shall not exceed US$2,500,000, subject to the final agreement between the parties upon completion of the business evaluation report to be prepared by independent valuer on the Subsidiaries and management accounts of Company and the Subsidiaries as of the Last Accounts Date.

6 Completion

6.1 Completion shall take place within 5 business days from the day of the Final Consideration value is acknowledged, and the completion and receipt of the latest auditors’ reports of the Company and the Subsidiaries at the registered office of the Purchaser.

6.2 At Completion the Vendor shall deliver (where appropriate as agent for the Company) to the Purchaser:

6.2.1 transfers in respect of the Sale Shares duly executed by the registered holder in favour of the Purchaser or as it may direct.

6.2.2 certificates for the Sale Shares and any other documents which may be required to give good title to the Sale Shares and to enable the Purchaser to procure registration of the same in its name or as it may direct.

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6.2.3 all historical and current accounting books and records, bank statements and documents and an independent valuation report of the Company.

6.2.4 the Company’s and the Subsidiaries’ certificate of incorporation, certificate of incorporation on change of name (if applicable), common seal, statutory registers, minute books, share certificate books and all other books (all duly written up to date).

6.2.5 any power of attorney under which any document required to be delivered under this clause 6.2 has been executed.

6.2.6 certified copies of board resolutions of the Company and the Subsidiaries in the agreed form.

6.2.7 certificate of incumbrance, letter of good standing and registered agent certificate and all other supporting documents necessary for the proof of good standing for a BVI company.

6.28 certificates for the shares in the Subsidiaries held by the Company and transfers in favour of the Purchaser or as the Purchaser may direct in respect of any shares in the Subsidiaries not held by the Company.

6.3 Provided the Vendor comply with all their obligations under clause 6.2 (subject only to the Purchaser fulfilling its obligations under this clause) the Purchaser shall at Completion pay to the Vendor by way of cash or equivalent in favour of the Vendor.

6.4 If for any reason the provisions of clause 6.2 are not fully complied with, the Purchaser shall be entitled (in addition and without prejudice to any other right or remedy available to it) to elect:

6.4.1 to rescind this agreement;

6.4.2 to fix a new date for Completion; or

6.4.3 to proceed to Completion so far as practicable, the Vendor then being obliged to use their best endeavours to perform or procure the performance of any of the outstanding provisions of clause 6.2.

6.5 The solicitors to any party to this agreement are authorised to take delivery on behalf of such party of any items under this agreement and their receipt shall be a good discharge for those items to the party and the solicitors to the party making delivery

7 Warranties and indemnities

7.1 The Vendor warrants, represents and undertakes to the Purchaser:

7.1.1 that subject to matters fully and accurately disclosed in the Disclosure Letter, the statements in Schedule 1 and 2 are and will at Completion be true and correct in all respects and not misleading.

7.1.2 as a separate and additional warranty, representation and undertaking to that set out in the clause 7.1.1 above subject to matters fully and accurately disclosed in the Disclosure Letter, the statements in Schedule 1 and 2, as if the same were set out in full with references to “the Company” being read and construed as a reference to “the Subsidiaries”, are and will at Completion be true and correct in all respects and not misleading.

7.1.3 that all information contained or referred to in the Disclosure Letter is true and accurate and fairly presented and nothing has been omitted from it which renders any of such information incomplete or misleading.

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7.2 The Vendor will indemnify the Purchaser in respect of any breach of any of the Warranties and in respect of any loss, liability, claim or expense incurred by the Purchaser by reason (whether direct or indirect) of any of the Warranties being untrue, incorrect or misleading.

7.3 Neither the Vendor nor and person connected with the Vendor has any interest (direct or indirect) in any other company or business which competes or has competed or is in the future likely to compete or has a close trading relationship with any business now carried on by the Company or intends to acquire any such interest

7.4 No indebtedness (actual or contingent) and no contract or arrangement is outstanding between the Company and the Vendor or director of the Company or any person connected with the Vendor or such director or in which the Vendor or director or persons connected with them are or may be interested (directly or indirectly).

7.5 No person is entitled to receive from the Company any finder’s fees brokerage or other commission in connection with the sale and purchase of the Sale Shares under this agreement.

7.6 There is not now outstanding and there has not at any time during the past 3 years been outstanding any contract or arrangement to which the Company is a party and in which the Vendor or any director of the Company is or has been interested whether directly or indirectly.

7.7 The Company is not a party to nor has its profits or financial position during the past 3 years been affected by any contract or arrangement which was not of an entirely arm’s length nature.

7.8 The Sale Shares are free from all claims, charges, liens, encumbrances, options, rights of pre-emption or equities whatsoever.

8      Waivers

8.1 The Vendor hereby irrevocably waives all and any rights of pre-emption to which he may be entitled, whether under the Articles of Association of the Company or otherwise, in respect of the transfer of the Sale Shares contemplated by this agreement.

8.2 The Purchaser may at its absolute discretion in whole or in part release, compound or compromise, or grant time or indulgence to any party for any liability under this agreement without affecting its rights against that or any other party under the same or any other liability.

9Vendors’ liability

The Vendor shall be jointly and severally liable in the event of any breach of any obligation or liability under this agreement (including, without limitation, in respect of the Warranties).

10General provisions

10.1 Completion shall not in any way prejudice or affect the operation of any provision of this agreement which contemplates or is capable of post-Completion operation and all such provisions shall continue in full force and effect notwithstanding Completion.

10.2 Each party shall bear its own costs of and incidental to the negotiation, making and fulfilment of this agreement and the transactions contemplated hereby, provided that if the Purchaser shall lawfully rescind this agreement the Vendor shall indemnify the Purchaser against all such costs incurred by it.

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10.3 The Purchaser may assign in whole or in part the benefit of this agreement which shall inure to the benefit of the successors in title and assigns of the Purchaser.

10.4 No party shall divulge to any third party (other than its professional advisers) any information regarding the terms of this agreement or any matters contemplated by this transaction or make any announcement relating to it, provided that the Purchaser shall be entitled to make such announcements as may be required by law or by the rules and regulations of United States Securities and Exchange Commission and OTC Bulletin Board.

10.5               Any notices:

10.5.1 must be in writing, and may be given to any party at its registered office or to such other address as may have been notified to the other parties; and

10.5.2 will be effectively served:

10.5.2.1 on the day of receipt where any hand-delivered letter, any facsimile or email message is received on a business day before or during normal working hours;

10.5.2.2 on the following business day, where any hand-delivered letter, any facsimile or email message received either on a business day or after normal working hours or on any other day; or

10.5.2.3 on the second business day following the day of posting from within The Special Administrative Region of Hong Kong of any letter sent by mail postage prepaid.

10.6 This agreement shall be governed by and construed in accordance with the laws of The Hong Kong and each party agrees to submit to the exclusive jurisdiction of the courts of Hong Kong.

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AS WITNESS the parties hereby duly execute this agreement on the date first above written

SIGNED by the Vendor (who having	)
been previously identified by the	)
production of his PRC Resident Card	)
No. 441421197405195933)	)
in the presence of:	)

INTERPRETED to the Vendor by:

SIGNED by	)
	)
for and on behalf of the Purchaser in the	)
presence of:-	)

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SCHEDULE 1

Warranties

1 The contents of clauses 2.1 and 2.2 above are and will at Completion be true and correct in all respects.

2 The Company is not, and will not at Completion be, under any commitment to allot or issue any share or loan capital to any person and no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the issue of any share or loan capital of the Company.

3 The Vendor is the sole beneficial owner of all the Sale Shares and will at Completion have the right and power to sell and transfer or procure the transfer of all the Sale Shares to the Purchaser in accordance with the provisions of this agreement.

4 The Vendor is not indebted to the Company and the Subsidiaries, nor the Company and the Subsidiaries indebted to the Vendor, and there is no circumstance whereby any such indebtedness could arise.

5. The Subsidiaries are the only Subsidiaries of the Company

6 All requirements applicable to the continuance in existence, management, property or operations of the Company have been complied with.

7 Since the Last Accounts Date no dividend or other distribution has been declared or paid on, and no capital distribution made or agreed to be made in respect of, any share capital of the Company.

8 The management accounts of the Company as of 30 June 2012 and as of the Last Accounts Date and audit reports of the Company for the two financial years immediately preceding the Last Accounts Date (collectively “the Accounts”) and the accounting records of the Company comply with the accounting requirements of the Companies Ordinance Cap.32 and all other relevant statutes and are in accordance with the accounting standards, regulations and interpretations issued by the Hong Kong Institute of Certified Public Accountants.

9 The Accounts have been prepared in accordance with generally accepted accountancy principles and are true, complete and accurate in all material respects, and show a true and fair view of the assets and liabilities of the Company.

11 The Company is the owner of and has good marketable title to all the assets used in its business and has no assets not so used.

12 Since the Last Accounts Date the Company has carried on in the ordinary and usual course the business carried on by it at that date.

13 Since the Last Accounts Date there has been no material adverse change in the Company’s financial position or prospects.

14 All the book and other debts of the Company outstanding at Completion are the absolute property of the Company and will (save insofar as a specific provision has been made in the balance sheet included in the Accounts for them) be good and collectable in the ordinary course of business and in any event not later than three months after Completion.

15 The Company does not have outstanding any commitment for capital expenditure or any agreement or arrangement not on an arm’s length basis.

16 There is not outstanding any mortgage or charge on the whole or any part of the undertaking, property or assets of the Company.

17 Neither the directors of the Company nor the Vendor has any reason to believe that the transactions contemplated by this agreement will result in loss of business with any of the Company’s present suppliers or customers.

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18 There is no liability whatsoever (whether legally binding or not) to make any payment to or for the benefit of any person in respect of past service or the termination of the employment of that or any other person and the Company has no superannuation fund, retirement benefit or other pension schemes or arrangements save as provided in the Company’s pension scheme which scheme is fully funded.

19 There is no outstanding commitment (whether legally binding or not) to increase the remuneration of any officer or employee of the Company.

20 The Company has within the relevant time limits correctly made all returns and payments required to be made by the Company for any taxation purposes and none of such returns or payments is the subject of any dispute with the revenue or customs and excise authorities and the Vendor is not aware of any circumstance likely to give rise to such dispute.

23 The Company is not involved in litigation, prosecution, arbitration or any other proceedings for the enforcement of rights or settlement of disputes and no act, omission or event has occurred which has given rise to a threat of such proceedings or which is likely to result in the Company being involved in any such proceedings.

24 All information material to a purchaser of all the issued shares in the Company has been made known to the Purchaser in writing before the making of this agreement.

25 All information supplied by the Vendor or his advisers to the Purchaser or its advisers concerning the Company (including without limitation information in the Disclosure Letter and information referred to in this Schedule) is true, complete and accurate in all respects.

26 There is no fact or circumstance which renders any of the information referred to in this Schedule untrue, inaccurate or misleading in any way which might affect willingness of a purchaser to purchase the Sale Shares on the terms (including those as to price) of this agreement.

27 The Company has not given any guarantees of the liabilities of any person or undertaken obligations in the nature of guarantees (by whatever name called).

28. The execution, delivery and performance of this Agreement by the Company will not: (i) require any consent, approval, authorization, permit, license, action, or notice to or of, as the case may be, any third party by or under any commitment, agreement or arrangement to which the Company is a party or by which it or any of its assets or are bound; or (ii) require any consent, approval, authorization or other action by, or filing with or notification to, any governmental authority or any other Person.

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SCHEDULE 2

Management Account as of September 7,2012

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Jussey Investments Limited

Balance Sheet

As of September 7, 2012

	US$
Non-Current Assets
Property, plant and equipment		637,167.58
Goodwill		9,060,191.64
Investment in subsidiary		0.00
		9,697,359.21
Current Assets
Amount due from a subsidiary		1,153.85
Amounts due from directors		1.00
Amounts due from related parties		0.00
Inventories		680,418.10
Trade and other receivables		637,442.87
Pledged bank deposit		132,705.53
Deposit Paid		6,142.23
Cash and bank balances		309,355.98
Derivative financial instruments		0.00
Total Current Assets		1,767,219.55
Current Liabilities
Amounts due to directors		0.00
Amounts due to related parties		1,153.85
Amounts due to the holding company		0.00
Amounts due to directors		161,556.61
Trade and other payables		13,056,053.13
Obligations under finance leases - current		311,651.03
Bank loan - current		0.00
Bank overdraft		44,130.91
Accrued expenses		837.44
Taxation		417.64
Total Current Liabilities		13,575,800.59
Net Current Assets		(11,808,581.04	)
Total Assets less Current Liabilites		(2,111,221.82	)
Shareholders’ Equity
Share capital		1.00
Reserves - b/f		0.00
Reserves		(1,153.85	)
Other comprehensive income-b/f		0.00
Other comprehensive income		0.00
Net equity contributed to the company		(1,152.85	)
Non-controlled interest		(2,110,068.97	)
		(2,111,221.82	)

EX-99.1

EXHIBIT 99.1         Press Release dated September 28, 2012

ACL Semiconductors Completes Acquisition of USmart and eVision

HONG KONG, September 28, 2012 — ACL Semiconductors Inc. (OTC Bulletin Board: ACLO) ("ACL"), a leading China-based distributor of memory electronic products in Southern China and Hong Kong, announced today that it has completed the acquisition of Jussey Investments Limited (“Jussey”), the owner of 80% equity interest in USmart Electronic Products Limited (“USmart”) and 100% equity interest in eVision Telecom Limited (“eVision”). The Jussey acquisition follows the definitive sale and purchase agreement (the “SPA”) executed on September 28, 2012. The purchase price was approximately US$1,846,797.89 (HK$14,405,023.55) pursuant to the SPA.

Founded in 2006, USmart is a Hong Kong based ODM manufacturer that specializes in designing, manufacturing and distributing advanced technologies for the three ‘C’ (computer, customer electronic appliance and communication) market in China. USmart’s products include computer peripherals, premium smartphones, high-end tablets, flash storage, communication devices and consumer electronic appliances.

Founded in 2011, eVision is a Hong Kong based solution company that specializes in CDMA2000 (the 3G wireless standard adopted by China Telecom). eVision provides CDMA 2000 solutions to USmart. Through an exclusive R&D service agreement with an independent third party, eVision holds a CMDA2000 software license granted by VIA Telecom Co. Ltd.

Mr. Chung-Lun Yang, Chief Executive Officer and Chairman of ACL, stated, “We are pleased to complete the acquisition of Jussey, the major shareholder of USmart and eVision. We expect that the acquisition will diversify ACL’s product portfolio with USmart developing and manufacturing 3G smartphones for its customers and with eVision providing support for the CDMA2000 3G standard.”

Mr. Yang concluded, “This acquisition will transform our company into an R&D manufacturer with its own products and brands, and facilitate the entry into the expanding telecommunication industry. With the 3G baseband licenses acquired through USmart and eVision, ACL will be well positioned to expand its operations. The combined company will benefit from both the vertical integration and the PRC-located design and manufacturing capabilities, as well as from its relationships with Samsung and ATMD. ”

About ACL Semiconductors Inc.

ACL Semiconductors Inc. is a China-based distributor of semiconductor components in Hong Kong and Southern China. Starting April 1, 2012, ACL is distributing Samsung’s semiconductor and LCD products through ATMD, a newly established joint venture with Tomen Devices. Semiconductor products are used in everything from mobile phones, digital cameras and laptop computers to MP3 players and Wi-Fi products. For more information about ACL Semiconductors Inc. please visit ACL Semiconductors Inc.’s corporate website at http://www.acl-semicon.com.

Forward-Looking Statements

This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, when used in the preceding discussion, the words "plan," "confident that," "believe," "scheduled," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbour created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, the availability of components and successful production of the company's products, general acceptance of the company's products and technologies, competitive factors, timing, and other risks described in the company's SEC reports and filings.

Investor Contacts:

Kun Lin Lee	Stephanie Carrington
Chief Financial Officer	The Ruth Group
ACL Semiconductors Inc.	+1-646-536-7017
+1-408-981-9363	scarrington@theruthgroup.com
+852-3666-9939
klee@atlantic.com.hk

EX-99.2

EXHIBIT 99.2 (a) The audited financial statements of Jussey for the years ended March 31, 2012 and 2011

JUSSEY INVESTMENTS LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 MARCH 2012

INDEPENDENT AUDITORS’ REPORT

TO THE SHAREHOLDERS OF JUSSEY INVESTMENTS LIMITED

(Incorporated in the British Virgin Islands with limited liability)

We have audited the consolidated financial statements of Jussey Investments Limited (the “Company”) and its subsidiaries (together, the “Group”) set out on pages 3 to 32, which comprise the consolidated balance sheets as at 31 March 2012, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Director’s responsibility for the consolidated financial statements

The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit and to report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

Except as describe in the basis for qualified opinion paragraph, we conducted our audit in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors” judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity”s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity”s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Unit 1278, 12th Floor, Kowloonbay International Trade & Exhibition Centre, 1 Trademart Drive, Kowloon Bay, Hong Kong
Tel: (852) 2541-0862	Fax: (852) 3544-8248	Email: customer_service@proconcpa.com

- 1 -

INDEPENDENT AUDITORS’ REPORT

TO THE SHAREHOLDERS OF JUSSEY INVESTMENTS LIMITED

(Incorporated in the British Virgin Islands with limited liability)

(Continued)

Basis of qualified opinion

The result of the Group is reported on the basis that the Group continues to carry on business. However, the Group had suffered from a net deficit of US$9,965,220 as at 31 March 2012 and a loss of US$2,016,607 for the year then ended. In the event that the Group fails to operate on an ongoing basis, the value of the assets would have to be reduced to their net realisable value and the Group would have to provide for additional liabilities which may arise.

Qualified Opinion

In our opinion, except for the effect on the consolidated financial statements of the matter described in the basis for qualified opinion paragraph, the consolidated financial statements give a true and fair view of the state of the Group”s affairs as at 31 March 2012 and of the Group”s loss and cash flows for the year then ended in accordance with International Financial Reporting Standards.

/s/ PROCON CPA Limited

PROCON CPA Limited

Certified Public Accountants

Engagement Director: Eric Choy

Practising Certificate Number: P04687

Hong Kong, 25 September 2012

Unit 1278, 12th Floor, Kowloonbay International Trade & Exhibition Centre, 1 Trademart Drive, Kowloon Bay, Hong Kong
Tel: (852) 2541-0862	Fax: (852) 3544-8248	Email: customer_service@proconcpa.com

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JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

CONSOLIDATED BALANCE SHEET

			As at 31 March
	Note		2012			2011
ASSETS
Non-current asset
Property, plant and equipment		5		798,881			573,892
Current assets
Cash at banks and in hand		11		101,818			118,908
Pledged bank deposits		10		132,573			132,423
Derivative financial instrument		8		3,799			-
Trade and other receivables		9		858,260			1,457,387
Inventories		7		814,129			865,887
				1,910,579			2,574,605
Total assets				2,709,460			3,148,497
EQUITY
Capital and reserves attributable to the Company’s equity
holders
Share capital		12		25,643			1
Reserves		13		(8,057,324	)		(6,396,356	)
Non-controlling interest				(1,933,539	)		(1,599,088	)
Total equity / (deficit)				(9,965,220	)		(7,995,443	)
LIABILITIES
Non-current liability
Obligations under finance leases		16		287,678			-
				287,678			-

- 3 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

CONSOLIDATED BALANCE SHEET

			As at 31 March
	Note		2012			2011
Current liabilities
Bank overdrafts		15		69,976			59,073
Obligations under finance leases		16		41,097			110,330
Trade and other payables		14		12,275,929			10,972,095
Income tax payable				-			2,442
				12,387,002			11,143,940
Total liabilities				12,674,680			11,143,940
Total equity and liabilities				2,709,460			3,148,497
Net current liabilities				(10,476,423	)		(8,569,335	)
Total assets less current liabilities				(9,677,542	)		(7,995,443	)

/s/ Zhiming Li

Sole director

The notes on pages 8 to 32 are an integral part of these consolidated financial statements.

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JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

			Year ended 31 March
	Note		2012			2011
Revenue		17		6,562,947			4,380,106
Cost of sales		18		(5,985,636	)		(4,899,756	)
Gross income / (loss)				577,311			(519,650	)
Other income and gain		17		206,524			104,801
Selling and distribution expenses		18		(385,078	)		(169,305	)
Administrative expenses		18		(2,400,321	)		(1,749,413	)
Operating loss				(2,001,564	)		(2,333,567	)
Finance costs		19		(15,043	)		(18,642	)
Loss before income tax				(2,016,607	)		(2,352,209	)
Income tax expense		20		-			(14,344	)
Profit / (Loss) for the year attributable to the equity
holders of the Company				(2,016,607	)		(2,366,553	)
Other comprehensive income for the year
- Currency translation difference				21,188			(13,889	)
Total comprehensive income for the year				(1,995,419	)		(2,380,442	)
Attributable to:
- Owners of the company				(1,660,968	)		(1,904,354	)
- Non-controlling interests				(334,451	)		(476,088	)
				(1,995,419	)		(2,380,442	)

The notes on pages 8 to 32 are an integral part of these consolidated financial statements.

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JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Attributable to equity holders of the Company
	Share		Accumulated    Non-controlling
	capital		loss			interest			Total
Balance at 1 April 2010		1		(4,492,002	)		(1,123,000	)		(5,615,001	)
Loss for the year		-		(2,366,553	)		-			(2,366,553	)
Other comprehensive income:
- Currency translation difference		-		(13,889	)		-			(13,889	)
Total comprehensive income		-		(2,380,442	)		-			(2,380,442	)
Transfer to non-controlling interest		-		476,088			(476,088	)		-
		-		(1,904,354	)		(476,088	)		(2,380,442	)
Balance at 31 March 2011 and at 1 April
2011		1		(6,396,356	)		(1,599,088	)		(7,995,443	)
Increase in share capital		25,642		-			-			25,642
Loss for the year		-		(2,016,607	)		-			(2,016,607	)
Other comprehensive income:		-
- Currency translation difference		-		21,188			-			21,188
Total comprehensive income		-		(1,995,419	)		-			(1,995,419	)
Transfer to non-controlling interest		-		334,451			(334,451	)		-
		-		(1,660,968	)		(334,451	)		(1,995,419	)
Balance at 31 March 2012		25,643		(8,057,324	)		(1,933,539	)		(9,965,220	)

The notes on pages 8 to 32 are an integral part of these consolidated financial statements.

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JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

CONSOLIDATED CASH FLOW STATEMENT

			Year ended 31 March
	Note		2012			2011
Cash flows from operating activities
Loss before income tax				(2,016,607	)		(2,352,209	)
Adjustment for:
Depreciation		5		360,894			247,579
Gain from derivative financial instrument				(3,799	)		-
Interest expense		19		15,043			18,642
Interest income				(249	)		(110	)
Changes in working capital
Decrease/(increase) in trade and other receivables				602,043			(542,321	)
Decrease/(increase) in inventories				56,889			(339,770	)
Increase in trade and other payables				1,301,136			3,485,637
Net cash generated from operating activities				315,350			517,448
Cash flows from investing activities
Additions to property, plant and equipment		5		(563,041	)		(178,135	)
Interest received				249			110
Net cash used in investing activities				(562,792	)		(178,025	)
Cash flows from financing activities
Issue of share capital		12		1			-
Increase in pledged bank deposits		10		(150	)		(51	)
Drawdown of long-term bank borrowings, secured		16		287,678			-
Repayment of short-term bank borrowings, secured		15		-			(74,786	)
Repayment of principal portion of finance lease		21(b)		(110,330	)		(103,589	)
Interest paid				(15,043	)		(18,642	)
Net cash generated from/(used in) financing activities				162,156			(197,068	)
Net (decrease)/increase in cash and cash equivalents				(85,286	)		142,355
Cash and cash equivalents at beginning of the year				59,835			(55,835	)
Effect on changes of foreign exchange rate				57,293			(26,685	)
Cash and cash equivalents at end of the year		21(a)		31,842			59,835

The notes on pages 8 to 32 are an integral part of these consolidated financial statements.

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JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 Background information

Jussey Investments Limited (the “Company”) is a private limited liability company incorporated in British Virgin Islands. The address of the registered office and principal place of business of the Company is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.

On 30 September 2011, the Company executed an acquisition of 1 ordinary shares of USmart Electronic Products Limited (“USmart”). On 14 July 2012, USmart allotted 7 ordinary shares to the Company and 2 ordinary shares to an individual investor. The Company became 80% holding company of USmart.

On 11 April 2012, the Company executed an acquisition of 200,000 ordinary shares of eVision Telecom Limited (“eVision”) and became 100% holding company of eVision.

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are set out in Note 2.4 to the consolidated financial statements.

These consolidated financial statements are presented in United States dollars unless otherwise stated. These consolidated financial statements have been approved for issue by the Board of Directors on 25 September 2012.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated financial statements of the Group have been prepared under the historical cost convention, as modified by the revaluation of certain assets and liabilities, which are stated at fair value, and in accordance with International Financial Reporting Standards (“IFRS”), which collective term includes all applicable individual IFRS, International Accounting Standards (“IAS”) and interpretations issued by the International Accounting Standard Board, accounting principles generally accepted internationally.

The preparation of consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group”s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.

2.2 Going concern

At 31 March 2012, the Group”s current liabilities exceeded its current assets by $10,476,423 (2011: $8,569,335) and shareholders” deficit of $9,965,220 (2011: $7,995,443). The shareholder of the Group has confirmed its intention to provide continuing financial support to the Group so as to enable it to meet its liabilities as and when they fall due and to continue its business for the foreseeable future. The directors believe that the Group will continue as a going concern. Consequently, the directors have prepared the financial statements on a going concern basis.

- 8 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.3 Changes in accounting policy and disclosures

(a) New and amended standards adopted by the group

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 April 2011 that would be expected to have a material impact on the group .

IAS 24 (Revised), “Related Party Disclosures” is effective for annual period beginning on or after January 2011. It introduces an exemption from all of the disclosure requirements of IAS 24 for transactions among government related entities and the government. Those disclosures are replaced with a requirement to disclose:

(i) The name of the government and the nature of their relationship;

(ii) The nature and amount of any individually significant transactions; and

(iii) The extent of any collectively-significant transactions qualitatively or quantitatively.

It also clarifies and simplifies the definition of a related party.

(b) New and amended standards have been issued but are not effective for the financial year beginning 1 April 2011 and have not been early adopted

The group”s and parent entity”s assessment of the impact of these new and amended standards is set out below.

IFRS 9, ,,Financial instruments” addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity”s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The group is yet to assess IFRS 9”s full impact and intends to adopt IFRS 9 upon its effective date, which is for the accounting period beginning on or after 1 January 2015.

IFRS 10,, Consolidated financial statements” builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The group is yet to assess IFRS 10”s full impact and intends to adopt IFRS 10 no later than the accounting period beginning on or after 1 January 2013.

- 9 -

JUSSEY INVESTMENTS LIMITED 

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.3 Changes in accounting policy and disclosures (Continued)

(b) New and amended standards have been issued but are not effective for the financial year beginning 1 April 2011 and have not been early adopted (Continued)

IFRS 12 ,,Disclosures of interests in other entities” includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The group is yet to assess IFRS 12”s full impact and intends to adopt IFRS 12 no later than the accounting period beginning on or after 1 January 2013.

IFRS 13,, Fair value measurement” aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs. The group is yet to assess IFRS 13”s full impact and intends to adopt IFRS 13 no later than the accounting period beginning on or after 1 January 2013.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the group.

2.4 Consolidation

The consolidated financial statements include the Company and its subsidiary, are prepared as if the Company had acquired its subsidiary on April 1, 2010 and complied in accordance with IFRS. All significant inter-company accounts and transactions between consolidated companies have been eliminated in consolidation. The consolidated financial statements include 100% of assets, liabilities, and net income or loss of its majority-owned subsidiary; the ownership interests of minority investors are recorded as noncontrolling interests.

The Company”s subsidiary companies and its principal activities as of March 31, 2012 are summarized as follows:

		Place of	Percentage of
	Date of	incorporation/	equity interest
	incorporation/	registration and	attributable to
Name	establishment	operation	the Company	Principal activities
Usmart Electronic	21 February 2005	Hong Kong	80% (Direct)	Investment holding
Products Limited				and manufacturing
(“Usmart”)				and trading of
				electronic
				components and
				products
eVision Telecom Limited	8 April 2011	Hong Kong	100% (Direct)	Research and
(“eVision”)				development
Dongguan Ke Zheng	10 July 2010	The People” s	80% (Indirect)	Trading and
Electronic Company		Republic of		manufacturing of
Limited (東莞科正電子		China		electronic products
有限公司)

- 10 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.5 Foreign currency translation

(a) Functional and presentation currency

Items included in the consolidated financial statements of each of the group entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in United States dollars, while the Group”s major functional currency is Hong Kong dollars (HK$). The consolidated financial statements are translated into United States dollars from HK$ with a ratio of USD1.00=HK$7.80, a fixed exchange rate maintained between Hong Kong and United States derived from the Hong Kong Monetary Authority pegging HK$ and USD monetary policy.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of comprehensive income.

(c) Group entities

The results and financial positions of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii) income and expenses for each statement of comprehensive income presented are translated at average exchange rates; and

(iii) all resulting exchange differences are recognised as a separate component of equity.

2.6 Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are expensed in the consolidated statement of comprehensive income during the financial year in which they are incurred.

- 11 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.6 Property, plant and equipment (Continued)

Depreciation of leasehold improvements is calculated to write off their cost less accumulated impairment losses over the unexpired periods of the leases or their expected useful lives of 1 to 5 years to the Group, whichever is shorter. Depreciation of other property, plant and equipment are calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

-  Tools	5 years
-  Plant and machinery	5 years
-  Leasehold improvement	5 years
-  Furniture, fixtures and equipment	5 years
-  Motor vehicles	3 – 5 years

The assets” residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset”s carrying amount is written down immediately to its recoverable amount if the asset”s carrying amount is greater than its estimated recoverable amount (Note 2.8).

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss on derecognition and disposal of a property, plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant asset, and is recognised in the consolidated statement of comprehensive income.

2.7 Impairment of investments in subsidiaries and non-financial assets

Assets that have an indefinite useful life for example, goodwill or intangible assets not ready to use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset”s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset”s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date

2.8 Financial assets

The group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.

- 12 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.8 Financial assets (Continued)

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for the amounts that are settled or expected to be settled more than 12 months after the end of the reporting period. These are classified as non-current assets. The group's loans and receivables comprise `trade and other receivables' and cash and cash equivalents' in the balance sheet

(c) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.

2.9 Impairment of financial assets

(a) Assets carried at amortised cost

The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a,, loss event” ) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

For loans and receivables category, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan or held- to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the group may measure impairment on the basis of an instrument's fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor”s credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated income statement.

- 13 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.9 Impairment of financial assets (Continued)

(b) Assets classified as available for sale

The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. For debt securities, the group uses the criteria referred to in (a) above. In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss is removed from equity and recognised in profit or loss. Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the consolidated income statement. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the consolidated income statement.

2.10 Derivative financial instruments and hedging activities

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The group designates certain derivatives as either:

(a) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);

(b) hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge); or

(c) hedges of a net investment in a foreign operation (net investment hedge).

Fair value hedge

Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The group only applies fair value hedge accounting for hedging fixed interest risk on borrowings. The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate borrowings is recognised in the income statement within ,,finance costs” . The gain or loss relating to the ineffective portion is recognised in the income statement within other gains/(losses) net . Changes in the fair value of the hedge fixed rate borrowings attributable to interest rate risk are recognised in the income statement within ,,finance costs”.

If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to profit or loss over the period to maturity.

- 14 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.10 Derivative financial instruments and hedging activities (Continued)

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow hedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement within,, other gains/(losses) net” .

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in the income statement within ,,revenue” . However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory or plant and equipment), the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in cost of goods sold in the case of inventory or in depreciation in the case of fixed assets.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement within ,,other gains/(losses) - net” .

Net investment hedge

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.

Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised in the income statement.

Gains and losses accumulated in equity are included in the income statement when the foreign operation is partially disposed of or sold.

2.11 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Costs of inventories include the transfer from equity of any gains/losses on qualifying cash flow hedges purchases of raw materials

- 15 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.12 Trade and other receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

2.13 Cash and cash equivalents

In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. In the consolidated and entity balance sheet, bank overdrafts are shown within borrowings in current liabilities.

2.14 Share capital

Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Where any group company purchases the company”s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to owners of the company until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to owners of the company.

2.15 Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.16 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or financial liability, including fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges, and transfer taxes and duties. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statement of comprehensive income over the period of the borrowings using the effective interest method.

- 16 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.16 Borrowings (Continued)

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

All other borrowing costs are charged to the consolidated statement of comprehensive income in the year in which they are incurred.

2.17 Borrowings cost

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

2.18 Current and deferred income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is not recognised if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred taxation is provided on temporary differences arising on investments in subsidiaries and an associated company, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

2.19 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation where, as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

- 17 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.19       Provisions (Continued)

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

2.20 Revenue and other income recognition

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of discounts returns and value added taxes. The Group recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the group”s activities, as described below.

(a) Sales of goods is recognized when the Group has transferred to the buyer the significant risks and rewards of ownership of the goods and the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

(b) Sales of consignment is recognised until the consignees sells the goods to a third party or purchases the consigned goods for its own account; and

(c) Interest income is recognized using the effective interest method.

2.21 Employee benefits

(a) Employee leave entitlements

Employee entitlements to annual leave and long service leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long service leave as a result of services rendered by employees up to the balance sheet date.

Employee entitlements to sick leave and maternity or paternity leave are not recognised until the time of leave.

(b) Defined contribution plans

The Group operates a defined contribution Mandatory Provident Fund retirement scheme under the Mandatory Provident Fund Scheme Ordinance, for all of its full-time employees in Hong Kong. Contributions are made based on a percentage of the employees” basic salaries and are charged to the consolidated statement of comprehensive income as they become payable. The Group and the employees are required to monthly contribute 5% of the employees salary with a maximum amount of HK$1,000 per month for each employee. The employers contributions are vested fully with the employees when contributed into the scheme. No forfeited contributions are available to reduce the contributions payable in the future years.

Pursuant to PRC laws and regulations, contributions to the defined contribution retirement schemes for the Group s local staff are made to the relevant government authorities in the PRC, which are calculated based on certain percentages of the applicable payroll costs as stipulated under the requirements in the PRC. These contributions are charged to the consolidated statement of comprehensive income as incurred.

- 18 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 Summary of significant accounting policies (Continued)

2.22 Leases

Lease that transfer substantially all the rewards and risks of ownership of assets to the Group, are accounted for as finance leases. At the inception of a finance lease, the cost of the leased asset is capitalised at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the consolidated statement of comprehensive income.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are expensed in the consolidated statement of comprehensive income on a straight-line basis over the period of the lease.

3 Financial risk and capital risk management

The Group”s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and cash flow and fair value interest rate risk), credit risk and liquidity risk. The Group”s overall risk management procedure focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group s financial performance.

3.1 Financial risk factors

(a) Market risk

(i) Foreign exchange risk

The Group operates in Hong Kong and in the PRC and is exposed to foreign exchange risk primarily with respect to the Hong Kong dollars and Renminbi. Foreign exchange risk arises when future commercial transactions, recognised assets and liabilities are denominated in a currency that is not the Group”s functional currency. In the opinion of the directors, such transactions are not significant and the Group does not have any significant foreign exchange risk. Accordingly, no sensitivity analysis is performed.

(ii) Cash flow and fair value interest rate risk

Apart from the bank balances, borrowings, bank overdrafts and obligations under finance leases which carry interest at market rates, the Group has no significant interest-bearing assets or liabilities, and its income and operating cash flows are substantially independent of changes in market interest rates. Accordingly, the directors are of the opinion that the Group does not have significant cash flow and fair value interest rate risk and no sensitivity analysis is performed.

- 19 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3 Financial risk and capital risk management (Continued)

3.1 Financial risk factors (Continued)

(b) Credit risk

Credit risk arises from amounts due from group companies and an associated company, trade and other receivables and cash at banks.

In order to minimise the credit risk resulting from counterparty default, the management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual customer at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors are of the opinion that the relevant credit risk is significantly reduced. In addition, the Group trades with customers with good credit history; therefore, the related credit risk is low.

The credit risk on cash at banks is limited because the counterparties are reputable and creditworthy banks and the maximum exposure to credit risk of cash at banks at the balance sheet date is disclosed in Note 12. The maximum exposure to credit risk of other classes of financial assets at the balance sheet date is represented by the carrying amount of these financial assets as disclosed in Note 9. The Group does not hold any collateral as security.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash balances. Due to the nature of the underlying business, the Group aims to maintain flexibility in funding by a prudent dividend pay out policy.

The contractual undiscounted cash flows of the Group”s financial liabilities as disclosed in Note 9 based on the remaining period at the balance sheet date to the contractual maturity date is less than one year and equal their carrying values, as the impact of discounting is not significant.

3.2 Capital risk management

The Group”s objectives when managing capital are to safeguard the Group ability to continue as a going concern in order to provide returns for the shareholders and benefits for other stakeholders. The Group”s overall strategy remains unchanged from prior year.

The capital structure of the Group represents equity attributable to equity holders of the Group, comprising issued share capital and retained earnings.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to the shareholders or issue new shares.

3.3 Fair value estimation

The carrying values less impairment provision of receivables and payables are a reasonable approximation of their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments, unless the effect of discounting will be immaterial.

- 20 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

4 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(a) Depreciation of property, plant and equipment

Impairment review for property, plant and equipment are performed by management annually. In determining the impairment of these assets, assumptions and economic estimates have to be made. Management determines the estimated useful lives and related depreciation charges for the Group s property, plant and equipment. Management will revise the depreciation charge where useful lives are different to those previously estimated, or it will write off or write down technically obsolete or non-strategic assets that have been abandoned or sold.

(b) Income tax

The Group recognises liabilities for anticipated tax exposure based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax provisions in the year in which such determination is made.

(c) Fair value of derivatives and other financial instruments

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The group uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. The fair value of the foreign currency non-deliverable forward contract was valued by an independent appraisal firm which has been engaging with appropriate qualification and recent experience in the valuation of similar financial instruments being valued.

(d) Impairment of inventories and trade receivables

The Group assesses annually whether its inventories and trade receivables have any indication of impairment. The recoverable amounts of inventories and trade receivables have been determined mainly based on the age and quality of inventories and past repayment history by the customers respectively. This assessment requires the use of judgement and estimates exercised by the management.

- 21 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5 Property, plant and equipment

Group

				Furniture,
	Leasehold			fixtures and						Plant and			Motor
	improvement			equipment			Tools			machinery			vehicles			Total
At 1 April 2010
Cost		278,520			75,153			14,556			659,046			-			1,027,275
Accumulated depreciation		(111,408	)		(24,035	)		(4,764	)		(244,228	)		-			(384,435	)
Net book amount		167,112			51,118			9,792			414,818			-			642,840
Year ended 31 March 2011
Opening net book amount		167,112			51,118			9,792			414,818			-			642,840
Additions		-			24,354			17,225			86,255			50,301			178,135
Depreciation		(55,704	)		(19,836	)		(6,356	)		(150,593	)		(15,090	)		(247,579	)
Exchange alignment		-			124			-			372			-			496
Closing net book amount		111,408			55,760			20,661			350,852			35,211			573,892
At 31 March 2011 and 1 April 2011
Cost		278,520			99,618			31,781			743,088			50,301			1,203,308
Accumulated depreciation		(167,112	)		(43,858	)		(11,120	)		(392,236	)		(15,090	)		(629,416	)
Net book amount		111,408			55,760			20,661			350,852			35,211			573,892
Year ended 31 March 2012
Opening net book amount		111,408			55,760			20,661			350,852			35,211			573,892
Additions		76,328			25,786			33,131			423,385			4,411			563,041
Disposal		-			(836	)		-			-			-			(836	)
Depreciation		(70,970	)		(25,084	)		(13,046	)		(235,381	)		(16,413	)		(360,894	)
Write-back		-			334			-			-			-			334
Exchange alignment		-			1,666			127			20,059			1,492			23,344
Closing net book amount		116,766			57,626			40,873			558,915			24,701			798,881
At 31 March 2012
Cost		354,848			124,898			64,912			1,189,181			54,765			1,788,604
Accumulated depreciation		(238,082	)		(67,272	)		(24,039	)		(630,266	)		(30,064	)		(989,723	)
Net book amount		116,766			57,626			40,873			558,915			24,701			798,881

- 22 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5 Property, plant and equipment (Continued)

Depreciation expense of $360,894 (2011: $247,579) has been expensed in cost of sales and administrative expenses.

Plant and machinery with carrying amounts of $295,897 (2011: Nil) have been acquired under finance lease agreement.

6 Financial instruments by category

			Assets at fair
			value through
	Loans and		the profit &
	receivables		loss		Total
31 March 2012
Assets as per balance sheet
- Derivative financial instruments (Note 8)		-		3,799		3,799
- Trade and other receivables excluding prepayments (Note 9)		858,260		-		858,260
- Pledged bank deposits (Note 10)		132,573		132,573
- Cash and cash equivalents (Note 11)		101,818		-		101,818
Total		1,092,651		3,799		1,096,450

	Other financial
	liabilities at
	amortised cost		Total
Liabilities as per balance sheet
- Trade and other payables (Note 14)		12,275,929		12,275,929
- Bank overdrafts (Note 15)		69,976		69,976
- Obligations under finance leases (Note 16)		328,775		328,775
Total		12,674,680		12,674,680

			Assets at fair
			value through
	Loans and		the profit &
	receivables		loss		Total
31 March 2011
Assets as per balance sheet
- Trade and other receivables excluding prepayments (Note 9)		1,457,387		-		1,457,387
- Pledged bank deposits (Note 10)		132,423		132,423
- Cash and cash equivalents (Note 11)		118,908		-		118,908
Total		1,708,718		-		1,708,718

- 23 -

	JUSSEY INVESTMENTS LIMITED
	(All amounts in United States dollars unless otherwise stated)
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6	Financial instruments by category (Continued)

	Other financial
	liabilities at
	amortised cost		Total
Liabilities as per balance sheet
- Trade and other payables (Note 14)		10,972,095		10,972,095
- Bank overdrafts (Note 15)		59,073		59,073
- Obligations under finance leases (Note 16)		110,330		110,330
Total		11,141,498		11,141,498

7 Inventories

	2012			2011
Stock in trade
Finished goods		564,928			1,547,709
Finished goods   consigned outward		16,723			-
Finished goods   recoverable samples		948			-
Work-in-progress		82,300			114,896
Raw materials		488,170			651,461
		1,153,069			2,314,066
Less: Provision for impairment		(338,940	)		(1,448,179	)
		814,129			865,887

The cost of inventories recognised as an expense and included in cost of sales amounted to $5,985,636 (2011:$4,899,756).

As at 31 March 2012, the Group had consigned finished goods to the licensees, Aristo Technologies Limited, Atlantic Ocean (H.K.) Limited, Able Technology Limited and 2P Station, amounting to $2,075, $4,548, $9,902 and $197 respectively. Since the Group cannot supervise the activities of the licensees, the directors consider that it is possible that the Group may not be able to recover possession of all or part of these consigned finished goods in the event that the licensees are unable to meet their financial obligations. The directors are not aware of any circumstances that the licensees are unable to meet their financial obligations.

Other than the consigned finished goods, the directors are of the opinion that the underlying value of the inventories is not less than its carrying amount as at 31 March 2012 in the consolidated balance sheet.

- 24 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8 Derivative financial instruments

	2012				2011
	Assets		Liabilities		Assets		Liabilities
Foreign exchange derivatives
Currency forwards		3,799		-		-		-

The Group has entered into a foreign currency non-deliverable forward contract to manage its foreign currency and exchange rate exposures which did not meet the criteria for hedge accounting. Changes in the fair value amounting to $3,799 (2011: Nil) were charged to the statement of comprehensive income during the year. The carrying amount of this financial instrument is the same as its fair value at the reporting date.

The fair value of the foreign currency non-deliverable forward contract was valued by an independent appraisal firm, Roma Appraisals Limited, which has appropriate qualification and recent experience in the valuation of similar financial instruments being valued.

9 Trade and other receivables

	2012		2011
Trade receivables		703,718		526,205
Other receivables		148,400		259,497
Deposits		6,142		-
Amounts due from related parties		-		671,685
		858,260		1,457,387

The carrying values of the trade and other receivables approximate their fair values as at 31 March 2012 and 2011 and are denominated in the following currencies:

	2012		2011
Hong Kong dollars		375,266		1,052,571
Renminbi		65,022		278,194
United States dollars		417,972		126,622
		858,260		1,457,387

- 25 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9 Trade and other receivables (Continued)

As at 31 March 2012, trade receivables of $464,607 (2011: $339,751) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:

	2012		2011
Past due by:
Less than 30 days		191,827		107,744
31-90 days		218,031		158,701
Over 90 days		54,749		73,306
		464,607		339,751

	The directors are of the opinion that no trade and other receivables as at the balance sheet date were impaired.
10	Pledged bank deposits
	Bank deposit has been pledged to a bank to secure for banking facilities granted to the Group.
11	Cash and cash equivalents
	The carrying values of the cash and cash equivalents are denominated in the following currencies:

	2012		2011
Cash and cash equivalents
(excluding bank overdrafts)
- Hong Kong dollars		19,777		59,195
- Renminbi		29,710		53,922
- United States dollars		50,099		5,791
- Euro		2,232		-
		101,818		118,908

Cash, cash equivalents and bank overdrafts include the following for the purposes of the statement of cash flows:

	2012			2011
Cash and cash equivalents		101,818			118,908
Bank overdrafts		(69,976	)		(59,073	)
		31,842			59,835

12	Share capital
	The Company was incorporated in British Virgin Islands on 30 September 2011 with an authorized share capital of $50,000 divided into 50,000 ordinary shares of $1 each.
	On date of incorporation, 1 ordinary share was issued and fully paid.

- 26 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

13 Reserves

	Accumulated
	losses
Balance at 1 April 2010		(4,492,002	)
Loss for the year		(2,366,553	)
Other comprehensive income:
- Currency translation difference		(13,889	)
Total comprehensive income		(2,380,442	)
Transfer to non-controlling interest		476,088
		(1,904,354	)
Balance at 31 March 2011 and 1 April 2011		(6,396,356	)
Loss for the year		(2,016,607	)
Other comprehensive income:
- Currency translation difference		21,188
Total comprehensive income		(1,995,419	)
Transfer to non-controlling interest		334,451
		(1,660,968	)
Balance at 31 March 2012		(8,057,324	)

14 Trade and other payables

	2012		2011
Trade payables		176,900		292,658
Other payables		11,877,700		335,659
Accruals		41,097		-
Amount due to a subsidiary director (Note 23)		180,232		171,729
Amount due to related parties		-		10,172,049
		12,275,929		10,972,095

- 27 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14	Trade and other payables (Continued)
	The carrying values of trade and other payables approximate their fair values as at 31 March 2012 and 2011 and are denominated in the following currencies:

	2012		2011
Hong Kong dollars		11,434,278		10,619,292
Renminbi		730,661		292,986
United State dollars		110,990		59,817
		12,275,929		10,972,095

15	Bank borrowings, secured and banking facilities
(a)	Bank borrowings are analysed as follows:

	2012		2011
Bank overdrafts
(Note (i) and Note 21(a))		69,976		59,073

(i)	Bank overdrafts
	At 31 March 2012, the effective interest rate of bank overdrafts at the balance sheet date was 6.25% (2011: 6.25%) per annum. The bank overdraft is secured by fixed deposit, property, plant and equipment, personal guarantee given by a third party and corporate guarantee given by related parties and third parties.

(b)	Banking facilities
	As at 31 March 2012, the Group had certain banking facilities, including short term bank loans, trade financing and bank overdrafts of $384,615 (2011: $384,615), of which $69,976 (2011: $59,073) was utilised by the Group. These banking facilitates are secured by:

(i)	pledged bank deposits (Note 10) of approximately $128,205 (2011: $128,205);
(ii)	personal guarantee and indemnity for an unlimited amount given by a former director of a subsidiary;
(iii)	corporate guarantees and indemnities for an unlimited amount given by companies controlled by a former director of a subsidiary or his related parties;
(iv)	third legal charge on a property owned by a Company controlled by a former director of a subsidiary; and
(v)	machineries owned by a subsidiary (Note 5).

- 28 -

	JUSSEY INVESTMENTS LIMITED
	(All amounts in United States dollars unless otherwise stated)
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16	Obligations under finance leases   Group
	As at 31 March 2012, the finance lease liabilities of the Company were repayable as follows:

	2012			2011
Finance lease liabilities - minimum lease payments
Within one year		46,154			114,047
In the second year to fifth year		184,615			-
After fifth year		138,461			-
		369,230			114,047
Future finance charges on finance lease		(40,455	)		(3,717	)
The present value of finance lease liabilities		328,775			110,330

	2012		2011
The present value of finance lease liabilities is repayable as follows
Within one year		41,097		110,330
In the second year to fifth year		287,678		-
		328,775		110,330

17 Turnover and other income

	2012		2011
Revenue / Turnover
Sales of goods		6,562,947		4,380,106
Other income
Assembly income		1,699		14,502
Bank interest income		99		53
Commission income		2,051		-
Fixed deposit interest		150		57
Gain from derivative financial instrument		3,799		-
Insurance claim		-		2,485
Management income		-		4,801
Profit on disposal of machinery		12,764		-
Service income		2,587		-
Sundry income		183,375		82,903
		206,524		104,801

- 29 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18 Expenses by nature

	2012		2011
Auditors  remuneration		20,000		-
Cost of inventories sold		5,985,636		4,899,756
Depreciation of property, plant and equipment (Note 5)		360,894		247,579
Staff costs
- salaries and other benefits		873,306		854,310
- pension costs   defined contribution plan		33,520		32,531
Other expenses		1,497,679		784,298
Total cost of sales, selling and distribution expenses,
administrative expenses and other operating expenses		8,771,035		6,818,474

19 Finance costs

	2012		2011
Bank charges		3,427		3,255
Short term bank loan Interest		-		156
Bank overdraft interest		925		1,066
Bank term loan interest		-		1,594
Bank machine loan interest		3,799		10,459
Exchange difference		1,835		2,112
Hire purchase charge		5,057		-
		15,043		18,642

20	Income tax expense
	The Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdictions in which members of the Group are domiciled and operated.

	2012		2011
Current income tax
- PRC corporate income tax		-		14,344
- Hong Kong profits tax		-		-
Income tax expense		-		14,344

PRC corporate income tax (“CIT”) has been provided at a rate of 25% (2011: 25%) on the taxable income as reported in the statutory accounts of the companies comprising the Group, which are prepared in accordance with PRC GAAP, as adjusted for income and expenses items which are not assessable or deductible for income tax purposes.

No Hong Kong profits tax has been provided as the Group s entities have no estimated assessable profit for the year (2011: Nil).

- 30 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

20 Income tax expense (Continued)

The taxation on the Group s loss before taxation differs from the theoretical amount that would arise using the taxation rate of the home country of the Company s subsidiary as follows:

	2012			2011
Loss before income tax		(2,016,607	)		(2,352,209	)
Tax at applicable losses in the jurisdiction concerned		(332,740	)		(388,114	)
Tax effect of non-deductible expenses		54,635			82,125
Tax effect of non-taxable income		(5,988	)		(35,499	)
Tax effect of other allowance		(16,575	)		(21,573	)
Tax effect of asset claiming for full deduction for tax purposes		(2,495	)		(2,395	)
Tax effect of balancing charge		124			30,506
Tax effect of tax losses (recognised) / unrecognised		303,039			334,950
Others		-			14,344
Income tax expense		-			14,344

21	Notes to consolidated cash flow statement
(a)	Analysis of balances of cash and cash equivalents:

	2012			2011
Cash and cash equivalents (Note 11)		101,818			118,908
Bank overdrafts (Note 15(a)(i))		(69,976	)		(59,073	)
		31,842			59,835

(b) Analysis of changes in obligations under finance leases during the year:

	2012			2011
At the beginning of the year		110,330			213,919
Inception of finance leases		328,775			-
Payment of capital element of finance leases		(110,330	)		(103,589	)
At the end of the year		328,775			110,330

- 31 -

JUSSEY INVESTMENTS LIMITED

(All amounts in United States dollars unless otherwise stated)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

22	Commitments under operating leases
	The future aggregate minimum lease payments of the Group and the Company under non- cancellable operating leases in respect of leasehold land and buildings are as follows:

	2012		2011
Offices
- Not later than one year		160,973		242,818
- Later than one year and not later than five years		844,268		858,743
		1,005,241		1,101,561

23	Related party transactions
	At the balance sheet date, the Company is controlled by Li Zhiming, which owns 100% of the Company s shares.
	The amount due from / (to) a subsidiary director is unsecured, non-interest-bearing and repayable on demand.

24	Events after balance sheet date
	In March 2012, ACL Semiconductors Inc., a company listed on the Over The Counter Bulletin Broad in the United States of America, have indicated that they may acquire the controlling interest of the Group.

- 32 -

EXHIBIT 99.2          (b)          The pro forma financial information for the three and six months ended June 30, 2012 of the Company and its subsidiaries concerning the Acquisition.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

The following unaudited pro forma condensed combined statement of operations of ACL Semiconductors Inc., (“ACL” or the "Company") gives effect to the merger of ACL and Jussey Investments Limited ("Jussey") as if such transaction occurred at the beginning of the periods presented. The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2012 is derived from the unaudited financial statements of ACL and Jussey for the six months ended June 30, 2012. The unaudited pro forma condensed combined statement of operations for the three months ended June 30, 2012 is derived from the unaudited financial statements of ACL and Jussey for the three months ended June 30, 2012.

The unaudited pro forma condensed combined balance sheet at June 30, 2012 gives effect to the Merger of ACL and Jussey as if such transaction occurred on January 1, 2012. The unaudited pro forma condensed combined balance sheet is derived from the historical balance sheets of ACL and Jussey as of June 30, 2012.

The unaudited pro forma condensed combined financial data do not reflect the effects of any anticipated changes to be made by ACL in its operations from the historical operations and are presented for informational purposes only and should not be construed to be indicating (i) the results of operations or the financial position of ACL that actually would have occurred had the proposed merger been consummated as of the dates indicated or (ii) the results of operation or the financial position of ACL in the future.

The proposed Merger is expected to be accounted for as a merger and acquisition and it is the intention of the parties to continue the operations of ACL and its subsidiary, and Jussey and subsidiary as ACL subsidiaries.

The following pro forma condensed combined financial data and notes are qualified in their entirety by reference to, and should be read in conjunction with, "Management's Discussion and Analysis of Financial Condition and Results of Operation," the consolidated financial statements and notes thereto of ACL and Jussey and other historical information included elsewhere in this filing.

ACL Semiconductors Inc.

Pro forma Condensed Combined Balance Sheet

As of June 30, 2012

	ACL			Jussey			Adjustments			Pro Forma
Assets
Cash and cash equivalents	$	(103,315	)	$	43,213		$	-		$	(60,102	)
Restricted cash		2,089,041			132,639						2,221,680
Accounts receivable, net		12,282,501			741,864						13,024,365
Inventories		3,159,210			714,397						3,873,607
Other current assets		281,533			0						281,533
Property, plant and equipment		9,552,544			702,722			(480,833	)		9,774,433
Investment		2,604,567			947						2,605,514
Goodwill								10,872,352			10,872,352
Other deposit		122,162			6,142						128,304
Amount due from related company		5,103,430			0						5,103,430
Total assets	$	35,091,673		$	2,341,924		$	10,391,519-		$	47,825,116
Liabilities and stockholders’ deficit
Accounts payable	$	109,681		$	11,974,152						12,083,833
Amount due to related parties		7,257,702			791,877			(443,846	)		7,605,733
Accrual		313,589			55,090						368,679
Line of credit/loan facilities		9,629,600									9,629,600
Bank loan		6,847,819			50,073						6,897,892
Capital lease – current portion		96,914									96,914
Income tax payable		(320,707	)								(320,707	)
Due to shareholders		112,385			180,232			2,200,000			2,492,617
Other current liabilities		7,815,617									7,815,617
Capital lease – noncurrent portion		188,305									188,305
Deferred tax liabilities		63,245									63,245
Total liabilities	$	32,114,150		$	13,051,424		$	0		$	46,927,728
NET ASSETS	$	2,977,523		$	(10,709,588	)	$	8,635,365		$	903,388
Stockholders’ equity:
Common stock		34,831			1			(1	)		34,831
Paid-in capital		3,753,577									3,753,577
Accumulated deficit		(810,885	)		(8,673,641	)-		8,636,654			(847,872	)
Accumulated other comprehensive loss					1,288			(1,288	)		0
Non-controlling interest					(2,037,148	)					(2,037,148	)
Total stockholders’ equity	$	2,977,523			(10,709,500	)		8,635,365			903,388

ACL Semiconductors Inc.

Pro forma Condensed Combined Statement of Operations

For the Six Months Ended June 30, 2012

	ACL			Jussey			Adjustments			Pro Forma
Net sales	$	73,778,901		$	2,329,331		$	-		$	76,108,232
Cost of revenue		(73,024,299	)		(2,315,634	)					(75,339,933	)
Gross profit (loss)		754,602			13,696						768,298
Selling, general and administrative expenses		(2,306,817	)		(1,468,208	)		(11,382	)		(3,786,406	)
Income (loss) from operations		(1,552,215	)		(1,454,511	)					(3,018,108	)
Other income (expenses)		(433,157	)		(152,690	)		(25,605	)		(306,072	)
Income (loss) from operations before income taxes		(1,985,372	)		(1,301,821	)		(36,987	)		(3,324,181	)
Income tax provision		-			(4,335	)					(4,353	)
Net income (loss)		(1,985,372	)		(1,306,175	)		(36,987	)		(3,328,534	)
Foreign currency translation gain(loss)		-			634						634
Income (Loss) before dividend		(1,985,372	)		(1,305,541	)		(36,987	)		(3,327,900	)
Dividend		(7	)		0
											(7	)
Income(Loss) before non-controlling interest		(1,985,379	)		(1,305,541	)		(36,987	)		(3,227,907	)
Non-controlling interest		-			207,795						207,795
Comprehensive loss	$	(1,985,379	)	$	(1,097,746	)	$	(36,987	)	$	(3,120,112	)
Per share information – basic and fully diluted:
Weighted average shares outstanding		30,109,898			1			(1	)		30,109,898
Net earnings (loss) per share, basic		(0.07	)		(1,097,746	)				$	(0.11	)

ACL Semiconductors Inc

Pro forma Condensed Combined Statement of Operations

For the Three Months Ended June 30, 2012

	ACL			Jussey			Adjustments			Pro Forma
Net sales	$	31,365,881		$	948,021		$	-		$	(30,109,898	)
Cost of sales		(30,976,050	)		(978,059	)					(31,954,109	)
Gross profit (loss)		389,831			(30,037	)					359,794
Selling, general and administrative expenses		(1,111,814	)		(745,706	)		(5,691	)		(1,863,211	)
Income (loss) from operations		(721,983	)		(775,743	)					(1,503,417	)
Other (expenses)		(397,720	)		48,734			(12,803	)		(361,788	)
Income (loss) from operations before income taxes		(1,119,703	)		(727,009	)		(18,494	)		(1,865,205	)
Income tax provision		-			(2,589	)					(2,589	)
Net income (loss)		(1,119,703	)		(729,598	)		(18,494	)		(1,867,794	)
Foreign currency translation gain(loss)		-			1,360						1,360
Net income(loss) before dividend		(1,119,703	)		(728,238	)		(18,494	)		(1,847,941	)
Dividend		(7	)		-						(7	)
Net income before non-controlling interest		(1,119,710	)		(728,238	)		(18,494	)		(1,866,442	)
Non-controlling interest		-			115,449						115,449
Comprehensive loss	$	(1,119,710	)	$	(612,789	)	$	(18,494	)	$	(1,750,993	)
Per share information – basic and fully diluted:
Weighted average shares outstanding		30,109,898			1			(1	)		30,109,898
Net earnings (loss) per share, basic		(0.04	)		(729,598	)				$	(0.06	)

ACL Semiconductors Inc

Notes to Condensed Combined Pro forma Financial Statements

Note 1. Description of the Transaction

On September 28, 2012, ACL Semiconductors Inc., a Delaware corporation (“ACL”), executed a Stock Sale and Purchase Agreements (the “S&P Agreements”) with the sole shareholder (the “Investor”) of Jussey Investments Limited, a British Virgin Islands corporation ("Jussey") who is the sole owner of one hundred percent (100%) of the outstanding shares of Jussey. Pursuant to the terms of the SPA, the shareholder agreed to sell common stock of Jussey on his hand which represented all shares of common stock of Jussey owned by the Investor, and ACL agreed to pay the whole amount of US$2,2 millions in full value as consideration. At the time of closing under the SPA, the Investor will transfer 100% ownership of such shares to ACL, and ACL will pay in cash at a total of $2,200,000 to the Investor in exchange for his Jussey Shares. The effect of the transaction will be to make Jussey and its subsidiaries wholly-owned and 80.00% owned subsidiaries of ACL, and to cause a change of control of Jussey. Following the closing, there will be no change of control in ACL.

The transaction is being accounted for as a “cash acquisition,” since the stockholders of Jussey will be paid by cash following the completion of the transaction. ACL is the legal and accounting acquirer in this merger and acquisition. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements for periods prior to the transaction will be the combination of ACL and Jussey and its subsidiaries, and will be recorded at the historical cost basis since the fair market value of Jussey is closed to its historical value. In addition, the new product line and related project sales which was calculated at discount cash flow model will be accounted for as goodwill and be amortized in accordance with the life of the projected contracts which will be three years or less. After completion of the transaction, ACL’s consolidated financial statements will include the assets and liabilities of ACL, Jussey and its subsidiaries, and the shareholders’ equity of ACL; the historical operations of ACL, Jussey and its subsidiaries, and the operations of ACL, Jussey and its subsidiaries from the closing date of the transaction.

Note 2. Presentation

The Pro forma condensed consolidated financial statements gives effect to the transaction as if occurred at the beginning of the periods presented.