UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
		OR
þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2010
		OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		OR
o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-14542

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED

(Exact name of Registrant as specified in its charter)

Bermuda
(Jurisdiction of incorporation or organization)

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

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

Common Shares, par value 0.01 per share
Securities registered or to be registered pursuant to Section 12(g) of the Act.

None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None
(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

 

 

FORWARD-LOOKING STATEMENTS

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

     Such statements are not promises or guarantees and are subject to a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include our ability to maintain and develop market share for our products; global, regional or national economic and financial conditions, including events such as the financial crisis that commenced in 2008 and the consequent economic recession, and their individual or collective impact on demand for our products and services; the introduction of competing products or technologies; our inability to successfully identify, consummate and integrate acquisitions; our potential exposure to liability claims; the uncertainty and volatility of the markets in which we operate; the availability and price of copper, our principal raw material; our ability to negotiate extensions of labor agreements on acceptable terms and to successfully deal with any labor disputes; our ability to service, and meet all requirements under, our debt, and to maintain adequate credit facilities and credit lines; our ability to make payments of interest and principal under our existing and future indebtedness; our ability to increase manufacturing capacity and productivity; the fact that we have operations outside the United States that may be materially and adversely affected by acts of terrorism, war and political and social unrest, or major hostilities; increased exposure to political and economic developments, crises, instability, terrorism, civil strife, expropriation and other risks of doing business in foreign markets; economic consequences arising from natural disasters and other similar catastrophes, such as floods, earthquakes, hurricanes and tsunamis; price competition and other competitive pressures; the impact of climate change on our business and operations and on or customers; our ability to avoid limitations on utilization of net losses for income tax purposes; fluctuations in currency, exchange and interest rates, operating results and the impact of technological changes and other factors that are discussed in this report and in our other filings made with the Securities and Exchange Commission (the “SEC” or the “Commission”).

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

	•		our business strategy;
	•		our prospects for future revenues and profits in the markets in which we operate;
	•		the impact of political, legal or regulatory changes or developments in the markets in which we do business;
	•		the fact that our Common Shares are now traded on a national exchange in the United States;
	•		our dependence on a limited number of suppliers for our raw materials and our vulnerability to fluctuations in the cost of our raw materials; and
	•		our liquidity.

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

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

OTHER CONVENTIONS

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

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

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

Part I

      3.2 Exchange Rates

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

     Unless otherwise noted, for the convenience of the reader, translations of amounts from Baht, Singapore dollars, Renminbi and Australian dollars to U.S. dollars have been made at the respective noon buying rates in New York City for cable transfers in those currencies as certified for customs purposes by the Federal Reserve Bank of New York (the “Noon Buying Rate”) on December 31, 2010. The respective Noon Buying Rates on December 31, 2010 were US$1.00 = Bt 30.1600; S$1.2885; RMB 6.600; and A$0.9879. The respective Noon Buying Rates on May 2, 2011, the latest practicable date before publication of this Annual Report, were US$1.00 = Bt 30.0424; S$1.2463; RMB 6.5267 and A$1.0588. No representation is made that the foreign currency amounts could have been or could be converted into U.S. dollars on these dates at these rates or at any other rates.

      Thailand

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

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

Sources: Federal Reserve Bulletin, Board of Governors of the Federal Reserve System. Federal Reserve Statistical Release H.10 (512), from the website of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov.

      Singapore

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

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

Sources: Federal Reserve Bulletin, Board of Governors of the Federal Reserve System. Federal Reserve Statistical Release H.10(512), from the website of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov.

      China

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

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

Sources: Federal Reserve Bulletin, Board of Governors of the Federal Reserve System. Federal Reserve Statistical Release H.10(512), from the website of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov.

      Australia

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

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

Sources: Federal Reserve Bulletin, Board of Governors of the Federal Reserve System. Federal Reserve Statistical Release H.10(512), from the website of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov.

      3.3 Risk Factors

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

           3.3.1 Risks Related to the Global Economic and Financial Crisis

     In response to the recent global financial crisis and the severe economic recession that followed it, the government of the United States and of many other leading industrialized nations implemented a number of economic stimulus measures, engaged in substantial deficit spending to boost economic activity and adopted policies of quantitative easing that resulted in, among other things, record government budget deficits and a prolonged period of record-low interest rates. The economic recovery that has taken place since the onset of the crisis in 2008 is perceived to be very fragile by many governmental authorities and leading economists. In general, leading banks have curtailed their lending activities, making it more difficult for many businesses to obtain financing for their capital needs. In addition, the record budgets deficits of many governments have engendered a backlash against public spending that may impact on, among other things, the level of infrastructure investment by governments in the markets in which the Company conducts operations.

     In 2010, world output — and per capita income — began to recover from the 2008-09 recession, which is largely considered to be the most severe economic downturn since the Great Depression that commenced in 1929. Gross World Product (GWP) grew 4.6%, largely on the strength of a rebound in global exports, which rose about 20% from the level of 2009. Growth was not evenly distributed across countries,

however. Lower income countries — those with per capita incomes below $30,000 per year — averaged 6.3% growth, while higher income countries — with per capita incomes above $30,000 — averaged just 2.8% growth. And countries with current account surpluses averaged 6.0% growth, while those with current account deficits averaged just 3.4% growth. A number of the world’s high-growth economies recorded the biggest GDP gains — China (+10.1%), Taiwan (+8.3%), India (+8.3%), Brazil (+7.5%), and South Korea (+6.1%). China also became the world’s largest exporter. Continuing uncertainties in real estate and financial markets resulted in slower growth in Japan (+3.0%), the US (+2.8%), and the European Union (+1.7%). In 2010, global unemployment continued to creep upwards, reaching 8.8%. Underemployment, on the other hand, especially in the developing world, remained much higher. Global gross fixed investment stabilized at about 23% of GWP, after a significant drop in 2009. World trade appears to be returning to pre-2009 patterns, with current account surpluses or deficits rising for a majority of countries. World external debt, however, dropped again in 2010 - about 5% from the 2009 level, as many countries reduced borrowing. Many, if not most, countries pursued expansionary monetary and fiscal policies. The global money supply, both narrowly and broadly defined, increased roughly 10%, as countries tried to keep interest rates low; the global budget deficit stabilized at roughly $3.5 trillion, as countries tried to rein in spending and slow the rise of public debt.

     While a number of the economic indicators mentioned above suggest the global economy is continuing to recover from the financial crisis, the Company believes that the recovery is uncertain and susceptible to a possible material downturn depending upon existing and unforeseen macro-economic and political conditions and events. In addition, the fiscal restraint now being urged by a number of governments may impact negatively on the levels of infrastructure investment in markets in which we are operating, which could have a material negative impact on our future results.

      Actual and Possible Impacts on the Company

     The lukewarm recovery of economic conditions worldwide in 2010 has helped the Company regain some momentum in terms of overall financial performance. In certain markets, sales increased as there has been an increased commitment to of infrastructure development by governmental entities in certain instances and in capital expenditures and construction by private companies in anticipation of the a projected increased demand in the residential and commercial building markets. Many of the Company’s customers have also moved forward with their construction projects in the current market environment. The decrease in enameled wire sales in 2009 have come back and shown stronger demand in 2010. Copper prices on the London Metal Exchange (LME) bounced back to the very high level in 2010 to reach $9,514 per metric ton at the end of 2010. Consistent with industry practice, the Company is typically able to pass on the increase in cost of raw material to its customers, This also resulted in a better turnover for the entire year of 2010. With the increase in copper and commodity prices in 2010, customers have sometimes been rushing in with order placements in the expectation that prices may further increase. However, commodity prices, including copper, are highly volatile. The benefits to the Company arising from copper price increases would not be sustainable in the event of a downturn in copper pricing. In such a case, the Company could find itself with overvalued inventory that requires a valuation write-down, which has happened in the past.

     The Company experienced the impact of the economic crisis beginning in the second half of 2008 and into the first half of 2009, which included lower sales and lower gross margins as compared to the first half of 2008 and the second half of 2007. The lower results in 2009 were primarily due to the reduction of sales orders from customers. However, with the re-bound of copper price in 2010, the customers were willing to accept a higher sales price from APWC, because they anticipated the copper price rising trend will continue. Revenue for 2010 was $469 million, representing a 30% growth from that of 2009. Gross margin also posted a much better result in 2010, an increase of 33%, as compared to that of 2009, primarily due to the Company’s FIFO inventory costing method when the lower cost of raw materials purchased at end of 2009 were first used in the production.

     The Company is unable to determine the precise impact of the global economic recovery on its operations and cash flow since its operating results are also affected by factors that are or may be unrelated to the economic improvement, such as the completion of routine purchase

cycles by customers and the completion, expansion or contraction of large infrastructure projects. However, the Company has concluded that the current economic recovery has positively affected the Company’s operations and cash flow. However, even with the positive sign of economic recovery, the Company believes that any efforts to forecast likely future performance with any degree of specificity would be fraught with uncertainty due to speed of the recovery itself. In addition, the apparent stabilization of the global capital markets and increase in economic activity in 2010 cannot be taken as certain indicators that the global recession is over and that sustained economic growth is assured. Accordingly, the Company cautions against placing reliance on any efforts to identify trends for the foreseeable future.

     The governments in the countries in which we operate have all revised their economic growth for the fiscal year 2010. For purposes of planning and prudent management, the Company is presently anticipating that the extremely challenging and difficult economic conditions that faced the global economy throughout 2009 will lessen somewhat and the internal budget prepared by management as a planning tool for 2011 anticipates a further increase in sales and gross margin, given the rise in copper prices.

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

     The macroeconomic events and those specific to the Company may have a material adverse impact on the Company’s business operations until such time as the global financial crisis has substantially abated and financial and economic conditions have materially improved. The Company notes, however, that the foregoing is subject to a number of unknown variables, including the impact of actions taken or that may be taken in the future by governmental entities to address the capital needs of banks and other financial institutions and to increase the flow of credit to businesses.

           3.3.2 Risks Related to the Common Shares and Corporate Governance

      Consolidation of Charoong Thai Group Accounts

     As of December 31, 2010, the Company effectively owned 50.93% of the issued and outstanding shares of Charoong Thai Wire and Cable Public Company Limited (“Charoong Thai”). That percentage ownership constitutes a decrease from the Company’s initial ownership percentage and is attributable to the exercise of warrants or conversion of convertible securities by third parties. The Company’s present intention is to maintain majority ownership of the voting securities of Charoong Thai. However, there may be circumstances under which the Company cannot maintain majority ownership of Charoong Thai. In the event Charoong Thai determined to make a further offering of voting securities, or securities convertible into or exchangeable for voting securities, and the Company was not in a position to fund or finance its participation in the offering, the ownership interest of the Company in Charoong Thai could fall below 50%. If the Company’s share holding in Charoong Thai were to fall below 50%, the accounts of the Charoong Thai group, which includes all of the Company’s Thailand operations, will not be consolidated but instead will be equity accounted. In such an event, the Company’s accounts will show a decrease in revenue and most categories of assets and liabilities, which events could have a material adverse effect on the value of the Common Shares.

      Potential Illiquidity of Common Shares

     Approximately 75.4% of our Common Shares are either unregistered securities or registered securities held by affiliates, which are subject to restrictions on trading. Accordingly, approximately 75% of our Common Shares are not fully liquid investments. In the recent past years, the volume of trading in our Common Shares has not been substantial. This illiquidity may negatively impact the value of the Common Shares.

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

     As the majority shareholder, Pacific Electric Wire & Cable Co., Ltd. (“PEWC”) has sufficient votes to control the outcome of any matters presented for a shareholder vote, including the election of the members of the Board of Directors. PEWC may vote its shares in the Company in the manner that it sees fit. In addition, subject to compliance with applicable securities laws, PEWC may sell, convey or encumber all or a portion of its ownership interest in the Company without regard to the best interests of the other shareholders of the Company except to the extent it may be required to comply with the terms of the Amended and Restated Shareholders’ Agreement dated March 27, 2009 among the Company, PEWC and SOF Investments, L.P., a Delaware limited partnership which owns beneficially 9.8% of the issued and outstanding Common Shares, and except that it may not engage in conduct oppressive to minority interests under applicable law.

     The Common Shares of the Company are traded on the NASDAQ Capital Markets tier. However, in listing on NASDAQ, as the Company has a more than fifty percent (50%) shareholder, the Company was entitled to rely upon a “controlled company exemption” that exempts it from having a board of directors comprised of a majority of independent directors. At present, a majority of the board of directors of the Company is affiliated with PEWC.

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

     Effective as of April 29, 2011, the Common Shares of the Company are traded on the NASDAQ Capital Markets tier. However, in listing on NASDAQ, as the Company has a more than fifty percent (50%) shareholder, the Company was entitled to rely upon a “controlled company exemption” that exempts it from having a board of directors comprised of a majority of independent directors. At present, a majority of the board of directors of the Company is affiliated with PEWC.

      Limited Trading Volume

     Our Common Shares are traded on the NASDAQ Capital Markets tier. Trading in, and demand for, our Common Shares has been limited. As a consequence, shareholders may find their ability to sell their Common Shares quickly or in substantial amounts is adversely affected by the limited public trading market. Thinly-traded equity can be more volatile than equity securities traded in an active trading market. The high and low daily closing price for our Common Shares during the past 24 months (April 2009 — April 2011) has been $7.50 and $0.50, respectively. In the future, our Common Shares may experience significant price fluctuations which could adversely affect the value of your ownership interest in the Company.

      Disclosure Controls and Procedures and Internal Control Over Financial Reporting

     The Company focused on improving its disclosure controls and procedures and its internal control over financial reporting and remediating all material weaknesses, and as a result, both disclosure controls and procedures and internal control over financial reporting were classified as effective as of December 31, 2008, but ineffective as of December 31, 2009 due to the development of material weaknesses. Deficiencies were noted in our controls over non-routine aspects of our financial statement closing process, including the accounting for foreign currency transactions and translation whereby foreign currency translation amounts were improperly recorded in other comprehensive income instead of the statement of operations, the calculation and recording of individual income tax liability, allowance for deferred tax assets, fixed asset residual value, and recurring consolidation entries. These deficiencies were attributable to our decentralized reporting structure, our complex consolidation process and inadequate reviews over account balances at the reporting date. In making our assessment, we evaluated that the aggregate effect of these deficiencies represented a material weakness as of December 31, 2009. However, we have implemented the

following measures in 2010 to remediate the material weakness:

      •  Training of all levels of finance and accounting staff, both at the subsidiary level and at headquarters level, on US GAAP and recent accounting and reporting developments.

      •  Accounting entries at each subsidiary must now be reviewed by their supervisor or finance manager, then signed off by the respective CFOs (or, in the absence of a CFO, the finance manager takes charge).

      •  Regular monthly finance meetings are conducted to discuss problems and verify account balances.

      •  Development of a more standardized group reporting package.

     As of December 31, 2010, our assessment was that the material weakness identified in the prior year was remediated.

      Delinquency in Reporting Obligations; Reporting of Financial Results

     As a foreign private issuer, the Company is currently required to file its annual report on Form 20-F with the SEC within six months following the close of its fiscal year. The Company was not in a position to make the filing of its 2004 annual report on a timely basis. After the expiration of an automatic grace period, on August 29, 2005 the OTC BB delisted the Company for failure to remain current in the filing of its periodic reports. On November 9, 2007, the Company filed its 2004 annual report. On March 17, 2008, the Company filed its combined 2005 and 2006 annual report. The Company then relisted on the OTC BB in April 2008 under the symbol “AWRCF.” On June 28, June 26, 2009 and June 16, 2010, the Company filed its 2007, 2008 and 2009 annual report, respectively, on a timely basis.

     The Company is currently compliant with its reporting obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and believes that it has addressed the corporate governance obstacles that led to its delinquency in filing its 2004, 2005 and 2006 annual reports. However, the Company cannot provide assurances that it will continue to be compliant in its reporting obligations under the Exchange Act. As a foreign private issuer, the Company is not required to provide financial results on a quarterly or semi-annual basis. In addition, Bermuda law does not require the Company to provide interim financial information to its shareholders, whether on a quarterly or semi-annual basis. As such, investors may not have the same access to financial information of the Company as they customarily receive in the case of a domestic issuer disclosing quarterly results on a Form 10-Q.

      Potential Conflict of Certain Officers and Directors

     The Company appointed two independent directors on September 28, 2007. In March 2011 the Company appointed a third independent director. Other than those three independent directors, all of the members of the Board of Directors are also directors or officers or otherwise affiliated with PEWC, the majority shareholder. Certain of our officers are also affiliated with PEWC. In each case, they may be subject to potential conflicts of interest. In addition, certain of our officers and directors who are also officers and/or directors of PEWC may be subject to conflicts of interest in connection with, for example, pursuing corporate opportunities in which we and PEWC or one of its affiliates have competing interests, and the performance by us and PEWC of our respective obligations under existing agreements, including the Composite Services Agreement (discussed in section 10.3). In addition, some of these persons will devote time to the business and affairs of PEWC and its affiliates as is appropriate under the circumstances, which could reduce the amount of time available for overseeing or managing our business and affairs. Notwithstanding any such potential conflicts, however, such individuals, in their capacities as our directors and officers, are subject to fiduciary duties to our shareholders.

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

      Obligations under the Amended and Restated Shareholders Agreement

     On June 28, 2007, SOF Investments, L.P. (“SOF”), a Delaware limited partnership, acquired 2,766,154 Common Shares, representing 20% of the issued and outstanding Common Shares (the “SOF Shares”), from Sino-JP Fund Ltd (“Sino-JP”), an institutional shareholder. On that same date, the Company entered into the Shareholders Agreement with PEWC and SOF, pursuant to which the Company granted to SOF certain rights and protections. Under the Shareholders Agreement, the Company agreed to indemnify SOF and its partners and certain of its affiliates (the “SOF Indemnified Persons”), for any additional taxes, interest, penalties and other costs that might be imposed upon or incurred by the SOF Indemnified Persons in the event that the Company is determined by the Internal Revenue Service (the “IRS”) to be a “controlled foreign corporation” (a “CFC”) or a “passive foreign investment company” (a “PFIC”), as such terms are interpreted and defined under IRS rules and regulations. The Company does not believe that it is now or is likely to become a CFC or a PFIC; however, the Company cannot provide any assurances that it will not become a CFC or a PFIC in the future.

     In addition, the Company granted certain registration rights to SOF with respect to the SOF Shares (the “Registrable Securities”) in the Shareholders Agreement. In particular, the Company agreed to use its reasonable best efforts to prepare and file, and cause to go effective, as soon as practicable, a shelf registration statement covering the resale of the Registrable Securities on a delayed or continuous basis. The Company also agreed to use its reasonable best efforts to keep its shelf registration statement effective until all Registrable Securities have been sold or until all Registrable Securities may be sold without restriction pursuant to Rule 144 promulgated pursuant to the Securities Act of 1933, as amended. In addition, the Company granted to SOF two demand registration rights for underwritten offerings and customary piggyback registration rights with regard to the Registrable Securities. Moreover, the Company agreed to use its reasonable best efforts to cause the Common Shares to be listed on a national “Securities Market,” which means any of the NASDAQ Stock Market, Inc. (Global Market or Global Select Market), the American Stock Exchange LLC (now known as NYSE Amex Equities) or the New York Stock Exchange LLC, not later than January 31, 2009, subject to notice and a sixty (60) day cure period. All of the costs and expenses of the Company in connection with the fulfillment of its obligations under the Shareholders Agreement were to be paid by the Company, other than underwriting fees, discounts and commissions attributable to the sale of Common Shares held by SOF.

     Under the terms of the Shareholders Agreement, if the Company failed to fulfill its obligations thereunder, SOF may have a claim for damages against the Company. No such claim has been made. In addition, if the Company fulfilled its reasonable best efforts undertakings but failed to meet one or more of the stated goals, SOF may have a put right of their Common Shares to PEWC. In accordance with those terms, on February 2, 2009, SOF delivered to PEWC notice of its exercise of the put right under the Shareholders Agreement due to the fact that the Common Shares were not listed on a national Securities Market as of January 31, 2009. On March 27, 2009, SOF sold 51% of its Common Shares to PEWC pursuant to the terms of a share purchase agreement between those parties. Upon the consummation of that share purchase agreement, SOF held 1,355,415 registered Common Shares of the Company and PEWC held 1,410,739 registered Common Shares, respectively, representing 9.8% and 10.2% of the outstanding Common Shares, with PEWC holding an additional 7,664,615 unregistered Common Shares, giving it an aggregate of 65.6% of the total issued and outstanding Common Shares. In connection with this transaction,

the Company, PEWC and SOF entered into an Amended and Restated Shareholders Agreement, which among other things, granted to the Company an extension for listing the Common Shares on a national Securities Market until February 2011 and maintains for SOF the right to sell its remaining Common Shares to PEWC in the event the Company does not list its Common Shares on a national Securities Market by February 2011. In April 2011, the Common Shares of the Company were approved for trading on the NASDAQ Capital Markets tier, which tier does not fit within the definition of a national “Securities Market”, as provided in the Amended and Restated Shareholders Agreement. The Company is not aware that SOF has taken any action with respect to the Common Shares held by it. The Amended and Restated Shareholders Agreement also provides for those registration and indemnification rights set forth above in the description of the Shareholders Agreement. While the sale of Common Shares by SOF to PEWC resulted in PEWC holding a higher concentration of Common Shares which may impact liquidity for the other shareholders, the Company does not believe that any definitive impact can be forecasted or determined.

     In addition, sales of Common Shares held by SOF and registered under the shelf registration statement, or any registration statement that goes effective following an exercise of demand registration rights, will increase the number of Common Shares available for purchase in the public market and may adversely affect the value of the Common Shares held by other shareholders. Even without substantial sales by SOF or PEWC of their respective Registrable Securities, the possibility of such sales may create a “market overhang” that has the effect of depressing the trading price of the Common Shares.

     The Company has also granted to SOF preemptive rights in the event of any issuance of additional equity securities (or securities convertible into or exchangeable for equity securities) by the Company, such that SOF may subscribe for additional securities in order to maintain its then percentage ownership interest in the issued and outstanding equity securities of the Company.

      Holding Company Structure; Potential Restrictions on the Payment of Dividends

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

      Requirement to Maintain Effectiveness of the Registration Statement and to List on a National Securities Exchange; Effect of the Put of the SOF Shares to PEWC

     Under the Amended and Restated Shareholders Agreement, SOF has retained the right to sell its remaining Common Shares (the “SOF Shares”) to PEWC if the Company does not achieve a listing on a national Securities Market within the time frame provided in the agreement. The Company’s Common Shares are currently listed on the NASDAQ Capital Markets tier. The Company intends to apply to list the Common Shares on the Global Markets tier after the Company is satisfied that it qualifies in all respects for that tier. However, there are no assurances that the Common Shares will qualify for the Global Markets tier or that the Company’s application, when filed, will be approved. In addition, the Company has agreed to maintain the effectiveness of the registration statement on Form F-1, for the benefit of SOF, and if the Company fails to do so for any period of thirty (30) consecutive trading days or an aggregate of sixty (60) trading days during any twelve month period,

then SOF may, subject to compliance with notice and other procedural requirements, exercise a right to sell its remaining Common Shares to PEWC. At all times, the Company must exercise its reasonable best efforts to comply with its covenants under the Amended and Restated Shareholders Agreement. Otherwise, the Company could be subject to a damages claim by SOF.

     On February 2, 2009, SOF delivered notice of its exercise of the put right under the Shareholders Agreement to PEWC due to the fact that the Common Shares were not listed on a national Securities Market as of January 31, 2009, which date was agreed to by the Company prior to the extension granted under the Amended and Restated Shareholders Agreement. On March 27, 2009, PEWC and SOF completed a share purchase transaction pursuant to which PEWC acquired 1,410,739 Common Shares from SOF. As of the closing of that transaction, PEWC held 9,075,354 Common Shares and SOF held 1,355,415 Common Shares, representing 65.6% and 9.8% of the issued and outstanding Common Shares, respectively. The Company does not believe that any definitive impact of the increase in PEWC’s ownership can be forecasted or determined.

      Corporate Matters; Limited Recourse; Limited Enforceability

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

           3.3.3 Risks Relating to Our Business

      Risks Relating to Copper

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

      Risks related to our Customer Base and our Geographic Markets

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

      Risks Relating to China

     We conduct substantial business operations in China. Accordingly, our results of operations and prospects are likely to be materially impacted by economic, legal and other developments in China.

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

     In recent years, the PRC government has moved away from a planned economic model and implemented economic reform measures emphasizing decentralization, utilization of market forces in the development of the economy and a high level of management autonomy. While such economic reform measures are generally viewed as a positive development for foreign businesses investing or establishing operations in China, many of the reforms are unprecedented and may be subject to revision, modification or termination based on the outcome of such economic changes and other considerations, such as their social impact. There is not sufficient administrative or judicial precedent to permit the Company to determine with any degree of certainty how the reforms will impact our business in China.

           PRC Civil Law System May Limit the Company’s Remedies

     The Chinese legal system is a civil law system based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since the late 1970s, the central government has promulgated laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. In particular, since 1979, the PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investment in China. Foreign investment laws and regulations in China are evolving and the interpretations of many laws, regulations and rules are not always uniform. Accordingly, enforcement of these laws, regulations and rules involves uncertainties, which may limit the remedies available to us in the event of any claims or disputes with third parties. In addition, any litigation in China may be protracted and could result in substantial costs and diversion of resources and management attention.

           PRC Control over the Convertibility of Currency May Restrict the Payment of Dividends

     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 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 our subsidiaries in

the PRC to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency-denominated obligations.

      PRC Regulation of Telecommunications Industry May Adversely Affect the Company’s Operations or Financial Condition

     In addition, the PRC government has considerable control over the structure and overall development of the telecommunications industry in the PRC. Purchasers of our telecommunications cable in China are subject to extensive regulation by and under the supervision of the primary telecommunications industry regulator in China, the Ministry of Industry and Information Technology (the “MIIT”), which was created by the State Council of the PRC in March 2008 to assume, among other things, the duties of the former Ministry of Information Industry. The MIIT is responsible for formulating policies and regulations for the telecommunications industry, granting telecommunications licenses, allocating frequency spectrum and numbers, formulating interconnection and settlement arrangements between telecommunications operators, and enforcing industry regulations. Other PRC governmental authorities also regulate tariff policies, capital investment and foreign investment in the telecommunications industry. As a result of its accession to the World Trade Organization (“WTO”) and the adoption of the Regulations on the Administration of Foreign-Invested Telecommunications Enterprises in December 2001, which implement its commitments to the WTO, the Chinese government has agreed to gradually liberalize the various segments and regions of the telecommunications market to foreign telecommunications operators. Currently, however, the MIIT has only granted licenses to operate fixed-line telecommunications networks (which use our telecommunications cables) to certain PRC government-related entities. As a result, the business of our companies in China may be more dependent on the political stability of the country and continuity of government policy than if there were more consumers of telecommunications cable and if the government-related entities were not so closely involved in the telecommunications industry. Future changes to the regulations and policies governing the telecommunications industry in China, including possible future overhaul of the industry, may have a material adverse effect on our business.

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

     Political or social instability in China could also adversely affect our business operations or financial condition. In particular, adverse public health epidemics or pandemics in China could not only interfere with our ability to operate our PRC subsidiaries, but could also affect the country’s overall economic growth, which could in turn affect the sales of our products in China. In addition, as our corporate headquarters are located in Taipei, any escalation in political tensions between the PRC and the government of Taiwan could impact adversely our ability to manage our Chinese operations efficiently or without third party interference.

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

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

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

     We consume substantial amounts of electricity in our manufacturing processes at our production facilities in China. Certain parts of China have been subject to power shortages in recent years. We have experienced a number of power shortages at our production facilities in China to date, particularly in Shenzhen where numerous clusters of factories are situated. We are sometimes given advance notice of power shortages and in relation to this we currently have a backup power system at certain of our production facilities in China. However, there can be no

assurance that in the future our backup power system will be completely effective in the event of a power shortage, particularly if that power shortage is over a sustained period of time and/or we are not given advance notice thereof. Any power shortage, brownout or blackout for a significant period of time may disrupt our manufacturing, and as a result, may have an adverse impact on our business.

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

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

     On March 16, 2007, the National People’s Congress of the PRC, or NPC, passed the new PRC Enterprise Income Tax Law (the “New EIT Law”). Under the New EIT Law, effective January 1, 2008, China adopted a uniform tax rate of 25% for all enterprises (including foreign-invested enterprises) and revoked the then current tax exemption, reduction and preferential treatments applicable to foreign-invested enterprises. However, there is a transition period for enterprises, whether foreign-invested or domestic, that were receiving preferential tax treatments granted by relevant tax authorities at the time the New EIT Law became effective. Enterprises that are subject to an enterprise income tax, or EIT, rate lower than 25% may continue to enjoy the lower rate and gradually transition to the new tax rate within five years after the effective date of the New EIT Law. Enterprises that are currently entitled to exemptions or reductions from the standard income tax rate for a fixed term may continue to enjoy such treatment until the fixed term expires. Pacific Electric Wire & Cable (Shenzhen) Co., Ltd. (“PEWS”) is the only subsidiary of the Company in the PRC that still enjoys a reduced tax rate under the transitional period. The preferential income tax rate of PEWS under the revised tax incentive regulations was 22% in 2010, and is scheduled to be 24% in 2011 and 25% in 2012.

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

     The Labor Contract Law became effective on January 1, 2008. It formalizes workers’ rights concerning overtime hours, pensions, layoffs, employment contracts and the role of trade unions. Considered one of the strictest labor laws in the world, among other things, this new law requires an employer to conclude an “open-ended employment contract” with any employee who either has worked for the employer for ten years or more or has had two consecutive fixed-term contracts. An “open-ended employment contract” is in effect a lifetime, permanent contract, which is terminable only in specified circumstances, such as a material breach of the employer’s rules and regulations, or for a serious dereliction of duty. Such employment contracts with qualifying workers would not be terminable if, for example, the Company determined to downsize its workforce in the event of an economic downturn. Under the new law, downsizing by 10% or more (or more than 20 persons) may occur only under specified circumstances, such as a restructuring undertaken pursuant China’s Enterprise Bankruptcy Law, or where a company suffers serious difficulties in production and/or business operations. Any of the Company’s staff employed to work exclusively within the PRC are covered by the new law and thus, the Company’s ability to adjust the size of its operations when necessary in periods of recession or less severe economic downturns has been curtailed. Accordingly, if the Company faces future periods of decline in business activity generally or adverse economic periods specific to the Company’s business, this new law can be expected to exacerbate the adverse effect of the economic environment on the Company’s results of operations and financial condition. Additionally, this new law has affected labor costs of our customers which may result in a decrease in such customers’ production and a corresponding decrease in their purchase of our products.

      Exposure to Foreign Exchange Risks

     Changes in exchange rates influence our results of operations. Our principal operations are located in Thailand, Australia, Singapore and China, and a substantial portion of our revenues is denominated in Baht, Australian dollars, Singapore dollars or Renminbi. Nearly all of the raw materials for these operations are imported and paid for in U.S. dollars and a substantial portion of our future capital expenditures are expected to be in U.S. dollars. We require a significant amount of U.S. dollars for our ongoing equipment upgrade and maintenance programs. Any devaluation of the Baht, the Australian dollar, the Singapore dollar or the Renminbi against the U.S. dollar would increase the effective cost of foreign manufacturing equipment and the amount of foreign currency denominated expenses and liabilities and would have an adverse impact on our operations.

     Although our reporting currency is U.S. dollars, the functional currency of our Thai operations, which accounted for 40.6% of our sales in 2010, is the Thai Baht. The functional currency of our Singapore operations, which accounted for 7.3% of our sales in 2010, is the Singapore dollar. The functional currency of our Australian operations, which accounted for 9.6% of our sales in 2010, is the Australian dollar. The functional currencies for our China operations which in total accounted for 31.7% of our sales in 2010, are divided into two groups: for Shangdong joint ventures and Shanghai Yayang, their functional currency is Renminbi, while for CCH, PEWS and Epan Industries, their functional currency is U.S. dollars. Accordingly, the functional currency accounts of these operations are all translated into U.S. dollars utilizing, for the year, the balance sheet exchange rate for balance sheet accounts, and an average exchange rate for the year for the income statement accounts. Such translation of the functional currency accounts is recognized as a separate component of shareholders’ equity. Any devaluation of the Baht, the Australian dollar, the Singapore dollar, or the Renminbi against the U.S. dollar would adversely affect our financial performance measured in U.S. dollars.

      Competition

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

      Risks associated with Required Productivity Increases

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

      Indebtedness

     As of December 31, 2010, the Company had a total of $310.5 million in credit available to itself, or one or more of its operating subsidiaries. The available credit is provided by a total of 34 banks in the various regions/territories in which we operate. Out of $310.5 million in available credit, $100.8 million was unused. The Company, collectively and on individual basis, is not highly leveraged and management does not consider it to be likely that the Company will become highly leveraged. Weighted average borrowing rate, for all the outstanding loans combined, would sum up to be 3.6%, which runs slightly higher than like-kind borrowing rates in the marketplace, i.e., three month LIBOR (data of March 31, 2011) of 0.3045% plus 2.5%.

      Composite Services Agreement with PEWC

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

      Risks Relating to Thailand

     A substantial portion of our Thai operations, which accounted for approximately 40.6% of our net sales in 2010, consists of the manufacture of telecommunications and power cable and sales of those products for use in large-scale telecommunications projects and various construction projects in Thailand. As a result, our future performance will depend in part on the political situation in Thailand and the general state of the Thai economy. Recent civil unrest has abated somewhat. However, the political situation remains volatile and unpredictable. Elections scheduled to take place in June 2011 add to the uncertain political climate. The Company’s Thai operations are increasingly vulnerable to uncertainties with regard to payment for current sales and the award of future contracts in view of the ongoing political crisis in Thailand. Additionally, in recent years the Thai economy has been highly cyclical and volatile, depending for economic growth in substantial part on a number of government initiatives for economic expansion. Moreover, the Baht remains volatile and subject to significant fluctuations in relation to the U.S. dollar. Such fluctuations in the value of the Baht may negatively impact our performance.

      Environmental Liabilities

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

      Alternative Transmission Technologies

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

      International Business Risks

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

Item 4: Information on the Company

4.1 History and Development of the Company

      General

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

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

      Principal Capital Expenditures and Divestitures

     Total purchases of property, plant and equipment amounted to $3.4 million in 2008 and $3.3 million in 2009, and $3.7 million in 2010. Those purchases related mainly to the capacity expansion of certain subsidiaries in Thailand and China, particularly Charoong Thai, and to the replacement of old equipment at various operating facilities.

4.2.1 Certain Recent Events

     On April 29, 2011, the Common Shares of the Company commenced trading on the NASDAQ Capital Markets tier.

     On March 17, 2011, the Board passed resolutions whereby 1) it accepted the resignation of an existing director, Mr. Lee Gai Poo, 2) it appointed a new member to the Board, Dr. Lambert Ding, as an independent director, who will also serve as a member of the Audit Committee, and 3) it passed on amendment to the Audit Committee charter, to clarify that the appointment of the independent auditors is subject to shareholder approval.

     On October 6, 2010, the SEC declared effective the Company’s Post-Effective Amendment No. 6 to a registration statement on Form F-1 covering 2,766,154 Common Shares, of which 1,410,739 Common Shares are held by PEWC and 1,355,415 Common Shares are held by SOF.

     On September 3, 2010, the Company held its annual general meeting of shareholders. At such meeting, each of the directors of the Company was re-elected except for Mr. Sun Tao-Tsun who resigned from the Board in August 2010. Ernst & Young was appointed independent auditors of the Company for the second year. In the meeting the 2009 financial results were presented along with unaudited six month interim financial results for the first half of 2010.

     On May 13, 2010, a Board meeting was called to discuss and pass the 2009 audited financial results presented by CFO, Mr. Frank Tseng.

     On January 5, 2010, CCG IR firm was appointed by the Company to handle all investor relations matters. The Board made this appointment with a view to improving shareholder communications and procuring assistance to enhance the Company’s visibility in its trading markets.

     On October 22, 2009 the Board passed a resolution whereby in connection with a restructuring plan, Crown Century Holdings Limited (“CCH HK”), a wholly-owned subsidiary of the Company, was approved to acquire 51% of the shares of Asia Pacific Electric Cable, Pty, Ltd., an Australian company owned 13.79% by APWC and 86.21% by Sigma Cable Co. (Pte) Limited, a subsidiary of the Company, (“Sigma Cable”). The plan provided for a transfer of shares from Sigma Cable for a consideration of $9,958,917, in order to offset intra-group loans being extended by CCH HK to Sigma Cable. This transaction was completed on March 31, 2010.

     Until March 27, 2009, SOF Capital, L.P., a Delaware limited partnership (“SOF”), owned twenty percent (20%) of the issued and outstanding Common Shares. On that date, SOF sold 51% of the Common Shares of the Company held by it to PEWC, pursuant to the exercise of certain sale rights under a shareholder’s agreement dated as of June 28, 2007 (the “Original Shareholders Agreement”) by and among PEWC, SOF and the Company. In connection with such transaction, the Company, PEWC and SOF entered into an Amended and Restated Shareholders Agreement, pursuant to which, among other things, the Company was granted an extension until February 2011 for it to achieve a listing on a national Securities Market and SOF maintained its right to sell its remaining Common Shares to PEWC if the Company does not achieve that listing.

4.2.2 Managing Our Business in Current Market Conditions

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

     Specifically, the Company has continued to focus on increased efforts to collect its receivables on a timely basis. The days of sales outstanding in 2010 have improved from 100 days to 96 days. The Company focuses on working actively with all of its significant customers to reduce collection times and minimize write offs. The Company has also reduced its inventory levels through planned lower raw material purchases while negotiating with suppliers to reduce costs of raw materials and supplies. The Company has focused also on reducing operating costs where practicable. Overall the Company has increased its headcount by 100 since the beginning of 2011, which reflects management’s view that the business of APWC continues to gradually pick up. The Company has entered into certain copper futures contracts in Singapore in several instances in order to reduce the effect of the current volatility in copper prices on its operations. The Company is also negotiating and

close to finalizing arrangements with banks for additional loans and credit facilities.

     We believe that the successful implementation of these actions has had a positive effect on our cash resources, and we intend to continue these measures in order to preserve our liquidity. The Company is seeking to maintain a strong cash position. None of the Company’s material lines of credit has been terminated. As of December 31, 2010, the Company had available and unused lines of credits from suppliers, banks and other lenders totaling, in the aggregate, approximately $186.0 million, a decrease of $25.2 million from a year ago. This reflects the greater capital commitment of the Company to increased purchases of raw materials and other capital outlays, as the volume of business increased during the course of 2010. We believe that available and unused amount of credit is sufficient to support our current working capital needs.

4.2.3 Recent Business Trends

     As part of the rebound in our business, the operating subsidiaries expect to encounter less difficulty in raising new banking facilities and loans to support their working capital requirements in the current environment where banks are more frequently willing to offer new facilities. Governments in certain countries, such as China, Thailand and Singapore, have pledged to increase infrastructure and construction spending to boost or maintain economic growth. Assuming those pledges are acted upon, those developments will quite possibly have a favorable impact on our sales of manufactured products. However, there is no certainty on that point, as the correlation is sometimes problematic. The rebound in the trading prices of many public companies and the increases in major indices on a number of national exchanges since the lows of March 2009 have been coupled with a material increase in customer purchases of the Company’s products for either private or government sponsored projects.

     The gradual improvement in global economic conditions during the course of 2010 impacted positively on the Company’s revenues and overall financial results for the year. APWC experienced a 30% growth in revenues in 2010 over 2009, and also experienced an increase of 33% in gross margins in 2010 over 2009. These positive developments yielded earnings per share of $1.02 in 2010, which was approximately a 40% increase over 2009. The positive revenue trends that played out during the course of 2010 have continued into the early part of 2011. For example, countries like Singapore or Brunei have placed their orders with Sigma Cable during 2011, particularly in the low to medium voltage transmission, with expected more to come in the foreseeable future. In addition, the re-bound in the trading prices of many public companies and the increases in major indices on a number of national exchanges since the lows of March 2009 have been coupled with a material increase in customer purchases of the Company’s products for expenditures for either private or government sponsored projects. As part of the rebound in our business, the operating subsidiaries expect to encounter less difficulty in raising new banking facilities and loans to support their working capital requirements in the current environment where banks are more frequently willing to offer new facilities. Governments in certain countries, such as China, Thailand and Singapore, have pledged to increase infrastructure and construction spending to boost or maintain economic growth. Assuming those pledges are acted upon, those developments will have a favorable impact on our sales of manufactured products. The Company’s results for the first half of 2010 benefitted from a modest increase in governmental spending on infrastructure development, whereas the second half of 2010 results — better than the first half, did indicate that the government spending increased further over the first half, particularly when the focus of governments was on building more housing and on infrastructure improvement. While the global economic recovery continues to confront significant challenges, as does our business and the markets in which we operate, and we are not able to forecast future results, the Company believes that its preliminary results for the early part of 2011 are trending consistent with its improved performance in 2010.

4.3 Business Overview

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

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

      Thailand

     The Company’s Thai operations are conducted through Charoong Thai Wire and Cable Public Company Limited (“Charoong Thai” or “CTW”), Siam Pacific Electric Wire & Cable Company Limited (“Siam Pacific”) and Pacific-Thai Electric Wire & Cable Co. Ltd. (“Pacific Thai”), which was transferred into Siam Pacific in March 2011.

     Charoong Thai is a publicly-traded Thai corporation, the shares of which are listed on the Stock Exchange of Thailand (“SET”). It manufactures aluminum and copper electric wire, medium and high voltage power cable and telecommunications cable. It has subsidiaries and affiliates in the businesses of optic fiber cable manufacturing and telecommunication and network services. Charoong Thai was established in Thailand in 1967 as a limited public company. As of December 31, 2010, the Company effectively owned 50.93% of the issued and outstanding shares of Charoong Thai. The Company’s present intention is to maintain majority ownership of the voting securities of Charoong Thai. The board of directors of Charoong Thai may authorize the issuance of additional shares of common stock of Charoong Thai. The Company has preemptive rights to purchase its pro rata share of any additional authorized shares, less amounts reserved for directors, officers and employees. In the event the board of Charoong Thai decides to cause it to issue additional shares, the Company may decide not to exercise its preemptive right, in which case the Company’s interest may be diluted..

     Siam Pacific was established in 1988 as a joint venture between PEWC and Italian-Thai Development Plc (“Ital-Thai”), a third party, which at the time was the largest diversified construction company in Thailand, principally engaged in the design, engineering, construction and project management of large-scale civil engineering and telecommunications projects in Thailand. Capitalizing on PEWC’s wire and cable manufacturing expertise and Ital-Thai’s significant presence in the local market, Siam Pacific was able to establish its presence in this market and gain knowledge of business opportunities in Thailand. Siam-Pacific is now a 100%-owned subsidiary of Charoong Thai and it focuses on the manufacture of telecommunications cable, power cable and enameled wire for the domestic Thailand market.

     Pacific Thai (now transferred into Siam Pacific) was established in 1989 as a wholly-owned subsidiary of Siam Pacific. Pacific Thai produces enameled wire for export only and has a special tax status which exempts it from import duties on raw materials used in export manufacturing. This special tax status is phasing out, and by the time the business consolidation is completed, the special tax status will expire.

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

     In a restructuring that included the transfer of Pacific Thai into Siam Pacific, the Company achieved a reorganization, which has generated cost savings while improving overall efficiency. The Company believes the synergistic effect of merging these operations will continue to produce significant savings in overhead cost as it facilitates the centralization of decision making and resource allocation for the Thai operations. Management of Pacific Thai and Siam Pacific was consolidated into Charoong Thai in order to enhance synergies and provide greater sharing of expertise. For example, each of Charoong Thai and Siam Pacific’s manufactured and distribute enameled wire and they are now in a better position to share technical expertise and resources. Under the restructuring, APWC owns 50.93% of Charoong Thai, which owns 100% of Siam Pacific. However, Siam Pacific continues to report its results separately to APWC headquarters.

      China

     The Company’s China operations are conducted through six business entities. The operating entities include Shanghai Yayang Electric Co., Ltd. (“Shanghai Yayang“or “SYE”), formerly known as Shanghai Pacific Electric Co., Ltd., a joint venture in Shanghai incorporated in June 1998 to manufacture enameled wire. The Company’s effective holding in Shanghai Yayang is 54.41%. Shanghai Yayang manufactures enameled wire with a diameter between 0.05mm and 2.5mm for sale and distribution in the eastern part of China, including to local and Taiwanese based end-users. Sitting in the board are six directors, either members of management of Shanghai Yayang who are expatriated from Taiwan or Thai representatives, also expatriated from or designated by APWC or PEWC.

     The Company owns Crown Century Holdings Limited (“CCH HK”), a Hong Kong registered company, and its wholly-owned subsidiary company, Pacific Electric Wire & Cable (Shenzhen) Co., Ltd. (“PEWS”). PEWS manufactures enameled wire for electric, video and audio products for export and with little portion sold domestically. CCH HK, since the restructuring in the first quarter of 2010, is no longer the trading arm of PEWS and transfers its distribution role to Epan Industries Pte Ltd (“Epan”). The contributions of Epan and PEWS to the Company’s annual operating results have increased substantially. The Company believes that PEWS is one of the leading manufacturers of enameled wire products in the China South market.

     Shangdong Pacific Fiber Optics Cable Co., Ltd. (“SPFO”) is a joint venture company in Yanggu County, Shandong Province, China. SPFO was established to manufacture fiber optic cables for the China market. The Company owns a 51.0% interest in SPFO, with the remaining interest owned by the joint venture partner, Shandong Yanggu Cable Company (“Shandong Yanggu”), an established cable manufacturer in Shandong Province that produces a wide range of cable products and is considered one of the leading cable producers in China.

     The Company holds a 25.0% interest in Shandong Pacific Rubber Cable Company, Ltd. (“SPRC”), which manufactures rubber cable for the China market. The remaining 75% is owned by Shandong Yanggu.

     The Company also holds a 49% interest in a joint venture called Shandong Huayu Pacific Fiber Optics Communication Co., Ltd. (“SHP”), which engages in the manufacture of optic fibers. The remaining 51% of SHP is owned by Hebei Huayu Co. Ltd. (as the successor in interest to Shandong Yanggu). Due to a severe downturn in the market for fiber optic cable after the SHP joint venture was established, the plant intended to be constructed for manufacturing fiber optic cable has yet to be completed and a production date for commencing operations has not been determined. The actual commencement of operations, if it occurs at all, will depend on our ongoing assessment of market conditions. The carrying value of the Company’s investment in SHP was $0.9 million as of December 31, 2010. In the event that the commencement of operations continues to be delayed indefinitely or the joint venture determines to forego planned operations, due to continued depressed conditions in the fiber optic cable market, or other factors are determined to have a direct impact on the assessed value of SHP, the Company will recognize impairment losses in the foreseeable future that could result in the full write-off of its investment in SHP. SHP is currently seeking out potential buyers to take over the business.

     Until 2006, the Company’s China operations included Ningbo Pacific Cable Co. Ltd. (“NPC”), a telecommunications cable manufacturing joint venture located in Ningbo Yin County, Zhejiang Province in eastern China, in which the Company owns a 94.31% interest. The other owner of NPC is China Ningbo City Yin County Yinjiang Town Industrial Corporation. NPC used to manufacture a range of telecommunications cable and local area network (“LAN”) electronic cables for sale and distribution in the Chinese domestic market and export market. Since 1997 the business was performing below the Company’s expectations due primarily to a lack of market penetration in China. In addition, the performance of certain managers at NPC, who were later terminated, did not comply with the Company’s standards for good business practices. In 2006, the Company determined to cease operations at NPC, as it concluded that the prospects for reversing the losses and achieving profitability were too remote. Thereafter, the Company liquidated certain machinery and equipment through sales to third parties. The land, building and some remaining machinery and equipment are still held by NPC. In December 2009, the Company started a series of discussions with a bank in Hong Kong on a possible loan which would provide a cash infusion and a trade finance facility, each aimed at re-building NPC to be a viable operation focusing on producing electronic wiring, a new product never before manufactured by APWC. The new business would draw upon the experience of, and technology from, our parent company, PEWC. While discussions with the bank remain ongoing, the Company is hopeful of completing financing arrangements and resuming operations at NPC during the course of 2011.

      Singapore

     The Company’s Singapore operations are principally conducted through its 98.3%-owned subsidiary, Sigma Cable Company (Private) Limited (“Sigma Cable”). The Company believes that Sigma Cable is one of the leading suppliers of power cable products in Singapore. Sigma Cable manufactures and sells a range of low voltage power cable products, used mainly in infrastructure projects and commercial and residential developments. Sigma Cable is also the exclusive distributor in Singapore of medium and high voltage wire and cable products manufactured by PEWC.

     Sigma Cable also has project engineering operations in Singapore to supply, deliver and install (“SDI”) primarily medium and high voltage cable to power transmission projects. While the Company currently obtains its supply of medium and high voltage power cable for its SDI operations from PEWC, other suppliers are also available if necessary. The Company anticipates that there will be increasing demand for medium and high voltage power cable and related turnkey installation projects in Singapore as two new SDI projects totaling $14.1 million contract sum are entered into by Sigma Cable with customers in the first quarter of 2011 and the Company is seeking to increase its business volume in its project engineering business segment.

     The Company also holds a 100% interest in Sigma-Epan International Pte. Ltd. (“Sigma-Epan”), a group of companies with limited operations in Singapore and Malaysia. Sigma-Epan group has its headquarters in Singapore. Prior to ceasing manufacturing operations in

May of 2007, Sigma-Epan manufactured specialty cables and assembled cable harnesses for the electronics, computer, building automation, audio and communication industries. Sigma-Epan continues to trade specialty electronic and other types of cables. After the Company’s restructuring completed in April 2010, Epan Industries, one of the subsidiaries of Sigma-Epan, has been the trading arms for PEWS products in China South market.

      Australia

     The Company went through a group restructuring exercise in March 2010. CCH HK acquired 51% of Australia Pacific Electric Cable Pty Limited (“APEC”) shares from Sigma Cable, thereby increasing the Company’s effective interests in APEC from 98.53% to 99.4% (through Sigma Cable at 34.61%, and APWC at 13.79%). APEC is located near Brisbane and is one of three major wire and cable manufacturers in Australia. APEC produces a range of power cables supplemented by imports from overseas sister companies. APEC possesses a substantial marketing and distribution infrastructure with a network of sales offices and warehouses in the major capital cities of Brisbane, Sydney, Melbourne and Perth.

      Malaysia

     Elecain Industry Sdn Bhd (“Elecain”), an operating subsidiary of the Company located in Malaysia, ceased operations in 2007. The board’s intention was to liquidate the company but due to unsettled issues with inter-company loan balances, the company still exists. Elecain was not significant to the business of the Company.

4.3.1 Products and Services

     The Company engages in three principal business lines consisting of the manufacture of wire and cable products, the distribution of its own manufactured products and of certain wire and cable products manufactured by PEWC, and the provision of project engineering services to certain of its customers. The Company manufactures and sells a wide variety of wire and cable products primarily in four general categories: telecommunications cable, power transmission cable, enameled wire and, until May 2007, electronic cables, which the Company ceased to manufacture as of that date. The Company’s telecommunications and power cables are used in a range of infrastructure projects and in commercial and residential developments. The Company’s enameled wire is used in the manufacturing of components and sub-components of household appliances and small machinery. The electronic cables, which include cable harnesses, are used in the electronics, computer, building automation, audio and communication industries. In addition, the Company acts as the Singapore distributor of wire and cable products manufactured by PEWC. The Company also offers SDI project engineering services of medium and high voltage cable for power transmission projects in Singapore.

Distribution

      Sales of Distributed Products

     The Company has a sales and marketing force for the distribution of its manufactured products in the markets where it has manufacturing facilities and in certain other Asian markets. In addition, the Company is a distributor of wire and cable products manufactured by PEWC. The leading PEWC products sold by the Company are medium and high voltage power cable (with capacities ranging from 3.3 kilovolts to 69 kilovolts), with the vast majority of such sales made in Singapore. The PEWC products sold by the Company do not compete with the Company’s manufactured products. In addition, certain subsidiaries also sell distributed products from other suppliers in Thailand and Australia during 2010.

Services

      SDI Project Engineering Services

     Based on trends of government and private sector expansion and upgrading of residential and commercial buildings and infrastructure projects in Singapore, the Company anticipates demand for medium and high voltage power and for value added services in the power supply industry. To take advantage of these opportunities, the Company has developed its SDI project engineering capability. The SDI project engineering involves supply, delivery and installation primarily of medium and high voltage cable to power transmission projects in Singapore. After entering into a contract to supply, deliver and install cable for a power transmission project, the Company delivers medium and high voltage cables and enters into subcontracting agreements with local companies to install the cable as required by the project. Because of these changes, Sigma Cable in Singapore is able to be awarded two significant contracts in the first quarter of 2011 with contracts valued at $14.1 million.

4.3.2 Manufacturing

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

      Telecommunications Cable

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

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

      Power Cable

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

cable is mainly used as lighting and power supply cable inside and outside of buildings. The voltage capacity of the Company’s power cables range from 300 volts to one kilovolt.

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

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

      Enameled Wire

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

4.3.3 Raw Materials

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

     The Company purchases copper in the form of rods and cathodes. Copper cathodes are thin sheets of copper purified from copper ore. Copper purchased by the Company in the form of cathodes must be sent to subcontractors to be melted and cast into the copper rods necessary for the manufacturing processes, for a processing fee equal to approximately 3.5% (based on the Company’s past experience) of the copper cathode purchase price. The Company presently relies on the services of Thai Metal Processing Co., Ltd., the Company’s long term equity investment, to process its copper cathodes into copper rods in Thailand, although the Company has a variety of processing companies from which to obtain these services. Construction of such a processing facility could also be an additional source of revenues and profit, to the extent that sales are made to unaffiliated parties. Copper rods are drawn into copper wire for the production of telecommunications cable, power cable and enameled wire.

     The Company has historically purchased a substantial portion of its copper rods from PEWC. Under the Composite Services Agreement between the Company and PEWC, PEWC agreed to supply to the Company on a priority basis its copper rod requirements at prices at least as favorable as prices charged to other purchasers in the same markets purchasing similar quantities. PEWC continues to be the principal supplier of copper rods to the Company’s operations in other Asian countries. Under the Company’s copper rod supply arrangements, orders will be

placed between eight to ten weeks before the desired delivery date, with prices “pegged” to the average spot price of copper on the LME for the one month prior to delivery plus a premium.

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

     The Company attempts to maintain approximately a three to five week supply of copper rods and cathodes for its Thai operations and approximately a two to four week supply in Singapore. In PEWS, the Company was able to maintain one to two weeks of supply of copper rods and cathodes. In APEC, the copper supply was maintained at one to two weeks in 2010. In Epan, approximately three weeks of copper supply is preserved for manufacturing purpose. The Company has never experienced a material supply interruption or difficulty obtaining sufficient supply of copper rod or cathode.

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

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

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

4.3.4 Quality Control

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

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

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

      4.3.5 Sales and Marketing

     The Company’s telecommunications cable and power cable products are primarily sold in the domestic markets of the countries where they are manufactured, whereas most of the enameled wire manufactured by the Company in Thailand is exported to take advantage of Pacific Thai’s tax status exempting it from paying import duties on raw materials used in the manufacture of export product. With the transfer, this tax exemption is phasing out. On the other hand, for enameled wire which are sold by Epan Industries in Singapore, are manufactured by PEWS in Shenzhen, China. The enameled wire is also exported to the customers in the Southeast Asia. However, these sales of enameled wire do not enjoy any tax exemption. The following table sets forth the Company’s sales revenues for the periods indicated among its three business segments — i.e., Manufactured Products, Distributed Products, and Supply, Delivery, and Installation (“SDI”) and, within the Manufactured Products segment, by geographic locations of manufacturing, together with their respective percentage share of total sales for such periods:

Sales within Thailand and Singapore are made directly by the sales department of the Company’s local subsidiaries in accordance with terms and pricing set by the local subsidiaries. The local subsidiaries are also responsible for sales planning, marketing strategy and customer liaison. The Company’s sales staff is knowledgeable about the Company’s products and frequently must render technical assistance, consulting services and repair and maintenance services to the Company’s customers. In order to ensure quality service and maintain sensitivity to market conditions, the Company does not conduct sales through independent sales agents on a commission basis but uses its own sales employees located at the operating subsidiaries.

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

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

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

      Thailand

     The Company produces and sells telecommunication cable, enameled wire and power cable in Thailand through Charoong Thai, which is one of the leading cable manufacturers in Thailand. Our distribution channels are both direct sell and to agencies representing the government and private sectors. The major customers of the Company are many prominent clients working with the government and contractors (for example, True, TT&T (Triple T)), subcontractors, and distributors for the private sector. Charoong Thai successfully concluded many projects, for instance, Suwannabhumi International Airport, Government Center, PTT Maptaput, and BRT (Bus Rapid Transit).

      Singapore

     The Company produces and sells low voltage power cable in Singapore. In addition, the Company sells a wide range of wire and cable products produced by PEWC. Power cables manufactured by the Company and PEWC are primarily sold to SP Powerassets, a quasi-public entity responsible for power delivery in Singapore, and to a large number of private contractors and construction firms. The Company also offers project engineering services for the SDI of medium and high voltage power cable to power transmission projects in Singapore.

     In Singapore alone, sales of manufactured products in 2010 accounted for 48.8% of the net sales in Singapore; sales of distributed products in 2010 accounted for 17.5%, the remaining 33.7% comprising of SDI project engineering services. While the Company is seeking to increase the volume of business in its SDI business segment, in 2010 sales of SDI project engineering services to SP Powerassets accounted for 100% of the Company’s SDI sales. Such sales are under a comprehensive contract, with purchase orders placed from time to time with the Company by SP Powerassets. Sales of copper wire and cable products purchased from PEWC since 2008 are as follows (in thousands):

     The sales of power cable increase by more than 300% was due to government demand, especially in its infrastructure plans to build up more housing and industrial areas, as well as around the inland subway systems since 2010 onwards.

      China

     The Company produces and sells copper-based telecommunication cable, fiber optic cables and enameled wire in China. The Company’s China operations are conducted through six business entities. Copper-based telecommunication cables and fiber optic cables are generally sold to the national, provincial or local offices of the fixed-line and mobile telecommunications network operators or sub-contractors of such agencies. The Company generally sells enameled wire directly to manufacturers of electric motors for use in various consumer appliances.

      4.3.6 Competition

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

      Thailand

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

      Singapore

     The Company believes that Sigma Cable is one of the leading suppliers of power cable products in Singapore, it experiences significant competition from other local producers. There is no tariff or other barriers against foreign competition in the local Singapore market and potential competitors are free to enter the industry. However, because of high capital costs, the Company believes it is unlikely that there will be new domestic entrants to the wire and cable industry in Singapore in the near future.

      Australia

     Currently, besides APEC, there are two major wire and cable producers in Australia: Olex Cables (owned by Nexans) and Prysmian Cables, with factories in the states of Victoria and New South Wales, respectively. Also, Advance Cable, a cable producer with a factory in Victoria, has recently obtained a bigger market share. In addition, a significant portion of the Australian market is serviced by two importers: (i) General Cables Australia, which imports cables from its parent company General Cables, which manufactures cables in New Zealand and (ii) Electra Cables, which imports cables from factories in China. These companies are APEC’s principal competitors. During fiscal year 2010, APEC was

the only power cable producer in Queensland and therefore sought to take advantage of its comparative proximity to customers in contrast to competitors that were required to transport their products into Queensland from other states in Australia. APEC has also opened sales offices with warehousing facilities in Sydney, Melbourne, Brisbane, and Perth in order to attract and service the customers in those regions. In February 2011, APEC entered into a distribution agreement with one of the regional suppliers with the hope that this collaboration will bring extra business to Australia operations. Foreign competition barriers exist with import duties and the more stringent Australian cable specifications standards. Free Trade Agreements are in effect with Singapore and Thailand.

      China

     PEWS manufactures enameled wire in the Shenzhen Special Economic Zone in Guangdong Province for electronic, video and audio products for the South China market and for export. After the restructuring, Epan Industries, one of the subsidiaries of Sigma-Epan, becomes the trading arm of PEWS. Based on information provided by customers and suppliers, the Company believes that, based on production capacity, PEWS is one of the largest enameled wire manufacturers amongst the six manufacturers in Shenzhen. It supplies mainly to transformer, motor and coil manufacturers in and around Shenzhen. It faces competition principally from overseas imports and local manufacturers.

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

     The Company believes that SPFO is one of the largest manufacturers of fiber optic cables in Shandong Province based on sales by dollar value. It supplies mainly to government controlled and licensed telecommunications network operators such as China Telecom, China Mobile and China Unicom. It faces competition principally from a number of the larger domestic fiber optic cable manufacturers.

4.3.7 Regional Considerations

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

      Thailand

     A substantial portion of the Company’s Thai operations, which accounted for approximately 40.6% of the Company’s net sales in 2010, consists of the manufacture of telecommunications and power cable and sales of those products for use in large-scale telecommunications projects and various construction projects in Thailand. The volume of sales of these products tends to correlate with the general level of economic activity in Thailand. As a result, the performance of the Company’s Thai operations depends in significant part on the general state of the Thai economy. Infrastructure development and related construction projects in Thailand depend significantly upon government sponsored initiatives. In recent years, the level of government involvement in infrastructure development has tended to track increases or contractions in Thailand’s gross domestic product (“GDP”). Overall, the construction industry and infrastructure projects have slowed considerably, thereby affecting local sales, placing competitive pressure on prices and prompting the Company to rationalize Thai operations and actively seek overseas export markets.

      Telecommunications

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

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

      Power

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

      Singapore

     The Company’s distribution and project engineering business segments are concentrated in the Singapore market. Sales from SDI projects, have been on a downward trend since the close of Casino phase I construction last year, $34 million in 2009 compared with just $23 million in 2010. While the sales of distributed products experienced a lack of projects and price competition from Korean based companies. Revenue in Singapore from distributed products in 2010 was $12.3 million, down by $15 million compared to the results in 2009.

     However, the Singapore government has established targets to increase the population from 4.6 million in 2007 to approximately 6 million by the end of 2020. This planned growth in population is expected to result in an increase in demand for residential property and construction. In addition, two new SDI projects totaling $14.1 million contract sum are entered into by Sigma Cable with customers in the first quarter of 2011 and the Company is seeking to increase its business volume in its project engineering business segment.

      China

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

4.4 Property, Plant and Equipment

     The Company’s manufactured products are produced at facilities located on premises owned or leased by Siam Pacific, Charoong Thai, Sigma Cable, APEC, Shanghai Yayang, SPFO and PEWS. The following is a summary of the Company’s material facilities and operations as of December 31, 2010.

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

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

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

     APEC owns a 6,735 square meter power cable manufacturing facility on a 39,000 square meter land parcel in Brisbane, Australia, which is mortgaged to Westpac Banking Corporation of Australia as security for a bank facility of approximately A$10 million.

     Shanghai Yayang operates a factory that produces enameled wire, located in an area of approximately 27,839 square meters of state-owned land in an industrial district in Fengxian, Shanghai. The entire factory is pledged to the Agricultural Bank of China for a bank credit line of $6.6 million at an annual interest rate of 5.31%.

     SPFO manufactures fiber optic cable in a purpose-built factory building of approximately 8,100 square meters on a leasehold of 63,332 square meters of state-owned land in Yanggu, Shandong Province, China. The Company’s leasehold interest has a term expiring December 24, 2056 .

     PEWS manufactures enameled wire in a facility on 36,000 square meters of state-owned land with a built-up area of 20,367 square meters in Long Gang, Shenzhen, China. A leasehold right of industrial land use for the land has been granted for 49 years. The facility is mortgaged to Agricultural Bank of China as security for a RMB 50 million bank loan granted in 2003 and extended through May 2011. This facility is now further extended for one year to end May 2012.

     Sigma-Epan leases an office space from Sigma Cable in Singapore where it employs nine individuals in its trading operations.

     NPC manufactured telecommunications cable on 10.9 acres of state-owned land in Ningbo, Yinjiang, Zhejian Province, China, with a factory area of 3.3 acres. A leasehold right of industrial land use for the land was granted for 50 years. Manufacturing operations at NPC were terminated in 2006. NPC continues to hold the leasehold right of the land and maintains ten employees. The Company is in negotiations with a bank to finance a resumption of manufacturing operations at NPC, with the Company planning to introduce a new product category. The resumption of operations is subject to, among other things, a successful completion of the bank negotiations and funding of the new business, neither of which can be assured at the present time.

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

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

4.5 Insurance

     The Company maintains insurance policies covering certain buildings, machinery and equipment against specified amounts of damage or loss caused by fire, flooding, other natural disasters and burglary and theft. The Company does not carry insurance for consequential loss arising from business interruptions or political disturbances and does not carry product liability insurance. In addition, the availability of insurance in China is limited, and the Company does not have business liability or disruption insurance for our operations in China. The Company believes that it maintains insurance coverage commensurate with the nature of and risks associated with its business, to the extent that appropriate insurance is available in the markets in which we conduct business. Further, the Company maintains business liability insurance in China, which covers fire and theft on buildings and inventories.

4.6 Environmental Matters

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

Item 5: Operating and Financial Review and Prospects

     The following discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto incorporated by reference herein. Because around 89.2% of the Company’s revenues are derived from its manufactured products segment for the year ended December 31, 2010, the following discussion is not presented on a segment basis.

5.1 Disclosures of Critical Accounting Policies

     Management’s discussion and analysis of financial condition and results of operations discusses the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

     Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

      Principles of Consolidation

     The consolidated financial statements include the accounts of the Company and its subsidiaries. All 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, judgments, 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.

      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.” (codified within FASB Accounting Standards Codification (ASC) 740, “Income Taxes”). FASB ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. The Company’s 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. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. FASB ASC 740 , requires that deferred tax assets be evaluated for future realization and reduced by a valuation allowance to the extent the Company believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience and expectations of future taxable income by taxing jurisdiction, the carry-forward periods available to the Company for tax reporting purposes, and other relevant factors. Deferred income tax expense (benefit) is the net change during the year in the deferred income tax asset or liability.

     Depreciation for 2008, 2009 and 2010 amounted to $7,646, $8,941 and $6,857, respectively. No depreciation expense is charged for construction in progress and machinery and equipment under installation.

     Capitalized interest on construction in progress is added to the cost of the underlying asset and is depreciated over the estimated useful life of the asset in the same manner as the underlying asset. No interest is capitalized in 2009 and 2010.

     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.

     In 2006, the Company terminated the Ningbo joint venture and liquidated its major equipment at the Ningbo Pacific facility. In October 2009, the Company has made a resolution to acquire additional 5.42% shareholding from the PRC, its joint venture partner. A resolution was passed in the Board of Directors meeting in August 2010 to approve the Ningbo construction plans. The Company plans to resume manufacturing operation with new constructed facilities at the Ningbo site. The acquisition of additional shareholding is expected to be completed in early 2012.

      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.

     Goodwill primarily resulted from a business combination. The Company adopted ASC 350, “ Intangibles-Goodwill and Other”, effective January 1, 2002. Under ASC 350, goodwill is no longer amortized but is subject to periodic impairment tests. ASC 350 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 ASC 350, the Company allocated the entire amount of goodwill to the manufactured products segment.

     In accordance with ASC 350, the Company reviews goodwill for impairment on an annual basis (December 31) or more frequently if events or circumstances indicate that the carrying values may not be recoverable. Based on the Company’s assessment conducted as of December 31, 2008, 2009 and 2010, no impairment was indicated. Total goodwill was $8,801, $8,801 and $8,801 as of December 31, 2008, 2009 and 2010, 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.

     The Company accounts for its long-term investments that represent less than 20 percent ownership using ASC 320, “Investments — Debt and Equity Securities” (ASC 320). Equity securities are classified as available-for-sale, as the Company does not trade in these securities, but rather they 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. 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 2008, 2009 and 2010, the Company recorded an impairment charge of $nil, $nil and $346, respectively, related to investment in certain available-for-sale securities.

      Impairment of Long-Lived Assets

     The Company accounts for impairment of long-lived assets in accordance with ASC 360, “Property, Plant and Equipment”. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In such instances, the Company estimates the undiscounted future cash flows that result from the use of the asset and its ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the Company recognizes an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset, determined principally using discounted cash flows.

     In 2009, the Company recorded an impairment charge of $77,000 related to the impairment of factory in Thailand (included in the manufactured products segment) that is not being used for operations. The impairment charge was 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 unfavorable market conditions.

      Trade Account Receivable and Allowance for Doubtful Accounts

     Trade accounts receivable are stated at face value less any allowances for doubtful accounts. 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 collectability of specific customer accounts: customer credit-worthiness, customer financial condition, past transaction history with the customer, current economic industry trends, and changes in customer payment terms.

      Revenue Recognition

     Sales represent 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 that coincides with their delivery and acceptance. This method of revenue recognition is in accordance with ASC 605-15, “Revenue Recognition-Products”.

     The Company classifies shipping and handling costs incurred within cost of sales.

      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 ASC 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts”.

     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 in accordance with ASC 605-25, “Revenue Recognition-Multiple-Element Arrangements”. 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.

      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.

      Foreign Currency Translation and Transactions

     The functional currency of the Company’s international subsidiaries is generally the local currency or U.S. Dollars. For these subsidiaries, the Company translates the assets and liabilities at exchange rates in effect at the balance sheet date and income and expense accounts at average exchange rates during the year. Resulting currency translation adjustments are recorded directly to accumulated other comprehensive income within stockholders’ equity. Gains and losses resulting from transactions in non-functional currencies are recorded in the consolidated statement of operations.

     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.

Gains and losses from foreign currency transactions are recorded in the consolidated statement 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 U.S. dollar payment equal to the value of such exchange. Realized and unrealized gains and losses on foreign exchange contracts are included as foreign exchange gains or losses in the consolidated statement of operations.

     The Company recognizes 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, 2008, 2009 and 2010, the Company has entered into forward exchange sale contracts with notional values of $3,500, $nil and $nil, respectively. There were no outstanding foreign forward exchange contracts as of December 31, 2010. The Company records these contracts at fair value with the related gains and losses in statement of operations.

      Copper Future Contracts

     Copper future contracts are designed to manage the Company’s consolidated exposure to changes in inventory value due to fluctuations in market prices for selected operating units. The company’s commodity future contracts positions are marked to market at each balance sheet date and all unrealized gains and losses are recognized in income currently. To date, these contract positions have not had a material effect on the company’s financial position, results of operations or cash flow.

      Earnings (Loss) Per Share

     Basic and diluted earnings (loss) per share are calculated in accordance with ASC 260, “Earnings Per Share”. There are no dilutive equity instruments.

      Fair Value Measurements

     Effective January 1, 2008, the Company adopted the provisions of ASC 820, “Fair Value Measurements and Disclosures” for financial assets and liabilities. Under ASC 820, fair value is defined as the price that would have been 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. ASC 820 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 categorized 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.

      Recent Pronouncements

     The Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Codification (ASC) effective for financial statements issued for interim and annual periods ending after September 15, 2009. The ASC is an aggregation of previously issued authoritative U.S. generally accepted accounting principles (GAAP) in one comprehensive set of guidance organized by subject area. In accordance with the ASC, references to previously issued accounting standards have been replaced by ASC references. Subsequent revisions to GAAP will be incorporated into the ASC through Accounting Standards Updates (ASU).

     In December 2007, FASB issued ASC 805, “Business Combinations”, which expands on the required disclosures better defines the acquirer and the acquisition date in a business combination, and establishes principles for recognizing and measuring the assets acquired (including goodwill), the liabilities assumed and any non-controlling interests in the acquired business. FASB ASC 805 also requires an acquirer to record an adjustment to income tax expense for changes in valuation allowances or uncertain tax positions related to acquired businesses. FASB ASC 805 is effective for all business combinations with an acquisition date in the first annual period following December 15, 2008; early adoption is not permitted. The Company adopted this statement as of January 1, 2009 and the adoption has had no impact to the consolidated financial statements.

     In February 2008, the FASB amended ASC 820, “Fair Value Measurements and Disclosures”, which deferred the effective date of ASC 820 for one year for certain non-financial assets and non-financial liabilities. The Company adopted this statement as of January 1, 2009 and the adoption has had no impact on the Company’s financial position and results of operations.

     In March 2008, the FASB amended ASC 815, “Derivatives and Hedging”, which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under ASC 815 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. This amendment will be effective for the Company in fiscal year 2010. The Company adopted this statement as of January 1, 2010 and the adoption has had no material impact on the Company’s financial position and result of operations.

     In April 2009, the FASB amended ASC 820, “Fair Value Measurements and Disclosures”, in which, if an entity determines that the level of activity for an asset or liability has significantly decreased and that a transaction is not orderly, further analysis of transactions or quoted prices

is needed, and a significant adjustment to the transaction or quoted prices may be necessary to estimate fair value in accordance with FASB ASC 820. The Company adopted this amendment and there was no material impact on the financial position, results of operations or cash flows.

     In May 2009, the FASB issued ASC 855, “Subsequent Events”. This Standard sets forth: 1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; 2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and 3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This Statement is effective for interim and annual periods ending after June 15, 2009. The Company adopted this statement and there was no impact on the financial position, results of operations or cash flows.

     In June 2009, the FASB issued the Update No. 2009-01-Topic 105-Generally Accepted Accounting Principles-amendments based on-Statement of Financial Accounting Standards No. 168-The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. The FASB Accounting Standards Codification will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. This Statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company has adopted and updated the accounting standards reference started in its annual report on Form 20-F for the year ended December 31, 2009 and in subsequent annual reports.

     In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05, “Measuring Liabilities at Fair Value” (ASU 2009-05) (codified within ASC 820 “Fair Value Measurements and Disclosures”). ASU 2009-05 amends the fair value and measurement topic to provide guidance on the fair value measurement of liabilities. ASU 2009-05 is effective for interim and annual periods beginning after August 26, 2009. The adoption of the amendments to the FASB Accounting Standards Codification resulting from ASU 2009-05 did not have a material impact on the Company’s consolidated financial statements.

     In October 2009, the FASB issued ASU No. 2009-13, “Multiple Deliverable Revenue Arrangements - a consensus of the FASB Emerging Issues Task Force” (ASU 2009-13) (codified within ASC Topic 605 “Revenue Recognition”). ASU 2009-13 addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. ASU 2009-13 is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. The Company is currently evaluating the impact that the adoption of the amendments to the FASB Accounting Standards Codification resulting from ASU 2009-13 may have on the Company’s consolidated financial statements.

     Effective January 1, 2010, the Company adopted the provisions of new accounting guidance related to variable interest entities. The new guidance amended the variable interest consolidation accounting model in ASC 810, Consolidation and included new disclosure requirements for certain types of variable interest entities. The adoption of the new provisions did not have an impact on the Company’s Condensed Consolidated Financial Statements.

     In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-06, “Improving Disclosures about Fair Value Measurements” an update to Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurements and Disclosures.” The amendment requires disclosure of transfers of assets and liabilities into and out of Level 1 and Level 2 of the fair value hierarchy, including the reasons and the timing of the transfers and disclosure of valuation techniques and inputs for assets and liabilities within Level 2 and Level 3 of the fair value hierarchy. Additionally, the guidance requires expanded disclosure about assets and liabilities within

Level 3. The new guidance became effective for the Company on January 1, 2010, except for the new guidance related to the expanded Level 3 disclosure, which is effective for periods beginning after December 15, 2010. The Company did not have any transfers in or out of Level 1 and Level 2 fair value measurements during the nine-month period ended September 30, 2010; therefore, the adoption of the new guidance did not have any impact on the Company’s Condensed Consolidated Financial Statements.

     In May 2009, the FASB issued ASC 855, “Subsequent Events,” which establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This guidance was effective for interim and annual periods ending after June 15, 2009. In February 2010, the FASB issued ASU No. 2010-09, “Subsequent Events (Topic 855)”, which requires an SEC filer to evaluate subsequent events through the date that the financial statements are issued, and removes the requirement to disclose a date in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of US GAAP. It also clarifies that if the financial statements have been revised, then an entity that is not an SEC filer should disclose both the date the financial statements were issued or available to be issued and the date the revised financial statements were issued or available to be issued. ASU No. 2010-09 is effective for the interim and annual periods ending after June 15, 2010. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

     In July 2010, the FASB issued an ASU 2010-20 (Topic 310) which amended accounting guidance for receivables to require further disaggregated disclosures that improve financial statement users’ understanding of (i) the nature of an entity’s credit risk associated with its financing receivables and (ii) the entity’s assessment of that risk in estimating its allowance for credit losses as well as changes in the allowance and the reasons for those changes. The new and amended disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The provisions of this accounting standard will not have an impact on the Company’s consolidated financial position or statement of operations, as its requirements are disclosure-only in nature.

     In December 2010, the FASB issued ASU No. 2010-28, “Intangibles—Goodwill and Other (Topic 350)”, which modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. ASU No. 2010-28 is effective for fiscal years, and interim period within those fiscal years, beginning on or after December 15, 2010. The adoption of ASU No. 2010-28 is not expected to have any impact on the Company’s financial position, results of operations and cash flows.

     In December 2010, the FASB issued ASU No. 2010-29, “Business Combinations (Topic 805)”, which specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this Update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. ASU No. 2010-29 is effective for business combinations for which the acquisition date is after the annual periods ending after December 15, 2010 and which early adoption is permitted. The Company believes that the adoption of ASU No. 2010-29 may impact future business combinations.

      5.2 Selected Gross Margin Data

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

     Results are analyzed and reported along the lines of our three principal business segments, consisting of manufactured products, project engineering and distribution. The operating data that senior management collects and analyzes from our operating subsidiaries include, in certain cases, certain limited information regarding results along product lines that are components within our manufactured products segment. For the benefit of our shareholders, included in the summary table below are certain results for product lines within our manufactured products segment with regard to net sales, gross profit and gross profit margin for the periods covered. The following table sets forth selected summary data for the periods indicated (dollar ($) amounts in thousands of US$):

     Note that gross profit margin by manufactured products excludes recovery or allowance for inventory reserve, but that recovery or allowance for inventory reserve is included in total gross margin.

      5.3 Operating Results

     The Company is 65.6% owned and controlled by PEWC, a Taiwanese company. An additional 9.8% of the Common Shares are owned and controlled by a U.S.-based private equity fund. The remaining 24.6% of the outstanding Common Shares are publicly-traded in the United States and listed on NASDAQ. Based upon a review of Schedule 13D and 13G filings made with the Commission by shareholders, and a review of the share register maintained by the Company’s transfer agents in Bermuda and the U.S., the Company is not aware that it has any shareholders resident in the jurisdictions where the Company has business operations.

While the Company’s operations and results are impacted by economic, fiscal, monetary and political policies of the respective governments in the countries where the Company operates, that impact is not a function of the shareholder base of the Company.

           5.3.1 Year Ended December 31, 2010 Compared with Year Ended December 31, 2009

      General

     Results of operations are determined primarily by market demand and government infrastructure projects, market selling prices of our products, our ability to manufacture high quality products efficiently in quantities sufficient to meet demand and to control production and operating costs. Our results are also influenced by a number of factors, including currency stability in the countries in which our operations are located, competition and the cost of raw materials, especially copper, which accounted for majority of the cost of sales in 2010.

     In order to minimize the impact of copper price fluctuations, we attempt to “peg” the prices of our products to the prevailing market price of copper and pass changes in the cost of copper through to customers as much as possible. In certain circumstances, however, we remain affected by fluctuations in the price of copper. For example, the price of telecommunications cable sold for use in public projects in Thailand is determined semi-annually and is based upon the average spot market price of copper on the LME during the six-month period commencing on January 1 and July 1 prior to the month of order. Thus, a recent rise or decline in copper prices may not be fully reflected under this pricing scheme for several months.

     Average copper prices per metric ton have increased by 48.9% from $5,150 in 2009 to $7,534 in 2010 (four quarters average). Gross profit margins for manufactured products in 2009 were on average at 12.8% compared to 13.1% in 2010.

     Copper prices indicated in this report are quoted from the London Metals Exchange (LME) index. The 2010 and 2009 copper prices are as follows:

     The average copper price in April 2011 on the LME was $9,483 per metric ton.

      Net Sales

     Sales of manufactured product increased by $118.5 million, or 39.5%, from $300.1 million in 2009 to $418.6 million in 2010. Sales of power cable increased by $45.3 million in 2010, or 44%, due to a increasing demand in Thailand as a result of expanded government and private construction contracts, coupled with increase in Australia due to much higher sales prices. Sales of enameled wire also increased, actually by far the largest increase in the group, up to 50.1% to $202.8 million. In Thailand, enameled wire sales increased by $28.9 million due to much more demand locally. Elsewhere enameled wire sales in CCH HK also increased to produce over $86.8 million in 2010 compared to $64.3 million in 2009. Shanghai Yayang even increase its sales of enameled wire up to nearly $40 million in 2010 compared to $23.3 million in 2009 due to the heavy demand from eastern part of China customers. Sales of telecommunication cable, on the contrary, showed signs of a sluggish decline in Shandong because of saturation in the marketplace,; however in Thailand, the fiber optic business (i.e. telecommunication cable) picked up to $44.9 million in 2010 from $26.0 million in 2009.

     Revenue from SDI project engineering in Singapore decreased in 2010 by $10.4 million, or 30.6% down as phase I of the government sponsored casino projects came to an end in mid 2010.

     Revenue from Distributed Products was at $27.1 million in 2010, down from $28.1 million in 2009.

     The following table shows the percentage share and dollar value (in thousands) of net sales of the respective geographical locations of manufacturing and provision of distributed products and SDI services with respect to our total sales in 2010:

      Gross Profit

     Gross profit for 2010 was $61.7 million, representing an increase of $15.3 million, or 33.0% compared to $46.4 million in 2009. The increase was primarily attributable to the raw material cost increases and which we were in large part able to pass on to our customers, while some of the fixed costs would stay pretty much at the same level. The upward adjustment of copper prices was in line with the general increase over the course of 2010 in commodity prices.

     Apart from the write-back of minimal allowance of inventory reserve of $1.9 million, gross profit contributed by sales of manufactured products was $58.1 million in 2010 compared to $20 million in 2009, an increase of 189.8%. The increase in gross profit from sale of manufactured products is due to the higher sales price chargeable to customers across various markets in which the Company operates. The relative contribution to gross profit from manufactured products for 2009 and 2010 is as follows:

     The contribution to gross profit from each segment line (and the components within the manufactured products segment) for 2009 and 2010 is as follows:

     Overall gross profit margins slightly increased from 12.8% in 2009 to 13.1% in 2010. Gross profit margins for manufactured products greatly increased from 6.7% in 2009 to 13.9% in 2010. Increased margins for telecommunication cable business was partly offset by gross margin decrease for enameled wires. Both CTW and PEWS all suffered setback in terms of losing gross margins when compared with that of last year’s due to pricing issues. Gross margin of power cable increased to 17.0% in 2010 from 8.4% in 2009.

      Operating Profit

     In addition to estimating an allowance for doubtful accounts based on historical sales and collection data, we perform a detailed review of our outstanding receivables, and make adjustments to our estimate to reflect significant delinquent accounts receivable. The Company is not aware of any significant delinquent accounts receivable that have not already been adequately reserved. In addition, our periodic allowance for doubtful accounts will continue to not have a material impact on our liquidity.

     Other than allowance for doubtful accounts, overall SG&A expenses increased by $3.8 million, as a portion of the corporate expenditure went to attending the road shows and investor relationship related activities in 2010. In addition, when business picks up, the headcount inevitably will increase, headcount number has increased by 102, up from 1,602 from beginning of 2010. Total SG&A expenses, when compared with that of 2009, went down by 1.0%. Recovery for doubtful accounts in 2010 was amounted to $1.3 million, mostly relating to a trade receivable in Thailand as the repayment progress has exceeded management’s expectations.

     Accounts receivable, net of allowance for doubtful accounts, increased by $42.7 million from December 31, 2009 of $101.8 million to $144.5 million as of December 31, 2010. The increase in accounts receivable was attributable to more sales have been generated. The overall Day of Sales Outstanding stands at approximately 95.8 days, improved as compared to that of 2009 where the number showed 99.6 days to get the sales collected.

      Exchange Gain/Loss

     The exchange rates at end of December 31, 2009 and 2010 are listed below, based on the Noon Buying Rate. However, they do not actually reflect the ongoing rates during the year when transactions actually took place.

     Based on the above rates, the revaluation of assets and liabilities denominated in U.S. dollars or other foreign currencies in the Company resulted in unrealized and realized foreign exchange gains of $3.0 million in 2010. The realized exchange gains, mainly arising from Thailand operation, was due to 1) the appreciation of Thai Baht during 2010 2) the early settlement of trust receipts denominated in Thai Baht, when bought in at a lower exchange rate.

      Impairment of Investment

     The impairment of investment in 2010 represents the impairment loss in TT&T securities in Thailand, owned by Siam Pacific. In the past, the unrealized loss, net of tax, was reported in separate component of shareholders’ equity. In 2010, the Company considered the continuing

decrease in fair value was other-than-temporary and recognized such impairment loss in the statement of operations.

      Other Income

     Other income in 2010 decreased by $1.1 million, compared with 2009 at $2.2 million. The decrease in 2010 consisted of less scrap sales, and less dividend from other long-term investment when compared with that of 2009.

      Income Taxes

     Under current Bermuda law, the Company is not subject to tax on income or capital gains, nor is withholding tax of Bermuda imposed upon payments of dividends by the Company to its shareholders.

     The Company’s investments in the Operating Subsidiaries are held through subsidiaries incorporated in the British Virgin Islands (“BVI”). Under current BVI law, dividends from the BVI subsidiaries’ investments are not subject to income taxes and no withholding tax is imposed on payments of dividends by the BVI subsidiaries to the Company.

     The Operating Subsidiaries and equity investees are governed by the income tax laws of Singapore, Thailand, Australia and the People’s Republic of China. The corporate income tax rate in Singapore was 18%, 17% and 17% for 2008, 2009 and 2010, 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, 2010 and a withholding tax of 10% is levied on dividends received by the Company. CTW is listed on Stock Exchange of Thailand (“SET”), its applicable corporate income rate was 25% for the first 300 million Baht of net profit and 30% for the amount exceeding 300 million Baht. In Australia, the corporate income tax rate was 30% for 2008/2009, 2009/2010 and 2010/2011 tax years. The applicable corporate income tax rate for the subsidiaries in the People’s Republic of China was 25% for each of the three years ended December 31, 2010.

     Pursuant to the Corporate Income Tax Law (the CIT Law) of the PRC that 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%). An enterprise located in specially-designated regions or cities and eligible for 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 it currently qualifies for a reduced rate of taxation of 22% for the year 2010. PEWS is the only subsidiary of the Company in the PRC that qualifies for the preferential tax rates under the CIT Law. Under current China law, dividend distributions of profits earned prior to January 1, 2008 to foreign investor(s) are exempt from withholding under the Chinese tax holiday treaties; distribution of the profits earned after January 1, 2008 is subject to withholding tax of 10%, reduced to 5% under the special tax arrangement between HK and China.

     In 2010 the overall effective tax rate was at 21.3%, of which Charoong Thai accounts for more than half of the income tax expenses. Australia operation was able to use its partial net operating loss carry forward of $262,000 to offset part of its income taxes. The Company files income taxes in each jurisdiction where such a filing is required based on its revenues. The provision for income taxes differs based on the taxes incurred by the operating subsidiaries in their respective jurisdictions. Effective tax rates differ from the statutory rate due to, among other things, whether certain expenses are deductible or not deductible for tax purposes and changes in valuation allowances.

     As of December 31, 2009, the Company’s operating subsidiaries in China had net operating loss (“NOL”) carry forwards of approximately $19.4 million which expire on various dates between 2010 and 2014. Based on their history of losses, management believes it is likely that

the net operating loss carry forwards will not be fully utilized by those subsidiaries, accordingly, the Company has not recognized the NOL carry-forwards as deferred tax assets.

     Because the Company operates in multiple jurisdictions, it considers the need for a valuation allowance on a country-by-country basis, taking into account the effect of local tax laws. Management believes, but cannot assure, that the Company will utilize the APEC loss carry-forwards in the future due to APEC’s profitability and continued generation of taxable income.

     Reserves not yet deductible for tax purposes affect temporary differences. Tax consequences of most events recognized in the financial statements for a year are included in determining income taxes currently payable. However, tax laws often differ from the recognition and measurement requirements of financial accounting standards. These differences are referred to as “temporary differences.” Temporary differences ordinarily become taxable or deductible when the related asset is recovered or the related liability is settled. The major temporary differences that gave rise to deferred tax assets and liabilities in 2009 and 2010 were allowance for inventories, allowance for doubtful accounts and the allowance for impairment in investment.

     Additional details regarding tax laws and income taxes of the Company including deferred tax liabilities and assets in 2009 and 2010 are disclosed in Note 10 of Item 18: “Financial Statements.”.

      5.3.2 Year Ended December 31, 2009 Compared with Year Ended December 31, 2008

      General

     Results of operations are determined primarily by market demand and government infrastructure projects, market selling prices of our products, our ability to manufacture high quality products efficiently in quantities sufficient to meet demand and to control production and operating costs. Our results are also influenced by a number of factors, including currency stability in the countries in which our operations are located, competition and the cost of raw materials, especially copper, which accounted for approximately 70% of the cost of sales in 2009.

     In order to minimize the impact of copper price fluctuations, we attempt to “peg” the prices of our products to the prevailing market price of copper and pass changes in the cost of copper through to customers as much as possible. In certain circumstances, however, we remain affected by fluctuations in the price of copper. For example, the price of telecommunications cable sold for use in public projects in Thailand is determined semi-annually and is based upon the average spot market price of copper on the LME during the six-month period commencing on January 1 and July 1 prior to the month of order. Thus, a recent rise or decline in copper prices may not be fully reflected under this pricing scheme for several months.

     Average copper prices per metric ton have decreased by 25.9% from $6,956 in 2008 to $5,150 in 2009 (four quarters average). Gross profit margins for manufactured products in 2009 were on average at 12.8% compared to 2.5% in 2008.

     Copper prices indicated in this report are quoted from the London Metals Exchange (LME) index. The 2009 and 2008 copper prices are as follows:

     According to the April 2009 East Asia and Pacific Update published by the World Bank, the rates of year 2009 GDP growth for Thailand, Singapore and China were 0.3%, -0.9%, and 8.4%, respectively, while the rates of year 2008 GDP growth for Thailand, Singapore and China were 2.6%, 1.1% and 9.0%, respectively. Our performance is largely influenced by the level of growth in the telecommunication and power infrastructure, construction and electronic goods manufacturing sectors.

      Net Sales

     Sales of manufactured product decreased by $147.7 million, or 33.0%, from $447.8 million in 2008 to $300.0 million in 2009. Sales in power cable decreased by $76.8 million in 2009, or 42.7%, due to a decrease in sales in Thailand as a result of reduced government and private construction contracts, coupled with decreases in Australia due to a much lower market price. On the contrary, in Singapore pricing increased marginally. Sales in enameled wire decreased by 38.9% to $135.1 million. In Thailand, enameled wire sales decreased by $55 million due to much less demand locally. Elsewhere enameled wire sales in CCH HK encountered a similar problem where its export business fell by $26 million during 2009. Shanghai Yayang, on the other hand, was tied up with shortage of operating funds to keep the steam going, and because of that, it did not reach its full capacity of producing at 600 tons per month. Although the Company had ample unused credit lines elsewhere in other subsidiaries, they were no use to SYE as Chinese Foreign exchange policies and bank regulations at other operating sites would prevent SYE from utilizing or borrowing additional funds within the group. Sales of telecommunication cable, on the contrary, showed signs of a strong recovery after two years of stalled business. SPFO increased sales to $36 million, a material increase from $16.6 million a year ago due to a significant demand for telecommunication infrastructure in certain markets in eastern China. These are all government related projects where SPFO supplies fiber optic cables to the contractors. Other markets such as Thailand still showed a sluggish business where the sales decreased by $4.3 million.

     Revenue from SDI project engineering in Singapore increased in 2009 by $12.3 million, or 59.8% due to the build out of government sponsored casino projects. Such business will likely be concluded in May 2010 and the projected turnover in 2010 for Sigma Cable has been revised down because of the anticipated completion of those projects.

     Revenue from Distributed Products suffered a setback as demand related to Singapore government-related housing projects has been delayed in part or suspended because of the financial downturn. Sales decreased by $4.3 million to $28.1 million from sales a year ago of $32.4 million.

     The following table shows the percentage share and dollar value (in thousands) of net sales of the respective geographical locations of manufacturing and provision of distributed products and SDI services with respect to our total sales in 2009:

      Gross Profit

     Gross profit for 2009 was $46.4 million, representing an increase of $33.6 million, or 362.5% compared to $12.8 million for 2008. The increase was primarily attributable to the recovery of allowance for inventory reserve provided for in 2008 of $25.1 million due to the significant fall in copper prices towards the end of 2008. LME copper prices increased from an average of $3,428 per metric ton in the first quarter of 2009 to $6,648 per metric ton in the fourth quarter of 2009, representing an increase of 93.9%. The upward adjustment of copper prices was in line with the general increase over the course of 2009 in commodity prices.

     Aside from recovery of copper price adjustment, gross profit contributed by sales of manufactured products was $20.0 million in 2009 compared to $37.3 million in 2008, a decrease of 46.4%. The decrease in gross profit from sale of manufactured products is due to the lower sales volume for power cable and enameled cable across the various markets in which the Company operates. The relative contribution to gross profit from manufactured products for 2008 and 2009 is as follows:

     The contribution to gross profit from each segment line (and each component within the manufactured products segment) for 2008 and 2009 is as follows:

     Overall gross profit margins increased from 2.5% in 2008 to 12.8% in 2009. Gross profit margins for manufactured products decreased slightly from 8.3% in 2008 to 6.7% in 2009. Increased margins for telecommunication cables, was offset largely by decreases in margins for power and enameled cables. Gross profit margin for power cable in Singapore increased by 0.43% due to slightly elevated sales prices in that market. CCH HK and PEWS, however, experienced an increase in enameled wire gross margin by a significant 2.43% , due to tightened inventory and shop floor control. Gross profit margins for telecommunications cables increased in both Shangdong and in Thailand’s Siam Fiber Optics, (SFO), due largely to the significant incremental demand for telecommunication cables as government’s attention to building up telecom infrastructure intensified. SPFO in Shangdong increased by 1.24% while SFO experienced another 4.49% increase in gross profits, although the sales dropped by $4.3 million.

      Operating Profit

     In addition to estimating an allowance for doubtful accounts based on historical sales and collection data, we perform a detailed review of our outstanding receivables, and make adjustments to our estimate to reflect significant delinquent accounts receivable. The Company is not aware of any significant delinquent accounts receivable that have not already been adequately reserved. In addition, our periodic allowance for doubtful accounts will continue to not have a material impact on our liquidity.

     Other than allowance for bad debt, overall SG&A expenses decreased by $0.3 million, or 1.1%, which is attributable to management’s efforts in cutting expenses and tightening control on non-production related expenditures. The headcount number went down by 90 people from a year ago. Bad debt allowance recovered (reduced) by $0.9 million including a reversal of $0.3 million by our Australian operations

which were over-accrued in the past, and Singvale Pte. Ltd., a company organized under APWC General Holdings, reversed its accrual of $0.6 million as the debt is to be transferred into Sigma Epan International as capital contribution.

     Accounts receivable, net of allowance for doubtful accounts, increased by $5.8 million from $96 million as of December 31, 2008 to $101.8 million as of December 31, 2009. The increase was attributable principally to the fact that during the financial downturn, more and more customers are facing cash and liquidity issues. Days of sales outstanding were 96 days for 2008 and 109 days for 2009.

      Exchange Gain/Loss

     The exchange rates at end of December 31, 2009 and 2008 are listed below, based on the Noon Buying Rate. However, they do not actually reflect the ongoing rates during the year when transactions actually took place.

     Based on the above rates, the revaluation of assets and liabilities denominated in U.S. dollars or other foreign currencies in the Company resulted in unrealized and realized foreign exchange gains of $0.6 million in 2009. The exchange gains were realized across various of the operating companies, where each contributed some gain.

      Gain on Sale of Investment

     The gain on sale of investment in 2009 was primarily attributable to a disposal of long-aged accounts payable held by Sigma Epan. The individual companies that have gone into liquidation process and the associated accounts payable amounts were: Epan (Thailand) Company of $0.3 million, Sigma-Epan Cable of $0.3 million, and Data Testing Lab of $7,700.

      Other Income

     Other income in 2009 increased by $1.1 million, compared with 2008, to $4.9 million. The increase in 2009 largely consists of much less interest expenses paid as the loans were reduced, gains on Forex rose to $0.5 million, as opposed to a Forex loss a year ago by $1.7 million. Gains on sales of copper scraps and increases in tax refund for reinvestment and reversal of accounts payable in China also contributed.

      Income Taxes

     In 2009 the overall effective tax rate for the group was at 27.3%. In 2008, the Company recorded income tax of $2.1 million despite recording a consolidated loss of $20.1 million due primarily to income tax recorded for profitable subsidiaries such as APEC.

     The Company files income taxes in each jurisdiction where such a filing is required based on its revenues. The provision for income taxes differs based on the taxes incurred by the operating subsidiaries in their respective jurisdictions. Effective tax rates differ from the statutory rate due to, among other things, whether certain expenses are deductible or not deductible for tax purposes and changes in valuation allowances.

     As of December 31, 2009, the Company’s operating subsidiaries in China had net operating loss (“NOL”) carry forwards of approximately $19.4 million which expire on various dates between 2010 and 2014. Based on their history of losses, management believes it is likely that the net operating loss carry forwards will not be fully utilized by those subsidiaries, accordingly, the Company has not recognized the NOL carry-forwards as deferred tax assets.

     A significant portion of the deferred tax assets recognized by the Company relates to net operating loss carry forwards of APEC of $1.4 million and reserves not yet deductible for tax purposes. Because the Company operates in multiple jurisdictions, it considers the need for a valuation allowance on a country-by-country basis, taking into account the effect of local tax laws. Management believes, but cannot assure, that the Company will utilize the APEC loss carry-forwards in the future due to APEC’s profitability and continued generation of taxable income.

     Reserves not yet deductible for tax purposes affect temporary differences. Tax consequences of most events recognized in the financial statements for a year are included in determining income taxes currently payable. However, tax laws often differ from the recognition and measurement requirements of financial accounting standards. These differences are referred to as “temporary differences.” Temporary differences ordinarily become taxable or deductible when the related asset is recovered or the related liability is settled. The major temporary differences that gave rise to deferred tax assets and liabilities in 2008 and 2009 were allowance for inventories, allowance for doubtful accounts and the allowance for impairment in investment.

     Additional details regarding tax laws and income taxes of the Company including deferred tax liabilities and assets in 2008 and 2009 are disclosed in Note 10 of Item 18: “Financial Statements.”

      5.4 Liquidity and Capital Resources

     As of December 31, 2010 we had $63.2 million in cash and cash equivalents, primarily in bank accounts and cash on hand, and none of which was in unrestricted or restricted short-term bank deposits. Our current sources of cash are our cash on hand, cash generated by our operations and our credit facilities. Our primary financing needs will continue to be available to fund the growth in our operations, and the purchase and replacement of property, plant and equipment and future acquisitions.

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

     We maintain several working capital and overdraft credit facilities with various commercial bank groups and financial institutions. Under our line of credit arrangements for short-term debt with our banks, we may borrow up to approximately $310.5 million, including letters of credit for commodity purchases, on such terms as we and the banks mutually agreed upon. These arrangements do not have termination dates but are reviewed annually for renewal. As of December 31, 2010, the unused portion of the credit lines was approximately $209.6 million.

Letters of credit are issued on our behalf in the ordinary course of business by our banks as required by certain supplier contracts. As of December 31, 2010, the Company had open letters of credit totaling $53.7 million. Liabilities relating to the letters of credit are included in current liabilities. There is no seasonality to the company’s borrowing, nor is there any restriction on the use of such borrowing.

     Net cash used in operating activities in the fiscal year ended December 31, 2010 was $2.6 million, as compared to $18.4 million of net cash generated from operating activities in the fiscal year ended December 31, 2009. Days of sales outstanding (DSO) is a measure of the average collection period of accounts receivable, and although the calculation is influenced by the period used and the timing of sales within that period, it can provide insight into the variances in collections from period to period. Our days of sales outstanding as December 31, 2010 were 102 days, as compared to 109 days as of December 31, 2009. The improvement in DSO as of December 31, 2010 is due to re-enforcing collection efforts based on various company policies across the group. However, because sales increased by nearly 30% in 2010, the increase in accounts receivable has a large negative impact on the cash flow amounting to $31.8 million in the current year. Also contributing to the net cash used in operations in 2010 was a cash outflow of $8.6 million resulted from the increase in our inventories balance as at December 31, 2010. The increase in inventories was due to sales increase as the operation needs more inventory to back up its pipeline, although our inventory turnover days has dropped down from 37 days in 2009 to 32 days in 2010. Reduction in our accounts payable, accrued expenses, and other liabilities as of December 31, 2010 has contributed to the increase in our cash flow by $13.4 million in the current year.

     In 2010, we borrowed more from banks and credit lines by as much as $46.1 million, or an increase of $37.0 million from that of 2009. This is primarily because our business needs more funding in purchasing more raw materials and finished goods from PEWC in light of increasing sales, particularly when the copper price has been hovering around over $9,000 per metric ton.

     Net cash used in investing activities was $6.6 million in 2010, as compared to approximately $7.9 million generated from investing activities in 2009. Investing activities are comprised primarily of the purchases of property, plant and equipment amounting to $3.7 million, as well as changes in our restricted short-term deposits. Part of the cash went to increase the restricted cash by $3.1 million as the bank loan increases in the current year.

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

     To date, the Company has invested an aggregate of $2.5 million in SPFO, in which the Company possesses a 51.0% shareholders’ interest. The Company’s joint venture partner, Shandong Yanggu, owns the remaining 49% shareholders’ interest in SPFO. Investments in SPFO have been directed at capacity expansion, and the joint venture has shown a slight decrease in sales despite the large improvement in sales in 2009. The Company also has carrying value of $0.9 million in the investment in SHP.

     We believe funds generated by our operating activities, our cash on hand and amounts available to us under our credit facilities will provide adequate cash to fund our requirements through at least the next twelve months. We continue to have sufficient liquidity to meet our anticipated working capital, capital expenditures, general corporate requirements, and other short-term and long-term obligations as they come due. We may further enhance our liquidity in the future, as needs arise, by establishing additional lines of credit, with the support of one or more of our principal shareholders if necessary and available. We currently anticipate that we will retain all of our earnings to fund our operations and do

not anticipate paying any cash dividends in the foreseeable future.

      5.5 Research and Development

     The Company does not currently engage in its own research and development. For the new product anticipated to be launched when the Ningbo facility resumes operations, we expect to utilize the technologies and know-how from our parent company, PEWC to produce electronic wiring. Under the Composite Services Agreement with PEWC described herein, the Company benefits from research and development conducted by PEWC at little or no cost to the Company. Accordingly, the Company has not made material expenditures on or commitments to research and development since formation.

      5.6 Trend Information

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

	•		Uncertainty arising from the volatility in the cost of copper, our principal raw material. In 2010, the copper prices have gone up from $7,300 per metric ton in the beginning of the year to almost $9,147 per metric ton at end of year. This increase caused the Company to reverse the allowance for its inventory provided for in 2009. Although copper prices have generally increased for the entire year of 2010, there is no assurance that we will not see volatility in the near future due to the current uncertain economic climate.
	•		Fluctuations in the demand for our products in the markets in which we do business , based upon variations in the level of governmental and private commitments to communications, power and industrial projects and programs that utilize our products.
	•		Political instability or uncertainty resulting in fewer or suspended government contracts, such as in Thailand. The current political unrest in Thailand presents increased risks for foreign investors and may result in a reduced government focus on infrastructure development (which often utilizes the Company’s manufactured products).

     See “Quantitative and Qualitative Disclosures About Market Risk.”

      5.7 Off-Balance Sheet Arrangements

     We do not consider the Company to have any material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that would be material to investors.

      5.8 Contractual Obligations

     The following table sets forth our obligations and commitments to make future payments under contracts and other commitments as of December 31, 2010:

     For more details on financial commitments and contingencies, please refer to our audited consolidated financial statements and the notes thereto in Item 18: “Financial Statements.”

Item 6: Directors, Senior Management and Employees

           6.1 Directors and Senior Management

     There is only one class of directorships and no one or more directors possesses any veto power over matters presented to the Board or any other special or enhanced voting rights. The Bye-laws provide that a quorum consists of a majority of the directors then in office. As of December 31, 2010, there were a total of 9 directors on the Board, including two independent directors, Mr. Anson Chan and Dr. Yichin Lee. Each director is entitled to one vote, and approval of any matter requires a simple majority assuming a quorum is present. On March 17, 2011, the Board passed a written resolution where it 1) accepted the resignation of one of the directors — Mr. Lee Gai Poo, 2) appointed a new member — Dr. Lambert Ding, to the Board who became the third independent director and also was appointed to serve on the audit committee, 3) amended the audit committee charter to clarify that appointment of the independent auditors requires shareholder approval.

     The following table sets forth certain information concerning the current directors and certain other officers of the Company. All directors are subject to annual election by the shareholders of the Company. Each of the directors was reelected at the Company’s annual general meeting of the shareholders held on September 3, 2010, other than Dr. Lambert Ding, who was appointed by the then current Board members to fill a vacancy on March 17, 2011. Officers generally hold office for such period and upon such terms as the Board may determine.

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

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

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

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

     Mr. Alex Erskine was appointed as resident Secretary in Bermuda in October 2008. Mr. Erskine is a partner in the Bermuda law firm of Appleby, where he is the local team leader of the funds and investment services practice group, which group he joined in 1999. From March 2007 until October 2008, Mr. Erskine was the managing partner of the British Virgin Islands office of Appleby. Prior to joining Appleby, Mr. Erskine was Deputy Legal and Compliance Director of the Asset Management Division of UBS AG.

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

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

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

     Dr. Yichin Lee has been an independent member of the Company’s Board of Directors and served on the Audit Committee since 2007. Dr. Lee is also the Managing Director of Giant Management Consulting LLC and an independent director of Giga Media Limited. Dr. Yichin Lee holds a doctorate degree in resource planning and management from Stanford University. Dr. Yichin Lee is not related to Mr. Michael C. Lee.

     Mr. Ching Rong Shue has been a member of the Company’s Board of Directors since 2006. He also serves as Vice President of PEWC.

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

     Mr. Yuan Chun Tang has been a member of the Company’s Board of Directors since 2004 and Chief Executive Officer since 2005. Mr. Yuan served as the Company’s Chairman from 2005 to 2009. He has also served as Chairman of PEWC since 2004 and has been the Director of Pacific Construction Corp. Ltd since 2002. Mr. Yuan served as the Director of Taiwan Co-generation Corp from 2005 to 2008. Mr. Yuan has also been the Chairman of Taiwan Electric Wire & Cable Industries Association since 2004. He has served as the

Supervisor to Taipei Importers/Exporters Association as well as the Director of Chinese National Federation of Industries in Taiwan since 1998 and 2004, respectively.

     Mr. Carson Tien has been with PEWC or one of its affiliates such as APWC for his entire career. He started out as engineer in PEWC’s Tao Yuan, Taiwan plant in 1969 and later was promoted to plant manager in 1977. In 1990 Carson again was promoted to Assistant VP responsible for Engineering and Manufacturing in PEWC. He then in 1996 was transferred from PEWC to APWC to head the Shenzhen, China plant as President of PEWSC. In 2005, he was appointed as Chief Operating Officer at APWC headquarters.

     Mr. Frank Tseng was appointed as Chief Financial Officer and Non-Resident Company Secretary effective October 22, 2009. Mr. Tseng previously served as the Deputy CFO for ABB Taiwan. Prior to that, he served as the Financial Controller of the Asia Pacific region of Phoenix Technologies Co., a NASDAQ-listed California Silicon Valley-based high-tech company.

     On March 15, 2011, Mr. Gai Po Lee resigned from the Board of Directors and on August 23, 2010, Mr. Jack Sun resigned from the Board of Directors.

     The Company’s Common Shares are traded on NASDAQ. Notwithstanding that, the Board of Directors is not composed of a majority of independent directors. The Company is relying upon the “controlled company exemption” that is available to issuers under the rules of NASDAQ. In effect, the “controlled company exemption” provides that an issuer is not required to have its Board of Directors consist of a majority of independent directors if a shareholder, or two or more shareholders who constitute a group, have beneficial ownership of more than 50% of the issued and outstanding voting securities of the issuer. PEWC owns and controls, directly or indirectly, 65.6% of the issued and outstanding Common Shares of the Company.

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

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

           6.2 Audit Committee

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

     On September 28, 2007, the Company filled two casual vacancies on the Board by appointing Mr. Anson Chan and Dr. Yichin Lee to be independent directors of the Company and to constitute the Audit Committee of the Board. Mr. Chan and Dr. Lee were reelected to the Board at the annual general meeting of the shareholders held on September 3, 2010. The Audit Committee is currently composed of Mr. Chan, Dr. Lee, and Dr. Ding who has been appointed as aforementioned on March 17, 2011, with Mr. Chan serving as the committee’s chairman.

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

           6.3 Compensation Committee

     On June 13, 2008, the Board authorized the formation of a Compensation Committee to assist the Company in determining the compensation to be paid to the executive directors of the Company. According to the terms of reference under which it operates, the Compensation Committee is authorized to: (i) review and recommend to the Board, or determine, the annual salary, bonus, stock options, and other benefits, direct and indirect, of the senior management of the Company and its principal operating subsidiaries; (ii) review new executive compensation programs, review on a periodic basis the operation of the Company’s executive compensation programs to determine whether they are properly coordinated, establish and periodically review policies for the administration of executive compensation programs, and take steps to modify any executive compensation programs that yield payments and benefits that are not reasonably related to executive performance; (iii) engage outside auditors and consultants to advise on market compensation; and (iv) establish and periodically review policies in the area of management perquisites.

     The Board is planning to appoint two independent directors, Mr. Anson Chan and Dr. Yichin Lee, to serve on the Compensation Committee.

           6.4 Compensation

     The aggregate amount of compensation paid by the Company to all of the Company’s directors and executive officers, as a group, for services in all capacities during 2010 was approximately $1.81 million. As of March 31, 2011, our directors and executive officers beneficially owned approximately 50,000 Common Shares representing approximately 0.4% of the issued and outstanding Common Shares. The annual compensation of its executive officers and directors on an individual basis is not a disclosure item under the laws of Bermuda or Taiwan.

     The fee payable to independent directors is $20,000 per year and the fee payable to directors who are executive officers of the Company or PEWC is $10,000 per year, together with, in each case, reimbursement of reasonable travel expenses for attendance of meetings of the Board of Directors.

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

           6.5 Employees

     The Company employed a total of 1,704 employees as of December 31, 2010, of which about 18% were administrative and management personnel. Approximately 52% of employees were located in Thailand, 34% in China, 9% in Singapore and 4% in Australia. Production workers are usually organized into two 12-hour shifts or three 8-hour shifts to allow continuous factory operation.

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

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

     The Company has several defined benefit and defined contribution plans covering its employees in Thailand, Australia, the PRC and Singapore. Contributions to the plans are made on an annual basis and totaled $0.8 million in 2010. Additionally, the Company has several

defined benefit plans in accordance with Thailand labor law. In Thai subsidiaries the companies must pay a retiring employee from one to ten times such employee’s salary rate during his or her final month, depending on the length of service. During 2010, the Company’s total expenses under this labor law were $0.5 million. These plans are not funded and the amount is recognized and included in Other Current Liabilities in the Company’s balance sheet. The Company settles it obligations as and when employees retire. The accumulated benefit obligations under this plan amounted to $2.8 million as at December 31, 2010.

     Approximately 28% of the employees of Sigma Cable are members of the United Workers of Electronics & Electrical Industries, an employees’ union in Singapore. Under the terms of a collective agreement signed in June 2003, the Company is required to negotiate salary and wage increases yearly. All other worker benefits and employment terms are included in the collective agreement. The Company believes that approximately 100% and 99% of the employees of PEWS and Shanghai Yayang, respectively, are members of their respective Company Workers’ Unions. These unions generally operate in accordance with related labor regulations in China. Approximately 15% of the employees of APEC are members of the Australian Workers’ Union. None of the employees of the other operating subsidiaries of the Company are members of a union.

     The Company has never experienced a strike or other disruption due to labor disputes. The Company considers its employee relations to be satisfactory and has not experienced difficulties attracting and retaining qualified employees. In Singapore, employee turnover is approximately 27% of total employees annually. In Thailand, employee turnover is approximately 8.7% of total employees annually.

Item 7: Major Shareholders and Related Party Transactions

           7.1 Major Shareholders

     From September 15, 2005 until June 28, 2007, Sino-JP Fund Ltd, a company incorporated under the laws of the Cayman Islands, held 2,766,154 Common Shares, representing 20% of the issued and outstanding Common Shares of the Company. On June 28, 2007, Sino-JP sold all of its Common Shares to SOF Investments, L.P., a Delaware limited partnership (“SOF”). From September 15, 2005 until March 27, 2009, PEWC held 7,664,615 Common Shares, representing 55.4% of the issued and outstanding Common Shares of the Company. On March 27, 2009, SOF sold 1,410,739, or 51%, of its Common Shares to PEWC. Since that sale, PEWC and SOF have held 65.6% and 9.8% of the issued and outstanding Common Shares of the Company, respectively. The remaining 24.6% of the issues and outstanding Common Shares are publicly traded in the U.S. on the NASDAQ, Capital Markets Tier.

     The following table sets forth certain information regarding beneficial ownership of the Company’s Common Shares as of March 31, 2011 by (i) all persons who are known to the Company to own beneficially more than five percent of the Common Shares of the Company and (ii) the officers and directors of the Company as a group. The information set forth in the following table is derived from public filings made by holders and information obtained from directors and officers. The voting rights attaching to the Common Shares below are the same as those attaching to all other Common Shares.

     The Company has 6,166,154 Common Shares that are registered securities, of which 3,400,000 Common Shares are publicly-traded on the NASDAQ Capital Markets Tier, which represents 24.6% of the issued and outstanding Common Shares. The remaining registered securities, 2,766,154 Common Shares, are held by PEWC and SOF, and are subject to trading restrictions under Rule 144 promulgated under the Securities Act. Other than the approximately 50,000 Common Shares held by directors or officers who are not resident in the United States and the 1,410,739 registered securities held indirectly by PEWC, the Company believes that substantially all of its registered securities are held by U.S. residents. The Company has no means to definitively confirm that belief, however, which is based upon a review of the share registers maintained by the Company’s Bermuda transfer agent and U.S. transfer agent and the addresses provided by the record holders. Based upon a review of the records of the Company’s U.S. transfer agent, including a list of non-objecting beneficial holders (NOBOs), the Company believes there are over 400 beneficial holders that are resident in the United States, although that constitutes only the Company’s best estimate of the number of U.S. beneficial holders.

           7.2 Related Party Transactions

     On September 2004, certain accounts payable to PEWC in the amount of $9.7 million from Sigma Cable Company (Private) Limited (“Sigma Cable”), a subsidiary in Singapore, were converted into a loan from PEWC. Such loan is repayable in quarterly installments and bears interest at the Singapore Interbank Offered Rate plus 1.52%. As of December 31, 2009 and the latest practicable date, the principal amount of the loan was completely paid off by Sigma Cable. Sigma Cable continues to incur ordinary course trade payables with PEWC in connection with copper purchases and the sale of distributed products on behalf of PEWC.

     As of December 31, 2010 and the latest practicable date, the Company, including its subsidiaries, had a principal balance outstanding of $1.7 million borrowed from subsidiaries of PEWC, including Moon View Venture Limited (“Moon View”). This short-term indebtedness is payable on a demand basis and does not accrue interest.

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

     The Company was a party to a shareholders agreement dated June 28, 2007, together with PEWC and SOF (the “Shareholders Agreement”), pursuant to which the Company granted to SOF certain rights and protections. Under the Shareholders Agreement, the Company agreed to indemnify SOF, and its partners and certain of its affiliates (the “SOF Indemnified Persons”), for any additional taxes, interest, penalties and other costs that might be imposed upon or incurred by the SOF Indemnified Persons in the event that the Company is determined by the Internal Revenue Service (the “IRS”) to be a “controlled foreign corporation” (a “CFC”) or a “passive foreign investment company” (a “PFIC”) as such terms are interpreted and defined under IRS rules or regulations. In addition, under the Shareholders Agreement, the Company granted to SOF certain registration rights with respect to its Common Shares, including the undertaking by the Company to prepare and file a shelf registration statement, and the further right of SOF to exercise two demand registration rights with regard to the Common Shares owned by it and to further exercise certain piggyback registration rights in connection with its Common Shares. Moreover, the Company agreed to use its reasonable best efforts to cause the Common Shares to be listed on a national “Securities Market,” which means any of the NADAQ Stock

Market, Inc. (Global Market or Global Select Market), the American Stock Exchange LLC (now known as NYSE Amex Equities) or the New York Stock Exchange LLC, not later than January 31, 2009, subject to notice and a sixty (60) day cure period. All of the costs and expenses of the Company in connection with the fulfillment of its obligations under the Shareholders Agreement were to be paid by the Company, other than underwriting fees, discounts and commissions attributable to the sale of Common Shares held by SOF.

     On February 2, 2009, SOF delivered notice of its exercise of the put right under the Shareholders Agreement to PEWC due to fact that the Common Shares were not listed on a national Securities Market as of January 31, 2009. On March 27, 2009, SOF sold 51% of the Common Shares held by it to PEWC. In connection with the sale, the Company, PEWC and SOF amended and restated the Shareholders Agreement (the “Amended and Restated Shareholders Agreement”), which among other things, granted to the Company an extension for listing its Common Shares on a national exchange until February 2011 and maintained for SOF the right to sell its remaining Common Shares to PEWC in the event the Company did not list its Common Shares on a national Securities Market by February 2011. The Amended and Restated Shareholders Agreement contains the same registration and indemnification obligations set forth in the Shareholders Agreement.

     Other than the Amended and Restated Shareholders Agreement, the Company is not a party to any agreements, and has not engaged in any other transactions, with SOF, or to the Company’s knowledge, its owners. For a more detailed description of the Company’s obligations under the Amended and Restated Shareholders Agreement, see the risk factor entitled “Obligations under Shareholders Agreement.”

     Under the terms of the Composite Services Agreement, APWC pays a management fee to PEWC in connection with the secondment, or temporary assignment and relocation, of certain PEWC managers to APWC facilities in Shenzhen and Thailand. The assigned managers assist APWC in implementing the results of certain research and development conducted by PEWC and made available by PEWC to the Company under the terms of the Composite Services Agreement. The assigned managers also assist APWC in the procurement of raw materials, primarily copper, which is also provided for under the Composite Services Agreement. The amount of such annual management fee was $239,000 as of December 31, 2010.

     Additional details regarding related party balances as of December 31, 2010 and related party transactions, including copper purchases from PEWC, are disclosed in Note 15 of our audited consolidated financial statements in Item 18: Financial Statements.

     There have been no other related party transactions or contracts entered into between PEWC and APWC in 2010.

Item 8: Financial Information

           8.1 Legal Proceedings

     There are currently no material proceedings in which any director, senior manager, or affiliate is adverse to the Company or has an adverse material interest. There are no legal proceedings to which the Company is a party which may have, or have had in the recent past, significant effects on the Company’s financial position or profitability.

           8.2 Dividend Policy

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

their ability to make distributions to the Company, including as a result of restrictive covenants contained in loan agreements, restrictions on the conversion of local currency earnings into U.S. dollars or other hard currency and other regulatory restrictions. The foregoing restrictions may also affect the Company’s ability to fund operations of one subsidiary with dividends and other payments received from another subsidiary.

           8.3 Significant Changes

     There have been no material or significant changes in the Company’s affairs since the end of the fiscal year ended December 31, 2010 that have not been described herein.

Item 9: The Offer and Listing

           9.1 Historical Trading Information

     The high and low market prices for Common Shares on the over-the-counter bulletin board (the “OTC BB”) (until August 2005), on the Pink Sheets (from August 2005 until April 2008), and again on the OTC BB (since April 2008), and on the NASDAQ since April 29, 2011, for each period specified are as follows:

           9.2 Markets

     The Company’s Common Shares have been listed on NASDAQ, Capital Markets Tier, since April 2011. Prior to that, the Company was listed on the OTC BB since April 2008 under the symbol “AWRCF,” immediately prior to which the Common Shares were traded on the Pink Sheets. See the risk factor entitled “Potential Illiquidity of Common Shares.” The Common Shares are not listed on any other exchanges or otherwise publicly traded within or outside the United States.

           10.1 Share Capital

     On September 8, 2008, our shareholders approved an increase to our authorized share capital from 20,000,000 Common Shares, par value $0.01 per share, to 50,000,000 Common Shares, par value $0.01 per share. As of December 31, 2010 and as of the date of the filing of this Annual Report, there were and are 13,830,769 Common Shares issued and outstanding. No capital of the Company is under option or agreed conditionally or unconditionally to be put under option. The stock option plan established by the Company in 1996 prior to its initial public offering was terminated by the Board of Directors in 2006. No options were ever exercised and no Common Shares were ever issued under that terminated stock option plan.

           10.2 Memorandum of Association and Bye-laws

                10.2.1 General

     For a detailed description of the Company’s principal activities, see Section 4.1: “History and Development of the Business.” Pursuant to the Company’s Bye-laws the Board of Directors consists of a single class of directors, each director has one vote on all matters put to the Board, and a quorum consists of a majority of the members of the Board of Directors then in office. The Company’s Bye-Laws were amended on September 8, 2008 to increase the authorized share capital. The Company’s Bye-laws, as so amended, were filed on February 18, 2009 as Exhibit 3.2 to Amendment No. 6 to the Company’s registration statement on Form F-1 filed on September 30, 2010.

                10.2.2 Description of Shareholder Rights Attaching to Our Common Shares

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

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

     Our authorized share capital as of December 31, 2010 was $500,000 consisting of 50,000,000 Common Shares, par value $0.01 per share, of which, as of December 31, 2010 and as of the date of the filing of this Annual Report, there were and are 13,830,769 Common Shares issued and outstanding.

	•		Holders of the Common Shares have no preemptive, redemption, conversion or sinking fund rights.
	•		Holders of the Common Shares are entitled to one vote per share on all matters submitted to a poll vote of holders of Common Shares and do not have any cumulative voting rights.
	•		In the event of our liquidation, dissolution or winding-up and subject to any alternative resolution that may be pursued by our shareholders, the holders of Common Shares are entitled to share ratably in our assets, if any, remaining after the payment of all our debts and liabilities.
	•		Our outstanding Common Shares are fully paid and nonassessable.

•

Additional authorized but unissued Common Shares may be issued by the Board without the approval of the shareholders.

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

	•		we are, or after the payment would be, unable to pay our liabilities as they become due; or
	•		the realizable value of our assets after such payment or distribution would be less than the aggregate amount of our liabilities and our issued share capital and share premium accounts.

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

           10.2.3 Share Capital

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

           10.2.4 Voting Rights

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

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

	•		the chairman of the meeting;
	•		at least three shareholders present in person or represented by proxy;
	•		any shareholder or shareholders present in person or represented by proxy and holding between them not less than one-tenth of the total voting rights of all shareholders having voting rights; or
	•		a shareholder or shareholders present in person or represented by proxy holding Common Shares conferring the right to vote on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all Common Shares.

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

           10.2.5 Dividend Rights

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

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

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

           10.2.6 Purchases by the Company of its own Common Shares

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

     However, to the extent that any premium is payable on the purchase, the premium must be provided out of the funds of the Company that would otherwise be available for dividend or distribution or out of the Company’s share premium account. Any Common Shares purchased by the Company are treated as cancelled and the amount of the Company’s issued capital is diminished by the nominal value of the shares accordingly but shall not be taken as reducing the amount of the Company’s authorized share capital.

           10.2.7 Preemptive Rights

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

     However, the Company has in the Amended and Restated Shareholders Agreement granted to SOF preemptive rights in the event of any issuance of additional equity securities (or securities convertible into or exchangeable for equity securities) by the Company, such that SOF may subscribe for additional securities in order to maintain its then percentage ownership interest in the issued and outstanding equity securities of the Company. See the risk factor entitled “Obligations under Shareholders Agreement.”

           10.2.8 Variation of Rights

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

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

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

           10.2.9 Transfer of Common Shares

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

           10.2.10 Transfer Restrictions

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

	•		is duly stamped, if required by law, and lodged with us;
	•		is accompanied by the relevant share certificate and such other evidence of the transferor’s right to make the transfer as the Board of Directors shall reasonably require;
	•		is in respect of one class of shares; and
	•		has obtained, where applicable, permission of the Bermuda Monetary Authority.

     Our Common Shares are traded on the NASDAQ Stock Market, Inc. in the United States as of April 2011, which qualifies as an “appointed stock exchange” for purposes of the Companies Act and the Bermuda Exchange Control Act and regulations made thereunder, in particular a notice to the public dated 1 June 2005. Accordingly, our Common Shares benefit from a general permission for free transferability for all transfers between persons who are not resident in Bermuda for exchange control purposes, for as long as such Common Shares remain listed on an appointed stock exchange.

     The Company, together with PEWC and SOF Investments, L.P., entered into a shareholders agreement dated as of June 28, 2007 (the “Shareholders Agreement”) which provides, among other things, for certain transfer restrictions, notice requirements and tag-along rights in the event PEWC wishes to transfer any of its Common Shares in certain types of transactions. The Shareholders Agreement was amended and restated on March 27, 2009 (the “Amended and Restated Shareholders Agreement”) in connection with the sale by SOF to PEWC of 51% of the Common Shares held by SOF. The Amended and Restated Shareholders Agreement is binding only upon the three parties to that agreement. Under the Amended and Restated Shareholders Agreement, the Company has been granted an extension until February 2011 to achieve a listing of the Common Shares on a national Securities Market and SOF has maintained its right to sell its remaining Common Shares to PEWC in the event the Company is not able to achieve that national listing. See Section 4.3: “Certain Recent Events.”

           10.2.11 Transmission of Shares

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

           10.2.12 Disclosure of Interests

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

           10.2.13 Rights in Liquidation

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

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

           10.2.14 Meetings of Shareholders

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

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

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

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

           10.2.15 Access to Books and Records and Dissemination of Information

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

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

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

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

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

           10.2.16 Election or Removal of Directors

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

     The Bye-laws provide that each director shall have one vote on all matters presented to the Board for a vote. At the annual general meeting held on September 3, 2010, all nine directors then in office were re-elected.

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

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

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

•

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

	•		if he becomes of unsound mind or a patient for any purpose under any statute or applicable law relating to mental health and the Board of Directors resolves that his office is vacated;
	•		if he becomes bankrupt or enters into a general settlement with his creditors;
	•		if he is prohibited by law from being a director; or
	•		if he ceases to be a director by virtue of the Companies Act or is removed from office pursuant to the Bye-laws.

           10.2.17 Amendment of Memorandum of Association and Bye-Laws

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

     Under Bermuda law, the holders of:

	•		an aggregate of not less than twenty percent in par value of a company’s issued share capital or any class thereof; or
	•		not less in the aggregate than twenty percent of the company’s debentures entitled to object to amendments to its memorandum of association,
			have the right to apply to the Supreme Court of Bermuda for an annulment of any amendment of the memorandum of association. Where such an application is made, the amendment becomes effective only to the extent that it is confirmed by the Bermuda Supreme Court. An application for an annulment of an amendment of the memorandum of association must be made within twenty-one days after the date on which the resolution amending the memorandum of association is passed and may be made on behalf of the persons entitled to make the application by one or more of their number as they may appoint in writing for the purpose.

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

           10.2.18 Merger or Consolidation (Amalgamation)

     The Companies Act provides that, subject to the terms of a company’s bye-laws, the merger or consolidation of a Bermuda company with another company (referred to as an “amalgamation” under Bermuda law) requires an amalgamation agreement which must be approved by the board of directors and at a meeting of the shareholders by seventy-five percent of the shareholders present and entitled to vote at such meeting in respect of which the quorum shall be two persons holding or representing by proxy more than one-third of the issued shares of the company. These provisions do not apply where a holding company is amalgamating with one or more of its wholly-owned subsidiaries or where two or more wholly-owned companies of the same holding company are amalgamating.

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

           10.2.19 Class Actions and Derivative Actions

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

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

           10.2.20 Personal Liability of Directors and Indemnity

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

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

           10.2.21 Exchange Controls

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

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

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

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

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

           10.3 Material Contracts

      Composite Services Agreement (“CSA”)

     The Company engages in transactions in the ordinary course of business with PEWC, including the purchase of certain raw materials and the distribution of PEWC products in various countries in the Asia Pacific region. The Company and PEWC are parties to a composite services agreement dated November 7, 1996 (the “Composite Services Agreement” or “CSA”), which the Company has renewed annually, at its option. The Composite Services Agreement contains provisions that define the relationship and the conduct of the respective businesses of the Company and PEWC and confers certain preferential benefits on the Company. In 2010 there were no material changes to the CSA between APWC and PEWC. Pursuant to the Composite Services Agreement,

	•		PEWC agrees to (a) sell copper rod to the Company, upon the Company’s request, (i) at a price consisting of the spot price of copper on the LME plus an agreed upon premium and (ii) at prices and on terms at least as favorable as PEWC provides copper rod to other purchasers of similar amounts of copper rod in the same markets, and (b) give priority in the supply of copper rod to the Company over other purchasers of copper rod from PEWC.
	•		The Company has the right to distribute any wire or cable product manufactured by PEWC in all markets in which the Company presently distributes or develops the capability to distribute in the future such products on such terms as have historically been in effect or on terms at least as favorable as PEWC grants to third parties that distribute such products in such markets. However, PEWC is not required to grant to the Company the right to distribute products manufactured by PEWC in the future in markets where the Company does not currently have the capability to distribute unless and until PEWC has no pre-existing contractual rights which would conflict with the grant of such right to the Company.
	•		Each of PEWC and the Company will notify the other party prior to entering into any negotiations with a third party concerning the establishment of any facility or similar venture to manufacture or distribute any wire or cable product outside of the markets where the Company currently manufactures or distributes, or intends to develop the capability to manufacture or distribute, any wire or cable product. Unless the Company and PEWC mutually agree otherwise, the Company has the right of first refusal to enter into any definitive agreement with such third party. If, however, such third party would not agree to the substitution of the Company for PEWC or such substitution would prevent the successful completion of the facility or venture, PEWC has agreed to arrange for the Company to participate to the extent possible.
	•		PEWC agrees to make available to the Company, upon the Company’s request and on terms to be mutually agreed between PEWC and the Company from time to time, certain services with respect to the design and manufacture of wire and cable products, computerization, inventory control, purchasing, internal auditing, quality control, emergency back-up services, and recruitment and training of personnel; such services may include the training of the Company’s employees and managers at PEWC facilities and the secondment of PEWC employees and managers to the Company.
	•		Without the consent of the Company, PEWC will not compete with respect to the manufacture or distribution of wire and cable products in any market in which the Company is manufacturing or has taken significant steps to commence manufacturing.

•

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

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

      Amended and Restated Shareholders Agreement

     In connection with the 2007 acquisition by SOF of twenty percent (20%) of the Company’s issued and outstanding Common Shares, the Company, PEWC and SOF entered into a shareholders agreement dated as of June 28, 2007 (the “Shareholders Agreement”), pursuant to which the Company granted to SOF certain rights and protections. Under the Shareholders Agreement, the Company agreed to indemnify SOF, and its partners and certain of its affiliates (the “SOF Indemnified Persons”), for any additional taxes, interest, penalties and other costs that might be imposed upon or incurred by the SOF Indemnified Persons in the event that the Company is determined by the Internal Revenue Service (the “IRS”) to be a “controlled foreign corporation” (a “CFC”) or a “passive foreign investment company” (a “PFIC”) as such terms are interpreted and defined under IRS rules or regulations. In addition, under the Shareholders Agreement, the Company granted to SOF certain registration rights with respect to the Common Shares owned by it, including the undertaking by the Company to prepare and file a shelf registration statement, and the further right of SOF to exercise two demand registration rights with regard to its Common Shares and to further exercise certain piggyback registration rights in connection with its Common Shares. The Shareholders Agreement was amended and restated on March 27, 2009 (the “Amended and Restated Shareholders Agreement”) in connection with the sale by SOF to PEWC of 51% of the Common Shares held by SOF. However, the foregoing rights of SOF have been preserved in the Amended and Restated Shareholders Agreement notwithstanding its sale of 51% of its original interest in APWC. See Item 7: “Major Shareholders and Related Party Transactions.”

           10.4 Taxation

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

           10.4.1 United States Taxation

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

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

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

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

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

      U.S. Federal Income Taxation of the Company

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

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

significant real property interests may be considered United States real property interests taxable as described above.

      Taxation of U.S. Holders

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

      Taxation of Dividends

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

     Under U.S. federal income tax laws, for taxable years beginning before January 1, 2013, a dividend paid to an individual U.S. shareholder from either a domestic corporation or a “qualified foreign corporation” is subject to tax at the reduced rates applicable to certain capital gains. A qualified foreign corporation includes certain foreign corporations that are eligible for benefits of a comprehensive income tax treaty with the United States which the Secretary of the Treasury determines is satisfactory for purposes of this provision and which includes an exchange of information program. In addition, a foreign corporation not otherwise treated as a qualified foreign corporation is so treated with respect to any dividend it pays if the stock with respect to which it pays such dividend is readily tradable on an established securities market in the United States.

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

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

     The notice further provided, however, that the Treasury and the IRS were continuing to consider, for subsequent years, the treatment of dividends with respect to stock listed only in a manner that did not meet this definition, such as on the Over-the-Counter Bulletin Board (the “OTC BB”) or on the electronic Pink Sheets. In particular, the notice indicated that the Treasury and the IRS were considering whether or to what extent treatment of stock that was listed only in such manner as “readily tradable on an established securities market in the United States” should be conditioned on the satisfaction of parameters regarding minimum trading volume, minimum number of market makers, maintenance and publication of historical trade or quotation data, issuer reporting requirements under SEC or exchange rules, or issuer disclosure or determinations regarding PFIC status. The IRS has not yet provided further guidance on whether or in what circumstances, a company like the

Company, which is traded on the OTC BB, will be treated as a qualified foreign corporation. As the Common Shares of the Company commenced trading on Nasdaq on April 29, 2011, any dividends paid by the Company after the date should qualify for the reduced rates referred to above.

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

      Taxation of Capital Gains

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

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

      Backup Withholding

     In general, information reporting requirements may be applicable to dividend payments (or other taxable distributions) made in respect of Common Shares to non-corporate U.S. Holders, and “backup withholding” at the rate of 28% (which rate is scheduled to increase to 31% after 2012) will apply to such payments (i) if the holder or beneficial owner fails to provide a taxpayer identification number in the manner required by U.S. law and applicable regulations, (ii) if the IRS notifies the payor that the taxpayer identification number furnished by the holder or beneficial owner is incorrect, (iii) if there has been notification from the IRS of a failure by the holder or beneficial owner to report all interest or dividends required to be shown on its United States federal income tax returns or (iv) in certain circumstances, if the holder or beneficial owner fails to comply with applicable certification requirements. In general, payment of the proceeds from a sale of Common Shares to or through a United States office of a broker is subject to both United States backup withholding and information reporting unless the holder or beneficial owner establishes an exemption. U.S. Holders who are required to establish their exempt status generally must provide such certification on IRS Form W-9. Amounts withheld under the backup withholding rules may be credited against a holder’s tax liability, and a holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS. Payment of the proceeds from the sale of Common Shares effected outside the United States by a foreign office of certain

United States connected brokers will not be subject to backup withholding tax but will be subject to information reporting requirements unless the broker has documentary evidence in its records that the beneficial owner is a non-U.S. Holder and has no actual knowledge to the contrary, or the beneficial owner otherwise establishes an exemption.

      Passive Foreign Investment Company

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

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

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

     The above rules will not apply if a “mark-to-market” election is available and a U.S. Holder validly makes such an election by filing a properly completed IRS Form 8621. If such election were made, a U.S. Holder generally would be required to take into account the difference, if any, between the fair market value and its adjusted tax basis in the Common Shares at the end of each taxable year as ordinary income or ordinary loss (to the extent of any net mark-to-market gains previously included in income). A U.S. Holder’s tax basis in the Common Shares would be adjusted to reflect any such income or loss amount. In addition, any gain from a sale, exchange or other disposition of the Common Shares would be treated as ordinary income, and any loss would be treated as ordinary loss (to the extent of any net mark-to-market gains previously included in income). A mark-to-market election is available to a U.S. Holder only if the Common Shares are considered “marketable stock” for these purposes. Generally, shares of a PFIC will be considered marketable stock if they are “regularly traded” on a “qualified exchange” within the meaning of applicable U.S. Treasury regulations. A class of shares is regularly traded during any calendar year during which such class of shares is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. A “qualified exchange” is defined to include a national securities exchange registered with the SEC or certain foreign exchanges. As the Common Shares of the Company commenced trading on the NASDAQ beginning on April 29, 2011, the mark-to-market election under the rules discussed above would be available after that date if the Company were otherwise classified as a PFIC.

     The special tax rules described above will also not apply to a U.S. Holder if the U.S. Holder elects to have the Company treated as a “qualified electing fund” (a “QEF election”) and the Company provides certain information to U.S. Holders. If the Company is treated as a PFIC, it will notify the U.S. Holders and provide such holders with the information necessary to make an effective QEF election, including

information as to the procedures for making such an election. The QEF election is made on a shareholder-by-shareholder basis and can ordinarily be revoked only with the consent of the IRS.

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

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

      Controlled Foreign Corporation

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

      Taxation of Non-U.S. Holders

      Taxation of Dividends

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

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

      Taxation of Capital Gains

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

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

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

      Backup Withholding

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

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

      U.S. State and Local Taxes

     The Company believes that it will not be subject to United States state and local taxes on its income or capital. However, if the Company begins conducting activities in the United States constituting a U.S. trade or business, the Company may be subject to taxation, and may be required to file tax returns, in one or more state or local jurisdictions. See discussion under “U.S. Federal Income Taxation of the Company,” above.

      Future Tax Legislation

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

      U.S. Treasury Circular 230 Notice

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

      10.4.2 Bermuda Taxation

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

     Under current Bermuda law, there are no taxes on profits, income or dividends nor is there any capital gains tax. Furthermore, the Company has received from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act of 1966, as amended, an undertaking that, in the event that Bermuda enacts any legislation imposing tax computed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax shall not be applicable to the Company or to any of its operations, or the shares, debentures or other obligations of the Company, until March 28, 2016. This undertaking does not, however, prevent the imposition of any such tax or duty on such persons as are ordinarily resident in Bermuda and holding such shares, debentures or obligations of the Company or of property taxes on Company-owned real property or leasehold interests in Bermuda.

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

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

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

         10.5 Documents on Display

     We are required to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), applicable to a foreign private issuer. We are currently required to file annually a Form 20-F no later than six months after the close of our fiscal year, which is December 31. Any time the Company is delinquent in filing timely any periodic reports, including an Annual Report on Form 20-F, with the SEC, that delinquency may adversely affect the Company’s status on any exchange or quotation service on which its shares are listed or quoted and the Company may not be entitled to use certain abbreviated registration statements with the SEC in connection with the registration of any of its securities. We have previously been delinquent in filing our annual reports. As a result, the Company was delisted from the OTC BB and traded on the Pink Sheets. On April 9, 2008, trading in the Common Shares of the Company was restored to the OTC BB under the trading symbol “AWRCF.” On April 29, 2011, the Common Shares of the Company commenced trading on the NASDAQ Capital Market tier under the trading symbol “APWC.”

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

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

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

Item 11: Quantitative and Qualitative Disclosures About Market Risks

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

      11.1 Interest Rate Risk

     The Company is not currently a party to any derivative instruments to manage interest rate exposure. As in our line of business, derivative instruments would more commonly be employed to hedge the price of commodities, copper in our case.

      11.2 Foreign Currency Risk

     The Company has exposure to fluctuations in currency exchange rates. The Company’s revenues are generated primarily in the local currency in its principal operating jurisdictions; namely Thailand, China, Singapore and Australia. However, nearly all of the costs associated with the purchase of the Company’s raw materials, including copper, and its capital expenditures, including ongoing equipment upgrade and maintenance programs, are in U.S. dollars. In order to limit the risks that would otherwise result from changes in currency exchange rates, the Company enters into derivative financial instruments on a selective basis from time to time which are foreign exchange forward contracts that are cash flow hedges intended to hedge the currency fluctuations that impact the dollar value of sales revenues generated in the local markets of our operating subsidiaries. The fair value of foreign currency contracts represents the amount required to enter into offsetting contracts with similar remaining maturities based upon quoted market prices. The Company did not enter into any foreign currency forward contract in 2010.

     As the Company’s operating subsidiaries incur operating costs in the local currency where they operate, the Company believes it is prudent that those operating subsidiaries incur indebtedness in the local currency when debt financing is necessary. The amount of indebtedness incurred by our operating subsidiaries from time to time is a function of our business strategy, the attractiveness of borrowing as opposed to other methods of financing operations and tax implications, among other considerations. The Company has exposure to currency exchange risk when the results of its operating subsidiaries are translated from the local currency into the U.S. dollar. At December 31, 2010 and 2009, the cumulative other comprehensive gain (loss) account included in the total equity section of the consolidated balance sheet included a cumulative gain (loss) of $1.8 million and ($10.2 million), respectively. This sensitivity analysis is inherently limited in that it assumes that multiple foreign currencies will always move in the same direction and to the same degree relative to the U.S. dollar.

     In 2008 we entered into derivative financial instruments on a selective basis throughout the year to mitigate foreign currency fluctuation risks arising from operating activities. The application of these instruments was primarily for currency hedging purposes and not for trading purposes. The Company uses Thai Baht forward foreign exchange contracts to reduce its 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 U.S. 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. There were no derivative instruments entered in 2009 and 2010.

         11.3 Market Risks Relating to Copper

     Copper is the principal raw material we use, accounting for a majority portion of the cost of sales in 2010. We purchase copper at prices based on the average prevailing international spot market prices on the London Metal Exchange (the “LME”) for copper for the one month prior to purchase. The price of copper is influenced heavily by global supply and demand as well as speculative trading. As with other costs of production, changes in the price of copper may affect our cost of sales. Whether this has a material impact on our operating margins and financial results depends primarily on our ability to adjust our selling prices to our customers, such that increases and decreases in the price of copper are fully reflected in those selling prices. The purchase price of our products is based in part on the cost of copper used to manufacture those products. In addition, in the ordinary course of business we maintain inventories of raw materials and finished products reasonably necessary for the conduct of our business. These inventories typically reflect the cost of copper prevailing in the market at the time we purchase. Most of our sales of manufactured products reflect copper prices prevailing at the time the products are ordered. A long-term decrease in the price of copper would require the Company to revalue the value of its inventory at periodic intervals to the then net realizable value, which could be below cost. Copper prices have been subject to considerable volatility and it is not always possible to manage our copper purchases and inventory so as to neutralize the impact of copper price volatility. Accordingly, significant volatility in copper prices could have an adverse effect on our operations. No assurance can be given that such volatility will not recur.

     In an effort to mitigate the market risks associated with volatility in copper pricing, from time to time the Company enters into copper forward pricing contracts in order to minimize fluctuations of its cost of copper. These instruments permit the Company to hedge its cost of copper for periods from 10 months to 12 months. These forward contracts were entered into with the purpose of securing the source of the copper. The Company entered into certain copper forward contracts with copper suppliers in 2010. All of the forward contracts are still open as of the reporting date and with a due date in the later part of 2011.

         11.4 Fair Value of Designated Market-Sensitive Derivative Contracts

     The Company does not record unrealized gains and losses on the designated cash flow hedge instruments in Other Comprehensive Income (loss), rather the income or loss flows through the statement of operations. Moreover, since the company did not enter into any hedging instrument in 2010, the question is not presently at issue.

Item 12: Description of Securities Other Than Equity Securities

     (Not applicable)

Part II

In making our assessment, we evaluated that the aggregate effect of these deficiencies represents a material weakness.

     To remediate the material weakness identified in 2009, we have undertaken the following measures in 2010 to improve our internal controls in the financial statement closing process:

	1)		In September 2010, the Company undertook a group wide training to finance staff across all subsidiaries on US GAAP reporting and package preparation.
	2)		Accounting supervisors and managers at each subsidiaries have now reviewed all the accounting entries, then pass on to the CFO or the designate.
	3)		Regular meetings among finance staff have been held to discuss accounting problems.
	4)		SAP ERP systems are rolling out with Sigma cable targeted to implement at end of 2011, Ningbo is planned to be the one after Sigma Cable.

      Changes in internal control over financial reporting

     Except as indicated in management’s report on internal control over financial reporting, there were no other changes in our internal control over financial reporting that occurred during our last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16A. Audit Committee Financial Expert

     During 2010 and until April 29, 2011, the Common Shares of the Company were traded on the over-the-counter bulletin board (“OTCBB”). As of April 29, 2011, the Common Shares of the Company trade on NASDAQ Capital market tier. While the Company’s Common Shares were traded on the OTCBB, the Company was not required to have an audit committee that met the requirements of, nor was it required to have an audit committee financial expert as contemplated by, Regulation 10A-3 under the Exchange Act. During those periods of time when the Company did not have any independent directors, our full Board of Directors fulfilled the functions of an audit committee pursuant to Section 3(a)(58)(B) of the Exchange Act. On September 28, 2007, our Board appointed Mr. Anson Chan and Dr. Yichin Lee as independent directors to fill the two casual vacancies on the Board, and on March 17, 2011, a third independent Director — Dr. Lambert L. Ding was appointed, to constitute the members of the Audit Committee, with Mr. Chan serving as the Audit Committee’s chairman- and financial expert. The Audit Committee of the Company’s Board of Directors now meets the requirements set forth in Regulation 10A-3 under the Exchange Act and under the rules of NASDAQ.

Item 16B. Code of Ethics

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

Item 16C. Principal Accountant Fees and Services

      Audit Fees

     The aggregate fees billed for fiscal years 2010 and 2009 for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements or services normally provided by the accountant in connection with statutory and regulatory filings or engagements totaled $0.9 million and $0.8 million, respectively.

      Audit-Related Fees

     No fees were billed for fiscal year 2010 or 2009 for assurance and audit-related services by the principal accountant other than as included in the figures provided in the preceding paragraph.

      Tax Fees

     The aggregate fees billed for fiscal years 2010 and 2009 for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning totaled approximately $121,000 and $19,000, respectively.

      All Other Fees

     There was IFRS conversion training provided by Ernst and Young taking place at Charoong Thai in the amount of $45,000, and paid for by Charoong Thai. Otherwise, there were no other fees billed for fiscal year 2010 or 2009 for products and services provided by the principal accountant, or other than those services described in the preceding paragraphs of this Item 16C.

      Audit Committee Approval

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

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

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

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

     During 2010, there were no purchases of equity securities made by or on behalf of the Company or any “affiliated purchaser” for the purposes of this Item 16E.

Item 16F. Change in Registrant’s Certifying Accountant

     The Company’s independent accountant for fiscal years 2005, 2006, 2007 and 2008, Mazars (“Mazars”) resigned and did not stand for re-election by shareholders after the completion of the 2008 audit. None of Mazars’ reports on the financial statements of the Company contained an adverse opinion or a disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope, or accounting principles. The decision to change accountants was put forth and approved by the Audit Committee.

     During the 2008 fiscal year, there were no disagreements with Mazars on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Mazars, would have caused it to make reference to the subject matter of the disagreements in connection with its report.

     During the 2008 fiscal year, no reportable events occurred in the course of the performance by Mazars of audit services for the Company. At the annual general meeting of the shareholders held on September 3, 2010, the Company’s shareholders re-authorized the engagement of Ernst & Young (“EY”) as the Company’s principal independent accountant to audit the Company’s financial statements for fiscal year 2010.

Item 16G. Corporate Governance

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

Part III

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