20-F/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F/A

(Amendment No. 1)


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


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


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

For the transition period from to


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

(Exact name of Registrant as specified in its charter)

Bermuda
(Jurisdiction of incorporation or organization)

7/Fl. B, No. 132, Sec. 3
Min-Sheng East Road
Taipei, 105, Taiwan
Republic of China
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.
None

Securities registered or to be registered pursuant to Section 12(g) of the Act.
None

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

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

13,830,769 Common Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

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

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

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

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

Large accelerated Filer o

Accelerated filer o

Non-accelerated filer þ

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

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

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying consolidated balance sheets of Asia Pacific Wire & Cable Corporation Limited and subsidiaries (the “Company”) as of December 31, 2007 and 2008, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Asia Pacific Wire & Cable Corporation Limited and subsidiaries as of December 31, 2007 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

Mazars LLP
Certified Public Accountants
(On January 3, 2009, Mazars
Moores Rowland LLP changed
its name to Mazars LLP.)

Singapore June 29,

2009

F-2

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of US Dollars, except share data)


	December 31,
	2007			2008
ASSETS

Current assets:
Cash and cash equivalents	$	29,127		$	37,510
Unrestricted short-term bank deposits (note 5)		1,861			7,756
Restricted short-term bank deposits (note 5)		18,714			15,033
Accounts receivable, net of allowance for doubtful accounts of $11,485 and $9,644 at December 31, 2007 and 2008, respectively (note 10)		145,902			95,901
Amounts due from related parties (note 16)		8,638			6,922
Inventories, net of allowance for inventories of $5,022 and $26,715 at December 31, 2007 and 2008, respectively (note 10)
Distributed products		3,897			8,227
Finished products		47,350			24,060
Products in process		26,702			14,563
Raw materials and supplies		27,482			25,712

		105,431			72,562

Investments (note 7)		2,555			68
Deferred tax assets (note 11)		2,481			3,064
Prepaid expenses		5,601			4,942
Other current assets		2,262			2,515

Total current assets		322,572			246,273


Property, plant and equipment:
Land		5,600			3,841
Land use rights		1,827			2,115
Buildings		45,374			40,243
Machinery and equipment		116,278			103,025
Motor vehicles		3,657			3,260
Office equipment		10,537			10,049
Land not being used for operation		630			540
Assets held for use		6,824			3,501

		190,727			166,574

Accumulated depreciation and amortization		(133,209	)		(118,568	)

		57,518			48,006


Other assets:
Long term investments (note 7)		650			544
Investment in equity investees (note 20)		4,246			4,103
Goodwill (note 6)		8,801			8,801
Other assets		297			889
Deferred tax assets (note 11)		2,032			1,182


		16,026			15,519


Total assets	$	396,116		$	309,798

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

F-3

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of US Dollars, except share data)


	December 31,
	2007			2008

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Bank loans and overdrafts (note 8)	$	102,174		$	57,962
Accounts payable		32,325			46,367
Accrued expenses		7,896			4,550
Amounts due to related parties (note 16)		31,801			25,811
Short-term loans from related parties (note 16)		1,972			1,732
Income tax liabilities (note 11)		8,782			5,710
Deferred tax liabilities (note 11)		561			65
Other current liabilities		4,652			3,648

Total current liabilities		190,163			145,845

Other liabilities		578			464
Deferred tax liabilities (note 11)		698			782

Total liabilities		191,439			147,091


Minority interest		67,894			48,578

Commitments and contingencies (notes 13 and 15)

Shareholders’ equity (note 9):
Common 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 in 2007 and 2008		138			138
Additional paid-in capital		111,541			111,541
Retained earnings		29,468			15,819
Accumulated other comprehensive loss (note 12)		(4,364	)		(13,369	)


Total shareholders’ equity		136,783			114,129


Total liabilities and shareholders’ equity	$	396,116		$	309,798

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

F-4

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of US Dollars, except share data)


	Year ended December 31,
	2006			2007			2008
Net sales
Manufactured products	$	439,280		$	494,805		$	447,848
Distributed products		12,416			10,783			32,415
Sales, delivery and installation of wires and cables		16,421			5,253			20,535

		468,117			510,841			500,798

Costs 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			12,750

Selling, 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			990
Interest 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			2,859


Income (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	)		8,551

Net 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

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

F-5

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands of US Dollars, except share data)


								Accumulated other
	Common		Additional		Retained			comprehensive
	Stock		paid-in capital		earnings			income (loss)			Total

Balance at January 1, 2006	$	138	$	111,541	$	13,551		$	(27,608	)	$	97,622
Net income for 2006		—		—		12,973			—			12,973
Currency translation adjustment		—		—		—			9,822			9,822
Less: 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												21,143


Balance at December 31, 2006		138		111,541		26,524			(19,438	)		118,765
Net income for 2007		—		—		4,833			—			4,833
Currency translation adjustment		—		—		—			15,179			15,179
Pension 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												18,018


Balance at December 31, 2007		138		111,541		29,468			(4,364	)		136,783
Net loss for 2008		—		—		(13,649	)		—			(13,649	)
Currency translation adjustment		—		—		—			(8,994	)		(8,994	)
Pension benefits recognized under SFAS 158 (note 17)		—		—		—			7			7
Unrealized 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

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

F-6

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of US Dollars, except share data)


	Year ended December 31,
	2006			2007			2008
Operating 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			7,646
Deferred income taxes		(423	)		(1,969	)		(145	)
Allowance (recovery) for doubtful accounts		1,221			3,295			12
Allowance (recovery) for inventory reserve		2,017			(1,272	)		25,145
Share of net gain of equity investees		(73	)		(124	)		142
Impairment 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	)		7
Adoption 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	)		2,889
Changes in operating assets and liabilities net of acquisitions of business:
Accounts receivable		(35,809	)		(13,613	)		36,193
Inventories		(52,017	)		4,854			7,724
Other current assets		(6,739	)		2,372			406
Amounts due to related parties		3,827			(1,609	)		(4,274	)
Accounts payable, accrued expenses and other liabilities		15,892			4,395			6,506


Net cash (used in) provided by operating activities		(42,930	)		1,906			60,047

Investing activities:
(Increase) decrease in restricted short-term bank deposits		(1,056	)		(3,156	)		1,941
Increase (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			416
Acquisition of additional investment in subsidiary		(477	)		—			—
Proceeds from disposal of investments		626			65			—
Disposal of other assets		190			—			2,368
Purchases 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			10,431
Net 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			8,383
Cash and cash equivalents at beginning of year		20,748			24,664			29,127


Cash and cash equivalents at end of year	$	24,664		$	29,127		$	37,510

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

F-7

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

1.		ORGANIZATION AND PRINCIPAL ACTIVITIES

		Asia Pacific Wire & Cable Corporation Limited (“APWC” or the “Company”), which is a subsidiary of Pacific Electric Wire & Cable Co., Ltd. (“PEWC”), a Taiwanese company, was incorporated as an exempted company in Bermuda on September 19, 1996 under the Companies Act 1981 of Bermuda (as amended) for the purpose of acting as a holding company. The Company is principally engaged in owning operating companies engaged in the power cable, telecommunication cable, enameled wire and electronic cable industry.

		The Company’s 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 Re

		As 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 Bankruptcy

		As 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.

		Litigation

		Following 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

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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%.

		Share Capital

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

F-9

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

1.		ORGANIZATION AND PRINCIPAL ACTIVITIES (continued)

		The subsidiaries of the Company are set out below:


	Percentage of
Place of incorporation and operations	Equity interest
	2007			2008
The British Virgin Islands

Asia 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	%

Singapore

Sigma 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 China

Ningbo 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 Kong

Crown Century Holdings Limited (“CCH”)		100	%		100	%

Australia

Australia Pacific Electric Cable Pty Limited (“APEC”)		98.53	%		98.53	%

F-10

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

ORGANIZATION AND PRINCIPAL ACTIVITIES (continued)


	Percentage of
Place of incorporation and operations	Equity interest
	2007			2008

Thailand

Charoong 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	%

Myanmar

Myanmar Sigma Cable Co., Ltd. (Not active)		78.59	%		78.59	%

ii) The equity investees of the Company are set out below:


	Percentage of
	Equity interest
Place of incorporation and operations	2007			2008

The People’s Republic of China

Shandong Huayu Pacific Fibre Optics Communications Co., Ltd. (“Shandong Huayu”)		48.73	%		48.73	%

Shandong Pacific Rubber Cable Co., Ltd. (“SPRC”)		25.00	%		25.00	%

Thailand

Siam 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

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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 PRESENTATION

		The 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 STATEMENTS

		Certain 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 POLICIES

		Principles of Consolidation

F-12

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

		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 Estimates

		The 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 Equivalents

		The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

		Inventories

		Inventories 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 Taxes

		In 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.

F-13

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

4.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

		Property, Plant and Equipment

		Property, 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		Nil
Land use rights		15 — 50 years
Buildings		5 — 30 years
Machinery and equipment		5 — 10 years
Motor vehicles		3 — 10 years
Office 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.

		Goodwill

		Goodwill 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.

F-14

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

		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.

		Investments

		Management 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 Assets

		Long-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.

F-15

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

4.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

		Allowance for Doubtful Accounts

		Trade 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 Recognition

		Sales 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 activities

		The 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 activities

		The 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 Costs

		The Company classifies such costs as cost of sales.

		Product Warranties

		The 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.

F-16

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

4.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

		Foreign Currency Translation

		The 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 Contracts

		The 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”.

F-17

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

4.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

		Gain on Issuance of Shares by Subsidiaries

		At 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 Share

		Basic 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 Measurements

		Effective 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.

F-18

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

4.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

		Recent Pronouncements

		In 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

F-19

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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

F-20

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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.

F-21

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

SHORT-TERM BANK DEPOSITS


	December 31,
	2007		2008

Unrestricted short-term bank deposits	$	1,861	$	7,756
Restricted 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.		GOODWILL

		Goodwill 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.		INVESTMENTS

		On 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 Securities
			Gross		Gross		Estimated
			Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value

December 31, 2007 Quoted equity securities	$	473	$	—	$	(272)	$	201

December 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.

F-22

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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		2008

Available-for-sale equity securities	$	201	$	68
Held-to-maturity debt securities		2,354		—

Short-term investments		2,555		68


Equity securities in privately-held companies and other investments		650		544

Long-term investments		650		544


Total 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 OVERDRAFTS

		Under 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);

F-23

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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 EARNINGS

		The 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.

F-24

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

10.

VALUATION AND QUALIFYING ACCOUNTS


			Net charged						Currency			Balance
	Balance at		(credited) to costs						translation			at end of
Description	beginning of year		and expenses			Deduction			adjustment			year
Year ended December 31, 2006:
Deducted from asset accounts
Allowance for doubtful accounts	$	8,383	$	1,221		$	(946	)	$	632		$	9,290
Allowance for inventories
— Net realizable value		2,387		1,121			—			—			3,508
— Obsolescence		1,941		896			(509	)		156			2,484
Allowance for deferred tax assets		6,027		(2,088	)		—			402			4,341

	$	18,708	$	1,150		$	(1,455	)	$	1,190		$	19,623

Year ended December 31, 2007:
Deducted from asset accounts
Allowance for doubtful accounts	$	9,290	$	3,295		$	(2,172	)	$	1,072		$	11,485
Allowance for inventories
— Net realizable value		3,508		(363	)		—			102			3,247
— Obsolescence		2,484		(909	)		—			200			1,775
Allowance for deferred tax assets		4,341		(3,158	)		—			302			1,485

	$	19,623	$	(1,135	)	$	(2,172	)	$	1,676		$	17,992

Year ended December 31, 2008:
Deducted from asset accounts
Allowance for doubtful accounts	$	11,485	$	12		$	(1,031	)	$	(822	)	$	9,644
Allowance for inventories
— Net realizable value		3,247		25,144			(142	)		(1,967	)		26,282
— Obsolescence		1,775		1			(1,164	)		(179	)		433
Allowance 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.

F-25

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

11.		INCOME TAXES

		Under 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.

F-26

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

11.		INCOME TAXES (continued)

		Pre-tax income (loss) from continuing operations was taxed in the following jurisdictions:


	Year ended December 31,
	2006			2007			2008

Thailand	$	25,524		$	9,116		$	(14,453	)
Singapore		(2,652	)		3,169			(712	)
Australia		2,811			6,255			2,731
The People’s Republic of China		10,323			1,318			(5,293	)
British Virgin Islands		(1,290	)		(3,143	)		152
Bermuda		(2,229	)		(3,679	)		(2,351	)

		32,487			13,036			(19,926	)
Equity investees
The 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			2008

Allocated to net income (loss)

Current:
Thailand	$	7,578		$	5,701		$	1,514
Singapore		(168	)		194			132
The People’s Republic of China		1,888			662			(679	)
Australia		1,382			1,710			1,310

Total current		10,680			8,267			2,277

Deferred:
Thailand		(71	)		(2,128	)		(865	)
Singapore		334			(3	)		—
The People’s Republic of China		(110	)		(56	)		1,135
Australia		(576	)		218			(415	)

Total deferred		(423	)		(1,969	)		(145	)

	$	10,257		$	6,298		$	2,132

Allocated to other comprehensive loss	$	(92	)	$	(6	)	$	(27	)

F-27

11.

INCOME TAXES (continued)

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

		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			2008
Higher statutory tax rate in:

Thailand	$	5,869		$	1,966		$	(3,887	)
Singapore		(530	)		634			(128	)
Australia		843			1,899			830
People’s Republic of China		1,411			305			(763	)

		7,593			4,804			(3,948	)

Expenses not deductible for tax purposes		4,541			4,163			894
Changes in valuation allowance		(1,686	)		(2,856	)		5,198
Others		(191	)		187			(12	)

Total charge for the year	$	10,257		$	6,298		$	2,132

Deferred tax liabilities and assets comprised the following:


	2007			2008
Deferred 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			837
Allowance for doubtful accounts		3,374			2,540
Allowance for inventories		772			7,365
Allowance for impairment in investment		610			540
Others		82			97

Total deferred tax assets		6,525			11,379
Valuation allowance for deferred tax assets		(1,485	)		(6,683	)

Total deferred tax assets		5,040			4,696

Net deferred tax assets	$	3,254		$	3,399

F-28

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

11.		INCOME TAXES (continued)

		The amount of deferred tax liabilities and assets at December 31, 2007 and 2008 were as follows:


	December 31,
	2007			2008
Gross current deferred tax liabilities	$	(561	)	$	(72	)

Gross current deferred tax assets		4,312			10,091
Valuation allowance for deferred tax assets		(1,254	)		(7,028	)

		3,058			3,063


Net current deferred tax assets		2,497			2,991


Gross long-term deferred tax liabilities		(1,225	)		(1,225	)

Gross long-term deferred tax assets		2,213			1,633
Valuation allowance for deferred tax assets		(231	)		—

		1,982			1,633


Net long-term deferred tax assets		757			408


Net 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			2008
Current
Deferred tax assets	$	2,481		$	3,064
Deferred tax liabilities		(561	)		(65	)

Total current		1,920			2,999

Long-term
Deferred tax assets		2,032			1,182
Deferred tax liabilities		(698	)		(782	)

Total long-term		1,334			400

Net 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.

F-29

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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		2008
Balance at January 1	$	—	$	475
Adoption 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		5
Settlements		—		(58	)

Balance at December 31	$	475	$	422

F-30

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

12.		ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

		The components of other comprehensive income (loss) are as follows:


				Unrealized
				gains
				(losses) on
	Currency			available-
	translation			for- sale
	adjustments			securities			Others			Total

Balance at January 1, 2006	$	(28,140	)	$	532		$	—		$	(27,608	)

Currency translation adjustment		9,822			—			—			9,822
Realized gain on liquidation of subsidiary		(1,801	)		—			—			(1,801	)
Deferred taxes relating to realized gain on liquidation of subsidiary		556			—			—			556
Gain realized on sale of available-for-sale securities		—			(601	)		—			(601	)
Deferred taxes relating to realized gain on sales of available-for-sale securities		—			258			—			258
Unrealized losses on available-for-sale securities		—			(156	)		—			(156	)
Deferred taxes relating to unrealized losses on available-for-sale securities		—			92			—			92


Balance at December 31, 2006		(19,563	)		125			—			(19,438	)
Currency translation adjustment		15,179			—			—			15,179
Gain realized on sale of available-for-sale securities		—			(34	)		—			(34	)
Deferred taxes relating to realized gain on sales of available-for-sale securities		—			6			—			6
Unrealized losses on available-for-sale securities		—			(12	)		—			(12	)
Deferred taxes relating to unrealized losses on available-for-sale securities		—			6			—			6
Pension 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			—			27
Pension benefits recognized under SFAS 158		—			—			7			7

Balance at December 31, 2008	$	(13,378	)	$	73		$	(64	)	$	(13,369	)

F-31

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

13.

COMMITMENTS AND CONTINGENCIES

	(a)		Leases

			The 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 Leases

2009	$	219		$	608
2010		116			372
2011		29			356
2012		29			284
2013		29			289
Thereafter		—			2,449

Total minimum lease payments	$	422		$	4,358

Amounts representing interest		(36	)

Present value of net minimum lease payments	$	386

Rental expense consisted of the following:


	2006		2007		2008
Rentals 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.

F-32

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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

F-33

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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:

			Indemnification

			The 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 Rights

			The 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 Option

			Under 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

F-34

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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 risk

			Financial 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.

F-35

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

14.

FINANCIAL INSTRUMENTS (continued)

	(b)		Fair Value Disclosures

			The 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).

F-36

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

14.

FINANCIAL INSTRUMENTS (continued)


	Fair value measurements using input type
	Level 1		Level 2			Level 3		Total
Marketable securities:
Listed securities traded on SET	$	68	$	—		$	—	$	68
Investment in equity investees:		—		—			4,103		4,103
Long-term investment:
Equity securities in privately-held companies — Thai Metal Processing		—		—			544		544
Foreign 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 in
	privately-held		Investment in equity
	company		investees
Balance, beginning of period	$	—	$	—
Transfer to Level 3		544		4,245
Total 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 CONCENTRATIONS

		Copper 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

F-37

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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 TRANSACTIONS

		The related parties are defined as affiliates of the Company; entities for which investments are accounted for by the equity method by the Company; the principal owners of the Company; its management; members of the immediate families of the principal owners of the Company and its management.


	December 31,
	2007		2008

Due from:
PEWC	$	2,076	$	639
PEWC, Singapore Branch		955		1,000
Italian-Thai Development Public Company Limited (“Ital-Thai”) and its affiliates		3,566		3,176
SPHC		1,544		1,390
A director of Siam Pacific		13		12
Shandong Yanggu Wire & Cable Corp Ltd (“Shandong Yanggu”)		431		699
Others		53		6

	$	8,638	$	6,922


Due to:
PEWC	$	24,577	$	19,140
PEWC, Singapore Branch		892		890
PEWC Singapore Co. (Pte) Ltd.		1,183		1,230
Shandong Yanggu		719		383
Fujikura Limited		220		292
Thai Metal Processing Co., Ltd.		147		27
SPHC		2,855		2,642
Shandong Huayu		1,208		1,170
Shandong Rubber Cable		—		14
Others		—		23

	$	31,801	$	25,811


Short-term loans from:
Moon View Venture Limited (“Moon View”)	$	1,537	$	1,732
Pacific 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.

F-38

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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			2008

Loans 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		2008

Purchases of copper from PEWC	$	54,403	$	55,360	$	46,882
Purchases of power cables from PEWC		18,587		11,442		6,631
Sales to Ital-Thai and its affiliates		11,615		8,538		5,427
Sales to Shandong Yanggu		141		572		428
Purchases of raw materials from Thai Metal Processing Co. Ltd		1,196		1,222		1,456
Purchases of goods from Fujikura Limited		1,109		766		1,133
Interest expense paid to PEWC		491		472		275
Interest expense paid to PEWC Singapore Co. (Pte) Ltd.		52		64		47
Interest income from Italian Thai Development Public Co Ltd		—		—		75
Management fee paid to PEWC		152		98		189
Management fee paid to Ital-Thai		32		—		—
Management fee received from PEWC, Singapore Branch		12		12		13
Purchases of goods from PEWC		—		—		713
Purchases of goods from Shandong Yanggu		43		450		586
Dividend income from Thai Metal Processing Co. Ltd.		117		104		130

F-39

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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

F- 40

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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 PLANS

		The 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.

F- 41

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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			2008

Change in benefit obligation:
Benefit obligation at beginning of year	$	1,265		$	1,868
Foreign currency translation adjustments		424			(279	)
Service cost		102			107
Interest cost		91			88
Benefits paid		(85	)		(11	)
Actuarial loss (gain)		193			—
Plan amendments		(122	)		—

Benefit obligation at end of year	$	1,868		$	1,773


Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Employer’s contribution

Fair 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		$	107
Interest cost		91			88
Amortizations of:
Unrecognized net transition obligation		—			(6	)
Unrecognized actuarial loss		—			2

Net periodic benefit cost	$	193		$	191


Amounts recognized in accumulated other comprehensive loss consist of the following: (recognized under SAFS 158)
Actuarial loss	$	193		$	163
Prior 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.

F- 42

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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			2008
Discount 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 31

2009		66
2010		76
2011		95
2012		38
2013		234
2014 - 2018		811

	$	1,320

18.

SUPPLEMENTAL CASH FLOW INFORMATION


	Year ended December 31,
	2006		2007		2008
Interest paid	$	5,551	$	7,187	$	6,037

Income taxes paid	$	5,625	$	10,772	$	5,177

19.		SEGMENT FINANCIAL INFORMATION

		Description of Products by Segment

		The 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 Assets

		The 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.

F- 43

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

19.

SEGMENT FINANCIAL INFORMATION (continued)


	Year ended December 31,
	2006			2007			2008

Segment profit (loss)
Manufactured products	$	58,488		$	44,671		$	37,267
Distributed products		1,107			80			1,584
Sales, 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		$	12,750

Reconciling items
Corporate and other expenses		(28,427	)		(29,511	)		(29,044	)
Exchange gain (loss)		5,464			864			(1,712	)
Interest income		705			1,517			990
Interest 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			2,859

Total income (loss) before income taxes	$	32,560		$	13,160		$	(20,068	)


Segment assets
Manufactured products	$	349,082		$	373,057		$	283,528
Distributed products		293			5,117			10,499
Sales, delivery and installation of wires and cables		187			1,649			416

Total segment assets	$	349,562		$	379,823		$	294,443

Reconciling items
Corporate and other assets		10,765			12,047			11,252
Investment in equity investees		4,238			4,246			4,103

Total assets	$	364,565		$	396,116		$	309,798


Expenditures for additions to long-lived assets
Manufactured products	$	5,202		$	2,650		$	3,383
Corporate		—			—			—

Total expenditure for additions to long-lived assets	$	5,202		$	2,650		$	3,383

F-45

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

19.

SEGMENT FINANCIAL INFORMATION (continued)


	Year ended December 31,
	2006			2007			2008

Depreciation expenses
Manufactured products	$	(8,964	)	$	(9,050	)	$	(7,645	)
Corporate		(25	)		(29	)		(1	)

Total depreciation expenses	$	(8,989	)	$	(9,079	)	$	(7,646	)


Impairment loss
Corporate	$	(86	)	$	(95	)	$	—

Total impairment expense	$	(86	)	$	(95	)	$	—


Interest income
Manufactured products	$	536		$	1,406		$	803
Distributed products		69			66			107
Sales, delivery and installation of wires and cables		93			45			75
Corporate		7			—			5

Total interest income	$	705		$	1,517		$	990


Interest expense
Manufactured 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 investees
Corporate	$	73		$	124		$	(142	)

Total share of net gain (loss) of equity investees	$	73		$	124		$	(142	)

F-46

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

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		2008

Manufactured products	$	3,217	$	7,114	$	11,973
Distributed products		11,668		6,710		27,162
Sales, delivery and installation of wires and cables		16,679		5,064		20,535

	$	31,564	$	18,888	$	59,670

		Geographic Area Data

		Revenue 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		2008

Revenues from external customers
Thailand	$	212,204	$	249,337	$	216,364
Singapore		49,134		47,798		62,810
Australia		58,277		55,789		86,625
The People’s Republic of China		148,502		157,917		134,999

Total revenues from external customers	$	468,117	$	510,841	$	500,798


Long-lived assets by area:
Thailand	$	36,221	$	37,037	$	29,027
Singapore		8,733		8,485		2,841
Australia		4,033		3,965		8,090
The People’s Republic of China		17,148		16,800		16,819
Other		10		32		30

Total long-lived assets	$	66,145	$	66,319	$	56,807

F-47

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of US Dollars, except share data)

20.		SUMMARIZED FINANCIAL INFORMATION OF EQUITY INVESTEES

		The 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			2008
	Unaudited			Unaudited

Current assets	$	26,338		$	31,760
Non-current assets		25,261			18,804
Current 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		2008
	Unaudited			Unaudited		Unaudited

Net sales	$	19,016		$	24,332	$	34,771
Sales less cost of sales		5,279			6,469		9,470
Net 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


	ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
Date: July 6, 2009	/s/ Yuan Chun Tang
	Yuan Chun Tang
	Chief Executive Officer


		Page

Report of independent registered public accounting firm		F-2

Consolidated balance sheets as of December 31, 2007 and 2008		F-3

Consolidated statements of operations for the years ended December 31, 2006, 2007 and 2008		F-5

Consolidated statements of shareholders’ equity for the years ended December 31, 2006, 2007 and 2008		F-6

Consolidated statements of cash flows for the years ended December 31, 2006, 2007 and 2008		F-7

Notes to consolidated financial statements		F-8