ASIA PACIFIC WIRE & CABLE CORP LTD (Form: 20-F, Received: 11/09/2007 06:03:15)

Principal Amount (In thousands of US$)

Bank loans and overdrafts

Long-term debt

Interest-bearing long-term loan from PEWC

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C., 20549

FORM 20-F


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


	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004


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

For the transition period from to

Commission file number 1-14542

ASIA PACIFIC WIRE & CABLE
CORPORATION LIMITED

(Exact name of Registrant as specified in its charter)

Bermuda

(Jurisdiction of incorporation or organization)

7/Fl. B, No. 132, Sec. 3
Min-Sheng East Road
Taipei, 105, Taiwan
Republic of China

(Address of principal executive offices)

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


Title for each class Common Shares, par value $0.01 per share			Name of each exchange on which registered None

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

None

(Title of Class)

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

Common Shares

(Title of Classes)

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 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 No

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

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

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

Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 Item 18

CONTENTS


Item 1:	Identity of Directors; Senior Management and Advisers		2
Item 2:	Offer Statistics and Expected Timetable		2
Item 3:	Key Information about Asia Pacific Wire & Cable		2
	3.1	Selected Consolidated Financial Data	2
	3.2	Exchange Rates	3
	3.3	Risk Factors	6
	3.4	Forward-looking Statements	14
Item 4:	Information on the Company		15
	4.1	History and Development of the Company; Recent Developments	15
	4.2	Business Overview	18
	4.3	Organizational Structure	29
	4.4	Property, Plant and Equipment	31
Item 5:	Operating and Financial Review and Prospects		33
	5.1	Disclosures of Critical Accounting Policies	33
	5.2	Summarized Income Statement	37
	5.3	Operating Results	38
	5.4	Liquidity and Capital Resources	43
	5.5	Inflation	45
Item 6:	Directors, Senior Management and Employees		45
	6.1	Directors and Senior Management	45
	6.2	Audit Committee	47
	6.3	Remuneration Committee	47
	6.4	Compensation	47
	6.5	Employees	47
Item 7:	Major Shareholders and Related Party Transactions		48
	7.1	Major Shareholders	48
	7.2	Related Party Transactions	49
Item 8:	Financial Information		49
	8.1	Legal Proceedings	49
	8.2	Dividend Policy	50
Item 9:	The Offer and Listing		50
	9.1	Historical Trading Information	50
	9.2	Nature of the Trading Market	51
Item 10:	Additional Information		52
	10.1	Memorandum of Association and Bye-laws	52
	10.2	Material Contracts	58
	10.3	Environmental Matters	60
	10.4	Insurance	60
	10.5	Credit Support	60
	10.6	Taxation	60
	10.7	Documents on Display	66
Item 11:	Quantitative and Qualitative Disclosures About Market Risk		67
	11.1	Foreign Currency Exposure	67
	11.2	Interest Rate Risk	67
	11.3	Risks Relating to Copper	68
Item 12:	Description of Securities Other Than Equity Securities		68
Item 13:	Defaults, Dividend Arrearages and Delinquencies		69
Item 14:	Material Modifications to the Rights of Security Holders and Use of Proceeds		69


Item 15:	Disclosure Controls and Procedures		69
Item 16A.	Audit Committee Financial Expert		69
Item 16B.	Code of Ethics		70
Item 16C.	Principal Accountant Fees and Services		70
Item 16D.	Exemptions from the Listing Standards for the Audit Committees		70
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		70
Item 16:	Financial Statements		71
Item 17:	Financial Statements		71
Item 18:	Exhibits		71
	18.1	Index to Asia Pacific Wire & Cable Corporation Limited Audited Financial Statements	71
	18.2	Index to Shandong Huayu Pacific Fiber Optics Communication Corporation Limited Audited Financial Statements	71
	18.3	Index to Exhibits	71

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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, 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 for copper, our principal raw material, the fact that we have operations outside the United States that may be materially and adversely affected by acts of terrorism or major hostilities, fluctuations in currency, exchange and interest rates, operating results and other factors that are discussed in this report and in our other filings made with the Securities and Exchange Commission (the ‘‘SEC’’).

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


	•	the business strategy;


	•	our prospects for future revenues and profits in the markets in which we operate;


	•	the possibility that our Common Shares will again be listed on a national exchange;


	•	our dependence on a limited number of suppliers for our raw materials and our vulnerability to fluctuations in the cost of our raw materials; and


	•	our liquidity.

We undertake no obligation to update any forward-looking statements or other information contained in this 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 Form 6-K reports periodically filed with the SEC. Also note that we provide a cautionary discussion of risks and uncertainties under ‘‘Risk Factors’’ beginning on page 6 of this report. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed here 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, 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.

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Part I

Item 1: Identity of Directors; Senior Management and Advisers

(Not applicable)

Item 2: Offer Statistics and Expected Timetable

(Not applicable)

Item 3: Key Information about Asia Pacific Wire & Cable

Cautionary Note

We are filing this annual report (the ‘‘Annual Report’’) during November 2007 to report on the Company for the fiscal year ended December 31, 2004. It is the Company’s intention to file as soon as practical one or more annual reports for the fiscal years ended December 31, 2005 and 2006 and thereafter to resume current periodic reporting under the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’). While we do make reference to certain events and developments since December 31, 2004, the principal purpose of this Annual Report is to describe our business, management, ownership, results of operations, financial condition and other matters as at December 31, 2004 and during the historic periods ended on or before that date. Shareholders should not rely upon this Annual Report for a comprehensive statement of all material developments regarding the Company for any periods subsequent to the fiscal year ended December 31, 2004 and shareholders should not assume that the information reported in this Annual Report for the 2004 fiscal year accurately describes the current business, management, ownership, results of operations, financial condition and other matters regarding the Company. For more detailed information on subsequent periods, reference should be made to annual reports and other filings we expect to make in the future regarding those periods and to current reports filed by the Company from time to time. See — ‘‘Recent Developments, Section 4.1.2.’’

3.1 Selected Consolidated Financial Data

The following selected consolidated financial data is derived from the consolidated financial statements of Asia Pacific Wire & Cable Corporation Limited (the ‘‘Company’’) for the years ended December 31, 2000, 2001, 2002, 2003 and 2004 prepared in accordance with U.S. GAAP.

The selected data set forth below should be read in conjunction with, and is qualified in its entirety by, the Consolidated Financial Statements of the Company included in Item 5: Operating and Financial Review and Prospects, Item 18: Financial Statements, and the notes thereto.

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	For the Year Ended December 31,
	2000				2001				2002				2003				2004
	(in thousands, except per share amounts)
Income Statement Data:
Net sales		$	192,194			$	197,311			$	241,179			$	211,399				294,256
Cost of sales			(174,983	)			(177,352	)			(206,435	)			(178,111	)			(255,384	)
Gross profit			17,211				19,959				34,744				33,288				38,872
Other operating income			—				—				—				1,336				—
Operating expenses			(13,347	)			(15,616	)			(19,282	)			(20,479	)			(28,867	)
Goodwill written off			—				(506	)			—				—				—
Impairment loss			(1,404	)			—				(1,559	)			—				(134	)
Operating profit/(loss)			2,460				3,837				13,903				14,145				9,871
Exchange gain/(loss)			(6,226	)			(81	)			(16	)			4,161				233
Net interest income/(expense)			(3,686	)			(3,173	)			(1,499	)			(1,122	)			(2,025	)
Share of net income/(loss) of equity investees			(2,844	)			(2,535	)			(4,090	)			1,475				(4,224	)
Gain on share issuance by subsidiaries and affiliates			—				—				1,011				—				—
Gain/(loss) on sale of investment			2,716				743				(557	)			(885	)			(1,161	)
Gain on disposal of property			6,634				—				—				—				—
Others			1,299				1,619				2,502				(214	)			925
Income/(loss) before income taxes and minority interests			353				410				11,254				17,560				3,619
Income taxes			(7,584	)			1,411				(4,683	)			(2,477	)			(4,716	)
Minority interests			3,791				(1,730	)			(1,780	)			(5,083	)			(1,427	)
Net income/(loss)		$	(3,440	)		$	91			$	4,791			$	10,000			$	(2,524	)
Earnings/(loss) per share ⁽¹⁾		$	(0.25	)		$	0.01			$	0.35			$	0.72			$	(0.18	)


	As of December 31,
	2000			2001			2002			2003			2004
Balance Sheet Data:
Cash and cash equivalents		$	24,634		$	14,241		$	14,431		$	25,032		$	24,419
Working capital			30,988			36,900			46,446			71,141			80,152
Total assets			209,951			193,426			208,193			232,176			270,433
Total debt			84,475			54,559			49,681			32,965			55,679
Total shareholders’ equity			84,674			80,718			92,047			107,176			107,146

3.2 Exchange Rates

Unless otherwise specified, 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, translation of amounts from Baht, Singapore dollars, Australian dollars and Renminbi 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

⁽¹⁾

The calculation of the earnings/(loss) per share is based on 13,830,769 Common Shares for the years ended December 31, 2000, 2001, 2002, 2003 and 2004, which gives effect to the issuance of 3,097,436 Common Shares in connection with the acquisition of Crown Century Holdings Limited and its wholly owned subsidiary.

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purposes by the Federal Reserve Bank of New York (the ‘‘Noon Buying Rate’’) on December 31, 2004. The respective Noon Buying Rates on December 31, 2004 were US$1.00 = Bt 38.80; S$ 1.632; A$ 0.781; and Rmb 8.28. The respective Noon Buying Rates on October 31, 2007, the latest practicable date before publication of this Annual Report, were US$1.00 = Bt 31.45; S$ 1.449; A$ 0.93; and Rmb 7.47. 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

On July 2, 1997, the Bank of Thailand announced it had switched from a system which had pegged the Baht to a basket of foreign currencies dominated by the U.S. dollar (the composition of which is not made public) to ‘‘a managed float which would allow the Baht’s value to be determined by market forces to reflect economic fundamentals.’’ This change in monetary policy allowed the Baht to decline in value relative to the U.S. dollar. The fall in the value of the Baht was exacerbated by subsequent financial crises in the region, particularly in Indonesia and South Korea. The Baht stabilized in 1999, buoyed by return of investors’ confidence and some capital inflows. However, for several years thereafter, the Thai economy began to decelerate as a result of weak domestic demand, coupled with a major fiscal expansion program espoused by the government, which contributed to a weakening of the Thai Baht. In the past several years, the global weakening of the U.S. dollar against many other currencies has resulted in a strengthening of the Baht against the U.S. dollar.

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


Year Ended December 31,	At Period End		Average ⁽¹⁾		Low		High
			(Bt per $1.00)
2000		43.450		40.478		44.380		36.970
2001		44.240		44.517		45.820		42.300
2002		43.200		43.020		44.20		40.42
2003		39.630		41.485		43.18		39.09
2004		38.80		40.263		41.70		38.80

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

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


Month	High		Low
April 2007		32.19		32.80
May 2007		32.51		33.40
June 2007		31.55		32.90
July 2007		29.50		31.17
August 2007		29.80		33.17
September 2007		31.50		32.50

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

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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.


Year Ended December 31,	At Period End		Average ⁽¹⁾		Low		High
			(S$ per $1.00)
2000		1.732		1.730		1.760		1.654
2001		1.847		1.797		1.854		1.732
2002		1.735		1.787		1.852		1.731
2003		1.699		1.743		1.784		1.699
2004		1.632		1.690		1.729		1.631

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

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


Month	High		Low
April 2007		1.511		1.521
May 2007		1.514		1.533
June 2007		1.530		1.544
July 2007		1.505		1.523
August 2007		1.511		1.535
September 2007		1.484		1.527

China

The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of Renminbi into foreign exchange 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.


Year Ended December 31,	At Period End		Average ⁽¹⁾		Low		High
			(Rmb per $1.00)
2000		8.277		8.278		8.279		8.277
2001		8.277		8.277		8.279		8.271
2002		8.280		8.277		8.280		8.270
2003		8.277		8.277		8.280		8.277
2004		8.277		8.277		8.277		8.276

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

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


Month	High		Low
April 2007		7.709		7.735
May 2007		7.707		7.646
June 2007		7.612		7.668
July 2007		7.564		7.600
August 2007		7.542		7.618
September 2007		7.554		7.493

3.3 Risk Factors


	3.3.1	OTCB BB DeListing; Potential Illiquidity of Common Shares

The Company failed to timely file its annual report on Form 20-F with the Securities and Exchange Commission (the ‘‘SEC’’) for the fiscal year ended December 31, 2004. Accordingly, on August 29, 2005, the Company was delisted from the Over-the-Counter Bulletin Board (the ‘‘OTC BB’’) operated by the National Association of Securities Dealers, Inc. (the ‘‘NASD’’). Since that delisting, the Common Shares have traded only on the Pink Sheets (www.pinksheets.com) under the trading symbol ‘‘AWRCF.’’ The Pink Sheets market is often highly illiquid and there may not be any market makers for the Common Shares on the Pink Sheets. The Company will not be able to be restored to the OTC BB or apply for listing on a national exchange until the Company is current in its periodic reporting under the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’). That means the Company must complete and file with the SEC annual reports on Form 20-F for 2005 and 2006 before it can pursue a more liquid and desirable trading market than the Pink Sheets. In addition, approximately 75.4% of our Common Shares are held as restricted securities, which are not publicly registered securities, and are, therefore, not freely tradable. In the recent past, the volume of trading in our Common Shares has not been substantial. The illiquidity of your ownership interest in the Company may negatively impact the value of your Common Shares.


	3.3.2	Multiple Changes of Control; Risk of Future Change of Control

Since the beginning of 2004, the Company has undergone three and arguably four changes of control, in that there have been four changes in the record holder of a majority of the Common Shares. Since 2004, the record holders of a majority of the Common Shares have been, in sequence, Pacific Electric Wire & Cable Co., Ltd. (‘‘PEWC’’), Set Top International Inc. (‘‘Set Top’’), Sino-JP Fund Ltd. (‘‘Sino-JP’’), Chiao Tung Bank and then again, PEWC.

As of December 31, 2004, Sino-JP held 10,074,102 shares, representing approximately 72.84% of the outstanding Common Shares (the ‘‘Supramajority Shares’’). Sino JP acquired its shares of the Company pursuant to an assignment from Asset Managers Co., Ltd. (‘‘AMC’’). The Supramajority Shares were acquired by AMC pursuant to a Share Purchase Agreement dated as of September 10, 2004 (the ‘‘2004 Share Purchase Agreement’’) by AMC and PEWC. The 2004 Share Purchase Agreement and a related Option Agreement dated September 10, 2004 (the ‘‘2004 Option Agreement’’) were entered into in connection with a settlement of certain litigation commenced by PEWC against Set Top and other parties. In connection with that settlement, Set Top was paid $25,000,000 by AMC in exchange for the ownership interest in and all claims relating to the Supramajority Shares. Upon the consummation of the 2004 Share Purchase Agreement, PEWC, which formerly held 75.4% of the outstanding Common Shares, held indirectly approximately 2.56% of the outstanding shares. Under the terms of the 2004 Option Agreement, PEWC was granted an option to reacquire 52.84% of the total issued and outstanding Common Shares (the ‘‘Repurchase Option’’). See ‘‘— Recent Developments, Section 4.1.2.’’

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Under the terms of the 2004 Option Agreement, PEWC was granted an option to reacquire 52.84% of the total issued and outstanding Common Shares (the ‘‘Repurchase Option’’). On September 14, 2005, PEWC exercised the Repurchase Option and reacquired 7,307,948 Common Shares (the ‘‘Repurchased Shares’’), representing 52.84% of the total issued and outstanding shares, for a price of $2.581 per share, or a total purchase price of $18,861,813.78, plus certain guaranteed returns payable by PEWC to Sino-JP. As a result of the reacquisition by PEWC of majority control, as of September 14, 2005, PEWC indirectly held 7,664,615 Common Shares, representing 55.4% of the total issued and outstanding Common Shares, and Sino-JP held 2,766,154 Common Shares, representing 20% of the total issued and outstanding Common Shares (the ‘‘Sino-JP Shares’’).

Subsequent to the 2004 Share Purchase Agreement, a number of disputes arose between Sino-JP and PEWC regarding the governance of the Company and other matters. Litigation was commenced in Bermuda, in which the Company was named a party, and in Hong Kong, in which the Company was not named a party. On June 28, 2007, the Company entered into a comprehensive settlement and release agreement with Sino-JP (the ‘‘Settlement Agreement’’), which dismissed and released all claims between the parties and which put an end to all related litigation. PEWC also entered into a settlement and release agreement with Sino-JP that terminated all disputes and litigation between those parties. On the same date, SOF Investments, L.P. (‘‘SOF’’), a Delaware limited partnership, acquired the Sino-JP Shares (the ‘‘SOF Acquisition’’) and entered into a shareholders agreement with the Company and PEWC. Upon the closing of that acquisition, all of the directors and officers designated by Sino-JP submitted their resignations and Sino-JP ceased to have any interest in the Company. As part of the Settlement Agreement, the Company agreed to indemnify all of those Sino-JP designated directors and officers (the ‘‘Sino-JP Indemnified Persons’’) for all acts or omissions taken in their capacity as a director or officer to the maximum extent permitted under the memorandum of association and the Bye-laws of the Company and the Bermuda Companies Act (the ‘‘Companies Act’’). The Company could incur significant costs in the event any claims are asserted or actions commenced against any of the Sino-JP Indemnified Persons for matters within the scope of the indemnification provisions of the Settlement Agreement. See —‘‘Recent Developments, Section 4.1.2.’’

In accordance with the provisions of the 2004 Share Purchase Agreement, Sino JP caused the Bye-laws of the Company to be amended to establish a classified board of directors, consisting of up to three (3) Class A Directors and up to seven (7) Class B Directors. Sino JP and its affiliates were entitled to designate candidates for election as the Class A directors, who, under the terms of the then revised Bye-laws, had a veto power over all matters presented to the Board of Directors of the Company for a vote.

Since 2004, the banking group creditors of PEWC, consisting of a consortium of 32 banks (the ‘‘PEWC Banking Group’’), represented by Chiao Tung Bank, have maintained control over any material expenditures by PEWC. Funding the exercise of the Repurchase Option required the approval of the PEWC Banking Group, which imposed certain conditions on the exercise of the Repurchase Option. Among the conditions, PEWC was required to enter into a letter of undertaking (the ‘‘PEWC Letter of Undertaking’’) which provides that (i) the funds made available would be used only to buy the Repurchased Shares, (ii) as indirect majority shareholder, PEWC would cause the Board of Directors of APWC to consist of a majority of independent directors, with the PEWC Banking Group having the right to consent to nominees for any independent directorships, (iii) PEWC shall deposit the Repurchased Shares in a trust to secure the obligations of PEWC to the PEWC Banking Group and (iv) PEWC shall make monthly installments up to NT$240 million through December 2006 in repayment of debt owed to the PEWC Banking Group.

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the PEWC Letter of Undertaking, which includes a default for three consecutive months under the agreements with the PEWC Banking Group, CTB was permitted to dispose of all of the Repurchased Shares and apply the proceeds to pay the PEWC Banking Group, or CTB may exercise all voting rights associated with the Repurchased Shares.

In May 2006, the PEWC Banking Group determined that PEWC had fulfilled or was in a position to fulfill the requirements with respect to the PEWC Letter of Undertaking under which a total repayment of US$6 million ought to be made by the end of 2006. Therefore, on June 6, 2006, CTB, on behalf of the PEWC Banking Group, delivered a letter instructing the termination of the PEWC Trust Agreement and authorizing the registration of the Repurchased Shares on behalf of PEWC without any pledge or encumbrance in favor of the PEWC Banking Group.

Accordingly, the Company believes that the risk of a change of control in favor of the PEWC Banking Group is significantly diminished, if not eliminated. The Company cannot assure you, however, that PEWC would not sell all or a sufficient number of its Common Shares so as to trigger a further change of control, although PEWC has informed us that it does not have any present intention to do so.

3.3.3 Inadequate Disclosure Controls and Procedures

Commencing in the fourth quarter of 2004 and continuing into the fourth quarter of 2005, the Company conducted an internal review regarding certain past financial and accounting practices. In addition, the Company retained an internationally recognized forensic accounting firm as outside advisor to assist in the conduct of the internal review. The internal review examined the adequacy of the Company’s disclosure controls and procedures. Management and the Company’s forensic accounting advisors identified the following material weaknesses:


	•	Lack of documented policies and procedures governing the Company’s accounting policies, internal control and code of conduct;


	•	Lack of an adequate internal audit function;


	•	Need for improvement in monthly financial statement close process for the Company and its subsidiaries to allow timely financial reporting;


	•	Need for greater U.S. GAAP and tax expertise to identify potential accounting and taxation issues that have a material impact on the Company; and


	•	Lack of credit control policies at certain subsidiaries.

3.3.4 Potential Conflict of Certain Officers and Directors

The Company recently appointed two independent directors on September 28, 2007. Other than the two recently appointed independent directors, all of the members of the Board 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 and the Indemnification Agreement (discussed below in Section 10.2). 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 fiduciary duties on our behalf. 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 at the first opportunity of any

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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. As of May 31, 2004, we do not make any loans to our directors or executive officers in accordance with the provisions of The Sarbanes-Oxley Act of 2002 .

3.3.5 Changes in Majority Ownership and Management

The record holder of a majority of the Common Shares of the Company has changed four times since the last annual report on Form 20-F preceding this Annual Report. With the changes in majority ownership, the Company has also experienced significant changes in a number of senior management positions. Certain members of the Board of Directors have resigned because of the requirements of the PEWC Banking Group after it reacquired majority control, although certain of those Board members who resigned have since been re-elected following the fulfillment by PEWC of the requirements of the PEWC Letter of Undertaking. The Company believes that its current management team is experienced and qualified to manage the operations of the Company. However, there remains a risk of continued instability in majority ownership or Company leadership that could adversely affect the business and operations of Company and have a negative impact on the value of your ownership interest.

3.3.6 Obligations under Shareholders Agreement

In connection with the acquisition by SOF of all of the Common Shares previously held by Sino-JP, 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 has 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. 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 has granted certain registration rights to SOF with respect to the 2,766,154 Common Shares (the ‘‘Registrable Securities’’) acquired by SOF from Sino-JP. In particular, the Company has 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 continuous basis. In addition, the Company has granted to SOF two demand registration rights for underwritten offerings and customary piggyback registration rights with regard to the Registrable Securities. Moreover, the Company has agreed that, not later than January 31, 2009, it shall have used 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, the New York Stock Exchange LLC or one or more of the principal or secondary exchanges for the public trading of equity securities in any of Hong Kong, Tokyo or Singapore. All of the costs and expenses of the Company in connection with the fulfillment of its obligations under the Shareholders Agreement are to be paid by the Company, other than underwriting fees, discounts and commissions attributable to the sale of Registrable Securities.

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.

If the Company fails to fulfill its obligations under the Shareholders Agreement, SOF may have a claim for damages against the Company or, if the Company fulfills its reasonable best efforts

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undertakings but fails to meet one or more of the stated goals, SOF may have a put right of its Common Shares to PEWC, either of which events may adversely impact the value of your Common Shares. See —‘‘Recent Developments, Section 4.1.2’’; see also the Shareholders Agreement for a complete statement of the obligations of the Company under that agreement.

3.3.7 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 influenced heavily by global supply and demand as well as speculative trading. As with other costs of production, an increase in the price of copper will increase our cost of sales. Whether this has a material impact on our operating margins and financial results depends primarily on our ability to pass on these increased costs to our customers. The selling 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 of purchase. Most of our sales of manufactured products reflect copper prices prevailing at the time the products are ordered. Copper prices have been subject to considerable volatility in recent years and this volatility has had a significant impact on our revenues and profits. Accordingly, significant volatility in copper prices could have an adverse effect on our operations. No assurance can be given that such volatility will not continue to recur. See — ‘‘Risks Relating to Copper, Section 11.3’’ for additional information.

3.3.8 Exposure to Foreign Exchange Risks

Changes in exchange rates influence our results of operations. Our principal operations are located in Thailand, Singapore and China and a substantial portion of our revenues is denominated in Baht, 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 Singapore dollar or 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. Forward foreign exchange contracts are used on a selective basis to hedge foreign exchange risk, but they do not provide any assurance that we will not incur substantial losses in the event of a devaluation of the Baht, Singapore dollar or Renminbi against the U.S. dollar.

Although our reporting currency is U.S. dollars, the functional currency of our Singapore operations, which accounted for 14.3% of Company sales (including sales of Distributed Products) in 2004, is the Singapore dollar, the functional currency of our Thai operations, which accounted for 44.3% of our sales in 2004, is the Baht, and the functional currency of our Chinese operations, which account for 31.0% of our sales in 2004, is the Renminbi. Accordingly, the functional currency accounts of these operations are 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, Singapore dollar or Renminbi against the U.S. dollar would adversely affect our financial performance measured in U.S. dollars.

Substantially all of the revenues of our operations in China are denominated in Renminbi. The value of the Renminbi against the U.S. dollar and other foreign currencies fluctuates and is subject to changes in the Chinese and international political and economic conditions. From 1994 to July 20, 2005, the conversion of Renminbi into foreign currencies, including U.S. dollars, was based on rates set by the People’s Bank of China daily based on the previous business day’s inter-bank foreign exchange market rates and current exchange rates on the world financial markets. From 1994 to July 20, 2005, the official exchange rate for the conversion of Renminbi to U.S. dollars was generally stable. On July 21, 2005, the PRC government introduced a managed floating exchange rate system to

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allow the value of the Renminbi to fluctuate within a regulated band based on market supply and demand and by reference to a basket of currencies. On the same day, the value of the Renminbi appreciated by approximately 2% against the U.S. dollar. The PRC government has since made and in the future may make further adjustments to the exchange rate system. Fluctuations in exchange rates may adversely affect the value, translated or converted into U.S. dollars, of our net assets, earnings and any declared dividends payable by our operating subsidiaries and joint ventures in China. We cannot assure you that any future movements in the exchange rate of the Renminbi against the U.S. dollar or other foreign currencies will not adversely affect our results of operations and financial condition.

For further information on our foreign exchange risks and certain exchange rates, see ‘‘Quantitative and Qualitative Disclosures about Market Risk: Foreign Currency Exposure, Section 11.1.’’

3.3.9 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. See Section 4.2.6, ‘‘Competition,’’ for additional information with reference to the competitive environment we face in specific countries.

3.3.10 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 the business it conducts with the Company pursuant to the terms of the Composite Services Agreement.

3.3.11 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 the economic, political and legal developments in China.

In recent years, the PRC government has implemented economic reform measures emphasizing decentralization, utilization of market forces in the development of the economy and a high level of management autonomy. Such economic reform measures may be inconsistent or ineffectual, and may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. Furthermore, these measures may be adjusted or modified, possibly resulting in such economic liberalization measures being applied inconsistently from industry to industry, or across different regions of the country.

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 1979, 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, legislation over the past decades has significantly enhanced the protections afforded to various forms of foreign investment in China. As foreign investment laws and regulations in China are relatively new and because of the limited volume of published decisions and their non-binding nature, the interpretations of many laws,

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regulations and rules are not always uniform and 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.

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.

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 Ministry of Information and Industry (the ‘‘MII’’), which is the primary telecommunications industry regulator in China. The MII 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 January 2002, 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 MII has only granted licenses to operate fixed-line telecommunications networks (which use our telecommunications cables) to certain domestic entities. As a result, the business of our companies in China may be more dependent on the political stability of the country 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 industry restructurings, may have a material adverse effect on our business.

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.

3.3.12 Risks Relating to Thailand

A substantial portion of our Thai operations, which accounted for approximately 44.3% of our net sales in 2004, 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. 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. However, 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. In 2004, the Baht traded in the range of approximately Baht 38.80 to Baht 41.70 to US$1.

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3.3.13 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.

3.3.14 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.

3.3.15 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; the risk of potential conflict and further instability in the relationship between Taiwan and the PRC; risks related to international political instability and to the recent global economic turbulence and adverse economic circumstances in Asia; unpredictable consequences on the economic conditions in the U.S. and the rest of the world arising from terrorist attacks, such as the attacks of September 11, 2001 in the U.S. 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 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 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.

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3.3.16 Corporate Matters; Organizational Documents

We are incorporated in and organized pursuant to the laws of Bermuda. In addition, most of our directors and officers reside outside the United States and a substantial portion of our 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. 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.

3.4 Forward-looking Statements

This Annual Report, including any documents incorporated by reference, contains statements that we believe constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements appear throughout this Annual Report and include statements regarding the intent, belief or current expectations of the Company and its management, including with respect to trends affecting the Company’s financial condition or results of operations and the Company’s plans with respect to capital expenditures and investments. These forward looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those described in these forward looking statements as a result of various factors. See — ‘‘Risk Factors, Section 3.3’’ for a further discussion of some of the factors that could cause such material differences.

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Item 4: Information on the Company

4.1 History and Development of the Company; Recent Developments


	4.1.1	History and Development of the Company

The Company (Asia Pacific Wire & Cable Corporation Limited), formed on September 19, 1996, is a Bermuda exempted limited liability company which, through its operating subsidiaries, 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 Singapore, Thailand, Australia and China. The Company manufactures and distributes its own wire and cable products and also distributes copper rod and wire and cable products (‘‘Distributed Products’’) manufactured by its principal shareholder, PEWC. From 1997, the Company has also offered project engineering services in the supply, delivery and installation (‘‘SDI’’) of power cables. Pacific Electric Wire & Cable Company, a Taiwanese company (‘‘PEWC’’), currently owns beneficially 55.4% of the issued and outstanding Common Shares of the Company. As of December 31, 2004, Sino-JP owned 20% of the issued and outstanding Common Shares. Sino-JP Fund Co., Ltd. is a privately owned investment company, incorporated under the laws of the Cayman Islands. On June 28, 2007, SOF Capital, L.P. acquired from Sino-JP the 20% of the issued and outstanding Common Shares previously held by Sino-JP. See —‘‘Recent Developments, Section 4.1.2’’; ‘‘Legal Proceedings, Section 8.1.’’ The remaining 24.6% of the issued and outstanding Common Shares are publicly traded on the Pink Sheets in the United States under the trading symbol ‘‘AWRCF.’’

The Company is one of the five largest producers of telecommunications and low voltage power cable and enameled wire in Thailand and believes that it is the largest producer of low voltage power cable in Singapore. In 2004, approximately 54.8% of the manufactured products sold by the Company were sold by its subsidiaries in Singapore and Thailand, with the remainder sold by its subsidiaries in China, Australia and Malaysia.

In Singapore, the Company also sells Distributed Products, which largely consist of copper rod and medium and high voltage power cable. Sales of Distributed Products accounted for 5.2% of the Company’s revenues in 2004. As the Company continues to focus its resources on manufacturing and distributing its own products, sales of Distributed Products are expected to decline over time as a percentage of the Company’s business. The Company’s SDI project engineering services accounted for 3.3% of the Company’s revenue in 2004.

The Company sells its cable products primarily to government agencies, telecommunications network operators and large construction companies and subcontractors bidding for government contracts. Telecommunications cable products manufactured by the Company are largely used as access lines to connect buildings and residences to feeder and trunk cables. Power cable manufactured by the Company is used primarily in power transmissions for public lighting, outdoor installations and in and to commercial and residential buildings. Enameled wire is sold primarily to private sector manufacturers of electric motors for use in various consumer appliances. The Company maintains local sales personnel in each country where it has manufacturing operations, and export sales are conducted through independent suppliers as well as the Company’s own sales personnel. The Company principally competes on the basis of product quality and performance, reliability of supply, timely delivery, customer service and price.


	4.1.2	Recent Developments

Relocation of Corporate Offices

In September 2005, the Company relocated its executive business office from Singapore to Taipei, Taiwan. It is presently located at Room B, 7/Fl., No. 132, Sec. 3, Min-Sheng East Road, Taipei, 105 Taiwan, ROC. The Company’s registered office is located at Canon’s Court, 22 Victoria Street, Hamilton HM EX, Bermuda, telephone number (441) 295-2244.

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Change of Control and Option Exercise by PEWC

As of December 31, 2004, Sino-JP Fund Co., Ltd. (‘‘Sino-JP’’) held 10,074,102 shares, representing approximately 72.84% of the outstanding Common Shares (the ‘‘Supramajority Shares’’). Sino JP acquired its shares of the Company pursuant to an assignment from Asset Managers Co., Ltd. (‘‘AMC’’). The Supramajority Shares were acquired by AMC pursuant to a Share Purchase Agreement dated as of September 10, 2004 (the ‘‘2004 Share Purchase Agreement’’) by AMC and Pacific Electric Wire & Cable Co., Ltd. (‘‘PEWC’’). The 2004 Share Purchase Agreement, and a related Option Agreement dated September 10, 2004 (the ‘‘2004 Option Agreement’’) were entered into in connection with a settlement of certain litigation commenced by PEWC against Set Top. In connection with that settlement, Set Top was paid $25,000,000 by AMC in exchange for the ownership interest in and all claims relating to the Supramajority Shares. Upon the consummation of the 2004 Share Purchase Agreement, PEWC, which formerly held 75.4% of the outstanding Common Shares, held indirectly approximately 2.56% of the outstanding Common Shares. Under the terms of the 2004 Option Agreement, PEWC was granted an option to reacquire 52.84% of the total issued and outstanding Common Shares (the ‘‘Repurchase Option’’). See —‘‘Legal Proceedings, Section 8.1.’’

In accordance with the provisions of the 2004 Share Purchase Agreement, Sino-JP had caused the Bye-laws of the Company to be amended to establish a classified board of directors, consisting of up to three (3) Class A Directors and up to seven (7) Class B Directors. Sino-JP and its affiliates were entitled to designate candidates for election as the Class A directors, who, under the terms of the revised Bye-laws, had a veto power over all matters presented to the Board of Directors of the Company for a vote.

On September 14, 2005, PEWC exercised the Repurchase Option and reacquired 7,307,948 Common Shares (the ‘‘Repurchased Shares’’), representing 52.84% of the total issued and outstanding Common Shares, for a price of $2.581 per share, or a total purchase price of $18,861,813.78, plus certain guaranteed returns payable by PEWC to Sino-JP. As a result of the reacquisition by PEWC of majority control, PEWC indirectly holds 7,664,615 Common Shares, representing 55.4% of the total issued and outstanding Common Shares and Sino-JP then held 2,766,154 Common Shares, representing 20% of the total issued and outstanding Common Shares (the ‘‘Sino-JP Shares’’).

Since 2004, the banking group creditors of PEWC, consisting of a consortium of 32 banks (the ‘‘PEWC Banking Group’’), represented by Chiao Tung Bank, have maintained control over any material expenditures by PEWC. Funding the exercise of the Repurchase Option required the approval of the PEWC Banking Group, which imposed certain conditions on the exercise of the Repurchase Option. Among the conditions, PEWC was required to enter into a letter of undertaking (the ‘‘PEWC Letter of Undertaking’’) which provides that (i) the funds made available would be used only to buy the Repurchased Shares, (ii) as indirect majority shareholder, PEWC would cause the Board of Directors of APWC to consist of a majority of independent directors, with the Banking Group having the right to consent to nominees for any independent directorships, (iii) PEWC shall deposit the Repurchased Shares in a trust to secure the obligations of PEWC to the PEWC Banking Group and (iv) PEWC shall make monthly installments through September 2006 in repayment of debt owed to the PEWC Banking Group.

In order to secure its obligations under the PEWC Letter of Undertaking, PEWC entered into a trust agreement dated September 12, 2005 (the ‘‘PEWC Trust Agreement’’) by and among PEWC, Moon View Ventures Limited BVI, a wholly-owned subsidiary of PEWC (‘‘Moon View’’), and Chiao Tung Bank Trust Department Trust Assets (‘‘CTB’’). Under the terms of the PEWC Trust Agreement, the Repurchased Shares were deposited with, and registered with the Company registrar in Bermuda in the name of, CTB. In addition to the Repurchased Shares, the trust assets include all dividend and voting rights; provided that PEWC was permitted to direct the voting of the Repurchased Shares unless and until there is a default under the PEWC Letter of Undertaking. In the event of a default by PEWC under the PEWC Letter of Undertaking, which includes a default for three consecutive months under the agreements with the PEWC Banking Group, CTB was permitted to dispose of all of the Repurchased Shares and apply the proceeds to pay the PEWC Banking Group or CTB could exercise all voting rights associated with the Repurchased Shares.

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In May 2006, the PEWC Banking Group determined that PEWC had or was in a position to fulfillment the requirements with respect to the PEWC Letter of Undertaking. Therefore, on June 6, 2006, CTB, on behalf of the PEWC Banking Group, delivered a letter instructing the termination of the PEWC Trust Agreement and authorizing the registration of the repurchased Shares on behalf of PEWC without any pledge or encumbrance in favor of the PEWC Banking Group.

Following the closing of the SOF Acquisition and the entering into the Settlement Agreement with Sino-JP, the Board called for an annual general meeting of shareholders which was held on September 7, 2007 (the ‘‘2007 AGM’’). At the 2007 AGM, the shareholders approved, among other things, the reappointment of Ernst & Young LLP to complete its audit of the consolidated financial statements of the Company for the year ended December 31, 2004, which financial statements are part of this Annual Report. In addition, the shareholders approved the appointment of Moores Rowland International — Singapore to act as the independent auditors of the Company for fiscal years 2005, 2006 and 2007.

Subsequent to December 31, 2004, independent directors Tim Wong and Charles Xue resigned from the Board. They were replaced on March 24, 2005 by Ulyos Maa and Jimmy Tsay. Thereafter, Jack Sun, Andy Cheng and David Sun resigned from the Board on October 14, 2005. Independent director Ulyos Maa also resigned on October 14, 2005. Christopher Cheng was appointed on April 6, 2006 to replace Mr. Maa, along with three other directors, Ching Rong Shue, Gai Poo Lee and Fang-Hsiung Chen. On June 29, 2006, Jimmy Tsay resigned from the Board, followed by Christopher Cheng on July 3, 2006. On June 28, 2007, Eric Chi Chiu Yip, Wellen Sham and Ryoji Furukawa resigned from the Board. On the same date, Andy Cheng, Jack Sun and David Sun were re-appointed to the Board.

At an annual meeting on September, 7, 2007 (the ‘‘2007 AGM’’), shareholders of the Company voted to change from a classified to an unclassified Board, composed of eight shareholder-elected directors and two casual vacancies to be filled after the meeting. As of the date of the filing of this Annual Report, the Board consists of ten members. The following eight members were elected by shareholders at the 2007 AGM: Michael Lee, Andy C.C. Cheng, David T. Sun, Jack T. Sun, Gai Poo Lee, Ching Rong Shue, Fang-Hsiung Cheng and Yuan Chun Tang.

Certain current Board members, who were elected after December 31, 2004, have relationships with PEWC. In addition to the 2004 Board members discussed above, new directors Ching Rong Shue and Gai Poo Lee are Vice Presidents of PEWC, and Fang-Hsiung Cheng is an Assistant Vice President of PEWC.

At a Board meeting held on September 28, 2007, the Board appointed Mr. Samuel See as interim chief financial officer. In addition, the Board filled the 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, with Mr. Anson Chan to serve as its chairman. In addition, the Board agreed to appoint Mr. Wei Kung as deputy chief operating officer, to be based in Bangkok at the offices of Charoong Thai. Mr. Kung will work with current chief operating officer, Mr. Carson Tien.

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Internal Review

In late 2004 and continuing into 2005, the Board of Directors determined to undertake an internal review regarding certain past financial and accounting practices. The Company retained an internationally-recognized forensic accounting firm as outside advisors to assist in the conduct of the internal review.

The focus of the investigation included certain internal control weaknesses and other matters, including:


	•	Lack of documented policies and procedures governing the Company’s accounting policies, internal controls and code of conduct.


	•	Lack of an adequate internal audit function.


	•	The need for improvement in monthly financial statement close process for the Company and its subsidiaries to allow timely financial reporting.


	•	Need for greater U.S. GAAP and tax expertise to identify potential accounting and taxation issues that have a material impact on the Company.


	•	Lack of credit control policies at various subsidiaries.


	•	Certain unauthorized payments from the Company and certain of its subsidiaries to several of its former directors and officers.

As a result of the internal investigation, certain members of management at one of the Company’s subsidiaries in China, Ningbo Pacific Cable Company Limited (‘‘NPC’’), were terminated. The Board has determined that, in a number of instances, management at NPC and one or more other subsidiaries in China failed to exercise satisfactory supervision over financial and accounting practices, engaged in transactions without an adequate business purpose and did not exercise good business judgment. In 2006, the Board determined to cease operations at NPC due to the dim prospects in the near to medium term for reversal of losses and a turn to profitability.

Management and the Company’s forensic accounting advisors concluded that there were many instances of inadequate supervisory and internal controls at several of the significant operating subsidiaries and that there existed a widespread failure to establish and implement disclosure controls and procedures sufficient to ensure that material information relating to the Company is disclosed to senior management by others within the corporate group. Management concluded that the failure to have effective disclosure controls and procedures had a material adverse effect on the financial results of certain operating subsidiaries, particularly in the case of NPC located in China where the Company determined to cease operations in part due to the failures and misconduct of local management. The Company has engaged a consultant to advise and assist on establishing an internal audit department and to assist in establishing and maintaining satisfactory disclosure controls and procedures. However, the Company has not completed this process and cannot assure its shareholders at this time that satisfactory disclosure controls and procedures are in place. The certifications provided as part of this Annual Report by our Chief Executive Officer and by our Chief Financial Officer are subject to and qualified by the disclosures and discussion in this Annual Report on the lack of adequate disclosure controls and procedures.

4.2 Business Overview

The Company’s Thai operations are conducted through Charoong Thai Wire and Cable Public Company Limited (‘‘Charoong Thai’’), Siam Pacific Electric Wire & Cable Company Limited (‘‘Siam Pacific’’) and Pacific-Thai Electric Wire & Cable Co. Ltd. (‘‘Pacific Thai’’).

Charoong Thai is a publicly-traded Thai corporation, the shares of which are listed on the Stock Exchange of Thailand (‘‘SET’’). Immediately after the acquisition of Siam Pacific by Charoong Thai, the shareholders of Charoong Thai consisted of the Company (68.42%), Ital-Thai (16.90%) and Bangkok Insurance (5.31%). The rest of the shares are publicly traded on the SET. After the sale of some of its Charoong Thai shares on the open market, the Company held approximately 52.83% of

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the issued and outstanding shares of Charoong Thai as at December 31, 2004. As of October 31, 2007, the Company owns approximately 50.39% of the issued and outstanding shares of Charoong Thai. Charoong Thai manufactures aluminum and copper electric wire, medium and high voltage power cable and telecommunications cable. It has subsidiaries and affiliates in the business of optic fiber cable manufacturing and the provision of telecommunication and network services.

Siam Pacific is a 100%-owned subsidiary of Charoong Thai. Siam Pacific manufactures telecommunications cable, power cable and enameled wire for the domestic Thai market.

Pacific Thai is a 100%-owned subsidiary of Siam Pacific. Pacific Thai manufactures enameled wire for the export market.

The Company’s Singapore operations are principally conducted through its 98.3%-owned subsidiary, Sigma Cable Company (Private) Limited (‘‘Sigma Cable’’). Sigma Cable manufactures low voltage power cable for sale and distribution in Singapore and countries in the Asia Pacific region. Sigma Cable also distributes in Singapore a wide range of wire and cable products produced by PEWC and provides SDI project engineering services.

The Company had a 100% interest in Sigma-Epan International Pte. Ltd. (‘‘Sigma-Epan’’), a group of companies with operations in Singapore and Malaysia. Sigma-Epan group had its headquarters in Singapore. Sigma-Epan manufactured specialty cables and assembled cable harnesses for the electronics, computer, building automation, audio and communication industries. Sigma-Epan ceased operations as of May 2007.

The Company holds a 98.53% effective interest in Australia Pacific Electric Cables Pty Limited (‘‘APEC’’), a subsidiary of Sigma Cable, located near Brisbane, Australia. APEC is one of three major wire and cable manufacturers in Australia. The company produces a range of power cables, which is 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.

During fiscal year 2006, the Company’s China operations were conducted through seven business entities. The operating entities 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 was China Ningbo City Yin County Yinjiang Town Industrial Corporation (‘‘CIC’’). NPC manufactured a range of telecommunications cable and local area network (‘‘LAN’’) electronic cables for sale and distribution in the Chinese domestic market and export market.

NPC’s performance since 1997 was below the Company’s expectations due primarily to difficulties faced in marketing its products and market penetration in China. The Company’s 2002 results included a write off of approximately $1.5 million in the carrying value of the telecommunication cable machinery at NPC. 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.

Shanghai Yayang Electric Co., Ltd. (‘‘Shanghai Yayang’’), formerly known as Shanghai Pacific Electric Co., Ltd., is a joint venture in Shanghai incorporated in June 1998 to manufacture enameled wire. The Company’s effective holding in Shanghai Yayang is 56.73%. Shanghai Yayang is also partly held by Pacific Thai. Shanghai Yayang manufactures enameled wire with a diameter of between 0.05mm and 2.5mm.

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.

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On June 30, 2001, the Company invested approximately $1.2 million for a 25.0% interest in an existing profitable company, Shandong Pacific Rubber Cable Company, Ltd. (‘‘SPRC’’), which manufactures rubber cable for the China market. The remaining 75% is owned by Shandong Yanggu. The investment was in the form of a contribution of machinery and cash.

On August 18, 2001, a joint-venture agreement was signed with Shandong Yanggu to establish Shandong Huayu Pacific Fiber Optics Communication Co., Ltd. (‘‘SHP’’) for the manufacture of optic fibers. The Company owns 49% of SHP with the remaining 51% owned by Hebei Huayu Co. Ltd. Due to the subsequent deterioration of the fiber optic market price, the plant has yet to be completed and production date has yet to be announced. The actual commencement of operations will depend on our ongoing assessment of market conditions. In 2004, the Company took a $1.3 million impairment loss on the SHP investment to reflect that assessment. In 2007, the Company sold all major equipment owned by SHP.

On March 22, 2002, the Company acquired two companies, namely, Crown Century Holdings Limited (‘‘CCH’’) and its wholly-owned subsidiary company, Pacific Electric Wire & Cable (Shenzhen) Co., Ltd. (‘‘PEWS’’) from PEWC, the majority shareholder of the Company. The acquisition was in exchange for 3,097,436 new shares of the Company issued to PEWC. PEWS manufactures enameled wire for electronic, video and audio products for the South China market and for export. CCH is the trading arm of PEWS. The operations of PEWS and CCH have been profitable since 1999 and have contributed to the profits of the Company in 2004.


	4.2.1	Products and Services

The Company manufactures and sells a wide variety of wire and cable products primarily in four general categories: telecommunications cable, power transmission cable, enameled wire and electronic cables. 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 copper rod and 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.

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.

Copper-based cables contain twisted pairs of insulated copper wire, each pair color-coded and corresponding to one telecommunications line. The cables are produced with different insulators such as polyethylene (‘‘PE’’), polyvinyl chloride (‘‘PVC’’) and foam skin, suitable for different installations and environmental conditions. 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.

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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 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 polyvinal formal, polyurethanea wire and polyester, among others. Enameled wire products are used in the assembly of a wide range of electrical products, including oil-filled transformers, refrigerator motors, telephones, radios, televisions, fan motors, air conditioner compressors and other electric appliances.

Electronic Cables

The Company produces a wide range of electronic cables and related byproducts, which includes high specification telecommunication cables, data-communication cables, security cables, cable assemblies, fiber optic cables, local area network (‘‘LAN’’) patch-cords products and harness assembly. The products are used in the electronics, building automation, telecommunications and data-communications industries. The customers include government bodies, large construction companies, subcontractors bidding for government contracts and system integrators. These cables were produced by the Sigma-Epan group, which had manufacturing operations in Singapore and Malaysia.

Sales of Distributed Products

The Company is also a distributor of copper rod and 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) and copper rod, 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.

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 operations supply, deliver and install primarily 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.


	4.2.2	Manufacturing

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

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A summary of the manufacturing process used for the Company’s primary wire and cable products is set forth below.

Telecommunications Cable

Production of 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 PE or PVC compound in one of ten standard colors. 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.

Power Cable

Unarmored cable. 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 millimeter to 1000 square millimeters. The copper conductors are then covered in an extrusion process with a plastic insulator such as a PVC, after which 2-5 conductors are twisted into a circular cable core in a cabling process and covered by a plastic outer cover.

Armored cable. Armored cable is produced in the same manner as unarmored cable, except that armored cable requires the addition of a helical wrap of galvanized steel or iron wires prior to the application of a final plastic outer cover.

Enameled Wire

Production of enameled wire begins by drawing the copper rods until they have reached the desired diameter, after which the drawn wires are annealed. The annealed wires are then varnished by one or more types of petroleum-based insulation material. Up to 14 coats of varnish are applied, depending upon the intended application of the enameled wire.


	4.2.3	Raw Materials

Copper is the principal raw material used by the Company, accounting for approximately 50% to 60% of total cost of sales of products using copper as a conductor. 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, an increase in the price of copper will increase 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 pass on these increased costs to its customers. Most sales of Company manufactured products reflect copper prices prevailing at the time the products are ordered.

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 7.0% of the copper cathode purchase price. The Company presently relies on the services of Thai Metal Processing Co., Ltd. to process its copper cathodes into copper rods in Thailand, although the Company has a variety of processing companies from which to obtain these services. Construction of such a 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.

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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. 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 copper cathodes, which are subject to a 1.0% import tariff, for use at its Thailand operations in order to avoid the higher import tariff of 5.0% on copper rods. The Company obtains copper cathodes from three major suppliers which import cathodes into the Thai market. These suppliers are Mitsubishi Corporation, Mitsui & Co (Thailand) and Marubeni Corporation. The Company has regularly signed one year contracts with each of its copper cathode suppliers pursuant to which the Company agrees to purchase a set quantity of copper cathodes each month. Under the terms of such contracts, the price of copper cathodes is usually ‘‘pegged’’ to the average of the spot price of copper on the LME for the delivery month plus a premium. The Company believes its relationships with its three copper cathode suppliers will allow access to alternative supplies in the event one or more of such suppliers was unable or unwilling to renew a supply contract on terms satisfactory to the Company, although 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. 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.

The Company is a major user of electric power and has not experienced any problem in obtaining a constant electricity supply in the past. The Company does not maintain any in-house power generating capacity.

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.


	4.2.4	Quality Control

The Company places a significant emphasis on product quality. The Company has implemented a range of quality control procedures with stringent quality standards under the supervision of a 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

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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 international standards for quality management and assurance standards in the manufacture of electric wire and cable. In September 1994, Sigma Cable received an ISO 9002 certificate from the Singapore Institute of Standards and Industrial Research. Charoong Thai received its ISO 9002 certification in September 1996. Siam Pacific and Pacific Thai, the Company’s two major subsidiaries in Thailand, both achieved ISO 9002 certification in May 1997. The certifications mean that the companies have in place quality assurance systems and the capability to consistently manufacture products of quality.


	4.2.5	Sales and Marketing

The Company’s telecommunications cable and power cable products are primarily sold in the domestic markets of the countries where they are manufactured, whereas most of the enameled wire manufactured by the Company 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. The following table sets forth the Company’s sales revenues by geographic area for the periods indicated together with their respective percentage share of total sales revenue for such periods:


	Year ended December 31, (dollar figures ($) are in thousands of US$)
	2002				2003				2004
	$		%		$		%		$		%
Manufactured Products:
Thailand		79,246		32.8		62,984		29.7		82,039		27.9	%
Singapore		16,637		6.9		12,514		5.9		16,887		5.8	%
Australia		13,961		5.8		22,058		10.4		30,491		10.4	%
China		46,095		19.1		60,606		28.7		91,243		31.0	%
Myanmar		—		—		—		—		—		—
Export		29,803		12.4		34,131		16.2		48,447		16.4	%
Total		185,742		77.0		192,293		90.9		269,107		91.5	%
Distributed Products ⁽¹⁾		24,303		10.1		15,187		7.2		15,493		5.2	%
SDI Project Engineering ⁽²⁾		31,134		12.9		3,919		1.9		9,656		3.3	%
Total net sales		241,179		100.0		211,399		100.0		294,256		100.0	%

⁽¹⁾	Distributed Products are largely sold in Singapore.

⁽²⁾	All SDI Project Engineering is supplied in Singapore.

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 risk 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.

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Payment methods for the Company’s products vary with markets and customers. The majority of sales by the Company of its manufactured products require 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 offer financing for purchases of the Company’s products. The Company sells its 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’’ and ‘‘PTEWC’’ brands, both registered trademarks in Thailand; products manufactured by Sigma Cable are sold under the ‘‘Sigma Cable’’ brand.

Thailand

The Company produces and sells telecommunications cable, enameled wire and power cable in Thailand. Sales of telecommunications cables, the Company’s leading product in Thailand, are conducted either by tender for participation in large scale telecommunications projects of the TOT Corporation Ple. (‘‘TOT’’), or directly to subcontractors of TT&T and True Corporation Ple., the two private telephone line contractors which would be licensed by TOT with regard to particular projects. Power cable (and a limited quantity of telecommunications cable) is generally sold to construction firms or contractors for use in infrastructure, commercial and residential construction projects. The Company generally sells enameled wire directly to manufacturers of electric motors for use in various consumer appliances. Enameled wire purchasers tend to be smaller businesses than those that purchase telecommunications and power cable. A small quantity of power and telecommunications cable and enameled wire is sold to general electrical products supply companies which then resell to end users.

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.

Sales of Company manufactured products in 2004 accounted for 40.2% of the Company’s net sales in Singapore; sales of Distributed Products accounted for 36.9% with the remaining 22.9% comprised of SDI project engineering services. In 2004, sales to SP Powerassets alone accounted for approximately 46.6% of the Company’s total sales in Singapore and 6.7% of the Company’s total aggregate sales. Additionally, sales of SDI project engineering services to SP Powerassets in 2004 accounted for all of the Company’s SDI sales. Approximately 46.8% of the sales to SP Powerassets in 2004 were sales of Distributed Products, which sales have a low profit margin. Such sales are not made under a continuing contract, but pursuant to purchase orders placed from time to time with the Company by SP Powerassets. Although SP Powerassets is an important customer of the Company, neither the loss of Distributed Product sales to SP Powerassets, nor the loss of manufactured product sales to SP Powerassets, which the Company expects would be replaced by sales to other customers, would likely have a material adverse effect on the Company’s results of operations. Although the Company does not believe that it could easily replace its SDI sales to SP Powerassets by sales to other customers, SDI sales presently account for only 3.3% of the Company’s sales.

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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 seven 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-contactors of such agencies. The Company generally sells enameled wire directly to manufacturers of electric motors for use in various consumer appliances.

Exports

The Company’s main export markets are Hong Kong, Vietnam, India, China, Malaysia and Indonesia. Export sales are conducted by local agents or distributors of the Company in accordance with terms and prices negotiated between the local agent and the Company at the time of sale. In Thailand, the Company’s principal export is enameled wire. In Singapore, the Company’s principal export is power cable. The Company does not actively pursue an export business in Singapore, but benefits from Singapore’s position as a trading center and makes export sales in response to buyer inquiries and solicitations. In 2004, total export sales accounted for 16.4% of net sales.


	4.2.6	Competition

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

Thailand

The wire and cable industry in Thailand is highly competitive. In its various product lines, the Company competes with a total of approximately 30 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. Siam Pacific and Charoong Thai are two of the five largest wire and cable producers in Thailand and their principal competitors are the three other largest producers in Thailand. 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 principally competes with four other major wire and cable manufacturers in Singapore. Although the Company believes it is the largest manufacturer of low voltage power cable in Singapore, it experiences significant competition from other local producers.

There are 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 AWPC there are two major wire and cable producers in Australia: Olex Cables (owned by Pacific Dunlop) and Pirelli Cables, with factories in the states of Victoria and New South

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Wales respectively. Both are APEC’s principal competitors. In addition, General Cables is a major participant in the market. During fiscal year 2004, APEC was the only power cable producer in Queensland and therefore sought to take advantage of other competitors importing into Queensland. APEC has also opened sales offices with warehousing facilities in Sydney, Melbourne and Perth in order to attract and service the customers in those regions. Foreign competition barriers exist with import duties and the more stringent Australian cable specifications standards. Free Trade Agreements have recently been signed 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. CCH is the trading arm of PEWS. 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.

SPFO is one of the largest manufacturers of fiber optic cables in Shandong Province and it supplies mainly to government controlled and licensed telecommunications network operators such as China Netcom, China Telecom, China Mobile, China Railcom, China Unicom and China Powercom. It faces competition principally from approximately twenty of the larger fiber optic cable manufacturers in China.

Other Markets

In 2004, the Company exported approximately 18.0% of its manufactured products. These products are principally sold through independent suppliers in competition with domestic and foreign manufacturers.


	4.2.7	Regional Considerations

Since the Asian currency and financial crisis which began in mid-1997, confidence has gradually returned to countries in the Asia Pacific region. The financial and currency markets have significantly stabilized with financial and economic reforms instituted by the local governments with assistance from the International Monetary Fund. Overall, the economies of most countries in the Asia Pacific region have shown continued growth and, in general, their respective currencies have strengthened in recent years as against the U.S. dollar.

Thailand

Economic growth in 2004 has decreased to 6.1% from 6.7% growth recorded in 2003 as a result of modest decreases in private investment, domestic consumption and exports. In 2004, the World Bank projected Thai economic growth in 2005 to be approximately 7.2% followed by 6.5% in 2006.

A substantial portion of the Company’s Thai operations, which accounted for approximately 44.3% of the Company’s net sales in 2004, 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 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.

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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.

Historically, control of the telecommunications sector in Thailand, including the right to grant concessions for the installation and operation of telecommunications services, has rested with state owned enterprises. There are currently three public agencies responsible for communications in Thailand: TOT, which controls domestic telephone service, the CAT Telecom Plc. (‘‘CAT’’), which handles postal and international telephone service, and the Thailand Post Co., Ltd. (a state enterprise), which controls and regulates the use of frequencies for radio communication stations and satellite communication networks. Telecommunications services in Thailand have traditionally been developed and expanded through grants by TOT and CAT of concessions to private operators to install and operate telecom projects on a build-transfer-operate basis, where the government enterprise involved would maintain control over the award of the concession and receive a profit share from the operations of the project.

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 Electricity Generating Authority of Thailand has estimated that aggregate country-wide consumption will increase from approximately 13,600 MW in 1996 to approximately 21,000 MW by 2006. 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 Singapore economy grew by approximately 8.4% in 2004 compared to a 1.1% increase in 2003. The impressive recovery was partially contributed by Singapore government efforts to re-set priorities and to attract and retain foreign investments. In 2004, the World Bank projected Singapore economic growth in 2005 to be approximately 3.7%.

The Singapore government has established targets to increase the population from the current 4.2 million to approximately 8 million by the end of 2010. This planned growth in population is expected to result in an increase in demand for residential property and construction.

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.

The Chinese economy is reported to have expanded by 10.1% in 2004 (2003: 9.1%) as a result of fiscal stimulus and robust external demand. Exports and imports continue to surge. Fixed-asset investment, a crucial component of China’s economic growth, rose during the period partly as a result of increased public expenditure on infrastructure projects and technology upgrades of state-owned entities. In 2004, the World Bank projected China economic growth in 2005 to be approximately 9.3% followed by 8.7% in 2006.

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4.3 Organizational Structure

Thailand

The Company’s Thai operations are conducted by Siam Pacific, which produces telecommunications cable, power cable and enameled wire for the domestic market, Pacific Thai, a specialized producer of enameled wire for the export market and Charoong Thai, which manufactures power telecommunications cables and, through its subsidiaries, provides telecommunication and network services. As at December 31, 2004, the Company owned effective 52.83% interests in Siam Pacific, Pacific Thai and Charoong Thai. By 2007, the Company’s effective ownership interest in those three entities had been reduced to 50.39%.

Siam Pacific was established in 1988 as a joint venture between PEWC and Ital-Thai, which is the largest diversified construction company in Thailand and is 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, the company was able to establish its presence in this market and gain knowledge of business opportunities in Thailand.

Pacific Thai was established in 1989 and is 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 must be renewed each year.

Charoong Thai is a public company 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. 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 an amount of additional shares equal to its pro rata share of the 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 those additional shares, the Company may decide not to exercise this right in which case the Company’s interest may be diluted.

Siam Pacific and Charoong Thai are two of the five largest telecommunications and power cable and wire manufacturers in Thailand and are two of the five government-approved suppliers of telecommunications cable for major public telecommunications projects.

As part of its restructuring plan, the Company has merged its Thai operations, which has generated cost savings while improving overall efficiency. The Company believes the synergistic effect of merging these operations would produce significantly savings in overhead cost and would centralize decision making and resource allocation for the Thai operations.

The transaction was completed on July 2, 2002 when Charoong Thai issued 177,500,000 new shares at Baht 5 per share, representing 49.92% of its enlarged base of 355,660,000 paid-up shares. The new shares were exchanged for Siam Pacific’s shares at a swap ratio of 1 Siam Pacific share for every 26.5 of Charoong Thai’s newly issued shares. Immediately after the completion of this transaction, the shareholders of the new enlarged Charoong Thai Company consisted of the Company (68.42%), Ital-Thai (16.90%) and Bangkok Insurance (5.31%). The rest of the shares are publicly traded on the SET.

Singapore

The Company’s Singapore operations are conducted primarily through its 98.3%-owned subsidiary Sigma Cable. The Company believes that Sigma Cable is the largest producer of low voltage 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 copper rod and medium and high voltage wire and cable manufactured by PEWC.

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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.

The Company owned Sigma-Epan, a primarily Singapore-based group of companies, which manufacture specialty cables and assemble cable harnesses for the electronics, computer, building automation, audio and communication industries. Sigma-Epan had manufacturing operations in Singapore and Malaysia. It achieved ISO 9002 certification for its quality management system in 1990. Its customers were largely multinational original equipment manufacturers and its export markets included Malaysia, the Philippines, Indonesia, Thailand, Australia, New Zealand, China and the USA. Sigma-Epan ceased operations in May 2007.

Australia

The Company has an effective 98.53% ownership interest in APEC, an Australian wire and cable distributor, which commenced operations at its power cable manufacturing facility in Queensland near Brisbane, Australia in 1997. The new facility produces low voltage power cable with a targeted production capacity of 2,000 tons per year.

APEC has historically sold its production output to distributors and major wholesalers that have been primarily dependent upon imports from other countries. In 1998, it established a sales office with warehousing facilities in Sydney, New South Wales to attract and service customers in this region of Australia. In 2000, it established another sales office with warehousing facilities in Melbourne, Victoria. In 2002, a sales office in Perth was established. APEC bids for supply contracts in state and national power development projects in Australia.

China

As of December 31, 2004, the Company owned a 94.31% interest in NPC. NPC manufactured a range of telecommunications cable and LAN electronic cables in Yinjiang Town, Zhejiang Province, China. NPC began commercial production of high quality telecommunications cable in December 1996. Total production capacity of the NPC operations was approximately 800,000 pkm per year.

NPC’s primary customers were the government controlled and regulated telecommunications networks operators, in particular their provincial and local offices in eastern China and major subcontractors bidding for government contracts.

The term of the NPC joint venture was 50 years commencing from December 31, 1993, the date the joint venture received its business license. The joint venture agreement permitted early termination with the consent of all the joint venture partners or following a serious breach by one of the joint venture partners of the terms of the joint venture contract. The joint venture agreement provided that the partners share in the profits in proportion to their equity interests in the joint venture. In 2006, the Company terminated the NPC joint venture due to lack of profitability, unsatisfactory management practices, and the lack of qualified executives to assume management responsibility following termination of the then senior managers, and the lack of promising prospects for the business in the short to medium term.

The Company also has a 56.73% effective interest in Shanghai Yayang, a company in Shanghai, China. Shanghai Yayang is a joint venture company manufacturing enameled wire which was formed in 1998, and is a subsidiary of Pacific Thai. Shanghai Yayang manufactures enameled wire with a diameter of between 0.05mm and 2.5mm.

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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% interest in SPFO with the remaining interest owned by the joint-venture partner, Shandong Yanggu Cable Company, an established 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 has invested a total of $2.8 million in SPFO.

The Company owns a 25% interest in Shandong Rubber Cable Company, Ltd. (‘‘SRC’’), which manufactures rubber cable for the China market. The remaining 75% is owned by Shandong Yanggu.

On August 18, 2001, a joint-venture agreement was signed with Shandong Yanggu to establish Shandong Huayu Pacific Fiber Optics Communication Co., Ltd. (‘‘SHP’’) for the manufacture of optic fibers. The Company has invested in excess of $5.0 million for a 49% interest in SHP, with the remaining interest in SHP being held by Shandong Yanggu. The projected production rate was initially set at 900,000km of optic fibers annually. Due to weak market outlook, the actual commencement of operations has been put on hold.

On March 22, 2002, the Company acquired two companies, namely, Crown Century Holdings Limited (‘‘CCH’’) and its wholly-owned subsidiary, Pacific Electric Wire & Cable (Shenzhen) Co., Ltd. (‘‘PEWS’’) from PEWC, the then majority shareholder of the Company. The acquisition was in exchange for 3,097,436 new shares of the Company issued to PEWC. PEWS manufactures enameled wire for electronic, video and audio products for the South China Market and for export. CCH is the trading arm of PEWS. The operations of PEWS and CCH have been profitable since 1999 and have contributed to the profits of the Company in 2004.

4.4 Property, Plant and Equipment

The Company’s manufactured products are produced at facilities on premises owned or leased by Siam Pacific, Pacific Thai, Charoong Thai, Sigma Cable, Sigma-Epan (operations were terminated in 2007), APEC, NPC (operations were terminated in 2006), Shanghai Yayang, SPFO and PEWS.

As of December 31, 2004, the summary status of the Company’s facilities and operations was as follows:

Siam Pacific owns a 5.2 acre production facility near Bangkok, Thailand, located on a 26.9 acre site that it also owns. The production facility is mortgaged to Bangkok Bank as security for a $9.0 million line of credit. Pacific Thai operates a separate 92,800 square meter production facility located at the same site which it leases from Siam Pacific.

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

Sigma Cable operates at a production facility 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.

Sigma-Epan leased an office space from Sigma Cable in Singapore and operated two factory units in Johore Bahru and Penang, both in Malaysia.

APEC owns a manufacturing facility in Brisbane, Australia, which is mortgaged to Westpac Banking Corporation of Australia as security for a bank facility of approximately Australian $4 million.

NPC operated 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. Operations at NPC were terminated subsequent to December 31, 2004.

Shanghai Yayang operates a factory, partially mortgaged to a finance company, located in an area of approximately 5,000 square meters of state-owned land in an industrial district in Fengxian, Shanghai.

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SPFO operates in a purpose-built factory building on a leasehold state-owned land in Yanggu, Shandong Province, China.

PEWS operates on 36,000 square meters of state-owned land with built-up area 20,367 square meters in Long Gang, Shenzhen, China. A leasehold right of industrial land use for the land has been granted for 50 years. The facility is mortgaged to Agricultural Bank of China as security for a Rmb 14 million bank facility granted in 2003.

The Company’s primary facilities are briefly described below:


Location	Company	Products
Bangkok, Thailand	Siam Pacific	Telecommunications cable, power cable, enameled wire
Bangkok, Thailand	Pacific Thai	Enameled wire
Bangkok, Thailand	Charoong Thai	Telecommunications cable, power cable
Ningbo, China	NPC	Telecommunications cable, LAN cable
Shanghai, China	Shanghai Yayang	Enameled wire
Yanggu, China	SPFO	Fiber optic cable
Shenzhen, China	PEWS	Enameled wire
Singapore	Sigma Cable	Power cable, SDI project engineering, distributed products
Singapore and Malaysia	Sigma-Epan	Electronic cable
Brisbane, Australia	APEC	Power cable

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

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Item 5: Operating and Financial Review and Prospects

The following discussion should be read in conjunction with the annual consolidated financial statements, including the notes to those financial statements, which are included with this Annual Report.

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.

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. In assessing the ultimate realization of inventories, we are required to make judgments as to future market requirements compared with current inventory levels. Revisions to our allowance for inventories may be required if actual market requirements differ from our estimates.

Carrying values

Valuations are required under accounting principles generally accepted in the United States to determine the carrying value of various assets. Our most significant assets that require management to prepare or obtain valuations are goodwill and deferred income taxes. Management must identify whether events have occurred that may impact the carrying value of these assets and make assumptions regarding future events, such as profitability. Differences between the assumptions used to prepare these valuations and actual results could materially impact the carrying amount of these assets and net earnings.

Investments

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.

Revenue recognition

A portion of our revenue is generated from installation activities which are recognized using the percentage-of-completion method. Recognized revenues and profit are subject to revisions as the activity progresses to completion.

We allocate revenue from installation and sale of cables contained in a single arrangement, or in related arrangements with the same customer, based on their relative fair values. The allocation of the

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fair value to the delivered elements is limited to the amount that is not contingent on future delivery of services or subject to customer-specific return or refund privileges. The amounts of revenue recognized is impacted by our judgments as to whether an arrangement includes multiple elements. Changes to the elements in an arrangement could affect the timing of the revenue recognition.

The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. While the Company has considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for valuation allowance, in the event the Company was to determine that it would be able to realize its deferred tax assets in the future in excess of its recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise, should the Company determine that it would not be able to realize all or part of its net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.

Bad Debt

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Impairment of Long-Lived Assets

We evaluate the carrying value of our long-lived assets, consisting primarily of property plant and equipment, whenever certain events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. In 2004, the Company recorded an impairment change of $134,000 related to the unrealized loss in value of a long-term investment in a privately-held company. In 2002, the Company recorded impairment charges of $1.6 million related to the impairment of certain property, plant and equipment of NPC.

These impairment charges were recorded to reduce the carrying value of the identified assets to fair value. 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. Changes in these estimates could have a material adverse effect on the assessment of our long-lived assets.

Financial Statements of Equity Investees

The company is a minority shareholder of Shandong Huayu Pacific Fiber Optics Communication Co., Ltd. (‘‘SHP’’). Under Rule 3-09 of Regulation S-X promulgated by the SEC, the losses sustained by the Company from its SHP investment require the inclusion of SHP’s separate audited financial statements in this Annual Report. The SHP financial statements are included as Exhibit 18.2 to this Annual Report.

The Company is a minority shareholder of Loxley Pacific Company Limited (‘‘LoxPac’’). Under Rule 3-09 of Regulation S-X promulgated by the SEC, the losses sustained by the Company from its LoxPac investment require the inclusion of LoxPac’s separate audited financial statements in this Annual Report. LoxPac did not use PCAOB-registered accountants in the preparation of its financial statements, and as a minority shareholder, the Company cannot compel LoxPac to re-audit its financial records. The Company is thus unable to include audited financial statements for LoxPac in this Annual Report.

Recent Pronouncements

In March 2004, the FASB approved the consensus reached on EITF No. 03-1 ‘‘The Meaning of Other Than Temporary Impairment and its Application to Certain Investments.’’ The main objective is to provide guidance for identifying other-than-temporarily impaired investments. EITF 03-01 also provides new disclosure requirements for investments that are deemed to be temporarily impaired. In September 2004, the FASB issued FASB Staff Position (FSP) EITF 03-1-1 that delays the effective

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date of the measurement and recognition guidance in EITF 03-01 until further notice. Once the FASB reaches a final decision on the measurement and recognition provisions, the Company will evaluate the impact of the adoption of the accounting provisions of EITF 03-1.

In November 2004, the FASB issued SFAS No. 151, ‘‘Inventory Cost – An Amendment to ARB No. 43, Chapter 4’’ (‘‘Statement 151’’). Statement 151 amends the guidance in ARB No. 43, Chapter 4, ‘‘Inventory Pricing’’ to clarify the accounting for abnormal amounts of idle facility expense, freight handling cost, and wasted materials (spoilage). Among other provisions, the new rule requires that items such as idle facility expense, excessive spoilage, double freight and rehandling costs be recognized as current period charges regardless of whether they meet the criterion of ‘‘so abnormal’’ as stated in ARB No. 43. Additionally, Statement 151 requires that the allocation of fixed production overheads to the costs of concession be based on the normal capacity of the production facilities. Statement 151 is effective for fiscal years beginning after June 15, 2005 and is required to be adopted by the Company beginning fiscal year 2006. The Company is currently evaluating the effect that the adoption of Statement 151 will have on its consolidation results of operations and financial condition but does not expect Statement 151 to have a material impact.

In December 2004, the FASB issued Statement No. 153, ‘‘Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions’’ (‘‘SFAS 153’’). The amendments made by SFAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance. Previously, APB 29 required that the accounting for an exchange of a productive asset for a similar productive asset or an equivalent interest in the same or similar productive asset should be based on the recorded amount of the asset relinquished. SFAS 153 is the result of a broader effort by the FASB to improve the comparability of cross-border financial reporting by working with the FASB toward development of a single set of high-quality accounting standards. APB 29 provided an exception to its basic measurement principle (fair value) for exchanges of similar productive assets. FASB believes that exception required that some nonmonetary exchanges, although commercially substantive, be recorded on a carryover basis. By focusing the exception on exchanges that lack commercial substance, the Board believes SFAS 153 produces financial reporting that more faithfully represents the economics of the transactions.

In March 2005, the FASB issued Interpretation, or FIN, No. 47, ‘‘Accounting for Conditional Asset Retirement Obligations’’ (‘‘FIN 47’’) – an Interpretation of FASB Statement No. 143, ‘‘Accounting for Asset Retirement Obligations’’, which clarifies the term ‘‘conditional asset retirement obligations’’ and specifically provides when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. The provisions of FIN 47 were effective on December 15, 2005. The adoption of FIN 47 did not have a material effect on our consolidated results of operations or financial condition.

In May 2005, the FASB issued FASB Statement No. 154, ‘‘Accounting Changes and Error Corrections’’ (‘‘SFAS 154’’). SFAS 154 replaces APB Opinion No. 20 (‘‘APB 20’’), ‘‘Accounting Changes’’ and FASB Statement No. 3, ‘‘Reporting Accounting Charges in Interim Financial Statements.’’ SFAS 154 requires that a voluntary change in accounting principle be applied retrospectively with all prior period financial statements presented on the new accounting principle, unless it is impracticable to do so. SFAS 154 also provides that a correction of errors in previously issued financial statements should be termed a ‘‘restatement.’’ APB 20 previously required most voluntary changes in accounting principle to be recognized by including in net income at the period of change the cumulative effect of changing to the new accounting principle. In addition, SFAS 154 carries forward without change the guidance contained in APB 20 for reporting a correction of an error in previously issued financial statements and a change in accounting estimate. The new standard is effective for accounting changes and correction of errors made after January 1, 2006. The Company does not expect the adoption of SFAS 154 to have a material impact on its consolidated financial statements.

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In February 2006, FASB Statement No. 155, ‘‘Accounting for Certain Hybrid Financial Instruments (‘‘SFAS 155’’) – an Amendment of FASB Statements No. 133 and 140,’’ was issued. This statement provides companies with relief from having to separately determine the fair value of an embedded derivative that would otherwise be required to be bifurcated from its host contract in accordance with SFAS 133 by allowing companies to make an irrevocable election to measure a hybrid financial instrument at fair value in its entirety, with changes in fair value recognized in earnings. The election may be made on an instrument-by-instrument basis and can be made only when a hybrid financial instrument is initially recognized or undergoes a remeasurement event. Statement No. 155 also requires that interests in securitized financial assets be evaluated to identify whether they are freestanding derivatives or hybrid financial instruments containing an embedded derivative that requires bifurcation. SFAS 155 is effective for all financial instruments acquired, issued, or subject to a remeasurement event occurring in fiscal years beginning after September 15, 2006. The impact of SFAS 155 will depend on the future issuance or remeasurement of and the nature of any hybrid financial instruments held by the Company after the effective date, but management does not currently expect SFAS 155 to have a material impact on the Company’s consolidated financial position, results of operations and cash flows.

In March 2006, FASB Statement No. 156, ‘‘Accounting for Servicing of Financial Assets – an Amendment of FASB Statement No. 140’’ (‘‘SFAS 156’’), was issued. SFAS 156 requires recognition of a servicing asset or liability at fair value each time an obligation is undertaken to service a financial asset by entering into a servicing contract. SFAS 156 also provides guidance on subsequent measurement methods for each class of servicing assets and liabilities and specifies financial statement presentation and disclosure requirements. SFAS 156 is effective for fiscal years beginning after September 15, 2006. Management does not currently expect SFAS 156 to have a material impact on the Company’s future consolidated financial position, results of operations and cash flows.

In June 2006, FASB ratified the consensus on EITF Issue No. 06-3 — ‘‘How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement’’ (‘‘EITF 06-3’’). The scope of EITF 06-3 includes any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, sales, use, value added, and certain excise taxes. EITF 06-3 states that presentation of taxes within the scope of this EITF on either a gross basis or a net basis is an accounting policy decision which should be disclosed pursuant to APB No. 22 – Disclosure of Accounting Policies. If such taxes are significant, and are presented on a gross basis, the amounts of those taxes should be disclosed. The consensus on EITF 06-3 will be effective for interim and annual reporting periods beginning after December 15, 2006.

In July 2006, the FASB issued FIN No. 48 — ‘‘Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109’’ (‘‘FIN 48’’). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with SFAS 109 — ‘‘Accounting for Income Taxes.’’ FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We are currently evaluating the potential impact, if any, that the adoption of FIN 48 will have on our consolidated financial statements.

In September 2006, FASB issued Statement No. 157 — ‘‘Fair Value Measurements’’ Statement No. 157 (‘‘SFAS 157’’), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements. SFAS 157 becomes effective for us on January 1, 2008. Upon adoption, the provisions of SFAS 157 are to be applied prospectively with limited exceptions.

In September 2006, FASB Statement No. 158, ‘‘Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and 132(R)’’ (‘‘SFAS 158’’), was issued. This statement requires an employer that sponsors one or more

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defined benefit pension or other postretirement plans to recognize an asset or liability for the overfunded or underfunded status of its postretirement benefit plans in its balance sheet for years ending after December 15, 2006. The funded status is measured as the difference between the fair value of the plan’s assets and its benefit obligation. The statement also requires an employer to measure plan assets and benefit obligations as of the date of the employer’s statement of financial position. SFAS 158 is effective for fiscal years ending after December 15, 2006, except for the requirement to measure plan assets and benefit obligations as of the statement of financial position date, which is effective for fiscal years ending after December 15, 2008. Transition for the recognition provisions is entirely prospective. We are currently evaluating the potential impact, if any, that the adoption of SFAS 158 will have on our consolidated financial statements.

In September 2006, the FASB ratified EITF Issue No. 06-1 — ‘‘Accounting for Consideration Given by a Service Provider to Manufacturers or Resellers of Equipment Necessary for an End-Customer to Receive Service from the Service Provider’’ (‘‘EITF 06-1’’). This guidance requires the application of EITF Issue No. 01-9 — ‘‘Accounting for Consideration Given by a Vendor to a Customer’’ (‘‘EITF 01-9’’), when consideration is given to a reseller or manufacturer for benefit to the service provider’s end-customer. EITF 01-9 requires the consideration given to be recorded as a liability at the time of the sale of the equipment and also provides guidance for the classification of the expense. EITF 06-1 is effective for the first annual reporting period beginning after June 15, 2007. We are currently evaluating the potential impact that adoption of EITF 06-1 will have on our consolidated financial statements.

In September 2006, Securities and Exchange Commission Staff Accounting Bulletin No. 108 codified as SAB Topic 1.N, ‘‘Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements’’ (‘‘SAB 108’’) was issued. This guidance states that registrants should use both a balance sheet approach and an income statement approach when quantifying and evaluating the materiality of a misstatement. The guidance also provides transition guidance for correcting errors existing in prior years. SAB 108 is effective for annual financial statements covering the first fiscal year ending after November 15, 2006. We are currently evaluating the potential impact, if any, that the adoption of SAB 108 will have on our consolidated financial statements.

In February 2007, the FASB issued Statement No. 159 – The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115 (‘‘SFAS 159’’). SFAS 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS 159 is effective for fiscal years beginning after November 15, 2007. We do not believe the adoption of SFAS 159 will have significant impact on our consolidated financial statements.

5.2 Summarized Income Statement

This discussion should be read in conjunction with the information contained in the Consolidated Financial Statements and notes thereto (the ‘‘Financial Statements’’) presented in Item 18 of this Annual Report.

The following table sets forth a summary statement of income for the periods indicated (dollar ($) amounts in thousands of US$):


	2002			2003			2004
Net Sales:
Manufactured products:
Telecommunications wire and cable		$	35,619		$	33,640		$	35,713
Power cable			58,710			58,450			55,577
Enameled wire			86,635			95,541			172,869
Electronic cable			4,778			4,662			4,947

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	2002			2003			2004
Total manufactured products		185,742			192,293			269,107
SDI project engineering		31,134			3,919			9,656
Distributed Products		24,303			15,187			15,493
Total net sales		241,179			211,399			294,256
Gross profit:
Manufactured products:
Telecommunications wire and cable		9,588			8,631			3,109
Power cable		13,466			11,224			10,709
Enameled wire		11,887			12,295			23,367
Electronic cable		252			555			561
Total manufactured products		35,193			32,705			37,746
SDI project engineering		(787	)		92			258
Distributed Products		338			491			868
Total gross profit		34,744			33,288			38,872
Gross profit margin:
Manufactured products
Telecommunications wire and cable	26.9%				25.3	%		8.7	%
Power cable	22.9%				19.2	%		19.3	%
Enameled wire	13.7%				12.9	%		13.5	%
Electronic cable	5.3%				11.9	%		11.3	%
Total manufactured products	18.9%				16.9	%		14.0	%
SDI Project engineering	−2.5%				2.3	%		2.7	%
Distributed Products	1.4%				3.2	%		5.6	%
Total gross margin	14.4%				15.7	%		13.2	%

5.3 Operating Results

5.3.1 Year Ended December 31, 2004 Compared with Year Ended December 31, 2003

General

Results of operations are determined primarily by 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 50% to 60% of the cost of sales.

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 69.9% from $1,779 in 2003 to $3,023 in 2004. The higher cost of copper resulted in lower gross profit margins for our products in 2004 than in previous years. Gross profit margins for manufactured products in 2004 were on average at 14.0% compared to 16.9% in 2003.

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Copper prices indicated in this report are quoted from the London Metal Exchange (LME) index. The 2004, 2003 and 2002 copper prices are as follows:


		2004			2003			2002
Average LME copper price ($/Ton)	1Q		$	3,068		$	1,663		$	1,557
	2Q			2,663			1,640			1,611
	3Q			3,139			1,753			1,516
	4Q			3,219			2,059			1,554
	Year			3,023			1,779			1,560

The rates of year 2004 GDP growth for Thailand, Singapore and China were 6.3%, 8.4% and 9.1% respectively. The 2003 GDP growth rates for Thailand, Singapore and China were 6.7%, 1.1% and 9.1% respectively. Our performance is largely influenced by the level of growth in the telecommunication and power infrastructure, construction and electronic goods manufacturing sectors. We are beginning to see the return of growth in these industrial sectors following the recovery in the general economies of the respective countries and increases in governments’ budget spending on infrastructure.

The Company showed net losses of $2.5 million in 2004, compared to net profit of $10.0 million in 2003. Overall net sales increased by 39.2% due to an increase in revenue from manufactured products by 39.9% and from SDI project engineering and Distributed Products by 31.6% compared to 2003. Overall gross profit margins have decreased from 15.7% in 2003 to 13.2% in 2004 mainly due to decrease in profit margin in telecommunication wire and cable products. Selling, general and administrative expenses have increased mainly due to increases in provision for doubtful accounts and impairment of investment, and professional fees.

Our net results in 2003 were aided by positive contributions from exchange gain, lower net interest expense and share of net gain of equity investees. An exchange gain of $4.2 million was recorded in 2003 largely due to the appreciation of the Thai Baht and the Australian dollar.

Net Sales

Sales of manufactured product increased by 40% from $192 million in 2003 to $269 million in 2004, resulting in an overall sales increase of 40%. Sales in enameled wire exhibited the strongest increase of 80.9% due to the strong demand from appliance manufacturers especially in China and higher selling prices reflecting the rise of copper prices. Sales of Distributed Products and revenue from SDI project engineering in Singapore increased in 2004 due to increased demand and offers of tenders from SP Powerassets.

The following shows the percentage share in net sales of the respective operations with respect to our total sales in 2004.


	Manufactured products only	All products and services
Thailand	48.5%	44.3%
Singapore	6.3%	14.3%
Australia	11.3%	10.4%
China	33.9%	31.0%
Total	100.0%	100.0%

In 2004, Sigma Cable recorded revenue of $9.7 million under project engineering turnkey contracts awarded by SP Powerassets. The projects call for the supply and installation of 66kV (kilo-volt) high-voltage power cables along various distinct routes. The Company will continue to tender for future projects.

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Gross Profit

Gross profit for 2004 was $38.9 million, representing an increase of 17.2% compared to $33.2 million for 2003. Gross profit contributed by sales of manufactured products was $37.7 million in 2004 compared to $32.7 million in 2003.

Overall gross profit margins have decreased from 15.7% in 2003 to 13.2% in 2004 due to decreased margin in telecommunication wire and cable products. Gross profit margin for manufactured products decreased from 17.0% in 2003 to 14.0% in 2004 due to higher cost of raw material.

Operating Profit

Selling, general and administrative expenses have increased by $8.3 million in 2004, due to provision for doubtful accounts and inventory, and professional fees. An impairment charge of $134,000 related to the unrealized loss in value of a long-term investment in a privately held company.

Gain/Loss from Investees

In 2003, the share of gain in equity investees was largely related to share of operating profits of Loxley Pacific Co., Ltd. (‘‘LoxPac’’) and the recovery of certain receivables from Newcall Group Limited (now known as Blue Chip New Zealand limited (‘‘BCN’’), in 2004, investee loss was related to LoxPac, BCN, SPHC, SHP and Shandong Pacific Rubber Cable Co., Ltd. (‘‘SPRC’’). The share of loss of equity interests in 2004 consists of the impairment of goodwill of $3,134,000 in LoxPac and impairment of $1,358,000 in SHP, taken upon determination of a market oversupply at Shandong and temporary suspension of construction of the production lines.

Loss on Sale of Investment

The loss on sale of investment in 2003 and 2004 was largely due to the disposal of a portion of our investment in Charoong Thai.

Exchange Gain/Loss

In July 1997, the flotation of the Thai Baht caused the currency to fall in value against the U.S. dollar and triggered declines in other regional currencies, such as the Singapore dollar and Australian dollar. The Thai Baht generally appreciated against the U.S. dollar during the course of 1998 and largely stabilized in 1999. However, from mid-2000, the Thai economy began to decelerate as a result of weak domestic demand, coupled with a major fiscal expansion program espoused by the newly elected government, which contributed to a weakening of the Thai Baht. In the past several years, the global weakening of the U.S. dollar against many other currencies has resulted in a strengthening of the Baht against the U.S. dollar. The exchange differences in the income statements arose largely as a result of these movements in the Thai Baht exchange rate and, to a lesser extent, the movements in the other operating currencies. The exchange rates as of December 31, 2004, based on the Noon Buying Rate, were as follows:


	December 31, 2004		December 31, 2003
Foreign currency to US$1:
Thai Baht		38.80		39.63
Singapore $		1.63		1.70
Australian $		0.78		0.75
Chinese Rmb		8.28		8.28

Based on the above rates, the revaluation of assets and liabilities denominated in U.S. dollars or other foreign currencies in the companies resulted in $0.2 million exchange gain in 2004.

We use Thai Baht forward foreign exchange contracts to reduce our exposure to foreign currency risks for liabilities denominated in foreign currencies. A forward foreign exchange contract obligates us and our subsidiaries to exchange predetermined amounts of specified foreign exchange currencies at specified exchange rates or to make an equivalent U.S. dollar payment equal to the value of such

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exchange. Realized and unrealized gains and losses on forward foreign exchange contracts are included in operations as foreign exchange gains or losses.

Income Taxes

In 2004, our income tax charge has increased partly from estimated PRC tax on CCH income and Australian taxes on APEC profits.

5.3.2 Year Ended December 31, 2003 Compared with Year Ended December 31, 2002

General

The monthly average copper prices in 2003 moved within the band of $1,586 to $2,200 per metric ton. Average copper prices per metric ton increased by 14.0% from $1,560 in 2002 to $1,779 in 2003. The higher cost of copper resulted in lower gross profit margins for our products in 2003 than in previous years. Gross profit margins for manufactured products in 2003 were on average at 16.9% compared to 18.9% in 2002.

Copper prices indicated in this report are quoted from the London Metal Exchange (LME) index. The 2003, 2002 and 2001 copper prices are as follows:


		2003			2002			2001
Average LME copper price ($/Ton)	1Q		$	1,663		$	1,557		$	1,764
	2Q			1,640			1,611			1,652
	3Q			1,753			1,516			1,472
	4Q			2,059			1,554			1,426
	Year			1,779			1,560			1,578

The rates of year 2003 GDP growth for Thailand, Singapore and China were 6.7%, 1.1% and 9.1% respectively. The 2002 GDP growth rates for Thailand, Singapore and China were 5.2%, 2.3% and 8.0% respectively. Our performance is largely influenced by the level of growth in the telecommunication and power infrastructure, construction and electronic goods manufacturing sectors. We are beginning to see the return of growth in these industrial sectors following the recovery in the general economies of the respective countries and increases in governments’ budget spending on infrastructure.

The Company showed improved net income of $10.0 million in 2003, more than double that of $4.8 million in 2002. Sales of manufactured product increased by 3.5%, although overall net sales fell due to a decrease in revenue from SDI project engineering and Distributed Products. Overall gross profit margins have increased from 14.4% in 2002 to 15.7% in 2003 due to product mix and improved selling prices for electronic cable, SDI project engineering and Distributed Products. Selling, general and administrative expenses have increased due to expanded group operations in China and Australia.

Our net results in 2003 were aided by positive contributions from exchange gain, lower net interest expense and share of net gain of equity investees. An exchange gain of $4.2 million was

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recorded in 2003 largely due to the appreciation of the Thai Baht and the Australian dollar. Net interest expenses have decreased by 25.2% due to decreased borrowings with payments from cash provided by operating activities.

Net Sales

Sales of manufactured product increased by 3.5% from $186 million in 2002 to $192 million in 2003, although overall net sales fell due to a decrease in revenue from SDI project engineering and Distributed Products. Sales in enameled wire exhibited the strongest increase of 10.3% due to the strong demand from appliance manufacturers, especially in China. Sales of Distributed Products and revenue from SDI project engineering in Singapore decreased in 2003 due to decreased demand a reduced number of and offers of tenders from SP Powerassets.

The following shows the percentage share in net sales of the respective operations with respect to our total sales in 2003.


	Manufactured products only	All products and services
Thailand	48.6%	44.2%
Singapore	8.4%	16.7%
Australia	11.5%	10.4%
China	31.5%	28.7%
Total	100.0%	100.0%

In 2003, Sigma Cable recorded revenue of $3.9 million under project engineering turnkey contracts awarded by SP Powerassets. The projects call for the supply and installation of 66kV (kilo-volt) high-voltage power cables along various distinct routes. The Company will continue to tender for future projects.

Gross Profit

Gross profit for 2003 was $33.1 million, representing a decrease of 4.6% compared to $34.7 million for 2002. Gross profit contributed by sales of manufactured products was $32.6 million in 2003 compared to $35.2 million in 2002.

Overall gross profit margins have increased from 14.4% in 2002 to 15.7% in 2003 due to product mix and improved selling prices for electronic cable, SDI project engineering and Distributed Products. However, gross profit margins for manufactured products decreased from 18.9% in 2002 to 16.9% in 2003 due to the higher cost of copper, the Company’s principal raw material.

Operating Profit

Selling, general and administrative expenses have increased due to expanded group operations in China and Australia. In 2002, impairment loss on NPC telecommunication machinery of $1.5 million was taken up in view of the weak copper telecommunication cable industry in the China region and dim prospects of future sales in this product. Despite the lower gross profit in 2003, income from operations increased by 1.7% from $13.9 million in 2002 to $14.1 million in 2003 due to other operating income of $1.3 million arising from the disposal of certain property, plant and equipment.

Gain/Loss from Investees

In 2002, investee loss was related to each of Loxley Pacific Co., Ltd. (‘‘LoxPac’’), Thai Professional Telecom Network Co., Ltd. (‘‘Thai Professional’’), Siam Pacific Holding Company Limited (‘‘SPHC’’) and Newcall Group Limited (‘‘NGL’’). The share of loss of equity investees in 2002 consists primarily of the share of loss in NGL, Thai Professional and LoxPac. The loss was in part due to the impairment of investment in LoxPac of $2.5 million. In 2003, the share of gain in equity investees was largely related to share of operating profits of LoxPac and the recovery of certain receivables from NGL.

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Gain on Share Issuance by Subsidiaries and Affiliates

In 2002, the issuance of new shares by Charoong Thai, Shanghai Yayang and LoxPac contributed to the $1.0 million net gain on share issuance by subsidiaries and affiliates. No such gain was recorded in 2003.

Loss on Sale of Investment

The loss on sale of investment in 2002 and 2003 was largely due to the disposal of a portion of our investment in Charoong Thai.

Exchange Gain/Loss


	December 31, 2003		December 31, 2002
Foreign currency to US$1:
Thai Baht		39.63		43.20
Singapore $		1.70		1.74
Australian $		0.75		0.56
Chinese Rmb		8.28		8.28

Based on the above rates, the revaluation of assets and liabilities denominated in U.S. dollars or other foreign currencies in the companies resulted in $4.2 million exchange gain in 2003, largely due to the appreciation of the Thai Baht and the Australian dollar.

Income Taxes

In 2003, our income tax charge has decreased partly due to the recognition of deferred tax assets in APEC as the company has demonstrated profitability.

5.4 Liquidity and Capital Resources

Capital Expenditure and Capital Resources

Net proceeds from the initial public offering of Common Shares on March 26, 1997 were $33.3 million. The proceeds have been used to finance a significant portion of the cost of our development. The following are the major investments and purchases in 2002, 2003 and 2004:

On March 22, 2002, the Company purchased 100% of PEWC’s interest in CCH and its wholly-owned subsidiary, PEWS, resulting in CCH and PEWS becoming wholly-owned subsidiaries of the Company upon completion of the transaction. The acquisition was funded by the issuance of 3,097,436 Common Shares. As a result of this new issue, PEWC’s holding in the Company increased

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from 68.3% to 75.4%. PEWS manufactures enameled wire for electronic, video and audio products for the South China market and for export. The consolidated revenues of CCH and PEWS for the year 2001 were $26.6 million with a profit of $1.4 million. For the year 2002, these companies contributed $35.0 million in sales and $4.8 million in net profits to the Company’s results.

Other investments in 2002 include: the acquisition of an additional 3.51% interest in NPC for $5.8 million, thereby increasing the Company’s interest in Ningbo from 90.8% to 94.31%; the acquisition of additional new shares in Shanghai Yayang for $0.3 million, thereby increasing the Company’s interest in Shanghai Yayang from 62.09% to 62.39%; the acquisition of an additional 1.84% interest in Newcall Communications Singapore Pte Ltd (‘‘NCS’’) for $0.5 million, thereby increasing the Company’s interest in NCS from 37.69% to 39.53%; the acquisition of additional new shares in LoxPac for $1.2 million, however, the further issuance of new shares during the year by LoxPac has caused the Company’s effective interest in LoxPac to be diluted from 30.56% to 24.58%; and, the acquisition of the remaining 33.85% interest in Siam Pacific for $11.6 million, in the form of Charoong Thai shares issued to the minority shareholders. NCS was liquidated during 2002 and the increased investment was written off.

In 2003, the Company injected $1.7 million in Shanghai Yayang through its subsidiary, Pacific Thai, thereby increasing the Company’s interest in Shanghai Yayang from 62.39% to 63.49%. The additional investment was in view of improved sales and operating performance and the need for capacity expansion as part of the company’s operation strategy. The Company and its joint venture partner, Shandong Yanggu, have also injected $0.3 million each in SPFO. To date, the Company has invested a total of $2.8 million with a 51.0% interest in SPFO. The Company has also contributed $0.2 million capital injection into SHP.

Total purchases of property, plant and equipment totaled $11.1 million in 2002 and $5.0 million in 2003 and $4.3 million in 2004. Purchases relate mainly to the capacity expansion of certain subsidiaries in China, namely Shanghai Yayang and SPFO. The remaining purchases were for replacement of old equipment.

Liquidity

We met our working capital requirements from cash provided by operations and both short-term and long-term borrowings. Net cash used for operating activities for 2004 was $18.1 million, compared to $24.3 million generated in 2003. Net cash used in investing activities in 2004 was $5.2 million, compared to $5.3 million used in 2003, and largely was used on purchasing property, plant, and equipment. Net cash generated from financing activities amounted to $24.3 million in 2004 largely from the increase of bank loans.

The Company maintains several working capital and overdraft credit facilities with various commercial bank groups and financial institutions. Under line of credit arrangements for short-term debt with the Company’s bankers, the Company may borrow up to approximately $103 million on such terms as the Company and the banks may mutually agree upon. These arrangements do not have termination dates but are reviewed annually for renewal. As of December 31, 2004, the unused portion of the credit lines was approximately $38.0 million which included unused letters of credit amounting to $24.6 million. Letters of credit are issued for the account of the Company during the ordinary course of business by major financial institutions as required by certain vendor contracts. As of December 31, 2004, the Company had open letters of credit totaling $45 million. Liabilities relating to the letters of credit are included in current liabilities.

Our main source of liquidity in the near future continues to be the net cash provided by our operating activities. 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.

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The following table set forth our obligations and commitments to make future payments under contracts and other commitments.


	Payments due by period
Contractual obligations as of December 31, 2004 (In thousands of US$)	Total		2005		2006-2007		2008-2009		After 2009
Long term debt		1,710		1,710		—		—		—
Long term loan from PEWC		5,945		—		—		5,945		—
Capital lease obligations (principal amount only)		323		110		213		—		—
Operating leases		5,650		527		534		404		4,185
Purchase obligations		—		—		—		—		—
Total contractual cash obligations		13,628		2,347		747		6,349		4,185

For more details on financial commitments and contingencies, please refer to Exhibit 18.1 ‘‘Asia Pacific Wire & Cable Corporation Limited – Audited Financial Statements,’’ beginning on page F-1.

5.5 Inflation

We do not consider inflation to have had a material impact on our results of operations during the periods covered.

Item 6: Directors, Senior Management and Employees

6.1 Directors and Senior Management

As of December 31, 2004, the Bye-laws provided for a classified board consisting of Class A Directors and Class B Directors. As of December 31, 2004, there were three Class A Directors and six Class B Directors. Each Director is entitled to one vote, and approval of any matter requires a simple majority assuming a quorum is present. However, any matter then submitted to the Board of Directors for a vote required the approval of at least one Class A Director. In 2007, the shareholders approved an amendment to the Bye-laws of the Company which deleted the provision for a classified board. Accordingly, at present, there is only one class of directorships and no one or more directors possess any veto power over matters presented to the Board.

The following table sets forth certain information concerning the directors and executive officers of the Company as at December 31, 2004. You are advised that the following table is presented for historical purposes and it does not list the current directors of the Company, who are named further on in this Section 6.1 of our Annual Report. All directors are subject to annual election at the shareholders’ meeting.


Name	Age	Position
Ryoji Furukawa	51	Directors (Class A)
Eric Chi Chiu Yip	47	Directors (Class A)
Wellen Sham	52	Director (Class A)
Michael C. Lee	55	Director (Class B)
Yuan Chun Tang	45	Director (Class B)
Andy C.C. Cheng	46	Director (Class B)
Jack T. Sun	55	Director (Class B)
Tim Wong	50	Director (Class B)
Charles Xue	51	Director (Class B)
James M. Keyes	41	Bermuda Resident Secretary
Reid Management Company	N/A	Resident Representative in Bermuda

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Certain officers and directors of the Company are also officers and directors of PEWC and/or PEWC affiliates or AMC or AMC affiliates, as described below. A brief professional summary for each member of the Board of Directors as of December 31, 2004 is as follows:

Mr. Ryoji Furukawa is a member of the Board of Directors of the Company. Mr. Furukawa also serves as a Director and the Chairman of Asset Managers (China) Company, Ltd. Mr. Furukawa became a director of the Company in 2004.

Mr. Eric Chi Chiu Yip is a member of the Board of Directors of the Company. Mr. Yip also serves as Chief Executive Officer of Asset Managers (China) Company Limited. Mr. Yip became a director of the Company in 2004.

Mr. Michael C. Lee is a member of the Company’s Board of Directors, as well Chief Executive Officer of PEWC. Mr. Lee also serves as Chairman of PUSA. Mr. Lee became a Director of the Company in 2004.

Mr. Yuan Chun Tang is a member of the Board of Directors of the Company. He also serves as Chairman of PEWC. Mr. Yuan became a Director of the Company in 2004.

Mr. Wellen Sham is a member of the Board of Directors of the Company. He also serves as Chairman of Sino-JP and Sino JP Assets Management. Mr. Sham became a Director of the Company in 2004.

Mr. Andy C.C. Cheng is a member of the Company’s Board of Directors, as well as Executive Vice President and Director of PEWC. Mr. Cheng became a Director of the Company in 2004.

Mr. Jack T. Sun is a member of the Company’s Board of Directors, as well as Executive Vice Chairman of Charoong Thai. Mr. Sun became a director of the Company prior to January 1, 2004.

Mr. Charles Xue is a member of the Company’s Board of Directors, and serves on the Audit Committee and the Remuneration Committee. He also serves as Chief Executive Officer of United Medical. Mr. Xue became a director of the Company prior to January 1, 2004.

Mr. Tim Wong is a member of the Company’s Board of Directors, and serves on the Audit Committee and the Remuneration Committee. He also serves as Senior Finance Manager of Utahloy Education Foundation. Mr. Wong became a director of the Company prior to January 1, 2004.

Notwithstanding the relationships with Sino-JP, AMC or with PEWC or with any of their respective affiliates, the above named individuals, in their capacities as directors and officers of the Company, are subject to fiduciary duties to the Company.

Actions may be taken by a quorum of directors (which consists of at least two directors) present at a board meeting. The Bye-Laws of the Company provide that any one director may call a board meeting.

Subsequent to December 31, 2004, independent directors Tim Wong and Charles Xue resigned from the Board. They were replaced on March 24, 2005 by Ulyos Maa and Jimmy Tsay. Thereafter, Jack Sun, Andy Cheng and David Sun resigned from the Board on October 14, 2005. See — ‘‘Recent Developments, Section 4.1.2.’’ Independent director Ulyos Maa also resigned on October 14, 2005. Christopher Cheng was appointed on April 6, 2006 to replace Mr. Maa, along with three other directors, Ching Rong Shue, Gai Poo Lee and Fang-Hsiung Chen. On June 29, 2006, Jimmy Tsay resigned from the Board, followed by Christopher Cheng on July 3, 2006. On June 28, 2007, Eric Chi Chiu Yip, Wellen Sham and Ryoji Furukawa resigned from the Board. On the same date, Andy Cheng, Jack Sun and David Sun were re-appointed to the Board.

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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.

As of December 31, 2004, the audit committee consisted of two independent directors, Mr. Charles Xue and Mr. Tim Wong, who served on the committee until their resignation in 2005. On March 24, 2005, two new independent directors, Mr. Ulyos Maa and Mr. Jimmy Tsay, were appointed to the Board and to the audit committee. Mr. Maa resigned on October 14, 2005, and was replaced on the audit committee by Mr. Christopher Cheng, who was appointed on April 6, 2006. Mr. Tsay and Mr. Cheng served on the committee until Mr. Tsay’s resignation on June 29, 2006, which was followed by Mr. Cheng’s resignation on July 3, 2006. The Company did not have an audit committee for the remainder of 2006.

As the Company is traded on the Pink Sheets, it is not required to have an audit committee that meets the requirements of Regulation 10A-3 of the Exchange Act. In the absence of an audit committee, the full Board of Directors may fulfill the functions of an audit committee pursuant to Section 3(a)(58) of the Exchange Act. For the fiscal year 2006, and until the appointment of a new audit committee on September 28, 2007, the full Board of Directors fulfilled the functions of an audit committee.

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. As of the date of the filing of this Annual Report, the audit committee is composed of Mr. Chan and Dr. Lee, with Mr. Chan serving as the committee’s chairman.

6.3 Remuneration Committee

The Board first created the remuneration committee in 2003 to assist it in determining the compensation to be paid to the executive directors of the Company. The first remuneration committee was comprised of two independent directors, Mr. Charles Xue and Mr. Tim Wong, who served on the committee until their resignation in 2005. Mr. Jimmy Tsay, another independent director, was appointed to the remuneration committee on the same date, and served until his resignation on June 29, 2006. As of the date of the filing of this Annual Report, the Board has not appointed new directors to the 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 2004 was approximately $1,300,000. As of December 31, 2004, our directors and executive officers beneficially owned 10,000 Common Shares representing approximately 0.072% of the outstanding Common Shares.

The fee for the independent directors is $20,000 per year and the fee payable to directors who are executive officers of the Company is $10,000 per year.

6.5 Employees

Certain relevant information regarding the Company’s employees as of December 31, 2004 is described in this Section 6.5. The Company employed a total of approximately 1,860 employees, of which 300 are administrative and management personnel. In Thailand, the Company employs

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approximately 925 staff members. In addition, the Company has approximately 160 employees in Singapore, 85 employees in Australia, 545 employees in China and 145 employees in Malaysia. 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.

Approximately 60% 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. None of the employees of Siam Pacific, Pacific Thai, Charoong Thai or APEC 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 good and has not experienced difficulties attracting and retaining qualified employees. In Singapore, employee turnover is approximately 8% of total employees annually. In Thailand, employee turnover is approximately 3% of total employees annually.

Item 7: Major Shareholders and Related Party Transactions

7.1 Major Shareholders

As of December 31, 2004, Sino-JP Fund, a company incorporated under the laws of the Cayman Islands, was the owner of 10,074,012 Common Shares, representing approximately 72.84% of the issued and outstanding Common Shares. Pacific Electric Wire & Cable Corporation was the owner, indirectly, of 356,757 Common Shares, representing approximately 2.56% of the issued and outstanding Common Shares. The remaining Common Shares were held by investors who purchased in the public market. See — ‘‘Recent Developments, Section 4.1.2.’’ The following table sets forth certain information regarding ownership of the Company’s capital stock as of December 31, 2004 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 voting rights attaching to the Common Shares below are the same as those attaching to all other Common Shares.


Identity of Person or Group	Number of Shares		Percent of Class
Pacific Electric Wire & Cable Co., Ltd.		356,757		2.56	%
Sino-JP Fund Co., Ltd.		10,074,022		72.84	%
Heartland Advisors, Inc. ⁽¹⁾		1,591,100		11.5	%
William J. Nasgovitz President and Principal Shareholder Heartland Advisors, Inc.		1,137,300		8.22	%
Directors and Officers of the Company		10,000		0.072	%

⁽¹⁾	Based on Schedule 13G filed January 14, 2005.

In July 2004, the Company and PEWC entered into a Settlement Agreement with Set Top International Inc. (‘‘Set Top’’), pursuant to which it was agreed that Set Top would be paid $25,000,000 in exchange for the release of all claims of an ownership interest in 10,074,102 Common Shares and the dismissal by all parties of all claims in litigation proceedings against each other, which included actions in New York, Singapore and Bermuda (the ‘‘Set Top Settlement Agreement’’). In addition, Set Top agreed to withdraw all of its claims in the bankruptcy proceedings of Pacific USA Holdings Ltd. (‘‘PUSA’’), a Dallas based subsidiary of PEWC.

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Under a Share Purchase Agreement dated September 10, 2004 by PEWC and Asset Managers Co., Ltd. (‘‘AMC’’), AMC agreed to purchase the 10,074,012 Common Shares from Set Top for purchase consideration of $25,000,000 (the ‘‘2004 Share Purchase Agreement’’). In addition, AMC entered into an Option Agreement dated September 10, 2004 (the ‘‘2004 Option Agreement’’) granting to PEWC an option (the ‘‘Repurchase Option’’) to purchase 7,307,948 Common Shares (the ‘‘Repurchase Shares’’), representing approximately 52.84% of the issued and outstanding Common Shares.

Until the implementation of the Set Top Settlement Agreement, PEWC owned indirectly 10,430,769 shares of the Company. Following the implementation of the Set Top Settlement Agreement and the closing of the 2004 Share Purchase Agreement, Sino-JP owned 10,074,012 Common Shares of the Company, representing approximately 72.84% of the issued and outstanding Common Shares, and PEWC owned indirectly 356,757 shares of the Company, representing approximately 2.56% of the issued and outstanding Common Shares.

On September 14, 2005, PEWC exercised the Repurchase Option and reacquired the Repurchase Shares for an aggregate purchase price of $18,861,813.78, or $2.581 per share, plus a guaranteed return. Exercising the Repurchase Option required approval of the PEWC Banking Group, which imposed certain conditions on PEWC. One condition imposed by the PEWC Banking Group was that PEWC enter into a letter of undertaking (‘‘the ‘‘PEWC Letter of Undertaking’’) which provided that, among other conditions, PEWC enter into a trust agreement with the PEWC Banking Group (the ‘‘PEWC Trust Agreement’’), under which the Repurchase Shares were registered in Bermuda in the name of Chiao Tung Bank Trust Department Trust Assets (‘‘CTB’’), although PEWC retained beneficial ownership of the Repurchase Shares unless and until there occurred an event of default under the PEWC Trust Agreement. In May 2006 the PEWC Banking Group determined that PEWC had fulfilled or was in a position to fulfill the requirements with respect to the PEWC Trust Agreement. Therefore, on June 6, 2006, CTB, on behalf of the PEWC Banking Group, delivered a letter instructing termination of the PEWC Trust Agreement and authorizing the registration of the repurchased Shares on behalf of PEWC without any pledge or encumbrance of the PEWC Banking Group. See — ‘‘Risk Factors: Change of Control, Section 3.3.1’’; ‘‘Recent Developments, Section 4.1.2.’’

7.2 Related Party Transactions

As at December 31, 2004, the Company’s largest short-term loan of $1.5 million was from Moon View Venture Limited, a subsidiary of PEWC. The loan is unsecured. As at December 31, 2004, the only long-term loan was from PEWC in the amount of $5.9 million. The loan is unsecured and consists of $3.0 million being interest-free while the remaining portion bears interest at LIBOR plus 1%. Interest has been paid quarterly. The loan is repayable in 2008.

Additional details regarding related party balances as of December 31, 2004 and related party transactions during the year 2004 are disclosed in Note 15 of Item 18: Financial Statements.

Item 8: Financial Information

8.1 Legal Proceedings


	8.1.1	Set Top Litigation (Settled); See — ‘‘Recent Developments, Section 4.1.2’’

Pacific Electric Wire & Cable Co., Ltd. & Asia Pacific Wire & Cable Corp., Ltd. v. Set Top International, Case No. 03 Civ. 9623 (JFK) (AJP) (the ‘‘New York Action’’)

On December 4, 2003, PEWC and the Company (collectively ‘‘Plaintiffs’’) commenced an action in the United States District Court for the Southern District of New York (the ‘‘Southern District’’) against the following parties: Set Top, Kinbong Holdings Limited (‘‘Kinbong’’), Tom Ching-Yun Tung, Frank Wei-Feng Lin, Tai-Sheng Lien, Fu-Chuan Tsai, Fu-Nu Tsai, Yuan-Chun Hsu, Jack Takacs and Robert Everett Wolin (collectively ‘‘Defendants’’). The Complaint alleged 12 causes of action, including fraud and conspiracy to commit fraud; violation of section 13(d) of the Securities Exchange Act; RICO violations under 18 USC § 1962; and breach of fiduciary duty.

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The case involved an alleged fraud perpetuated over a period of years by certain of the Defendants against Plaintiffs. Prior to the allegedly fraudulent transactions, PEWC owned (indirectly) a 75.42% interest in the Company. As a result of the transactions, PEWC’s controlling interest in the Company was purportedly transferred to Defendant Set Top.

The Southern District action did not progress to the discovery phase as the parties sought to agree to the terms of a settlement agreement on several occasions.

On July 2, 2004, the Company, PEWC and Set Top entered into a Settlement Agreement (the ‘‘Settlement Agreement’’) pursuant to which PEWC agreed to pay Set Top $25 million (the ‘‘Settlement Amount’’) by August 30, 2004 (subject to extension) to purchase all of Set Top’s interest in the Company’s shares. In the event that PEWC failed to pay the Settlement Amount to Set Top by August 30, 2004 (subject to extension), under the Settlement Agreement the ownership of 10,074,102 shares of the Company would pass to Set Top.

Pursuant to the Settlement Agreement, the Company, PEWC and Set Top agreed to withdraw all claims in all litigation proceedings against each other, including the actions in New York, Singapore and Bermuda, and Set Top agreed to withdraw all of its claims in the PUSA bankruptcy proceedings. The parties have filed stipulations of discontinuance and/or dismissal for each of those actions.

In order to implement the terms of the Settlement Agreement, PEWC and Asset Managers Co., Ltd. (‘‘AMC’’) entered into a Share Purchase Agreement dated as of September 10, 2004 (the ‘‘2004 Share Purchase Agreement’’), pursuant to which AMC agreed to pay to Set Top the sum of $25,000,000 in exchange for all right, title and interest of Set Top in 10,074,012 shares of APWC (the ‘‘Subject Shares’’). Following the closing of the 2004 Share Purchase Agreement, AMC designated Sino-JP Fund Co., Ltd. (‘‘Sino-JP’’) as an assignee of the Subject Shares and Sino-JP was registered as the record owner of the Subject Shares with the Company’s register. As of June 28, 2007, Sino-JP sold all of its Common Shares, the directors and officers designated by it submitted their resignations and Sino-JP ceased to have any interest in the Company. See — ‘‘Recent Developments, Section 4.1.2.’’

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.

Item 9: The Offer and Listing

9.1 Historical Trading Information

From March 26, 1997 through December 31, 2001, the Company’s Common Shares were listed and traded on the New York Stock Exchange (the ‘‘NYSE’’) under the symbol ‘‘AWC.’’ Prior to such listing, there was no public market for the Company’s equity securities.

The Company’s Common Shares were subsequently delisted from the NYSE in the first quarter of 2002 and were traded on the Over-the-Counter Bulletin Board (the ‘‘OTC BB’’), which is an electronic quotation service for trading of shares of OTC securities among market makers who are NASD members. As a foreign private issuer, the Company is 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

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current in the filing of its periodic reports. The Company is currently traded on the Pink Sheets under the symbol ‘‘AWRCF.’’ The Company intends to diligently pursue a relisting on the OTC BB or a national exchange as soon as possible. See — ‘‘Risk Factors – OTCB BB Delisting; Potential Illiquidity of Common Shares, Section 3.3.3’’; see — ‘‘Recent Developments, Section 4.1.2.’’

The Common Shares are not listed on any other exchanges or otherwise publicly traded within or outside the United States.

The high and low sales price for Common Shares on the OTC BB (from February 2002 when the Company re-established a public trading market for its Common Shares on the OTC BB) for each quarterly period from the first quarter of 2002 to the last quarter of 2004 are as follows:


	Price per Share ($)
	High		Low
2002
First Quarter		0.73		0.32
Second Quarter		0.90		0.48
Third Quarter		0.65		0.29
Fourth Quarter		1.55		0.51
2003
First Quarter		1.06		0.83
Second Quarter		1.60		0.75
Third Quarter		2.74		1.40
Fourth Quarter		3.60		2.15
2004
First Quarter		3.10		2.25
Second Quarter		2.90		1.90
Third Quarter		3.49		2.20
Fourth Quarter		4.75		2.90

9.2 Nature of the Trading Market

As of the date of the filing of this Annual Report, our Common Shares are quoted and traded on the Pink Sheets operated by Pink Sheets LLC, under the symbol ‘‘AWRCF.’’

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Item 10: Additional Information

10.1 Memorandum of Association and Bye-laws


	10.1.1	General

For a detailed description of the Company’s principal activities, see ‘‘History and Development of the Company, Section 4.1.’’ The Company’s Bye-laws were amended on December 16, 2004 to establish a classified Board of Directors consisting of up to three Class A Directors and up to seven Class B Directors. On September 7, 2007, the Company’s Bye-Laws were amended again to delete the provisions providing for a classified Board of Directors and to provide that a quorum shall consist of a majority of the members of the Board of Directors then in office. The Company’s Bye-laws, as so amended, have been filed with this Annual Report and also are available for inspection upon prior written notice during customary business hours at the offices of the Company.


	10.1.2	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 of $200,000 consists of 20,000,000 Common Shares, par value $0.01 per share, of which, as of December 31, 2004 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 the 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 for a complete understanding of the terms of the memorandum of association and Bye-laws.


	10.1.3	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

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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, special rights, 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.


	10.1.4	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. 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 by proxy;


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


	•	a shareholder or shareholders present in person or represented by proxy holding Common Shares 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.


	10.1.5	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, each share is entitled to a dividend if, as and when dividends are declared by the Board of Directors. 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 conditions as our Board of Directors may deem relevant.


	10.1.6	Purchases by a Company of its own Common Shares

Under Bermuda law, 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 a 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.

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	10.1.7	Preemptive Rights

Our Bye-laws 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.


	10.1.8	Variation of Rights

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


	•	with the consent in writing of the holders of not less than fifty percent of the issued Common Shares of that class; or


	•	pursuant to a resolution passed at a general meeting of the holders of such Common Shares, voting in proxy or present, at which a quorum is present.

The Bye-laws provide that a quorum for such a meeting shall be two persons present in person or by proxy holding shares of the relevant class. The Bye-laws specify that the creation or issue of shares ranking on parity with existing shares will not, subject to any statement to the contrary in the terms of issue of these shares or rights attached to those shares, vary the special rights attached to existing shares.


	10.1.9	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.


	10.1.10	Transfer Restrictions

The Board of Directors may in its absolute discretion and without assigning any reason refuse to register the transfer of any share that is not fully paid.

The Board of Directors may refuse to register an instrument of transfer of a share unless it:


	•	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;


	•	has obtained, where applicable, permission of the Bermuda Monetary Authority; and


	•	is in respect of one class of shares.

Our Common Shares are no longer listed on an ‘‘appointed stock exchange’’ and, therefore, do not qualify for a ‘‘blanket’’ authorization for free transferability from the Bermuda Monetary Authority for all transfers of our Common Shares between persons who are not resident in Bermuda for exchange control purposes. The Bermuda Monetary Authority has informed us that it has no objection to the continued free transferability of our Common Shares on the same basis as when the Company was listed on the NYSE except that the Bermuda Monetary Authority has requested it be informed of any shareholders holding five percent or more of the Common Shares in issue.

The Company, together with PEWC and SOF Investments, L.P., has 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 is binding only upon the three parties to that agreement. See — ‘‘Recent Developments, Section 4.1.2.’’


	10.1.11	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 he was sole holder, shall be the

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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.


	10.1.12	Disclosure of Interests

Under the Companies Act, a director who has an interest in a material contract or a material proposed 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 and he will be taken into account in ascertaining whether a quorum is present.


	10.1.13	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 they shall consist of property of the same kind or not and may for such purposes set such values as he deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders.


	10.1.14	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 its 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.

The Bye-laws provide that the Board of Directors may, whenever it think 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. 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. Any such notice shall be deemed to have been served twenty-four (24) hours after its dispatch in the case of cable, telex or telecopier and seven (7) days after dispatch in the case of notice through the post.


	10.1.15	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.

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Under Bermuda law, the minutes of shareholder meetings will be open for inspection by any shareholder or director without charge for not less than 2 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.

The register of shareholders of a company is required to be open for inspection between 10:00 a.m. and 12:00 noon each working day without charge and to members of the general public on the payment of a fee. 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.

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 are available for inspection by the public between 10:00 a.m. and 12:00 noon every working day. Bermuda law does not, however, provide a general right for shareholders to inspect or obtain copies of any other corporate records.


	10.1.16	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 his successor is appointed or his prior removal in the manner provided by the Companies Act or the Bye-laws.

At an annual general meeting held on September 7, 2007, the shareholders of the Company approved resolutions establishing the number of directorships at ten members. At that meeting, eight members of the Board of Directors were elected, with two seats then reserved as casual vacancies. See —‘‘Recent Developments, Section 4.1.2.’’

At an Annual General Meeting of Shareholders held on December 16, 2004, the Company amended its Bye-laws to establish a classified board consisting of up to three Class A Directors and up to seven Class B Directors. Each Class A Director and each Class B Director had one vote on any resolution that becomes before the Board of Directors, and except as specified in the Bye-laws, a simple majority of votes cast by the combined Board of Directors (both Class A and Class B) was sufficient for the adoption of any resolution; provided, however, no resolution could be adopted without the approval of at least one of the Class A Directors. At an Annual General Meeting of Shareholders held on September 7, 2007, the Company further amended its Bye-laws to delete the provisions establishing a classified board. As of the date of the filing of this Annual Report, the Company has only one class of Directors, with each Director having equal voting power.

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 these 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 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;

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	•	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.


	10.1.17	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 the Company’s issued Common Shares; or


	•	not less in the aggregate than twenty percent of the company’s debentures

are entitled to object to amendments to its memorandum of association, and 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.


	10.1.18	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 requires a merger or consolidation 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 at least one-third of the issued shares of the company.

Under Bermuda law, in the event of a merger or consolidation 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 a Bermuda court within one month of notice of the meeting of shareholders to appraise the fair value of those shares.


	10.1.19	Class Actions and Derivative Actions

Class actions and derivative actions are generally not available to shareholders under Bermuda law. A shareholder may commence an action in the name of a company to remedy a wrong done to the company where the act complained of is alleged to be beyond the corporate power of the company, or is illegal or would result in the violation of the company’s memorandum of association or Bye-laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for instance, where an act requiring the approval of a greater percentage of the company’s shareholders than those who actually approved it.

When one or more shareholders believes the affairs of a company are being conducted in a manner which is prejudicial to the interest of some of the shareholders, a Bermuda court, 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.

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	10.1.20	Registrar or Transfer Agent

Our branch transfer agent and registrar is Computershare Limited, located at 525 Washington Boulevard, Jersey City, NJ 07310. In addition to a register held by our branch transfer agent, a register of holders of the shares is maintained by the principal registrar and transfer agent, Appleby Management (Bermuda) Ltd. in Bermuda located at Argyle House, 41A Cedar Avenue, Hamilton HM 12, Bermuda.


	10.1.21	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, resident representative 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, resident representative 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.


	10.1.22	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 that the Bermuda Monetary Authority is promptly notified of all instances in which the Company becomes aware that a new shareholder has obtained five percent or more of the Company’s shares. Any issues of shares, and any transfers of Common Shares to any person regarded as resident in Bermuda for exchange control purposes, require specific prior approval from the Bermuda Monetary Authority under the Exchange Control Act.

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 such 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.

10.2 Material Contracts

Composite Services Agreement

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’’), which the Company has renewed annually,

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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. 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.

Indemnification Agreement

The Company and PEWC are parties to an indemnification agreement dated November 6, 1996 (the ‘‘Indemnification Agreement’’), pursuant to which PEWC agreed to indemnify the Company (including the Company’s directors, officers, employees and agents) against any cost, expense, loss, liability or damage arising out of any claim asserted or threatened to be asserted by any third party as a result of certain actions taken or failed to be taken by PEWC or its subsidiaries (other than the Company) prior to March 1997 with respect to Sigma Cable, Sino-Sin, APEC, Siam Pacific, Siam Pacific Holding Company, Pacific Thai, Charoong Thai and NPC, following the exercise by the Company of its option to purchase, directly or indirectly, each of them (collectively, the ‘‘Transferred

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Businesses’’). PEWC has a duty to indemnify the Company if such cost, expense, loss, liability or damage arises out of claims resulting from the actions or inactions of PEWC or its subsidiaries, with respect to the Transferred Businesses, to the extent such action or failure to act was not in compliance with applicable laws and regulations or obligations to third parties and, with respect to Charoong Thai, is limited to situations of which PEWC had knowledge.

Shareholders Agreement

10.3 Environmental Matters

The Company believes that all of its operations are in compliance with, and in certain circumstances exceed, all applicable environmental laws and regulations in Thailand, Singapore, Australia and China. The Company has not been subject to any legal, regulatory or other action alleging violations or breaches of environmental standards. While the Company does not believe that the nature of its operations creates environmental hazards, no assurance can be given that new environmental laws or regulations in Thailand, Singapore, Australia, China or elsewhere, will not, in the future, require changes in the Company’s production processes or otherwise adversely affect the Company’s operations and financial condition.

10.4 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. The Company believes that it maintains insurance coverage commensurate with the nature of and risks associated with its business.

10.5 Credit Support

PEWC has provided credit support to the Company and its subsidiaries through the provision of direct loans, credit terms in inter-company trade balances between PEWC and the operating subsidiaries and corporate guarantees for trade and credit facilities from banks and financial institutions for the purposes of financing working capital, capital expenditures, acquisitions and expansion programs. There can be no assurance that PEWC will provide support in the future.

10.6 Taxation

The following is a summary of certain tax consequences of the acquisition, ownership and disposition of common shares based on the tax laws of the United States and Bermuda. 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.

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	10.6.1	United States Taxation

The following is a summary of certain 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). 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 (including proposed and temporary regulations), rulings, current administrative interpretations and official pronouncements of the Internal Revenue Service (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. 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 of, 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 or partnership 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.

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.

Taxation of U.S. Holders

The discussion in ‘‘Taxation of Dividends’’ and ‘‘Taxation of Capital Gains’’ below assumes that we will not be treated as a passive foreign investment company (‘‘PFIC’’) for U.S. federal income tax purposes. For a discussion of the rules that apply if we are treated as a PFIC, see the discussion in ‘‘Passive Foreign Investment Company’’ below.

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Taxation of 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.

The Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-27, 117 Stat. 752) (the ‘‘2003 Act’’) was enacted on May 28, 2003. Subject to certain limitations, the 2003 Act generally provides that 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 (15%; 5% for taxpayers in the lower bracket; 0% for lower bracket taxpayers in 2008). 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, 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 Department of 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 OTC Bulletin Board 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 electronic Pink Sheets, will be treated as a qualified foreign corporation. Should the Company be relisted on a registered national exchange, any dividends paid by the Company 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

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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

Subject to the passive foreign investment company rates discussed below, 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) 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. A U.S. Holder’s adjusted tax basis in a common share will be reduced (but not below zero) by the amount of any distribution that is treated as a non-taxable return of capital. 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 long-term capital gains are subject to U.S. federal income tax at a marginal rate of 15%, or 5% in the case of individuals in the 10% or 15% income tax brackets. (If an individual is subject to the ‘‘alternative minimum tax’’, the maximum effective tax rate on long-term capital gains will be 26% to 28%).

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 long-term 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% 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 Internal Revenue Service (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.

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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. Stock of the Company is not currently traded on a national securities exchange or a qualifying foreign exchange. Accordingly, the mark-to-market election under these rules will not currently be available.

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

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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 controlled foreign corporation (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. The Company should not currently qualify as a CFC.

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

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 any gain recognized on a sale or other taxable disposition of common shares, unless (i) the gain is 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), or (ii) a Non-U.S. Holder is an individual and is present in the United States for at least 183 days in the taxable year of the disposition, and certain other conditions are present.

If a Non-U.S. Holder meets the test in clause (i) above, such Non-U.S. Holder generally will be subject to tax on any gain that is effectively connected with his conduct of a trade or business in the United States in the same manner as a U.S. Holder, as described in ‘‘Taxation of U.S. Holders — Taxation of Capital Gains’’ above. Effectively connected gain realized 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.

If a Non-U.S. Holder meets the test in clause (ii) above, such Non-U.S. Holder generally will be subject to tax at a 30% rate on the amount by which his U.S. source capital gain exceeds his U.S. source capital loss.

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Backup Withholding

Payments to Non-U.S. Holders of distributions on, or proceeds from the disposition of, common shares are generally exempt from information reporting and backup withholding. However, a Non-U.S. Holder may be required to establish that exemption by providing certification of non-U.S. status on an appropriate 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.


	10.6.2	Bermuda Taxation

In the opinion of Appleby, the following discussion correctly describes certain tax consequences of the ownership of common shares under Bermuda law.

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 registration 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.

10.7 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 required to file annually a Form 20-F no later than six months after the close of our fiscal year, which is December 31st. Any time the Company is delinquent in filing timely any periodic reports, including an Annual Report on 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 been delinquent in filing the Annual Report. As a result, the Company has been delisted and is currently traded on the Pink Sheets. 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.

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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 Risk

Our exposure to financial market risks derives primarily from the changes in foreign exchange rates, interest rate, and the commodity price of our primary raw material, copper.

11.1 Foreign Currency Exposure

Changes in currency exchange rates influence the Company’s results of operations. The Company’s principal operations and sales are located in Thailand, Singapore and China and a substantial portion of its revenues are denominated in Baht, Singapore dollars or Chinese Renminbi. Nearly all of the raw materials for these operations are imported and paid for in U.S. dollars and a substantial portion of the Company’s future capital expenditures are expected to be in U.S. dollars. The Company requires a significant amount of U.S. dollars for its ongoing equipment upgrade and maintenance programs. Although the Company’s reporting currency is U.S. dollars, the functional currency of its Singapore operations, which accounted for approximately 14.3% of Company sales (including sales of Distributed Products) in 2004, is the Singapore dollar, the functional currency of its Thai operations, which accounted for approximately 44.3% of Company sales in 2004, is the Baht, and the functional currency of its Chinese operations, which accounted for approximately 31% of Company sales in 2004, is the Renminbi. Accordingly, any devaluation of the Baht, or the Singapore dollar or the Chinese Renminbi against the U.S. dollar increases the effective cost of foreign manufacturing equipment and the amount of foreign currency denominated expenses and liabilities and has an adverse impact on the operations of the Company.

We have 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 is 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.

As of December 31, 2004, the Company has entered into forward exchange contracts with a notional value of approximately $4.3 million. The forward exchange contracts matured in January, February, March, May and June 2005.

11.2 Interest Rate Risk

The Company’s exposure to market rate risk for changes in interest rates relates primarily to the Company’s bank loans and overdrafts, long-term debt and interest-bearing long-term loans from PEWC. The Company maintains a mixture of both fixed and floating debt instruments. During 2004 interest paid totaled $1.6 million.

The following table provides information about the Company’s debt instruments as of December 31, 2004 that are sensitive to changes in interest rates.

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We have cash flow and earnings exposure due to market interest rate changes for our floating debt obligations. We manage the exposure to financial market risk by performing ongoing evaluations of our debt portfolios and restructuring our financial instruments accordingly to provide the optimum interest structure. A half percentage point change in interest rates would affect our interest payments by approximately 13% annually.

11.3 Risks Relating to Copper

Copper is the principal raw material we use, accounting for approximately 50% to 60% of the cost of sales in 2004. 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, an increase in the price of copper will increase our cost of sales. Whether this has a material impact on our operating margins and financial results depends primarily on our ability to pass on these increased costs to our customers. 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. Copper prices have been subject to considerable volatility in recent years and this volatility has had a significant impact on our revenues and profits. Accordingly, significant volatility in copper prices could have an adverse effect on our operations. No assurance can be given that such volatility will not continue to recur.

Item 12: Description of Securities Other Than Equity Securities

(Not Applicable)

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Part II

Item 13: Defaults, Dividend Arrearages and Delinquencies

(Not Applicable)

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

(Not Applicable)

Item 15: Disclosure Controls and Procedures

Subsequent to December 31, 2004, we retained an internationally recognized consulting firm, to review and evaluate the effectiveness of our disclosure controls and procedures and to assist the Company in establishing satisfactory disclosure controls and procedures. The consulting firm concluded that our disclosure controls and procedures were not satisfactory in a number of respects to ensure that material information relating to us was made known to them or to senior management by others within our Company. In particular, the following material weaknesses were identified:


	•	Lack of satisfactory policies and procedures governing the Company’s and its subsidiaries accounting policies, internal control and code of conduct;


	•	Lack of an adequate internal audit function;


	•	Lack of a structured monthly financial statement close process for the Company and its subsidiaries to allow timely financial reporting;


	•	Need for greater U.S. GAAP and tax expertise to identify potential accounting and taxation issues that have a material impact on the Company; and


	•	Lack of credit control policies at various subsidiaries.

We are developing new procedures to enhance internal controls over financial reporting, and we are establishing an internal audit department at the Company headquarters which would establish the rules for internal control procedures and would supervise operating and financial audits. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. The certifications provided as part of this Annual Report by our Chief Executive Officer and by our Chief Financial Officer are subject to and qualified by the disclosures and discussion in this Report on the absence of adequate disclosure controls and procedures. See — ‘‘Risk Factors: Inadequate Disclosure Controls and Procedures, Section 3.3.5.’’

This Annual Report does not contain a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s registered public accounting firm due to the application of a transition period established by the Securities and Exchange Commission.

Item 16A. Audit Committee Financial Expert

As of December 31, 2004, the Company had an audit committee composed of two independent directors, neither of whom was designated as a financial expert by the Board and both of whom resigned in 2005. As the Common Shares are traded in the Pink Sheets, the Company is not required to have an audit committee that meets the requirements of, nor is 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) 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 to constitute the members of the audit committee, with Mr. Chan serving as the audit committee’s chairman.

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The audit committee was responsible for coordinating the preparation of this Annual Report.

On April 26, 2005, the Company adopted an audit committee Charter, which sets forth the powers and responsibilities of the audit committee of the Company. A copy of the Charter is filed as an Exhibit to this Annual Report.

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 is filed as an Exhibit to this Annual Report.

Item 16C. Principal Accountant Fees and Services

Audit Fees

The aggregate fees billed for each of the fiscal years 2003 and 2004 for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements totaled $0.4 million and $1.0 million, respectively.

Audit-Related Fees

There were no fees for the fiscal years 2003 and 2004 for assurance and audit-related services by the principal accountant.

Tax Fees

The aggregate fees billed for the fiscal years 2003 and 2004 for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning total approximately $41,000 and $100,000, respectively. These fees were for services including tax planning, compliance and general advice.

All Other Fees

There were no other fees for the fiscal years 2003 and 2004 for services, other than those services described in the preceding paragraphs of this Item 16.3, rendered by the principal accountant.

Audit Committee Approval

The engagement of the accountant to render audit or non-audit services is entered into pursuant to pre-approval policies and procedures established in the Charter of the audit committee of the Company, all services described in this Item 16.3 were approved by the audit committee holding office at the time of the engagement, which was the full Board of Directors. The services described in this Item 16.3 were approved also by the current audit committee after its appointment by the Board on September 28, 2007.

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

The Company is not a listed issuer.

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

During 2004, there were no purchases by the issuer or any ‘‘affiliated purchaser’’ for the purposes of this Item.

Part III

Item 16: Financial Statements

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

Item 17: Financial Statements

See page F-1.

Item 18: Exhibits


18.1	Index to Asia Pacific Wire & Cable Corporation Limited Audited Financial Statements
	Report of independent auditors	F-2
	Consolidated balance sheets as of December 31, 2003 and 2004	F-3
	Consolidated statements of income for the years ended December 31, 2002, 2003 and 2004	F-5
	Consolidated statements of shareholders’ equity for the years ended December 31, 2002, 2003 and 2004	F-6
	Consolidated statements of cash flows for the years ended December 31, 2002, 2003 and 2004	F-7
	Notes to consolidated financial statements	F-8
18.2	Index to Shandong Huayu Pacific Fiber Optics Communication Corporation Limited Audited Financial Statements
	Report of independent auditors	FF-2
	Balance sheets as of December 31, 2004 and 2003	FF-3
	Statements of income for the years ended December 31, 2004 and 2003	FF-4
	Statements of shareholders’ equity for the years ended December 31, 2004 and 2003	FF-5
	Statements of cash flows for the years ended December 31, 2004 and 2003	FF-6
	Notes to financial statements	FF-7

18.3 Index to Exhibits


1.1			Memorandum of Association of Asia Pacific Wire & Cable Corporation Limited (incorporated by reference to Exhibit 1.1 of the Company’s Form 20-F filed with the Securities and Exchange Commission on June 21, 2001).
1.2			Amended and Restated Bye-Laws of Asia Pacific Wire & Cable Corporation Limited.
3.1			Shareholders’ Agreement dated June 28, 2007 by and among Asia Pacific Wire & Cable Corporation, Ltd., Pacific Electric Wire & Cable Co., Ltd., and SOF Investments, L.P.
4.1			Composite Services Agreement (incorporated by reference to Exhibit 3.1 of the Company’s Form 20-F filed with the Securities and Exchange Commission on June 21, 2001).
4.2			Indemnification Agreement dated November 6, 1996 (incorporated by reference to Exhibit 10.2 of the Company’s Form F-1 filed with the Securities and Exchange Commission on November 13, 1996).
4.3			Agreement for the Sale and Purchase of (i) Shares in Crown Century Holdings Limited and (ii) Shareholder’s Loan (incorporated by reference to Exhibit 5.1 of the Company’s Form 20-F filed with the Securities and Exchange Commission on July 1, 2002).

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4.4			Settlement Agreement between Set Top International Inc. (Party A) and Pacific Electric Wire and Cable Co., Ltd. and Asia Pacific Wire and Cable Corporation Ltd. (Party B) (Translation) (incorporated by reference to Exhibit 4.4 of the Company’s Form 20-F filed with the Securities and Exchange Commission on July 7, 2004).
4.5			Settlement Agreement between Asia Pacific Wire & Cable Corporation, Ltd. and Sino-JP Fund Co., Ltd.
4.6			Termination Agreement between Pacific Electric Wire & Cable Co., Ltd. and Chiao Tung Bank.
8			List of significant subsidiaries (see Note 1 to the consolidated financial statements).
11			Code of Ethics.
12.1			Certification of Chief Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act.
12.2			Certification of Chief Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act.
13.1			Certification by Chief Executive Officer of periodic financial report pursuant to 18 U.S.C. Section 1350, as mandated by Section 906 of the Sarbanes-Oxley Act.
13.2			Certification by Chief Financial Officer of periodic financial report pursuant to 18 U.S.C. Section 1350, as mandated by Section 906 of the Sarbanes-Oxley Act.
15(a)			Audit Committee Charter.

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SIGNATURE

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


			ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
Date: November 5, 2007			/s/ Yuan Chun Tang
			Yuan Chun Tang
			Chief Executive Officer

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Audited Financial Statements

Asia Pacific Wire & Cable Corporation Limited

December 31, 2004

INDEX TO FINANCIAL STATEMENTS

CONTENTS


	Page
Report of independent registered public accounting firm		F-2
Consolidated balance sheets as of December 31, 2003 and 2004		F-3
Consolidated statements of income for the years ended December 31, 2002, 2003 and 2004		F-5
Consolidated statements of shareholders’ equity for the years ended December 31, 2002, 2003 and 2004		F-6
Consolidated statements of cash flows for the years ended December 31, 2002, 2003 and 2004		F-7
Notes to consolidated financial statements		F-8

F-1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Asia Pacific Wire & Cable Corporation Limited

We have audited the accompanying consolidated balance sheets of Asia Pacific Wire & Cable Corporation Limited and subsidiaries (the ‘‘Company’’) as of December 31, 2004 and 2003, and the related consolidated statements of income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2004. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Asia Pacific Wire & Cable Corporation Limited and subsidiaries as of December 31, 2004 and 2003, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young
Ernst & Young
Certified Public Accountants

Singapore
October 22, 2007

F-2

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars, except share data)


	December 31,
	2003				2004
ASSETS
Current assets:
Cash and cash equivalents		$	17,244			$	18,504
Restricted short-term bank deposits (note 5)			3,567				8,169
Unrestricted short-term bank deposits (note 5)			7,788				5,915
Accounts receivable, net of allowance for doubtful accounts of $4,852 and $8,516 as at December 31, 2003 and December 31, 2004, respectively (note 11)			58,867				78,766
Amounts due from related parties (note 17)			3,108				4,444
Inventories, net of allowance for inventories of $2,207 and $3,450 as at December 31, 2003 and December 31, 2004, respectively (note 11)
Distributed products			5,819				1,503
Finished products			18,172				27,109
Products in process			9,703				12,415
Raw materials and supplies			12,002				21,368
			45,696				62,395
Investments (note 7)			1,041				2,076
Deferred tax assets (note 12)			774				2,576
Prepaid expenses			826				3,400
Other current assets			1,959				2,402
Total current assets			140,870				188,647
Property, plant and equipment:
Land			4,300				4,451
Land use rights			2,147				2,108
Buildings			37,282				38,908
Machinery and equipment			84,867				89,943
Motor vehicles			2,899				2,941
Office equipment			6,581				7,348
			138,076				145,699
Accumulated depreciation and amortization			(70,115	)			(80,896	)
			67,961				64,803
Other assets:
Long term investments (note 7)			2,441				668
Investment in equity investees (note 22)			10,249				7,788
Goodwill (note 6)			8,324				8,324
Other assets			218				108
Deferred tax assets (note 12)			2,113				95
			23,345				16,983
Total assets		$	232,176			$	270,433

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

F-3

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars, except share data)


	December 31,
	2003				2004
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Bank loans and overdrafts (note 8)		$	21,524			$	48,002
Accounts payable			17,323				23,799
Accrued expenses			2,466				3,763
Amounts due to related parties (note 17)			22,515				21,984
Short-term loans from related parties (note 17)			1,963				1,732
Income tax liabilities			1,795				3,333
Current portion of long-term debt (note 9)			—				1,710
Deferred tax liabilities (note 12)			449				493
Other current liabilities			1,694				3,679
Total current liabilities			69,729				108,495
Long-term debt, less current portion (note 9)			1,654				—
Long-term debt from related parties, less current portion (note 17)			7,824				5,945
Other liabilities			197				217
Deferred tax liabilities (note 12)			1,774				1,640
Total liabilities			81,178				116,297
Minority interests			43,822				46,990
Commitments and contingencies (notes 8 and 14)
Shareholders’ equity (note 10):
Common stock, $0.01 par value:
Authorized shares – 20,000,000 shares Issued and outstanding shares – 13,830,769 in 2003 and 2004			138				138
Additional paid-in capital			111,541				111,541
Retained earnings			21,032				18,508
Accumulated other comprehensive loss			(25,535	)			(23,041	)
Total shareholders’ equity			107,176				107,146
Total liabilities and shareholders’ equity		$	232,176			$	270,433

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

F-4

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US Dollars, except share data)


	Year ended December 31,
	2002				2003				2004
Net sales
Manufactured products		$	185,742			$	192,293			$	269,107
Distributed products			24,303				15,187				15,493
Sales, delivery and installation of wires and cables			31,134				3,919				9,656
			241,179				211,399				294,256
Costs of sales (purchases from related parties parties amounted to $81,910 in 2002, $53,141 in 2003 and $56,402 in 2004)			(206,435	)			(178,111	)			(255,384	)
Gross profit			34,744				33,288				38,872
Selling, general and administrative expenses			(18,353	)			(19,585	)			(25,203	)
Provision for doubtful debts			(929	)			(894	)			(3,664	)
Impairment of long-lived assets			(1,559	)			—				—
Income from operations			13,903				12,809				10,005
Exchange (loss)/gain			(16	)			4,161				233
Interest income			715				285				225
Interest expense			(2,214	)			(1,407	)			(2,250	)
Share of net (loss)/gain of equity investees			(4,090	)			1,475				(4,224	)
Gain on share issuance by subsidiaries and affiliates			1,011				—				—
Impairment of investments			—				—				(134	)
Loss on sale of investments			(557	)			(885	)			(1,161	)
Other income			2,502				1,122				925
Income before income taxes and minority interests			11,254				17,560				3,619
Income taxes (note 12)			(4,683	)			(2,477	)			(4,716	)
Minority interests			(1,780	)			(5,083	)			(1,427	)
Net income			4,791				10,000				(2,524	)
Basic and diluted income per share			0.35				0.72				(0.18	)
Basic and diluted weighted average common shares outstanding			13,830,769				13,830,769				13,830,769

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

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands of US Dollars, except share data)


	Common stock			Additional paid-in capital			Retained earnings				Accumulated other comprehensive income (loss)				Total
Balance at December 31, 2001		$	138		$	111,541		$	6,241			$	(37,202	)		$	80,718
Net income for 2002			—			—			4,791				—				4,791
Currency translation adjustment			—			—			—				6,919				6,919
Unrealized losses on available-for-sale securities – net of income tax of $10			—			—			—				(381	)			(381	)
Comprehensive income																	11,329
Balance at December 31, 2002		$	138		$	111,541		$	11,032			$	(30,664	)		$	92,047
Net income for 2003			—			—			10,000				—				10,000
Currency translation adjustment			—			—			—				4,754				4,754
Gains realized on disposal of available-for-sale securities			—			—			—				(89	)			(89	)
Unrealized gains on available-for-sale securities – net of income tax of $15			—			—			—				464				464
Comprehensive income																	15,129
Balance at December 31, 2003		$	138		$	111,541		$	21,032			$	(25,535	)		$	107,176
Net income for 2004			—			—			(2,524	)			—				(2,524	)
Currency translation adjustment			—			—			—				1,583				1,583
Unrealized gains on available-for-sale securities – net of income tax of $1			—			—			—				911				911
Comprehensive income																	(30	)
Balance at December 31, 2004		$	138		$	111,541		$	18,508			$	(23,041	)		$	107,146

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

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US Dollars, except share data)


	Year ended December 31,
	2002				2003				2004
Operating activities:
Net income		$	4,791			$	10,000			$	(2,524	)
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (gain) on disposal of property, plant and equipment			(7	)			(1,336	)			41
Depreciation			9,805				9,217				8,295
Deferred income taxes			1,867				(2,110	)			126
Provision for doubtful accounts			968				902				3,528
Provision for slow-moving inventories			847				77				1,439
Share of net loss (gain) of equity investees			4,090				(1,475	)			4,224
Impairment of long lived assets			1,559				—				—
Impairment of investments			—				—				134
Gain on share issuance by subsidiaries and affiliates			(1,011	)			—				—
Loss on sale of investments			557				885				1,161
Minority interests			1,780				5,083				1,427
Foreign currency translation adjustment			5,192				(1,405	)			(1,967	)
Changes in operating assets and liabilities net of acquisitions of businesses:
Accounts receivable			(8,836	)			(2,637	)			(22,578	)
Inventories			(7,746	)			(6,253	)			(18,138	)
Other current assets			3,024				547				(3,017	)
Amounts due to related parties			1,404				8,030				(1,868	)
Accounts payable, accrued expenses and other liabilities			1,065				4,733				11,582
Net cash provided by (used in) operating activities			19,349				24,258				(18,135	)
Investing activities:
Increase (decrease) in restricted short-term bank deposits			300				(2,488	)			(4,523	)
Increase (decrease) in unrestricted short-term bank deposits			2,921				(4,697	)			2,019
Investment in equity investees			(4,018	)			(183	)			(60	)
Advance to equity investees			(353	)			—				—
Purchases of property, plant and equipment			(11,135	)			(4,877	)			(4,269	)
Proceeds from disposal of property, plant and equipment			266				2,147				123
Acquisition of additional investment in subsidiary			(1,998	)			(1,091	)			—
Proceeds from disposal of investments			—				6,013				839
Disposal of other assets			—				81				638
Purchases of other assets			(364	)			(218	)			—
Investment in long-term investments			(197	)			—				—
Net cash used in investing activities			(14,578	)			(5,313	)			(5,233	)
Financing activities:
Additions of loans from related parties			459				—				—
Repayments of loans from related parties			—				(288	)			(231	)
Repayments of long-term debt			(6,619	)			(1,750	)			(1,879	)
Repayments of bank loans			(5,719	)			(65,884	)			(13,801	)
Increase in bank loans			7,051				51,060				39,815
Net (decrease) increase in overdrafts			(50	)			(57	)			467
Net cash (used in) provided by financing activities			(4,878	)			(16,919	)			24,371
Effect of exchange rate changes on cash and cash equivalents			297				787				257
Net increase in cash and cash equivalents			190				2,813				1,260
Cash and cash equivalents at beginning of year			14,241				14,431				17,244
Cash and cash equivalents at end of year		$	14,431			$	17,244			$	18,504

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

F-7

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


1.	ORGANIZATION AND PRINCIPAL ACTIVITIES

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

Background on the Pledge Agreement to Swiss Re

As previously disclosed in 2003, PEWC and Swiss Re entered into an Amended and Restated Letter of Credit and Reimbursement Agreement (the ‘‘LC Agreement’’), pursuant to which Swiss Re issued a letter of credit to satisfy certain credit and loan obligations of PEWC’s subsidiary, Pacific USA Holdings Corp. (‘‘PUSA’’), to PUSA’s lenders. Under the LC Agreement, Swiss Re issued a Standby Letter of Credit in favor of Standard Chartered Bank, Hong Kong Branch (‘‘Standard’’), in the total amount of $124,000 (the ‘‘Letter of Credit’’), conditioned upon the closing of a $120,000 transaction between PUSA and Standard. As a condition to obtaining the letter of credit, in February 2002, PUSA, PEWC and Swiss Re finalized a Pledge Agreement (‘‘Pledge Agreement’’), pursuant to which PUSA pledged to Swiss Re shares representing approximately 53% of the equity of the Company (the ‘‘Pledged Shares’’), together with certain shares of other related entities. PEWC is the ultimate beneficial owner of approximately 75.4% of the equity interest in the Company through its subsidiaries, Kinbong Holdings Limited (‘‘Kinbong’’) and PUSA.

PUSA Bankruptcy

As also previously disclosed in the 2003 financial statements, in December 2002, PUSA filed a voluntary petition for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. Because of the bankruptcy filing, in December 2002, Swiss Re paid to Standard $90,600 under the terms of the Letter of Credit as a result of which Swiss Re became entitled, under the terms of the Pledge Agreement, to foreclose on the Pledged Shares of the Company.

Pending Litigations

Following an internal investigation, it was discovered by the Boards of both PEWC and the Company that an ex-director, without the authorization of either Board, had separately negotiated a transaction whereby the Pledged Shares of the Company held by PUSA and the shares of the Company held by Kinbong would be transferred to Set Top International Inc. (‘‘Set Top’’), a British Virgins Islands company. The terms of the transaction were initially withheld from and, subsequently, misrepresented to the Boards of PEWC and the Company by the ex-director, together with certain of his associates.

The Boards of both PEWC and the Company concluded that the ex-director has an undisclosed interest in, or control position over, Set Top, and that the terms he agreed to with Set Top are significantly less favorable to the companies than those that would have been available in a bona fide transaction with an unaffiliated party.

On December 4, 2003, Pacific Electric Wire & Cable Co., Ltd. (‘‘PEWC’’), incorporated in Taiwan and the Company (collectively ‘‘Plaintiffs’’) commenced an action in the United States District Court for the Southern District of New York (the ‘‘Southern District’’) against the following parties: Set Top, Kinbong Holdings Limited (‘‘Kinbong’’), Tom Ching-Yun Tung, Frank Wei-Feng Lin, Tai-Sheng Lien, Fu-Chuan Tsai, Fu-Nu Tsai, Yuan-Chun Hsu, Jack Takacs and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (continued)

Robert Everett Wolin (collectively ‘‘Defendants’’). The Complaint alleged 12 causes of action, including fraud and conspiracy to commit fraud; violation of section 13(d) of the Securities Exchange Act; RICO violations under 18 USC § 1962; and breach of fiduciary duty.

The Southern District action did not progress to the discovery phase as the parties sought to agree to the terms of a settlement agreement on several occasions.

In order to implement the terms of the Settlement Agreement, PEWC, Set Top and Asset Managers Co., Ltd. (‘‘AMC’’) entered into a Share Purchase Agreement and a related Option Agreement dated on September 15, 2004, pursuant to which AMC agreed to pay to Set Top the sum of $25,000,000 in exchange for all right, title and interest of Set Top in 10,074,012 shares of APWC (the ‘‘Subject Shares’’). Following the closing of the 2004 Share Purchase Agreement, AMC designated Sino-JP Fund Co., Ltd. (‘‘Sino-JP’’) as an assignee of the Subject Shares and Sino-JP was registered as the record owner of the Subject Shares with the Company’s register.

As of December 31, 2004, Sino-JP Fund Co., Ltd. (‘‘Sino-JP’’) held 10,074,102 shares, representing approximately 72.84% of the outstanding shares of Common Stock of the Company.

On September 14, 2005, PEWC exercised the repurchase option under the Option Agreement and reacquired 7,307,948 shares of the Common Stock, representing 52.84% of the total issued and outstanding Common Stock. As a result of the reacquisition by PEWC of majority control, PEWC indirectly held as of that date 7,664,615 shares of Common Stock, representing 55.4% of the total issued and outstanding shares of Common Stock and Sino-JP now held as of that date 2,766,154 shares of the Common Stock, representing 20% of the total issued and outstanding shares of Common Stock (the ‘‘Sino-JP Shares’’).

On June 28, 2007, the Company entered into a comprehensive settlement and release agreement with Sino-JP Fund Co., Ltd (‘‘Sino-JP’’), which dismissed and released all claims between the parties and which put to an end to all related litigation. The 55% majority shareholder of the Company, PEWC, also entered into a settlement and release agreement with Sino-JP that terminated all disputes and litigation between those parties.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (continued)

On June 29, 2007, SOF Investments, L.P. (SOF’’), a Delaware limited partnership controlled by MSD Capital, L.P. acquired the Sino-JP Shares and entered into a shareholders’ agreement with the Company and PEWC. The shares acquired constituted 20% of the issued and outstanding shares of the Company.

The Company’s operating subsidiaries (the ‘‘Operating Subsidiaries’’) are engaged in the manufacturing and distribution of telecommunications and power cable and enameled wire products in Singapore, Thailand, Australia, the People’s Republic of China (‘‘PRC’’) and other markets in the Asia Pacific region. Major customers of the Operating Subsidiaries include government organizations, electric contracting firms, electrical dealers, and wire and cable factories. Charoong Thai Wire and Cable Public Company Limited (‘‘Charoong Thai’’) is listed on the Stock Exchange of Thailand and is engaged in the manufacturing of wire and cable products for the power and telecommunications industries in Thailand.

Acquisitions accounted for as purchases and disposals undertaken by the Company during the years ended December 31, 2002, 2003 and 2004 include the following:


	(a)	purchase on March 22, 2002 of 100% of PEWC’s interest in Crown Century Holdings Limited (‘‘CCH’’) and its wholly-owned subsidiary, Pacific Electric Wire & Cable (Shenzhen) Co., Ltd (‘‘PEWS’’) (collectively referred to as ‘‘CCH’’), resulting in CCH becoming a wholly-owned subsidiary of the Company upon completion of the transaction. The acquisition was funded by the issuance of 3,097,436 shares of the Company’s common stock. Since the entities were under common control, the merger has been accounted for at historical cost in a manner similar to pooling-of-interests and accordingly, the consolidated financial statements for periods prior to the combination have been restated to include the accounts and results of both entities.


	(b)	purchase in 2002 of an additional 3.51% interest in Ningbo for $5,830, thereby increasing the Company’s interest in Ningbo from 90.8% to 94.31% in 2002. The increase in the Company’s interest in Ningbo has been accounted for as a purchase. Accordingly, the excess of fair value of the assets acquired over the amount paid for the incremental ownership of 3.51% resulted in goodwill of $327.


	(c)	purchase in 2002 of additional new shares in Shanghai Yayang for $250, thereby increasing the Company’s interest in Shanghai Yayang from 62.09% to 63.81%. The increase in the Company’s interest in Shanghai Yayang has been accounted for as a purchase. Accordingly, the excess of fair value of the assets acquired over the amount paid for the incremental ownership of 1.72% resulted in goodwill of $85. The Company further purchased additional new shares in Shanghai Yayang for $50. However, further issuance of new shares during the year by Shanghai Yayang has caused the Company’s effective interest in Shanghai Yayang to be diluted from 63.81% to 62.39%. The Company recognized a loss of $79 on the issuance of new shares by Shanghai Yayang.


	(d)	purchase in 2002 of a 48.72% equity interest in Shandong Huayu Pacific Fibre Optics Communications Co., Ltd (‘‘Shandong Huayu’’) for a consideration of $2,330.


	(e)	purchase in 2002 of an additional 1.84% interest in Newcall Communications Singapore Pte Ltd (‘‘NCS’’), thereby increasing the Company’s interest in NCS from 37.69% to 39.53% in 2002. The purchase consideration of $535 was fully written off in 2002 as NCS was liquidated during that year.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (continued)


	(f)	purchase in 2002 of additional new shares in Loxley Pacific Company Ltd. for $1,153. However, further issuance of new shares during the year by Loxley Pacific Company Ltd. has caused the Company’s effective interest in Loxley Pacific Company Ltd to be diluted from 30.56% to 24.58%. The Company recognized a loss of $77 on the issuance of new shares by Loxley Pacific Company Ltd.


	(g)	purchase in 2002 of the remaining 33.85% interest in Siam Pacific Electric Wire & Cable Company Limited (‘‘Siam Pacific’’) for $11,563, in the form of Charoong Thai shares issued to the minority shareholders. The excess of fair value of the assets acquired over consideration paid resulted in goodwill of $1,586. However, the further issuance of new Charoong Thai shares and the disposal of Charoong Thai shares have caused the Company’s effective interest in Siam Pacific to be diluted from 66.15% to 63.87%. The Company recognized a gain of $1,167 and a loss of $557 on the issuance of new shares by Charoong Thai and the disposal of Charoong Thai shares, respectively.


	(h)	purchase in 2003 of additional new shares in Shanghai Yayang for $1,670, thereby increasing the Company’s interest in Shanghai Yayang from 62.39% to 63.49%. The increase in the Company’s interest in Shanghai Yayang has been accounted for as a purchase. Accordingly, the excess of fair value of the assets acquired over the amount paid for the incremental ownership of 1.1% resulted in goodwill of $717.


	(i)	disposal in 2003 of 8.46% interest in Charoong Thai for $6,013; thereby decreasing the Company’s interest in Charoong Thai from 63.87% to 55.41%. The Company recognised a loss of $885 on the disposal of Charoong Thai shares.


	(j)	convert in 2003 of $1,445 due from Newcall Group Limited (‘‘NGL’’) to equity in NGL, thereby increasing the Company’s interest in NGL from 20.81% to 27.45%.


	(k)	purchase in 2003 of additional new shares in Shandong Pacific Fiber Optics Co., Ltd. (‘‘Shandong Pacific’’) for $308. The Company’s equity in Shandong Pacific remained at 51%.


	(l)	purchase in 2003 of additional new shares in Shandong Huayu of $183, thereby increasing the Company’s interest in Shandong Huayu by 1.19% to 49.91%.


	(m)	during 2004, Charoong Thai contributed additional capital in Shanghai Yayang in the form of a cash injection of US$532 and purchased US$500 shares from PRC (APWC), thereby decreasing the Company’s interest in Shanghai Yayang by 6.76% to 56.73%. The Company recognized a loss of US$49 as a result of this deemed disposal of interest in Shanghai Yayang.


	(n)	disposal in 2004 of 2.58% interest in Charoong Thai, thereby decreasing the Company’s interest in Charoong Thai from 55.41% to 52.83%. The Company recognized a loss of US$1,377 on the disposal of these Charoong Thai shares.


	(o)	during the 2004, Newcall Group Limited (‘‘NGL’’) engaged in an acquisition agreement with Blue Chip New Zealand Limited (‘‘BCN’’). According to the agreement, NGL had to change its share capital from 179,501,043 ordinary shares with no stipulated par value to 2,500,015 shares of NZD 0.1 each, and issue 50,000,000 new ordinary shares of NZD 0.1 each to BCN’s shareholders as consideration for the acquisition of all ordinary shares of BCN. As a result of the transaction, the interest of the Company in NGL decreased to 1.24%. Following the transaction, NGL changed its name to BCN.

The Company was formed to take up PEWC’s wire and cable business in Singapore, Thailand, Australia and the People’s Republic of China and was successfully listed on the New York Stock

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (continued)

Exchange in March 1997. On December 24, 2001, the staff of the New York Stock Exchange (‘‘NYSE’’) announced that it had determined that the trading of the common stock of APWC should be suspended prior to December 31, 2001. The decision was reached in view of the fact that the Company had fallen below NYSE’s continued listing standards regarding: average global market capitalization over a consecutive 30 trading-day period of not less than $15; and average closing price of a security of not less than $0.001 over a consecutive 30 trading-day period. Following the delisting of the Company’s common stock on the NYSE, the Company’s common stock was traded under the ticker AWRCF, on the Over-the-Counter Bulletin Board (‘‘OTC BB’’), operated by NASD, Inc. After the Company failed to timely file its annual report of Form 20-F for the 2004 fiscal year, the Company was delisted from the OTC BB in August 2005 and since that time its shares of common stock have been quoted on the ‘‘pink sheets’’ market by Pink Sheets LLC, a privately owned company that provides pricing and financial information for over-the-counter securities. Notwithstanding the above developments, the Company continues to be subject to the reporting requirements under the Securities Exchange Act of 1934.


	i)	The subsidiaries of the Company are set out below:


Place of incorporation and operations	Percentage of equity interest
	2003			2004
The British Virgin Islands
Asia Pacific Wire & Cable General Holdings Ltd.		100	%		100	%
PRC (APWC) Holding Ltd.		100	%		100	%
Samray Inc.		100	%		100	%
Siam (APWC) Holdings Ltd.		100	%		100	%
Moon View Ltd.		100	%		100	%
Trigent Investment Holdings Limited		100	%		100	%
Crown Century Holdings Ltd.		100	%		100	%
Singapore
Sigma Cable Company (Private) Limited (‘‘Sigma Cable’’)		98.24	%		98.30	%
Sino-Sin Trading Pte. Ltd. (‘‘Sino-Sin’’)		100	%		100	%
Sigma-Epan International Pte Ltd. (‘‘Sigma-Epan’’)		100	%		100	%
Singvale Pte Ltd (‘‘Singvale’’)		100	%		100	%
The People’s Republic of China
Ningbo Pacific Cable Co., Ltd. (‘‘Ningbo Pacific’’)		94.31	%		94.31	%
Shanghai Yayang Electric Co., Ltd. (‘‘Shanghai Yayang’’)		63.49	%		56.73	%
Shandong Pacific Fiber Optics Co.Ltd (‘‘SPFO’’)		51	%		51	%
Pacific Electric Wire & Cable (Shenzhen) Co., Ltd (‘‘PEWS’’)		100	%		100	%
Hong Kong
Crown Century Holdings Limited (‘‘CCH’’)		100	%		100	%
Australia
Australia Pacific Electric Cable Pty Limited (‘‘APEC’’)		98.48	%		98.53	%
Thailand
Charoong Thai Wire and Cable Public Company Limited		55.41	%		52.83	%
Siam Pacific Electric Wire & Cable Company Limited (‘‘Siam-Pacific’’)		55.41	%		52.83	%

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (continued)


Place of incorporation and operations	Percentage of equity interest
	2003			2004
Pacific-Thai Electric Wire & Cable Company Limited (‘‘Pacific-Thai’’)		55.41	%		52.83	%
Hard Lek Limited (‘‘Hard Lek’’)		73.98	%		73.98	%
APWC (Thailand) Co., Ltd		95.59	%		95.66	%
PEWC (Thailand) Co., Ltd.		95.59	%		95.66	%
Myanmar
Myanmar Sigma Cable Co., Ltd.		80	%		78.59	%


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


Place of incorporation and operations	Percentage of equity interest
	2003			2004
The People’s Republic of China
Shandong Huayu Pacific Fibre Optics Communications Co., Ltd (‘‘Shandong Huayu’’)		49.91	%		48.73	%
Shandong Pacific Rubber Cable Co., Ltd. (‘‘SPRC’’) (Note 22)		25.00	%		25.00	%
Thailand
Siam Pacific Holding Company Limited (‘‘SHPC’’)		49	%		49	%
Loxley Pacific Co., Ltd. (‘‘Lox Pac’’)		29.16	%		21.86	%
Thai Professional Telecom Network Co., Ltd (‘‘Thai Professional’’)*		16.61	%		15.84	%

Accounted for as an equity investee despite the Company holding less than 20% equity interest because the Company has the ability to exercise significant influence over the operating and financial policies of Thai Professional.


2.	BASIS OF PRESENTATION

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (‘‘US GAAP’’). The basis of accounting differs from that used in the statutory financial statements of the Company’s subsidiaries and equity investee companies, which are prepared in accordance with the accounting principles generally accepted in their respective countries of incorporation. In the opinion of management, the consolidated financial statements have reflected all costs incurred by the Company and its subsidiaries in operating the business.

All dollar amounts in the financial statements and in the notes herein are U.S. dollars (‘‘US$’’) unless otherwise designated.


3.	CHANGES IN PRESENTATION OF COMPARATIVE FINANCIAL STATEMENTS

Certain comparative amounts in last year’s audited financial statements have been reclassified to conform with the current year’s presentation.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany accounts and transactions have been eliminated on consolidation. The Company’s investments for which its ownership exceeds 20%, but which are not majority-owned or controlled, are accounted for using the equity method if the Company has the ability to exercise significant influence over the companies’ operating and financial policies.

Use of Estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

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

Inventories

Inventories are valued at the lower of cost or market value. Cost is determined using the first-in, first-out or weighted average method.

Income Taxes

The Company accounts for income taxes using the liability method in accordance with FASB Statement No. 109 — Accounting for Income Taxes . Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted rates that will be in effect when the differences are expected to reverse. A valuation allowance is established if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Asset leases qualifying as capital leases are also included in property, plant and equipment. Major renew als and improvements are capitalized and minor replacements, maintenance, and repairs are charged to current operations as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or the respective lease term, whichever is shorter. No depreciation is charged for construction in progress and machinery and equipment under installation. Depreciation is provided as follows:


Land			Nil
Land use rights			15 – 50 years
Buildings			5 – 30 years
Machinery and equipment			5 – 10 years
Motor vehicles			3 – 8 years
Office equipment			3 – 10 years

Depreciation for 2002, 2003 and 2004 amounted to $9,805, $9,217 and $8,295 respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Capitalized interest on construction in progress is added to the cost of the underlying asset and is amortized over the estimated useful life of the asset in the same manner as the underlying asset. In 2002, the Company capitalized interest of $207 on its construction of a factory building in Singapore. No interest was capitalized in 2003 and 2004.

Goodwill

Goodwill represents the excess of the cost of purchased business over the fair value of the underlying net assets.

Goodwill, including goodwill associated with equity method investments, is not amortized, but tested for impairment at least annually or more frequently if circumstances indicate that impairment may exist. The Company identifies potential goodwill impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company determines fair value using a discounted cash flow approach. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired. If the carrying amount of a reporting unit exceeds its fair value, the amount of goodwill impairment loss, if any, must be measured. The Company measures the amount of goodwill impairment loss by comparing the implied fair value of goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized as an operating expense.

FASB Statement No. 142, ‘‘Goodwill and Other Intangible Assets’’, defines a reporting unit as an operating segment or one level below an operating segment (referred to as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. Upon adoption of Statement 142 on January 1, 2002, the Company allocated the whole amount of goodwill to the manufactured products segment.

The impairment assessment was made as of December 31, 2002, 2003 and 2004, and no impairment was indicated.

Investments

Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in investment income. Interest on securities classified as held-to-maturity is included in investment income.

Marketable equity securities and debt securities not classified as held-to-maturity are classified as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in a separate component of shareholders’ equity. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in investment income. Realized gains and losses and declines in values judged to be other-than-temporary on available-for-sale securities are included in investment income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in investment income.

Investments in which the Company does not have a controlling interest or an ownership and voting interest so large as to exert significant influence, and which are not publicly traded are accounted for at cost.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In 2004, the Company recorded an impairment charge of $134 related to the unrealized loss in value of a long-term investment in a privately-held company.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Recoverability of an asset is measured by comparison of the carrying amount of the asset to the net undiscounted future cash flow expected to be generated from the assets. If the future undiscounted cash flows are not sufficient to recover the carrying value of the asset, the asset’s carrying value is adjusted to fair value. The Company estimates fair value based on discounted future cash flow.

In 2002, the Company recorded an impairment charge of $1,559 related to the impairment of certain property, plant and equipment of Ningbo, included in the manufactured products segment. The remaining carrying value of these impaired long-lived assets, immediately after recording the impairment charge, was approximately $173.

These impairment charges were recorded to reduce the carrying value of the identified assets to fair value. Fair values were derived using a variety of methodologies, including cash flow analysis, estimates of sales proceeds and independent appraisals. Where cash flow analyses were used to estimate fair values, key assumptions employed, included estimates of future growth, estimates of gross margins and estimates of the impact of inflation. The charges were primarily the result of management’s revised outlook due to the prolonged unfavourable market conditions.

Allowance for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments based on the analysis of accounts receivable, historical bad debts, customer credit-worthiness and current economic trends.

Revenue Recognition

Sales represents the invoiced value of goods sold, net of value added tax and returns, commission income earned on distribution activities, and service fee income on installation activities. Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Sales of goods and distribution activities

The Company recognizes revenue from the sale of goods and distribution activities upon passage of title to the customer which coincides with their delivery and acceptance. This method of revenue recognition is in accordance with Staff Accounting Bulletin, SAB 104 — ‘‘Revenue Recognition in Financial Statements.’’

Installation activities

The Company recognizes revenue from installation activities using the percentage-of-completion method, based on the customer certification of the distance of cable laid with respect to the estimated total contract revenue, and in accordance with Statement of Position (SOP) 81-1, ‘‘Accounting for the Performance of Construction-Type and Certain Production-Type Contracts’’ issued by the American Institute of Certified Public Accountants.

When elements such as installation and sale of cables are contained in a single arrangement, or in related arrangements with the same customer, the Company allocates revenue to each element based on its relative fair value. The allocation of the fair value to the delivered elements is limited to the amount that is not contingent on future delivery of services or subject to customer-specified return or refund privileges.

The Company adopted EITF No. 00-21, ‘‘Accounting for Revenue Arrangements with Multiple Deliverables’’ (‘‘EITF 00-21’’) in 2003. The impact of adopting EITF 00-21 was not material to the financial statements in 2003 and 2004.

Shipping and Handling Costs

The Company classifies such costs as cost of sales.

Product Warranties

The Company provides for the estimated cost of product warranties based on the warranty policy and historical experience, and accrues for specific items at the time their existence is known and the amounts are determinable.

Foreign Currency Translation

The Company’s functional currency is the United States dollar and the consolidated financial statements have been presented in United States dollars.

Foreign currency transactions are recorded at the applicable rates of exchange in effect at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. Exchange differences are dealt with in the consolidated statements of income.

The financial statements of the Company’s subsidiaries where the local currency is the functional currency have been translated into United States dollars in accordance with FASB Statement No. 52, ‘‘Foreign Currency Translation.’’ All balance sheet accounts have been translated using the exchange rates in effect at the balance sheet date. Statement of income amounts have been translated using the exchange rates in effect during the year. The gains and losses resulting from the changes in exchange rates from year to year have been reported separately as a component of shareholders’ equity.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign Currency Forward Contracts

The Company’s subsidiaries use forward foreign exchange contracts to reduce their exposure to foreign currency risk for liabilities denominated in foreign currency. A forward foreign exchange contract obligates the Company to exchange predetermined amounts of specified foreign currencies at specified exchange rates on specified dates or to make an equivalent US dollar payment equal to the value of such exchange. Realized and unrealized gains and losses on foreign exchange contracts are included in income as foreign exchange gains or losses.

The Company recognizes all derivative financial instruments in the consolidated financial statements at fair value regardless of the purposes or intent for holding the instrument. Changes in the fair value of derivative financial instruments are either recognized periodically in income or in shareholders’ equity as a component of comprehensive income depending on whether the derivative financial instruments qualify for hedge accounting, and if so, whether they qualify as a fair value or cash flow hedge.

Generally, changes in fair values of derivatives accounted for as fair value hedges are recorded in income along with the portions of the changes in the fair value of the hedged items that relate to the hedged risks. Changes in fair value of derivatives accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in other comprehensive income net of deferred taxes. Changes in fair value of derivatives used as hedges of the net investment in foreign operations are reported in other comprehensive income as part of the cumulative translation adjustment. Changes in fair values of derivatives not qualifying as hedges are reported in income.

As at December 31, 2003 and 2004, the Company has entered into forward exchange contracts with notional values of $100 and $4,333, respectively. The forward exchange contracts matured in January, February, March, May and June 2005. The fair values of the forward exchange contracts as at December 31, 2003 and 2004 were $1 and $90, respectively. These forward exchange contracts do not qualify for hedge accounting in accordance with FASB Statement No. 133 ‘‘Accounting for Certain Derivative Instruments and Certain Hedging Activities’’.

Gain on Issuance of Shares by Subsidiaries

At the time a subsidiary sells its stock to unrelated parties at a price in excess of its book value, the Company’s net investment in that subsidiary increases. If at that time, the subsidiary is not a newly-formed, non-operating entity, nor a research and development, start-up or development stage company, nor is there question as to the subsidiary’s ability to continue in existence, the Company records the increase as a non-operating gain in the Consolidated Statements of Operations. Otherwise, the increase is reflected in ‘‘effect of subsidiaries’ equity transactions’’ in the Company’s Consolidated Statements of Shareholders’ Equity.

Earnings (Loss) Per Share

Basic and diluted earnings (loss) per share is calculated in accordance with FASB Statement No. 128, ‘‘Earnings Per Share.’’

Recent Pronouncements

In March 2004, the Financial Accounting Standards Board (‘‘FASB’’) approved the consensus reached on Emerging Issues Task Force EITF No. 03-1 ‘‘ The Meaning of Other Than Temporary Impairment and its Application to Certain Investments ’’ (‘‘EITF 03-1’’). The main objective is to provide guidance for identifying other-than-temporarily impaired investments. EITF 03-01 also provides new disclosure requirements for investments that are deemed to be temporarily impaired. In September 2004, the FASB issued FASB Staff Position (FSP) EITF 03-1-1 that

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4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

delays the effective date of the measurement and recognition guidance in EITF 03-01 until further notice. Once the FASB reaches a final decision on the measurement and recognition provisions, the Company will evaluate the impact of the adoption of the accounting provisions of EITF 03-1.

In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151, ‘‘ Inventory Cost — An Amendment to Accounting Review Bulletin No. 43 (‘‘ARB 43’’), Chapter 4 ’’ (‘‘SFAS 151’’). SFAS 151 amends the guidance in ARB No. 43. Chapter 4, ‘‘Inventory Pricing’’ to clarify the accounting for abnormal amounts of idle facility expense, freight handling cost, and wasted materials (spoilage). Among other provisions, the new rule requires that items such as idle facility expense, excessive spoilage, double freight and rehandling costs be recognized as current period charges regardless of whether they meet the criterion of ‘‘so abnormal’’ as stated in ARB 43. Additionally, SFAS 151 requires that the allocation of fixed production overheads to the costs of concession be based on the normal capacity of the production facilities. SFAS 151 is effective for fiscal years beginning after June 15, 2005 and is required to be adopted by the Company beginning fiscal 2006. The Company is currently evaluating the effect that the adoption of SFAS 151 will have on its consolidation results of operations and financial condition.

In December 2004, the FASB issued Statement No. 153, ‘‘ Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions ’’. (‘‘SFAS 153’’) The amendments made by SFAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance. Previously, APB 29 required that the accounting for an exchange of a productive asset for a similar productive asset or an equivalent interest in the same or similar productive asset should be based on the recorded amount of the asset relinquished. SFAS 153 is the result of a broader effort by the FASB to improve the comparability of cross-border financial reporting by working with the IASB toward development of a single set of high-quality accounting standards. APB 29 provided an exception to its basic measurement principle (fair value) for exchanges of similar productive assets. FASB believes that exception required that some nonmonetary exchanges, although commercially substantive, be recorded on a carryover basis. By focusing the exception on exchanges that lack commercial substance, FASB believes SFAS 153 produces financial reporting that more faithfully represents the economics of the transactions.

In March 2005, the FASB issued Interpretation, or FIN, No. 47, ‘‘ Accounting for Conditional Asset Retirement Obligations ’’ (‘‘FIN 47’’) — an interpretation of FASB Statement No. 143, ‘‘ Accounting for Asset Retirement Obligations ’’, which clarifies the term ‘‘conditional asset retirement obligations’’ and specifically when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. The provisions of FIN 47 are effective on December 15, 2005. The adoption of FIN 47 is not expected to have a material effect on our consolidated results of operations or financial condition.

In May 2005, the FASB issued FASB Statement No. 154, ‘‘ Accounting Changes and Error Corrections ’’ (‘‘SFAS 154’’). SFAS 154 replaces APB Opinion No. 20 (‘‘APB 20’’), Accounting Changes and FASB Statement No. 3, ‘‘ Reporting Accounting Charges in Interim Financial Statements ’’. SFAS 154 requires that a voluntary change in accounting principle be applied retrospectively with all prior period financial statements presented on the new accounting principle, unless it is impracticable to do so. SFAS 154 also provides that a correction of errors in previously issued financial statements should be termed a ‘‘restatement.’’ APB 20 previously required most voluntary changes in accounting principle to be recognized by including in net

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

income at the period of change the cumulative effect of changing to the new accounting principle. In addition, SFAS 154 carries forward without change the guidance contained in APB 20 for reporting a correction of an error in previously issued financial statements and a change in accounting estimate. The new standard is effective for accounting changes and correction of errors made after January 1, 2006. The Company does not expect the adoption of SFAS 154 to have a material impact on its consolidated financial statements.

In February 2006, FASB Statement No. 155, ‘‘ Accounting for Certain Hybrid Financial Instruments ’’ (‘‘SFAS 155’’) — an Amendment of FASB Statements No. 133 and 140, was issued. This statement provides companies with relief from having to separately determine the fair value of an embedded derivative that would otherwise be required to be bifurcated from its host contract in accordance with SFAS 133 by allowing companies to make an irrevocable election to measure a hybrid financial instrument at fair value in its entirety, with changes in fair value recognized in earnings. The election may be made on an instrument-by-instrument basis and can be made only when a hybrid financial instrument is initially recognized or undergoes a remeasurement event. Statement No. 155 also requires that interests in securitized financial assets be evaluated to identify whether they are freestanding derivatives or hybrid financial instruments containing an embedded derivative that requires bifurcation. SFAS 155 is effective for all financial instruments acquired, issued, or subject to a remeasurement event occurring in fiscal years beginning after September 15, 2006. The impact of SFAS 155 will depend on the future issuance or remeasurement of and the nature of any hybrid financial instruments held by the Company after the effective date, but management does not currently expect SFAS 155 to have a material impact on the Company’s consolidated financial position, results of operations and cash flows.

In March 2006, FASB Statement No. 156, ‘‘ Accounting for Servicing of Financial Assets — an Amendment of FASB Statement No. 140 ’’ (‘‘SFAS 156’’), was issued. SFAS 156 requires recognition of a servicing asset or liability at fair value each time an obligation is undertaken to service a financial asset by entering into a servicing contract. SFAS 156 also provides guidance on subsequent measurement methods for each class of servicing assets and liabilities and specifies financial statement presentation and disclosure requirements. SFAS 156 is effective for fiscal years beginning after September 15, 2006. Management does not currently expect SFAS 156 to have a material impact on the Company’s future consolidated financial position, results of operations and cash flows.

In June 2006, FASB ratified the consensus on EITF Issue No. 06-3 — ‘‘ How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement ’’ (‘‘EITF 06-3’’). The scope of EITF 06-3 includes any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, sales, use, value added, and certain excise taxes. EITF 06-3 states that presentation of taxes within the scope of this EITF on either a gross basis or a net basis is an accounting policy decision which should be disclosed pursuant to APB No. 22 — Disclosure of Accounting Policies. If such taxes are significant, and are presented on a gross basis, the amounts of those taxes should be disclosed. The consensus on EITF 06-3 will be effective for interim and annual reporting periods beginning after December 15, 2006.

In July 2006, the FASB issued FIN No. 48 — ‘‘ Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109 ’’ (‘‘FIN 48’’). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with SFAS 109 — ‘‘ Accounting for Income Taxes ’’. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

classification, interest and penalties, accounting in interim periods, disclosure and transition. We are currently evaluating the potential impact, if any, that the adoption of FIN 48 will have on our consolidated financial statements.

In September 2006, FASB issued Statement No. 157 — ‘‘ Fair Value Measurements ’’ Statement No. 157 (‘‘SFAS 157’’) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements. SFAS 157 becomes effective for us on January 1, 2008. Upon adoption, the provisions of SFAS 157 are to be applied prospectively with limited exceptions.

In September 2006, FASB Statement No. 158, ‘‘ Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R)’’ (‘‘ SFAS 158’’), was issued. This statement requires an employer that sponsors one or more defined benefit pension or other postretirement plans to recognize an asset or liability for the overfunded or underfunded status of its postretirement benefit plans in its balance sheet for years ending after December 15, 2006. The funded status is measured as the difference between the fair value of the plan’s assets and its benefit obligation. The statement also requires an employer to measure plan assets and benefit obligations as of the date of the employer’s statement of financial position. SFAS 158 is effective for fiscal years ending after December 15, 2006, except for the requirement to measure plan assets and benefit obligations as of the statement of financial position date, which is effective for fiscal years ending after December 15, 2008. Transition for the recognition provisions is entirely prospective. We are currently evaluating the potential impact, if any, that the adoption of SFAS. 158 will have on our consolidated financial statements.

In September 2006, the FASB ratified EITF Issue No. 06-1 — ‘‘ Accounting for Consideration Given by a Service Provider to Manufacturers or Resellers of Equipment Necessary for an End-Customer to Receive Service from the Service Provider ’’ (‘‘EITF 06-1’’). This guidance requires the application of EITF Issue No. 01-9 — ‘‘ Accounting for Consideration Given by a Vendor to a Customer ’’ (‘‘EITF 01-9’’), when consideration is given to a reseller or manufacturer for benefit to the service provider’s end-customer. EITF 01-9 requires the consideration given to be recorded as a liability at the time of the sale of the equipment and also provides guidance for the classification of the expense. EITF 06-1 is effective for the first annual reporting period beginning after June 15, 2007. We are currently evaluating the potential impact that adoption of SFAS 157 will have on our consolidated financial statements.

In September 2006, Securities and Exchange Commission Staff Accounting Bulletin No. 108 codified as SAB Topic 1.N, ‘‘ Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements ’’ (‘‘SAB 108’’) was issued. This guidance states that registrants should use both a balance sheet approach and an income statement approach when quantifying and evaluating the materiality of a misstatement. The guidance also provides transition guidance for correcting errors existing in prior years. SAB 108 is effective for annual financial statements covering the first fiscal year ending after November 15, 2006. We are currently evaluating the potential impact, if any, that the adoption of SAB 108 will have on our consolidated financial statements.

In February 2007, the FASB issued Statement No. 159 — The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115 . SFAS No. 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. Statement No. 159 is effective for

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

fiscal years beginning after November 15, 2007. We do not believe the adoption of SFAS 157 will have significant impact on our consolidated financial statements.


5.	SHORT-TERM BANK DEPOSITS


	December 31,
	2003			2004
Restricted short-term bank deposits		$	3,567		$	8,169
Unrestricted short-term bank deposits			7,788			5,915
		$	11,355		$	14,084

Restricted short-term bank deposits represent the amounts of cash pledged by two subsidiaries to secure credit facilities granted by financial institutions.


6.	GOODWILL

Goodwill relates to the manufactured products segment and the changes in the carrying value of goodwill for the years ended December 31, 2003 and 2004 are as follows :—


Balance, December 31, 2002	$	7,607
Goodwill acquired		717
Balance, December 31, 2003	$	8,324
Goodwill acquired		—
Balance, December 31, 2004	$	8,324


7.	INVESTMENTS

The following is a summary of available-for-sale securities and held-to-maturity securities:


	Available-for-sale Securites
	Cost			Gross Unrealized Gains			Gross Unrealized Losses				Estimated Fair Value
December 31, 2003 Quoted equity securities		$	465		$	591		$	(15	)		$	1,041
December 31, 2004 Quoted equity securities		$	463		$	1,632		$	(19	)		$	2,076


	Held-to-maturity Securities
	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Estimated Fair Value
December 31, 2003 Corporate debts		$	50		$	—		$	—		$	50
December 31, 2004 Corporate debts		$	52		$	—		$	—		$	52

A summary of the carrying values and balance sheet classification of all investments in debt and equity securities including held-to-maturity and available-for-sale securities disclosed above was as follows:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


7.	INVESTMENTS (continued)


	December 31,
	2003			2004
Available-for-sale equity securities		$	1,041		$	2,076
Short-term investments			1,041			2,076
Held-to-maturity debt securities		$	50		$	52
Equity securities in privately-held companies and other investments			2,391			616
Long-term investments			2,441			668
Total investments		$	3,482		$	2,744

There were realized gains (losses) of $nil, $89 and $(19) on disposal of available-for-sale securities in 2002, 2003 and 2004, respectively. The disposal of available-for-sale securities was for a consideration of $nil, $175 and $nil in 2002, 2003 and 2004, respectively. The net adjustment to unrealized holding (losses) gains on available-for-sale securities included as a separate component of shareholders’ equity totaled, $(381), $464 and $911 in 2002, 2003 and 2004, respectively.

On December 31, 2003 and 2004, the Company held available-for-sale and held-to-maturity securities issued by a minority shareholder of two of the Operating Subsidiaries. The estimated fair values of such available-for-sale and held-to-maturity securities were $1,041 and $50 at December 31, 2003 and $2,076 and $52 at December 31, 2004, respectively.


8.	BANK LOANS AND OVERDRAFTS

Under line of credit arrangements for short-term debt with the Company’s bankers, the Company may borrow up to approximately $103,183 (2003: $78,000) on such terms as the Company and the banks may mutually agree upon. These arrangements do not have termination dates but are reviewed annually for renewal. As of December 31, 2004, the unused portion of the credit lines was approximately $37,973 (2003: $42,000), which included unused letters of credit amounting to $24,606 (2003: $26,725). Letters of credit are issued by the Company during the ordinary course of business through major financial institutions as required by certain vendor contracts. As of December 31, 2004, the Company had open letters of credit totaling $45,423 (2003: $18,212) Liabilities relating to the letters of credit are included in current liabilities.

The credit lines of the Company were secured by:


	(i)	Mortgage of the Company’s land, buildings, machinery and equipment with a total carrying amount of $8,158 at December 31, 2004 (2003: $4,892);


	(ii)	Mortgage of the assets with total carrying amount of $1,276 at December 31, 2004 of a subsidiary of the Company; (2003: $1,021)


	(iii)	Pledge of short-term deposits of $8 ,169 at December 31, 2004 (2003: $3,567);


	(iv)	Joint and several personal guarantees from certain directors of a subsidiary of the Company; and


	(v)	Corporate guarantees issued by the Company, a subsidiary of the Company and the holding company.

The weighted average interest rates on bank loans and overdrafts as of December 31, 2003 and 2004 were 4.0% and 5.0% per annum respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


9.	LONG-TERM DEBT


	December 31,
	2003			2004
Bank loan		$	1,654		$	1,710
Less: Current portion			—			(1,710	)
Long-term debt		$	1,654		$	—

During 2002, 2003 and 2004, interest paid totaled $477, $155 and $250, respectively. The bank loan on December 31, 2004 is secured by land and buildings of a subsidiary of the Company with a net book value of $2,974 on December 31, 2004 and requires the Company to maintain a certain minimum percentage holding in this subsidiary.

The loan as at December 31, 2003 bore interest at the commercial bill rate plus 1%, and the weighted average interest rate on commercial bills during the year was 5.83%.

The above loan as at December 31, 2004 matured in March 2005 and the Company renewed the bank loan upon its maturity to March 2006.


10.	DISTRIBUTION OF EARNINGS

The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions from the Operating Subsidiaries and the investee companies.

As described in Note 2, the earnings reflected in the financial statements prepared in accordance with US GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries and investee companies. In accordance with the relevant laws and regulations applicable to the Company’s subsidiaries and investee companies, the earnings available for distribution are based on their respective statutory financial statements. At December 31, 2004, the amount of the Company’s retained earnings available for distribution was approximately $16,023 and the consolidated retained earnings included $(3,085), $(1,003), $(700), $154 and $nil of the accumulated (losses) profits of Lox Pac, Thai Professional, SPHC, SPRC and Shandong Huayu, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


11.	VALUATION AND QUALIFYING ACCOUNTS


Description	Balance at beginning of year			Net charged to costs and expenses			Deduction				Currency translation adjustments			Balance at end of year
Year ended December 31, 2002:
Deducted from asset accounts
Allowance for doubtful accounts		$	3,029		$	968		$	(123	)		$	84		$	3,958
Allowance for inventories			2,518			847			(1,012	)			52			2,405
		$	5,547		$	1,815		$	(1,135	)		$	136		$	6,363
Year ended December 31, 2003:
Deducted from asset accounts
Allowance for doubtful accounts		$	3,958		$	902		$	(279	)		$	271		$	4,852
Allowance for inventories			2,405			77			(370	)			95			2,207
		$	6,363		$	979		$	(649	)		$	366		$	7,059
Year ended December 31, 2004:
Deducted from asset accounts
Allowance for doubtful accounts		$	4,852		$	3,528		$	(11	)		$	147		$	8,516
Allowance for inventories			2,207			1,439			(270	)			74			3,450
		$	7,059		$	4,967		$	(281	)		$	221		$	11,966


12.	INCOME TAXES

Under current Bermuda law, the Company is not subject to tax on income or capital gains, and no Bermuda withholding tax is imposed upon payments of dividends by the Company to its shareholders.

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

The Operating Subsidiaries and Equity Investees are governed by the income tax laws of Singapore, Thailand, Australia, New Zealand, the People’s Republic of China and Myanmar. The corporate income tax rate in Singapore was 22%, 22% and 20% for 2002, 2003 and 2004, 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, 2004 and a withholding tax of 10% is levied on dividends received by the Company. In Australia, the corporate income tax rate was 30% for 2002/2003, 2003/2004 and 2004/2005 tax years. The corporate income tax rate for New Zealand was 33% for 2002/2003, 2003/2004 and 2004/2005 tax years and a withholding tax of 30% is levied on dividends received by the Company. The applicable corporate income tax rate for the subsidiaries in the People’s Republic of China was 33% for each of the three years ended December 31, 2004. The corporate income tax rate for Myanmar was 30% for 2002/2003, 2003/2004 and 2004/2005 tax years.

Pursuant to the income tax law of the PRC concerning foreign investment enterprises and various local income tax laws (the Income Tax Law), the enterprises generally are subject to income tax at an effective rate of 33% (30% state income taxes plus 3% local income taxes) on income as reported in their statutory accounts unless the enterprise is located in specially-designated regions or cities for which more favorable effective rates apply.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


12.	INCOME TAXES (continued)

PEWS is located in Shenzhen, which is a region where preferential tax rates apply and currently qualifies for a reduced rate of taxation of 15% (50% of the full rate of 30% State income taxes and no local income taxes). PEWS is exempt from income tax for the two years starting from its first profitable year of operations (2001). PEWS is entitled to a 50% tax exemption from the State income taxes for a further three-year period (2003 to 2005) under the Income Tax Law.

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


	Year ended December 31,
	2002				2003				2004
Thailand		$	17,131			$	14,381			$	10,014
Singapore			(3,572	)			(4,194	)			(2,382	)
Australia			1,257				3,924				1,386
The People’s Republic of China			1,117				4,598				2,689
Myanmar			(24	)			—				—
British Virgin Islands			707				(2,699	)			(2,260	)
Bermuda			(1,268	)			1,430				(1,604	)
			15,348				17,440				7,843
Equity investees
Thailand			(3,357	)			120				(2,772	)
New Zealand			(221	)			—				—
Singapore			(475	)			—				—
The People’s Republic of China			—				—				(1,452	)
Others			(41	)			—				—
		$	11,254			$	17,560			$	3,619

Significant components of the provision (benefit) for income taxes are as follows:


	Year ended December 31,
	2002				2003				2004
Allocated to net income
Current:
Thailand		$	2,787			$	3,747			$	3,232
Singapore			(30	)			150				254
Myanmar			12				12				—
The People’s Republic of China			—				252				925
Australia			—				286				460
			2,769				4,447				4,871
Deferred:
Thailand			2,022				(466	)			(194	)
Singapore			(108	)			(258	)			—
The People’s Republic of China			—				—				83
Australia			—				(1,246	)			(44	)
Total deferred			1,914				(1,970	)			(155	)
		$	4,683			$	2,477			$	4,716
Allocated to comprehensive income (loss)		$	(10	)		$	15			$	(1	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


12.	INCOME TAXES (continued)

On December 31, 2004, the Operating Subsidiaries had net operating loss carry forwards of approximately $16,793. The remaining net operating loss can be carried forward indefinitely, subject to any condition to be met under the relevant tax laws of the respective jurisdictions. The utilization of these net operating loss carry forwards is subject to agreement by the income tax authorities in the respective jurisdictions.

The provision for income taxes differs from the amount computed by applying the respective statutory rates to income before income taxes of the Company and the Operating Subsidiaries. The principal reasons for the differences are listed in the following table:


	Year ended December 31,
	2002				2003				2004
Tax at statutory rate in Bermuda		$	—			$	—			$	—
Higher statutory rate in Thailand			3,540				3,278				1,961
Higher statutory rate in Singapore			(891	)			(923	)			(1,222	)
Higher statutory rate in Australia			377				1,177				416
Higher statutory rate in New Zealand			(66	)			—				—
Higher statutory rate in the People’s Republic of China			369				1,114				(148	)
Higher statutory rate in Myanmar			(7	)			—				—
			3,322				4,646				1,007
Expenses not deductible for tax purposes			1,023				121				1,361
Changes in valuation allowance			740				(1,950	)			1,766
Others			(402	)			(340	)			582
Total charge for the year		$	4,683			$	2,477			$	4,716

Deferred tax liabilities and assets are comprised of the following:


	December 31,
	2003				2004
Deferred tax liabilities:
Tax over book depreciation		$	(322	)		$	(275	)
Book over tax basis in subsidiaries			(1,398	)			(1,365	)
Translation adjustments			(503	)			(493	)
Total deferred tax liabilities			(2,223	)			(2,133	)
Deferred tax assets:
Unused tax losses and unused tax credits		$	4,322			$	4,462
Provision for doubtful accounts			847				2,172
Provision for inventories			377				876
Provision for impairment in investment			595				583
Others			125				(277	)
Total deferred tax assets			6,266				7,816
Valuation allowance for deferred tax assets			(3,379	)			(5,145	)
Total deferred tax assets			2,887				2,671
Net deferred tax assets		$	664			$	538

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


12.	INCOME TAXES (continued)

The amount of deferred tax liabilities and assets at December 31, 2003 and 2004 were as follows:


	December 31,
	2003				2004
Gross current deferred tax liabilities		$	(449	)		$	(493	)
Gross current deferred tax assets			774				4,209
Valuation allowance for deferred tax assets			—				(1,633	)
			774				2,576
Net current deferred tax assets		$	325			$	2,083
Gross long-term deferred tax liabilities			(1,774	)			(1,640	)
Gross long-term deferred tax assets			5,492				3,607
Valuation allowance for deferred tax assets			(3,379	)			(3,512	)
			2,113				95
Net long-term deferred tax assets/(liabilities)		$	339			$	(1,545	)
Net deferred tax assets/(liabilities)		$	664			$	538

Undistributed earnings of the Company’s foreign subsidiaries included in the Company’s retained earnings amounted to approximately $24,202 and $22,253 on December 31, 2003 and 2004, respectively. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to withholding taxes payable to the respective foreign countries. Except for earnings relating to a subsidiary in Thailand, the Company has no intention of distributing the earnings that are subject to withholding taxes. Withholding taxes of approximately $781 would be payable upon remittance of all previously unremitted earnings of that subsidiary, to the extent allowed by the subsidiary’s articles of association, on December 31, 2004.

A subsidiary of the Company has been granted certain promotional privileges by the Board of Investment of Thailand for a project investment of manufacturing enameled copper wire for export purposes. Such privileges include exemption from import duty and tax on raw and essential materials used for export manufacturing up to January 2002. However, since the subsidiary has net operating loss carry forwards, no tax benefits have been obtained from the above privileges.

PEWS is located in Shenzhen, which is a region where preferential tax rates apply and currently qualifies for a reduced rate of taxation of 15%. PEWS is exempt from income tax for the two years starting from its first profitable year of operations (2001). PEWS is entitled to a 50% tax exemption from the local income tax for a further three-year period (2003 to 2005) under the local income tax law. With the tax holiday exemption, current income tax liabilities of PEWS were reduced by approximately $290 for the year ended December 31, 2004. The tax holiday exemption also increased the net income per share by $0.02 for the year ended December 31, 2004.

The management estimated and accrued a tax provision amount of $620 during the year as the Company determined that it is more-likely-than-not that income derived from certain activities may be subject to taxes in offshore locations that have a higher tax rate.

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


12.	INCOME TAXES (continued)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company had deferred tax assets totaling approximately $6,266 and $7,816 at December 31, 2003 and 2004, respectively. However, realization of all of these deferred assets is not reasonably assured; therefore, they were reserved by a valuation allowance of $3,379 and $5,145 at December 31, 2003 and 2004, respectively.

The net change in valuation allowance for the years ended December 31, 2002, 2003 and 2004 was an increase (decrease) of approximately $740, $(1,950) and $1,766, respectively, resulting primarily from net operating losses (gains) generated during the respective years.


13.	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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


	Currency translation adjustments				Unrealized gains (losses) on available- for- sale securities				Total
Balance at December 31, 2001		$	(37,334	)		$	132			$	(37,202	)
Currency translation adjustment			6,919				—				6,919
Unrealized losses on available-for-sale securities			—				(391	)			(391	)
Deferred taxes relating to unrealized losses on available-for-sale securities			—				10				10
Balance at December 31, 2002			(30,415	)			(249	)			(30,664	)
Currency translation adjustment			4,754				—				4,754
Losses realized on disposal of available-for-sale securities			—				(89	)			(89	)
Unrealized gains on available-for-sale securities			—				479				479
Deferred taxes relating to unrealized gains on available-for-sale securities			—				(15	)			(15	)
Balance at December 31, 2003			(25,661	)			126				(25,535	)
Currency translation adjustment			1,583				—				1,583
Unrealized gains on available-for-sale securities			—				910				910
Deferred taxes relating to unrealized gains on available-for-sale securities			—				1				1
Balance at December 31, 2004		$	(24,078	)		$	1,037			$	(23,041	)


14.	COMMITMENTS AND CONTINGENCIES


	(a)	Leases

The Company leases certain machinery and equipment under capital leases for both 2003 and 2004.

The Company leases a piece of land in Singapore and certain buildings under non-cancelable operating lease arrangements for terms from 5 to 30 years.

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


14.	COMMITMENTS AND CONTINGENCIES (continued)

Future minimum payments under capital leases and non-cancelable operating leases with initial terms of one year or more consisted of the following as of December 31, 2004:


	Capital Leases				Operating Leases
2005			134				527
2006			239				332
2007			—				202
2008			—				202
2009			—				202
Thereafter			—				4,185
Total minimum lease payments		$	373			$	5,650
Amounts representing interest			(50	)
Present value of net minimum lease payments		$	323

Rental expense consisted of the following:


	Year ended December 31,
	2002			2003			2004
Rentals under operating lease		$	117		$	425		$	545

The current and non-current portion of the capital lease liabilities of $110 and $213 as of December 31, 2004 are included in other current liabilities and other liabilities, respectively. The capital lease liabilities are secured by a charge over the leased machinery and equipment at cost of $ 811 and $662 as of December 31, 2003 and 2004, respectively. The accumulated depreciation of these leased assets for the years ended December 31, 2003 and 2004 amounted to $365 and $247, respectively.


	(b)	As of December 31, 2004, there were outstanding bank guarantees of $19,285 (2003: $107) issued by the banks on behalf of Charoong Thai and its subsidiaries in respect of certain performance bonds as required in the normal course of business of the companies. These guarantees generally expire within 1 year.


	(c)	As of December 31, 2004, Charoong Thai and its subsidiaries had given continuing corporate guarantee of $32,797 (2003: $4,649) in respect of banking facilities extended to two Operating Subsidiaries.


	(d)	Sigma Cable has agreed to provide continuing financial support to APEC to enable APEC to meet its liabilities as and when they fall due.


	(e)	Approximately $1,911 of property, plant and equipment of a subsidiary in the People’s Republic of China is located on a piece of leasehold land held by an equity investee. The equity investee is in the process of obtaining the land use right certificate in respect of the said land.


	(f)	In 2004, corporate income tax amounting to $274 was made against a subsidiary company. The subsidiary company appealed against the assessment. With regards to the tax assessment of the subsidiary, the appeals committee is considering the appeal. However, the Company has not set up provision for the tax assessment in the financial statements since the management believes that, based on the facts and additional evidence, it will not have to pay the assessed tax.

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


14.	COMMITMENTS AND CONTINGENCIES (continued)


	(g)	In February 2004, the Company provided a corporate guarantee amounting to approximately $2,656 to a third party for the procurement of copper by a subsidiary company. The guarantee expired on February 28, 2005 and was renewed at approximately $3,035 on February 28, 2006 and February 28, 2007. The guarantee will expire on February 28, 2008.


	(h)	On December 27, 2004, the Company provided a corporate guarantee amounting to $9,646 to PEWC in relation to a loan provided by PEWC to a subsidiary company and certain trade payables owing to PEWC by the subsidiary company.


15.	FINANCIAL INSTRUMENTS


	(a)	Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, bank deposits, investments, investment securities and trade accounts receivable.

The Company maintains cash and cash equivalents with various financial institutions. These financial institutions are located in Singapore, Thailand, Australia and the People’s Republic of China. The Company’s policy is designed to limit its exposure to any one institution. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy.

Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities comprising the Company’s customer base. The Company carefully assesses the financial strength of its customers and generally does not require any collateral. At December 31, 2004, there was no trade receivable which exceeded 10% of the Company’s account receivable amounts.

The Company is exposed to credit loss in the event of non-performance by counter parties on foreign exchange contracts, but the Company does not anticipate non-performance by any counter parties.


	(b)	Fair value

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash and cash equivalents : The carrying amount reported in the balance sheet for cash and cash equivalents approximates its fair value because of the short-term maturity of these instruments.

Accounts receivable and accounts payable : The carrying amounts reported in the balance sheet for accounts receivable and accounts payable approximate their fair values because of the short-term maturity of these instruments.

Investment securities : The fair values of marketable equity securities are based on quoted market prices, details of which are set out in Note 7. The fair values for debt securities are based on discounted cash flow analysis using current interest rates for instruments with similar maturities. It is not practicable to estimate the fair values of the equity investments that do not have a quoted market price, without incurring excessive costs.

Long-term and short-term debt : The carrying amounts of the Company’s borrowings under its short-term revolving credit arrangements approximate their fair values. The fair values of the Company’s long-term debt are estimated using discounted cash flow analyses, based on

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


15.	FINANCIAL INSTRUMENTS (continued)

the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The fair value of the long-term debt from a related party is not determinable because of the related party nature of the loan.

Forward exchange contracts : The fair values of forward exchange contracts are estimated by reference to market quotations for forward contracts with similar terms, adjusted where necessary for maturity differences.

The carrying amounts and fair values of the Company’s financial instruments as of December 31, 2003 and 2004 were as follows:


	2003						2004
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Cash and cash equivalents		$	17,244		$	17,244		$	18,504		$	18,504
Restricted short-term bank deposits			3,567			3,567			8,169			8,169
Unrestricted short-term bank deposits			7,788			7,788			5,915			5,915
Equity securities available-for-sale			1,041			1,041			2,076			2,076
Debt securities held-to-maturity			50			50			52			52
Bank loans and overdrafts			21,524			21,524			48,002			48,002
Debts			1,654			1,654			1,710			1,710
Forward exchange contracts			1			1			90			90


16.	CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS

Copper is the principal raw material used by the Company. The Company purchases copper at prices closely related to the prevailing international spot market prices on the London Metal Exchange for copper. The price of copper is influenced heavily by global supply and demand as well as speculative trading. Consequently, an increase in the price of copper will have a direct effect on the Company’s cost of sales.

Changes in exchange rates influence the Company’s results of operations. The Company’s principal operations are located in Thailand, the People’s Republic of China (‘‘PRC’’) and Singapore and a substantial portion of its revenues are denominated in Thai Baht, PRC Renminbi (‘‘RMB’’) or Singapore dollars, whereas a substantial portion of the Company’s cost of sales are denominated in US dollars. In 1997, the devaluation of the Thai Baht against the US dollar adversely affected the operations of the Company in Thailand. Any devaluation of the Thai Baht, RMB or Singapore dollar against the US dollar would have an adverse impact on the operations of the Company.

The Company has investments in subsidiaries in the PRC. The distributions of earnings outside the PRC are subject to control because the RMB is not freely convertible into foreign currencies.

On January 1, 1994, the PRC government introduced a single rate of exchange as quoted daily by the People’s Bank of China (the ‘‘Unified Exchange Rate’’). The quotation of the exchange rates does not imply free convertibility of RMB into other foreign currencies. All foreign exchange transactions continue to take place either through the Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the Bank of China or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


17.	RELATED PARTY BALANCES AND TRANSACTIONS


	December 31,
	2003			2004
Due from:
Pardee Assets Co. Ltd		$	2		$	2
Shandong Yanggu Wire & Cable Corp Ltd (‘‘Shandong Yanggu’’)			58			—
PEWC			—			1,859
PEWC, Singapore Branch			277			543
Italian-Thai Development Public Company Limited (‘‘Ital-Thai’’) and its affiliates			887			634
SPHC			1,624			1,204
A director of Siam Pacific			21			10
Others			239			192
		$	3,108		$	4,444
Due to:
PEWC		$	18,339		$	17,891
PEWC, Singapore Branch			1,000			1,145
Fujikura Limited			16			44
Thai Metal Processing Co., Ltd.			111			160
SPHC			2,600			2,544
Others			449			199
		$	22,515		$	21,984
Short-term loans from:
Moon View Venture Limited (‘‘Moon View’’)		$	1,537		$	1,537
PEWC			231			—
Pacific Overseas Investment Management Ltd			195			195
		$	1,963		$	1,732

The above balances with related parties are interest-free and are repayable upon demand.


	December 31,
	2003			2004
Long term loans from PEWC		$	7,824		$	5,945

Moon View and PEWC, Singapore Branch are controlled by PEWC. Ital-Thai is the minority shareholder of one of the Company’s Operating Subsidiaries.

All balances with related parties are unsecured.

The long term loans from PEWC included amounts of $4,818 and $2,945 as of December 31, 2003 and 2004, respectively, which bear interest at LIBOR plus 1% per annum. The long-term loans have no fixed term of repayment and are expected to be repaid in 2008.

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


17.	RELATED PARTY BALANCES AND TRANSACTIONS (continued)

The transactions undertaken with related parties can be summarized as follows:


	Year ended December 31,
	2002			2003			2004
Purchases of copper from PEWC		$	42,959		$	30,708		$	30,968
Purchases of power cables from PEWC			34,271			20,130			23,505
Subcontracting services provided by PEWC			804			100			—
Commission income from PEWC			348			—			—
Sales to Ital-Thai and its affiliates			1,014			520			1,247
Sales to PEWC			12			941			—
Sales to PEWC, Singapore Branch			—			146			42
Sales to Lox Pac			—			19			7
Sales to Shandong Yanggu			—			131			53
Purchases of raw materials from Thai Metal Processing Co. Ltd			1,157			995			1,297
Purchases of goods from Fujikura Limited			3,523			1,161			416
Interest expense paid to PEWC			111			129			21
Management fee paid to PEWC			141			292			151
Management fee received from PEWC			11			12			12
Management fee received from PEWC, Singapore Branch			—			24			24
Interest income from NCS and affiliates			209			—			—
Royalty fee paid to Fujikura Limited			69			14			—
Purchases of goods from Shandong Yanggu			—			147			216
Dividend income from Thai Metal Processing Co. Ltd.			—			152			155

Copper is the major raw material of the Company’s wire and cable products. The Company purchases copper in the form of copper rods and copper cathode. Copper cathode is purchased by Siam Pacific to avoid the high import tariff levied on copper rods. Copper cathode needs to be processed into copper rods prior to the manufacturing of wire and cable products.

Substantially all of the Company’s copper rods are supplied by PEWC while copper cathodes are supplied by unrelated third parties. The price of copper rods purchased from PEWC is determined by reference to the quoted copper prices on the London Metal Exchange (the ‘‘LME’’) plus a certain premium.

In addition to copper rods, the Company purchases high voltage power cable from PEWC for distribution purposes. The purchase price of power cable from PEWC is determined by reference to the quoted copper prices on the LME. Prior to 2003, a sales commission at an average rate of 1% to 3% was received from PEWC in addition to sales proceeds received from customers.

Pursuant to the composite services agreement,


	(a)	PEWC will sell copper rod to the Company, upon the Company’s request, (i) at a price consisting of the average spot price of copper on the LME for the one month prior to purchase plus an agreed upon premium, (ii) at prices and on terms at least as favorable as it provides copper rod to other purchasers of similar amounts of copper rod in the same markets from PEWC and (iii) will give priority in the supply of copper rod to the Company over other purchasers of copper rod from PEWC.


	(b)	PEWC will grant to the Company the right to distribute any wire or cable product manufactured by PEWC in all markets in which the Company presently distributes or

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


17.	RELATED PARTY BALANCES AND TRANSACTIONS (continued)


		develops the capability to distribute in the future, such products on such terms as have historically been in effect or on terms at least as favorable as PEWC grants to third parties that distribute such products in such markets. However, PEWC shall not be required to grant to the Company the right to distribute products manufactured by PEWC in the future in markets where the Company does not currently have the capability to distribute unless and until PEWC has no pre-existing contractual rights which would conflict with the grant of a right to the Company.


	(c)	PEWC will make available to the Company, upon the Company’s request and on terms to be mutually agreed between PEWC and the Company from time and time, access to certain of PEWC’s technology (and PEWC personnel necessary to use such technology) with respect to the design and manufacture of wire and cable products, including, without limitation, certain fiber optic technology.


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


	(e)	Each of PEWC and the Company will 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 shall have the right of first refusal to enter into any definitive agreement with such third party. If, however, such third party would not agree to the substitution of the Company for PEWC or such substitution would prevent the successful completion of the facility or venture, PEWC will arrange for the Company to participate to the extent possible.


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


	(g)	For purposes of the composite services agreement, each province in China is considered the equivalent of a market.


	(h)	The composite services agreement dated November 7, 1996 has a three-year term. The Agreement originally expired on November 7, 1999 but has been renewed annually at the option of the Company.

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


18.	DEFINED CONTRIBUTION AND BENEFIT PLANS

The Company has several defined contribution plans covering its employees in Australia, the People’s Republic of China (‘‘PRC’’) and Singapore. Contributions to the plan are made annually. Total charges for the years ended December 31 2002, 2003 and 2004 were $548, $691 and $756, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


18.	DEFINED CONTRIBUTION AND BENEFIT PLANS (continued)

In accordance with the Thailand labor law, is obliged to make payment to retiring employees, at rates of 1 to 10 times of their final month’s salary rate, depending on the length of service. During the financial year 2004, the Company’s total expense included $1,000 (2003 and 2002: $nil). The plan is not funded and the amount is recognized in Other Current Liabilities in the balance sheet. The Company pays to settle the obligations as and when employees retire.

In conformity with SFAS 132, ‘‘Employers’ Disclosures about Pensions and Other Postretirement Benefits,’’ the following table sets forth the Plan’s funded status and pension amounts recognized as at December 31, 2004 based on the latest actuarial valuation:


	2004
	(in US$’000)
Change in benefit obligation:
Benefit obligation at beginning of year		—
Service cost		1,000
Interest cost		—
Benefits paid		—
Actuarial loss (gain)		—
Curtailment		—
Settlement		—
Benefit obligation at end of year		1,000
Change in plan assets:
Fair value of plan assets at beginning of year		—
Employer’s contribution
Actual return on plan assets		—
Settlement		—
Benefits paid		—
Fair value of plan assets at end of year		—
Funded status		(1,000	)
Unrealized net transition obligation		—
Unrecognized net actuarial loss (gain)		—
Accrued benefit cost		(1,000	)
Components of net periodic benefit cost:
Service cost		1,000
Interest cost		—
Expected return on plan assets		—
Amortizations of:
Unrecognized net transition obligation		—
Unrecognized actuarial loss		—
Net periodic benefit cost		1,000

The accumulated benefit obligations amounted to $1,000 as at December 31, 2004.

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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


18.	DEFINED CONTRIBUTION AND BENEFIT PLANS (continued)

The significant assumptions used in determining the actuarial present value of the projected benefit obligations as at December 31, 2004, 2003 and 2002 are as follows:


Weighted Average of All Plans:			2004
Discount Rate			6.0%
Rate of Increase in Compensation Levels			5.0%
Employee turnover rates:—
Prior to age 35			10.0%
Age 35 to 50			5.0%
Age 51 to 60			—


19.	SUPPLEMENTAL CASH FLOW INFORMATION


	Year ended December 31,
	2002			2003			2004
Interest paid, including amounts capitalized		$	1,446		$	1,630		$	2,647
Income taxes paid		$	1,139		$	3,461		$	1,844


20.	SEGMENT FINANCIAL INFORMATION

Description of Products by Segment

The Company has three reportable segments — manufacturing of wire and cable products (‘‘Manufactured products’’), distribution of copper and cable products manufactured by PEWC (‘‘Distributed products’’) and sales, delivery and installation of wires and cables.

Measurement of Segment Profit or Loss and Segment Assets

The Company evaluates performance and allocates resources based on profit or loss from operations before interest, gains and losses on the Company’s investment portfolio, and income taxes. The accounting policies of the reportable segments, including transactions entered between reportable segments, are the same as those described in the summary of significant accounting polices.


	Year ended December 31,
	2002			2003			2004
Revenues
Revenues from external customers:
Manufactured products		$	185,742		$	192,293		$	269,107
Distributed products			24,303			15,187			15,493
Sales, delivery and installation of wires and cables			31,134			3,919			9,656
Total revenues from external customers		$	241,179		$	211,399		$	294,256
Intersegment revenues:
Manufactured products		$	1,206		$	4,134		$	5,146
Total intersegment revenues		$	1,206		$	4,134		$	5,146
Total revenue		$	242,385		$	215,533		$	299,402

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


20.	SEGMENT FINANCIAL INFORMATION (continued)


	Year ended December 31,
	2002				2003				2004
Reconciling items
Intersegment revenues			(1,206	)			(4,134	)			(5,146	)
Total consolidated revenues		$	241,179			$	211,399			$	294,256
Segment profit
Manufactured products		$	35,193			$	32,705			$	37,746
Distributed products			338				491				868
Sales, delivery and installation of wires and cables			(787	)			92				258
Total segment profit		$	34,744			$	33,288			$	38,872
Reconciling items
Corporate and other expenses			(20,387	)			(21,364	)			(30,162	)
Exchange (loss) gain			(16	)			4,161				233
Interest income			715				285				225
Interest expense			(2,214	)			(1,407	)			(2,250	)
Share of net gain (loss) of equity investees			(4,090	)			1,475				(4,224	)
Other income			2,502				1,122				925
Total consolidated income before income taxes		$	11,254			$	17,560			$	3,619
Segment assets
Manufactured products		$	189,187			$	209,356			$	247,977
Distributed products			2,016				6,348				2,294
Sales, delivery and installation of wires and cables			927				460				1,977
Total segment assets		$	192,130			$	216,164			$	252,248
Reconciling items
Corporate and other assets			7,512				5,763				10,397
Investment in equity investees			8,735				10,249				7,788
Intersegment accounts receivable			(184	)			—				—
Total consolidated assets		$	208,193			$	232,176			$	270,433
Expenditures for additions to long-lived assets
Manufactured products		$	11,135			$	4,877			$	4,500
Total expenditure for additions to long-lived assets		$	11,135			$	4,877			$	4,500
Depreciation expenses
Manufactured products		$	9,805			$	9,217			$	8,295
Total consolidated depreciation expenses		$	9,805			$	9,217			$	8,295
Impairment loss
Manufactured products		$	1,559			$	—			$	—
Corporate			—				—				(134	)
Total consolidated impairment expense		$	1,559			$	—			$	(134	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


20.	SEGMENT FINANCIAL INFORMATION (continued)


	Year ended December 31,
	2002				2003			2004
Interest income
Manufactured products		$	208			$	67		$	41
Distributed products			219				40			88
Sales, delivery and installation of wires and cables			280				153			55
Corporate			8				25			41
Total consolidated interest income		$	715			$	285		$	225
Interest expense
Manufactured products		$	2,033			$	988		$	1,845
Distributed products			160				34			155
Sales, delivery and installation of wires and cables			205				132			96
Corporate			(184	)			253			154
Total consolidated interest expense		$	2,214			$	1,407		$	2,250
Share of net (loss) gain of equity investees
Corporate		$	(4,090	)		$	1,475		$	(4,224	)
Total consolidated share of net (loss) gain of equity investees		$	(4,090	)		$	1,475		$	(4,224	)

The sales to a major customer, SP Powerassets, which include sales of manufactured products, distributed products, and sales, delivery and installation of wires and cables can be summarized as follows:


	Year ended December 31,
	2002			2003			2004
Manufactured products		$	663		$	1,127		$	767
Distributed products			9,175			11,840			9,176
Sales, delivery and installation of wires and cables			31,134			3,919			9,656
		$	40,972		$	16,886		$	19,599

F-39

Table of Contents

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


20.	SEGMENT FINANCIAL INFORMATION (continued)

Geographic Area Data

Revenue from external customers is attributed to individual countries based on the customer’s country of domicile and is summarized as follows:


	Year ended December 31,
	2002			2003			2004
Revenues from external customers
Thailand		$	107,264		$	93,543		$	130,486
Singapore			73,859			35,193			42,036
Australia			13,961			22,058			30,491
The People’s Republic of China			46,095			60,605			91,243
Total revenues from external customers		$	241,179		$	211,399		$	294,256
Long-lived assets by area:
Thailand		$	43,238		$	42,856		$	39,829
Singapore			10,013			9,720			9,820
Australia			4,731			5,312			5,159
The People’s Republic of China			17,875			18,397			18,319
Total long-lived assets		$	75,857		$	76,285		$	73,127


21.	MATURITY FOR LONG-TERM DEBTS

The aggregate maturities for long-term debts for the five years after December 31, 2004 are $1,710, $nil, $nil, $5,945 and $nil, respectively.


22.	SUMMARIZED FINANCIAL INFORMATION OF EQUITY INVESTEES

The following tables present summarized financial information of the Company’s principal equity investees, Lox Pac, Thai Professional, SPHC, BCN (the formerly known as NGL), Shandong Huayu and SPRC for 2002, 2003 and 2004.

On June 21, 2004, the investment in BCN was reclassified to short-term investments because the Group’s effective shareholding interest has dropped to 1.24% following a reverse takeover excerise at BCN. BCN is listed on the New Zealand Stock Exchange. The aggregate market value of the Company’s investment in BCN amounted to approximately $1,278 and $891 as of December 31, 2003 and 2004, respectively.

In addition, on January 1, 2004, the investment in SPRC was reclassified from long-term investments as the Company’s considered that it is now able to exercise significant influence over the operating and financial decisions of SPRC and actively participates in the running of day-to-day operations.

F-40

Table of Contents

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)


22.	SUMMARIZED FINANCIAL INFORMATION OF EQUITY INVESTEES (continued)

The following tables present summarized financial information of the Company’s principal equity investees, Lox Pac, Thai Professional, SPHC, Shandong Huayu and SPRC for 2002, 2003 and 2004.


	December 31,
	2003				2004
Current assets		$	9,322			$	18,921
Non-current assets			22,230				25,746
Current liabilities			(4,371	)			(13,545	)
Non-current liabilities			—				—
			(4	)			(725	)
Total shareholders’ equity		$	27,177			$	30,397


	Year ended December 31,
	2002			2003			2004
Net sales		$	11,105		$	4,753		$	17,071
Sales less cost of sales			2,135			1,062			4,723
Net income/(loss)			624			821			(715	)

On December 31, 2003 and December 31, 2004, the unamortized difference between the amount at which the investment in Lox Pac and Thai Professional was carried and the amount of the Company’s underlying equity in its net assets amounted to $2,081 and $nil, respectively.

In conjunction with the adoption of Statement 142, the Company discontinued the amortization of goodwill associated with equity method investments effective January 1, 2002. The Company impaired goodwill in certain equity investees amounting to $3,534 in 2004 (2003: $nil, 2002: $2,500).

Included in share of net (loss)/gain of equity investees are impairment of investments in and allowance for advances to equity investees of $nil (2002: $1,234) and writeback of advances to equity investees of $1,346 in 2003.


23.	SUBSEQUENT EVENTS

As disclosed in Note 1, on September 14, 2005, PEWC exercised the repurchase option under the Option Agreement and reacquired 7,307,948 shares of the Common Stock, representing 52.84% of the total issued and outstanding Common Stock. As a result of the reacquisition by PEWC of majority control, PEWC indirectly held as of that date 7,664,615 shares of Common Stock, representing 55.4% of the total issued and outstanding shares of Common Stock and Sino-JP held as of that date 2,766,154 shares of the Common Stock, representing 20% of the total issued and outstanding shares of Common Stock (the ‘‘Sino-JP Shares’’).

F-41

Table of Contents

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of US Dollars, except share data)

On June 29, 2007, SOF Investments, L.P. (‘‘SOF’’), a Delaware limited partnership controlled by MSD Capital, L.P. acquired the Sino-JP Shares and entered into a shareholders’ agreement with the Company and PEWC. The shares acquired constituted 20% of the issued and outstanding shares of the Company.

The equity interest in subsidiaries changed during 2005, 2006 and March 2007. The Company’s interest in Charoong Thai decreased from 52.83% to 52.43% and from 52.43% to 50.39% due to the exercise of warrants in Year 2005 and Year 2006, respectively. The final warrant was exercised on 27 April 2006 and the remaining unexercised warrants expired. Furthermore, during 2006, Charoong Thai contributed additional capital in Shanghai Yayang in the form of a cash injection of US$1 million, thereby decreasing the Company’s interest in Shanghai Yayang by 2.83% to 53.90% (2004: 56.73%).

In addition, in January 2006, the Company decided to cease its Ningbo subsidiary operations.

F-42

Table of Contents

Audited Financial Statements

Shandong huayu pacific fiber optics communication co., ltd

December 31, 2004

INDEX TO FINANCIAL STATEMENTS

CONTENTS


	Page
Report of independent registered public accounting firm		FF-2
Balance sheets as of December 31, 2004 and 2003		FF-3
Statements of income for the years ended December 31, 2004 and 2003		FF-4
Statements of shareholders’ equity for the years ended December 31, 2004 and 2003		FF-5
Statements of cash flows for the years ended December 31, 2004 and 2003		FF-6
Notes to financial statements		FF-7

FF-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Shandong Huayu Pacific Fiber Optics Communication Co., Ltd

We have audited the accompanying balance sheet of Shandong Huayu Pacific Fiber Optics Communication Co., Ltd (the ‘‘Company’’) as of December 31, 2004, and the related statements of income, changes in shareholders’ equity, and cash flows for the year ended December 31, 2004. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Shandong Huayu Pacific Fiber Optics Communication Co., Ltd as of December 31, 2004, and the results of its operations and its cash flows for the year then ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

Ernst & Young
Certified Public Accountants

Singapore
November 5, 2007

FF-2

SHANDONG HUAYU PACIFIC FIBER OPTICS COMMUNICATION CO., LTD

BALANCE SHEETS
(In thousands of RMB)


	December 31
	2003				2004
	Unaudited
ASSETS
Current assets:
Cash and cash equivalents		$	16			$	1
Other assets			418				293
Total current assets			434				294
Amount due from a related company (Note 8)			1,663				1,163
Property, plant and equipment:
Land use rights			—				1,718
Machinery and equipment			344				344
Buildings and constructions			49				4,504
Project materials			37,059				37,489
Construction in progress			16,921				17,182
			54,373				61,237
Accumulated depreciation and impairment losses			(92	)			(17,409	)
			54,281				43,828
Total assets			56,378				45,285
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable			3,354				9,260
Accrued expenses			—				50
Amount due to related parties (Note 8)			14,753				14,838
Total current liabilities			18,107				24,148
Commitments and contingencies (Note 5)
Shareholders’ equity:
Share capital			40,593				41,088
Retained earnings			(2,322	)			(19,951	)
Total shareholders’ equity			38,271				21,137
Total liabilities and shareholders’ equity		$	56,378			$	45,285

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

FF-3

SHANDONG HUAYU PACIFIC FIBER OPTICS COMMUNICATION CO., LTD

STATEMENTS OF INCOME
(In thousands of RMB)


	Year ended December 31,
	2003				2004
	Unaudited
Sales		$	—			$	—
Cost of sales			—				—
Gross Profit			—				—
Impairment of long-lived assets			—				(17,031	)
General and administrative expenses			(2,152	)			(598	)
Provision for doubtful accounts			(170	)			—
Losses from operations			(2,322	)			(17,629	)
Income taxes			—				—
Net loss		$	(2,322	)		$	(17,629	)

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

FF-4

SHANDONG HUAYU PACIFIC FIBER OPTICS COMMUNICATION CO., LTD

STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands of RMB)


	Share Capital			Retained earnings				Total
Balance at January 1, 2003 (Unaudited)		$	33,777		$	—			$	33,777
Additional share capital			6,816			—				6,816
Net income for 2003			—			(2,322	)			(2,322	)
Balance at December 31, 2003 (Unaudited)			40,593			(2,322	)			38,271
Additional share capital			495			—				495
Net income for 2004			—			(17,629	)			(17,629	)
Balance at December 31, 2004		$	41,088		$	(19,951	)		$	21,137

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

FF-5

SHANDONG HUAYU PACIFIC FIBER OPTICS COMMUNICATION CO., LTD

STATEMENTS OF CASH FLOWS
(In thousands of RMB)


	Year ended December 31,
	2003				2004
	Unaudited
Operating activities:
Net loss		$	(2,322	)		$	(17,629	)
Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation of property, plant and equipment			63				286
Impairment of long lived assets			—				17,031
Changes in operating assets and liabilities:
Other assets			2,087				124
Amount due from a related company			(1,663	)			500
Accounts payable			(116	)			5,906
Accrued expenses			—				50
Amount due to related parties			(4,575	)			85
Net cash (used in) provided by operating activities			(6,526	)			6,353
Investing activity:
Purchases of property, plant and equipment			(328	)			(6,864	)
Net cash used in investing activity			(328	)			(6,864	)
Financing activity:
Contribution from joint venture holders			6,816				496
Net cash provided by financing activity			6,816				496
Net decrease in cash and cash equivalents			(38	)			(15	)
Cash and cash equivalents at beginning of year			54				16
Cash and cash equivalents at end of year		$	16			$	1

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

FF-6

SHANDONG HUAYU PACIFIC FIBER OPTICS COMMUNICATION CO., LTD
NOTES TO FINANCIAL STATEMENTS
(In thousands of RMB)


1.	ORGANIZATION AND PRINCIPAL ACTIVITIES

On August 18, 2001, a joint-venture agreement was signed between Asia Pacific Wire & Cable Corporation Limited and Shandong Yanggu Huatai Co, Ltd (‘‘Shandong Yanggu’’) to establish Shandong Huayu Pacific Fiber Optics Communication Co., Ltd. (‘‘the Company’’) for the manufacture of optic fibers. Shandong Yanggu’s share was subsequently transferred to Hebei Huayu Co. Ltd. At balance sheet date, 49% of the Company is owned by Asia Pacific Wire & Cable Corporation Limited and a subsidiary with the remaining 51% owned by Hebei Huayu Co. Ltd (presently known as Yu Yuan Co. Ltd).

Due to the subsequent deterioration of the fiber optic market price, the plant has yet to be completed and production date has yet to be announced.


2.	BASIS OF PRESENTATION

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (‘‘US GAAP’’). The basis of accounting differs from that used in the statutory financial statements of the Company, which are prepared in accordance with the accounting principles generally accepted in the People’s Republic of China. In the opinion of management, the financial statements have reflected all costs incurred by the Company in operating the business.

All amounts in the financial statements and in the notes herein are Renminbi (‘‘$’’) unless otherwise designated.

The comparative figures as at and for the year ended 31 December 2003 were not audited.


3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the 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.

Income Taxes

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Asset leases qualifying as capital leases, if any, are also included in property, plant and equipment. Major renewals and improvements are capitalized and minor replacements, maintenance, and repairs are charged to current operations as incurred. Depreciation is computed using the straight-line method over the estimated useful

FF-7

SHANDONG HUAYU PACIFIC FIBER OPTICS COMMUNICATION CO., LTD
NOTES TO FINANCIAL STATEMENTS
(In thousands of RMB)


3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

lives of the assets or the respective lease term, whichever is shorter. No depreciation is charged for construction in progress and machinery and equipment under installation. Depreciation is provided as follows:


Land use rights			50 years
Buildings and constructions			20 years
Machinery and equipment			5 years

Depreciation for 2004 amounted to $286 (2003: $63).

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Recoverability of an asset is measured by comparison of the carrying amount of the asset to the net undiscounted future cash flow expected to be generated from the asset. If the future undiscounted cash flows are not sufficient to recover the carrying value of the asset, the asset’s carrying value is adjusted to fair value. The Company estimates fair value based on discounted future cash flow.

In 2004, the Company recorded an impairment charge of $17,031 related to the impairment of certain property, plant and equipment. The remaining carrying value of these impaired long-lived assets, immediately after recording the impairment charge, was approximately $43,828.

These impairment charges were recorded to reduce the carrying value of the identified assets to fair value. Fair values were derived using a variety of methodologies, including cash flow analysis, estimates of sales proceeds and independent appraisals. Where cash flow analyses were used to estimate fair values, key assumptions employed, included estimates of future growth, estimates of gross margins and estimates of the impact of inflation. The charges were primarily the result of management’s revised outlook due to the prolonged unfavourable market conditions.

Recent Pronouncements

In March 2005, the FASB issued Interpretation, or FIN, No. 47, ‘‘ Accounting for Conditional Asset Retirement Obligations’’ (‘‘FIN 47’’) — an interpretation of FASB Statement No. 143, ‘‘ Accounting for Asset Retirement Obligations’’ , which clarifies the term ‘‘conditional asset retirement obligations’’ and specifically when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. The provisions of FIN 47 are effective on December 15, 2005. The adoption of FIN 47 is not expected to have a material effect on our results of operations or financial condition.

In March 2006, FASB Statement No. 156, ‘‘ Accounting for Servicing of Financial Assets - an Amendment of FASB Statement No. 140’’ (‘‘SFAS 156’’), was issued. SFAS 156 requires recognition of a servicing asset or liability at fair value each time an obligation is undertaken to service a financial asset by entering into a servicing contract. SFAS 156 also provides guidance on subsequent measurement methods for each class of servicing assets and liabilities and specifies financial statement presentation and disclosure requirements. SFAS 156 is effective for fiscal years beginning after September 15, 2006. Management does not currently expect SFAS 156 to have a material impact on the Company’s future financial position, results of operations and cash flows.

In July 2006, the FASB issued FIN No. 48 — ‘‘ Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109 ’’ (‘‘FIN 48’’). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with SFAS 109 — ‘‘ Accounting for Income Taxes’’ . FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position

FF-8

SHANDONG HUAYU PACIFIC FIBER OPTICS COMMUNICATION CO., LTD
NOTES TO FINANCIAL STATEMENTS
(In thousands of RMB)


3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We are currently evaluating the potential impact, if any, that the adoption of FIN 48 will have on our financial statements.

In September 2006, FASB issued Statement No. 157 — ‘‘ Fair Value Measurements’’ Statement No. 157 (‘‘SFAS 157’’) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements. SFAS 157 becomes effective for us on January 1, 2008. Upon adoption, the provisions of SFAS 157 are to be applied prospectively with limited exceptions.

In February 2007, the FASB issued Statement No. 159 — The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115 . SFAS No. 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. Statement No. 159 is effective for fiscal years beginning after November 15, 2007. We do not believe the adoption of SFAS 157 will have significant impact on our financial statements.


4.	INCOME TAXES

The Company is governed by the income tax laws of the People’s Republic of China. The applicable corporate income tax rate for the Company was 33% for years ended December 31, 2004 and 2003.

The provision for income taxes differs from the amount computed by applying the statutory rates to income before income taxes of the Company. The principal reasons for the difference are listed in the following table:


	Year ended December 31,
	2003			2004
	(Unaudited)
	$			$
Tax at statutory rate in the People’s Republic of China		(766	)		(5,817	)
Deferred tax benefits not recognized		766			5,817
Total charge for the year		—			—

FF-9

SHANDONG HUAYU PACIFIC FIBER OPTICS COMMUNICATION CO., LTD
NOTES TO FINANCIAL STATEMENTS
(In thousands of RMB)


5.	COMMITMENTS AND CONTINGENCIES

The Company is in the process of obtaining the land use right certificate in respect of its land.


6.	FINANCIAL INSTRUMENTS


	(a)	Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and receivables.

The Company maintains cash and cash equivalents with financial institutions that are located in the People’s Republic of China. The Company relies on capital contributions from the shareholders’ when funding is required.


	(b)	Fair value

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash and cash equivalents : The carrying amount reported in the balance sheet for cash and cash equivalents approximates its fair value because of the short-term maturity of these instruments.

Receivables and payables : The carrying amounts reported in the balance sheet for accounts receivable and accounts payable approximate their fair values because of the short-term maturity of these instruments.


7.	CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS

The Company’s principal operation is located in Shandong, a province in the People’s Republic of China (‘‘PRC’’). The Company has not commenced productions. As the management determined that there is a market oversupply at Shandong, there has been a temporary suspension of construction of the production lines.


8.	RELATED PARTY BALANCES AND TRANSACTIONS


	December 31, 2003		December 31, 2004
	(Unaudited)
	$		$
Due from:
He Bei Huayu Co. Ltd		1,663		1,163
Due to:
Asia Pacific Wire and Cable Corporation Limited		13,914		13,914
Shangdong Pacific Fiber Optics Co. Ltd		839		924

All balances with related parties are interest-free and unsecured.


9.	SUBSEQUENT EVENTS

The Company sold major equipments including drawing towers, glass working lathe, rewinding and screening systems to a third party on 6 ^th June 2007 for net proceeds of approximately $15,800.

FF-10

Exhibit 1.2

AMENDED AND RESTATED BYE-LAWS

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED

INTERPRETATION

1.	In these Amended and Restated Bye-Laws, or Bye-Laws, unless the context otherwise requires – “ Bermuda ” means the Islands of Bermuda;

“ Board ” means the Board of Directors of the Company or the Directors present at a meeting of Directors at which there is a quorum;

“ Company ” means the company incorporated in Bermuda under the name of Asia Pacific Wire & Cable Corporation Limited on the 19th day of September, 1996;

“ the Companies Acts ” means every Bermuda statute from time to time in force concerning companies insofar as the same applies to the Company;

“ paid up ” means paid up or credited as paid up;

“ Register ” means the Register of Shareholders of the Company;

“ Registered Office ” means the registered office for the time being of the Company;

“ Resident Representative ” includes any person appointed by the Board, pursuant to Section 130 of the Companies Acts, to perform the functions set out in that section;

“ Resolution ” means a resolution of the shareholders or, where required, of a separate class or separate classes of shareholders, adopted either in general meeting or by written resolution, in accordance with the provisions of these Bye-Laws;

“ Seal ” means the common seal of the Company and any duplicate thereof;

“ Secretary ” includes a temporary or assistant Secretary and any person or company appointed by the Board to perform any of the duties of the Secretary and shall include the Secretary resident in Bermuda;

“ Shareholder ” means a shareholder or member of the Company; “these Bye-Laws” means these Bye-Laws in their present form or as from time to time amended;

for the purposes of these Bye-Laws a corporation shall be deemed to be present in person if its representative duly authorised pursuant to the Companies Acts is present;

words importing the singular number only include the plural number and vice versa;

words importing the masculine gender only include the feminine and neuter genders respectively;

words importing persons include companies or associations or bodies of persons, whether corporate or unincorporate;

reference to writing shall include typewriting, printing, lithography, photography and other modes of representing or reproducing words in a legible and non-transitory form;

any words or expressions defined in the Companies Acts in force at the date when these Bye-Laws or any part thereof are adopted shall bear the same meaning in these Bye-Laws or such part (as the case may be).

REGISTERED OFFICE

2.	The Registered Office shall be at such place in Bermuda as the Board shall from time to time appoint

SHARE AND CAPITAL RIGHTS

3.	As at the date of the adoption of these Bye-laws, the authorised share capital of the Company is two hundred thousand United States dollars (US$200,000) divided into twenty million (20,000,000) Common Shares of one United States cent (US$0.01) each.

(a)

Subject to any special rights conferred on the holders of any share or class of shares, any share in the Company may be issued with or have attached thereto such preferred, deferred, qualified or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may by Resolution determine or, if there has not been any such determination or so far as the same shall not make specific provision, as the Board may determine.

4.	Subject to the Companies Acts, any preference shares may, with the sanction of a Resolution be issued on terms:

(a)

that they are to be redeemed on the happening of a specified event or on a given date; and/or,

(b)

that they are liable to be redeemed at the option of the Company; and/or,

(c)

if authorised by the memorandum/Incorporating Act of the Company, that they are liable to be redeemed at the option of the holder.

The terms and manner of redemption shall be provided for by way of amendment of these Bye-Laws.

Notwithstanding the generality of the foregoing, the Board is authorized without further action by the share holders to issue, from time to time, preferred shares in one or more series and to fix or alter the voting powers, designations, preferences and relative, participating, optional or other special rights, if any, and qualifications, limitations or restrictions thereof, including, without limitation, dividend rights and whether dividends are cumulative, conversion rights, if any, rights and terms of redemption, including provisions for total or partial redemptions over time, if any, redemption price and liquidation preferences of and unissued shares or wholly unissued series of preferred stock. In addition, the Board may establish the number of shares constituting any such class or series and the designation thereof, and increase or decrease the number of shares of any such series subsequent to the issuance of shares of such series, but not below the number of outstanding shares of such series.

MODIFICATION OF RIGHTS

Subject to the Companies Acts, all or any of the special rights for the time being attached to any class of shares for the time being issued may from time to time (whether or not the Company is being wound up) be altered or abrogated with the consent in writing of the holders of more than fifty percent of the issued shares of that class or with the sanction of a Resolution of the holders of such shares voting in person or by proxy. To any such separate general meeting, all the provisions of these Bye-Laws as to general meetings of the Company shall mutatis mutandis apply, but so that the necessary quorum shall be two or more persons holding or representing by proxy any of the shares of the relevant class, that every holder of shares of the relevant class shall be entitled on a poll to one vote for every such share held by him and that any holder of shares of the relevant class present in person or by proxy may demand a poll; provided, however, that if the Company or a class of Shareholders shall have only one Shareholder present in person or by proxy, one Shareholder shall constitute the necessary quorum.

6.	The special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to or the terms of issue of such shares, be deemed to be altered by the creation or issue of further shares ranking pan passu therewith.

SHARES

Subject to the provisions of these Bye-Laws, the unissued shares of the Company (whether forming part of the original capital or any increased capital) shall be at the disposal of the Board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times and for such consideration and upon such terms and conditions as the Board may determine.

8.	The Board may in connection with the issue of any shares exercise all powers of paying commission and brokerage conferred or permitted by law.

Except as ordered by a court of competent jurisdiction or as required by law, no person shall be recognised by the Company as holding any share upon trust and the Company shall not be bound by or required in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any interest in any fractional part of a share or (except only as otherwise provided in these Bye-Laws or by law) any other right in respect of any share except an absolute right to the entirety thereof in the registered holder.

CERTIFICATES

10.	The preparation, issue and delivery of certificates shall be governed by the Companies Acts. In the case of a share held jointly by several persons, delivery of a certificate to one of several joint holders shall be sufficient delivery to all.

11.

If a share certificate is defaced, lost or destroyed it may be replaced without fee but on such terms (if any) as to evidence and indemnity and to payment of the costs and out of pocket expenses of the Company in investigating such evidence and preparing such indemnity as the Board may think fit and, in case of defacement, on delivery of the old certificate to the Company.

12.	All certificates for share or Ioan capital or other securities of the Company (other than letters of allotment, scrip certificates and other like documents) shall, except to the extent

that the terms and conditions for the time being relating thereto otherwise provide, be issued under the Seal. The Board may by resolution determine, either generally or in any particular case, that any signatures on any such certificates need not be autographic but may be affixed to such certificates by some mechanical means or may be printed thereon or that such certificates need not be signed by any persons.

LIEN

13.

The Company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys, whether presently payable or not, called or payable, at a date fixed by or in accordance with the terms of issue of such share in respect of such share, and the Company shall also have a first and paramount lien on every share (other than a fully paid share) standing registered in the name of a Shareholder, whether singly or jointly with any other person, for all the debts and liabilities of such Shareholder or his estate to the Company, whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such Shareholder, and whether the time for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of such Shareholder or his estate and any other person, whether a Shareholder or not. The Company’s lien on a share shall extend to all dividends payable thereon. The Board may at any time, either generally or in any particular case, waive any lien that has arisen or declare any share to be wholly or in part exempt from the provisions of this Bye-Law.

14.

The Company may sell, in such manner as the Board may think fit, any share on which the Company has a lien but no sale shall be made unless some sum in respect of which the lien exists is presently payable nor until the expiration of fourteen days after a notice in writing, stating and demanding payment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the time being of the share.

15.

The net proceeds of sale by the Company of any shares on which it has a lien shall be applied in or towards payment or discharge of the debt or liability in respect of which the lien exists so far as the same is presently payable, and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) be paid to the holder of the share immediately before such sale. For giving effect to any such sale the Board may authorise some person to transfer the share sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of the purchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the sale.

CALLS ON SHARES

16.

The Board may from time to time make calls upon the Shareholders in respect of any moneys unpaid on their shares (whether on account of the par value of the shares or by way of premium) and not by the terms of issue thereof made payable at a date fixed by or in accordance with such terms of issue, and each Shareholder shall (subject to the Company serving upon him at least fourteen days notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares. A call may be revoked or postponed as the Board may determine.

17.	A call may be made payable by installments and shall be deemed to have been made at the time when the resolution of the Board authorizing the call was passed.

18.	The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

19.

If a sum called in respect of the share shall not be paid before or on the day appointed for payment thereof the person from whom the sum is due shall pay interest on the sum from the day appointed for the payment thereof to the time of actual payment at such rate as the Board may determine, but the Board shall be at liberty to waive payment of such interest wholly or in part.

20.

Any sum which, by the terms of issue of a share, becomes payable on allotment or at any date fixed by or in accordance with such terms of issue, whether on account of the nominal amount of the share or by way of premium, shall for all the purposes of these Bye-Laws be deemed to be a call duly made, notified and payable on the date on which, by the terms of issue, the same becomes payable and, in case of non-payment, all the relevant provisions of these Bye-Laws as to payment of interest, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

21.	The Board may on the issue of shares differentiate between the allottees or holders as to the amount of calls to be paid and the times of payment.

FORFEITURE OF SHARES

22.

If a Shareholder fails to pay any call or installment of a call on the day appointed for payment thereof, the Board may at any time thereafter during such time as any part of such call or installment remains unpaid serve a notice on him requiring payment of so much of the call or installment as is unpaid, together with any interest which may have accrued.

23.

The notice shall name a further day (not being less than 14 days from the date of the notice) on or before which, and the place where, the payment required by the notice is to be made and shall state that, in the event of non-payment on or before the day and at the place appointed, the shares in respect of which such call is made or instalment is payable will be liable to be forfeited. The Board may accept the surrender of any share Iiable to be forfeited hereunder and, in such case, references in these Bye-Laws to forfeiture shall include surrender.

24.

If the requirements of any such notice as aforesaid are not complied with, any share in respect of which such notice has been given may at any time thereafter, before payment of all calls or installments and interest due in respect thereof has been made, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.

25.	When any share has been forfeited, notice of the forfeiture shall be served upon the person who was before forfeiture the holder of the share; but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice as aforesaid.

26.	A forfeited share shall be deemed to be the property of the Company and may be sold, re-offered or otherwise disposed of either to the person who was, before forfeiture, the

holder thereof or entitled thereto or to any other person upon such terms and in such manner as the Board shall think fit, and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the Board may think fit.

27.

A person whose shares have been forfeited shall thereupon cease to be a Shareholder in respect of the forfeited shares but shall, notwithstanding the forfeiture, remain liable to pay to the Company all moneys which at the date of forfeiture were presently payable by him to the Company in respect of the shares with interest thereon at such rate as the Board may determine from the date of forfeiture until payment, and the Company may enforce payment without being under any obligation to make any allowance for the value of the shares forfeited.

28.

An affidavit in writing that the deponent is a Director or the Secretary of the Company and that a share has been duly forfeited on the date stated in the affidavit shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. The Company may receive the consideration (if any) given for the share on the sale, re-allotment or disposition thereof and the Board may authorise some person to transfer the share to the person to whom the same is sold, re-allotted or disposed of, and he shall thereupon be registered as the holder of the share and shall not be bound to see to the application of the purchase money (if any) nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the forfeiture, sale, re-allotment or disposal of the share.

REGISTER OF SHAREHOLDERS

29.

The Secretary shall establish and maintain the Register of Shareholders at the Registered Office in the manner prescribed by the Companies Acts. Unless the Board otherwise determines, the Register of Shareholders shall be open to inspection in the manner prescribed by the Companies Acts between 10.00 a.m. and 12.00 noon on every working day. Unless the Board so determines, no Shareholder or intending Shareholder shall be entitled to have entered in the Register any indication of any trust or any equitable, contingent, future or partial interest in any share or any interest in any fractional part of a share and if any such entry exists or is permitted by the Board it shall not be deemed to abrogate any of the provisions of Bye-Law 9.

REGISTER OF DIRECTORS AND OFFICERS

30.

The Secretary shall establish and maintain a register of the Directors and Officers of the Company as required by the Companies Acts. The register of Directors and Officers shall be open to inspection in the manner prescribed by the Companies Acts between 10:00 a.m. and 12:00 noon on every working day.

TRANSFER OF SHARES

31.	Subject to the Companies Acts and to such of the restrictions contained in these Bye-Laws as may be applicable, any Shareholder may transfer all or any of his shares by an instrument of transfer in the usual common form or in any other form which the Board may approve.

32.	The instrument of transfer of a share shall be signed by or on behalf of the transferor and where any share is not fully-paid the transferee, and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register in

respect thereof. All instruments of transfer when registered may be retained by the Company. The Board 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 may also decline to register any transfer unless:-

(a)

the instrument of transfer is duly stamped and lodged with the Company, accompanied by the certificate for the shares to which it relates, and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer;

(b)

the instrument of transfer is in respect of only one class of share; and

(c)

where applicable, the permission of the Bermuda Monetary Authority with respect thereto has been obtained.

(d)

Subject to any directions of the Board from time to time in force, the Secretary may exercise the powers and discretions of the Board under this Bye-Law and Bye-Laws 31 and 33.

33.	If the Board declines to register a transfer it shall, within three months after the date on which the instrument of transfer was lodged, send to the transferee notice of such refusal.

34.

No fee shall be charged by the Company for registering any transfer, probate, letters of administration, certificate of death or marriage, power of attorney, distringas or stop notice, order of court or other instrument relating to or affecting the title to any share, or otherwise making an entry in the Register relating to any share.

TRANSMISSION OF SHARES

35.

In the case of the death of a Shareholder, the survivor or survivors, where the deceased was a joint holder, and the estate representative, where he was sole holder, shall be the only person recognised by the Company as having any title to his shares; but nothing herein contained shall release the estate of a deceased holder (whether the sole or joint) from any liability in respect of any share held by him solely or jointly with other persons. For the purpose of this Bye-Law, 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 may in its absolute discretion determine to be the person recognised by the Company for the purpose of this Bye-Law.

36.

Any person becoming entitled to a share in consequence of the death of a Shareholder or otherwise by operation of applicable law may, subject as hereafter provided and upon such evidence being produced as may from time to time be required by the Board as to his entitlement, either be registered himself as the holder of the share or elect to have some person nominated by him registered as the transferee thereof. If the person so becoming entitled elects to be registered himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. If he shall elect to have his nominee registered, he shall signify his election by signing an instrument of transfer of such share in favour of his nominee. All the limitations, restrictions and provisions of these Bye-Laws relating to the right to transfer and the registration of transfer of shares shall be applicable to any such notice or instrument of transfer as aforesaid as if the death

of the Shareholder or other event giving rise to the transmission had not occurred and the notice or instrument of transfer was an instrument of transfer signed by such Shareholder.

37.

A person becoming entitled to a share in consequence of the death of a Shareholder or otherwise by operation of applicable law shall (upon such evidence being produced as may from time to time be required by the Board as to his entitlement) be entitled to receive and may give a discharge for any dividends or other moneys payable in respect of the share, but he shall not be entitled in respect of the share to receive notices of or to attend or vote at general meetings of the Company or, save as aforesaid, to exercise in respect of the share any of the rights or privileges of a Shareholder until he shall have become registered as the holder thereof. The Board may at any time give notice requiring such person to elect either to be registered himself or to transfer the share and if the notice is not complied with within sixty days the Board may thereafter withhold payment of all dividends and other moneys payable in respect of the shares until the requirements of the notice have been complied with.

38.	Subject to any directions of the Board from time to time in force, the Secretary may exercise the powers and discretions of the Board under Bye-Laws 35, 36 and 37.

INCREASE OF CAPITAL

39.	The Company may from time to time increase its capital by such sum to be divided into shares of such par value as the Company by Resolution shall prescribe.

40.

The Company may, by the Resolution increasing the capital, direct that the new shares or any of them shall be offered in the first instance either at par ^. or at a premium or (subject to the provisions of the Companies Acts) at a discount to all the holders for the time being of shares of any class or classes in proportion to the number of such shares held by them respectively or make any other provision as to the issue of the new shares.

41.	The new shares shall be subject to all the provisions of these Bye-Laws with reference to lien, the payment of calls, forfeiture, transfer, transmission and otherwise.

ALTERATION OF CAPITAL

42.	The Company may from time to time by Resolution:

(a)

increase its capital as provided by Bye-Law 39;

(b)

divide its shares into several classes and attach thereto respectively any preferential, deferred, qualified or special rights, privileges or conditions;

(c)

consolidate and divide all or any of its share capital into shares of larger par value than its existing shares;

(d)

sub-divide its shares or any of them into shares of smaller par value than is fixed by its memorandum, so, however, that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived;

(e)

make provision for the issue and allotment of shares which do not carry any voting rights;

(f)

cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled; and

(g)

change the currency denomination of its share capital.

Where any difficulty arises in regard to any division, consolidation, or sub-division under this Bye-Law, the Board may settle the same as it thinks expedient and, in particular, may arrange for the sale of the shares representing fractions and the distribution of the net proceeds of sale in due proportion amongst the Shareholders who would have been entitled to the fractions, and for this purpose the Board may authorise some person to transfer the shares representing fractions to the purchaser thereof, who shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

43.	Subject to the Companies Acts and to any confirmation or consent required by law or these Bye-Laws, the Company may by Resolution from time to time convert any preference shares into redeemable preference shares.

REDUCTION OF CAPITAL

44.

Subject to the Companies Acts, its memorandum and any confirmation or consent required by law or these Bye-Laws, the Company may from time to time by Resolution authorise the reduction of its issued share capital or any capital redemption reserve fund or any share premium or contributed surplus account in any manner.

45.	In relation to any such reduction, the Company may by Resolution determine the terms upon which such reduction is to be effected including in the case of a reduction of part only of a class of shares, those shares to be affected.

GENERAL MEETINGS AND WRITTEN RESOLUTIONS

46. (a)

The Board shall convene and the Company shall hold general meetings as Annual General Meetings in accordance with the requirements of the Companies Acts at such times and places as the Board shall appoint. The Board may, whenever it thinks fit, and shall, when required by the Companies Acts, convene general meetings other than Annual General Meetings which shall be called Special General Meetings.

(a)

Except in the case of the removal of auditors and directors, anything which may be done by resolution of the Company in general meeting or by resolution of a meeting of any class of the Shareholders of the Company may, without a meeting and without any previous notice being required, be done by resolution in writing, signed by all of the Shareholders or their proxies, or in the case of a Shareholder that is a corporation (whether or not a company within the meaning of the Companies Acts) on behalf of such Shareholder, being all of the Shareholders of the Company who at the date of the resolution in writing would be entitled to attend a meeting and vote on the resolution. Such resolution in writing may be signed by, or in the case of a Shareholder that is a corporation (whether or not a company within the meaning of the Companies Acts), on behalf of, all the Shareholders of the Company, or any class thereof, in as many counterparts as may be necessary.

(b)

For the purposes of this Bye-Law, the date of the resolution in writing is the date when the resolution is signed by, or in the case of a Shareholder that is a corporation (whether or not a company within the meaning of the Companies Acts), on behalf of, the last Shareholder to sign and any reference in any enactment to the date of passing of a resolution is, in relation to a resolution in writing made in accordance with this section, a reference to such date.

(c)

A resolution in writing made in accordance with this Bye-Law is as valid as if it had been passed by the Company in general meeting or, if applicable, by a meeting of the relevant class of Shareholders of the Company, as the case may be. A resolution in writing made in accordance with this section shall constitute minutes for the purposes of the Companies Acts and these Bye-Laws.

NOTICE OF GENERAL MEETINGS

47.

An Annual General Meeting shall be called by not less than 20 days’ notice in writing and a Special General Meeting shall be called by not less than 20 days’ notice in writing. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and shall specify the place, day and time of the meeting, and, in the case of a Special General Meeting, the general nature of the business to be considered. Notice of every general meeting shall be given in any manner permitted by Bye-Laws 120 and 121 to all Shareholders other than such as, under the provisions of these Bye-Laws or the terms of issue of the shares they hold, are not entitled to receive such notice from the Company.

Notwithstanding that a meeting of the Company is called by shorter notice than that specified in this Bye-Law, it shall be deemed to have been duly called if it is so agreed:-

(a)

in the case of a meeting called as an Annual General Meeting, by all the Shareholders entitled to attend and vote thereat;

(b)

in the case of any other meeting, by a majority in number of the Shareholders having the right to attend and vote at the meeting, being a majority together holding not less than 95 percent in nominal value of the shares giving that right.

48.

The accidental omission to give notice of a meeting or (in cases where instruments of proxy are sent out with the notice) the accidental omission to send such instrument of proxy to, or the non-receipt of notice of a meeting or such instrument of proxy by, any person entitled to receive such notice shall not invalidate the proceedings at that meeting.

PROCEEDINGS AT GENERAL MEETINGS

49.

No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, but the absence of a quorum shall not preclude the appointment, choice or election of a chairman which shall not be treated as part of the business of the meeting. Save as otherwise provided by these Bye-Laws, at least two Shareholders holding a majority of the shares of the Company in issue present in person or by proxy and entitled to vote shall be a quorum for all purposes; provided, however, that if the Company shall have only one Shareholder, one Shareholder present in person or by proxy shall constitute the necessary quorum.

50.

If within five minutes (or such longer time as the chairman of the meeting may determine to wait) after the time appointed for the meeting, a quorum is not present, the meeting, if convened on the requisition of Shareholders, shall be dissolved. In any other case, it shall stand adjourned to such other day and such other time and place as the chairman of the meeting may determine and at such adjourned meeting two Shareholders present in person (or, in the case of a Shareholder being a corporation, by its duly authorised representative) or by proxy (whatever the number of shares held by them) shall be a quorum provided that if the Company shall have only one Shareholder, one Shareholder present in person (or, in the case of a Shareholder being a corporation, by its duly authorised representative) or by proxy shall constitute the necessary quorum. The Company shall give not less than 5 days’ notice of any meeting adjourned through want of a quorum and such notice shall state that the sole Shareholder or, if more than one, two Shareholders present in person or by proxy (whatever the number of shares held) shall be a quorum.

51.

A meeting of the Shareholders or any class thereof may be held by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

52.	Each Director shall be entitled to attend and speak at any general meeting of the Company.

53.

The Chairman (if any) of the Board or, in his absence, the President shall preside as chairman at every general meeting. If there is no such Chairman or President, or if at any meeting neither of the Chairman nor the President is present within five minutes after the time appointed for holding the meeting, or if neither of them is willing to act as chairman, the Directors present shall choose one of their number to act or if one Director only is present he shall preside as chairman if willing to act. If no Director is present or, if each of the Directors present declines to take the chair, the persons present and entitled to vote on a poll shall elect one of their number to be chairman.

54.

The chairman may, with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place. When a meeting is adjourned for three months or more, notice of the adjourned meeting shall be given as in the case of an original meeting.

55.	Save as expressly provided by these Bye-Laws, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

VOTING

56. (A)

Save where a greater majority is required by the Companies Acts or these Bye-Laws, any question proposed or consideration at any general meeting shall be decided on by a simple majority of votes cast.

(B)

Save where a general meeting is required by the Companies Act, a resolution in writing signed (in such manner as to indicate, expressly or impliedly, unconditional approval) by or on behalf of all persons for the time being entitled to

receive notice of and to attend and vote at general meetings of the Company shall, for the purposes of these Bye-Laws, be treated as a resolution duly passed at a general meeting of the Company. Any such resolution shall be deemed to have been passed at a meeting held on the date on which it was signed by the last Shareholder to sign, and where the resolution states a date as being the date of his signature thereof by any Shareholder the statement shall be prima facie evidence that it was signed by him on that date. Such a resolution may consist of several documents in the like form, each signed by one or more relevant Shareholder(s).

57.	At any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded by:-

(a)

the chairman of the meeting; or

(b)

at least three Shareholders present in person or represented by proxy; or

(c)

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 the Shareholders having the right to vote at such meeting; or

(d)

Shareholder or Shareholders present in person or represented by proxy holding shares conferring the right to vote at such meeting, being shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all such shares conferring such right.

Unless a poll is so demanded and the demand is not withdrawn, a declaration by the chairman that a resolution has, on a show of hands, been carried or carried unanimously or by a particular majority or not carried by a particular majority or lost shall be final and conclusive, and an entry to that effect in the Minute Book of the Company shall be conclusive evidence of the fact without proof of the number of votes recorded for or against such resolution.

58.	If a poll is duly demanded, the result of the poll shall be deemed to be the resolution of the meeting at which the poll is demanded.

59.

A poll demanded on the election of a chairman, or on a question of adjournment, shall be taken forthwith. A poll demanded on any other question shall be taken in such manner and either forthwith or at such time (being not later than three months after the date of the demand) and place as the chairman shall direct. It shall not be necessary (unless the chairman otherwise directs) for notice to be given of a poll.

60.	The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded and it may be withdrawn at any time before the close of the meeting or the taking of the poll, whichever is the earlier.

61.	On a poll, votes may be cast either personally or by proxy.

62.	A person entitled to more than one vote on a poll need not use all his votes or cast all the votes he uses in the same way.

63.	In the case of an equality of votes at a general meeting, whether on a show of hands or on a poll, the chairman of such meeting shall not be entitled to a second or casting vote.

64.

In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding.

65.

A Shareholder who is a patient for any purpose of any statute or applicable law relating to mental health or in respect of whom an order has been made by any Court having jurisdiction for the protection or management of the affairs of persons incapable of managing their own affairs may vote, whether on a show of hands or on a poll, by his receiver, committee, curator bonis or other person in the nature of a receiver, committee or curator bonis appointed by such Court and such receiver, committee, curator bonis or other person may vote on a poll by proxy, and may otherwise act and be treated as such Shareholder for the purpose of general meetings.

66.	No Shareholder shall, unless the Board otherwise determines, be entitled to vote at any general meeting unless all calls or other sums presently payable by him in respect of shares in the Company have been paid.

67.

If (i) any objection shall be raised to the qualification of any voter or (ii) any votes have been counted which ought not to have been counted or which might have been rejected or (iii) any votes are not counted which ought to have been counted, the objection or error shall not vitiate the decision of the meeting or adjourned meeting on any resolution unless the same is raised or pointed out at the meeting or, as the case maybe, the adjourned meeting at which the vote objected to is given or tendered or at which the error occurs. Any objection or error shall be referred to the chairman of the meeting and shall only vitiate the decision of the meeting on any resolution if the chairman decides that the same may have affected the decision of the meeting. The decision of the chairman on such matters shall be final and conclusive.

PROXIES AND CORPORATE REPRESENTATIVES

68.	The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney authorised by him in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same.

69.

Any Shareholder may appoint a standing proxy or (if a corporation) representative by depositing at the Registered Office a proxy or (if a corporation) an authorisation and such proxy or authorisation shall be valid for all general meetings and adjournments thereof or, resolutions in writing, as the case may be, until notice of revocation is received at the Registered Office. Where a standing proxy or authorisation exists, its operation shall be deemed to have been suspended at any general meeting or adjournment thereof at which the Shareholder is present or in respect to which the Shareholder has specially appointed a proxy or representative. The Board may from time to time require such evidence as it shall deem necessary as to the due execution and continuing validity of any such standing proxy or authorisation and the operation of any such standing proxy or authorisation shall be deemed to be suspended until such time as the Board determines that it has received the requested evidence or other evidence satisfactory to it.

70.

Subject to Bye-Law 69, the instrument appointing a proxy together with such other evidence as to its due execution as the Board may from time to time require, shall be delivered at the Registered Office (or at such place as may be specified in the notice convening the meeting or in any notice of any adjournment or, in either case or the case of a written resolution, in any document sent therewith) prior to the holding of the meeting or adjourned meeting at which the person named in the instrument proposes to vote or, in the case of a poll taken subsequently to the date of a meeting or adjourned meeting, before the time appointed for the taking of the poll, or, in the case of a written resolution, prior to the effective date of the written resolution and in default the instrument of proxy shall not be treated as valid.

71.

Instruments of proxy shall be in any common form or in such other form as the Board may approve and the Board may, if it thinks fit, send out with the notice of any meeting or any written resolution forms of instruments of proxy for use at that meeting. The instrument of proxy shall be deemed to confer authority to demand or join in demanding a poll and to vote on any amendment of a resolution put to the meeting for which it is given as the proxy thinks fit. The instrument of proxy shall unless the contrary is stated therein be valid as well for any adjournment of the meeting as for the meeting to which it relates.

72.

A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal, or revocation of the instrument of proxy or of the authority under which it was executed, provided that no intimation in writing of such death, insanity or revocation shall have been received by the Company at the Registered Office (or such other place as may be specified for the delivery of instruments of proxy in the notice convening the meeting or other documents sent therewith) one hour at least before the commencement of the meeting or adjourned meeting, or the taking of the poll, or the day before the effective date of any written resolution at which the instrument of proxy is used.

73.

Subject to the Companies Acts, the Board may at its discretion waive any of the provisions of these Bye-Laws related to proxies or authorisations and, in particular, may accept such verbal or other assurances as it thinks fit as to the right of any person to attend and vote on behalf of any Shareholder at general meetings or to sign written resolutions.

APPOINTMENT AND REMOVAL OF DIRECTORS

74.	The number of Directors shall be such number not less than two as the Company by Resolution may from time to time determine and, subject to the Companies Acts and these Bye-Laws, shall serve until re-elected or their successors are appointed at the next Annual General Meeting.

75.

The Company shall at the Annual General Meeting and may by Resolution determine the minimum and the maximum number of Directors and may by Resolution determine that one or more vacancies in the Board shall be deemed casual vacancies for the purposes of these Bye-Laws. Without prejudice to the power of the Company by Resolution in pursuance of any of the provisions of these Bye-Laws to appoint any person to be a Director, the Board, so long as a quorum of Directors remains in office, shall have power at any time and from time to time to appoint any individual to be a Director so as to fill a casual vacancy.

76.

The Company may in a Special General Meeting called for that purpose remove a Director provided notice of any such meeting shall be served upon the Director concerned not less than 14 days before the meeting and he shall be entitled to be heard at that meeting. Any vacancy created by the removal of a Director at a Special General Meeting may be filled at the Meeting by the election of another Director in his place or, in the absence of any such election, by the Board.

RESIGNATION AND DISQUALIFICATION OF DIRECTORS

77.	The office of a Director shall be vacated upon the happening of any of the following events:

(a)

if he resigns his office by notice in writing delivered to the Registered Office or tendered at a meeting of the Board;

(b)

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

(c)

if he becomes bankrupt or compounds with his creditors;

(d)

if he is prohibited by law from being a Director; and

(e)

if he ceases to be a Director by virtue of the Companies Acts or is removed from office pursuant to these Bye-Laws.

ALTERNATE DIRECTORS

78.

(A) The Company may by Resolution elect a person or persons qualified to be Directors to act as Directors in the alternative to any of the Directors of the Company or may authorise the Board to appoint such Alternate Directors and a Director may appoint and remove his own Alternate Director. Any appointment or removal of an Alternate Director by a Director shall be effected by depositing a notice of appointment or removal with the Secretary at the Registered Office, signed by such Director, and such appointment or removal shall become effective on the date of receipt by the Secretary. Any Alternate Director may be removed by Resolution of the Company and, if appointed by the Board, may be removed by the Board. Subject as aforesaid, the office of Alternate Director shall continue until the next annual election of Directors or, if earlier, the date on which the relevant Director ceases to be a Director. An Alternate Director may also be a Director in his own right and may act as alternate to more than one Director.

(B) A Director may at any time, by notice in writing signed by him delivered to the Registered Office of the Company or at the Head Office or at a meeting of the Board, appoint any person (including another Director) to act as alternate Director in his place during his absence and may in like manner at any time determine such appointment. If such person is not another Director such appointment unless previously approved by the Board shall have effect only upon and subject to being so approved. The appointment of an alternate Director shall determine on the happening of any event, which were he a Director, would cause him to vacate such office or if his appointor ceases to be a Director.

79.	An Alternate Director shall be entitled to receive notices of all meetings of Directors, to attend, be counted in the quorum and vote at any such meeting at which any Director to

whom he is alternate is not personally present, and generally to perform all the functions of any Director to whom he is alternate in his absence.

80.

Every person acting as an Alternate Director shall (except as regards powers to appoint an alternate and remuneration) be subject in all respects to the provisions of these Bye-Laws relating to Directors and shall alone be responsible to the Company for his acts and defaults and shall not be deemed to be the agent of or for any Director for whom he is alternate. An Alternate Director may be paid expenses and shall be entitled to be indemnified by the Company to the same extent mutatis mutandis as if he were a Director. Every person acting as an Alternate Director shall have one vote for each Director for whom he acts as alternate (in addition to his own vote if he is also a Director). The signature of an Alternate Director to any resolution in writing of the Board or a committee of the Board shall, unless the terms of his appointment provide to the contrary, be as effective as the signature of the Director or Directors to whom he is alternate.

DIRECTORS’ FEES AND ADDITIONAL REMUNERATION AND EXPENSES

81.

The amount, if any, of Directors’ fees shall from time to time be determined by the Company by Resolution and in the absence of a determination to the contrary in general meeting, such fees shall be deemed to accrue from day to day. Each Director may be paid his reasonable travelling, hotel and incidental expenses in attending and returning from meetings of the Board or committees constituted pursuant to these Bye-Laws or general meetings and shall be paid all expenses properly and reasonably incurred by him in the conduct of the Company’s business or in the discharge of his duties as a Director. Any Director who, by request, goes or resides abroad for any purposes of the Company or who performs services which in the opinion of the Board go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine, and such extra remuneration shall be in addition to any remuneration provided for by or pursuant to any other Bye-Law.

DIRECTORS’ INTERESTS

82.

(A) A Director may hold any other office or place of profit with the Company (except that of auditor) in conjunction with his office of Director for such period and upon such terms as the Board may determine, and may be paid such extra remuneration therefor (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine, and such extra remuneration shall be in addition to any remuneration provided for by or pursuant to any other Bye-Law.

(B) A Director may act by himself or his fine in a professional capacity for the Company (otherwise than as auditor) and he or his firm shall be entitled to remuneration for professional services as if he were not a Director.

(C) Subject to the provisions of the Companies Acts, a Director may notwithstanding his office be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested; and be a Director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any body corporate promoted by the Company or in which the Company is interested. The Board may also cause the voting power conferred by the shares in any other

company held or owned by the Company to be exercised in such manner in all respects as it thinks fit, including the exercise thereof in favour of any resolution appointing the Directors or any of them to be directors or officers of such other company, or voting or providing for the payment of remuneration to the directors or officers of such other company.

(D) So long as, where it is necessary, he declares the nature of his interest at the first opportunity at a meeting of the Board or by writing to the Directors as required by the Companies Acts, a Director shall not by reason of his office be accountable to the Company for any benefit which he derives from any office or employment to which these Bye-Laws allow him to be appointed or from any transaction or arrangement in which these Bye-Laws allow him to be interested, and no such transaction or arrangement shall be liable to be avoided on the ground of any interest or benefit.

(E) Subject to the Companies Acts and any further disclosure required thereby, a general notice to the Directors by a Director or officer declaring that he is a director or officer or has an interest in a person and is to be regarded as interested in any transaction or arrangement made with that person, shall be a sufficient declaration of interest in relation to any transaction or arrangement so made.

POWERS AND DUTIES OF THE BOARD

83.

Subject to the provisions of the Companies Acts and these Bye-Laws and to any directions given by the Company by Resolution, the Board shall manage the business of the Company and may pay all expenses incurred in promoting and incorporating the Company and may exercise all the powers of the Company. No alteration of these Bye-Laws and no such direction shall invalidate any prior act of the Board which would have been valid if that alteration had not been made or that direction had not been given. The powers given by this Bye-Law shall not be limited by any special power given to the Board by these Bye-Laws and a meeting of the Board at which a quorum is present shall be competent to exercise all the powers, authorities and discretions for the time being vested in or exercisable by the Board.

84.

The Board may exercise all the powers of the Company to borrow money and to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any other persons.

85.

All cheques, promissory notes, drafts, bills of exchange and other instruments, whether negotiable or transferable or not, and all receipts for money paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as the Board shall from time to time by resolution determine.

86.

The Board on behalf of the Company may provide benefits, whether by the payment of gratuities or pensions or otherwise, for any person including any Director or former Director who has held any executive office or employment with the Company or with any body corporate which is or has been a subsidiary or affiliate of the Company or a predecessor in the business of the Company or of any such subsidiary or affiliate, and to any member of his family or any person who is or was dependent on him, and may

contribute to any fund and pay premiums for the purchase or provision of any such gratuity, pension or other benefit, or for the insurance of any such person.

87.

The Board may from time to time appoint one or more of its body to be a managing director, joint managing director or an assistant managing director or to hold any other employment or executive office with the Company for such period and upon such terms as the Board may determine and may revoke or terminate any such appointments. Any such revocation or termination as aforesaid shall be without prejudice to any claim for damages that such Director may have against the Company or the Company may have against such Director for any breach of any contract of service between him and the Company which may be involved in such revocation or termination. Any person so appointed shall receive such remuneration (if any) (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine, and either in addition to or in lieu of his remuneration as a Director.

DELEGATION OF TEE BOARD’S POWERS

88.

The Board may by power of attorney appoint any company, firm or person or any fluctuating body of persons, whether nominated directly or indirectly by the Board, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board under these Bye-Laws) and for such period and subject to such conditions as it may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney and of such attorney as the Board may think fit, and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him.

89.

The Board may entrust to and confer upon any Director or officer any of the powers exercisable by it upon such terms and conditions with such restrictions as it thinks fit, and either collaterally with, or to the exclusion of, its own powers, and may from time to time revoke or vary all or any of such powers but no person dealing in good faith and without notice of such revocation or variation shall be affected thereby.

90.

The Board may delegate any of its powers, authorities and discretions to committees, consisting of such person or persons (whether a member or members of its body or not) as it thinks fit. Any committee so formed shall, in the exercise of the powers, authorities and discretions so delegated, conform to any regulations which may be imposed upon it by the Board.

PROCEEDINGS OF THE BOARD

91.

The Board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it thinks fit. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes the motion shall be deemed to have been lost. A Director may, and the Secretary on the requisition of a Director shall, at any time summon a board meeting.

92.

Notice of a board meeting shall be deemed to be duly given to a Director if it is given to him personally or by word of mouth or sent to him by post, cable, telex, telecopier or other mode of representing or reproducing words in a legible and non-transitory form at his last known address or any other address given by him to the Company for this

purpose. A Director may waive notice of any meeting either prospectively or retrospectively.

93.

(A) The quorum necessary for the transaction of the business of the Board may be fixed by the Board and, unless so fixed at any other number, shall be a majority of the Directors then in office. Any Director who ceases to be a Director at a board meeting may continue to be present and to act as a Director and be counted in the quorum until the termination of the Board meeting if no other Director objects and if otherwise a quorum of Directors would not be present.

(B) A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or proposed contract, transaction or arrangement with the Company and has complied with the provisions of the Companies Acts and these Bye-Laws with regard to disclosure of his interest shall be entitled to vote in respect of any contract, transaction or arrangement in which he is so interested and if he shall do so his vote shall be counted, and he shall be taken into account in ascertaining whether a quorum is present.

94.	So long as a quorum of Directors remains in office, the continuing Directors may act notwithstanding any vacancy in the Board but, if no quorum of Directors remains, the continuing Directors or a sole continuing Director may act only for the purpose of calling a general meeting.

95.

The Board may elect a Chairman of the Board from amongst its members. If no Chairman of the Board is elected or he is absent, the President shall be chairman. If at any meeting neither the Chairman of the Board nor the President is present within five minutes after the time appointed for holding the same, the Directors present may choose one of their number to be chairman of the meeting.

96.	The meetings and proceedings of any committee consisting of two or more members shall be governed by the provisions contained in these Bye-Laws for regulating the meetings and proceedings of the Board so far as the same are applicable and are not superseded by any regulations imposed by the Board.

97.

A resolution in writing signed by all the Directors for the time being entitled to receive notice of a meeting of the Board or by all the members of a committee for the time being shall be as valid and effectual as a resolution passed at a meeting of the Board or, as the case may be, of such committee duly called and constituted. Such resolution may be contained in one document or in several documents in the like form each signed by one or more of the Directors or members of the committee concerned.

98.

All acts done by the Board or by any committee or by any person acting as a Director or member of a committee or any person duly authorised by the Board or any committee, shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any member of the Board or such committee or person acting as aforesaid or that they or any of them were disqualified or had vacated their office, be as valid as if every such person had been duly appointed and was qualified and had continued to be a Director, member of such committee or person so authorised.

99.	A meeting of the Board or a committee appointed by the Board may be held by means of such telephone, electronic or other communication facilities as permit all persons

participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

OFFICERS

100.

The officers of the Company shall include a President and a Vice-President or a Chairman and a Deputy Chairman who shall be Directors and shall be elected by the Board as soon as possible after the statutory meeting and each annual general meeting. In addition, the Board may appoint any person whether or not he is a Director to hold such office as the Board may from time to time determine. Any person elected or appointed pursuant to this Bye-Law shall hold office for such period and upon such terms as the Board. may determine and the Board may revoke or terminate any such election or appointment. Any such revocation or termination shall be without prejudice to any claim for damages that such officer may have against the Company or the Company may have against such officer for any breach of any contract of service between him and the Company which may be involved in such revocation or termination. Save as provided in the Companies Acts or these Bye-Laws, the powers and duties of the officers of the Company shall be such (if any) as are determined from time to time by the Board.

MINUTES

101.	The Directors shall cause Minutes to be made and books kept for the purpose of recording -

(a)

all appointments of officers made by the Directors;

(b)

the names of the Directors and other persons (if any) present at each meeting of Directors and of any committee;

(c)

of all proceedings at meetings of the Company, of the holders of any class of shares in the Company, and of committees;

(d)

of all proceedings of managers (if any).

SECRETARY AND RESIDENT REPRESENTATIVE

102.	The Secretary shall be appointed by the Board at such remuneration (if any) and upon such terms as it may think fit and any Secretary so appointed may be removed by the Board.

The duties of the Secretary shall be those prescribed by the Companies Acts together with such other duties as shall from time to time be prescribed by the Board.

The Board shall appoint a Secretary who shall be an individual ordinarily resident in Bermuda and who shall be the Secretary of the Company and, in addition, shall also appoint a resident representative who shall be an individual ordinarily resident in Bermuda and who shall be titled the Resident Representative, for as long as such appointed shall be required by the Companies Act.

103.	A provision of the Companies Acts or these Bye-Laws requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in the place of, the Secretary.

THE SEAL

104.

(A) The Seal shall consist of a circular metal device with the name of the Company around the outer margin thereof and the country and year of incorporation across the centre thereof. Should the Seal not have been received at the Registered Office in such form at the date of adoption of this Bye-Law then, pending such receipt, any document requiring to be sealed with the Seal shall be sealed by affixing a red wafer seal to the document with the name of the Company, and the country and year of incorporation type written across the centre thereof.

(B) The Board shall provide for the custody of every Seal. A Seal shall only be used by authority of the Board or of a committee constituted by the Board. Subject to these Bye-Laws, any instrument to which the Seal is affixed shall be signed by two Directors or the Secretary and one Director, or by any two persons whether or not Directors or the Secretary, who have been authorised either generally or specifically to attest to the use of a Seal; provided that the Secretary or a Director may affix a Seal attested with his signature only to authenticate copies of these Bye-Laws, the Minutes of any meeting or any other documents requiring authentication.

(C) The Company may have a duplicate seal for use abroad where and as the Directors shall determine and the Company may by writing under the seal appoint any agents or agent or committee abroad to be the duly authorized agent of the Company for the purpose of affixing and using such duplicate seal and they may impose such restrictions on the use thereof as may be thought fit. Wherever in the Bye-Laws reference is made to the seal, the reference shall, when and so far as may be applicable, be deemed to include any such duplicate seal as aforesaid.

DIVIDENDS AND OTHER PAYMENTS

105.

The Board may from time to time declare cash dividends or distributions out of contributed surplus to be paid to the Shareholders according to their rights and interests including such interim dividends as appear to the Board to be justified by the position of the Company. The Board may also pay any fixed cash dividend which is payable on any shares of the Company half yearly or on such other dates, whenever the position of the Company, in the opinion of the Board, justifies such payment.

106.	Except insofar as the rights attaching to, or the terms of issue of, any share otherwise provide:-

(a)

all dividends or distributions out of contributed surplus may be declared and paid according to the amounts paid up on the shares in respect of which the dividend or distribution is paid, and an amount paid up on a share in advance of calls may be treated for the purpose of this Bye-Law as paid-up on the share;

(b)

dividends or distributions out of contributed surplus may be apportioned and paid pro rata according to the amounts paid-up on the shares during any portion or portions of the period in respect of which the dividend or distribution is paid.

107.	The Board may deduct from any dividend, distribution or other moneys payable to a Shareholder by the Company on or in respect of any shares all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in respect of shares of the Company.

108.	No dividend, distribution or other moneys payable by the Company on or in respect of any share shall bear interest against the Company.

109.

Any dividend, distribution, interest or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post addressed to the holder at his address in the Register or, in the case of joint holders, addressed to the holder whose name stands first in the Register in respect of the shares at his registered address as appearing in the register or addressed to such person at such address as the holder or joint holders may in writing direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first in the Register in respect of such shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. Any one of two or more joint holders may give effectual receipts for any dividends, distributions or other moneys payable or property distributable in respect of the shares held by such joint holders.

110.

Any dividend or distribution out of contributed surplus unclaimed for a period of six years from the date of declaration of such dividend or distribution shall be forfeited and shall revert to the Company and the payment by the Board of any unclaimed dividend, distribution, interest or other sum payable on or in respect of the share into a separate account shall not constitute the Company a trustee in respect thereof.

111.

With the sanction of a Resolution the Board may direct payment or satisfaction of any dividend or distribution out of contributed surplus wholly or in part by the distribution of specific assets, and in particular of paid-up shares or debentures of any other company, and where any difficulty arises in regard to such distribution or dividend the Board may settle it as it thinks expedient, and in particular, may authorise any person to sell and transfer any fractions or may ignore fractions altogether, and may fix the value for distribution or dividend purposes of any such specific assets and may determine that cash payments shall be made to any Shareholders upon the footing of the values so fixed in order to secure equality of distribution and may vest any such specific assets in trustees as may seem expedient to the Board.

RESERVES

112.

The Board may, before recommending or declaring any dividend or distribution out of contributed surplus, set aside such sums as it thinks proper as reserves which shall, at the discretion of the Board, be applicable for any purpose of the Company and pending such application may, also at such discretion, either be employed in the business of the Company or be invested in such investments as the Board may from time to time think fit. The Board may also without placing the same to reserve carry forward any sums which it may think it prudent not to distribute.

CAPITALIZATION OF PROFITS

113.

The Company may, upon the recommendation of the Board, at any time and from time to time pass a Resolution to the effect that it is desirable to capitalize all or any part of any amount for the time being standing to the credit of any reserve or fund which is available for distribution or to the credit of any share premium account or any capital redemption reserve fund and accordingly that such amount be set free for distribution amongst the

Shareholders or any class of Shareholders who would be entitled thereto if distributed by way of dividend and in the same proportions, on the footing that the same be not paid in cash but be applied either in or towards paying up amounts for the time being unpaid on any shares in the Company held by such Shareholders respectively or in payment up in full of unissued shares, debentures or other obligations of the Company, to be allotted and distributed credited as fully paid amongst such Shareholders, or partly in one way and partly in the other, and the Board shall give effect to such Resolution, provided that for the purpose of this Bye-Law, a share premium account and a capital redemption reserve fund may be applied only in paying up of unissued shares to be issued to such Shareholders credited as fully paid and provided further that any sum standing to the credit of the share premium account may only be applied in crediting as fully paid shares of the same class as that from which the relevant share premium was derived.

114.

Where any difficulty arises in regard to any distribution under the last preceding Bye-Law the Board may settle the same as it thinks expedient and, in particular, may authorise any person to sell and transfer any fractions or may resolve that the distribution should be as nearly as may be practicable in the correct proportion but not exactly so or may ignore fractions altogether, and may determine that cash payments should be made to any Shareholders in order to adjust the rights of all parties, as may seem expedient to the Board. The Board may appoint any person to sign on behalf of the persons entitled to participate in the distribution any contract necessary or desirable for giving effect thereto and such appointment shall be effective and binding upon the Shareholders.

RECORD DATES

115.

Notwithstanding any other provisions of these Bye-Laws the Company may by Resolution or the Board may fix any date as the record date for any dividend, distribution, allotment or issue and for the purpose of identifying the persons entitled to receive notices of general meetings. Any such record date may be on or at any time before or after any date on which such dividend, distribution, allotment or issue is declared, paid or made or such notice is despatched.

ACCOUNTING RECORDS

116.	The Board shall cause to be kept accounting records sufficient to give a true and fair view of the state of the Company’s affairs and to show and explain its transactions, in accordance with the Companies Acts.

117.

The records of account shall be kept at the Registered Office or at such other place or places as the Board thinks fit, and shall at all times be open to inspection by the Directors: PROVIDED that if the records of account are kept at some place outside Bermuda, there shall be kept at an office of the Company in Bermuda such records as will enable the directors to ascertain with reasonable accuracy the financial position of the Company at the end of each three month period. No Shareholder (other than an officer of the Company) shall have any right to inspect any accounting record or book or document of the Company except as conferred by law or authorised by the Board or by Resolution.

118.	A copy of every balance sheet and statement of income and expenditure, including every document required by law to be annexed thereto, which is to be laid before the Company

in general meeting, together with a copy of the auditor’s report, shall be sent to each person entitled thereto in accordance with the requirements of the Companies Acts.

AUDIT

119.

Save and to the extent that an audit is waived in the manner permitted by the Companies Acts, auditors shall be appointed and their duties regulated in accordance with the Companies Acts, any other applicable law and such requirements not inconsistent with the Companies Acts as the Board may from time to time determine.

SERVICE OF NOTICES AND OTHER DOCUMENTS

120.

Any notice or other document (including a share certificate) may be served on or delivered to any Shareholder by the Company either personally or by sending it through the post (by airmail where applicable) in a pre-paid letter addressed to such Shareholder at his address as appearing in the Register or by delivering it to or leaving it at such registered address. In the case of joint holders of a share, service or delivery of any notice or other document on or to one of the joint holders shall for all purposes be deemed as sufficient service on or delivery to all the joint holders. Any notice or other document if sent by post shall be deemed to have been served or delivered seven days after it was put in the post, and in proving such service or delivery, it shall be sufficient to prove that the notice or document was properly addressed, stamped and put in the post.

121.

Any notice of a general meeting of the Company shall be deemed to be duly given to a Shareholder if it is sent to him by cable, telex, telecopier or other mode of representing or reproducing words in a legible and non-transitory form at his address as appearing in the Register or any other address given by him to the Company for this purpose. Any such notice shall be deemed to have been served twenty-four hours after its despatch.

122.

Any notice or other document delivered, sent or given to a Shareholder in any manner permitted by these Bye-Laws shall, notwithstanding that such Shareholder is then dead or bankrupt or that any other event has occurred, and whether or not the Company has notice of the death or bankruptcy or other event, be deemed to have been duly served or delivered in respect of any share registered in the name of such Shareholder as sole or joint holder unless his name shall, at the time of the service or delivery of the notice or document, have been removed from the Register as the holder of the share, and such service or delivery shall for all purposes be deemed as sufficient service or delivery of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in the share.

WINDING UP

123.

If the Company shall be wound up, the liquidator may, with the sanction of a resolution of the Company and any other sanction required by the Companies Acts, divide amongst the Shareholders in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for such purposes set such values as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Shareholders or different classes of Shareholders. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trust for the benefit of the contributories as the liquidator, with the like sanction, shall think fit, but so that no

Shareholder shall be compelled to accept any shares or other assets upon which there is any liability.

INDEMNITY

124.

Subject to the proviso below, every Director, officer of the Company and member of a committee constituted under Bye-Law 90 shall be indemnified out of the funds of the Company against all civil liabilities, loss, damage or expense (including but not limited to 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 such Director, officer or committee member and the indemnity contained in this Bye-Law shall extend to any person acting as a Director, officer or committee member in the reasonable belief that he has been so appointed or elected notwithstanding any defect in such appointment or election PROVIDED ALWAYS that the indemnity contained in this Bye-Law shall not extend to any matter which would render it void pursuant to the Companies Acts.

125.

Every Director, officer and member of a committee duly constituted under Bye-Law 90 of the Company shall be indemnified out of the funds of the Company against all liabilities incurred by him as such Director, officer or committee member in defending any proceedings, whether civil or criminal, in which judgment is given in his favour, or in which he is acquitted, or in connection with any application under the Companies Acts in which relief from liability is granted to him by the court.

126.

To the extent that any Director, officer or member of a committee duly constituted under Bye-Law 90 is entitled to claim an indemnity pursuant to these Bye-Laws in respect of amounts paid or discharged by him, the relative indemnity shall take effect as an obligation of the Company to reimburse the person making such payment or effecting such discharge.

ALTERATION OF BYE-LAWS

127.	These Bye-Laws may be amended from time to time in the manner provided for in the Companies Acts.

Exhibit 3.1

Shareholders’ Agreement by and among Asia Pacific Wire & Cable Corporation, Ltd.,

Pacific Electric Wire & Cable Co., Ltd., and SOF Investments, L.P.

SHAREHOLDERS’ AGREEMENT

This SHAREHOLDERS’ AGREEMENT (this “ Shareholders’ Agreement ”) is entered into and effective as of June 28, 2007, by and among ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED , a Bermuda company (“ APWC ” or the “ Company ”), PACIFIC ELECTRIC WIRE & CABLE CO., LTD. , a Taiwan, ROC company (“ PEWC ”), and SOF INVESTMENTS, L.P. , a Delaware limited partnership, (“ SOF ”, and, together with APWC and PEWC, collectively referred to as, the “ Parties ” and, each individually, a “ Party ”).

RECITALS

WHEREAS, as of the date hereof, PEWC beneficially Owns in the aggregate 7,664,615 Shares of the Common Stock of APWC, US$0.01 par value per share (the “ Common Stock ”), constituting approximately fifty-five and four-tenths percent (55.4%) of the issued and outstanding Common Stock;

WHEREAS, as of the closing of the Stock Purchase Agreement, SOF will beneficially Own in the aggregate 2,766,154 Shares of the Common Stock, constituting approximately twenty percent (20%) of the issued and outstanding Common Stock;

WHEREAS, the Company has not completed an audit of its financial statements since the fiscal year ended December 31, 2003 and it is the goal of the Company, among other actions intended to enhance shareholder value, to take such steps as are reasonably necessary to become current in its periodic reporting under the Exchange Act;

WHEREAS, each of the signatories hereto has full power and authority to act on behalf of the Parties listed on such signature pages in connection with this Shareholders’ Agreement; and

WHEREAS, the Parties deem it in their best interest to enter into this Shareholders’ Agreement on the terms and subject to the conditions as set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the agreements and covenants contained in this Shareholders’ Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions . Certain capitalized terms as used herein shall have the meanings set forth in Appendix A ( Definitions ) hereto which is incorporated herein by reference.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1 APWC Representations and Warranties . APWC represents and warrants to SOF and PEWC as follows:

(a) Organization and Good Standing . APWC is a company limited by shares duly organized and validly existing, and in good standing under the laws of the Islands of Bermuda.

(b) Authority; No Conflict .

(i) Upon the execution and delivery by APWC, this Shareholders’ Agreement will constitute the legal, valid, and binding obligations of APWC, enforceable against APWC in accordance with its respective terms. APWC has the right, power, and authority to execute and deliver this Shareholders’ Agreement and, subject to a Permitted Exception, to perform its obligations under this Shareholders’ Agreement.

(ii) Neither the execution and delivery of this Shareholders’ Agreement by APWC nor the consummation or performance of any of the Contemplated Transactions by APWC will:

(A) conflict with, or result in a breach of any provision of APWC’s Organizational Documents, or any resolution adopted by the board of directors or the shareholders of APWC;

(B) give any Person the right to prevent, delay or otherwise interfere with any of the Contemplated Transactions, subject to a Permitted Exception;

(D) conflict with, result in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, or result in the acceleration, modification or termination of, any Contract to which APWC is a party or by which APWC may be bound.

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(iii) APWC is not and will not be required to obtain any Consent, other than such as have been obtained, from any Person in connection with the execution and delivery of this Shareholders’ Agreement or, subject to a Permitted Exception, the consummation or performance of any of the Contemplated Transactions.

(c) Capitalization . The authorized share capital of the Company consists of 20,000,000 Shares of Common Stock, par value US$0.01 per share, of which 13,830,769 Shares are issued and outstanding.

2.2 PEWC Representations and Warranties . PEWC represents and warrants to SOF and APWC as follows:

(a) Organization and Good Standing . PEWC is a corporation duly organized, validly existing under the laws of Taiwan, ROC.

(b) Authority; No Conflict .

(i) Upon the execution and delivery by PEWC, this Shareholders’ Agreement will constitute the legal, valid, and binding obligations of PEWC, enforceable against PEWC in accordance with its respective terms. PEWC has the right, power, and authority to execute and deliver this Shareholders’ Agreement and, subject to a Permitted Exception, to perform its obligations under this Shareholders’ Agreement.

(ii) Neither the execution and delivery of this Shareholders’ Agreement by PEWC nor the consummation or performance of any of the Contemplated Transactions by PEWC will:

(A) conflict with, or result in a breach of any provision of PEWC’s Organizational Documents, or any resolution adopted by the board of directors or the shareholders of PEWC;

(B) give any Person the right to prevent, delay, or otherwise interfere with any of the Contemplated Transactions, subject to a Permitted Exception;

(D) conflict with, result in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, or result in the acceleration, modification or termination of any Contract to which PEWC is a party or by which PEWC may be bound.

(iii) PEWC is not and will not be required to obtain any Consent, other than such as have been obtained, from any Person in connection with the

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execution and delivery of this Shareholders’ Agreement or the consummation or, subject to a Permitted Exception, performance of any of the Contemplated Transactions.

2.3 SOF Representations and Warranties . SOF represents and warrants to APWC and PEWC as follows:

(a) Organization and Good Standing . SOF is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware and is controlled by MSD Capital, L.P., a Delaware limited partnership.

(b) Authority; No Conflict .

(i) Upon the execution and delivery by SOF, this Shareholders’ Agreement will constitute the legal, valid, and binding obligations of SOF, enforceable against SOF in accordance with its respective terms. SOF has the right, power, and authority to execute and deliver this Shareholders’ Agreement and, subject to a Permitted Exception, to perform its obligations under this Shareholders’ Agreement.

(ii) Neither the execution and delivery of this Shareholders’ Agreement by SOF nor the consummation or performance of any of the Contemplated Transactions by SOF will:

(A) conflict with, or result in a breach of any provision of SOF’s Organizational Documents, or any resolution adopted by general partner of SOF

(B) give any Person the right to prevent, delay, or otherwise interfere with any of the Contemplated Transactions, subject to a Permitted Exception;

(D) conflict with, result in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, or result in the acceleration, modification or termination of any Contract to which SOF is a party or by which SOF may be bound.

(iii) SOF is not and will not be required to obtain any Consent, other than such as have been obtained, from any Person in connection with the execution and delivery of this Shareholders’ Agreement or, subject to a Permitted Exception, the consummation or performance of any of the Contemplated Transactions.

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ARTICLE III

BOARD OF DIRECTORS/ CORPORATE GOVERNANCE MATTERS

3.1 Board Observer . From and after the date hereof and subject to the terms and conditions hereof, and until the termination of this Shareholders’ Agreement in accordance with Section 8.3 below, SOF shall be entitled to designate one (1) individual as a Board Observer (the “ Board Observer ”), with such individual to be subject to the prior written consent of the Company, which such consent shall not be unreasonably withheld or delayed. This Board Observer shall be entitled to receive (i) notice of and attend all meetings of the Board of Directors, (ii) copies of minutes or consents relating to each action taken by the Board of Directors and (iii) copies of all documents and other materials distributed to members of the Board of Directors, in each case, at the same time and in the same form as received by members of the Board of Directors (items (i), (ii) and (iii), collectively, the “ Board Materials ”); provided , however , that any materials provided to the Board Observer pursuant to either clause (ii) or clause (iii) of this sentence may be shared by the Board Observer with SOF and its Affiliates and that such information shall otherwise be kept confidential by the Board Observer, SOF and its Affiliates and shall not be disclosed to any other Person, except as may be required by applicable law or regulation or legal process. Any individual designated pursuant to this Section 3.1 as Board Observer may be removed with or without cause at any time and for any reason or no reason by SOF in its sole discretion, by delivery of written notice to the Company only by SOF and SOF shall be entitled to maintain a Board Observer and to designate a replacement Board Observer from time to time, with such replacement Board Observer to be subject to the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed, so long as SOF then Owns at least ten percent (10%) of the outstanding Shares of Common Stock. Notwithstanding anything herein to the contrary, SOF may elect at any time and from time to time not to designate a Board Observer, in which event SOF shall not be provided with or receive any Board Materials. Any designation by SOF of a Board Observer or any removal of any Board Observer by SOF shall be made by written notice to the Company. Notwithstanding anything to the contrary set forth in Section 9.7 of this Shareholders’ Agreement, SOF may not assign its rights under this Section 3.1 without the prior written consent of the Company.

3.2 Related Party Matters . The Company and PEWC hereby covenant and agree that the business relationship and all of the commercial transactions between the Company or any of its Affiliates, on the one hand, and PEWC or any of its Affiliates on the other shall be conducted in such a manner as is consistent with the Company’s and PEWC’s past customary practices, on such terms and conditions that are equal to, the same as or better than then current market terms available to the Company with respect to the subject matter of each such transaction and in accordance with any applicable Legal Requirements (herein “ Satisfactory Contract Terms ”). In addition, SOF acknowledges that both the Company and PEWC will continue to engage in such transactions on Satisfactory Contract Terms.

3.3 Amendment of Bye-laws . The Company hereby covenants and agrees to take all requisite action necessary to call a Board of Directors meeting and a general meeting of the shareholders of the Company as soon a practicably possible to (i) approve a new public accounting firm to perform audit services for the Company and (ii) amend the Bye-laws of the Company to delete Section 91A of such Bye-laws (the “ Proposals ”). The Company shall

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procure that the Board of Directors shall recommend that the shareholders of the Company vote in favor of the Proposals. APWC, PEWC and SOF each hereby covenants and agrees that each will take any and all action reasonably necessary to effectuate the Proposals.

ARTICLE IV

TAX COVENANTS

4.1 Compliance with U.S. Tax Requirements . So that SOF can timely determine and comply with its U.S. tax reporting and payment obligations with respect to its Ownership in the Company, the Company and PEWC each hereby agree and covenant as follows:

(a) Compliance with Subpart F Rules . The Company shall, with respect to each taxable year of SOF during any part of which SOF held Shares of the Company, retain the services of any one of the top four public accounting firms (in terms of gross revenue) headquartered in the United States, or such other SEC-qualified public accounting firm subject to the consent of SOF, such consent not to be unreasonably withheld, delayed or conditioned (it being agreed by SOF that Moores Rowland International and any SEC qualified public accounting firm successor of Moores Rowland International is acceptable to SOF) (the “Accounting Firm”), to: (i) determine for each taxable year of SOF whether, for any part of that year, the Company was a “ Controlled Foreign Corporation ” (“ CFC ”) as defined in Code Section 957 of the U.S. Internal Revenue Code (all references to “Section” are to this Code, which is referred to hereinafter as the “ Code ”) and if so, whether SOF was a “United States shareholder” as defined in Code Section 951(b) with respect to the Company for any part of that year, and (ii) if the Company is a CFC and SOF is a United States shareholder of the Company for any part of such taxable year, determine what amounts, if any, are includible in the gross income of SOF under Code Section 951(a) with respect to the Company, (iii) if required by the Instructions to U.S. Internal Revenue Service (“ IRS ”) Form 5471 “Information Return of U.S. Persons With Respect to Certain Foreign Corporations” or otherwise by law, prepare and timely provide such Form 5471 to SOF for filing by SOF with the IRS with respect to the Company for such taxable year (for this purpose, “timely” shall mean by the due date for the Form 5471 for such year without taking into account any extension, unless SOF in its sole discretion requests and is granted an extension, except that for the first taxable year of SOF ending after the effective date of this Shareholders’ Agreement, “timely” shall mean by August 31 following the end of such taxable year), and (iv) advise SOF as to the U.S. tax treatment of any distribution from the Company or of any sale of stock of the Company, including the applicability of the U.S. foreign tax credit, whether or not the Company was a CFC in the year in which the distribution was made or the Shares were sold. The Company further agrees to provide to the Accounting Firm and SOF all information and reasonable access to its books and records necessary or helpful to the Accounting Firm, as requested by such Accounting Firm or SOF, to carry out the Accounting Firm’s duties under this Section and otherwise for SOF to determine and comply with its reporting and tax payment obligations under Code Section 951. If requested by the Accounting Firm or SOF, the Company shall request of each of its shareholders that own at least ten percent (10%) of the total outstanding voting stock of all classes of the Company that such shareholder complete, execute, and deliver to the Company either IRS Form W-9 “Request for Taxpayer Identification Number and Certification” or IRS Form W-8BEN “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding,” whichever is appropriate for such

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shareholder, with respect to whether such shareholder is or is not a “U.S. Person” as defined in the instructions to such forms. The Company shall have no obligation to disclose such forms or any information thereon to the Accounting Firm or to SOF except such information as is necessary to determine the Company’s status as a CFC or SOF’s status as a United States shareholder. The Company shall comply with this Section 4.1(a) at its own expense, provided that the services referred to in clauses (ii), (iii) and (iv) of the first sentence of this Section 4.1(a) shall be provided (as necessary) to SOF at the Company’s sole expense for the first taxable year of SOF ending after the effective date of this Shareholders’ Agreement and thereafter at the expense of SOF, with SOF responsible for paying directly to the Accounting Firm such fees and expenses of the Accounting Firm related to the services referred to in clauses (ii), (iii) and (iv) of the first sentence of this Section 4.1(a).

(b) Certification with Respect to Subpart F . Within sixty (60) days following the close of each taxable year of SOF, the Company shall certify in writing to SOF, based on the advice provided by the Accounting Firm selected under Section 4.1(a) above, (i) whether or not the Company was a CFC for any part of that taxable year, (ii) if the Company was a CFC for all or any part of such year, whether or not SOF was a United States shareholder of the Company for any part of that taxable year in which the Company was also a CFC, and (iii) whether or not Form 5471 is required to be filed by SOF with respect to the Company for such taxable year. SOF agrees to provide to the Accounting Firm and the Company all information necessary or advisable, as reasonably determined and requested by the Accounting Firm or the Company, in order for the Accounting Firm to carry out its duties under this Section 4.1(b); provided that, if reasonably requested by SOF, the Accounting Firm and the Company agree to execute a reasonable confidentiality agreement with respect to such information. If for any taxable year the filing of Form 5471 is necessary, upon the presentation of a completed Form 5471 to SOF by the Accounting Firm for any taxable year for filing with the IRS as provided in Section 4.1(a) above, the Company shall further certify that the Form 5471 is correct and complete. With respect to each such certification, the Company shall indemnify SOF, each of the partners of SOF, and each other Person to whom any income under Code Section 951(a) may be attributed directly or indirectly from SOF under Code Section 704 or otherwise under the Code (collectively, the “CFC Indemnified Parties”), for any interest and penalties that may be imposed on the CFC Indemnified Parties under the Code with respect to taxes owed on income determined to be reportable under Code Section 951(a) but that was not reported on Form 5471, as well as for reasonable attorney’s fees incurred by the CFC Indemnified Parties in defending against any challenge by the IRS to a decision to not file Form 5471 based upon the Company’s certification or, if one was filed, the correctness of the Form 5471 (collectively, the “ CFC Losses ”). In the course of any such defense, the CFC Indemnified Parties shall have sole discretion with respect to the grounds for such defense, the extent to which such defense shall be pursued through administrative and judicial appeals, and the negotiation of any settlement with the IRS, except that if the Accounting Firm represents in writing to the Company and the CFC Indemnified Parties that there is at least substantial authority for any position taken on the Form 5471 (or with respect to not filing a Form 5471) that is being challenged by the IRS, the CFC Indemnified Parties shall defend that position at least through the level of IRS administrative appeals before agreeing to any settlement or payment, unless the Company otherwise agrees to a cessation or settlement of the dispute. In addition, the Company shall use its reasonable best efforts to include the CFC Indemnified Parties as a third party beneficiary in the engagement of the Accounting Firm for the services described in Section 4.1(a) (without modifying the legally

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recognized interpretation of “reasonable best efforts”, for purposes of this Shareholders’ Agreement, “reasonable best efforts” shall be deemed to exclude any requirement to divest or spin off any assets or other business operations of the Company). Notwithstanding the foregoing, in the case of CFC Losses due to an error directly attributable to the Accounting Firm, the Company shall only be required to provide such indemnification to the CFC Indemnified Parties to the extent the Accounting Firm has not reimbursed the CFC Indemnified Parties for any CFC Losses within one year after the date of such CFC Indemnified Party making such claim against the Accounting Firm (the “ CFC Accounting Claim Period ”). In connection with any such Accounting Firm error, during such CFC Accounting Claim Period, SOF hereby undertakes to pursue diligently and enforce all rights and remedies against the Accounting Firm then available to it as a third party beneficiary or otherwise, prior to making any demand for indemnification on the Company. In the case of any CFC Losses directly or indirectly attributable to information supplied by SOF, or SOF’s failure to supply information, in each case pursuant to the second sentence of this Section 4.1(b), the Company shall not be required to provide indemnification to the CFC Indemnified Parties.

(c) Distributions Sufficient to Cover Taxes Imposed Under Subpart F . With respect to each taxable year of SOF for which it is determined under Section 4.1(a) above that an amount is includible in the gross income of SOF under Code Section 951(a), the Company shall, at the request of SOF and to the extent permitted by law, make a distribution to its shareholders, including SOF, on their respective Shares in an amount (in the case of SOF) equal to the amount of such inclusion multiplied by the highest marginal income tax rate for individuals in the United States in effect for the year with respect to which such inclusion occurs. Such distribution shall be made by no later than sixty (60) days following the filing by SOF with the IRS of the Form 5471 reporting the includible amount. If any additional amount of tax is later determined to be owed as a result of a challenge by the IRS as contemplated by Section 4.1(b) above or as a result of an amendment to the Form 5471 for any reason at the request or recommendation of the Accounting Firm, the Company shall make an additional shareholder distribution hereunder by no later than sixty (60) days following the remittance by SOF to the U.S. Treasury of such additional tax amount.

(d) Obligation of PEWC to Purchase Shares in Advance of CFC Status . By no later than sixty (60) days prior to any proposed sale or other Transfer by PEWC of any of the Shares Owned by PEWC, if immediately prior to such proposed sale or other Transfer the Company is not a CFC or, if the Company is a CFC, SOF is not a “United States shareholder” of the Company as defined in Code Section 951(b), PEWC shall provide written Notification of such proposed sale or other Transfer to the Company, SOF, and the Accounting Firm. Such Notification shall include: (i) whether or not the contemplated purchaser or other transferee is a “U.S. person” as defined in the Instructions to IRS Forms W-9 and W-8BEN, (ii) the number of Shares of each class of stock of the Company that is proposed to be sold or otherwise Transferred, (iii) in the case of a sale of Shares, the anticipated purchase price of the Shares, and (iv) the anticipated date of Transfer of the Shares. The Company shall, immediately upon receipt of such Notification, request of the Accounting Firm that it make a determination within fifteen (15) days of whether such sale or other Transfer will cause the Company to be a CFC and, if the Company is or will become a CFC as a result of the sale, cause SOF to become a United States shareholder with respect to the Company, and, if the determination is that, as a result of the sale or other Transfer, the Company will become a CFC and that SOF will be a United States

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shareholder with respect to the Company, PEWC shall have the obligation, exercisable solely at the discretion of SOF by written demand to PEWC delivered within fifteen (15) days of receipt of notice of the Accounting Firm’s determination, to purchase from SOF all or any portion of the Shares held by SOF as SOF, in its sole discretion, shall decide, at a price per share that is the greater of: (i) the purchase price of such Shares as set forth in a binding agreement between PEWC and the proposed purchaser, or (ii) the trailing thirty (30) Trading Days’ average closing price of the Common Stock. PEWC shall include in any agreement for the sale of Shares by PEWC, or otherwise shall refuse to proceed with the Transfer of Shares unless the transferee agrees in writing directed to the Company and SOF to, a covenant by the purchaser or other transferee to assume PEWC’s obligations under this Article IV, including but not limited to this Section 4.1(d), with respect to the Shares being purchased by such purchaser or otherwise acquired by such transferee. Any purported sale or other Transfer of Shares by PEWC, or by any subsequent holder of Shares acquired from PEWC or from any such subsequent holder, that is not in compliance with the provisions of this Section 4.1(d) shall be null and void, and shall not be registered in the share register of the Company.

(e) Compliance with the PFIC Rules . The Company shall, with respect to each taxable year of SOF during any part of which SOF held Shares of the Company, retain the services of the Accounting Firm to determine whether the Company is a “passive foreign investment company” (“ PFIC ”) as defined in Code Section 1297, and if so: (i) to assist SOF to determine whether to make a “qualified electing fund” election under Code Section 1295 (“ QEF Election ”) and any other election that may be available under the PFIC Rules of the Code (Sections 1291 through 1298), and if so, to make any such election (which shall be at the sole discretion of SOF), (ii) to determine what additional amounts of taxes that may be due or additional amounts of income that may be includible in the gross income of SOF for such taxable year and the character of such income under the PFIC Rules, whether as the result of an “excess distribution” under Code Section 1291 or pursuant to the rules applicable under a QEF Election or any other election made under the PFIC Rules, and (iii) to prepare and provide to SOF Form 8621 “Return of a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund” for timely filing by SOF with the IRS with respect to the Company for such taxable year. The Company further agrees to provide to the Accounting Firm and SOF all information and reasonable access to its books and records necessary or helpful to the Accounting Firm, as requested by the Accounting Firm or SOF, to carry out the Accounting Firm’s duties under this Section 4.1(e) and otherwise for SOF to determine and comply with its reporting and tax payment obligations under the PFIC Rules, and further, if a QEF Election is in effect for SOF for any taxable year, to prepare, with the assistance of the Accounting Firm, and provide to SOF for submission to the IRS as provided in IRS regulations a “PFIC Annual Information Statement” as described in IRS Regulation Section 1.1295-1(g)(1) or any successor regulation thereto. The Company shall comply with this Section 4.1(e) at its own expense, provided that the services referred to in clauses (i), (ii) and (iii) of the first sentence of this Section 4.1(e) shall be provided (as necessary) to SOF at the Company’s sole expense for the first taxable year of SOF in which the Company is a PFIC and thereafter at the expense of SOF, with SOF responsible for paying directly to the Accounting Firm such fees and expenses of the Accounting Firm related to the services referred to in clauses (i), (ii) and (iii) of the first sentence of this Section 4.1(e).

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(f) Certification with Respect to the PFIC Rules . Within sixty (60) days following the close of each taxable year of SOF, the Company shall certify in writing to SOF, based on the advice provided by the Accounting Firm selected under Section 4.1(a) above, either that the Company was not a PFIC for any part of that taxable year, or that the Company was a PFIC for some portion of that taxable year but that Form 8621 was nevertheless not required to be filed for that taxable year, or that the Company was a PFIC for that taxable year and that a Form 8621 was required to be filed by SOF for that year with respect to the Company. Upon the presentation of a completed Form 8621 to SOF by the Accounting Firm for any taxable year for filing with the IRS as provided in Section 4.1(e) above, the Company shall further certify that the Form 8621 is correct and complete. With respect to each certification, the Company shall indemnify SOF, each of the partners of SOF, and each other Person to whom any item of income or tax obligation under the PFIC rules may be attributed directly or indirectly from SOF under the Code (collectively, the “PFIC Indemnified Parties”), for any interest and penalties that may be imposed on the PFIC Indemnified Parties under the Code with respect to taxes (including any interest treated as part of the “deferred tax amount”) owed or on income determined to be reportable under the PFIC rules but that was not reported on Form 8621, as well as for reasonably attorney’s fees incurred by the PFIC Indemnified Parties in defending against any challenge by the IRS a decision to not file Form 8621 based upon the Company’s certification or, if one was filed, the correctness of the Form 8621 (collectively, the “PFIC Losses”). In the course of any such defense, the PFIC Indemnified Parties shall have sole discretion with respect to the grounds for such defense, the extent to which such defense shall be pursued through administrative and judicial appeals, and the negotiation of any settlement with the IRS, except that if the Accounting Firm represents in writing to the Company and the PFIC Indemnified Parties that there is at least substantial authority for any position taken on the Form 8621 (or with respect to not filing a Form 8621) that is being challenged by the IRS, the PFIC Indemnified Parties shall defend that position at least through the level of IRS administrative appeals before agreeing to any settlement or payment, unless the Company otherwise agrees to a cessation or settlement of the dispute. In addition, the Company shall use its reasonable best efforts to include the PFIC Indemnified Parties as a third party beneficiary in the engagement of the Accounting Firm for the services described in this Section 4.1(f). Notwithstanding the foregoing, in the case of PFIC Losses due to an error directly attributable to the Accounting Firm, the Company shall only be required to provide such indemnification to the PFIC Indemnified Parties to the extent the Accounting Firm has not reimbursed the PFIC Indemnified Parties for any PFIC Losses within one year after the date of such PFIC Indemnified Party making such claim against the Accounting Firm (the “ PFIC Accounting Claim Period ”). In connection with any such Accounting Firm error during such PFIC Accounting Claim Period, SOF hereby undertakes to pursue diligently and enforce all rights and remedies against the Accounting Firm then available to it as a third party beneficiary or otherwise, prior to making any demand for indemnification on the Company.

(g) Distributions Sufficient to Cover Taxes Imposed Under the PFIC Rules . With respect to each taxable year of SOF for which it is determined under Section 4.1(e) above that an additional amount of tax is owed or otherwise that an amount is includible in the gross income of SOF under the PFIC Rules, the Company shall, at the request of SOF and to the extent permitted by law, make a distribution to its shareholders, including SOF, on their respective Shares in an amount (in the case of SOF) equal to the amount of such additional tax or, with respect to an inclusion in income, such inclusion multiplied by the highest marginal income tax

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rate for individuals in the United States in effect for the year with respect to which such inclusion occurs. Such distribution shall be made by no later than sixty (60) days following the filing by SOF with the IRS of the Form 8621 reporting the additional taxes or includible amount. If any additional amount of tax is later determined to be owed as a result of a challenge by the IRS as contemplated by Section 4.1(f) above or as a result of an amendment to the Form 8621 for any reason at the request or recommendation of the Accounting Firm, the Company shall make an additional shareholder distribution hereunder by no later than sixty (60) days following the remittance by SOF to the U.S. Treasury of such additional tax amount.

(h) General Obligation of Cooperation . In addition to any specific obligation of the Company and PEWC as set forth above in this Article IV, each of PEWC and the Company shall cooperate fully with each other, with SOF, and with the Accounting Firm selected in Section 4.1(a) above for each to carry out its obligations under this Article IV and to allow SOF to determine and fully comply with its obligations under U.S. tax law with respect to its interest in the Company, including any elections that may be available to SOF; provided , however , that the foregoing agreement regarding cooperation shall not require PEWC or the Company to incur any significant additional cost or expense, or to forego any benefit, not expressly provided for in this Shareholders’ Agreement. PEWC shall further exercise whatever authority it holds as a shareholder of the Company to cause the Company to fully comply with its obligations under this Article IV.

ARTICLE V

TAG ALONG RIGHTS

5.1 Tag Along Right . From and after the date hereof and subject to the terms and conditions hereof, and until the termination of this Shareholders’ Agreement in accordance with Section 8.3 below, if PEWC proposes to Transfer to a Tag Along Transferee (or group of related Tag Along Transferees), in one transaction or a series of related transactions, (i) Shares that constitute more than five percent (5.0%) of the issued and outstanding Shares or (ii) Shares that, when combined with the holdings of the Tag Along Transferee and its Affiliates and any other group members, would result in such Group Owning in excess of five percent (5.0%) of the outstanding Shares, then PEWC shall offer SOF the right to include in its Transfer to the Tag Along Transferee the Tag Along Shares on the same terms and conditions as PEWC (a “ Tag Along Right ”).

5.2 Notice . No later than twenty (20) Business Days prior to the proposed consummation date of any Transfer described in this Article V, PEWC shall provide the Tag Along Notice to SOF and the Company. Such Tag Along Right shall be exercisable by written notice to PEWC and the Company given within fifteen (15) Business Days after receipt of the Tag Along Notice. Failure by SOF to respond within fifteen (15) Business Days after receipt of the Tag Along Notice shall be regarded as a rejection of the offer made pursuant to the Tag Along Notice and a decline by SOF of its rights under this Article V with respect to such Transfer. If SOF elects to exercise such Tag Along Right, SOF shall be obligated and bound after sending such election notice to sell the Tag Along Shares, free and clear of all liens, claims and encumbrances, for a purchase price per Share described in the Tag Along Notice and upon the other terms and conditions of such transaction as agreed to by PEWC (and otherwise take all

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reasonably necessary action to cause consummation of the proposed transaction, including voting such Shares in favor of such transaction and becoming a party to any agreement relating to the Transfer); provided that SOF shall not be required to (i) make any representations or warranties in connection with such Transfer other than representations and warranties as to (A) SOF’s Ownership of its Shares to be sold or Transferred free and clear of all liens, claims and encumbrances, (B) SOF’s power and authority to effect such Transfer and (C) such matters pertaining to compliance with securities laws as the Tag Along Transferee may reasonably require, (ii) agree to any indemnification obligations in connection with such transaction other than obligations (which shall be limited to the proceeds received in such Transfer) arising out of a breach by SOF of such representations and warranties or (iii) agree to any post-closing covenants other than customary further assurances covenants.

5.3 Right to Transfer . If a Tag Along Notice from SOF is not received by PEWC and the Company in accordance with Section 5.2, PEWC shall have the right to consummate the Transfer to a Tag Along Transferee without the participation of SOF, but only on terms and conditions which are no more favorable to PEWC in any material respect than those stated in the Tag Along Notice and only if the Transfer to the Tag Along Transferee occurs on a date within ninety (90) days of SOF’s receipt of the Tag Along Notice. If such Transfer to the Tag Along Transferee does not occur within such ninety (90) day period, PEWC’s right to Transfer the Tag Along Shares under the foregoing sentence shall expire and PEWC’s obligations under Section 5.1 shall be reinstated and such securities shall not be Transferred without first reoffering to SOF its Tag Along Rights in accordance with Section 5.1.

ARTICLE VI

REGISTRATION RIGHTS

6.1 Shelf Registration .

(a) As promptly as possible after receiving all requisite information necessary for filing of a Registration Statement, the Company shall use its reasonable best efforts to prepare and file with the SEC a Registration Statement or Statements covering, among such other securities as may be offered from time to time by the Company, the resale of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. Each such Registration Statement shall be on Form F-1, or any successor form thereto (except if the Company is then eligible to register for resale the Registrable Securities on Form F-3, or any successor form thereto, in which case such registration may be on Form F-3, or any successor form thereto, in accordance with the requirements thereof and the terms thereof). If, for any reason, the SEC refuses to permit all of the Registrable Securities to be registered on a single Registration Statement or at the same time on multiple Registration Statements, then as many of the Registrable Securities Owned by SOF as the SEC will permit to be registered in such initial Registration Statement(s), and the balance of Registrable Securities shall be registered on another Registration Statement or Statements filed only after the effective date of the Registration Statement(s) registering the Registrable Securities; provided , however , that no Shares other than the Registrable Securities may be included in such Registration Statement that would adversely effect the rights of SOF provided herein. Subject to the terms of this Shareholders’ Agreement, the Company shall use its reasonable best efforts to cause each such

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Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, and shall use its reasonable best efforts to keep each such Registration Statement continuously effective under the Securities Act until the date on which (A) all Registrable Securities (i) have been sold, or (ii) may be sold without volume restrictions pursuant to Rule 144(k), as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to SOF and to the Company’s transfer agent and (B) after receipt by SOF of unlegended certificates representing freely transferable Shares from the transfer agent (the “ Effectiveness Period ”). After receipt of such opinion letter, all Parties agree to use reasonable best efforts to cooperate in providing the transfer agent with all documents reasonably necessary for delivery of such unlegended certificates. The Company shall telephonically request effectiveness of each such Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall promptly notify SOF (via electronic message or facsimile) of the effectiveness of each such Registration Statement no later than the next Trading Day following the date such Registration Statement is declared effective by the SEC. The Company shall, on a timely basis, file a final Prospectus with the SEC as required by Rule 424. Notwithstanding anything in this Shareholders’ Agreement to the contrary, in the event that SOF is required by applicable law to be named as an underwriter in a Registration Statement, or in any Prospectus contained therein, in order to have any Registrable Securities then held by SOF included in such Registration Statement, SOF may elect by written notice to the Company not to have such Registrable Securities so included, and upon receipt of such notice, the Company shall remove such specified Registrable Securities from inclusion in the Registration Statement.

(b) If: (i) the Registration Statement is not declared effective under the Securities Act by the SEC by November 30, 2008, or (ii) after the Effectiveness Date, a Registration Statement or Statements, as the case may be, ceases or cease for any reason to remain continuously effective as to all Registrable Securities for which it or they is or are required to be effective, or SOF is otherwise not permitted to utilize the Prospectus therein to resell such Registrable Securities, in either case, for more than fifteen (15) consecutive Trading Days or more than an aggregate of forty-five (45) Trading Days during any twelve (12) month period (which need not be consecutive calendar days) (any such failure or event being referred to as an “ Event ”), then APWC and PEWC agree that SOF will suffer irreparable damages if the Company fails to meet its obligations in this Section 6.1 and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Put Right described in Section 6.6 hereof shall become immediately exercisable upon the occurrence of any such Event and shall continue so long as such Event has not been cured.

(c) From and after the date of this Shareholders’ Agreement until the end of the Effectiveness Period, without the prior written consent of SOF, which consent shall not be unreasonably withheld or delayed, the Company shall not enter into an agreement that grants a holder or prospective holder of any securities of the Company demand or incidental registration rights that by their terms are not subordinate to or pari passu with the registration rights granted to SOF in this Shareholders’ Agreement.

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6.2 Underwritten Demand Right .

(a) From and after the date hereof and subject to the terms and conditions hereof, and until the termination of this Shareholders’ Agreement in accordance with Section 8.3 hereof, if SOF so elects, an offering of the Registrable Securities shall be in the form of an Underwritten Offering. In such event, SOF shall select one or more nationally recognized firms of investment bankers, with the consent of the Company, which shall not be unreasonably withheld or delayed, to act as the lead managing underwriter or underwriters in connection with such offering and shall select any additional investment bankers and managers to be used in connection with the offering. The Company shall not be obligated to effect more than two (2) Underwritten Offerings in the aggregate on behalf of SOF and all SOF Transferees.

(b) In connection with any Underwritten Offering pursuant to Section 6.2(a), the Company shall: (i) enter into an underwriting agreement in customary form with the underwriters participating in the offering; and (ii) provide reasonable cooperation to the underwriters and SOF in marketing the Registrable Securities, including but not limited to, (A) if necessary, amending the Registration Statement to allow for the Underwritten Offering and (B) at least one (1) Company officer (the chief financial officer or other appropriate officer) participating in any “road show” or similar presentation in connection with such offering.

6.3 Piggyback Registration . If, at any time from and after the date hereof and subject to the terms and conditions hereof, and until the termination of this Shareholders’ Agreement in accordance with Section 8.3 hereof, the Company shall determine to file with the SEC a Registration Statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities (other than on Form F-4, or any successor form thereto, or Form S-8 if then available to the Company, or any successor form thereto, or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or bona fide, employee benefit plans), the Company shall send to SOF written notice of such determination (the “ Piggyback Notice ”) and, if within ten (10) days after the delivery of the Piggyback Notice, SOF shall so request in writing, the Company shall include in such Registration Statement all or any part of the Registrable Securities that SOF requests to be registered, except that if, in connection with any Underwritten Offering for the account of the Company the managing underwriter(s) thereof shall impose a limitation on the number of Shares which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement (i) all Shares, if any, that the Company proposes to sell for its own account and (ii) the number of Shares, including the Registrable Securities, that the managing underwriter(s) advise(s), allocated pro rata among the holders of such Shares who are then entitled to exercise piggyback registration rights on the basis of the number of Shares requested to be included therein by each holder of such Shares. If an offering in connection with which SOF is entitled to registration under this Section 6.3 is an Underwritten Offering, then SOF, unless otherwise agreed by the Company, shall offer and sell such Registrable Securities in an Underwritten Offering using the same underwriter or underwriters and, subject to the provisions of this Shareholders’ Agreement, on the same terms and conditions as other Shares included in such Underwritten Offering.

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6.4 Registration Procedures . In connection with the Company’s registration obligations hereunder, the Company shall (and, for purposes of Section 6.4(a) and (l), SOF shall):

(a) Not less than four (4) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), (i) furnish to SOF copies of the “Principal and Selling Shareholders” section of such Registration Statement or other documents proposed to be filed, if such sections have been revised since the previous filing of such Registration Statement or any amendment or supplement thereto, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of SOF, and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to SOF, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which SOF shall reasonably object in good faith, provided that the Company is notified of such objection in writing no later than two (2) Trading Days after SOF has been so furnished copies of such documents. SOF agrees to furnish to the Company a completed selling shareholder questionnaire not less than ten (10) Business Days after written request therefore has been made by the Company. The Company shall not be required to include the Registrable Securities of SOF in a Registration Statement if SOF fails to furnish to the Company a fully completed selling shareholder questionnaire at least three (3) Trading Days prior to the date the Registration Statement is filed with the SEC (subject to the other requirements in this Section 6.4(a)).

(b) (i) Prepare and file with the SEC such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities;

(ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Shareholders’ Agreement), and as so supplemented or amended to be filed pursuant to Rule 424;

(iii) respond as promptly as reasonably possible to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and, upon written request by SOF, as promptly as reasonably possible provide SOF with true and complete copies of all material written correspondence from and to the SEC relating to a Registration Statement; and

(iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Shareholders’ Agreement) with the

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intended methods of disposition by SOF thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

(c) If during the Effectiveness Period, the number of Registrable Securities at any time exceeds one-hundred percent (100%) of the number of Shares of Common Stock then included in a Registration Statement, then the Company shall use its reasonable best efforts to file as soon as reasonably practicable an additional Registration Statement or post effective amendment to the existing Registration Statement covering the resale by SOF of not less than one-hundred percent (100%) of the number of such Registrable Securities.

(d) Use its reasonable best efforts to notify SOF (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible and confirm such notice in writing

(i) (A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement has been filed;

(B) when the SEC notifies the Company whether there will be a “review” of such Registration Statement and whenever the SEC comments in writing on such Registration Statement; and

(ii) of any request by the SEC or any other federal or state Governmental Authority for amendments or supplements to a Registration Statement or Prospectus or for additional information;

(iii) of the issuance by the SEC or any other Federal or state Governmental Authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose;

(iv) of the receipt by the Company of any Notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose;

(v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or

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necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and

(vi) the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided that any and all of such information shall be kept confidential by SOF until such information otherwise becomes public, unless disclosure by SOF is required by law; provided , further , that notwithstanding SOF’s agreement to keep such information confidential, SOF makes no acknowledgement that any such information is material, non-public information.

(e) Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

(f) Furnish to SOF, without charge, to the extent requested in writing by SOF, at least one (1) conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits to such Registration Statement (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the SEC.

(g) Promptly deliver to SOF, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as SOF may reasonably request in writing in connection with resales by SOF. Subject to the terms of this Shareholders’ Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by SOF in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 6.4(d).

(h) Prior to any resale of Registrable Securities by SOF, use its reasonable best efforts to register or qualify or cooperate with SOF in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for the resale by SOF under the securities or Blue Sky laws of such jurisdictions within the United States as SOF reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

(i) If requested by SOF, cooperate with SOF to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a

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transferee pursuant to a Registration Statement, which certificates shall be free of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as SOF may request.

(j) Upon the occurrence of any event contemplated by this Section 6.4, as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its shareholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies SOF in accordance with clauses (iii) through (vi) of Section 6.4(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then SOF shall suspend use of such Prospectus. The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 6.4(j) to suspend the availability of a Registration Statement and Prospectus, subject to triggering an Event pursuant to Section 6.1(b), for a period not to exceed sixty (60) calendar days (which need not be consecutive days) in any twelve (12) month period.

(k) Comply with all applicable rules and regulations of the SEC.

(l) If reasonably requested by the Company prior to any filing by the Company with the SEC in connection with any applicable Registration Statement or Prospectus requirement of the SEC, SOF agrees to furnish to the Company a certified statement as to the number of Shares beneficially Owned by SOF and, if required by the SEC, the natural Persons thereof that have voting and dispositive control over such Shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities solely because SOF fails to furnish such information within three (3) Trading Days of the Company’s request any Event that may otherwise occur solely because of such delay shall be suspended, until such information is delivered to the Company.

(m) In the case of an Underwritten Offering, use its reasonable best efforts to furnish or caused to be furnished to SOF and the underwriters a signed counterpart, addressed to SOF and the underwriters, of: (i) an opinion of counsel for the Company, dated the date of each closing under the underwriting agreement, reasonably satisfactory to the underwriters; and (ii) a “comfort” letter, dated the effective date of such Registration Statement and the date of each closing under the underwriting agreement, signed by the independent public accountants who have certified the Company’s financial statements included in such Registration Statement, covering substantially the same matters with respect to such Registration Statement (and the Prospectus included therein) and with respect to events subsequent to the date of such financial statements, as are customarily covered in accountants’ letters delivered to underwriters in underwritten public offerings of securities, and such other financial matters as the underwriters may reasonably request and customarily obtained by underwriters in Underwritten Offerings,

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provided that, to be an addressee of the comfort letter, SOF may be required to confirm that it is in the category of Persons to whom a comfort letter may be delivered in accordance with applicable accounting literature.

(n) In the case of an Underwritten Offering, use its reasonable best efforts to make available for inspection by the representatives of SOF and the representative of any underwriters participating in any disposition pursuant to a Registration Statement, and any special counsel or accountants retained by SOF or underwriters, during normal business hours and subject to receipt of an executed confidentiality agreement in a form reasonably satisfactory to the Company, such financial and other records, corporate documents and properties of the Company as are necessary in order to conduct a “due diligence investigation.”

(o) In the case of an Underwritten Offering, make generally available to its shareholders, as soon as reasonably practicable, earnings statements covering a period of at least twelve (12) months beginning after the effective date of the registration statement that satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder in the case of an Underwritten Offering.

6.5 Listing of Common Stock . The Company shall use its reasonable best efforts to have its Common Stock listed on either the Nasdaq Stock Market, Inc. (Global Market or Global Select Market), the American Stock Exchange LLC, the New York Stock Exchange LLC (a “ US Securities Market ” and together with a Foreign Securities Market, a “ Securities Market ”) or a Foreign Securities Market, either in connection with a dual listing of the Common Stock or otherwise as contemplated by Section 6.8(a) of this Shareholders’ Agreement as promptly as possible after the date hereof, with it being understood that, prior to the listing of the Common Stock on any Securities Market, the Company must finalize the audit of its financial statements for each of the fiscal years ended December 31, 2004, 2005 and 2006 and otherwise qualify with the respective Securities Markets applicable listing requirements. APWC and PEWC agree that SOF will suffer irreparable damages if the Company fails to have the Shares listed on a Securities Market by January 31, 2009 and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Put Right described in Section 6.6 hereof shall become exercisable upon the occurrence of a Put Event and shall continue so long as such Put Event has not been cured.

6.6 Put Right and Option; Put Purchase Price; Exclusive Remedy .

(a) PEWC hereby irrevocably grants and issues to SOF, the right and option (but not the obligation) to sell to PEWC upon the occurrence of a Put Event, and PEWC agrees to purchase from SOF upon the occurrence of such Put Event, all Registrable Securities then owned by SOF (the “ Put Shares ”), for an amount equal to the Put Price together with interest (calculated on the basis of a 360 day year) on the Put Price, computed from the date hereof until the Put Closing (defined below) at a rate per annum that shall be equal to the Libor Rate plus fifty (50) basis points (compounded annually) (the “ Put Right ”). SOF may exercise its respective Put Right at any time while the Put Event remains uncured via written Notification to PEWC. The closing related to such Put Right shall occur within sixty (60) days of SOF’s exercise of such Put Right (the “ Put Closing ”). If the Put Event terminates prior to the Put Closing, the exercise of the Put Right shall be deemed rescinded and the transaction relating to

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the Put Right shall be deemed cancelled. Such event shall not terminate the existence of a Put Right upon the triggering of a future Put Event.

(b) For the avoidance of doubt, the Parties agree that, in the event that the Company has complied with each of its obligations under Article VI of this Shareholders’ Agreement, whether such obligation is absolute or on a reasonable best efforts basis, the Put Right granted to SOF shall constitute the exclusive right and remedy of SOF for a failure of the Company to achieve an effective Registration Statement by November 30, 2008 or a listing on a US Securities Market by January 31, 2009.

6.7 Registration Fees .

All fees and expenses incident to the performance of or compliance with this Shareholders’ Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation,

(i) registration, listing and filing fees, and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system,

(ii) fees and expenses of compliance with any securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the securities registered),

(iii) expenses in connection with the preparation, printing, mailing and delivery of any registration statements, prospectuses and other documents in connection therewith and any amendments or supplements thereto,

(iv) security engraving and printing expenses,

(v) internal expenses of the Company (including all salaries and expenses of its officers and employees performing legal or accounting duties),

(vi) reasonable fees and expenses of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of any comfort letters requested pursuant to Section 6.4(m)),

(vii) reasonable fees and expenses of any special experts retained by the Company in connection with such registration,

(viii) fees and expenses in connection with any review by the National Association of Securities Dealers, Inc. of the underwriting arrangements or other terms of the offering, and all fees and expenses of any “qualified independent underwriter,” including the fees and expenses of any counsel thereto,

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(ix) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding any underwriting fees, discounts and commissions attributable to the sale of Registrable Securities,

(x) costs of printing and producing any agreements among underwriters, underwriting agreements, any “blue sky” or legal investment memoranda and any selling agreements and other documents in connection with the offering, sale or delivery of the Registrable Securities,

(xi) transfer agents’ and registrars’ fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering, and

(xii) fees and expenses payable in connection with any ratings of the Registrable Securities, including expenses relating to any presentations to rating agencies.

6.8 Relisting of Company . In the event that the Company determines to transfer its public listing to a Foreign Securities Market, the registration rights granted to SOF herein shall apply to SOF in such market with equal force and effect, subject to such modifications as are reasonably necessary to comply with then applicable rules and regulations of such market; provided , however , that the foregoing shall not relieve the Company from any of its obligations, as such obligations would be performed in a substantially similar manner in that market, or materially impair any of SOF’s rights under this Article VI, including, without limitation, its Put Right under Section 6.6 of this Shareholders’ Agreement.

ARTICLE VII

PREEMPTIVE RIGHT

7.1 Preemptive Right . From and after the date hereof and subject to the terms and conditions hereof, and until the termination of this Shareholders’ Agreement in accordance with Section 8.3 hereof, if the Board of Directors decides to sell any equity securities or other securities convertible into or exchangeable for equity securities, then SOF shall have the right and option to buy from the Company a Pro Rata Amount (as defined below) of the same securities (the “ Preemptive Shares ”) and on the same terms and subject to the same conditions as such securities are being sold to the purchasing parties; provided , however , such right shall not apply to Permitted Issuances (the “ Preemptive Right ”). To the extent that SOF does not elect to purchase the Pro Rata Amount from APWC as described herein, SOF shall not have the right to participate in such transaction. The “ Pro Rata Amount” shall be equal the product of (a) the number of equity securities to be sold by the Company and (b) a fraction, the numerator of which shall be the number of Shares of Common Stock then currently Owned in the aggregate by SOF, and the denominator of which shall be the total number of issued and outstanding Shares of Common Stock as of the date of the Preemptive Notice (the “ Pro Rata Percentage ”).

7.2 Notice . No later than twenty (20) Business Days prior to the consummation of any proposed Transfer described in this Section 7.1, the Company shall provide the Preemptive

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Notice to SOF. The Preemptive Right shall be exercisable by written notice to the Company given within fifteen (15) Business Days after receipt of the Preemptive Notice (the “ Election Notice ”). Failure by SOF to respond within fifteen (15) Business Days after receipt of the Preemptive Notice shall be regarded as a rejection of the offer made pursuant to the Preemptive Notice and a decline by SOF of its rights under this Article VII with respect to such Transfer. If SOF elects to exercise such Preemptive Right, SOF shall be obligated and bound after sending the Election Notice to buy the Preemptive Shares, free and clear of all liens, claims and encumbrances, for a purchase price per Share described in the Preemptive Notice and upon the other terms and conditions of such transaction as reasonably agreed between SOF and the Company; provided that SOF shall not be required to (i) make any representations or warranties in connection with such Transfer other than representations and warranties as to (A) SOF’s power and authority to effect such Transfer and (B) such matters pertaining to compliance with securities laws as the Company may reasonably require, (ii) agree to any indemnification obligations in connection with such transaction other than as a result of a breach by SOF of such representations and warranties or (iii) agree to any post-closing covenants other than customary further assurances covenants.

7.3 Right to Sell . If an Election Notice is not received by the Company in accordance with Section 7.2, the Company shall have the right to consummate the Transfer without the participation of SOF, but only on terms and conditions which are no less favorable to the Company in any material respect to those stated in the Preemptive Notice and only if the Transfer occurs on a date within ninety (90) days of SOF’s receipt of the Preemptive Notice. If such Transfer does not occur within such ninety (90) day period, the Company’s right to issue the Preemptive Shares under the foregoing sentence shall expire and the Company’s obligations under Section 7.1 shall be reinstated, and such securities shall not be Transferred without first being reoffered to SOF in compliance with Section 7.1.

ARTICLE VIII

STOCK CERTIFICATES; OTHER MATTERS

8.1 Stock Certificates; Share Registry . (a) As promptly as practicable after the simultaneous closings of the Stock Purchase Agreement and this Shareholders’ Agreement, the Company shall cause the delivery to SOF and PEWC, respectively, of (i) certificate(s) and/or book entry Shares representing the 2,766,154 Shares Owned by SOF and the 7,664,615 Shares Owned by PEWC as reasonably requested by SOF and PEWC, respectively and (ii) a certified copy of the Company’s share register maintained by Reid Management Limited reflecting the foregoing Share ownership by SOF and PEWC, respectively. The Parties agree to use reasonable best efforts to cooperate in providing the transfer agent with all documents reasonably necessary for delivery of such certificates. The certificate(s) issued to SOF shall contain the first legend listed below and the certificate(s) issued to PEWC shall contain both of the legends listed below:

“THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF (“TRANSFERRED”) UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNLESS SUCH TRANSFER IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE SECURITIES ACT.

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THE TRANSFER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE SHAREHOLDERS’ AGREEMENT, DATED JUNE 28, 2007, BETWEEN ASIA PACIFIC WIRE AND CABLE CORPORATION, LIMITED (“APWC”) AND CERTAIN SHAREHOLDERS, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE REGISTERED OFFICE OF APWC AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH SHARES UPON WRITTEN REQUEST TO APWC. NO SUCH TRANSFER WILL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS OF SUCH SHAREHOLDERS’ AGREEMENT HAVE BEEN COMPLIED WITH IN FULL AND NO PERSON MAY REQUEST APWC TO REGISTER THE TRANSFER OF ANY SHARES IF SUCH TRANSFER IS IN VIOLATION OF SUCH SHAREHOLDERS’ AGREEMENT.”

In addition, contemporaneous with the execution of this Shareholders’ Agreement, PEWC shall return all certificates representing Shares beneficially Owned by it that are represented by certificates to the Company and the Company shall issue substitute certificates that comply with this Section 8.1. The legend(s) on each certificate may be modified from time to time by the Board of Directors to comply with applicable law and/or this Shareholders’ Agreement. Any share certificates issued to transferees of SOF and PEWC shall contain the above legends to the extent appropriate in accordance with the other terms of this Shareholders Agreement.

(b) The Parties acknowledge that, in addition to its share register maintained with the Company’s resident company secretary in Bermuda, the Company maintains one or more additional share registers in order to comply with trading requirements and practices in the United States. The parties hereby agree that the share register maintained by the Company’s resident company secretary in Bermuda shall be the official share register of the Company, and shall be dispositive as to record ownership of Shares in the event of any conflict or discrepancy between the books and records maintained by the resident company secretary and any other share registers maintained by or on behalf of the Company.

8.2 Closings . The closing (the “ Closing ”) of each purchase, sale, issuance and/or other Transfer of any and all Share(s) transferred pursuant to (i) Articles V and VII of this Shareholders’ Agreement shall take place in either the city of New York, New York or Taipei, Taiwan, ROC, as agreed between the Parties and (ii) Section 4(d) and Section 6.6 in New York, New York, in either case at a location and time, and on a date designated by the Company in accordance with this Shareholders’ Agreement or at such other place, time or date as is mutually agreed upon in writing by all concerned Parties. At the Closing, each Party transferring cash shall transfer such cash in U.S. Dollars by wire transfer of immediately available funds and transferring any Share(s) shall Transfer and deliver, or cause to be transferred and delivered, to the purchaser(s) or other transferee(s) of such Share(s) any and all certificates representing such Share(s), duly endorsed or accompanied by duly executed stock powers with any required transfer stamps affixed and any required transfer taxes paid, free and clear of any liens, claims, and encumbrances (except for any such lien, claim, or encumbrance existing as a result of this Shareholders’ Agreement), against payment and delivery of the consideration, if any, for such Share(s); provided that the delivery of certificates to the purchaser(s) or other transferee(s) of

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such Shares may be delayed pending receipt of such certificate(s) from the Company’s resident company secretary in Bermuda.

8.3 Termination . The provisions of this Shareholders’ Agreement shall terminate as follows: (i) Section 3.1 upon SOF ceasing to Own ten percent (10%) of the total outstanding Shares; (ii) Sections 3.2, 6.2, 6.3 and 6.5, and Articles V and VII upon SOF and all SOF Transferees ceasing to Own five percent (5%) of the total outstanding Shares, (iii) Article IV, with regard to (x) Section 4.1 (a)-(d) and (y) Section 4.1 (e)-(g), respectively, until the date which is six years after the date of the filing by SOF with the IRS of the last annual income tax return for a fiscal year in which it reports holding ten percent (10%) or more of the total outstanding Shares and five percent (5%) or more of the total outstanding Shares, respectively and (iv) with regard to all other provisions of this Shareholders’ Agreement, the date which is thirty (30) days after the last date to occur under Sections 8.3(i), (ii) and (iii) above; provided, that any such termination shall not relieve a Party hereto of any liability for a breach occurring prior to such termination. This Shareholders’ Agreement may also be terminated by mutual agreement between each of the Parties hereto.

8.4 Distributions of Shares of Company Subsidiaries . From and after the date hereof and subject to the terms and conditions hereof, and until the termination of this Shareholders’ Agreement in accordance with Section 8.3 herein, in the event shares of common stock of a Subsidiary of the Company are distributed by the Company to its shareholders including SOF, the Parties hereto shall, and the Company shall cause such Subsidiary to, enter into a shareholders’ agreement on the same or substantially the same terms and provisions of this Shareholders’ Agreement, with modifications thereto reasonably agreed to by the Parties.

8.5 Transferability of Shares . The Shares Owned by SOF are fully transferable, to the extent permitted by law, and no terms herein shall be deemed to restrict the ability of SOF to Transfer its Shares. In no event shall PEWC Transfer any Shares Owned by PEWC to a United States organized or domiciled Affiliate if such Transfer results in, or is reasonably likely to result in, the Company being a Controlled Foreign Corporation; provided that in no event shall such Transfer be in an amount of Shares greater than 9.9% of the total outstanding Shares.

8.6 Investor Status . Each of PEWC and SOF hereby declares that neither the execution of this Shareholders’ Agreement nor anything herein shall be construed as an admission that such Person is, for the purposes of Sections 13(d) or 13(g) of the Securities Act, (i) acting (or has agreed or is agreeing to act together with any other Person) as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of the Company or otherwise with respect to the Company or any securities of the Company or (ii) a member of any group with respect to the Company or any securities of the Company.

ARTICLE IX

MISCELLANEOUS

9.1 Public Announcements . The Parties shall provide to each other any press release, public announcement, or similar publicity with respect to this Shareholders’ Agreement and shall

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consult with each other before issuing or making any such release and shall give due consideration to any reasonable comments made by the other Party and shall incorporate any reasonable comments made by the other Party to the extent the comments (i) relate to such other Party and (ii) would not result in a violation of any Legal Requirement. The Parties shall not issue any such press release or make any such public statement expressly referring to this Shareholders’ Agreement and addressing the subject matter hereof without the prior written consent of each other Party, which consent shall not be unreasonably withheld, conditioned, or delayed; provided that a Party may, without obtaining the prior consent of any other Party, issue such press release or make such public statements as such Party determines in good faith are required by a Legal Requirement. The Company shall cause its employees, officers and directors to comply with this Section 9.1. To the extent any such release or announcement is not in English, an English translation shall be provided.

9.2 Notices . All notices, consents, waivers and other communications under this Shareholders’ Agreement shall be in writing, sent contemporaneously to all of the receiving Parties, and shall be deemed to have been duly provided, delivered, and received when (a) delivered by hand (with written confirmation of receipt), (b) sent by facsimile (with written confirmation of receipt) if a copy of such facsimile is mailed by registered mail (return receipt requested) or in accordance with clause (c) hereof, or (c) when received by the addressee, if sent by an internationally recognized delivery or courier service (return receipt requested), in each case, to the appropriate addresses and facsimile numbers as provided on the signature page for such Party (or to such other addresses and facsimile numbers as any Party may designate by notice to the other Parties in accordance with this Section 9.2).

9.3 Arbitration; Jurisdiction; Service of Process . Any dispute, controversy, or claim arising out of or in relation to this Shareholders’ Agreement, including the validity, invalidity, breach, or termination thereof, shall be exclusively resolved by arbitration in accordance with rules of arbitration of the American Arbitration Association in force on the date when the request for arbitration is submitted in accordance with such rules. The number of arbitrators shall be three (3), appointed in accordance with said rules. The seat of the arbitration shall be New York, New York, United States. The arbitration proceedings shall be conducted in English language.

The Parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of the State of New York and of the United States of America located in New York County for any actions, suits or proceedings arising out of or relating to this Shareholders’ Agreement (and agree not to commence any action, suit or proceeding relating thereto except in such courts, and further agree that service of any process, summons, notice or document by U.S. registered mail to their respective addresses set forth above shall be effective service of process for any action, suit or proceeding brought against either party in any such court). The parties hereby irrevocably and unconditionally waive any objection that either party may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of or relating to this letter agreement in the courts of the State of New York or the United States of America located in New York County, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. THE PARTIES FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVE THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR

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RELATING TO THIS SHAREHOLDERS’ AGREEMENT. For the avoidance of doubt, the Parties agree that any dispute, controversy or claim shall be resolved, in the first instance, pursuant to the arbitration procedures set forth above.

The Company and PEWC irrevocably appoint CT Corporation (the “ Process Agent ”), at 111 Eighth Avenue, New York, New York 10011 (212-894-8940), respectively, as its agent and true and lawful attorney-in-fact in its name, place and stead to, and SOF irrevocably authorizes the office identified as its address for Notices in accordance with Section 9.2, to accept on behalf of each of the respective Parties and their respective properties and revenues, service of copies of the summons and complaint and any other process which may be served in any suit, action or proceeding brought pursuant to this Shareholders’ Agreement, and each of the Parties hereto agrees that failure of the Process Agent to give any notice of any such service of process to any of the Parties hereto shall not impair or affect the validity of such service or the enforcement of any judgment based thereon.

9.4 Further Assurances; Legal Prohibitions . Each Party hereto shall (a) furnish such information, (b) execute and deliver such documents, and (c) do all other such acts and things, in each case, if and as reasonably requested by any other party hereto for the purpose of carrying out the intents and purposes of this Shareholders’ Agreement and the Contemplated Transactions, as applicable to each Party. If the performance by the Company of any obligation(s) of the Company under this Shareholders’ Agreement may be prohibited or otherwise limited by applicable law, the Parties hereto shall use their reasonable best efforts (including by voting its Shares in person or by proxy at any vote of the Company’s shareholders) to enable the Company to fully satisfy, fulfill, and perform such obligation(s) or satisfy, fulfill, and perform such obligation(s) to the extent not prohibited by applicable law. Further, the Parties agree to act in good faith in carrying out the terms and provisions of this Shareholders’ Agreement and to not engage in any transaction or activity intended to circumvent or otherwise impair the intended rights or obligations of the Parties provided hereunder.

9.5 Waiver . Neither the failure to exercise, nor any delay by any Party in exercising, any right, power, or privilege under this Shareholders’ Agreement, or any other document contemplated by this Shareholders’ Agreement shall operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege shall preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Shareholders’ Agreement or any other document contemplated by this Shareholders’ Agreement may be discharged by one Party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by each other Party hereto, (b) no waiver that may be given by any Party hereto shall be applicable except in the specific instance when and for which such waiver is given, and (c) no notice to or demand on one Party shall be deemed to be a waiver of any obligation of such Party or of the right of the Party giving such notice or demand to take further action without notice or demand as provided in this Shareholders’ Agreement, or any other document contemplated by this Shareholders’ Agreement.

9.6 Entire Agreement; Modification . This Shareholders’ Agreement (together with each other document contemplated by this Shareholders’ Agreement) terminates, supersedes, and replaces all prior written and oral agreements among the Parties with respect to the subject

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matter of this Shareholders’ Agreement and each other document contemplated by this Shareholders’ Agreement and constitutes (together with each other document contemplated by this Shareholders’ Agreement) a complete and exclusive statement of the terms of the agreement by and among the Parties with respect to the subject matter of this Shareholders’ Agreement and each other document contemplated by this Shareholders’ Agreement. This Shareholders’ Agreement may not be amended except by a written agreement executed by all Parties to be charged with or otherwise affected by any such amendment.

9.7 Assignments, Successors, and No Third-Party Rights . No Party may assign any of the rights or obligations of such Party under this Shareholders’ Agreement without the prior written consent of each of the other Parties, which consent shall not be unreasonably withheld, conditioned, or delayed; provided , however , that SOF may assign its rights and obligations under Articles IV, V, VI, VIII and IX hereunder (i) to an Affiliate of SOF and (ii) in any Transfer of Shares to a single party (a party and its Affiliates considered a single party) that in the aggregate represents five and one-tenth percent (5.1%) or more of the outstanding Shares of Common Stock (such assignment right pursuant to clause (ii) above is herein, “ SOF’s Assignment Right ”); provided , further , that (A) SOF’s Assignment Right shall not apply to any attempted assignment to, and the rights and obligations contained herein are not assignable to, any Person (or any of its Affiliates, it being agreed for the avoidance of doubt that a financial investor holding twenty five percent (25%) or less of the equity securities in such Person shall not be deemed an Affiliate) that at the time of such assignment (i) is a direct competitor of the Company or any of its Subsidiaries or (ii) is listed on Schedule 9.7 of this Shareholders’ Agreement (collectively, the “Prohibited Transferees”) and (B) not later than ten (10) Trading Days prior to the effective date of any proposed assignment pursuant to SOF’s Assignment Right, SOF shall provide the Company with written notice of such proposed assignment, such notice to contain the name and address of the proposed assignee. Upon request, the Company shall certify to SOF and the proposed transferee the list of “Prohibited Transferees” and the Company and PEWC shall provide any information then known by the Company or PEWC (as applicable, without any requirement of inquiry or investigation) regarding the Prohibited Transferees as shall be reasonably requested by SOF or a proposed SOF Transferee. Nothing expressed or referred to in this Shareholders’ Agreement shall be construed to give any Person other than the Parties any legal or equitable right, remedy, or claim under or with respect to this Shareholders’ Agreement or any provision of this Shareholders’ Agreement. This Shareholders’ Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the Parties and the successors and permitted assigns of the Parties.

9.8 Joinder of Transferees . (a) Without modifying any of the other terms of this Shareholders’ Agreement, for so long as PEWC continues to Control the Company after giving effect to any Transfer, PEWC may Transfer any Share(s) Owned by it to one or more Persons; provided that such Party agrees in writing for the benefit to the Parties to be bound by all of the terms of Articles V, VIII and IX hereof.

(b) To the extent that SOF shall Transfer any Share(s) Owned by it and such Transfer is either (i) to an Affiliate or (ii) in connection with such Transfer, SOF’s Assignment Right is applicable, at the option of SOF, such transferee (an “SOF Transferee”) thereof may agree in writing for the benefit of the Parties to be bound by all of the terms of this Shareholders’ Agreement to the same extent as SOF , and be treated for all purposes herein as if it were a Party,

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by executing a joinder in the form of Exhibit A hereto (a “Shareholders Joinder”), which PEWC and APWC shall countersign and provide to such transferee.

9.9 Severability . If any provision of this Shareholders’ Agreement is held invalid, illegal or unenforceable by any court of competent jurisdiction, the other provisions of this Shareholders’ Agreement shall remain in full force and effect. Any provision of this Shareholders’ Agreement held invalid, illegal or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid, illegal or unenforceable. The Parties shall endeavor in good faith negotiations to replace any invalid, illegal or unenforceable provision with a valid, legal and enforceable provision, the effect of which comes as close as possible to that of the invalid, illegal or unenforceable provision.

9.10 Article and Section Headings; Construction . The headings of Articles and Sections in this Shareholders’ Agreement are provided for convenience only and shall not affect the construction or interpretation of this Shareholders’ Agreement. All references to “Article,” “Articles,” “Section,” or “Sections” refer to the corresponding Article, Articles, Section, or Sections of this Shareholders’ Agreement. All words used in this Shareholders’ Agreement shall be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

9.11 Time of the Essence . With regard to all dates and time periods set forth or referred to in this Shareholders’ Agreement, time is of the essence.

9.12 Governing Law . This Shareholders’ Agreement shall be governed by, enforced under, and construed in accordance with the laws of New York without regard to conflicts of law principles (other than Section 5-1401 and 5-1402 of the New York General Obligations Law).

9.13 Contemplated Transactions . The Parties hereby covenant and agree that in consummating each Contemplated Transaction each Party will comply with all applicable laws, rules and regulations of any Governmental Authority or Regulatory Authority with jurisdiction over such transactions.

9.14 Counterparts . This Shareholders’ Agreement may be executed by facsimile signature and in one or more counterparts, each of which shall be deemed to be an original copy of this Shareholders’ Agreement and all of which, when taken together, shall be deemed to constitute one and the same agreement.

9.15 Specific Performance . The Parties expressly agree that they will be irreparably damaged if this Shareholders’ Agreement is not specifically enforced. In any action or proceeding to specifically enforce the provisions of this Shareholders’ Agreement, any Person (including, without limitation, the Company) against whom such action or proceeding is brought hereby waives the claim or defense therein that the plaintiff or claimant has an adequate remedy at law, and such Person shall not argue in any such action or proceeding the claim or defense that such remedy at law exists. Upon a breach or threatened breach of the terms, covenants and/or conditions of this Shareholders’ Agreement by any Party, each other Party shall, in addition to all other remedies available herein with respect to such breach, be entitled to a temporary or permanent injunction, and/or a decree for specific performance, without showing any actual

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damage or being required to post a bond or other security, in accordance with the provisions hereof. The provisions of this paragraph shall not prevent any Party from seeking a remedy at law in connection with any breach of this Shareholders’ Agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Shareholders’ Agreement to be executed, delivered, and effective as of the date first written above.

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
By:	/s/ Yuan Chun Tang
	Name:	Yuan Chun Tang
	Title:	Chairman

Notice Address:

7 ^th Floor, No 132 Sec. 3

Min-Sheng East Road

Taipei, 105 Taiwan, ROC

Attn: Ling Y. Wu, Esq.

With a Copy to:

Morrison & Foerster LLP

1290 Avenue of the Americas

New York, NY 10104-0050

Attn: Michael J. Hagan, Esq.

Fax: (212) 468-7900

PACIFIC ELECTRIC WIRE & CABLE CO, LTD.
By:	/s/ Tao-Heng Sung
	Name:	Tao-Heng Sung
	Title:	President

No. 95, Section 2

Dunhua South Road

Taipei, 106 Taiwan, ROC

Attn: Yuan Chun Tang, Chairman

With a Copy to:

Thacher Proffitt & Wood LLP

Two World Financial Center

New York, NY 10281

Attn: Walter Van Dorn, Esq.

Fax: (212) 912-7751

SOF INVESTMENTS, L.P.

By: MSD Capital, L.P., its General Partner

By: MSD Capital Management LLC, its General Partner

By:	/s/ Mark R. Lisker
	Name:	Mark R. Lisker
	Title:	Manager and General Counsel

Notice Address:

SOF Investments, L.P.

Attention: General Counsel

645 Fifth Avenue, 21st Floor

New York, NY 10022

Fax: (212) 303-1772

With a Copy to:

Haynes and Boone, LLP

901 Main Street, Suite 3100

Dallas, Texas 75202

Attn: Ms. Janice V. Sharry, Esq.

Fax: (214) 200-0620

APPENDIX A

DEFINITIONS

“ Affiliate ” shall have the meaning assigned to such term in Rule 405 of the Securities Act.

“ APWC ” shall have the meaning assigned to such term in the Preamble to this Shareholders’ Agreement.

“ Board Observer ” shall have the meaning assigned to such term in Section 3.1.

“ Board of Directors ” shall mean the board of directors of the Company.

“ Board Materials ” shall have the meaning assigned to such term in Section 3.1.

“ Business Day ” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized by law to close.

“ Closing ” shall have the meaning assigned to such term in Section 8.2.

“ Code ” shall refer to the Internal Revenue Code as found in 26 U.S.C.

“ Code Section 951 ” shall mean 26 U.S.C. § 951 or any similar statute hereafter enacted having substantially the same purpose and effect as such Code Section.

“ Code Section 951(a) ” shall mean 26 U.S.C. § 951(a) or any similar statute hereafter enacted having substantially the same purpose and effect as such Code Section.

“ Code Section 951(b) ” shall mean 26 U.S.C. § 951(b) or any similar statute hereafter enacted having substantially the same purpose and effect as such Code Section.

“ Code Section 957 ” shall mean 26 U.S.C. § 957 or any similar statute hereafter enacted having substantially the same purpose and effect as such Code Section.

“ Code Section 1291 ” shall mean 26 U.S.C. § 1291 or any similar statute hereafter enacted having substantially the same purpose and effect as such Code Section.

“ Code Section 1295 ” shall mean 26 U.S.C. § 1295 or any similar statute hereafter enacted having substantially the same purpose and effect as such Code Section.

“ Code Section 1297 ” shall mean 26 U.S.C. § 1297 or any similar statute hereafter enacted having substantially the same purpose and effect as such Code Section.

“ Common Stock ” shall mean the common shares, US$0.01 par value, of the Company and shall include, without limitation, any share(s) or other security(ies) of the Company issued in exchange for, with respect to, or resulting from or in connection with, any dividend on, or split,

recapitalization, reclassification, exchange, or change in par value of, any share(s) of Common Stock or resulting from or in connection with any recapitalization, reclassification, exchange, combination, subdivision, consolidation, amalgamation, or restructuring of the Company.

“ Company ” shall have the meaning assigned to such term in the Preamble to this Shareholders’ Agreement.

“ Consent ” shall mean any approval, consent, ratification, waiver, or other authorization (including any governmental or regulatory authorization).

“ Contemplated Transaction ” and “ Contemplated Transactions ” shall mean each, and collectively all, respectively, of the transactions contemplated by this Shareholders’ Agreement.

“ Contract ” shall mean any agreement, contract, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding.

“ Control ” shall have the meaning assigned to such term in Rule 405 of the Securities Act.

“ Controlled Foreign Corporation ” or “ CFC ” shall have the meaning assigned to such term in Section 4.1(a).

“ Convertible Securities ” shall mean (i) any options or warrants to purchase or other rights to acquire Common Stock, (ii) any securities by their terms convertible into or exchangeable for Common Stock, and (iii) any options or warrants to purchase or other rights to acquire any such convertible or exchangeable securities.

“ Effectiveness Date ” shall mean the date on which the SEC declares the initial Registration Statement filed hereunder to be effective.

“ Effectiveness Period ” shall have the meaning set forth in Section 6.1(a).

“Election Notice” shall have the meaning set forth in Section 7.2.

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and the rules, regulations, and forms promulgated thereunder.

“ Event ” shall have the meaning set forth in Section 6.1(b).

“Foreign Securities Market” shall mean one or more of the principal or secondary exchanges for the public trading of equity securities in any of Hong Kong, Tokyo or Singapore.

“ Form W-8BEN ” shall mean the Form, as adopted by the IRS entitled, “Certificate of Foreign Status or Beneficial Owner for United States Withholding” or any similar, successor Form as adopted by the IRS.

“ Form W-9 ” shall mean the Form, as adopted by the IRS entitled, “Request for Taxpayer Identification Number and Certification” or any similar, successor Form as adopted by the IRS.

“ Form 5471 ” shall mean the Form, as adopted by the IRS entitled, “Information Return of U.S. Persons With Respect to Certain Foreign Corporations” or any similar, successor Form as adopted by the IRS.

“ Form 8621 ” shall mean the Form, as adopted by the IRS entitled, “Return of a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund” or any similar, successor Form as adopted by the IRS.

“ Governmental Authority ” shall mean any (a) national, federal, state, local, county, municipal, city, town, village, district, foreign, or other government or jurisdiction of any kind, character, or nature whatsoever, (b) governmental or quasi-governmental authority of any kind, character, or nature whatsoever (including, without limitation, any court, judge, tribunal, agency, branch, department, commission, board, bureau, official, administrator, regulator, legislator, instrumentality, arbitrator, or mediator), (c) multi-national organization or body, or (d) individual Person or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any kind, character, or nature whatsoever.

“ Group ” shall have the meaning assigned to such term in Section 13(d)(3) of the Securities Act.

“ IRS ” shall mean the United States Internal Revenue Service.

“ Legal Requirement ” shall mean, with respect to any Person, any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty applicable to such Person.

“ Libor Rate ” shall mean, the average daily rate of a fluctuating rate of interest equal to the three (3) month London interbank offered rate as published in the “Money Rates” section of The Wall Street Journal.

“ Notification ” shall mean a writing containing any information required by this Shareholders’ Agreement to be communicated to any Person, which shall be sent in accordance with Section 9.2 hereof.

“ Order ” shall mean any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Authority or by any arbitrator.

“ Organizational Documents ” shall mean (a) the articles or certificate of incorporation, memorandum of association and the bye-laws of a corporation; (b) the partnership agreement or any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (e) any amendment to any of the foregoing.

“ Own ,” “ Owns ,” “ Owned ,” and “ Ownership ” shall mean beneficial ownership as determined pursuant to and in accordance with Rule 13d-3 promulgated under the Exchange Act

and, for purposes of this Shareholders’ Agreement, any determination of ownership at any time shall be equitably adjusted for any stock split, combination, recapitalization, dividend, distribution, and other similar transaction occurring after the date of this Shareholders’ Agreement.

“ Owner ” shall mean, with respect to any Share(s), the Person(s) that Owns such Share(s).

“ Party ” or “ Parties ” shall have the meaning assigned to such term in the Preamble to this Shareholders’ Agreement.

“ Permitted Exception ” shall mean any required consent or approval of, or filing with or notice to, a Regulatory Authority related to the registration of the Shares with such Regulatory Authority, the listing of the Shares on a Securities Market or any amendment to the Bye-laws or other Organizational Documents of the Company occurring after the date hereof.

“ Permitted Issuance ” shall mean (i) the issuance of any Shares of Common Stock pursuant to the exercise or exchange of any Convertible Securities outstanding as of the date hereof; (ii) the issuance of any Shares of Common Stock or Convertible Securities (and subsequent exercise or exchange of such Convertible Security) to independent directors, officers or employees of the Company, in connection with their service as directors of the Company or their employment by the Company or their service as an officer of the Company; (iii) the issuance of any Shares of Common Stock or Convertible Securities as consideration for the acquisition by the Company or any Subsidiary of the Company of another business entity or interest therein by merger, amalgamation, purchase of substantially all the assets or other business combination or investment, or (iv) the issuance of any Shares of Common Stock pursuant to a stock dividend or upon any stock split or other subdivision or combination of Shares.

“ Person ” shall mean any individual, sole proprietorship, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, entity, or Governmental Authority.

“ PEWC ” shall have the meaning assigned to such term in the Preamble to this Shareholders’ Agreement.

“ PFIC ” or “Passive Foreign Investment Company” shall have the meaning as set out in Code Section 1297.

“ PFIC Accounting Claim Period ” shall have the meaning set forth in Section 4.1(f) of this Shareholders’ Agreement.

“ PFIC Rules ” shall mean 26 U.S.C. §§ 1291-98 or any similar statutes hereafter enacted having substantially the same purpose and effect as such Code Section.

“Piggyback Notice” shall have the meaning as set forth in Section 6.3.

“ Preemptive Notice ” shall mean a Notification which shall describe fully: (i) the terms, including the price, of the proposed Transfer; (ii) the number of Shares equal to SOF’s Pro Rata Amount of such Shares being sold; (iii) method of proposed Transfer; and (iv) the proposed closing date of the Transfer.

“ Preemptive Right ” shall have the meaning assigned to such term in Section 7.1.

“ Preemptive Shares ” shall have the meaning assigned to such term in Section 7.1.

“ Proceeding ” shall mean any formal action, arbitration, mediation, dispute resolution, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative) in, commenced, brought, conducted, or heard by or before, or otherwise involving, any judge, court, arbitrator, mediator, or Governmental Authority of any kind, character, or nature, the results of which shall be legally binding on the parties subject thereto.

“ Process Agent ” shall have the meaning set forth in Section 9.3.

“Prohibited Transferees” has the meaning set forth in Section 9.7.

“ Proposals ” shall have the meaning as set forth in Section 3.3.

“Pro Rata Amount” shall have the meaning set forth in Section 7.1.

“ Prospectus ” shall mean the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“ Put Closing ” shall have the meaning set forth in Section 6.6.

“ Put Event ” shall mean any date (i) after November 30, 2008 whereby (A) an Event has occurred and continues to occur or (B) the Shares are not quoted on the Nasdaq OTC Bulletin Board or (ii) after January 31, 2009 whereby the Shares are not listed on a US Securities Market.

“ Put Price ” shall mean for (i) Shares purchased pursuant to the Stock Purchase Agreement, an aggregate amount equal to the product of (a) the number of Shares being sold and (b) US$4.35 and (ii) Shares purchased under Section VII hereof, an aggregate amount equal to the purchase price therefor.

“ Put Right ” shall have the meaning set forth in Section 6.6.

“ Put Shares ” shall have the meaning set forth in Section 6.6.

“ QEF Election ” shall mean “qualified electing fund” as established in Code Section 1295.

“ Registrable Securities ” shall mean at any time the Shares beneficially Owned by SOF (and SOF Permitted Assignees, if any) or any SOF Transferee (but only with respect to the Shares of Common Stock so Transferred) who agrees to be bound by the terms and conditions hereof, which Shares are acquired by SOF pursuant to the Stock Purchase Agreement or Article VII hereof; provided , however , that Registrable Securities shall not include any Shares (i) the sale of which has been registered pursuant to the Securities Act and which shares have been sold pursuant to such registration or (ii) which have been sold pursuant to Rule 144 or Rule 144A of the SEC under the Securities Act.

“ Registration Statement ” shall mean a registration statement of the Company under the Securities Act, as amended.

“Regulatory Authority” shall mean the SEC, the Bermuda Monetary Authority and any other regulatory or administrative Governmental Authority having competent jurisdiction over one or more of the Contemplated Transactions.

“ Rule 144 ” shall mean Rule 144 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such rule.

“ Rule 144(k) ” shall mean Rule 144(k) promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such rule.

“ Rule 144A ” shall mean Rule 144A promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such rule.

“ Rule 415 ” shall mean Rule 415 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such rule.

“ Rule 424 ” shall mean Rule 424 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such rule.

“Satisfactory Contract Terms” shall have the meaning set forth in Section 3.2.

“ SEC ” shall mean the Securities and Exchange Commission.

“ Securities Act ” shall mean the Securities Act of 1933, as amended, and the rules, regulations, and forms promulgated thereunder.

“ Securities Market ” shall have the meaning as set forth in Section 6.5.

“ Share ” or “ Shares ” shall mean the shares of the Company, including without limitation the Common Stock, now or in the future Owned beneficially by a Shareholder, and all securities of the Company that may be issued in exchange for or in respect of such shares or securities (including, without limitation, all securities issued or resulting from any dividend, stock split, subdivision, consolidation, recapitalization, or amalgamation effected by the Company).

“ Shareholder ” and “Shareholders” shall mean each, and collectively all, respectively, of (a) the parties to this Shareholders’ Agreement (other than the Company) and (b) the successors of the parties to this Shareholders’ Agreement (other than the Company).

“ Shareholders’ Agreement ” shall have the meaning assigned to such term in the Preamble to this Shareholders’ Agreement.

“Shareholders Joinder” shall have the meaning assigned to such term in Section 9.8(a) of this Shareholders’ Agreement.

“ SOF ” shall have the meaning assigned to such term in the Preamble to this Shareholders’ Agreement.

“ SOF Permitted Assignees ” shall mean any assignee of SOF as permitted pursuant to Section 9.7 hereof.

“SOF’s Assignment Right” shall have the meaning assigned to such term in Section 9.7.

“ Stock Purchase Agreement ” shall mean that certain Stock Purchase Agreement by and between Sino-JP Fund Co., Ltd. and SOF Investment, L.P., dated as of the date hereof.

“Subsidiary” shall mean any corporation, association, trust, limited liability company or other business entity of which the designated Person shall at any time own or control, directly or indirectly, through a Subsidiary or Subsidiaries at least a majority (by number of votes) of the outstanding shares of capital stock (or other beneficial interests) which are (a) entitled ordinarily, in the absence of contingencies, to vote for the election of a majority of such business entity’s directors (or Persons exercising similar functions), even if the right to vote may have been suspended by the happening of such a contingency, or (b) entitled at the time to vote for the election of a majority of such business entity’s directors (or persons exercising similar functions), whether or not the right so to vote exists by reason of the happening of a contingency.

“ Tag Along Right ” shall have the meaning assigned to such term in Section 5.1.

“ Tag Along Shares ” shall mean, for a Shareholder, the number of Shares equal to the product of (i) the number of Shares Owned by such Shareholder multiplied by (ii) a fraction, the numerator of which is the number of Shares the Transferring Shareholder(s) propose(s) to sell or otherwise dispose of to the Tag Along Transferee, and the denominator of which is the total number of issued and outstanding Shares Owned by the Transferring Shareholder(s) prior to the proposed Transfer of Tag Along Shares of the Company.

“ Tag Along Transferee ” shall mean a party or parties that is not a Subsidiary of PEWC.

“ Tag Along Notice ” shall mean a Notification which shall describe fully: (i) the terms, including the price, of the proposed Transfer; (ii) the number of Shares held by PEWC to be disposed of; (iii) the number representing the Tag Along Shares should SOF elect to exercise the Tag Along Rights; (iv) the name and address of the Tag Along Transferee; and (v) the proposed closing date of the Transfer.

“Trading Day” shall mean days on which Securities Markets are open for trading in New York, New York.

“ Transfer ” shall mean any issuance, sale or transfer, whether or not outright or as security, inter vivos or testamentary, with or without consideration, voluntary or involuntary, of all or any part of any right, title or interest (including but not limited to voting rights) in or to any Shares. A voluntary pledge of Shares as collateral shall not constitute a Transfer when such Shares are pledged, but any subsequent transfer in connection with such pledge shall constitute a Transfer.

“US Securities Market ” shall have the meaning as set forth in Section 6.5.

“ Underwritten Offering ” shall mean an offering in which Shares are offered and sold on a firm commitment basis through one or more underwriters, all pursuant to an underwriting agreement between the Company and SOF and such underwriter(s).

SCHEDULE 9.7

PROHIBITED TRANSFEREES

Sino-JP Fund Co., Ltd.

Asset Managers Co., Ltd.

Wellen Sham

Ryoji Furukawa

Eric Yip

Andrew Wang

Hu Hung Chiu

Tung Yu Jeh

Tung Ching Yun

Sun Tao Tsun

Huang Ching Ling

Miao Jwu Yi

Ma Kam Fook Robert

Lui Pui Wing Amy

Hu Sun Mar Li

Chung Che Ling

Yip Chi Hung

Tam Pui Na,Rafia

Wong Kun To

Cheng Kwan Hung, Anthony

Cheng Shu Wing

Pang Hong

Gold Global Limited

PCL Nominees Limited

Greateam Limited

Harmutty Limited

Haddowe Limited

Casparson Properties Limited

Afterville Limited

Nee Soon Limited

Showground Limited

Berridale Developments Limited

Jutech Investments Limited

All Dragon International Limited

Blinco Enterprises Limited

Patagonia Limited

Texan Management Limited

Clipper Investment Limited

Pacific Capital (Asia) Limited

All Dragon International Limited

PCL Holdings Limited

Laidlaw Pacific Financial Service (Holdings) Limited

Super Wish Limited

Mosel Vitelic Corp.

Vision2000 Venture Ltd. (Cayman)

Giant Haven Investment Ltd. (BVI)

Integrated Memory Technologies Inc.

PacMos Technologies Holdings Limited

Soft Device Inc.

ChipMos Technologies (Bermuda) Ltd.

Third Dimension Semiconductor, Inc.

Fortune Wave Profits Ltd.

Great Wall Semiconductor Corporation

ThaiLin Semiconductor Corp.

ChipMos Technologies (Shanghai) Ltd.

Exhibit A

Form of Joinder

SHAREHOLDERS’ AGREEMENT JOINDER

This Shareholders’ Agreement Joinder (this “ Joinder ”) is made as of ______ __, ____, by and among ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED , a Bermuda company (the “ Company ”), PACIFIC ELECTRIC WIRE & CABLE CO., LTD. , a Taiwan, ROC company (“ PEWC ” and together with the Company, the “ Current Parties ”) and __________, a __________ company (“ Transferee ”). Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Shareholders’ Agreement (as defined below).

RECITALS

WHEREAS, the Current Parties are parties to that certain Shareholders’ Agreement (as modified from time to time, the “ Shareholders’ Agreement ”), dated as of June __, 2007; and

WHEREAS, as of the date hereof, Transferee is acquiring __________ Shares of Common Stock (the “ Transferred Shares ”) from SOF Investments, L.P., a Delaware limited partnership or a transferee of SOF (“ SOF ” and such transfer, the “ Transfer ”) and in connection therewith, Transferee wishes to enter into this Joinder in order to become a party to the Shareholders’ Agreement and assume certain of the rights, and become bound by the obligations, of SOF (or its transferee) thereunder with respect to the Transferred Shares.

NOW, THEREFORE, the parties hereto agree as follows:

1. Transferee hereby accedes to and expressly agrees to be bound by the terms of the Shareholders’ Agreement to the same extent as SOF with respect to the Transferred Shares.

2. Each of the Company and PEWC acknowledge that this Joinder is effective to make the Transferee a party to the Shareholders’ Agreement and that the Transferee shall be entitled to the benefits of all of the terms and conditions of the Shareholders’ Agreement to the same extent as SOF with respect to the Transferred Shares.

3. This Joinder may be executed by facsimile signature and in one or more counterparts, each of which shall be deemed to be an original copy of this Joinder and all of which, when taken together, shall be deemed to constitute one and the same agreement.

4. All notices, consents, waivers and other communication to Transferee in accordance with Section 9.2 of the Shareholders’ Agreement shall be addressed as follows:

[Name]

[Address]

[Attention]

[Fax]

5. This Joinder shall be governed by, enforced under, and construed in accordance with the Laws of the State of New York without regard to conflicts of law principles (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have caused this Joinder to be executed, delivered, and effective as of the date first written above.

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED

By:
	Name:
	Title:

PACIFIC ELECTRIC WIRE & CABLE CO, LTD.

By:
By:
	Name:
	Title:

[TRANSFEREE]

By:
By:
	Name:
	Title:

Exhibit 4.5

Settlement Agreement between

Asia Pacific Wire & Cable Corporation Ltd. and Sino-JP Fund Co., Ltd.

DEED OF RELEASE

This Deed of Release is entered as of June 28, 2007 (hereinafter, the “ Deed of Release ” or the “ Release ”) by and among: (1) ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED , a company incorporated under the laws of Bermuda (“ APWC ” or the “ Company ”); (2) SINO-JP FUND CO., LTD . (“ Sino-JP ”), a company incorporated under the laws of the Cayman Islands; (3) ASSET MANAGERS CO., LTD . (“ AMC ”), a company incorporated under the laws of the Japan (“ AMC ”); (4) SINO-JP ASSETS MANAGEMENT COMPANY LIMITED , a company incorporated under the laws of the Cayman Islands ( “SJPAM” ), (5) MR. WELLEN SHAM ; (6) MR. RYOJI FURUKAWA : (7) MR. ERIC YIP ; (8) MR. ANDREW WANG ; (9) MR. YUAN CHUN TANG (“ TONY YUAN ”); (10) MR. DAVID TAO-HENG SUN (“ DAVID SUN ”); and (11) MR. LEE GAI POO (“ LEE GAI POO ”) (collectively, the “ Parties ,” or each separately, a “ Party ”).

WHEREAS,

(a) Sino-JP has been a holder of certain of APWC’s issued and outstanding common shares, $0.01 par value per share;

(b) Certain disputes arose among Pacific Electric Wire & Cable Company Limited (“ PEWC ”), the majority shareholder of APWC, AMC and Sino-JP and other related parties and legal proceedings have been instituted in different parts of the world (“the Legal Proceedings ”). The Company was joined as a party in the following proceedings:-

(i)

Case No. 130 of 2006 (“ the Petition Action ”);

(ii)

Case No.192 of 2006 (“ the First AGM Proceedings ”);

(iii)

Case No. 292 of 2006 (“ Second AGM Proceedings ”);

(iv)

Case No. 314 of 2006 (“ the Lee Gai Po Application ”).

(c) Sino-JP intends to sell its 2,766,154 shares in the Company pursuant to a share sale agreement with a third party buyer (“ the Prospective Purchaser ”) for US$11,756,154.50 (“ the Purchase Price ”) at US$4.25 per share; and

(d) Each of the Parties has determined that it is in its best interest to finally and definitively terminate, release, discharge and forever extinguish any and all Claims (as such term is defined below) which each such Party has had, has now or may have in the future against any other Party arising out of or in any way relating to the Claims or the involvement of any such Party in the business and affairs of the Company;

(e) in order to effectuate such release and termination of any and all Claims, and intending to be forever legally bound hereby, the Parties have agreed to execute and exchange this Deed of Release, subject to the terms, conditions, and limitations set forth herein.

NOW, THEREFORE, in accordance with this Release and in consideration for the releases provided for herein and for other consideration, the receipt and adequacy of which is hereby acknowledged by the Parties, each of the Parties hereby releases each of the other Parties as set forth below, and otherwise stipulates and agrees as follows:

1. Definitions :-

“Claims” has the meaning ascribed to it in Clause 2 hereof.

“Closing” means the closing of the transactions contemplated by this Deed of Release, such that this Deed of Release shall have full force and effect and be legally binding on each Party hereto.

“Conditions” means the conditions set out in Clause 2 hereof.

“Deed of Indemnity” means the Deed of Indemnity between AMC and the Company dated 15 ^th September 2004.

“Deed of Settlement” means the settlement deed to be entered into between Sino-JP, Wellen Sham, Ryoji Furukawa, Eric Yip, Andrew Wang and other parties related to Sino-JP on the one part and PEWC, David Sun, Tony Yuan, Lee Gai Po and all other parties related to PEWC on the other part, a draft of which is annexed hereto as Annexure A.

“Effective Time” has the meaning ascribed to it in the SPA.

“Existing Policy” has the meaning ascribed to in Clause 4(e).

“First AGM Proceedings” has the meaning ascribed to in Recital (b)(ii).

“Group” means the Company and its direct and indirect subsidiaries from time to time, including, without limitation, the subsidiaries as set out in Schedule 1.

“Group Company” means a company in the Group.

“Lee Gai Po Application” has the meaning ascribed to it in Recital (b)(iv).

“Limitation Period” has the meaning ascribed to it in Clause 4(e).

“Petition Action” has the meaning ascribed to it in Recital (b)(i).

“Option Agreement” means the Option Agreement between Sino-JP and PEWC dated 15 ^th September 2004.

“PEWC Parties” means the PEWC Parties as defined in the Deed of Settlement.

“Prospective Purchaser” has the meaning ascribed to it in Recital (c).

“Purchase Price” has the meaning ascribed in Recital (c).

“Resigning Parties” means each of Wellen Sham, Andrew Wang, Eric Yip, and Ryoji Furukawa.

“Second AGM Proceedings” has the meaning ascribed to it in Recital (b) (iii).

“Sino-JP Parties” means the Sino-JP Parties as defined in the Deed of Settlement.

“SP Agreement” means the Share Purchase Agreement between AMC and PEWC dated 10 September 2004.

“Stock Purchase Agreement” or “SPA” means the agreement to be entered into between Sino-JP, the Prospective Purchaser and MSD Capital, L.P. in respect of Sino-JP’s sale of its 2,766,154 shares in the Company to the Prospective Purchaser.

In this Deed of Release, words importing the singular include the plural and vice versa, words importing gender or the neuter and references to persons include bodies corporate or unicorporate.

In this Deed of Release, headings are for convenience only and shall not affect the construction of this Deed.

The Schedules to this Deed of Release form an integral part of this Deed of Release and any reference to this Deed of Release shall include a reference to the Schedules.

Unless the context otherwise requires, any reference in this Deed to Recitals, Clauses and Schedules are references to the recitals of, the clauses of and the schedules to this Deed.

2. RELEASE .

(a) In consideration of the promises made by the Parties to each other herein, the Parties hereby agree to cooperate in taking the following actions, fulfilling the following conditions and making the following deliveries in anticipation of, and subject to, the Closing (“ the Conditions ”):

the simultaneous due execution and delivery of this Deed of Release, the Stock Purchase Agreement and the Deed of Settlement;

ii.

satisfaction of the Conditions set out in paragraph 2A of the Deed of Settlement, so that such agreement has full force and effect;

iii.

payment of all of the outstanding directors fees and salaries due to Wellen Sham, Ryoji Furukawa, Eric Yip and Andrew Wang amounting to an aggregate of US$7,084.84 by cashier’s order or otherwise in immediately available funds payable in US Dollars in Hong Kong on a same day basis to the order of Sino-JP Fund Co. Ltd. or as otherwise directed by Mr. Wellen Sham;

iv.

exchange of copies of Consent Orders of Discontinuance substantially in the form shown in Schedules 2 to 4 hereof (a) executed by Trott & Duncan; and (b) executed by Appleby; and

exchange of copies of the Consent Order of Discontinuance substantially in the form shown in Schedule 5 hereof executed by Cox Hallett Wilkinson; and executed by Appleby; and

vi.

delivery by each of Wellen Sham, Ryoji Furukawa, Eric Yip and Andrew Wang (collectively, the “Resigning Parties”) of letters of resignation in respect of all directorships and any other positions of power or authority each of them may then hold in relation to the Group substantially in the form set forth in Schedule 6 hereto; and

vii.

the due approval, subject to the occurrence of the Effective Time, by the Board of Directors of the Company, with at least one Class A Director designated by Sino-JP participating and voting, of the due execution and delivery of this Deed of Release, a shareholders’ agreement with the Prospective Purchaser and other parties, in a form approved by the Company, and the election of one or more Company nominees to fill Class A Directorship vacancies, and such other matters of an administrative nature as shall be presented to the Board.

(b) Following the fulfillment of all of the Conditions, this Deed of Release and each of the matters referred to in the Conditions shall come into full force and effect, the Closing hereunder shall be deemed to have occurred, all documents, instruments and payments constituting Conditions shall be released and each obligation hereunder shall be legally binding on the Party incurring or assuming such obligation without any further action on the part of any Person, immediately upon the occurrence of the Effective Time.

(c) Upon and as from the Effective Time, each Party, for itself and, as applicable, its subsidiaries, divisions, and other controlled corporate entities, and each of their respective successors, predecessors, assigns, directors, officers, employees, attorneys, insurer(s), agents, and representatives, hereby releases, and forever discharges, any other Party, and each of their respective successors, predecessors, assigns, directors, officers, employees, attorneys, insurer(s), agents, and representatives, from or on account of any and all past, present or future claims, causes of action, cross-claims, counterclaims, rights, liabilities, requests, allegations, demands, promises, contracts, obligations, actions, suits, lawsuits, proceedings of any kind (whether civil, criminal, administrative, regulatory, disciplinary, professional or otherwise), judgments, orders, decrees, losses, damages, assessments, costs (including attorneys’ fees and expenses), interest, or penalties, of whatever nature, character, type, or description, whenever and however occurring, whether now known, claimed, asserted, suspected or discoverable, whether at law or in equity, and whether sounding in contract, tort, or other obligation imposed by law or equity, or any statutory, regulatory or common law claim or remedy of any type and of whatever nature, whether known or unknown, directly or indirectly, which such Party ever had, now has, or hereafter can, shall or may have at any time in the future against any other Party by reason of any matter, cause or thing whatsoever from the beginning of the world to the Effective Time arising out of, incurred or accrued in connection with or in any way related to (i) any interest (ownership or otherwise) any such Party may have or have had in, over or with the Company or any other Group Company, (ii) the management of the Group, (iii) any acts taken or omitted to be taken in

any capacity, including without limitation as a director, officer, employee, manager, shareholder, agent, representative, adviser or otherwise, (iv) any rights or obligations that any Party may have or may have had under the SP Agreement, the Option Agreement and the Deed of Indemnity and (v) share certificates of the Company (including, but not limited to, share certificates AP9, AP10 and AP2056) (each a “ Claim ” and collectively, the “ Claims ”). Each Party, for itself, and if applicable, its subsidiaries, divisions and other controlled corporate entities agrees and covenants not to sue, or initiate any suit, proceeding or investigation of whatever kind (whether civil, criminal, administrative, regulatory, disciplinary, professional or otherwise) against any other Party and as applicable its respective current and former subsidiaries, divisions and other controlled corporate entities.

For the avoidance of any doubt, the Parties agree that this Deed of Release is a full and final settlement of any and all claims that Parties have against each other in the Legal Proceedings or arising from or based upon any facts or matters or allegations in the Legal Proceedings.

Each Sino-JP Party agrees that any rights or obligations that any Sino-JP Party may have or may have had under the SP Agreement, the Deed of Indemnity and the Option Agreement and any interest (ownership or otherwise) any such Party may have or have had in, over or with the Company or any other Group Company are hereby terminated and extinguished as among the Parties and shall be of no further force or effect and that no action or proceedings of any nature will be brought or maintained in connection with or relating to any of the Claims.

Each of the Parties acknowledges that each respectively may have sustained damages, losses, fees, costs or expenses that are presently unknown or unsuspected. The Parties expressly waive all rights provided by California Civil Code Section 1542 (to the extent that Section 1542 otherwise might apply and notwithstanding the below choice of law provision) which states: “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor,” or by any other similar provision of state, federal or foreign (i.e., non-United States) law. The Parties knowingly, voluntarily and expressly waive, to the fullest extent permitted by law, any and all rights they may have under any statute or any common law principle that would limit the effect of the foregoing releases based upon their knowledge (or otherwise) at the time they execute this Deed of Release.

At and as from the Effective Time, the Parties will take all actions necessary to procure the discontinuance of the Petition Action, the First AGM Proceedings, the Second AGM Proceedings and the Lee Gai Po Application on the following terms and conditions:-

Sino-JP and the Company agree to consent to the discontinuance of each of the Petition Action, the First AGM Proceedings and the Second AGM Proceedings, on the basis that there be no order as to the costs of those actions by instructing their respective Bermuda Counsel to endorse the Consent Orders for Discontinuance in the form or substantially the form of the draft attached at Schedules 2 to 4 hereto and procuring their respective legal representatives in Hong Kong to exchange copies of the signed Consent Orders of Discontinuance which they are holding in escrow in accordance with Clause 2(a)(iv) hereof. Upon exchange of these Consent Orders of Discontinuance, Sino-JP shall and shall irrevocably instruct Trott & Duncan to take

all necessary action to obtain the relevant orders from the Bermuda Court in terms of the Consent Orders of Discontinuance as shown in Schedules 2 to 4 and the Company shall and shall irrevocably instruct its lawyers representing it in those proceedings to render any reasonable assistance to enable such court orders to be granted.

ii.

AMC, Sino-JP and the Company agree that they shall each bear their own respective costs incurred up to the date of obtaining the relevant orders from the Bermuda Court pursuant to the terms of Clause 2(c)(i) hereof in the Petition Action, the First AGM Proceedings and the Second AGM Proceedings and that any costs made in favour of any of the parties to the date of the satisfaction of the Conditions in any of these proceedings shall be waived and that any such costs orders shall be treated as wholly discharged, annulled and of no force or effect.

iii.

The Company and Lee Gai Po agree to consent to the discontinuance of the Lee Gai Po Application on the basis that there be no order as to costs of that action by instructing their respective Bermuda Counsel to endorse the Consent Order for Discontinuance as shown in the form or substantially the form of the draft attached at Schedule 5 hereto and irrevocably instruct their respective legal representatives in Hong Kong to exchange copies of the signed Consent Order of Discontinuance which they are holding in escrow in accordance with Clause 2(a)(v) hereof. Upon exchange of the Consent Order of Discontinuance, the Company shall and shall irrevocably instruct its lawyer representing it in the Lee Gai Po Application to take all necessary action to obtain the relevant order from the Bermuda Court in terms of the Consent Order of Discontinuance as shown in Schedule 5 hereto and Lee Gai Po shall and shall irrevocably instruct his lawyers representing him in the Lee Gai Po Application to render any reasonable assistance to the Company’s lawyer to enable such orders to be granted as soon as possible. Any cost orders made in favour of any of the parties shall be treated as wholly discharged, annulled and of no force or effect.

(d) In connection with the foregoing, the Sino-JP Parties hereby represent to the Company that (i) the Company is not a party to any litigation in Hong Kong involving Sino-JP and (ii) there is not now, and there has never been, any Claim asserted against the Company in any litigation in Hong Kong between Sino-JP and PEWC and other parties. Notwithstanding the foregoing, this Deed of Release shall not apply to, and nothing contained in this Deed of Release shall be construed to release, compromise, settle, waive or satisfy any claims concerning any alleged breach of the terms of this Deed of Release.

3. EFFECT OF RELEASES .

(a) By signing below, each Party acknowledges that this Deed of Release has been executed voluntarily and that each has had the opportunity to obtain the advice of an attorney or a representative of their choice prior to executing this Deed of Release, and that each, respectively, has a full understanding of the terms of this Deed of Release, and that accordingly, in the event of any dispute involving the scope, meaning or effect of this Deed of Release, nothing herein shall be construed in favor of any Party as against any other.

(b) As to the Claims released herein, each Party expressly waives, to the fullest extent permissible under law, any and all rights that such Party may have or purport to have under any provision of law that in any way limits or qualifies the terms of a release of Claims at the time of

the execution of this Release. Upon the advice of counsel, any such provision of common or statutory law is hereby expressly waived by the releasing Parties. Specifically, and without in any way limiting the foregoing, the releasing Parties, upon the advice of legal counsel, hereby waive any contrary rights under any applicable law.

4. Resignations; Covenants .

(a) Each of the Resigning Parties covenants and agrees that (i) he shall not at any time disclose any matters relating to any member of the Group, act as a witness on behalf of, or otherwise provide assistance to any third party seeking to sue, or otherwise commence any action or proceeding against, any member of the Group in relation to any matter arising from the business and affairs of the Group or any interest (ownership or otherwise) any Party may have had in, or in relation to, the Group except where ordered by a court or governmental or regulatory agency of competent jurisdiction to do so and (ii) except for the US$7,084.84 referred to in Clause 2(a) and Clauses 4(d) and 4(e) hereof, he does not now have, and shall not in the future assert against any member of the Group any Claim for compensation, remuneration, payment of fees or any debts of any kind, reimbursement or payment of expenses or other obligations or employment benefits of any kind or nature, all of which have been settled in full to the satisfaction of such Resigning Party prior to the date hereof.

(b) The Company agrees that it will not voluntarily offer or provide assistance to any government, statutory, regulatory body, professional body or enforcement agency, stock exchange or any other third party seeking to sue or institute any form of civil, criminal, disciplinary, administrative, professional or other types of proceedings or investigation of whatever sort against any Sino-JP Party, its respective affiliates, subsidiaries, employees, directors and agents arising out of or in connection with any event, condition or matter occurring or existing up to the Effective Date (including, but not limited to, matters relating to any acts taken or omitted to have been taken or any directorship office and employment or any matters relating to the acquisition and/or ownership and/or sale of the shares in the Company and/or share certificates of the Company (including, but not limited to, share certificates AP7, AP8, AP9, AP10 and AP2056)) except where ordered by a court, government or regulatory agency of any competent jurisdiction to do so. For the avoidance of doubt, the Company will not offer or voluntarily provide any assistance to a Group Company to do any matter that the Company is prohibited from doing by this clause and warrants that no other Group Company will do any matter that the Company is prohibited from doing by this Clause.

(c) The Sino-JP Parties, jointly and severally, agree to indemnify and hold harmless each of the Group Companies in the event of a breach of this Deed of Release by any Sino-JP Party, including but not limited to a breach of the covenant not to sue, for all damages incurred and for all reasonable costs and expenses incurred by any of the Group Companies in satisfying such damages and remedying any such breach. The Company agrees to indemnify and hold harmless each of the Sino-JP Parties in the event of a breach of this Deed of Release by any Group Company (including, but not limited to, a breach of the covenant and warranty stated in Clause 4(b) above), for all damages incurred and for all reasonable costs and expenses incurred by the Sino-JP Parties in satisfying such damages and remedying any such breach.

(d) The Company agrees to effect and maintain, at its expense for the Resigning Parties, Directors and Officers insurance with a retention level identical to and in a form

substantially similar to that of the existing Directors and Officers policy effected by the Group (Policy No. 2320000332-000001) ( “the Existing Policy” ) providing cover as an additional named insured for Wellen Sham, Ryoji Furukawa, Eric Yip and Andrew Wang and with an aggregate liability limit of not less than US$15million up to such time as the limitation period for instituting any kind of proceedings against Wellen Sham, Ryoji Furukawa, Eric Yip and Andrew Wang in connection with their office and/or directorship in any of the Group Company expires ( “the Limitation Period” ), which the Parties agree is presently six (6) years from the date of this Deed of Release. The Company will provide a copy of the insurance to these individuals within 21 days of each renewal. In the event any claims, proceedings or investigations of whatsoever nature (including, but not limited to, those mentioned in Clause 4(b)) are made, commenced or initiated against any of the Resigning Parties relating to or arising from any acts taken or omitted to be or have been taken in his capacity as an officer or director or employee acting on behalf of any Group Company or any other matters relating to his direct or indirect ownership interest in, or any position of authority or management or responsibility with, the Group or acquisition and/or ownership and/or sale of the shares in the Company and/or share certificates of the Company (including, but not limited to, share certificates AP7, AP8, AP9, AP10 and AP2056 up to the Effective Date), the Company shall indemnify, to the extent and subject to the terms and conditions of Clause 4(e) below, the Sino-JP Party against whom such claims, proceedings or investigations are instituted against any liability (including any legal defense costs) which is not covered under the Directors and Officers insurance effected pursuant to this clause.

(e) Solely with respect to the Parties to this Deed of Release, the Company agrees that the provisions of Bye-Laws 124 through 126 of the Bye-Laws of the Company shall be conclusively interpreted as (i) applying to the Resigning Parties on the same terms and conditions as such provisions apply to directors and officers in office from time to time and such indemnification obligations shall remain in full force and effect until the expiry of the Limitation Period which the Parties agree is presently six (6) years from the date of this Deed of Release, (ii) to the extent permissible under the Bermuda Companies Act, indemnifying the Resigning Parties against loss and expense resulting from all types of claims, proceedings or investigations made or initiated against any of the Resigning Parties relating to the matters mentioned in Clause 4(b) and (d) above, (iii) subject to (i) and (ii), in the event any claims, proceedings or investigations of whatever nature are made, commenced or initiated against any of the Resigning Parties relating to any matters relating to or arising from the Group referred to in Clause 4(b) and (d) above, to the extent such loss and expense is not covered under the Directors and Officers Insurance effected pursuant to Clause 4(e) above, the Company shall pay from time to time on behalf of the Resigning Party concerned the reasonable legal costs and expenses of counsel selected by the concerned Resigning Party (such selection to be subject to the consent of the Company; provided that such consent not to be unreasonably withheld or delayed and, for the avoidance of doubt, the Parties hereby agree in the case of any claims, proceedings, and investigations against such concerned Resigning Party in Hong Kong or the United States that the selection of the law firm of either Simmons & Simmons or Hogan & Hartson, respectively, shall be a reasonable selection, although the concerned Resigning Party is not limited to select among only the two foregoing law firms), which are actually incurred in defending any such claim, proceedings or investigation ( “defence costs” ) before the final resolution of such claim, proceedings or investigation subject to the Company’s right to seek reimbursement of such defence costs from the Resigning Party concerned in the event that any court of competent

jurisdiction finds (after any applicable appeals or the expiration of any time for filing an appeal) that the claim, proceedings or investigation is based upon, arises out of or was made, commenced or initiated in connection with any fraud or dishonesty (including any fraudulent misrepresentation) committed by the Resigning Party.

(f) The Company hereby covenants and agrees that it will not, at any time during which the indemnification obligations provided for in Clauses 4(d) and 4(e) remain in effect, take any action in conflict with such indemnification obligations, including, but not limited to, amending the Bye-Laws of the Company with regard to such indemnification obligations. Notwithstanding the foregoing, the Company and the Resigning Parties agree to use all reasonable efforts to first seek recovery under the Existing Policy or any renewal referred to in Clause 4(d) ( “the Renewal Policy” ) prior to asserting any claim for indemnification under Clauses 4(d) and 4(e). All amounts paid or payable to any Resigning Party under the Existing Policy or the Renewal Policy shall reduce any amounts otherwise payable by the Company under Clauses 4(d) and 4(e). The Company can seek recovery under the Existing Policy or the Renewal Policy for the amount it indemnifies the Resigning Parties subject to the terms and conditions of the Existing Policy or the Renewal Policy (as the case may be). In the event of full payment of indemnification from the Company to any Resigning Party, such Resigning Party shall, as condition of its right to receive such indemnification payment, irrevocably and unconditionally assign to the Company the right to receive the proceeds of any claim filed by or on behalf of such Resigning Party under or in respect of the Existing Policy or the Renewal Policy subject to its terms and conditions, pursuant to an instrument of assignment in form and substance satisfactory to the Company.

(g) Each party agrees that the occurrence of the Effective Time is a condition precedent to the respective obligations of the Parties set out in Clauses 2(c) and 4 hereof. Notwithstanding the foregoing, nothing contained herein shall be construed to release, compromise, settle, waive or satisfy any claim concerning any alleged breach of the terms of this Deed of Release.

(h) The Company acknowledges and warrants that this Deed of Release applies to all the Group Companies and the individuals who sign this Deed of Release are fully authorized to do so and are legally able to bind the party or parties on whose behalf they sign.

5. Warranties and Representations

The Parties acknowledge and represent that:-

(a) There is a risk subsequent to execution of this Deed of Release that certain facts, circumstances or legal decisions may be discovered, established or adjudicated implying that any Party incurred or suffered loss or damages that was different from, less than, or greater than that believed or known at the time of execution and the Parties each assume such risk to themselves and agree that this Agreement should apply to such different, unknown or unanticipated loss or damage as they relate to facts, events or conditions occurring or existing up to the Effective Date.

(b) None of the Parties shall seek to reopen or set aside this Deed of Release on the grounds that it in the future becomes aware of any mistake of law (including any such mistake arising as a result of a subsequent change of law) or a mistake of fact relating to or in connection with this Deed of Release.

(c) The rights and obligations set out in this Deed of Release shall be binding upon and shall inure to the benefit of the Parties and shall be binding upon any and all predecessors, successors, liquidators, receivers and assigns of the Parties.

(d) There are no existing or pending agreements, arrangements, transactions or negotiations involving any party that would render this Deed of Release or any part hereof void, voidable or unenforceable.

(e) The Company acknowledges and warrants that this Deed of Release applies to all the Group Companies and the individuals who sign this Deed of Release are fully authorized to do so and are legally able to bind the party or parties on whose behalf they sign.

(f) Each Party is the lawful owner of all rights, title and interest in and to all the claims in relation to the Claims, and that it has not sold, assigned, transferred, or purported or attempted to sell, assign and transfer, in whole or in part any Claims and/or rights in any agreements, contracts or deeds entered into between the Parties against or purportedly against any other Party to any other person or entity. In the event any Party has assigned any of the Claims and/or rights in any agreements, contracts or deeds entered into between the Parties, such Party shall indemnify each other Party against, and defend and hold him harmless from, any claims arising out of or relating to any such assignment or transfer or any such purported or attempted assignment or transfer of any such Claims.

6. Counterparts . This Deed of Release may be executed in counterparts, each of which shall be deemed an original as against any Party whose signature appears thereon, but all of which together shall constitute one and the same instrument.

7. Confidentiality . The Parties agree that this Deed of Release, its negotiation and its terms shall be kept confidential and shall not be disclosed to anyone, except as may be required by applicable law or regulation, including without limitation, rules and regulations promulgated under the U.S. Securities Exchange Act of 1934, as amended; provided, however, that the Parties shall be entitled to disclose this Release to their insurers, regulators (including the Bermuda Monetary Authority), attorneys, and auditors. The confidentiality obligations set forth herein shall be binding on each of the Parties whether or not the Effective Time shall have occurred.

8. Specific Performance . Each of the Parties acknowledges that a breach by it of this Deed of Release may lead to irreparable harm to one or more of the other Parties for which monetary damages may not be adequate relief. Accordingly, each of the Parties agrees that each other Party may seek specific performance or injunctive or other equitable relief in the event of a breach of this Agreement by any other Party.

9. Costs and Expenses . Each of the Parties shall bear and be solely responsible for its costs and expenses incurred in connection with the preparation, negotiation, execution, delivery and performance of this Deed of Release.

10. Integration . This Deed of Release, including all annexures, appendices, exhibits and schedules, set forth the entire understanding of the Parties with respect to their subject matter and supersede all prior agreements and understandings between or among the Parties with respect to their subject matter.

11. Notices . All notices and other communications required or permitted to be transmitted to any Party pursuant to the provisions of this Deed shall be in English and in writing delivered by hand or by prepaid courier (in each case against signature of receipt) or sent by facsimile addressed as follows to the Parties (with a simultaneous copy by email) or to such other address or facsimile number and e-mail address as a Party may from time to time notify to the other Parties:-

To APWC:

Asia Pacific Wire & Cable Corporation Limited

7 ^th Floor, No 132 Sec. 3

Min-Sheng East Road

Taipei, 105 Taiwan, ROC

Attention: Ling Y. Wu, Esq.

Facsimile: 886-2-2712-3557

Telephone: 886-2-2712-2558

E-mail: lyw@mail.pewc.com.tw

To Asset Managers Company Limited, Sino-JP, Wellen Sham, SJPAM,

Ryoji Furukawa, Eric Yip and Andrew Wang:

Sino-JP Assets Management Co., Ltd.

Room 1108-1109

Bank of America Tower

12 Harcourt Road, Central, Hong Kong

Attention: Wellen Sham

Facsimile: 852-2521-9100

Telephone: 852-2521-8222

E-mail: wellenol@gmail.com copy (which shall not constitute notice) to Wanda Tong at Simmons & Simmons

Wanda.Tong@Simmons-Simmons.com

To Yuan Chun Tang:

Yuan Chun Tang

25 ^th Floor, Sec 2

Dunhua South Road

Taipei, 106 Taiwan, ROC

Facsimile: 886-6636-6130

Telephone: 886-6636-6100

E-mail: tonyuan@gmail.com

To David Tao-Heng Sun:

David Tao-Heng Sun

25 ^th Floor, Sec 2

Dunhua South Road

Taipei, 106 Taiwan, ROC

Facsimile: 886-6636-6130

Telephone: 886-6636-6100

E-mail: sundavid@loxinfo.co.th

To Lee Gai Po

Lee Gai Po

25 ^th Floor, Sec 2

Dunhua South Road

Taipei, 106 Taiwan, ROC

Facsimile: 886-6636-6130

Telephone: 886-6636-6100

E-mail: gplee@mail.pewc.com.tw

12. Miscellaneous . i. If one or more provisions of this Deed of Release are held to be unenforceable under applicable law, such provision shall be excluded from this Deed of Release and the balance of this Deed of Release shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. In the event that any such provision of this Deed of Release is so held invalid, the Parties shall promptly renegotiate new provisions to restore this Deed of Release as nearly as possible to its original intent and effect. To the extent permitted by applicable law, the Parties hereby waive any provisions of such law that renders any provision of this Deed of Release prohibited in any respect.

ii.

Each Party irrevocably consents to the service of process, notices or other papers in connection with or in any way arising from a court action, arbitration, or other proceeding to enforce the terms of this Deed of Release, or the enforcement of any judgment relating thereto, by the use of any of the methods and to the addresses stipulated in Clause 11 for the giving of notices. Nothing contained herein shall affect the right of any Party to serve such processes, notices or other papers in any other manner permitted by applicable law.

iii.

This Deed of Release (and all the matters to be agreed herein) constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and discussions between them.

iv.

This Deed of Release may be executed in any number of separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same Deed.

This Deed of Release shall be governed by the laws of Bermuda and the Courts of Bermuda shall have non-exclusive jurisdiction in respect of any dispute arising hereunder. Each of the Parties hereto submits to the non-exclusive jurisdiction of the Courts of Bermuda as the venue for any disputes hereunder and waives any objection it may have to the commencement of proceedings in any such court, waives any claim that such proceedings have been brought in an inconvenient forum and waives the right to object that such court does not have jurisdiction over such party.

vi.

This Deed of Release shall be binding upon and inure to the benefit of the successors, agents, servants, directors, officers, volunteers, heirs, executors, liquidators, receivers, assigns and administrators of the Parties hereto, but none of the rights, benefits or obligations of the Parties under this Deed of Release shall be assignable in any way.

vii.

This Deed of Release cannot be amended, modified or revised unless done in a writing and by each and every one of the Parties as a Deed or by order of the Court. No provision may be waived except in writing signed by the Party to be charged.

viii.

This Deed of Release shall be considered as drafted jointly by the Parties, and no uncertainty or ambiguity found in the terms hereof shall be construed for or against any Party based on an attribution of drafting to any one Party.

ix.

After the execution of this Deed of Release, each Party, at the reasonable request of any other Party, shall take such actions and shall furnish, execute and deliver such additional documents, instruments, notices, or other further assurances as may be reasonably necessary or desirable to effect complete consummation of this Deed of Release.

Each of the Parties acknowledges that it has reviewed this Deed of Release with its legal counsel and is fully aware of all of the legal implications attendant to signing this Deed.

xi.

Notwithstanding the foregoing, this Deed of Release shall not apply to, and nothing contained in this Deed of Release shall be construed to release, compromise, settle, waive or satisfy any claims concerning any alleged breach of the terms of this Release.

xii.

In case of any conflict between this Deed of Release and any other agreement between and among any of the Parties hereto relating to the settlement of the Claims, the provisions of this Deed of Release shall govern.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the undersigned hereby duly execute this Deed of Release dated as of the date first written above and authorise this signature page to be attached as a counterpart of this Deed of Release.

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
By:	/s/ Yuan Chun Tang
	Name:
	Title:
	Date:

SINO-JP FUND CO., LTD.
By:	/s/ Wellen Sham
	Name:
	Title:
	Date:

ASSET MANAGERS CO. LTD.
By:	/s/ Ryuichi Tanabe
	Name:	Ryuichi Tanabe
	Title:	Director & Representative Executive Officer
	Date:

SINO-JP ASSETS MANAGEMENT COMPANY LIMITED
By:	/s/ Wellen Sham
	Name:
	Title:
	Date:

/s/ Wellen Sham
Mr. Wellen Sham

/s/ Ryoji Furukawa
Mr. Ryjoi Furukawa

/s/ Eric Yip
Mr. Eric Yip

/s/ Andrew Wang
Mr. Andrew Wang

/s/ Yuan Chun Tang
Mr. Yuan Tung Chang

/s/ Tao Heng Sun
Mr. David Tao-Heng Sun

/s/ Lee Gai Poo
Mr. Lee Gai Poo

Schedule 1

Group Companies

APWC General Holdings Ltd.

Crown Century Holdings Ltd. (BVI)

Siam (APWC) Holdings Ltd.

Singvale Pte Ltd.

Samray Inc.

PRC (APWC) Holdings Ltd.

Moon View Ltd.

Trigent Investment Holdings Ltd.

Hardlek Ltd.

PEWC (Thailand) Co., Ltd.

APWC (Thailand) Co., Ltd.

Charoong Thai Wire & Cable Public Co., Ltd.

CTW Apex Co., Ltd.

CTW Beta Co., Ltd.

Siam Pacific Electric Wire & Cable Co., Ltd.

Pacific Thai Electric Wire & Cable Co., Ltd.

Shanghai Yayang Trading Pte Ltd.

Sino-Sin Trading Pte Ltd.

Sigma-Epan International Pte Ltd.

Sigma Cable Company (Pte) Ltd.

Australian Pacific Electric Cable Pty Ltd.

Epan Industries Pte Ltd.

Elecain Industry Sdn Bhd

Sigma Epan Malaysia Sdn Bhd

Epan Data Comm System Pte Ltd.

Shandong Pacific Fiber Optics Cable Co., Ltd.

Ningbo Pacific Cable Co., Ltd.

Crown Century Holdings Ltd. (Hong Kong)

Pacific Electric Wire & Cable (Shenzhen) Co., Ltd.

Schedule 2

IN THE SUPREME COURT OF BERMUDA

2006: NO. 130

IN THE MATTER OF SECTION 111 OF THE COMPANIES ACT 1981

AND IN THE MATTER OF ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED

BETWEEN

SINO-JP FUND COMPANY LIMITED

Petitioner

-AND-

(1) PACIFIC ELECTRIC WIRE & CABLE COMPANY LIMITED

(2) MOON VIEW VENTURES LIMITED

(3) ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED

Respondents

CONSENT ORDER FOR DISCONTINUANCE

UPON the parties having agreed terms of settlement

BY CONSENT IT IS ORDERED that:-

(i)

this action is hereby discontinued;

(ii)

there be no order as to costs; and

(iii)

for the avoidance of doubt, the parties shall not enforce any unsatisfied costs order made in their favour to date.

Dated this

day of June 2007.

We, Trott & Duncan, consent to an order in these terms:

Dated this

day of June 2007


			Trott & Duncan
			Attorneys for the Petitioner

We, Cox Hallett Wilkinson, consent to an order in these terms:

Dated this

day of June 2007


			Cox Hallett Wilkinson
			Attorneys for the First and Second Respondents

We, Applebys, consent to an order in these terms:

Dated this

day of June 2007


			Appleby
			Attorneys for the Third Respondent

Cox Hallett Wilkinson of 18 Parliament Street, Hamilton, Bermuda, Attorneys for the First and Second Respondents

To:	Trott & Duncan

20 Brunswick Street

Hamilton HM 10

Attorneys for the Petitioner

To:

Appleby

Canon’s Court

22 Victoria Street

Hamilton

Attorneys for the Third Respondent

Schedule 3

IN THE SUPREME COURT OF BERMUDA

2006: No. 192

IN THE MATTER OF SECTION 75 OF THE COMPANIES ACT

AND IN THE MATTER OF THE BYE-LAWS OF ASIA PACIFIC

WIRE & CABLE CORPORATION LIMITED

BETWEEN

SINO-JP FUND COMPANY LIMITED	Plaintiff

and

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED	Defendant

CONSENT ORDER FOR DISCONTINUANCE

UPON the parties having agreed terms of settlement

BY CONSENT IT IS ORDERED that:-

(i)	this action is hereby discontinues;

(ii)	there be no order as to costs;

(iii)

For the avoidance of doubt, the parties hereto shall not enforce any unsatisfied costs orders made in their favour to date.

Dated this day of 2007.

We, Trott & Duncan, consent to an order in these terms.

Dated this day of June 2007.


		Trott & Duncan Attorneys for the Plaintiff

We, Appleby consent to an order in these terms.

Dated this day of 2007.


		Appleby Attorneys for the Defendant

Schedule 4

IN THE SUPREME COURT OF BERMUDA

2006: No. 292

IN THE MATTER OF SECTIONS 19, 71 & 79 OF THE COMPANIES ACT

AND IN THE MATTER OF THE BYE-LAWS OF ASIA PACIFIC

WIRE & CABLE CORPORATION LIMITED

BETWEEN

SINO-JP FUND COMPANY LIMITED	Plaintiff

and

(1) ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED

(2) PACIFIC ELECTRIC WIRE AND CABLE COMPANY LIMITED

	Defendant

CONSENT ORDER FOR DISCONTINUANCE

UPON the parties having agreed terms of settlement

BY CONSENT IT IS ORDERED that:-

(i)	this action is hereby discontinued;

(ii)	there be no order as to costs;

(iii)

For the avoidance of doubt, the parties hereto shall not enforce any unsatisfied costs orders made in their favour to date.

Dated this day of 2007.

We, Trott & Duncan, consent to an order in these terms.

Dated this day of June 2007.


		Trott & Duncan Attorneys for the Plaintiff

We, Cox Hallett Wilkinson, consent to an order in these terms.

Dated this day of 2007.


		Cox Hallett Wilkinson Attorneys for Pacific Electric Wire & Cable Company Limited

We, Appleby consent to an order in these terms.

Dated this day of 2007.


		Appleby Attorneys for Asia Pacific Wire & Cable Corporation Limited

Schedule 5

IN THE SUPREME COURT OF BERMUDA

2006: No. 314

IN THE MATTER OF SECTION 76 OF THE COMPANIES ACT 1981

AND IN THE MATTER OF ASIA PACIFIC

WIRE & CABLE CORPORATION LIMITED

BETWEEN

LEE GAI PO	Plaintiff

and

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED	Defendant

CONSENT ORDER FOR DISCONTINUANCE

UPON the parties having agreed terms of settlement

BY CONSENT IT IS ORDERED that :-

(i)	this action is hereby discontinued;

(ii)	there be no order as to costs;

(iii)

For the avoidance of doubt, the parties hereto shall not enforce any unsatisfied costs orders made in their favour to date.

Dated this

day of

2007.

We, Cox Hallett Wilkinson, consent to an order in these terms.

Dated this day of June 2007.


		Cox Hallett Wilkinson Attorneys for the Plaintiff

We, Trott & Duncan, consent to an order in these terms.

Dated this day of June 2007.


		Trott & Duncan Attorneys for the Sino-JP Fund Co. Ltd.

We, Appleby consent to an order in these terms.

Dated this day of 2007.


		Appleby Attorneys for the Defendant

Schedule 6

Form of Resignation Letter

June __, 2007

Asia Pacific Wire & Cable Corporation Limited

7 ^th Floor, No 132 Sec. 3

Min-Sheng East Road

Taipei, 105 Taiwan, ROC

Attention: Board of Directors

Re: Resignation Letter

Dear Sirs:

I hereby resign in respect of all directorships and any other positions of power or authority that I now hold in relation to Asia Pacific Wire & Cable Corporation Limited and each of its subsidiaries (collectively, the “APWC Companies”) and, to the extent applicable, authorize each APWC Company to remove me as a signatory on each account which such APWC Company maintains with a bank or other financial institution, with immediate and irrevocable force and effect as of the Effective Date (as such term is defined in that certain Deed of Release, dated on or about the date hereof, by and among the undersigned and the addressee hereof, among other parties).

Additionally, I hereby confirm that I do not currently have, and shall not in the future assert, against any APWC Company any claim for compensation, remuneration, payment of fees or any debts of any kind, reimbursement or payment of expenses or other obligations or employment benefits of any kind or nature, all of which have been settled in full to my satisfaction prior to my execution of this letter.

	Very truly yours,
	[___________]

Annexure A

[Deed of Settlement]

Exhibit 4.6

Termination Agreement between

Pacific Electric Wire & Cable Co. Ltd. and Chiao Tung Bank

[Translation]

		Ref. No.:
Duplicate		Retention Period:

Letter from Chiao Tung Bank Trust Department

	Address: 11/F, 100 Chi Lin Road, Chung Shan District, Taipei City
	Handled by: Wang Hsing Yueh (02)2522-9182

To:	Pacific Electric Wire & Cable Co., Ltd.
Date:	6 ^th June 2006
Doc. No.:	Chiao Hsin Fa Tzu No. 9521000439
Urgency:	Most urgent
Confidential level and conditions for disclosure or confidential period:
Attachment:	Nil
Re:	Concerning the appointment of our bank as trustee to hold on trust your company’s valuable securities of Asia Pacific Wire & Cable Corporation Limited (“APWC”), the creditor banks have conditionally agreed to release the trust relationship. Please proceed to terminate the Trust Deed and handle matters relevant to the return and transfer registration of the trust property.
Explanation:	Pursuant to the conclusions reached at the meeting of the creditor banks’ representatives held on 5 ^th May 2006, the termination shall be done in accordance with the Trust Deed entered into between your company and our bank on 12 ^th September 2005.
Original to:	Moon View Venture Limited, B.V.I.
Duplicate to:	Ernest & Young Attorneys Firm, Pacific Electric Wire & Cable Co., Ltd. and the Sales Department of our bank
c.c:	Chiao Tung Bank Trust Department
	Chiao Tung Bank Trust Department

MINUTES OF MEETING OF JOINT REPRESENTATIVE BANKS FOR THE

CREDITOR BANKS (CONTINUED CONSULTATION OF MATTERS RELATING TO

THE CREDITOR RIGHTS AND OVERSEAS ASSETS OF PACIFIC ELECTRIC WIRE

&CABLE CO. LTD)

1. Date and Time	:	5 ^th May, 2006 (Friday) (from 2:00 p.m. to 5:00 p.m.)
2. Venue	:	Conference Rm, Chiao Tung Bank Head Office, 8/F, No. 91, HengYang Road, Taipei
3. Present	:	Attendance list of the Creditor banks
4. Also present	:	Pacific Electric Wire & Cable Co. Ltd., KPMG, Chen & Partners Attorneys At Law, Chiao Tung Bank Trust Department
5. Report by the Chairman	:	Nil
6. Report by Pacific Electric Wire & Cable Co. Ltd. (hereinafter called “PEWC”)	:	Nil
7. Update by the Supervising Accountant on overseas matters	:	Refer to the attachment “Supervising Report” for the period of March, 2006

8.	Resolutions:

In order to provide sufficient time for PEWC to resolve the case with AMC, a Japanese corporation, in relation to the dispute of the buy back of shares representing 52.84% shareholding of Asia Pacific Wire & Cable Corporation Limited (“APWC”), and to protect Creditor Banks’ right, in line with the consensus reached by us on July 20, 2005, after PEWC fulfills the following requirements, then Creditor Banks agree in principle to release and waive the trust deed of APWC shares, rights under certain pledge, nomination and election of independent directors and the Collateral Enhancement Plan:

PEWC shall provide an undertaking per a resolution of its board of directors to repay USD$6,000,000 to Creditor Banks o in addition to the monthly payment stated in the phase IV of work-out agreement under the ROC Banking Association Self-Regulatory Debt Negotiation & Disciplinary Mechanism and monthly provision for Loan Repayment Fund, etc. (not including the proposed disposal of asset mentioned in the phase IV of work-out agreement) o , as substitute for the trust deed of APWC shares and the Collateral Enhancement Plan. If PEWC fails to fulfill such requirements, PEWC shall surrender the beneficiary right of APWC shares to Creditor Banks which shall have the right to dispose of such shares.

To accommodate PEWC to make arrangement of such repayments, USD$2,000,000 out of USD$6,000,000 has to be repaid on/before September 30, 2006 and the balance of USD$4,000,000 shall be repaid on/before December 31, 2006 respectively. After the payment of USD$2,000,000 is made, Creditor Banks agree the Chiao Tung Bank Trust Department to be released as Trustee of APWC shares (PEWC repaid Creditor Banks in New Taiwan Dollars equivalent to USD$2,000,000 on May 11, 2006, the distribution list was attached hereto).

In order to increase the operating fund of PEWC, Creditor Banks in principle approve the loan to be provided by Chinfon Bank in the amount equivalent to the amount earlier raised by PEWC itself, and Creditor Banks also agree that Chinfon Bank is entitled to share with Jih Sun International Bank and Cathay United Bank the right to and interest in the collateral under certain syndicated loans. However, the monthly calculation basis of repayment fund provided by PEWC from October 2005 shall not include the syndication loan in the amount of USD$30,000,000.

Regarding the plan which PEWC intends to purchase the shares held by its affiliate companies to solve the insufficiency of funds of the said companies, Creditor Banks in principle agree that PEWC, in view of its liabilities resulting from its provision of endorsement and/or guarantee to (including the provision of the collaterals) its subsidiaries and its affiliate companies, is permitted to repay part of interests for these companies during the work-out period, so long as such repayment would not affect its own operation and financial situation. For those subsidiaries and affiliate companies which PEWC does not provide endorsement and/or guarantee, PEWC should follow the resolutions adopted under the work-out scheme.

9.	Other business:

KPMG has verbally resigned from its position as the supervising accountant for PEWC and its subsidiaries from May 31, 2006. We will discuss this matter in the upcoming meeting.

10.	End of Meeting

Exhibit 8

List of Significant Subsidiaries

Place of incorporation and operations		Percentage of equity interest
The British Virgin Islands
Asia Pacific Wire & Cable General Holdings Ltd.		100%
PRC (APWC Holding Ltd.)		100%
Samray Inc.		100%
Siam (APWC) Holdings Ltd.		100%
Moon View Ltd.		100%
Trigent Investment Holdings Ltd.		100%
Crown Century Holdings Ltd.		100%
Singapore
Sigma Cable Company (Private) Ltd.		98.30%
Sino-Sin Trading Pte. Ltd.		100%
Sigma-Epan International Pte. Ltd.		100%
Singvale Pte. Ltd.		100%
The People’s Republic of China
Ningbo Pacific Cable Co., Ltd.		94.31%
Shanghai Yayang Electric Co., Ltd.		56.73
Shandong Pacific Fiber Optics Co., Ltd.		51%
Pacific Electric Wire & Cable (Shenzhen) Co., Ltd.		100%
Hong Kong
Crown Century Holdings Ltd.		100%
Australia
Australia Pacific Electric Cable Pty Ltd.		98.53%

Thailand
Charoong Thai Wire and Cable Public Co., Ltd.		52.83%
Siam Pacific Electric Wire & Cable Co., Ltd.		52.83%
Pacific-Thai Electric Wire & Cable Co., Ltd.		52.83%
Hard Lek Ltd.		73.98%
APWC (Thailand) Co., Ltd.		95.66%
PEWC (Thailand) Co., Ltd.		95.66%
Myanmar
Myanmar Sigma Cable Co., Ltd.		78.59%

Exhibit 11

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED

CODE OF ETHICS

for

CHIEF EXECUTIVE OFFICER

and

SENIOR FINANCIAL OFFICERS

General Philosophy

The honesty, integrity and sound judgment of the chief executive officer (the “ CEO ”) and the senior financial officers of Asia Pacific Wire & Cable Corporation (“ APWC ”) are fundamental to the reputation and success of APWC.

Applicability

Each of the chief executive officers and senior financial officers of APWC shall be bound by this Code of Ethics, and the phrase “the CEO and the senior financial officers” shall include each of them.

CEO and Senior Financial Officers Code of Ethics

To the best of their knowledge and ability, the CEO and the senior financial officers of shall, in performing his or her duties:

•	Act with honesty and integrity, and avoid, or handle ethically and with full internal disclosure as provided below, actual or apparent conflicts of interest between personal and professional relationships.

•	Act in good faith, with due care, competence and diligence, to provide colleagues with information that is accurate, complete, objective, relevant, timely and understandable, and to use and promote independent judgment.

•	Strive to provide full, fair, accurate, timely and understandable disclosure in all reports and document that APWC files with, or submits to, the Securities and Exchange Commission and other government or regulatory agencies or includes in public communications made by APWC.

•	Strive to identify and rectify any significant deficiencies in the design or operation of internal controls or disclosure controls which could adversely affect APWC’s ability to record, process, summarize and report financial or other required information.

•	Comply in all material respects with applicable laws, rules and regulations of federal, state, and local governments (both United States and foreign) and other appropriate private and public regulatory agencies.

•	Respect the confidentiality of information acquired in the course of employment, disclosing it only when authorized or legally obligated to do so, and never using it for personal advantage.

•	Share knowledge and maintain skills necessary and relevant to APWC’s needs.

•	Proactively promote ethical and honest behavior within APWC.

•	Assure responsible use of and control of all assets, resources and information of APWC.

•	Promptly report, and promote prompt internal reporting of,

(i)

any violations of this Code of Ethics;

(ii)

any fraud, whether or not material, that involves management or other employees who have a significant role in APWC’s financial reporting, disclosures or internal controls; and

(iii)

any material violation of the securities or other laws, rules or regulations applicable to APWC by APWC or any employee or agent thereof.

Such report shall be made to the CEO (if not involved), to the Chief Financial Officer (if not involved), to the General Counsel and/or to the Audit Committee (for which the procedures established by the Audit Committee for the confidential, anonymous submission of concerns by employees may be used).

The CEO and all senior financial officers are required to adhere to this Code of Ethics at all times. The Board of Directors shall have the sole and absolute discretionary authority to approve any waiver from, or amendment of, this Code of Ethics. Any such waiver and the grounds for such waiver for the CEO or a senior financial officer, and any such amendment, shall be promptly disclosed in a manner and with such particularity as is consistent with applicable law and this Code of Ethics.

Any of the covered officers who ignore or violate this Code of Ethics will be subject to corrective action, which may include immediate dismissal.

Exhibit 12.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Yuan Chun Tang, certify that:

1.	I have reviewed this annual report on Form 20-F of Asia Pacific Wire & Cable Corporation Limited;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:

November 5, 2007


/s/ Yuan Chun Tang
Yuan Chun Tang Chief Executive Officer

Exhibit 12.2

Certification of Interim Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Samuel See, certify that:

1.	I have reviewed this annual report on Form 20-F of Asia Pacific Wire & Cable Corporation Limited;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 5, 2007
/s/ Samuel See
Samuel See
Interim Chief Financial Officer

Exhibit 13.1

Certification Pursuant to 18 U.S.C. Section 1350 as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the periodic report of Asia Pacific Wire & Cable Corporation Limited (the “Company”) on Form 20-F for the period ended December 31, 2004 as filed with the Securities and Exchange Commission (the “Report”), I, Yuan Chun Tang, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.


Date:	November 5, 2007	/s/ Yuan Chun Tang
		Yuan Chun Tang Chief Executive Officer

Exhibit 13.2

Certification Pursuant to 18 U.S.C. Section 1350 as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the periodic report of Asia Pacific Wire & Cable Corporation Limited (the “Company”) on Form 20-F for the period ended December 31, 2004 as filed with the Securities and Exchange Commission (the “Report”), I, Samuel See, Interim Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Date:	November 5, 2007	/s/ Samuel See
		Samuel See
		Interim Chief Financial Officer

Exhibit 15(a)

CHARTER

of the

AUDIT COMMITTEE

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED

The Board of Directors of Asia Pacific Wire & Cable Corporation Limited (the “ Company ”) has adopted and approved this Charter, setting forth the purpose, responsibilities, authority and membership requirements of its Audit Committee.

1.	PURPOSE

The primary purpose of the Audit Committee (the “ Committee ”) is to assist the Board of Directors (the “ Board ”) in overseeing (a) the quality and integrity of the financial statements and other financial information provided by the Company to the stockholders of the Company, any governmental or regulatory body, the public or other users thereof, (b) the Company’s compliance with legal and regulatory requirements, (c) the qualifications, independence and performance of the Company’s independent auditors, and (d) the performance of the Company’s internal audit function.

2.	MEMBERSHIP

The Committee shall be comprised of not less than two members of the Board. Each member of the Committee shall satisfy the “independence” requirements of (i) Section 10A of the Securities Exchange Act of 1934 (the “ Exchange Act ”), (ii) the rules of the Securities and Exchange Commission (the “ SEC ”) adopted pursuant to such Section 10A, and (iii) any other applicable regulatory requirements. At least one member of the Committee shall qualify as an “audit committee financial expert” in accordance with the rules of the SEC.

The members and the Chair of the Committee shall be appointed by the Board. The members and the Chair of the Committee shall serve at the pleasure of the Board for such term or terms as the Board may determine .

3.	RESPONSIBILITIES

The following functions shall be the common recurring activities of the Committee in carrying out its oversight function.

A. Responsibilities Relating to Financial Reports

1.	Scope of Audit

The Committee shall review annually with management and the independent auditors the scope and general extent of the independent auditors’ examination prior to the commencement of the annual audit.

2.	Annual Financial Statements

The Committee shall review with management and the independent auditors the audited financial statements to be included in the Company’s Annual Report to Stockholders and Annual Report on Form 20-F and the Company’s disclosure under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

3.	Quarterly Financial Statements

The Committee shall review with management and the independent auditors, prior to the filing of any Form 6-K, the Company’s interim financial results to be included in such report and the Company’s disclosure under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

4.	Accounting Principles

From time to time, the Committee shall review and discuss, with management and/or the independent auditors, (a) significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements; (b) major issues regarding accounting principles and financial statement presentation, including major changes to the Company’s selection or application of accounting principles; and (c) the effect on the Company’s financial statements of significant regulatory and accounting initiatives and any material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of the Company with unconsolidated entities

B. Responsibilities Relating to Independent Auditors

1.	Discussions with Auditors on Independence

The Committee shall, at least annually, obtain and review a written report from the independent auditors describing all relationships between the independent auditors and the Company; discuss with the independent auditors any such disclosed relationships and their impact on the independent auditors’ objectivity and independence; and consider whether the provision of non-audit services by the independent auditors is compatible with maintaining the independent auditors’ independence.

2.	Report on Auditor Qualifications

The Committee shall, at least annually, obtain and review a written report from the independent auditors describing: (a) the auditing firm’s internal quality control procedures, and (b) any material issues raised by the most recent internal quality-control review, or peer review, of the independent auditors, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting any audit carried out by the independent auditors, and any steps taken to deal with any such issues.

3.	Other Auditor Reports

The Committee shall review any reports provided by the independent auditors to the Committee as required under the Exchange Act with regard to (a) critical accounting policies and practices used by the Company; (b) alternative treatments of financial information within GAAP for policies and practices related to material items that have been discussed with management (including ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditors); and (c) other material written communications between the independent auditors and management, such as any “management” or “internal control” letter, or schedule of unadjusted differences.

4.	Audit Issues

The Committee shall regularly review with the independent auditors and management any problems or difficulties the auditors may have encountered in the course of their audit work, and management’s response thereto, including any restrictions on the scope of activities or access to requested information, and any significant disagreements with management.

5.	Hiring Employees of Auditors

The Committee shall establish policies for hiring current or former partners, principals, shareholders or employees of the independent auditors in accordance with applicable law.

C . Responsibilities Relating to Internal Audit Function and Internal Controls

1.	Internal Audit Function

The Committee shall have principal responsibility to assist with the Board’s oversight of the Company’s internal audit function, including review of the performance of the internal audit function in providing management and the Committee with ongoing assessments of the Company’s risk management processes and system of internal controls.

2.	Internal Controls; Executive Sessions

The Committee shall meet periodically with management, the person(s) primarily responsible for the internal audit function and the independent auditors in separate executive sessions to discuss any major issues as to the quality and adequacy of the Company’s internal controls, and any other matters that the Committee or any of these groups believes should be discussed privately.

3.	Risk Assessment and Management

The Committee shall periodically discuss policies and guidelines with respect to risk assessment and risk management, the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures.

D . Other Activities

1.	Earnings Releases; Guidance to Analysts

The Committee shall, from time to time, discuss and review generally earnings press releases (with particular attention to any use of “pro forma” or “adjusted” non-GAAP information,) as well as financial information and earnings guidance, if any, provided to analysts and rating agencies.

2.	Legal Matters

The Committee shall review periodically with the Company’s General Counsel legal matters that may have a material impact on the financial statements, the Company’s compliance policies and any material reports or inquiries received from regulators or governmental agencies.

3.	Complaint Procedures

The Committee shall establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

4.	Review of Charter and Committee Performance

The Committee shall review and assess the adequacy of this Charter and the Committee’s performance on an annual basis.

5.	Other Activities

The Committee may perform any other activities consistent with this Charter, the Company’s by-laws and governing laws that the Committee or the Board deems necessary or appropriate.

4.	AUTHORITY AND RESOURCES

Access

The Committee shall have full and unrestricted access to all books, records, facilities and personnel of the Company as required or appropriate in the Committee’s sole discretion to properly discharge its responsibilities. The Committee is empowered to investigate any matter relating to its responsibilities brought to its attention.

2.	Authority Concerning Auditors

The Committee shall have the sole authority to, and shall, directly appoint, retain, set the terms of engagement of, evaluate, terminate, oversee and cause the Company to compensate the Company’s independent auditors (including resolution of disagreements between management and the independent auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, audit-related or attest services for the Company. The independent auditors shall report directly to the Committee.

3.	Pre-Approval of Non-Audit Services

The Committee shall have sole authority to pre-approve all engagements for non-audit services permitted under the Exchange Act to be performed for the Company by the independent auditors. The Committee may pre-approve non-audit and audit-related services pursuant to pre-approval policies and procedures adopted by the Committee.

4.	Advisors

The Committee has the authority to retain independent legal, accounting and other advisors to advise the Committee as the Committee shall deem appropriate in the discharge of its responsibilities.

Funding

The Committee has the authority to determine the appropriate amount of, and require the Company to pay, compensation to the independent auditors for services rendered to the Company, compensation to any independent legal, accounting and other advisors retained to advise the Committee, and the administration expenses that are necessary or appropriate in the Committee’s sole discretion in the carrying out of the Committee’s duties.

5.	LIMITATIONS OF COMMITTEE’S ROLE

The Committee’s job is one of oversight and it recognizes that the Company’s management is responsible for preparing the Company’s financial statements and that the independent auditors are responsible for auditing those financial statements. The Company’s financial management, as well as the Company’s independent auditors, have more time, knowledge and detailed information about the Company than do Committee members. Consequently, in carrying out its oversight responsibilities, the Committee is not providing any expert or special assurance as to the Company’s financial statements or any professional certification as to the independent auditors’ work.

In carrying out its responsibilities, the Committee and its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances and, accordingly, the Committee may diverge from the forgoing functions as appropriate given the circumstances.

6.	DELEGATION

The Committee may, in its discretion, form and delegate all or a portion of its authority and responsibilities to subcommittees (which may be the Chair or other member) of the Committee when appropriate, as permitted by the Exchange Act, the rules of the SEC and other applicable law, including the authority to grant pre-approvals of engagements related to audit, audit-related and non-audit services permitted under the Exchange Act, provided that the decisions of any such subcommittee to grant pre-approvals shall be presented to the Committee and subject to the disclosure provisions of the Exchange Act.

7.	MEETINGS

The Committee shall meet at least four times per year on a quarterly basis, or more frequently as circumstances require. The Committee shall report periodically to the Board at regularly scheduled Board meetings.

[As approved by the Audit Committee and the Board of Directors: April 26, 2005.]