UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 20-F



|o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|- | --------------------------------------------------------------------------------------------------



OR



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2015
|- | ------------------------------------------------------------------------------------------------------------------------------------



OR



|o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
|- | --------------------------------------------------------------------------------------------



OR



|o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------------------------



Commission file number 1-14542



ASIA PACIFIC WIRE & CABLE

CORPORATION LIMITED

(Exact name of Registrant as specified in its charter)



Bermuda

(Jurisdiction of incorporation or organization)



7/Fl. B, No. 132, Sec. 3

Min-Sheng East Road

Taipei, 105, Taiwan

Republic of China

(Address of principal executive offices)



Securities registered or to be registered pursuant to Section 12(b)
of the Act.



|Title of each class                     |  | Name of each exchange on which registered
|--------------------------------------- |  | -----------------------------------------
|Common Shares, par value 0.01 per share |  | NASDAQ Global Market                     



Securities registered or to be registered pursuant to Section 12(g)
of the Act.

None



Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act.

None



Indicate the number of outstanding shares of each of the issuer’s
classes of capital or common stock as of the close of the period covered by the annual report.

13,819,669 Common Shares



Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.

Yes  ̈ No x













If this report is an annual or transition
report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.    Yes  ̈ No  ̈



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.    Yes x No  ̈



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).    Yes x No
 ̈



Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and
large accelerated filer” in Rule 12b-2 of the Exchange Act.  Large accelerated Filer  ̈ Accelerated
filer  ̈  Non-accelerated filer x



Indicate by check mark which basis of accounting
the registrant has used to prepare the financial statements included in this filing: U.S. GAAP  ̈
International Financial Reporting Standards as issued by the International Accounting Standards Board x  Other
 ̈



If “Other” has been checked in
response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.     Item
17  ̈ Item 18  ̈



If this is an annual report, indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ̈ No
x














FORWARD-LOOKING STATEMENTS



Our disclosure and analysis in this Annual Report
on Form 20-F contain some forward-looking statements. Forward-looking statements give our current beliefs or expectations or forecasts
of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts.
Such statements may include words such as “anticipate,” “estimate,” “expect,” “intend,”
“plan,” “believe” and other words and terms of similar meaning in connection with any discussion of future
operating or financial performance.



Such statements are not promises or guarantees
and are subject to a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements
to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements.
Important factors that could cause or contribute to such differences include our ability to maintain and develop market share
for our products; global, regional or national economic and financial conditions, the recent global drop in demand for and the
pricing of commodities, including copper, our principal raw material, and their individual or collective impact on demand for
our products and services; the introduction of competing products or technologies; the extreme volatility of share prices on major
securities exchanges throughout the world, our inability to successfully identify, consummate and integrate acquisitions; our
potential exposure to liability claims; the uncertainty and volatility of the markets in which we operate; changes in laws or
regulations applicable to the Company in the markets in which we conduct business; the availability and price of copper, our principal
raw material; our ability to negotiate extensions of labor agreements on acceptable terms and to successfully deal with any labor
disputes; our ability to service and meet all requirements under our debt, and to maintain adequate credit facilities and credit
lines, in certain markets, our ability to compete effectively with state-owned enterprises (“SOEs”), which may receive
governmental subsidies to enhance results or receive preferred vendor status in state controlled projects, our ability to make
payments of interest and principal under our existing and future indebtedness; our ability to increase manufacturing capacity
and productivity; the fact that we have operations outside the United States that may be materially and adversely affected by
acts of terrorism, war and political and social unrest, or major hostilities; increased exposure to political and economic developments,
crises, instability, terrorism, civil strife, expropriation and other risks of doing business in foreign markets; economic consequences
arising from natural disasters and other similar catastrophes, such as floods, earthquakes, hurricanes and tsunamis; the fact
that Asia Pacific Wire & Cable Corporation Limited (“APWC” or the “Company”) is a holding company
that depends for income upon distributions from operating subsidiaries, most of which are not wholly-owned and for which there
may be restrictions on the timing and amount of distributions; price competition and other competitive pressures; the impact of
climate change on our business and operations and on our customers; tax inefficiencies associated with our cross-border operations,
including without limitation, limitations on our ability to utilize net losses within our group of companies for income tax purposes;
fluctuations in currency, exchange and interest rates, operating results and the impact of technological changes and other factors
that are discussed in this report and in our other filings made with the Securities and Exchange Commission (the “SEC”
or the “Commission”).



In particular, these statements include, among
other things, statements relating to:





|• | our business strategy;
|- | ----------------------
|  |                       










|• | our prospects for future revenues and profits in the markets in which we operate;                                                                
|- | -------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                  
|• | the impact of political, legal or regulatory changes or developments in the markets in which we do business;                                     
|  |                                                                                                                                                  
|• | our dependence upon the level of business activity and investment by our customers for the generation of our sales revenue;                      
|  |                                                                                                                                                  
|• | our reliance on our majority shareholder for research and development relating to our product lines                                              
|  |                                                                                                                                                  
|• | the fact that our Common Shares are traded on a national exchange in the United States;                                                          
|  |                                                                                                                                                  
|• | our dependence on a limited number of suppliers for our raw materials and our vulnerability to fluctuations in the cost of our raw materials; and
|  |                                                                                                                                                  
|• | our liquidity.                                                                                                                                   
































We undertake no obligation to update any forward-looking
statements or other information contained in this Annual Report, whether as a result of new information, future events or otherwise,
except as required by law. You are advised, however, to consult any additional disclosures we make in our filings with the SEC.
Also note that we provide a cautionary discussion of risks and uncertainties under the “Risk Factors” section of this
Annual Report. These are factors that we think could cause our actual results to differ materially from expected results. Other
factors besides those listed there could also adversely affect us.



This discussion is permitted by the Private
Securities Litigation Reform Act of 1995.






























OTHER CONVENTIONS



Unless otherwise specified, all references in
this Annual Report to “Thailand” are to the Kingdom of Thailand, all references to “Singapore” are to The
Republic of Singapore, all references to “Taiwan” are to Taiwan, The Republic of China, all references to “China”
and to the “PRC” are to The People’s Republic of China (for the purpose of this Annual Report, excluding Hong
Kong and Macau), all references to “Australia” are to the Commonwealth of Australia and all references to the “U.S.”
are to the United States of America.



Most measurements in this Annual Report are given
according to the metric system. Standard abbreviations of metric units (e.g., “mm” for millimeter)
have been employed without definitions.  All references in this Annual Report to “tons” are to metric tons, which
are equivalent in weight to 2,204.6 pounds.



With respect to measurements relating to the
manufacture of wire and cable products, references to “pkm” are to kilometers of twisted pairs of copper wire.



Dollar amounts in this Annual Report are expressed
in thousands ($000), except where otherwise indicated or with respect to earnings per share.


























Part I



|Item 1: | Identity of Directors, Senior Management and Advisers
|------- | -----------------------------------------------------



(Not applicable)



|Item 2: | Offer Statistics and Expected Timetable
|------- | ---------------------------------------



(Not applicable)



|Item 3: | Key Information
|------- | ---------------



3.1	       Selected Consolidated Financial Data



The following selected consolidated financial
data is derived from the consolidated financial statements of the Company for the years ended December 31, 2012, 2013, 2014
and 2015, prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”).



Until and including our consolidated
financial statements included in our annual report on Form 20-F for the year ended December 31, 2012, we prepared our
consolidated financial statements in accordance with generally accepted accounting principles accepted in the United States
(“U.S. GAAP”). As required by First Time Adoption of International Financial Reporting Standards, or IFRS 1,
financial results for the year ended December 31, 2012 were adjusted in our annual report for the fiscal year ended
December 31, 2013 (the “2013 Annual Report”) in accordance with IFRS and differ from the results reported in
the annual reports filed with the Commission prior to the 2013 Annual Report.



1






The selected data set forth below should be read
in conjunction with, and is qualified in its entirety by, the discussion in “Item 5: Operating and Financial Review and Prospects”
and the consolidated financial statements and the notes thereto included in “Item 18: Financial Statements.”



|                                                             |  | For the Year Ended December 31,
|------------------------------------------------------------ |  | -------------------------------
|                                                             |  | 2015                           
|                                                             |  | (in US$ thousands)             
|Income Statement Data:                                       |  |                                
|Net sales                                                    |  | $                              
|Costs of sales                                               |  |                                
|Gross profit                                                 |  |                                
|Other operating income                                       |  |                                
|Selling general & administrative expenses                    |  |                                
|Other operating expenses                                     |  |                                
|Operating profit/(loss)                                      |  |                                
|Finance cost                                                 |  |                                
|Finance income                                               |  |                                
|Share of profit of an associate                              |  |                                
|Gain on disposal of investment                               |  |                                
|Loss on disposal of a subsidiary                             |  |                                
|Gain on liquidation of subsidiaries                          |  |                                
|Exchange gain (loss)                                         |  |                                
|Other income                                                 |  |                                
|Other expenses                                               |  |                                
|Income/(loss) from continuing operations before income taxes |  |                                
|Income taxes expenses                                        |  |                                
|Net income/(loss)                                            |  | $                              
|Net income/(loss) attributable to non-controlling interests  |  |                                
|Net income/(loss) attributable to APWC                       |  |                                
|Basic and diluted earnings/(loss) per share(1)               |  |                                

___________



|(1) | The calculation of the earnings per share is based on 13,830,751, 13,820,200, 13,819,669 and 13,819,669 basic and diluted weighted common shares issued and outstanding for the year ended December 31, 2012, 2013, 2014 and 2015, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2








|                                |  | As of December 31,
|------------------------------- |  | ------------------
|                                |  | 2015              
|                                |  | (in US$ thousands)
|Balance Sheet Data:             |  |                   
|Cash and cash equivalents       |  | $                 
|Working capital                 |  |                   
|Total assets                    |  |                   
|Total debt                      |  |                   
|Net assets                      |  |                   
|Capital stock                   |  |                   
|Total APWC shareholders’ equity |  |                   



| | 3.2 | Exchange Rates
| | --- | --------------



Unless otherwise specified, all references in
this Annual Report to “$,” “U.S. dollars” or “US$” are to United States dollars; all references
to “Bt,” “Thai Baht” or “Baht” are to Baht, the legal tender currency of Thailand; all references
to “S$” are to Singapore dollars, the legal tender currency of Singapore; all references to “A$” are to
Australian dollars, the legal tender currency of Australia; and all references to “RMB” are to Chinese Renminbi, the
legal tender currency of China.



3






Unless otherwise noted, for the convenience
of the reader, translations of amounts from Baht, Singapore dollars, Renminbi and Australian dollars to U.S. dollars have been
made at the respective noon buying rates in New York City for cable transfers in those currencies as certified for customs purposes
by the Federal Reserve Bank of New York (the “Noon Buying Rate”) on December 31, 2015. The respective Noon Buying
Rates on December 31, 2015 were US$ 1.00 = Bt 36.08; S$ 1.4166; RMB 6.4778; and A$ 1.3725. The respective Noon Buying Rates on
March 31, 2016, the latest practicable date before publication of this Annual Report, were US$ 1.00 = Bt 35.09; S$1.3462;
RMB 6.4480 and A$ 1.3026. No representation is made that the foreign currency amounts could have been or could be converted into
U.S. dollars on these dates at these rates or at any other rates.



Sources: Federal Reserve Bulletin, Board of Governors of the Federal
Reserve System. Federal Reserve Statistical Release H.10, from the website of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov.



Thailand



The Thai Baht is convertible into foreign currencies
and is subject to a managed float against a basket of foreign currencies, the most significant of which is the U.S. dollar. The
composition of the basket for determining the value of the Baht is not made public by the Bank of Thailand. The following tables
set forth, for the periods indicated, certain information concerning the Noon Buying Rate of the Thai Baht. No representation is
made that the Baht or U.S. dollar amounts referred to herein could have been or could be converted into U.S. dollars or Baht, as
the case may be, at any particular rate or at all.



|Year Ended December 31, |  | At Period End  |       | Average(1) |  | High |       | Low
|----------------------- |  | -------------- | ----- | ---------- |  | ---- | ----- | ---
|                        |  | (Bt per $1.00)
|                        |  |                |       |            |  |      |       |    
|2011                    |  |                | 31.51 |            |  |      | 30.46 |    
|2012                    |  |                | 30.59 |            |  |      | 30.99 |    
|2013                    |  |                | 32.68 |            |  |      | 30.85 |    
|2014                    |  |                | 32.90 |            |  |      | 32.54 |    
|2015                    |  |                | 36.08 |            |  |      | 34.39 |    



|(1) | Average means the average of the Noon Buying Rates on the last day of each month during a year.
|--- | -----------------------------------------------------------------------------------------------



4






The high and low exchange rates for the six months
preceding the date of this Annual Report were:



|Month         |  | High |       | Low
|------------- |  | ---- | ----- | ---
|October 2015  |  |      | 36.48 |    
|November 2015 |  |      | 35.99 |    
|December 2015 |  |      | 36.17 |    
|January 2016  |  |      | 36.33 |    
|February 2016 |  |      | 35.77 |    
|March 2016    |  |      | 35.59 |    



Sources: Federal Reserve Bulletin, Board of Governors of the Federal
Reserve System. Federal Reserve Statistical Release H.10, from the website of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov.



Singapore



The Singapore dollar is convertible into foreign
currencies and floats against a trade-weighted basket of foreign currencies, the composition of which is not made public by Singapore’s
central bank, the Monetary Authority of Singapore, but of which the U.S. dollar is a component. The following tables set forth,
for the periods indicated, certain information concerning the Noon Buying Rate of the Singapore dollar. No representation is made
that the Singapore dollar or U.S. dollar amounts referred to herein could have been or could be converted into U.S. dollars or
Singapore dollars, as the case may be, at any particular rate or at all.



5






|     |  | At Period End  |       | Average(1) |  | High |       | Low
|---- |  | -------------- | ----- | ---------- |  | ---- | ----- | ---
|     |  | (S$ per $1.00)
|     |  |                |       |            |  |      |       |    
|2011 |  |                | 1.295 |            |  |      | 1.260 |    
|2012 |  |                | 1.221 |            |  |      | 1.245 |    
|2013 |  |                | 1.262 |            |  |      | 1.253 |    
|2014 |  |                | 1.324 |            |  |      | 1.270 |    
|2015 |  |                | 1.417 |            |  |      | 1.378 |    

______________



|(1) | Average means the average of the Noon Buying Rates on the last day of each month during a year.
|--- | -----------------------------------------------------------------------------------------------



The high and low exchange rates for the six months
preceding the date of this Annual Report were:



|Month         |  | High |       | Low
|------------- |  | ---- | ----- | ---
|October 2015  |  |      | 1.434 |    
|November 2015 |  |      | 1.424 |    
|December 2015 |  |      | 1.422 |    
|January 2016  |  |      | 1.441 |    
|February 2016 |  |      | 1.427 |    
|March 2016    |  |      | 1.401 |    



Sources: Federal Reserve Bulletin, Board of Governors of the Federal
Reserve System. Federal Reserve Statistical Release H.10, from the website of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov.



China



The PRC government imposes control over its
foreign currency reserves in part through direct regulation of the conversion of Renminbi into foreign currencies, including the
conversion rate limitations on capital transfers and through restrictions on foreign trade and other regulatory impediments to
the free transferability of capital. The following tables set forth, for the periods indicated, certain information concerning
the Noon Buying Rate of the Renminbi. No representation is made that the Renminbi or U.S. dollar amounts referred to herein could
have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all.



6








|Year Ended December 31, |  | At Period End   |       | Average(1) |  | High |       | Low
|----------------------- |  | --------------- | ----- | ---------- |  | ---- | ----- | ---
|                        |  | (RMB per $1.00)
|                        |  |                 |       |            |  |      |       |    
|2011                    |  |                 | 6.294 |            |  |      | 6.460 |    
|2012                    |  |                 | 6.230 |            |  |      | 6.299 |    
|2013                    |  |                 | 6.054 |            |  |      | 6.141 |    
|2014                    |  |                 | 6.205 |            |  |      | 6.170 |    
|2015                    |  |                 | 6.478 |            |  |      | 6.287 |    

_____________



|(1) | Average means the average of the Noon Buying Rates on the last day of each month during a year.
|--- | -----------------------------------------------------------------------------------------------



The high and low exchange rates for the six months
preceding the date of this Annual Report were:



|Month         |  | High |       | Low
|------------- |  | ---- | ----- | ---
|October 2015  |  |      | 6.359 |    
|November 2015 |  |      | 6.395 |    
|December 2015 |  |      | 6.490 |    
|January 2016  |  |      | 6.593 |    
|February 2016 |  |      | 6.580 |    
|March 2016    |  |      | 6.550 |    



Sources: Federal Reserve Bulletin, Board of Governors of the Federal
Reserve System. Federal Reserve Statistical Release H.10, from the website of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov.



7






Australia



The following tables set forth, for the periods
indicated, certain information concerning the Noon Buying Rate of the Australian dollar. No representation is made that the Australian
dollar or U.S. dollar amounts referred to herein could have been or could be converted into U.S. dollars or Australian dollars,
as the case may be, at any particular rate or at all.



|Year Ended December 31, |  | At Period End  |       | Average(1) |  | High |       | Low
|----------------------- |  | -------------- | ----- | ---------- |  | ---- | ----- | ---
|                        |  | (A$ per $1.00)
|                        |  |                |       |            |  |      |       |    
|2011                    |  |                | 0.976 |            |  |      | 0.968 |    
|2012                    |  |                | 0.962 |            |  |      | 0.964 |    
|2013                    |  |                | 1.120 |            |  |      | 1.048 |    
|2014                    |  |                | 1.224 |            |  |      | 1.115 |    
|2015                    |  |                | 1.372 |            |  |      | 1.342 |    

________________



|(1) | Average means the average of the Noon Buying Rates on the last day of each month during a year.
|--- | -----------------------------------------------------------------------------------------------



The high and low exchange rates for the six
months preceding the date of this Annual Report were:



|Month         |  | High |       | Low
|------------- |  | ---- | ----- | ---
|October 2015  |  |      | 1.424 |    
|November 2015 |  |      | 1.423 |    
|December 2015 |  |      | 1.409 |    
|January 2016  |  |      | 1.459 |    
|February 2016 |  |      | 1.417 |    
|March 2016    |  |      | 1.394 |    



Sources: Federal Reserve Bulletin, Board of Governors of the Federal
Reserve System. Federal Reserve Statistical Release H.10, from the website of the Board of Governors of the Federal Reserve System
at  http://www.federalreserve.gov.



8






| | 3.3 | Risk Factors
| | --- | ------------



You should carefully consider the following risks
before you decide to buy our Common Shares. If any one of these risks or uncertainties were to occur, our business, financial condition,
results and performance could be seriously harmed and/or the price of our Common Shares might significantly decrease. The risks
and uncertainties described in this Annual Report on Form 20-F are not the only ones facing us. Additional risks and uncertainties
that currently are not known to us or that we currently believe are immaterial also may adversely affect our businesses, results
of operations, condition (financial or otherwise) and the value of any investment in our Common Shares.



| | 3.3.1 | The auditors’ report included in this annual report was prepared in reliance on audit work; procedures and quality controls which were not inspected by the Public Company Accounting Oversight Board and, as such, investors may be deprived of the benefits of such inspection.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Auditors of companies that are registered with
the SEC and traded publicly in the United States, including our independent registered public accounting firm, must be registered
with the U.S. Public Company Accounting Oversight Board (“PCAOB”), and are required by the laws of the United States
to undergo regular inspections by the PCAOB to assess their compliance with PCAOB rules and requirements and professional standards
applicable to independent, registered public accounting firms. Because the Company has substantial operations within China, our
auditor relied on its China affiliates to perform the audit on the Company’s consolidated financial statements in so far
as they relate to the condition (financial and otherwise) and results of operations of the Company in China and its overall impact
on the consolidated financial statements of the Company as a whole. The PCAOB is currently unable to conduct inspections of the
work of our auditor’s affiliates in China as it is prohibited by the Chinese authorities. Investors should be mindful that
the risk of inaccurate or incomplete reporting may be increased because our auditor’s work related to our operations in
China is not currently inspected by the PCAOB.



9






The lack of PCAOB’s inspection of the audit
work performed in China prevents the PCAOB from regularly evaluating the audit work of any auditor that is performed in China including
the audit work performed by our auditor. As a result, investors may be deprived of the full benefits of PCAOB inspections.



The inability of the PCAOB to conduct inspections
of audit work performed in China makes it more difficult to evaluate the effectiveness of our auditor’s audit procedures
as compared to auditors in other jurisdictions that are subject to PCAOB inspections on all of their work. As a result, investors
may have reservations regarding our reported financial information and the accuracy and completeness of our consolidated financial
statements.



| | 3.3.2 | Risks Related to the Continuing Impacts of the Global Economic and Financial Crisis
| | ----- | -----------------------------------------------------------------------------------



Shortly after the 2008 global financial and
economic crises, the U.S. Federal Reserve Bank (the “U.S. Fed”) and the central banks of most of the leading industrialized
nations lowered their short-term interest rates to near zero in an effort to stimulate borrowing and increase economic activity.
The U.S. Fed and certain other of those central banks also undertook a series of government bond repurchase programs to enhance
market liquidity and to maintain a very low interest rate environment. The extremely low cost of borrowing, which continued for
an extremely long period of time, enhanced liquidity and facilitated borrowing to stimulate investment. Some economists and policymakers
have expressed concern that this artificially low interest rate environment will have negative repercussions once interest rates
start to rise. Recently, the U.S. Fed and certain other central banks have curtailed their bond repurchase programs. In December
2015, the U.S. Fed raised its benchmark rate by 25 basis points (or .25%), which was the first U.S. central bank interest rate
rise since it benchmark rate was reduced to near zero following the 2008 great recession. An increase in U.S dollar borrowing
costs could adversely affect our business in the markets where we have operating plants (Thailand, China, Singapore and Australia).
Our financial statements for our operating subsidiaries in those markets are reported and denominated in local currencies and
when translated into US dollars, our reporting currency, these operating subsidiaries would suffer a decrease in reported revenue
and operating profits due to foreign currency translation if one takes into account only increased U.S. dollar borrowing costs.
Moreover, our copper purchases are based on U.S. dollar quotations, which mean the operating subsidiaries would have to pay more
in local currency in order to meet their trade payable obligations.



10






Impact of Stronger U.S. Dollar



The rate of exchange for the U.S. Dollar has
strengthened materially over the course of 2015 as measured against most of other major global currencies. As our raw materials
and most other costs of production are priced in U.S. Dollars, the increase in the value of the U.S. Dollar, particularly as measured
against the currencies in which our operating subsidiaries generate revenue, has an overall net negative effect on our financial
results.



Price Volatility for our Principal Raw Material



A comparison of copper prices on the London
Metals Exchange (the “LME”), between year-end 2014 and year-end 2015 shows thatthe average price for
copper fell from $6,860 per metric ton to $5,502 per metric ton by year-end 2015, representing a 19.80% price decline. The effect
of that decrease has adversely impacted the Company’s ability to improve its overall financial results. The decrease in
the average LME copper price over 2015 was the principal contributing factor to the drop in 2015 of our average selling price
compared with 2014.



11






Copper prices on the LME dropped during 2015
at one point to a price lower than $4,516 per ton. Consistent with industry practice, customers would expect that the selling prices
of our products, particularly of copper based wires, would therefore be lower than our product prices at the end of 2014. The decrease
in copper prices and other commodity prices also resulted in a decreased turnover for the entire year, as customers delayed placing
orders with the Company or reduced the quantity of such orders in anticipation of a possible further reduction in copper prices.
A further decrease in copper prices would likely have an adverse effect on the revenues of the Company.



The Company is unable to determine the precise
impact of the volatility of copper prices, and the fragile state of the global recovery, on its operations and cash flow, since
its operating results are also affected by factors that are, or may be, unrelated to the economic volatility and the downward pressures
on commodity prices, such as the completion of routine purchase cycles by customers and the completion, expansion or contraction
of large infrastructure projects. However, the Company is of the opinion that the falling copper prices have negatively affected
the Company’s operations and cash flow. The Company believes that any efforts to forecast likely future performance with
any degree of specificity would be fraught with uncertainty. Accordingly, the Company cautions against placing reliance on any
efforts to identify trends for the foreseeable future.



12






| | 3.3.3 | Risks Related to the Common Shares and the Company
| | ----- | --------------------------------------------------



Consolidation of Charoong Thai Group Accounts



As of December 31, 2015, the Company effectively
owned 50.93% of the issued and outstanding shares of Charoong Thai Wire and Cable Public Company Limited (“Charoong Thai”
or “CTW”), a decrease from the Company’s initial ownership percentage which was attributable to the exercise
of warrants or conversion of convertible securities by third parties. The Company’s present intention is to maintain majority
ownership of the voting securities of Charoong Thai. However, there may be circumstances under which the Company cannot maintain
majority ownership of Charoong Thai. In the event Charoong Thai were to make a further offering of voting securities, or securities
convertible into or exchangeable for voting securities, and the Company was not in a position to fund or finance its participation
in the offering, the ownership interest of the Company in Charoong Thai could fall below a level necessary for consolidated treatment,
and the Company may lose the controlling interest in Charoong Thai. If that were the case, the accounts of the Charoong Thai group,
which includes all of the Company’s Thailand operations, would not be consolidated under IFRS, but instead would be accounted
for under the equity method. In such an event, the Company’s accounts would show a significant decrease in revenue and most
categories of assets and liabilities, which events could have a material adverse effect on the value of the Common Shares.



13






Potential Illiquidity of Common Shares



Approximately 75.5% of our Common Shares are
either unregistered securities or registered securities held by affiliates (or were repurchased by the Company), which are subject
to restrictions on trading. Accordingly, approximately 75.5% of our Common Shares are not fully liquid investments. APWC has been
listed on NASDAQ since April 2011; however, the volume of trading in our Common Shares has not been significant. The value of our
Common Shares may be impacted negatively by their relative illiquidity when compared to the publicly-traded shares of many other
issuers.



| | Control of the Company Rests with Majority Shareholder; Controlled Company Exemption; Risks Related to PEWC
| | -----------------------------------------------------------------------------------------------------------



As the majority shareholder, Pacific Electric
Wire & Cable Co., Ltd. (“PEWC”), a Taiwanese company, has sufficient votes to control the outcome of any matters
presented for a shareholder vote, including the election of each member of the Board of Directors of the Company (“Board
of Directors”). PEWC may vote its shares in the Company in the manner that it sees fit. In addition, subject to applicable
securities laws, PEWC may sell, convey or encumber all or a portion of its ownership interest in the Company without regard to
the best interests of the other shareholders of the Company except to the extent that it is prohibited from engaging in conduct
oppressive to non-controlling interests under applicable law.



The Common Shares of the Company are traded on
the NASDAQ Global Market tier. However, as the Company has a more than fifty percent (50%) shareholder, the Company is entitled
to rely upon a “controlled company exemption” to the requirement that a company have a board of directors comprised
of a majority of independent directors in order to be listed on NASDAQ. At present, a majority of the board of directors of the
Company is affiliated with PEWC.



14






PEWC was delisted from the Taipei Stock Exchange
in 2003 following the disclosure of a major corporate scandal involving fraud and embezzlement by certain former executives of
PEWC, one or more of whom are now serving prison sentences for their actions. Commencing in 2004, PEWC brought a number of actions
in different jurisdictions against those former executives and others seeking to recover substantial assets that had been misappropriated.
Some of those actions are ongoing. PEWC is still seeking to recover financially, and in terms of its market reputation, from the
malfeasance of those former executives. The financial and governance problems experienced by PEWC increase the uncertainty regarding
its ability to perform under the Composite Services Agreement between PEWC and the Company, although to date PEWC has met its obligations
under that agreement. (See---section 10.3 Material Contracts).



Limited Trading Volume



Although our Common Shares are traded on the
NASDAQ Global Market tier, the trading and demand for our Common Shares has been limited. As a consequence, shareholders may find
that their ability to sell their Common Shares quickly or in substantial amounts is adversely affected by the limited public trading
market. Thinly-traded equity can be more volatile than equity securities traded in an active trading market. The high and low daily
closing prices for our Common Shares during the past 24 months (March 2014 – March 2016) were $2.99 and $1.2, respectively.
In the future, our Common Shares may experience significant price fluctuations which could adversely affect the value of your ownership
interest in the Company.



15






Disclosure Controls and Procedures and Internal Control over Financial
Reporting



Our management is
responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Rule 13a-15(f)
under the Securities Exchange Act of 1934 (the “Exchange Act”).



Based on the Company’s
evaluation under the applicable framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”),
our management, including our chief executive officer (“CEO”) and chief financial officer (“CFO”), concluded
that there was not any material weakness in the Company’s internal controls over financial reporting for the fiscal year
ended December 31, 2015. However, in certain prior years, such as the year ended December 31, 2014, management of the
Company, including its CEO and CFO, did conclude that there then existed one or more material weaknesses. While your management
took remedial measures to address the material weaknesses identified as of year-end 2014, the Company cannot be certain that those
remedied material weaknesses will not re-occur or that new material weaknesses will not take place in the future.



Reporting of Financial Results



The Company is currently compliant with its reporting
obligations under the Exchange Act. As a foreign private issuer, the Company is not required by the rules of the Commission to
provide financial results on a quarterly or semi-annual basis. In addition, Bermuda law does not require the Company to provide
interim financial information to its shareholders, whether on a quarterly or semi-annual basis. As such, investors may not have
the same access to financial information of the Company as they customarily receive in the case of a domestic issuer disclosing
quarterly results on a Form 10-Q. Under the NASDAQ rules; however, listed issuers are required to report semi-annual unaudited
financial results, which the Company has been doing since its listing on NASDAQ.



16






Potential Conflict of Certain Officers and Directors



We have three independent directors; the other
six members of the Board of Directors are also directors or officers or affiliated with PEWC, the majority shareholder. Certain
of our officers are also affiliated with PEWC. In each case, they may be subject to potential conflicts of interest. In addition,
certain of our officers and directors who are also officers and/or directors of PEWC may be subject to conflicts of interest in
connection with, for example, pursuing corporate opportunities in which we and PEWC or one of its affiliates have competing interests,
and in the performance by us and PEWC of our respective obligations under existing agreements, including the Composite Services
Agreement (discussed in section 10.3). In addition, some of these persons will devote time to the business and affairs of PEWC
and its affiliates as is appropriate under the circumstances, which could reduce the amount of time available for overseeing or
managing our business and affairs. Notwithstanding any such potential conflicts, however, such individuals, in their capacities
as our directors and officers, are subject to fiduciary duties to our shareholders.



The Bermuda Companies Act 1981, as amended (the
“Companies Act”), subjects our officers and directors to certain fiduciary standards in the exercise of their executive
and management duties on behalf of the Company. Under the Companies Act, an officer of ours (which term includes our directors)
is subject to a duty of care requiring him to act honestly, in good faith and in the best interests of the Company in the discharge
of his duties and to, among other things, give notice to the Board of Directors at the first opportunity of any interest he has
in any material contract or proposed material contract with us or any of our subsidiaries. The Companies Act also prohibits us,
subject to certain exceptions, from making loans to any directors without first obtaining the consent of shareholders holding
in the aggregate not less than nine-tenths of the total voting rights of all the shareholders having the right to vote at any
shareholders meeting. We do not make any loans to our directors or executive officers in accordance with the provisions of the
Sarbanes-Oxley Act of 2002.



17






Holding Company Structure; Potential Restrictions on the Payment
of Dividends



We have no direct business operations other than
our ownership of the capital stock of our subsidiaries and affiliates and certain investments in the wire and cable business. While
we have no present intention to pay dividends, should we decide in the future to do so, as a holding company our ability to pay
dividends and meet our other obligations will depend upon the amount of distributions, if any, received from our operating subsidiaries
and other holdings and investments. Our operating subsidiaries and other holdings and investments, from time to time, may be subject
to restrictions on their ability to make distributions to us, including as a result of restrictive covenants contained in loan
agreements, restrictions on the conversion of local currency earnings into U.S. dollars or other hard currency and other regulatory
restrictions. For example, PRC legal restrictions permit payments of dividends by our business entities in the PRC only out of
their retained earnings, if any, determined in accordance with relevant PRC accounting standards and regulations. Under PRC law,
such entities are also required to set aside a portion of their net income each year to fund certain reserve funds. These reserves
are not distributable as cash dividends. The foregoing restrictions may also affect our ability to fund operations of one subsidiary
with dividends and other payments received from another subsidiary.



18






Corporate Matters; Limited Recourse; Limited Enforceability



We are incorporated in and organized pursuant
to the laws of Bermuda. In addition, all of our directors and officers reside outside the United States and our material assets
are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United
States upon such persons or to realize against them in courts of the United States upon judgments predicated upon civil liabilities
under the United States federal securities laws. Even if investors are successful in realizing against such persons in courts of
the United States, the laws of Taiwan may render such investors unable to enforce the judgment against the Company’s assets
or the assets of its officers and directors. Also, investors may have difficulty in bringing an original action based upon the
United States federal securities law against such persons in the Taiwan courts. Additionally, we have been advised by our legal
counsel in Bermuda, Appleby Global (Bermuda) Limited, that there is doubt as to the enforcement in Bermuda, in original actions
or in actions for enforcement of judgments of United States courts, of liabilities predicated upon U.S. federal securities laws,
although Bermuda Courts will enforce foreign judgments for liquidated amounts in civil matters subject to certain conditions and
exceptions. As a result, shareholders may encounter more difficulties in enforcing their rights and protecting their interests
in the face of actions taken by management, the Board of Directors or controlling shareholders than they would if the Company were
organized under the laws of the United States or one of the states therein, or if the Company had material assets located within
the United States or some of the directors and officers were resident within the United States. See “Enforceability of Certain
Civil Liabilities” for additional information.



19






| | 3.3.4 | Risks Relating to Our Business
| | ----- | ------------------------------



Risks Relating to Copper



Copper is the principal raw material we use,
accounting for a majority of the cost of sales. We purchase copper at prices based on the average prevailing international spot
market prices on the LME for copper for the one month prior to purchase, or the first five days of the current average copper price.
The price of copper is affected by numerous factors beyond our control, including international economic and political conditions,
supply and demand, inventory levels maintained by suppliers, actions of participants in the commodities markets and currency exchange
rates. As with other costs of production, changes in the price of copper may affect the Company’s cost of sales. Whether
this has a material impact on our operating margins and financial results depends primarily on the Company’s ability to adjust
selling prices to its customers, such that increases and decreases in the price of copper are fully reflected in those selling
prices. Most of our sales of manufactured products reflect the cost of copper used to manufacture those products at the time the
products are ordered. In the ordinary course of business we maintain inventories of raw materials and finished products reasonably
necessary for the conduct of our business. These inventories typically reflect the cost of copper prevailing in the market at the
time of purchase. A long-term decrease in the price of copper would require the Company to revalue its inventory at periodic intervals
to the then net realizable value, which could be below cost. Copper prices have been subject to considerable volatility and it
is not always possible to manage our copper purchases and inventory so as to neutralize the impact of copper price volatility.
Accordingly, significant volatility in copper prices could have an adverse effect on our operations. No assurance can be given
that such volatility will not recur.



20






Risks related to our Customer Base and our Geographic Markets



Our sales of manufactured and distributed products
are made primarily to customers that use our products as components in their own products or in construction or infrastructure
projects in which they participate. The volume of our sales is significantly correlated with overall economic conditions in the
markets in which we compete, including how much our customers invest in their own product manufacturing or project development.
Increases or decreases in economic activity and investment in the markets where we operate generally will result in higher or lower
sales volume and higher or lower net income for the Company.



Risks relating to Force Majeure Events



Operations and other business conducted at our
plants and other facilities are at risk to acts of god consisting of uncontrollable natural and climatic events (often referred
to as force majeure events), such as the 2011 flooding in much of Thailand that severely disrupted our manufacturing operations
at the Siam Pacific Electric Wire and Cable Ltd. (“Siam Pacific”) plant, a subsidiary 100% controlled by Charoong
Thai. The flooding affected much of our Thai operations and forced the suspension of operations of Siam Pacific for a period of
five months resulting in a 20% reduction in product sales in 2011. The adverse impact of the flooding carried over into 2012.
Since then the insurance coverage in Thailand includes fire and theft, but does not include flood or losses due to business interruption
as coverage for business losses due to flooding is generally not available in Thailand or is considered to be prohibitively costly
in the limited circumstances where it is available.



21






Risks Relating to North Asia Region



Economic Reform Measures in the PRC May Adversely Affect the
Company’s Operations or Financial Condition



The PRC government has gradually moved away from
a planned economic model and implemented economic reform measures emphasizing decentralization, utilization of market forces in
the development of the economy and a high level of management autonomy. When General Secretary Xi Jinping took office in December
2012, the government decreased its focus on export-oriented activities and placed greater emphasis on building up rural areas in
China, including integrating a number of primitive, largely inaccessible agricultural areas into the national economy. However,
many of the reforms are unprecedented and may be subject to revision, modification or termination based on the outcomes of the
reform efforts and other considerations, including their impact on societal stability. There is not sufficient administrative or
judicial precedent to allow the Company to determine with any degree of certainty how the reforms will impact our business in China.



Recent Macro-economic Concerns



China has risen to be the world’s second
largest economy measured by gross domestic product. Increasingly, over the past year there has been global concern about the possibility
of the current economic downturn in China becoming more severe and leading to a possible recession. There is widespread concern
about a possible “housing bubble” in China. A downturn in residential construction is one factor that could adversely
affect the Company’s business in China. A broader recession in China would likely have a more profound adverse impact on
our business results in that market.



22






Any Decrease in Real Estate Development and Construction Activities
in China May Affect the Company’s Operations or Financial Condition



Our wire and cable products are manufactured
and sold in China and are used in the commercial and residential real estate industry and in infrastructure development. Therefore,
the demand for our wire and cable products is affected by the pace of modernization and the growth of the real estate industry
in China, which could in turn be affected by a number of factors, such as the level of governmental investment in infrastructure
development, the strength of the commercial and residential real estate markets, the level of disposable income, consumer confidence,
unemployment rate, interest rates, credit availability and volatility in the stock markets.



To dampen an over-heated real estate market,
the PRC government implemented a series of measures in the real estate market. The real estate market in China may also be negatively
affected by the reform of the real estate tax system in respect of levying real estate tax on individually owned real estate which
is not used for a business purpose, which has already been implemented by certain local government authorities and may be expanded
nationwide sometime in the future.



Any decrease in commercial and residential real
estate development and construction activities would certainly affect the demand for our manufactured products and may affect the
Company’s results of operations or financial condition.



23






The PRC Legal System May Limit the Company’s Remedies



The PRC legal system is a civil law system based
on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since the late 1970s,
the PRC central government has promulgated a large volume of laws and regulations governing economic matters such as foreign investment,
corporate organization and governance, commerce, taxation and trade. In particular, since reforms were first introduced in 1979,
the PRC legislation and regulations have significantly enhanced the protections provided to various forms of foreign investment
in China. Foreign investment laws and regulations in China are evolving and the interpretations of many laws, regulations and rules
are not always uniform. Accordingly, enforcement of these laws, regulations and rules involves uncertainties, which may limit the
remedies available to us in the event of any claims or disputes with third parties. In addition, any litigation in China may be
protracted and could result in substantial costs and diversion of resources and management attention. As the PRC legal system continues
to evolve, we cannot predict future developments in the PRC legal system, including promulgation of new laws, changes to existing
laws or the interpretation and enforcement thereof.



24






Uncertainties Exist with respect to the Enactment Timetable,
Interpretation and Implementation of Draft PRC Foreign Investment Law and how it may affect the Company’s Corporate Governance



On January 19, 2015, the PRC Ministry of
Commerce published a discussion draft of the proposed PRC Foreign Investment Law (“Foreign Enterprise Law”), aiming
to, upon its enactment, replace the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity
Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise
Law, together with their implementation rules. The draft Foreign Investment Law embodies an expected PRC regulatory trend to rationalize
its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to better
align the corporate legal requirements for both foreign and domestic investments. The PRC Ministry of Commerce is currently soliciting
comments on this draft and uncertainties exist with respect to its enactment timetable, interpretation and implementation. The
draft Foreign Investment Law, if enacted and implemented as proposed, may materially affect our relevant corporate governance
practices and increase our compliance costs. For instance, the draft Foreign Investment Law imposes periodic information reporting
requirements on foreign investors. Aside from an investment implementation report and an investment amendment report that are
required for each investment and alteration of investment specifics, an annual report is mandatory, and large foreign investors
meeting certain criteria are required to report on a quarterly basis. Any company found to be non-compliant with these information
reporting obligations may potentially be subject to fines and/or administrative or criminal liabilities, and the persons directly
responsible may be subject to sanctions.



25






PRC Regulations of Loans to and Direct Investment in PRC Entities
by Offshore Holding Companies may delay or prevent us from making Loans or additional Capital Contributions to our PRC Subsidiaries,
which could adversely affect our ability to fund and expand our business



We conduct substantial business operations in
China. We may make loans to our PRC subsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Loans
by APWC or any of our offshore subsidiaries to our PRC subsidiaries, which are treated as foreign-invested enterprises under PRC
law, are subject to PRC regulations and foreign exchange loan registrations. Such loans to any of our PRC subsidiaries to finance
their activities cannot exceed statutory limits and must be registered with the local counterpart of the State Administration
of Foreign Exchange (“SAFE”). The statutory limit for the total amount of foreign debts of a foreign-invested enterprise
is the difference between the amount of total investment as approved by the PRC Ministry of Commerce or its local counterpart
and the amount of registered capital of such foreign-invested enterprise. We may also decide to finance our PRC subsidiaries by
means of capital contributions. These capital contributions must be approved by the PRC Ministry of Commerce or its local counterpart.



On March 30, 2015, the SAFE promulgated SAFE
Circular No. 19, a notice regulating the conversion by a foreign-invested company of foreign currency into Renminbi by restricting
how converted Renminbi may be used. This notice requires that the Renminbi capital converted from the foreign currency-denominated
capital of a foreign-invested enterprise may not be directly or indirectly used for purposes beyond the business scope of such
foreign-invested enterprise. The Renminbi capital converted from the foreign currency-denominated capital of a foreign-invested
enterprise may not be used to provide entrusted loans or repay Renminbi loans between non-financial companies As a result, SAFE
Circular No. 19 may impose an additional layer of bureaucratic compliance and could, under certain circumstances, limit our ability
to transfer the proceeds from our non-RMB denominated borrowing arrangements outside of the PRC to our PRC subsidiaries, which
may, absent the requisite approvals from SAFE, adversely affect the continued growth of our business.



26






In light of the various requirements imposed
by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, including SAFE Circular referred
to above, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary
government approvals on a timely basis, if at all, with respect to future loans or capital contributions by us to our PRC subsidiaries
and conversion of such loans or capital contributions into Renminbi. If we fail to complete such registrations or obtain such approvals,
our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could adversely affect our ability
to fund and expand our business.



Political or Social Instability in the PRC May Adversely Affect
the Company’s Operations or Financial Condition



Political or social instability in China could
also adversely affect our business operations or financial condition. In addition, adverse public health epidemics or pandemics
in China could not only interfere with our ability to operate our PRC subsidiaries, but could also affect the country’s overall
economic growth, which could in turn affect the sales of our products in China. Growing environmental awareness and concern over
the deterioration of the quality of the environment in China, including air and water quality, could dampen domestic industrial
growth and reduce foreign investor interest in PRC investment. In addition, as our corporate headquarters are located in Taipei,
any escalation in political tensions between the PRC and the government of Taiwan could impact adversely our ability to manage
our Chinese operations efficiently or without third party interference.



Inflation in the PRC May Adversely Affect the Company’s
Operations or Financial Condition



The rapid growth of the PRC economy has historically
resulted in high levels of inflation. The PRC government has publicly announced its commitment to control inflation, and the anti-inflation
policies of the PRC government may have an adverse effect on the business climate and growth of private enterprise in the PRC.
An economic slowdown may increase our costs. If inflation is significant, our costs would likely increase, and there can be no
assurance that we would be able to increase our prices to an extent that would offset the increase in our expenses.



27






PRC Power Shortages and Lack of Insurance May Adversely Affect
the Company’s Operations or Financial Condition



We consume substantial amounts of electricity
in our manufacturing processes at our production facilities in China. Certain parts of China have been subject to power shortages
in recent years. We have experienced a number of power shortages at our production facilities in China to date, particularly in
Shenzhen where numerous clusters of factories are situated. We are sometimes given advance notice of power shortages, but often
power shortages or outages occur unexpectedly for various periods of time. We currently have a backup power system at certain of
our production facilities in China. However, there can be no assurance that in the future our backup power system will be completely
effective in the event of a power shortage, particularly if that power shortage is over a sustained period of time and/or we are
not given advance notice thereof. Any power shortage, brownout or blackout for a significant period of time may disrupt our manufacturing,
and as a result, may have an adverse impact on our business.



The insurance industry in China is still at an
early stage of development and foreign insurance companies are permitted to operate only in a certain large cities. PRC insurance
companies do not offer extensive business insurance products. As a result, we have limited business liability and disruption insurance
coverage for our operations in China. Any business disruption, litigation or natural disaster might result in our incurring substantial
costs and the diversion of resources, which could have a material adverse effect on our business and operations.



28






PRC Tax Treatments May Affect the Company’s
Operations or Financial Condition



Under current tax law in China, foreign-invested
enterprises no longer receive more favorable tax treatment than domestic enterprises. China has in place a uniform tax rate of
25% for all enterprises (including foreign-invested enterprises) and has revoked the prior tax exemptions, reductions and preferential
treatments applicable to foreign-invested enterprises.



Dividends Payable by Our PRC Subsidiaries to Their Respective
Offshore Investors May Be Subject to PRC Withholding Taxes



Under Chinese tax law and related regulations,
dividends, interests, rent or royalties payable by a foreign-invested enterprise, such as our PRC subsidiaries, to any of its
foreign non-resident enterprise investors, and proceeds from any such foreign enterprise investor’s disposition of assets
(after deducting the net value of such assets) are subject to a 10% withholding tax, unless the foreign enterprise investor’s
jurisdiction of incorporation has a tax treaty with China that provides for a reduced rate of withholding tax. Undistributed profits
earned by foreign-invested enterprises prior to January 1, 2008 are exempted from any withholding tax. Bermuda, where APWC,
the ultimate owner of our PRC subsidiaries and investments, is incorporated, does not have such a tax treaty with China. Hong
Kong, where Crown Century Holdings Limited (“CCH HK”), the sole shareholder in Pacific Electric Wire and Cable (Shenzhen)
(“PEWS”), is incorporated, has a tax arrangement with China that currently provides for a 10% withholding tax on dividends
subject to certain conditions and requirements, such as the requirement that the Hong Kong resident enterprise own at least 25%
of the PRC enterprise distributing the dividend at all times within the 12-month period immediately preceding the distribution
of dividends and be a “beneficial owner” of the dividends. However, if CCH HK is not considered to be the beneficial
owner of the dividends paid to it by PEWS under the tax circulars promulgated in October 2009 and June 2012, such dividends would
be subject to withholding tax at a rate of 10%. If our PRC subsidiaries declare a dividend or distribution and distribute profits
earned after January 1, 2008 to their respective offshore investors in the future, such payments will be subject to withholding
tax.



29






Labor Law Legislation in the PRC May Adversely Affect the Company’s
Operations or Financial Condition



The PRC Labor Contract Law formalizes workers’
rights concerning overtime hours, pensions, layoffs, employment contracts and the role of trade unions. Considered one of the strictest
labor laws in the world, among other things, this law requires an employer to conclude an “open-ended employment contract”
with any employee who either has worked for the employer for ten years or more or has had two consecutive fixed-term contracts.
An “open-ended employment contract” is in effect a lifetime, permanent contract, which is terminable only in specified
circumstances, such as a material breach of the employer’s rules and regulations, or for a serious dereliction of duty. Such
employment contracts with qualifying workers would not be terminable if, for example, the Company determined to downsize its workforce
in the event of an economic downturn. Under the current law, downsizing by 10% or more (or more than 20 persons) may occur only
under specified circumstances, such as a restructuring undertaken pursuant to the PRC Enterprise Bankruptcy Law, or where a company
suffers serious difficulties in production and/or business operations. Any of the Company’s staff employed to work exclusively
within the PRC are covered by the law and thus, the Company’s ability to adjust the size of its operations when necessary
in periods of recession or less severe economic downturns has been curtailed. Accordingly, if the Company faces future periods
of decline in business activity generally or adverse economic periods specific to the Company’s business, this law can be
expected to exacerbate the adverse effect of the economic environment on the Company’s results of operations and financial
condition. Additionally, this law has affected labor costs of our customers which could result in a decrease in such customers’
production and a corresponding decrease in their purchase of our products.



30






Exposure to Foreign Exchange Risks



Fluctuations in foreign exchange rates influence
our results of operations. Our principal operations are located in the three geographic regions that have now been designated
as our revised business segments; namely, the North Asia region, the Thailand region and the Rest of the World (“ROW”)
region. A substantial portion of our aggregate revenues is denominated in the following currencies: Baht, Australian dollars,
Singapore dollars or Renminbi. Nearly all of the raw materials for these operations are imported and paid for in U.S. dollars
and a substantial portion of our future capital expenditures are expected to be in U.S. dollars. We require a significant amount
of U.S. dollars for our ongoing equipment upgrade and maintenance programs. Any devaluation of any of the Baht, the Australian
dollar, the Singapore dollar or the Renminbi against the U.S. dollar would increase the effective cost of foreign manufacturing
equipment and the amount of our foreign currency denominated expenses and liabilities and would have an adverse impact on our
operations.



Although our reporting currency is U.S. dollars,
the functional currency of our Thailand region, which accounted for 42.4% of our sales in 2015, is the Thai Baht. The functional
currencies of our ROW region, which accounted for 34.4% of sales in 2015, are the Australia dollar and the Singapore dollar.
The functional currencies for our North Asia operations, which, in total accounted for 23.2% of our sales in 2015, are divided
into two groups: for Shandong Pacific Rubber Cable Company, Ltd. (“SPRC”, equity investee with 25% equity owned by
APWC, accounting under equity method), and Shanghai Asia Pacific Electric Co., Ltd. (“Shanghai Yayang”), their functional
currency is Renminbi, while for CCH HK and PEWS their functional currency is U.S. dollars. Accordingly, the functional currency
accounts of these operations are all translated into U.S. dollars utilizing the reporting date exchange rate for balance sheet
accounts, and an average exchange rate for the year for the income statement accounts for the reporting purposes. Any devaluation
of the Baht, the Australian dollar, the Singapore dollar, or the Renminbi against the U.S. dollar would adversely affect our financial
performance measured in U.S. dollars.



31




In addition to our operating revenues being generated in local currencies, a portion of our investment assets are denominated in foreign currencies, including the RMB. Accordingly, our investment results will be subject to possible currency rate fluctuations as well as the volatility of overseas capital markets. Our results of operations may be materially impacted by those fluctuations and volatility.



Competition



The wire and cable industry in the Asia Pacific
region is highly competitive, and if we fail to successfully invest in and maintain product development, productivity improvements
and customer service and support, sales of our products could be adversely affected. Our competitors include a large number of
independent domestic and foreign suppliers. Certain competitors in each of our markets have substantially greater manufacturing,
sales, research and financial resources than we do. We and other wire and cable producers compete primarily on the basis of product
quality and performance, reliability of supply, customer service and price. To the extent that one or more of our competitors are
more successful with respect to the primary competitive factors, our business could be adversely affected. In addition, the Company’s
profit could be adversely impacted if low margin wire and cable manufacturers in China enter into the markets where we operate.
With respect to certain of our products, they are made to common specifications and may be interchangeable with the products of
certain of our competitors. Since customers could potentially substitute our products with those of our competitors, customer loyalty
is an important pillar of our business’s competitive position.



32






Highly Concentrated Markets



Failure to properly execute customer projects
in certain highly concentrated markets may adversely impact our ability to obtain similar contracts from other customers in the
market and may result in material financial penalties. In certain markets, sales of manufactured products are highly concentrated
in large state-controlled entities or large private infrastructure developers. As those markets are often highly concentrated,
the loss of individual customers in such markets may have a material adverse impact on our position in that market as a whole.



Risks associated with Required Productivity
Increases



Our business strategy includes a focus on increasing
profitability through increased efficiency and productivity. In the event we are not able to implement measures to increase efficiencies
and productivity, we may be limited in achieving increased profitability or may become less profitable. Moreover, productivity
increases are linked to capacity utilization rates. A drop in the utilization rate of our manufacturing capacity would adversely
impact productivity.



Employees’ Unions



Some of the operating subsidiaries of the Company
have a large number of employees that are members of employees’ unions. Failure to successfully negotiate and/or renew collective
agreements, strikes, or other labor disputes could result in a disruption of our operations. The Company believes that approximately
100% and 99% of the employees of PEWS and Shanghai Yayang, respectively, are members of their respective company workers’
unions. Approximately 16% of the employees of Australia Pacific Electric Cables Pty., Ltd. (“APEC”) are members of
the Australian Workers’ Union. While the Company has never experienced a strike or other disruption due to labor disputes,
the possibility exists that a labor dispute could lead to a disruption of our operations, hindering our ability to serve our customers,
and ultimately having a material adverse impact on the Company’s results of operations.



33






Information Systems



Failure or disruptions of our information systems
could have a material impact on our business and operations. The Company heavily relies on information systems and technology for,
amongst other tasks, processing customer orders, shipment of products, billing our customers, tracking inventory, supporting accounting
functions and financial statement preparation, paying our employees, and otherwise running our business. Disruptions in our system,
whether from external or internal causes, could have a significant material adverse impact on our business. Specifically, a disruption
in our systems could adversely affect our ability to properly serve our customers and as a result, could affect our customer loyalty
and ultimately, have an adverse impact on our business. The Company is actively engaged in the monitoring of our information systems
to manage the risk of security threats and sophisticated computer crime and to reduce the risk of disruption to the integrity of
our data.



Employees and Personnel



If we fail to retain our key employees and attract
qualified personnel, our business may be harmed. The loss of any of our executive officers or other key employees, without a properly
implemented transition plan, could have an adverse effect on operations. The loss of executive officers or key employees could
impair customer relationships and result in the loss of vital industry knowledge, expertise, and experience. There is also a risk
of losing key employees to our competitors, which could pose a possible risk of the theft of trade secrets, with competitors then
gaining valuable information about our manufacturing process. The Company’s future success depends on its continued ability
to attract and retain talented and qualified personnel.



34






Indebtedness



As of December 31, 2015, the Company had
a total of $249.7 million in credit available to itself, or one or more of its operating subsidiaries. The available credit is
provided by a total of 14 banks in the various regions/territories in which we operate. Out of total available credit, $148.6 million
was unused and available for borrowing. The Company, collectively and on an individual basis, is not highly leveraged and management
does not consider it to be likely that the Company will become highly leveraged. The weighted average borrowing rate, for all the
outstanding loans combined, was 3.29% for 2015, which runs, at this particular point in time, slightly higher than like-kind borrowing
rates that might be available to us in the marketplace, i.e., three month LIBOR (data of April 8, 2016)
of 0.26% plus 2.5%.



Impairment Charges



As a result of market and industry conditions
or in the event we close any of our manufacturing facilities, we may be required to recognize impairment charges for our long-lived
assets, including goodwill. To the extent the Company must incur goodwill impairment on our long-lived assets, there may be an
adverse effect on our financial condition, including earnings per share and other financial results.



35






As of December 31, 2015, the
Company performed impairment testing for SPRC, equity investee with 25% equity owned by APWC, accounting under equity method,
as SPRC has been reporting losses in the past few years owing to slower economy growth and a slowdown of the business of
its customers in China in recent years. The Company determined that it was not necessary to recognize any impairment loss
against SPRC. Nevertheless, the Company cannot offer any assurances that an impairment loss will not incur in the future for
various reasons including, but not limited to, strategic decisions made in response to changes in economic and competitive
conditions, the impact of the economic environment on our business or a material adverse change in any material relationships
with our clients. If we recognize significant impairment charges, our results of operations may be materially and
adversely affected.



Composite Services Agreement with PEWC



We engage in transactions in the ordinary course
of business with PEWC, including the purchase of certain raw materials and the distribution of PEWC products in various countries
in the Asia Pacific region. We and PEWC have entered into a composite services agreement dated November 7, 1996, as amended
and supplemented (the “Composite Services Agreement”), which contains provisions that define our relationship and
the conduct of our respective businesses and confers certain preferential benefits on us. The Composite Services Agreement is
renewable at our option and is currently in force. However, we are unable to predict whether PEWC would, at some future date,
seek to limit, or be unable to perform in whole or in part, the business it conducts with the Company pursuant to the terms of
the Composite Services Agreement.



36






Risks Relating to Thailand Region



A substantial portion of our Thai operations,
which accounted for approximately 42.4% of our total net sales in 2015, consists of the manufacture of telecommunications and power
cable and sales of those products for use in large-scale telecommunications projects and various construction projects in Thailand.
As a result, our future results will depend in part on the political situation in Thailand and the general state of the Thai economy.
With the political tension remaining high in Thailand, the continuing political uncertainty and the risk of further social unrest
tends to lessen the attractiveness of the local market for foreign investment, and diminishes the focus of the government on infrastructure
development, both of which considerations may adversely impact on the volume of business of the Company’s actual and potential
customers in the Thai market.



The Company’s Thai operations remain vulnerable
to uncertainties with regard to payment for current sales and the award of future contracts in view of the ongoing political instability
in Thailand. Additionally, in recent years the Thai economy has been highly cyclical and volatile, depending for economic growth
in substantial part on a number of government initiatives for economic expansion. Moreover, the Baht remains volatile and subject
to significant fluctuations in relation to the U.S. dollar. Such fluctuations in the value of the Baht may negatively impact our
performance.



Environmental Liabilities



We are subject to certain environmental protection
laws and regulations governing our operations and the use, handling, disposal and remediation of hazardous substances used by us.
A risk of environmental liability could arise from our manufacturing activities in the event of a release or discharge by us of
a hazardous substance. Under certain environmental laws, we could be held responsible for the remediation of any hazardous substance
contamination at our facilities and at third party waste disposal sites and could also be held liable for any consequences arising
out of human exposure to such substances or other environmental damage. There can be no assurance that the costs of complying with
environmental, health and safety laws and requirements in our current operations or the liabilities arising from past releases
of, or exposure to, hazardous substances, will not result in future liabilities incurred, or expenditures payable, by us that could
materially and adversely affect our financial results, cash flows or financial condition.



37






Alternative Transmission Technologies



Our fiber optic and copper-based telecommunications
business is subject to competition from other transmission technologies, principally wireless-based technologies. Fiber optic cable
is presently being used in telecommunications trunks and feeder cable businesses and minimally in the access cable business. Over
the past five years, we have withdrawn entirely from the fiber optics business in China. Wireless telecommunications businesses
have sometimes made substantial inroads in early emerging markets where sufficient funding may not then be available to install
the infrastructure necessary for market-wide fixed line telecommunications. In addition, the ease of use of wireless telecommunications
may make that medium an attractive alternative in circumstances where access to fixed line telecommunications is limited. While
these technologies do present significant competition in the markets in which we conduct or plan to conduct business, the Company
believes that demand for its fixed wire products will remain strong. However, no assurance can be given that the future development
and use of such alternative technologies will not adversely affect our results of operations.



38






International Business Risks



We are subject to risks specific to our international
business operations, including: the risk of supply disruption; production disruption or other disruption arising from events of
force majeure, such as the severe weather and climatic events that caused the 2011 floods in Thailand; the outbreak of highly infectious
or communicable diseases such as Severe Acute Respiratory Syndrome, swine influenza or pandemics of a similar nature; the risk
of potential conflict and further instability in the relationship between Taiwan and the PRC; risks related to national and international
political instability, such as disruptions to business activities and investment arising out of the political unrest and turmoil
in Thailand; risks related to the recent global economic turbulence and adverse economic developments in a number of Asian markets;
risks related to changes in governmental or private sector policies and priorities with respect to infrastructure investment and
development; unpredictable consequences on the economic conditions in the U.S. and the rest of the world arising from terrorist
attacks, and other military or security operations; unexpected changes in regulatory requirements or legal uncertainties regarding
tax regimes; tariffs and other trade barriers, including current and future import and export restrictions; difficulties in staffing
and managing international operations in countries such as Australia, Singapore, the PRC, Thailand and Taiwan; risks that changes
in foreign currency exchange rates will make our products comparatively more expensive; limited ability to enforce agreements and
other rights in foreign countries; changes in labor conditions; longer payment cycles and greater difficulty in collecting accounts
receivable; burdens and costs of compliance with a variety of foreign laws; limitation on imports or exports and the possible expropriation
of private enterprises; and reversal of the current policies (including favorable tax and lending policies) encouraging foreign
investment or foreign trade by our host countries. Although we have not experienced any serious harm, except for the flooding situation
in Thailand in 2011, in connection with our international operations, we cannot assure you that such problems will not rise in
the future.



39






Item 4: Information on the Company





4.1 History and Development of the Company



General



Asia Pacific Wire & Cable Corporation Limited
was formed on September 19, 1996 as a Bermuda exempted limited liability Company under the Companies Act. The address of the
Company’s principal place of business is Room B, 7th Floor, No. 132, Sec. 3, Min-Sheng East Road, Taipei, 105,
Taiwan, and its telephone number is (886) 2-2712-2558. Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark,
Delaware 19711, is the Company’s agent for service of process in the United States.



The Company is principally engaged in the manufacture
and distribution of telecommunications (primarily copper, but also fiber optic) and power cable, enameled wire and electronic
wire products in the Asia Pacific region, primarily in Thailand, China, Singapore and Australia. The Company manufactures and
distributes its own wire and cable products (“Manufactured Products”) and also distributes wire and cable products
(“Distributed Products”) manufactured by its principal shareholder, PEWC, and other third party suppliers. The Company
also provides project engineering services in the supply, delivery and installation (“SDI”) of power cables to certain
of its customers.



40






Principal Capital Expenditures



Total purchases of property, plant and equipment
amounted to $9.5 million in 2013, $6.0 million in 2014 and $7.4 million in 2015, mostly for newly purchased production machinery
and equipment for the CTW group in Thailand and for APEC in Australia, as well as for the building improvement at PEWS.



| | 4.1.1 | Certain Recent Events
| | ----- | ---------------------



In 2015, in connection with the sale to PEWC
of certain Common Shares held by a private equity fund, the Company was able to terminate the amended and restated shareholders
agreement dated as of March 27, 2009 (the “Shareholders Agreement”) among the Company, PEWC and the private equity
fund. The Company benefited from the termination of the Shareholders Agreement in that the obligation of the Company to maintain
an effective registration statement for the two shareholders, and the obligation of the Company to indemnify the private equity
fund investor for certain contingent U.S. tax exposures were both terminated. As a result of the transaction, PEWC’s direct
and indirect beneficial ownership of our Common Shares increased to approximately 75.4% of the Company’s total issued and
outstanding Common Shares.



In 2012, the Company determined to convert its
financial accounting principles from US GAAP to IFRS. The Company made this change to align the accounting principles used at its
public holding company level with those employed for some years by its principal operating subsidiaries and because of the increasing
acceptance and usage of IFRS by foreign private issuers. Accordingly, the financial data contained in this report for the fiscal
years ended December 31, 2015, 2014, 2013 and 2012 are reported in accordance with IFRS.



41






As part of the Company’s evaluation of
its financial reporting, the Company examined its historical business reporting segments, consisting of manufactured products,
distribution and SDI project engineering. The Company noted that in some years manufactured products represented 90% or more of
total revenues, that SDI project engineering to date has been limited to the Singapore market and that distribution has traditionally
been viewed as an ancillary component of the Company’s overall business plan. After careful deliberation, management decided
in 2013 to reorganize the Company’s business segments along regional lines, which it believes better reflects the organizational
structure, deployment of its assets, cost allocations and information gathering and reporting of the consolidated group. In addition,
in 2013 the Company appointed Mr. William Gong Wei as it chief operating officer (“COO”) and Mr. Gong Wei undertook,
at the Company’s request, a reorganization of the lines of reporting among the Company’s operating subsidiaries to
reflect the determination of management to emphasize regional reporting.



The Company now has three operating segments,
consisting of the North Asia region, the Thailand region and the Rest of the World (“ROW”) region.



Each segment engages in business activities
generating revenues and incurring expenses. Each segment generates a management report which contains its own financial information
and submits to the Company’s chief operating decision maker (“CODM”) for review on a monthly basis. The Company’s
CEO and COO are the ones who review all the management reports provided by each segment, make the decisions on how the resources
are to be allocated and assesses the operating performances based on the reports. Each reporting segment has a segment manager
who is in charge of the business operations in such region and regularly contacts the Company’s CEO and COO to discuss operational-related
matters.



42






On December 17, 2015, the Company announced
its financial results for the first nine months of 2015. On August 26, 2015, APWC announced its financial results for the
first six months of 2015. On August 13, 2014, the Company announced also that its Board of Directors had authorized the future
implementation of a share repurchase program of up to $1 million worth of its Common Shares. APWC did not announce a commencement
date for that future share repurchase program and, to date, it has not yet been implemented. In addition, Mr. Yuan Chun Tang,
CEO, and Mr. Ivan Hsia, CFO, were authorized to take all actions necessary to organize and implement the Company’s 2015
annual general meeting of shareholders (the “2015 AGM”).



The Company conducted its 2015 AGM in Taipei
on October 8, 2015, where all matters put to a vote of the shareholders were approved.



| | 4.1.2 | Managing Our Business in Current Market Conditions
| | ----- | --------------------------------------------------



In order to address the continuing market challenges
facing our business, the Company has taken and plans to continue to implement a number of measures in order to maintain efficient
operations.



Specifically, the Company has continued to
focus on increased efforts to collect its receivables on a timely basis. The days of sales outstanding in 2015 were 74 days,
a material improvement over our 85 days of sales outstanding in 2014. The Company continues to focus on working actively with
all of its significant customers to reduce collection times and minimize write-offs. The Company has also reduced
its inventory levels through planned reductions in raw material purchases while negotiating with suppliers to reduce costs of
raw materials and supplies. The Company has focused also on reducing operating costs where practicable. We believe that
the successful implementation of these actions has had a positive effect on our cash resources, and we intend to continue
these measures in order to preserve our liquidity and maintain a strong cash position. As of December 31, 2015, the
Company had available and unused lines of credits from suppliers, banks and other lenders totaling, in the aggregate,
approximately $148.7 million, a decrease of $19.7 million from that date one year prior. We believe that available and unused
amounts of credit are sufficient to support our current working capital needs. The total bank loans and trust receipts
outstanding as of December 31, 2015 were $16.2 million lower than that as of December 31, 2014. Trust receipts
represent debt incurred by the Company for goods then in its possession.



43






| | 4.1.3 | Recent Business Trends
| | ----- | ----------------------



APWC experienced a 13.7% reduction
in overall 2015 revenues against revenue of 2014 and a decrease in gross profit by 35.0% against that of 2014.
The Company’s operating profit in 2015 was $(2.6) million. The profit was eroded because of the material decrease in
expenditures on major infrastructure development projects in Thailand, which adversely impacted our gross margins in that
region. We also faced increased competition in the ROW region as well as the economy slowdown in the North Asia region. The
Company's gross margin yielded earnings per share of $(0.59) in 2015, compared to earnings per share of $0.04 in 2014 and
$0.42 in 2013.



| | 4.2 | Business Overview
| | --- | -----------------



The Company is a holding company that operates
its business through operating subsidiaries and associates, principally located in Thailand, China, Singapore and Australia.



44






The following chart shows the organizational
structure of the Company as of December 31, 2015 and its principal operating subsidiaries, including affiliate ownerships,
and the percentage of ownership interest and voting power in each case. The location of the headquarters of each company is indicated
in parentheses under the company’s name (“S” for Singapore, “T” for Thailand, “A” for
Australia and “C” for China or Hong Kong).







Thailand Region



The Company’s Thai operations are conducted
through Charoong Thai, Siam Pacific, Double D Cable Company Ltd. (“DD”) and Siam Fiber Optics Co. Ltd. (“Siam
Pacific Optics”)



45






Charoong Thai is a publicly-traded Thai corporation,
the shares of which are listed on the Stock Exchange of Thailand (“SET”). It manufactures aluminum and copper
electric wire, medium and high voltage power cable and telecommunications cable. It has subsidiaries and affiliates in the businesses
of optic fiber cable manufacturing and telecommunication and network services. Charoong Thai was established in Thailand in 1967
as a limited public company. As of December 31, 2015, the Company effectively owned 50.93% of the issued and outstanding shares
of Charoong Thai. The Company’s present intention is to maintain majority ownership of the voting securities of Charoong
Thai. The board of directors of Charoong Thai may authorize the issuance of additional shares of common stock of Charoong Thai.
The Company has preemptive rights to purchase its pro rata share of any additional authorized shares, less amounts reserved for
directors, officers and employees. In the event the board of Charoong Thai decides to cause it to issue additional shares, the
Company may decide not to exercise its preemptive rights, in which case the Company’s interest may be diluted. In May 2013,
rather than producing premium products, a new subsidiary – named “DD” was formed by Charoong Thai in order to
produce cable products that were just on par with, or exceeded, national standards in an effort to enhance the competitive position
of Charoong Thai.



Siam Pacific was established in 1988 as a joint
venture between PEWC and Italian-Thai Development Plc (“Ital-Thai”), a third party, which at the time was the largest
diversified construction company in Thailand, principally engaging in the design, engineering, construction and project management
of large-scale civil engineering and telecommunications projects in Thailand. Capitalizing on PEWC’s wire and cable manufacturing
expertise and Ital-Thai’s significant presence in the local market, Siam Pacific was able to establish its presence in this
market and gain knowledge of business opportunities in Thailand. Siam Pacific is now a 100%-owned subsidiary of Charoong Thai
and it focuses on the manufacture of telecommunications cable, and enameled wire for the domestic Thailand market. As we have
reported previously, the Siam Pacific operation suffered significant flooding damage in September and October of 2011 but with
support from affiliated companies in Taiwan and in China, Siam Pacific resumed full operations during the course of 2012. During
2014 and 2015, Siam Pacific conducted its operations without any material disruptions.



46






Based on information published by the Thai Ministry
of Commerce on sales by dollar value, the Company believes that Siam Pacific and Charoong Thai are two of the leading telecommunications
and power cable and wire manufacturers in Thailand and are two of a very limited number of the government-approved suppliers of
telecommunications cables for major public telecommunications projects in Thailand.



North Asia Region





During 2015, the Company’s China (and North
Asia) operations were conducted through five business entities – Shanghai Yayang, CCH HK, PEWS, Ningbo Pacific Cable Co.
Ltd. (“Ningbo”) and SPRC. The operating entities include Shanghai Yayang, formerly known as Shanghai Pacific Electric
Co., Ltd., a subsidiary in Shanghai incorporated in June 1998 to manufacture enameled wires. The Company’s effective holding
in Shanghai Yayang is 66.35%. Shanghai Yayang manufactures enameled wires with a diameter between 0.05mm and 2.5mm for sale and
distribution in the eastern part of China, including to local and Taiwanese based end-users. The board consists of six directors,
each of whom is either a member of management of Shanghai Yayang who are expatriated from Taiwan or Thai representatives, also
expatriated or designated by APWC or PEWC.







47






The Company owns 100% of CCH HK, a Hong Kong
registered company, and its wholly-owned subsidiary company, PEWS. PEWS manufactures enameled wires for electric, video and audio
products for both domestic and export sales.





The Company holds a 25.0% interest in SPRC,
which manufactures rubber cable for the China market. The remaining 75% is owned by Shandong Yanggu Wire & Cable Corp. Ltd.
(“Shandong Yanggu”), an established cable manufacturer in Shandong Province that produces a wide range of cable products
and is considered one of the major cable producers in China.



The Company held a 49% interest in Shandong
Huayu Pacific Fiber Optics Communication, Co., Ltd. (“SHP”), which engages in the manufacture of optic fibers. In
January 2013, the Company completed the sale of its 49% interest in SHP to its partner, Shandong Pacific Fiber Optics Cable Co.
Ltd., which acquired 100% of SHP as of the closing of that sale. Due to a severe downturn in the market for fiber optic cable
after SHP was established, the plant intended to be constructed for manufacturing fiber optic cable was not completed and a production
date for commencing operations had not been determined. The Company received RMB 9.5 million for its 49% interest in SHP, which
yielded a gain for the Company of over $0.2 million in 2013. The management considered disposing of its interest in SHP for some
time because this equity investee had been in a loss position for several years and because fiber optic cable in Shandong Province
is not an element of the Company’s core business plan.





Rest of the World (“ROW”)
Region



The Company’s ROW region currently includes
its Singapore and Australian operations.



The Company’s Singapore operations are
principally conducted through its 98.3%-owned subsidiary, Sigma Cable. The Company believes that Sigma Cable is one of the major
suppliers of power cable products in Singapore. Sigma Cable manufactures and sells a range of low voltage power cable products,
used mainly in infrastructure projects and commercial and residential developments. Sigma Cable is the exclusive distributor in
Singapore of medium and high voltage wire and cable products manufactured by PEWC. It is also the distributor for general wire
manufactured by a third party supplier.





48








Sigma Cable also has project engineering operations
in Singapore to supply, deliver and install primarily medium and high voltage cable to power transmission projects. While the Company
currently obtains its supply of medium and high voltage power cable for its SDI operations from PEWC, other suppliers are also
available if necessary. The Company anticipates that there will be modest demand for medium and high voltage power cable projects
sponsored by the Singapore government in the fairly near future.





In January 2014, Epan Industries Pte Ltd. (“Epan”),
a Singaporean, indirect wholly-owned subsidiary of APWC, was sold to Sigma Cable Company (Private) Limited (“Sigma Cable”),
an indirect, 98.3%-owned subsidiary of the Company in Singapore. Currently, Epan is acting as the distributor of Sigma Cable products
and those of other third party suppliers.







49






Australia



The Company’s business in Australia is
conducted by Australia Pacific Electric Cable Pty. Ltd. (“APEC”). The Company went through group restructurings in
March 2010 and in June 2012. CCH HK, in total, acquired 64.79% of the shares of APEC from Sigma Cable. The Company’s effective
interest in APEC is now 99.4%. APEC is located near Brisbane and is one of three major wire and cable manufacturers in Australia.
APEC produces a range of power cables supplemented by imports from overseas sister companies. APEC possesses a substantial marketing
and distribution infrastructure with a network of sales offices and warehouses in the major cities of Brisbane, Sydney, Melbourne
and Perth.



| | 4.2.1 | Products and Services
| | ----- | ---------------------



The Company engages in three principal business
lines consisting of the manufacture of wire and cable products, the distribution of certain wire and cable products manufactured
by PEWC, as well as some third party products, and the provision of project engineering services to certain of its customers. The
Company manufactures and sells a wide variety of wire and cable products primarily in four general categories: telecommunications
cable, power transmission cable, enameled wire, and electronic wire. The Company’s telecommunications and power cables are
used in a range of infrastructure projects and in commercial and residential developments. The Company’s enameled wire is
used in the manufacturing of components and sub-components of a number of household appliances and various small machinery. The
electronic wire products, which include cable harnesses, are used in the electronics, computer, building automation, audio and
communication industries. In addition, the Company acts as a distributor of wire and cable products in Singapore manufactured by
PEWC and other third party suppliers. The Company also offers SDI project engineering services of
medium and high voltage cable for power transmission projects in Singapore.



50






Distribution Products



The Company has a sales and marketing force for
the distribution of its Manufactured Products in the markets where it has manufacturing facilities and in certain other Asian markets.
In addition, the Company is a distributor of wire and cable products manufactured by PEWC and other third party suppliers. The
leading PEWC products sold by the Company are medium and high voltage power cable (with capacities ranging from 3.3 kilovolts to
69 kilovolts), with the vast majority of such sales made in Singapore. The PEWC products sold by the Company do not compete with
the Company’s Manufactured Products. In addition, from time to time, certain subsidiaries also sell distributed products
from other suppliers in Thailand and Australia.



SDI Project Engineering Services



Based upon the needs of government and the private
sector with regard to residential and commercial buildings and infrastructure projects in Singapore, the Company anticipates modest
demand for medium and high voltage power and for value added services in the power supply industry. To take advantage of these
opportunities, the Company has developed its SDI project engineering capability. The SDI project engineering involves supply, delivery
and installation primarily of medium and high voltage cable to power transmission projects in Singapore. After entering into a
contract to supply, deliver and install cable for a power transmission project, the Company delivers medium and high voltage cables
and enters into subcontracting agreements with local companies to install the cable as required by the project.



51






| | 4.2.2 | Manufacturing
| | ----- | -------------



Copper rod is the base component for most of
the Company’s products. The manufacturing processes for these products require that the rod be “drawn” and insulated.
In the “drawing” process, copper rod is drawn through a series of dies to reduce the copper to a specific diameter.
For certain applications, the drawn copper conductor is then plated with tin. Copper used in cable is covered with various insulating
materials that are applied in an extrusion process. The insulated wires are then combined, or “cabled” to produce the
desired electrical properties and transmission capabilities. Then, depending upon the cable, some form of protective cover is placed
over the cabled wires. A summary of the manufacturing process used for the Company’s primary wire and cable products is set
forth below.



Telecommunications Cable



The Company produces a wide range of bundled
telecommunications cable for telephone and data transmissions with different capacities and insulations designed for use in various
internal and external environments principally as access cable to connect buildings and residents to trunk cables. Telecommunications
cables produced by the Company include copper-based and fiber optic cables.



Production of copper-based telecommunications
cable begins by drawing a copper rod until it has reached the desired diameter, after which the drawn wires are subjected to a
process called “annealing” in which the wires are heated in order to make the wires softer and more pliable. Utilizing
an extrusion process, which involves the feeding, melting and pumping of a compound through a die to shape it in final form as
it is applied to insulate the wire, the wires are then covered by a polyethylene (“PE”) or polyvinyl chloride (“PVC”)
compound and foam skin, suitable for different installations and environmental conditions. In order to reduce the cross-talk between
pairs of communication wires, the insulated wires are then “twinned” or twisted so that two insulated single wires
are combined to create a color-coded twisted pair. The twisted pairs of wire are then “cabled” or “stranded”
into units of 25 twisted pairs for combination with other 25 pair units to form cable of various widths and capacities. The appropriate
number of units is cabled together after stranding to form a round cable core. Depending upon the planned environment, a petroleum
jelly compound may then be added to fill the cable core to seal out moisture and water vapor. Aluminum or copper tape is used
to “shield” the cable and, finally, the shielded cable core is covered by plastic outer sheathing. The Company manufactures
telecommunications cable with capacities and sizes ranging from 25 to 3,000 pairs of 0.4 mm-diameter wire to 10 to 600 pairs of
0.9 mm-diameter wire.



52






Power Cable



The Company produces a range of armored and unarmored
low voltage power transmission cable. Low voltage power cable, generally considered to be cable with a capacity of 1 to 3.3 kilovolts,
is typically used to transmit electricity to and within commercial and residential buildings, as well as to outdoor installations
such as street lights, traffic signals and other signs. Armored low-voltage power cable is usually used for public lighting and
power transmission running to buildings and installed either above or below ground. Unarmored low voltage cable is mainly used
as lighting and power supply cable inside and outside of buildings. The voltage capacity of the Company’s power cables range
from 300 volts to one kilovolt.



Production of unarmored cable begins by drawing
and annealing of copper rods. The drawn copper wires are then stranded or “bunched” into round or sector-shaped conductors
in sizes ranging from 1.5 square millimeters to 1000 square millimeters. The copper conductors are then covered in an extrusion
process with a plastic insulator such as PVC, after which 2-5 conductors are twisted into a circular cable core in a cabling process
and covered by a plastic outer cover.



Unarmored cable is composed of one or more cores
of copper wire, insulated by substances such as PVC. Armored cable is produced in the same manner and the same range of configurations
as unarmored cable, but with the addition of an outer layer of galvanized steel or iron wires to protect the cable from damage.



53






Enameled Wire



The Company also produces several varieties of
enameled wire. Enameled wire is copper wire varnished, in an enameling process, by insulating materials. The enameling process
makes the wire more resistant to oil, heat, friction and fusion, and therefore suitable for use in machinery and components and
sub-components of manufactured goods. The Company manufactures enameled wire in sizes that range from 0.02 mm to 4.00 mm in diameter,
varnished by various types of petroleum insulation materials including polyvinyl formal, polyurethane wire and polyester, among
others. Enameled wire products are used in the assembly of a wide range of electrical products, including oil-filled transformers,
refrigerator motors, telephones, radios, televisions, fan motors, air conditioner compressors and other electric appliances.



Electronic Wire



The Company produces electronic wire with its
major production facilities in Ningbo, China. The electronic wire is predominately used for heat resistant applications in consumer
electronics and in the automotive industry.



54






| | 4.2.3 | Raw Materials
| | ----- | -------------



Copper is the principal raw material used by
the Company for copper-based products. The Company purchases copper at prices based on the average prevailing international spot
market prices on the London Metals Exchange (“LME”) for copper for the one month prior to purchase. The price of copper
is influenced heavily by global supply and demand as well as speculative trading. As with other costs of production, changes in
the price of copper may affect the Company’s cost of sales. Whether this has a material impact on the Company’s operating
margins and financial results depends primarily on the Company’s ability to adjust selling prices to its customers, such
that increases and decreases in the price of copper are reflected in those selling prices. Most sales of the Company’s Manufactured
Products reflect copper prices prevailing at the time the products are ordered. A long-term decrease in the price of copper would
require the Company to revalue the value of its inventory at periodic intervals to the then net realizable value, which could
be below cost.



The Company purchases copper in the form of rods
and cathodes. Copper cathodes are thin sheets of copper purified from copper ore. Copper purchased by the Company in the form of
cathodes must be sent to subcontractors to be melted and cast into the copper rods necessary for the manufacturing processes, for
a processing fee equal to approximately 3.5% (based on the Company’s past experience) of the copper cathode purchase price.
The Company presently utilizes the services of Thai Metal Processing Co., Ltd. to process its copper cathodes into copper rods
in Thailand, although the Company has a variety of processing companies from which it may obtain these services. Construction of
a copper processing facility could also be an additional source of revenues and profit, to the extent that sales are made to unaffiliated
parties. However, the Company does not have any present plans to establish or acquire a copper processing facility. Copper rods
are drawn into copper wire for the production of telecommunications cable, power cable and enameled wire.



55






The Company has historically purchased a substantial
portion of its copper rods from PEWC. Under the Composite Services Agreement between the Company and PEWC, PEWC agreed to supply
to the Company on a priority basis its copper rod requirements at prices at least as favorable as prices charged to other purchasers
in the same markets purchasing similar quantities. PEWC continues to be a leading supplier of copper rods to the Company’s
operations. Under the Company’s copper rod supply arrangements, orders are typically placed between eight to ten weeks before
the desired delivery date, with prices “pegged” to the average spot price of copper on the LME for the one month prior
to delivery plus a premium.



The Company purchases both copper cathodes which
are subjected to a 1.0% import tariff, and copper rods which normally are subject to a 5.0% import tariff for its Thailand operations.
The key suppliers are Sterlite Industries (India) Ltd - India, PEWC-Taiwan, Prime Global Corp.-Korea, Lanexang Mineral Ltd.-Laos
and the Mitsubishi Corporation Unimetal Ltd.-Japan, Mitsubishi Corporation-Japan, Glencore International AG.-Switzerland, and Marubeni
Corporation-Japan. The Company has regularly signed one-year contracts with each of the copper suppliers, pursuant to which the
Company agrees to purchase a set quantity of copper each month. Under the terms of such contracts, the price of copper is usually
pegged to the monthly average of the spot price of copper on the LME for the delivery month (M-0), or 1 month before delivery month
(M-1) plus a premium. The Company has almost two decades of good relationships with many copper suppliers, and currently believes
that the copper suppliers will be capable of providing an adequate supply of copper for the Company’s requirements. The Company
does not anticipate any change in relations with its copper suppliers in the near term.



56






The Company attempts to maintain approximately
a three to five week supply of copper rods and cathodes for its Thai operations and approximately a two to four week supply in
Singapore. In PEWS, the Company generally maintains one to two weeks of supply of copper rods and cathodes. In APEC, the copper
supply is generally maintained at one to two weeks of anticipated requirements. The Company has never experienced a material supply
interruption or difficulty obtaining a sufficient supply of copper rod or cathode.



Other raw materials used by the Company include
aluminum used as a conductor in power cable and petroleum-based insulation materials such as PE, PVC and jelly compounds for insulating
covers on cables and varnishes on enameled wire; aluminum foils for sheathing of communication cable; and galvanized steel wire
for the production of armored wire. The Company has not had any difficulty in maintaining adequate supplies of these raw materials
and expects to continue to be able to purchase such raw materials at prevailing market prices.



Other than import tariffs in Thailand, the Company
does not face any restriction or control on the purchase or import of its raw materials. The Company may freely choose its suppliers
and negotiate the price and quantity of material with its suppliers. The Company formulates consumption plans for raw materials
regularly and continually monitors market conditions in respect of the supply, price and quality of raw materials.



57






Inflation would increase the cost of raw materials
and operating expenses for the Company. The Company would try to maintain its gross margins by increasing the prices of its products.



| | 4.2.4 | Quality Control
| | ----- | ---------------



The Company places a significant emphasis on
product quality. The Company has implemented a range of quality control procedures with stringent quality standards under the supervision
of dedicated quality control staff. Quality control procedures are implemented from the raw material to the finished product stages
at each of the Company’s major production facilities. Raw materials are inspected to ensure they meet the necessary level
of quality before production begins. During the manufacturing process, quality control procedures are performed at several stages
of production. Upon completion, finished goods are brought to quality control centers set up in the factory for inspection and
testing of different electrical and physical properties.



Depending on the requirements of its customers,
the Company has the capability to manufacture its products to meet a variety of different quality and production standards. These
include local standards and certifications, such as the Singapore Institute of Standards and Industrial Research Quality Mark and
the Thailand Industrial Standard, as well as other standards including the National Electrical Manufacturers Association Standard,
the British Standard, the Japan Industrial Standard and Underwriters Laboratories Inc. Standard, as applicable.



All the major companies in the APWC group have
attained International Standards Organization (“ISO”) 9002 certification for quality management and assurance standards
in the manufacture of electric wire and cable and have maintained that certification for at least the last ten years. The certifications
mean that the companies have in place quality assurance systems and the capability to consistently manufacture products of quality.



58






| | 4.2.5 | Sales and Marketing
| | ----- | -------------------



The Company’s telecommunications cable
and power cable products are primarily sold in the domestic markets of the countries where they are manufactured, whereas most
of the enameled wire manufactured by the Company in Thailand is exported., primarily to customers throughout Southeast Asia. The
following table sets forth the Company’s sales revenues for the periods indicated in its three reporting segments –
North Asia region, Thailand region and ROW region for its three principal product lines, i.e., Manufactured
Products, Distributed Products, and SDI together with their respective percentage share of total sales by reporting segment for
such periods.



|                |  | For the year ended December 31,  
|--------------- |  | ---------------------------------
|                |  | (figures in US$ are in thousands)
|                |  | 2015                             
|                |  | $                                
|Regions:        |  |                                  
|North Asia      |  | $                                
|Thailand        |  |                                  
|ROW             |  |                                  
|Total Net Sales |  | $                                



Our operating subsidiaries are also responsible
for sales planning, marketing strategy and customer liaison. The Company’s sales staff is knowledgeable about the Company’s
products and frequently must render technical assistance, consulting services and repair and maintenance services to the Company’s
customers. In order to ensure quality service and maintain sensitivity to market conditions, the Company does not conduct sales
through independent sales agents on a commission basis but uses its own sales employees located at the operating subsidiaries.



59






As copper constitutes the most significant component
of the Company’s wire and cable products, the price of the Company’s products depends primarily upon the price of copper.
In order to minimize the impact of copper price fluctuations, the Company attempts to determine the prices of its products based
on the prevailing market price of copper. The Company may be affected, to a degree, in the short term by significant fluctuations
in the price of copper.



Payment methods for the Company’s products
vary with markets and customers. The majority of sales by the Company of its Manufactured Products requires payment within 90 days,
but may vary depending on the customer and payment record. Sales pursuant to a successful project tender or sales to governmental
or public utilities are conducted in accordance with the tender or other applicable regulations. In connection with the distribution
of medium and high voltage power cable manufactured by PEWC, the Company is required to pay PEWC 90% of the cost of the products
either within 30 days of receipt of the product or, in the case of SDI products, upon installation, with the remaining 10% in either
case to be paid within one year. In connection with the purchase of copper rod, the Company is required to pay PEWC the cost of
the copper rod within 30 days from obtaining the products from PEWC. For the export market, payment is usually made by prior delivery
of an irrevocable letter of credit. Neither the Company nor its local subsidiaries offers financing for purchases of the Company’s
products. Company employees engaged in sales and marketing are paid a salary and may also receive a bonus based on performance.



60






Products are marketed under the respective names
of each company. For instance, products manufactured by Siam Pacific are marketed under the “Siam Pacific”. Products
manufactured by Sigma Cable are sold under the “Sigma Cable” brand.



Thailand



The Company produces and sells telecommunication
cable, enameled wire and power cable in Thailand. Charoong Thai is one of the leading cable manufacturers in Thailand. Our distribution
channels include both direct sales to government entities and private sector participants in the infrastructure sector, and sales
to agents for governmental entities. Sales within Thailand region are made directly by the sales department of the Company’s
local subsidiaries in accordance with terms and pricing set by the local subsidiaries. The major customers of the Company include
many prominent clients working with the government and its contractors (True Corporation Plc (“True”), TT&T (“Triple
T”), etc.), subcontractors, and distributors for the private sector. Charoong Thai has successfully participated in many
major projects, which included, Suwannabhumi International Airport, Government Center, PTT Maptaput, and BRT (Bus Rapid Transit).



ROW



The Company produces and sells low voltage power
cable in Singapore and Australia. In addition, the Company sells a wide range of wire and cable products produced by PEWC. The
Company also offers SDI project engineering services for medium and high voltage power cable to power transmission projects in
Singapore.



61






In Singapore alone, sales of Manufactured Products
in 2015 accounted for 37% of the total net sales in Singapore; sales of Distributed Products in 2015 accounted for 54%, the remaining
9% representing SDI project engineering services. SP Power Assets Ltd. has historically been far and away the leading customer
for the Company’s SDI services. Sales to the customer are under a comprehensive contract, with purchase orders placed from
time to time with the Company by SP Power Assets Ltd.



China



The Company produces and sells enameled
wire and electronic wire in China. The Company’s China operations are now conducted through five business entities;
following the establishment of PEWC Hong Kong, which has continued to act as a distributor of PEWS products following its
sale in 2014 to PEWC. The Company generally sells enameled wire directly to manufacturers of electric motors for use in
various consumer appliances.



| | 4.2.6 | Competition
| | ----- | -----------



The wire and cable industry in the Asia Pacific
region is highly competitive. The Company’s competitors include a large number of independent domestic and foreign suppliers.
Certain competitors in each of the Company’s markets have substantially greater manufacturing, sales, research and financial
resources than the Company. The Company and other wire and cable producers increasingly compete on the basis of product quality
and performance, reliability of supply, customer service and price. To the extent that one or more of the Company’s competitors
is more successful with respect to the primary competitive factors, the Company’s business could be adversely affected.



62






Thailand



The wire and cable industry in Thailand is highly
competitive. In its various product lines, the Company competes with a total of approximately thirty local wire and cable manufacturers
and, to a lesser extent, with foreign producers for sales in Thailand of telecommunications cable, power cable and enameled wire.
The Company is one of the five largest producers in the Thai market. These five largest producers are the only producers of telecommunications
cable approved by the Thai Industrial Standards Institute and, therefore, the only cable producers whose products may be used in
government-commissioned projects. Stringent governmental approval processes, tariffs and other import restrictions have limited
competition in the Thailand market from foreign wire and cable producers. The Company also experiences significant competition
from a number of smaller producers with regard to sales of enameled wire products.



Singapore



The Company believes that Sigma Cable is one
of the major suppliers of power cable products in Singapore; however, it experiences significant competition from other local producers.
There is no tariff or other barrier against foreign competition in the local Singapore market and potential competitors are free
to enter the industry. However, because of high capital costs, the Company does not presently anticipate that it is likely there
will be new domestic entrants to the wire and cable industry in Singapore in the near future.



63






Australia



Currently, besides APEC, there are two major
wire and cable producers with operations located in Australia: Olex Cables (owned by Nexans) and Prysmian Cables, with factories
in the states of Victoria and New South Wales, respectively. Also, Advance Cable, a cable producer with a factory in Victoria,
has recently obtained a bigger market share. In addition, a significant portion of the Australian market is serviced by two importers:
(i) General Cables Australia, which imports cables from its parent company General Cables, which manufactures cables in New
Zealand and (ii) Electra Cables, which imports cables from factories in China. These companies are APEC’s principal
competitors. APEC however is the only power cable producer in Queensland and therefore seeks to take advantage of its comparative
proximity to Queensland-based customers in contrast to competitors that are required to transport their products into Queensland
from other states in Australia. APEC has also opened sales offices with warehousing facilities in Sydney, Melbourne, Brisbane,
and Perth in order to attract and service the customers in those regions. APEC also has a distribution agreement with one of the
regional suppliers with the goal of generating additional business for the Australia operations. Foreign competition barriers exist
with import duties and the more stringent Australian cable specifications standards. Asean (Association of South East Asian Nations)
Free Trade Area (AFTA) Agreements are in effect with Singapore and Thailand, among other Asian countries.



China



PEWS manufactures enameled wires in the Shenzhen
Special Economic Zone in Guangdong Province for electronic, video and audio products for the South China market and for export.
PEWC Hong Kong, one of the subsidiaries of PEWC, is the trading arm of PEWS. It supplies mainly to overseas transformer, motor
and coil manufacturers.  It faces competition principally from overseas imports and local manufacturers.



64






Shanghai Yayang is the only major enameled wire
producer in Shanghai and it supplies mainly to transformer, motor and coil manufacturers in the eastern part of China. It faces
competition principally from overseas imports and manufacturers from other provinces in China.



| | 4.2.7 | Regional Considerations
| | ----- | -----------------------



The principal Asian markets in which we do business
have displayed exceptional overall economic growth in recent years compared to the United States and a number of other more developed
markets, subject to occasional episodes of economic and currency exchange volatility attributable to various factors including
the increased risks of emerging market investment, actual or potential political instability and occasional pandemics. In some
countries, the International Monetary Fund (the “IMF”) exerts considerable influence over economic policy and provides
support to stabilize the domestic economy. In general, the Asian markets in which we do business have been export-driven in recent
years and have in the case of China and Singapore, for example, accumulated considerable capital reserves, which contributes to
a more stable business environment.



Thailand Region



A substantial portion of the Company’s
Thai operations, whose sales accounted for approximately 42.4% of the Company’s net sales in 2015, consists of the
manufacture of telecommunications and power cable and sales of those products for use in large-scale telecommunications projects
and various construction projects in Thailand. The volume of sales of these products tends to correlate with the general level
of economic activity in Thailand. As a result, the performance of the Company’s Thai operations depends in significant part
on the general state of the Thai economy. Infrastructure development and related construction projects in Thailand depend significantly
upon government sponsored initiatives. In recent years, the level of government involvement in infrastructure development has
tended to track increases or contractions in Thailand’s gross domestic product (“GDP”). Overall, the construction
industry and infrastructure projects have slowed considerably, thereby affecting local sales, placing competitive pressure on
prices and prompting the Company to rationalize Thai operations and actively seek overseas export markets.



65






Telecommunications



Sales of the Company’s telecommunication
products in Thailand have depended to a significant degree on the substantial investment in and development of the telecommunications
sector by the Thai government. In particular, the Company’s sales of Manufactured Products are affected by the dollar value
of contracts awarded by the government for telecommunications and other infrastructure projects.



The Company produces and sells copper core telecommunications
cable, enameled copper wire and enameled aluminum wire to the Thai market, and also exports enameled wire to overseas markets.
Sales of telecommunications cable, one of the Company’s leading products in Thailand, are conducted either by tender for
participation in large scale telecommunications projects of the Telephone Organization of Thailand Corporation Plc. (“TOT”),
or by sales directly to subcontractors of Triple T and True, the two private telephone line contractors which would be licensed
by TOT with regard to particular projects. The Company generally sells enameled wire directly to electrical appliance manufacturers
or an OEM (original equipment manufacturers) for both the local and export markets, and in smaller units that are sold to local
dealers.



66






Power



In Thailand, the prevailing historical trend
has been that economic growth would stimulate rapid growth in the demand for electric power, and annual rates of growth in electricity
demand would outpace annual economic growth rates. Despite the rapid growth in electricity demand, electricity consumption in Thailand
remains low by international standards. The Company believes that, in the medium to longer term, there will be an increased demand
for power supply which will lead to increased demand for the Company’s power cable products from both developers of power
production facilities and contractors installing power supply lines.



Singapore



The Company’s distribution and project
engineering business segments are concentrated in the Singapore market. In 2015, the Company realized $8.8 million in revenues
from SDI projects, compared to $21.6 million in 2014 and $18.6 million in 2013. Revenue in Singapore from Distributed Products
in 2015 was $52.9 million, compared to $61.0 million in 2014 and $54.8 million in 2013.



The Singapore government has established targets
to increase the resident population from the approximately 3.9 million citizens and permanent residents at the end of 2015 to approximately
6 million by the end of 2020. This planned growth in population is expected to result in an increase in demand for residential
property and construction. The Company continues to seek ways to increase its business volume in its project engineering business
segment.



67






China



The economy of China differs from that of most
developed free-market economies in a number of respects, including structure, degree of government involvement, level of development,
growth rate, capital reinvestment, allocation of resources, rate of inflation and balance of payments position. In recent years,
the PRC government has implemented economic reform measures which emphasize decentralization, expansion of consumption in the domestic
market, utilization of market forces and the development of foreign investment projects of which Shanghai Yayang is an example.



| | 4.3 | Organization Structure
| | --- | ----------------------



Please refer to Business Overview in section
4.2



| | 4.4 | Property, Plant and Equipment
| | --- | -----------------------------



The Company’s Manufactured Products are
produced at facilities located on premises owned or leased by Siam Pacific, Charoong Thai, Sigma Cable, APEC, Shanghai Yayang,
PEWS and NPC. The following is a summary of the Company’s material facilities and operations as of December 31, 2015.



Siam Pacific owns a 7.45 acre production facility
near Bangkok, Thailand, located on a 26.79 acre site that it also owns. Telecommunications cable and enameled wire are manufactured
at this facility. The production facility constitutes a portion of certain property and assets which are pledged to a financial
institution.



68






Charoong Thai owns a 24.7 acre production facility
in Chachoengsao province, near Bangkok, Thailand, where telecommunications cable and power cable are manufactured. The production
facility is located on a 57.9 acre site which Charoong Thai also owns. Neither the production facility nor the land is mortgaged.



Sigma Cable produces power cable on a 19,373
square meter site in Singapore leased from the Jurong Town Corporation (“JTC”) for 30 years from September 16, 2000
to September 16, 2030. JTC is a government-linked corporation and is Singapore’s largest industrial landlord. Building
assets are pledged to United Overseas Bank.



APEC owns a 6,735 square meter power cable manufacturing
facility on a 39,000 square meter land parcel in Brisbane, Australia. Neither the production facility nor the land is mortgaged.



Shanghai Yayang operates a factory that produces
enameled wires, located in an area of approximately 27,839 square meters of state-owned land in an industrial district in Fengxian,
Shanghai. Assets consisting of buildings with a value of approximately $1 million are pledged to Industrial and Commercial Bank
of China.



PEWS manufactures enameled wire in a facility
on 36,000 square meters of state-owned land with a built-up area of 20,367 square meters in Long Gang, Shenzhen, China. A leasehold
right of industrial land use for the land has been granted for 49 years. The land and building are pledged to Agricultural Bank
of China as security for a $7.6 million bank loan.



NPC is situated in Ing-Chiang Township in Ningbo
City in Zhè Jiāng Province, China. NPC manufactures electronic wire in a facility that occupies 44,000 total square
meters, with a land use right expiring July, 2044. The factory and the land use right are pledged to a local financial institution
to secure a $5.3 million loan.



69






All of the Company’s facilities in Thailand,
Singapore, Australia and China use production processes and equipment of international standard imported from Europe, the United
States, Taiwan, and Japan.



The production capacity and extent of utilization
of the Company’s facilities varies from time to time and such information is considered to be commercially sensitive and
proprietary information.



| | 4.5 | Insurance
| | --- | ---------



The Company maintains insurance policies covering
certain buildings, machinery and equipment against specified amounts of damage or loss caused by fire, flooding, other natural
disasters and burglary and theft. The Company does not carry insurance for consequential loss arising from business interruptions
or political disturbances and does not carry product liability insurance. In addition, the availability of insurance in China is
limited, and the Company does not have business liability or disruption insurance for our operations in China. The Company believes
that it maintains insurance coverage commensurate with the nature of and risks associated with its business. Siam Pacific has insurance
coverage which covers fire and theft, but does not provide coverage for flood damage or business interruption, as in Thailand insurance
companies are generally unwilling to issue policies covering flood or business interruption.



70






| | 4.6 | Environmental Matters
| | --- | ---------------------



The Company is subject to a variety of laws and
regulations covering the storage, handling, emission and discharge of materials into the environment. The Company believes that
all of its operations are in compliance with, and in certain circumstances exceed, all applicable environmental laws and regulations.
The Company’s operations in Thailand have recovered fully from the property damage and cessation of operations that occurred
there in 2011 by reason of the nationwide flooding crisis. The Company has not been subject to any legal, regulatory or other action
alleging violations or breaches of environmental standards. While it is difficult to accurately estimate future environmental compliance
costs and potential liabilities, if any, the Company does not currently anticipate any material adverse effect on its consolidated
results of operations, financial position or cash flows as a result of compliance with these laws.



|Item 4A: | Unresolved Staff Comments
|-------- | -------------------------



(Not applicable)



|Item 5: | Operating and Financial Review and Prospects
|------- | --------------------------------------------



The following discussion should be read in conjunction
with the information contained in our audited consolidated financial statements and notes thereto (the “Financial Statements”)
presented in Item 18 of this Annual Report.



| | 5.1 | Disclosures of Critical Accounting Policies
| | --- | -------------------------------------------



Summarized below are our accounting policies
that we believe are important to the presentation of our financial results and also involve the need for management to make estimates
about the effect of matters that are uncertain in nature. Actual results may differ from these estimates, judgments and assumptions.
Certain accounting policies are particularly critical because of their significance to our reported financial results and the possibility
that future events may differ significantly from the conditions and assumptions underlying the estimates used and judgments made
by our management in preparing our financial statements. The following discussion should be read in conjunction with the consolidated
financial statements and related notes, which are included in this annual report.



71






Fair Value Measurement



The Company measures financial instruments at
fair value at each balance sheet date.



Fair value is the price that would be received
to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date.
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place
either:



| | ► | In the principal market for the asset or liability, or                                           
| | - | -------------------------------------------------------------------------------------------------
| |   |                                                                                                  
| | ► | In the absence of a principal market, in the most advantageous market for the asset or liability.



The principal or the most advantageous market
must be accessible to the Company.



The fair value of an asset or a liability is
measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants
act in their economic best interest.



72






A fair value measurement of a non-financial asset
takes into account a market participant's ability to generate economic benefits by using the asset at its highest and best use
or by selling it to another market participant that would use the asset at its highest and best use.



The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.



All assets and liabilities for which fair value
is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value measurement as a whole:





| | ► | Level 1: Quoted (unadjusted)
    market prices in active markets for identical assets or liabilities                                                     
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                          
| | ► | Level 2: Valuation techniques for which
    the lowest level input that is significant to the fair value measurement is directly or indirectly observable
| |   |                                                                                                                                                          
| | ► | Level 3: Valuation
    techniques for which the lowest level input that is significant to the fair value measurement is unobservable                     





For assets and liabilities that are recognized
in the financial statements on a recurring basis, the Company determines whether transfers have occurred between Levels in the
hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as
a whole) at the end of each reporting period.



73






For the purpose of fair value disclosures, the
Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or
liability and the level of the fair value hierarchy as explained above.



Inventories



Inventories are stated at the lower of cost and
net realizable value. Cost is determined on the weighted average basis and, in the case of work in progress and finished goods,
comprises direct materials, direct labor and an appropriate proportion of overheads. Net realizable value is based on estimated
selling prices less any estimated costs to be incurred to completion and the estimated cost necessary to make the sale.



Financial Instruments



| | (i) | Financial assets
| | --- | ----------------



Initial recognition and measurement





Financial assets within the scope of International
Accounting Standard 39 Financial Instruments: Recognition and Measurement (“IAS 39”) are classified as financial assets
at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets,
or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification
of its financial assets at initial recognition.







All financial assets are recognized initially
at fair value plus transaction costs, except in the case of financial assets recorded at fair value through profit or loss.



74






Purchases or sales of financial assets that require
delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized
on the trade date, i.e., the date that the Company commits to purchase or sell the asset.



Subsequent measurement



The subsequent measurement of financial assets
depends on their classification as described below:



Financial assets at fair value through profit or loss



Financial assets at fair value through profit
or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through
profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing
in the near term.



Financial assets at fair value through profit
or loss are carried in the balance sheet at fair value with net changes in fair value presented as finance costs (negative net
changes in fair value) or finance income (positive net changes in fair value) in the income statement.



Derivatives not designated as hedging instruments



A derivative is a financial instrument or other
contract within the scope of IAS 39 with all of the following characteristics:





| | (a) | its value changes in response to the change in
    a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, a
    credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not
    specific to a party to the contract (sometimes called the 'underlying');
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



75






| | (b) | it requires no initial net investment, or an initial net
    investment that is smaller than would be required for other types of contracts that would be expected to have a similar response
    to changes in market factors; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                    
| | (c) | it is settled at a future date.                                                                                                                                                                                                    





Fair value is the measurement basis for all financial
instruments meeting the definition of a derivative. Change in fair value of non-hedged items is recorded in profit and loss.



Loans and receivables



Loans and receivables are non-derivative financial
assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial
assets are subsequently measured at amortized cost using the effective interest rate (“EIR”) method, less impairment.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortization is included in finance income in the income statement. The losses arising from impairment
are recognized in the other operating expenses for receivables.



Held-to-maturity investments



Non-derivative financial assets with fixed or
determinable payments and fixed maturities are classified as held to maturity when the Company has the positive intention and ability
to hold them to maturity. After initial measurement, held to maturity investments are measured at amortized cost using the EIR,
less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortization is included as finance income or finance cost in the income statement. The
losses arising from impairment are recognized in the income statement in finance costs.



76






Available-for-sale financial assets



Available-for-sale financial assets include
equity investments and debt securities. Equity investments classified as available for sale are those that are neither classified
as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those that are intended
to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in
the market conditions.



After initial measurement, available-for-sale
financial assets are subsequently measured at fair value with unrealized gains or losses recognized as other comprehensive income
in the available-for-sale reserve until the investment is derecognized, at which time the cumulative gain or loss is recognized
in other operating income, or the investment is determined to be impaired, when the cumulative loss is reclassified from the available-for-sale
reserve to the income statement in finance costs. Interest earned whilst holding available-for-sale financial investments is reported
as finance income using the EIR method.



For a financial asset reclassified out of from
the available-for-sale category, the fair value carrying amount at the date of reclassification becomes its new amortized cost
and any previous gain or loss on the asset that has been recognized in equity is amortized to profit or loss over the remaining
life of the investment using the EIR. Any difference between the new amortized cost and the maturity amount is also amortized over
the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded
in equity is reclassified to the income statement.



77






| | (ii) | Impairment of financial assets
| | ---- | ------------------------------



The Company assesses, at each reporting date,
whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group
of financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that
has occurred since the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact
on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence
of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty,
default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization
and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears
or economic conditions that correlate with defaults.



Financial assets carried at amortized cost



For financial assets carried at amortized cost,
the Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually
significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective
evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in
a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that
are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in
a collective assessment of impairment.



78






If there is objective evidence that an impairment
loss has been incurred, 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 expected credit losses that have not yet been incurred). The present
value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a loan
has a variable interest rate, the discount rate for measuring any impairment loss is the current EIR.



The carrying amount of the asset is reduced through
the use of an allowance account and the loss is recognized in profit or loss. Interest income continues to be accrued on the reduced
carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the
impairment loss. The interest income is recorded as finance income in the income statement. Loans together with the associated
allowance are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been
transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because
of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by
adjusting the allowance account. If a write-off is later recovered, the recovery is credited to finance costs in the income statement.



Trade Receivables Impairment:



For a trade receivable, impairment assessment
is performed on an individual basis:



79






A financial asset is impaired (and impairment
losses are determined) if, and only if, there is objective evidence of impairment as a result of one or more events that occurred
after initial recognition (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of
the financial asset that can be reliably estimated.



Objective evidence that a financial asset or
group of assets is impaired includes observable data that comes to the attention of the holder about the following loss events:





| | ► | significant financial difficulty of the issuer
    or obligor;                                                                                                                                                                                                              
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                             
| | ► | breach of contract, such as a default or delinquency in interest
    or principal payments;                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                             
| | ► | the lender, for economic or legal reasons
    relating to the borrower's financial difficulty, granting to the borrower a concession that would not otherwise be considered;                                                                                                
| |   |                                                                                                                                                                                                                                                                             
| | ► | it becoming probable that the borrower will enter bankruptcy
    or other financial reorganization;                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                             
| | ► | the disappearance of an active market for that asset because
    of financial difficulties (but not simply because the asset is no longer publicly traded); or                                                                                                              
| |   |                                                                                                                                                                                                                                                                             
| | ► | observable data indicating that there
    is a measurable decrease in the estimated future cash flows from a Company of financial assets since initial recognition,
    although the decrease cannot yet be identified with the individual assets in the Company, including:



80






| | ► | adverse changes in the payment status
    of borrowers in relation to the Company (e.g.an increased number of delayed payments); or
| | - | -----------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                    
| | ► | national or local economic conditions
    that correlate with defaults on the assets in the Company.                               





For trade receivables that have been individually
assessed, but for which there is no objective evidence of impairment, the review for impairment is performed on a group basis,
based on similar credit risk characteristics.



Available for sale financial assets



For available-for-sale financial assets, the
Company assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired.



In the case of equity investments classified
as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment
below its cost. ‘Significant’ is evaluated against the original cost of the investment and ‘prolonged’
against the period in which the fair value has been below its original cost. The Company's policy considers a significant decline
to be one in which the fair value is below the weighted average original cost by more than 20%. A prolonged decline is considered
to be one in which the fair value is below the weighted average original cost for a period of more than 12 months. When there is
evidence of impairment, the cumulative loss – measured as the difference between the acquisition cost and the current fair
value, less any impairment loss on that investment previously recognized in the income statement – is removed from other
comprehensive income and recognized in the income statement. Impairment losses on equity investments are not reversed through profit
or loss; increases in their fair value after impairment are recognized directly in other comprehensive income.



81






In the case of debt instruments classified as
available for sale, impairment is assessed based on the same criteria as financial assets carried at amortized cost. However, the
amount recorded for impairment is the cumulative loss measured as the difference between the amortized cost and the current fair
value, less any impairment loss on that investment previously recognized in the income statement.



Future interest income continues to be accrued
based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose
of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair
value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss
was recognized in the income statement, the impairment loss is reversed through the income statement.



| | (iii) | Financial Liabilities
| | ----- | ---------------------



Financial liabilities initial recognition and measurement



Financial liabilities within the scope of IAS
39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated
as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial liabilities
at initial recognition.



All financial liabilities are recognized initially
at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.



82






The Company’s financial liabilities include
trade and other payables, bank overdrafts and interest bearing loans and borrowings.



Subsequent measurement



After initial recognition, interest bearing loans
and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss
when the liabilities are derecognized as well as through the EIR amortization process.



Amortized cost is calculated by taking into account
any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included
as finance costs in the income statement.



Impairment of non-financial assets



The Company assesses, at each reporting date,
whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for
an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher
of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use. A
CGU is the smallest group of assets that generates cash inflows that are largely independent of the cash flows from other assets
or groups of assets. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or group of assets. When the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.



83






In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions
are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.



The Company bases its impairment calculation
on detailed budgets and forecast calculations, which are prepared separately for each of the Company’s CGUs to which the
individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods,
a long-term growth rate is calculated and applied to project future cash flows after the fifth year.



Impairment losses of continuing operations, including
impairment on inventories, are recognized in the income statement in expense categories consistent with the function of the impaired
asset.



For assets excluding goodwill, an assessment
is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer
exist or have decreased. If such indication exists, the Company estimates the asset’s or CGU’s recoverable amount.
A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s
recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had
no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the income statement.



84






Taxes



Deferred tax



Deferred tax is provided using the liability
method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.



Deferred tax liabilities are recognized for all
taxable temporary differences, except:



| | ► | When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or                                           
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                  
| | ► | In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.



85






Deferred tax assets are recognized for all deductible
temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to
the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the
carry forward of unused tax credits and unused tax losses can be utilized, except:



| | ► | When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or                                                                               
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                      
| | ► | In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.



The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each
reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred
tax asset to be recovered.



Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted at the reporting date.



86






Deferred tax relating to items recognized outside
profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction
either in other comprehensive income or directly in equity.



Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred
taxes relate to the same taxable entity and the same taxation authority.



Uncertain tax position



An entity’s tax position might be uncertain;
for example, where the tax treatment of an item of expense or structured transaction may be challenged by the tax authorities.



Local management should consider each uncertain
tax positions individually, by first consider whether each position taken in the tax return is probable of being sustained on examination
by the taxing authority. It should recognize a liability for each item that is not probable of being sustained. The liability then
is measured using a single best estimate of the most likely outcome. The uncertain tax positions are presented in the current tax
liabilities.



The Company’s policy is to recognize interest
expense and penalties related to income tax matters as a component of income tax expense.



Revenue recognition



Revenue is recognized to the extent that it is
probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment
is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually
defined terms of payment and excluding taxes or duty. The Company assesses its revenue arrangements against specific criteria to
determine if it is acting as principal or agent.



87






SDI





The Company’s supply, delivery and installation
services are considered as multiple elements arrangements in accordance with International Accounting Standard 18 Revenue. The
sale of cables and the installation service are considered as one single arrangement.



Revenue of SDI is accounted for using the percentage-of-completion
method, based on the customer certification of the length of cable laid in proportion to the estimated total length of cable under
the contracts in accordance with International Accounting Standard 11 Construction Contracts.





When the current estimates of total contract
revenue and contract cost indicate a loss, a provision for the entire loss on the contract shall be made. The recognition of provision
for losses shall be in the period in which they become evidenced. On a quarterly basis, the Company should review the budget
and forecast whether a loss provision should be recorded.



| | 5.2 | Selected Gross Margin Data
| | --- | --------------------------



This discussion should be read in conjunction
with the information contained in our Consolidated Financial Statements presented in Item 18 of this Annual Report.



88






Results are analyzed and reported along the lines
of our three principal business segments, consisting of the North Asia region, the Thailand region, and the ROW region. For the
benefit of our shareholders, included in the summary table below are certain results for product lines within our 3 business segments
with regard to net sales, gross profit and gross profit margin for the periods covered. The following table sets forth selected
summary data for the periods indicated (dollar ($) amounts in thousands of US$).





|                          |  | For the year ended December 31,     
|------------------------- |  | ------------------------------------
|                          |  | 2015                                
|                          |  | (in thousands except for percentage)
|Net Sales:                |  |                                     
|North Asia region         |  | $                                   
|Thailand region           |  |                                     
|ROW region                |  |                                     
|Total                     |  | $                                   
|Gross profit:             |  |                                     
|North Asia region         |  | $                                   
|Thailand region           |  |                                     
|ROW region                |  |                                     
|Total gross profit        |  | $                                   
|Gross profit margin:      |  |                                     
|North Asia region         |  |                                     
|Thailand region           |  |                                     
|ROW region                |  |                                     
|Total gross profit margin |  |                                     





| | 5.3 | Operating Results
| | --- | -----------------



The Company is 75.4% owned and controlled by
PEWC, a Taiwanese company. The remaining 24.6% of the outstanding Common Shares are publicly-traded in the United States and listed
on NASDAQ. Based upon a review of Schedule 13D and 13G filings made with the Commission by shareholders, and a review of the share
register maintained by the Company’s transfer agents in Bermuda and the U.S., the Company is not aware that it has any shareholders
resident in the jurisdictions where the Company has business operations. While the Company’s operations and results are impacted
by economic, fiscal, monetary and political policies of the respective governments in the countries where the Company operates,
that impact is not a function of the shareholder base of the Company.





89








| | 5.3.1 | Year Ended December 31, 2015 Compared with Year Ended December 31, 2014
| | ----- | -----------------------------------------------------------------------



|                                                             |  | For the Year Ended 
December 31, |          |      |  |             
|------------------------------------------------------------ |  | -------------------------------- | -------- | ---- |  | ------------
|                                                             |  | 2015                             |          | 2014 |  | Changes in $
|                                                             |  | (in thousands)                   |          |      |  |             
|Income Statement Data:                                       |  |                                  |          |      |  |             
|Net sales                                                    |  | $                                | 389,632  |      |  | $           
|Costs of sales                                               |  |                                  | (366,143 | )    |  |             
|Gross profit                                                 |  |                                  | 23,489   |      |  |             
|Other operating income                                       |  |                                  | 1,140    |      |  |             
|Selling general & administrative expenses                    |  |                                  | (26,882  | )    |  |             
|Other operating expenses                                     |  |                                  | (332     | )    |  |             
|Operating profit/(loss)                                      |  |                                  | (2,585   | )    |  |             
|Finance cost                                                 |  |                                  | (1,547   | )    |  |             
|Finance income                                               |  |                                  | 697      |      |  |             
|Share of loss of an associate                                |  |                                  | (801     | )    |  |             
|Loss on sale of a subsidiary                                 |  |                                  | —        |      |  |             
|Exchange loss                                                |  |                                  | (4,640   | )    |  |             
|Other income                                                 |  |                                  | 119      |      |  |             
|Other expenses                                               |  |                                  | (180     | )    |  |             
|Income/(loss) from continuing operations before income taxes |  |                                  | (8,937   | )    |  |             
|Income taxes expenses                                        |  |                                  | (661     | )    |  |             
|Net income/(loss)                                            |  | $                                | (9,598   | )    |  | $           
|Net income/(loss) attributable to non-controlling interests  |  |                                  | (1,440   | )    |  |             
|Net income/(loss) attributable to APWC                       |  |                                  | (8,158   | )    |  |             











90




General



Results of operations are determined primarily
by market demand and government infrastructure projects, market selling prices of our products, our ability to manufacture high
quality products efficiently in quantities sufficient to meet demand and to control production and operating costs. Our results
are also influenced by a number of factors, including currency stability in the countries in which our operations are located,
competition and the cost of raw materials, especially copper, which accounted for the majority of our cost of sales in 2015 and
2014.



In order to minimize the impact of copper price
fluctuations, we attempt to “peg” the prices of our products to the prevailing market price of copper and pass changes
in the cost of copper through to customers as much as possible. In certain circumstances, however, we remain affected by fluctuations
in the price of copper. A recent rise or decline in copper prices may not be fully reflected under this pricing scheme for several
months.



Average copper prices per metric ton decreased
by 19.80% from $6,860 in 2014 to $5,502 in 2015 (annual average).



Copper prices indicated in this report are quoted
from the LME index. The 2015 and 2014 copper prices were as follows:



|                                 |  |  |      | 2015 |  | 2014
|-------------------------------- |  |  | ---- | ---- |  | ----
|Average LME copper price ($/Ton) |  |  | Q1   |      |  |     
|                                 |  |  | Q2   |      |  |     
|                                 |  |  | Q3   |      |  |     
|                                 |  |  | Q4   |      |  |     
|                                 |  |  | Year |      |  |     







91




The average copper price in March 2016 on
the LME was $5,926 per metric ton.



Net Sales



Total sales in the North Asia region decreased
by $24.6 million, or 21.4%, from $114.8 million in 2014 to $90.2 million in 2015. The revenue declined primarily because of the
economic slowdown in China, which caused a decrease in the sales volume of our products in that market.





Revenue from the Thailand region decreased by
$1.5 million from $166.9 million in 2014 to $165.4 million in 2015, or 0.9%. The decrease was primarily the result of the currency
depreciation of the Baht against the U.S. dollar.









Revenue decreased by $35.6 million, or 21.0%,
from $169.6 million in 2014 to $134.0 million in 2015 in the ROW region. The decrease was due to both the increased market competition,
primarily the competition of the products imported from China, as well as the depreciation of each of the Singapore and Australian
dollars against the U.S. dollar.







Gross Profit





Gross profit for 2015 was $23.5 million, representing
a decrease of $13.3 million, or 36.0% down compared to $36.7 million in 2014.









The gross profit margin of the North Asia region
was down from 3.87% in 2014 to 2.09% in 2015. The Company’s main product in this region is enameled wire. As the technology
required to manufacture the product is rather basic and well known, and the manufacturing process is not sophisticated, the Company’s
business in the region was adversely affected by greater competition in the local market. In order to maintain the market share
without sacrificing the product quality, the Company lowered the selling price to be competitive with the local competitors’
prices. The margin was also eroded because of the drop of the copper price by 19.8%.









92






The gross margin of the Thailand region was 5.74%
in 2015, down from 9.52% in 2014. Our major clients in this region include government entities, private sector participants in
the infrastructure sector and agents for governmental entities. The unstable political environment adversely affected Thai government’s
spending on infrastructure. The gross margin of the Thailand region was eroded by the decrease in sales to the public sector, from
which our subsidiaries in the Thailand region traditionally enjoyed a higher profit margin. In addition, a portion of orders were
outsourced to other wire and cable manufacturers as some of our equipment and machinery was shut down temporarily for upgrading
to meet the environmental regulations, which caused an increase in our costs.







The gross profit margin of the ROW region decreased from 9.68% in
2014 to 9.04% in 2015. The decrease of the gross margin was primarily due to the competition in each of the Australia and Singapore
markets, where the subsidiaries in this region lowered the selling price to compete with similar products imported from China by
other competitors.



Operating Profit





Selling, General & Administrative (“SG&A”)
expenses were $26.9 million in 2015, decreased by $2.6 million, or 8.8%, from $29.5 million in 2014. The decrease in SG&A was
primarily attributable to the decrease in sales-related commissions and remuneration, which resulted from the decrease of
government projects. The decrease was also partially attributable to the depreciation of local currencies against the U.S. dollar.
For the years ended 2015 and 2014, SG&A expenses accounted for 6.9% and 6.5% of the net sales, respectively.



In addition, other operating expenses decreased
by $1.8 million from $2.2 million in 2014 to 0.3 million in 2015. The decrease in other operating expenses was primarily attributable
to a $2.2 million provision recorded in 2014 for doubtful accounts.









93




Finance Income





The finance income was interest earned from bank
deposits. Interest income decreased from $1.2 million in 2014 to $0.7 million in 2015 by $0.5 million, or 40.3%, primarily due
to tighter cash position in the Thailand region and the depreciation of local currencies against the U.S. dollar.







Share of Loss of an Associate





The increase in the share of loss of an associate
by $0.5 million in 2015, as compared to that of 2014, was primarily due to the loss that the Company recognized according to its
ownership percentage in SPRC.







Exchange Gain/(Loss)



The exchange rates at December 31, 2015
and 2014 are listed below, based on the Noon Buying Rate. However, they do not actually reflect the ongoing rates during the year
when transactions actually took place.



|                          |  | As of December 31,
|------------------------- |  | ------------------
|                          |  | 2015              
|Foreign currency to US$1: |  |                   
|Thai Baht                 |  |                   
|Singapore $               |  |                   
|Australian $              |  |                   
|Chinese RMB               |  |                   







94




Other Expense



Other expenses increased by $0.1 million compared
to 2014 primarily due to the write-off of other receivables in 2015.



Income Taxes



Income tax expense was $0.7 million in 2015 compared
to $2.3 million in 2014. The change was mainly due to the decrease of the income before income tax.





| | 5.3.2 | Year Ended December 31, 2014 Compared with
Year Ended December 31, 2013
| | ----- | -----------------------------------------------------------------------





|                                                      |  | For the Year Ended December 31, |          |      |  |             
|----------------------------------------------------- |  | ------------------------------- | -------- | ---- |  | ------------
|                                                      |  | 2014                            |          | 2013 |  | Changes in $
|                                                      |  | (in thousands)                  |          |      |  |             
|Income Statement Data:                                |  |                                 |          |      |  |             
|Net sales                                             |  | $                               | 451,327  |      |  | $           
|Costs of sales                                        |  |                                 | (414,583 | )    |  |             
|Gross profit                                          |  |                                 | 36,744   |      |  |             
|Other operating income                                |  |                                 | 1,135    |      |  |             
|Selling general & administrative expenses             |  |                                 | (29,479  | )    |  |             
|Other operating expenses                              |  |                                 | (2,168   | )    |  |             
|Operating profit                                      |  |                                 | 6,232    |      |  |             
|Finance cost                                          |  |                                 | (1,697   | )    |  |             
|Finance income                                        |  |                                 | 1,167    |      |  |             
|Share of loss of an associate                         |  |                                 | (338     | )    |  |             
|Gain on disposal of investment                        |  |                                 | —        |      |  |             
|Loss on sale of a subsidiary                          |  |                                 | (178     | )    |  |             
|Exchange gain (loss)                                  |  |                                 | (206     | )    |  |             
|Other income                                          |  |                                 | 104      |      |  |             
|Other expenses                                        |  |                                 | (49      | )    |  |             
|Income from continuing operations before income taxes |  |                                 | 5,035    |      |  |             
|Income taxes expenses                                 |  |                                 | (2,274   | )    |  |             
|Net income                                            |  | $                               | 2,761    |      |  | $           
|Net income attributable to non-controlling interests  |  |                                 | 2,189    |      |  |             
|Net income attributable to APWC                       |  |                                 | 572      |      |  |             







95




General



Results of operations are determined primarily
by market demand and government infrastructure projects, market selling prices of our products, our ability to manufacture high
quality products efficiently in quantities sufficient to meet demand and to control production and operating costs. Our results
are also influenced by a number of factors, including currency stability in the countries in which our operations are located,
competition and the cost of raw materials, especially copper, which accounted for majority of the cost of sales in 2014 and 2013.



In order to minimize the impact of copper price
fluctuations, we attempt to “peg” the prices of our products to the prevailing market price of copper and pass changes
in the cost of copper through to customers as much as possible. In certain circumstances, however, we remain affected by fluctuations
in the price of copper. A recent rise or decline in copper prices may not be fully reflected under this pricing scheme for several
months.



Average copper prices per metric ton decreased
by 6.4% from $7,326 in 2013 to $6,860 in 2014 (annual average).





96




Copper prices indicated in this report are quoted
from the LME index. The 2014 and 2013 copper prices are as follows:



|                                 |  |  |      | 2014 |  | 2013
|-------------------------------- |  |  | ---- | ---- |  | ----
|Average LME copper price ($/Ton) |  |  | Q1   |      |  |     
|                                 |  |  | Q2   |      |  |     
|                                 |  |  | Q3   |      |  |     
|                                 |  |  | Q4   |      |  |     
|                                 |  |  | Year |      |  |     



Net Sales



Total sales in the North Asia region increased
by $45.5 million, or 65.6%, from $69.3 million in 2013 to $114.8 million in 2014. The increase in sales was primarily due to the
fact that starting November 2013, the region's export sales were no longer made through EPAN, and as a result, a substantial portion
of the export sales was moved to the North Asia region. The increase in sales was also contributed by the increase in the sales
of manufactured products due to a different sales strategy, which increased both domestic and export sales.



Revenue from the Thailand region decreased by
$8.4 million from $175.3 million in 2013 to $166.9 million in 2014, or 4.8%. The decrease was primarily attributable to the fact
that the volatile political situation adversely impacted the level of infrastructure investment and customer demand for our products.



Revenue decreased by $46.4 million, or 21.5%,
from $216.0 million in 2013 to $169.6 million in 2014 in the ROW region. The decrease was primarily because starting November 2013,
a substantial portion of the export business was transferred to the North Asia region rather than being conducted through the ROW
region. The decrease was also attributable to the decrease in sales in APEC due to stronger competition in the Australia market
and the depreciation of the Australian dollar.





97




Gross Profit



Gross profit for 2014 was $36.7 million, representing
a decrease of $15.1 million, or 29.1% down compared to $51.8 million in 2013. The decrease was primarily attributable to the lower
margin in the Thailand region and the Company’s business in Australia in the ROW region.



The gross profit margin of the North Asia region
was down from 4.47% in 2013 to 3.87% in 2014. The Company’s main product in this region is enameled wire, as the technology
required to manufacture the product is low and the manufacturing process is not sophisticated, the Company’s business in
the region was adversely affected by competition in the local market. In order to maintain the market share without sacrificing
the product quality, the Company lowered the selling price to match competitors’ prices.



The gross margin of the Thailand region was 9.52%
in 2014, down from 15.05% in 2013, a decrease of 36.7%. Our major clients in this region included government entities, private
sector participants in the infrastructure sector and agents for governmental entities. The unstable political environment adversely
affected Thai government’s spending on infrastructure. The gross margin of the Thailand region was eroded by the decrease
in sales to the public sector, from which our subsidiaries in the Thailand region enjoyed a higher profit margin.



The gross profit margin of the ROW region decreased
from 10.34% in 2013 to 9.68% in 2014. The decrease of the gross margin was primarily due to the competition in the Australia market,
where the Company’s Australia subsidiary lowered the selling price to compete with similar products imported from China by
other competitors.





98




Operating Profit



S SG&A expenses were $29.5 million in 2014,
decreased by $5.1 million, or 14.7%, from $34.6 million in 2013. The decrease in SG&A was primarily attributable to the decrease
in sales-related commissions and remuneration. The decrease was partially due to the depreciation of the Thai Baht and Australian
dollar. For the years ended 2014 and 2013, SG&A expenses accounted for 6.5% and 7.5% of the net sales, respectively.



In 2014, we recorded a net provision of allowance
for doubtful accounts of $2.2 million, owing to the fact that some of the major customers of the Company were not able to settle
their overdue payments. Our internal controls provide that we perform a detailed review of our outstanding receivables, and make
adjustments to our estimate to reflect significant delinquent accounts receivable. The Company is not aware of other significant
delinquent accounts receivable that have not already been adequately reserved. The Company has brought actions against some customers
who failed to settle their delinquent accounts. The outcome of those actions will not have a material impact on our results of
operations or financial condition.





Other operating income decreased by $0.4 million
compared to 2013 primarily due to a non-recurring income in 2013.







Finance Income



The finance income was interest earned from bank
deposits. Interest income decreased from $1.3 million in 2013 to $1.2 million in 2014 by $0.1 million, or 10.6%, primarily due
to tighter cash position in the North Asia region and the depreciation of the Thai Baht and Australian dollar against the U.S.
dollar.





99




Share of Loss of an Associate



The increase in the share of loss of an associate
by $0.1 million in 2014, as compared to that of 2013, was primarily due to the loss that the Company recognized of $0.3 million
according to its shareholding in SPRC.



Gain on Disposal of Investment



In 2013, a gain of $0.2 million was recognized
from the disposal of the Company’s equity investment in Shandong Huayu Pacific Fiber Optics.



Loss on Disposal of a Subsidiary



In August 2014, the Company recognized a loss
of $0.2 million from the disposal of PEWC Hong Kong, a wholly-owned subsidiary of the Company.



Exchange Gain/(Loss)



The exchange rates at December 31, 2014 and 2013
are listed below, based on the Noon Buying Rate. However, they do not actually reflect the ongoing rates during the year when transactions
actually took place.



|                          |  | As of December 31,
|------------------------- |  | ------------------
|                          |  | 2014              
|Foreign currency to US$1: |  |                   
|Thai Baht                 |  |                   
|Singapore $               |  |                   
|Australian $              |  |                   
|Chinese RMB               |  |                   







100








Other Expense



Other expenses decreased by $0.2 million compared
to 2013 primarily due to the net loss on financial instruments in 2013.



Income Taxes



Income tax expense was $2.3 million in 2014 compared
to $5.5 million in 2013. The change was mainly due to the decrease in pre-tax income. The increase in effective tax rate from 32.88%
in 2013 to 45.16% in 2014 was owing to the fact that our future tax benefits resulting from loss carry forwards could not be recognized.



| | 5.4 | Liquidity and Capital Resources
| | --- | -------------------------------



As of December 31, 2015 we had $51.3 million
in cash and cash equivalents, primarily in bank accounts and cash on hand. Our current sources of cash are our cash on hand, cash
generated by our operations and our credit facilities. Our primary financing needs will continue to be focused on the purchase
and replacement of property, plant and equipment, future acquisitions and expenditures for ongoing operations.





101




We have no direct business operations other than
our ownership of the capital stock of our subsidiaries and equity investees. Consequently, our subsidiaries have been and will
continue to be the primary source of funds generated by operations. Corporate needs are funded primarily through distributions
from our subsidiaries. Although we have no current intention to pay dividends, we would rely upon distributions of dividends from
our subsidiaries in order to do so. As noted in our risk factors, our operating subsidiaries and other holdings and investments,
from time to time, may be subject to restrictions on their ability to make distributions to us. Such restrictions could result
from restrictive covenants contained in our loan agreements, restrictions on the conversion of local currency earnings into U.S.
dollars or other currency and other regulatory restrictions. For example, PRC legal restrictions permit payments of dividends by
our business entities in the PRC only out of their retained earnings, if any, determined in accordance with relevant PRC accounting
standards and regulations. Under PRC law, such entities are also required to set aside a portion of their net income each year
to fund certain reserve funds. These reserves are not distributable as cash dividends. The foregoing restrictions may also affect
our ability to fund operations of one subsidiary with dividends and other payments received from another subsidiary. We are not
aware of any other restrictions in other countries in which we do business other than those discussed in the “Risk Factors”
section. Distributions may also be limited from time to time by reason of restrictions protective of the rights of minority shareholders
of our subsidiaries and by reason of the current cash requirements of the operating subsidiaries. Consequently, we periodically
need to manage our corporate cash needs to align with the permitted timing of distributions.



We maintain several working capital and overdraft
credit facilities with various commercial bank groups and financial institutions. Under our line of credit arrangements for short-term
debt with our banks, we may borrow up to approximately $249.7 million, including letters of credit for commodity purchases, on
such terms as we and the banks mutually agreed upon. These arrangements do not have termination dates but are reviewed annually
for renewal. As of December 31, 2015, the unused portion of the credit lines was approximately $148.6 million. Letters of
credit are issued on our behalf in the ordinary course of business by our banks as required by certain supplier contracts. As of
December 31, 2015, the Company had obligations in respect of amounts callable under issued, but undrawn letters of credit
totaling $29.7 million. Liabilities relating to the letters of credit are included in current liabilities. There is no seasonality
to the Company’s borrowing.





102




Net cash provided by operating activities in
the year ended December 31, 2015 was $9.2 million, as compared to $8.1 million of net cash provided by operating activities
in the year ended December 31, 2014.



In 2014, net cash provided by operations was
$8.1 million compared to $20.6 million in 2013. The decrease was primarily the result of a decrease in net income in 2014.



Days of sales outstanding (“DSO”)
is a measure of the average collection period of accounts receivable, and although the calculation is influenced by the period
used and the timing of sales within that period, it can provide insight into the variances in collections from period to period.
Our days of sales outstanding as of December 31, 2015 was 74 days, as compared to 85 days as of December 31, 2014. We
have in place rigorous policies across the Company that emphasize the importance of continuous focus on collection efforts.



In 2015, cash used in investing activities was
$7.3 million compared to $6.3 million in 2014. The increase in net cash used in investing activities was primarily due to the increase
in cash used to purchase property, plant and equipment in 2015 comparing to 2014.





103




In 2014, cash used in investing activities was
$6.3 million compared to $5.5 million in 2013. The increase in net cash used in investing activities was primarily due to the proceeds
from disposal of available-for-sale financial assets and held-for-sale assets in 2013 which was partially offset by the decrease
in cash used to purchase property, plant and equipment in 2014 comparing to 2013.





Net cash used in financing activities was $14.6
million in 2015. In 2015, net cash used in financing activities reflected primarily the repayment of borrowings as the Company
managed to reduce the exchange loss caused by the depreciation of local currencies against the U.S. dollar.



Net cash provided by financing activities was
$7.7 million in 2014 compared to $19.4 million used in financing activities in 2013. Net cash used in financing activities reflected
primarily the repayment of borrowings and proceeds from borrowings.







We engage in various transactions with PEWC,
including the purchase of certain raw materials and the distribution of PEWC products, mainly in Singapore. The Composite Services
Agreement contains provisions that define our relationship and the conduct of our respective businesses and confer certain preferential
benefits on us. Under the Composite Services Agreement, the material terms of which are summarized in the “Material Contracts”
section, there are no obligations binding on the Company in favor of PEWC, nor are there any pre-established purchase commitments
for copper. As such, the Composite Services Agreement should not impact cash flows or liquidity until such time as actual purchases
are made in the ordinary course of business such as for the purchase of raw materials. The Composite Service Agreement may, however,
impact operations to the extent that PEWC is not able to fulfill its obligations, such as supplying copper, and copper is not otherwise
readily available on comparable terms from other market sources. Cash generated by operations and borrowings, when needed, from
our credit facilities have been the primary sources of funding purchases under the Composite Services Agreement, and we believe
these sources will continue to provide sufficient funds for future purchases under this agreement.





104




We believe funds generated by our operating activities,
our cash on hand and amounts available to us under our credit facilities will provide adequate cash to fund our requirements through
at least the next twelve months. We continue to have sufficient liquidity to meet our anticipated working capital, capital expenditures,
general corporate requirements, and other short-term and long-term obligations as they come due. We may further enhance our liquidity
in the future, as needs arise, by establishing additional lines of credit, with the support of one or more of our principal shareholders
if necessary and available. We currently anticipate that we will retain all of our earnings to fund our operations and do not anticipate
paying any cash dividends in the foreseeable future.



| | 5.5 | Research and Development
| | --- | ------------------------



The Company does not currently engage in its
own research and development. Under the Composite Services Agreement with PEWC described herein, the Company benefits from research
and development conducted by PEWC at little or no cost to the Company. Accordingly, the Company has not made material expenditures
on or commitments to research and development since formation.





105






| | 5.6 | Trend Information
| | --- | -----------------



We are not aware of any trend, commitment, event
or uncertainty that can reasonably be expected to have a material effect on our current or future business other than the following,
each of which has materially impacted our financial results in the past and may do so in the future:



| | · | Uncertainty arising from the volatility in the cost of copper, our principal raw material.  In 2015, the copper price went down from $6,860 (yearly average for 2014) per metric ton to $5,502 per metric ton (yearly average for 2015).  Under our business model, the Company, like other companies in the industry, remains subject to movements in the price of copper, our principal raw material.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Fluctuations in the demand for our products in the markets in which we do business, based upon variations in the level of governmental and private investments in communications, power and industrial projects and programs that utilize our products.  We are not an end-user of our products and, therefore, we depend upon the requirements of our customers to generate sales.                    



See “Quantitative and Qualitative Disclosures
About Market Risk.”



| | 5.7 | Off-Balance Sheet Arrangements
| | --- | ------------------------------



The Company has not entered into any transactions
with unconsolidated entities whereby the Company has financial guarantees, subordinated retained interests, derivative instruments,
or other contingent arrangements that expose the Company to material continuing risks, contingent liabilities, or any other obligation
in an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to the Company.





106






| | 5.8 | Contractual Obligations
| | --- | -----------------------



The following table sets forth our obligations
and commitments to make future payments under contracts and other commitments as of December 31, 2015:



|                                                                                      |  | Payments due by period
|------------------------------------------------------------------------------------- |  | ----------------------
|Contractual obligations (In thousands of US$)                                         |  | Total                 
|Bank loans and overdrafts                                                             |  | $                     
|Finance lease obligations (principal amount only)                                     |  |                       
|Finance charges on finance lease obligations                                          |  |                       
|Operating lease obligations                                                           |  |                       
|Capital commitment relating to installation of equipment and acquisition of machinery |  |                       
|Capital commitment relating to repair and maintenance consulting service              |  |                       
|Purchase obligations for copper cathodes                                              |  |                       
|                                                                                      |  | $                     



The contractual obligation for the purchase
of coper cathodes disclosed in the table above was the minimum purchase commitment. For more details on financial commitments and
contingencies, please refer to our audited consolidated financial statements and the notes thereto in Item 18: “Financial
Statements.”





107








|Item 6: | Directors, Senior Management and Employees
|------- | ------------------------------------------
|        |                                           
|        | 6.1                                       
|        |                                           

There is only one class of directorships and
no one or more directors possesses any veto power over matters presented to the Board or any other special or enhanced voting
rights. The Bye-Laws provide that a quorum consists of a majority of the directors then in office. As of December 31, 2015,
there were a total of nine (9) directors on the Board, including three independent directors, Mr. Anson Chan, Dr. Yichin Lee,
and Dr. Lambert Ding. By a resolution passed at the Company’s most recent annual general meeting of shareholders (the“2015
AGM”) held on October 8, 2015, the shareholders determined that the minimum number of directors shall be fixed at two
(2), the maximum number of directors be fixed at ten (10) and that one (1) vacancy shall exist on the Board of Directors, which
shall be deemed to be a casual vacancy, which may be filled from time to time by the Board of Directors in accordance with the
provisions of the Bye-Laws. Each director is entitled to one vote, and approval of any matter requires a simple majority assuming
a quorum is present. The following table sets forth certain information concerning the current directors and certain other officers
of the Company. All directors are subject to annual election by the shareholders of the Company. Each of the directors was reelected
at the Company’s 2015 AGM. Officers generally hold office for such period and upon such terms as the Board may determine.



|Name                            | Date of Birth      | Position                                        
|------------------------------- | ------------------ | ------------------------------------------------
|Appleby Services (Bermuda) Ltd. | N/A                | Assistant Resident Secretary                    
|Anson Chan                      | November 3, 1963   | Independent director, Audit Committee Chairman  
|Andy C.C. Cheng                 | April 29, 1958     | Director and Non-Executive Chairman of the Board
|Fang Hsiung Cheng               | May 31, 1942       | Director                                        
|Alex Erskine                    | September 7, 1963  | Resident Secretary in Bermuda                   
|Daphne Hsu                      | August 12, 1962    | Financial Controller                            
|Lambert L. Ding                 | October 12, 1959   | Independent director, Audit Committee Member    
|Michael C. Lee                  | September 28, 1951 | Director                                        
|Yichin Lee                      | January 4, 1961    | Independent director, Audit Committee Member    
|Alex Chen                       | December 30, 1957  | Director                                        
|David Sun                       | December 22, 1953  | Director                                        
|Yuan Chun Tang                  | November 26, 1960  | Director, Chief Executive Officer               
|William Gong Wei                | October 31, 1961   | Chief Operating Officer                         
|Ivan Hsia                       | August 14, 1973    | Chief Financial Officer                         







108




Certain officers and directors of the Company
are or were also officers and directors of PEWC and/or PEWC affiliates, as described below. A brief professional summary for each
member of the Board of Directors and senior management is as follows:



Mr. Anson Chan has been an independent member
of the Company’s Board of Directors and a member and Chairman of the Audit Committee and compensation committee since 2007.
Mr. Chan is also a Managing Director of the Bonds Group of Companies and was a Senior Advisor to Elliott Associates from 2005 to
2008.



Mr. Andy C.C. Cheng was a member of the Company’s
Board of Directors from 2004 to 2005 and was re-elected in 2007. Mr. Cheng was appointed as Chairman of the Board in 2009. From
1987 to 2003, Mr. Cheng served as Vice President in charge of procurement at PEWC. Mr. Cheng has been an Executive Vice President
at PEWC since 2004 and Chairman of each of the investment divisions of PEWC, Tai Ho Investment Co., Ltd. and You Chi Investment
Co., Ltd., since June 2008. Mr. Andy C.C. Cheng is not related to Mr. Fang Hsiung Cheng.



Mr. Fang Hsiung Cheng has been a member of the
Company’s Board of Directors since 2006.  He also serves as Assistant Vice President of PEWC. Mr. Fang Hsiung Cheng
is not related to Mr. Andy C.C. Cheng.





109




Ms. Daphne Hsu has been Financial Controller
of the Company since March 2005, prior to which she served as Financial Controller for ten years in Taiwan and China at a Thomson
SA joint venture.



Dr. Lambert Ding was appointed March 17,
2011 as an independent member of the Board of Directors. Dr. Ding is the president and CEO of Union Environmental Engineering Services
and before that, he was an associate professor at Yuan Ze University. Dr. Ding holds a Doctor of Philosophy degree from the University
of Southern California, awarded in 1989. He is also a Registered Environment Assessor and holds several patents. Dr. Ding serves
as a member of the audit committee and compensation committee.



Mr. Michael C. Lee has been a member of the Company’s
Board of Directors since 2004 and is also Chief Executive Officer of PEWC and Chairman of Pacific USA Holdings, Ltd. Mr. Michael
C. Lee is not related to Dr. Yichin Lee.



Dr. Yichin Lee has been an independent member
of the Company’s Board of Directors and served on the Audit Committee since 2007. He is also a member of the compensation
committee. Dr. Lee is the Managing Director of FCC partners. Dr. Yichin Lee holds a doctorate degree in Resource Planning and Management
from Stanford University. Dr. Yichin Lee is not related to Mr. Michael C. Lee.



Mr. Alex Chen has been appointed as Chief Marketing
Officer effective July 1, 2015. Mr. Chen was first assigned to PEWC as Engineer, Assistant to General Manager, and later Manager
of Quality Assurance Department from 1983 to 2008. He was appointed as Managing Director of Siam Pacific Electric Wire & Cable
Co. Ltd. in Thailand from 2008 to 2015. Mr. Chen also serves as Vice President and General Division Manager of the General Sales
Division of PEWC, and as a Director of the Taiwan Electric Research & Testing Center.





110




Mr. David Sun has been a member of the Company’s
Board of Directors since 2007. He also serves as President of PEWC and Managing Director of Charoong Thai Wire and Cable Public
Company Limited.



Mr. Yuan Chun Tang has been a member of the Company’s
Board of Directors since 2004 and Chief Executive Officer since 2005. Mr. Yuan served as the Company’s Chairman from 2005
to 2009. He has also served as Chairman of PEWC since 2004 and has been the Director of Pacific Construction Corp. Ltd since 2002.
Mr. Yuan served as the Director of the Taiwan Co-generation Corp. from 2005 to 2008. Mr. Yuan has also been the Chairman of the
Taiwan Electric Wire & Cable Industries Association since 2004. He has served as the Supervisor to the Taipei Importers/Exporters
Association as well as the Director of Chinese National Federation of Industries in Taiwan since 1998 and 2004, respectively.



Mr. William Gong Wei has been appointed Chief
Operating Officer effective April 1, 2013. He was first assigned to Charoong Thai Wire and Cable Pte. Co. Ltd. as Engineer,
Assistant Plant Manager, and later consultant to the high voltage cable division from 1991 to 2000. Thereafter, Mr. Gong Wei left
Charoong Thai to pursue other professional activities until he rejoined the Company in 2009. In April 2009 he was appointed as
General Manager of Sigma Cable in Singapore. Mr. Gong Wei holds a master’s degree from the Asian Institute of Technology
in Bangkok, Thailand.



Mr. Ivan Hsia was appointed as Chief Financial
Officer effective August 1, 2013. Mr. Hsia previously served as the Deputy CFO of the Company. Prior to that, he served as
the Senior Internal Audit Manager of the Company. Before joining APWC, Mr. Hsia was the head of internal audit at Newegg.com in
Los Angeles, CA, USA.





111




The Company’s Common Shares are traded
on the Global Markets tier of NASDAQ. Notwithstanding that, the Board of Directors is not composed of a majority of independent
directors. The Company is relying upon the “controlled company exemption” that is available to issuers under the rules
of NASDAQ. In effect, the “controlled company exemption” provides that an issuer is not required to have its Board
of Directors consist of a majority of independent directors if a shareholder, or two or more shareholders who constitute a group,
have beneficial ownership of more than 50% of the issued and outstanding voting securities of the issuer. PEWC owns and controls,
directly or indirectly, 75.4% of the issued and outstanding Common Shares of the Company.



No service contract exists between any director
and the Company or any of its subsidiaries providing for benefits upon termination of employment.



The Company has no arrangements or understandings
with any major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director
or member of senior management.



| | 6.2 | Audit Committee
| | --- | ---------------



The Audit Committee of the Board of Directors
primarily functions to assist the Board in its oversight of: (i) the reliability and integrity of accounting policies and
financial reporting and disclosure practices and (ii) the establishment and maintenance of processes to ensure that there
is compliance with all applicable laws, regulations and company policy and an adequate system of internal control, management of
business risks and safeguard of assets.





112




The Audit Committee is composed of Mr. Anson
Chan, Dr. Yichin Lee and Dr. Lambert Ding, with Mr. Chan serving as the chairman of the Audit Committee.



The Audit Committee, as currently constituted,
complies with the requirements of Regulation 10A-3 of the Exchange Act and the corporate governance requirements of NASDAQ.



| | 6.3 | Compensation Committee
| | --- | ----------------------



The Compensation Committee primarily functions
to assist the Company in determining the compensation to be paid to the executive directors and certain members of the senior management
of the Company. According to the charter under which it operates, the Compensation Committee is authorized to: (i) review
and recommend to the Board, or determine, the annual salary, bonus, stock options, and other benefits, direct and indirect, of
the senior management of the Company and its principal operating subsidiaries; (ii) review new executive compensation programs,
review on a periodic basis the operations of the Company’s executive compensation programs to determine whether they are
properly coordinated, establish and periodically review policies for the administration of executive compensation programs, and
take steps to modify any executive compensation programs that yield payments and benefits that are not reasonably related to executive
performance; (iii) engage outside auditors and consultants to advise on market compensation; and (iv) establish and periodically
review policies in the area of management perquisites.





113




The Compensation Committee is comprised of three
independent directors, Mr. Anson Chan, Dr. Yichin Lee, and Dr. Lambert Ding. Mr. Andy Cheng and Mr. Yuan Chun Tang, the Company’s
Chairman and Chief Executive Officer, respectively, serve in a non-voting advisory capacity to the Compensation Committee.



| | 6.4 | Compensation
| | --- | ------------



The aggregate amount of compensation paid by
the Company to all of the Company’s directors and executive officers, as a group, for services in all capacities during 2015
was approximately $2.2 million. As of March 31, 2016, our directors and executive officers beneficially owned approximately
103,000 Common Shares representing approximately 0.7% of the issued and outstanding Common Shares. The annual compensation of its
executive officers and directors on an individual basis is not a disclosure item under the laws applicable to the Company.



In 2015, the fee payable to each independent
director was $30,000 per year and the fee payable to each director who is a director or an executive officer of the Company or
PEWC or any of their respective affiliates was $20,000 per year, together with, in each case, reimbursement of reasonable travel
expenses for attendance at meetings of the Board of Directors or any of its committees.



No funds or provisions have been set aside for
providing compensation to directors or management except for government mandated programs.





114






| | 6.5 | Employees
| | --- | ---------



The Company employed a total of 1,409 employees
as of December 31, 2015, of which about 18.2% were administrative and management personnel.  Approximately 56.9%
of employees were located in the Thailand region, 27.6% in the North Asia region and 15.5% in the ROW region. Production workers
are usually organized into two 12-hour shifts or three 8-hour shifts to allow continuous factory operations.



The Company offers a range of employee benefits,
which it believes are comparable to industry practice in its local markets. Such benefits include performance-based pay incentives,
medical benefits, vacation, pension, housing for a small number of workers in Singapore and in Thailand, and a small housing supplement
to other workers. The Company also provides training programs for its personnel designated to improve worker productivity and occupational
safety.



Presently, there is no group bonus, profit-sharing
or stock option plan. However, some of the Company’s subsidiaries have bonus or profit-sharing plans based on individual
performance and the profitability of the particular subsidiary for the fiscal year, which plans are generally in accordance with
the industry practice and market conditions in the respective countries.



The Company has several defined benefit and defined
contribution plans covering its employees in Thailand, Australia, the PRC and Singapore. Contributions to the plans are made on
an annual basis and totaled $1.2 million in 2015. Additionally, the Company has several defined benefit plans in accordance with
Thailand labor law. In its Thai subsidiaries, the Company must pay a retiring employee from one to twenty-nine times such employee’s
salary rate during his or her final month, depending on the length of service. During 2015, the Company’s total expenses
under this labor law were $0.6 million. These plans are not funded and the amount is recognized and included in Employee Benefit
Liabilities in the Company’s balance sheet. The Company settles it obligations as and when employees retire. The accumulated
benefit obligations under this plan amounted to $6.3 million as at December 31, 2015.





115




Approximately 21% of the employees of Sigma Cable
are members of the United Workers of Electronics & Electrical Industries, an employees’ union in Singapore. Under the
terms of a collective agreement signed in June 2003, the Company is required to negotiate salary and wage increases yearly. All
other worker benefits and employment terms are included in the collective agreement. The Company believes that approximately 100%
and 99% of the employees of PEWS and Shanghai Yayang, respectively, are members of their respective Company Workers’ Unions.
These unions generally operate in accordance with related labor regulations in China. Approximately 16% of the employees of APEC
are members of the Australian Workers’ Union. None of the employees of the other operating subsidiaries of the Company are
members of a union.



The Company has never experienced a strike or
other disruption due to labor disputes. The Company considers its employee relations to be satisfactory and has not experienced
difficulties attracting and retaining qualified employees. In Singapore, employee turnover is approximately 24.4% of total employees
annually. In Thailand, average employee turnover is approximately 5% of total employees annually.





116






|Item 7: | Major Shareholders and Related Party Transactions
|------- | -------------------------------------------------
|        |                                                  
|        | 7.1                                              
|        |                                                  

On March 27, 2009, PEWC acquired 1,410,739
Common Shares of the Company from a special purpose investment vehicle of a U.S. based private equity fund investor (the “PE
Investor”), which amount represented 51% of the Common Shares then held indirectly by the PE Investor. Following that transaction,
PEWC and the PE Investor held 65.6% and 9.8% of the issued and outstanding Common Shares of the Company, respectively. Pursuant
to a 2012 Share Buy-back Plan, the Company re-purchased 9,300 Common Shares, which are now held by the Company and booked as treasury
shares. In a subsequent private transaction in June 2013, the Company repurchased a further 1,800 Common Shares, such that a total
of 11,100 Common Shares are now issued but not outstanding and are booked as treasury shares. On August 21, 2015, PEWC and
Moon View Ventures Limited, a BVI company and wholly-owned subsidiary of PEWC, acquired 1,355,415 Common Shares that were held
indirectly by the PE Investor. In connection with the sale of those Common Shares, the parties terminated the Amended and Restated
Shareholders’ Agreement, which benefited the Company by reason of the elimination of certain U.S. tax indemnification obligations
of the Company (and PEWC) in favor of the PE Investor, and the termination of the Company’s obligation to maintain effective
a shelf registration statement on Form F-3, covering the Common Shares held by the PE Investor. The remaining approximately 24.6%
of the issued and outstanding Common Shares are publicly traded in the U.S. on the NASDAQ Global Markets tier.



The following table sets forth certain information
regarding beneficial ownership of the Company’s Common Shares as of March 31, 2016 by (i) all persons who are known
to the Company to own beneficially more than five percent of the Common Shares of the Company and (ii) the officers and directors
of the Company as a group. The information set forth in the following table is derived from public filings made by holders and
information obtained from directors and officers. The voting rights attaching to the Common Shares below are the same as those
attaching to all other Common Shares.



117








|                                           |  | Number of |            | Percent of
|------------------------------------------ |  | --------- | ---------- | ----------
|Identity of Person or Group                |  | Shares    |            | Class     
|Pacific Electric Wire & Cable Co., Ltd.(1) |  |           | 10,430,769 |           
|Directors and Officers of the Company      |  |           | 102,954    |           



|(1) |  | PEWC owns 1,410,739 shares directly and owns its remaining shares indirectly, as a
result of PEWC’s control of its direct wholly-owned subsidiary, Moon View Ventures Limited, a BVI company, which beneficially
owns 8,363,363 Common Shares, and as a result of PEWC’s control of its indirect wholly-owned subsidiary, Pacific Holdings
Group, a Nevada corporation, which beneficially owns 656,667 Common Shares.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company has 6,166,154 Common Shares that
are registered securities, of which 3,388,900 Common Shares are publicly-traded on the NASDAQ Global Markets tier, which represents
approximately 24.6% of the issued and outstanding Common Shares. With regard to the remaining 2,777,254 registered securities,
2,766,154 Common Shares, are held by PEWC and its subsidiaries, and 11,100 Common Shares are held by the Company in treasury,
and all of those shares are subject to trading restrictions under Rule 144 promulgated under the Securities Act. Other than the
approximately 103,000 Common Shares held by directors or officers who are not resident in the United States and the 2,766,154
registered securities held indirectly by PEWC, the Company believes that substantially all of its registered securities are held
by U.S. residents (other than the 11,100 Common Shares held by the Company in treasury). The Company has no means to definitively
confirm that belief; however, which is based upon a review of the share registers maintained by the Company’s Bermuda transfer
agent and U.S. transfer agent and the addresses provided by the record holders. Based upon a review of the records of the Company’s
U.S. transfer agent, including a list of non-objecting beneficial holders (“NOBOs”), the Company believes there are
substantially more than 400 beneficial holders that are resident in the United States, although that constitutes only the Company’s
best estimate of the number of U.S. beneficial holders.





118








| | 7.2 | Related Party Transactions
| | --- | --------------------------



The Company incurs ordinary course trade payables
with PEWC in connection with copper purchases under the Composite Services Agreement and the sale by the Company of Distributed
Products that are manufactured by PEWC.



As of December 31, 2015 the Company, including
its subsidiaries, had a net principal balance outstanding of $6.4 million borrowed from PEWC and subsidiaries of PEWC. This short-term
indebtedness is payable on a demand basis and does not accrue interest.



The Company used the proceeds from each of the
related party loans described above for working capital and purchases of capital equipment. The terms of borrowing by APWC or any
of its subsidiaries from PEWC are on terms at least no less favorable than terms available in arms-length transactions with unaffiliated
parties.



Under the terms of the Composite Services Agreement,
APWC pays a management fee to PEWC in connection with the secondment, or temporary assignment and relocation, of certain PEWC managers
to APWC facilities in Thailand and Shanghai. The assigned managers assist APWC in implementing the results of certain research
and development conducted by PEWC and made available by PEWC to the Company under the terms of the Composite Services Agreement.
The assigned managers also assist APWC in the procurement of raw materials, primarily copper, which is also provided for under
the Composite Services Agreement. The amount of such annual management fee was approximately $241 thousand as of December 31,
2015.





119




From time to time we have engaged in a variety
of transactions with our affiliates. We generally conduct transactions with our affiliates on an arm’s-length basis. The
sales and purchase prices with related parties are determined through negotiation, generally based on the quoted copper price on
LME plus a certain premium.



Additional details regarding related party balances
as of December 31, 2015 and related party transactions, including copper purchases from PEWC, are disclosed in our audited
consolidated financial statements in Item 18: Financial Statements.



|Item 8: | Financial Information
|------- | ---------------------
|        |                      
|        | 8.1                  
|        |                      

There are currently no material proceedings in
which any director, senior manager, or affiliate is adverse to the Company or has an adverse material interest. There are no actual
or pending legal proceedings to which the Company is, or is likely to become, a party which may reasonably be expected to have,
or have had in the recent past, a material effect on the Company’s condition (financial or otherwise) or results of operations.





120






| | 8.2 | Dividend Policy
| | --- | ---------------



To date, the Company, a Bermuda company formed
in 1996, has not paid any dividends. While the Company has no present intention to pay dividends, should it decide in the future
to do so, as a holding company, the Company’s ability to pay dividends, as well as to meet its other obligations, will depend
upon the amount of distributions, if any, received from the Company’s operating subsidiaries and other holdings and investments.
The Company’s operating subsidiaries and other holdings and investments, from time to time, may be subject to restrictions
on their ability to make distributions to the Company. Those restrictions may also affect the Company’s ability to fund operations
of one subsidiary with dividends and other payments received from another subsidiary.



| | 8.3 | Significant Changes
| | --- | -------------------



There have been no material or significant changes
in the Company’s affairs since the end of the fiscal year ended December 31, 2015 that have not been described herein.



|Item 9: | The Offer and Listing
|------- | ---------------------
|        |                      
|        | 9.1                  
|        |                      

The high and low market prices for Common
Shares on the over-the-counter bulletin board (the “OTC BB”) (from April 2008 until April 2011), and on the NASDAQ
since April 29, 2011, for each period specified are as follows:





121










|                                       |  | Price per Share ($)
|-------------------------------------- |  | -------------------
|                                       |  | High               
|Five most recent full financial years: |  |                    
|2011                                   |  |                    
|2012                                   |  |                    
|2013                                   |  |                    
|2014                                   |  |                    
|2015                                   |  |                    
|                                       |  |                    
|Two most recent full financial years:  |  |                    
|2014                                   |  |                    
|First quarter                          |  |                    
|Second quarter                         |  |                    
|Third quarter                          |  |                    
|Fourth quarter                         |  |                    
|2015                                   |  |                    
|First quarter                          |  |                    
|Second quarter                         |  |                    
|Third quarter                          |  |                    
|Fourth quarter                         |  |                    
|2016                                   |  |                    
|First quarter                          |  |                    
|                                       |  |                    
|Most recent six months:                |  |                    
|October 2015                           |  |                    
|November 2015                          |  |                    
|December 2015                          |  |                    
|January 2016                           |  |                    
|February 2016                          |  |                    
|March 2016                             |  |                    





| | 9.2 | Markets
| | --- | -------



The Company’s Common Shares were listed
on NASDAQ Capital Markets tier on April 29, 2011 under the symbol “APWC”. On February 15, 2013, the Company’s
Common Shares were elevated to NASDAQ Global Markets tier. Prior to its NASDAQ listing, the Common Shares were traded on the OTC
BB since April 2008 under the symbol “AWRCF”. See the risk factor entitled “Potential Illiquidity of Common
Shares.” The Common Shares are not listed on any other exchanges or otherwise publicly traded within or outside the United
States.  The elevation of the Common Shares to NASDAQ’s Global Markets tier was achieved due primarily to an improved
trading price of the Common Shares.



122








|Item 10: | Additional Information
|-------- | ----------------------
|         |                       
|         | 10.1                  
|         |                       

As of December 31, 2015 and as of the date
of the filing of this Annual Report, the Company has an authorized share capital of 50,000,000 Common Shares, par value $0.01 per
share. During 2012, the Company repurchased 1,900 Common Shares. On December 31, 2012 there were 13,830,769 Common Shares
issued and 13,828,869 Common Shares outstanding. During 2013, the Company repurchased a further 7,400 Common Shares, for a total
of 9,300 Common Shares that were repurchased under the Company’s Share Buy-back Plan during 2012 and 2013, until the Company
suspended the Share Buy-back Plan effective as of April 25, 2013. Subsequently in 2013, in a private transaction, the Company
purchased a further 1,800 Common Shares that were also booked as treasury shares and are classified as issued but not outstanding.
No Common Shares have been purchased by or on behalf of the Company under the share buy-back program that was announced by the
Company in 2014, but not yet implemented. As of December 31, 2015, and as of the date of the filing of this Annual Report,
there were and there are 13,830,769 Common Shares issued and 13,819,669 Common Shares issued outstanding. No capital of the Company
is under option or agreed conditionally or unconditionally to be put under option. The Company does not have any classes of capital
stock other than its Common Shares.





123






| | 10.2   | Memorandum of Association and Bye-Laws
| | ------ | --------------------------------------
| |        |                                       
| | 10.2.1 | General                               
| |        |                                       

For a detailed description of the Company’s
principal activities, see Section 4.1: “History and Development of the Business.” Pursuant to the Company’s Bye-Laws
the Board of Directors consists of a single class of directors, each director has one vote on all matters put to the Board, and
a quorum consists of a majority of the members of the Board of Directors then in office. The Company’s Bye-Laws were amended
on October 7, 2011 to allow the Company to purchase its own shares for cancellation or acquire them to be held as treasury
shares.



In 2012, the Company commenced a Share Buy-back
Plan, pursuant to which the Company repurchased, in the aggregate, 9,300 issued and outstanding Common Shares, with the most recent
purchase under the Share Buy-back Plan having been made on January 10, 2013. Subsequently in 2013, in a private transaction,
the Company purchased a further 1,800 Common Shares that were also booked a treasury shares and are classified as issued but not
outstanding. Those repurchased Common Shares are booked as treasury shares and may be re-sold to third parties by the Company in
the future. In April 2013, the Company announced the suspension of the Share Buy-back Plan, although the Board of Directors may
re-implement it in the future if it so determines.



In August 2014, the Company announced that the
Board of Directors had authorized a further share buy-back plan of up to $1 million in Common Shares. The Company has not determined
a commencement date for that further buy-back plan, which will depend upon a number of factors including the trading price of the
Common Shares and general market conditions.





124






| | 10.2.2 | Description of Shareholder Rights Attaching to Our Common Shares
| | ------ | ----------------------------------------------------------------
| |        |                                                                 

The Company was incorporated in Bermuda on September 19,
1996 under the Companies Act. The rights of our shareholders are governed by Bermuda law and our memorandum of association and
Bye-Laws.



The following discussion of our Common Shares
and the laws governing the rights of our shareholders is based upon the advice of Appleby (Bermuda) Limited, our Bermuda counsel.



Our authorized share capital as of December 31,
2015 was $500,000 consisting of 50,000,000 Common Shares, par value $0.01 per share, of which, as of December 31, 2015, and
as of the date of the filing of this Annual Report, there were and are 13,830,769 Common Shares issued of which 13,819,669 Common
Shares are outstanding and eligible to vote. There are 11,100 Common Shares that are issued (but not outstanding and not currently
eligible to vote) and held as treasury shares by the Company.



|· |  | Holders of the Common Shares have no preemptive, redemption, conversion or sinking
fund rights.
|- |  | -----------------------------------------------------------------------------------------------

|· |  | Holders of the Common Shares are entitled to one vote per share on all matters submitted
to a poll vote of holders of Common Shares and do not have any cumulative voting rights.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· |  | In the event of our liquidation, dissolution or winding-up and subject to any alternative
resolution that may be pursued by our shareholders, the holders of Common Shares are entitled to share ratably in our assets,
if any, remaining after the payment of all our debts and liabilities.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                                                                                                                                                              





125




| |  | 
| |  | 

|· |  | Our outstanding Common Shares are fully paid and non-assessable.
|- |  | ----------------------------------------------------------------

|· |  | Additional authorized but unissued Common Shares, and issued shares held in treasury,
may be issued or conveyed by the Board without the approval of the shareholders.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

The holders of Common Shares will receive such
dividends, if any, as may be declared by the Board of Directors out of funds legally available for such purposes. We may not declare
or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for believing that:



|· |  | we are, or after the payment would be, unable to pay our liabilities as they become
due; or
|- |  | -------------------------------------------------------------------------------------------

|· |  | the realizable value of our assets after such payment or distribution would be less
than the aggregate amount of our liabilities and our issued share capital and share premium accounts.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following is a summary of provisions of Bermuda
law and our organizational documents, including our memorandum of association and Bye-Laws. We refer you to our memorandum of association
and our Bye-Laws, copies of which have been filed with the SEC. You are urged to read these documents in their entirety for a complete
understanding of the terms thereof.





126






| | 10.2.3 | Share Capital
| | ------ | -------------



Our authorized capital consists of one class
of Common Shares. Under our Bye-Laws, our Board of Directors has the power to issue any authorized and unissued shares on such
terms and conditions as it may determine. Any shares or class of shares may be issued with such preferred, deferred, qualified
or other special rights or any restrictions with regard to such matters, whether in regard to dividend, voting, return of capital
or otherwise, as we may from time to time by resolution of the shareholders prescribe, or in the absence of such shareholder direction,
as the Board of Directors may determine. This provision in the Bye-Laws could be used to prevent a takeover attempt, or to make
a takeover attempt prohibitively expensive, and thereby preclude shareholders from realizing a potential premium over the market
value of their shares.



| | 10.2.4 | Voting Rights
| | ------ | -------------



Generally, under Bermuda law and our Bye-Laws,
questions brought before a general meeting are decided by a simple majority vote of shareholders present or represented by proxy,
with no provision for cumulative voting. Matters will be decided by votes cast by way of voting cards, proxy cards or a show of
hands unless a poll is demanded.



If a poll is demanded, each shareholder who is
entitled to vote and who is present in person or by proxy has one vote for each Common Share entitled to vote on such question.
A poll may only be demanded under the Bye-Laws by:



|· |  | the chairman of the meeting;
|- |  | ----------------------------

|· |  | at least three shareholders present in person or represented by proxy;
|- |  | ----------------------------------------------------------------------

|· |  | any shareholder or shareholders present in person or represented by proxy and holding
between them not less than one-tenth of the total voting rights of all shareholders having voting rights; or
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· |  | a shareholder or shareholders present in person or represented by proxy holding Common
Shares conferring the right to vote on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum
paid up on all Common Shares.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





127




Unless the Board of Directors otherwise determines,
no shareholder shall be entitled to vote at any general meeting unless all calls or other sums presently payable by that shareholder
in respect of all shares held by such shareholder have been paid.



| | 10.2.5 | Dividend Rights
| | ------ | ---------------



Under Bermuda law, a company may declare and
pay dividends unless there are reasonable grounds for believing that the company is, or would, after the payment, be unable to
pay its liabilities as they become due or that the realizable value of the company’s assets would thereby be less than the
aggregate of its liabilities and issued share capital and share premium accounts.



Under our Bye-Laws, the Board may from time to
time declare dividends or distributions out of contributed surplus to be paid to the shareholders according to their rights and
interests. With the sanction of a shareholders resolution, the Board of Directors may determine that any dividend may be paid by
distribution of specific assets, including paid-up shares or debentures of any other company. The Board of Directors may also pay
any fixed cash dividend which is payable on any of our Common Shares half-yearly or on other dates, whenever our position, in the
opinion of the Board of Directors, justifies such payment.





128




Dividends, if any, on our Common Shares will
be at the discretion of our Board of Directors, and will depend on our future operations and earnings, capital requirements, surplus
and general financial condition as our Board of Directors may deem relevant.



| | 10.2.6 | Purchases by the Company of its own Common Shares
| | ------ | -------------------------------------------------



Under Bermuda law and as authorized by the Company’s
memorandum of association, we may purchase our own Common Shares out of the capital paid up on the Common Shares in question or
out of funds that would otherwise be available for dividend or distribution or out of the proceeds of a fresh issue of Common Shares
made for the purposes of the purchase. We may not purchase our Common Shares if, on the date on which the purchase is to be effected,
there are reasonable grounds for believing that the Company is, or after the purchase would be, unable to pay its liabilities as
they become due.



However, to the extent that any premium is payable
on the purchase, the premium must be provided out of the funds of the Company that would otherwise be available for dividend or
distribution or out of the Company’s share premium account.



| | 10.2.7 | Preemptive Rights
| | ------ | -----------------



Our Bye-Laws generally do not provide the holders
of our Common Shares preemptive rights in relation to any issues of Common Shares by us or any transfer of our shares.





129






| | 10.2.8 | Variation of Rights
| | ------ | -------------------



We may issue more than one class of shares and
more than one series of shares in each class. The rights attached to any class of shares may be altered or abrogated either:



| | · | with the consent in writing of the holders of more than fifty percent of the issued shares of that class; or
| | - | ------------------------------------------------------------------------------------------------------------
| | · | pursuant to a resolution of the holders of such shares.                                                     



The Bye-Laws provide that the necessary quorum
shall be two or more persons present in person or by proxy holding shares of the relevant class. The Bye-Laws specify that the
creation or issuance of shares ranking pari passu with existing shares will not, subject to any statement to the contrary in the
terms of issuance of those shares or rights attached to those shares, vary the special rights attached to existing shares.



| | 10.2.9 | Transfer of Common Shares
| | ------ | -------------------------



Subject to the “Transfer Restrictions”
section below, a shareholder may transfer title to all or any of his shares by completing an instrument of transfer in the usual
common form or in such other form as the Board of Directors may approve. The form of transfer is required to be signed by or on
behalf of the transferor and also the transferee where any share is not fully paid. The transferor shall be deemed to remain the
holder of the shares until the name of the transferee is entered in the Register of Members.





130






| | 10.2.10 | Transfer Restrictions
| | ------- | ---------------------



The Board of Directors may, in its absolute discretion
and without assigning any reason therefor, decline to register any transfer of any share which is not a fully paid share. The Board
of Directors may also refuse to register an instrument of transfer of a share unless the instrument of transfer:



|· |  | is duly stamped, if required by law, and lodged with us;
|- |  | --------------------------------------------------------

|· |  | is accompanied by the relevant share certificate and such other evidence of the transferor’s
right to make the transfer as the Board of Directors shall reasonably require;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· |  | is in respect of one class of shares; and
|- |  | -----------------------------------------

|· |  | has obtained, where applicable, permission of the Bermuda Monetary Authority.
|- |  | -----------------------------------------------------------------------------



Our Common Shares are traded on the NASDAQ Stock
Market, Inc. which qualifies as an “appointed stock exchange” for purposes of the Companies Act and the Bermuda Exchange
Control Act and regulations made thereunder, in particular a notice to the public dated 1 June 2005. Accordingly, our Common Shares
benefit from a general permission for free transferability for all transfers between persons who are not resident in Bermuda for
exchange control purposes, for as long as such Common Shares remain listed on an appointed stock exchange.





131






| | 10.2.11 | Transmission of Shares
| | ------- | ----------------------



In the event of the death of a shareholder, the
survivor or survivors, where the deceased shareholder was a joint holder, and the estate representative, where the deceased shareholder
was sole holder, shall be the only persons recognized by us as having any title to the shares of the deceased. “Estate representative”
means the person to whom probate or letters of administration has or have been granted in Bermuda, or failing any such person,
such other person as the Board of Directors may in its absolute discretion determine to be the person recognized by us for this
purpose.



| | 10.2.12 | Disclosure of Interests
| | ------- | -----------------------



Under the Companies Act, a director who has an
interest in a material contract or a proposed material contract, or a 10% or more interest (directly or indirectly) in an entity
that is interested in a contract or proposed contract or arrangement with us, is obligated to declare the nature of such interest
at the first opportunity at a meeting of the Board of Directors, or by writing to the Board of Directors. If the director has complied
with the relevant sections of the Companies Act and the Bye-Laws with respect to the disclosure of his interest, the director may
vote at a meeting of the Board of Directors or a committee thereof on a contract, transaction or arrangement in which that director
is interested, in which case his vote shall be counted and he shall be taken into account in ascertaining whether a quorum is present.



| | 10.2.13 | Rights in Liquidation
| | ------- | ---------------------



Under Bermuda law, in the event of liquidation
or winding-up of a company, after satisfaction in full of all claims of creditors and subject to the preferential rights accorded
to any series of preferred stock, the proceeds of such liquidation or winding-up are distributed among the holders of shares in
accordance with a company’s bye-laws.





132




Under our Bye-Laws, if we are wound up, the liquidator
may, pursuant to a resolution of the shareholders and any approval required by the Companies Act, divide among the shareholders
in cash or other assets the whole or part of our assets, whether such assets shall consist of property of the same kind or not,
and may for such purposes set such values as such liquidator deems fair upon any property to be divided and may determine how such
division shall be carried out as between the shareholders.



| | 10.2.14 | Meetings of Shareholders
| | ------- | ------------------------



Under Bermuda law, a company, unless it elects
to dispense with the holding of annual general meetings, is required to convene at least one general meeting per calendar year.
The directors of a company, notwithstanding anything in such company’s bye-laws, shall, on the requisition of the shareholders
holding at the date of the deposit of the requisition not less than one-tenth of the paid-up capital of the company carrying the
right of vote, duly convene a special general meeting. Our Bye-Laws provide that the Board of Directors may, whenever it thinks
fit, convene a special general meeting.



Bermuda law requires that shareholders be given
at least five days’ notice of a meeting of the Company. Our Bye-Laws extend this period to provide that not less than 20
days’ written notice of a general meeting must be given to those shareholders entitled to receive such notice. The accidental
omission to give notice to or non-receipt of a notice of a meeting by any person does not invalidate the proceedings of a meeting.





133




Our Bye-Laws state that no business can be transacted
at a general meeting unless a quorum of at least two shareholders representing a majority of the issued shares of the Company are
present in person or by proxy and entitled to vote.



Under our Bye-Laws, notice to any shareholders
may be delivered either personally or by sending it through the post, by airmail where applicable, in a pre-paid letter addressed
to the shareholder at his address as appearing in the share register or by delivering it to, or leaving it at, such registered
address. Any notice sent by post shall be deemed to have been served seven (7) days after dispatch. A notice of a general meeting
is deemed to be duly given to the shareholder if it is sent to him by cable, telex or tele-copier or other mode of representing
or reproducing words in a legible and non-transitory form and such notice shall be deemed to have been served twenty-four (24)
hours after its dispatch.



| | 10.2.15 | Access to Books and Records and Dissemination of Information
| | ------- | ------------------------------------------------------------



Under Bermuda law, members of the general public
have the right to inspect the public documents of a company available at the office of the Bermuda Registrar of Companies. These
documents include the memorandum of association and any amendment to the memorandum of association.



Under Bermuda law, the minutes of shareholder
meetings will be open for inspection by any shareholder or director without charge for not less than two hours during business
hours each day, subject to any reasonable restrictions that we may impose. The shareholders shall be entitled to receive a copy
of every balance sheet and statement of income and expenditure before a general meeting as required under the Bye-Laws.





134




Under our Bye-Laws, unless the Board otherwise
determines, the register of shareholders of the Company is required to be open for inspection between 10:00 a.m. and 12:00 noon
each working day without charge to members of the general public. A company is required to maintain its share register in Bermuda
but may, subject to the provisions of the Companies Act, establish a branch register outside of Bermuda. We have established a
branch register with our transfer agent, Computershare Limited, which is based in Jersey City, New Jersey.



Under Bermuda Law, a company is required to keep
at its registered office a register of its directors and officers that is open for inspection for not less than two hours in each
day by members of the public without charge. Under our Bye-Laws, the register of directors and officers is available for inspection
by the public between 10:00 a.m. and 12:00 noon every working day.



Bermuda law does not provide a general right
for shareholders to inspect or obtain copies of any other corporate records, except for the Bye-Laws of the Company.



| | 10.2.16 | Election or Removal of Directors
| | ------- | --------------------------------



The Bye-Laws provide that the number of directors
will be such number, not less than two, as our shareholders by resolution may from time to time determine. A director will serve
until re-elected or his successor is appointed at the next annual general meeting or his prior removal in the manner provided by
the Companies Act or the Bye-Laws. There is no requirement under Bermuda law, the Company’s memorandum of association or
its Bye-Laws that a majority of the Company’s directors be independent.





135




The Bye-Laws provide that each director shall
have one vote on all matters presented to the Board for a vote. At the Annual General Meeting held on October 8, 2015, all
nine directors then in office were re-elected.



The shareholders may by resolution determine
that one or more vacancies in the Board of Directors shall be deemed casual vacancies for the purposes of the Bye-Laws. The Board,
so long as a quorum of directors remains in office, shall have the power at any time and from time to time to appoint any individual
to be a director so as to fill a casual vacancy. The shareholders may approve the appointment of alternate directors or may authorize
the Board to appoint them. Directors may also appoint and remove their own alternates. At the Annual General Meeting held on October 8,
2015, the shareholders approved the reservation of one directorship as a casual vacancy.



We may, in a special general meeting called for
this purpose, remove a director, provided notice of such meeting is served upon the director concerned not less than fourteen days
before the meeting and he shall be entitled to be heard at that meeting.



The office of a director will be vacated in the
event of any of the following:



|· |  | if he resigns his office by notice in writing to be delivered to our registered office
or tendered at a meeting of the Board of Directors;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------

|· |  | if he becomes of unsound mind or a patient for any purpose under any statute or applicable
law relating to mental health and the Board of Directors resolves that his office is vacated;
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· |  | if he becomes bankrupt or enters into a general settlement with his creditors;
|- |  | ------------------------------------------------------------------------------

|· |  | if he is prohibited by law from being a director; or
|- |  | ----------------------------------------------------

|· |  | if he ceases to be a director by virtue of the Companies Act or is removed from office
pursuant to the Bye-Laws.
|- |  | ----------------------------------------------------------------------------------------------------------------





136






| | 10.2.17 | Amendment of Memorandum of Association and Bye-Laws
| | ------- | ---------------------------------------------------
| |         |                                                    

Bermuda law provides that the memorandum of association
of a company may be amended by resolution passed at a general meeting of which due notice has been given. An amendment to a memorandum
of association does not require the consent of the Minister of Finance save for specific circumstances, for example, the adopting
of any authority to carry on restricted business activities.



Under Bermuda law, the holders of:



|· |  | an aggregate of not less than twenty percent in par value of a company’s issued
share capital or any class thereof; or
|- |  | ----------------------------------------------------------------------------------------------------------------------

|· |  | not less in the aggregate than twenty percent of the company’s debentures entitled
to object to amendments to its memorandum of association,
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------

|· |  | have the right to apply to the Supreme Court of Bermuda for an annulment of any amendment
of the memorandum of association.  Where such an application is made, the amendment becomes effective only to the extent
that it is confirmed by the Bermuda Supreme Court.  An application for an annulment of an amendment of the memorandum
of association must be made within twenty-one days after the date on which the resolution amending the memorandum of association
is passed and may be made on behalf of the persons entitled to make the application by one or more of their number as they may
appoint in writing for the purpose.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





137




Our Bye-Laws may be amended in the manner provided
for in the Companies Act, which provides that the directors may amend the Bye-Laws, provided that any such amendment shall be effective
only to the extent approved by the shareholders.



| | 10.2.18 | Merger or Amalgamation
| | ------- | ----------------------



The Companies Act provides that two or more Bermuda
companies may merge and their undertaking, property and liabilities shall vest in one of such companies as the surviving company
(referred to as a “merger” under Bermuda law). The Companies Act also provides that a Bermuda company may amalgamate
with another company and continue as an amalgamated company (referred to as an “amalgamation” under Bermuda law). A
merger or amalgamation requires a merger or amalgamation agreement which must be approved by the board of directors and at a meeting
of the shareholders by seventy-five percent of the shareholders present and entitled to vote at such meeting in respect of which
the quorum shall be two persons holding or representing by proxy more than one-third of the issued shares of the company. These
provisions do not apply where a holding company is merging or amalgamating with one or more of its wholly-owned subsidiaries or
where two or more wholly-owned companies of the same holding company are merging or amalgamating.



Under Bermuda law, in the event of a merger or
an amalgamation of a Bermuda company, a shareholder who did not vote in favor of the transaction and who is not satisfied that
fair value has been offered for the shares, may apply to the Supreme Court of Bermuda within one month of notice of the meeting
of shareholders to appraise the fair value of those shares.





138






| | 10.2.19 | Class Actions and Derivative Actions
| | ------- | ------------------------------------



Class actions, as they are commonly understood
in the United States, are not available to shareholders under Bermuda law. Derivative actions are generally only available to shareholders
under Bermuda law in very limited circumstances. A shareholder may commence an action in the name of a company to remedy a wrong
done to the company where the wrongdoers are in control of the company and the act complained of is of a fraudulent character,
oppressive, beyond the corporate power of the company, illegal or would have required the approval of a greater percentage of the
company’s shareholders than those that actually approved it. A shareholder may not commence such an action where the wrong
complained of is capable of ratification by the company in a general meeting by ordinary resolution.



When one or more shareholders believes the affairs
of a company are being conducted in a manner which is oppressive or prejudicial to the interest of some of the shareholders, the
Supreme Court of Bermuda, upon petition, may make such order as it sees fit, including an order regulating the conduct of the company’s
affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company, and in
the case of a purchase of the shares by the company, for the reduction accordingly of the company’s capital or otherwise.





139






| | 10.2.20 | Personal Liability of Directors and Indemnity
| | ------- | ---------------------------------------------



The Companies Act requires every officer, including
directors, of a company in exercising powers and discharging duties, to act honestly in good faith with a view to the best interests
of the company, and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
The Companies Act further provides that any provision, whether in the bye-laws of a company or in any contract between the company
and any officer or any person employed by the company as auditor, exempting such officer or person from liability, or indemnifying
him against any liability which by virtue of any rule of law would otherwise attach to him, in respect of any fraud or dishonesty
of which he may be guilty in relation to the company, shall be void.



Every director, officer and committee member
shall be indemnified out of our funds against all civil liabilities, loss, damage or expense including liabilities under contract,
tort and statute or any applicable foreign law or regulation and all reasonable legal and other costs and expenses properly payable,
incurred or suffered by him as director, officer or committee member; provided that the indemnity contained in the Bye-Laws will
not extend to any matter which would render it void under the Companies Act as discussed above.



| | 10.2.21 | Exchange Controls
| | ------- | -----------------



We have been designated by the Bermuda Monetary
Authority as a non-resident under the Exchange Control Act of 1972 (the “Exchange Control Act”). This designation
allows us to engage in transactions in currencies other than the Bermuda dollar.





140




The transfer of Common Shares between persons
regarded as resident outside Bermuda for exchange control purposes and the issue of Common Shares to such persons may be effected
without specific consent under the Exchange Control Act and regulations thereunder, provided the Common Shares are listed on an
appointed stock exchange.



Notwithstanding the recording of any special
capacity, we are not bound to investigate or incur any responsibility in respect of the proper administration of any estate or
trust.



We will take no notice of any trust applicable
to any of our Common Shares whether or not we had notice of such trust.



As an “exempted company,” we are
exempt from Bermuda laws which restrict the percentage of share capital that may be held by non-Bermudians. However, as an exempted
company we may not participate in certain designated business transactions, which we do not consider relevant to our present or
planned business activities.



| | 10.3 | Material Contracts
| | ---- | ------------------



Composite Services Agreement (“CSA”)



The Company engages in transactions in the ordinary
course of business with PEWC, including the purchase of certain raw materials and the distribution of PEWC products in various
countries in the Asia Pacific region. The Company and PEWC are parties to a composite services agreement dated November 7,
1996 (the “Composite Services Agreement” or“CSA”), which the Company has renewed annually, at its option.
The Composite Services Agreement contains provisions that define the relationship and the conduct of the respective businesses
of the Company and PEWC and confers certain preferential benefits on the Company. In 2015 there were no material changes to the
CSA between APWC and PEWC. Pursuant to the Composite Services Agreement,





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|· |  | PEWC agrees to (a) sell copper rod to the Company, upon the Company’s request,
(i) at a price consisting of the spot price of copper on the LME plus an agreed upon premium and (ii) at prices and
on terms at least as favorable as PEWC provides copper rod to other purchasers of similar amounts of copper rod in the same markets,
and (b) give priority in the supply of copper rod to the Company over other purchasers of copper rod from PEWC.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· |  | The Company has the right to distribute any wire or cable product manufactured by
PEWC in all markets in which the Company presently distributes or develops the capability to distribute in the future such products
on such terms as have historically been in effect or on terms at least as favorable as PEWC grants to third parties that distribute
such products in such markets.  However, PEWC is not required to grant to the Company the right to distribute products
manufactured by PEWC in the future in markets where the Company does not currently have the capability to distribute unless and
until PEWC has no pre-existing contractual rights which would conflict with the grant of such right to the Company.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· |  | Each of PEWC and the Company will notify the other party prior to entering into any
negotiations with a third party concerning the establishment of any facility or similar venture to manufacture or distribute any
wire or cable product outside of the markets where the Company currently manufactures or distributes, or intends to develop the
capability to manufacture or distribute, any wire or cable product.  Unless the Company and PEWC mutually agree otherwise,
the Company has the right of first refusal to enter into any definitive agreement with such third party.  If, however,
such third party would not agree to the substitution of the Company for PEWC or such substitution would prevent the successful
completion of the facility or venture, PEWC has agreed to arrange for the Company to participate to the extent possible.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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|· |  | PEWC agrees to make available to the Company, upon the Company’s request and
on terms to be mutually agreed between PEWC and the Company from time to time, certain services with respect to the design and
manufacture of wire and cable products, computerization, inventory control, purchasing, internal auditing, quality control, emergency
back-up services, and recruitment and training of personnel; such services may include the training of the Company’s employees
and managers at PEWC facilities and the secondment of PEWC employees and managers to the Company.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· |  | Without the consent of the Company, PEWC will not compete with respect to the manufacture
or distribution of wire and cable products in any market in which the Company is manufacturing or has taken significant steps
to commence manufacturing.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· |  | For purposes of the Composite Services Agreement, each province in China is considered
the equivalent of a country.
|- |  | -------------------------------------------------------------------------------------------------------------------



To the extent that transactions occur in the
future between the Company and PEWC or affiliates of PEWC other than under the Composite Services Agreement, such transactions
will be entered into on an arm’s length basis on terms no less favorable than those available from unaffiliated third parties.





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| | 10.4 | Taxation
| | ---- | --------



The following is a summary of the material tax
consequences of the acquisition, ownership and disposition of Common Shares based on the tax laws of the United States and Bermuda,
subject to the assumptions, qualifications and limitations in our discussion below. Such summary is subject to changes in United
States and Bermuda law, including changes that could have retroactive effect. The following summary does not take into account
the individual circumstances of an investor, nor does it purport to be a complete technical analysis or examination of all potential
tax effects relevant to a decision to purchase Common Shares, including without limitation, the tax laws of the various states
or localities within the United States.





|10.4.1 |  | United States Taxation
|------ |  | ----------------------





The following is a summary of the material United
States federal income tax consequences of the acquisition, ownership and disposition of Common Shares by a U.S. Holder (as defined
below) and a Non-U.S. Holder (as defined below), in each case, subject to the assumptions, qualifications and limitations in our
discussion below. Such summary is subject to changes in United States law, including changes that could have retroactive effect.
The summary does not purport to be a comprehensive description of all possible tax considerations that may be relevant to a decision
to purchase Common Shares. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”),
regulations promulgated under the Code by the U.S. Treasury Department (the “Treasury”) (including proposed and temporary
regulations), rulings, current administrative interpretations and official pronouncements of the IRS, and judicial decisions,
all as currently in effect and all of which are subject to differing interpretations or to change, possibly with retroactive effect.
Such change could materially and adversely affect the tax consequences described below. No assurance can be given that the IRS
would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. Further,
this summary does not discuss any foreign, state or local tax consequences.





144




In particular, this summary deals only with Common
Shares held as capital assets and does not address the United States tax treatment of U.S. Holders and Non-U.S. Holders that are
subject to special treatment under the Code, such as dealers in stocks, securities, or currencies, traders in securities that elect
to use a mark-to-market method of accounting for their securities holdings, financial institutions, insurance companies, tax-exempt
entities, real estate investment trusts, regulated investment companies, qualified retirement plans, individual retirement accounts,
and other tax deferred accounts, expatriates of the United States, persons subject to the alternative minimum tax, persons holding
shares as part of a hedging or conversion transaction or a straddle, or other integrated transaction, persons who acquired Common
Shares pursuant to the exercise of any employee stock option or otherwise as compensation for services, or persons whose functional
currency is not the United States dollar or who own (directly, indirectly or by attribution) 10% or more of the stock of the Company.
This discussion is limited to investors who hold their shares as capital assets. No ruling has been or will be sought from the
IRS regarding any matter discussed herein. Counsel to the Company has not rendered any legal opinion regarding any tax consequences
to the Company or others of an investment in the Company. Consequently, prospective purchasers who are U.S. Holders or Non-U.S.
Holders are advised to satisfy themselves as to the overall United States federal, state, local and foreign tax consequences of
their acquisition, ownership and disposition of Common Shares by consulting their own tax advisors.





145




As used herein, the term “U.S. Holder”
means a beneficial owner of Common Shares that is (i) a citizen or resident of the United States, (ii) a corporation
(including any entity treated as a corporation for U.S. federal income tax purposes) created or organized in the United States
or under the laws of the United States or any state (or the District of Columbia), (iii) an estate, the income of which is
subject to United States federal income tax regardless of its source, or (iv) a trust, if a court within the United States
is able to exercise primary supervision over the administration of the trust and one or more “United States persons”
(as defined in Section 7701(a)(30) of the Code) has the authority to control all substantial decisions of the trust, or, to the
extent provided in the Regulations, certain trusts in existence on August 20, 1996, and treated as U.S. Persons prior to such
date, that elect to be treated as U.S. Persons.



The term “Non-U.S. Holder” means
a beneficial owner of Common Shares that is not a U.S. Holder. As described in “Taxation of Non-U.S. Holders” below,
the consequences to a Non-U.S. Holder may differ substantially from the tax consequences to a U.S. Holder.



If a partnership (including for this purpose
any entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of Common Shares, the U.S. federal
income tax consequences to a partner in the partnership will generally depend on the status of the partner and the activities of
the partnership. A holder of Common Shares that is a partnership and the partners in such partnership should consult their own
tax advisors regarding the U.S. federal income tax consequences of the ownership and disposition of Common Shares.





146




U.S. Federal Income Taxation of the Company



The Company expects that it will be treated as
a foreign corporation for U.S. federal income tax purposes, and it will make no election to the contrary. As a foreign corporation,
subject to the rules discussed below, the income, gains, losses, deductions and expenses of the Company will not be passed through
to the investors, and all distributions by the Company to the investors will be treated as dividends, return of capital, and/or
capital gains.



The Company currently does not conduct activities
in the United States and expects that it will continue to conduct activities in a manner so as not to constitute the conduct of
a trade or business in the United States or, invest in securities the income from which is treated, for U.S. federal income tax
purposes, as arising from a U.S. trade or business. As a result, the income of the Company generally should not be subject to U.S.
federal income tax on a net income basis. However, gains realized from certain investments in United States real property interests
by foreign persons, such as the Company, may be subject to U.S. federal income tax on a net basis, withholding tax and a branch
profits tax. Debt instruments with an equity component linked to a United States real property interest and stock in certain United
States corporations holding significant real property interests may be considered United States real property interests taxable
as described above.



Taxation of U.S. Holders



The discussion in “Taxation of Dividends”
and “Taxation of Capital Gains” below assumes that the Company will not be treated as a PFIC for U.S. federal income
tax purposes. For a discussion of the rules that apply if the Company is treated as a PFIC, see the discussion in “Passive
Foreign Investment Company” below.





147




Taxation of Dividends



The Company has never declared or paid any cash
dividends and does not presently anticipate paying dividends. A U.S. Holder receiving a distribution with respect to Common Shares
generally will be required to include such distribution in gross income (as ordinary income subject to regular, and not reduced,
tax rates) on the day received as foreign-source dividend income to the extent such distribution is paid from the Company’s
current or accumulated earnings and profits (as determined under United States federal income tax principles). Such dividends will
not be eligible for the dividends received deduction (generally allowed to certain United States corporations in respect of dividends
received from United States corporations). U.S. Holders that are corporations and directly own 10% or more of the voting stock
of the Company may be entitled to claim a foreign tax credit for United States federal income tax purposes in respect of foreign
taxes paid by the Company and certain subsidiaries. However, if a U.S. Holder claims the foreign tax credit, it must “gross-up”
the deemed tax payment and treat the grossed-up amount as part of the dividend distribution, so that the amount included in income
is equal to the dividend received plus the amount of the foreign tax deemed paid by such U.S. Holder.



Under U.S. federal income tax laws, a dividend
paid to an individual U.S. shareholder from either a domestic corporation or a “qualified foreign corporation” is subject
to tax at the reduced rates applicable to certain capital gains. A qualified foreign corporation includes certain foreign corporations
that are eligible for benefits of a comprehensive income tax treaty with the United States which the Secretary of the Treasury
determines is satisfactory for purposes of this provision and which includes an exchange of information program. In addition, a
foreign corporation not otherwise treated as a qualified foreign corporation is so treated with respect to any dividend it pays
if the stock with respect to which it pays such dividend is readily tradable on an established securities market in the United
States.





148




In the absence of a comprehensive income tax
treaty between the United States and Bermuda, the Company will not be treated as a “qualified foreign corporation”
under the treaty test. So long as the Company is not a PFIC (as discussed below), dividends paid by the Company to individual shareholders
would qualify for these reduced rates if its stock was treated as readily tradable on an established securities market in the United
States.



In Notice 2003-71, 2003-2 C.B. 922, the IRS determined
that common or ordinary stock, or an American depositary receipt in respect of such stock, is considered readily tradable on an
established securities market in the United States if it is listed on a national securities exchange that is registered under Section
6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) or on the NASDAQ Stock Market. As stated in the SEC’s Annual Report
for 2002, registered national exchanges as of September 30, 2002 include the American Stock Exchange (now known as NYSE Amex
Equities), the Boston Stock Exchange, the Cincinnati Stock Exchange, the Chicago Stock Exchange, the NYSE, the Philadelphia Stock
Exchange, and the Pacific Exchange, Inc.



For so long as the Common Shares continue to
be traded on NASDAQ, or are readily tradable on any other established securities market in the United States, any dividends paid
by the Company should qualify for the reduced rates referred to above so long as they remain in effect.



To the extent any distribution exceeds the current
and accumulated earnings and profits of the Company for a taxable year, the distribution will be treated as a non-taxable return
of capital to the extent of the U.S. Holder’s adjusted tax basis in the Common Shares with respect to which the distribution
is made, causing a reduction in the adjusted basis of the Common Shares (thereby increasing the amount of gain, or decreasing the
amount of loss, to be recognized by the U.S. Holder on a subsequent disposition of the Common Shares). To the extent such distribution
exceeds the U.S. Holder’s adjusted tax basis in the Common Shares, such excess will be treated as capital gain.





149




Taxation of Capital Gains



A U.S. Holder will recognize taxable gain or
loss on any sale, exchange or other disposition of Common Shares (including a liquidation, dissolution or as a result of a non-pro
rata redemption of Common Shares that qualified for treatment as a sale or exchange for United States federal income tax purposes)
in an amount equal to the difference between the amount realized for the Common Shares and the U.S. Holder’s adjusted tax
basis in the Common Shares. Such gain or loss generally will be treated as capital gain or loss and will be long-term capital gain
or loss if the Common Shares have been held for more than one year on the date of the sale, exchange or other disposition thereof,
and will be short-term capital gain or loss if the Common Shares have been held for one year or less on the date of the sale or
exchange thereof. Any gain recognized by a U.S. Holder generally will be treated as United States source income. In general, an
individual’s short-term capital gains are taxable as ordinary income and an individual’s long-term capital gains are
subject to U.S. federal income tax at preferential rates.



Long-term capital gains of corporations generally
are subject to the U.S. federal income tax at a current maximum marginal rate of 35%. Short-term capital gain generally is taxable
at ordinary income rates. Although capital gains of corporations currently are taxed at the same rates as ordinary income, the
distinction between capital gain and ordinary income or loss is relevant for purposes of, among other things, limitations on the
deductibility of capital losses. Corporations may deduct capital losses only to the extent of capital gains and generally may carry
back capital losses to each of the preceding three years and carry forward capital losses to each of the succeeding five years.
Individuals may deduct capital losses to the extent of capital gains plus up to $3,000 ($1,500 for married individuals filing separate
returns) and may carry forward capital losses indefinitely.





150




Backup Withholding



In general, information reporting requirements
may be applicable to dividend payments (or other taxable distributions) made in respect of Common Shares to non-corporate U.S.
Holders, and “backup withholding” at the rate of 28% will apply to such payments (i) if the holder or beneficial
owner fails to provide a taxpayer identification number in the manner required by U.S. law and applicable regulations, (ii) if
the IRS notifies the payor that the taxpayer identification number furnished by the holder or beneficial owner is incorrect, (iii) if
there has been notification from the IRS of a failure by the holder or beneficial owner to report all interest or dividends required
to be shown on its United States federal income tax returns or (iv) in certain circumstances, if the holder or beneficial
owner fails to comply with applicable certification requirements. In general, payment of the proceeds from a sale of Common Shares
to or through a United States office of a broker is subject to both United States backup withholding and information reporting
unless the holder or beneficial owner establishes an exemption. U.S. Holders who are required to establish their exempt status
generally must provide such certification on IRS Form W-9. Amounts withheld under the backup withholding rules may be credited
against a holder’s tax liability, and a holder may obtain a refund of any excess amounts withheld under the backup withholding
rules by timely filing the appropriate claim for refund with the IRS. Payment of the proceeds from the sale of Common Shares effected
outside the United States by a foreign office of certain United States connected brokers will not be subject to backup withholding
tax but will be subject to information reporting requirements unless the broker has documentary evidence in its records that the
beneficial owner is a non-U.S. Holder and has no actual knowledge to the contrary, or the beneficial owner otherwise establishes
an exemption.





151




Passive Foreign Investment Company



In general, the Company will be treated as a
PFIC for United States federal income tax purposes for any taxable year if either (i) at least 75% of the gross income of
the Company is passive income or (ii) at least 50% of the value (determined on the basis of a quarterly average) of the Company’s
assets is attributable to assets that produce or are held for the production of passive income. The Company believes, based on
its current operations and assets, that it is not a PFIC and does not expect to become a PFIC in the future. This conclusion is
a factual determination based on, among other things, a valuation of the Company’s assets, which will likely change from
time to time.



If the Company were a PFIC for any taxable year
during which a U.S. Holder held Common Shares, the U.S. Holder would be subject to special tax rules with respect to (i) any
“excess distribution” by the Company to the U.S. Holder (generally any distribution received by the U.S. Holder in
a taxable year that is greater than 125% of the average annual distribution received by the U.S. Holder in the three preceding
taxable years, or the U.S. Holder’s holding period for the Common Shares, if shorter) and (ii) any gain realized on
the sale or other disposition (including a pledge) of Common Shares.





152




Under these special tax rules, (i) the excess
distribution or gain would be allocated ratably over the U.S. Holder’s holding period for the Common Shares, (ii) the
amount allocated to the U.S. Holder’s current taxable year and to any period prior to the first taxable year in which the
Company was a PFIC would be includible as ordinary income in the U.S. Holder’s current taxable year and (iii) the amount
allocated to a prior year during which the Company was a PFIC would be subject to tax at the highest tax rate in effect for that
year, and an interest charge would also be imposed with respect to the resulting tax attributable to each such prior year. The
interest charge is computed using the applicable rates imposed on underpayments of United States federal income tax for the relevant
periods.



The above rules will not apply if a “mark-to-market”
election is available and a U.S. Holder validly makes such an election by filing a properly completed IRS Form 8621. If such election
were made, a U.S. Holder generally would be required to take into account the difference, if any, between the fair market value
and its adjusted tax basis in the Common Shares at the end of each taxable year as ordinary income or ordinary loss (to the extent
of any net mark-to-market gains previously included in income). Thus, the U.S. Holder may recognize taxable income without receiving
any cash to pay its tax liability with respect to such income. A U.S. Holder’s tax basis in the Common Shares would be adjusted
to reflect any such income or loss amount. In addition, any gain from a sale, exchange or other disposition of the Common Shares
would be treated as ordinary income, and any loss would be treated as ordinary loss (to the extent of any net mark-to-market gains
previously included in income).  A mark-to-market election is available to a U.S. Holder only if the Common Shares are
considered “marketable stock” for these purposes. Generally, shares of a PFIC will be considered marketable stock if
they are “regularly traded” on a “qualified exchange” within the meaning of applicable U.S. Treasury regulations.
A class of shares is regularly traded during any calendar year during which such class of shares is traded, other than in de minimis
quantities, on at least 15 days during each calendar quarter. A “qualified exchange” is defined to include a national
securities exchange registered with the SEC or certain foreign exchanges. As the Common Shares of the Company commenced trading
on the NASDAQ beginning on April 29, 2011, the mark-to-market election under the rules discussed above is available if the
Company were otherwise classified as a PFIC, for so long as the Common Shares continue to be regularly traded on NASDAQ or another
qualified exchange.





153




The special tax rules described above will also
not apply to a U.S. Holder if the U.S. Holder elects to have the Company treated as a “qualified electing fund” (a
“QEF election”) and the Company provides certain information to U.S. Holders. If the Company is treated as a PFIC,
it will notify the U.S. Holders and provide such holders with the information necessary to make an effective QEF election, including
information as to the procedures for making such an election. The QEF election is made on a shareholder-by-shareholder basis and
can ordinarily be revoked only with the consent of the IRS.



A U.S. Holder that makes a valid QEF election
will be currently taxable on its pro rata share of the Company’s ordinary earnings and net capital gain (at ordinary income
and capital gains rates, respectively) for each taxable year that the Company is classified as a PFIC, regardless of whether distributions
are received. Thus, the U.S. Holder may recognize taxable income without receiving any cash to pay its tax liability with respect
to such income. The U.S. Holder’s basis in the Common Shares will be increased to reflect taxed but undistributed income.
Distributions of income that have been previously taxed will result in a corresponding reduction of basis in the Common Shares
and will not be taxed again as a distribution to the U.S. Holder.





154




A U.S. Holder owning Common Shares during any
year that the Company is a PFIC must file IRS Form 8621. U.S. Holders should consult their tax advisors concerning the United States
federal income tax consequences of holding Common Shares and of making a mark-to-market or QEF election if the Company is treated
as a PFIC in the future.



Controlled Foreign Corporation



A non-U.S. corporation generally will be a CFC
for U.S. tax purposes if United States shareholders collectively own more than 50 percent of the total combined voting power or
total value of the corporation’s stock on any day during any taxable year. For this purpose, United States shareholders are
limited to those U.S. persons who own, directly, indirectly or constructively, 10 percent or more of the total combined voting
power of all classes of stock of the non-U.S. corporation. If a corporation is a CFC for an uninterrupted period of 30-days in
any tax year, every United States shareholder that owns stock on the last day of the CFC’s tax year, must include in gross
income such shareholder’s pro rata share of the CFC’s “subpart F income” and income from investments in
certain types of U.S. property (i.e., tangible personal property located in the United States, stock of a
United States corporation, an obligation of a United States person, or a right to use patents, copyrights, and other similar property
in the United States) even if the income has not been distributed to the shareholders in the form of dividends or otherwise. Subpart
F income consists of certain specified categories of income including, among others, dividends, interest, rents, royalties, net
gains from the sale of property giving rise to such income and income from certain types of transactions involving “related
persons” as defined for U.S. federal income tax purposes.





155




Taxation of Non-U.S. Holders



Taxation of Dividends



Subject to the discussion in “Backup Withholding”
below, Non-U.S. Holders generally will not be subject to U.S. federal income tax, including withholding tax, on distributions received
on Common Shares, unless the distributions are effectively connected with a trade or business conducted in the United States (and,
if an applicable income tax treaty so requires, attributable to a permanent establishment maintained in the United States).



If distributions are effectively connected with
a U.S. trade or business (and, if applicable, attributable to a U.S. permanent establishment), Non-U.S. Holders generally will
be subject to tax on such distributions in the same manner as U.S. Holders, as described in “Taxation of U.S. Holders —
Taxation of Dividends” above. In addition, any such distributions received by a corporate Non-U.S. Holder may also, under
certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty.



Taxation of Capital Gains



Gain realized by Non-U.S. Holders upon the sale
or exchange or complete redemption of Common Shares held as a capital asset generally should not be subject to United States federal
income tax provided that the gain is not effectively connected with a trade or business conducted in the United States (and, if
an applicable tax treaty so requires, attributable to a permanent establishment maintained in the United States). However, in the
case of nonresident alien individuals, such gain will be subject to the 30% (or lower tax treaty rate) U.S. flat tax if (i) such
person is present in the United States for 183 days or more during the taxable year (on a calendar year basis unless the nonresident
alien individual has previously established a different taxable year) and certain other conditions are met; and (ii) such
gain is derived from U.S. sources.





156




Generally, the source of gain upon the sale or
exchange or complete redemption of Common Shares is determined by the place of residence of the shareholder. For purposes of determining
the source of gain, the Code defines residency in a manner that may result in an individual who is otherwise a nonresident alien
with respect to the United States being treated as a United States resident for purposes of determining the source of income only.
Each potential individual investor who anticipates being present in the United States for 183 days or more (in any taxable year)
should consult a separate, outside tax advisor with respect to the possible application of this rule.



Special rules may apply in the case of shareholders
(i) that have an office or fixed place of business in the United States to which a distribution or gain in respect of the
Common Shares is attributable; or (ii) that are former citizens or residents of the United States, CFCs, foreign personal
holding companies or corporations that accumulate earnings to avoid United States federal income tax. Such persons in particular
are urged to consult their United States tax advisors before investing in the Company.



Backup Withholding



In the case of Common Shares held by a Non-U.S.
Holder, or held in the United States by a custodian or nominee for a Non-U.S. Holder, U.S. back-up withholding taxes may apply
to distributions in respect of such Common Shares unless such Non-U.S. Holder properly certifies as to its non-U.S. status using
IRS Form W-8.





157




Backup withholding is not an additional tax.
Amounts withheld as backup withholding from a payment to a Non-U.S. Holder may be credited against his U.S. federal income tax
liability and a Non-U.S. Holder may obtain a refund of any excess amounts withheld by filing the appropriate claim for refund with
the IRS and furnishing any required information in a timely manner.



Future Tax Legislation



Future amendments to the Code, other legislation,
new or amended U. S. Treasury Regulations, administrative rulings or guidance by the IRS, or judicial decisions may adversely affect
the federal income tax aspects of an investment in the Company, with or without advance notice, and retroactively or prospectively.



U.S. Treasury Circular 230 Notice



Any United States federal tax advice included
in this Annual Report (a) was not intended to be used, and cannot be used, for the purpose of avoiding United States federal
tax penalties, and (b) was not written to support the promotion or marketing of the Company, its Common Shares or any transaction(s)
or matter(s) addressed in the written advice. The taxpayer should seek advice based upon the taxpayer’s particular circumstances
from an independent tax adviser.



| | 10.4.2 | Bermuda Taxation
| | ------ | ----------------



In the opinion of Appleby, the following discussion
correctly describes the material tax consequences of the ownership of Common Shares under Bermuda law, subject to the assumptions,
qualifications and limitations in the discussion below. Such summary is subject to changes in Bermuda law, including changes that
could have retroactive effect.





158




Under current Bermuda law, there are no taxes
on profits, income or dividends nor is there any capital gains tax. Furthermore, the Company has received from the Minister of
Finance of Bermuda under the Exempted Undertakings Tax Protection Act of 1966, as amended, an undertaking that, in the event that
Bermuda enacts any legislation imposing tax computed on profits or income, or computed on any capital asset, gain or appreciation,
or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax shall not be applicable to the
Company or to any of its operations, or the shares, debentures or other obligations of the Company, until March 31, 2035. This
undertaking does not, however, prevent the imposition of any such tax or duty on such persons as are ordinarily resident in Bermuda
and holding such shares, debentures or obligations of the Company or of property taxes on Company-owned real property or leasehold
interests in Bermuda.



As an exempted company, the Company must pay
to the Bermuda government an annual government fee calculated on a sliding-scale basis by reference to its assessable capital,
that is, its authorized share capital plus any share premium.



There is no stamp duty or other transfer tax
payable upon the transfer of shares in the Company by shareholders.



The United States does not have a comprehensive
income tax treaty with Bermuda.



| | 10.5 | Documents on Display
| | ---- | --------------------



We are required to comply with the reporting
requirements of the Exchange Act, applicable to a foreign private issuer. We are currently required to file annually a Form 20-F
no later than four months after the close of our fiscal year, which is December 31. Any time the Company is delinquent in filing
timely any periodic reports, including an Annual Report on Form 20-F, with the SEC, that delinquency may adversely affect the Company’s
status on any exchange or quotation service on which its shares are listed or quoted and the Company may not be entitled to use
certain abbreviated registration statements with the SEC in connection with the registration of any of its securities. We have
not been delinquent in filing our annual reports in any of the past five years.





159




As a foreign private issuer, we are exempt from
the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal
shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.



Our reports and other information, when so filed,
may be inspected and copied (at prescribed rates) at the public reference facilities maintained by the SEC at Judiciary Plaza,
100 F Street, N.E., Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information. In addition, the SEC
maintains a web site that contains information filed electronically with the SEC, which can be accessed over the Internet at http://www.sec.gov.
We have filed all our reports electronically since November 4, 2002. Such reports can be accessed over the Internet at http://www.sec.gov.



In addition, we post certain information regarding
the Company and its operations on our website located at www.apwcc.com. Summary information regarding the Company posted on our
website should not be considered to be a substitute for, or a restatement of, the more complete information regarding the Company,
its results of operations and financial condition set forth in this Annual Report or other documents or information which we may
file with the SEC.





160








|Item 11: | Quantitative and Qualitative Disclosures About Market Risks
|-------- | -----------------------------------------------------------



The Company has exposure to several quantitative
market risks, including fluctuations in interest rates, foreign currency exchange rates and the pricing of commodities, principally
copper, the Company’s main raw material. Risk management measures undertaken by the Company include entering into derivative
agreements covering foreign exchange rates and copper pricing, as well as copper forward pricing agreements. The Company does not
purchase or sell derivative instruments for trading purposes. The Company does not engage in trading activities involving copper
contracts for which a lack of marketplace quotations would necessitate the use of fair value estimation techniques.



| | 11.1 | Interest Rate Risk
| | ---- | ------------------



The Company is not currently a party to any derivative
instruments to manage interest rate exposure. In the current interest rate environment, the Company does not believe that the limited
potential loss limitation protection available through the purchase of interest rate swaps or other derivative instruments against
its exposure under floating rate finance facilities merits the cost that would be incurred in those transactions.



| | 11.2 | Foreign Currency Risk
| | ---- | ---------------------



The Company has exposure to fluctuations in currency
exchange rates. The Company’s revenues are generated primarily in the local currency or currencies in its principal operating
regions, North Asia, Thailand, and the ROW, which are also its reporting segments. However, nearly all of the costs associated
with the purchase of the Company’s raw materials, including copper, and its capital expenditures, including ongoing equipment
upgrade and maintenance programs, are in U.S. dollars.





161




As the Company’s operating subsidiaries
incur operating costs in the local currency where they operate, the Company believes it is prudent that those operating subsidiaries
incur indebtedness in the local currency when debt financing is necessary. The amount of indebtedness incurred by our operating
subsidiaries from time to time is a function of our business strategy, the attractiveness of borrowing as opposed to other methods
of financing operations and tax implications, among other considerations. The Company has exposure to currency exchange risk when
the results of its operating subsidiaries are translated from the local currency into the U.S. dollar. At December 31, 2014
and 2015, the other comprehensive income in the total equity section of the consolidated balance sheets included currency translation
adjustments of $(4.3) million and $(9.7) million, respectively.



| | 11.3 | Market Risks Relating to Copper
| | ---- | -------------------------------



Copper is the principal raw material we use,
accounting for a majority portion of the cost of sales in 2015. We purchase copper at prices based on the average prevailing international
spot market prices on the LME for copper for the one month prior to purchase. The price of copper is influenced heavily by global
supply and demand as well as speculative trading. As with other costs of production, changes in the price of copper may affect
our cost of sales. Whether this has a material impact on our operating margins and financial results depends primarily on our ability
to adjust our selling prices to our customers, such that increases and decreases in the price of copper are reflected in those
selling prices. The purchase price of our products is based in part on the cost of copper used to manufacture those products. In
addition, in the ordinary course of business we maintain inventories of raw materials and finished products reasonably necessary
for the conduct of our business. These inventories typically reflect the cost of copper prevailing in the market at the time we
purchase. Most of our sales of Manufactured Products reflect copper prices prevailing at the time the products are ordered. A long-term
decrease in the price of copper would require the Company to revalue the value of its inventory at periodic intervals to the then
market value, which could be below cost. Copper prices have been subject to considerable volatility and it is not always possible
to manage our copper purchases and inventory so as to neutralize the impact of copper price volatility. Accordingly, significant
volatility in copper prices could have an adverse effect on our operations. No assurance can be given that such volatility will
not recur.





162






| | 11.4 | Equity Price Risk
| | ---- | -----------------



The Company is exposed to equity price risk as
a result of our unlisted available-for-sale equity securities. The carrying value of these investments in private companies is
subject to fluctuations and their fair market value may be significantly different from the carrying value.



| | 11.5 | Fair Value of Designated Market-Sensitive Derivative Contracts
| | ---- | --------------------------------------------------------------



(Not applicable)



|Item 12: | Description of Securities Other Than Equity Securities
|-------- | ------------------------------------------------------



(Not applicable)







163




Part II



|Item 13: | Defaults, Dividend Arrearages and Delinquencies
|-------- | -----------------------------------------------



The Company has not experienced any material
default in the payment of principal, interest, a sinking or purchase fund installment, or incurred any other material default,
not cured within 30 days relating to the Company’s or any of its consolidated subsidiaries’ indebtedness.



|Item 14: | Material Modifications to the Rights of Security Holders and Use of Proceeds
|-------- | ----------------------------------------------------------------------------



(Not applicable)



|Item 15: | Controls and Procedures
|-------- | -----------------------



Disclosure Controls and Procedures



An evaluation was carried out under the supervision
and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer
(“CFO”), of the effectiveness of our disclosure controls and procedures in accordance with the provisions of Rule
13a-15 promulgated under the Securities Exchange Act of 1934, as amended. Based upon that evaluation and for the reasons stated
in the management’s report on internal control over financial reporting below, our management concluded that our disclosure
controls and procedures were effective as of December 31, 2015.



Management’s report on Internal Control
over Financial Reporting



The Company’s
management, including our CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial
reporting. We do not expect that our internal control will prevent all errors and all fraud, or eliminate the possibility of fraudulent
conduct. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that
the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their costs. The design of any system of controls also
is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design
will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate because
of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.





164




The Company’s
management, including its CEO and CFO, has assessed the effectiveness of our internal control over financial reporting as of December 31,
2015 (the“Assessment Date”). In making its assessment, management used the criteria set forth in Internal Control
— Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations (“COSO”) of the Treadway
Commission. These criteria include the control environment, risk assessment, control activities, information and communication
and monitoring of each of the above criteria. Based on this assessment, the Company’s management, including its CEO and
CFO, concluded that the Company’s internal control over financial reporting was effective as of the Assessment Date.



In 2014, our independent
registered public accounting firm identified a material weakness in the financial statement closing process. Deficiencies were
noted in our controls over complex and non-routine transactions in our financial statement closing process. These deficiencies
were attributable to the lack of experience and knowledge of our accounting personnel at the subsidiary in relevant financial accounting
and reporting requirements for financial instruments as well as the lack of oversight by senior management. The aggregate effect
of these deficiencies represented a material weakness. Based on this assessment, the Company’s management, including its
CEO and CFO, concluded that the Company’s internal control over financial reporting was ineffective as of December 31,
2014.





165




To remediate the material
weakness identified in 2014, we have undertaken the following measures in 2015 to improve our internal controls in the financial
statement closing process:



| | 1) | A new policy titled Regulations Governing the Acquisition and Disposal of Assets was implemented
in 2015. The policy stipulates the procedures the Company should follow for dealing with the acquisition and disposal of assets
including financial derivatives.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2) | Strengthened the communication with each subsidiary, with a focus on the identification and
                                                              accounting of financial derivatives transactions and to make clear the required approval process before entering into a
                                                              derivatives transaction with a financial institution.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3) | A review process was implemented for any relevant credit reports to ensure all off balance sheet
financial derivatives transactions entered into with a financial institution have been captured by the Company.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4) | The Company implemented a new accounting system to replace the manual consolidation process. The
system will help to accelerate the financial closing process and reduce human error when preparing the Company’s consolidated
financial statements.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







166






Changes in internal
control over financial reporting



Except for the remedial
measures described above, there were no changes in our internal control over financial reporting, identified in connection with
the evaluation of such internal control that occurred during the last fiscal year, that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.



|Item 16A. | Audit Committee Financial Expert
|--------- | --------------------------------



During 2010 and until April 29, 2011, the
Common Shares of the Company were traded on the over-the-counter bulletin board (“OTCBB”). As of April 29, 2011,
the Common Shares of the Company began trading on NASDAQ. While the Company’s Common Shares were traded on the OTCBB, the
Company was not required to have an audit committee that met the requirements of, nor was it required to have an audit committee
financial expert as contemplated by, Regulation 10A-3 under the Exchange Act. During those periods of time when the Company did
not have any independent directors, our full Board of Directors fulfilled the functions of an audit committee pursuant to Section
3(a)(58)(B) of the Exchange Act. For all of 2014 and 2015, our audit committee has consisted of our three independent directors,
Mr. Anson Chan, Dr. Yichin Lee and Dr. Lambert L. Ding, with Mr. Chan serving as the Audit Committee’s chairman and financial
expert. The Audit Committee of the Company’s Board of Directors meets the requirements set forth in Regulation 10A-3 under
the Exchange Act and under the rules of NASDAQ.





167






|Item 16B. | Code of Ethics
|--------- | --------------



On April 26, 2005, the Company adopted a
code of ethics applicable to its Chief Executive Officer and senior financial officers. A copy of the Company’s code of ethics
for senior executives is on file with the SEC.



|Item 16C. | Principal Accountant Fees and Services
|--------- | --------------------------------------



Audit Fees



The aggregate fees for fiscal years 2015 and
2014 for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements
totaled $0.7 million and $0.8 million, respectively.



Tax Fees



The aggregate fees for fiscal years 2015 and
2014 for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning totaled approximately
$98 thousand and $95 thousand, respectively.



All Other Fees



(None)



Audit Committee Approval



The engagement of the accountant to render audit,
audit-related and non-audit services is entered into pursuant to pre-approval policies and procedures established in the Charter
of the Audit Committee of the Company. Each of the services described in this Item 16C was approved by the Audit Committee.





168






|Item 16D. | Exemptions from the Listing Standards for the Audit Committees
|--------- | --------------------------------------------------------------



The Audit Committee of the Company’s Board
of Directors consists of three directors, each of whom is independent, as such term is defined in Regulation 10A-3 promulgated
under the Exchange Act, and one of whom is a financial expert.



|Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|--------- | ----------------------------------------------------------------------



On August 17, 2015, PEWC and its wholly-owned
BVI subsidiary, Moon View Ventures Limited (“MVV” and collectively with PEWC, the “Purchasers”) acquired
from MSD Credit Opportunity Master Fund, L.P., a Cayman Islands partnership (“MSDC”), a total of 1,355,415 Common Shares
(the “Purchased Shares”) pursuant to a stock purchase agreement (the “Stock Purchase Agreement”) among
the parties thereto. The Purchased Shares were recorded in the name of, and are beneficially held by, MVV. Other than the transaction
consummated pursuant to the Stock Purchase Agreement during 2015, neither the Company nor an “affiliated purchaser”
engaged in any purchase of Common Shares or any other securities of the Company.



|Item 16F. | Change in Registrant’s Certifying Accountant
|--------- | --------------------------------------------



(Not applicable)





169






|Item 16G. | Corporate Governance
|--------- | --------------------



The Common Shares of the Company are traded on
the NASDAQ Global Markets tier. However, as the Company has a more than fifty percent (50%) shareholder, the Company is entitled
to rely upon a “controlled company exemption” that exempts it from having a board of directors comprised of a majority
of independent directors. At present, a majority of the board of directors of the Company is affiliated with PEWC. The Company
also relies on the NASDAQ’s allowance for foreign private issuers to follow home country practices in lieu of the requirement
that listed companies have regularly scheduled meetings at which only independent directors are present (“executive sessions”).
The independent directors of the Company meet periodically in executive session in their capacity as members of the Audit Committee
of the Board of Directors of the Company without other Directors present, but on occasion meet with the independent auditors of
the Company present in such executive session, and on occasion meet with members of management present in order to understand more
fully management’s analysis of the Company’s financial performance and compliance with relevant corporate governance
requirements. These are the only material differences between the Company’s corporate governance practices and the corporate
governance practices set forth for domestic companies under the NASDAQ rules on the subject matter.



|Item 16H. | Mine Safety Disclosure
|--------- | ----------------------



(Not applicable)











170




Part III



|Item 17: | Financial Statements
|-------- | --------------------



The Company has elected to provide the financial
statements and related information specified in Item 18 in lieu of Item 17.



|Item 18: | Financial Statements
|-------- | --------------------



See pages F-1 – F-80.



|Item 19: | Exhibits                                                                                      
|-------- | ----------------------------------------------------------------------------------------------
|         |                                                                                               
|19.1     | Index to Audited Financial Statements                                                         
|         | Reports of independent registered accounting firms                                            
|         | Consolidated income statements for the years ended December 31, 2015 and 2014                 
|         | Consolidated statements of comprehensive income for the years ended December 31, 2015 and 2014
|         | Consolidated balance sheets as of December 31, 2015, December 31, 2014 and December 31, 2013  
|         | Consolidated statements of shareholder ́s equity for the years ended December 31, 2015 and 2014
|         | Consolidated statements of cash flows for the years ended December 31, 2015 and 2014          
|         | Notes to consolidated financial statements                                                    
|         |                                                                                               
|        

171




|     |                                                                                                                                                                                                                                                 
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|19.2 | Index to Exhibits                                                                                                                                                                                                                               
|1.1  | Memorandum of Association of Asia Pacific Wire & Cable Corporation Limited (incorporated by reference to Exhibit 1.1 of the Company’s annual report on Form 20-F filed with the Securities and Exchange Commission on June 21, 2001).           
|1.2  | Third Amended and Restated Bye-Laws of Asia Pacific Wire & Cable Corporation Limited (incorporated by reference to Exhibit 3.2 of the Company’s annual report on Form 20-F filed with the Securities and Exchange Commission on April 30, 2012).
|4.1  | Amended and Restated Shareholders’ Agreement dated March 27, 2009 (incorporated by reference to Exhibit 3.4 of the Company’s Post-Effective Amendment No. 1 to Form F-1 filed with the Securities and Exchange Commission on April 2, 2009).    
|4.2  | Shareholders’ Agreement Joinder dated as of July 1, 2011(incorporated by reference to Exhibit 3.5 of the Company’s Post-Effective Amendment No. 8 to Form F-1 on Form F-3 filed with the Securities and Exchange Commission on August 31, 2011).
|4.3  | Composite Services Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Form F-1 filed with the Securities and Exchange Commission on November 13, 1996).                                                                      
|4.4  | Amended and Restated summaries of Joint Venture Agreements (incorporated by reference to Exhibit 4.6 of the Company’s annual report on Form 20-F filed with the Securities and Exchange Commission on April 30, 2013).                          
|     |                                                                                                                                                                                                                                                 
|    

172




|     |                                                                                                                                                                                                                                                                                                                      
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.5  | Loan Facility Agreement between Crown Century Holdings Limited and Bangkok Bank Public Company Limited dated March 17, 2011 (incorporated by reference to Exhibit 10.8 of the Company’s Post-Effective Amendment No. 8 to Form F-1 on Form F-3 filed with the Securities and Exchange Commission on August 31, 2011).
|4.6  | Rule 10b5-1 Issuer Purchase Plan (incorporated by reference to the Company’s report on Form 6-K filed with the Securities and Exchange Commission on April 25, 2013).                                                                                                                                                
|4.7  | Stock Purchase Agreement dated as of August 17, 2015, by and between Pacific Electric
        Wire & Cable Co. Ltd., Moon View Ventures Limited and MSD Credit Opportunity Master Fund, L.P. (filed herewith).                                                                                                       
|8    | List of significant subsidiaries (see Note 1 to the consolidated financial statements).                                                                                                                                                                                                                              
|11   | Code of Ethics (incorporated by reference to Exhibit 11 of the Company’s annual report on Form 20-F filed with the Securities and Exchange Commission on November 9, 2007).                                                                                                                                          
|12.1 | Certification of Chief Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith).                                                                                                                                                                                         
|12.2 | Certification of Chief Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith).                                                                                                                                                                                         
|13.1 | Certification by Chief Executive Officer of periodic financial report pursuant to 18 U.S.C. Section 1350, as mandated by Section 906 of the Sarbanes-Oxley Act (filed herewith).                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                      
|    

173




|      |                                                                                                                                                                                                        
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|13.2  | Certification by Chief Financial Officer of periodic financial report pursuant to 18 U.S.C. Section 1350, as mandated by Section 906 of the Sarbanes-Oxley Act (filed herewith).                       
|15(a) | Amended and Restated Audit Committee Charter (incorporated by reference to Exhibit 16.G of the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on May 13, 2011).











174




SIGNATURE



Pursuant to the requirements of Section 12 of
the Securities Exchange Act of 1934, the registrant certifies that it meets all of the requirements for filing on Form 20-F and
has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.







|               | ASIA PACIFIC WIRE & CABLE
        
        CORPORATION LIMITED
|-------------- | --------------------------------------------------------------
|April 30, 2016 | /s/ Yuan Chun Tang                                            
|               | Name:  Yuan Chun Tang                                         
|               | Title:    Chief Executive Officer                             













175
















|
|











Asia
Pacific Wire & Cable Corporation Limited







Audited Consolidated Financial
Statements









As of December 31, 2015 and 2014

Years ended December 31, 2015,
2014 and 2013















INDEX TO
FINANCIAL STATEMENTS



CONTENTS



|Report of independent registered public accounting firm |  |  | 2 | 
|------------------------------------------------------- |  |  | - | 
|                                                        |  |  |   | 
|Consolidated income statements                          |  |  | 3 | 
|                                                        |  |  |   | 
|Consolidated statements of comprehensive income         |  |  | 4 | 
|                                                        |  |  |   | 
|Consolidated balance sheets                             |  |  | 5 | 
|                                                        |  |  |   | 
|Consolidated statements of changes in equity            |  |  | 7 | 
|                                                        |  |  |   | 
|Consolidated statements of cash flows                   |  |  | 8 | 
|                                                        |  |  |   | 
|Notes to the consolidated financial statements          |  |  | 9 | 



| | 1. | Principal activities and corporate information
| | -- | ----------------------------------------------

| | 2. | Basis of preparation
| | -- | --------------------

| | 2.1 | Basis of preparation
| | --- | --------------------

| | 2.2 | Basis of consolidation
| | --- | ----------------------

| | 3. | Summary of significant accounting policies
| | -- | ------------------------------------------

| | 4. | Standards issued but not yet effective
| | -- | --------------------------------------

| | 5. | Segment information
| | -- | -------------------

| | 6. | Material partly-owned subsidiaries
| | -- | ----------------------------------

| | 7. | Other income/expenses and adjustments
| | -- | -------------------------------------

| | 7.1 | Other operating income
| | --- | ----------------------

| | 7.2 | Other operating expenses
| | --- | ------------------------

| | 7.3 | Finance costs
| | --- | -------------

| | 7.4 | Finance income
| | --- | --------------

| | 7.5 | Other income
| | --- | ------------

| | 7.6 | Other expense
| | --- | -------------

| | 7.7 | Depreciation, amortization and lease expense included in the consolidated income statements
| | --- | -------------------------------------------------------------------------------------------

| | 7.8 | Employee benefits expense
| | --- | -------------------------

| | 8. | Income tax
| | -- | ----------

| | 9. | Earnings per share
| | -- | ------------------

| | 10. | Cash and cash equivalents
| | --- | -------------------------

| | 11. | Other financial assets and financial liabilities
| | --- | ------------------------------------------------

| | 11.1 | Other financial assets
| | ---- | ----------------------

| | 11.2 | Interest-bearing loans and borrowings
| | ---- | -------------------------------------

| | 11.3 | Hedging activities and derivatives
| | ---- | ----------------------------------

| | 11.4 | Fair values
| | ---- | -----------

| | 12. | Trade and other receivables
| | --- | ---------------------------

| | 13. | Inventories
| | --- | -----------

| | 14. | Gross amounts due from customers for contract work-in-progress
| | --- | --------------------------------------------------------------

| | 15. | Property, plant and equipment
| | --- | -----------------------------

| | 16. | Prepaid land lease payments
| | --- | ---------------------------

| | 17. | Investment properties
| | --- | ---------------------

| | 18. | Intangible assets
| | --- | -----------------

| | 19. | Investment in associates
| | --- | ------------------------

| | 20. | Trade and other payables
| | --- | ------------------------

| | 21. | Employee benefit
| | --- | ----------------

| | 22. | Equity
| | --- | ------

| | 23. | Related party transactions
| | --- | --------------------------

| | 24. | Commitments and contingencies
| | --- | -----------------------------

| | 25. | Fair value measurement
| | --- | ----------------------

| | 26. | Financial risk management objectives
| | --- | ------------------------------------

| | 27. | Subsequent event
| | --- | ----------------

| | 28. | Approval of the financial statements
| | --- | ------------------------------------





F-1






REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM







The Board of Directors and Shareholders
of Asia Pacific Wire & Cable Corporation Limited:



We have audited the accompanying consolidated
balance sheets of Asia Pacific Wire & Cable Corporation Limited (the “Company”) as of December 31, 2015 and 2014,
and the related consolidated income statements, statements of comprehensive income, changes in equity, and cash flows
for each of the three years in the period ended December 31, 2015. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not
engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our
opinion.



In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the consolidated financial position of Asia Pacific Wire
& Cable Corporation Limited at December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows
for each of the three years in the period ended December 31, 2015, in conformity with International Financial Reporting
Standards as issued by the International Accounting Standards Board.













/s/ Ernst & Young

Taipei, Taiwan



April 30, 2016



F-2








ASIA PACIFIC WIRE & CABLE
CORPORATION LIMITED



CONSOLIDATED INCOME STATEMENTS



For the years ended December
31, 2015, 2014 and 2013





|                                                                                           |  |      |  | 2015 |          | 2014 |  | 2013
|------------------------------------------------------------------------------------------ |  | ---- |  | ---- | -------- | ---- |  | ----
|                                                                                           |  | Note |  |      | US$’000  |      |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Sales of goods / services                                                                  |  | 3.14 |  |      | 389,632  |      |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Cost of sales                                                                              |  | 7,13 |  |      | (366,143 | )    |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Gross profit                                                                               |  |      |  |      | 23,489   |      |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Other operating income                                                                     |  | 7    |  |      | 1,140    |      |  |     
|Selling, general and administrative expenses                                               |  | 7    |  |      | (26,882  | )    |  |     
|Other operating expenses                                                                   |  | 7    |  |      | (332     | )    |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Operating profit/(loss)                                                                    |  |      |  |      | (2,585   | )    |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Finance costs                                                                              |  | 7    |  |      | (1,547   | )    |  |     
|Finance income                                                                             |  | 7    |  |      | 697      |      |  |     
|Share of loss of associates                                                                |  | 19   |  |      | (801     | )    |  |     
|Gain on disposal of investment – held for sale                                             |  |      |  |      | -        |      |  |     
|Loss on disposal of a subsidiary                                                           |  |      |  |      | -        |      |  |     
|Exchange loss                                                                              |  |      |  |      | (4,640   | )    |  |     
|Other income                                                                               |  | 7    |  |      | 119      |      |  |     
|Other expense                                                                              |  | 7    |  |      | (180     | )    |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Profit/(Loss) before tax                                                                   |  |      |  |      | (8,937   | )    |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Income tax expense                                                                         |  | 8    |  |      | (661     | )    |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Profit/(Loss) for the year                                                                 |  |      |  |      | (9,598   | )    |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Attributable to:                                                                           |  |      |  |      |          |      |  |     
|Equity holders of the parent                                                               |  |      |  |      | (8,158   | )    |  |     
|Non-controlling interests                                                                  |  |      |  |      | (1,440   | )    |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|                                                                                           |  |      |  |      | (9,598   | )    |  |     
|                                                                                           |  |      |  |      |          |      |  |     
|Earnings per share                                                                         |  |      |  |      |          |      |  |     
|►Basic and diluted profit/(loss) for the year attributable to equity holders of the parent |  | 9    |  | $    | (0.59    | )    |  | $   



The accompanying notes are
an integral part of these consolidated financial statements.



F-3






ASIA PACIFIC WIRE & CABLE
CORPORATION LIMITED



CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME



For the years ended December
31, 2015, 2014 and 2013





|                                                                                           |  |  |      | 2015 |  | 2014 |         | 2013
|------------------------------------------------------------------------------------------ |  |  | ---- | ---- |  | ---- | ------- | ----
|                                                                                           |  |  | Note |      |  |      | US$’000 |     
|                                                                                           |  |  |      |      |  |      |         |     
|Profit/(Loss) for the year                                                                 |  |  |      |      |  |      | (9,598  | )   
|Other comprehensive income                                                                 |  |  |      |      |  |      |         |     
|Other comprehensive income to be reclassified to profit or loss in subsequent periods:     |  |  |      |      |  |      |         |     
|                                                                                           |  |  |      |      |  |      |         |     
|Exchange differences on translation of foreign operations, net of tax of $0                |  |  | 22   |      |  |      | (15,847 | )   
|                                                                                           |  |  |      |      |  |      |         |     
|Net gain/(loss) on available-for-sale financial assets                                     |  |  |      |      |  |      | 444     |     
|Income tax effect                                                                          |  |  | 8    |      |  |      | 99      |     
|                                                                                           |  |  |      |      |  |      |         |     
|                                                                                           |  |  | 22   |      |  |      | 543     |     
|                                                                                           |  |  |      |      |  |      |         |     
|                                                                                           |  |  |      |      |  |      |         |     
|Other comprehensive income not to be reclassified to profit or loss in subsequent periods: |  |  |      |      |  |      |         |     
|                                                                                           |  |  |      |      |  |      |         |     
|Re-measuring losses on defined benefit plans                                               |  |  | 21   |      |  |      | (154    | )   
|Income tax effect                                                                          |  |  | 8    |      |  |      | (52     | )   
|                                                                                           |  |  |      |      |  |      |         |     
|Defined benefit pension plan, net of tax                                                   |  |  | 22   |      |  |      | (206    | )   
|                                                                                           |  |  |      |      |  |      |         |     
|Other comprehensive loss for the year, net of tax                                          |  |  |      |      |  |      | (15,510 | )   
|                                                                                           |  |  |      |      |  |      |         |     
|Total comprehensive loss for the year, net of tax                                          |  |  |      |      |  |      | (25,108 | )   
|                                                                                           |  |  |      |      |  |      |         |     
|                                                                                           |  |  |      |      |  |      |         |     
|                                                                                           |  |  |      |      |  |      |         |     
|Attributable to:                                                                           |  |  |      |      |  |      |         |     
|Equity holders of the parent                                                               |  |  |      |      |  |      | (17,702 | )   
|Non-controlling interests                                                                  |  |  |      |      |  |      | (7,406  | )   
|                                                                                           |  |  |      |      |  |      |         |     
|                                                                                           |  |  |      |      |  |      |         |     
|                                                                                           |  |  |      |      |  |      | (25,108 | )   



The accompanying notes are
an integral part of these consolidated financial statements.

F-4








ASIA PACIFIC WIRE & CABLE
CORPORATION LIMITED

CONSOLIDATED BALANCE SHEETS





|                                                                      |  |       |  | As of December 31,
|--------------------------------------------------------------------- |  | ----- |  | ------------------
|                                                                      |  |       |  | 2015              
|                                                                      |  | Note  |  |                   
|Assets                                                                |  |       |  |                   
|Current assets                                                        |  |       |  |                   
|Cash and cash equivalents                                             |  | 10    |  |                   
|Other current financial assets – at fair value through profit or loss |  | 11    |  |                   
|Trade receivables                                                     |  | 12    |  |                   
|Other receivables                                                     |  | 12    |  |                   
|Due from related parties                                              |  | 23    |  |                   
|Inventories                                                           |  | 13    |  |                   
|Gross amounts due from customers for contract work-in-progress        |  | 14    |  |                   
|Prepayments                                                           |  |       |  |                   
|Assets classified as held for sale                                    |  | 15    |  |                   
|Other current assets                                                  |  |       |  |                   
|                                                                      |  |       |  |                   
|                                                                      |  |       |  |                   
|Non-current assets                                                    |  |       |  |                   
|Other non-current financial assets – available for sale               |  | 11,25 |  |                   
|Other non-current financial assets – held to maturity                 |  | 11    |  |                   
|Property, plant and equipment                                         |  | 15    |  |                   
|Prepaid land lease payments                                           |  | 16    |  |                   
|Investment properties                                                 |  | 17,25 |  |                   
|Intangible assets                                                     |  | 18    |  |                   
|Investments in associates                                             |  | 19    |  |                   
|Other non-current assets                                              |  |       |  |                   
|Deferred tax assets                                                   |  | 8     |  |                   
|                                                                      |  |       |  |                   
|                                                                      |  |       |  |                   
|                                                                      |  |       |  |                   
|Total assets                                                          |  |       |  |                   





F-5






ASIA PACIFIC WIRE & CABLE
CORPORATION LIMITED

CONSOLIDATED BALANCE SHEETS





|                                                    |  |      |  | As of December 31,
|--------------------------------------------------- |  | ---- |  | ------------------
|                                                    |  |      |  | 2015              
|                                                    |  | Note |  |                   
|Current liabilities                                 |  |      |  |                   
|Interest-bearing loans and borrowings               |  | 11   |  |                   
|Trade and other payables                            |  | 20   |  |                   
|Due to related parties                              |  | 23   |  |                   
|Due to immediate holding company                    |  | 23   |  |                   
|Accruals                                            |  |      |  |                   
|Current tax liabilities                             |  | 8    |  |                   
|Employee benefit liability                          |  | 21   |  |                   
|Financial lease liabilities                         |  | 24   |  |                   
|Provisions for employee benefit                     |  | 21   |  |                   
|Onerous contracts provisions                        |  | 3.14 |  |                   
|Dividend payable                                    |  |      |  |                   
|Other current liabilities                           |  |      |  |                   
|                                                    |  |      |  |                   
|                                                    |  |      |  |                   
|                                                    |  |      |  |                   
|Non-current liabilities                             |  |      |  |                   
|Employee benefit liability                          |  | 21   |  |                   
|Financial lease liabilities                         |  | 24   |  |                   
|Provisions for employee benefit                     |  | 21   |  |                   
|Other non-current liabilities                       |  |      |  |                   
|Deferred tax liabilities                            |  | 8    |  |                   
|                                                    |  |      |  |                   
|Total liabilities                                   |  |      |  |                   
|                                                    |  |      |  |                   
|Equity                                              |  | 22   |  |                   
|Issued capital                                      |  |      |  |                   
|Additional paid-in capital                          |  |      |  |                   
|Treasury shares                                     |  |      |  |                   
|Retained earnings                                   |  |      |  |                   
|Other components of equity                          |  |      |  |                   
|                                                    |  |      |  |                   
|Equity attributable to equity holders of the parent |  |      |  |                   
|Non-controlling interests                           |  | 6    |  |                   
|                                                    |  |      |  |                   
|Total equity                                        |  |      |  |                   
|                                                    |  |      |  |                   
|Total liabilities and equity                        |  |      |  |                   



The accompanying notes are
an integral part of these consolidated financial statements.

F-6








ASIA PACIFIC WIRE & CABLE
CORPORATION LIMITED



CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY



For the years ended December
31, 2015, 2014 and 2013



|                                                              |  | Attributable to the equity holders of the parent |                 |  |  | 
|------------------------------------------------------------- |  | ------------------------------------------------ | --------------- |  |  | 
|                                                              |  |                                                  | Issued  capital |  |  | 
|                                                              |  |                                                  | US$’000         |  |  | 
|                                                              |  |                                                  |                 |  |  | 
|Balance at January 1, 2013                                    |  |                                                  | 138             |  |  | 
|Purchase of treasury shares                                   |  |                                                  | -               |  |  | 
|Net income                                                    |  |                                                  | -               |  |  | 
|Other comprehensive loss                                      |  |                                                  | -               |  |  | 
|Dividend paid to non-controlling shareholders of subsidiaries |  |                                                  | -               |  |  | 
|                                                              |  |                                                  |                 |  |  | 
|Balance at December 31, 2013                                  |  |                                                  | 138             |  |  | 
|Net income                                                    |  |                                                  | -               |  |  | 
|Other comprehensive loss                                      |  |                                                  | -               |  |  | 
|Dividend paid to non-controlling shareholders of subsidiaries |  |                                                  | -               |  |  | 
|                                                              |  |                                                  |                 |  |  | 
|Balance at December 31, 2014                                  |  |                                                  | 138             |  |  | 
|Net loss                                                      |  |                                                  | -               |  |  | 
|Other comprehensive loss                                      |  |                                                  | -               |  |  | 
|Dividend paid to non-controlling shareholders of subsidiaries |  |                                                  | -               |  |  | 
|                                                              |  |                                                  |                 |  |  | 
|Balance at December 31, 2015                                  |  |                                                  | 138             |  |  | 



The accompanying notes are
an integral part of these consolidated financial statements.

F-7






ASIA PACIFIC WIRE & CABLE
CORPORATION LIMITED



CONSOLIDATED STATEMENTS OF
CASH FLOWS



For the years ended December
31, 2015, 2014 and 2013





|                                                                                                |  | 2015    |         | 2014    |  | 2013   
|----------------------------------------------------------------------------------------------- |  | ------- | ------- | ------- |  | -------
|                                                                                                |  | US$’000 |         | US$’000 |  | US$’000
|Operating activities:                                                                           |  |         |         |         |  |        
|Profit/(Loss) before tax                                                                        |  |         | (8,937  | )       |  |        
|Adjustments to reconcile profit/(loss) before tax to net                                        |  |         |         |         |  |        
|cash provided by operating activities:                                                          |  |         |         |         |  |        
|Depreciation                                                                                    |  |         | 5,598   |         |  |        
|Reversal of impairment loss of investment properties                                            |  |         | (12     | )       |  |        
|Amortization of prepaid land lease payments                                                     |  |         | 59      |         |  |        
|Gain on disposal of investment property                                                         |  |         | (32     | )       |  |        
|Amortization of intangible assets                                                               |  |         | 36      |         |  |        
|Gain on disposal of property, plant and equipment                                               |  |         | (41     | )       |  |        
|Gain on disposal of investment - held for sale                                                  |  |         | -       |         |  |        
|Loss on disposal of a subsidiary                                                                |  |         | -       |         |  |        
|Noncash other income                                                                            |  |         | -       |         |  |        
|Adjustment for gain on fair value of derivatives                                                |  |         | (20     | )       |  |        
|Dividend income                                                                                 |  |         | (99     | )       |  |        
|Finance income                                                                                  |  |         | (697    | )       |  |        
|Finance costs                                                                                   |  |         | 1,547   |         |  |        
|Share of loss of associates                                                                     |  |         | 801     |         |  |        
|Impairment for trade receivables                                                                |  |         | 332     |         |  |        
|Impairment (reversal of impairment) for trade receivables for related parties                   |  |         | (16     | )       |  |        
|Impairment (write-back of impairment) of inventories                                            |  |         | 1,481   |         |  |        
|Unrealized foreign exchange difference, net                                                     |  |         | 1,430   |         |  |        
|Changes in operating assets and liabilities                                                     |  |         |         |         |  |        
|Trade and other receivable, net                                                                 |  |         | 15,660  |         |  |        
|Inventories                                                                                     |  |         | 16,020  |         |  |        
|Prepayment and other current assets                                                             |  |         | (2,317  | )       |  |        
|Amounts due to/from related parties                                                             |  |         | (7,589  | )       |  |        
|Other non-current assets                                                                        |  |         | (124    | )       |  |        
|Trade and other payables, accruals, other current liabilities and other non-current liabilities |  |         | (10,545 | )       |  |        
|Cash flows provided by operating activities                                                     |  |         | 12,535  |         |  |        
|Dividend received                                                                               |  |         | 99      |         |  |        
|Interest received                                                                               |  |         | 688     |         |  |        
|Interest paid                                                                                   |  |         | (1,371  | )       |  |        
|Income tax paid                                                                                 |  |         | (2,747  | )       |  |        
|Net cash provided by operating activities                                                       |  |         | 9,204   |         |  |        
|Investing activities:                                                                           |  |         |         |         |  |        
|Proceeds from disposal of available-for-sale financial assets                                   |  |         | -       |         |  |        
|Purchases of property, plant and equipment                                                      |  |         | (7,417  | )       |  |        
|Purchases of intangible assets                                                                  |  |         | (27     | )       |  |        
|Proceeds from disposal of held for sale assets                                                  |  |         | -       |         |  |        
|Net cash outflow on disposal of subsidiaries                                                    |  |         | -       |         |  |        
|Proceeds from disposal of property, plant and equipment                                         |  |         | 70      |         |  |        
|Proceeds from disposal of investment property                                                   |  |         | 53      |         |  |        
|Net cash used in investing activities                                                           |  |         | (7,321  | )       |  |        
|Financing activities:                                                                           |  |         |         |         |  |        
|Dividend paid to non-controlling shareholders of subsidiaries                                   |  |         | (2,035  | )       |  |        
|Repayments of borrowings                                                                        |  |         | (41,553 | )       |  |        
|Proceeds from borrowings                                                                        |  |         | 28,986  |         |  |        
|Share buy-back                                                                                  |  |         | -       |         |  |        
|Change in financial lease liabilities                                                           |  |         | (31     | )       |  |        
|Net cash provided by (used in) financing activities                                             |  |         | (14,633 | )       |  |        
|Effect of exchange rate changes on cash and cash equivalents                                    |  |         | (4,810  | )       |  |        
|Net increase (decrease) in cash and cash equivalents                                            |  |         | (17,560 | )       |  |        
|Cash and cash equivalents at beginning of year                                                  |  |         | 68,863  |         |  |        
|Cash and cash equivalents at end of year                                                        |  |         | 51,303  |         |  |        



The accompanying notes are
an integral part of these consolidated financial statements.



F-8


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 1. | PRINCIPAL ACTIVITIES AND CORPORATE INFORMATION
| | -- | ----------------------------------------------



Asia Pacific Wire & Cable
Corporation Limited (“APWC” or the “Company”), which is a subsidiary of Pacific Electric Wire & Cable
Co., Ltd. (“PEWC”), a Taiwanese company, was incorporated as an exempted company in Bermuda on September 19, 1996 under
the Companies Act 1981 of Bermuda (as amended) for the purpose of acting as a holding company. The Company is principally engaged
in owning operating companies engaged in the power cable, telecommunication cable, enameled wire and electronic cable industry.
The Company’s registered office is located at Canon’s Court, 22 Victoria Street, Hamilton HM EX, Bermuda. The Company’s
executive business office is presently located in Taipei, Taiwan.



The Company’s operating
subsidiaries (the “Operating Subsidiaries”) are engaged in the manufacturing and distribution of telecommunications,
power cable and enameled wire products in Singapore, Thailand, Australia, the People’s Republic of China (“PRC”)
and other markets in the Asia Pacific region. Major customers of the Operating Subsidiaries include government organizations, electric
contracting firms, electrical dealers, and wire and cable factories. The Company’s Operating Subsidiaries also engage in
the distribution of certain wire and cable products manufactured by PEWC and third parties. The Company also provides project engineering
services in supply, delivery and installation (the “SDI”) of power cable to certain of its customers.



Since 1997, the Company has
been a U.S. public company with its common shares registered with the Securities and Exchange Commission (the “SEC”
or the “Commission”). On April 29, 2011, the Company’s common shares commenced trading on NASDAQ Capital Market
tier.



On February 15, 2013, the Company’s
common shares started trading on the NASDAQ Global Market tier.



In 2007, a U.S. private equity
firm (the “PE Investor”) acquired, indirectly through a special purpose investment vehicle, 20% of the issued and outstanding
common shares from a foreign private equity firm. In 2009, the PE Investor caused a sale of a portion of its indirect ownership
interest in the Company such that the PE Investor then held indirectly, on a post-sale basis, 9.8% of the issued and outstanding
common shares of the Company.



On August 17, 2015, the PE Investor
caused its special investment vehicle to sell its remaining 9.8% of the issued and outstanding shares of the Company to PEWC. PEWC
is currently holding 75.4% of the equity of the Company. As of December 31, 2015, there are no contracts, arrangements, understandings
or relationships (legal or otherwise) between PEWC and any person with respect to any securities of the Company, including, but
not limited to, transfer or voting of any the securities, finder’s fees, joint ventures, loan or option agreements, puts
or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies.



Share Capital



On September 8, 2008, the Company’s
shareholders approved an increase to the authorized share capital from 20,000,000 common shares, par value $0.01 per share, to
50,000,000 common shares, par value $0.01 per share.



Share Capital Repurchase
Program



The Company’s board of
directors authorized a share capital repurchase program for its common shares on August 28, 2012, up to $2 million worth of its
common shares over the next twelve months. During 2012 and 2013, the Company repurchased 11,100 shares with total considerations
of $38 until the Company suspended the share capital repurchase program as of June 30, 2013. The Company records the value of its
common shares held in the treasury at cost.

F-9


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS






| | 1. | PRINCIPAL ACTIVITIES AND CORPORATE INFORMATION (continued)
| | -- | ----------------------------------------------------------



On August 13, 2014, the Company
announced that its Board of Directors had authorized the future implementation of a share repurchase program of up to $1 million
worth of its Common Shares. The Company did not announce a commencement date for that future share repurchase program and, to date,
it has not yet been implemented.



| | 2. | BASIS OF PREPARATION
| | -- | --------------------



| | 2.1 | The consolidated financial statements are prepared in accordance with International Financial Reporting
Standard (IFRS) as issued by the International Accounting Standards Board (IASB).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The financial statements for
the year ended December 31, 2013 were the first the Company has prepared in accordance with IFRS as issued by IASB.



The financial statements have
been prepared on a historical basis except where otherwise disclosed in the accounting policies. The consolidated financial statements
are presented in U.S. Dollars and all values are rounded to the nearest thousand (US$’000), except when otherwise indicated.



| | 2.2 | Basis of consolidation
| | --- | ----------------------



The consolidated financial statements
comprise the financial statements of the Company and its subsidiaries as of December 31, 2015 and 2014, and the results of operations
of the Company and all subsidiaries for the years ended December 31, 2015, 2014 and 2013.



Subsidiaries are fully consolidated
from the date of acquisition (the date on which the Company obtains control), and continue to be consolidated until the date that
such control ceases. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements
of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All
intra-group balances, transactions, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated
in full.



Non-controlling interests in the
results and equity of subsidiaries are shown separately in the consolidated income statements, statements of comprehensive income,
statements of changes in equity and balance sheets respectively. Total comprehensive income (loss) within a subsidiary is attributed
to the non-controlling interest even if it results in a deficit balance.



A change in the ownership interest
of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Company loses control over a subsidiary,
it:

| | ► | Derecognizes the assets (including goodwill)
and liabilities of the subsidiary
| | - | ------------------------------------------------------------------------------

| | ► | Derecognizes the carrying amount of any
non-controlling interest
| | - | ----------------------------------------------------------------

| | ► | Derecognizes the cumulative transaction
differences recorded in equity
| | - | ----------------------------------------------------------------------

| | ► | Recognizes the fair value of the consideration
received
| | - | -------------------------------------------------------

| | ► | Recognizes the fair value of any investment
retained
| | - | ----------------------------------------------------

| | ► | Recognizes any surplus or deficit in profit
or loss
| | - | ---------------------------------------------------

| | ► | Reclassifies the parent’s share
of components previously recognized in other comprehensive income to profit or loss or retained
earnings, as appropriate, as would be required if the Company had directly disposed of the related assets or liability.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-10


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS








| | 2. | BASIS OF PREPARATION (continued)
| | -- | --------------------------------



| | 2.2 | Basis of consolidation (continued)
| | --- | ----------------------------------



The subsidiaries of the Company are set out below:

|                                                                     |  |                              
|-------------------------------------------------------------------- |  | -----------------------------
|                                                                     |  | Percentage of equity interest
|                                                                     |  | As of December 31,           
|Place of incorporation and operations                                |  | 2015                         
|The British Virgin Islands                                           |  |                              
|APWC General Holdings Limited                                        |  | 100%                         
|PRC (APWC) Holding Ltd.                                              |  | 100%                         
|Samray Inc.                                                          |  | 100%                         
|Siam (APWC) Holdings Ltd.                                            |  | 100%                         
|Moon View Ltd.                                                       |  | 100%                         
|Trigent Investment Holdings Limited                                  |  | 100%                         
|Crown Century Holdings Ltd.                                          |  | 100%                         
|Singapore                                                            |  |                              
|Sigma Cable Company (Private) Limited (“Sigma Cable”)                |  | 98.30%                       
|Sigma-Epan International Pte Ltd. (“Sigma-Epan”) (under liquidation) |  | 100%                         
|Epan Industries Pte Ltd.                                             |  | 98.30%                       
|Singvale Pte Ltd.                                                    |  | 100%                         
|Malaysia                                                             |  |                              
|Sigma-Epan Malaysia Sdn. Bhd. (under liquidation)                    |  | 100%                         
|The People’s Republic of China (“PRC”)                               |  |                              
|Ningbo Pacific Cable Co., Ltd. (“Ningbo Pacific”)                    |  | 100%                         
|Shanghai Yayang Electric Co., Ltd. (“SYE”)                           |  | 66.35%                       
|Pacific Electric Wire & Cable (Shenzhen) Co., Ltd. (“PEWS”)          |  | 100%                         
|Hong Kong                                                            |  |                              
|Crown Century Holdings Limited (“CCH (HK)”)                          |  | 100%                         
|Australia                                                            |  |                              
|Australia Pacific Electric Cable Pty Limited (“APEC”)                |  | 99.40%                       

F-11


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


| | 2. | BASIS OF PREPARATION (continued)
| | -- | --------------------------------



| | 2.2 | Basis of consolidation (continued)
| | --- | ----------------------------------



|                                                                      |  | Percentage of equity interest
|--------------------------------------------------------------------- |  | -----------------------------
|                                                                      |  | As of December 31,           
|Place of incorporation and operations                                 |  | 2015                         
|Thailand                                                              |  |                              
|Charoong Thai Wire and Cable Public Company Limited (“Charoong Thai”) |  | 50.93%                       
|Siam Pacific Electric Wire & Cable Company Limited (“Siam Pacific”)   |  | 50.93%                       
|Double D Cable Company Limited (“Double D”)                           |  | 50.93%                       
|Hard Lek Limited.                                                     |  | 73.98%                       
|APWC (Thailand) Co., Ltd.                                             |  | 99.48%                       
|PEWC (Thailand) Co., Ltd.                                             |  | 99.48%                       
|CTW Beta Co. Ltd.                                                     |  | 50.89%                       
|Siam Fiber Optics Co. Ltd.                                            |  | 30.56%                       



* Charoong Thai is listed on
the Stock Exchange of Thailand and is engaged in the manufacturing of wire and cable products for the power and telecommunications
industries in Thailand.



Changes
in ownerships in subsidiaries during the years ended December 31, 2015 and 2014 included the following:



| | (a) | On January 13, 2014, Sigma-Epan sold its 100% interest in the Epan Industries to Sigma Cable for
a total cash consideration of S$1. APWC effective interest in Epan Industries decreased from 100% to 98.30%.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sigma-Epan has gone into voluntary liquidation process after disposal of Epan Industries.
| |  | -----------------------------------------------------------------------------------------



| | (b) | On August 5, 2014, CCH (HK) sold its 100% interest of Pacific Electric Wire & Cable (Hong Kong)
Limited (“PEWC (HK)”) to Dragon Conqueror Ltd. (a PEWC subsidiary) for a total consideration of US$220,154. PEWC (HK)
became an affiliated company.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-12


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS






| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
| | -- | ------------------------------------------



| | 3.1 | Current versus non-current classification
| | --- | -----------------------------------------



The Company presents assets
and liabilities in the balance sheets based on current and non-current classification. An asset as current when it is:

| | ► | Expected to be realized or intended to
be sold or consumed in the normal operating cycle;
| | - | -----------------------------------------------------------------------------------------

| | ► | Held primarily for the purpose of trading;
| | - | ------------------------------------------

| | ► | Expected to be realized within twelve
months after the reporting period; or
| | - | ---------------------------------------------------------------------------

| | ► | Cash or cash equivalent unless restricted
from being exchanged or used to settle a liability for at least twelve months after the reporting period.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------



All other
assets are classified as non-current.



A liability
is current when:

| | ► | It is expected to be settled in a normal
operating cycle;
| | - | ---------------------------------------------------------

| | ► | It is held primarily for the purpose of
trading;
| | - | ------------------------------------------------

| | ► | It is due to be settled within twelve
months after the reporting period; or
| | - | ---------------------------------------------------------------------------

| | ► | There is no unconditional right to defer
the settlement of the liability for at least twelve months after the reporting period.
| | - | -------------------------------------------------------------------------------------------------------------------------------



The Company classifies all other
liabilities as non-current.



Deferred
tax assets and liabilities are classified as non-current assets and liabilities.



| | 3.2 | Operating profit
| | --- | ----------------



The operating profit is the profit
earned from core business operations, and does not include any profit earned from investment and the effects of interest and taxes.



| | 3.3 | Fair value measurement
| | --- | ----------------------



The Company measures financial
instruments at fair value at each balance sheet date. In addition, fair values of financial instruments measured at amortized cost
are disclosed in Note 11.4.



Fair value is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:

| | ► | In the principal market for the asset
or liability, or
| | - | ------------------------------------------------------

| | ► | In the absence of a principal market,
in the most advantageous market for the asset or liability.
| | - | -------------------------------------------------------------------------------------------------



The principal or the most advantageous
market must be accessible to by the Company.



The fair value of an asset
or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
that market participants act in their economic best interest.



A fair value measurement of
a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would use the asset in its highest and best use.



The Company uses valuation
techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing
the use of relevant observable inputs and minimizing the use of unobservable inputs.



All assets and liabilities
for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described
as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

| | ► | Level 1 — Quoted (unadjusted) market
prices in active markets for identical assets or liabilities
| | - | -------------------------------------------------------------------------------------------------

| | ► | Level 2 — Valuation techniques for
which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | ► | Level 3 — Valuation techniques for
which the lowest level input that is significant to the fair value measurement is unobservable
| | - | ---------------------------------------------------------------------------------------------------------------------------------



F-13


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.3 | Fair value measurement (continued)
| | --- | ----------------------------------



For assets and liabilities
that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement
as a whole) at the end of each reporting period.



For the
purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis

of the nature, characteristics
and risks of the asset or liability and the level of the fair value hierarchy as explained above.



| | 3.4 | Cash and Cash Equivalents
| | --- | -------------------------



Cash and cash equivalents in
the consolidated balance sheet comprise of cash at banks and highly liquid investments with purchased maturities of three months
or less, which are subject to an insignificant risk of change in value.



For the purpose of the consolidated
statements of cash flows, cash and cash equivalents are net of outstanding bank overdrafts as they are considered an integral part
of the Company’s cash management.



| | 3.5 | Inventories
| | --- | -----------



Inventories are stated at the
lower of cost and net realizable value. Cost is determined on the weighted average basis and, in the case of work in progress and
finished goods, comprises direct materials, direct labor and an appropriate proportion of overheads based on the normal operating
capacity. Net realizable value is based on estimated selling prices less any estimated costs to be incurred to completion and the
estimated cost necessary to make the sale.



| | 3.6 | Property, Plant and Equipment
| | --- | -----------------------------



Property, plant and equipment
is stated at cost, net of accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing
part of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are
met.



Expenditure incurred after
items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to profit
or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for
a major inspection is capitalized in the carrying amount of the asset as a replacement. When significant parts of property, plant
and equipment are required to be replaced at intervals, the Company recognizes such parts as individual assets with specific useful
lives and depreciates them accordingly.



Spare parts and servicing equipment
are usually carried as inventory and recognized in profit or loss as consumed. However, major spare parts and stand-by equipment
qualify as property, plant and equipment when an entity expects to use them for more than one year.



The present value of the expected
cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria
for a provision are met. A provision shall be recognized when:

(a)     
an entity has a present obligation (legal or constructive) as a result of a past event;

(b)    
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(c)     
a reliable estimate can be made of the amount of the obligation.

If these conditions are not
met, no provision shall be recognized.



F-14


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.6 | Property, Plant and Equipment (continued)
| | --- | -----------------------------------------



Depreciation

Depreciation is calculated
on a straight-line basis over the estimated useful lives of the assets as follows:



| | ►Buildings               | 20-30 years
| | ------------------------ | -----------
| | ►Building improvement    | 5-20 years 
| | ►Machinery and equipment | 5-15 years 
| | ►Motor vehicles          | 3-10 years 
| | ►Office equipment        | 3-10 years 



An item of property, plant
and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between
the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.



The assets’ residual values
(presumably nil), useful lives and methods of depreciation are reviewed at each financial year end, and adjusted prospectively,
if appropriate.



Impairment

If circumstances arise which indicate
assets might be impaired, a review should be undertaken of their cash generating abilities through either use or sales. This review
will produce an amount, which should be compared with the asset’s carrying value, and if the carrying value is higher, the
difference must be written off as an impairment adjustment in the income statement. Further detailed methodology used for an impairment
test is given in Note 3.11 - Impairment of non-financial assets.



| | 3.7 | Leases
| | --- | ------



The determination of whether an
arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date. The arrangement is assessed
for whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right
to use the asset or assets, even if that right is not explicitly specified in an arrangement.



Finance leases

Finance leases that transfer substantially
all the risks and benefits incidental to ownership of the leased item to the Company, are capitalized at the commencement of the
lease at the fair value of the leased property 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 to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are recognized in finance costs in the income statement.



A leased
asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain
ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and
the lease term.



Operating leases

Operating
lease payments are recognized as an operating expense in the income statement on a straight-line basis over the lease term.



Prepaid
land lease payments under operating leases are initially stated at cost and subsequently recognized on the straight-line basis
over the lease terms. The prepaid land lease payments are presented as current or non-current assets on the face of balance sheet,
depending on the amount to be recognized less or more than twelve months after the reporting period.



F-15


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.8 | Borrowing Costs
| | --- | ---------------



Borrowing costs are required
to be capitalized as part of the cost of the asset if they are directly attributable to the acquisition, construction or productions
of a qualifying asset (whether or not the funds have been borrowed specifically). All other borrowing costs are recognized as an
expense in the period in which they are incurred.



A qualifying asset is an asset
that necessarily takes a substantial period to get ready for its intended use or sale.



Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing of funds.



Borrowing costs include:

| | ► | interest expense calculated using the
effective interest method;
| | - | ----------------------------------------------------------------

| | ► | finance charges in respect of finance
leases; and
| | - | -------------------------------------------------

| | ► | exchange differences arising from foreign
currency borrowings to the extent that they are regarded as an adjustment to interest costs. Exchange differences are generally
regarded as borrowing costs only to the extent that the combined borrowing costs, including exchange differences, approximate the
amount of borrowing costs on functional currency equivalent borrowings.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For specific borrowings, the borrowing
costs eligible for capitalization are the actual borrowing costs incurred related to funds that are borrowed specifically to obtain
a qualifying asset less any investment income earned on the temporary investment of those borrowings.



For general borrowings, the capitalization
rate applied to borrowing costs on the consolidation level will be based on cash management strategy, which might be the weighted
average of the group borrowings outstanding during the period.



| | 3.9 | Investment Properties
| | --- | ---------------------



Investment properties are properties
held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties
are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are carried
at historical cost less provisions for depreciation and impairment. Additional costs incurred subsequent to the acquisition of
an asset increase the carrying amount of the asset or recognized as a separate asset if it is probable that future economic benefits
associated with the assets will flow into the Company and the cost of an asset can be measured reliably. Routine maintenance and
repairs are expensed as incurred. While land is not depreciated, all other investment property is depreciated based on the respective
assets estimated useful lives ranging from 20 to 30 years using the straight-line method.



The estimated useful lives, residual
values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted
for on a prospective basis. An investment property is derecognized upon disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of
the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included
in income or loss in the period in which the property is derecognized.



International Accounting Standards
(“IAS”) 40 requires disclosures about the fair value of any investment property recorded at cost. See Note 17 –
Investment Properties.

F-16


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.10 | Financial Instruments
| | ---- | ---------------------



| | (i) | Financial assets
| | --- | ----------------



Initial recognition and
measurement

Financial assets within the scope
of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments,
available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
The Company determines the classification of its financial assets at initial recognition.



All financial assets are recognized
initially at fair value plus transaction costs, except in the case of financial assets recorded at fair value through profit or
loss. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention
in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase
or sell the asset.



Subsequent measurement

The subsequent measurement of financial
assets depends on their classification as described below:



Financial assets at fair
value through profit or loss

Financial assets at fair value
through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair
value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling
or repurchasing in the near term.



Financial assets at fair value
through profit or loss are carried in the balance sheet at fair value with net changes in fair value presented as finance costs
(negative net changes in fair value) or finance income (positive net changes in fair value) in the income statement.



Derivatives not designated
as hedging instruments

A derivative is a financial instrument
or other contract within the scope of IAS 39 with all of the following characteristics:



| | (a) | its value changes in response to the change in a specified interest rate, financial instrument
price, commodity price, foreign exchange rate, index of prices or rates, a credit rating or credit index, or other variable, provided
in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the 'underlying');
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | it requires no initial net investment, or an initial net investment that is smaller than would
be required for other types of contracts that would be expected to have a similar response to changes in market factors; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | it is settled at a future date.
| | --- | -------------------------------



Fair value is the measurement
basis for all financial instruments meeting the definition of a derivative. Change in fair value of non-hedged item is recorded
in profit and loss.



F-17


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.10 | Financial Instruments (continued)
| | ---- | ---------------------------------



Loans and receivables

Loans and receivables are non-derivative
financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial
assets are subsequently measured at amortized cost using the effective interest rate (“EIR”) method, less impairment.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortization is included in finance income in the income statement. The losses arising from impairment
are recognized in the other operating expenses for receivables.



Held-to-maturity investments

Non-derivative financial assets
with fixed or determinable payments and fixed maturities are classified as held to maturity when the Company has the positive intention
and ability to hold them to maturity. After initial measurement, held to maturity investments are measured at amortized cost using
the EIR, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR amortization is included as finance income or finance cost in the income statement.
The losses arising from impairment are recognized in the income statement as finance costs.



Available-for-sale financial
assets

Available-for-sale financial assets
include equity investments and debt securities. Equity investments classified as available for sale are those that are neither
classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those
that are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response
to changes in the market conditions.



After initial measurement, available-for-sale
financial assets are subsequently measured at fair value with unrealized gains or losses recognized as other comprehensive income
in the available-for-sale reserve until the investment is derecognized, at which time the cumulative gain or loss is recognized
in other income, or the investment is determined to be impaired, when the cumulative loss is reclassified from the available-for-sale
reserve to the income statement in finance costs. Interest earned whilst holding available-for-sale financial investments is reported
as finance income using the EIR method.



For a financial asset reclassified
out of the available-for-sale category, the fair value carrying amount at the date of reclassification becomes its new amortized
cost and any previous gain or loss on the asset that has been recognized in equity is amortized to profit or loss over the remaining
life of the investment using the EIR. Any difference between the new amortized cost and the maturity amount is also amortized over
the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded
in equity is recognized in the income statement.



Derecognition

A financial asset (or, where applicable, a part of
a financial asset or part of a group of similar financial assets) is derecognized when:



►The rights to receive cash flows from the asset have expired, or

►The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the
Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.



F-18


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.10 | Financial Instruments (continued)
| | ---- | ---------------------------------



Derecognition (continued)

When the Company has transferred
its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent
it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks
and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Company’s continuing
involvement in the asset. In that case, the Company also recognizes an associated liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights and obligations that the Company has retained.



| | (ii) | Impairment of financial assets
| | ---- | ------------------------------



The Company assesses, at each
reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial
asset or a group of financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or
more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’) and that loss event
has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty,
default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization
and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears
or economic conditions that correlate with defaults.



Financial assets carried
at amortized cost

For financial assets carried at
amortized cost, the Company first assesses whether objective evidence of impairment exists individually for financial assets that
are individually significant, or collectively for financial assets that are not individually significant. If the Company determines
that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes
the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment.
Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not
included in a collective assessment of impairment.



If there is objective evidence
that an impairment loss has been incurred, 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 expected credit losses that have not yet been incurred).
The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate.
If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current EIR.



The carrying amount of the asset
is reduced through the use of an allowance account and the loss is recognized in profit or loss. Interest income continues to be
accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the
purpose of measuring the impairment loss. The interest income is recorded as finance income in the income statement. Loans together
with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been
realized or has been transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases
or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased
or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to finance costs in
the income statement.

F-19


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.10 | Financial Instruments (continued)
| | ---- | ---------------------------------



(ii)
Impairment of financial assets (continued)



Trade
receivables impairment

For trade receivables, impairment
assessment is performed firstly on an individual basis:



A financial asset is impaired
(and impairment losses are determined) if, and only if, there is objective evidence of impairment as a result of one or more events
that occurred after initial recognition (a 'loss event') and that loss event (or events) has an impact on the estimated future
cash flows of the financial asset that can be reliably estimated.



Objective evidence that a financial
asset or group of assets is impaired includes observable data that comes to the attention of the holder about the following loss
events:

| | ► | significant financial difficulty of the
issuer or obligor;
| | - | ----------------------------------------------------------

| | ► | breach of contract, such as a default
or delinquency in interest or principal payments;
| | - | ---------------------------------------------------------------------------------------

| | ► | the lender, for economic or legal reasons
relating to the borrower's financial difficulty, granting to the borrower a concession that would not otherwise be considered;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ► | it becoming probable that the borrower
will enter bankruptcy or other financial reorganization;
| | - | -----------------------------------------------------------------------------------------------

| | ► | the disappearance of an active market
for that asset because of financial difficulties (but not simply because the asset is no longer publicly traded ; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | ► | observable data indicating that there
is a measurable decrease in the estimated future cash flows from a Company of financial assets since initial recognition, although
the decrease cannot yet be identified with the individual assets in the Company, including:
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | l | adverse changes in the payment status
of borrowers in the Company (e.g. an increased number of delayed payments); or
| | - | --------------------------------------------------------------------------------------------------------------------

| | l | national or local economic conditions
that correlate with defaults on the assets in the Company.
| | - | ------------------------------------------------------------------------------------------------



For trade receivables that have
been individually assessed, but for which there is no objective evidence of impairment, the review for impairment is performed
on a group basis, based on similar credit risk characteristics.



Available-for-sale financial
assets

For available-for-sale financial
assets, the Company assesses at each reporting date whether there is objective evidence that an investment or a group of investments
is impaired.



In the case of equity investments
classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the
investment below its cost. ‘Significant’ is evaluated against the original cost of the investment and ‘prolonged’
against the period in which the fair value has been below its original cost. The Company's policy considers a significant decline
to be one in which the fair value is below the weighted average original cost by more than 20%. A prolonged decline is considered
to be one in which the fair value is below the weighted average original cost for a period of more than 12 months. When there is
evidence of impairment, the cumulative loss – measured as the difference between the acquisition cost and the current fair
value, less any impairment loss on that investment previously recognized in the income statement – is removed from other
comprehensive income and recognized in the income statement. Impairment losses on equity investments are not reversed through profit
or loss; increases in their fair value after impairment are recognized directly in other comprehensive income.



F-20


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.10 | Financial Instruments (continued)
| | ---- | ---------------------------------



Available for sale financial
assets (continued)

In the case of debt instruments
classified as available for sale, impairment is assessed based on the same criteria as financial assets carried at amortized cost.
However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortized cost and the
current fair value, less any impairment loss on that investment previously recognized in the income statement.



Future interest income continues
to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows
for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent
year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the
impairment loss was recognized in the income statement, the impairment loss is reversed through the income statement.



| | (iii) | Financial liabilities
| | ----- | ---------------------



Financial liabilities initial
recognition and measurement

Financial liabilities within the
scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives
designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial
liabilities at initial recognition.



All financial liabilities are
recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.



The Company’s financial
liabilities include trade and other payables, bank overdrafts and interest-bearing loans and borrowings.



Subsequent measurement

After initial recognition, interest-bearing
loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit
or loss when the liabilities are derecognized as well as through the EIR amortization process.



Amortized cost is calculated by
taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization
is included as finance costs in the income statement.



Derecognition

A financial liability is derecognized
when the obligation under the liability is discharged or cancelled, or expires. When an existing financial liability is replaced
by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognized in the income statement.



| | (iv) | Offsetting of financial instruments
| | ---- | -----------------------------------



Financial assets and financial
liabilities are offset and the net amount is reported in the consolidated balance sheet if there is a currently enforceable legal
right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the
liabilities simultaneously.

F-21


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.10 | Financial Instruments (continued)
| | ---- | ---------------------------------



| | (v) | Fair value of financial instruments
| | --- | -----------------------------------



The fair value of financial
instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer
price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs.



For financial instruments not
traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include:



► Using
recent arm’s length market transactions

► Reference to the current fair value of another instrument that
is substantially the same

► A discounted cash flow analysis or other valuation models



| | 3.11 | Impairment of non-financial assets
| | ---- | ----------------------------------



The Company assesses, at each
reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount
is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value
in use. A CGU is the smallest group of assets that generates cash inflows that are largely independent of the cash flows from other
assets or groups of assets. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or Company of assets. When the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.



In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions
are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.



The Company bases its impairment
calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Company’s CGUs to
which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For
longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.



Impairment losses of continuing
operations, including impairment on inventories, are recognized in the income statement in expense categories consistent with the
function of the impaired asset.



For assets excluding goodwill,
an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment
losses no longer exist or have decreased. If such indication exists, the Company estimates the asset’s or CGU’s recoverable
amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine
the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying
amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net
of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the income
statement.

F-22


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.12 | Intangible assets
| | ---- | -----------------



Computer software

The costs
of acquiring software is capitalized separately as an intangible asset on the basis of the costs incurred to acquire and bring
to use the specific software. Acquired software (licenses) is stated at cost less accumulated amortization and impairment losses.



Amortization of software applications
is charged to operating expenses and/or cost on a straight-line basis over their estimated useful lives, from the date they are
available for use.



The residual values and useful
lives are reviewed at each balance sheet date and adjusted, if appropriate.



| | 3.13 | Taxes
| | ---- | -----



Current income tax

Current income tax assets and
liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities.
The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date
in the countries where the Company operates.



Current income tax relating to
items recognized directly in equity is recognized in equity and not in the income statement. Management periodically evaluates
positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.



Deferred tax

Deferred tax is provided using
the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.



Deferred tax liabilities are recognized
for all taxable temporary differences, except:



| | ► | When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit
or loss; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ► | In respect of taxable temporary differences
associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Deferred tax assets are recognized
for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets
are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,
and the carry forward of unused tax credits and unused tax losses can be utilized, except:



| | ► | When
the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
nor taxable profit or loss; or
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ► | In respect of deductible temporary differences
associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only
to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will
be available against which the temporary differences can be utilized.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The carrying amount of deferred
tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed
at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the
deferred tax asset to be recovered.



F-23


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.13 | Taxes (continued)
| | ---- | -----------------



Deferred tax assets and liabilities
are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based
on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.



Deferred tax relating to items
recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the
underlying transaction either in other comprehensive income or directly in equity.



Deferred tax assets and deferred
tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities
and the deferred taxes relate to the same taxable entity and the same taxation authority.



Uncertain tax position

An entity’s tax position
might be uncertain; for example, where the tax treatment of an item of expense or structured transaction may be challenged by the
tax authorities.



The Company considers each uncertain
tax positions individually, by first considering whether each position taken in the tax return is probable of being sustained on
examination by the taxing authority, and recognizing a liability for each item that is not probable of being sustained. The liability
then is measured using a single best estimate of the most likely outcome. The uncertain tax positions are presented in the current
tax liabilities.



The Company’s policy is
to recognize interest expense and penalties related to income tax matters as a component of income tax expense.



| | 3.14 | Revenue recognition
| | ---- | -------------------



Revenue is recognized to the extent
that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of
when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into
account contractually defined terms of payment and excluding taxes or duty. The Company assesses its revenue arrangements against
specific criteria to determine if it is acting as principal or agent. The specific recognition criteria described below must also
be met before revenue is recognized.



Sale of manufactured goods
and distributed products

Revenue from the sale of goods
is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of
the goods.



SDI

The Company’s supply, delivery
and installation services are considered as multiple elements arrangements and are accounted for in accordance with IAS 18. The
sale of cables and the installation service are considered as one single arrangement.



Revenue of SDI is accounted for
using the percentage-of-completion method, based on the customer certification of the length of cable laid with respect to the
estimated total length of cable under the contract in accordance with IAS 11.



F-24


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.14 | Revenue recognition (continued)
| | ---- | -------------------------------



When the current estimates of
total contract revenue and contract cost indicate a loss, a provision for the entire loss on the contract is made. Provision for
losses is recognized in the period in which they become evident. On a quarterly basis, the Company reviews the budget and forecast
whether a loss provision should be recorded.



Onerous operating contracts

Onerous contract is a type of contract in which
the costs of meeting the obligations under the contract are higher than the economic benefits received under the contract.



The Company has contracts to supply
products that cost more to produce than originally determined in the contracts due to a rise in raw material costs. The Company
established the unavoidable costs of meeting the obligations under the contract as a liability for the contractual responsibilities.
The liability has been calculated based on the difference between the copper price on the London Metal Exchange (the “LME”)
at reporting date and the prices determined in the contracts. As of December 31, 2015 and 2014 the amount of onerous contracts
were $79 and $41, respectively.



Bill and hold transaction

For a 'bill and hold' sales transaction,
where delivery is delayed at the buyer's request, but the buyer takes title and accepts billing, the Company’s policy is
not to recognize revenue until the delivery is made.



Payment received on the revenue
of undelivered goods under bill and hold arrangements are recorded on the balance sheet as other current liabilities, as of December
31, 2015 and 2014 amounted to $3,677 and $11,202, respectively.



Rebates

Based on IAS 18, the amount of
revenue arising on a transaction is usually determined by agreement between the entity and the buyer or user of the asset. It is
measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and
volume rebates allowed by the entity. Consequently, where an entity provides sales incentives to a customer when entering into
a contract these are usually treated as rebates and will be included in the measurement of (i.e. deducted from) revenue when the
goods are delivered or services provided.



Provisions for rebates based on
attainment of sales targets are estimated and accrued as each of the underlying sales transactions is recognized.



Provision for rebate should only
be recorded when there is a contractually formal signed rebate contract exists.



At interim dates, if no reliable
estimate can be made, the revenue recognized on the transaction should not exceed the consideration that would be received if the
maximum rebates were taken. Therefore, the Company assumes that the customers will achieve the necessary sales volume target to
earn the maximum rebate. The provisions are subject to continuous review and adjustment as appropriate based on the most recent
information available to management.



As of the balance sheet date,
the Company recalculates and adjusts the provision for rebate based on the actual sales.



Interest income

For all financial assets measured
at amortized cost, interest income is recorded using EIR. EIR is the rate that exactly discounts the estimated future cash payments
or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount
of the financial asset or liability. Interest income is included in finance income in the income statement.



Rental income

Rental income arising from operating
leases on investment properties is accounted for on a straight-line basis over the lease terms and is included in revenue due to
its operating nature.



Dividends

Dividend revenue is recognized
when the Company’s right to receive the payment is established, which is generally when shareholders approve the dividend.

F-25


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.15 | Foreign currencies
| | ---- | ------------------



The Company’s consolidated
financial statements are presented in USD, which is also the parent company’s functional currency. For each entity the Company
determines the functional currency and items included in the financial statements of each entity are measured using that functional
currency.



Transactions and balances

Transactions in foreign currencies
are initially recorded by the Company’s entities at their respective functional currency spot rates at the date the transaction
first qualifies for recognition.



Monetary assets and liabilities
denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.



Differences arising on settlement
or translation of monetary items are recognized in profit or loss with the exception of monetary items that are designated as part
of the hedge of the Company’s net investment of a foreign operation. These are recognized in other comprehensive income until
the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits
attributable to exchange differences on those monetary items are also recorded in other comprehensive income.



Non-monetary items that are measured
in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair
value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with
the recognition of gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain
or loss is recognized in other comprehensive income or profit or loss are also recognized in other comprehensive income or profit
or loss, respectively).



Translation
to the presentation currency

The results
and financial position of an entity whose functional currency are translated into a different presentation currency using the following
procedures:



| | a. | assets and liabilities for each balance sheet presented are translated at the closing rate at the
date of that balance sheet;
| | -- | -----------------------------------------------------------------------------------------------------------------------------

| | b. | income and expenses for each statement presenting profit or loss and other comprehensive income
(ie including comparatives) are translated at exchange rates at the dates of the transactions;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c. | all resulting exchange differences shall be recognized in other comprehensive income; and
| | -- | -----------------------------------------------------------------------------------------

| | d. | for equity items, the historical rate is used; therefore, these equity items are not retranslated.
| | -- | --------------------------------------------------------------------------------------------------



F-26


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.16 | Employee benefits
| | ---- | -----------------



The Company has both defined contribution
and defined benefit obligation. The liabilities of the Company arising from defined benefit obligations, and the related current
service cost, are determined using the projected unit credit method.



For defined benefit plans, the
cost charged to the income statement consists of current service cost, net interest cost and past service cost. Re-measurements,
comprising of actuarial gains and losses but excluding net interest are recognized immediately in the balance sheet with a corresponding
debit or credit to retained earnings through other comprehensive income in the period in which they occur. Re-measurements are
not reclassified to profit or loss in subsequent periods. Contributions to defined contribution plans are charged to the income
statement as incurred. All past service costs are recognized at the earlier of when the amendment occurs.



Compensated absence

The cost of accumulating paid
absences is recognized when employees render the service that increases their entitlement to future paid absences.



The cost of accumulating paid
absences is measured as the additional amount that the entity expects to pay as a result of the unused entitlement that has accumulated
at the end of the reporting period.



| | 3.17 | Earnings per share
| | ---- | ------------------



The Company presents basic and
diluted earnings per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing the net income attributable
to shareholders of the Company by the weighted average number of common shares outstanding during the period, adjusted for own
shares held.



In calculating diluted EPS, the
number of shares should be that used in calculating the basic EPS, plus the weighted average number of shares that would be issued
on the conversion of all the dilutive potential common shares into common shares. The earnings figure should be that used for basic
EPS adjusted to reflect any post-tax effects from changes that would arise if the potential shares outstanding in the period were
actually issued.



| | 3.18 | Treasury shares
| | ---- | ---------------



Own equity instruments that are
reacquired (treasury shares) are recognized at cost and deducted from equity. No gain or loss is recognized in the profit or loss
on the purchase, sale, issue or cancellation of the Company’s own equity instruments. Any difference between the carrying
amount and the consideration, if reissued, is recognized in additional paid-in capital. Voting rights related to treasury shares
are nullified and no dividends are allocated to them.

F-27


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.19 | Investments in an associate
| | ---- | ---------------------------



The Company’s investment
in its associates are accounted for using the equity method. An associate is an entity in which the Company has significant influence.
Under the equity method, the investment is initially recognized at cost. The carrying amount of the investment is adjusted to recognize
changes in the Company’s share of net assets of the associate since the acquisition date. Goodwill relating to the associate
is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment.



The income statement reflects
the Company’s share of the results of operations of the associate. Any change in other comprehensive income of those investees
is presented as part of the Company’s other comprehensive income. When there has been a change recognized directly in the
equity of the associate, the Company recognizes its share of any changes, when applicable, in the statement of changes in equity.
Unrealized gains and losses resulting from transactions between the Company and the associate are eliminated to the extent of the
interest in the associate.



The Company’s share of profit
or loss of an associate is shown on the face of the income statement and represents profits or loss after tax and non-controlling
interests in the subsidiaries of the associate.



The financial statements of the
associate are prepared for the same reporting period as the Company. When necessary, adjustments are made to bring the accounting
policies in line with those of the Company.



After application of the equity
method, the Company determines whether it is necessary to recognize an impairment loss on its investment in its associate. The
Company determines at each reporting date whether there is any objective evidence that the investment in associates is impaired.
If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate
and its carrying value and recognizes the amount in share of losses of associates in the income statement.



Upon loss of significant influence
over the associate, the Company measures and recognizes any retained investment at its fair value. Any difference between the carrying
amount of the associate upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal
is recognized in profit or loss.



| | 3.20 | Government grant
| | ---- | ----------------



Government grants are recognized
where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the
grant relates to an expense item, it is recognized as other income on a systematic basis over the periods that the related costs,
which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognized as an liability in equal
amounts over the expected useful life of the related asset.



| | 3.21 | Non-current assets held for sale
| | ---- | --------------------------------



The Company classifies non-current
assets and disposal groups as held for sale/distribution to owners if their carrying amounts will be recovered principally through
a sale/distribution rather than through continuing use. Non-current assets and disposal groups are measured at the lower of their
carrying amount and fair value less costs to sell. The criteria for held for sale classification is regarded met only when the
sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must
be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date
of classification.



Property, plant and equipment
and intangible assets once classified as held for sale/distribution to owners are not depreciated or amortized.



When equity method investments
are classified as held for sale, the investor discontinues the use of the equity method from the date that the investment (or the
portion of it) is classified as held for sale; instead, the associate or joint venture is then measured at the lower of its carrying
amount and fair value less cost to sell.

F-28


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.22 | Significant accounting judgements, estimates and assumptions
| | ---- | ------------------------------------------------------------



The preparation of the Company’s
consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount
of assets or liabilities affected in future periods.



Judgements



In the process of applying
the Company’s accounting policies, management has made the following judgements, which have the most significant effect on
the amounts recognized in the consolidated financial statements:



Bill and hold transaction

Revenue from sale of goods
is recognized when the significant risks and rewards of ownership of the goods have been transferred to the buyer, usually on delivery
of the goods.



Estimates and assumptions



The key assumptions concerning
the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based
its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances
and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control
of the Company. Such changes are reflected in the assumptions when they occur.



Impairment of non-financial
assets

At each reporting date or whenever
events indicate that the asset’s value has declined or significant changes in the market with an adverse effect have taken
place, the Company assesses whether there is an indication that an asset in the scope of IAS 36 may be impaired. If any indication
exists, the Company completes impairment testing for the CGU to which the individual assets belong. Where the carrying amount of
an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
The recoverable amount of an individual asset or CGU is the higher of fair value less costs to sell and its value in use. The fair
value less costs of disposal calculation is based on available data from binding sale arrangements, conducted at arm’s length,
for similar assets or observable market prices less incremental costs for disposal of the assets. The value in use is measured
at the net present value of the future cash flows the entity expects to derive from the asset or CGU. Cash flow projection involves
subjective judgments and estimates which include the estimated useful lives of property, plant and equipment, capacity that generates
future cash flows, capacity of physical output, potential fluctuations of economic cycle in the industry and the Company’s
operating situation.



Fair value disclosure of
investment properties

The Company carries its investment
properties at cost, and discloses the fair value of the investment properties in footnotes. The Company engaged an independent
valuation specialist to assess fair value. The valuation has been made on the assumption to sell the property interests on the
open market in the neighborhood without the benefit of any deferred term contract, leaseback, joint venture, management agreement
or any similar arrangement which would serve to increase the value of the property interests. The method of valuation used to determine
the fair value of the investment properties is provided in Note 17.



F-29


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.22 | Significant accounting judgements, estimates and assumptions (continued)
| | ---- | ------------------------------------------------------------------------



Fair value of financial
instruments

Where the fair values of financial
assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using
valuation techniques including income approach (for example, the discounted cash flows model) or the market approach. Changes in
assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 11 for
more details.



Impairment of trade receivables

The Company maintains an allowance
for estimated loss arising from the inability of its customers to make the required payments. The Company makes its estimates based
on the ageing of its trade receivable balances, customers’ creditworthiness, historical write-off experience and recovery
of collateral. If the financial condition of its customers was to deteriorate so that the actual impairment loss might be higher
than expected, the Company would be required to revise the basis of making the allowance and its future result would be affected.



Refer to Note 12 and Note 26
for more information regarding the impairment of trade receivables and the related credit risks.



Net realizable value of
inventory

Net realized value is the estimated
selling price in the ordinary course of business less estimated costs to completion and the estimated costs necessary to make the
sale. Management makes reference to actual sales prices after reporting date when making their estimate of net realizable value.



Refer to Note 13 for more information
regarding the net realizable value of inventory.



Taxes

Uncertainties exist with respect
to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given
the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements,
differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate
future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates,
for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such
provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations
by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues
depending on the conditions prevailing in the respective domicile of the Company companies.



Deferred tax assets are recognized
for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon
the likely timing and the level of future taxable profits together with future tax planning strategies.



As of December 31, 2015, the
Company has $15,110 (2014: $7,730) of tax losses carried forward. These losses related to subsidiaries that have a history of losses,
do not expire and may not be used to offset taxable income elsewhere in the Company except for $892 (2014: $40) that will be realized.
The subsidiaries do not have any tax planning opportunities available that could support the recognition of these losses as deferred
tax assets. On this basis, the Company has determined that it cannot recognize deferred tax assets on the tax losses carried forward.



If the Company was able to
recognize all unrecognized deferred tax assets, profit and equity would have increased by $3,327 (2014: $2,815; 2013: $1,566).
Further details on taxes are disclosed in Note 8.



Post-employment benefits
under defined benefit plans

In accordance with the Thailand
labor law, Charoong Thai and its subsidiaries are obliged to make payment to retiring employees, at rate of 1 to 10 times of their
monthly salary rate, depending on the length of service. In addition, Charoong Thai also has the extra benefit plan to make payment
to qualified retiring employees 29 times of their final monthly salary.



F-30


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| | -- | ------------------------------------------------------



| | 3.22 | Significant accounting judgements, estimates and assumptions (continued)
| | ---- | ------------------------------------------------------------------------



Post-employment benefits
under defined benefit plans (continued)

The cost of the defined benefit
pension plan and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation
involves making various assumptions that may differ from actual developments in the future. These include the determination of
the discount rate, future salary increases and mortality rates. Due to the complexity of the valuation and its long-term nature,
a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting
date.



In determining the appropriate
discount rate, management considers the limited corporate bond in Thailand, taken into account the yields on Thai Government Bonds
and extrapolated maturity corresponding to the expected duration of the defined benefit obligation.



The mortality rate is based
on most recent mortality investigation on policyholders of life insurance companies in Thailand. Future salary increases and pension
increases are based on expected future inflation rates derived from external economic data and together with historical experience
of Charoong Thai.



Further details about the assumptions
used, including a sensitivity analysis, are given in Note 21.



Revenue recognition of SDI
projects

Changes in percentage of completion
would result in changes in contract revenue and costs recognized in the statement of comprehensive income during the year. Significant
estimation by management is also required in assessing the recoverability of the contracts based on estimated total contract revenue
and contract costs. In making the estimation, management’s evaluation is based on the actual level of work performed and
past experience.



The carrying amount of the Company’s
gross amounts due from customers for contract work-in-progress is disclosed in Note 14.

F-31


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 4. | STANDARDS ISSUED BUT NOT YET EFFECTIVE
| | -- | --------------------------------------



The standards and interpretations
that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below.
The Company intends to adopt these standards, if applicable, when they become effective.



IFRS 15 Revenue from contracts with customers



In May 2014, the IASB issued
IFRS 15, Revenue from Contracts with Customers. According to the new standard, revenue is recognized to depict the transfer
of promised goods or services to a customer in an amount that reflects the consideration to the entity expects to be entitled in
exchange for those goods or services. Revenue is recognized when, or as, the customer obtains control of the goods or services.
IFRS 15 also includes guidance on the presentation of contract balances, this is, assets and liabilities arising from contracts
with customers, depending on the relationship between the entity’s performance and the customer’s payment. In addition,
the new standard requires a set of quantitative and qualitative disclosures to enable users of financial statements to understand
the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts with customers. IFRS 15 supersedes IAS
11, Construction Contractsand IAS 18, Revenueaswell as related interpretations. On September 11, 2015,
the IASB issued an amendment formalizing the deferral of the effective date by one year to January 1, 2018. Earlier application
is permitted. The Company is currently assessing the impact of the standard on its consolidated financial statements.



Accounting for Acquisitions of interests in
Joint Operations-Amendments to IFRS 11



In May 2014, the IASB issued an amendment to IFRS
11, Joint Arrangements, entitled Accounting for Acquisitions of Interest in Joint Operations.The amendment
adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business and requires
the application of IFRS 3, Business Combinations, for such acquisitions. The amendment is effective for annual periods beginning
on or after January 1, 2016. Earlier application is permitted. The Company does not expect the amendments to have an impact on
its consolidated financial statements.



Clarification of Acceptable
Methods of Depreciation and Amortization- Amendments to IAS 16 and IAS 38



In May 2014, the IASB issued
amendments to IAS 16, Property, Plant and Equipment, and IAS 38, Intangible Assets, entitled Clarification of
Acceptable Methods of Depreciation and Amortization. Amendments clarify that the use of revenue-based methods to calculate
the depreciation of an asset is not appropriate, because revenue generated by an activity that includes the use of an asset generally
reflects factors other than the consumption of the economic benefits embodied in the asset. These amendments are effective for
annual periods beginning on or after January 1, 2016. Earlier application is permitted. The Company does not expect these amendments
to have an impact on its consolidated financial statements.



IFRS 9 Financial Instruments



In July 2014, the IASB issued
the final version of IFRS 9, Financial Instruments, which replaces the guidance in IAS 39, Financial Instruments: Recognition
and Measurement and all previous versions of IFRS 9. This final version includes requirements on: (1) classification and measurement
of financial assets and liabilities; (2) impairment; and (3) hedge accounting. IFRS 9 introduces a single approach for the classification
and measurement of financial assets according to their cash flow characteristic and the business model they are managed in, and
provides a new impairment model based on expected credit losses. IFRS 9 also includes new regulations regarding the application
of hedge accounting to better reflect an entity’s risk management activities especially with regard to managing non-financial
risks. IFRS 9 is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted. The Company
is currently assessing the impact of the standard on its consolidated financial statements.



Sales or Contribution of Assets between an investor
and its Associate or Joint Venture-Amendments to IFRS 10 and IAS 28



In September 2014, the IASB issued
amendments to IFRS 10, Consolidated Financial Statements and IAS 28, Investments in Associates and Joint Ventures,
entitled Sales or Contribution of Assets between an Investor and its Associate or Joint Venture. These narrow scope amendments
clarify, that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or
not), and a partial gain or loss is recognized when a transaction involves assets that do not constitute a business. The amendments
are effective for annual periods beginning on or after January 1, 2016. Earlier application is permitted. The Company does not
expect the amendments to have an impact on its consolidated financial statements.



F-32


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 4. | STANDARDS ISSUED BUT NOT YET EFFECTIVE (continued)
| | -- | --------------------------------------------------



Investment Entities: Applying the Consolidated
Exception-Amendments to IFRS 10, IFRS 12 and IAS 28



In December 2014, IASB issued
narrow scope amendments to IFRS 10, Consolidated Financial Statements, IFRS 12, Disclosure of Interests in Other Entities
and IAS 28, Investments in Associates and Joint Ventures. These amendments introduce clarifications to the requirements
when accounting for investment entities. The amendments also provide relief in particular circumstances, which will reduce the
costs of applying the Standards. The amendments are effective for annual periods beginning on or after January 1, 2016. Earlier
application is permitted. The Company does not expect the amendments to have an impact on its consolidated financial statements.



Disclosure Initiative – Amendments to IAS
1



In December 2014, IASB issued
the amendments to IAS 1, Presentation of Financial Statements.The amendments mark the completion of the five narrow-focus
improvements to disclosure requirements include (1) amended guidance on materiality in IAS 1 to clarify that immaterial information
can detract from useful information, materiality applies to the whole of the financial statements and materiality applies to each
disclosure requirement in an IFRS; and (2) amended guidance on the order of the notes, including accounting policies to remove
language from IAS 1 that has been interpreted as prescribing the order of notes to the financial statements and clarify that entities
have flexibility about where they disclose accounting policies in the financial statements. The amendments are effective for annual
periods beginning on or after January 1, 2016. Earlier application is permitted. The Company does not expect the amendments to
have a material impact on its consolidated financial statements.



IFRS 16 Lease



In January 2016, IASB issued IFRS
16 Leases which will replace IAS 17 Leases. The new standard specifies how to recognize, measure, present and disclose leases.
The standard provides for a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases
unless the lease term is 12 months or less or the underlying asset has a low value. Lessor accounting will still use the dual classification
approach to classify each lease as an operating lease or a finance lease. The standard is effective for annual periods beginning
on or after January 1, 2019, with early application permitted if IFRS 15 is also applied. The Company is currently assessing the
impact of the standard on its consolidated financial statements.



Disclosure Initiative – Amendment to IAS
7



In January 2016, IASB issued the amendments to IAS
7, Statement of Cash Flows. The amendments relate to changes in liabilities arising from financial activities and to require
a reconciliation of the carrying amount of liabilities at the beginning and end of the annual period. The amendment is effective
for annual periods beginning on or after January 1 2017 and is expected to increase the disclosures for the consolidated financial
statements.



| | 5. | SEGMENT INFORMATION
| | -- | -------------------



For management purposes, the
Company organizes its business segments along regional lines and has three operating segments, consisting of the North Asia region,
the Thailand region and the Rest of the World (“ROW”) region.



Each segment engages in business
activities generating revenues and incurring expenses. Each segment generates a management report which contains its own financial
information and submits to the Company’s chief operating decision maker (“CODM”) for review on a monthly basis.
The Company’s Chief Executive Officer (“CEO”) and Chief Operating Officer (“COO”) are the ones who
review all the management reports provided by each segment, makes the decisions on how the resources are to be allocated and assesses
the operating performances based on the reports. Each reporting segment has a segment manager who is in charge of the business
operations in such region and regularly contacts the Company’s CEO and COO to discuss operational-related matters.



As the three operating segments
exceed the quantitative thresholds, they are also reportable segments.



In 2014, the Company changed the
structure of its internal organization, which caused the composition of its operating segments to change. The segment information
was restated retroactively to reflect the change.

F-33


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 5. | SEGMENT INFORMATION (continued)
| | -- | -------------------------------



Segment performance is evaluated
based on profit or loss and is measured consistently with profit or loss in the consolidated financial statements. The accounting
policies for segment information, including transactions entered between segments are generally the same as those described in
the summary of significant accounting policies.



Inter-segment revenues are eliminated upon consolidation
and reflected in the “adjustments and eliminations” column. All other adjustments and eliminations are part of detailed
reconciliations presented further below.



|                              |  |            |         |          |  |     |         |                 |  | Corporate 
expense |         |             
|----------------------------- |  | ---------- | ------- | -------- |  | --- | ------- | --------------- |  | ------------------ | ------- | ------------
|                              |  |            |         |          |  |     |         |                 |  | adjustments        |         |             
|Year ended December 31, 2015  |  | North Asia |         | Thailand |  | ROW |         | Total 
segments |  | and eliminations   |         | Consolidated
|                              |  |            | US$’000 |          |  |     | US$’000 |                 |  |                    | US$’000 |             
|Sales of goods / services     |  |            |         |          |  |     |         |                 |  |                    |         |             
|External customers            |  |            | 90,237  |          |  |     | 165,354 |                 |  |                    | 134,041 |             
|Inter-segment                 |  |            | 2,381   |          |  |     | 1,502   |                 |  |                    | -       |             
|Segment net loss              |  |            | (2,364  | )        |  |     | (1,148  | )               |  |                    | (673    | )           
|Depreciation and amortization |  |            | (1,511  | )        |  |     | (2,699  | )               |  |                    | (1,480  | )           
|Interest income               |  |            | 15      |          |  |     | 621     |                 |  |                    | 77      |             
|Interest expense              |  |            | (804    | )        |  |     | (467    | )               |  |                    | (40     | )           
|Income tax (expense)/benefit  |  |            | 524     |          |  |     | (703    | )               |  |                    | (300    | )           
|                              |  |            |         |          |  |     |         |                 |  |                    |         |             
|Other disclosures             |  |            |         |          |  |     |         |                 |  |                    |         |             
|Capital expenditure           |  |            | 594     |          |  |     | 6,409   |                 |  |                    | 427     |             



|                              |  |            |         |          |  |     |         |                 |  | Corporate 
expense |         |             
|----------------------------- |  | ---------- | ------- | -------- |  | --- | ------- | --------------- |  | ------------------ | ------- | ------------
|                              |  |            |         |          |  |     |         |                 |  | adjustments        |         |             
|Year ended December 31, 2014  |  | North Asia |         | Thailand |  | ROW |         | Total 
segments |  | and eliminations   |         | Consolidated
|                              |  |            | US$’000 |          |  |     | US$’000 |                 |  |                    | US$’000 |             
|                              |  |            |         |          |  |     |         |                 |  |                    |         |             
|Sales of goods / services     |  |            |         |          |  |     |         |                 |  |                    |         |             
|External customers            |  |            | 114,836 |          |  |     | 166,864 |                 |  |                    | 169,627 |             
|Inter-segment                 |  |            | 1,665   |          |  |     | 53      |                 |  |                    | -       |             
|Segment net income (loss)     |  |            | (2,181  | )        |  |     | 6,338   |                 |  |                    | 7,571   |             
|                              |  |            |         |          |  |     |         |                 |  |                    |         |             
|Depreciation and amortization |  |            | (1,385  | )        |  |     | (3,068  | )               |  |                    | (1,646  | )           
|Interest income               |  |            | 38      |          |  |     | 1,036   |                 |  |                    | 90      |             
|Interest expense              |  |            | (846    | )        |  |     | (427    | )               |  |                    | (91     | )           
|Income tax expense            |  |            | 583     |          |  |     | (1,834  | )               |  |                    | (552    | )           
|                              |  |            |         |          |  |     |         |                 |  |                    |         |             
|Other disclosures             |  |            |         |          |  |     |         |                 |  |                    |         |             
|Capital expenditure           |  |            | 2,154   |          |  |     | 3,159   |                 |  |                    | 677     |             



F-34


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 5. | SEGMENT INFORMATION (continued)
| | -- | -------------------------------



|                              |  |            |         |          |  |     |         |                |  | Corporate 
expense |         |             
|----------------------------- |  | ---------- | ------- | -------- |  | --- | ------- | -------------- |  | ------------------ | ------- | ------------
|                              |  |            |         |          |  |     |         |                |  | adjustments        |         |             
|Year ended December 31, 2013  |  | North Asia |         | Thailand |  | ROW |         | Total segments |  | and eliminations   |         | Consolidated
|                              |  |            | US$’000 |          |  |     | US$’000 |                |  |                    | US$’000 |             
|                              |  |            |         |          |  |     |         |                |  |                    |         |             
|Sales of goods / services     |  |            |         |          |  |     |         |                |  |                    |         |             
|External customers            |  |            | 69,347  |          |  |     | 175,347 |                |  |                    | 215,982 |             
|Inter-segment                 |  |            | 43,136  |          |  |     | 117     |                |  |                    | 38,724  |             
|Segment net income (loss)     |  |            | (2,000  | )        |  |     | 10,969  |                |  |                    | 5,851   |             
|                              |  |            |         |          |  |     |         |                |  |                    |         |             
|Depreciation and amortization |  |            | (1,063  | )        |  |     | (2,947  | )              |  |                    | (1,675  | )           
|Interest income               |  |            | 67      |          |  |     | 1,101   |                |  |                    | 135     |             
|Interest expense              |  |            | (735    | )        |  |     | (517    | )              |  |                    | (95     | )           
|Income tax expense            |  |            | (328    | )        |  |     | (2,969  | )              |  |                    | (1,726  | )           
|                              |  |            |         |          |  |     |         |                |  |                    |         |             
|Other disclosures             |  |            |         |          |  |     |         |                |  |                    |         |             
|Capital expenditure           |  |            | 3,817   |          |  |     | 4,606   |                |  |                    | 1,086   |             
|                              |  |            |         |          |  |     |         |                |  |                    |         |             





Adjustments and eliminations

Corporate expenses, gain on disposal of investment,
and share of gain (loss) of associates are not allocated to individual segments as the underlying instruments are managed on a
group basis.



Capital expenditure consists of additions of property,
plant and equipment, and intangible assets.



Reconciliation of profit

|                                             |  | For the year ended December 31,
|-------------------------------------------- |  | -------------------------------
|                                             |  |                                
|                                             |  |                                
|Segment net income (loss)                    |  |                                
|Corporate expense                            |  |                                
|Gain on disposal of investment held for sale |  |                                
|Loss on disposal of a subsidiary             |  |                                
|Share of net loss of associates              |  |                                
|Net gain on financial instruments            |  |                                
|Inter-segment profit (elimination)           |  |                                
|Tax expenses                                 |  |                                
|                                             |  |                                
|Profit (Loss) after tax                      |  |                                



F-35


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 5. | SEGMENT INFORMATION (continued)
| | -- | -------------------------------



|                        |  |            |         |          |  |     |         |                 |  | Corporate 
expense |         |             
|----------------------- |  | ---------- | ------- | -------- |  | --- | ------- | --------------- |  | ------------------ | ------- | ------------
|                        |  |            |         |          |  |     |         |                 |  | adjustments        |         |             
|                        |  | North Asia |         | Thailand |  | ROW |         | Total 
segments |  | and eliminations   |         | Consolidated
|                        |  |            | US$’000 |          |  |     | US$’000 |                 |  |                    | US$’000 |             
|As of December 31, 2015 |  |            |         |          |  |     |         |                 |  |                    |         |             
|Total assets            |  |            | 64,087  |          |  |     | 146,031 |                 |  |                    | 91,511  |             
|Total liabilities       |  |            | 35,860  |          |  |     | 43,582  |                 |  |                    | 29,988  |             
|As of December 31, 2014 |  |            |         |          |  |     |         |                 |  |                    |         |             
|Total assets            |  |            | 74,686  |          |  |     | 194,231 |                 |  |                    | 98,517  |             
|Total liabilities       |  |            | 41,917  |          |  |     | 75,590  |                 |  |                    | 33,254  |             





Reconciliation of assets:



|                           |  | As of December 31,
|-------------------------- |  | ------------------
|                           |  |                   
|                           |  |                   
|Segment operating assets   |  |                   
|                           |  |                   
|Corporate and other assets |  |                   
|Investment in associates   |  |                   
|Deferred tax assets        |  |                   
|Inter-segment elimination  |  |                   
|Total assets               |  |                   



Reconciliation of liabilities:



|                              |  | As of December 31,
|----------------------------- |  | ------------------
|                              |  |                   
|                              |  |                   
|Segment operating liabilities |  |                   
|                              |  |                   
|Corporate liabilities         |  |                   
|Deferred tax liabilities      |  |                   
|Inter-segment elimination     |  |                   
|Total liabilities             |  |                   



F-36


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 5. | SEGMENT INFORMATION (continued)
| | -- | -------------------------------



Revenue from external customers
is attributed to individual countries based on the customer’s country of domicile and is summarized as follows:

|                                 |  |                                
|-------------------------------- |  | -------------------------------
|                                 |  | For the year ended December 31,
|                                 |  | 2015                           
|                                 |  | US$’000                        
|Revenues from external customers |  |                                
|                                 |  |                                
|Thailand                         |  |                                
|Singapore                        |  |                                
|Australia                        |  |                                
|PRC                              |  |                                
|Vietnam                          |  |                                
|Southeast Asia                   |  |                                
|Northeast Asia                   |  |                                
|                                 |  |                                
|                                 |  |                                



Countries in the Southeast Asia region include Cambodia, Indonesia, India, Laos, Malaysia and Myanmar.





Countries in the Northeast Asia region include Japan and South Korea.





Major customer information



Revenue from one customer amounted to $42,279 (2014: $47,175; 2013: $58,984) represent 10.9% (2014: 10.5%; 2013: 12.8%), arising
from sales in the ROW segment.







Long-lived
assets by the country of domicile are summarized as follow:



|                           |  | As of December 31,
|-------------------------- |  | ------------------
|                           |  | 2015              
|                           |  | US$’000           
|Long-lived assets by area: |  |                   
|Thailand                   |  |                   
|North Asia                 |  |                   
|ROW                        |  |                   
|Corporate                  |  |                   
|Total long-lived assets    |  |                   



F-37


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 6. | MATERIAL PARTLY-OWNED SUBSIDIARIES
| | -- | ----------------------------------



The Company has a subsidiary with
material non-controlling interests (“NCI”). Information regarding the subsidiary is as follows:



Proportion of equity interest
held by NCI:



|                                                        |  |                                          |  | As of December 31,
|------------------------------------------------------- |  | ---------------------------------------- |  | ------------------
|Name                                                    |  | Country of 
incorporation and 
operation |  | 2015              
|                                                        |  |                                          |  |                   
|Charoong Thai and its subsidiaries (“CTW Consolidated”) |  | Thailand                                 |  |                   
|SYE                                                     |  | China                                    |  |                   



From APWC group perspective, SYE is considered
an entity with material non-controlling interests and should be separated from Charoong Thai group.



|                                      |  | As of December 31,
|------------------------------------- |  | ------------------
|                                      |  | 2015              
|                                      |  | US$’000           
|Accumulated balances of material NCI: |  |                   
|                                      |  |                   
|CTW Consolidated                      |  |                   
|SYE                                   |  |                   



|                                 |  | For the year ended December 31,
|-------------------------------- |  | -------------------------------
|                                 |  | 2015                           
|                                 |  | US$’000                        
|Profit / (loss) of material NCI: |  |                                
|                                 |  |                                
|CTW Consolidated                 |  |                                
|SYE                              |  |                                



F-38


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 6. | MATERIAL PARTLY-OWNED SUBSIDIARIES (continued)
| | -- | ----------------------------------------------



The summarized financial information of the subsidiary
is provided below. This information is based on amounts before inter-company eliminations:



Summarized income statements for 2015:

|                                                        |  | CTW consolidated |          | SYE    
|------------------------------------------------------- |  | ---------------- | -------- | -------
|                                                        |  | US$’000          |          | US$’000
|Revenues                                                |  |                  | 167,462  |        
|Cost of sales                                           |  |                  | (158,037 | )      
|Administrative expenses                                 |  |                  | (6,744   | )      
|Finance costs                                           |  |                  | (653     | )      
|Others                                                  |  |                  | (2,981   | )      
|Profit/(loss) before tax                                |  |                  | (953     | )      
|Income tax                                              |  |                  | (703     | )      
|Profit/(loss) for the year                              |  |                  | (1,656   | )      
|Total comprehensive income/(loss)                       |  |                  | (11,509  | )      
|Profit/(loss) attributable to non-controlling interests |  |                  | (5,647   | )      
|Dividends paid to non-controlling interests             |  |                  | 2,035    |        



Summarized income statements for 2014:



|                                                        |  | CTW consolidated |          | SYE
|------------------------------------------------------- |  | ---------------- | -------- | ---
|                                                        |  |                  | US$’000  |    
|Revenues                                                |  |                  | 166,917  |    
|Cost of sales                                           |  |                  | (151,021 | )  
|Administrative expenses                                 |  |                  | (7,063   | )  
|Finance costs                                           |  |                  | (651     | )  
|Others                                                  |  |                  | 128      |    
|Profit/(loss) before tax                                |  |                  | 8,310    |    
|Income tax                                              |  |                  | (1,834   | )  
|Profit/(loss) for the year                              |  |                  | 6,476    |    
|Total comprehensive income/(loss)                       |  |                  | 5,856    |    
|Profit/(loss) attributable to non-controlling interests |  |                  | 2,874    |    
|Dividends paid to non-controlling interests             |  |                  | 4,158    |    



Summarized income statements for 2013:



|                                                        |  | CTW consolidated |          | SYE
|------------------------------------------------------- |  | ---------------- | -------- | ---
|                                                        |  |                  | US$’000  |    
|Revenues                                                |  |                  | 175,464  |    
|Cost of sales                                           |  |                  | (148,861 | )  
|Administrative expenses                                 |  |                  | (12,117  | )  
|Finance costs                                           |  |                  | (770     | )  
|Others                                                  |  |                  | (564     | )  
|Profit/(loss) before tax                                |  |                  | 13,152   |    
|Income tax                                              |  |                  | (2,968   | )  
|Profit/(loss) for the year                              |  |                  | 10,184   |    
|Total comprehensive income/(loss)                       |  |                  | 2,098    |    
|Profit/(loss) attributable to non-controlling interests |  |                  | 1,029    |    
|Dividends paid to non-controlling interests             |  |                  | 3,877    |    

F-39


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


| | 6. | MATERIAL PARTLY-OWNED SUBSIDIARIES (continued)
| | -- | ----------------------------------------------



Summarized balance sheets as of December 31, 2015:

|                                                           |  | CTW consolidated |         | SYE    
|---------------------------------------------------------- |  | ---------------- | ------- | -------
|                                                           |  | US$’000          |         | US$’000
|Cash, inventory and other current assets                   |  |                  | 117,913 |        
|Property, plant and equipment and other non-current assets |  |                  | 39,885  |        
|Trade and other payable (current)                          |  |                  | (37,717 | )      
|Other non-current liabilities                              |  |                  | (5,867  | )      
|Non-controlling interest                                   |  |                  | (2,537  | )      
|Total equity                                               |  |                  | 111,677 |        
|Equity attributable to equity holders of the parent        |  |                  | 56,877  |        
|Non-controlling interests                                  |  |                  | 54,800  |        



Summarized balance sheets as of December 31, 2014:

|                                                           |  | CTW consolidated |         | SYE    
|---------------------------------------------------------- |  | ---------------- | ------- | -------
|                                                           |  | US$’000          |         | US$’000
|Cash, inventory and other current assets                   |  |                  | 167,785 |        
|Property, plant and equipment and other non-current assets |  |                  | 38,193  |        
|Trade and other payable (current)                          |  |                  | (69,516 | )      
|Other non-current liabilities                              |  |                  | (6,073  | )      
|Non-controlling interest                                   |  |                  | (3,062  | )      
|Total equity                                               |  |                  | 127,327 |        
|Equity attributable to equity holders of the parent        |  |                  | 64,848  |        
|Non-controlling interests                                  |  |                  | 62,479  |        





Summarized cash flow information for the year ended
December 31, 2015:



|                                           |  | CTW consolidated |         | SYE    
|------------------------------------------ |  | ---------------- | ------- | -------
|                                           |  | US$’000          |         | US$’000
|Operating                                  |  |                  | 907     |        
|Investing                                  |  |                  | 585     |        
|Financing                                  |  |                  | (19,043 | )      
|Effect of changes in exchange rate on cash |  |                  | (3,384  | )      
|Net decrease in cash and cash equivalents  |  |                  | (20,935 | )      



Summarized cash flow information for the year ended
December 31, 2014:



|                                           |  | CTW consolidated |         | SYE    
|------------------------------------------ |  | ---------------- | ------- | -------
|                                           |  | US$’000          |         | US$’000
|Operating                                  |  |                  | 7,985   |        
|Investing                                  |  |                  | (13,881 | )      
|Financing                                  |  |                  | 7,443   |        
|Effect of changes in exchange rate on cash |  |                  | 90      |        
|Net increase in cash and cash equivalents  |  |                  | 1,637   |        



Summarized cash flow information for the year ended
December 31, 2013:



|                                           |  | CTW consolidated |         | SYE    
|------------------------------------------ |  | ---------------- | ------- | -------
|                                           |  | US$’000          |         | US$’000
|Operating                                  |  |                  | 15,644  |        
|Investing                                  |  |                  | 771     |        
|Financing                                  |  |                  | (11,772 | )      
|Effect of changes in exchange rate on cash |  |                  | 511     |        
|Net increase in cash and cash equivalents  |  |                  | 5,154   |        

F-40


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


| | 7. | OTHER INCOME/EXPENSES AND ADJUSTMENTS
| | -- | -------------------------------------



| | 7.1 | Other operating income
| | --- | ----------------------



|                                                   |  | For the year ended December 31,
|-------------------------------------------------- |  | -------------------------------
|                                                   |  |                                
|                                                   |  |                                
|Reversal of allowance for related parties          |  |                                
|Reversal of allowance for investment properties    |  |                                
|Gain on disposal of property, plant, and equipment |  |                                
|Gain on disposal of investment property            |  |                                
|Sales of scrap copper                              |  |                                
|Others                                             |  |                                
|                                                   |  |                                
|Total other operating income                       |  |                                



| | 7.2 | Other operating expenses
| | --- | ------------------------



|                                                    |  | For the year ended December 31,
|--------------------------------------------------- |  | -------------------------------
|                                                    |  |                                
|                                                    |  |                                
|Allowance for trade receivables for related parties |  |                                
|Allowance for trade receivables                     |  |                                
|                                                    |  |                                
|Total other operating expenses                      |  |                                



| | 7.3 | Finance costs
| | --- | -------------



|                                                                         |  | For the year ended December 31,
|------------------------------------------------------------------------ |  | -------------------------------
|                                                                         |  | 2015                           
|                                                                         |  | US$’000                        
|Interest on debts and borrowings                                         |  |                                
|Finance charges payable under finance leases and hire purchase contracts |  |                                
|                                                                         |  |                                
|Total interest expenses                                                  |  |                                
|                                                                         |  |                                
|Banking charges                                                          |  |                                
|                                                                         |  |                                
|Total finance costs                                                      |  |                                



| | 7.4 | Finance income
| | --- | --------------



|                     |  | For the year ended December 31,
|-------------------- |  | -------------------------------
|                     |  |                                
|                     |  |                                
|                     |  |                                
|Interest income      |  |                                
|                     |  |                                
|Total finance income |  |                                



| | 7.5 | Other income
| | --- | ------------



|                                  |  | For the year ended December 31,
|--------------------------------- |  | -------------------------------
|                                  |  | 2015                           
|                                  |  | US$’000                        
|Net gain on financial instruments |  |                                
|Dividend income                   |  |                                
|                                  |  |                                
|Total other income                |  |                                



F-41


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 7. | OTHER INCOME/EXPENSES AND ADJUSTMENTS (continued)
| | -- | -------------------------------------------------



| | 7.6 | Other expenses
| | --- | --------------



|                                  |  | For the year ended December 31,
|--------------------------------- |  | -------------------------------
|                                  |  |                                
|                                  |  |                                
|Net loss on financial instruments |  |                                
|Others                            |  |                                
|                                  |  |                                
|Total other expenses              |  |                                



| | 7.7 | Depreciation, amortization and lease expense included in the consolidated income statements
| | --- | -------------------------------------------------------------------------------------------



|                                                                |  | For the year ended December 31,
|--------------------------------------------------------------- |  | -------------------------------
|                                                                |  |                                
|                                                                |  |                                
|Included in cost of sales:                                      |  |                                
|Depreciation – tangible assets                                  |  |                                
|Amortization – intangible assets                                |  |                                
|Included in selling expenses:                                   |  |                                
|Depreciation – tangible assets                                  |  |                                
|Included in general and administrative expenses:                |  |                                
|Depreciation – tangible assets                                  |  |                                
|Amortization – intangible assets                                |  |                                
|Amortization – prepaid land lease payment                       |  |                                
|Depreciation – investment property                              |  |                                
|Minimum lease payments recognised as an operating lease expense |  |                                
|                                                                |  |                                





| | 7.8 | Employee benefits expenses
| | --- | --------------------------



|                                                 |  | For the year ended December 31,
|------------------------------------------------ |  | -------------------------------
|                                                 |  | 2015                           
|                                                 |  | US$’000                        
|Included in cost of sales:                       |  |                                
|Wages and salaries                               |  |                                
|Labor and health insurance costs                 |  |                                
|Pension costs                                    |  |                                
|Other employment benefits                        |  |                                
|Included in selling expenses:                    |  |                                
|Wages and salaries                               |  |                                
|Labor and health insurance costs                 |  |                                
|Pension costs                                    |  |                                
|Other employment benefits                        |  |                                
|Included in general and administrative expenses: |  |                                
|Wages and salaries                               |  |                                
|Labor and health insurance costs                 |  |                                
|Pension costs                                    |  |                                
|Director fees                                    |  |                                
|Other employment benefits                        |  |                                
|                                                 |  |                                
|Total employee benefits expenses                 |  |                                



F-42


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 8. | INCOME TAX
| | -- | ----------



Under current Bermuda law, the
Company is not subject to tax on income or capital gains, nor is withholding tax of Bermuda imposed upon payments of dividends
by the Company to its shareholders.



The Company’s investments
in the Operating Subsidiaries are held through subsidiaries incorporated in the British Virgin Islands (“BVI”). Under
current BVI law, dividends from the BVI subsidiaries’ investments are not subject to income taxes and no withholding tax
is imposed on payments of dividends by the BVI subsidiaries to the Company.



The Operating Subsidiaries and
equity investees are governed by the income tax laws of Singapore, Thailand, Australia and the PRC. The corporate income tax rate
in Singapore was 17% for each of the three years ended December 31, 2015, and there is no withholding tax on dividends applicable
to the Company. For Thailand, the statutory corporate income tax rate was 30% and a withholding tax of 10% is levied on dividends
received by the Company. Charoong Thai is listed on Stock Exchange of Thailand (“SET”). As a part of an initiative
to promote Thailand’s competitiveness, the Thai Government announced in Royal Decree (No. 530) to provide for a reduction
of corporate income tax from 30% to: (1) 23% for any accounting periods commencing between January 1, 2012 and December 31, 2012;
(2) 20% from any accounting periods commencing between January 1, 2013 and December 31, 2014. Thai Government announced in Royal
Decree (No. 577) the corporate income tax continues at 20% on or after January 1, 2015, but not exceeding December 31, 2015. On
13 October 2015, the Thai Cabinet approved the draft of Revenue Code Amendment Act to permanently reduce the corporate income tax
rate to 20% from the accounting period beginning on or after 1 January 2016. Currently is undergoing the legislation process. In
Australia, the corporate income tax rate was 30% for 2012/2013, 2013/2014 and 2014/2015 tax years. The applicable corporate income
tax rate for the subsidiaries in the PRC was 25% for each of the three years ended December 31, 2015.



Under the Corporate Income Tax
Law (the “CIT Law”) of the PRC, dividend distributions of profits earned prior to January 1, 2008 to foreign investor(s)
are exempt from withholding tax; distribution of the profits earned after January 1, 2008 is subject to withholding tax of 10%,
reduced to 5% under the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region on the Avoidance
of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income provided that the Hong Kong holding company,
CCH (HK) qualified as the “beneficial owner” of the dividend income under Guoshuifa [2009] No.601. As the management
of APWC decided to simplify the CCH (HK) to have the sole function of controlling and directing its subsidiaries. CCH (HK) does
not carry on substantive business activities effective early 2013. This may lead it not qualify as the “beneficial owner”
of the dividend income under Circular 601 to be applicable to withholding tax of 5%. As such, from 2013 onwards, the withholding
tax are calculated based on 10% tax rate.



F-43


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 8. | INCOME TAX (continued)
| | -- | ----------------------



The major components of income tax expenses for the
years ended December 31, 2015, 2014 and 2013 are:



|                                                                                        |  | 2015    |      | 2014    |  | 2013   
|--------------------------------------------------------------------------------------- |  | ------- | ---- | ------- |  | -------
|                                                                                        |  | US$’000 |      | US$’000 |  | US$’000
|Consolidated income statements                                                          |  |         |      |         |  |        
|Current income tax:                                                                     |  |         |      |         |  |        
|Current income tax charge                                                               |  |         | 942  |         |  |        
|Deferred tax expenses/(benefits):                                                       |  |         |      |         |  |        
|Relating to origination and reversal of temporary differences                           |  |         | (777 | )       |  |        
|Relating to change in tax rate                                                          |  |         | 496  |         |  |        
|                                                                                        |  |         |      |         |  |        
|Income tax expense reported in the income statement                                     |  |         | 661  |         |  |        
|                                                                                        |  |         |      |         |  |        
|Consolidated statements of comprehensive income                                         |  |         |      |         |  |        
|Deferred tax related to items recognized in other comprehensive income during the year: |  |         |      |         |  |        
|Unrealized gain/(loss) on available-for-sale financial assets                           |  |         |      |         |  |        
|Recognized during the year                                                              |  |         | 72   |         |  |        
|Effect of change in tax rate                                                            |  |         | (171 | )       |  |        
|Net loss on actuarial gains and losses                                                  |  |         |      |         |  |        
|Recognized during the year                                                              |  |         | (31  | )       |  |        
|Effect of change in tax rate                                                            |  |         | 83   |         |  |        
|                                                                                        |  |         |      |         |  |        
|Income tax benefits charged to other comprehensive (loss) income                        |  |         | (47  | )       |  |        



The parent company’s tax
is filed in Bermuda, which does not have a statutory tax rate. The provision for income taxes differs based on the tax incurred
by the Operating Subsidiaries, in their respective jurisdiction. The Company determines its statutory tax rate based on its major
commercial domicile that is its subsidiaries in Thailand. The reconciliation of the statutory tax rate and the Company’s
effective tax rate is as follows:



|                                                                                                                |  | 2015    |        | 2014    |  | 2013   
|--------------------------------------------------------------------------------------------------------------- |  | ------- | ------ | ------- |  | -------
|                                                                                                                |  | US$’000 |        | US$’000 |  | US$’000
|                                                                                                                |  |         |        |         |  |        
|Profit before tax                                                                                               |  |         | (8,937 | )       |  |        
|Tax at statutory rate of 20% (2014: 20%; 2013: 20%)                                                             |  |         | (1,788 | )       |  |        
|Foreign income taxed at different rate                                                                          |  |         | 621    |         |  |        
|Expenses not deductible/(solely deductible) for tax purpose                                                     |  |         | 463    |         |  |        
|Utilization of previously unrecognized tax losses                                                               |  |         | -      |         |  |        
|Net deferred tax asset not recognized                                                                           |  |         | 1,006  |         |  |        
|Tax exempt on income                                                                                            |  |         | (45    | )       |  |        
|Uncertain tax position                                                                                          |  |         | (265   | )       |  |        
|Return to provision adjustment                                                                                  |  |         | (6     | )       |  |        
|Deferred tax liability arising from undistributed earnings                                                      |  |         | (72    | )       |  |        
|Effect of changes in temporary differences to be realized in different periods with different enacted tax rates |  |         | 496    |         |  |        
|Withholding tax on dividends                                                                                    |  |         | 206    |         |  |        
|Others                                                                                                          |  |         | 45     |         |  |        
|                                                                                                                |  |         |        |         |  |        
|Income tax expense reported in income statement                                                                 |  |         | 661    |         |  |        



At the effective income
tax rate of -7.40% (2014: 45.16%; 2013: 32.88%)



F-44


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 8. | INCOME TAX (continued)
| | -- | ----------------------



Deferred tax



Deferred tax relates to the following:



|                                                            |  | Consolidated balance sheet |        | Consolidated income statement   
|----------------------------------------------------------- |  | -------------------------- | ------ | --------------------------------
|                                                            |  | As of December 31,         |        | For the year ended Decembers 31,
|                                                            |  | 2015                       |        | 2014                            
|                                                            |  | US$’000                    |        | US$’000                         
|                                                            |  |                            |        |                                 
|Outside basis differences                                   |  |                            | (2,703 | )                               
|Revaluations of available-for-sale investment to fair value |  |                            | (466   | )                               
|Book over tax basis in subsidiary                           |  |                            | (41    | )                               
|Accrued interest income                                     |  |                            | (79    | )                               
|Unutilized building allowance (net)                         |  |                            | (92    | )                               
|Unused tax losses                                           |  |                            | 892    |                                 
|Allowance for doubtful accounts                             |  |                            | 122    |                                 
|Inventory impairment                                        |  |                            | 941    |                                 
|Allowance for impairment in investments                     |  |                            | 380    |                                 
|Rebates and other accrued liabilities                       |  |                            | 563    |                                 
|Unpaid retirement benefits                                  |  |                            | 1,047  |                                 
|Charges related to flooding in Thailand                     |  |                            | -      |                                 
|Deferred revenue and cost of sales                          |  |                            | 310    |                                 
|Actuarial loss                                              |  |                            | 214    |                                 
|Unabsorbed depreciation                                     |  |                            | 663    |                                 
|Allowance for investment property impairment                |  |                            | -      |                                 
|Mark-to-Market value of forward contract                    |  |                            |        |                                 
|                                                            |  |                            | (4     | )                               
|Deferred tax expenses / (benefits)                          |  |                            |        |                                 
|Net deferred tax assets                                     |  |                            | 1,747  |                                 



Reflected in the balance sheet as follows:



|                         |  |  |        |   |  |  |        |   | 
|------------------------ |  |  | ------ | - |  |  | ------ | - | 
|Deferred tax assets      |  |  | 4,481  |   |  |  | 4,551  |   | 
|Deferred tax liabilities |  |  | (2,734 | ) |  |  | (2,720 | ) | 
|Deferred tax assets, net |  |  | 1,747  |   |  |  | 1,831  |   | 



Reconciliation of deferred tax assets, net



|                                                                                  |  | 2015    |       | 2014    |  | 2013   
|--------------------------------------------------------------------------------- |  | ------- | ----- | ------- |  | -------
|                                                                                  |  | US$’000 |       | US$’000 |  | US$’000
|                                                                                  |  |         |       |         |  |        
|Opening balance as of January 1                                                   |  |         | 1,831 |         |  |        
|Tax benefit/(expenses) during the period recognized in profit or loss             |  |         | 281   |         |  |        
|Tax benefit/(expenses) during the period recognized in other comprehensive income |  |         | 47    |         |  |        
|Exchange difference on translation foreign operations                             |  |         | (412  | )       |  |        
|Closing balance as of December 31                                                 |  |         | 1,747 |         |  |        



The Company offset tax assets
and liabilities if and only if it has legally enforceable right to set off current tax assets and current tax liabilities and
the deferred tax assets and deferred tax liabilities related to income taxes levied by the same tax authority.



F-45


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 8. | INCOME TAX (continued)
| | -- | ----------------------



The Company has available unused
net operating losses which arose in Thailand and China as of December 31, 2015, and arose in Thailand, China and Singapore as of
December 31, 2014, that may be applied against future taxable income and that expire as follows respectively:



|                   |  | As of December 31,
|------------------ |  | ------------------
|Year of expiration |  | 2015              
|                   |  |                   
|2015               |  |                   
|2016               |  |                   
|2017               |  |                   
|2018               |  |                   
|2019               |  |                   
|2020               |  |                   
|No expiration      |  |                   
|                   |  |                   



Deferred tax assets have not
been recognized in respect of these losses as they may not be used to offset taxable profits elsewhere in the Company, as they
have arisen in subsidiaries that have been loss-making for some time, and there are no other tax planning opportunities or other
evidence of recoverability in the near future. If the Company were able to recognize all unrecognized deferred tax assets, the
profit would increase by $3,327 for the year ended December 31, 2015 (2014: $2,815; 2013: $1,566).



There are no income tax consequences
attached to the payment of dividends in either 2015 or 2014 by the Company to its shareholders.



As of December 31, 2015 and 2014,
the Company is subject to taxation in PRC, Australia, Thailand, and Singapore. The Company’s tax years from 2010 and forward
are still subject to examination by the tax authorities in various tax jurisdictions.



F-46


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 8. | INCOME TAX (continued)
| | -- | ----------------------



| |  | A reconciliation of the beginning and ending amounts of uncertain tax position is as follows:
| |  | ---------------------------------------------------------------------------------------------



|Change in Uncertain Tax Positions                            |  |        
|------------------------------------------------------------ |  | -------
|                                                             |  | 2015   
|                                                             |  | US$’000
|Balance as of January 1                                      |  |        
|Additions based on tax positions related to the current year |  |        
|Decrease due to lapses in statute of limitations             |  |        
|                                                             |  |        
|Balance as of December 31                                    |  |        



The Company is not expecting
there would be any reasonably possible change in the total amounts of uncertain tax position within twelve months of the reporting
date. As of December 31, 2015, 2014 and 2013 the amount of uncertain tax position (excluding interest and penalties) included in
the consolidated balance sheets that would, if recognized, affect the effective tax rate is $1,733, $1,891 and $2,266 respectively.



The Company recognized interest
expense and penalties related to income tax matters as a component of income tax expense. The amount of related interest and penalties
the Company has provided as of the dates listed below were:



|                                                               |  | As of December 31,
|-------------------------------------------------------------- |  | ------------------
|                                                               |  | 2015              
|                                                               |  | US$’000           
|Accrued interest on uncertain tax position                     |  |                   
|Accrued penalties on uncertain tax position                    |  |                   
|                                                               |  |                   
|Total accrued interest and penalties on uncertain tax position |  |                   



For the years ended December 31,
2015, 2014 and 2013, the Company recognized $299, $327 and $395 in interest and $nil, $nil and $nil in penalty, respectively. For
the years ended December 31, 2015, 2014 and 2013, the Company reversed $248, $579 and $170 in interest and $158, $358 and $108
in penalties, respectively, due to lapses in statute of limitations.



The Company considers each uncertain
tax position individually, by first considering whether each position taken in the tax return is probable of being sustained on
examination by the taxing authority. It should recognize a liability for each item that is not probable of being sustained. The
liability then is measured using a single best estimate of the most likely outcome. The uncertain tax positions presented in the
current tax liability is the total liability for uncertain tax positions.



F-47


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 9. | EARNINGS PER SHARE
| | -- | ------------------



Earnings per share are calculated
by dividing net profit attributable to equity holders of the parent by the weighted average number of shares outstanding during
the year. The Company does not have any dilutive securities beyond the treasury shares disclosed in Note 22. The treasury shares
transaction resulted in an immediate reduction in outstanding shares used to calculate the weighted-average common shares outstanding
for both basic and diluted earnings per share.



The following table sets forth
the computation of basic and diluted earnings attributable to common shareholders per share:



|                                                                  |  | For the year ended                                  
|----------------------------------------------------------------- |  | ----------------------------------------------------
|                                                                  |  | December 31,                                        
|                                                                  |  | 2015                                                
|                                                                  |  | US$’000                                             
|                                                                  |  | (except for number of shares and earnings per share)
|Numerator:                                                        |  |                                                     
|Net profit/(loss) attributable to APWC from continuing operations |  |                                                     
|Net profit/(loss) attributable to APWC                            |  |                                                     
|                                                                  |  |                                                     
|Denominator:                                                      |  |                                                     
|Weighted-average common shares outstanding – basic and diluted    |  |                                                     
|                                                                  |  |                                                     
|Earnings per share – basic and diluted                            |  |                                                     
|Continuing operations                                             |  |                                                     
|Total earnings per share – basic and diluted                      |  |                                                     



Income from continuing operations
attributable to non-controlling interests are $(1,440), $2,189 and $5,419 for the years ended December 31, 2015, 2014 and 2013,
respectively.



| | 10. | CASH AND CASH EQUIVALENTS
| | --- | -------------------------



|                               |  | As of December 31,
|------------------------------ |  | ------------------
|                               |  | 2015              
|                               |  | US$’000           
|Cash on hand and cash at banks |  |                   



Cash at banks earns interest
at floating rates based on daily bank deposit rates. Cash equivalents include short-term deposits which are made for varying periods
of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective
short-term deposit rates. As of December 31, 2015 and 2014, the Company had no cash equivalents.



F-48


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 11. | OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES
| | --- | ------------------------------------------------



11.1 Other financial assets



|                                                                 |  | As of December 31,
|---------------------------------------------------------------- |  | ------------------
|                                                                 |  | 2015              
|                                                                 |  | US$’000           
|                                                                 |  |                   
|Financial instruments at fair value through profit or loss       |  |                   
|Foreign exchange forward contracts (Note 11.3)                   |  |                   
|Total financial instruments at fair value through profit or loss |  |                   
|                                                                 |  |                   
|Assets held-to-maturity                                          |  |                   
|Quoted debt securities                                           |  |                   
|Total assets held-to-maturity                                    |  |                   
|                                                                 |  |                   
|Available for sale investments                                   |  |                   
|Unquoted equity shares                                           |  |                   
|Total available for sale investments                             |  |                   
|                                                                 |  |                   
|Total other financial assets                                     |  |                   
|                                                                 |  |                   
|Total current                                                    |  |                   
|                                                                 |  |                   
|Total non-current                                                |  |                   



Financial assets at fair value through profit
or loss

Financial assets at fair value through profit
or loss reflect the positive change in fair value of those foreign exchange forward contracts that are not designated in hedge
relationships, but are intended to reduce the level of foreign currency risk for expected sales and purchases.



Assets held-to-maturity – quoted debt securities

A Thai subsidiary invested
$306 (Baht 11 million) in subordinated debentures of Bangkok Bank Public Company Limited. The debentures bear a fixed interest
rate of 4.375% per annum with a maturity of ten years callable at the option of the issuer after five years. As the call option
is clearly and closely related to the debt host contract, no bifurcation of embedded call option is required. The debentures are
marketable and rated AA- by Fitch Rating (Thailand) Ltd.



The market yield is close
to coupon rate. The fair value approximated its amortized cost as of December 31, 2015 and 2014.



Available-for-sale
investments - unquoted equity shares

The investments in shares
of a non-listed company, which are recognized initially at fair value plus transaction costs. After initial measurement, available-for-sale
financial investments are subsequently measured at fair value with unrealized gains or losses recognized as the other comprehensive
income. Available-for-sale investments – unquoted equity share consist of the investments in Thai Metal Processing Co.,
Ltd, (“TMP”) which is engaged in the fabrication of copper rods. During the years ended December 31, 2015, 2014 and
2013, the Company received dividends of $99, $104 and $110 from TMP, respectively, which were recorded in other income in the
consolidated income statements.



F-49


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 11. | OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
| | --- | ------------------------------------------------------------



11.2 Interest-bearing loans and borrowings



Under the line of credit
arrangements for short-term debt with the Company’s banks, the Company may borrow up to approximately $249,658 and $278,370
as of December 31, 2015 and 2014, respectively, on such terms as the Company and the banks may mutually agree upon. These arrangements
do not have termination dates but are reviewed annually for renewal. As of December 31, 2015 and 2014, the unused portion of the
credit lines was approximately $148,556 and $168,241, respectively, which included unused letters of credit amounting to $83,980
and $85,943, respectively. Letters of credit are issued by the Company in the ordinary course of business through major financial
institutions as required by certain vendor contracts. As of December 31, 2015 and 2014, the Company had open letters of credit
totaling $29,698 and $49,042, respectively. Liabilities relating to the letters of credit are included in current liabilities.



|                                                    |  | As of December 31,
|--------------------------------------------------- |  | ------------------
|                                                    |  | 2015              
|                                                    |  | Interest rate     
|                                                    |  | %                 
|Current interest-bearing loans and borrowings       |  |                   
|Bank loans                                          |  |                   
|Bank loans                                          |  |                   
|Trust receipt                                       |  |                   
|Trust receipt                                       |  |                   
|Total current interest-bearing loans and borrowings |  |                   







F-50


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 11. | OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
| | --- | ------------------------------------------------------------



11.3 Hedging activities and derivatives



Commodity
price risk



The Company purchases copper
on an ongoing basis as its operating activities require a continuous supply of copper for the manufactured products. The Company
exercises rigorous controls through the commodity forward contracts to reduce its exposure to the fluctuations in market prices
for copper for selected operating units. The majority of these transactions take the form of contracts that are entered into and
continue to be held for the purpose of receipt or delivery of the copper in accordance with the Company’s expected sales
or production timing or usage requirements. Such contracts are not within the scope of hedging accounting, or derivatives. To date,
these contract positions have not had a material effect on the Company’s financial position, results of operations or cash
flow.



Foreign
currency risk



The Company enters into foreign
exchange forward contracts with the intention to reduce the foreign exchange risk of expected sales and purchased, these contracts
are not designated in hedge relationships and are measured at fair value through profit or loss. These contracts are entered into
the periods consistent with foreign currency exposure of the underlying transactions, generally from one to 12 months.



As of December 31, 2015 and
2014, the Company had outstanding forward contracts with notional amounts of $11.5 million and $nil respectively. The outstanding
forward contracts mature between January 5, 2016 and June 20, 2016. The Company recognized gains amounted to $20 and $nil for the
years ended December 31, 2015 and 2014, respectively, in the consolidated income statements.



The forward contract balance
varies with the expected foreign currency transactions and changes in foreign exchange rate.



|                         |  | 2015    |    | 2014       
|------------------------ |  | ------- | -- | -----------
|                         |  | Assets  |    | Liabilities
|                         |  | US$’000 |    | US$’000    
|Foreign currency forward
|contracts               
|Fair value               |  |         | 19 |            



F-51


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 11. | OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
| | --- | ------------------------------------------------------------



11.4 Fair values



Set out below is a comparison
of the carrying amounts and fair value of the Company’s financial instruments that are carried in the financial statements:

|                                                                      |  | Carrying amount    |         | Fair value        
|--------------------------------------------------------------------- |  | ------------------ | ------- | ------------------
|                                                                      |  | As of December 31, |         | As of December 31,
|                                                                      |  | 2015               |         | 2014              
|                                                                      |  | US$’000            |         | US$’000           
|Financial assets-current                                              |  |                    |         |                   
|Cash and cash equivalents                                             |  |                    | 51,303  |                   
|Other current financial assets – at fair value through profit or loss |  |                    | 19      |                   
|Trade receivables                                                     |  |                    | 69,991  |                   
|Other receivables                                                     |  |                    | 17,563  |                   
|Due from related parties                                              |  |                    | 18,180  |                   
|Financial assets-non-current                                          |  |                    |         |                   
|Other non-current financial assets – available for sale               |  |                    | 2,862   |                   
|Other non-current financial assets – held to maturity                 |  |                    | 306     |                   
|Total                                                                 |  |                    | 160,224 |                   
|                                                                      |  |                    |         |                   
|Financial liabilities-current                                         |  |                    |         |                   
|Interest-bearing loans and borrowings                                 |  |                    | 37,701  |                   
|Trade and other payables                                              |  |                    | 31,690  |                   
|Due to related parties                                                |  |                    | 8,547   |                   
|Due to immediate holding company                                      |  |                    | 1,537   |                   
|Financial lease liabilities                                           |  |                    | 22      |                   
|Financial liabilities-non-current                                     |  |                    |         |                   
|Financial lease liabilities                                           |  |                    | 51      |                   
|Total                                                                 |  |                    | 79,548  |                   



The fair value of the financial
assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:



| | ► | Cash and cash equivalents, trade receivables,
other receivables, due from related parties, trade and other payables, due to related parties, due to immediate holding company
and financial lease liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ► | Fixed-rate and variable-rate receivables/borrowings
are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness
of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances were provided to account
for the expected losses of these receivables. As of December 31, 2015, the carrying amounts of such receivables, net of allowances,
were not materially different from their calculated fair values.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-52


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 11. | OTHER FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
| | --- | ------------------------------------------------------------



11.4 Fair value (continued)



| | ► | Fair value of other current financial assets - derivatives are derived from quoted market prices.
| | - | -------------------------------------------------------------------------------------------------

| | ► | Fair value of unquoted available-for-sale
financial assets is estimated using appropriate valuation techniques.
| | - | ---------------------------------------------------------------------------------------------------------------

| | ► | Fair value of interest-bearing borrowings
and loans and other non-current financial assets – held to maturity are determined by using discounted cash flow method using
discount rate that reflects the issuer’s borrowing rate as of the end of the reporting period. The non-performance risk as
of December 31, 2015 was assessed to be insignificant.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Description of significant
unobservable inputs to valuation



|                                                                   |  | Valuation technique    |                 | Significant unobservable inputs |  | Liquidity discount |  | Sensitivity of the input to fair value                              
|------------------------------------------------------------------ |  | ---------------------- | --------------- | ------------------------------- |  | ------------------ |  | --------------------------------------------------------------------
|                                                                   |  |                        | (2015 and 2014) |                                
|                                                                   |  |                        |                 |                                 |  |                    |  | 2015                                                                
|Financial asset                                                    |  |                        |                 |                                 |  |                    |  |                                                                     
|Available-for-sale financial assets in unquoted equity instruments |  | Market Approach Method |                 | Liquidity Discount              |  | 30%                |  | 5% decrease in the
    discount would increase in fair value by $211



The Company estimates the fair
value of available-for-sale financial investments in unquoted equity shares by using the market approach (market comparatives approach).
The key in this method is the selection of quoted comparable companies and accommodate adjustments to bring the accounts of different
companies into a broadly consistent framework for analysis. Then, select appropriate Indicators of Value. The followings should
be taken into account:



| | ► | Enterprise Value (EV) versus Market Capitalization;
| | - | ---------------------------------------------------

| | ► | Earnings-based: EBITDA +/or EBIT versus
Net Earnings +/or Net Cash Flow
| | - | -----------------------------------------------------------------------

| | ► | Balance Sheet based: Net Total Assets
versus Shareholders Funds
| | - | ---------------------------------------------------------------



Discount for the lack of liquidity
to reflect the lesser liquidity of unquoted equity instruments compared with those of its comparable public company peers. The
Company assessed the discount for the lack of liquidity to be 30 percent on the basis of relevant studies applicable in the region
and industry as well as on the specific facts and circumstances of the unquoted equity shares. The unquoted equity shares’
finance performance is characterized by stable, consistent growth and profitability. The Company believes the liquidity discount
of 30% would be appropriate.



The Company carries unquoted equity
shares as available-for-sale financial instruments classified as level 3 within the fair value hierarchy.  A reconciliation
of the beginning and closing balances is summarized below:



|                                                               |  | Total  
|-------------------------------------------------------------- |  | -------
|                                                               |  | US$’000
|At January 1, 2014                                             |  |        
|Re-measurement recognized in other comprehensive income (loss) |  |        
|Exchange difference                                            |  |        
|At December 31, 2014                                           |  |        
|Re-measurement recognized in other comprehensive income (loss) |  |        
|Exchange difference                                            |  |        
|At December 31, 2015                                           |  |        



F-53


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 12. | TRADE AND OTHER RECEIVABLES
| | --- | ---------------------------

|                               |  | As of December 31,
|------------------------------ |  | ------------------
|                               |  | 2015              
|                               |  | US$’000           
|                               |  |                   
|Trade receivables              |  |                   
|Less: Provision for impairment |  |                   
|Trade receivable, net          |  |                   
|Other receivable               |  |                   



As of December 31, 2015 and 2014 trade receivables
of an initial value of $3,289 and $3,705, respectively, were fully impaired. See below for the movement in the provision for impairment
of trade receivables.



|                                |  | Individually
impaired |       | Collectively
impaired |  | Total  
|------------------------------- |  | --------------------- | ----- | --------------------- |  | -------
|                                |  | US$’000               |       | US$’000               |  | US$’000
|At January 1, 2014              |  |                       | 1,541 |                       |  |        
|Charge for the year             |  |                       | 2,359 |                       |  |        
|Write-off                       |  |                       | (46   | )                     |  |        
|Unused amounts reversed         |  |                       | (253  | )                     |  |        
|Currency translation adjustment |  |                       | (53   | )                     |  |        
|At December 31, 2014            |  |                       | 3,548 |                       |  |        
|Charge for the year             |  |                       | 104   |                       |  |        
|Write-off                       |  |                       | (486  | )                     |  |        
|Unused amounts reversed         |  |                       | 13    |                       |  |        
|Currency translation adjustment |  |                       | (50   | )                     |  |        
|At December 31, 2015            |  |                       | 3,129 |                       |  |        



The ageing analysis of trade receivables is as follows:



|                  |  |         |        |                               |  | Past due but not impaired
|----------------- |  | ------- | ------ | ----------------------------- |  | -------------------------
|                  |  | Total   |        | Neither past due nor impaired |  | Past due 1-3 months      
|                  |  | US$’000 |        | US$’000                       |  | US$’000                  
|December 31, 2015 |  |         | 69,991 |                               |  |                          
|December 31, 2014 |  |         | 88,194 |                               |  |                          



The Company maintains provision for impairment of
trade receivables for estimated losses resulting from the inability of its customers to make required payments. Management considers
the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, customer financial
condition, past transaction history with the customer, current economic industry trends, and changes in customer payment terms.
The impairment losses assessed individually as of December 31, 2015 and 2014 primarily resulted from the financial difficulties
of the counter trading parties and the amounts recognized were the difference between the carrying amount of the accounts receivable
and the present value of expected collectable amounts.



The Company obtained
collateral in respect of customer doubtful accounts. The collateral takes the form of a lien over the customer’s assets and
gives the Company a claim on these assets for the doubtful accounts. The Company has the first lien for the collateral. The collateral
is in general, not recorded on the balance sheet. The fair value of the collateral has been determined based on the valuation performed
by independent appraisers. As of December 31, 2015 and 2014, the fair values of the collateral were $836 and
$917, respectively, which were higher than the amounts of the associated delinquent accounts, as a result, no impairments were
recognized.



See Note 26(b) credit risk of trade receivables,
which discusses how the Company manages and measures credit quality of trade receivables that are neither past due nor impaired.

F-54


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 13. | INVENTORIES
| | --- | -----------

|                                                                |  | As of December 31,
|--------------------------------------------------------------- |  | ------------------
|                                                                |  | 2015              
|                                                                |  | US$’000           
|Raw materials and supplies                                      |  |                   
|Work in progress                                                |  |                   
|Finished goods                                                  |  |                   
|Distributed products                                            |  |                   
|                                                                |  |                   
|Allowance for inventories                                       |  |                   
|Total inventories at the lower of cost and net realizable value |  |                   



For the year ended December
31, 2015 and 2014, the Company recognized allowance for inventory of $1,481 and $2,394 as an expense in cost of sales for inventories
carried at net realizable value.



For the year ended December
31, 2013, the amount of $1,046 was credited to cost of sales when the circumstances that caused the net realizable value of inventory
to be lower than its cost no longer existed.



| | 14. | Gross amounts due from customers for contract work-in-progress
| | --- | --------------------------------------------------------------



|                                                         |  | As of December 31,
|-------------------------------------------------------- |  | ------------------
|                                                         |  | 2015              
|                                                         |  | US$’000           
|Construction contract work-in-progress                   |  |                   
|Construction costs                                       |  |                   
|Attributable loss                                        |  |                   
|                                                         |  |                   
|Less: Progress billing received and receivable           |  |                   
|Total gross amounts due from customers for contract work |  |                   



Revenues recognized in excess of amounts billed are
classified as current assets under contract work-in-progress. Amounts billed to clients in excess of revenues recognized to date
are classified as current liabilities under advance billings on contracts.



F-55


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 15. | PROPERTY, PLANT AND EQUIPMENT
| | --- | -----------------------------

|                                 |  | Land    |       | Buildings |  | Building improvement |         | Machinery and equipment |  | Motor vehicle and other asset and assets under finance lease |        | Office equipment |  | Construction in progress |         | Total  
|-------------------------------- |  | ------- | ----- | --------- |  | -------------------- | ------- | ----------------------- |  | ------------------------------------------------------------ | ------ | ---------------- |  | ------------------------ | ------- | -------
|                                 |  | US$’000 |       | US$’000   |  | US$’000              |         | US$’000                 |  | US$’000                                                      |        | US$’000          |  | US$’000                  |         | US$’000
|                                 |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|Cost                             |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|At January 1, 2014               |  |         | 5,083 |           |  |                      | 50,725  |                         |  |                                                              | 3,623  |                  |  |                          | 100,712 |        
|Additions                        |  |         | -     |           |  |                      | -       |                         |  |                                                              | 16     |                  |  |                          | 1,003   |        
|Disposals                        |  |         | -     |           |  |                      | -       |                         |  |                                                              | -      |                  |  |                          | (1,941  | )      
|Transfer                         |  |         | -     |           |  |                      | 1,636   |                         |  |                                                              | 425    |                  |  |                          | 4,164   |        
|Exchange differences             |  |         | (39   | )         |  |                      | (886    | )                       |  |                                                              | (2     | )                |  |                          | (816    | )      
|                                 |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|At December 31, 2014             |  |         | 5,044 |           |  |                      | 51,475  |                         |  |                                                              | 4,062  |                  |  |                          | 103,122 |        
|                                 |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|Additions                        |  |         | -     |           |  |                      | 30      |                         |  |                                                              | 262    |                  |  |                          | 425     |        
|Disposals                        |  |         | -     |           |  |                      | -       |                         |  |                                                              | -      |                  |  |                          | (5,999  | )      
|Transfer                         |  |         | -     |           |  |                      | 40      |                         |  |                                                              | 588    |                  |  |                          | 1,952   |        
|Classified as held for sales     |  |         | -     |           |  |                      | -       |                         |  |                                                              | -      |                  |  |                          | (306    | )      
|Exchange differences             |  |         | (627  | )         |  |                      | (4,174  | )                       |  |                                                              | (365   | )                |  |                          | (9,586  | )      
|                                 |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|At December 31, 2015             |  |         | 4,417 |           |  |                      | 47,371  |                         |  |                                                              | 4,547  |                  |  |                          | 89,608  |        
|                                 |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|                                 |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|Depreciation                     |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|At January 1, 2014               |  |         | -     |           |  |                      | (29,758 | )                       |  |                                                              | (2,346 | )                |  |                          | (86,841 | )      
|Depreciation charge for the year |  |         | -     |           |  |                      | (1,932  | )                       |  |                                                              | (163   | )                |  |                          | (2,923  | )      
|Depreciation on disposals        |  |         | -     |           |  |                      | -       |                         |  |                                                              | -      |                  |  |                          | 1,941   |        
|Transfer                         |  |         | -     |           |  |                      | -       |                         |  |                                                              | -      |                  |  |                          | -       |        
|Exchange differences             |  |         | -     |           |  |                      | 468     |                         |  |                                                              | (6     | )                |  |                          | 570     |        
|                                 |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|At December 31, 2014             |  |         | -     |           |  |                      | (31,222 | )                       |  |                                                              | (2,515 | )                |  |                          | (87,253 | )      



F-56


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




|                                 |  | Land    |       | Buildings |  | Building improvement |         | Machinery and equipment |  | Motor vehicle and other asset and assets under finance lease |        | Office equipment |  | Construction in progress |         | Total  
|-------------------------------- |  | ------- | ----- | --------- |  | -------------------- | ------- | ----------------------- |  | ------------------------------------------------------------ | ------ | ---------------- |  | ------------------------ | ------- | -------
|                                 |  | US$’000 |       | US$’000   |  | US$’000              |         | US$’000                 |  | US$’000                                                      |        | US$’000          |  | US$’000                  |         | US$’000
|                                 |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|At December 31, 2014             |  |         | -     |           |  |                      | (31,222 | )                       |  |                                                              | (2,515 | )                |  |                          | (87,253 | )      
|Depreciation charge for the year |  |         | -     |           |  |                      | (1,786  | )                       |  |                                                              | (179   | )                |  |                          | (2,721  | )      
|Depreciation on disposals        |  |         | -     |           |  |                      | -       |                         |  |                                                              | -      |                  |  |                          | 5,974   |        
|Transfer                         |  |         | -     |           |  |                      | -       |                         |  |                                                              | -      |                  |  |                          | -       |        
|Classified as held for sales     |  |         | -     |           |  |                      | -       |                         |  |                                                              | -      |                  |  |                          | 84      |        
|Exchange differences             |  |         | -     |           |  |                      | 3,058   |                         |  |                                                              | 219    |                  |  |                          | 8,433   |        
|                                 |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|At December 31, 2015             |  |         | -     |           |  |                      | (29,950 | )                       |  |                                                              | (2,475 | )                |  |                          | (75,483 | )      
|                                 |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|Net book value                   |  |         |       |           |  |                      |         |                         |  |                                                              |        |                  |  |                          |         |        
|At December 31, 2015             |  |         | 4,417 |           |  |                      | 17,421  |                         |  |                                                              | 2,072  |                  |  |                          | 14,125  |        
|At December 31, 2014             |  |         | 5,044 |           |  |                      | 20,253  |                         |  |                                                              | 1,547  |                  |  |                          | 15,869  |        
|At January 1, 2014               |  |         | 5,083 |           |  |                      | 20,967  |                         |  |                                                              | 1,277  |                  |  |                          | 13,871  |        



Assets classified as held for sale:

|                                                                                                  |  | 2015   
|------------------------------------------------------------------------------------------------- |  | -------
|                                                                                                  |  | US$’000
|Carrying value of assets held for sale previously classified under Property, plant and equipment: |  |        
|Machinery and equipment                                                                           |  |        
|Office equipment                                                                                  |  |        
|                                                                                                  |  |        



The above represent the assets held for sale as result of the
changing of production process of a subsidiary.



F-57


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 15. | PROPERTY, PLANT AND EQUIPMENT (continued)                                                                                                                                                                                                                                                                                                                                                       
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | Capitalized borrowing costs                                                                                                                                                                                                                                                                                                                                                                     
| |     | Capitalized interest on construction
in progress is added to the cost of the underlying asset and is depreciated over the estimated useful life of the asset in the
same manner as the underlying asset. The capitalized interest was related to and has been included as part of the cost of Ningbo
Pacific’s construction in progress.                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | There was no borrowing cost
capitalized for the year ended December 31, 2015. The amount of borrowing costs capitalized during the years ended December 31,
2014 and 2013 were $43 and $30, respectively. The rate used to determine the amount of borrowing costs eligible for capitalization
was in the range of 1.15% to 6.30% and 1.5% to 6.23%, during each of 2014 and 2013, respectively.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | Financial leases under property,
plant and equipment                                                                                                                                                                                                                                                                                                                                            
| |     | The carrying value of motor
vehicles under financial leases as of December 31, 2015 and 2014 were $64 and $43, respectively.                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | Pledge                                                                                                                                                                                                                                                                                                                                                                                          
| |     | Information about the property,
plant and equipment that were pledged to others as collaterals is provided in Note 26.                                                                                                                                                                                                                                                                          



| | 16. | PREPAID LAND LEASE PAYMENTS
| | --- | ---------------------------



|                                                            |  | 2015    |       | 2014   
|----------------------------------------------------------- |  | ------- | ----- | -------
|                                                            |  | US$’000 |       | US$’000
|Carrying amount as of January 1,                            |  |         | 1,918 |        
|Recognized lease expense during the year                    |  |         | (59   | )      
|Exchange difference                                         |  |         | (65   | )      
|Carrying amount as of December 31,                          |  |         | 1,794 |        
|Current portion included in prepayments                     |  |         | 57    |        
|Non-current portion included in prepaid land lease payments |  |         | 1,737 |        



The property land is situated in Mainland
China and is held under a long-term operating lease for 33 – 50 years.



F-58


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 17. | INVESTMENT PROPERTIES
| | --- | ---------------------



The net book value of investment properties as of
December 31, 2015 and 2014 was as follow:



|                               |  | Land not being used for operation |     | Office buildings for rent |  | Total  
|------------------------------ |  | --------------------------------- | --- | ------------------------- |  | -------
|                               |  | US$’000                           |     | US$’000                   |  | US$’000
|As of December 31, 2015        |  |                                   |     |                           |  |        
|Cost                           |  |                                   | 532 |                           |  |        
|Less: Accumulated depreciation |  |                                   | -   |                           |  |        
|                               |  |                                   |     |                           |  |        
|Net book value                 |  |                                   | 532 |                           |  |        



|                               |  | Land not being used for operation |     | Office buildings for rent |  | Total  
|------------------------------ |  | --------------------------------- | --- | ------------------------- |  | -------
|                               |  | US$’000                           |     | US$’000                   |  | US$’000
|As of December 31, 2014        |  |                                   |     |                           |  |        
|Cost                           |  |                                   | 583 |                           |  |        
|Less: Accumulated depreciation |  |                                   | -   |                           |  |        
|Less: Accumulated impairment   |  |                                   | (12 | )                         |  |        
|                               |  |                                   |     |                           |  |        
|Net book value                 |  |                                   | 571 |                           |  |        



A reconciliation of the net book value of investment
properties was as follow:



|                                                   |  | 2015    |     | 2014   
|-------------------------------------------------- |  | ------- | --- | -------
|                                                   |  | US$’000 |     | US$’000
|Net book value at January 1                        |  |         | 757 |        
|Depreciation (included in administrative expenses) |  |         | (16 | )      
|Disposals                                          |  |         | (21 | )      
|Reversal of impairment loss                        |  |         | 12  |        
|Exchange difference                                |  |         | (65 | )      
|Net book value at December 31                      |  |         | 667 |        



Investment properties are carried
at historical cost less accumulated depreciation and impairment. Land is not depreciated and office buildings are depreciated
on a straight-line basis over the estimated useful lives from 20 to 30 years.



F-59


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 17. | INVESTMENT PROPERTIES (continued)
| | --- | ---------------------------------



The amount recognized in profit arising
from the investment properties for the years ended December 31, 2015, 2014 and 2013 was as follow:



|                                                                           |  | 2015    |    | 2014    |  | 2013   
|-------------------------------------------------------------------------- |  | ------- | -- | ------- |  | -------
|                                                                           |  | US$’000 |    | US$’000 |  | US$’000
|Rental income derived from investment properties                           |  |         | 16 |         |  |        
|Direct operating expenses (including repairs and maintenance)              |  |         | (1 | )       |  |        
|generating rental income                                                   |  |         |    |         |  |        
|Direct operating expenses (including repairs and maintenance) that did not |  |         | (1 | )       |  |        
|generate rental income                                                     |  |         |    |         |  |        
|Net profit arising from investment properties carried at cost              |  |         | 14 |         |  |        



The fair value of the investment
properties are stated below:



|                                  |  | As of December 31,
|--------------------------------- |  | ------------------
|                                  |  | 2015              
|                                  |  | US$’000           
|Land not being used for operation |  |                   
|Office building for rent          |  |                   



The fair value of aforementioned
investment properties have been determined based on the valuation performed by independent appraisers and is considered a
level 3 measurement. The valuation has been made on the assumption to sell the property interests in the open market in the
neighborhood without the benefit of any deferred term contract, leaseback, joint venture, management agreement or any similar arrangement,
which would serve to increase the value of the property interests. The valuation adopted market comparison approach to estimate
the fair market value of the properties. Under the market comparison approach, the appraisal is based on recent sales and listings
of comparable property. Adjustments were made for differences between the subject property and those actual sales and listings
regarded as comparable. The factors which used for considering the property valuation include the significant unobservable inputs,
such as location, transportation, land uses, facilities, neighboring area, land characteristics, potential, regulations and liquidity.



| | 18. | INTANGIBLE ASSETS
| | --- | -----------------



Computer software



|                         |  | 2015    |      | 2014   
|------------------------ |  | ------- | ---- | -------
|                         |  | US$’000 |      | US$’000
|Cost                     |  |         |      |        
|At January 1             |  |         | 381  |        
|Addition                 |  |         | 27   |        
|Exchange difference      |  |         | (21  | )      
|At December 31           |  |         | 387  |        
|                         |  |         |      |        
|Accumulated amortization |  |         |      |        
|At January 1             |  |         | (271 | )      
|Amortization             |  |         | (36  | )      
|Exchange difference      |  |         | 13   |        
|At December 31           |  |         | (294 | )      
|                         |  |         |      |        
|Net book value           |  |         |      |        
|At December 31           |  |         | 93   |        



The cost of acquiring software
is capitalized separately as an intangible asset on the basis of the costs incurred to acquire and bring to use the specific software.
Intangible assets are stated at cost less accumulated amortization. Amortization of intangible assets are charged to operating
expenses and cost on a straight-line basis over 5 years from the date they are available for use.

F-60


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 19. | INVESTMENTS IN ASSOCIATES
| | --- | -------------------------



The associates of the Company are set out
below:



|                                                                                                         |  |                                     |  |                          |  | Percentage of equity interest
|-------------------------------------------------------------------------------------------------------- |  | ----------------------------------- |  | ------------------------ |  | -----------------------------
|                                                                                                         |  |                                     |  | Country of incorporation |  | As of December 31            
|Company Name                                                                                             |  | Nature of business                  |  |                          |  | 2015                         
|                                                                                                         |  |                                     |  |                          |  |                              
|Shandong Pacific Rubber Cable Co., Ltd. (“SPRC”)                                                         |  | Manufacturing of rubber cable       |  | PRC                      |  |                              
|                                                                                                         |  |                                     |  |                          |  |                              
|Siam Pacific Holding Company Limited (“SPHC”)                                                            |  | Investment & holding company        |  | Thailand                 |  |                              
|                                                                                                         |  |                                     |  |                          |  |                              
|Loxpac (Thailand) Company Limited (“Loxpac”) (Formerly  known as “Loxley Pacific Co., Ltd.)              |  | Providing telecommunication service |  | Thailand                 |  |                              
|                                                                                                         |  |                                     |  |                          |  |                              
|Loxpac Hong Kong Co., Limited (“Loxpac HK”) (Formerly known as “Loxley Pacific Hong Kong Co., Limited” ) |  | Investment & holding company        |  | Hong Kong                |  |                              



|                            |  | As of  December 31,
|--------------------------- |  | -------------------
|                            |  | 2015               
|                            |  | US$’000            
|Balance at January 1        |  |                    
|Additions                   |  |                    
|Capital return              |  |                    
|Share of loss of associates |  |                    
|Exchange difference         |  |                    
|                            |  |                    
|Balance at December 31      |  |                    



The investments in Loxpac and
Loxpac HK have been fully impaired.



F-61


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 19. | INVESTMENTS IN ASSOCIATES (continued)
| | --- | -------------------------------------



The Company’s investments
in associates are accounted for using the equity method in the consolidated financial statements.



The following table summarized financial
information of the Company’s investments in associates:



|                                                           |  | As of December 31, 2015
|---------------------------------------------------------- |  | -----------------------
|                                                           |  | SPRC                   
|                                                           |  | US$’000                
|Current assets                                             |  |                        
|Non-current assets                                         |  |                        
|Current liabilities                                        |  |                        
|Non-current liabilities                                    |  |                        
|Equity                                                     |  |                        
|                                                           |  |                        
|Reconciliation to the Company’s investments in associates: |  |                        
|Percentage of equity interest                              |  |                        
|Carrying amount of the investment                          |  |                        
|                                                           |  |                        
|Revenue                                                    |  |                        
|Profit                                                     |  |                        
|                                                           |  |                        
|Share of the associates’ profit for the year:              |  |                        



|                        |  | As of December 31, 2014
|----------------------- |  | -----------------------
|                        |  | SPRC                   
|                        |  | US$’000                
|Current assets          |  |                        
|Non-current assets      |  |                        
|Current liabilities     |  |                        
|Non-current liabilities |  |                        
|Equity                  |  |                        



F-62


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 19. | INVESTMENTS IN ASSOCIATES (continued)
| | --- | -------------------------------------



|                                                           |  | As of December 31, 2014
|---------------------------------------------------------- |  | -----------------------
|                                                           |  | SPRC                   
|                                                           |  | US$’000                
|Reconciliation to the Company’s investments in associates: |  |                        
|Percentage of equity interest                              |  |                        
|Carrying amount of the investment                          |  |                        
|                                                           |  |                        
|Revenue                                                    |  |                        
|Profit                                                     |  |                        
|                                                           |  |                        
|Share of the associates’ profit for the year:              |  |                        



|                                              |  | As of December 31, 2013
|--------------------------------------------- |  | -----------------------
|                                              |  | SPRC                   
|                                              |  | US$’000                
|Revenue                                       |  |                        
|Profit                                        |  |                        
|                                              |  |                        
|Share of the associates’ profit for the year: |  |                        



As of December 31, 2015 and 2014, the Company's
associates had no contingent liabilities or capital commitments.



| | 20. | TRADE AND OTHER PAYABLES
| | --- | ------------------------

|               |  | As of December 31,
|-------------- |  | ------------------
|               |  | 2015              
|               |  | US$’000           
|Trade payables |  |                   
|Other payables |  |                   
|               |  |                   



Terms and conditions of the above financial
liabilities:



| | ► | Trade payables are non-interest bearing and are normally settled on
60-day terms.
| | - | ---------------------------------------------------------------------------------

| | ► | Other payables are non-interest bearing and have an average term of
60 days.
| | - | ----------------------------------------------------------------------------

| | ► | For terms and conditions relating to other related parties, refer
to Note 23.
| | - | -----------------------------------------------------------------------------



F-63


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 21. | EMPLOYEE BENEFIT
| | --- | ----------------



Pension – Defined
contribution plans



The Company has several defined
contribution plans covering its employees in Australia, PRC and Singapore. Contributions to the plan are made annually. Total
charges for the years ended December 31, 2015, 2014 and 2013, were $1,172, $1,283 and $1,285, respectively.



Pension – Defined
benefit plans



The defined benefit liability
recognized in the consolidated balance sheet in respect to defined benefit plans is the present value of the defined benefit obligation
at the end of the reporting period, together with adjustments for past service costs and actuarial losses. The defined benefit
obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined
benefit obligation is determined by discounting the estimated future cash outflows using future actuarial assumptions about demographic
and financial variables that affect the determination of the amount of such benefits.



In
accordance with the Thailand labor law, Charoong Thai and its subsidiaries are obliged to make payment to retiring employees,
at rates of 1 to 10 times of their final month’s salary rate, depending on the length of service.  In addition, Charoong
Thai also has the extra benefit plan to make payment to qualified retiring employees, at rates of 1 to 29 times of final month's
salary. The Company’s net benefit cost was $551, $544 and $549 for the years ended December 31, 2015, 2014 and 2013, respectively.
 The plan is not funded. As of December 31, 2015 and 2014, the amount recognized were $446 and $665 in current liabilities,
$5,859 and $6,073 in non-current liabilities, respectively. The Company pays to settle the
obligations as and when employees retire.



The following tables summaries
the components of net benefit expense recognized in the income statement and the funded status and amounts recognized in the consolidated
balance sheet for the plan:



|                                    |  | For the year ended December 31,
|----------------------------------- |  | -------------------------------
|Net benefit cost                    |  | 2015                           
|                                    |  | US$’000                        
|Current service cost                |  |                                
|Interest cost on benefit obligation |  |                                
|Net benefit cost                    |  |                                



|                                                 |  | For the year ended December 31,
|------------------------------------------------ |  | -------------------------------
|Other comprehensive income                       |  | 2015                           
|                                                 |  | US$’000                        
|Actuarial (gain) / loss – experience             |  |                                
|Actuarial (gain) / loss – demographic assumption |  |                                
|Actuarial (gain) / loss – financial assumption   |  |                                
|Actuarial loss                                   |  |                                



|                                        |  | For the year ended December 31,
|--------------------------------------- |  | -------------------------------
|Change in the defined obligation        |  | 2015                           
|                                        |  | US$’000                        
|Defined benefit obligation at January 1 |  |                                
|Current service cost                    |  |                                
|Interest cost on benefit obligation     |  |                                



F-64


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 21. | EMPLOYEE BENEFIT (continued)
| | --- | ----------------------------



|Net benefit cost for the current period      |  |  | 7,289 |   |  |  | 6,418 |   |  |  | 6,389 |  
|-------------------------------------------- |  |  | ----- | - |  |  | ----- | - |  |  | ----- | -
|Benefits paid directly by the Company        |  |  | (597  | ) |  |  | (408  | ) |  |  | (138  | )
|Actuarial loss in other comprehensive income |  |  | 154   |   |  |  | 712   |   |  |  | 51    |  
|Exchange differences                         |  |  | (541  | ) |  |  | 16    |   |  |  | (428  | )
|Defined benefit obligation at  December 31   |  |  | 6,305 |   |  |  | 6,738 |   |  |  | 5,874 |  



Actuarial assumptions



The significant assumptions
used in determining the actuarial present value of the defined benefit obligations for the year ended December 31, 2015 and 2014
are as follows:



|                        |  | 2015 |           | 2014
|----------------------- |  | ---- | --------- | ----
|                        |  |      | %         |     
|Discount rate           |  |      | 2.9 ~ 3.0 |     
|Rate of salary increase |  |      | 6.0       |     



Maturity profile of defined benefit obligation



The following pension benefit payments are expected payments to be made in the future years out of the defined benefit plan obligation:



|                                                         |  | As of December 31,
|-------------------------------------------------------- |  | ------------------
|                                                         |  | 2015              
|                                                         |  | US$’000           
|Within the next 12 months (next annual reporting period) |  |                   
|Between 2 and 5 years                                    |  |                   
|Between 5 and 10 years                                   |  |                   
|Beyond 10 years                                          |  |                   
|Total expected payments                                  |  |                   
|                                                         |  |                   
|Weight average duration of defined benefit obligation    |  |                   



Sensitivity analysis



A one-percentage point change in the assumed rates
would have yielded the following effects:



|                                      |  | 2015    |      | 2014   
|------------------------------------- |  | ------- | ---- | -------
|                                      |  | US$’000 |      | US$’000
|Discount rate – 1% increase           |  |         | (625 | )      
|Discount rate – 1% decrease           |  |         | 735  |        
|Rate of salary increase – 1% increase |  |         | 705  |        
|Rate of salary increase – 1% decrease |  |         | (614 | )      



The sensitivity result
above determines their individual impact on the plan’s year-end defined benefit obligation. In reality, the plan is subject
to multiple external experience items which may move the defined benefit obligation in similar or opposite directions, while the
plan’s sensitivity to such changes can vary over time.



Long service leave

The liability for long service
leave is recognized in the provision for employee benefits and measured as present value of expected future payments to be made
in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is
given to expected future wage and salary levels, experience of employee departure, and periods of service. Expected future payments
are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that
match as closely as possible, the estimated future cash outflows. As of December 31, 2015 and 2014, the amounts of long service
leave was $558 and $584, respectively.



F-65


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 22. | EQUITY
| | --- | ------



|                              |  | As of December 31,
|----------------------------- |  | ------------------
|Authorized shares             |  | 2015              
|                              |  | Number of shares  
|Common shares of US$0.01 each |  |                   



|Common shares issued and fully paid |  | Number of shares |            | US$’000
|----------------------------------- |  | ---------------- | ---------- | -------
|At December 31, 2015                |  |                  | 13,830,769 |        
|At December 31, 2014                |  |                  | 13,830,769 |        
|At January 1, 2014                  |  |                  | 13,830,769 |        



Outstanding shares



|                            |  | Number of shares
|--------------------------- |  | ----------------
|At January 1, 2013          |  |                 
|Purchase of treasury shares |  |                 
|At December 31, 2013        |  |                 
|Purchase of treasury shares |  |                 
|At December 31, 2014        |  |                 
|Purchase of treasury shares |  |                 
|At December 31, 2015        |  |                 



Additional paid-in-capital



|                                         |  | US$,000
|---------------------------------------- |  | -------
|At January 1, 2013                       |  |        
|Increase in shareholding in a subsidiary |  |        
|At December 31, 2013                     |  |        
|Increase in shareholding in a subsidiary |  |        
|At December 31, 2014                     |  |        
|Increase in shareholding in a subsidiary |  |        
|At December 31, 2015                     |  |        



F-66


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 22. | EQUITY (continued)
| | --- | ------------------



Other comprehensive income – net of tax



The disaggregation of changes of other comprehensive
income by each type of reserve in equity is shown below:



|                                                         |  | For the year ended December 31, 2015
|-------------------------------------------------------- |  | ------------------------------------
|                                                         |  | Available-for-sale
reserve          
|                                                         |  | US$’000                             
|Exchange difference on translation of foreign operations |  |                                     
|Re-measuring losses on defined benefit plans             |  |                                     
|Net loss on available-for-sale financial assets          |  |                                     
|                                                         |  |                                     





|                                                         |  | For the year ended December 31, 2014
|-------------------------------------------------------- |  | ------------------------------------
|                                                         |  | Available-for-sale
reserve          
|                                                         |  | US$’000                             
|Exchange difference on translation of foreign operations |  |                                     
|Re-measuring losses on defined benefit plans             |  |                                     
|Net gain on available-for-sale financial assets          |  |                                     
|                                                         |  |                                     



|                                                         |  | For the year ended December 31, 2013
|-------------------------------------------------------- |  | ------------------------------------
|                                                         |  | Available-for-sale
reserve          
|                                                         |  | US$’000                             
|Exchange difference on translation of foreign operations |  |                                     
|Re-measuring losses on defined benefit plans             |  |                                     
|Net gain on available-for-sale financial assets          |  |                                     
|                                                         |  |                                     



F-67


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 23. | RELATED PARTY TRANSACTIONS
| | --- | --------------------------



The related parties are defined
as affiliates of the Company; entities for which investments are accounted for by the equity method by the Company; the principal
owners of the Company; its management; members of the immediate families of the principal owners of the Company and its management.



Moon View Venture Limited (“Moon
View”), PEWC, Singapore Branch, PEWC Singapore Co. (Pte) Ltd., Dragon Conqueror Ltd. and PEWC (HK) are controlled by PEWC.
Moon View is the immediate holding company of the Company. Italian-Thai Development Public Company Limited (“Italian-Thai”)
is the non-controlling shareholder of one of the Company’s operating subsidiaries in Thailand. SPHC is one of the Company’s
equity investees. Fujikura Limited is a non-controlling shareholder of one of the Company’s operating subsidiaries in Thailand.



| | (a) | Outstanding balance with related parties:
| | --- | -----------------------------------------

|The following table provided the total amount of outstanding balance at December 31, 2015 and 2014.
|---------------------------------------------------------------------------------------------------
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|The ultimate parent company                                                                        
|PEWC                                                                                               
|PEWC, Singapore Branch                                                                             
|PEWC Singapore Co. (Pte) Ltd.                                                                      
|PEWC (HK)                                                                                          
|Dragon Conqueror Limited                                                                           
|                                                                                                   
|The immediate holding company                                                                      
|Moon View                                                                                          
|                                                                                                   
|Associate                                                                                          
|SPHC                                                                                               
|                                                                                                   
|Non-controlling shareholder of subsidiary                                                          
|Italian-Thai and its affiliates                                                                    
|Fujikura Limited                                                                                   
|                                                                                                   
|Others                                                                                             
|Total                                                                                              



As of December 31, 2015
and 2014, the interest rates on the balance due to PEWC Singapore Co., (Pte) Ltd. range from 1.26% to 1.32% and 1.23% to 1.24%,
respectively, and the payables are repayable upon demand. All balances with related parties are unsecured.



F-68


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 23. | RELATED PARTY TRANSACTIONS (continued)
| | --- | --------------------------------------



| | (b) | Transactions with related parties:
| | --- | ----------------------------------



The transactions undertaken with
related parties are summarized as follows:



|                                          |  |                                                                     |  | For the year ended December 31,
|----------------------------------------- |  | ------------------------------------------------------------------- |  | -------------------------------
|                                          |  |                                                                     |  | 2015                           
|                                          |  |                                                                     |  | US$’000                        
|The ultimate parent company               |  |                                                                     |  |                                
|PEWC                                      |  | Purchases of materials                                              |  |                                
|                                          |  | Purchases of products                                               |  |                                
|                                          |  | Sales                                                               |  |                                
|                                          |  | Management fee received                                             |  |                                
|                                          |  | Management fee paid                                                 |  |                                
|                                          |  | Information technology service fee paid                             |  |                                
|PEWC, Singapore Branch                    |  | Management fee received                                             |  |                                
|PEWC Singapore Co. (Pte) Ltd.             |  | Interest expenses paid                                              |  |                                
|PEWC (HK)                                 |  | Purchases of materials                                              |  |                                
|                                          |  | Sales                                                               |  |                                
|                                          |  |                                                                     |  |                                
|Non-controlling shareholder of subsidiary |  |                                                                     |  |                                
|Italian Thai and its affiliates           |  | Sales                                                               |  |                                
|                                          |  | Construction of factory building expenses and acquisition of assets |  |                                
|Fujikura Limited                          |  | Purchases of products                                               |  |                                



Terms and condition of transactions
with related parties



| |  | The sales to and purchases from related parties are based on negotiation by the entities. Outstanding
balances at the year-end are unsecured and interest free. There have been no guarantees provided or received for any related party
receivables or payables. For the years ended December 31, 2015, 2014 and 2013, the Company did not record any impairment of receivables
relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial
position of the related party and the market in which the related party operates.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Copper
is the major raw material of the Company’s wire and cable products.  The Company purchases copper in the form of copper
rods and copper cathode.  Copper cathode is purchased by Siam Pacific to avoid the high import tariffs levied on copper rods. 
Copper cathode needs to be processed into copper rods prior to the manufacturing of wire and cable products.



Substantially
all of the Company’s copper rods are supplied by PEWC while copper cathodes are supplied by unrelated third parties. The
price of copper rods purchased from PEWC is determined by reference to the quoted copper prices on the London Metal Exchange (the
“LME”) plus a certain premium.



F-69


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 23. | RELATED PARTY TRANSACTIONS (continued)
| | --- | --------------------------------------



Terms
and condition of transactions with related parties (continued)

In addition
to copper rods, the Company purchases high voltage power cable from PEWC for distribution purposes. The purchase price of power
cable from PEWC is determined by reference to the quoted copper prices on the LME. No sales commission was received from PEWC during
the years ended December 31, 2015, 2014 and 2013.



Pursuant
to the composite services agreement:



| | (a) | PEWC will sell copper rod to the Company, upon the Company’s request, (i) at a price consisting
of the average spot price of copper on the LME for the one month prior to purchase plus an agreed upon premium, (ii) at prices
and on terms at least as favorable as it provides copper rod to other purchasers of similar amounts of copper rod in the same markets
as PEWC and (iii) will give priority in the supply of copper rod to the Company over other purchasers of copper rod from PEWC.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | PEWC grants to the Company the right to distribute any wire or cable product manufactured by PEWC
in all markets in which the Company presently distributes or develops the capability to distribute in the future, such products
on such terms as have historically been in effect or on terms at least as favorable as PEWC grants to third parties that distribute
such products in such markets. However, PEWC shall not be required to grant to the Company the right to distribute products manufactured
by PEWC in the future in markets where the Company does not currently have the capability to distribute unless and until PEWC has
no pre-existing contractual rights which would conflict with the grant of such right to the Company.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | PEWC will make available to the Company, upon the Company’s request and on terms to be mutually
agreed between PEWC and the Company from time to time, access to certain of PEWC’s technology (and PEWC personnel necessary
to use such technology) with respect to the design and manufacture of wire and cable products, including, without limitation, certain
fiber optic technology.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | PEWC will make available to the Company, upon the Company’s request and on terms to be mutually
agreed between PEWC and the Company from time to time, certain services with respect to the design and manufacture of wire and
cable products, computerization, inventory control, purchasing, internal auditing, quality control, emergency back-up services,
and recruitment and training of personnel; such services may include the training of the Company’s employees and managers
at PEWC facilities and the secondment of PEWC employees and managers to the Company.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Each of PEWC and the Company will offer the other party the right to participate in any negotiations
with a third party concerning the establishment of any facility or similar venture to manufacture or distribute any wire or cable
product outside of the markets where the Company currently manufactures or distributes, or intends to develop the capability to
manufacture or distribute, any wire or cable product. Unless the Company and PEWC mutually agree otherwise, the Company shall have
the right of first refusal to enter into any definitive agreement with such third party. If, however, such third party would not
agree to the substitution of the Company for PEWC or such substitution would prevent the successful completion of the facility
or venture, PEWC will arrange for the Company to participate to the extent possible.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Compensation of key management personnel of the Company
| | --- | -------------------------------------------------------



|                                                    |  | For the years ended December, 31
|--------------------------------------------------- |  | --------------------------------
|                                                    |  | 2015                            
|                                                    |  | US$’000                         
|Short-term employee benefits                        |  |                                 
|Post-employment benefits                            |  |                                 
|Termination benefits                                |  |                                 
|Total compensation paid to key management personnel |  |                                 



| |  | The amounts disclosed in the table are the amounts recognized as an expense during the reporting
period related to key management personnel.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------

F-70


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


| | 24. | COMMITMENTS AND CONTINGENCIES
| | --- | -----------------------------



| | (a) | Operating lease commitments – the Company as lessee
| | --- | ---------------------------------------------------



| |  | The Company leases a piece of land in Singapore and certain buildings under non-cancellable operating
lease arrangements for terms from 5 to 30 years.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Future minimum rental payable under non-cancellable operating leases with initial terms of one
year or more consisted of the following:
| |  | ---------------------------------------------------------------------------------------------------------------------------------------

|                                            |  | As of December 31,
|------------------------------------------- |  | ------------------
|                                            |  | 2015              
|                                            |  | US$’000           
|Within one year                             |  |                   
|After one year but not more than five years |  |                   
|More than five years                        |  |                   
|                                            |  |                   



| | (b) | Finance lease and hire purchase commitments
| | --- | -------------------------------------------



The Company leases certain machinery and equipment
under finance leases.



| |  | Future minimum payments under finance leases with initial terms of one year or more consisted
of the following as of December 31:
| |  | ---------------------------------------------------------------------------------------------------------------------------------



|                                            |  | 2015             |    | 2014                               
|------------------------------------------- |  | ---------------- | -- | -----------------------------------
|                                            |  | Minimum payments |    | Present value of payments (Note 15)
|                                            |  | US$’000          |    | US$’000                            
|Within one year                             |  |                  | 25 |                                    
|After one year but not more than five years |  |                  | 54 |                                    
|More than five years                        |  |                  | -  |                                    
|Total minimum lease payments                |  |                  | 79 |                                    
|Less: amount representing finance charges   |  |                  | (6 | )                                  
|Present value of minimum lease payment      |  |                  | 73 |                                    



As of December 31,
2015 and 2014, the finance lease liabilities are secured by the leased machinery and equipment at cost of $154 and
$149, respectively. The accumulated depreciation of these leased assets as of December 31, 2015 and 2014 amounted to $90
and $106, respectively. The depreciation of machinery and equipment under finance leases are included
in the depreciation expenses under costs of sales. The average discount interest rate implicit in the lease is in the range of
6.72% and 7.84%, for 2015 and 2014, respectively.

F-71


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 24. | COMMITMENTS AND CONTINGENCIES (continued)
| | --- | -----------------------------------------



| | (c) | Purchase commitments
| | --- | --------------------



| |  | As of December 31, 2015 and 2014, the Company and its subsidiaries had commitments
to purchase raw materials totaling $104 million to $171 million and $160 million to 213 million (21,650 to 35,664 metric tons and
24,500 to 32,590 metric tons), respectively, from third parties at the prices stipulated in the contracts.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Capital commitments
| | --- | -------------------



As of December 31, 2015 and 2014, the Company and
its subsidiaries had capital commitment relating to the construction of factory building improvement and acquisition of machinery,
totaling $2.3 million and $4.6 million, respectively.



| | (e) | Guarantees
| | --- | ----------



As of December 31, 2015 and
2014, Charoong Thai and its subsidiaries had given continuing corporate guarantee of $2.9 million and $6.9 million, respectively,
in respect of banking facilities extended to two operating subsidiaries.



As of December 31, 2015 and
2014, the Company provided a corporate guarantee not exceeding the sum of $31.2 million and $31.2 million, respectively, for the
bond performance and banking facility of Sigma Cable.



As of December 31, 2015 and
2014, there were outstanding bank guarantees of $30.5 million and $31.5 million, respectively, issued by the banks on behalf of
Charoong Thai and its subsidiaries in respect of certain performance bonds as required in the normal course of business of the
companies. These guarantees generally expire within 1 year.



| | (f) | Service commitments
| | --- | -------------------



| |  | As of December 31, 2015 and 2014, the Company and its subsidiaries had commitments in respect of
repair and maintenance consulting services with related parties totaling $0.1 million and $0.1 million, respectively.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-72


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 25. | FAIR VALUE MEASUREMENT
| | --- | ----------------------



Quantitative disclosures fair value measurement
hierarchy for assets as of December 31, 2015:



|                                                       |  |                   |  | Fair value measurement using
|------------------------------------------------------ |  | ----------------- |  | ----------------------------
|                                                       |  | Date of valuation |  | Total                       
|                                                       |  |                   |  |                             
|                                                       |  |                   |  | US$’000                     
|Fair value information:                                |  |                   |  |                             
|Available-for-sale financial assets (Note 11.1)        |  |                   |  |                             
|Unquoted equity shares                                 |  |                   |  |                             
|Thai Metal Processing Co., Ltd.                        |  | December 31, 2015 |  |                             
|Other current financial assets-derivatives (Note 11.1) |  |                   |  |                             
|Foreign exchange forward contract                      |  | December 31, 2015 |  |                             
|Assets for which fair values are disclosed:            |  |                   |  |                             
|Investment properties (Note 17)                        |  |                   |  |                             
|Land                                                   |  | December 31, 2015 |  |                             
|Office buildings                                       |  | December 31, 2015 |  |                             



There have been no transfers between Level
1 and Level 2 during the year.



F-73


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 25. | FAIR VALUE MEASUREMENT (continued)
| | --- | ----------------------------------



Quantitative disclosures fair value measurement
hierarchy for assets as of December 31, 2014:



| |  | 
| |  | 

|                                                |  |                   |  | Fair value measurement using
|----------------------------------------------- |  | ----------------- |  | ----------------------------
|                                                |  | Date of valuation |  | Total                       
|                                                |  |                   |  | US$’000                     
|Fair value information:                         |  |                   |  |                             
|Available-for-sale financial assets (Note 11.1) |  |                   |  |                             
|Unquoted equity shares                          |  |                   |  |                             
|Thai Metal Processing Co., Ltd.                 |  | December 31, 2014 |  |                             
|Assets for which fair values are disclosed:     |  |                   |  |                             
|Investment properties (Note 17)                 |  |                   |  |                             
|Land                                            |  | December 31, 2014 |  |                             
|Office buildings                                |  | December 31, 2014 |  |                             



There have been no transfers between Level 1 and Level 2 during
the year.



F-74


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 26. | FINANCIAL RISK MANAGEMENT OBJECTIVES
| | --- | ------------------------------------



Financial risks are those
derived from financial instruments the Company is exposed to during or at the closing of each fiscal year. The objective of the
Company’s financial risk management is to minimize its risk exposure against various financial risks, which include market
risk, credit risk and liquidity risk. The Company uses derivative instruments to cover certain risks when it considers them necessary.
It is the Company’s policy that no trading in derivatives for speculative purposes shall be undertaken.



The Company manages its
exposure to key financial risks, as described in the succeeding paragraphs.



| | (a) | Market risk
| | --- | -----------



Market risk is the risk that
the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices
comprise four types of risk: interest rate risk, equity price risk, foreign currency risk and commodity price risk. Financial instruments
affected by market risk include loans and borrowings, available-for-sale investments and derivative financial instruments.



The sensitivity analysis in
the following sections relates to the position as of December 31, 2015 and 2014.



The analysis excludes the impact
of movements in market variables on the carrying value of other post-retirement obligations provisions and on the non-financial
assets and liabilities of foreign operations.



Interest rate risk



The Company’s exposure
to interest rate risk arises from borrowing at floating interest rates. Changes in interest rate will affect future cash flows
but not the fair value. Less than 40% of the Company’s financial liabilities bear floating interest rate and the rest of
its financial liabilities either bears fixed interest rate which are close to the market rate or are non-interest bearing.



At the reporting dates,
a change of 30 basis points of interest rate in a reporting period could cause the profit for the years ended December 31,
2015 and 2014 to increase/decrease by $89 and $127, respectively.



Equity price risk



The Company’s unlisted
equity security is classified as non-current financial assets-available for sale which is subsequently measured at estimated fair
value.



At the reporting date, the
exposure to unlisted equity security at fair value was $2.9 million (2014: $2.5 million). Sensitivity analysis of the unlisted
equity investment has been provided in Note 11.4.



F-75


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 26. | FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
| | --- | ------------------------------------------------



Foreign currency risk



Foreign currency risk is the risk
that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
The Company’s exposure to the risk of changes in foreign exchange rates arise from sales, purchases and borrowings by operating
units in currencies other than the unit’s functional currency. The Company’s principal operations are located in Thailand,
the PRC, Singapore and Australia and a substantial portion of its revenues are denominated in Thai Baht, RMB, Australian Dollars
or Singapore Dollars, whereas a substantial portion of the Company’s cost of sales are denominated in US Dollars, its reporting
currency. Any devaluation of the functional currencies of the Company’s principal subsidiaries against the US dollar would
likely have an adverse impact on the operations of the Company. The Company currently does not maintain a foreign currency hedging
policy. However, management monitors the foreign exchange exposure and will consider hedging significant foreign currency exposure
should the need arise.



The balance of financial assets
and liabilities denominated in a currency different from the Company’s reporting currency are summarized below.



|                       |  | Financial Assets   |        | Financial Liabilities
|---------------------- |  | ------------------ | ------ | ---------------------
|                       |  | As of December 31, |        | As of December 31    
|                       |  | 2015               |        | 2014                 
|                       |  |                    |        |                      
|Thai Baht (THB)        |  |                    | 9,757  |                      
|Singapore dollar (SGD) |  |                    | 491    |                      
|Taiwan dollar (TWD)    |  |                    | 5,985  |                      
|Renminbi (RMB)         |  |                    | 79,262 |                      
|Hong Kong dollar (HKD) |  |                    | 4,923  |                      
|Japanese yen (JPY)     |  |                    | -      |                      



Foreign currency sensitivity



The following table demonstrates
the sensitivity of the Company’s profit before tax and equity to a reasonably possible change of each foreign currency exchange
rates against the US dollar, with all other variables held constant.



|     |  | Change rate |    | THB |  | SGD |     | TWD |  | RMB |     | HKD |  | JPY
|---- |  | ----------- | -- | --- |  | --- | --- | --- |  | --- | --- | --- |  | ---
|2014 |  |             | 5  | %   |  |     | 16  |     |  |     | 1   |     |  |    
|     |  |             | -5 | %   |  |     | (16 | )   |  |     | (1  | )   |  |    
|     |  |             |    |     |  |     |     |     |  |     |     |     |  |    
|2015 |  |             | 5  | %   |  |     | 13  |     |  |     | 17  |     |  |    
|     |  |             | -5 | %   |  |     | (13 | )   |  |     | (17 | )   |  |    



F-76


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 26. | FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
| | --- | ------------------------------------------------



Commodity price risk



The Company is affected by
the volatility of certain commodities. Copper is the principal raw material used by the Company. The Company purchases copper at
price closely related to the prevailing international spot market on the London Metal Exchange for copper. The price of copper
is influenced heavily by global supply and demand as well as speculative trading. Consequently, a change in the price of copper
will have a direct effect on the Company’s cost of sales. The Company does not use derivative instruments to hedge the price
risk associated with the purchase of this commodity. However, we cover some of these risks through long-term purchase contracts.



Commodity price sensitivity



The following table shows the
potential effect of price changes in copper.



|       |  | Change in year-end price |     | Effect on profit before tax |  | Effect on equity
|------ |  | ------------------------ | --- | --------------------------- |  | ----------------
|       |  | US$’000                  |     | US$’000                     |  | US$’000         
|       |  |                          |     |                             |  |                 
|2015   |  |                          | +28 | %                           |  |                 
|Copper |  |                          | -28 | %                           |  |                 
|       |  |                          |     |                             |  |                 
|2014   |  |                          | +13 | %                           |  |                 
|Copper |  |                          | -13 | %                           |  |                 



On average, copper composes
around 82% and 84% of the product cost in 2015 and 2014, respectively. The above sensitivity analysis is based on the average fluctuation
rate in the past five years and one month manufacturing lead time to estimate its impact on profit before tax.



| | (b) | Credit risk
| | --- | -----------



Credit risk arises from
the financial assets of the Company, which comprise cash and cash equivalents, held-to-maturity securities and trade and other
receivables.



The Company maintains cash
and cash equivalents with various financial institutions. These financial institutions are located in Singapore, Thailand, Australia,
Hong Kong and the People’s Republic of China. The Company’s policy is designed to limit its exposure to any one institution.
The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in
the Company’s investment strategy. In addition, in selected countries, the Company uses credit rating agency such as Dun
and Bradstreet to screen out new low performing customers. Customers are given credit terms over time when they establish good
payment patterns with the Company.



Concentrations of credit
risk with respect to accounts receivable are limited due to the large number of entities comprising the Company’s customer
base. The Company carefully assesses the financial strength of its customers and generally does not require any collateral. The
Company’s exposure to credit risk arises from default of counterparty, with maximum exposure equal to the carrying amount
of these financial instruments.



The Company is exposed to
credit loss in the event of non-performance by counter-parties on foreign exchange contracts and trade and other receivables. For
the year end December 31, 2015 and 2014, the Company recorded a provision of allowance for doubtful accounts of $1.9 million and
$2.2 million, respectively, for a customer of a subsidiary who was not able to settle overdue payments.



As of December 31, 2015
and 2014, trade receivables from one customer represented 9.6% and 7.1% of total trade receivables of the Company, respectively.
The credit concentration risk of other trade receivables is insignificant.







F-77


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 26. | FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
| | --- | ------------------------------------------------



| | (c) | Liquidity risk
| | --- | --------------



Liquidity risk arises from the
financial liabilities of the Company and its subsidiaries and their subsequent ability to meet obligations to repay their financial
liabilities as and when they fall due. Management manages the Company’s liquidity risk by closely monitoring cash flow from
the operations. The Company has about $51 million in cash and cash equivalents, $149 million in unutilized amounts of bank loans,
and the total financial liabilities is $80 million at the reporting date, which for financial assets and liabilities results in
a net asset position. Liquidity risk is considered to be minimal.



The table below summarizes the maturity profile of
the Company’s financial liabilities based on contractual undiscounted payment obligations.



|                                      |  | < 1 year |         | 2 to 3 years |  | 4 to 5 years |    | > 5 years |  | Total  
|------------------------------------- |  | -------- | ------- | ------------ |  | ------------ | -- | --------- |  | -------
|                                      |  |          |         |              |  |              |    |           |  |        
|                                      |  | US$’000  |         | US$’000      |  | US$’000      |    | US$’000   |  | US$’000
|As of December 31, 2015               |  |          |         |              |  |              |    |           |  |        
|Financial liabilities                 |  |          |         |              |  |              |    |           |  |        
|Interest-bearing loans and borrowings |  |          | 38,092  |              |  |              | -  |           |  |        
|Trade and other payables              |  |          | 31,690  |              |  |              | -  |           |  |        
|Due to related parties                |  |          | 8,547   |              |  |              | -  |           |  |        
|Due to immediate holding company      |  |          | -       |              |  |              | -  |           |  |        
|Finance lease liability               |  |          | 25      |              |  |              | 43 |           |  |        
|                                      |  |          | 78,354  |              |  |              | 43 |           |  |        
|                                      |  |          |         |              |  |              |    |           |  |        
|As of December 31, 2014               |  |          |         |              |  |              |    |           |  |        
|Financial liabilities                 |  |          |         |              |  |              |    |           |  |        
|Interest-bearing loans and borrowings |  |          | 54,712  |              |  |              | -  |           |  |        
|Trade and other payables              |  |          | 36,467  |              |  |              | -  |           |  |        
|Due to related parties                |  |          | 22,208  |              |  |              | -  |           |  |        
|Due to immediate holding company      |  |          | -       |              |  |              | -  |           |  |        
|Finance lease liability               |  |          | 34      |              |  |              | 25 |           |  |        
|                                      |  |          | 113,421 |              |  |              | 25 |           |  |        



F-78


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 26. | FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
| | --- | ------------------------------------------------



| | (d) | Capital management
| | --- | ------------------



The primary objectives of the
Company’s capital management are to safeguard the Company’s ability to continue as a going concern and maintain healthy
capital ratios in order to support its business, maximize shareholders’ value and to maintain an optimal capital structure
to reduce the cost of capital.



The Company manages its capital
structure and makes adjustments to it, in light of changes in economic conditions and the risks characteristics of the underlying
assets. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital
to shareholders, issue new shares or conduct stock repurchase programs. The Company is not subject to any externally imposed capital
requirements. No changes were made in the objectives, policies or processes for managing capital during the years ended December
31, 2015 and 2014.



In line with industry practices,
the Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes
within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.



|                                      |  | As of December 31,
|------------------------------------- |  | ------------------
|                                      |  | 2015              
|                                      |  | US$’000           
|Interest bearing loans and borrowings |  |                   
|Trade and other payables              |  |                   
|Less: cash and cash equivalents       |  |                   
|Net debt                              |  |                   
|Total Equity                          |  |                   
|Capital and net debt                  |  |                   
|Gearing ratio                         |  |                   



The Company has no direct business
operations other than its ownership of the capital stock of its subsidiaries and joint venture holdings. While the Company has
no present intention to pay dividends, should the Company decide in the future to do so, as a holding company its ability to pay
dividends and meet its other obligations will depend upon the amount of distributions, if any, received from its operating subsidiaries
and other holdings and investments. The Company’s operating subsidiaries and other holdings and investments, from time to
time, may be subject to restrictions on their ability to make distributions to the Company, including as a result of restrictive
covenants contained in loan agreements, restrictions on the conversion of local currency earnings into U.S. dollars or other hard
currency and other regulatory restrictions. For example, PRC legal restrictions permit payments of dividends by our business entities
in the PRC only out of their retained earnings, if any, determined in accordance with relevant PRC accounting standards and regulations.
Under PRC law, such entities are also required to set aside a portion of their net income each year to fund certain reserve funds.
These reserves are not distributable as cash dividends. The foregoing restrictions may also affect the Company’s ability
to fund operations of one subsidiary with dividends and other payments received from another subsidiary.



| | (e) | Collateral
| | --- | ----------



The credit lines of the
Company were collateralized by:

|(i) |  | Mortgage of the Company’s land, buildings, machinery and equipment with a total
carrying amount of $12,924 at December 31, 2015 (2014: $12,988);
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | Pledge of other receivables of $9,519 at December 31, 2015 (2014: $9,595) ;
|---- |  | ---------------------------------------------------------------------------

|(iii) |  | Corporate guarantee issued by the Company and a subsidiary of the Company.
|----- |  | --------------------------------------------------------------------------

|(iv) |  | A trading facility was secured by all the assets and uncalled capital with total carrying
amount of $27,964 of a subsidiary as of December 31, 2015 (2014: $ 31,466).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

The weighted average interest
rates on bank loans and overdrafts as of December 31, 2015 and 2014 were 3.29% and 3.57% per annum, respectively.



F-79


ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




| | 26. | FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
| | --- | ------------------------------------------------



| | (f) | Derivative – offsetting loans
| | --- | -----------------------------



| |  | In 2014, the Company entered into Import Bill Advance Loan denominated in SGD at floating rate
and time deposit denominated in USD at fixed rate with one bank for the amount of $2.9 million. At same time, the Company entered
into a currency forward transaction to sell SGD to reduce the currency risk.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



These transactions were net
settled upon the maturity of the loan agreement. The contractual effect of the loans is the equivalent of a cross-currency interest
rate swap arrangement with no initial net investment.



The patterns of these transactions
met all the indicators under IAS 39IG B.6 based on the fact that the loan and time deposit were entered into at the same time,
had same counterparty, had underlying variable of foreign exchange rate and interest rate, and no initial net investment. The transactions
should be accounted for at fair value through profit or loss; therefore, the Company recognized $5 as exchange gain for the year
ended December 31, 2014.



| | 27. | SUBSEQUENT EVENT
| | --- | ----------------



On March 15, 2016, the Board of Directors of Charoong
Thai approved the dividend payments to its shareholders in Baht  $6 million. The dividend payment was approved
by the Annual General Meeting of Shareholders on April 29, 2016. Other than the above event, the Company is not aware
of any matter or circumstance not otherwise dealt with in the report that has significantly affected or may significantly affect
the operations of the Company, the results of those operations, or the state of affairs of the Company.



| | 28. | APPROVAL OF THE FINANCIAL STATEMENTS
| | --- | ------------------------------------



The financial statements were approved and authorized
for issuance by the board of directors on April 30, 2016.



| | 29. | COMPARATIVE INFORMATION
| | --- | -----------------------



Certain items in prior years’ consolidated
financial statements have been reclassified to conform to the current period’s presentation in order to facilitate comparison.





F-80

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