##### Table of Contents



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
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from            to
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 Commission file number 1-14542
 ASIA PACIFIC WIRE & CABLE
CORPORATION LIMITED
  Bermuda   7/Fl. B, No. 132, Sec. 3
Min-Sheng East Road
Taipei, 105, Taiwan
Republic of China
  13,830,769 Common Shares
 o þ
 o þ
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
 þ o o
 o o
 o þ




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##### 



TABLE
OF CONTENTS
 PagePart
IItem
1: Identity of Directors, Senior Management and Advisers
    
    

    4Item
2: Offer Statistics and Expected Timetable
    
    

    4Item
3: Key Information
    
    

    4Item
4: Information on the Company
    
    
    22Item
5: Operating and Financial Review and Prospects
    
    
    44Item
6: Directors, Senior Management and Employees
    
    
    66Item
7: Major Shareholders and Related Party Transactions
    
    
    71Item
8: Financial Information
    
    
    73Item
9: The Offer and Listing
    
    
    75Item
10: Additional Information
    
    
    76Item
11: Quantitative and Qualitative Disclosures About Market Risk
    
    
    93Item
12: Description of Securities Other Than Equity Securities
    
    
    95Part
IIItem
13: Defaults, Dividend Arrearages and Delinquencies
    
    
    96Item
14: Material Modifications to the Rights of Security Holders and Use
of Proceeds
    
    
    96Item
15: Controls and Procedures
    
    
    96Item
16A. Audit Committee Financial Expert
    
    
    97Item
16B. Code of Ethics
    
    
    97Item
16C. Principal Accountant Fees and Services
    
    
    97Item
16D. Exemptions from the Listing Standards for the Audit
Committees
    
    
    98Item
16E. Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
    
    
    98Item
16F. Change in Registrants Certifying Accountant
    
    
    98Item
16G. Corporate Governance
    
    
    98Part
IIIItem
17: Financial Statements
    
    
    99Item
18: Financial Statements
    
    
    99Item
19: Exhibits
    
    
    99SIGNATURE
    
    
    101EX-12.1EX-12.2EX-13.1EX-13.2
  1




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##### Table of Contents



FORWARD-LOOKING STATEMENTS
    
    
    our business strategy;
    
    our prospects for future revenues and profits in the markets in which we operate;
    
    the possibility that our Common Shares will again be listed on a national exchange;
    
    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.
  OTHER CONVENTIONS
  2




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3




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##### Table of Contents



Part I
 
 Item 1: Identity of Directors, Senior Management and Advisers
  
 Item 2: Offer Statistics and Expected Timetable
  
 Item 3: Key Information
 3.1 Selected Consolidated Financial Data
   For the Year Ended December 31,2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008(in thousands, except per share amounts)Income Statement Data:Net sales
    
    $
    294,256
    
    
    $
    337,262
    
    
    $
    468,117
    
    
    $
    510,841
    
    
    $
    500,798Cost of sales
    
    
    (255,384
    )
    
    
    (300,656
    )
    
    
    (410,823
    )
    
    
    (465,165
    )
    
    
    (488,048
    )Gross profit
    
    
    38,872
    
    
    
    36,606
    
    
    
    57,294
    
    
    
    45,676
    
    
    
    12,750Operating expenses
    
    
    (28,867
    )
    
    
    (26,553
    )
    
    
    (27,612
    )
    
    
    (29,451
    )
    
    
    (29,044
    )Impairment loss
    
    
    (134
    )
    
    
    (3,223
    )
    
    
    (86
    )
    
    
    (95
    )
    
    
    Operating profit/(loss)
    
    
    9,871
    
    
    
    6,830
    
    
    
    29,596
    
    
    
    16,130
    
    
    
    (16,294
    )Exchange gain/(loss)
    
    
    233
    
    
    
    (3,137
    )
    
    
    5,464
    
    
    
    864
    
    
    
    (1,712
    )Net interest (expense)
    
    
    (2,025
    )
    
    
    (2,747
    )
    
    
    (5,181
    )
    
    
    (6,063
    )
    
    
    (4,779
    )Share of net income/(loss) of equity investees
    
    
    (4,224
    )
    
    
    170
    
    
    
    73
    
    
    
    124
    
    
    
    (142
    )Gain on liquidation of subsidiary
    
    
    
    
    
    
    
    
    
    
    1,801
    
    
    
    
    
    
    
    (Loss)/gain on sale of investment
    
    
    (1,161
    )
    
    
    (259
    )
    
    
    (729
    )
    
    
    35
    
    
    
    Others
    
    
    925
    
    
    
    829
    
    
    
    1,536
    
    
    
    2,070
    
    
    
    2,859Income/(loss) before income taxes and
minority interests
    
    
    3,619
    
    
    
    1,686
    
    
    
    32,560
    
    
    
    13,160
    
    
    
    (20,068
    )Income taxes
    
    
    (4,716
    )
    
    
    (3,860
    )
    
    
    (10,257
    )
    
    
    (6,298
    )
    
    
    (2,132
    )Minority interests
    
    
    (1,427
    )
    
    
    (2,783
    )
    
    
    (9,330
    )
    
    
    (2,029
    )
    
    
    8,551Net income/(loss)
    
    $
    (2,524
    )
    
    $
    (4,957
    )
    
    $
    12,973
    
    
    $
    4,833
    
    
    $
    (13,649
    )Earnings/(loss) per share(1)
    
    $
    (0.18
    )
    
    $
    (0.36
    )
    
    $
    0.94
    
    
    $
    0.35
    
    
    $
    (0.99
    )
 
 (1)
    
    The calculation of the earnings/(loss) per share is based on 13,830,769 Common
Shares for the years ended December 31, 2004, 2005, 2006, 2007 and 2008. 4




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As of December 31,2004
    
    2005
    
    2006
    
    2007
    
    2008(in thousands)Balance Sheet Data:Cash and cash equivalents
    
    $
    24,419
    
    
    $
    20,748
    
    
    $
    24,664
    
    
    $
    29,127
    
    
    $
    37,510Working capital
    
    
    80,152
    
    
    
    80,350
    
    
    
    108,084
    
    
    
    132,409
    
    
    
    100,428Total assets
    
    
    270,433
    
    
    
    262,938
    
    
    
    364,565
    
    
    
    396,116
    
    
    
    309,798Total debt
    
    
    57,389
    
    
    
    58,438
    
    
    
    100,195
    
    
    
    104,146
    
    
    
    59,694Total shareholders equity
    
    
    107,146
    
    
    
    97,622
    
    
    
    118,765
    
    
    
    136,783
    
    
    
    114,129
 3.2 Exchange Rates
   Thailand
  Year Ended December 31,
    
    At Period End
    
    Average(1)
    
    High
    
    Low(Bt per $1.00)2004
    
    
    38.80
    
    
    
    40.263
    
    
    
    41.70
    
    
    
    38.802005
    
    
    40.99
    
    
    
    40.339
    
    
    
    42.08
    
    
    
    38.212006
    
    
    36.10
    
    
    
    37.680
    
    
    
    40.76
    
    
    
    35.192007
    
    
    29.50
    
    
    
    32.020
    
    
    
    35.96
    
    
    
    29.282008
    
    
    34.72
    
    
    
    33.130
    
    
    
    35.72
    
    
    
    29.36
 
 (1)
    
    Average means the average of the Noon Buying Rates on the last day of each month
during a year. 5




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Month
    
    High
    
    LowDecember 2008
    
    
    35.72
    
    
    
    34.40January 2009
    
    
    34.98
    
    
    
    34.78February 2009
    
    
    36.11
    
    
    
    34.90March 2009
    
    
    36.25
    
    
    
    35.26April 2009
    
    
    35.66
    
    
    
    35.23May 2009
    
    
    35.25
    
    
    
    34.31
 
  Singapore
  AtPeriodYear Ended December 31,
    
    End
    
    Average(1)
    
    High
    
    Low(S$ per $1.00)2004
    
    
    1.632
    
    
    
    1.690
    
    
    
    1.729
    
    
    
    1.6312005
    
    
    1.663
    
    
    
    1.665
    
    
    
    1.706
    
    
    
    1.6182006
    
    
    1.534
    
    
    
    1.580
    
    
    
    1.652
    
    
    
    1.5342007
    
    
    1.436
    
    
    
    1.501
    
    
    
    1.543
    
    
    
    1.4362008
    
    
    1.438
    
    
    
    1.414
    
    
    
    1.529
    
    
    
    1.347
 
 (1)
    
    Average means the average of the Noon Buying Rates on the last day of each month
during a year.  Month
    
    High
    
    LowDecember 2008
    
    
    1.531
    
    
    
    1.472January 2009
    
    
    1.511
    
    
    
    1.433February 2009
    
    
    1.546
    
    
    
    1.451March 2009
    
    
    1.557
    
    
    
    1.506April 2009
    
    
    1.522
    
    
    
    1.477May 2009
    
    
    1.481
    
    
    
    1.441
 6




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China
  At PeriodYear Ended December 31,
    
    End
    
    Average(1)
    
    High
    
    Low(Rmb per $1.00)2004
    
    
    8.277
    
    
    
    8.277
    
    
    
    8.277
    
    
    
    8.2762005
    
    
    8.070
    
    
    
    8.183
    
    
    
    8.277
    
    
    
    8.0702006
    
    
    7.804
    
    
    
    7.958
    
    
    
    8.070
    
    
    
    7.8042007
    
    
    7.295
    
    
    
    7.581
    
    
    
    7.813
    
    
    
    7.2952008
    
    
    6.823
    
    
    
    6.919
    
    
    
    7.295
    
    
    
    6.780
 
 (1)
    
    Average means the average of the Noon Buying Rates on the last day of each month
during a year.  Month
    
    High
    
    LowDecember 2008
    
    
    6.884
    
    
    
    6.823January 2009
    
    
    6.840
    
    
    
    6.823February 2009
    
    
    6.847
    
    
    
    6.824March 2009
    
    
    6.844
    
    
    
    6.824April 2009
    
    
    6.836
    
    
    
    6.818May 2009
    
    
    6.833
    
    
    
    6.818
 
  Australia
  At PeriodYear Ended December 31,
    
    End
    
    Average(1)
    
    High
    
    Low(A$ per $1.00)2004
    
    
    1.281
    
    
    
    1.361
    
    
    
    1.462
    
    
    
    1.2532005
    
    
    1.362
    
    
    
    1.312
    
    
    
    1.377
    
    
    
    1.2542006
    
    
    1.268
    
    
    
    1.319
    
    
    
    1.417
    
    
    
    1.264
 7




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At PeriodYear Ended December 31,
    
    End
    
    Average(1)
    
    High
    
    Low(A$ per $1.00)2007
    
    
    1.139
    
    
    
    1.184
    
    
    
    1.295
    
    
    
    1.0672008
    
    
    1.141
    
    
    
    1.177
    
    
    
    1.647
    
    
    
    1.021
 
 (1)
    
    Average means the average of the Noon Buying Rates on the last day of each month
during a year.  Month
    
    High
    
    LowDecember 2008
    
    
    1.577
    
    
    
    1.428January 2009
    
    
    1.567
    
    
    
    1.432February 2009
    
    
    1.582
    
    
    
    1.387March 2009
    
    
    1.587
    
    
    
    1.424April 2009
    
    
    1.441
    
    
    
    1.367May 2009
    
    
    1.372
    
    
    
    1.251
 
  3.3 Capitalization and Indebtedness
  Short-term debt*Bank loan
    
    $
    15,209Trust receipts
    
    
    42,75357,962Short-term loan from related parties (unsecured)
    
    
    1,732Total short-term debt
    
    
    59,694Shareholders equityCommon stock, $0.01 par value: 
Authorized shares  20,000,000
shares (50,000,000 shares as of September 8, 2008); issued and
outstanding shares  13,830,769
    
    
    138Additional paid-in capital
    
    
    111,541Retained earnings
    
    
    15,819Accumulated other comprehensive loss
    
    
    (13,369
    )Total shareholders equity
    
    
    114,129Total capitalization
    
    
    173,823
 8




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##### Table of Contents



*
    
    Certain short-term debt is collateralized by the Companys land, buildings, machinery and
equipment and a pledge of short-term deposits. Corporate guarantees have also been issued by the
Company and certain of its subsidiaries. 3.4 Risk Factors
 3.4.1 Risks Related to the Global Economic and Financial Crisis
    Governmental Intervention
    9




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Actual and Possible Impacts on the Company
    10




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3.4.2 Risks Related to the Common Shares and Corporate Governance
 Consolidation of Charoong Thai Group Accounts
  11




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Potential Illiquidity of Common Shares
  Control of the Company Rests with Majority Shareholder; Controlled Company Exception for Any
Exchange Listing; Risks Related to PEWC
     12




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Limited Trading Volume on the OTC BB
  Disclosure Controls and Procedures and Internal Control Over Financial Reporting Previously Classified as Ineffective
   Delinquency in Reporting Obligations; Reporting of Financial Results
   Potential Conflict of Certain Officers and Directors
  13




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Obligations under the Amended and Restated Shareholders Agreement
    14




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Risks Relating to the Settlement Agreement
  15




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Holding Company Structure; Potential Restrictions on the Payment of Dividends
  Requirement to Maintain Effectiveness of the Registration Statement and to List on a National
Securities Exchange; Effect of the Put of the SOF Shares to PEWC
   Corporate Matters; Limited Recourse; Limited Enforceability
  16




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##### Table of Contents



3.4.3 Risks Relating to Our Business
 Risks Relating to Copper
  Risks Relating to China
  Economic Reform Measures in the PRC May Adversely Affect the Companys Operations or
Financial Condition
  PRC Civil Law System May Limit the Companys Remedies
  17




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##### Table of Contents



PRC Control over the Convertibility of Currency May Restrict the Payment of Dividends
  PRC Regulation of Telecommunications Industry May Adversely Affect the Companys
Operations or Financial Condition
  Political or Social Instability in the PRC May Adversely Affect the Companys Operations
or Financial Condition
  18




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##### Table of Contents



Inflation in the PRC May Adversely Affect the Companys Operations or Financial Condition
  PRC Power Shortages and Lack of Insurance May Adversely Affect the Companys Operations or
Financial Condition
   PRC Tax Treatments May Adversely Affect the Companys Operations or Financial Condition
  19




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##### Table of Contents



New Labor Law Legislation in the PRC May Adversely Affect the Companys Operations or
Financial Condition
  Exposure to Foreign Exchange Risks
   20




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Competition
  Composite Services Agreement with PEWC
  Risks Relating to Thailand
  Alternative Transmission Technologies
  21




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##### Table of Contents



International Business Risks
  3.5 Forward-looking Statements
  
 Item 4: Information on the Company
 4.1 History and Development of the Business
   22




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4.2 Certain Information Regarding Historical Ownership and Control of the Company
  23




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24




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25




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4.3 Certain Recent Events
    26




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##### Table of Contents



4.4 Business Overview
  Thailand
    27




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Singapore
   Australia
  China
     28




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##### Table of Contents



Malaysia
  4.4.1 Products and Services
  Telecommunications Cable
  29




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##### Table of Contents



Power Cable
   Enameled Wire
  Electronic Cables
  Sales of Distributed Products
  30




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##### Table of Contents



SDI Project Engineering Services
  4.4.2 Manufacturing
   Telecommunications Cable
  Power Cable
   31




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Enameled Wire
  4.4.3 Raw Materials
      32




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##### Table of Contents



4.4.4 Quality Control
    4.4.5 Sales and Marketing
  33




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Year ended December 31,(dollar figures ($) are in thousands of US$)2006
    
    2007
    
    2008$
    
    %
    
    $
    
    %
    
    $
    
    %Manufactured Products:Thailand
    
    
    142,500
    
    
    
    30.4
    
    
    
    170,585
    
    
    
    33.4
    
    
    
    149,544
    
    
    
    29.9Singapore
    
    
    29,440
    
    
    
    6.3
    
    
    
    31,762
    
    
    
    6.3
    
    
    
    35,318
    
    
    
    7.0Australia
    
    
    49,134
    
    
    
    10.5
    
    
    
    55,789
    
    
    
    10.9
    
    
    
    61,167
    
    
    
    12.2China
    
    
    148,502
    
    
    
    31.7
    
    
    
    157,917
    
    
    
    30.9
    
    
    
    134,999
    
    
    
    27.0Export
    
    
    69,704
    
    
    
    14.9
    
    
    
    78,752
    
    
    
    15.4
    
    
    
    66,820
    
    
    
    13.3Total
    
    
    439,280
    
    
    
    93.8
    
    
    
    494,805
    
    
    
    96.9
    
    
    
    447,848
    
    
    
    89.4Distributed Products(1)
    
    
    12,416
    
    
    
    2.7
    
    
    
    10,783
    
    
    
    2.1
    
    
    
    32,415
    
    
    
    6.5SDI Project Engineering(2)
    
    
    16,421
    
    
    
    3.5
    
    
    
    5,253
    
    
    
    1.0
    
    
    
    20,535
    
    
    
    4.1Total net sales
    
    
    468,117
    
    
    
    100.0
    
    
    
    510,841
    
    
    
    100.0
    
    
    
    500,798
    
    
    
    100.0
 
 (1)
    
    Distributed Products are largely sold in Singapore.(2)
    
    All SDI Project Engineering is supplied in Singapore.     34




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Thailand
  Singapore
   Year ended December 31,(dollar figures ($) are in thousands of US$)2006
    
    2007
    
    2008Manufactured Product:Power Cable
    
    
    12,416
    
    
    
    7,109
    
    
    
    6,435Electronic Wire
    
    
    1,925
    
    
    
    3,493
    
    
    
    194Total
    
    
    14,341
    
    
    
    10,602
    
    
    
    6,629
  China
  35




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Exports
  4.4.6 Competition
  Thailand
  Singapore
   36




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##### Table of Contents



Australia
  China
    Other Markets
  4.4.7 Regional Considerations
  Thailand
   37




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##### Table of Contents



Telecommunications
   Power
  Singapore
   38




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##### Table of Contents



China
   4.5 Inflation
  4.6 Organizational Structure
  39




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Thailand
    40




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##### Table of Contents



Singapore
    Australia
  41




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##### Table of Contents



China
         42




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##### Table of Contents



4.7 Property, Plant and Equipment
            43




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##### Table of Contents



Item 5: Operating and Financial Review and Prospects
  5.1 Disclosures of Critical Accounting Policies
   Inventories
   Carrying Values
  44




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Goodwill
      Investments
   45




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Revenue Recognition
    
    
    is the primary obligor in the arrangement with the customer;
    
    takes title to the products;
    
    has the risks and rewards of ownership; and
    
    does not act as an agent or broker and is compensated based on the price it establishes for
the products it sells.
     46




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Deferred Income Taxes
  Bad Debt
  Impairment of Long-Lived Assets
  Fair Value Measurements
   
    
    Level 1  Valuations based on quoted prices in active markets for identical assets that
the Company has the ability to access. Valuation adjustments and block discounts are not
applied to Level 1 instruments. Since valuations are based on quoted prices that are
readily and regularly available in an active market, valuation of these products does not
entail a significant degree of judgment.
    
    Level 2  Valuations based on one or more quoted prices in markets that are not active
or for which all significant inputs are observable, either directly or indirectly.
 47




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
    
    Level 3  Valuations based on unobservable inputs which are supported by little or no
market activity and significant to the overall fair value measurement.
   Recent Pronouncements
      48




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49




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50




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51




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5.2
Selected Gross Margin Data
   2006
    
    
    2007
    
    
    2008Net Sales:Manufactured products:Telecommunications wire and cable
    
    $
    49,069
    
    
    $
    46,444
    
    
    $
    46,955Power cable
    
    
    147,726
    
    
    
    188,818
    
    
    
    179,794Enameled wire
    
    
    237,097
    
    
    
    258,470
    
    
    
    221,099Electronic cable
    
    
    5,388
    
    
    
    1,073
    
    
    
    Total manufactured products
    
    
    439,280
    
    
    
    494,805
    
    
    
    447,848SDI project engineering
    
    
    16,421
    
    
    
    5,253
    
    
    
    20,535Distributed Products
    
    
    12,416
    
    
    
    10,783
    
    
    
    32,415Total net sales
    
    
    468,117
    
    
    
    510,841
    
    
    
    500,798Gross profit:Manufactured products:Telecommunications wire and cable
    
    
    11,294
    
    
    
    7,712
    
    
    
    5,120Power cable
    
    
    24,890
    
    
    
    33,916
    
    
    
    29,369Enameled wire
    
    
    21,901
    
    
    
    2,995
    
    
    
    2,778Electronic cable
    
    
    403
    
    
    
    48
    
    
    
    Total manufactured products
    
    
    58,488
    
    
    
    44,671
    
    
    
    37,267SDI project engineering
    
    
    (284
    )
    
    
    (347
    )
    
    
    (956
    )Distributed Products
    
    
    1,107
    
    
    
    80
    
    
    
    1,584Recovery (allowance) for inventory reserve
    
    
    (2,017
    )
    
    
    1,272
    
    
    
    (25,145
    )Total gross profit
    
    
    57,294
    
    
    
    45,676
    
    
    
    12,750Gross profit margin:Manufactured products:Telecommunications wire and cable
    
    
    23.0
    %
    
    
    16.6
    %
    
    
    10.9
    %Power cable
    
    
    16.8
    %
    
    
    18.0
    %
    
    
    16.2
    %Enameled wire
    
    
    9.2
    %
    
    
    1.2
    %
    
    
    1.3
    %Electronic cable
    
    
    7.5
    %
    
    
    4.5
    %
    
    
    0.0
    %Total manufactured products
    
    
    13.3
    %
    
    
    9.0
    %
    
    
    8.3
    %SDI Project engineering
    
    
    (1.7
    )%
    
    
    (6.6
    )%
    
    
    (4.7
    )%Distributed Products
    
    
    8.9
    %
    
    
    0.7
    %
    
    
    4.9
    %Total gross margin
    
    
    12.2
    %
    
    
    8.9
    %
    
    
    2.5
    %
  52




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5.3 Operating Results
  5.3.1 Year Ended December 31, 2008 Compared with Year Ended December 31, 2007
 General
     2008
    
    2007Average LME copper price ($/Ton)
    
    
    1Q
    
    
    
    7,796
    
    
    
    5,9332Q
    
    
    
    8,443
    
    
    
    7,6423Q
    
    
    
    7,680
    
    
    
    7,7124Q
    
    
    
    3,905
    
    
    
    7,188Year
    
    
    6,956
    
    
    
    7,119
  53




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Net Sales
   Manufactured
    
    All productsproducts only
    
    and servicesThailand
    
    
    48.3
    %
    
    $
    216,364
    
    
    
    43.2
    %
    
    $
    216,364Singapore
    
    
    7.9
    %
    
    
    35,318
    
    
    
    17.3
    %
    
    
    86,625Australia
    
    
    13.7
    %
    
    
    61,167
    
    
    
    12.5
    %
    
    
    62,810China
    
    
    30.1
    %
    
    
    134,999
    
    
    
    27.0
    %
    
    
    134,999Total
    
    
    100.0
    %
    
    $
    447,848
    
    
    
    100.0
    %
    
    $
    500,798
 Gross Profit
   2007
    
    2008Telecommunication cable
    
    
    17.3
    %
    
    
    13.7
    %Power cable
    
    
    75.9
    %
    
    
    78.8
    %Enameled wire
    
    
    6.7
    %
    
    
    7.5
    %Electronic cable
    
    
    0.1
    %
    
    
    0.0
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
  54




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Operating Profit
    Exchange Gain/Loss
   December 31,
    
    December 31,2008
    
    2007Foreign currency to US$1:Thai Baht
    
    
    34.72
    
    
    
    29.50Singapore $
    
    
    1.44
    
    
    
    1.44Australian $
    
    
    1.41
    
    
    
    1.14Chinese Rmb
    
    
    6.82
    
    
    
    7.30
  Gain/Loss from Investees
  55




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Impairment of Investments
  Gain on Sale of Investment
  Other Income
  Income Taxes
      56




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5.3.2 Year Ended December 31, 2007 Compared with Year Ended December 31, 2006
 General
     2007
    
    2006Average LME copper price ($/Ton)
    
    
    1Q
    
    
    
    5,933
    
    
    
    4,9402Q
    
    
    
    7,642
    
    
    
    7,2103Q
    
    
    
    7,712
    
    
    
    7,6704Q
    
    
    
    7,188
    
    
    
    7,068Year
    
    
    7,119
    
    
    
    6,722
  Net Sales
  57




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Manufactured
    
    
    All productsproducts only
    
    
    and servicesThailand
    
    
    50.4
    %
    
    $
    249,337
    
    
    
    48.8
    %
    
    $
    249,337Singapore
    
    
    6.4
    %
    
    
    31,762
    
    
    
    9.4
    %
    
    
    47,798Australia
    
    
    11.3
    %
    
    
    55,789
    
    
    
    10.9
    %
    
    
    55,789China
    
    
    31.9
    %
    
    
    157,917
    
    
    
    30.9
    %
    
    
    157,917Total
    
    
    100.0
    %
    
    $
    494,805
    
    
    
    100.0
    %
    
    $
    510,841
 Gross Profit
  2006
    
    2007Telecommunication cable
    
    
    19.3
    %
    
    
    17.3
    %Power cable
    
    
    42.6
    %
    
    
    75.9
    %Enameled wire
    
    
    37.4
    %
    
    
    6.7
    %Electronic cable
    
    
    0.7
    %
    
    
    0.1
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
   Operating Profit
  58




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Exchange Gain/Loss
   December 31,
    
    December 31,2007
    
    2006Foreign currency to US$1:Thai Baht
    
    
    29.50
    
    
    
    36.10Singapore $
    
    
    1.44
    
    
    
    1.53Australian $
    
    
    1.14
    
    
    
    1.27Chinese Rmb
    
    
    7.30
    
    
    
    7.80
   Gain/Loss from Investees
  59




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Impairment of Investments
  Gain on Sale of Investment
  Other Income
  Income Taxes
       60




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5.4 Liquidity and Capital Resources
     61




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62




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5.5 Impact of the Global Economic and Financial Crisis
     63




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5.6 Research and Development
  5.7 Trend Information
  
    
    The deterioration of economic conditions resulting from the current global
financial and credit crisis and economic downturn.The global financial and economic
crisis has and is likely to continue to affect adversely each of the markets in which
we sell and distribute our products and provide services. There is a reasonable
likelihood that sales will stagnate or decrease if there is a reduction in
infrastructure development by governmental entities and in capital expenditures by
private companies. Please see the risk factor entitled Current Economic Risks.
    
    Uncertainty arising from the volatility in the cost of copper, our principal raw
material.Recent decreases in commodity prices, including that of copper, have caused
the Company to write-down the carrying cost of its inventory in 2008. Although copper
prices have generally increased in the first few months of 2009, there is no assurance
that we will not see volatility in the near future due to the current uncertain
economic climate.
    
    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 commitments to
communications, power and industrial projects and programs that utilize our products.
    
    Political instability or uncertainty resulting in fewer or suspended government
contracts, such as in Thailand.
  5.8 Off-Balance Sheet Arrangements
  5.9 Contractual Obligations
  65




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Payments due by periodContractual obligations as of
    
    
    
    
    
    Less
    
    
    
    
    
    
    
    
    
    MoreDecember 31, 2008
    
    
    
    
    
    than one
    
    
    
    
    
    
    
    
    
    than 5(In thousands of US$)
    
    Total
    
    year
    
    1-3 years
    
    3-5 years
    
    yearsCapital lease obligations
(principal amount only)
    
    
    386
    
    
    
    196
    
    
    
    161
    
    
    
    29
    
    
    
    Future finance charges on capital
lease obligation
    
    
    36
    
    
    
    23
    
    
    
    13
    
    
    
    
    
    
    
    Operating leases
    
    
    4,358
    
    
    
    608
    
    
    
    1,012
    
    
    
    289
    
    
    
    2,449Purchase obligations for copper
cathodes
    
    
    4,657
    
    
    
    4,657
    
    
    
    
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    
    9,437
    
    
    
    5,484
    
    
    
    1,186
    
    
    
    318
    
    
    
    2,449
 
  
 Item 6: Directors, Senior Management and Employees
 6.1 Directors and Senior Management
   66




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Name
    
    Date of Birth
    
    PositionAppleby Management (Bermuda) Ltd.
    
    N/A
    
    Resident Representative in Bermuda and Assistant Resident
SecretaryAnson Chan
    
    November 3, 1963
    
    Independent director, Audit Committee ChairmanAndy C.C. Cheng
    
    April 29, 1958
    
    DirectorFang Hsiung Cheng
    
    May 31, 1942
    
    DirectorAlex Erskine
    
    September 7, 1963
    
    Resident Secretary in BermudaDaphne Hsu
    
    August 12, 1962
    
    Financial ControllerGai Poo Lee
    
    February 28, 1957
    
    DirectorMichael C. Lee
    
    September 28, 1951
    
    DirectorYichin Lee
    
    January 4, 1961
    
    Independent director, Audit Committee MemberSamuel See
    
    November 20, 1965
    
    Interim Chief Financial OfficerChing Rong Shue
    
    March 4, 1950
    
    DirectorDavid Sun
    
    December 22, 1953
    
    DirectorJack Sun
    
    August 27, 1949
    
    DirectorYuan Chun Tang
    
    November 26, 1960
    
    Director, Chairman of the Board and Chief Executive OfficerLing Y. Wu
    
    October 18, 1953
    
    Non-Resident Secretary
        67




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6.2 Audit Committee
    6.3 Compensation Committee
    69




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6.4 Compensation
     6.5 Employees
     70




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Item 7: Major Shareholders and Related Party Transactions
 7.1 Major Shareholders
    Number ofIdentity of Person or Group
    
    Shares
    
    Percent of ClassPacific Electric Wire & Cable Co., Ltd.(1)
    
    
    9,075,354
    
    
    
    65.600
    %SOF Investments, L.P.(2)
    
    
    1,355,415
    
    
    
    9.800
    %Directors and Officers of the Company
    
    50,000
    


    
    0.362
    %
 
 (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 British
Virgin Islands company, which beneficially owns 6,707,948 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.(2)
    
    MSD Capital, L.P. (MSD Capital) is the general partner of SOF and may be deemed to have
or share voting and/or investment power over, and beneficially own, securities owned by SOF. MSD
Capital Management LLC is the general partner of MSD Capital and may be deemed to have or share
voting and/or investment power over, and beneficially own, securities owned by MSD Capital. Each
of Glenn R. Fuhrman, John C. Phelan and Marc R. Lisker is a manager of MSD Capital Management and
may be deemed to have or share voting and/or investment power over, and beneficially own,
securities owned by MSD Capital Management. Each of Messrs. Fuhrman, Phelan and Lisker disclaim
beneficial ownership of such securities, except to the extent of the pecuniary interest of such
person in such securities.  71




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7.2 Related Party Transactions
       72




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Item 8: Financial Information
 8.1 Legal Proceedings
  8.1.1 Sino-JP/PEWC/APWC Litigation (Settled)
  73




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##### Table of Contents



8.1.2 Sigma Cable/Highness Electrical Litigation (decided; merits of appeal being
determined)
    8.2 Dividend Policy
  8.3 Significant Changes
  74




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Item 9: The Offer and Listing
 9.1 Historical Trading Information
    Price per Share($)High
    
    LowFive most recent full financial years:2004
    
    
    4.50
    
    
    
    2.102005
    
    
    4.75
    
    
    
    1.202006
    
    
    3.05
    
    
    
    0.802007
    
    
    7.19
    
    
    
    2.502008
    
    
    6.45
    
    
    
    0.80Two most recent full financial years:2007First Quarter
    
    
    4.20
    
    
    
    2.50Second Quarter
    
    
    5.00
    
    
    
    3.03Third Quarter
    
    
    7.19
    
    
    
    4.95Fourth Quarter
    
    
    5.95
    
    
    
    4.502008First Quarter
    
    
    6.10
    
    
    
    4.55Second Quarter
    
    
    6.45
    
    
    
    5.50Third Quarter
    
    
    5.50
    
    
    
    2.65Fourth Quarter
    
    
    5.10
    
    
    
    0.802009First Quarter
    
    
    1.50
    
    
    
    0.50Most recent six months:2008December
    
    
    1.65
    
    
    
    0.762009January
    
    
    1.15
    
    
    
    0.90
 75




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Price per Share($)High
    
    LowFebruary
    
    
    1.19
    
    
    
    0.56March
    
    
    1.50
    
    
    
    0.50April
    
    
    1.50
    
    
    
    0.90May
    
    
    0.95
    
    
    
    0.90
 9.2 Nature of the Trading Market
  
 Item 10: Additional Information
 10.1 Share Capital
  10.2 Memorandum of Association and Bye-laws
 10.2.1 General
  10.2.2 Description of Shareholder Rights Attaching to Our Common Shares
    
    
    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.
 76




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
    
    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.
    
    Our outstanding Common Shares are fully paid and nonassessable.
    
    Additional authorized but unissued Common Shares may be issued by the Board without
the approval of the shareholders.
  
    
    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.
  10.2.3 Share Capital
  10.2.4 Voting Rights
   
    
    the chairman of the meeting;
    
    at least three shareholders present in person or by proxy;
    
    any shareholder or shareholders present in person or by proxy and holding between
them not less than one-tenth of the total voting rights of all shareholders having voting
rights; or
 77




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
    
    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.
  10.2.5 Dividend Rights
    10.2.6 Purchases by the Company of its own Common Shares
   10.2.7 Preemptive Rights
   78




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10.2.8 Variation of Rights
  
    
    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.
  10.2.9 Transfer of Common Shares
  10.2.10 Transfer Restrictions
  
    
    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.
   79




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10.2.11 Transmission of Shares
  10.2.12 Disclosure of Interests
  10.2.13 Rights in Liquidation
   10.2.14 Meetings of Shareholders
   80




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10.2.15 Access to Books and Records and Dissemination of Information
      10.2.16 Election or Removal of Directors
   81




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
    
    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.
 10.2.17 Amendment of Memorandum of Association and Bye-Laws
   
    
    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 alterations to the
Companys memorandum of association,
   82




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10.2.18 Merger or Consolidation (Amalgamation)
   10.2.19 Class Actions and Derivative Actions
   10.2.20 Registrar or Transfer Agent
  10.2.21 Personal Liability of Directors and Indemnity
   83




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10.2.22 Exchange Controls
      10.3 Material Contracts
 Composite Services Agreement
  
    
    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
 84




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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.
    
    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.
  Indemnification Agreement
  Amended and Restated Shareholders Agreement
  85




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10.4 Environmental Matters
  10.5 Insurance
  10.6 Credit Support
  10.7 Taxation
  10.7.1 United States Taxation
  86




---



##### Table of Contents



Taxation of U.S. Holders
  87




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Taxation of Dividends
       88




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Taxation of Capital Gains
   Backup Withholding
  Passive Foreign Investment Company
  89




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90




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Controlled Foreign Corporation
  Taxation of Non-U.S. Holders
 Taxation of Dividends
   Taxation of Capital Gains
   91




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Backup Withholding
   10.7.2 Bermuda Taxation
      10.8 Documents on Display
  92




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Item 11: Quantitative and Qualitative Disclosures About Market Risk
  11.1 Foreign Currency Exposure
    93




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##### Table of Contents



11.2 Interest Rate Risk
   Principal Amount (In thousands of US$)Bank loans and overdrafts
    
    
    57,962
  11.3 Risks Relating to Copper
   94




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Item 12: Description of Securities Other Than Equity Securities
  95




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Part II
 
 Item 13: Defaults, Dividend Arrearages and Delinquencies
  
 Item 14: Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15: Controls and Procedures
 Disclosure Controls and Procedures
  Internal Controls over Financial Reporting
     96




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Item 16A. Audit Committee Financial Expert
   
 Item 16B. Code of Ethics
  
 Item 16C. Principal Accountant Fees and Services
 Audit Fees
  Audit-Related Fees
  Tax Fees
  97




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All Other Fees
  Audit Committee Approval
  
 Item 16D. Exemptions from the Listing Standards for the Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
 Item 16F. Change in Registrants Certifying Accountant
  
 Item 16G. Corporate Governance
  98




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Part III
 
 Item 17: Financial Statements
  
 Item 18: Financial Statements
  
 Item 19: Exhibits
 19.1
    
    Index to Audited Financial StatementsReport of independent auditorsConsolidated balance sheets as of December 31, 2007 and 2008Consolidated statements of income for the years ended December 31, 2006, 2007 and 2008Consolidated statements of shareholders equity for the years ended December 31, 2006,
2007 and 2008Consolidated statements of cash flows for the years ended December 31, 2006, 2007 and 2008Notes to consolidated financial statements19.2
    
    Index to Exhibits3.1
    
    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).3.2
    
    Second Amended and Restated Bye-Laws of Asia Pacific Wire & Cable Corporation Limited
(incorporated by reference to Exhibit 3.2 of the Companys Amendment No. 4 to Form F-1
filed with the Securities and Exchange Commission on February 18, 2009).3.4
    
    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).10.1
    
    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).10.2
    
    Indemnification Agreement dated November 6, 1996 (incorporated by reference to Exhibit
10.2 of the Companys Form F-1 filed with the Securities and Exchange Commission on
November 13, 1996).10.3
    
    Agreement for the Sale and Purchase of (i) Shares in Crown Century Holdings Limited and
(ii) Shareholders Loan (incorporated by reference to Exhibit 5.1 of the Companys annual
report on Form 20-F filed with the Securities and Exchange Commission on July 1, 2002).10.4
    
    Settlement Agreement between Set Top International Inc. (Party A) and Pacific Electric
Wire and Cable Co., Ltd. and Asia Pacific Wire and Cable Corporation Ltd. (Party B)
(Translation) (incorporated by reference to Exhibit 4.4 of the Companys annual report on
Form 20-F filed with the Securities and Exchange Commission on July 7, 2004).10.5
    
    Settlement Agreement between Asia Pacific Wire & Cable Corporation, Ltd. and Sino-JP Fund
Co., Ltd. (incorporated by reference to Exhibit 4.5 of the Companys annual report on
Form 20-F filed with the Securities and Exchange Commission on November 9, 2007).
 99




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##### Table of Contents



10.6
    
    Termination Agreement between Pacific Electric Wire & Cable Co., Ltd. and Chiao Tung Bank
(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 November 9, 2007).10.7
    
    Summaries of Joint Venture Agreements (incorporated by reference to Exhibit 10.7 of the
Companys Amendment No. 1 to Form F-1 filed with the Securities and Exchange Commission
on November 26, 2008).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.12.2
    
    Certification of Interim Chief Financial Officer of the Company, pursuant to Section 302
of the Sarbanes-Oxley Act.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.13.2
    
    Certification by Interim 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.15(a)
    
    Audit Committee Charter (incorporated by reference to Exhibit 15(a) of the Companys
annual report on Form 20-F filed with the Securities and Exchange Commission on November
9, 2007).21
    
    List of significant subsidiaries (see Note 1 to the consolidated financial statements).
 100




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##### Table of Contents



SIGNATURE
  ASIA
PACIFIC WIRE & CABLE CORPORATION LIMITEDDate: June 26, 2009
    /s/ Yuan Chun TangYuan Chun TangChief Executive Officer 101




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##### Table of Contents



Asia Pacific Wire & Cable Corporation Limited




---



##### 



PageReport of independent registered public accounting firm
    
    F-2Consolidated balance sheets as of December 31, 2007 and 2008
    
    F-3Consolidated statements of operations for the years ended
December 31, 2006, 2007 and 2008
    
    F-5Consolidated statements of shareholders equity for the years ended
December 31, 2006, 2007 and 2008
    
    F-6Consolidated statements of cash flows for the years ended
December 31, 2006, 2007 and 2008
    
    F-7Notes to consolidated financial statements
    
    F-8
  F-1




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##### Table of Contents



(On January 3, 2009, Mazars
Moores Rowland LLP changed
its name to Mazars LLP.)
   
 F-2




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##### Table of Contents



December 31,2007
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    29,127
    
    
    $
    37,510Unrestricted short-term bank deposits (note 5)
    
    
    1,861
    
    
    
    7,756Restricted short-term bank deposits (note 5)
    
    
    18,714
    
    
    
    15,033Accounts receivable, net of allowance for doubtful
accounts of $11,485 and $9,644 at December 31, 2007 and
2008, respectively (note 10)
    
    
    145,902
    
    
    
    95,901Amounts due from related parties (note 16)
    
    
    8,638
    
    
    
    6,922Inventories, net of allowance for inventories of $5,022
and $26,715 at December 31, 2007 and 2008, respectively
(note 10)Distributed products
    
    
    3,897
    
    
    
    8,227Finished products
    
    
    47,350
    
    
    
    24,060Products in process
    
    
    26,702
    
    
    
    14,563Raw materials and supplies
    
    
    27,482
    
    
    
    25,712105,431
    
    
    
    72,562Investments (note 7)
    
    
    2,555
    
    
    
    68Deferred tax assets (note 11)
    
    
    2,481
    
    
    
    3,064Prepaid expenses
    
    
    5,601
    
    
    
    4,942Other current assets
    
    
    2,262
    
    
    
    2,515Total current assets
    
    
    322,572
    
    
    
    246,273Property, plant and equipment:Land
    
    
    5,600
    
    
    
    3,841Land use rights
    
    
    1,827
    
    
    
    2,115Buildings
    
    
    45,374
    
    
    
    40,243Machinery and equipment
    
    
    116,278
    
    
    
    103,025Motor vehicles
    
    
    3,657
    
    
    
    3,260Office equipment
    
    
    10,537
    
    
    
    10,049Land not being used for operation
    
    
    630
    
    
    
    540Assets held for use
    
    
    6,824
    
    
    
    3,501190,727
    
    
    
    166,574Accumulated depreciation and amortization
    
    
    (133,209
    )
    
    
    (118,568
    )57,518
    
    
    
    48,006Other assets:Long term investments (note 7)
    
    
    650
    
    
    
    544Investment in equity investees (note 20)
    
    
    4,246
    
    
    
    4,103Goodwill (note 6)
    
    
    8,801
    
    
    
    8,801Other assets
    
    
    297
    
    
    
    889Deferred tax assets (note 11)
    
    
    2,032
    
    
    
    1,18216,026
    
    
    
    15,519Total assets
    
    $
    396,116
    
    
    $
    309,798
  F-3




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##### Table of Contents



December 31,2007
    
    
    2008LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Bank loans and overdrafts (note 8)
    
    $
    102,174
    
    
    $
    57,962Accounts payable
    
    
    32,325
    
    
    
    46,367Accrued expenses
    
    
    7,896
    
    
    
    4,550Amounts due to related parties (note 16)
    
    
    31,801
    
    
    
    25,811Short-term loans from related parties (note 16)
    
    
    1,972
    
    
    
    1,732Income tax liabilities (note 11)
    
    
    8,782
    
    
    
    5,710Deferred tax liabilities (note 11)
    
    
    561
    
    
    
    65Other current liabilities
    
    
    4,652
    
    
    
    3,648Total current liabilities
    
    
    190,163
    
    
    
    145,845Other liabilities
    
    
    578
    
    
    
    464Deferred tax liabilities (note 11)
    
    
    698
    
    
    
    782Total liabilities
    
    
    191,439
    
    
    
    147,091Minority interest
    
    
    67,894
    
    
    
    48,578Commitments and contingencies (notes 13 and 15)Shareholders equity (note 9):Common stock, $0.01 par value:Authorized shares - 20,000,000 shares
Issued and outstanding shares  13,830,769
in 2007 and 2008
    
    
    138
    
    
    
    138Additional paid-in capital
    
    
    111,541
    
    
    
    111,541Retained earnings
    
    
    29,468
    
    
    
    15,819Accumulated other comprehensive loss (note 12)
    
    
    (4,364
    )
    
    
    (13,369
    )Total shareholders equity
    
    
    136,783
    
    
    
    114,129Total liabilities and shareholders equity
    
    $
    396,116
    
    
    $
    309,798
  F-4




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##### Table of Contents



Year ended December 31,2006
    
    
    2007
    
    
    2008Net salesManufactured products
    
    $
    439,280
    
    
    $
    494,805
    
    
    $
    447,848Distributed products
    
    
    12,416
    
    
    
    10,783
    
    
    
    32,415Sales, delivery and installation of wires and
cables
    
    
    16,421
    
    
    
    5,253
    
    
    
    20,535468,117
    
    
    
    510,841
    
    
    
    500,798Costs of sales (purchases from related parties
amounted to $75,338 in 2006, $69,240 in 2007 and
$57,401 in 2008)Manufactured products
    
    
    (380,792
    )
    
    
    (450,134
    )
    
    
    (410,581
    )Distributed products
    
    
    (11,309
    )
    
    
    (10,703
    )
    
    
    (30,831
    )Sales, delivery and installation of wires and
cables
    
    
    (16,705
    )
    
    
    (5,600
    )
    
    
    (21,491
    )(Allowance) recovery for inventory reserve
    
    
    (2,017
    )
    
    
    1,272
    
    
    
    (25,145
    )(410,823
    )
    
    
    (465,165
    )
    
    
    (488,048
    )Gross profit
    
    
    57,294
    
    
    
    45,676
    
    
    
    12,750Selling, general and administrative expenses
    
    
    (26,195
    )
    
    
    (26,156
    )
    
    
    (29,032
    )Allowance for doubtful accounts
    
    
    (1,221
    )
    
    
    (3,295
    )
    
    
    (12
    )Impairment of long-lived assets
    
    
    (196
    )
    
    
    
    
    
    
    Income (loss) from operations
    
    
    29,682
    
    
    
    16,225
    
    
    
    (16,294
    )Exchange gain (loss)
    
    
    5,464
    
    
    
    864
    
    
    
    (1,712
    )Interest income
    
    
    705
    
    
    
    1,517
    
    
    
    990Interest expense
    
    
    (5,886
    )
    
    
    (7,580
    )
    
    
    (5,769
    )Share of net gain (loss) of equity investees
    
    
    73
    
    
    
    124
    
    
    
    (142
    )Impairment of investments
    
    
    (86
    )
    
    
    (95
    )
    
    
    (Loss) gain on sale of investments
    
    
    (729
    )
    
    
    35
    
    
    
    Gain on liquidation of subsidiary
    
    
    1,801
    
    
    
    
    
    
    
    Other income
    
    
    1,536
    
    
    
    2,070
    
    
    
    2,859Income (loss) before income taxes and minority
interests
    
    
    32,560
    
    
    
    13,160
    
    
    
    (20,068
    )Income taxes (note 11)
    
    
    (10,257
    )
    
    
    (6,298
    )
    
    
    (2,132
    )Minority interests
    
    
    (9,330
    )
    
    
    (2,029
    )
    
    
    8,551Net income (loss)
    
    $
    12,973
    
    
    $
    4,833
    
    
    $
    (13,649
    )Basic and diluted income (loss) per share
    
    $
    0.94
    
    
    $
    0.35
    
    
    $
    (0.99
    )Basic and diluted weighted average common shares
outstanding
    
    
    13,830,769
    
    
    
    13,830,769
    
    
    
    13,830,769
  F-5




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##### Table of Contents



Accumulated otherCommon
    
    
    Additional
    
    
    Retained
    
    
    comprehensiveStock
    
    
    paid-in capital
    
    
    earnings
    
    
    income (loss)
    
    
    TotalBalance at January 1, 2006
    
    $
    138
    
    
    $
    111,541
    
    
    $
    13,551
    
    
    $
    (27,608
    )
    
    $
    97,622Net income for 2006
    
    
    
    
    
    
    
    
    
    
    12,973
    
    
    
    
    
    
    
    12,973Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,822
    
    
    
    9,822Less: reclassification adjustment for
realized translation gain for
liquidation of subsidiary included in
net income, net of income tax of
$556
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,245
    )
    
    
    (1,245
    )Gain realized on sale of
available-for-sale
securities  net of income tax of $258
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (343
    )
    
    
    (343
    )Unrealized loss on available-for-sales
securities  net of income tax of $92
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (64
    )
    
    
    (64
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,143Balance at December 31, 2006
    
    
    138
    
    
    
    111,541
    
    
    
    26,524
    
    
    
    (19,438
    )
    
    
    118,765Net income for 2007
    
    
    
    
    
    
    
    
    
    
    4,833
    
    
    
    
    
    
    
    4,833Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,179
    
    
    
    15,179Pension benefits recognized under SFAS
158 (note 17)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (71
    )
    
    
    (71
    )Adoption of FIN 48 effective January 1,
2007 (note 11)
    
    
    
    
    
    
    
    
    
    
    (1,889
    )
    
    
    
    
    
    
    (1,889
    )Gain realized on sale of
available-for-sale
securities  net of income tax of $6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28
    )
    
    
    (28
    )Unrealized loss on available-for-sale
securities  net of income tax of $6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (6
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,018Balance at December 31, 2007
    
    
    138
    
    
    
    111,541
    
    
    
    29,468
    
    
    
    (4,364
    )
    
    
    136,783Net loss for 2008
    
    
    
    
    
    
    
    
    
    
    (13,649
    )
    
    
    
    
    
    
    (13,649
    )Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,994
    )
    
    
    (8,994
    )Pension benefits recognized under SFAS
158 (note 17)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    7Unrealized loss on sale of
available-for-sale securities  net of
income tax of $27
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18
    )
    
    
    (18
    )Comprehensive (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,654
    )Balance at December 31, 2008
    
    $
    138
    
    
    $
    111,541
    
    
    $
    15,819
    
    
    $
    (13,369
    )
    
    $
    114,129
 
 F-6




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##### Table of Contents



Year ended December 31,2006
    
    
    2007
    
    
    2008Operating activities:Net income (loss)
    
    $
    12,973
    
    
    $
    4,833
    
    
    $
    (13,649
    )Adjustments to reconcile net income (loss) to net
cash (used in) provided by operating activities:Gain on disposal of property, plant and equipment
    
    
    (136
    )
    
    
    (802
    )
    
    
    (4
    )Depreciation
    
    
    8,989
    
    
    
    9,079
    
    
    
    7,646Deferred income taxes
    
    
    (423
    )
    
    
    (1,969
    )
    
    
    (145
    )Allowance (recovery) for doubtful accounts
    
    
    1,221
    
    
    
    3,295
    
    
    
    12Allowance (recovery) for inventory reserve
    
    
    2,017
    
    
    
    (1,272
    )
    
    
    25,145Share of net gain of equity investees
    
    
    (73
    )
    
    
    (124
    )
    
    
    142Impairment of long lived assets
    
    
    196
    
    
    
    
    
    
    
    Impairment of investments
    
    
    86
    
    
    
    95
    
    
    
    Loss (gain) on sale of investments
    
    
    729
    
    
    
    (35
    )
    
    
    Gain on liquidation of subsidiary
    
    
    (1,801
    )
    
    
    
    
    
    
    Pension benefits recognized under SFAS 158
    
    
    
    
    
    
    (71
    )
    
    
    7Adoption of FIN 48 as of January 1, 2007
    
    
    
    
    
    
    (1,889
    )
    
    
    Minority interests
    
    
    9,330
    
    
    
    2,029
    
    
    
    (8,551
    )Foreign currency translation adjustment
    
    
    (1,192
    )
    
    
    (7,662
    )
    
    
    2,889Changes in operating assets and liabilities
net of acquisitions of business:Accounts receivable
    
    
    (35,809
    )
    
    
    (13,613
    )
    
    
    36,193Inventories
    
    
    (52,017
    )
    
    
    4,854
    
    
    
    7,724Other current assets
    
    
    (6,739
    )
    
    
    2,372
    
    
    
    406Amounts due to related parties
    
    
    3,827
    
    
    
    (1,609
    )
    
    
    (4,274
    )Accounts payable, accrued expenses and other liabilities
    
    
    15,892
    
    
    
    4,395
    
    
    
    6,506Net cash (used in) provided by operating activities
    
    
    (42,930
    )
    
    
    1,906
    
    
    
    60,047Investing activities:(Increase) decrease in restricted short-term bank deposits
    
    
    (1,056
    )
    
    
    (3,156
    )
    
    
    1,941Increase (decrease) in unrestricted short-term bank deposits
    
    
    8,619
    
    
    
    518
    
    
    
    (5,906
    )Purchases of property, plant and equipment
    
    
    (5,202
    )
    
    
    (2,650
    )
    
    
    (3,383
    )Proceeds from disposal of property, plant and equipment
    
    
    574
    
    
    
    1,414
    
    
    
    416Acquisition of additional investment in subsidiary
    
    
    (477
    )
    
    
    
    
    
    
    Proceeds from disposal of investments
    
    
    626
    
    
    
    65
    
    
    
    Disposal of other assets
    
    
    190
    
    
    
    
    
    
    
    2,368Purchases of other assets
    
    
    
    
    
    
    (239
    )
    
    
    (592
    )Net cash provided by (used in) investing activities
    
    
    3,274
    
    
    
    (4,048
    )
    
    
    (5,156
    )Financing activities:Repayments of long-term debt
    
    
    (5,026
    )
    
    
    (2,237
    )
    
    
    (240
    )Repayments of bank loans
    
    
    (19,048
    )
    
    
    (21,671
    )
    
    
    (54,643
    )Proceeds from bank loans
    
    
    65,516
    
    
    
    28,275
    
    
    
    10,431Net increase (decrease) in overdrafts
    
    
    354
    
    
    
    (416
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    41,796
    
    
    
    3,951
    
    
    
    (44,452
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    1,776
    
    
    
    2,654
    
    
    
    (2,056
    )Net increase in cash and cash equivalents
    
    
    3,916
    
    
    
    4,463
    
    
    
    8,383Cash and cash equivalents at beginning of year
    
    
    20,748
    
    
    
    24,664
    
    
    
    29,127Cash and cash equivalents at end of year
    
    $
    24,664
    
    
    $
    29,127
    
    
    $
    37,510
  F-7




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##### Table of Contents



1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIESAsia 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 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.Background on the Pledge Agreement to Swiss ReAs previously disclosed in the Companys 2006 Financial Statements, PEWC and Swiss Re
entered into an Amended and Restated Letter of Credit and Reimbursement Agreement (the LC
Agreement), pursuant to which Swiss Re issued a letter of credit to satisfy certain credit
and loan obligations of PEWCs subsidiary, Pacific USA Holdings Corp. (PUSA), to PUSAs
lenders. Under the LC Agreement, Swiss Re issued a Standby Letter of Credit in favor of
Standard Chartered Bank, Hong Kong Branch (Standard), in the total amount of $124 million
(the Letter of Credit), conditioned upon the closing of a $120 million transaction
between PUSA and Standard. As a condition to obtaining the letter of credit, in February
2002, PUSA, PEWC and Swiss Re finalized a Pledge Agreement (Pledge Agreement), pursuant
to which PUSA pledged to Swiss Re shares representing approximately 53% of the equity of
the Company (the Pledged Shares), together with certain shares of other related entities.
At that time PEWC was the ultimate beneficial owner of approximately 75.4% of the equity
interest in the Company through its subsidiaries, Kinbong Holdings Limited (Kinbong) and
PUSA.PUSA BankruptcyAs also previously disclosed in the 2006 financial statements, in December 2002, PUSA filed
a voluntary petition for bankruptcy protection under Chapter 11 of the United States
Bankruptcy Code. Because of the bankruptcy filing, in December 2002, Swiss Re paid to
Standard $90.6 million under the terms of the Letter of Credit as a result of which Swiss
Re became entitled, under the terms of the Pledge Agreement, to foreclose on the Pledged
Shares of the Company.LitigationFollowing an internal investigation, it was discovered by the Boards of both PEWC and the
Company that an ex-director of PEWC (ex-director), without the authorization of either
Board, had separately negotiated a transaction whereby the Pledged Shares of the Company
held by PUSA and the shares of the Company held by Kinbong would be transferred to Set Top
International Inc. (Set Top), a British Virgins Islands company. The terms of the
transaction were initially withheld from and, subsequently, misrepresented to the Boards of
PEWC and the Company by the ex-director, together with certain of his associates.The Boards of both PEWC and the Company concluded that the ex-director had an undisclosed
interest in, or control position over, Set Top, and that the terms he agreed to with Set
Top were significantly less favorable to the companies than those that would have been
available in a bona fide transaction with an unaffiliated party.On December 4, 2003, PEWC and the Company commenced an action in the United States District
Court for the Southern District of New York (the Southern District) against the following
parties: Set Top, Kinbong, Tom Ching-Yun Tung, Frank Wei-Feng Lin, Tai-Sheng Lien, Fu-Chuan
Tsai, Fu-Nu Tsai, Yuan-Chun Hsu, Jack Takacs and Robert Everett Wolin (collectively
Defendants). The Complaint alleged various causes of action, including fraud and
conspiracy to commit fraud;
 F-8




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1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES(continued)violation of section 13(d) of the Securities Exchange Act; RICO violations under 18 USC §
1962; and breach of fiduciary duty.The Southern District action did not progress to the discovery phase as the parties sought
to agree to the terms of a settlement agreement. On July 2, 2004, the Company, PEWC and Set
Top entered into a Settlement Agreement (the Settlement Agreement) pursuant to which PEWC
agreed to pay Set Top $25 million (the Settlement Amount).Pursuant to the Settlement Agreement, the Company, PEWC and Set Top agreed to withdraw all
claims in all litigation proceedings against each other, including the actions in New York,
Singapore and Bermuda, and Set Top agreed to withdraw all of its claims in the PUSA
bankruptcy proceedings. The parties have filed stipulations of discontinuance and/or
dismissal for each of those actions.In order to implement the terms of the Settlement Agreement, PEWC, Set Top and Asset
Managers Co., Ltd. (AMC) entered into a Share Purchase Agreement and a related Option
Agreement dated September 15, 2004, pursuant to which AMC agreed to pay to Set Top $25
million in exchange for all right, title and interest of Set Top in 10,074,102 shares of
APWC. Following the closing of the 2004 Share Purchase Agreement, AMC designated Sino-JP
Fund Co., Ltd. (Sino-JP) as an assignee of the Subject Shares and Sino-JP was registered
as the record owner of the Subject Shares with the Companys register.As of December 31, 2004, Sino-JP held 10,074,102 shares, representing approximately 72.84%
of the outstanding shares of Common Stock of the Company.On September 14, 2005, PEWC exercised the repurchase option under the Option Agreement and
reacquired 7,307,948 shares of the Common Stock, representing 52.84% of the total issued and
outstanding Common Stock. As a result of the reacquisition by PEWC of majority control, PEWC
indirectly held as of that date 7,664,615 shares of Common Stock, representing 55.4% of the
total issued and outstanding shares of Common Stock and Sino-JP now held 2,766,154 shares of
the Common Stock, representing 20% of the total issued and outstanding shares of Common
Stock (the Sino-JP Shares).Subsequent to the 2004 Share Purchase Agreement, a number of disputes arose between Sino-JP
and PEWC regarding the governance of the Company and other matters. Litigation was commenced
in Bermuda, in which the Company was also a party, and in Hong Kong, in which the Company
was not a party.On June 28, 2007, the Company entered into a comprehensive settlement and release agreement
with Sino-JP, which dismissed and released all claims between the parties and which put an
end to all related litigation. The 55% majority shareholder of the Company, PEWC, also
entered into a settlement and release agreement with Sino-JP that terminated all disputes
and litigation between those parties.On June 28, 2007, SOF Investments, L.P. (SOF), a Delaware limited partnership controlled
by MSD Capital, L.P. acquired the Sino-JP Shares and entered into a shareholders agreement
with the Company and PEWC. The shares acquired constituted 20% of the issued and
outstanding shares of the Company.On March 27, 2009, SOF sold 10.2% of the issued and outstanding shares of the Company to
PEWC. The sale results in PEWC holding 65.6% of the equity of the Company and SOF holding
9.8%.
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##### Table of Contents



1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES(continued)The subsidiaries of the Company are set out below:
 Percentage ofPlace of incorporation and operations
    
    Equity interest2007
    
    2008The British Virgin IslandsAsia Pacific Wire & Cable General Holdings Ltd
    
    
    100
    %
    
    
    100
    %PRC (APWC) Holding Ltd.
    
    
    100
    %
    
    
    100
    %Samray Inc.
    
    
    100
    %
    
    
    100
    %Siam (APWC) Holdings Ltd.
    
    
    100
    %
    
    
    100
    %Moon View Ltd.
    
    
    100
    %
    
    
    100
    %Trigent Investment Holdings Limited
    
    
    100
    %
    
    
    100
    %Crown Century Holdings Ltd.
    
    
    100
    %
    
    
    100
    %SingaporeSigma Cable Company (Private) Limited (Sigma Cable)
    
    
    98.3
    %
    
    
    98.3
    %Sino-Sin Trading Pte. Ltd. (Sino-Sin)
    
    
    100
    %
    
    
    100
    %Sigma-Epan International Pte Ltd. (Sigma-Epan)
    
    
    100
    %
    
    
    100
    %Singvale Pte Ltd (Singvale)
    
    
    100
    %
    
    
    100
    %The Peoples Republic of ChinaNingbo Pacific Cable Co., Ltd. (Ningbo Pacific)
    
    
    94.31
    %
    
    
    94.31
    %Shanghai Yayang Electric Co., Ltd. (Shanghai Yayang)
    
    
    54.41
    %
    
    
    54.41
    %Shandong Pacific Fiber Optics Co.Ltd (SPFO)
    
    
    51
    %
    
    
    51
    %Pacific Electric Wire & Cable (Shenzhen) Co., Ltd (PEWS)
    
    
    100
    %
    
    
    100
    %Hong KongCrown Century Holdings Limited (CCH)
    
    
    100
    %
    
    
    100
    %AustraliaAustralia Pacific Electric Cable Pty Limited (APEC)
    
    
    98.53
    %
    
    
    98.53
    %
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1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES(continued)
 Percentage ofPlace of incorporation and operations
    
    Equity interest2007
    
    
    2008ThailandCharoong Thai Wire and Cable Public Company Limited
(Charoong Thai)**
    
    
    50.93
    %
    
    
    50.93
    %Siam Pacific Electric Wire & Cable Company Limited
(Siam-Pacific)
    
    
    50.93
    %
    
    
    50.93
    %Pacific-Thai Electric Wire & Cable Company Limited
(Pacific-Thai)
    
    
    50.93
    %
    
    
    50.93
    %Hard Lek Limited (Hard Lek)
    
    
    73.98
    %
    
    
    73.98
    %APWC (Thailand) Co., Ltd
    
    
    99.48
    %
    
    
    99.48
    %PEWC (Thailand) Co., Ltd
    
    
    99.48
    %
    
    
    99.48
    %MyanmarMyanmar Sigma Cable Co., Ltd. (Not active)
    
    
    78.59
    %
    
    
    78.59
    %
  Percentage ofEquity interestPlace of incorporation and operations
    
    2007
    
    
    2008The Peoples Republic of ChinaShandong Huayu Pacific Fibre Optics
Communications Co., Ltd. (Shandong Huayu)
    
    
    48.73
    %
    
    
    48.73
    %Shandong Pacific Rubber Cable Co., Ltd. (SPRC)
    
    
    25.00
    %
    
    
    25.00
    %ThailandSiam Pacific Holding Company Limited (SPHC)
    
    
    49.00
    %
    
    
    49.00
    %Loxley Pacific Co., Ltd. (Lox Pac)
    
    
    21.39
    %
    
    
    21.39
    %Thai Professional Telecom Network Co., Ltd
(Thai Professional)*
    
    
    15.84
    %
    
    
    15.84
    %
 
 *
    
    Accounted for as an equity investee despite the Company holding less than 20%
equity interest because the Company has the ability to exercise significant
influence over the operating and financial policies of Thai Professional.**
    
    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. F-11




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1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES(continued)Acquisitions accounted for as purchases and disposals undertaken by the Company during the
years ended December 31, 2006, 2007 and 2008 include the following:
 (a)
    
    Disposal in 2006 of 2.04% interest in Charoong Thai, thereby decreasing the
Companys interest in Charoong Thai from 52.43% to 50.39% due to the exercise of
warrants. The Company recognized a loss of $1,955 on the disposal of these Charoong
Thai shares.(b)
    
    During 2006, Charoong Thais subsidiary, Pacific-Thai contributed additional
capital in Shanghai Yayang in the form of a cash injection of $1,000, the excess of its
consideration paid over the fair value of the assets acquired resulted in goodwill of
$477. The Companys interest in Charoong Thai decreased from 52.43% to 50.39% due to
the exercise of warrants in 2006, which also resulted in the Companys interest in
Shanghai Yayang to decrease by 2.46% to 53.90% in 2006.(c)
    
    In August 2000, the Board of Directors of Charoong Thai resolved to dissolve
CTW (Hong Kong) Limited which was an overseas subsidiary company as CTW (Hong Kong)
Limited was inactive. The dissolution was completed on August 16, 2006, and a gain of
$1,801 was recognized in the consolidated statement of operations in 2006.
 The Company was listed on the New York Stock Exchange in March 1997. On December 24, 2001, the
staff of the New York Stock Exchange (NYSE) announced that it had determined that the
trading of the common stock of APWC should be suspended prior to December 31, 2001. The
decision was reached in view of the fact that the Company had fallen below NYSEs continued
listing standards regarding: average global market capitalization over a consecutive 30
trading-day period of not less than $15; and average closing price of a security of not less
than $0.001 over a consecutive 30 trading-day period. Following the delisting of the Companys
common stock on the NYSE, the Companys common stock was traded under the ticker AWRCF, on the
Over-the-Counter Bulletin Board (OTC BB), operated by NASD, Inc. After the Company failed to
timely file its annual report on Form 20-F for the 2004 fiscal year, the Company was delisted
from the OTC BB in August 2005 and since that time its shares of common stock have been quoted
on the pink sheets market by Pink Sheets LLC, a privately owned company that provides
pricing and financial information for over-the-counter securities. On April 9, 2008, the
Company has listed and begun trading its common shares on the OTC BB after completing all
reporting requirements and filing all outstanding financial reports with the SEC. The Company
is subject to the reporting requirements under the Securities Exchange Act of 1934.2.
    
    BASIS OF PRESENTATIONThe consolidated financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America (US GAAP). The basis of accounting
differs from that used in the statutory financial statements of the Companys subsidiaries
and equity investee companies, which are prepared in accordance with the accounting
principles generally accepted in their respective countries of incorporation. In the
opinion of management, the consolidated financial statements have reflected all costs
incurred by the Company and its subsidiaries in operating the business.All dollar amounts in the financial statements and in the notes herein are U.S. dollars
(US$) unless otherwise designated.3.
    
    CHANGES IN PRESENTATION OF COMPARATIVE FINANCIAL STATEMENTSCertain comparative amounts in prior financial statements have been reclassified to conform
with the current years presentation. The reclassifications had no effect on financial
condition, gross profit, income (loss) from operations or net income (loss).4.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESPrinciples of Consolidation
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The consolidated
financial
statements include
the accounts of the
Company and its
subsidiaries.
Significant
intercompany
accounts and
transactions have
been eliminated on
consolidation. The
Companys
investments for
which its ownership
exceeds 20%, but
which are not
majority-owned or
controlled, are
accounted for using
the equity method
if the Company has
the ability to
exercise
significant
influence over the
companies
operating and
financial policies.
When the Companys carrying value in an equity method
investee company is reduced to zero, no further
losses are recorded in the Companys consolidated
financial statements unless the Company guaranteed
obligations of the investee company or has committed
additional funding. When the Investee company
subsequently reports income, the Company will not
record its share of such income until it equals the
amount of its share of losses not previously
recognized.Use of EstimatesThe preparation of the consolidated financial statements in conformity with generally
accepted accounting principles accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those estimates.Cash and Cash EquivalentsThe Company considers all highly liquid investments with an original maturity of three
months or less when purchased to be cash equivalents.InventoriesInventories are valued at the lower of cost or market value. Cost is determined using the
first-in, first-out or weighted average method.If the expected sales price less completion costs and costs to execute sales (net
realizable value) is lower than the carrying amount, a write-down is charged to
expenses in cost of sales for the amount by which the carrying amount exceeds its net
realizable value. When the finished goods that were previously written down to net
realizable value are subsequently sold at above net realizable value, a recovery is
credited to cost of sales. See note 10.Income TaxesIn 2007, the Company adopted the provisions of Financial Accounting Standards Board (FASB)
Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes-an interpretation
of FASB Statement No. 109. FIN 48 clarifies the accounting for uncertainty in income taxes
recognized in an enterprises financial statements in accordance with SFAS No. 109,
Accounting for Income Taxes (SFAS 109). FIN 48 prescribes a recognition threshold and
measurement attribute for the financial statements recognition and measurement of a tax
position taken or expected to be taken in a
tax return, and provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure, and transition. For those benefits to be
recognized, a tax position must be more-likely-than-not to be sustained upon examination by
taxing authorities. The amount recognized is measured as the largest amount of benefit that is
greater than fifty percent likely of being realized upon ultimate settlement. Our policy is to
recognize interest expense and penalties related to income tax matters as a component of
income tax expense.Current income tax expense is the amount of income taxes expected to be payable for the
current year. A deferred income tax asset or liability is established for the expected future
tax consequences resulting from differences in the financial reporting and tax bases of assets
and liabilities and for the expected future tax benefit to be derived from tax credit and loss
carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred income tax expense (benefit) is the net change during the year
in the deferred income tax asset or liability.
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4.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Property, Plant and EquipmentProperty, plant and equipment are stated at cost less depreciation and any impairment
losses. Asset leases qualifying as capital leases are also included in property, plant and
equipment. Major renewals and improvements are capitalized and minor replacements,
maintenance, and repairs are charged to current operations as incurred. Depreciation is
computed using the straight-line method over the estimated useful lives of the assets or the
respective lease term, whichever is shorter. No depreciation is charged for construction in
progress and machinery and equipment under installation. Depreciation is provided as follows:
 Land
    
    NilLand use rights
    
    15  50 yearsBuildings
    
    5  30 yearsMachinery and equipment
    
    5  10 yearsMotor vehicles
    
    3  10 yearsOffice equipment
    
    3  10 years
 Depreciation for 2006, 2007 and 2008 amounted to $8,989, $9,079 and $7,646, respectively.When property and equipment are retired, sold or otherwise disposed of, the assets
carrying amount and related accumulated depreciation are removed from the accounts and
any gain or loss is included in operations. The useful lives and residual values if not
insignificant are reassessed annually.A factory at CTW is not being used for operation as at December 31, 2008 and has
been presented separately from property, plant and equipment currently used in the
business, classified as Land not being used for operation.In 2006, the Company terminated the NPC joint venture due to lack of profitability,
unsatisfactory management practices, and the lack of qualified executives to assume management
responsibility following termination of the then senior managers, and the lack of promising
prospects for the business in the short to medium term. The Company liquidated its major
equipment at the NPC facility. The remaining property and equipment have been temporarily
classified as Assets held for use in its Balance Sheet before the Company determines its
further plan.GoodwillGoodwill represents the excess of the cost of purchased business over the fair value of the
underlying net assets.Goodwill, including goodwill associated with equity method investments, is not amortized,
but tested for impairment at least annually or more frequently if circumstances indicate
that impairment may exist. The Company identifies potential goodwill impairment by
comparing the fair value of a reporting unit with its carrying amount, including goodwill.
The Company determines fair value using a discounted cash flow approach. If the fair value
of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not
considered impaired. If the carrying amount of a reporting unit exceeds its fair value, the
amount of goodwill impairment loss, if any, must be measured. The Company measures the
amount of goodwill impairment loss by comparing the implied fair value of goodwill with the
carrying amount of that goodwill. If the carrying amount of the reporting unit goodwill
exceeds the implied fair value of goodwill, an impairment loss is recognized as an operating
expense.FASB Statement No. 142, Goodwill and Other Intangible Assets, defines a reporting unit as
an operating segment or one level below an operating segment (referred to as a component). A
component of an operating segment is a reporting unit if the component constitutes a
business for which discrete financial information is available and segment management
regularly reviews the operating results of that component. Upon adoption of Statement 142 on
January 1, 2002, the Company allocated the whole amount of goodwill to the manufactured
products segment.
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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Goodwill (contd)The impairment assessment was made as of December 31, 2006, 2007 and 2008, and no
impairment was indicated. Total goodwill was $8,801, $8,801 and $8,801 as of December
31, 2006, 2007 and 2008, respectively.InvestmentsManagement determines the appropriate classification of its investment at the time of
purchase and re-evaluates such designation as of each balance sheet date.Equity securities are classified as available-for-sale, as the Company does not trade in
these securities, but rather are held as longer term investments due to business
relationships with the entities. Available-for-sale securities are carried at fair value,
with the unrealized gains and losses, net of tax, reported in a separate component of
shareholders equity. The amortized cost of held-to-maturity debt securities in this
category is adjusted for amortization of premiums and accretion of discounts to maturity.
Such amortization is included in investment income. Realized gains and losses and declines
in values judged to be other-than-temporary on available-for-sale securities are included in
investment income. The cost of securities sold is based on the specific identification
method. Interest and dividends on securities classified as available-for-sale are included
in investment income.Investments in which the Company does not have a controlling interest or an ownership voting
interest to exert significant influence, and which are not publicly traded are accounted for
at cost.A judgmental aspect of accounting for investments (including investments in equity
investees) involves determining whether an other-than-temporary decline in value of the
investment has been sustained. If it has been determined that an investment has sustained
an other-than-temporary decline in its value, the investment is written down to its fair
value, by a charge to earnings. Such evaluation is dependent on the specific facts and
circumstances. Factors that are considered by the Company in determining whether an
other-than-temporary decline in value has occurred include: the market value of the security
in relation to its cost basis; the financial condition of the investee; and the intent and
ability to retain the investment for a sufficient period of time to allow for recovery in
the market value of the investment.In 2006, 2007 and 2008, the Company recorded an impairment charge of $nil, $117 and $nil,
respectively, related to investment in certain equity investees.Impairment of Long-Lived AssetsLong-lived assets are reviewed for impairment whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable. Recoverability of an asset is
measured by comparison of the carrying amount of the asset to the net undiscounted future
cash flow expected to be generated from the assets. If the future undiscounted cash flows
are not sufficient to recover the carrying value of the asset, the assets carrying value is
adjusted to fair value. The Company estimates fair value based on discounted future cash
flow.In 2006, the Company recorded an impairment charge of $196 related to the
impairment of certain property, plant and equipment of Ningbo Pacific, a subsidiary
included in the manufactured products segment.These impairment charges were recorded to reduce the carrying value of the
identified assets to fair values. Fair values were derived using a variety of
methodologies, including cash flow analysis, estimates of sales proceeds and
independent appraisals. Where cash flow analyses were used to estimate fair values, key
assumptions employed, included estimates of future growth, estimates of gross margins
and estimates of the impact of inflation. The charges were primarily the result of
managements revised outlook due to the prolonged unfavourable market conditions.
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##### Table of Contents



4.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Allowance for Doubtful AccountsTrade accounts receivable are stated at the amount the Company expects to collect. The Company
maintains allowances for doubtful accounts for estimated losses resulting from the inability
of its customers to make required payments. Management considers the following factors when
determining the collectibility of specific customer accounts: customer credit-worthiness, past
transaction history with the customer, current economic industry trends, and changes in
customer payment terms. If the financial condition of the Companys customers were to
deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on
managements assessment, the Company provides for estimated uncollectible amounts through a
charge to earnings and a credit to a valuation allowance. Balances that remain outstanding
after the Company has used reasonable collection efforts are written off through a charge to
the valuation allowance and a credit to accounts receivable.Revenue RecognitionSales represents the invoiced value of goods sold, net of value added tax and returns,
commission income earned on distribution activities, and service fee income on installation
activities. 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. The following
specific recognition criteria must also be met before revenue is recognized.Sales of goods and distribution activitiesThe Company recognizes revenue from the sale of goods and distribution activities upon
passage of title to the customer which coincides with their delivery and acceptance. This
method of revenue recognition is in accordance with Staff Accounting Bulletin, SAB 104 
Revenue Recognition in Financial Statements.Installation activitiesThe Company recognizes revenue from installation activities using the
percentage-of-completion method, based on the customer certification of the distance of
cable laid with respect to the estimated total contract revenue, and in accordance with
Statement of Position (SOP) 81-1, Accounting for the Performance of Construction-Type and
Certain Production-Type Contracts issued by the American Institute of Certified Public
Accountants.When elements such as installation and sale of cables are contained in a single arrangement,
or in related arrangements with the same customer, the Company allocates revenue to each
element based on its relative fair value. The allocation of the fair value to the delivered
elements is limited to the amount that is not contingent on future delivery of services or
subject to customer-specified return or refund privileges.The Company adopted EITF No. 00-21, Accounting for Revenue Arrangements with Multiple
Deliverables (EITF 00-21) in 2003. The impact of adopting EITF 00-21 was not material to
the financial statements in 2006, 2007 and 2008.Shipping and Handling CostsThe Company classifies such costs as cost of sales.Product WarrantiesThe Company provides for the estimated cost of product warranties based on the warranty
policy and historical experience, and accrues for specific items at the time their existence
is known and the amounts are determinable. Historical warranty liability and related costs
have not been significant to the Companys operations.
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##### Table of Contents



4.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Foreign Currency TranslationThe Companys functional currency is generally the United States dollar and the consolidated
financial statements have been presented in United States dollars.The financial statements of the Companys subsidiaries where the local currency is the
functional currency have been translated into United States dollars in accordance with
FASB Statement No. 52, Foreign Currency Translation. All balance sheet accounts have
been translated using the exchange rates in effect at the balance sheet dates. Statement
of operations amounts have been translated using the exchange rates in effect during the
year. The gains and losses resulting from the changes in exchange rates from year to
year have been reported separately as a component of shareholders equity.Foreign currency transactions are recorded at the applicable rates of exchange in effect at
the transaction dates. Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are translated at the applicable rates of exchange
in effect at that date. Exchange differences are dealt with in the consolidated
statements of operations.Foreign Currency Forward ContractsThe Companys subsidiaries use forward foreign exchange contracts to reduce their exposure
to foreign currency risk for liabilities denominated in foreign currency. A forward foreign
exchange contract obligates the Company to exchange predetermined amounts of specified
foreign currencies at specified exchange rates on specified dates or to make an equivalent
US dollar payment equal to the value of such exchange. Realized and unrealized gains and
losses on foreign exchange contracts are included in income as foreign exchange gains or
losses.The Company recognizes all derivative financial instruments in the consolidated financial
statements at fair value regardless of the purposes or intent for holding the instrument.
Changes in the fair value of derivative financial instruments are either recognized
periodically in income or in shareholders equity as a component of comprehensive income
depending on whether the derivative financial instruments qualify for hedge accounting, and
if so, whether they qualify as a fair value or cash flow hedge.Generally, changes in fair values of derivatives accounted for as fair value hedges are
recorded in income along with the portions of the changes in the fair value of the
hedged items that relate to the hedged risks. Changes in fair value of derivatives
accounted for as cash flow hedges, to the extent they are effective as hedges, are
recorded in other comprehensive income net of deferred taxes. Changes in fair value of
derivatives used as hedges of the net investment in foreign operations are reported in
other comprehensive income as part of the cumulative translation adjustment. Changes in
fair values of derivatives not qualifying as hedges are reported in income.As of December 31, 2006, 2007 and 2008, the Company has entered into forward exchange sale
contracts with notional values of $1,842, $12,674 and $3,500, respectively. As of December
31, 2008, the Company has entered into forward exchange purchase contracts of $15,458. The
forward exchange contracts matured in January, February, March, May 2009. The fair values of
the forward exchange contracts as at December 31, 2006, 2007, and 2008 were recorded as $81,
$nil, and $6 in other assets, $113 in other liability, respectively. These forward exchange
contracts are qualified for hedge accounting in accordance with FASB Statement No. 133
Accounting for Certain Derivative Instruments and Certain Hedging Activities.
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4.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Gain on Issuance of Shares by SubsidiariesAt the time a subsidiary sells its stock to unrelated parties at a price in excess
of its book value, the Companys net investment in that subsidiary increases. If at
that time, the subsidiary is not a newly-formed, non-operating entity, nor a research
and development, start-up or development stage company, nor is there question as to the
subsidiarys ability to continue in existence, the Company records the increase as a
non-operating gain in the Consolidated Statements of Operations. Otherwise, the
increase is reflected in effect of subsidiaries equity transactions in the Companys
Consolidated Statements of Shareholders Equity.(Loss) Earnings Per ShareBasic and diluted (loss) earnings per share is calculated in accordance with FASB Statement
No. 128, Earnings Per Share. There are no dilutive equity instrument.Fair Value MeasurementsEffective January 1, 2008, the Company adopted the provisions of SFAS No. 157, Fair Value
Measurements (SFAS No. 157) for financial assets and liabilities, and related FSPs,
including FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the
Market for That Asset Is Not Active (FSP FAS 157-3). Under SFAS No. 157, fair value
is defined as the price that would be received to sell an asset or paid to transfer a
liability (i.e., the exit price) in an orderly transaction between market
participants at the measurement date.In determining fair value, the Company uses various valuation approaches. SFAS No.
157 establishes a hierarchy for inputs used in measuring fair value that maximizes the
use of observable inputs and minimizes the use of unobservable inputs by requiring that
the most observable inputs be used when available. Observable inputs are inputs that
market participants would use in pricing the asset or liability developed based on
market data obtained from sources independent of the Company. Unobservable inputs are
inputs that reflect the Companys assumptions about the assumptions market participants
would use in pricing the asset or liability developed based on the best information
available in the circumstances. The hierarchy is broken down into three levels based on
the observability of inputs as follows:
 
    
    Level 1  Valuations based on quoted prices in active markets for identical
assets that the Company has the ability to access. Valuation adjustments and block
discounts are not applied to Level 1 instruments. Since valuations are based on quoted
prices that are readily and regularly available in an active market, valuation of these
products does not entail a significant degree of judgment.
    
    Level 2  Valuations based on one or more quoted prices in markets that are not
active or for which all significant inputs are observable, either directly or indirectly.
    
    Level 3  Valuations based on unobservable inputs which are supported by little
or no market activity and significant to the overall fair value measurement.
 The availability of observable inputs can vary from investment to investment and is
affected by a wide variety of factors, including, for example, the type of investment,
the liquidity of markets and other characteristics particular to the transaction. To
the extent that valuation is based on models or inputs that are less observable or
unobservable in the market, the determination of fair value requires more judgment and
the investments are categorizes as Level 3.The carrying amounts of financial instruments carried at cost, including cash and
cash equivalents, bank deposits, trade receivables, other current assets, trade
payables, related party balances and other liabilities approximate their fair value due
to the short-term maturities of such instruments.
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4.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Recent PronouncementsIn September 2006, FASB issued Statement No. 157  Fair Value MeasurementsStatement No.
157 (SFAS 157) defines fair value, which establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair value
measurements. The provisions of this standard apply to other accounting pronouncements that
require or permit fair value measurements. SFAS 157 was effective for the Company on January
1, 2008 and it did not have a material affect on its consolidated financial statements, see
note 14 (b).In February 2007, the FASB issued Statement No. 159  The Fair Value Option for Financial
Assets and Financial Liabilities  Including an amendment of FASB Statement No. 115. SFAS
No. 159 permits entities to choose to measure eligible items at fair value at specified
election dates and report unrealized gains and losses on items for which the fair value
option has been elected in earnings at each subsequent reporting date. Statement No. 159 is
effective for fiscal years beginning after November 15, 2007. SFAS 159 was effective for the
Company for the fiscal year beginning on January 1, 2008 and it did not have an effect on the Companys consolidated financial
statements.In June 2007, the FASB ratified EITF Issue No. 07-3 (EITF 07-3), Accounting for
Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and
Development Activities. This issue provides that nonrefundable advance payments for goods
or services that will be used or rendered for future research and development activities
should be deferred and capitalized. Such amounts should be recognized as an expense as the
related goods are delivered or the related services are performed. EITF 07-3 is effective
for fiscal years beginning after December 15, 2007. The adoption of EIFT 07-3 did not have
an effect on the Companys consolidated financial statements.In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations (SFAS
No. 141(R)), which establishes principles and requirements for the reporting entity in a
business combination, including recognition and measurement in the financial statements of
the identifiable assets acquired, the liabilities assumed, and any non-controlling interest
in the acquiree. This statement also establishes disclosure requirements to enable financial
statement users to evaluate the nature and financial effects of the business combination.
SFAS No. 141(R) applies prospectively to business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning on or after
December 15, 2008, and interim periods within those fiscal years. Early adoption is
prohibited. The impact of this standard is dependant upon the level of future acquisitions.In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51. SFAS No. 160 establishes accounting and
reporting standards for the non-controlling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary
is an ownership interest in the consolidated entity that should be reported as equity in the
consolidated financial statements. Additionally, SFAS No. 160 requires expanded disclosures in
the consolidated financial statements. SFAS No. 160 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008. The Company is
currently assessing the potential impact of SFAS No. 160 on its financial statements.In February 2008, the FASB issued FASB Staff Position (FSP) FAS 157-1, Application of FASB
Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address
Fair Value Measurement for Purpose of Lease Classification of Measurement under Statement 13,
which amends SFAS 157 to exclude accounting pronouncements that address fair value
measurements for purpose of lease classification or measurement under SFAS No. 13, Accounting
for Leases. In February 2008, the FASB also issued FSP FAS 157-2, Effective Date of FASB
Statement No. 157, which delays the effective date of SFAS 157 until the first quarter of
fiscal 2010 for all non-financial assets and non-financial liabilities, except for items that
are recognized or disclosed at fair value in the financial statements on a recurring basis (at
least annually). This FSP defers the effective date of SFAS 157 to fiscal years beginning
after November 15, 2008, and the interim periods within those fiscal years for items within
the scope of this FSP. The application of
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4.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Recent Pronouncements (contd)SFAS 157 in future periods to those items covered by FSP 157-2 is not expected to have a
material effect on the consolidated financial statements of the Company.In March 2008, the FASB issued SFAS No. 161 (SFAS 161), Disclosures about Derivative
Instruments and Hedging Activities, an Amendment of FASB Statement No. 133, which requires
additional disclosures about the objectives of the derivative instruments and hedging
activities, the method of accounting for such instruments under SFAS No. 133 and its related
interpretations, and a tabular disclosure of the effects of such instruments and related
hedged items on our financial position, financial performance, and cash flows. SFAS 161 will
be effective for the Company in fiscal year 2010. The Company is currently assessing the
potential impact that adoption of SFAS 161 may have on its financial statements.In April 2008, FASB issued FSP No. 142-3 Determination of the useful life of intangible
assets. This FSP amends the factors that should be considered in developing renewal or
extension assumptions used to determine the useful life of a recognized intangible asset
under FASB Statement No. 142, Goodwill and Other Intangible Assets. The intent of this FSP
is to improve the consistency between the useful life of a recognized intangible asset under
SFAS No. 142 and the period of expected cash flows used to measure the fair value of the
asset under SFAS No. 141, Business Combinations, and other U.S. GAAP. This FSP will be
effective for the Company for fiscal years beginning after December 15, 2008, and interim
periods within those fiscal years. Early adoption is prohibited. The adoption of FSP 142-3
is not expected to have a material effect on the consolidated financial statements of the
Company.In May 2008, the Financial Accounting Standards Board issued SFAS No. 162, The
Hierarchy of Generally Accepted Accounting Principles. The new standard is intended to
improve financial reporting by identifying a consistent framework, or hierarchy, for
selecting accounting principles to be used in preparing financial statements that are
presented in conformity with U.S. GAAP for nongovernmental entities. SFAS No. 162 is
effective 60 days following the SECs approval of the Public Company Accounting
Oversight Board Auditing amendments to AU Section 411, The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles. The adoption of SFAS No. 162
is not expected to have a material effect on the consolidated financial statements of
the Company.In June 2008, FASB issued FASB Staff Position FSP EITF 03-6-1 Determining whether
instruments granted in share-based payment transactions are participating securities.
This FASB Staff Position (FSP) addresses whether instruments granted in share-based
payment transactions are participating securities prior to vesting and, therefore, need
to be included in the earnings allocation in computing earnings per share (EPS) under the
two-class method described in paragraphs 60 and 61 of FASB Statement No. 128, Earnings
per Share. This FSP will be effective for the Company for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal years. All
prior-period EPS data presented shall be adjusted retrospectively (including interim financial
statements, summaries of earnings, and selected financial data) to conform with the provisions
of this FSP. Early application is not permitted. The Company is currently evaluating the
potential impact, if any, of the adoption of FSP EITF 03-6-1 on the Companys consolidated
financial statements.In September 2008, Financial Accounting Standards Board issued FASB Staff
Positions (FSP) FAS 133-1 and FIN 45-4 Disclosures about Credit Derivatives and
Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No.
45; and Clarification of the Effective Date of FASB Statement No. 161. This FSP amends
FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities,
to require disclosures by sellers of credit derivatives, including credit derivatives
embedded in a hybrid instrument. This FSP also amends FASB Interpretation No. 45,
Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, to require an additional disclosure about the
current status of the payment/performance risk of a guarantee. Further, this FSP
clarifies the Boards intent about the effective date of FASB Statement No. 161,
Disclosures about Derivative
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Recent Pronouncements (contd)Instruments and Hedging Activities. This FSP applies to credit derivatives within the scope
of Statement 133, hybrid instruments that have embedded credit derivatives, and
guarantees within the scope of Interpretation 45. This FSPs amendment to Statement 133
also pertains to hybrid instruments that have embedded credit derivatives (for example,
credit-linked notes). The provisions of this FSP that amend Statement 133 and
Interpretation 45 shall be effective for reporting periods (annual or interim) ending
after November 15, 2008. This FSP encourages that the amendments to Statement 133 and
Interpretation 45 be applied in periods earlier than the effective date to facilitate
comparisons at initial adoption. In periods after initial adoption, this FSP requires
comparative disclosures only for periods ending subsequent to initial adoption. The
adoption of FSP 133-1 and FIN 45-4 is not expected to have a material effect on the
Companys consolidated financial statements.In October 2008, the FASB issued the FASB Staff Position (FSP No. 157-3) which
clarifies the application of FASB Statement No. 157, Fair Value Measurements in a
market that is not active and provides an example to illustrate key considerations in
determining the fair value of a financial asset when the market for that asset is not
active. This FSP applies to financial assets within the scope of accounting
pronouncements that require or permit fair value measurements in accordance with
Statement 157. The FSP shall be effective upon issuance, including prior periods for
which financial statements have not been issued. Revisions resulting from a change in
the valuation technique or its application shall be accounted for as a change in
accounting estimate (FASB Statement No. 154 Accounting changes and Error Corrections,
paragraph 19). The disclosure provisions of Statement No. 154 for a change in
accounting estimate are not required for revisions resulting from a change in valuation
technique or its application. The application of FSP 157-3 did not have a material
effect on the consolidated financial statements of the Company.In November 2008, the FASB issued its final consensus on Issue 08-8  Accounting
for an instrument (or an embedded Feature) with a settlement amount that is based on
the stock of an entitys consolidated subsidiary This issue applies to freestanding
financial instruments (and embedded features) for which the payoff to the counterparty
is based, in whole or in part, on the stock of a consolidated subsidiary. This issue
applies to those instruments (and embedded features) in the consolidated financial
statements of the parent, whether the instrument was entered into by the parent or the
subsidiary. This issue will be effective for fiscal years beginning on or after
December 15, 2008 and interim periods within those fiscal years. Early adoption is not
permitted. The consensus shall be applied to outstanding instruments as of the
beginning of the fiscal year in which this issue is initially applied. The adoption of
Issue 08-8 is not expected to have a material effect on the consolidated financial
statements of the Company.In November 2008, the FASB issued the EITF Issue No. 08-6 Equity Method Investment Accounting
Considerations (EITF 08-6) to clarify the accounting for certain transactions and
impairment considerations involving equity method investments. The FASB and the IASB concluded
a joint effort in converging the accounting for business combinations as well as the
accounting and reporting for non-controlling interests culminating in the issuance of
Statement 141(R) and Statement 160. The objective of that joint effort was not to reconsider
the accounting for equity method investments; however, the application of the equity method is
affected by the accounting for business combinations and the accounting for consolidated
subsidiaries, which were affected by the issuance of Statement 141(R) and Statement 160. EITF
08-6 is effective for fiscal years beginning on or after December 15, 2008, and interim
periods within those fiscal years, consistent with the effective dates of Statement 141(R) and
Statement 160. EITF 08-6 shall be applied prospectively. Earlier application by an entity that
has previously adopted an alternative accounting policy is not permitted. The adoption of EITF
08-6 is not expected to have a material effect on the consolidated financial statements of the
Company.
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4.
    
    SHORT-TERM BANK DEPOSITS
 December 31,2007
    
    
    2008Unrestricted short-term bank deposits
    
    $
    1,861
    
    
    $
    7,756Restricted short-term bank deposits
    
    
    18,714
    
    
    
    15,033$
    20,575
    
    
    $
    22,789
 Restricted short-term bank deposits represent the amounts of cash pledged by three
subsidiaries to secure credit facilities granted by financial institutions.
Unrestricted short-term bank deposits represents bank deposits which do not qualify as
cash equivalents.The bank deposits bear interest ranging from 1% to 5.1% and 0.325% to 4.6% per
annum for the year 2007 and 2008, respectively.5.
    
    GOODWILLGoodwill of $8,801 (2007: $8,801; 2006: $8,801) relates to the manufactured products segment
and there are no changes in the carrying value of goodwill for the years ended December 31,
2006, 2007 and 2008.6.
    
    INVESTMENTSOn December 31, 2007 and 2008, the Company held available-for-sale securities issued by a
minority shareholder of two of the Operating Subsidiaries.The following is a summary of these available-for-sale securities:
 Available-for-sale SecuritiesGross
    
    
    Gross
    
    
    EstimatedUnrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDecember 31, 2007
Quoted equity securities
    
    $
    473
    
    
    $
    
    
    
    $
    (272)
    
    
    $
    201December 31, 2008
Quoted equity securities
    
    $
    392
    
    
    $
    
    
    
    $
    (324)
    
    
    $
    68
 The above investment in TT&T Public Company Limited (TT&T) has been in a continuous
unrealized loss position for more than 12 months. TT&T is listed on the Stock Exchange of
Thailand. Its principal activity is the operation of provincial telephone network
throughout Thailand and services include, fixed line telephone, pay phone, data
communication and distribution of telephone equipment.
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7.
    
    INVESTMENTS(continued)A summary of the carrying values and balance sheet classification of all
investments in debt, equity securities and available-for-sale securities disclosed
above was as follows:
 December 31,2007
    
    
    2008Available-for-sale equity securities
    
    $
    201
    
    
    $
    68Held-to-maturity debt securities
    
    
    2,354
    
    
    
    Short-term investments
    
    
    2,555
    
    
    
    68Equity securities in privately-held companies and other
investments
    
    
    650
    
    
    
    544Long-term investments
    
    
    650
    
    
    
    544Total investments
    
    $
    3,205
    
    
    $
    612
 There were realized gains of $343, $28 and $nil on disposal of available-for-sale
securities in 2006, 2007 and 2008, respectively. The disposal of available-for-sale
securities was for a consideration of $626, $65 and $14 in 2006, 2007 and 2008,
respectively. The net adjustment to unrealized holding losses on available-for-sale
securities included as a separate component of shareholders equity, net at income
taxes, totaled, $(64), $(6) and $(46) in 2006, 2007 and 2008, respectively.The held-to-maturity investment as of December 31, 2007 bears interest at 3.0% per
annum and matured in June 2008.The long-term investments in non-marketable securities are valuated at cost net of allowance
for impairment (if any). The long-term investment consists of the investment in a privately
owned company in Thailand which is engaged in the fabrication of copper rods. There is no
impairment recognized in 2007 and 2008 because there are no any events or changes in
circumstances that may have had a significant adverse effect on the fair value of the
investment.8.
    
    BANK LOANS AND OVERDRAFTSUnder line of credit arrangements for short-term debt with the Companys bankers, the
Company may borrow up to approximately $248,749 (2007: $252,099) 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, 2008, the unused portion of
the credit lines was approximately $140,756 (2007: $134,811), which included unused letters
of credit amounting to $93,499 (2007: $98,089). Letters of credit are issued by the Company
during the ordinary course of business through major financial institutions as required by
certain vendor contracts. As of December 31, 2008, the Company had open letters of credit
totaling $57,976 (2007: $80,693). Liabilities relating to the letters of credit are included
in current liabilities.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 $40,246 at December 31, 2008 (2007: $37,541);
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8.
    
    BANK LOANS AND OVERDRAFTS(continued)
 (ii)
    
    Mortgage of the assets with total carrying amount of $nil at December 31, 2008
of a subsidiary of the Company (2007: $nil);The subsidiary has ceased its business operation since May 2007 and
all the bank facilities were cancelled as of November 30, 2007.(iii)
    
    Pledge of short-term deposits of $15,033 at December 31, 2008 (2007: $18,714);(iv)
    
    Joint and several personal guarantees from certain directors of a subsidiary of
the Company; and(v)
    
    Corporate guarantees issued by the Company, a subsidiary of the Company and the
holding company.
 The weighted average interest rates on bank loans and overdrafts as of December 31, 2006,
2007 and 2008 were 5.9%, 6.1% and 5.3% per annum, respectively.9.
    
    DISTRIBUTION OF EARNINGSThe Companys ability to pay dividends is primarily dependent on the Company receiving
distributions from the Operating Subsidiaries and the investee companies.As described in Note 2, the earnings reflected in the financial statements prepared in
accordance with US GAAP differ from those reflected in the statutory financial statements of
the Companys subsidiaries and investee companies. In accordance with the relevant laws and
regulations applicable to the Companys subsidiaries and investee companies, the earnings
available for distribution are based on their respective statutory financial statements. At
December 31, 2007, the amount of the Companys retained earnings available for distribution
was approximately $27,126 and the consolidated retained earnings included $(3,084),
$(1,003), $(729), $695 and $(145) of the
accumulated (losses) profits of Lox Pac, Thai Professional, SPHC, SPRC and Shandong Huayu,
respectively. At December 31, 2008, the amount of the Companys retained earnings
available for distribution was approximately $14,709 and the consolidated retained
earnings included $(3,084), $(1,003), $(734), $586 and $(175) of the accumulated
(losses) profits of Lox Pac, Thai Professional, SPHC, SPRC and Shandong Huayu,
respectively.
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10.
    
    VALUATION AND QUALIFYING ACCOUNTS
 Net charged
    
    
    
    
    
    
    Currency
    
    
    BalanceBalance at
    
    
    (credited) to costs
    
    
    
    
    
    
    translation
    
    
    at end ofDescription
    
    beginning of year
    
    
    and expenses
    
    
    Deduction
    
    
    adjustment
    
    
    yearYear ended December 31, 2006:Deducted from asset accountsAllowance for doubtful accounts
    
    $
    8,383
    
    
    $
    1,221
    
    
    $
    (946
    )
    
    $
    632
    
    
    $
    9,290Allowance for inventories Net realizable value
    
    
    2,387
    
    
    
    1,121
    
    
    
    
    
    
    
    
    
    
    
    3,508 Obsolescence
    
    
    1,941
    
    
    
    896
    
    
    
    (509
    )
    
    
    156
    
    
    
    2,484Allowance for deferred
tax assets
    
    
    6,027
    
    
    
    (2,088
    )
    
    
    
    
    
    
    402
    
    
    
    4,341$
    18,708
    
    
    $
    1,150
    
    
    $
    (1,455
    )
    
    $
    1,190
    
    
    $
    19,623Year ended December 31, 2007:Deducted from asset accountsAllowance for doubtful accounts
    
    $
    9,290
    
    
    $
    3,295
    
    
    $
    (2,172
    )
    
    $
    1,072
    
    
    $
    11,485Allowance for inventories Net realizable value
    
    
    3,508
    
    
    
    (363
    )
    
    
    
    
    
    
    102
    
    
    
    3,247 Obsolescence
    
    
    2,484
    
    
    
    (909
    )
    
    
    
    
    
    
    200
    
    
    
    1,775Allowance for deferred tax assets
    
    
    4,341
    
    
    
    (3,158
    )
    
    
    
    
    
    
    302
    
    
    
    1,485$
    19,623
    
    
    $
    (1,135
    )
    
    $
    (2,172
    )
    
    $
    1,676
    
    
    $
    17,992Year ended December 31, 2008:Deducted from asset accountsAllowance for doubtful accounts
    
    $
    11,485
    
    
    $
    12
    
    
    $
    (1,031
    )
    
    $
    (822
    )
    
    $
    9,644Allowance for inventories Net realizable value
    
    
    3,247
    
    
    
    25,144
    
    
    
    (142
    )
    
    
    (1,967
    )
    
    
    26,282 Obsolescence
    
    
    1,775
    
    
    
    1
    
    
    
    (1,164
    )
    
    
    (179
    )
    
    
    433Allowance for deferred tax assets
    
    
    1,485
    
    
    
    5,227
    
    
    
    
    
    
    
    (29
    )
    
    
    6,683$
    17,992
    
    
    $
    30,384
    
    
    $
    (2,337
    )
    
    $
    (2,997
    )
    
    $
    43,042
 Due to changing market conditions in the wire & cable industry, the Company evaluates the
inventory in all of its product lines on a periodic basis. As a result, a reserve for
inventory obsolescence of $896 and $1 were recognized for the years ended December 31, 2006
and 2008, respectively. A recovery for obsolescence of $909 was recognized, as a credit to
cost of sales, for the years ended December 31, 2007. In addition, inventory write-down to
net realizable value of $1,121 were charged to cost of sales in 2006 and a decrease of $363
in the net realizable value allowance was recognized as credit to cost of sales, for
finished goods written down to net previous years, which were sold at above net realizable
value in 2007.During 2008, the decreases in commodity prices, including that of copper, resulted in a
write-down of the carrying cost of the Companys inventory as of December 31, 2008. Copper
prices on the London Metal Exchange (the LME) have fallen from an average monthly high of
$8,685 per metric ton in April 2008 to only $3,072 per metric ton in December 2008. In
addition, sales towards the end of 2008 have decreased due to the worldwide economic
slowdown thereby increasing our inventory levels at year end. As a result of the fall in
commodity prices and our high inventory levels, a reserve of $25,144 for inventory
write-down to net realizable value was charged to cost of sales in 2008. The allowance for
inventory losses is based on the Companys best estimates of product sales prices and
customer demand patterns, and its plans to transition its products. As a result of the
commodity markets dynamic nature, it is at least reasonably possible that the estimate used
by the Company to determine its allowance for inventory losses may be more or less than the
actual amount or results in the near term.
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11.
    
    INCOME TAXESUnder current Bermuda law, the Company is not subject to tax on income or capital gains, and
no Bermuda withholding tax is 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, the Peoples Republic of China and Myanmar. The corporate
income tax rate in Singapore was 20%, 18% and 18% for 2006, 2007 and 2008, respectively, and
there is no withholding tax on dividends applicable to the Company. For Thailand, the
corporate income tax rate was 30% for each of the three years ended December 31, 2008 and a
withholding tax of 10% is levied on dividends received by the Company. In Australia, the
corporate income tax rate was 30% for 2006/2007, 2007/2008 and 2008/2009 tax years. The
applicable corporate income tax rate for the subsidiaries in the Peoples Republic of China
was 33% for 2006 and 2007 and 25% for 2008. The corporate income tax rate for Myanmar was
30% for 2006/2007, 2007/2008 and 2008/2009 tax years.Pursuant to the Corporate Income Tax Law (the CIT Law) of the PRC came into effect on
January 1, 2008, all the enterprises generally are subject to corporate income tax at an
effective rate of 25% on income as reported in their statutory accounts (2007: 33%). The
enterprise is located in specially-designated regions or cities enjoyed the preferential
policy in the form of a reduced tax rate shall have five years from the time when the CIT
Law takes effect to transition progressively to the legally prescribed tax rate. During this
period, an enterprise that enjoyed the 15% corporate income tax rate shall be subject to the
18% tax rate for the year 2008, 20% for the year 2009, 22% for the year 2010, 24% for the
year 2011, and 25% for the year 2012.PEWS is located in Shenzhen, which is a region where preferential tax rates apply and
currently qualifies for a reduced rate of taxation of 15% (50% of the full rate of 30% State
income taxes and no local income taxes). Pursuant to the Notice on the Implementation of the
Transitional Preferential CIT Policies Guofa, as of January 1, 2008, the enterprise that
enjoyed the 15% income tax rate shall be subject to the 18% for the year 2008. PEWS
qualifies for a further reduced rate of 10% if export revenues exceed 70% of its total
revenues. PEWS is exempt from income tax for the two years starting from its first
profitable year of operations (2001). PEWS is entitled to a 50% tax exemption from the State
income taxes for a further three-year period (2003 to 2005) under the Income Tax Law. With
the preferential tax rate, current income tax liabilities of PEWS were reduced by
approximately $116 for the year ended December 31, 2008. The preferential tax rate also
increased the net income per share by $0.008 for the year ended December 31, 2008.
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11.
    
    INCOME TAXES(continued)Pre-tax income (loss) from continuing operations was taxed in the following jurisdictions:
 Year ended December 31,2006
    
    
    2007
    
    
    2008Thailand
    
    $
    25,524
    
    
    $
    9,116
    
    
    $
    (14,453
    )Singapore
    
    
    (2,652
    )
    
    
    3,169
    
    
    
    (712
    )Australia
    
    
    2,811
    
    
    
    6,255
    
    
    
    2,731The Peoples Republic of China
    
    
    10,323
    
    
    
    1,318
    
    
    
    (5,293
    )British Virgin Islands
    
    
    (1,290
    )
    
    
    (3,143
    )
    
    
    152Bermuda
    
    
    (2,229
    )
    
    
    (3,679
    )
    
    
    (2,351
    )32,487
    
    
    
    13,036
    
    
    
    (19,926
    )Equity investeesThe Peoples Republic of China
    
    
    
    
    
    
    (123
    )
    
    
    (142
    )British Virgin Islands
    
    
    73
    
    
    
    247
    
    
    
    73
    
    
    
    124
    
    
    
    (142
    )$
    32,560
    
    
    $
    13,160
    
    
    $
    (20,068
    )
 Significant components of the provision (benefit) for income taxes are as follows:
 Year ended December 31,2006
    
    
    2007
    
    
    2008Allocated to net income (loss)Current:Thailand
    
    $
    7,578
    
    
    $
    5,701
    
    
    $
    1,514Singapore
    
    
    (168
    )
    
    
    194
    
    
    
    132The Peoples Republic of China
    
    
    1,888
    
    
    
    662
    
    
    
    (679
    )Australia
    
    
    1,382
    
    
    
    1,710
    
    
    
    1,310Total current
    
    
    10,680
    
    
    
    8,267
    
    
    
    2,277Deferred:Thailand
    
    
    (71
    )
    
    
    (2,128
    )
    
    
    (865
    )Singapore
    
    
    334
    
    
    
    (3
    )
    
    
    The Peoples Republic of China
    
    
    (110
    )
    
    
    (56
    )
    
    
    1,135Australia
    
    
    (576
    )
    
    
    218
    
    
    
    (415
    )Total deferred
    
    
    (423
    )
    
    
    (1,969
    )
    
    
    (145
    )$
    10,257
    
    
    $
    6,298
    
    
    $
    2,132Allocated to other comprehensive loss
    
    $
    (92
    )
    
    $
    (6
    )
    
    $
    (27
    )
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11.
    
    INCOME TAXES(continued)
    
 At December 31, 2006, 2007 and 2008, the Operating Subsidiaries had net
operating loss carry forwards of approximately $19,460, $5,970 and $16,643,
respectively. The remaining net operating losses can be carried forward indefinitely,
subject to any condition to be met under the relevant tax laws of the respective
jurisdictions. The utilization of these net operating loss carry forwards is subject
to agreement by the income tax authorities in the respective jurisdictions.The parent companys tax is filed in Bermuda, which does not have a statutory tax
rate. Therefore the provision for income taxes differs based on the taxes incurred by
the Operating Subsidiaries, in their respective jurisdiction. The principal reasons for
the differences are listed in the following table:
 Year ended December 31,2006
    
    
    2007
    
    
    2008Higher statutory tax rate in:Thailand
    
    $
    5,869
    
    
    $
    1,966
    
    
    $
    (3,887
    )Singapore
    
    
    (530
    )
    
    
    634
    
    
    
    (128
    )Australia
    
    
    843
    
    
    
    1,899
    
    
    
    830Peoples Republic of China
    
    
    1,411
    
    
    
    305
    
    
    
    (763
    )7,593
    
    
    
    4,804
    
    
    
    (3,948
    )Expenses not deductible for tax purposes
    
    
    4,541
    
    
    
    4,163
    
    
    
    894Changes in valuation allowance
    
    
    (1,686
    )
    
    
    (2,856
    )
    
    
    5,198Others
    
    
    (191
    )
    
    
    187
    
    
    
    (12
    )Total charge for the year
    
    $
    10,257
    
    
    $
    6,298
    
    
    $
    2,132
 Deferred tax liabilities and assets comprised the following:
 2007
    
    
    2008Deferred tax liabilities:Tax over book depreciation
    
    $
    (275
    )
    
    $
    (275
    )Book over tax basis in subsidiaries
    
    
    (1,511
    )
    
    
    (1,022
    )Total deferred tax liabilities
    
    
    (1,786
    )
    
    
    (1,297
    )Deferred tax assets:Unused tax losses and unused tax credits
    
    
    1,687
    
    
    
    837Allowance for doubtful accounts
    
    
    3,374
    
    
    
    2,540Allowance for inventories
    
    
    772
    
    
    
    7,365Allowance for impairment in investment
    
    
    610
    
    
    
    540Others
    
    
    82
    
    
    
    97Total deferred tax assets
    
    
    6,525
    
    
    
    11,379Valuation allowance for deferred tax assets
    
    
    (1,485
    )
    
    
    (6,683
    )Total deferred tax assets
    
    
    5,040
    
    
    
    4,696Net deferred tax assets
    
    $
    3,254
    
    
    $
    3,399
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##### Table of Contents



11.
    
    INCOME TAXES(continued)The amount of deferred tax liabilities and assets at December 31, 2007 and 2008 were as
follows:
 December 31,2007
    
    
    2008Gross current deferred tax liabilities
    
    $
    (561
    )
    
    $
    (72
    )Gross current deferred tax assets
    
    
    4,312
    
    
    
    10,091Valuation allowance for deferred tax assets
    
    
    (1,254
    )
    
    
    (7,028
    )3,058
    
    
    
    3,063Net current deferred tax assets
    
    
    2,497
    
    
    
    2,991Gross long-term deferred tax liabilities
    
    
    (1,225
    )
    
    
    (1,225
    )Gross long-term deferred tax assets
    
    
    2,213
    
    
    
    1,633Valuation allowance for deferred tax assets
    
    
    (231
    )
    
    
    1,982
    
    
    
    1,633Net long-term deferred tax assets
    
    
    757
    
    
    
    408Net deferred tax assets
    
    $
    3,254
    
    
    $
    3,399
 The deferred tax liabilities and assets are presented in the accompanying consolidated
balance sheets as follows:
 December 31,2007
    
    
    2008CurrentDeferred tax assets
    
    $
    2,481
    
    
    $
    3,064Deferred tax liabilities
    
    
    (561
    )
    
    
    (65
    )Total current
    
    
    1,920
    
    
    
    2,999Long-termDeferred tax assets
    
    
    2,032
    
    
    
    1,182Deferred tax liabilities
    
    
    (698
    )
    
    
    (782
    )Total long-term
    
    
    1,334
    
    
    
    400Net deferred tax assets
    
    $
    3,254
    
    
    $
    3,399
 Undistributed earnings of the Companys foreign subsidiaries included in the Companys
retained earnings amounted to approximately $30,000, $32,697 and $19,165 as of December 31,
2006, 2007 and 2008, respectively. Upon distribution of those earnings in the form of
dividends or otherwise, the Company would be subject to withholding taxes payable to the
respective foreign countries. Except for earnings relating to a subsidiary in Thailand, the
Company has no intention of distributing the earnings that are subject to withholding taxes.
Withholding taxes of approximately $128 would be payable upon remittance of all previously
unremitted earnings of that subsidiary, to the extent allowed by the subsidiarys articles
of association, as of December 31, 2008.
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##### Table of Contents



11.
    
    INCOME TAXES(continued)The management estimated and accrued a tax provision in the amount of $156 and $nil during
2007 and 2008 as the Company determined that it is more-likely-than-not that income derived
from certain activities may be subject to taxes in offshore locations that have a higher tax
rate. The accrued tax provisions were recorded in income tax liabilities.Deferred income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes. The Company had deferred tax assets totaling approximately
$6,525 and $11,379 at December 31, 2007 and 2008, respectively. However, realization of all
of these deferred assets is not reasonably assured; therefore, they were reserved by a
valuation allowance of $1,485 and $6,683 at December 31, 2007 and 2008, respectively.The net change in valuation allowance for the years ended December 31, 2006, 2007 and 2008
was an increase (decrease) of approximately $(1,686), $(2,856) and $5,198 respectively,
resulting primarily from net operating (gains) losses generated during the respective years.On July 13, 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in
Income Taxes  An Interpretation of FASB Statement No. 109 (FIN 48). FIN 48 clarifies
the accounting for uncertainty in income taxes recognized in an entitys financial
statements in accordance with FASB Statement No. 109, Accounting for Income Taxes and
prescribes a recognition threshold and measurement attributes for financial statement
disclosure of tax positions taken or expected to be taken on a tax return. Under FIN 48, the
impact of an uncertain income tax position on the income tax return must be recognized at
the largest amount that is more-likely-than-not to be sustained upon audit by the relevant
taxing authority. An uncertain income tax position will not be recognized if it has less
than a 50% likelihood of being sustained. Additionally, FIN 48 provides guidance on
derecognition, classification, interest and penalties, accounting in interim periods,
disclosure and transition.The Company adopted the provisions of FIN 48 on January 1, 2007. The total amount of
unrecognized tax benefits as of the date of adoption was $220. The Companys practice is to
recognize interest and/or penalties related to income tax matters as a component of income
tax expenses. Upon adoption of FIN 48 on January 1, 2007, the Company recognized $1,774 of
interest and penalties. As a result of the implementation of FIN 48 on January 1, 2007, the
Company recognized a reduction to retained earnings of $1,889. As a result of the
implementation of FIN 48, the Company recognized a $105 decrease in deferred tax assets and
a corresponding decrease in the valuation allowance. As of January 1, 2007, the amount of
unrecognized tax benefits included in the balance sheet that would, if recognized, affect
the effective tax rate is $115.As of December 31, 2007 and 2008, the Company is subject to taxation in The Peoples
Republic of China, Hong Kong, Australia, Thailand, and Singapore. The Companys tax years
for 1999 and forward are subject to examination by the tax authorities in the jurisdictions
where the Company is subject to taxation.As of December 31, 2007 and 2008, the amount of unrecognized tax benefits included in the
balance sheet that would, if recognized, affect the effective tax rate is $130 and $76,
respectively. The Company recognized $440 and $391 in interest and penalties during 2007 and
2008. As of December 31, 2007 and 2008, the Company recognized $2,214 and $2,540,
respectively of interest and penalties.Change in Uncertain Tax Positions
 December 31,2007
    
    
    2008Balance at January 1
    
    $
    
    
    
    $
    475Adoption of FIN 48 effective January 1, 2007
    
    
    220
    
    
    
    Additions based on tax positions related to the current year
    
    
    213
    
    
    
    Additions for tax positions of prior years
    
    
    42
    
    
    
    5Settlements
    
    
    
    
    
    
    (58
    )Balance at December 31
    
    $
    475
    
    
    $
    422
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12.
    
    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)The components of other comprehensive income (loss) are as follows:
 Unrealizedgains(losses) onCurrency
    
    available-translation
    
    for- saleadjustments
    
    securities
    
    Others
    
    TotalBalance at January 1, 2006
    
    $
    (28,140
    )
    
    $
    532
    
    
    $
    
    
    
    $
    (27,608
    )Currency translation adjustment
    
    
    9,822
    
    
    
    
    
    
    
    
    
    
    
    9,822Realized gain on liquidation of subsidiary
    
    
    (1,801
    )
    
    
    
    
    
    
    
    
    
    
    (1,801
    )Deferred taxes relating to realized gain
on
liquidation of subsidiary
    
    
    556
    
    
    
    
    
    
    
    
    
    
    
    556Gain realized on sale of
available-for-sale securities
    
    
    
    
    
    
    (601
    )
    
    
    
    
    
    
    (601
    )Deferred taxes relating to realized gain
on
sales of available-for-sale securities
    
    
    
    
    
    
    258
    
    
    
    
    
    
    
    258Unrealized losses on available-for-sale
securities
    
    
    
    
    
    
    (156
    )
    
    
    
    
    
    
    (156
    )Deferred taxes relating to unrealized
losses
on available-for-sale securities
    
    
    
    
    
    
    92
    
    
    
    
    
    
    
    92Balance at December 31, 2006
    
    
    (19,563
    )
    
    
    125
    
    
    
    
    
    
    
    (19,438
    )Currency translation adjustment
    
    
    15,179
    
    
    
    
    
    
    
    
    
    
    
    15,179Gain realized on sale of
available-for-sale securities
    
    
    
    
    
    
    (34
    )
    
    
    
    
    
    
    (34
    )Deferred taxes relating to realized gain
on
sales of available-for-sale securities
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    6Unrealized losses on available-for-sale
securities
    
    
    
    
    
    
    (12
    )
    
    
    
    
    
    
    (12
    )Deferred taxes relating to unrealized
losses
on available-for-sale securities
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    6Pension benefits recognized under SFAS 158
    
    
    
    
    
    
    
    
    
    
    (71
    )
    
    
    (71
    )Balance at December 31, 2007
    
    
    (4,384
    )
    
    
    91
    
    
    
    (71
    )
    
    
    (4,364
    )Currency translation adjustment
    
    
    (8,994
    )
    
    
    
    
    
    
    
    
    
    
    (8,994
    )Unrealized losses on available-for-sale
securities
    
    
    
    
    
    
    (45
    )
    
    
    
    
    
    
    (45
    )Deferred taxes relating to unrealized losses
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    27Pension benefits recognized under SFAS 158
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    7Balance at December 31, 2008
    
    $
    (13,378
    )
    
    $
    73
    
    
    $
    (64
    )
    
    $
    (13,369
    )
 F-31




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13.
    
    COMMITMENTS AND CONTINGENCIES
 (a)
    
    LeasesThe Company leases certain machinery and equipment under capital leases for 2007 and
2008.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 payments under capital leases and non-cancellable operating leases
with initial terms of one year or more consisted of the following as of December 31,
2008:
 Capital Leases
    
    
    Operating Leases2009
    
    $
    219
    
    
    $
    6082010
    
    
    116
    
    
    
    3722011
    
    
    29
    
    
    
    3562012
    
    
    29
    
    
    
    2842013
    
    
    29
    
    
    
    289Thereafter
    
    
    
    
    
    
    2,449Total minimum lease payments
    
    $
    422
    
    
    $
    4,358Amounts representing interest
    
    
    (36
    )Present value of net minimum lease payments
    
    $
    386
 Rental expense consisted of the following:
 2006
    
    
    2007
    
    
    2008Rentals under operating lease
    
    $
    738
    
    
    $
    766
    
    
    $
    658
 The current and non-current portion of the capital lease liabilities of $196 and $190
as of December 31, 2008 are included in other current liabilities and other
liabilities, respectively. The capital lease liabilities are secured by a charge
over the leased machinery and equipment at cost of $537 and $407 as of December 31,
2007 and 2008, respectively. The accumulated depreciation of these leased assets as
of December 31, 2007 and 2008 amounted to $214 and $219, respectively.The average discount interest rate implicit in the lease is 7.8% and
9.25% for 2007 and 2008, respectively.
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13.
    
    COMMITMENTS AND CONTINGENCIES(continued)
 (b)
    
    As of December 31, 2008, there were outstanding bank guarantees of $20,962
(2007: $50,221) 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.(c)
    
    As of December 31, 2008, Charoong Thai and its subsidiaries had given
continuing corporate guarantee of $79,891 (2007: $79,743) in respect of banking
facilities extended to two Operating Subsidiaries.(d)
    
    As of December 31, 2008, Charoong Thai has contract commitments to purchase
totaling $2,051 to $4,657 (2007: $47,431 to $71,147), of raw materials from third
parties at the prices stipulated in the contracts.(e)
    
    As of December 31, 2008, Sigma Cable has committed to sell/deliver copper
cables at a predetermined price totaling $10.9 million throughout 2008. As of December
31, 2008 the estimated fair value gain not recognized in the financial statements
relating to this commitment is approximately $4.88 million.(f)
    
    Sigma Cable has agreed to provide continuing financial support to APEC to
enable APEC to meet its liabilities as and when they fall due. The letter of awareness
from Sigma Cable with an ownership covenant requires Sigma Cable to maintain a minimum
of 85% of interest in APEC.(g)
    
    Approximately $2,159 of property, plant and equipment of a subsidiary in the
Peoples Republic of China is located on a piece of leasehold land held by an equity
investee. The equity investee has obtained the land use right certificate in respect of
the said land on August 20, 2008.(h)
    
    The Company provided a corporate guarantee not exceeding the sum of $2,761 (AUD
4 million) to a third party for the procurement of copper by a subsidiary company. The
guarantee period is for one year. The latest renewal was made on January 16, 2008 and
the guarantee will expire on February 28, 2009.(i)
    
    The Company provided a corporate guarantee not exceeding the sum of $7 million
for bank credit line of one Thailand subsidiary; and a corporate guarantee not
exceeding the sum of $3,466 (SGD 5 million) for the bond facility of Sigma Cable. Any
settlement, discharge or release for these guarantees will be conditional upon on
securities or payment to the Beneficiaries.(j)
    
    In February 2008, Supreme Court in Singapore rendered a decision against Sigma
Cable in which Sigma Cable is found liable to one of its customers for damage
approximately in an amount of $886. Sigma Cable appealed the decision. However, the
management believed that it was more likely than not that the Companys appeal would
not be successful. Therefore, this amount has been accrued as of December 31, 2005. The
appeal was dismissed on October 21, 2008.(k)
    
    A customer of Sigma Cable has claimed for damages relating to the termination
of Sigma Cables purchase agreement with the customer. As at the date of this report,
neither of the parties has started legal action, hence, the outcome of any potential
litigation is still uncertain and the amount of damages is yet to be assessed.(l)
    
    As disclosed in Note 1, on June 28, 2007 SOF acquired the Sino-JP shares
pursuant to a share purchase agreement (the Purchase Agreement), and entered into a
shareholders agreement with the Company and PEWC (the Shareholders/ Agreement). On
March 27,
2009, SOF sold 10.2% of the issued and outstanding shares of the Company to PEWC and
entered into an Amended and Restated Shareholders Agreement with the Company and
PEWC (the Amended Shareholders Agreement). Among other things, the Amended
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13.
    
    COMMITMENTS AND CONTINGENCIES(continued)
 Shareholders Agreement grant to the Company an extension for listing its common
shares on a national exchange until February 2011 and provides for the following:IndemnificationThe Company must certify to SOF whether or not it is considered a Controlled Foreign
Corporation or a Passive Foreign Investment Company as of each fiscal year end.
Should this certification be challenged by the taxing authorities and found to be
incorrect, the Company must indemnify SOF and its shareholders against interest and
penalties that may be imposed and reasonable attorneys fees incurred.It is managements opinion that this indemnification will not result in any adverse
material financial consequence to the Company.Registration RightsThe Company has prepared and filed with the SEC a registration statement on From F-1
covering the resale of the Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415 of the Securities Act of 1933, which
registration statement was declared effective under the Securities Act by the SEC on
March 11, 2009. Registrable Securities includes the shares beneficially owned by
SOF.Subject to the Amended Shareholders Agreement, the Company must use its reasonable
best efforts to keep such registration statement continuously effective until (i) all
Registrable Securities either have been sold or may be sold without volume
restrictions pursuant to Rule 144 of the Securities Act of 1933 and (ii) SOF receives
freely transferable shares from the Issuers transfer agent.If any such registration statement ceases to remain continuously effective for any
reason after the effectiveness date and during any time when the registration
statement is required to be effective, or SOF is otherwise not permitted to utilize
the prospectus therein to resell such Registrable Securities, in either case, for
more than thirty (30) consecutive trading days or more than an aggregate of sixty
(60) trading days during any twelve month period (an  Event ), then the Put Right
(defined below) will become immediately exercisable and will continue until such
event has been cured.Put Right and OptionUnder the terms of the Amended Shareholders Agreement, SOF has the right and option
(but not the obligation) to sell to PEWC upon the occurrence of a Put Event (defined
below), and PEWC agreed to purchase from SOF upon the occurrence of a Put Event, all
Registrable Securities then owned by SOF (the  Put Shares ), for an amount equal to
the Put Price (defined below) together with interest (calculated on the basis of a
360 day year) on the Put Price, computed (x) from June 28, 2007 through May 31, 2010
at a rate per annum that shall be equal to the Libor Rate plus fifty (50) basis
points (compounded annually), and (y) from June 1, 2010 until the Put Closing
(defined below) at a rate per annum that shall be equal to the Libor Rate plus one
hundred and fifty (150) basis points (compounded annually) (the  Put Right ). If
the Put Event terminates prior to the closing of such Put Right, the exercise of the
Put Right is deemed rescinded and the transaction relating to the Put Right is deemed
cancelled, but this will not terminate the existence of a future Put Right upon the
triggering of a future Put Event.A Put Event means any date (i) after March 11, 2009 whereby an Event has occurred
and continues to occur, or (ii) after February 1, 2011 whereby the shares are not
listed on a US
Securities Market, which means any of the Nasdaq Stock Market, Inc. (Global Market or
Global Select Market), the NYSE Alternext U.S. (f/k/a the American Stock Exchange
LLC), the New York Stock Exchange LLC or one or more of the principal or secondary
exchanges for the public trading of equity securities in any of Hong Kong, Tokyo or
Singapore. The
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13.
    
    COMMITMENTS AND CONTINGENCIES(continued)
 Put Price means for (i) shares purchased pursuant to the Purchase Agreement, an
aggregate amount equal to the product of (a) the number of shares being sold and (b)
US$4.35 and (ii) Shares purchased under preemptive right provisions of the Amended
Shareholders Agreement, and aggregate amount equal to the purchase price thereof.The Shareholders Agreement does not contain any provisions that impose any purchase,
reimbursement or financing obligations on the Company in the event that SOF exercises
the Put Right. The Put Right is an obligation solely of PEWC and not of the Company.
However, for the avoidance of doubt and as a re-affirmation that the financial and
other obligation to SOF in the event of an exercise of the Put Right rest exclusively
with PEWC, the Company has, on March 27, 2008, entered into a Non-Recourse
Confirmation Agreement with PEWC whereby PEWC (i) covenants that it has no put right
against the Company relating to the Put Shares and that PEWCs obligations to SOF are
without recourse to the Company, (ii) waives any such right should it arise in the
future, and (iii) agrees that it shall not cause the Company, directly or indirectly,
to incur any costs associated with the exercise of the Put Right.The Shareholders Agreement provides, and the Non-recourse Confirmation Agreement
confirms, that the Put Rights is solely the obligation of PEWC. The Company has no
purchase, reimbursement or financing obligations in the event that SOF exercises the
Put Right. As such, the Company has classified the Put Shares as equity in the
accompanying financial statements.
 14.
    
    FINANCIAL INSTRUMENTS
 (a)
    
    Concentrations of credit riskFinancial instruments that potentially subject the Company to
significant concentrations of credit risk consist principally of cash
and cash equivalents, bank deposits, investments, investment
securities and trade accounts receivable.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.Concentrations of credit risk with respect to trade 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. At December 31, 2008, one Thailand subsidiarys customer
accounted for 12% of the Companys accounts receivable.The Company is exposed to credit loss in the event of non-performance
by counter parties on foreign exchange contracts, but the Company does not
anticipate non-performance by any counter parties.
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14.
    
    FINANCIAL INSTRUMENTS (continued)
 (b)
    
    Fair Value DisclosuresThe following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:Cash and cash equivalents: The carrying amount reported in the balance sheet
for cash and cash equivalents approximates its fair value because of the short-term
maturity of these instruments.Bank deposits: The carrying amount reported in the balance sheet for bank
deposits approximates its fair value because of the short-term maturity of these
instruments.Accounts receivable and accounts payable: The carrying amounts reported in
the balance sheet for accounts receivable and accounts payable approximate their fair
values because of the short-term maturity of these instruments.Related party balances: The carrying amounts reported in the balance sheet
for related party balances approximate their fair values because of the short-term
maturity of these instruments.Long-term and short-term debt: The carrying amounts of the Companys borrowings under its
short-term revolving credit arrangements approximate their fair values. The fair values of the
Companys long-term debt are estimated using discounted cash flow analyses, based on the
Companys current incremental borrowing rates for similar types of borrowing arrangements. As
of December 31, 2008, the Company had no non-interest bearing long-term debt outstanding with
a related party. The fair value of the non-interest bearing short-term debt from related
parties is not determinable because of the related party nature of the debt and the fact that
they have no stated due dates.Investment securities: The fair values of marketable equity securities are
based on quoted market prices, details of which are set out in Note 7. In
accordance with SFAS No. 157, the marketable securities are classified within
Level 1 of fair value hierarchy. The fair values for debt securities and equity
securities in privately-held companies are based on discounted cash flow
analysis using current interest rates for instruments with similar maturities.
It is not practicable to estimate the fair values of the equity investments that
do not have a quoted market price, without incurring excessive costs. In
accordance with SFAS No. 157, the such instruments are classified in the Level 3
of fair value hierarchy.Forward exchange contracts: The fair values of forward exchange contracts are
estimated by reference to market quotations for forward contracts with similar terms,
adjusted where necessary for maturity differences. The foreign currency forward
contracts are classified within Level 2 as the valuation inputs are based on quoted
prices and market observable data of similar instruments.There are no significant differences between the carrying amounts and fair values of
the Companys financial instruments as of December 31, 2007 and 2008.The following table presents the Companys assets and liabilities
measured at fair value on a recurring basis at December 31, 2008, using quoted
prices in active markets for identical assets (Level 1); significant other
observable inputs (Level 2); and significant unobservable inputs (Level 3).
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14.
    
    FINANCIAL INSTRUMENTS (continued)
 Fair value measurements using input typeLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalMarketable securities:Listed securities traded on SET
    
    $
    68
    
    
    $
    
    
    
    $
    
    
    
    $
    68Investment in equity investees:
    
    
    
    
    
    
    
    
    
    
    4,103
    
    
    
    4,103Long-term investment:Equity securities in privately-held companies  Thai Metal Processing
    
    
    
    
    
    
    
    
    
    
    544
    
    
    
    544Foreign currency forward contracts net payable
    
    
    
    
    
    
    (107
    )
    
    
    
    
    
    
    (107
    )Total
    
    $
    68
    
    
    $
    (107
    )
    
    $
    4,647
    
    
    $
    4,608
 The following table presents the changes in Level 3 instruments measured on a
recurring basis for the year ended December 31, 2008. The Companys Level 3
instrument consists of equity securities in privately-held companies.
 Equity securities inprivately-held
    
    
    Investment in equitycompany
    
    
    investeesBalance, beginning of period
    
    $
    
    
    
    $
    Transfer to Level 3
    
    
    544
    
    
    
    4,245Total realized (loss) included in earnings
    
    
    
    
    
    
    (142
    )Balance, end of period
    
    $
    544
    
    
    $
    4,103
 The realized (loss) included in earnings for the year ended December 31, 2008, are reported in
share of net gain of equity investees.
 15.
    
    CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONSCopper is the principal raw material used by the Company. The Company purchases copper at
prices closely related to the prevailing international spot market prices 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.Changes in exchange rates influence the Companys results of operations. The Companys
principal operations are located in Thailand, the Peoples Republic of China (PRC) and
Singapore and a substantial portion of its revenues are denominated in Thai Baht, PRC
Renminbi (RMB) or Singapore dollars, whereas a substantial portion of the Companys cost
of sales are denominated in US dollars. Any devaluation of the Thai Baht, RMB or Singapore
dollar against the US dollar would have an adverse impact on the operations of the Company.The Company conducts substantial business operations in the PRC. The results of
operations and prospects are likely to be materially impacted by economic, legal and
other developments in the PRC.The PRC government imposes controls on the convertibility of the Renminbi into
foreign currencies and, in certain cases, the remittance of currency out of China.
Under existing PRC foreign exchange regulations, payments of current account items,
including profit distributions, interest payments and
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15.
    
    CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS (continued)expenditures from trade related transactions, can be made in foreign currencies without
prior approval from the State Administration of Foreign Exchange (SAFE) by complying
with certain procedural requirements. However, approval from SAFE or its local branch
is required where Renminbi is to be converted into foreign currency and remitted out of
China to pay capital expenses such as the repayment of loans denominated in foreign
currencies. The PRC government may also at its discretion restrict access in the future
to foreign currencies for current account transactions. Shortages in the availability
of foreign currency may restrict the ability of the Companys subsidiaries in the PRC
to remit sufficient foreign currency to pay dividends or other payments to the Company,
or otherwise satisfy their foreign currency-denominated obligations.16.
    
    RELATED PARTY BALANCES AND TRANSACTIONSThe 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.
 December 31,2007
    
    
    2008Due from:PEWC
    
    $
    2,076
    
    
    $
    639PEWC, Singapore Branch
    
    
    955
    
    
    
    1,000Italian-Thai Development Public Company Limited (Ital-Thai) and its affiliates
    
    
    3,566
    
    
    
    3,176SPHC
    
    
    1,544
    
    
    
    1,390A director of Siam Pacific
    
    
    13
    
    
    
    12Shandong Yanggu Wire & Cable Corp Ltd (Shandong Yanggu)
    
    
    431
    
    
    
    699Others
    
    
    53
    
    
    
    6$
    8,638
    
    
    $
    6,922Due to:PEWC
    
    $
    24,577
    
    
    $
    19,140PEWC, Singapore Branch
    
    
    892
    
    
    
    890PEWC Singapore Co. (Pte) Ltd.
    
    
    1,183
    
    
    
    1,230Shandong Yanggu
    
    
    719
    
    
    
    383Fujikura Limited
    
    
    220
    
    
    
    292Thai Metal Processing Co., Ltd.
    
    
    147
    
    
    
    27SPHC
    
    
    2,855
    
    
    
    2,642Shandong Huayu
    
    
    1,208
    
    
    
    1,170Shandong Rubber Cable
    
    
    
    
    
    
    14Others
    
    
    
    
    
    
    23$
    31,801
    
    
    $
    25,811Short-term loans from:Moon View Venture Limited (Moon View)
    
    $
    1,537
    
    
    $
    1,732Pacific Overseas Investment Management Ltd
    
    
    195
    
    
    
    $
    1,732
    
    
    $
    1,732
 The above balances with related parties are interest-free and are repayable upon
demand. All balances with related parties are unsecured.
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16.
    
    RELATED PARTY BALANCES AND TRANSACTIONS(continued)Moon View, PEWC, Singapore Branch and PEWC Singapore Co. (Pte) Ltd are controlled by
PEWC. Ital-Thai is the minority shareholder of one of the Companys Operating
Subsidiaries in Thailand. Shandong Yanggu is the shareholder of one of the Companys
Operating Subsidiaries in China. SPHC is one of the Companys equity investees.
 December 31,2007
    
    
    2008Loans from PEWC Singapore Co. (Pte) Ltd
    
    $
    240
    
    
    $
    Less: short term portion
    
    
    (240
    )
    
    
    Long term portion
    
    $
    
    
    
    $
    
 The long term loans from PEWC Singapore Co. (Pte) Ltd have a term of three years and were
due in March 2007 and are uncollateralized. Partial repayment was made in 2007 and the
remaining balance of $240 was repaid in 2008.The transactions undertaken with related parties can be summarized as follows:
 Year ended December 31,2006
    
    
    2007
    
    
    2008Purchases of copper from PEWC
    
    $
    54,403
    
    
    $
    55,360
    
    
    $
    46,882Purchases of power cables from PEWC
    
    
    18,587
    
    
    
    11,442
    
    
    
    6,631Sales to Ital-Thai and its affiliates
    
    
    11,615
    
    
    
    8,538
    
    
    
    5,427Sales to Shandong Yanggu
    
    
    141
    
    
    
    572
    
    
    
    428Purchases of raw materials from Thai Metal Processing Co. Ltd
    
    
    1,196
    
    
    
    1,222
    
    
    
    1,456Purchases of goods from Fujikura Limited
    
    
    1,109
    
    
    
    766
    
    
    
    1,133Interest expense paid to PEWC
    
    
    491
    
    
    
    472
    
    
    
    275Interest expense paid to PEWC Singapore Co. (Pte) Ltd.
    
    
    52
    
    
    
    64
    
    
    
    47Interest income from Italian Thai Development Public Co Ltd
    
    
    
    
    
    
    
    
    
    
    75Management fee paid to PEWC
    
    
    152
    
    
    
    98
    
    
    
    189Management fee paid to Ital-Thai
    
    
    32
    
    
    
    
    
    
    
    Management fee received from PEWC, Singapore Branch
    
    
    12
    
    
    
    12
    
    
    
    13Purchases of goods from PEWC
    
    
    
    
    
    
    
    
    
    
    713Purchases of goods from Shandong Yanggu
    
    
    43
    
    
    
    450
    
    
    
    586Dividend income from Thai Metal Processing Co. Ltd.
    
    
    117
    
    
    
    104
    
    
    
    130
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16.
    
    RELATED PARTY BALANCES AND TRANSACTIONS(continued)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 tariff 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.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 2006, 2007 and 2008.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
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16.
    
    RELATED PARTY BALANCES AND TRANSACTIONS(continued)
 successful completion of the facility or venture, PEWC will arrange for the Company
to participate to the extent possible.(f)
    
    Without the consent of the Company, PEWC will not compete with respect to the
manufacture of wire and cable products in any market in which the Company is
manufacturing or has taken significant steps to commence manufacturing.(g)
    
    For purposes of the composite services agreement, each province in China is
considered the equivalent of a market.(h)
    
    The composite services agreement dated November 7, 1996 has a three-year term.
The Agreement originally expired on November 7, 1999. The Company gave a notice to
extend the Agreement by successive one-year periods commencing on April 20, 2001. The
notice is treated as a standing notice for successive one-year period renewals until
further written notice from the Company.
 To the extent that transactions occur in the future between the Company and PEWC or
affiliates of PEWC other than under the Composite Service 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.
 17.
    
    DEFINED CONTRIBUTION AND BENEFIT PLANSThe Company adopted the recognition and disclosure provisions of SFAS 158, effective
December 31, 2006, which changed the manner in which the funded status of the Companys
defined benefit plans is reported in the consolidated balance sheet. Under SFAS 158,
actuarial gains and losses and prior service costs continue to be deferred and recognized in
expense ratably over appropriate future periods, but the overfunded or underfunded status of
the defined benefit plans is now measured as the difference between the fair value of plan
assets and the projected benefit obligation (PBO). This difference is recorded as an asset
(if overfunded) or a liability (if underfunded), with a corresponding adjustment to
accumulated other comprehensive loss, net of tax. To reflect the funded status of its plans
in the consolidated balance sheet upon adopting SFAS 158, the Company recorded an adjustment
to increase its liability for pension and other postretirement benefits by $71. Following
adoption, as the net unrecognized actuarial loss and unrecognized prior service costs are
recognized in net periodic benefit cost in the consolidated statements of operations, those
amounts are reclassified from accumulated other comprehensive loss.SFAS 158 will also require companies to measure the funded status of their defined benefit
plans as of the balance sheet date, beginning in fiscal years ending after December 15,
2008. The Company currently measures the funded status of its plan as of the balance sheet
date.The Company has several defined contribution plans covering its employees in Australia, the
Peoples Republic of China (PRC) and Singapore. Contributions to the plan are made
annually. Total charges for the years ended December 31, 2006, 2007 and 2008 were $815,
$785, and $872 respectively.In accordance with the Thailand labor law, Charoong Thai is 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. During the financial year 2008, the Companys total expense
included $191 (2007: $193; 2006: $140). The plan is not funded and the amount is recognized
in Other Current Liabilities in the balance sheet. The Company pays to settle the
obligations as and when employees retire.
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17.
    
    DEFINED CONTRIBUTION AND BENEFIT PLANS(continued)In conformity with SFAS 132, Employers Disclosures about Pensions and Other
Postretirement Benefits, and SFAS 158, Employers Accounting for Defined Benefits Pension
and Other Postretirement Plans, the following table sets forth the Plans funded status and
pension amounts recognized as at December 31, 2007 and 2008 based on the latest actuarial
valuation:
 2007
    
    2008Change in benefit obligation:Benefit obligation at beginning of year
    
    $
    1,265
    
    
    $
    1,868Foreign currency translation adjustments
    
    
    424
    
    
    
    (279
    )Service cost
    
    
    102
    
    
    
    107Interest cost
    
    
    91
    
    
    
    88Benefits paid
    
    
    (85
    )
    
    
    (11
    )Actuarial loss (gain)
    
    
    193
    
    
    
    Plan amendments
    
    
    (122
    )
    
    
    Benefit obligation at end of year
    
    $
    1,868
    
    
    $
    1,773Change in plan assets:Fair value of plan assets at beginning of year
    
    $
    
    
    
    $
    Employers contributionFair value of plan assets at end of year
    
    
    
    
    
    
    Funded status
    
    $
    (1,868
    )
    
    $
    (1,773
    )Unrealized net transition obligation
    
    
    
    
    
    
    Unrecognized net actuarial loss (gain)
    
    
    
    
    
    
    Accrued benefit cost
    
    $
    (1,868
    )
    
    $
    (1,773
    )Components of net periodic benefit cost:Service cost
    
    $
    102
    
    
    $
    107Interest cost
    
    
    91
    
    
    
    88Amortizations of:Unrecognized net transition obligation
    
    
    
    
    
    
    (6
    )Unrecognized actuarial loss
    
    
    
    
    
    
    2Net periodic benefit cost
    
    $
    193
    
    
    $
    191Amounts recognized in accumulated other comprehensive loss
consist of the following: (recognized under SAFS 158)Actuarial loss
    
    $
    193
    
    
    $
    163Prior service cost (credit)
    
    
    (122
    )
    
    
    (99
    )Total recognized in other comprehensive loss
    
    $
    71
    
    
    $
    64
 The accumulated benefit obligations amounted to $1,868 and $1,773 as at December 31, 2007
and 2008, respectively.The estimated net loss and prior service cost (credit) for the defined benefit plans that
will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost
over the next fiscal year are $2 and $(6), respectively.
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17.
    
    DEFINED CONTRIBUTION AND BENEFIT PLANS(continued)The significant assumptions used in determining the actuarial present value of the projected
benefit obligations as at December 31, 2008, 2007 and 2006 are as follows:
 2006 & 2007
    
    2008Discount Rate
    
    
    6.0
    %
    
    
    5.5
    %Rate of Increase in Compensation Levels
    
    
    5.0%-6.0
    %
    
    
    5.0
    %Employee turnover rates:-Prior to age 35
    
    
    2.0%-10.0
    %
    
    
    2.0% - 10.0
    %Age 35 to 50
    
    
    2.0%-5.0
    %
    
    
    2.0% - 5.0
    %Age 51 to 60
    
    
    
    
    
    
    
 The following pension benefit payments, which reflect expected future service, as
appropriate, are expected to be paid:
 Year ended December 312009
    
    
    662010
    
    
    762011
    
    
    952012
    
    
    382013
    
    
    2342014 - 2018
    
    
    811$
    1,320
 18.
    
    SUPPLEMENTAL CASH FLOW INFORMATION
 Year ended December 31,2006
    
    
    2007
    
    
    2008Interest paid
    
    $
    5,551
    
    
    $
    7,187
    
    
    $
    6,037Income taxes paid
    
    $
    5,625
    
    
    $
    10,772
    
    
    $
    5,177
 19.
    
    SEGMENT FINANCIAL INFORMATIONDescription of Products by SegmentThe Company has three reportable segments  manufacturing of wire and cable products
(Manufactured products), distribution of copper and cable products manufactured by PEWC
(Distributed products) and sales, delivery and installation of wires and cables.Measurement of Segment Profit or Loss and Segment AssetsThe Company evaluates performance and allocates resources based on profit or loss from
operations before interest, gains and losses on the Companys investment portfolio, and
income taxes. The accounting policies of the reportable segments, including transactions
entered between reportable segments, are the same as those described in the summary of
significant accounting polices.
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19.
    
    SEGMENT FINANCIAL INFORMATION(continued)
 Year ended December 31,2006
    
    
    2007
    
    
    2008RevenuesRevenues from external customers:Manufactured products
    
    $
    439,280
    
    
    $
    494,805
    
    
    $
    447,848Distributed products
    
    
    12,416
    
    
    
    10,783
    
    
    
    32,415Sales, delivery and installation
of wires and cables
    
    
    16,421
    
    
    
    5,253
    
    
    
    20,535Total revenues from external customers
    
    $
    468,117
    
    
    $
    510,841
    
    
    $
    500,798Intersegment revenues:Manufactured products
    
    $
    934
    
    
    $
    2,648
    
    
    $
    348Total intersegment revenues
    
    $
    934
    
    
    $
    2,648
    
    
    $
    348Total revenue
    
    $
    469,051
    
    
    $
    513,489
    
    
    $
    501,146Reconciling itemsIntersegment revenues
    
    
    (934
    )
    
    
    (2,648
    )
    
    
    (348
    )Total revenues
    
    $
    468,117
    
    
    $
    510,841
    
    
    $
    500,798
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19.
    
    SEGMENT FINANCIAL INFORMATION(continued)
 Year ended December 31,2006
    
    
    2007
    
    
    2008Segment profit (loss)Manufactured products
    
    $
    58,488
    
    
    $
    44,671
    
    
    $
    37,267Distributed products
    
    
    1,107
    
    
    
    80
    
    
    
    1,584Sales, delivery and installation of wires and cables
    
    
    (284
    )
    
    
    (347
    )
    
    
    (956
    )(Allowance) recovery for inventory reserve
    
    
    (2,017
    )
    
    
    1,272
    
    
    
    (25,145
    )Total segment profit
    
    $
    57,294
    
    
    $
    45,676
    
    
    $
    12,750Reconciling itemsCorporate and other expenses
    
    
    (28,427
    )
    
    
    (29,511
    )
    
    
    (29,044
    )Exchange gain (loss)
    
    
    5,464
    
    
    
    864
    
    
    
    (1,712
    )Interest income
    
    
    705
    
    
    
    1,517
    
    
    
    990Interest expense
    
    
    (5,886
    )
    
    
    (7,580
    )
    
    
    (5,769
    )Share of net gain (loss) of equity investees
    
    
    73
    
    
    
    124
    
    
    
    (142
    )Gain on liquidation of subsidiary
    
    
    1,801
    
    
    
    
    
    
    
    Other income
    
    
    1,536
    
    
    
    2,070
    
    
    
    2,859Total income (loss) before income taxes
    
    $
    32,560
    
    
    $
    13,160
    
    
    $
    (20,068
    )Segment assetsManufactured products
    
    $
    349,082
    
    
    $
    373,057
    
    
    $
    283,528Distributed products
    
    
    293
    
    
    
    5,117
    
    
    
    10,499Sales, delivery and installation of wires and cables
    
    
    187
    
    
    
    1,649
    
    
    
    416Total segment assets
    
    $
    349,562
    
    
    $
    379,823
    
    
    $
    294,443Reconciling itemsCorporate and other assets
    
    
    10,765
    
    
    
    12,047
    
    
    
    11,252Investment in equity investees
    
    
    4,238
    
    
    
    4,246
    
    
    
    4,103Total assets
    
    $
    364,565
    
    
    $
    396,116
    
    
    $
    309,798Expenditures for additions to long-lived assetsManufactured products
    
    $
    5,202
    
    
    $
    2,650
    
    
    $
    3,383Corporate
    
    
    
    
    
    
    
    
    
    
    Total expenditure for additions to long-lived assets
    
    $
    5,202
    
    
    $
    2,650
    
    
    $
    3,383
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19.
    
    SEGMENT FINANCIAL INFORMATION(continued)
 Year ended December 31,2006
    
    
    2007
    
    
    2008Depreciation expensesManufactured products
    
    $
    (8,964
    )
    
    $
    (9,050
    )
    
    $
    (7,645
    )Corporate
    
    
    (25
    )
    
    
    (29
    )
    
    
    (1
    )Total depreciation
expenses
    
    $
    (8,989
    )
    
    $
    (9,079
    )
    
    $
    (7,646
    )Impairment lossCorporate
    
    $
    (86
    )
    
    $
    (95
    )
    
    $
    Total impairment expense
    
    $
    (86
    )
    
    $
    (95
    )
    
    $
    Interest incomeManufactured products
    
    $
    536
    
    
    $
    1,406
    
    
    $
    803Distributed products
    
    
    69
    
    
    
    66
    
    
    
    107Sales, delivery and installation of wires and cables
    
    
    93
    
    
    
    45
    
    
    
    75Corporate
    
    
    7
    
    
    
    
    
    
    
    5Total interest income
    
    $
    705
    
    
    $
    1,517
    
    
    $
    990Interest expenseManufactured products
    
    $
    (5,476
    )
    
    $
    (7,184
    )
    
    $
    (5,368
    )Distributed products
    
    
    (129
    )
    
    
    (250
    )
    
    
    (273
    )Sales, delivery and installation of wires and cables
    
    
    (173
    )
    
    
    (62
    )
    
    
    (128
    )Corporate
    
    
    (108
    )
    
    
    (84
    )
    
    
    Total interest expense
    
    $
    (5,886
    )
    
    $
    (7,580
    )
    
    
    (5,769
    )Share of net gain (loss) of equity investeesCorporate
    
    $
    73
    
    
    $
    124
    
    
    $
    (142
    )Total share of net
gain (loss) of equity investees
    
    $
    73
    
    
    $
    124
    
    
    $
    (142
    )
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##### Table of Contents



19.
    
    SEGMENT FINANCIAL INFORMATION(continued)Significant sales of approximately 10% of the total revenue for any of the financial
year are to a customer, SP Powerassets, which include sales of manufactured products,
distributed products, and sales, delivery and installation of wires and cables, which
can be summarized as follows:
 Year ended December 31,2006
    
    
    2007
    
    
    2008Manufactured products
    
    $
    3,217
    
    
    $
    7,114
    
    
    $
    11,973Distributed products
    
    
    11,668
    
    
    
    6,710
    
    
    
    27,162Sales, delivery and installation of
wires and cables
    
    
    16,679
    
    
    
    5,064
    
    
    
    20,535$
    31,564
    
    
    $
    18,888
    
    
    $
    59,670
 Geographic Area DataRevenue from external customers is attributed to individual countries based on the
customers country of domicile and is summarized as follows:
 Year ended December 31,2006
    
    
    2007
    
    
    2008Revenues from external customersThailand
    
    $
    212,204
    
    
    $
    249,337
    
    
    $
    216,364Singapore
    
    
    49,134
    
    
    
    47,798
    
    
    
    62,810Australia
    
    
    58,277
    
    
    
    55,789
    
    
    
    86,625The Peoples Republic of China
    
    
    148,502
    
    
    
    157,917
    
    
    
    134,999Total revenues from external customers
    
    $
    468,117
    
    
    $
    510,841
    
    
    $
    500,798Long-lived assets by area:Thailand
    
    $
    36,221
    
    
    $
    37,037
    
    
    $
    29,027Singapore
    
    
    8,733
    
    
    
    8,485
    
    
    
    2,841Australia
    
    
    4,033
    
    
    
    3,965
    
    
    
    8,090The Peoples Republic of China
    
    
    17,148
    
    
    
    16,800
    
    
    
    16,819Other
    
    
    10
    
    
    
    32
    
    
    
    30Total long-lived assets
    
    $
    66,145
    
    
    $
    66,319
    
    
    $
    56,807
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##### Table of Contents



20.
    
    SUMMARIZED FINANCIAL INFORMATION OF EQUITY INVESTEESThe following tables present summarized financial information of the Companys
principal equity investees, Lox Pac, Thai Professional, SPHC, Shandong Huayu and SPRC.
 December 31,2007
    
    
    2008Unaudited
    
    
    UnauditedCurrent assets
    
    $
    26,338
    
    
    $
    31,760Non-current assets
    
    
    25,261
    
    
    
    18,804Current liabilities
    
    
    (18,847
    )
    
    
    (21,271
    )Non-current liabilities
    
    
    (2,006
    )
    
    
    (1,731
    )Total shareholders equity
    
    $
    30,746
    
    
    $
    27,562
 Year ended December 31,2006
    
    2007
    
    2008Unaudited
    
    Unaudited
    
    UnauditedNet sales
    
    $
    19,016
    
    
    $
    24,332
    
    
    $
    34,771Sales less cost of sales
    
    
    5,279
    
    
    
    6,469
    
    
    
    9,470Net income/ (loss)
    
    
    (516
    )
    
    
    127
    
    
    
    (1,271
    )
 At December 31, 2008 the Companys share of the underlying net assets of certain equity
investees was higher than its value of the investment in these equity investees,
therefore no impairment charge was recorded in 2008. At December 31, 2007 the Companys
share of the underlying net assets of certain equity investees was lower than its value
of the investment in these equity investees. Accordingly, the Company recorded an
impairment charge in value of its investment in these equity investees amounting to
$117.
 F-48