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UNITED STATES
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
OR
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for
the fiscal year ended December. 31, 2023
o
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
o
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
OR
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)
15/Fl. B, No. 77, Sec. 2
Dunhua South Road
Taipei, 106, Taiwan
Republic of China
(Address of principal executive offices)
Ivan Hsia
15/Fl. B, No. 77, Sec. 2
Dunhua South Road
Taipei, 106, Taiwan
Republic of China
Tel: +886-2-27122558
Email: ivan.hsia@apwcc.com
(Name, telephone, e-mail and/or facsimile number and address of company contact person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class
Common Shares,
par value 0.01 per share
Trading Symbol(s)
Name of each exchange on which registered
APWC
NASDAQ Capital Market
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
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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.
20,616,227 Common Shares outstanding as of December 31, 2023
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
oYes x 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.
oYes x No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
xYes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files).
x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an
emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
Large accelerated Filer o Accelerated filer o Non-accelerated filer x Emerging growth company o
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if
the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report. o
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-
1(b).☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this
filing:
U.S. GAAP o
International Financial Reporting Standards as issued by the International Accounting Standards Board x
Other o
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow.
o Item 17 o Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
o Yes x No
1
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Table of Contents
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Part I
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Item 1: Identity of Directors, Senior Management and Advisers
Item 2: Offer Statistics and Expected Timetable
Item 3: Key Information
3.A. Selected Consolidated Financial Data
3.B. Capitalization and Indebtedness
3.C. Reasons for the Offer and Use of Proceeds
3.D. Risk Factors
Item 4: Information on the Company
4.A. History and Development of the Company
4.B. Business Overview
4.C. Organizational Structure
4.D. Property, Plants and Equipment
Item 4A: Unresolved Staff Comments
Item 5: Operating and Financial Review and Prospects
5.A. Operating Results
5.B. Liquidity and Capital Resources
5.C. Research and Development
5.D. Trend Information
5.E. Critical Accounting Estimates
Item 6: Directors, Senior Management and Employees
6.A. Directors and Senior Management
6.B. Compensation
6.C. Board Practices
6.D. Employees
6.E. Share Ownership
6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Item 7: Major Shareholders and Related Party Transactions
7.A. Major Shareholders
7.B. Related Party Transactions
Item 8: Financial Information
8.A. Consolidated Statements and Other Financial Information
8.B. Significant Changes
Item 9: The Offer and Listing
Item 10: Additional Information
10.A. Share Capital
10.B. Memorandum of Association and Bye-Laws
10.C. Material Contracts
10.D. Exchange Controls
10.E. Taxation
10.F. Dividends and Paying Agents
10.G. Statement by Experts
10.H. Documents on Display
10.I. Subsidiary Information
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Item 11: Quantitative and Qualitative Disclosures About Market Risks
11.1 Interest Rate Risk
11.2 Foreign Currency Risk
11.3 Market Risks Relating to Copper
11.4 Equity Price Risk
11.5 Fair Value of Designated Market-Sensitive Derivative Contracts
Item 12: Description of Securities Other than Equity Securities
Part II
Item 13: Defaults, Dividend Arrearages and Delinquencies
Item 14: Material Modifications to the Rights of Security Holders and Use of Proceeds
Item 15: Controls and Procedures
Item 16A: Audit Committee Financial Expert
Item 16B: Code of Ethics
Item 16C: Principal Accountant Fees and Services
Item 16D: Exemptions from the Listing Standards for the Audit Committees
Item 16E: Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Item 16F: Change in Registrant’s Certifying Accountant
Item 16G: Corporate Governance
Item 16H: Mine Safety Disclosure
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item 16J. Insider Trading Policies
Item 16K. Cybersecurity
Item 17: Financial Statements
Item 18: Financial Statements
Item 19: Exhibits
19.1 Index to Audited Financial Statements
19.2 Index to Exhibits
Part III
Signature
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CERTAIN DEFINITIONS AND CONVENTIONS
Unless the context otherwise indicates or requires, all references to:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
the terms “we,” “us,” “our,” and “APWC” refer to Asia Pacific Wire & Cable Corporation Limited, a holding company
incorporated in Bermuda with principal executive offices in Taipei, Taiwan.
the terms “our Company,” “our business” and “our operations” refer to APWC together with our operating subsidiaries.
Dollar amounts in this Annual Report are expressed in thousands ($000), except where otherwise indicated (e.g. “million”)
or with respect to earnings per share.
the terms “dollar”, “US$” or “$” refer to U.S. dollars, the lawful currency of the United States of America.
“Bt,” “Thai Baht”, “THB” or “Baht” refer to Baht, the legal tender currency of Thailand.
“Sing$” or “S$” refer to Singapore dollars, the legal tender currency of Singapore.
“A$” or “AU$” refer to Australian dollars, the legal tender currency of Australia.
"TWD" refers to the Taiwan New Dollar, the legal tender currency of Taiwan.
“RMB” refers to the Chinese Renminbi, the legal tender currency of China.
“Thailand” refers to the Kingdom of Thailand.
“Singapore” refers to The Republic of Singapore.
“Taiwan” or "ROC" refer to Taiwan, The Republic of China.
“China” or “PRC” refer to The People’s Republic of China (for the purpose of this Annual Report, excluding Hong Kong
and Macau).
“Australia” refers to the Commonwealth of Australia.
“United States” or “U.S.” refer 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 or 1,000 kilograms.
All references to “outstanding” in respect of APWC’s Common Shares shall mean that such Common Shares have been issued
by APWC and are not registered in APWC’s register of members as treasury shares.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This annual report on Form 20-F ("Annual Report") contains forward-looking statements within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of 1995. 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”, “may”,
“should”, “likely”, “seeks” 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
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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 impact of
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the COVID-19 pandemic on our business, operations, demands for our products, results, financial position and liquidity; the extreme
volatility in the demand for and the pricing of commodities, including copper, our principal raw material, and their individual or
collective impact on demand for our products and services; the introduction of competing products or technologies; the volatility of
share prices on major securities exchanges throughout the world, our inability to successfully identify, consummate and integrate
acquisitions; our potential exposure to liability claims; the uncertainty and volatility of the markets in which we operate; changes in
laws or regulations applicable to our Company in the markets in which we conduct business; the availability and price of copper, our
principal raw material, including the effects of recent and potential economic sanctions on Russia; our ability to negotiate extensions of
labor agreements on acceptable terms and to successfully deal with any labor disputes; our ability to service and meet all requirements
under our debt, and to maintain adequate credit facilities and credit lines; in certain markets, our ability to compete effectively with
state-owned enterprises (“SOEs”), which may receive governmental subsidies to enhance results or receive preferred vendor status in
state controlled projects; our ability to make payments of interest and principal under our existing and future indebtedness; our ability
to increase manufacturing capacity and productivity; the fact that we have operations outside the United States that may be materially
and adversely affected by acts of terrorism, war and political and social unrest, or major hostilities; exposure to political and economic
developments; COVID-19 and government implemented lockdowns, circuit breakers, and other mandates that may adversely affect our
business and operations; crises, instability, terrorism, civil strife, expropriation and other risks of doing business in foreign markets;
economic consequences arising from natural disasters and other similar catastrophes, such as floods, earthquakes, hurricanes and
tsunamis; the fact that APWC is a holding company that depends for income upon distributions from operating subsidiaries, most of
which are not wholly-owned and for which there may be restrictions on the timing and amount of distributions; price competition and
other competitive pressures; the impact of climate change on our business and operations and on our customers; tax inefficiencies
associated with our cross-border operations, including without limitation, limitations on our ability to utilize net losses within our group
of companies for income tax purposes; fluctuations in currency, exchange and interest rates, operating results and the impact of
technological changes and other factors that are discussed in this report and in our other filings made with the Securities and Exchange
Commission (the “SEC”). Statements about the effects of the COVID-19 pandemic on our business results, financial position and
liquidity are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected.
In particular, these statements include, among other things, statements relating to:
•
•
•
•
•
•
•
our business strategy;
our prospects for future revenues and profits in the markets in which we operate;
the impact of political, legal or regulatory changes or developments in the markets in which we do business;
our dependence upon the level of business activity and investment by our customers for the generation of our sales revenue;
our reliance on our majority shareholder for research and development relating to our product lines; the fact that APWC’s
common shares (the “Common Shares”) are traded on a national exchange in the United States and the relative liquidity or
lack thereof, based upon the historical trading volume of our publicly-traded Common Shares and the small size of our
public float;
our dependence on a limited number of suppliers for our raw materials and our vulnerability to fluctuations in the cost and
availability of such raw materials; and
the liquidity (or lack thereof) generally of our property and assets.
We undertake no obligation to update any forward-looking statements or other information contained in this Annual Report,
whether as a result of new information, future events or otherwise, except as required by law. You are advised, however, to consult any
additional disclosures we make in our filings with the SEC. Also note that we provide a cautionary discussion of risks and uncertainties
under the “Risk Factors” section of this Annual Report. These are factors that we think could cause our actual results to differ
materially from expected results. Other factors besides those listed there could also adversely affect us.
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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
3.A. Selected Consolidated Financial Data
The following selected consolidated financial data is derived from the consolidated financial statements of our Company for the
years ended December 31, 2023, 2022, 2021, 2020 and 2019, prepared in accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
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The selected data set forth below should be read in conjunction with, and is qualified in its entirety by, the discussion in “Item 5.
Operating and Financial Review and Prospects” and the consolidated financial statements and the notes thereto referenced in “Item 18.
Financial Statements.”
For the Year Ended December 31,
2023
2022
2021
2020
2019 (2)
(in US$ thousands, except for earnings per share)
Income Statement Data:
Revenue
Costs of sales
Gross profit
Other operating income
Selling, general & administrative
expenses
Other operating expenses
Net impairment loss on financial and
contract assets
Operating profit/(loss)
Finance costs
Finance income
Share of loss of associates
Exchange gain/(loss)
Other income
Other expense
Profit before taxes
Income taxes expense
Profit/(loss) for the year
Attributable to:
Equity holders of APWC
Non-controlling interests
Earnings per share (1)
Basic and diluted profit/(loss) for the
year attributable to equity holders of the
parent
$
$
$
$
$
425,772 $
433,893 $
476,659 $
313,564 $
(395,545)
(401,363)
(455,508)
(279,686)
30,227
433
(24,472)
—
(4,640)
1,548
(2,527)
205
(2)
679
570
(9)
464
(162)
302 $
32,530
1,026
(24,978)
(3)
(508)
8,067
(1,650)
120
(1)
143
889
(3)
7,565
(2,808)
21,151
587
(26,484)
(7)
(220)
(4,973)
(1,251)
123
(1)
(4,425)
671
(1)
(9,857)
1,345
33,878
814
(27,006)
(5)
(124)
7,557
(744)
320
(1)
(579)
1,173
(1)
7,725
(4,016)
4,757 $
(8,512) $
3,709 $
3,867 $
(3,565) $
3,874 $
883 $
(2,642) $
(5,870) $
(552) $
4,261 $
338,160
(313,373)
24,787
385
(25,051)
(547)
(223)
(649)
(1,012)
506
(3)
1,550
717
(3)
1,106
(2,057)
(951)
(1,632)
681
0.19 $
0.19 $
(0.19) $
(0.04) $
(0.12)
7
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Balance Sheet Data:
Cash and cash equivalents
Working capital
Total assets
Total debts
Net assets
Capital stock
Total APWC shareholders’ equity
2023
2022
2021
2020
2019 (2)
As of December 31,
(in US$ thousands)
$
$
$
$
$
$
$
37,970 $
54,017 $
44,507 $
52,237 $
154,377
366,664
53,737
214,621
206
157,059
165,926
371,019
57,731
211,428
206
151,595
149,810
389,428
65,387
209,317
138
147,500
180,323
338,119
13,781
234,875
138
157,860
53,673
185,855
298,911
11,356
228,435
138
153,854
(1)
(2)
The calculation of the earnings per share is based on 20,616,227 basic and diluted weighted Common Shares issued and
outstanding for the year ended December 31, 2023. For the year ended December 31, 2022, it was based on 20,020,364 basic
and diluted weighted Common Shares issued and outstanding; and was based on 13,819,669 basic and diluted weighted
Common Shares issued and outstanding for each of the year ended December 31, 2021, 2020, and 2019.
Includes the impact of the application of IFRS 16.
3.B. Capitalization and Indebtedness
Not applicable
3.C. Reasons for the Offer and Use of Proceeds
Not applicable.
3.D. Risk Factors
You should carefully consider the risk factors set forth below in connection with any investment in APWC, including any
investment in the Common Shares. If any one of these risks or uncertainties occurs, our business, financial condition and results of
operations could be materially and adversely affected. The risks described in this Annual Report on Form 20-F are not the only ones
facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations.
Any of these risks could materially and adversely affect our business, financial condition, results of operations and cash flows, and
could result in a loss of all or part of your investment.
Summary of Risk Factors
The following is a summary of the principal risks we face, organized under relevant headings. The list below is not exhaustive,
and you should read the “Risk Factors” section in full.
Risks Related to Our Business (for more detailed discussion, see “Risk Factors -- Risks Related to Our Business”)
•
•
•
•
Pandemics, epidemics or disease outbreaks, such as COVID-19 pandemic, have, and may in the future, could have a
material adverse effect on our business, financial condition and, results of operations.
Significant volatility in copper prices could be detrimental to our Company’s profitability.
The markets in which we operate are highly competitive and may be affected by competition with SOEs and we cannot
guarantee we will have the available capital to make necessary capital expenditures.
We operate in highly concentrated end markets, and the loss of individual customers in such markets could have a
material adverse impact on our position in that market as a whole.
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•
Our business could be harmed if we fail to attract and retain qualified personnel.
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•
•
We are subject to certain environmental protection laws and regulations governing our operations.
Information systems failure or cybersecurity breaches could have a material adverse effect on our Company, including on
our business, financial condition, and results of operations.
Risks Related to our Financial Activities (for more detailed discussion, see “Risk Factors -- Risks Related to our Financial
Activities”)
•
•
Restrictive covenants and default provisions in our existing debt agreements may materially restrict our operations as well
as adversely affect our liquidity, business, financial condition and results of operations.
We are exposed to foreign exchange rate risk.
Risk Related to the Regions in Which We Operate (for more detailed discussion, see “Risk Factors -- Risks Related to the
Regions in Which We Operate”)
•
•
•
•
•
•
The performance of our Company’s Thai operations is affected by the political and economic situation in Thailand.
The PRC legal system may limit our Company’s remedies, impacting our subsidiaries’ ability to enforce agreements in the
PRC with third parties.
The enforcement of laws, rules and regulations in the PRC can change quickly with little advance notice. Uncertainties
exist with respect to the interpretation and implementation of the PRC laws regarding foreign investment, cybersecurity,
personal data protection and anti-monopoly, and any change in government interpretation or enforcement could implicate
our PRC subsidiaries and have a material adverse effect on us.
PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay or prevent us
from making loans or additional capital contributions to our PRC subsidiaries.
The PRC government’s control of currency conversion and expatriation of funds may affect our liquidity.
Political or social instability, including tensions between PRC and Taiwan, may materially adversely affect our
Company’s business, financial condition, and results of operations.
Risks Related to the Common Shares and APWC (for more detailed discussion, see “Risk Factors -- Risks Related to the
Common Shares and APWC”)
•
•
•
•
•
•
The Common Shares may be delisted from Nasdaq, which could affect their market price and liquidity.
As a foreign private issuer, there is less publicly available information concerning our Company than there would be if
APWC was a U.S. public company.
Our Common Shares have a limited public float and are subject to price volatility, which could adversely affect our
prevailing market price.
APWC may not be able to resume paying a dividend and any dividends paid in the future could be reduced or eliminated,
which could adversely affect our prevailing market price.
Our holding company structure and potential restrictions on the payment of dividends could materially adversely affect
our market price.
APWC is incorporated in Bermuda, and investors may face limited recourse and enforceability against APWC as well as
its directors and officers as compared to corporations incorporated in the U.S.
Control of APWC rests with its majority shareholder, Pacific Electric Wire & Cable Co., Ltd., a Taiwanese company ("PEWC"),
and APWC relies on Nasdaq’s controlled company and foreign private issuer exemptions, all of which could materially and adversely
affect our corporate governance.
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Risks Related to Our Business
Pandemics, epidemics or disease outbreaks, such as COVID-19 pandemic, have, and may in the future, could have a material
adverse effect on our business, financial condition and, results of operations.
The global spread of the Coronavirus Disease 2019 (“COVID-19”) has significantly impacted worldwide economic activity and
financial markets. Our operations and production have been affected and disrupted by the outbreak of COVID-19, such as reducing on-
site staff and transitioning a significant portion of our workforce to remote work. Moreover, mandated COVID-19 measures have led to
operating below standard production levels. Additionally, COVID-19 has affected and disrupted our suppliers, customers, and other
business partners, leading to challenges such as travel restrictions, business closures, and reduced demand for our products.
Although the effects of COVID-19 during 2023 were not as significant as in prior years, new variants continued to cause waves
of COVID-19 cases around the world. Furthermore, if a new pandemic, epidemic or disease outbreak were to occur, we could
experience broad and varied impacts similar to the impact of COVID-19. However, the occurrence or continuation of any of these
events, including the reemergence of COVID-19 in severity, could materially affect our business, financial condition, and results of
operations.
Significant volatility in copper prices could be detrimental to our Company’s profitability.
Copper is the principal raw material we use, accounting for a majority of the cost of sales. Our prevailing practice is to purchase
copper at prices based on the average prevailing international spot market prices on the London Metal Exchange (the “LME”) for
copper for the one month prior to purchase. The price of copper is affected by numerous factors beyond our control, including global
economic and political conditions, supply and demand, inventory levels maintained by suppliers, potential disruptions in supply of
copper (including as the result of economic sanctions on copper producers such as Russia), actions of participants in the commodities
markets and currency exchange rates. As with other costs of production, changes in the price of copper may affect our Company’s cost
of sales. Whether this has a material impact on our operating margins and financial results depends primarily on our Company’s ability
to adjust selling prices to its customers, such that increases and decreases in the price of copper are fully reflected in those selling prices
and customers continue to place orders. In the cases when we enter into a long-term sales contract at fixed selling prices, rising copper
prices could render such contract onerous and our Company would be required to recognize losses from this onerous contract in the
income statement. Most of our sales of manufactured products reflect the cost of copper used to manufacture those products at the time
the products are ordered. In the ordinary course of business we maintain inventories of raw materials and finished products reasonably
necessary for the conduct of our business. These inventories typically reflect the cost of copper prevailing in the market at the time of
purchase. A long-term decrease in the price of copper would require our Company to revalue its inventory at periodic intervals to the
then net realizable value, which could be below cost. Copper prices have been subject to considerable volatility, and it is not always
possible to manage our copper purchases and inventory so as to neutralize the impact of copper price volatility. In addition, an
excessive increase in the price of copper could result in fewer orders from customers or increased cost of sales given agreed sales
prices, and negatively impact our Company. Accordingly, significant volatility in copper prices could have a material adverse effect on
our business, financial condition and results of operations.
The ability of suppliers to deliver raw materials, parts and components and energy resources could affect our Company’s ability to
manufacture products without disruption and in turn negatively affect our operations.
Our Company uses a range of materials, including copper, aluminum, polyethylene and polyvinyl chloride compound in the
global production of our products, which come from numerous suppliers. Our operations and those of our suppliers are subject to
disruption by supply chain issues due to economic, political and other factors largely beyond our Company’s control, including
COVID-19 related supplier plant shutdowns or slowdowns, component shortages, supply chain disruptions and delays, fluctuations in
shipping costs, work stoppages, labor shortages, financial issues such as supplier bankruptcy, information technology failures, and
hazards such as fire, earthquakes, flooding, droughts or other natural disasters, new laws or regulations, global economic or political
events including terrorist attacks and war, and suppliers’ allocations to other purchasers. The effects of climate change, including
extreme weather events, long-term changes in temperature levels, water availability, supply costs impacted by increasing energy costs,
or energy costs impacted by carbon prices or offsets may exacerbate these risks. Any inability of suppliers to deliver parts, components
and manufacturing equipment to our Company’s manufacturing facilities, and any inability to manufacture without disruption, could
affect our adversely business’s performance.
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The markets in which we operate are highly competitive.
The wire and cable industry in the Asia Pacific region is highly competitive, and if we fail to successfully invest in and maintain
product development, productivity improvements and customer service and support, sales of our products could be materially adversely
affected. Our competitors include a large number of independent domestic and foreign suppliers. Certain competitors in each of our
markets have substantially greater manufacturing, sales, research and financial resources than us. We and other wire and cable
producers compete primarily on the basis of product quality and performance, reliability of supply, customer service, and price. To the
extent that one or more of our competitors are more successful with respect to the primary competitive factors, our business could be
materially adversely affected. In addition, our Company’s business could be materially adversely impacted if low margin wire and
cable manufacturers in China enter into the markets where we operate, like they have in Australia and Singapore. Our Company’s
business, financial condition and results of operations may also be materially adversely affected in the event it must compete with
SOEs, which are often subsidized by the government such that they are protected against the challenges of market forces confronting
private enterprises. When SOEs enter the market, it can become untenable for private enterprises in competition with SOEs to conduct
profitable operations when the SOEs are being subsidized by the government and may operate in a loss position for an extended period.
Certain of our products are made to common specifications and may be interchangeable with the products of certain of our competitors.
Since customers could potentially substitute our products with those of our competitors, customer loyalty is an important pillar of our
business’s competitive position.
In addition, in order to remain competitive in the industry, our Company must periodically make substantial investments in
capital equipment to ensure that our production processes are and remain state-of-the-art. Capital expenditures are not always
predictable, as they are often driven by customer requirements for enhanced products. We cannot guarantee we will have the available
capital to make such capital expenditures when required, which could materially adversely affect our business, financial condition and
results of operations.
Alternative
telecommunications products.
transmission
technologies, such as wireless
telecommunications, could materially reduce sales of our
Our telecommunications cable business is subject to competition from other transmission technologies, principally wireless-
based technologies. 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. These technologies present significant competition in the
markets in which we conduct or plan to conduct business and no assurance can be given that the future development and use of such
alternative technologies will not materially adversely affect our business, financial condition and results of operations.
We operate in highly concentrated end markets.
Failure to properly execute customer projects in markets where a small number of customers are responsible for a large portion
of our sales could materially adversely impact our ability to obtain similar contracts from other customers in that market and may result
in material financial penalties. In certain of our markets, sales of manufactured products are highly concentrated in large SOEs or large
private infrastructure developers. As those markets are often highly concentrated, the loss of individual customers in such markets
could have a material adverse impact on our position in that market as a whole and could materially adversely affect our business,
financial condition and results of operations.
Pacific Electric Wire & Cable Co., Ltd. may not perform its obligations under the Composite Services Agreement.
We engage in transactions in the ordinary course of business with our controlling shareholder, PEWC, including the purchase of
certain raw materials and the distribution of PEWC’s 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. The Composite
Services Agreement is renewable at our option and is currently in force. Under the Composite Services Agreement, PEWC has agreed
to supply APWC with copper and provides research and development for our products. Although PEWC has performed its obligations
under the Composite Services Agreement to date, we are unable to ensure that PEWC will not in the future seek to limit, or be unable
to perform in whole or in part, the business it conducts with our Company pursuant to the terms of the Composite Services
Agreement. Given its controlling shareholder position, PEWC could in such instance seek to influence our response to any such events
or occurrences. Any such
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limitation or inability to perform the Composite Services Agreement on PEWC’s part could have a material adverse effect on our
business, financial condition and results of operations. (See “Item 10.C. Material Contracts” for a description of the Composite
Services Agreement.)
Our insurance coverage does not cover all of our business risks.
Our global operations are subject to many risks including errors and omissions, infrastructure disruptions such as large-scale
outages or interruptions of service from utilities or telecommunications providers, supply chain interruptions, third-party liabilities and
fires or natural disasters. Our 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. Our Company does not
carry insurance for consequential loss arising from business interruptions or political disturbances and does not carry product liability
insurance. Consequently, the amount of our insurance coverage may not be adequate to cover all potential claims or liabilities, and we
may be forced to bear substantial costs resulting from the lack of adequate insurance. No assurance can be given that we will not incur
losses beyond the limits or outside the scope of coverage of our insurance policies. Accordingly, we may be subject to an uninsured or
under-insured loss in such situations. Any failure to maintain adequate insurance coverage on terms favorable to us, or at all, could
have a material adverse effect on our business, financial condition and results of operations.
A significant number of our ROW employees are members of employees’ unions.
A significant number of the employees of our Rest of World (“ROW”) segment are members of employees’ unions. Failure to
successfully negotiate and/or renew collective agreements, strikes, or other labor disputes could result in a disruption of our operations.
Any such labor dispute could lead to a disruption of our operations, hindering our ability to serve our customers, and could have a
material adverse effect on our Company and could materially adversely affect our business, financial condition and results of
operations.
Our business could be harmed if we fail to attract and retain qualified personnel.
If we fail to retain our key employees and attract qualified personnel by investing adequate resources to develop our human
capital, our business may be harmed. The loss of any of our executive officers or other key employees could have a material adverse
effect on our business, financial condition and results of operations. The loss of executive officers or key employees could impair
customer relationships and result in the loss of vital industry knowledge, expertise, and experience. There is also a risk of losing key
employees to our competitors, which could pose a possible risk of the theft of trade secrets, with competitors then gaining valuable
information about our manufacturing process. Increased costs associated with recruiting, motivating and retaining qualified personnel
could have a negative impact on our profitability. Our Company’s future success depends on its continued ability to attract and retain
talented and qualified personnel.
Our operations are subject to environmental protection laws and regulations, which impose compliance costs and subject us to
potential liabilities should we violate any of these laws and regulations.
We are subject to certain environmental protection laws and regulations governing our operations and the use, handling, disposal
and remediation of hazardous substances used by us. We could incur environmental liability from our manufacturing activities in the
event of a release or discharge by us of a hazardous substance. Under certain environmental laws, we could be held responsible for the
remediation of any hazardous substance contamination at our facilities and at third party waste disposal sites and could also be held
liable for any consequences arising out of human exposure to such substances or other environmental damage. There can be no
assurance that the costs of complying with environmental, health and safety laws and requirements arising from our current operations,
or the liabilities arising from past releases of, or exposure to, hazardous substances, will not result in future liabilities incurred, or
expenditures payable, by us that would materially adversely affect our business, financial condition and results of operations.
Information systems failure or cybersecurity breaches could have a material adverse effect on our business, financial condition,
and results of operations.
APWC's subsidiaries each have their respective information systems to support the operation of such subsidiary. While APWC’s
operating subsidiaries vary in the degree of reliance that they place on their information systems, any failure or interruption of these
systems could materially adversely affect our Company’s business, financial condition and results of operations. Among other things,
financial data may be corrupted and financial information may not be accurately reported or presented in a timely manner, which could
impair our Company’s ability to timely file periodic or annual
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reports with the SEC or timely disseminate material information to shareholders. Because there is no unified framework for
administering information systems amongst APWC’s subsidiaries, our competitors with a unified framework for administering
information systems across their subsidiaries may have a competitive advantage over us and may be able to more efficiently administer
such systems and respond to incidents and minimize risk to their business.
Cybersecurity presents risks and threats to us because intense competition in the wire and cable sector renders the Company
vulnerable to theft and copying of design specifications. While our Company relies upon its majority shareholder, PEWC, for much of
our Company's research and development, our Company's products are designed precisely to meet customer specifications for the
applications for which they are intended. Cybersecurity risks create the potential for a material adverse impact on our Company’s
business, financial condition and result of operations due to, but not limited to, losing intellectual property, implementing reactive
measures, managing litigation or investigations, addressing reputational harm, or losing a competitive advantage. To date, none of the
cyber incidents identified have had a material adverse effect on our business. However, we do not have visibility into all unauthorized
incursions and our systems may be experiencing ongoing incursions of which we are not aware. Mitigating these risks requires ongoing
management oversight to ensure that sufficient controls and procedures are in place for appropriate persons to receive pertinent
cybersecurity risk information to take appropriate action. We cannot offer any assurance that those controls and procedures will be
sufficient to protect against cybersecurity risks and that our business, financial condition and results of operations will not be materially
and adversely affected as a result of any such failure.
Increased reliance on information systems requires the implementation of information technology (“IT”) security measures to
protect networks, computers, programs and data from attack, damage or unauthorized access and ensure the confidentiality, availability
and integrity of Company data. Our Company employs safeguards, both technological and contractual, in order to protect its
proprietary interests and those of its customers and third-party licensors, including, without limitation, certain insurance against theft
and risk of loss. However, we cannot guarantee that such safeguards will protect our Company from all types of IT and cybersecurity
threats. If our Company’s IT and cybersecurity measures are compromised or otherwise fail to protect systems, networks and data, or if
an event of force majeure occurs and our Company’s disaster recovery plan does not operating effectively, our Company’s business
may be disrupted and stand to lose assets, reputation and business, and potentially face regulatory fines and litigation as well as the cost
of remediation, which could materially adversely impact our Company’s business, financial condition and results of operations.
Our multinational operations and structure subject us to potentially adverse tax consequences.
We conduct our business through operating subsidiaries and report our taxable income in multiple jurisdictions based upon our
business operations in those jurisdictions. While we believe our tax positions are consistent with the tax laws in the jurisdictions in
which we conduct our business, it is possible that these positions may be contested or overturned by jurisdictional tax authorities,
which may have a significant impact on our global provision for income taxes, which could result in one-time tax charges, higher
effective tax rates, reduced cash flows and lower overall profitability of our operations.
Certain government agencies in jurisdictions where we do business have had an extended focus on issues related to the taxation
of multinational companies. In addition, the Organization for Economic Co-operation and Development is conducting a project focused
on base erosion and profit shifting in international structures, which seeks to establish certain international standards for taxing the
worldwide income of multinational companies. As a result of these developments, the tax laws of certain countries in which we do
business could change on a prospective or retroactive basis, and any such changes could increase our liabilities for taxes, interest and
penalties, and therefore could harm our business, cash flows, results of operations and financial position.
Pursuant to the Bermuda Economic Substance Act 2018 (“ESA”) which commenced December 31, 2018, an entity that falls
within the scope of the ESA and carries on as a business any of the “relevant activities” referred to in the ESA, must comply with
economic substance requirements. The “relevant activities” include: banking, insurance, fund management, financing and leasing,
headquarters, shipping, distribution and service center, intellectual property and holding entity. An in-scope entity which is engaged in
any of the “relevant activities” must satisfy an economic substance test, by performing core income-generating activities in the
jurisdiction, being directed and managed in the jurisdiction and, having within the jurisdiction (i) an adequate amount of operating
expenditure, (ii) adequate physical presence and (iii) an adequate number of qualified full-time employees or other personnel.
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Risks Related to our Financial Activities
Restrictive covenants and default provisions in our existing debt agreements may materially restrict our operations as well as
adversely affect our liquidity, business, financial condition and results of operations.
If our business units do not generate sufficient cash flows from operations, we may be unable to make required payments on our
debt, including debt secured by our or our subsidiaries’ assets. Any such failure to make any such payment could have a material
adverse effect on our liquidity, business, financial condition and results of operations. In addition our debt agreements contain
restrictive covenants and default provisions. Covenants in the agreements governing our existing debt, and debt we may incur in the
future, may materially restrict our operations, including our ability to incur debt, pay dividends, make certain investments and
payments, and encumber or dispose of assets. In addition, any global economic deterioration may cause us to incur significant net
losses or force us to assume considerable liabilities. We cannot make assurances that we will be able to remain in compliance with our
financial covenants, which, as a result, may lead to a default. Any such default may thereby restrict our ability to access unutilized
credit facilities or the global capital markets to meet our liquidity needs. Furthermore, a default under certain debt agreements by
APWC or APWC’s subsidiaries may trigger cross-defaults under other debt agreements. In the event of default, we may not be able to
cure the default or obtain a timely waiver. An event of default under any agreement governing our existing or future debt, if not cured
or timely waived, could have a material adverse effect on our liquidity, business, financial condition and results of operations. Please
see Section 5.B. (“Liquidity and Capital Resources”) of this Annual Report and Note 27(c) of our consolidated financial statements
referenced in Item 18 of this Annual Report for a further discussion of our secured and unsecured indebtedness.
Foreign exchange fluctuations could materially impact our financial performance and our financial condition.
Our principal operations and properties are located in the three regions that constitute our business segments, namely the North
Asia, Thailand and ROW regions. Although our reporting currency is the U.S. dollar, the functional currency of our Thailand region,
which accounted for 39% of sales in 2023, is the Thai Baht. The functional currencies of our ROW region, which accounted for 47% of
sales in 2023, are the Australian dollar and the Singapore dollar. The functional currencies for our North Asia operations, which in total
accounted for 14% of sales in 2023, are divided into three groups: (1) the PRC Subsidiaries, whose functional currency is the RMB,
(2) Crown Century, whose functional currency is the U.S. dollar, and (3) the ROC Subsidiaries, whose functional currency is the TWD.
Accordingly, the functional currency accounts of these operations are all translated into U.S. dollars utilizing the reporting date
exchange rate for balance sheet accounts, and an average exchange rate for the year for the income statement accounts, for reporting
purposes. Any devaluation of the Baht, the Australian dollar, the Singapore dollar, the TWD, or the RMB against the U.S. dollar would
adversely affect our financial performance, as measured in U.S. dollars.
Our Company conducts business in many foreign currencies and is subject to exchange rate risk on cash flows related to sales,
expenses, financing and investment transactions. A substantial portion of our aggregate revenues is denominated in the following
currencies: RMB, TWD, Baht, Australian dollars and Singapore dollars, while our purchases of raw materials and expenditures related
to equipment upgrades are largely denominated in U.S. dollars. Any devaluation of the Baht, the Australian dollar, the Singapore dollar
or the RMB against foreign currencies (such as the U.S. Dollar) would increase the effective cost of transactions denominated in such
other foreign currencies. This would have an adverse impact on our operations and cash flows. Likewise, an increase in U.S. dollar
borrowing costs and any increase in the strength of the U.S. dollar in foreign exchange markets (which could also increase borrowing
rates) could materially adversely affect our business in the markets where we have operating plants, such as Thailand, China, Singapore
and Australia. Consequently, adverse movements in exchange rates could have a material adverse effect on our business, financial
condition and results of operations.
In addition, a portion of our investment properties and financial instruments are denominated in currencies other than the U.S.
dollar. Accordingly, our investment results will be subject to possible currency rate fluctuations as well as the volatility of overseas
capital markets. Our results of operations may be materially impacted by those fluctuations and volatility.
Significant impairment charges could materially adversely impact our results of operations.
In prior years, we have on occasion recognized impairment charges on certain property, plant and equipment due to lack of
profitability. An impairment charge may be incurred for various reasons including, but not limited to, strategic decisions made in
response to changes in economic and competitive conditions, the impact of the economic environment
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on our business or a material adverse change in any material relationships with our clients. If we recognize significant impairment
charges, our results of operations may be materially adversely affected.
Risk Related to the Regions in Which We Operate
We face risks relating to our operations in Thailand.
A substantial portion of our Thai operations consist of the manufacture of telecommunication and power cables and sales of
those products for use in various construction and infrastructure projects in Thailand. The performance of our Company’s Thai
operations is affected by the political and economic situation in Thailand. In recent years, the level of government involvement in
infrastructure development has tended to track increases or contractions in Thailand’s gross domestic product and 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. Overall, the construction industry and infrastructure projects have slowed considerably, thereby affecting local
sales, placing competitive pressure on prices and prompting our Company to rationalize Thai operations and actively seek overseas
markets. Political tensions remain high in Thailand and political instability in Thailand tends to diminish governmental focus on
infrastructure development projects, which can materially adversely impact the volume of sales to (and payment by) our customers who
are engaged in large infrastructure projects and, consequently, materially adversely affect our business, financial condition and results
of operations. In addition, our Thai operations could be materially adversely impacted if low margin wire and cable manufacturers from
China, including SOEs, were to enter the Thailand market.
There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations; the PRC legal system
may limit our Company’s remedies, which may impact our ability to enforce agreements in the PRC with third parties; and changes
in policies, laws, rules and regulations in the PRC could adversely affect us.
Our operations conducted in the PRC are governed by PRC laws, rules and regulations and our PRC subsidiaries are subject to
laws, rules and regulations applicable to foreign investment in China. The PRC legal system is a civil law system based on written
statutes. Prior court decisions may be cited for reference but have limited precedential value. China has not developed a fully integrated
legal system and enacted laws, rules and regulations may not sufficiently cover all aspects of economic activities or may be subject to a
significant degree of interpretation by PRC regulatory agencies and courts. As these laws, rules and regulations are relatively new and
quickly evolving and because of the limited number of published decisions and the non-precedential nature of these decisions, and
because the laws, rules and regulations often give the relevant regulator certain discretion in how to enforce them, the interpretation
and enforcement of these laws and regulations involves uncertainties and can be inconsistent and unpredictable. Therefore, it is
possible that our existing operations may be found not to be in compliance with relevant law and regulations in the future.
Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and
contractual terms, the remedies and the legal protection we enjoy may be limited 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. In terms of enforcement, agreements which are governed by PRC laws may be more difficult to enforce by legal
or arbitral proceedings in the PRC than in countries with more developed legal systems. Even if the agreements generally provide for
arbitral proceedings for disputes arising out of the agreements to be in another jurisdiction, in practice it may be difficult for us to
obtain effective enforcement in the PRC of an arbitral award obtained in that jurisdiction.
Moreover, government policies, internal rules, laws and regulations, particularly for local applications, may be varied and
enacted without sufficient prior notice or announcement to the public on a timely basis, and which may be effective retroactively.
Consequently, we may not be aware of a violation of a new or updated policy or rule until we are notified by the regulating authority
after the violating event has occurred.
Pursuant to the “Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law” (the
“Opinions”) issued by the Central Committee of the Chinese Communist Party and the State Council on July 6, 2021, among others,
the PRC government sought to strengthen judicial cooperation in cross-border supervision and law enforcement on securities activities.
The China Securities Regulatory Commission ("CSRC") published the Provisions of the State Council of the PRC on the
Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), and Administrative
Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), which, among
others, clarified the scope of overseas offering and listing by a PRC company, and listed a number of circumstances where overseas
offering is prohibited. The CSRC subsequently published the Trial Administrative Measures of Overseas Securities Offering and
Listing by Domestic Companies (the
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“Trial Measures”) effective March 31, 2023. The new regulations for the filing-based administration of overseas securities offering
and listing by companies that are incorporated in the PRC and the domestic operating entities of companies whose securities are
indirectly offered and listed overseas (collectively referred to as "domestic companies") are, and are made up of six sets of documents,
namely, the Trial Measures and five supporting guidelines. The CSRC also issued an accompanying "Notes on the Trial Administrative
Measures of Overseas Securities Offering and Listing by Domestic Companies" which provides an explanation of the Trial Measures.
The Trial Measures and the changes from the prior drafts circulated by the CSRC have the potential to impact our PRC operations,
financial position and business strategies, particularly if we were to seek a spin-off and foreign listing of our Chinese entities.
As the PRC legal system continues to evolve, we cannot predict if future developments in the PRC legal system could be
detrimental to our Company and have a material adverse effect on its business, financial condition, results of operations, and the value
of our Common Shares.
Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our
business, financial conditions and results of operations.
Certain of our subsidiaries operate in the PRC, where the enforcement of laws, rules and regulations can change quickly with
little advance notice. The PRC government may intervene or influence the operations of our PRC subsidiaries at any time, or may begin
to exert more control over offerings conducted overseas. Accordingly, our business, financial condition and results of operations may
be affected to a significant degree by political, economic and social conditions in the PRC generally.
The PRC economy differs from the economies of most developed countries in many respects, including the degree of
government involvement and control, with a substantial portion of the productive assets in China still managed by the government. The
PRC government regulates industry development by imposing industrial policies and exerting considerable direct and indirect influence
on the development of the PRC economy by controlling, among others, the allocation of resources, foreign exchange, growth rate and
the level of development, monetary policy, taxation and foreign investment. The PRC government has significant influence over
business activities and has become more involved in regulating China based companies. Legislative and enforcement actions and trends
by the PRC authorities are not always predictable. In recent years the PRC government has enhance regulation in areas such as anti-
monopoly, cybersecurity and data privacy.
The PRC Anti-Monopoly Law (“AML”) includes oversight of concentration of undertakings, monopoly agreements and
abusive behavior by companies with market dominance and was amended effective August 1, 2022 to include, among others, increased
penalties for anti-trust violations. The State Administration for Market Regulation (“SAMR”), the anti-monopoly enforcement agency
in the PRC, has in recent years strengthened enforcement under the AML, with increased investigations and the levying of significant
fines. In 2023, SAMR finalized a series of implementing regulations, rules and guidelines to facilitate the interpretation and
enforcement of AML.. While the business of APWC may not fall within the industries where recent active anti-monopoly enforcement
efforts have focused, we cannot assure you that we will not be affected, either directly or indirectly, by this increased focus. In addition,
to comply with existing and new anti-monopoly laws, regulations and guidance which are constantly evolving, we may need to devote
additional resources and efforts, including adjusting investment strategy and business arrangements, which may adversely affect our
business, growth prospects, and the value of our Common Shares.
The 2017 PRC Cybersecurity Law (“CSL”) was enacted with the aim of increasing data protection, data localization, and cybersecurity
in the interest of national security. Recently enacted laws include the PRC Data Security Law, effective September 1, 2021 (the “DSL”)
and the Personal Information Protection Law, effective November 1, 2021 (the “PIPL”). The DSL and PIPL, together with the CSL,
form the over-arching framework that governs data protection and cybersecurity in the PRC. The CSL focuses on cybersecurity and the
protection of the critical information infrastructure (“CII”), the DSL focuses on regulating “important data” and data processing
activities that would have an impact on national security, and the PIPL focuses on protecting personal information.
On August 17, 2021, China released the text of the “Critical Information Infrastructure Security Protection Regulations” (“CII
Regulations”) which became effective September 1, 2021. Under the CII Regulations, critical information infrastructure refers to
important network infrastructure and information systems, in important industries and sectors, and requires the appropriate regulatory
and administrative departments in these sectors (“Protection Departments”) to formulate CII identification rules based on the actual
situations of their respective sectors and submit such identification rules to the Ministry of Public Security (“MPS”) for recording. The
Protection Departments are responsible for identifying the CII in their respective sectors and promptly notifying relevant operators.
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On December 28, 2021, the Cyberspace Administration of China (“CAC”) and the MPS, among others, adopted Cybersecurity Review
Measures (“CRM”) effective February 15, 2022, replacing the 2020 version. CRM Article I state the measures were formulated in
accordance with the National Security Law of the PRC, the CSL, the DSL and the CII Regulations. The CRM require CII operators to
undergo a security review if the procurement of any “network products and services” affects or may affect China’s national security.
Online platform operators, holding the personal information of more than 1 million users and newly listing on foreign markets, must
also report for a cybersecurity review with the Cybersecurity Review Office of the CAC. Whether the cybersecurity review requirement
will apply if the listing company’s subsidiary is a PRC entity (as is the case for APWC) is undetermined.
Neither ‘important data’ nor ‘core data’ have been comprehensively defined in PRC law. ‘Important data’ is a unique category of data
introduced by the CSL and adopted into the DSL, but was defined in neither law. In Q4, 2022, the National Information Security
Standardization Technical Committee (TC260) released a draft guidance document, which provides a methodology and set of criteria
for grading data as either ‘important data’ or ‘core data’. On July 3, 2023 the CAC and MPS, among others, jointly released the 2023
edition of the Catalogue of Critical Network Equipment and Specialized Cybersecurity Products (“Catalogue”). The 2023 Catalogue
designated 38 network products subject to mandatory Critical Network Equipment and Specialized Cybersecurity Products
Certification. To the extent that any data that APWC’s PRC subsidiaries may in the future collect and process within the PRC and
which falls within the scope of “important data”, APWC will be subject to various statutory obligations, such as conducting a national
security review if the processing activity may affect national security, and periodically carrying out requisite risk assessments.
Compliance with current obligations and potential future obligations that may be promulgated pursuant to any of the CSL, DSL, PIPL,
CII Regulations, CRM or other related laws, rules or regulations, could require us to incur additional costs and expend resources,
including the updating of internal procedures and hiring of external consultants to conduct assessments, which would increase APWC’s
costs and adversely affect profitability.
As final rules and implementing regulations have yet to be issued, the implications and applications of recent enforcement and
legislative actions remain unclear at the moment and provide minimal guidance. Many of the economic reforms carried out by the PRC
government are unprecedented or experimental and expected to be refined and improved over time. As such, we cannot assure you that
APWC and APWC’s operations in the PRC will not be affected, either directly or indirectly, by such refinement or changes in
government policy, or the interpretation of, or enforcement of, such laws and regulations, which could have a material adverse effect on
our business, financial condition, results of operations and the value of our Common Shares.
Uncertainties with respect to the interpretation and implementation of the PRC Foreign Investment Law and Implementation
Regulations may affect our Company’s Corporate Governance.
The PRC Foreign Investment Law and the Regulations for Implementation of the Foreign Investment Law (collectively the
“FIL”) took effect January 1, 2020 and replaced the trio of prior laws governing foreign investment in China, namely, the Law on Sino-
Foreign Equity Joint Ventures, the Law on Sino-Foreign Cooperative Joint Ventures, and the Law on Wholly Foreign-Owned
Enterprises, together with their implementation regulations (the “Old FIL Laws”).
Several key changes under the FIL include protection of foreign IP rights and trade secrets, and equal treatment of domestic and
foreign companies in government procurement. As the Old FIL Laws were repealed at the same time the FIL became effective, foreign-
invested enterprises (“FIE”) became subject to the PRC Company Law and Partnership Enterprise Law, which stipulate different rules
on corporate governance, voting, profit distributions and equity transfer restrictions, among others. FIEs established before the FIL’s
effective date have a five-year transition period to convert to the appropriate corporate form and make necessary adjustments to their
articles of association and other documents to comply with such rules, which now apply to foreign and domestic investors alike. The
FIL imposes information reporting requirements on foreign investors and FIEs and any found to be non-compliant with these reporting
obligations may be subject to fines or administrative liabilities.
Since the FIL is relatively new, uncertainties still exist in relation to its interpretation and implementation. The FIL may affect
our relevant corporate governance practices and increase our compliance costs. We continue our review of the provisions regarding
equity interest transfers and distribution of profits or remaining assets, and the specific adjustments FIEs must undertake.
On December 27, 2021, the National Development and Reform Commission (“NDRC”) and the Ministry of Commerce of the
PRC (“MOFCOM”) issued Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Version) effective
January 1, 2022. The wire & cable industry is not within the sector where foreign investment is prohibited or restricted in the 2021
Version. Accordingly, APWC’s PRC business is unlikely to be directly affected by the rules and enforcement actions targeting variable
interest entity structures, even if APWC proposes a spin-off of its PRC entities and an offshore listing. However, it is not known
whether these matters will be addressed by additional laws or
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regulations promulgated pursuant to the FIL. The FIL could be interpreted and implemented in a manner that could have a material
adverse effect on our Company’s business, financial condition and results of operations.
PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay or prevent us from
making loans or additional capital contributions to our PRC subsidiaries, which could materially adversely affect our ability to fund
and expand our business.
We conduct substantial business operations in China. We may make loans or capital contributions to our PRC subsidiaries.
Loans or capital contributions by APWC or any of our offshore subsidiaries to our PRC subsidiaries, which are treated as FIEs under
PRC law, may be subject to PRC regulations and/or foreign exchange loan registrations. Such loans to any of our PRC subsidiaries to
finance their activities generally cannot exceed statutory limits and must be filed with China’s State Administration of Foreign
Exchange (the “SAFE”). We may also decide to finance our PRC subsidiaries by means of capital contributions, in which case the PRC
subsidiary is required to register the details of the capital contribution with the relevant governmental authorities in China.
In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore
holding companies, we cannot assure that we will be able to complete the necessary government registrations or obtain the necessary
government approvals on a timely basis, if at all, with respect to future loans or capital contributions by our Company to our PRC
subsidiaries and conversion of such loans or capital contributions into RMB. If we fail to complete such registrations or obtain such
approvals, our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially adversely
affect our ability to fund and expand our business, and could materially adversely affect or business, financial condition and results of
operations.
The PRC government’s control of currency conversion and expatriation of funds may affect our liquidity.
The PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance
of currency out of the PRC. Our PRC subsidiaries represent the majority of the sales in our North Asia segment, which segment
constituted approximately 14% of our sales in 2023. Substantially all revenues of our subsidiaries organized under the laws of the PRC,
are denominated in RMB. Shortages in the availability of foreign currency in the PRC may restrict the ability of our PRC subsidiaries
to remit sufficient foreign currency to pay dividends or to make other payments to us, or otherwise to satisfy their foreign currency-
denominated obligations. Under existing Chinese foreign exchange regulations, payments of current account items, including profit
distributions, interest payments, and trade-related payments, can be made in foreign currencies without prior approval from SAFE by
complying with certain procedural requirements, including, among others, submission of relevant documentary evidence of such
transactions to designated foreign exchange banks in the PRC for processing of relevant payments. We are required to present relevant
documentary evidence of such transactions and conduct such transactions at designated foreign exchange banks in the PRC. However,
for any PRC company, dividends can be declared and paid only out of the retained earnings of that company under PRC law and may
be subject to taxation. As a result, our PRC subsidiaries may be restricted in their ability to transfer cash outside of the PRC whether in
the form of dividends, loans, and advances. If our PRC subsidiaries distribute dividends, these restrictions and requirements could
reduce the amount of distributions that we would receive, which could in turn restrict our ability to fund our operations, generate
income, pay dividends, and service our indebtedness.
Furthermore, approval from SAFE or its local branch is required where RMB are to be converted into foreign currencies and
remitted out of the PRC for payments of capital account items, such as the repayment of loans denominated in foreign currencies.
Without a prior approval from SAFE or its local branch, cash generated from the operations of our PRC subsidiaries may not be used to
repay debt in a currency other than the RMB owed by such subsidiaries to entities outside the PRC, or make other payments of capital
account items outside the PRC in a currency other than the RMB. The PRC government may also at its discretion, restrict access in the
future to foreign currencies for current account transactions. In the current regime of stringent regulation of outflow of capital, RMB
outflow may face the same level of scrutiny by the PRC government as the outflow of foreign currencies.
Additionally, because repatriation of funds of our PRC subsidiaries requires the prior approval of SAFE and/or its authorized
bank and compliance with certain procedural requirements, such repatriation could be delayed, restricted, or limited. There can be no
assurance that the rules and regulations pursuant to which SAFE grants or denies such approval or stipulates the procedural
requirements will not change in a way that adversely affects the ability of our PRC subsidiaries to expatriate funds out of the PRC,
thereby negatively affecting our liquidity, our results of operations and the value of our Common Shares.
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Political or social instability, including tensions between PRC and Taiwan, may materially adversely affect our Company’s business,
financial condition, and results of operations.
Political or social instability in China could also materially adversely affect our business operations or financial condition. Lack
of political or social certainty exposes our operations to increased risk of adverse or unpredictable actions by PRC government
officials. For example, APWC’s principal office is located in Taipei, Taiwan, and any escalation in political tensions between the PRC
and the government of Taiwan could materially adversely impact our ability to manage our operations in the PRC efficiently or without
third party interference. The PRC government has long advocated a one-China policy with regard to the Republic of China. Any overtly
aggressive actions by the PRC towards Taiwan could have a materially destabilizing impact on Taiwan generally, and on our business
in particular, and could materially and adversely affect our business, financial condition and results of operations.
PRC SOEs have competitive advantages and our business and operations may be materially and adversely affected in the event we
must compete with such SOEs.
Much of the PRC's manufacturing output is still conducted through SOEs, which are often subsidized by the government such
that they are protected against the challenges of market forces confronting private enterprises. As a consequence, it can become
untenable for private enterprises in competition with SOEs to conduct profitable operations when the SOEs are being subsidized by the
government and may operate in a loss position for an extended period. Our Company’s business, financial condition and results of
operations may be materially adversely affected in the event it must compete with such SOEs.
Risks Related to the Common Shares and APWC
The Common Shares may be delisted from Nasdaq, which could affect their market price and liquidity.
The Common Shares are currently listed on Nasdaq under the trading symbol “APWC” on the Capital Market tier. In order for
the Common Shares to remain listed on the Nasdaq Capital Market tier, we must continue to meet certain minimum financial and other
requirements including, without limitation, maintaining a closing bid price for the Common Shares of at least $1.00 per share. Nasdaq’s
rules provide for the delisting of the Common Shares if the closing bid price for the Common Shares falls below $1.00 per share for 30
consecutive business days and we are unable to regain compliance with the applicable requirements in the time permitted by Nasdaq.
In addition to Nasdaq’s enumerated criteria for continued listing on the Capital Market tier, Nasdaq also has broad discretionary
public interest authority that it can exercise to apply additional or more stringent criteria for the continued listing of the Common
Shares, or suspend or delist securities even though the securities met all enumerated criteria for continued listing on Nasdaq. We cannot
assure you that Nasdaq will not exercise such discretionary authority.
In accordance with the provisions of the Exchange Control Act 1972, as amended, and related regulations of Bermuda, the
permission of the Bermuda Monetary Authority (the “BMA”) is required for all issuances and transfers of shares (which includes the
Common Shares) of Bermuda companies to or from a non-resident of Bermuda for exchange control purposes, other than in cases
where the BMA has granted a general permission. The BMA, in its notice to the public dated June 1, 2005, has granted a general
permission for the issue and subsequent transfer of any securities of a Bermuda company from and/or to a non-resident of Bermuda for
exchange control purposes for so long as any “Equity Securities” of APWC (which include the Common Shares) are listed on an
“Appointed Stock Exchange” (which includes Nasdaq). In granting the general permission the BMA accepts no responsibility for
APWC’s financial soundness or the correctness of any of the statements made or opinions expressed herein. Consequently, if the
Common Shares are delisted from Nasdaq, it will be necessary to obtain the prior permission of the BMA to transfer such Common
Shares to any transferee, subject to any applicable general permissions issued by the BMA.
There can be no assurance that the Common Shares will remain listed on Nasdaq on any tier. Any delisting of the Common
Shares could materially adversely affect their market price and liquidity. If the Common Shares are delisted, APWC expects
its Common Shares would be quoted on an over-the-counter market. If this were to occur, APWC’s shareholders could face significant
material adverse consequences, including the need to receive permission from the BMA to transfer the Common Shares, limited
availability of market quotations for the Common Shares and reduced liquidity for the trading of the Common Shares. In
addition, APWC could experience a decreased ability to issue additional securities and obtain additional financing in the future.
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As a foreign private issuer, there is less publicly available information concerning our Company than there would be if APWC was
a U.S. public company.
APWC is a “foreign private issuer”, as defined in the SEC’s rules and regulations and, consequently, APWC is not subject to all
of the disclosure requirements applicable to public companies organized within the United States. For example, APWC is exempt from
certain rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that regulate disclosure obligations and
procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the
Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange Act. In addition, APWC’s senior management and
directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related
rules with respect to their purchases and sales of APWC’s securities. Moreover, APWC is not required to file periodic reports and
financial statements with the SEC as frequently or as promptly as U.S. public companies, and is not required to file quarterly reports on
Form 10-Q or current reports on Form 8-K under the Exchange Act. Accordingly, there is less publicly available information
concerning our Company than there would be if APWC was a U.S. public company.
Future sales of APWC’s Securities may cause the prevailing market price of the Common Shares to decrease.
There may be future sales or other dilution of APWC’s equity, which could materially adversely affect the market price of the
Common Shares. APWC may, from time to time, issue equity securities, including Common Shares or securities that are convertible
into or exchangeable for, or that represent the right to receive, Common Shares. The market price of the Common Shares could decline
as a result of issuances of any such equity securities or any such securities that are convertible into or exchangeable for, or that
represent the right to receive, Common Shares, or as a result of the perception that such issuances could occur.
The market for the Common Shares may not be liquid, which could cause volatility and adversely affect our prevailing market
price.
Active, liquid trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for
investors, compared to less active and less liquid markets. Thinly-traded equity securities can be more volatile than equity securities for
which there is significant trading volume. In addition, APWC’s share price may be volatile and could be subject to fluctuations in
response to various factors, most of which are beyond our control. Liquidity of a securities market is often a function of the volume of
the underlying shares that are publicly held by unrelated parties. As of December 31, 2021, approximately 75.5% of APWC’s issued
and outstanding Common Shares were directly or beneficially owned by PEWC. Following the completion of APWC’s rights offering
in February 2022 (as further described in Item 7 in this Annual Report) and as of the date of this Annual Report, approximately 80.9%
of APWC’s issued and outstanding Common Shares are directly or beneficially owned by PEWC, with such Common Shares subject to
certain restrictions on trading. In addition, although the Common Shares are currently traded on the Nasdaq Capital Market tier, the
trading and demand for the Common Shares has been historically limited. As a consequence, shareholders may find that the value of
their Common Shares and/or their ability to sell their Common Shares quickly or in substantial amounts may be materially adversely
affected by the limited public trading market of the Common Shares. In the future, the Common Shares may experience significant
price fluctuations which could materially adversely affect the value of a shareholder's ownership interest in APWC.
Our Common Shares have a limited public float and are subject to price volatility, which could adversely affect our prevailing
market price.
Given PEWC’s sizable ownership of our outstanding Common Shares, we have a limited public float, which adversely affects
trading volumes and liquidity in our Common Shares. We have experienced significant share price and volume fluctuations and could
be subject to continuing fluctuations in the future. The trading price of our Common Shares may fluctuate widely due to various
factors, including the level of purchases or sales in our Common Shares relative to total volume of trading in our Common Shares,
actual or anticipated actions by PEWC, including purchases or sales of our Common Shares by PEWC, actual or anticipated changes in
our financial conditions and operating results, changes in our capital structure or liquidity including issuance of additional debt or
equity to the public, changes in our dividend policy, news regarding our products or geographic markets, and broad market and industry
fluctuations. This volatility in our share price, and limited trading volume in our Common Shares, could adversely affect our business
and financing opportunities.
Being the subject of an activist investor campaign could cause us to incur substantial costs, divert management’s attention and
resources, and have an adverse effect on our business. We have been in the past, and may continue to be,
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subject to proposals by activist investors urging us to take certain actions. Responding to activist campaigns is generally costly and
time-consuming, as we may need to retain the services of legal, financial and communications advisors to assist APWC in responding
to the activist investor’s concerns, the costs of which could negatively impact our future financial results. A campaign could also divert
the attention of our directors and officers away from our business and operations, which could adversely impact our business. In
addition, perceived uncertainties as to our future direction, strategy or leadership arising from an activist campaign could cause our
stock price to experience periods of enhanced volatility or harm our ability to raise capital.
APWC may not be able to resume paying a dividend and any dividends paid in the future could be reduced or eliminated, which
could adversely affect our prevailing market price.
APWC did not declare or pay any dividends for the years ended December 31, 2023, 2022, 2021 and 2020. There are a number
of factors that can affect APWC’s ability to pay dividends and there is no guarantee that APWC will pay dividends in any given year or
pay any specific amount of dividends. APWC may not be able, or may choose not to reinstate its dividend program and pay future
dividends, and if reinstated any future dividend could again be eliminated or reduced. The declaration, amount and payment of future
dividends are at the discretion of APWC’s Board of Directors (the “Board”) and will be dependent on our Company’s future operating
results and the cash requirements of our Company’s business. In addition, APWC will not pay dividends in the event it is not allowed to
do so under Bermuda law. Furthermore, since APWC is a holding company, nearly all of the assets shown on its consolidated balance
sheet are held by its subsidiaries. Accordingly, APWC’s cash flow and its ability to pay dividends are dependent upon distributions
from its subsidiaries. The reduction, suspension or elimination of dividends may negatively affect the market price of the Common
Shares.
Our holding company structure and potential restrictions on the payment of dividends could materially adversely affect our market
price.
APWC is a holding company with no direct business operations other than its ownership of the capital stock of its subsidiaries
and equity investees. APWC’s principal assets are the equity interests it directly or indirectly holds in its operating subsidiaries. As a
holding company, APWC’s ability to pay dividends and meet its other obligations depends upon the amount of distributions, if any,
received from its operating subsidiaries and other holdings and investments. APWC’s operating subsidiaries and other holdings and
investments, from time to time, may be subject to restrictions on their ability to make distributions to APWC, including, but not limited
to, as a result of restrictive covenants contained in loan agreements, restrictions on the conversion of local currency earnings into U.S.
dollars or other currency, and other regulatory restrictions. For example, PRC legal restrictions permit payments of dividends by our
business entities operating 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 reserves. These reserves are not distributable as cash dividends. The foregoing restrictions may also affect APWC’s
ability to fund operations of one subsidiary with dividends and other payments received from another subsidiary. Distributions may
also be limited from time to time by reason of restrictions protective of the rights of minority shareholders of APWC’s subsidiaries and
by reason of the current cash requirements of APWC’s operating subsidiaries. Such restrictions on payments involving entities
organized in PRC could adversely affect our liquidity, our business results and thus, the price of our Common Shares.
APWC is incorporated in Bermuda, and investors may face limited recourse and enforceability against APWC as well as its
directors and officers as compared to corporations incorporated in the U.S.
APWC is incorporated in and organized pursuant to the laws of Bermuda with its principal office located in Taiwan. All of
APWC’s directors and officers reside outside the United States and our Company’s material assets are located outside the United
States. As a result, it may be difficult for investors to effect service of process within the United States upon such persons or to realize
judgements against them in courts of the United States predicated upon civil liabilities under the United States federal securities laws.
Even if investors are successful in realizing judgments against such persons in courts of the United States, the laws of Taiwan may
render such investors unable to enforce the judgment against our Company’s assets or the assets of APWC’s officers and directors.
Also, investors may have difficulty in bringing an original action based upon the United States federal securities law against such
persons in the Taiwan courts. Additionally, 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. As a result, shareholders
may encounter more difficulties in enforcing their rights and protecting their interests in the face of actions taken by management, the
Board or controlling shareholders than they would if APWC was organized under the laws of the United
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States or one of the states therein, or if our Company had material assets located within the United States, or some of the directors and
officers resided within the United States.
Control of APWC rests with its majority shareholder, PEWC, and APWC relies on Nasdaq’s controlled company and foreign private
issuer exemptions, all of which could materially and adversely affect our corporate governance.
PEWC holds more than 50% of our issued and outstanding Common Shares. Accordingly, we are a “controlled company” within
the meaning of Nasdaq’s corporate governance standards, and may elect to utilize exemptions from certain corporate governance
standards, including the requirement (1) that a majority of the board of directors consist of independent directors, (2) to have a
nominating committee that is comprised entirely of independent directors with a written charter addressing the committee’s purpose
and responsibilities and (3) to have a compensation committee that is comprised entirely of independent directors with a written charter
addressing the committee’s purpose and responsibilities. We utilize the controlled company exemption for (1) the requirement to have a
majority of our Board consist of independent directors, and (2) the requirement to have a nominating committee that is comprised
entirely of independent directors with a written charter addressing such committee’s purpose and responsibilities. While we rely on the
controlled company exemption for (2), our independent directors oversee our process for identifying director nominees and review the
qualifications of such nominees.
At present, a majority of our Board is affiliated with PEWC, and we rely on Nasdaq’s allowance for foreign private issuers to
follow home country practices in lieu of the requirement that listed companies have regularly scheduled meetings at which only
independent directors are present (“executive sessions”). Nonetheless, our independent directors meet periodically in their capacity as
members of our Audit Committee. Our management occasionally join such meetings in the interest of communicating management’s
analysis of the Company’s financial performance and compliance with relevant corporate governance requirements.
Because we have fewer independent directors (i.e. those who meet Nasdaq’s independence standards) on our Board than issuers
that comply with all of Nasdaq’s corporate governance standards, you are not provided the same level of protection afforded to
investors in issuers that comply with all of Nasdaq’s corporate governance standards.
As APWC’s majority shareholder, PEWC has sufficient votes to control the outcome of any matter presented for a shareholder
vote, including the election of each member of our Board. PEWC may vote its shares in APWC in the manner that it sees fit. In
addition, subject to applicable securities laws, PEWC may sell, convey or encumber all or a portion of its ownership interest in APWC
without regard to the best interests of APWC’s other shareholders except to the extent that it is prohibited from engaging in conduct
oppressive to non-controlling interests under applicable law. The interests of PEWC may conflict with our interests or the interests of
our other shareholders. As a result, PEWC may take actions with respect to us or our business that may not be in our or our other
shareholders’ best interest.
Financial or corporate governance issues at PEWC may affect PEWC’s attention to and actions with respect to APWC, including
with respect to its performance of its obligations under, or increase uncertainty regarding its ability to perform its obligations under, the
Composite Services Agreement between APWC and PEWC. (See “Item 3.D. Risk Factors – PEWC may not perform its obligations
under the Composite Services Agreement” and “Item 10.C. Material Contracts” for a description of the Composite Services
Agreement.).
Potential conflict of certain officers and directors could adversely affect our corporate governance.
APWC has three independent directors. As of December 31, 2023, there were four additional members of our Board, all of
whom are also directors or officers of, or otherwise affiliated with, PEWC, APWC’s majority shareholder. Certain of APWC’s officers
are also affiliated with PEWC. In each case, they may be subject to potential conflicts of interest. In addition, certain of APWC’s
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 our Company and PEWC or one of its affiliates have competing interests, and in
the performance by APWC and PEWC of their respective obligations under existing agreements, including the Composite Services
Agreement. In addition, some of these persons devote time to the business and affairs of PEWC and its affiliates, which could reduce
the amount of time available for overseeing or managing our Company’s business and affairs.
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If we lose control of Charoong Thai, Charoong Thai’s financial results would not be consolidated with ours.
As of December 31, 2023, our Company effectively owned 50.93% of the issued and outstanding shares of Charoong Thai Wire
and Cable Public Company Limited (“Charoong Thai” or “CTW”). While our Company holds preemptive rights that would permit it to
maintain majority ownership of CTW, there may be circumstances under which our Company cannot maintain majority ownership of
Charoong Thai. In the event Charoong Thai were to make a further offering of voting securities, or securities convertible into or
exchangeable for voting securities, and our Company decided not to, or was not in a position to, fund or finance its participation in the
offering, the ownership interest of our Company in Charoong Thai could fall below a level necessary for consolidated treatment, and
our Company may lose the controlling interest in Charoong Thai. If that were the case, the accounts of the Charoong Thai group, which
includes all of our Company’s Thailand operations, would not be consolidated under IFRS, but instead would be accounted for under
the equity method. In such an event, our Company’s accounts would show a significant decrease in revenue and most categories of
assets and liabilities, which could materially adversely affect our Company and the value of the Common Shares.
Risk Related to Subsidiary Governance
Governance challenges across subsidiaries.
Our global operations entail managing a network of subsidiaries across multiple jurisdictions, each characterized by distinct
regulatory landscapes, cultural norms, and legal frameworks. Navigating these complexities requires diligent oversight and adaptability
to ensure compliance with diverse regulatory obligations and local laws. Factors such as differences in reporting requirements,
governance practices, and business cultures pose inherent risks to our operations. Inadequate governance practices or failure to
effectively synchronize policies and procedures across subsidiaries may expose the company to heightened regulatory scrutiny,
potential legal liabilities, operational inefficiencies, and reputational damage.
Effective governance of subsidiaries across diverse jurisdictions is also imperative to mitigate the risk of mismanagement and
fraud, which can lead to substantial financial losses. The decentralized nature of subsidiary operations, coupled with variations in
regulatory requirements and cultural practices, creates vulnerabilities that could be exploited for fraudulent activities or
mismanagement. Without robust oversight mechanisms and internal controls, subsidiaries may face increased susceptibility to financial
irregularities, such as unauthorized transactions, embezzlement, bribery, or corruption.
Failure to implement adequate governance structures, including clear reporting lines, internal controls, and risk
management frameworks, heightens the risk of undetected financial misconduct. Instances of fraud or mismanagement not only result
in direct financial losses, including asset misappropriation and revenue leakage, but also erode shareholder trust, tarnish the company's
reputation, and attract regulatory sanctions or legal liabilities.
Inadequate governance to manage these complexities may result in regulatory non-compliance, reputational damage, legal
liabilities, and operational disruptions, which could adversely affect our financial performance and shareholder value.
General Risk Factors
Any failure to achieve and maintain effective internal controls could have a material adverse effect on our reputation, business,
financial conditions, and results of operations and the market price of the Common Shares.
Effective internal controls are necessary for us to provide reasonable assurance with respect to our financial reports and to
prevent fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that
the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their costs. The design of any system of controls also is based in
part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions; over time, a control may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-
effective control system, misstatements due to error or fraud may occur and not be detected. As a result, even effective internal controls
are able to provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. Any failure
in our internal control could result in a material adverse effect on our business and a decline of investor confidence in the reliability of
our financial statements, which could materially adversely affect the market price of the Common Shares.
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International trade policies may negatively impact our business, results of operations and financial condition.
Government policies on international trade and investment such as import quotas, tariffs, and capital controls, whether adopted
by individual governments or addressed by regional trade blocs, can affect the demand for our products and services and those of our
customers and impact the competitive position of our products or services or those of our customers. For example, the business of our
customers in China may be adversely impacted by the continuing trade friction between the United States and China. We cannot predict
future trade policy or the terms of any renegotiated trade agreements and their impact on our business. The adoption and expansion of
trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the
potential to adversely impact demand for our products, our costs, our customers, and our suppliers, which in turn could materially
adversely impact our business, financial condition and results of operations.
Our international business operations subject us to certain risks which may materially and adversely affect our business and
operations.
We are subject to risks specific to our international business operations, including: the risk of supply disruption; production
disruption or other disruption arising from events of force majeure, such as severe weather and climatic events; the outbreak of highly
infectious or communicable diseases such as COVID-19, Severe Acute Respiratory Syndrome, swine influenza or pandemics of a
similar nature; the risk of potential conflict and further instability in the relationship between Taiwan and the PRC; risks related to
national and international political instability, such as disruptions to business activities and investment arising out of political unrest
and turmoil in Thailand; risks related to global economic turbulence and adverse economic developments in Asian markets; risks
associated with possible interest rate increases, which could result in increases in the cost of borrowing and reduced liquidity for us and
our customers; risks related to changes in governmental or private sector policies and priorities with respect to infrastructure investment
and development; unpredictable consequences on the economic conditions in the U.S. and the rest of the world arising from terrorist
attacks, and other military or security operations; unexpected changes in regulatory requirements or legal uncertainties regarding tax
regimes; tariffs and other trade barriers, including current and future import and export restrictions; difficulties in staffing and
managing international operations in countries such as Australia, Singapore, the PRC, Thailand and Taiwan; risks that changes in
foreign currency exchange rates will make our products comparatively more expensive; limited ability to enforce agreements and other
rights in foreign countries; changes in labor conditions; longer payment cycles and greater difficulty in collecting accounts receivable;
burdens and costs of compliance with a variety of foreign laws; limitation on imports or exports and the possible expropriation of
private enterprises; and reversal of the current policies (including favorable tax and lending policies) encouraging foreign investment or
foreign trade by our host countries. On March 6, 2024, the SEC adopted a new climate disclosure rule effective May 28, 2024, that will
add to Form 20-F a new section Item. 3.E. (“Climate -related disclosures”). Compliance will be phased in for non-accelerated filers
such as APWC beginning fiscal year 2027 and APWC is assessing the requirements imposed on it by this new disclosure rule, affects
on its operations and associated costs of compliance.
Climate change, or legal, regulatory or market measures to address climate change, may materially adversely affect our Company’s
financial condition and business operations.
Climate change resulting from increased concentrations of greenhouse gases in the atmosphere could present risks to our
Company’s future operations due to natural disasters and extreme weather conditions, such as hurricanes, tornadoes, earthquakes,
wildfires, droughts or flooding. Such extreme weather conditions could pose physical risks to our Company’s suppliers and facilities,
disrupt operation of our Company’s supply chain, including availability of raw materials and transportation, and impact operational
costs.
Concern over climate change has resulted in both existing and pending legal and regulatory requirements designed to mitigate its
effects. Our Company is therefore subject to environmental, health and safety regulations in connection with its global business
operations, including but not limited to: regulations related to the development, manufacture, shipping and use of its products,
handling, discharge, recycling and disposal of hazardous materials used in its products or in producing its products, and the operation of
its facilities. Such measures subject us to additional costs and restrictions and require operating and capital expenditures, which could
impact our Company’s business, financial condition, results of operations and cash flows. For example, any pollutants and waste
generated during our Company’s manufacturing process need to be disposed of and/or mitigated in compliance with applicable laws
and regulations. Additionally, a lack of consistent climate legislation across the regions in which we operate may create economic and
regulatory uncertainty. Any failure or inability to comply with existing or future environmental, health and safety regulations, including
those relating to climate change, could result in significant remediation or other legal liabilities, the imposition of penalties and fines,
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restrictions on the development, manufacture, sale, shipping or use of certain of its products and limitations on the operation of its
facilities.
In addition to regulatory compliance, growing customer sustainability requirements and shareholder sentiment in respect of
environmental and sustainability standards could cause our Company to incur substantial expense from time to time to alter its
manufacturing, operations or equipment designs to meet these regulatory and sustainability requirements as well as investor
expectations. Moreover, we may not be able to timely meet these requirements due to the required level of capital investment or
technological advancement. Any failure to comply with these regulations, or meet these customer requirements or sustainability targets,
could adversely impact the demand for our Company’s products and subject our business to significant costs and liabilities and
reputational risks that could adversely affect our business, financial condition and results of operations.
Inflationary price pressures of raw materials or other inputs used by our business could negatively impact the profitability of our
business.
Increases in the price of commodities, raw materials, utilities, labor or other inputs that our operations or our Company’s
suppliers use in manufacturing and supplying products, components and parts, along with logistics and other related costs, may lead to
higher costs for our Company’s products and services. In addition, new laws or regulations adopted in response to climate change could
increase energy and transportation costs, as well as the costs of certain raw materials and components. Any increase in the cost of
inputs to our Company’s production could lead to higher costs for our Company’s products and could negatively impact our Company’s
operating results, future profitability and ability to successfully deliver on our Company’s strategy.
ITEM 4: INFORMATION ON THE COMPANY
4.A. History and Development of the Company
Asia Pacific Wire & Cable Corporation Limited was incorporated on September 19, 1996 as a Bermuda exempted company
limited by shares and incorporated under the Bermuda Companies Act 1981, as amended (the “Companies Act”). The address of
APWC’s principal office is Room B, 15th Floor, No. 77, Sec. 2, Dunhua South Road, Taipei, 106, Taiwan, and its telephone number is
+886 2-2712-2558. Our Company’s registered agent (and agent for service of process) in the United States is Pacific Holdings Group,
with an address at 2901 Dallas Parkway, Suite 360, Plano, Texas 75093.
Principal capital expenditures consisted of purchases of property, plant and equipment totaling $4.3 million in 2023, $3.7 million
in 2022 and $8.5 million in 2021, mostly for the purchase of production machinery and equipment in North Asia in 2023.
In 2024, we expect our business’ principal capital expenditures to include the purchase of new equipment to expand production
capacity in Australia and Thailand. We expect total capital expenditures in 2024 to be $0.7 million based on current assumptions,
although this number could change based on market conditions and other relevant factors. Our Company intends to pay for these
expenditures with funds generated from its operations.
Our Company’s present plans also include the development of an alternative energy business in Taiwan by availing itself of new
tax-driven development incentives provided by the Taiwan government for the expansion of “green” energy alternatives. This project
remains at a development-stage and has not generated any revenues to date.
Our website is located at www.apwcc.com. The information contained or linked to on our website is not included in, or
incorporated by reference into, this Annual Report on Form 20-F. Our filings with the SEC, including reports, proxy and information
statements, and other information regarding us that is filed electronically with the SEC are available on the SEC’s website at
www.sec.gov.
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4.B. Business Overview
Our Company’s Operations and Principal Activities
APWC is a holding company that operates its business through operating subsidiaries. Through our subsidiaries, our Company is
principally engaged in the manufacture and distribution of enameled wire, power cable, and telecommunications products in Thailand,
Singapore, Australia, PRC, Hong Kong and certain other markets in the Asia Pacific region. Our Company also provides project
engineering services in supply, delivery and installation of power cable (“SDI”). Our Company’s major customers include appliance
component manufacturers, electrical contracting firms, state owned entities, wire and cable dealers and factories.
APWC has no direct business operations other than its direct and indirect ownership of the capital stock of its subsidiaries and
equity investee holdings. Although APWC has not paid a dividend to holders of our Common Shares since 2019, APWC’s ability to
pay any dividends in the future, as well as to meet its other obligations and to fund operations, depends upon the amount of
distributions, if any, received from its direct and indirect operating subsidiaries and other holdings and investments. APWC’s operating
subsidiaries and other holdings and investments, from time to time, may be subject to restrictions on their ability to make distributions
to APWC, 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 applicable to the countries in which our subsidiaries
are formed and conduct their business. For further discussion of the risks created by these restrictions and limitations, see “Risk
Factors-Risks Related to our Financial Activities” and “Risk Factors-Risks Relating to the Regions in which We Operate.”
Reporting Segments and Geographic Regions
We operate our business in three reporting segments: Thailand, North Asia, and ROW. Our Company’s power cable and
telecommunications cable products are primarily sold in the domestic markets of the countries where they are manufactured, whereas a
portion of the enameled wires manufactured by our Company in Thailand are exported, primarily to customers throughout Southeast
Asia. The following table sets forth our Company’s sales revenues for the periods indicated in its three reporting segments for its
principal product lines.
Year ended
December 31, 2023
Revenue from external customers
Power
Enamel
SDI
Others*
North
Asia
US$’000
Thailand
US$’000
ROW
US$’000
Total
segments
Consolidated
US$’000
9
55,959
2,667
14
58,649
80,564
79,510
—
6,851
166,925
140,501
1,972
55,028
2,697
200,198
221,075
137,441
57,695
9,562
425,772
* includes revenues from fabrication service contracts and the sale of other wire and cable products.
Year ended
December 31, 2022
Revenue from external customers
Power
Enamel
SDI
Others*
North
Asia
US$’000
Thailand
US$’000
ROW
US$’000
Total
segments
Consolidated
US$’000
92
76,002
1,209
26
77,329
46,340
102,122
—
23,379
171,841
135,739
—
44,722
4,262
184,723
182,171
178,124
45,931
27,667
433,893
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* includes revenues from fabrication service contracts and the sale of other wire and cable products.
Year ended
December 31, 2021
Revenue from external customers
Power
Enamel
Fabrication
Others*
North
Asia
US$’000
Thailand
US$’000
ROW
US$’000
Total
segments
Consolidated
US$’000
—
107,027
—
5
107,032
63,629
105,749
—
28,401
197,779
127,891
—
39,476
4,481
171,848
191,520
212,776
39,476
32,887
476,659
* includes revenues from fabrication service contracts and the sale of other wire and cable products.
The following chart sets forth the organizational structure, as of December 31, 2023, of APWC and its principal subsidiaries, and
indicates the percentage ownership or voting power of each entity. The location of the headquarters of each company is indicated in
parentheses above the company’s name (“T” for Thailand, “C” for China or Hong Kong, “S” for Singapore and “A” for Australia).
In Thailand, APWC has the following subsidiaries:
•
Charoong Thai Wire & Cable Public Co. Ltd. (“Charoong Thai”), a public company listed in Thailand that is majority
owned by APWC.
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•
Charoong Thai owns three principal subsidiaries in Thailand, namely Siam Pacific Electric Wire & Cable Co. Ltd. (“Siam
Pacific”), Double D Cable Co. Ltd., and Siam Fiber Optics Co. Ltd.
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Our Company produces and sells enameled wires, power cables, and telecommunication cables in Thailand. Charoong Thai is
one of the leading cable manufacturers in Thailand. Our distribution channels include both direct sales to state owned entities
and private sector participants in the infrastructure sector, and sales to agents for state owned entities. Sales within the Thailand
region are made directly by the sales department of the APWC operating subsidiaries in accordance with terms and pricing set
by the local subsidiaries. The major customers of our Company include clients working with the government and its contractors.
In North Asia, APWC has four principal subsidiaries:
•
•
•
•
Crown Century Holdings Ltd. (“Crown Century”), which is a registered Hong Kong company majority owned by APWC,
Shanghai Yayang Electric Co., Ltd. (“Shanghai Yayang”), a PRC company that is majority owned by Charoong Thai,
Pacific Electric Wire and Cable (Shenzhen) Co. Ltd. (“PEWSC”), a PRC company wholly owned by Crown Century, and
Ningbo Pacific Cable Co., Ltd. (“Ningbo”, collectively with PEWSC and Shanghai Yayang, the “PRC Subsidiaries”), a
PRC company wholly owned by Crown Century.
Our Company produces and sells enameled wires in China. Our Company generally sells enameled wires directly to
manufacturers of electric motors for use in various consumer appliances. PEWSC manufactures enameled wires for electric,
video and audio products for the South China market. Shanghai Yayang, which had previously produced enameled wires, ceased
production at the end of October of 2019 and has been restructured as a trading company in Shanghai that supplies mainly
transformer, motor and coil manufacturers in the eastern part of China. Ningbo is currently a dormant entity. Our Company
continues to indirectly own the equity of Ningbo, which still holds its government-granted business license. Our Company has
disposed of all of the buildings and most of the equipment and the land use rights for the property where Ningbo’s operations
had been situated. The principal machinery utilized at the Ningbo facility has either been sold or stored at other operating
facilities of our Company.
In the ROW, APWC has three principal subsidiaries:
•
•
•
Sigma Cable Company Pte. Ltd. (“Sigma Cable”), a Singapore entity that is majority owned by APWC,
Epan Industries Pte. Ltd., a Singapore company that is wholly owned by Sigma Cable, and
Australia Pacific Electric Cable Pty. Ltd. (“APEC”), an Australian company majority owned by APWC through its
ownership in Crown Century and Sigma Cable.
Our Company produces and sells low voltage power cables in Singapore and Australia. In addition, our Company sells a wide
range of wire and cable products produced by third party suppliers in addition to PEWC. Our Company also offers SDI project
engineering services for medium and high voltage power cables to power transmission projects in Singapore. SP Power Assets
Ltd. has historically been the principal customer for our Company’s SDI services, accounting for nearly all of our SDI sales.
Sales to SP Power Assets Ltd. are under a comprehensive contract, with purchase orders placed from time to time.
In addition to these principal subsidiaries in our reportable segments, we established Asia Pacific New Energy Co. Ltd.
(“APNEC”), a Taiwanese company, in Taipei City on October 26, 2018 for a new renewable energy business. APNEC seeks to develop
an alternative energy business in Taiwan by availing itself of incentives provided by the Taiwan energy authority for the expansion of
“green” energy alternatives. On December 15, 2022, APWC increased its investment in APNEC in the form of a capital injection of
$3.9 million (or NT$120 million). The purpose was to fund the fishery solar farm and on-train communication system integration
projects. These projects remain at a development-stage and APNEC has not generated material revenue to date.
Dividends received from our operating subsidiaries and equity investees may be subjected to withholding taxes. Under the
Corporate Income Tax Law of the PRC, dividend distribution of profits to foreign investor(s) is subject to a withholding tax of
10%. There is no withholding tax on dividend distributions from a Hong Kong entity to either residents
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or non-residents. In Thailand, dividends paid by a company to any individual or corporate payee overseas are subject to a withholding
tax of 10%. Under the current Singapore corporate tax system, dividends paid by a Singapore resident company are tax exempt, and are
not subject to withholding taxes. In Australia, dividends paid to non-residents are exempt from dividend withholding taxes except when
dividends are paid out of profit that is not taxed by Australian income tax.
APWC’s operating subsidiaries are also responsible for sales planning, marketing strategy and customer liaison. Our Company’s
sales staff are knowledgeable about our Company’s products and also render technical assistance, consulting services and repair and
maintenance services to our Company’s customers. Our Company does not conduct sales through independent sales agents on a
commission basis but uses its own sales employees located at and employed by APWC’s operating subsidiaries.
Payment methods for our Company’s products vary with markets and customers. The majority of sales by our Company require
payment within 90 days of product delivery, 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 SDI products, our Company is required to pay PEWC 100% of the cost of the products within 45 days
from the date of invoice. In connection with a purchase of copper rod, our Company is required to pay PEWC the cost of the copper
rod within 60 days of receipt of the products from PEWC. For the export market, payment is usually made by prior delivery of an
irrevocable letter of credit. Neither APWC nor its operating subsidiaries offer financing for purchases of our Company’s products.
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 the operating subsidiaries in each geographic region. For instance, products
manufactured by Siam Pacific are marketed under the “Siam Pacific” trade name. Products manufactured by Sigma Cable are sold
under the “Sigma Cable” brand.
Products and Services
Across our Company’s three reporting segments, our Company manufactures and sells a wide variety of wire and cable products
in primarily three general categories: enameled wire, power cable, and telecommunications cable. Our Company’s enameled wires are
used in the manufacturing of components and sub-components of a number of household appliances and small machinery. Our
Company’s telecommunications and power cables are used in a range of infrastructure projects and in commercial and residential
developments. In addition, our Company acts as a distributor in Singapore of wire and cable products manufactured by PEWC. Our
Company also offers SDI project engineering services of medium and high voltage cables for power transmission projects in Singapore.
Products
Copper rod is the base component for most of our 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 cables is covered with
various insulating materials that are applied in an extrusion process. The insulated wires are then combined, or “cabled” to produce the
desired electrical properties and transmission capabilities. Then, depending upon the cable, some form of protective cover is placed
over the cabled wires. A summary of the manufacturing process used for our Company’s primary wire and cable products is set forth
below.
Enameled Wire
Our Company produces several varieties of enameled wires. Enameled wires are copper wires varnished, in an enameling
process, by insulating materials. The enameling process makes the wires more resistant to oil, heat, friction and fusion, and therefore
suitable for use in machinery and components and sub-components of manufactured goods. Our Company manufactures enameled
wires in sizes that range from 0.02 mm to 4.00 mm in diameter, varnished by various types of petroleum insulation materials including
polyvinyl formal, polyurethane wires and polyester. 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.
Power Cable
Our Company produces a range of armored and unarmored low voltage power transmission cables. Low voltage power cables,
generally considered to be cable with a capacity of 1 to 3.3 kilovolts, are typically used to transmit electricity
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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 cables are usually used for public lighting and power transmission running to buildings and installed
either above or below ground. Unarmored low voltage cables are mainly used as lighting and power supply cables inside and outside of
buildings. The voltage capacity of our Company’s power cables ranges from 300 volts to 1 kilovolt.
Production of unarmored cables begins by drawing and annealing of copper rods. The drawn copper wires are then stranded or
“bunched” into round or sector-shaped conductors in sizes ranging from 1.5 square millimeters to 1000 square millimeters. The copper
conductors are then covered in an extrusion process with a plastic insulator such as polyvinyl chloride ("PVC"), after which 2-5
conductors are twisted into a circular cable core in a cabling process and covered by a plastic outer cover.
Unarmored cables are composed of one or more cores of copper wire, insulated by substances such as PVC. Armored cables are
produced in the same manner and the same range of configurations as unarmored cables, but with the addition of an outer layer of
galvanized steel or iron wires to protect the cables from damage.
Telecommunications Cable
Our Company produces a wide range of bundled telecommunications cables for telephone and data transmissions with different
capacities and insulations designed for use in various internal and external environments. The principal use of these cables is as access
cables to connect buildings and residents to trunk cables. Telecommunications cables produced by our Company include copper-based
and fiber optic cables.
Production of copper-based telecommunications cables begins by drawing a copper rod until it has reached the desired diameter,
after which the drawn wires are subjected to a process called “annealing” in which the wires are heated in order to make the wires
softer and more pliable. Utilizing an extrusion process, which involves the feeding, melting and pumping of a compound through a die
to shape it in final form as it is applied to insulate the wire, the wires are then covered by a polyethylene (“PE”) or PVC compound and
foam skin, suitable for different installations and environmental conditions. In order to reduce the cross-talk between pairs of
communication wires, the insulated wires are then “twinned” or twisted so that two insulated single wires are combined to create a
color-coded twisted pair. The twisted pairs of wires are then “cabled” or “stranded” into units of 25 twisted pairs for combination with
other 25 pair units to form cable of various widths and capacities. The appropriate number of units is cabled together after stranding to
form a round cables 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 cables and, finally, the shielded cable core is
covered by plastic outer sheathing. Our Company manufactures telecommunications cables with capacities and sizes ranging from 25
to 3,000 pairs of 0.4 mm-diameter wires to 10 to 600 pairs of 0.9 mm-diameter wires.
Services
Fabrication
Our Company performs fabrication services for its customers, converting raw materials to wire and cable products. Raw
materials, such as copper, aluminum, PVC, PE and optic fibers, are commodities traded on global markets with anticipated price
fluctuations and currency risk. Given these risks, our Company provides fabrication services using customer-owned materials in order
to limit exposure to these risks.
SDI Project Engineering Services
Given government and private sector infrastructure projects and residential and commercial buildings activity in Singapore, our
Company anticipates modest demand for medium and high voltage power and for value added services in the power supply industry. To
take advantage of these opportunities, our Company has developed an SDI project engineering capability. This SDI project engineering
involves supply, delivery and installation of primarily medium and high voltage cables to power transmission projects in Singapore. In
entering into a contract to supply, deliver and install cables for a power transmission project, our Company delivers medium and high
voltage cables and enters into subcontracting agreements with local companies to install the cables as required by the project.
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Raw Materials
As copper constitutes the most significant component of our Company’s wire and cable products, the price of our Company’s
products depends primarily upon the price of copper. In order to minimize the impact of copper price fluctuations, our Company
typically purchases copper at prices based on the average prevailing international spot market prices on the LME for copper for the one
month prior to purchase. The price of copper is influenced heavily by global supply and demand as well as speculative trading. As with
other costs of production, changes in the price of copper can affect our Company’s cost of sales. Whether this has a material impact on
our Company’s operating margins and financial results depends primarily on our Company’s ability to adjust selling prices to its
customers, such that increases and decreases in the price of copper are reflected in those selling prices. In the cases when we enter into
a long-term sales contract at fixed selling prices, rising copper prices could render this contract onerous and our Company would be
required to recognize losses from this onerous contract in the income statement. Most sales of our Company’s manufactured products
reflect copper prices prevailing at the time the products are ordered. A long-term decrease in the price of copper would require our
Company to revalue the value of its inventory at periodic intervals to the then net realizable value, which could be below cost.
Our Company purchases copper in the form of rods and cathodes. Copper cathodes are thin sheets of copper purified from
copper ore. Copper rods are drawn into copper wires for the production of enameled wires, power cables and telecommunications
cables. Copper purchased by our 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 example, our Company’s operating subsidiaries in Thailand may import copper
cathodes and utilize services from their business partners, including Thai Metal Processing Co., Ltd., to process the copper cathodes.
Our Company’s key suppliers include Glencore International AG. - Switzerland, Jiangxi Copper Corporation Limited - China,
Alpha Industries Sdn Bhd - Malaysia, Mitsubishi Corporation RtM International Pte. - Singapore, Marubeni Corporation - Japan , and
Fujian Shanghang SUN COPPER Co., Ltd. - China. Our Company attempts to maintain a few weeks supply of copper rods and
cathodes for its operations. Our Company has regularly signed one-year contracts with each of its copper suppliers, pursuant to which
our Company agrees to purchase a set quantity of copper each month. Under the terms of such contracts, the price of copper is typically
pegged to the monthly average of the spot price of copper on the LME for the delivery month (M-0), or 1 month before delivery month
(M-1) plus a premium. Our Company has not had and does not anticipate any material supply interruption or difficulty in obtaining a
sufficient supply of copper rod or cathode, although the recent delays in shipping could increase our cost of acquiring copper. Our
Company anticipates that its copper suppliers will be capable of providing an adequate supply of copper to meet our Company’s
requirements and our Company does not anticipate any change in relations with its copper suppliers in the near term. (See Item 3D:
Risk Factors-Risks Relating to our Business: “The ability of suppliers to deliver raw materials, parts and components and energy
resources could affect our Company’s ability to manufacture products without disruption and in turn negatively affect our operations.”).
Our Company has historically purchased a small portion of its copper rods from PEWC. Under the Composite Services
Agreement, PEWC has agreed to supply our Company on a priority basis with our copper rod requirements at prices at least as
favorable as prices charged to other purchasers in the same markets purchasing similar quantities. Our Company has diversified its
copper purchases from among a number of preferred copper suppliers to ensure that our Company receives the most advantageous
pricing on its copper purchases. Our Company does not currently purchase copper rods from PEWC.
Other raw materials used by our Company include aluminum, which is used as a conductor in power cables and petroleum-based
insulation materials such as PE, PVC and jelly compounds for insulating covers on cables and varnishes on enameled wires; aluminum
foils for sheathing of communication cables; and galvanized steel wires for the production of armored wires. Our Company has not had
and does not anticipate any difficulty in maintaining adequate supplies of these raw materials and expects to continue to be able to
purchase such raw materials at prevailing market prices. Other than import tariffs in Thailand, our Company does not face any
restriction or control on the purchase or import of its raw materials. Our Company may freely choose its suppliers and negotiate the
price and quantity of material with its suppliers. Our Company formulates consumption plans for raw materials regularly and
continually monitors market conditions in respect of the supply, price and quality of raw materials.
Inflation increases the cost of raw materials and operating expenses for our Company. If inflationary pressure persists, our
Company may not be able to maintain its operating margins by raising the prices of its products.
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Quality Control
In order to maintain product quality, our Company has implemented a range of quality control procedures under the supervision
of dedicated quality control staff. Quality control procedures are implemented from the raw material to the finished product stages at
each of our 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 production facilities for inspection and testing of
different electrical and physical properties.
Depending on the requirements of its customers, our Company has the capability to manufacture products to meet a variety of
different quality and production standards. These include standards and certifications issued from Enterprise Singapore, the Thai
Industrial Standards Institute, the National Electrical Manufacturers Association, the British Standard Institute, the Japan Industrial
Standards and UL Solutions.
All of our Company’s principal operating entities have attained International Organization for Standardization (“ISO”) 9001
certification for quality management and assurance standards in the manufacture of electric wires and cables and have maintained that
certification for at least the last ten years. These certifications mean that these entities have in place quality assurance systems and the
capability to consistently manufacture products of quality.
Competition
The wire and cable industry in the Asia Pacific region is highly competitive. Our Company’s competitors include a large number
of independent domestic and foreign suppliers. Certain competitors in each of our Company’s markets have substantially greater
manufacturing, sales, research and financial resources than us. Our Company and other wire and cable producers primarily compete on
the basis of product quality and performance, reliability of supply, customer service, and price.
North Asia
PEWSC manufactures enameled wires in the Shenzhen Special Economic Zone in Guangdong Province for electronic, video and
audio products in the south China market. It supplies mainly to transformer, motor and coil manufacturers. It faces competition
principally from overseas imports and local manufacturers.
Shanghai Yayang has been restructured as a trading company in Shanghai and it supplies mainly transformer, motor and coil
manufacturers in the eastern part of China. It faces competition principally from overseas imports and manufacturers in China.
Thailand
The wire and cable industry in Thailand is highly competitive. In its various product lines, our Company competes with
approximately thirty local wire and cable manufacturers and, to a lesser extent, with foreign producers for sales in Thailand of power
cables, enameled wires, and telecommunications cables. Our Company is one of the five largest producers in the Thai market.
Governmental approval processes, tariffs and other import restrictions have limited competition in the Thailand market from foreign
wire and cable producers. Our Company also experiences significant competition from a number of smaller producers with regard to
sales of enameled wire products.
ROW
Although we believe that Sigma Cable is one of the major suppliers of power cable products in Singapore based on available
data, it is subject to significant competition from producers within the region. There are no tariff or other barriers against foreign
competition in the local Singapore market, and potential competitors are free to enter the industry. The performance of Sigma Cable in
2023 was adversely impacted by increased intense competition from other manufacturers seeking to capture a greater share of the
Singaporean market.
In addition to APEC, there are two major wire and cable producers with operations in Australia: Olex Cables (owned by Nexans)
and Prysmian Cables, with factories in the States of Victoria and New South Wales, respectively. A significant portion of Australian
market is serviced by two importers: (i) Electra Cables which reportedly imports cables from China factories; and (ii) World Wire
Cables, which reportedly also sources cables from its Chinese partners to sell in
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the Australian market. These companies are APEC’s principal competitors. APEC is the only power cable producer in the State of
Queensland and therefore seeks to take advantage of its comparative proximity to Queensland-based customers in contrast to
competitors that are required to transport their products into Queensland from other states in Australia. APEC has sales offices with
warehousing facilities in Sydney, Melbourne, Brisbane, and Perth in order to attract and serve customers in those regions. APEC also
has a distribution agreement with one of the regional suppliers with the goal of generating additional business for the Australia
operations.
Regional Considerations
The principal Asian markets in which we do business have displayed higher overall economic growth in recent years compared
to the United States and a number of other more developed markets, subject to occasional episodes of economic and currency exchange
volatility attributable to various factors including the increased risks of emerging market investment, actual or potential political
instability, and pandemics.
North Asia
Our Company’s North Asia operations are conducted principally in 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 government of China has implemented economic reform measures which emphasize decentralization, expansion of
consumption in the domestic market, residential and commercial real estate development, infrastructure development, utilization of
market forces and the development of foreign investment projects.
Thailand
The volume of sales of our Company’s products in Thailand tends to correlate with the general level of economic activity in
Thailand. As a result, the performance of our Company’s Thai operations depends in significant part on the general state of the Thai
economy. Infrastructure development and related construction projects in Thailand depend significantly upon government sponsored
initiatives. In recent years, the level of government involvement in infrastructure development has tended to track increases or
contractions in Thailand’s gross domestic product. Overall, the construction industry and infrastructure projects have slowed
considerably, thereby affecting local sales, placing competitive pressure on prices and prompting our Company to rationalize Thai
operations and actively seek overseas export markets. Political instability in Thailand tends to diminish governmental focus on
infrastructure development projects, which can adversely impact the volume of sales to our customers who are engaged in large
infrastructure projects.
Insurance
Our 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. Our Company does not carry insurance for
consequential loss arising from business interruptions or political disturbances and does not carry product liability insurance.
Consequently, the amount of our insurance coverage may not be adequate to cover all potential claims or liabilities, and we may be
forced to bear substantial costs resulting from the lack of adequate insurance. No assurance can be given that we will not incur losses
beyond the limits or outside the scope of coverage of our insurance policies. Please see “Our insurance coverage does not cover all of
our business risks” in Section 3.d. above for more information regarding insurance coverage risks.
Environmental Regulations
Our Company is subject to a variety of laws and regulations covering the storage, handling, emission and discharge of materials
into the environment. Our Company believes that all of its operations are in material compliance with all applicable environmental laws
and regulations. Our Company has not been subject to any material legal, regulatory or other action alleging violations or breaches of
environmental standards.
4.C. Organizational Structure
Please refer to Business Overview in Item 4.B. above.
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4.D. Property, Plants and Equipment
Our Company’s manufactured products are produced at facilities located on premises owned or leased by Siam Pacific,
Charoong Thai, Sigma Cable, APEC, and PEWSC. The following is a summary of our Company’s material facilities and operations.
Siam Pacific owns a 7.45 acre production facility near Bangkok, Thailand, located on its owned 26.79 acre site.
Telecommunications cables and enameled wires are manufactured at this facility. The production facility constitutes a portion of certain
property and assets which are pledged to financial institutions.
Charoong Thai owns a 34 acre production facility
in Chachoengsao province, near Bangkok, Thailand, where
telecommunications cables and power cables are manufactured. The production facility is located on a 65 acre site owned by Charoong
Thai. Neither the production facility nor the land is mortgaged.
Sigma Cable produces power cables at a 19,373 square meter facility in Singapore leased from the Jurong Town Corporation
(“JTC”) under a 30 year lease running from September 16, 2000 to September 16, 2030. JTC is a government-linked corporation and
is Singapore’s largest industrial landlord. Building assets are pledged to United Overseas Bank.
APEC owns a 6,735 square meter power cable manufacturing facility situated on an owned 39,000 square meter land parcel in
Brisbane, Australia. The manufacturing facility and land are pledged as security for a bank loan facility issued to APEC.
Shanghai Yayang ceased production in 2019 and was restructured as a trading company, located in an area of approximately
27,839 square meters of state-owned land in an industrial district in Fengxian, Shanghai. No assets at this facility are presently
encumbered.
PEWSC manufactures enameled wires in a facility on 36,000 square meters of state-owned land with a built-up area of 20,367
square meters in Long Gang, Shenzhen, China. A leasehold right of industrial land use for the land was granted for 49 years expiring on
July 5, 2046. The land and building are pledged to Agricultural Bank of China as security for a $2 million bank loan. The loan
agreements were renewed for one year and are set to expire in March 2024.
Most of our Company’s facilities in Thailand, Singapore, Australia and China use production processes and equipment imported
from Europe, the United States, Taiwan, or Japan.
The production capacity and extent of utilization of our Company’s facilities vary from time to time, and such information is
considered to be commercially sensitive and proprietary information.
ITEM 4A: UNRESOLVED STAFF COMMENTS
Not applicable
ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS
5.A. Operating Results
The following discussion should be read in conjunction with the information contained in our audited consolidated financial
statements and notes thereto (the “Financial Statements”) referenced in Item 18 of this Annual Report. Selected accounting policies are
set out in Note 3 of our consolidated financial statements referenced in Item 18 of this Annual Report, which are prepared in
accordance with IFRS as issued by the IASB.
Selected Operating Data
Results are analyzed and reported along the lines of our three principal business segments, consisting of the North Asia,
Thailand, and ROW regions. Included in the summary table below are certain results within our three business segments with regard to
net sales, operating profit, and operating profit margin for the designated periods.
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Operating Results
Net Sales:
North Asia region
Thailand region
ROW region
Total
Operating profit/(loss):
North Asia region
Thailand region
ROW region
Corporate expenses & adjustments
Total operating (loss)/profit
Operating profit/(loss) margin:
North Asia region
Thailand region
ROW region
For the year ended December 31,
2023
2022
2021
(US$’000 except for percentages)
$
$
$
$
58,649
$
77,329
$
166,925
200,198
425,772
1,794
(2,119)
8,628
(6,755)
$
$
171,841
184,723
433,893
241
2,636
7,768
(2,578)
$
$
1,548
$
8,067
$
107,032
197,779
171,848
476,659
4,523
(13,537)
6,690
(2,649)
(4,973)
3.06 %
(1.27)%
4.31 %
0.31 %
1.53 %
4.21 %
4.23 %
(6.84)%
3.89 %
As of December 31, 2023, APWC is approximately 80.96% beneficially owned and controlled by PEWC, with the remaining
approximately 19.04% of the issued and outstanding Common Shares being publicly-traded in the United States and listed on Nasdaq.
Based upon a review of Schedule 13D and 13G filings made with the SEC by shareholders, and a review of the share register
maintained by APWC’s transfer agents in Bermuda and the U.S., we are not aware of any shareholders residing in the jurisdictions
where our Company has business operations. While our Company’s operations and results are impacted by economic, fiscal, monetary
and political policies of the respective governments in the countries where our Company operates, that impact is not a function of
APWC’s shareholder base. Inflation has, and may continue to, increase the cost of raw materials and operating expenses for our
Company. If inflationary pressure persists, we may not be able to maintain our operating margins even if we raise the price of our
products.
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Year Ended December 31, 2023 Compared with Year Ended December 31,2022
For the Year Ended
December 31,
2023
US$’000
2022
US$’000
Changes
US$’000
Changes
%
Income Statement Data:
Revenue
Costs of sales
Gross profit
Other operating income
Selling, general and administrative, research and
development expenses
Other operating expenses
Net impairment loss on financial and contract assets
Operating profit
Finance costs
Finance income
Share of loss of associates
Exchange gain
Other income
Other expense
Profit before tax
Income taxes expense
Profit for the year
Attributable to:
Equity holders of APWC
Non-controlling interests
General
$
425,772 $
433,893 $
(395,545)
(401,363)
30,227
433
32,530
1,026
(24,472)
(24,978)
—
(4,640)
1,548
(2,527)
205
(2)
679
570
(9)
464
(162)
302
3,867
(3,565)
(3)
(508)
8,067
(1,650)
120
(1)
143
889
(3)
7,565
(2,808)
4,757
3,874
883
(8,121)
5,818
(2,303)
(593)
506
3
(4,132)
(6,519)
(877)
85
(1)
536
(319)
(6)
(7,101)
2,646
(4,455)
(7)
(4,448)
(1.9)
(1.4)
(7.1)
(57.8)
(2.0)
(100.0)
813.4
(80.8)
53.2
70.8
100.0
374.8
(35.9)
200.0
(93.9)
(94.2)
(93.7)
(0.2)
(503.7)
Results of operations are determined primarily by market demand and government infrastructure projects, market selling prices
of our products, our ability to manufacture high quality products efficiently in quantities sufficient to meet demand and to control
production and operating costs. Our results are also influenced by a number of factors, including impacts from the Sino-American trade
war, currency stability in the countries in which our operations are located, competition and the cost of raw materials, especially
copper, which accounted for the majority of our cost of sales in 2023 and 2022.
In order to minimize the impact of copper price fluctuations, we attempt to “peg” the prices of our products to the prevailing
market price of copper and pass changes in the cost of copper through to customers as much as possible. In certain circumstances,
however, we remain affected by fluctuations in the price of copper. A recent rise or decline in copper prices may not be fully reflected
under this pricing scheme for several months.
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Average copper prices per metric ton decreased by 3.76% from $8,814 in 2022 to $8,483 in 2023 (annual average). Copper
prices indicated in this Annual Report are quoted from the index published by the LME. The 2023 and 2022 average copper prices were
as follows:
Average LME copper price ($/Ton)
Q1
Q2
Q3
Q4
Year
2023
2022
8,929
8,478
8,355
8,169
8,483
9,984
9,525
7,741
8,005
8,814
The average copper price in March 2024 on the LME was $8,675 per ton.
Revenue
Revenue from the North Asia region decreased by $18.7 million, or 24%, from $77.3 million in 2022 to $58.6 million in 2023.
The decrease was attributable to decreased sales volume primarily due to increased competition and the Sino-American trade war.
These factors contributed to a sluggish market, resulting in a decline in sales compared with the previous period.
Revenue from the Thailand region decreased by $4.9 million, or 3%, from $171.8 million in 2022 to $166.9 million in 2023. The
decrease was due to the decrease in government spending on infrastructure and delay in government projects.
Revenue from the ROW region increased by $15.5 million, or 8%, from $184.7 million in 2022 to $200.2 million in 2023. The
increase of $1.9 million, or 12%, was due to strong demand in the construction sector in Australia, and the increase of $13.6 million, or
88%, was attributable to the completion of public sector projects in Singapore.
Gross Profit
Gross Profit decreased by $2.3 million, or 7%, from $32.5 million in 2022 to $30.2 million in 2023. The gross profit margin was
7.1% in 2023 compared to 7.5% in 2022. The decrease in gross profit margin was primarily attributable to the a decline in higher-
margin Thai government projects and decreased sales volume in enameled wire as well as loss from onerous contracts in the Thailand
region.
Operating Profit
Operating profit for 2023 was $1.5 million, representing a decrease of $6.5 million, or 80.8%, from $8.1 million in 2022.
The operating profit margin of the North Asia region increased from 0.31% in 2022 to 3.06% in 2023. The increase in operating
profit was the result of the increase in the manufacturing productivity, or overall equipment effectiveness ("OEE"), which lowered the
cost of our products.
The operating profit margin of the Thailand region decreased from 1.53% in 2022 to (1.27)% in 2023. The decrease in operating
profit was due to a decline in higher-margin Thai government projects, decreased sales volume in enameled wire as well as loss from
onerous contracts.
The operating profit margin of the ROW region increased from 4.21% in 2022 to 4.31% in 2023. The operating profit margin of
2023 remained consistent compared to that of 2022.
Furthermore, the impairment loss on financial and contract assets increased from $0.5 million in 2022 to $4.6 million in 2023.
The increase was due to the increased loss allowance provided for the delinquent accounts.
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Finance Cost
Our finance costs consist mainly of interest on bank loans and borrowings. The interest costs increased by $0.9 million, or 53%,
from $1.7 million in 2022 to $2.5 million in 2023. The interest-bearing loans and borrowings decreased to $53.7 million in 2023
compared to $57.7 million in 2022. The increase in interest is due to the increase in interest rates in various countries.
Finance Income
Our finance income consists of interest earned on bank deposits. Interest income were $0.1 million in both 2022 and 2023.
Share of Loss of Associates
Our share of loss remained consistent in 2023 compared to that of 2022. This was primarily due to the loss that our Company
recognized in accordance with its percentage ownership interest in Siam Pacific Holding Company.
Exchange Gain/(Loss)
The exchange gain of 2023 was primarily attributable to the appreciation of Thai Baht. The exchange rates on December 31,
2023 and 2022 are listed below, based on the Noon Buying Rate. Note that they do not reflect the exchange rates at which transactions
actually took place.
Foreign currency to US$1:
Thai Baht
Singapore $
Australian $
Chinese RMB
As of December 31,
2023
2022
34.35
1.319
1.465
7.100
34.59
1.340
1.470
6.897
Sources: Federal Reserve Bulletin, Board of Governors of the Federal Reserve System. Federal Reserve Statistical Release H.10, from
the website of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov.
Income taxes
Income tax expense was $0.2 million in 2023, compared to $2.8 million in 2022. The decrease in income tax expense was due to
increased deferred tax assets resulting from net operating losses from prior years recognized by SCC in 2023.
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Year Ended December 31, 2022 Compared with Year Ended December 31, 2021
Income Statement Data:
Revenue
Costs of sales
Gross profit
Other operating income
Selling, general and administrative expenses
Other operating expenses
Net impairment loss on financial and contract assets
Operating (loss)/profit
Finance costs
Finance income
Share of loss of associates
Exchange gain/(loss)
Other income
Other expense
Profit before tax
Income taxes expense
Profit/(loss) for the year
Attributable to:
Equity holders of APWC
Non-controlling interests
General
For the Year Ended
December 31,
2022
US$’000
2021
US$’000
Changes
US$’000
Changes
%
$
433,893 $
476,659 $
(42,766)
(401,363)
(455,508)
32,530
1,026
(24,978)
(3)
(508)
8,067
(1,650)
120
(1)
143
889
(3)
7,565
(2,808)
4,757
3,874
883
21,151
587
(26,484)
(7)
(220)
(4,973)
(1,251)
123
(1)
(4,425)
671
(1)
(9,857)
1,345
(8,512)
(2,642)
(5,870)
54,145
11,379
439
1,506
4
(288)
13,040
(399)
(3)
—
4,568
218
(2)
17,422
(4,153)
13,269
6,516
6,753
(9.0)
10.7
53.8
74.8
(7.8)
83.2
130.9
1264.4
26.5
(2.4)
66.7
(103.2)
32.5
66.7
(176.7)
(95.2)
490.0
66.2
(115.0)
Results of operations are determined primarily by market demand and government infrastructure projects, market selling prices
of our products, our ability to manufacture high quality products efficiently in quantities sufficient to meet demand and to control
production and operating costs. Our results are also influenced by a number of factors, including impacts of COVID-19, currency
stability in the countries in which our operations are located, competition and the cost of raw materials, especially copper, which
accounted for the majority of our cost of sales in 2022 and 2021.
In order to minimize the impact of copper price fluctuations, we attempt to “peg” the prices of our products to the prevailing
market price of copper and pass changes in the cost of copper through to customers as much as possible. In certain circumstances,
however, we remain affected by fluctuations in the price of copper. A recent rise or decline in copper prices may not be fully reflected
under this pricing scheme for several months.
Average copper prices per metric ton decreased by 5.37% from $9,314 in 2021 to $8,814 in 2022 (annual average). Copper
prices indicated in this Annual Report are quoted from the index published by the LME. The 2022 and 2021 average copper prices were
as follows:
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Average LME copper price ($/Ton)
2022
2021
9,984
9,525
7,741
8,005
8,814
8,479
9,711
9,371
9,697
9,314
Q1
Q2
Q3
Q4
Year
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Revenue
Revenue from the North Asia region decreased by $30 million, or 28%, from $107 million in 2021 to $77.3 million in 2022. The
decrease was attributable to decreased sales volume primarily due to the impact of the conflict in Ukraine. The price of raw materials,
crude oil, and natural gas rose, which squeezed the export market for home appliances and electronic consumer products, and export
volume shrank. Also negatively affecting revenue were China’s 2020-2022 COVID lockdowns and the Sino-American trade war, which
disrupted supply chains and the world economy.
Revenue from the Thailand region decreased by $25.9 million, or 13%, from $197.8 million in 2021 to $171.8 million in 2022.
The decrease was attributable primarily to the decrease in sales to the public sector in 2022 and depreciation of the Thai Baht, which
depreciated by 9.71% compared to 2021.
Revenue increased by $12.9 million, or 7%, from $171.8 million in 2021 to $184.7 million in 2022 in the ROW region.
Increased product sales due to orders released to the market, after the Singapore government removed certain COVID-19 restrictions. A
decline in the demand for cables decreased the revenues in Australia.
Gross Profit
Gross Profit increased by $11.4 million, or a 53.8% change, from $21.2 million in 2021 to $32.5 million in 2022. The gross
profit margin was 7.5% in 2022 compared to 4.4% in 2021. The increase in gross profit margin was primarily attributable to the effects
of copper price fluctuations, which decreased loss on onerous contracts and diminution in the value of inventory in 2022 in the
Thailand region.
Operating Profit
Operating profit for 2022 was $8.1 million, representing an increase of $13 million, or 262.2%, from the operating loss of $(5)
million in 2021.
The operating profit margin of the North Asia region decreased from 4.23% in 2021 to 0.31% in 2022. The decrease resulted
from a decrease in sales volume and the fluctuation of copper prices.
The operating profit margin of the Thailand region increased from (6.84)% in 2021 to 1.53% in 2022. The operating profit
increase was the result of a 13.5% drop in copper prices compared to the end of 2021.
The operating profit margin of the ROW region slightly increased from 3.89% in 2021 to 4.21% in 2022 due to the increased
sales volume in Singapore.
Finance Cost
Our finance costs consist mainly of interest on bank loans and borrowings. Interest costs increased to $1.7 million in 2022
compared to $1.3 million in 2021. Interest-bearing loans and borrowings decreased to $57.7 million in 2022 compared to $65.4 million
in 2021. The increase in interest is due to the increase in interest rates in various countries, and the decrease in loan balance is due to
the decrease in the required working capital due to the decrease in revenue.
Finance Income
Our finance income consists of interest earned on bank deposits. Interest income were $0.1 million in both 2021 and 2022.
Share of Loss of Associates
Our share of loss remained consistent in 2022 compared to that of 2021. This was primarily due to the loss that our Company
recognized in accordance with its percentage ownership interest in Siam Pacific Holding Company.
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Exchange Gain/(Loss)
The exchange gain of 2022 was primarily attributable to the depreciation of Thai Baht and appreciation of Chinese RMB. The
exchange rates on December 31, 2022 and 2021 are listed below, based on the Noon Buying Rate. Note that they do not reflect the
exchange rates at which transactions actually took place.
Foreign currency to US$1:
Thai Baht
Singapore $
Australian $
Chinese RMB
As of December 31,
2022
2021
34.59
1.340
1.470
6.897
33.33
1.352
1.377
6.373
Sources: Federal Reserve Bulletin, Board of Governors of the Federal Reserve System. Federal Reserve Statistical Release H.10, from
the website of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov.
Income taxes
Income tax expense was $2.8 million in 2022 compared to ($1.3) million in 2021. Increase in taxation over the period 2021 to
2022 was largely due to better earnings in Thailand in 2022.
5.B. Liquidity and Capital Resources
As of December 31, 2023, we had $38 million in cash and cash equivalents, primarily in bank accounts and cash on hand. The
majority of this cash and cash equivalents was held at our operating subsidiaries in Thai Baht, U.S. dollars, and Chinese RMB. Our
current sources of cash are our cash on hand, cash generated by our operations, and our credit facilities. Our liquidity is primarily
utilized for the purchase and replacement of property, plant and equipment, future acquisitions and expenditures for ongoing
operations.
We maintain several revolving working capital and overdraft credit facilities with various commercial bank groups and financial
institutions (the “Facilities”). As of December 31, 2023, the total amount of the Facilities was approximately $264.0 million and the
unused amount of the Facilities was approximately $187.8 million (taking into account letters of credit issued thereunder). The
Facilities do not have termination dates but are reviewed annually for renewal. There is no seasonality to our Company’s borrowing.
For details of our Company’s bank loans and borrowings, see Note 11(b) to our consolidated financial statements. As of December 31,
2023, a majority of the short-term bank loans and borrowings were held at variable interest rates, whereas the long-term bank loans
were held at a fix interest rate.
Except for foreign currency forward contracts, our Company did not use other derivatives to hedge financial risks in 2023.
Please refer to Note 11(c) and Note 27 to our consolidated financial statements for information about the management of financial
risks.
In February 2022, we completed a rights offering in which we received gross proceeds of approximately $8.3 million, before
expenses of the rights offering, from the sale of 6,796,558 Common Shares. The net proceeds of the rights offering were used for
general working capital and corporate purposes. The Company’s controlling shareholder, PEWC, purchased 6,259,924 Common Shares
which included an exercise of over-subscription rights. Please see Item 10 of this Annual Report for additional information regarding
the rights offering.
On July 10, 2020, APWC entered into a secured loan agreement (the “Secured Loan”) with PEWC as lender. In August 2020, we
borrowed the principal amount of $6 million at a fixed 3% rate of interest under the Secured Loan, pledging our Company’s 98.3%
ownership stake in Sigma Cable as collateral. The Secured Loan was repaid in full in 2021, the facility was terminated and the shares
pledged as collateral are unencumbered.
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APWC has no direct business operations other than its ownership of the capital stock of its subsidiaries and equity investees. As
a holding company, APWC’s ability to pay dividends, as well as to meet its other obligations such as holding
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company needs, depends mainly upon the amount of distributions, if any, received from its operating subsidiaries and other holdings
and investments.
The working capital and capital expenditure needs of APWC’s operating subsidiaries are primarily funded and met by their own
operations and borrowings from banks. APWC does not fund the operations or capital expenditure needs of its subsidiaries on an
ordinary course basis. However, the Board may authorize contributions from time to time to its subsidiaries on an as-needed basis.
There were no contributions from APWC to any of our subsidiaries for the years ended December 31, 2023, 2022, or 2021.
Of the $38 million in cash and cash equivalents we had on hand as of December 31, 2023, $2.7 million was held at APWC, and
the remainder was held by its subsidiaries. APWC uses its cash position to pay operating expenses and other obligations. All
Facilities are at the subsidiary level; APWC does not have any Facilities. APWC’s operating subsidiaries and other holdings and
investments, from time to time, may be subject to restrictions on their ability to make distributions to APWC, including, but not limited
to, as a result of restrictive covenants contained in their loan agreements, restrictions on the conversion of local currency earnings into
U.S. dollars or other currency, and other regulatory restrictions. For example, PRC legal restrictions permit payments of dividends by
our business entities in the PRC only out of their retained earnings, if any, determined in accordance with relevant PRC accounting
standards and regulations. Under PRC law, such entities are also required to set aside a portion of their net income each year to fund
certain reserve funds. These reserves are not distributable as cash dividends. The foregoing restrictions may also affect APWC’s ability
to fund operations of one subsidiary with dividends and other payments received from another subsidiary. Distributions may also be
limited from time to time by reason of restrictions protective of the rights of minority shareholders of APWC’s subsidiaries and by
reason of the current cash requirements of its operating subsidiaries. Consequently, we periodically need to manage our corporate cash
needs to align with the permitted timing of distributions.
Net cash used in operating activities in the year ended December 31, 2023 was $6.1 million, as compared to $6.6 million of net
cash provided by operating activities in the year ended December 31, 2022. The increase in cash used from operations was primarily
due to several factors, including decreased net profit, and increased trade receivables, compared to 2022.
Net cash provided by operating activities in the year ended December 31, 2022 was $6.6 million, as compared to $41.6 million
of net cash used in operating activities in the year ended December 31, 2021.
Days of sales outstanding (“DSO”) is a measure of the average collection period of accounts receivable, and although the
calculation is influenced by the period used and the timing of sales within that period, it can provide insight into the variances in
collections from period to period. Our DSO for 2023 was 80 days, as compared to 78 days for 2022. The change was primarily due to
increased sales in the public sector compared to 2022, resulting in longer DSO days for 2023. We have in place policies across our
Company that emphasize the importance of continuous focus on collection efforts.
In 2023, cash used in investing activities was $4.9 million compared to $2.7 million used in investing activities in 2022. The
increase in net cash used in investing activities was primarily attributable to increased purchases of property, plant and equipment in
2023.
In 2022, cash used in investing activities was $2.7 million compared to $6.2 million used in investing activities in 2021. The
decrease in net cash used in investing activities was primarily attributable to decreased purchases of property, plant and equipment in
2022.
Net cash outflows from financing activities were $5.5 million in 2023. The cash used in 2023 was primarily attributable to the
repayment of borrowings.
Net cash inflows from financing activities were $9.6 million in 2022. The cash inflows in 2022 were primarily attributable to a
decrease in borrowings.
We have historically been able to satisfy our working capital needs from our cash flow from operations. In the event that we do
not generate sufficient cash flow from our operations to meet our cash requirements, we will rely on external financing. At present, we
believe that our current cash and cash equivalents, along with existing credit lines under our loan facilities, will provide adequate cash
to fund our requirements through at least the next twelve months. We are confident in our liquidity to meet anticipated working capital,
capital expenditures, general corporate requirements, and other short-term
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and long-term obligations as they come due. We also believe that our strong cash and cash equivalents position are critical at this time
of uncertainty. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities
and requirements, we may be required to seek additional equity or debt financing (including by engaging in debt and/or equity
financings with our principal shareholder).
The following table sets forth our Company’s contractual obligations as of December 31, 2023:
Contractual obligations
(In thousands of US$)
Interest-bearing loans and borrowings
Lease obligations
Capital commitment relating to factory building
improvement and acquisition of machinery
Purchase obligations for raw materials
Total
57,170
2,090
735
146,839
206,834
$
$
Payments due by period
Less
than
1 year
1-5
years
More
than
5 years
57,170
676
725
146,839
205,410
—
1,059
10
—
1,069
—
355
—
—
355
Our Company has not entered into any transactions with unconsolidated entities whereby our Company has financial guarantees
or other contingent arrangements that expose our Company to material continuing risks, contingent liabilities, or any other obligation in
an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to our Company.
5.C. Research and Development
Our Company does not currently engage in its own research and development. Under the Composite Services Agreement with
PEWC, described herein, our Company benefits from research and development conducted by PEWC at little or no cost to our
Company. Accordingly, our Company has not made material expenditures on or commitments to research and development since its
formation.
5.D. Trend Information
We are not aware of any trend, commitment, event or uncertainty that can reasonably be expected to have a material effect on
our current or future business other than the following, each of which has materially impacted our financial results in the past and may
do so in the future:
•
•
Uncertainty arising from the volatility in the cost of copper, our principal raw material. The yearly average copper price
per ton decreased from $9,314 in 2021 to $8,814 in 2022, and to $8,483 in 2023. Under our business model, our Company,
like other companies in the industry, is affected by movements in the price of copper, our principal raw material. (See “Item
3. Key Information–Risk Factors–Risks Relating to our Business–Significant volatility in copper prices could be detrimental
to our profitability” for more information about the effects of movements in the price of copper on our Company.)
Fluctuations in the demand for our products in the markets in which we do business. Demand for our products in the
markets in which we do business fluctuates based upon variations in the level of governmental and private investments in
communications, power and industrial projects and programs that utilize our products. We are not an end-user of our
products and, therefore, we depend upon the requirements of our customers to generate sales.
(See “Item 11. Quantitative and Qualitative Disclosures About Market Risks”)
5.E. Critical Accounting Estimates
The critical accounting estimates and judgements and those that are most significant in connection with our financial statement
policies are set out in Note 3.23 of our consolidated financial statements referenced in Item 18 of this Annual Report, which are
prepared in accordance with IFRS as issued by the IASB.
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Given the uncertainties inherent in our business activities, we must make certain estimates and assumptions that require difficult,
subjective and complex judgments. Because of uncertainties inherent in such judgments, actual outcomes and result may differ from
our assumptions and estimates, which could materially affect our consolidated financial statement.
ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A. Directors and Senior Management
APWC has one class of directors with each director entitled to one vote on any matters presented to the Board, and none of the
directors possess any veto power over matters presented to the Board or any other special or enhanced voting rights. APWC's Third
Amended and restated Bye-Laws ("Bye-Laws") provide that a quorum consists of a majority of the directors then in office. As of
December 31, 2023, APWC's Board was comprised of seven (7) directors, including its three independent directors, Mr. Anson Chan,
Dr. Yichin Lee, and Dr. Lambert Ding. By a resolution passed at APWC’s most recent annual general meeting of shareholders
(the “2023 AGM”) held on July 24, 2023, the shareholders set the minimum number of directors at two (2) and the maximum number
of directors at nine (9). Each director is entitled to one vote, and approval of any matter requires a simple majority assuming a quorum
is present. The following table sets forth certain information concerning the current directors and certain other officers of APWC. All
directors are subject to annual election by the shareholders of APWC. Each of these seven directors were elected at APWC’s 2023
AGM. Officers generally hold office for such period and upon such terms as the Board may determine.
Name
Date of Birth
Position
Ocorian Services (Bermuda) Limited.
N/A
Resident Assistant Secretary
Anson Chan
Lambert L. Ding
Yichin Lee
David Sun
George Sun
Lee Gai Poo
Yuan Chun Tang
Ivan Hsia
Daphne Hsu
November 3, 1963
October 12, 1959
January 4, 1961
December 22, 1953
April 4, 1951
February 28, 1957
Independent director, Audit Committee Chairman
Independent director, Audit Committee Member
Independent director, Audit Committee Member
Director
Director
Director
November 26, 1960
Director, Chief Executive Officer
August 14, 1973
August 12, 1962
Chief Financial Officer
Financial Controller
Certain officers and directors of APWC are or were also officers or directors of PEWC and/or PEWC affiliates, as described
below. A brief professional summary for each member of our Board and senior management is as follows:
Mr. Anson Chan has been an independent member of our Board and a member and Chairman of both the Audit Committee and
Compensation Committee since 2007. Mr. Chan is also a Managing Director of the Bonds Group of Companies and was elected as a
director of A SPAC II Acquisition Corp. in May 2022. Mr. Chan was a Senior Advisor to Elliott Associates from 2005 to 2008. He is
also a Certified Public Accountant in the U.S. and a Charted Accountant in Ontario, Canada.
Dr. Lambert Ding has been an independent member of our Board since 2011. Dr. Ding is the president and CEO of Union
Environmental Engineering Services and was an Associate Professor at Yuan Ze University. Dr. Ding holds a Doctor of Philosophy
degree from the University of Southern California, conferred in 1989. He is also a Registered Environment Assessor and holds several
patents. Dr. Ding serves as a member of the Audit Committee and Compensation Committee.
Dr. Yichin Lee has been an independent member of our Board and served on the Audit Committee since 2007, a member of
PEWC's Board of Supervisors since 2022. He is also a member of the Compensation Committee. Dr. Lee is the Managing Director of
FCC Partners. Dr. Lee holds a doctorate degree in Resource Planning and Management from Stanford University. Dr. Lee is not related
to Mr. Michael C. Lee, a former Board member.
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Mr. David Sun has been a member of our Board since 2007. He also serves as Managing Director of Charoong Thai. Mr. David
Sun and Mr. George Sun are siblings.
Mr. George Sun has been a member of our Board since 2021, and a member of PEWC’s Board of Directors since 2015. He also
serves as Vice Chairman of PEWC. Mr. Sun started his own business in Silicon Valley in 1983 and successfully took the company
public 10 years later. Mr. Sun is also a leading a venture capitalist and has been coaching startup companies for many years. Mr.
George Sun and Mr. David Sun are siblings.
Mr. Lee Gai Poo has been a member of our Board since 2021. He also served as Vice President and General Plant Manager of
PEWC from 2004 to 2008. He served as a member of APWC’s Board from 2006 to 2011. Mr. Lee Gai Poo has served as Executive
Vice President of PEWC since 2021.
Mr. Yuan Chun Tang has been a member of our Board since 2004 and Chief Executive Officer since 2005. Mr. Yuan served as
APWC’s Chairman from 2005 to 2009. He has also served as Chairman of PEWC since 2004. Mr. Yuan served as the Director of the
Taiwan Cogeneration Corporation from 2005 to 2008. Mr. Yuan has also served as Chairman of the Taiwan Electric Wire & Cable
Industries Association since 2004. He has served since 1998 as a Supervisor of the Importers and Exporters Association of Taipei and
since 2004 as a Director of the Chinese National Federation of Industries in Taiwan.
Mr. Ivan Hsia has been Chief Financial Officer of APWC since August 1, 2013. Mr. Hsia previously served as the Deputy CFO
of APWC. Prior to that, he served as the Senior Internal Audit Manager of APWC. Before joining APWC, Mr. Hsia was the head of
internal audit at Newegg.com in Los Angeles, CA, USA.
Mr. Cody Wu has served as Chief Operating Officer of APWC since May 1, 2022. From 1980 to 2006, Mr. Wu held several
positions at PEWC, including Engineer, Quality Assurance Department; Section Manager, Production Department; and Factory
Manager. He was appointed General Manager of Shanghai Yayang in September 2006 and appointed General Manager of PEWSC in
April 2013. He resigned his position as Chief Operating Officer of APWC effective September 1, 2023.
Ms. Daphne Hsu has been Financial Controller of APWC since March 2005, prior to which she served as Financial Controller
for ten years in Taiwan and China at a Thomson SA joint venture.
The Common Shares currently trade on Nasdaq's Capital Market tier. APWC utilizes Nasdaq's “controlled company exemption”
that is available to issuers under the rules of Nasdaq as our Board is not composed of a majority of independent directors. The
“controlled company exemption” provides that an issuer is not required to have its Board of Directors consist of a majority of
independent directors if a shareholder, or two or more shareholders who constitute a group, have beneficial ownership of more than
50% of the issued and outstanding voting securities of the issuer. As of December 31, 2023, PEWC owned and controlled, directly or
indirectly, approximately 80.96% of the issued and outstanding Common Shares of APWC.
No service contracts exist between any officers or current directors and APWC, or any of its subsidiaries, providing for benefits
upon termination of employment.
APWC has no arrangements or understandings with any major shareholders, customers, suppliers or others, pursuant to which
any person referred to above was selected as a director or member of senior management.
Diversity
Following is our Nasdaq Board diversity matrix:
Board Diversity Matrix (As of December 31, 2023)
Country of Principal Executive Offices:
Foreign Private Issuer
Disclosure Prohibited under Home Country Law
Total Number of Directors
Taiwan
Yes
No
7
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Female
Male
Non-Binary
Did Not Disclose
Gender
Part I: Gender Identity
Directors
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction
LGBTQ+
Did Not Disclose Demographic Background
—
—
—
—
7
—
—
7
—
—
—
—
—
—
—
—
Although APWC did not meet the diversity objectives of Nasdaq Rule 5605(f) by December 31, 2023, APWC is committed to
evaluating suitable diversity candidates who possess the requisite knowledge, skills, communication, and experience to perform the
duties of an APWC director.
6.B. Compensation
The aggregate amount of compensation paid by us to all of APWC’s directors and members of its administrative, supervisory or
management bodies (“Senior Management Members”), as a group, for services in all capacities during 2023 was approximately $2
million. The annual compensation of APWC’s directors and Senior Management Members on an individual basis for services in all
capacities is not required to be disclosed under the laws of Bermuda.
In 2023, the fee payable to each independent director was $30,000 per year and the fee payable to each director who is a director
or an executive officer of APWC or PEWC or any of their respective affiliates was $20,000 per year, together with, in each case,
reimbursement of reasonable travel expenses for attendance at meetings of the Board or any of its committees.
No funds or provisions have been set aside or accrued by APWC or its subsidiaries to provide pension, retirement or similar
benefits to directors or management except for government mandated programs. No equity compensation, including options, is
included as part of the compensation for directors or Senior Management Members.
6.C. Board Practices
Audit Committee
The Audit Committee of the Board 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 controls,
management of business risks and safeguarding of assets. The Audit Committee also oversees the appointment and remuneration of the
Company's independent auditors.
The Audit Committee is composed of Mr. Anson Chan, Dr. Yichin Lee and Dr. Lambert Ding, with Mr. Chan serving as the
chairman of the Audit Committee.
The Audit Committee, as currently constituted, complies with the requirements of Regulation 10A-3 of the Exchange Act and
the corporate governance requirements of Nasdaq.
Compensation Committee
The Compensation Committee primarily functions to assist our Company in determining the compensation to be paid to the
executive directors and certain members of the senior management of our Company. According to the charter under which it operates,
the Compensation Committee is authorized to: (i) review and recommend to the Board, or determine, the annual salary, bonus, stock
options, and other benefits, direct and indirect, of the senior management of APWC and its principal operating subsidiaries; (ii) review
new executive compensation programs, review on a periodic basis the operations of our Company’s executive compensation programs
to determine whether they are properly coordinated, establish and periodically review policies for the administration of executive
compensation programs, and take steps to modify any executive compensation programs that yield payments and benefits that are not
reasonably related to
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executive performance; (iii) engage outside auditors and consultants to advise on market compensation; and (iv) establish and
periodically review policies in the area of management perquisites.
The Compensation Committee is comprised of three independent directors, Mr. Anson Chan, Dr. Yichin Lee, and Dr. Lambert
Ding. The Compensation Committee may invite members of management to its meetings as it deems appropriate in order to participate
and provide input in a non-voting capacity. However, the Compensation Committee meets regularly without members of management
present and in no event is any officer present at a meeting of the Compensation Committee where their compensation or performance is
discussed or determined.
6.D. Employees
As of December 31, 2023, 2022, and 2021, our Company employed a total of 1,210, 1,207, and 1,190 employees, of which
administrative and management personnel accounted for 15.5%, 13.6%, and 13.8%, respectively. The rest were classified as production
personnel that usually organized into two 12-hour shifts or three 8-hour shifts for continuous factory operations.
Our Company’s employees located in the Thailand, North Asia, and ROW regions in terms of percentage were respectively
63.6%, 18.6%, and 17.8% as of December 31, 2023; 65%, 18.4%, and 16.6% as of December 31, 2022; 66.5%, 17.9%, and 15.6% as of
December 31, 2021.
Our 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 Thailand, and a small housing supplement for other workers. Our Company also provides training programs for its
personnel designed to improve worker productivity and occupational safety.
Presently, there is no group bonus, profit-sharing or stock option plan. However, some of APWC’s subsidiaries have bonus or
profit-sharing plans based on individual performance and fiscal year profitability of the particular subsidiary, which plans are generally
in accordance with industry practice and market conditions in their respective countries.
Our Company has several defined contribution plans covering its employees in Australia, the PRC, Singapore, Thailand, and
Taiwan. Additionally, our Company has defined benefit plans in accordance with Thailand labor laws. Pursuant to these defined benefit
plans, our Company pays a retiring employee at its Thai subsidiaries from one to twenty-six times such employee’s salary rate during
his or her final month, depending on the length of service. During 2023, our Company’s total expenses under this labor law were $0.6
million. These defined benefit plans are not funded and the amount is recognized and included in Employee Benefit Liabilities on our
Company’s balance sheet. Our Company settles its obligations as and when employees retire. The accumulated benefit obligations
under these plans amounted to $7.0 million as at December 31, 2023. For further information related to these employee benefit plans,
see Note 21 of our consolidated financial statements referenced in Item 18 of this Annual Report.
Approximately 11% 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, our Company is required to
negotiate salary and wage increases yearly. All other worker benefits and employment terms are included in the collective
agreement. Our Company believes that approximately 100% of the employees of PEWSC are members of their Company Workers’
Union. These unions generally operate in accordance with related labor regulations in China. Approximately 16% of the employees of
APEC are members of the Australian Workers’ Union. None of the employees of APWC’s other operating subsidiaries are members of
a union.
Our Company has never experienced a strike or other disruption due to a labor dispute. Our Company considers its employee
relations to be satisfactory and has not experienced difficulty attracting and retaining qualified employees.
6.E. Share Ownership
The Common Shares beneficially owned by the persons listed in “Item 6. Directors, Senior Management and Employees – 6.B.
Compensation” are disclosed in “Item 7. Major Shareholders and Related-Party Transactions – 7.A. Major Shareholders.”
No equity compensation, including options, is included as part of the compensation for directors or senior management.
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6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Not applicable.
ITEM 7: MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A. Major Shareholders
As of December 31, 2023, there were 20,616,227 Common Shares issued and outstanding, excluding a total of 11,100 treasury
shares. In January 2022, APWC distributed, at no charge to its shareholders, non-transferable subscription rights to purchase additional
Common Shares to all of its shareholders. This rights offering expired on January 31, 2022, and was oversubscribed. Pursuant to this
rights offering, PEWC and its two subsidiaries that hold Common Shares, Moon View Ventures Limited and Pacific Holdings Group,
acquired additional Common Shares as follows: (i) PEWC, which exercised 1,410,739 basic subscription rights at an investment of
$846,443, was issued 693,806 additional Common Shares; (ii) Moon View, which exercised 7,661,235 basic subscription rights and
exercised over-subscription rights for a total investment of approximately $5,975,389, was issued 4,897,859 additional Common
Shares; and (iii) Pacific Holdings, which exercised 1,358,795 basic subscription rights at an investment of $815,277, was issued
668,259 additional Common Shares. As a result of this rights offering, APWC’s issued and outstanding shares increased from
13,819,669 to 20,616,227 shares, and PEWC’s aggregate ownership of our Common Shares increased from 10,430,769 to 16,690,693
shares, representing an increase in percentage ownership from 75.48% to 80.96%. While the remaining publicly traded Common
Shares increased from 3,388,900 to 3,925,534 shares, the ownership percentage in APWC represented by such Common Shares
decreased from 24.52% to 19.04%.
The following table sets forth certain information regarding beneficial ownership of the Common Shares as of March 31, 2024
by (i) all persons who are known to APWC to own beneficially more than five percent of the Common Shares and (ii) APWC’s
executive officers (Senior Management Members) and directors as a group. The information set forth in the following table is derived
from public filings made by holders and information obtained from directors and officers. The voting rights attached to the Common
Shares below are the same as those attached to all other Common Shares.
Identity of Person or Group
Pacific Electric Wire & Cable Co., Ltd.(1)
Directors and Executive Officers (Senior Management Members) of APWC
Number of Shares
Percent of Class
16,690,693
246,541
80.959 %
1.196 %
_____________________________
(1)
PEWC beneficially owns 2,104,545 shares directly and the remaining shares indirectly, as a result of (i) PEWC's control of its wholly-owned
subsidiary Moon View Ventures Limited, a BVI company, which owns of record 12,559,094 Common Shares and (ii) PEWC's control of its
indirect wholly-owned subsidiary Pacific Holdings Group, a Nevada corporation, which owns of record 2,027,054 Common Shares.
Based upon a review of the records of APWC’s U.S. transfer agent, including a list of non-objecting beneficial holders, as of
December 31, 2023, APWC believes there are more than 400 record holders in the United States, representing approximately 18% of
the Common Shares outstanding as of such date, although that constitutes only APWC’s best estimate of the number of U.S. beneficial
holders.
7.B. Related Party Transactions
Our 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. These transactions are governed by the
Composite Services Agreement dated November 7, 1996 between APWC and PEWC (the “Composite Services Agreement” or
“CSA”), which our Company has renewed annually, at its option. The Composite Services Agreement contains provisions that define
the relationship and the conduct of the respective businesses of our Company and PEWC and confers certain preferential benefits on
our Company. For a description of the Composite Services Agreement, see Item 10.C.
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Under the terms of the Composite Services Agreement, our Company pays a management fee to PEWC in connection with the
secondment, or temporary assignment and relocation, of certain PEWC managers to our Company’s operating units. The assigned
managers assist our Company in implementing the results of certain research and development conducted by PEWC and made
available by PEWC to our Company under the terms of the Composite Services Agreement. The assigned managers also assist our
Company in the procurement of raw materials, primarily copper, which is also provided for under the Composite Services Agreement.
The annual management fee was approximately $205 in 2023, $153 in 2022 and $133 in 2021.
On July 10, 2020, APWC and PEWC entered into a secured loan agreement pursuant to which in August 2020 we borrowed the
principal amount of $6 million from PEWC, at a fixed 3% interest rate and secured by a pledge of our Company’s 98.3% ownership
stake in Sigma Cable. Our Company used the proceeds from the Secured Loan for working capital and purchases of capital equipment.
In June 2021, the loan was repaid in full to PEWC, and the loan facility was terminated.
To the extent that transactions occur in the future between our 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.
Additional details regarding related party balances as of December 31, 2023 and related party transactions are disclosed in our
audited consolidated financial statements referenced in “Item 18. Financial Statements.” Please refer to Note 24 of our consolidated
financial statements presented herewith.
ITEM 8: FINANCIAL INFORMATION
8.A. Consolidated Statements and Other Financial Information
Consolidated Statements
See Item 18: Financial Statements
Legal Proceedings
There are currently no material proceedings in which any director, senior manager, or affiliate is adverse to APWC or has an
adverse material interest. There are no actual or pending legal proceedings to which APWC is, or is likely to become, a party which
may reasonably be expected to have, or have had in the recent past, a material effect on our Company’s condition (financial or
otherwise) or results of operations.
Dividend Policy
Under our Bye-Laws, our Board may from time to time declare dividends or distributions out of contributed surplus to be paid to
the shareholders according to their rights and interests. With the sanction of a shareholders resolution, our Board may determine that
any dividend may be paid by distribution of specific assets, including paid-up shares or debentures of any other company. Our Board
may also pay any fixed cash dividend which is payable on any of the Common Shares half-yearly or on other dates, whenever APWC’s
position, in the opinion of our Board, justifies such payment.
While our Board approved a dividend policy in 2016 with the stated goal of paying annual cash dividends of at least 25% of
APWC’s net post-tax audited consolidated profits attributable to shareholders, our Board determined not to pay a dividend since 2019,
taking into account our Company’s funding needs and business performance. At this time, we do not anticipate paying any dividends,
or otherwise making any distributions or transfers, to our shareholders in 2024.
As a holding company, our ability to pay dividends, as well as to meet our other obligations, depends 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 APWC. Those
restrictions may also affect APWC’s ability to fund operations of one subsidiary with dividends and other payments received from
another subsidiary.
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In addition, the ability of our operating subsidiaries to make distributions to APWC will depend upon a number of factors,
including operating results, capital requirements, expansion plans, business prospects, obligations in respect of non-recurring items,
debt covenants and other factors that may arise from time to time. There can be no guarantee that APWC will pay any dividends in the
future.
8.B. Significant Changes
Please see Note 29 (Subsequent Events) to the consolidated financial statements referenced in Item 18 hereof for information on
recent material events, which contains information regarding the refinancing on a long-term basis of a liability classified as current
from Charoong Thai. There have been no material or significant changes in the Company’s affairs since the end of the fiscal year ended
December 31, 2023 that have not been described herein or in such Note 29.
ITEM 9: THE OFFER AND LISTING
The Common Shares currently trade on the Nasdaq Capital Market tier under the trading symbol “APWC”. The Common Shares
are not listed on any other exchanges or otherwise publicly traded within or outside the United States.
ITEM 10: ADDITIONAL INFORMATION
10.A. Share Capital
As of December 31, 2023, there were 20,627,327 Common Shares issued, with 20,616,227 Common Shares issued and
outstanding and 11,100 Common Shares held in treasury.
On January 14, 2022, APWC distributed, at no charge to the holders of its Common Shares, subscription rights to purchase
additional Common Shares. The subscription rights were issued to holders of Common Shares as of 5:00 p.m., Eastern Standard Time,
on January 7, 2022, the record date for the rights offering, at a ratio of one subscription right per Common Share. Each subscription
right entitled its holder to invest $0.60 towards the purchase of Common Shares at a price per share equal to the subscription price (the
“basic subscription right”). The subscription price in the rights offering was $1.22 per Common Share. In accordance with the terms of
the rights offering, this subscription price was equal to 90% of the lower of (1) the volume weighted average price per common share
on the Nasdaq Capital Market over the five consecutive trading days through and including the expiration date of the rights offering,
and (2) the closing price per common share on the Nasdaq Capital Market on the expiration date of the rights offering. The pricing
formula was intended to ensure that the subscription price was at least a 10% discount to the closing price per Common Share on the
expiration date of the rights offering.
The rights offering included an over-subscription privilege, which permitted each rights holder that exercised its subscription
rights in full the option to purchase additional Common Shares that remained unsubscribed at the expiration of the rights offering. The
over-subscription privilege was subject to the availability and allocation of shares among holders exercising their over-subscription
privilege. The Common Shares issued as part of the over-subscription privilege were allocated pro-rata among shareholders who
exercised their over-subscription rights based on the number of shares each such shareholder owned on the record date, taking into
account the investment amount that each such shareholder allocated toward over-subscription rights.
The rights offering expired on January 31, 2022, and on February 2, 2022, APWC announced the successful completion of the
rights offering, which was oversubscribed. In the rights offering, APWC issued and sold 6,796,558 additional Common Shares pursuant
to the exercise of subscription rights, raising gross proceeds of approximately $8.3 million before any expenses of the rights offering.
No capital stock of APWC is under option or agreed conditionally or unconditionally to be put under option. APWC does not
have any classes of capital stock other than Common Shares.
10.B. Memorandum of Association and Bye-Laws
General
The following is a summary of provisions of Bermuda law and APWC’s organizational documents, including APWC’s
Memorandum of Association and Bye-Laws. We refer you to APWC’s Memorandum of Association and Bye-
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Laws, copies of which have been filed with the SEC. You are urged to read these documents in their entirety for a complete
understanding of the terms thereof.
The objects under which APWC is formed and incorporated under its Memorandum of Association are:
(1)
(2)
(3)
to carry on business as a holding company and to acquire and hold shares, stocks, debenture stocks, bonds, mortgages,
obligations and securities of any kind issued or guaranteed by any company, corporation or undertaking of whatever
nature and wherever constituted or carrying on business, and shares, stock, debentures, debenture stock, bonds,
obligations and other securities issued or guaranteed by any government, sovereign ruler, commissioners, trust, local
authority or other public body, whether in Bermuda or elsewhere, and to vary, transpose, dispose of or otherwise deal with
from time to time as may be considered expedient any of the Company’s investments for the time being;
to acquire any such shares and other securities as are mentioned in the preceding paragraph by subscription, syndicate
participation, tender, purchase, exchange or otherwise and to subscribe for the same, either conditionally or otherwise, and
to guarantee the subscription thereof and to exercise and enforce all rights and powers conferred by or incident to the
ownership thereof;
to co-ordinate the administration, policies, management, supervision, control, research, planning, trading and any and all
other activities of any company or companies now or thereafter incorporated or acquired which may be or may become a
company, wherever incorporated, which is or becomes a holding company or a subsidiary of, or affiliated with, the
Company within the meanings respectively assigned to those terms in The Companies Act 1981, or with the prior written
approval of the Minister of Finance, any company or companies now or hereafter incorporated or acquired with which the
Company may be or may become associated;
(4)
packaging of goods of all kinds;
(5)
buying, selling and dealing in goods of all kinds;
(6)
designing and manufacturing of goods of all kinds;
(7) mining and quarrying and exploration for metals, minerals, fossil fuels and precious stones of all kinds and their
preparation for sale or use;
(8)
(9)
exploring for, the drilling for, the moving, transporting and refining petroleum and hydro carbon products including oil
and oil products;
scientific research including the improvement, discovery and development of processes, inventions, patents, and designs
and the construction, maintenance and operation of laboratories and research centers;
(10)
land, sea and air undertakings including the land, ship and air carriage of passengers, mails and goods of all kinds;
(11)
ships and aircraft owners, managers, operators, agents, builders and repairers;
(12)
acquiring, owning, selling, chartering, repairing or dealing in ships and aircraft;
(13)
travel agents, freight contractors and forwarding agents;
(14)
dock owners, wharfingers, warehousemen;
(15)
ship chandlers and dealing in rope, canvas oil and ship stores of all kinds;
(16)
all forms of engineering;
(17)
acquiring by purchase or otherwise and holding as an investment inventions, patents, trademarks, trade names, trade
secrets, designs and the like;
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(18)
buying, selling, hiring, letting and dealing in conveyances of any sort;
(19)
employing, providing, hiring out and acting as agent for artists, actors, entertainers of all sorts, authors, composers,
producers, directors, engineers and experts or specialists of any kinds;
(20)
to acquire by purchase or otherwise hold, sell, dispose of and deal in real property situated outside Bermuda and in
personal property of all kinds wherever situated; and
(21)
to enter into any guarantee contract of indemnity or suretyship and to assure, support or secure with or without
consideration or benefit the performance of any obligations of any person or persons and to guarantee the fidelity of
individuals filling or about to fill situations of trust or confidence.
For a detailed description of our Company’s principal activities, see Item 4 above. Pursuant to APWC’s Bye-Laws, the Board
consists of a single class of directors, each director has one vote on all matters put to the Board, and a quorum consists of a majority of
the members of the Board then in office.
Description of Shareholder Rights Attaching to the Common Shares
APWC was incorporated in Bermuda on September 19, 1996 under the Companies Act. The rights of APWC’s shareholders are
governed by Bermuda law and APWC’s Memorandum of Association and Bye-Laws.
APWC’s authorized share capital as of December 31, 2023 was $0.5 million consisting of 50,000,000 Common Shares, par
value $0.01 per share. Of which, as of December 31, 2023, and as of the date of the filing of this Annual Report, there were and are
20,627,327 Common Shares issued of which 20,616,227 Common Shares are issued and outstanding and eligible to vote.
There were 11,100 Common Shares issued (but not outstanding and not currently eligible to vote) and held as treasury shares
by APWC.
•
•
•
•
•
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 APWC’s liquidation, dissolution or winding-up and subject to any alternative resolution that may be
pursued by APWC’s shareholders, the holders of Common Shares are entitled to share ratably in APWC’s assets, if any,
remaining after the payment of all of APWC’s debts and liabilities.
APWC’s issued and outstanding Common Shares are fully paid and non-assessable.
Additional authorized but unissued Common Shares, and issued shares held in treasury, may be issued or conveyed by the
Board without the approval of the shareholders.
The holders of Common Shares will receive such dividends, if any, as may be declared by the Board out of funds legally
available for such purposes. APWC may not declare or pay a dividend, or make a distribution out of contributed surplus, if there are
reasonable grounds for believing that:
•
•
APWC is, or after the payment would be, unable to pay its liabilities as they become due; or
the realizable value of APWC’s assets after such payment or distribution would be less than the aggregate amount of its
liabilities.
Share Capital
APWC’s authorized capital consists of one class of Common Shares. Under APWC’s Bye-Laws, our Board has the power to
issue any authorized and unissued shares on such terms and conditions as it may determine. Any shares or class of shares may be issued
with such preferred, deferred, qualified or other special rights or any restrictions with regard to such matters, whether in regard to
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dividend, voting, return of capital or otherwise, as APWC may from time to time by resolution of the shareholders prescribe, or in the
absence of such shareholder direction, as the Board may determine. This
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provision in the Bye-Laws could be used to prevent a takeover attempt, or to make a takeover attempt prohibitively expensive, and
thereby preclude shareholders from realizing a potential premium over the market value of their shares.
Voting Rights
Generally, under Bermuda law and APWC’s Bye-Laws, questions brought before a general meeting are decided by a simple
majority vote of shareholders present or represented by proxy, with no provision for cumulative voting. Matters will be decided by
votes cast by way of voting cards, proxy cards or a show of hands unless a poll is demanded. For purposes of determining the number
of votes cast with respect to any proposal, only those votes cast “for” or “against” shall be included. An “abstain” vote will not count
as votes cast on any such proposal.
If a poll is demanded, each shareholder who is entitled to vote and who is present in person or by proxy has one vote for each
Common Share entitled to vote on such question. A poll may only be demanded under the Bye-Laws by:
•
•
•
•
the chairman of the meeting;
at least three shareholders present in person or represented by proxy;
any shareholder or shareholders present in person or represented by proxy and holding between them not less than one-
tenth of the total voting rights of all shareholders having voting rights; or
a shareholder or shareholders present in person or represented by proxy holding Common Shares conferring the right to
vote on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all Common
Shares.
Unless the Board 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.
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 its liabilities.
Under APWC’s Bye-Laws, the Board may from time to time declare dividends or distributions out of contributed surplus to be
paid to the shareholders according to their rights and interests. With the sanction of a shareholders resolution, the Board may determine
that any dividend may be paid by distribution of specific assets, including paid-up shares or debentures of any other company. The
Board may also pay any fixed cash dividend which is payable on any of the Common Shares half-yearly or on other dates, whenever
APWC’s position, in the opinion of the Board, justifies such payment.
Dividends, if any, on the Common Shares will be at the discretion of the Board, and will depend on our future operations and
earnings, capital requirements, surplus and general financial condition as our Board may deem relevant.
Purchases by APWC of its own Common Shares
Under Bermuda law and as authorized by APWC’s Memorandum of Association and Bye-Laws, APWC may purchase its 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. APWC may
not purchase its Common Shares if, on the date on which the purchase is to be effected, there are reasonable grounds for believing that
APWC 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 APWC
that would otherwise be available for dividend or distribution or out of APWC’s share premium account.
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Preemptive Rights
APWC’s Bye-Laws generally do not provide the holders of its Common Shares preemptive rights in relation to any issues of
Common Shares by APWC or any transfer of APWC’s shares.
Variation of Rights
APWC may issue more than one class of shares and more than one series of shares in each class. The rights attached to any class
of shares may be altered or abrogated either:
•
•
with the consent in writing of the holders of more than fifty percent of the issued shares of that class; or
pursuant to a resolution of the holders of such shares.
The Bye-Laws provide that the necessary quorum shall be two or more shareholders present in person or by proxy holding a
majority of shares of the relevant class in issue and entitled to vote. The Bye-Laws specify that the creation or issuance of shares
ranking pari passu with existing shares will not, subject to any statement to the contrary in the terms of issuance of those shares or
rights attached to those shares, vary the special rights attached to existing shares.
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 may approve. The form of transfer is required to be
signed by or on behalf of the transferor and also the transferee where any share is not fully paid. The transferor shall be deemed to
remain the holder of the shares until the name of the transferee is entered in the register of members of APWC.
Transfer Restrictions
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 refuse to register an instrument of transfer of a share unless:
•
•
•
•
•
the instrument of transfer is duly stamped, if required by law, and lodged with APWC;
the instrument is accompanied by the relevant share certificate for the shares to which it relates, and such other evidence
as the Board shall reasonably require to show the right of the transferor to make the transfer;
the instrument of transfer is in respect of only one class of shares;
where applicable, the permission of the BMA with respect thereto has been obtained; and
subject to the Companies Act, the Bye-Laws and any directions of the Board from time to time in force, the secretary of
APWC may exercise the powers and discretions of the Board with respect to: (i) the transfer of shares by a shareholder by
way of an instrument of transfer in the usual common form and (ii) sending to a notice of refusal to register a transfer of
shares where the Board declines to register such transfer, within three months after the date on which the instrument of
transfer was lodged.
In accordance with the provisions of the Exchange Control Act 1972, as amended, and related regulations of Bermuda, the
permission of the BMA is required for all issuances and transfers of shares (which includes the Common Shares) of Bermuda
companies to or from a non-resident of Bermuda for exchange control purposes, other than in cases where the BMA has granted a
general permission. The BMA, in its notice to the public dated June 1, 2005, has granted a general permission for the issue and
subsequent transfer of any securities of a Bermuda company from and/or to a non-resident of Bermuda for exchange control purposes
for so long as any “Equity Securities” of the company (which include the Common Shares) are listed on an “Appointed Stock
Exchange” (which includes Nasdaq). In granting the general permission the BMA accepts no responsibility for our financial soundness
or the correctness of any of the statements made or opinions expressed herein.
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Accordingly, the Common Shares benefit from a general permission for free transferability for all transfers between persons who
are not resident in Bermuda for exchange control purposes, for as long as such Common Shares remain listed on an appointed stock
exchange. In the event that the Common Shares are delisted from Nasdaq, it will be necessary to obtain the prior permission of the
BMA to transfer such Common Shares to any transferee, subject to any applicable general permissions issued by the BMA.
Transmission of Shares
In the event of the death of a shareholder, the survivor or survivors, where the deceased shareholder was a joint holder, and the
estate representative, where the deceased shareholder was sole holder, shall be the only persons recognized by APWC 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 may in its absolute discretion determine to be the
person recognized by APWC for this purpose.
Disclosure of Interests
Under the Companies Act, a director who has an interest in a material contract or a proposed material contract, or a 10% or more
interest (directly or indirectly) in an entity that is interested in a contract or proposed contract or arrangement with us, is obligated to
declare the nature of such interest at the first opportunity at a meeting of the Board of Directors, or by writing to the Board of Directors.
If the director has complied with the relevant sections of the Companies Act and the Bye-Laws with respect to the disclosure of his
interest, the director may vote at a meeting of the Board of Directors or a committee thereof on a contract, transaction or arrangement
in which that director is interested, in which case his vote shall be counted and he shall be taken into account in ascertaining whether a
quorum is present.
Rights in Liquidation
Under Bermuda law, in the event of liquidation or winding-up of a company, after satisfaction in full of all claims of creditors
and subject to the preferential rights accorded to any series of preferred shares, the proceeds of such liquidation or winding-up are
distributed among the holders of shares in accordance with a company’s bye-laws.
Under APWC’s Bye-Laws, if APWC is 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 APWC’s assets,
whether such assets shall consist of property of the same kind or not, and may for such purposes set such values as such liquidator
deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders.
Meetings of Shareholders
Under Bermuda law, a company, unless it elects to dispense with the holding of annual general meetings, is required to convene
at least one general meeting per calendar year. The directors of a company, notwithstanding anything in such company’s bye-laws,
shall, on the requisition of the shareholders holding at the date of the deposit of the requisition not less than one-tenth of the paid-up
capital of the company carrying the right of vote, duly convene a special general meeting. APWC’s Bye-Laws provide that the Board
may, whenever it thinks fit, convene a special general meeting.
Bermuda law requires that shareholders be given at least five days’ notice of a meeting of APWC. APWC’s Bye-Laws extend
this period to provide that not less than 20 days’ written notice of a general meeting must be given to those shareholders entitled to
receive such notice. The accidental omission to give notice to or non-receipt of a notice of a meeting by any person does not invalidate
the proceedings of a meeting.
APWC’s 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 APWC are present in person or by proxy and entitled to vote.
Under APWC’s Bye-Laws, notice to any shareholders may be delivered either personally or by sending it through the post, by
airmail where applicable, in a pre-paid letter addressed to the shareholder at his address as appearing in the share register or by
delivering it to, or leaving it at, such registered address. Any notice sent by post shall be deemed to have been served seven (7) days
after dispatch. A notice of a general meeting is deemed to be duly given to the shareholder if it is sent to him by cable, telex or
telecopier or other mode of representing or reproducing words in a legible and non-transitory form and such notice shall be deemed to
have been served twenty-four (24) hours after its dispatch.
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Access to Books and Records and Dissemination of Information
Under Bermuda law, members of the general public have the right to inspect the public documents of a company available at the
office of the Bermuda Registrar of Companies. These documents include the memorandum of association and any amendment to the
memorandum of association.
Under Bermuda law, the minutes of shareholder meetings will be open for inspection by any shareholder or director without
charge for not less than two hours during business hours each day, subject to any reasonable restrictions that APWC may impose. The
shareholders shall be entitled to receive a copy of every balance sheet and statement of income and expenditure before a general
meeting as required under the Bye-Laws.
Under APWC’s Bye-Laws, unless the Board otherwise determines, the register of shareholders of APWC is required to be open
for inspection between 10:00 a.m. and 12:00 noon each working day without charge to members of the general public. A company is
required to maintain its share register in Bermuda but may, subject to the provisions of the Companies Act, establish a branch register
outside of Bermuda. APWC has established a branch register with APWC’s transfer agent, Computershare Limited, which is based in
Jersey City, New Jersey.
Under Bermuda Law, a company is required to keep at its registered office a register of its directors and officers that is open for
inspection for not less than two hours in each day by members of the public without charge. Under APWC’s Bye-Laws, the register of
directors and officers is available for inspection by the public between 10:00 a.m. and 12:00 noon every working day.
Bermuda law does not provide a general right for shareholders to inspect or obtain copies of any other corporate records, except
for the Bye-Laws of APWC.
Election or Removal of Directors
The Bye-Laws provide that the number of directors will be such number, not less than two, as APWC’s shareholders by
resolution may from time to time determine. A director will serve until re-elected or his successor is appointed at the next annual
general meeting or his prior removal in the manner provided by the Companies Act or the Bye-Laws. There is no requirement under
Bermuda law, APWC’s memorandum of association or its Bye-Laws that a majority of APWC’s directors be independent.
The Bye-Laws provide that each director shall have one vote on all matters presented to the Board for a vote.
The shareholders may by resolution determine that one or more vacancies in the Board shall be deemed casual vacancies for the
purposes of the Bye-Laws. The Board, so long as a quorum of directors remains in office, shall have the power at any time and from
time to time to appoint any individual to be a director so as to fill a casual vacancy. The shareholders may approve the appointment of
alternate directors or may authorize the Board to appoint them. Directors may also appoint and remove their own alternates.
APWC 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:
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if he resigns his office by notice in writing to be delivered to APWC’s registered office or tendered at a meeting of the
Board;
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 resolves that his office is vacated;
if he becomes bankrupt or enters into a general settlement with his creditors;
if he is prohibited by law from being a director; or
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if he ceases to be a director by virtue of the Companies Act or is removed from office pursuant to the Bye-Laws.
Directors’ remuneration is determined by APWC’s shareholders during general meetings. Directors may also be paid all
reasonable travel, hotel, and other expenses properly incurred in attending meetings of the Board, meetings of any committee appointed
by the Board, general meetings of the shareholders of APWC, or any meetings in connection with the business of APWC or their duties
as Directors generally. There are no age limit requirements regarding retirement or non-retirement of directors. Holding shares is not a
requirement in order to be appointed as a director of APWC.
The Board may exercise all the powers of APWC to borrow money and to mortgage or charge its undertaking, property and
uncalled share capital, or any part thereof. The Board may also issue debentures, debenture stock, and other securities whether outright
or as security for any debt, liability or obligation of APWC or any third party.
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 of Bermuda save for specific circumstances, for example, the adopting of any authority to carry on restricted
business activities.
Under Bermuda law, the holders of:
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an aggregate of not less than twenty percent in par value of a company’s issued share capital or any class thereof; or
not less in the aggregate than twenty percent of the company’s debentures entitled to object to amendments to its
memorandum of association,
have the right to apply to the Supreme Court of Bermuda for an annulment of any amendment of the memorandum of
association. Where such an application is made, the amendment becomes effective only to the extent that it is confirmed by the
Bermuda Supreme Court. An application for an annulment of an amendment of the memorandum of association must be made
within twenty-one days after the date on which the resolution amending the memorandum of association is passed and may be
made on behalf of the persons entitled to make the application by one or more of their number as they may appoint in writing for
the purpose.
APWC’s 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.
Merger or Amalgamation
The Companies Act provides that two or more Bermuda companies may merge and their undertaking, property and liabilities
shall vest in one of such companies as the surviving company (referred to as a “merger” under Bermuda law). The Companies Act also
provides that a Bermuda company may amalgamate with another company and continue as an amalgamated company (referred to as an
“amalgamation” under Bermuda law). A merger or amalgamation requires a merger or amalgamation agreement which must be
approved by the board of directors and at a meeting of the shareholders by seventy-five percent of the shareholders present and entitled
to vote at such meeting in respect of which the quorum shall be two persons holding or representing by proxy more than one-third of
the issued shares of the company. These provisions do not apply where a holding company is merging or amalgamating with one or
more of its wholly-owned subsidiaries or where two or more wholly-owned companies of the same holding company are merging or
amalgamating.
Under Bermuda law, in the event of a merger or an amalgamation of a Bermuda company, a shareholder who did not vote in
favor of the transaction and who is not satisfied that fair value has been offered for the shares, may apply to the Supreme Court of
Bermuda within one month of notice of the meeting of shareholders to appraise the fair value of those shares.
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Class Actions and Derivative Actions
Class actions, as they are commonly understood in the United States, are not available to shareholders under Bermuda law.
Derivative actions are generally only available to shareholders under Bermuda law in very limited circumstances. A shareholder may
commence an action in the name of a company to remedy a wrong done to the company where the wrongdoers are in control of the
company and the act complained of is of a fraudulent character, oppressive, beyond the corporate power of the company, illegal or
would have required the approval of a greater percentage of the company’s shareholders than those that actually approved it. A
shareholder may not commence such an action where the wrong complained of is capable of ratification by the company in a general
meeting by ordinary resolution.
Since the July 2018 amendment to the Rules of the Supreme Court, if a derivative action is commenced and the relevant
defendant enters an appearance, leave of the Supreme Court of Bermuda must be obtained before the derivative action can proceed.
When one or more shareholders believes the affairs of a company are being conducted in a manner which is oppressive or
prejudicial to the interest of some part of the shareholders, the Supreme Court of Bermuda, upon petition, brought by the
shareholder(s), may make such order as it sees fit if it is satisfied that the affairs of the company are or have been conducted in such an
oppressive or prejudicial manner and, that, as a result, it would be just and equitable to wind up the company, but that to so wind up the
company would unfairly prejudice the part of the shareholders ; such an order can include (with limitation) provisions regulating the
conduct of the company’s affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the
company, and in the case of a purchase of the shares by the company, for the reduction accordingly of the company’s capital or
otherwise.
Personal Liability of Directors and Indemnity
The Companies Act requires every officer, including directors, of a company in exercising powers and discharging duties, to act
honestly in good faith with a view to the best interests of the company, and to exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances. The Companies Act further provides that any provision, whether in the
bye-laws of a company or in any contract between the company and any officer or any person employed by the company as auditor,
exempting such officer or person from liability, or indemnifying him against any liability which by virtue of any rule of law would
otherwise attach to him, in respect of any fraud or dishonesty of which he may be guilty in relation to the company, shall be void.
Every director, officer and committee member shall be indemnified out of APWC’s funds against all civil liabilities, loss,
damage or expense including liabilities under contract, tort and statute or any applicable foreign law or regulation and all reasonable
legal and other costs and expenses properly payable, incurred or suffered by him as director, officer or committee member; provided
that the indemnity contained in the Bye-Laws will not extend to any matter which would render it void under the Companies Act as
discussed above.
Other Miscellaneous Matters
Notwithstanding the recording of any special capacity, APWC is not bound to investigate or incur any responsibility in respect of
the proper administration of any estate or trust.
APWC will take no notice of any trust applicable to any of its Common Shares whether or not it had notice of such trust.
As an “exempted company,” APWC is exempt from Bermuda laws which restrict the percentage of share capital that may be
held by non-Bermudians. However, as an exempted company APWC may not participate in certain designated business transactions,
which we do not consider relevant to our present or planned business activities.
10.C. Material Contracts
Composite Services Agreement
Our 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. APWC and PEWC are parties to a
Composite Services agreement dated November 7, 1996, which APWC has renewed annually, at its
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option. The Composite Services Agreement contains provisions that define the relationship and the conduct of the respective businesses
of our Company and PEWC and confers certain preferential benefits on our Company. In 2023, there were no material changes to the
CSA between APWC and PEWC. Pursuant to the Composite Services Agreement,
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PEWC agrees to (a) sell copper rod to our Company, upon our 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 our Company over other purchasers of copper rod from PEWC.
Our Company has the right to distribute any wire or cable product manufactured by PEWC in all markets in which our
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 our Company the right to distribute products manufactured by
PEWC in the future in markets where our 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 our Company.
Each of PEWC and our Company will offer the other party the right to participate in any negotiations with a third party
concerning the establishment of any facility or similar venture to manufacture or distribute any wire or cable product
outside of the markets where our Company currently manufactures or distributes, or intends to develop the capability to
manufacture or distribute, any wire or cable product. Unless our Company and PEWC mutually agree otherwise, our
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 our Company for PEWC or such substitution would prevent the successful
completion of the facility or venture, PEWC has agreed to arrange for our Company to participate to the extent possible.
PEWC agrees to make available to our Company, upon our Company’s request and on terms to be mutually agreed
between PEWC and our Company from time to time, certain services and technology with respect to the design and
manufacture of wire and cable products (including fiber optic products), and certain services with respect to
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 our Company’s employees and managers
at PEWC facilities and the secondment of PEWC employees and managers to our Company.
Without the consent of our Company, PEWC will not compete with respect to the manufacture or distribution of wire and
cable products in any market in which our 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.
The foregoing is a summary of material terms of the CSA. For the full agreement, we refer you to the Composite Services
Agreement, a copy of which has been filed with the SEC.
10.D. Exchange Controls
APWC has 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 APWC to engage in transactions in currencies other than the Bermuda dollar.
The transfer of Common Shares between persons regarded as resident outside Bermuda for exchange control purposes and the
issue of Common Shares to such persons may be effected without specific consent under the Exchange Control Act and regulations
thereunder, provided the Common Shares are listed on an appointed stock exchange.
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10.E. Taxation
The following is a summary of certain material U.S. federal income tax and Bermuda tax consequences of the acquisition,
ownership and disposition of the Common Shares, subject to the assumptions, qualifications and limitations in our discussion below.
Such summary is subject to changes in United States and Bermuda law, including changes that could have retroactive effect. Such
changes in laws could result in different tax consequences from our summary below, and adversely affect your tax burden on
investment income from APWC.
The following summary is neither intended as tax advice nor purports to describe a comprehensive discussion of all possible tax
consequences that may be relevant to APWC’s investors and prospective investors. Therefore, you are strongly urged to consult your
own tax advisors regarding the overall tax consequences of the acquisition, ownership and disposition of the Common Shares in light
of your particular circumstances.
United States Taxation
This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code'), administrative pronouncements,
judicial decisions and final, temporary and proposed U.S. Department of the Treasury regulations, all as of the date hereof, and all of
which are subject to differing interpretations or to change, possibly with retroactive effect. The United States does not have a
comprehensive income tax treaty with Bermuda.
We have not sought any ruling from the IRS in respect of the statements made and the conclusions reached in this discussion,
and there can be no assurance that the IRS will agree with such statements and conclusions, or that the IRS will not challenge any of
the positions taken by us and that such challenge, if any, will not be sustained. A different treatment from that described below could
adversely affect the tax consequences of the ownership and disposition of our Common Shares as set forth in this summary.
In particular, this summary deals only with Common Shares held by U.S. Holders as capital assets for U.S. federal income tax
purposes, and does not address any aspect of the “Medicare contributions tax” on “net investment income”, the U.S. federal alternative
minimum tax, U.S. federal estate and gift taxes, state and local, and foreign tax consequences to U.S. Holders of the
acquisition, ownership, and disposition of Common Shares.
This summary does not purport to deal with all aspects of U.S. federal income taxation that may be relevant to a particular
holder in light of such holder’s circumstances. In particular, this summary does not address all of the tax consequences that may apply
to members of a special class of holders subject to special rules, including:
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dealers in securities or currencies;
persons subject to special tax accounting rules under Section 451(b) of the Code;
regulated investment companies;
real estate investment companies;
traders in securities that elect to use a mark-to-market method of accounting for securities holdings;
tax-exempt organizations;
banks, insurance companies, or any other financial institutions;
persons that actually or constructively own 10% or more, by vote or value, of our Common Shares;
persons that hold our Common Shares as part of a straddle or a hedging, conversion, or other integrated transaction for
U.S. federal income tax purposes;
persons that purchase or sell Common Shares as part of a wash sale for U.S. federal income tax purposes;
partnerships or other pass-through entities and investors therein; or
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persons whose functional currency is not the US Dollar.
If a partnership (including 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 treatment of a partner in that partnership generally will depend on the status of the partner
and the activities of the partnership. If you are a partner of a partnership holding Common Shares, you should consult your own tax
advisor regarding the U.S. federal income tax consequences to you.
Prospective investors of our Common Shares should consult their own tax advisors regarding the U.S. federal, state and local,
and non-U.S. and other tax consequences of owning and disposing of the Common Shares in their particular circumstances.
This summary applies to you if you are a U.S. Shareholder. As used herein, a "U.S. Shareholder" means a beneficial owner of
our Common Shares who or that is, for U.S. federal income tax purposes, any of the following:
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an individual who is a citizen or resident of the United States,
a corporation, or other entity taxable as a corporation, created or organized under the laws of the United States, any state
thereof or the District of Columbia,
an estate whose income is subject to U.S. federal income tax regardless of its source, or
a trust if a U.S. court can exercise primary supervision over the trust's administration and one or more U.S. persons (as
defined in the Code and Treasury Regulations) are authorized to control all substantial decisions of the trust.
Taxation of U.S. Holders
Taxation of Dividends
Subject to the discussion of the “passive foreign investment company” rules below, the gross amount of any distributions of cash
or property with respect to our Common Shares generally will be treated as dividends for U.S. federal income tax purposes to the extent
paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in
excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated first as a
return of capital that is applied against and reduces the U.S. Shareholder's adjusted tax basis in the Common Shares, but not below zero,
and thereafter as capital gain realized on the sale or other disposition of the Common Shares. Because we do not maintain calculations
of our earnings and profits under U.S. federal income tax principles, it is expected that distributions generally will be reported to U.S.
Shareholders as dividends. The amount of any distribution paid in a foreign currency will be equal to the U.S. dollar value of such
currency, translated at the spot rate of exchange on the date such distribution is received, regardless of whether the payment is in fact
converted into U.S. dollars at that time.
Any dividends that a U.S. Shareholder receives will be includable in such holder’s gross income as ordinary income on the day
such holder actually or constructively receives them. Such dividends will not be eligible for the dividends received deduction generally
allowed to certain corporate U.S. Shareholders. Dividends paid by us generally will be non-U.S. source income for purposes of the U.S.
“foreign tax credit” rules. The rules governing U.S. foreign tax credits are complex and involve the application of rules that depend on
the particular circumstances of each U.S. Shareholder. Therefore, each U.S. Shareholder should consult his, her or its own tax advisor
with respect to the availability of U.S. foreign tax credits to such U.S. Shareholder’s particular circumstances.
Subject to certain limitations, including certain limitations based on taxable income and filing status, and subject to certain
minimum holding period requirements, dividends paid to non-corporate U.S. Shareholders, including individuals, may be eligible for a
reduced rate of taxation if we are deemed to be a “qualified foreign corporation” for U.S. federal income tax purposes. A qualified
foreign corporation includes a non-U.S. corporation if (1) its shares (including the Common Shares) are readily tradable on an
established securities market in the United States or (2) it is eligible for the benefits of a comprehensive income tax treaty with the
United States that meets certain requirements. However, a corporation is not a qualified foreign corporation if it is a “passive foreign
investment company” (as discussed below) for the taxable year in which the dividend is paid or the preceding taxable year. The
Common Shares are traded on the Nasdaq Capital Market, an established securities market. The United States does not have a
comprehensive income tax treaty with
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Bermuda. Each U.S. Shareholder should consult his, her or its own tax advisor regarding the treatment of dividends and such holder's
eligibility for a reduced rate of taxation.
Taxation of Capital Gains
Subject to the discussion of the “passive foreign investment company" rules below, a U.S. Shareholder generally will recognize
gain or loss on the sale or exchange of Common Shares equal to the difference between the amount realized on the sale or exchange
and the U.S. Shareholder’s adjusted tax basis in the Common Shares. Such gain or loss will be capital gain or loss and will be long-
term capital gain or loss if the Common Shares were held for more than one year. Gain or loss, if any, recognized by a U.S. Shareholder
generally will be treated as U.S.-source gain or loss for U.S. foreign tax credit limitation purposes. A U.S. Shareholder’s adjusted tax
basis in its Common Shares generally is equal to its purchase price for such shares, adjusted according to U.S. federal income tax
principles. Long-term capital gains recognized by non-corporate U.S. Shareholders generally will be subject to tax at reduced rates. The
deductibility of capital losses is subject to limitations.
Passive Foreign Investment Company
A non-U.S. corporation will be classified as a passive foreign investment company (a “PFIC”) for U.S. federal income tax
purposes if either:
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75% or more of its gross income for the taxable year is passive income; or
on a quarterly average for the taxable year by value (or, if it is not a publicly traded corporation and so elects, by adjusted
basis) 50% or more of its assets produce or are held for the production of passive income.
For the purposes of this test, such non-U.S. corporation will be treated as owning its proportionate share of the assets and
earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, 25% or more (by value)
of the stock.
Based on current projections concerning the composition of APWC’s income and assets, APWC does not believe that it will be
treated as a PFIC for its current or future taxable years. However, because this conclusion is based on our current projections and
expectations as to our future business activity, we can provide no assurance that APWC will not be treated as a PFIC in respect of its
current or any future taxable years. If we are classified as a PFIC for U.S. federal income tax purposes, a U.S. Shareholder that does not
make an election to treat us as a “qualified electing fund” and did not make a “mark-to-market” election, each as described below, will
be subject to the following U.S. federal income tax consequences:
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“Excess distributions” we make to a U.S. Shareholder would be taxed in a special way. “Excess distributions” are
amounts received by a U.S. Shareholder with respect to our Common Shares in any taxable year that exceed 125% of the
average distributions received by the U.S. Shareholder from us in the shorter of either the three previous years or the U.S.
Shareholder’s holding period for such Common Shares before the current taxable year. Excess distributions must be
allocated ratably to each day that a U.S. Shareholder has held our Common Shares. A U.S. Shareholder must include
amounts allocated to the current taxable year and to any non-PFIC years in his or her gross income as ordinary income for
that year. A U.S. Shareholder must pay U.S. federal income tax on amounts allocated to each prior taxable PFIC year at
the highest marginal tax rate in effect for that year on ordinary income and the tax is subject to an interest charge at the
rate applicable to deficiencies for U.S. federal income tax.
The entire amount of gain that is realized by a U.S. Shareholder upon the sale or other disposition of our Common Shares
would also be considered an excess distribution and would be subject to U.S. federal income tax as described above.
A U.S. Shareholder’s adjusted tax basis in shares that were acquired from a U.S. decedent would not receive a step-up to
fair market value as of the date of the decedent’s death but instead would be equal to the decedent’s adjusted tax basis, if
lower than such value.
The special PFIC rules do not apply to a U.S. Shareholder if the U.S. Shareholder makes an election to treat us as a “qualified
electing fund” in the first taxable year in which the U.S. Shareholder owns our Common Shares and if we comply with certain
reporting requirements. Instead, a shareholder of a qualified electing fund is required for each taxable
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year to include in income a pro rata share of the ordinary earnings of the qualified electing fund as ordinary income and a pro rata share
of the net capital gain of the qualified electing fund as long-term capital gain, subject to a separate election to defer payment of taxes,
which deferral is subject to an interest charge. The election is made on a shareholder-by-shareholder basis and may be revoked only
with the consent of the IRS. A U.S. Shareholder makes the election by attaching a completed IRS Form 8621, including the PFIC
annual information statement, to a timely filed U.S. federal income tax return. Even if an election is not made, a U.S. Shareholder
generally must file a completed IRS Form 8621 in each year that we are a PFIC. U.S. Shareholders should be aware that, for each
taxable year, if any, that we are a PFIC, we can provide no assurances that we will satisfy the record keeping requirements of a PFIC, or
that we will make available to U.S. Shareholders the information such U.S. Shareholders require to make a “qualified electing fund”
election with respect to us.
A U.S. Shareholder who owns PFIC shares that are publicly traded could elect to mark the shares to market annually,
recognizing as ordinary income or loss each year an amount equal to the difference as of the close of the taxable year between the fair
market value of the PFIC shares and the U.S. Shareholder’s adjusted tax basis in the PFIC shares. If such a mark-to-market election
were made, then the rules set forth above would not apply for periods covered by the election. Assuming that we are trading on the
Nasdaq Capital Market, our Common Shares are expected to be treated as publicly traded for purposes of the mark-to-market election
and, therefore, such election should be able to be made if we are classified as a PFIC. A mark-to-market election is, however, subject to
complex and specific rules and requirements, and U.S. Shareholders are strongly urged to consult their tax advisors concerning this
election if we are classified as a PFIC.
U.S. Shareholders are urged to consult their tax advisors regarding the adverse tax consequences of owning our Common Shares
if we are, or become, a PFIC, and the possibility of making certain elections designed to lessen those adverse consequences.
U.S. Information Reporting and Backup Withholding
Dividends paid, if any, on our Common Shares to a U.S. Shareholder may be subject to information reporting and, unless a U.S.
Shareholder either furnishes its taxpayer identification number or otherwise establishes an exemption, may also be subject to U.S.
backup withholding tax. In addition, information reporting generally will apply to payments of proceeds from the sale, exchange,
redemption or other disposition of our Common Shares by a paying agent, including a broker, within the United States to a U.S.
Shareholder. A paying agent within the United States will be required to impose backup withholding on any payments of the proceeds
from the sale, exchange redemption or other disposition of the Common Shares within the United States to a U.S. Shareholder if such
U.S. Shareholder fails to furnish its correct taxpayer identification number or otherwise fails to establish an exemption or comply with
such backup withholding requirements. Backup withholding is not an additional tax and may be refunded (or credited against the U.S.
Shareholder’s U.S. federal income tax liability, if any), provided that certain required information is furnished to the IRS. The
information reporting requirements may apply regardless of whether withholding is required.
Bermuda Taxation
Under current Bermuda law, there are no taxes on profits, income or dividends nor is there any capital gains tax. Furthermore,
APWC 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 APWC or to any of its operations, or the shares, debentures or other obligations of APWC, until
March 31, 2035. This undertaking does not, however, prevent the imposition of any such tax or duty on such persons as are ordinarily
resident in Bermuda and holding such shares, debentures or obligations of APWC or of property taxes on APWC’s self-owned real
property or leasehold interests in Bermuda.
As an exempted company, APWC must pay to the Bermuda government an annual government fee calculated on a sliding-scale
basis by reference to its assessable capital, that is, its authorized share capital plus any share premium.
There is no stamp duty or other transfer tax payable upon the transfer of shares in APWC by shareholders.
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10.F. Dividends and Paying Agents
Not applicable
10.G. Statement by Experts
Not applicable
10.H. Documents on Display
APWC is required to comply with the reporting requirements of the Exchange Act, applicable to a foreign private issuer. APWC
is currently required to file annually a Form 20-F no later than four months after the close of its fiscal year, which is December 31. Any
time APWC is delinquent in filing timely any periodic reports, including an Annual Report on Form 20-F, with the SEC, that
delinquency may adversely affect APWC’s status on any exchange or quotation service on which its shares are listed or quoted and
APWC may not be entitled to use certain abbreviated registration statements with the SEC in connection with the registration of any of
its securities. APWC has not been delinquent in filing our annual reports in any of the past five years.
As a foreign private issuer, APWC is exempt from the rules under the Exchange Act prescribing the furnishing and content of
proxy statements, and its 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 accessed over the Internet on the SEC’s website at http://www.sec.gov.
In addition, we post certain information regarding our Company and its operations on our website located at www.apwcc.com.
Summary information regarding our Company posted on our website should not be considered to be a substitute for, or a restatement
of, the more complete information regarding our 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.
10.I. Subsidiary Information
Not applicable
ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Our Company has exposure to several quantitative market risks, including fluctuations in interest rates, foreign currency
exchange rates and the pricing of commodities, principally copper, our Company’s main raw material. Risk management measures
undertaken by our Company include entering into derivative agreements covering foreign exchange rates and copper pricing, as well as
copper forward pricing agreements. Our Company does not purchase or sell derivative instruments for trading purposes. Our Company
does not engage in trading activities involving copper contracts for which a lack of marketplace quotations would necessitate the use of
fair value estimation techniques.
11.1 Interest Rate Risk
Our Company is not currently a party to any derivative instruments to manage interest rate exposure. In the current interest rate
environment, our Company does not believe that the limited potential loss limitation protection available through the purchase of
interest rate swaps or other derivative instruments against its exposure under floating rate finance facilities merits the cost that would be
incurred in those transactions.
11.2 Foreign Currency Risk
Our Company has exposure to fluctuations in currency exchange rates. Our Company’s revenues are generated primarily in the
local currency or currencies in its principal operating regions, North Asia, Thailand, and the ROW, which are also its reporting
segments. However, significant proportions of raw materials are in U.S. dollars.
As our Company’s operating subsidiaries incur operating costs in the local currency where they operate, our Company believes it
is prudent that those operating subsidiaries incur indebtedness in the local currency when debt
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financing is necessary. The amount of indebtedness incurred by our operating subsidiaries from time to time is a function of our
business strategy, the attractiveness of borrowing as opposed to other methods of financing operations and tax implications, among
other considerations. Our Company has exposure to currency exchange risk when the results of its operating subsidiaries are translated
from the functional currencies into its reporting currency, the U.S. dollar. At December 31, 2023 and 2022, the other comprehensive
income in the total equity section of the consolidated balance sheets included currency translation adjustments of $19.8 million and
$20.1 million, respectively.
See “Item 3: Key Information–Risk Factors–Risks Related to our Financial Activities–Foreign exchange fluctuations could
materially impact our financial performance and our financial condition” for information about the effects of foreign currency
fluctuations on our Company.
Our Company enters into foreign exchange forward contracts with the intent to reduce the foreign exchange risk of expected
sales and purchase transactions. Our Company monitors the foreign exchange exposure and will consider hedging significant foreign
currency exposure should the need arise. See Notes 11 and 27 to APWC’s Financial Statements.
11.3 Market Risks Relating to Copper
Copper is the principal raw material we use, accounting for a majority portion of the cost of sales in 2023. We purchase copper
at prices based on the average prevailing international spot market prices on the LME for copper for the one month prior to purchase.
The price of copper is influenced heavily by global supply and demand as well as speculative trading. As with other costs of
production, changes in the price of copper may affect our cost of sales. Whether this has a material impact on our operating margins
and financial results depends primarily on our ability to adjust our selling prices to our customers, such that increases and decreases in
the price of copper are reflected in those selling prices going forward. 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 we purchase. Most of our sales of products reflect copper prices prevailing at the time the products are ordered
by our customers. However, in the cases when our Company enters into a sales contract at fixed prices, rising copper price could render
this sales contract onerous that requires our Company to recognize the related onerous losses. In addition, a long-term decrease in the
price of copper would require our Company to revalue the value of its inventory at periodic intervals to the then market value, which
could be below cost. Copper prices have been subject to considerable volatility and it is not always possible to manage our copper
purchases and inventory so as to neutralize the impact of copper price volatility. Accordingly, significant volatility in copper prices
could have a material adverse effect on the results of our operations.
11.4 Equity Price Risk
Our Company is exposed to equity price risk as a result of our unlisted available-for-sale equity securities. The carrying value of
these investments in private companies is subject to fluctuations and their fair market value may be significantly different from the
carrying value.
11.5 Fair Value of Designated Market-Sensitive Derivative Contracts
Not applicable
ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable
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ITEM 13: DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None
Part II
ITEM 14: MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not applicable
ITEM 15: CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of our management, including APWC’s Chief
Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures in
accordance with the provisions of Rule 13a-15 promulgated under the Exchange Act. Based upon that evaluation, APWC’s CEO and
CFO concluded that our disclosure controls and procedures were effective as of December 31, 2023.
Management’s report on Internal Control over Financial Reporting
APWC’s management, including APWC’s CEO and CFO, is responsible for establishing and maintaining adequate internal
control over financial reporting. We do not expect that our internal control will prevent all errors and all fraud, or eliminate the
possibility of fraudulent conduct. A control system, no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered relative to their costs. The design of any system of
controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate
because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
APWC’s management, including APWC’s CEO and CFO, has assessed the effectiveness of our internal control over financial
reporting as of December 31, 2023 (the “Assessment Date”). In making its assessment, management used the criteria set forth in
"Internal Control — Integrated Framework" issued in 2013 by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”). These criteria include the control environment, risk assessment, control activities, information and
communication and monitoring of each of the above criteria. Based on this assessment, APWC’s management, including APWC’s CEO
and CFO, concluded that APWC’s internal control over financial reporting was effective as of the Assessment Date.
Attestation report of registered public accounting firm
This Annual Report does not contain an attestation report of our registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by our registered public accounting firm due to the fact that such
report is not required as APWC is a non-accelerated filer.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation of such
internal control that occurred during the last fiscal year that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
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ITEM 16A: AUDIT COMMITTEE FINANCIAL EXPERT
For each of 2023, 2022 and 2021, APWC’s Audit committee has consisted of APWC’s three independent directors, Mr. Anson
Chan, Dr. Yichin Lee and Dr. Lambert L. Ding, with Mr. Chan serving as the Audit Committee’s chairman and financial expert. The
Audit Committee of the Board meets the independence requirements set forth in Regulation 10A-3 under the Exchange Act and under
the rules of Nasdaq. Please see Section 6.a. of this Annual Report for additional information on Mr. Chan, Dr. Lee and Dr. Ding.
ITEM 16B: CODE OF ETHICS
On April 26, 2005, APWC adopted a code of ethics applicable to its Chief Executive Officer and senior financial officers. A copy
of APWC’s code of ethics for senior executives is on file with the SEC (see Item 19 below).
ITEM 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees for fiscal years 2023 and 2022 for professional services rendered by the principal independent accountant for
the audit of APWC’s annual financial statements totaled $0.9 million and $0.9 million, respectively.
Tax Fees
The aggregate fees for fiscal years 2023 and 2022 for professional services rendered by the principal independent accountant for
tax compliance, tax advice and tax planning totaled approximately $30.0 thousand and $41.7 thousand, respectively.
All Other Fees
(None)
Audit Committee Approval
The engagement of the independent accountant to render audit, audit-related and non-audit services is entered into pursuant to
pre-approval policies and procedures established in the Charter of the Audit Committee of APWC. Each of the services described in
this Item 16C was approved by the Audit Committee.
ITEM 16D: EXEMPTIONS FROM THE LISTING STANDARDS FOR THE AUDIT COMMITTEES
The Audit Committee of the Board consists of three directors, each of whom is independent, as such term is defined in
Regulation 10A-3 promulgated under the Exchange Act, and one of whom is a financial expert.
ITEM 16E: PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not applicable
ITEM 16F: CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable
ITEM 16G: CORPORATE GOVERNANCE
PEWC holds more than 50% of our issued and outstanding Common Shares. Accordingly, we are a “controlled company” within
the meaning of Nasdaq’s corporate governance standards, and may elect to utilize exemptions from certain corporate governance
standards, including the requirement (1) that a majority of the board of directors consist of independent directors, (2) to have a
nominating committee that is comprised entirely of independent directors with a written charter addressing the committee’s purpose
and responsibilities and (3) to have a compensation committee that is comprised entirely of independent directors with a written charter
addressing the committee’s purpose and responsibilities. We utilize the controlled company exemption for (1) the requirement to have a
majority of our board of directors consist of
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independent directors, and (2) the requirement to have a nominating committee that is comprised entirely of independent directors with
a written charter addressing such committee’s purpose and responsibilities. While we rely on the controlled company exemption for (2),
our independent directors oversee our process for identifying director nominees and review the qualifications of such nominees.
At present, a majority of the Board is affiliated with PEWC, and we rely on Nasdaq’s allowance for foreign private issuers to
follow home country practices in lieu of the requirement that listed companies have regularly scheduled meetings at which only
independent directors are present (“executive sessions”). Nonetheless, our independent directors meet periodically in their capacity as
members of our Audit Committee. Our independent auditors and management occasionally join such meetings, in the interest of
communicating management’s analysis of the Company’s financial performance and compliance with relevant corporate governance
requirements.
Because we have fewer independent directors (i.e. those who meet Nasdaq’s independence standards) on our Board than issuers
that comply with all of Nasdaq’s corporate governance standards, investors are not provided the same level of protection afforded to
investors in issuers that comply with all of Nasdaq’s corporate governance standards.
As APWC’s majority shareholder, PEWC has sufficient votes to control the outcome of any matter presented for a shareholder
vote, including the election of each member of the Board. PEWC may vote its shares in APWC in the manner that it sees fit. In
addition, subject to applicable securities laws, PEWC may sell, convey or encumber all or a portion of its ownership interest in APWC
without regard to the best interests of APWC’s other shareholders, except to the extent that it is prohibited from engaging in conduct
oppressive to non-controlling interests under applicable law. The interests of PEWC may conflict with our interests or the interests of
our other shareholders. As a result, PEWC may take actions with respect to us or our business that may not be in our or our other
shareholders’ best interest.
ITEM 16H: MINE SAFETY DISCLOSURE
Not applicable
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
ITEM 16J. INSIDER TRADING POLICIES
Not applicable
ITEM 16K. CYBERSECURITY
Cybersecurity Risk management and strategy
Our cybersecurity risk management program aims to identify threats, to present and evaluate them transparently, to mitigate, and
manage them proactively. We have developed an Information Security Management System (“ISMS”) in accordance with ISO
(International Organization for Standardization) 27001 intended to protect the confidentiality, integrity, and availability of our critical
systems and information.
We conduct assessments in the event of a material change in our business practices that may affect information systems,
products, services, and our IT environment. These assessments include identification of reasonably foreseeable internal and external
risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures,
systems, and safeguards in place to manage such risks.
We periodically conduct ongoing internal and external vulnerability analyses, including simulated attacks as well as external
testing via a third-party to evaluate the effectiveness of our cybersecurity process and controls.
Our Company has a dedicated IT director who is responsible for investigating all security incidents and alerts including
determining the threat type, incident scope and incident severity. Where appropriate, major incidents are escalated according to ISMS.
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In 2023, we did not identify any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents,
that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or
financial condition. Despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurance that we have not
experienced an undetected cybersecurity incident. For more information about these risks, please see “Item 3. Key Information – D.
Risk Factors.”
Cybersecurity Governance
The stewardship of our information security management initiatives is under the guidance of our IT director Mr. Chu, who leads
a dedicated team. His extensive information security work experience spans over 10 years, including roles as a cybersecurity manager,
ISMS manager in a leading LCD industry enterprise, and holding an ISO 27001 Lead Auditor certification. This team is responsible for
coordinating a comprehensive array of information security strategies and controls. Additionally, they are charged with the assessment
and classification of the severity of potential information security incidents, as well as the formulation and execution of responsive and
restorative measures. The team is also instrumental in the facilitation and enactment of pertinent policies, procedures, and security
protocols.
Members of the audit committee receive regular updates from management, regarding cybersecurity related matters. This
includes existing and new cybersecurity risks, how management is addressing, managing and/or mitigating those risks, cybersecurity
and data privacy incidents (if relevant), and the status of key information security initiatives.
If a cybersecurity incident occurs, our cybersecurity-related departments will promptly organize personnel for internal
assessment. If it is further determined that the incident could potentially be a material cybersecurity event, the cybersecurity-related
departments will promptly report the incident and assessment results to our CEO and CFO, and, to the extent appropriate, involve
external legal counsel to provide advice. Our management shall prepare disclosure material on the cybersecurity incident for review
and approval by our board of directors before it is disseminated to the public.
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ITEM 17: FINANCIAL STATEMENTS
Part III
Our Company has provided the financial statements and related information specified in Item 18.
ITEM 18: FINANCIAL STATEMENTS
See pages F-1 – F-86.
ITEM 19: EXHIBITS
19.1 Index to Audited Financial Statements
Report of independent registered public accounting firm
Consolidated income statements for the years ended December 31, 2023, 2022, and 2021
Consolidated statements of comprehensive income for the years ended December 31, 2023, 2022 and 2021
Consolidated balance sheets as of December 31, 2023 and 2022
Consolidated statements of changes in equity for the years ended December 31, 2023, 2022 and 2021
Consolidated statements of cash flows for the years ended December 31, 2023, 2022 and 2021
Notes to consolidated financial statements
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19.2 Index to Exhibits
1.1
1.2
2.1
4.1
8
11
12.1
12.2
13.1
13.2
15.1
Memorandum of Association of Asia Pacific Wire & Cable Corporation Limited (incorporated by reference
to Exhibit 1.1 of the Company’s annual report on Form 20-F filed with the Securities and Exchange
Commission on June 21, 2001). (P)
Third Amended and Restated Bye-Laws of Asia Pacific Wire & Cable Corporation Limited (incorporated
by reference to Exhibit 3.2 of the Company’s annual report on Form 20-F filed with the Securities and
Exchange Commission on April 30, 2012).
Description of the Rights of Holders of Common Shares (filed herewith).
Composite Services Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Form F-1 filed
with the Securities and Exchange Commission on November 13, 1996). (P)
List of significant subsidiaries (see Note 2.2 to the consolidated financial statements).
Code of Ethics (incorporated by reference to Exhibit 11 of the Company’s annual report on Form 20-F filed
with the Securities and Exchange Commission on November 9, 2007).
Certification of Chief Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley
Act (filed herewith).
Certification of Chief Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act
(filed herewith).
Certification by Chief Executive Officer of periodic financial report pursuant to 18 U.S.C. Section 1350, as
mandated by Section 906 of the Sarbanes-Oxley Act (filed herewith).
Certification by Chief Financial Officer of periodic financial report pursuant to 18 U.S.C. Section 1350, as
mandated by Section 906 of the Sarbanes-Oxley Act (filed herewith).
Amended and Restated Audit Committee Charter (incorporated by reference to Exhibit 16.G of the
Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on May 13,
2011).
97.1
Asia Pacific Wire & Cable Corporation Limited Clawback Policy (filed herewith).
101.INS*
Inline XBRL Instance Document.
101.SCH*
Inline XBRL Taxonomy Extension Schema Document.
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*
Cover Page Interactive Data File (embedded within the Inline XBRL document).
(P) – Paper filings
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The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and
authorized the undersigned to sign this annual report on its behalf.
SIGNATURE
April 25, 2024
ASIA PACIFIC WIRE & CABLE
CORPORATION LIMITED
/s/ Yuan Chun Tang
Name: Yuan Chun Tang
Title:
Chief Executive Officer
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
Audited Consolidated Financial Statements
As of December 31, 2023 and 2022
Years ended December 31, 2023, 2022 and 2021
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INDEX TO FINANCIAL STATEMENTS
CONTENTS
Reports of independent registered public accounting firm(PCAOB ID 1345)
Consolidated income statements
Consolidated statements of comprehensive income
Consolidated balance sheets
Consolidated statements of changes in equity
Consolidated statements of cash flows
Notes to the consolidated financial statements
F-2
F-4
F-5
F-6
F-7
F-8
F-10
1. Principal activities and corporate information
2. Basis of Preparation
2.1 Basis of Preparation
2.2 Basis of consolidation
3. Summary of significant accounting policies
4. New Standards and interpretations
5. Segment information
6. Material partly-owned subsidiaries
7. Income and expenses items
8. Income tax
9. Earnings per share
10. Cash and cash equivalents
11. Financial assets and financial liabilities
12. Trade and other receivables
13. Inventories
14. Contract assets
15. Property, plant and equipment
16. Right of use assets
17. Investment properties
18. Intangible assets
19. Investment in associates
20. Trade and other payables
21. Employee benefit liabilities
22. Other current liabilities
23. Equity
24. Related party transactions
25. Commitments and contingencies
26. Fair value measurement
27. Financial risk management objectives
28. Cash flow information
29. Subsequent event
30. Approval of the financial statements
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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:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Asia Pacific Wire & Cable Corporation Limited and its
subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income,
comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31,
2023, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the
consolidated financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2023 in conformity with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting
firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are
required to obtain an understanding of internal control over financial reporting 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.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our
audits also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable
basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts
or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the
consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition – Estimating Measure of Progress for Supply, Delivery and Installation (“SDI”) Contracts
As described in Note 3.14 and 5 to the consolidated financial statements, the Company’s revenues include revenue from
the supply, delivery and installation (“SDI”) of cable to power transmission contracts which amounted to $57.7 million for
the year ended December 31, 2023. Such revenue is recognized over a period of
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time, during which the Company satisfied its performance obligations to the customer. The Company used an input method
(cost-to-cost) to measure the progress towards satisfaction of performance obligation. The estimate about revenue, costs
and progress towards complete satisfaction of a performance obligation may revise when there is a change in
circumstances and determine the amount of related revenue. Due to the nature of the work performed, management’s
estimation of the progress towards completion of performance obligation is complex and requires significant judgment.
The principal considerations for our determination that performing procedures relating to revenue recognition – estimating
measure of progress for supply, delivery and installation is a critical audit matter are (i) the significant judgment by
management in developing the estimates of total revenues and total costs at completion, including significant judgments
and assumptions on a contract by contract basis and (ii) a high degree of auditor judgment, subjectivity, and effort in
performing procedures and evaluating audit evidence related to management’s estimates of total revenues and total costs at
completion for contracts.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included, among others, testing management’s
process for developing the estimates of total revenues and total costs at completion, including evaluating on a test basis, the
reasonableness of certain significant judgments and assumptions considered by management specific to each contract.
Evaluating the significant judgments and assumptions related to the estimates of total revenues and total costs at
completion involved evaluating whether the significant judgments and assumptions used by management were reasonable
considering (i) management’s historical forecasting accuracy; (ii) evidence to support the relevant aforementioned
assumptions; (iii) the consistent application of accounting policies; and (iv) the timely identification of circumstances
which may require a modification to a previous estimate.
/s/ PricewaterhouseCoopers, Taiwan
Taipei, Taiwan
Republic of China
April 25, 2024
We have served as the Company's auditor since 2017.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
CONSOLIDATED INCOME STATEMENTS
For the years ended December 31, 2023, 2022 and 2021
Revenue
Cost of sales
Gross profit
Other operating income
Selling, general and administrative, research and
development expenses
Other operating expenses
Net impairment loss on financial and contract assets
Operating profit/(loss)
Finance costs
Finance income
Share of loss of associates
Exchange gain/(loss)
Other income
Other expenses
Profit/(loss) before tax
Income tax (expense)/benefit
Profit/(loss) for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Note
5(e)
7(g),13
7(a)
7(b)
7(c)
7(d)
7(e)
19
7(f)
8
2023
US$’000
2022
US$’000
2021
US$’000
425,772
433,893
476,659
(395,545)
30,227
(401,363)
32,530
(455,508)
21,151
433
1,026
587
(24,472)
—
(4,640)
1,548
(2,527)
205
(2)
679
570
(9)
464
(162)
302
3,867
(3,565)
302
(24,978)
(3)
(508)
8,067
(1,650)
120
(1)
143
889
(3)
7,565
(2,808)
4,757
3,874
883
4,757
(26,484)
(7)
(220)
(4,973)
(1,251)
123
(1)
(4,425)
671
(1)
(9,857)
1,345
(8,512)
(2,642)
(5,870)
(8,512)
Earnings/(loss) per share
Basic and diluted profit/(loss) for the year attributable to
equity holders of the parent
9
$
0.19 $
0.19 $
(0.19)
The accompanying notes are an integral part of these consolidated financial statements.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended December 31, 2023, 2022 and 2021
Profit/(loss) for the year
Other comprehensive income/(loss)
Other comprehensive income/(loss) to be reclassified to
profit or loss in subsequent periods:
Note
2023
US$’000
2022
US$’000
2021
US$’000
302
4,757
(8,512)
Exchange differences on translation of foreign
operations, net of tax of $0
23(c)
784
784
(9,506)
(9,506)
(15,028)
(15,028)
Other comprehensive income/(loss) not to be reclassified to
profit or loss in subsequent periods:
Changes in the fair value of equity instruments measured
at fair value through other comprehensive income
Income tax effect
Other comprehensive income/(loss) from equity
instruments measured at fair value, net of tax
Re-measuring income on defined benefit plans
Income tax effect
Defined benefit pension plan, net of tax
11(d)
8
23(c)
21
8
23(c)
1,104
(221)
883
1,885
(377)
1,508
(1,352)
270
(1,082)
732
(147)
585
734
(147)
587
559
(112)
447
Other comprehensive income/(loss) for the year, net of
tax
3,175
(10,003)
(13,994)
Total comprehensive income/(loss) for the year, net of tax
3,477
(5,246)
(22,506)
Attributable to:
Equity holders of the parent
Non-controlling interests
5,464
(1,987)
3,477
(3,827)
(1,419)
(5,246)
(10,193)
(12,313)
(22,506)
The accompanying notes are an integral part of these consolidated financial statements.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
CONSOLIDATED BALANCE SHEETS
As of December 31, 2023 and 2022
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Assets
Current assets
Cash and cash equivalents (excluding bank overdrafts)
Financial assets at fair value through profit or loss
Trade receivables
Other receivables
Contract assets
Due from related parties
Inventories
Prepayments
Other current assets
Non-current assets
Financial assets at fair value through other comprehensive income
Property, plant and equipment
Right of use assets
Investment properties
Intangible assets
Investments in associates
Deferred tax assets
Other non-current assets
Total assets
Liabilities
Current liabilities
Interest-bearing loans and borrowings
Trade and other payables
Due to related parties
Financial liabilities at fair value through profit or loss
Accruals
Current tax liabilities
Employee benefit liabilities
Lease liabilities
Other current liabilities
Non-current liabilities
Interest-bearing loans and borrowings
Employee benefit liabilities
Lease liabilities
Deferred tax liabilities
Other non-current liabilities
Total liabilities
Equity
Issued capital
Additional paid-in capital
Treasury shares
Retained earnings
Other components of equity
Equity attributable to equity holders of the parent
Non-controlling interests
Total equity
Total liabilities and equity
Note
10
11
12
12,27(e)
14
24
13
11,26
15,27(e)
16(a)
17,26
18
19
8
11(b)
20
24
11,26
21
22
11(b)
21
8
3
23
6
As of December 31,
2023
US$’000
2022
US$’000
37,970
307
104,955
1,670
13,946
1,368
128,230
2,595
3,909
294,950
2,902
49,941
2,825
5,112
124
810
7,799
2,201
71,714
366,664
53,737
51,743
7,941
74
15,250
2,116
1,839
638
7,235
54,017
39
81,982
2,397
12,450
11,018
130,608
3,341
3,673
299,525
1,553
50,713
3,432
5,250
139
805
7,143
2,459
71,494
371,019
45,576
39,891
16,613
6
21,218
2,432
1,947
627
5,289
140,573
133,599
—
5,997
1,445
3,840
188
11,470
152,043
206
118,103
(38)
57,931
(19,143)
157,059
57,562
214,621
366,664
12,155
7,693
1,947
4,197
—
25,992
159,591
206
118,103
(38)
54,064
(20,740)
151,595
59,833
211,428
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The accompanying notes are an integral part of these consolidated financial statements.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the years ended December 31, 2023, 2022 and 2021
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Balance at
January 1, 2021
Net profit
Other
comprehensive
income/(loss)
Total
comprehensive
income/(loss)
Effect from the
changes in
shareholding
percentage in
subsidiary
Balance at
December 31,
2021
Net loss
Other
comprehensive
income/(loss)
Total
comprehensive
income/(loss)
Issuance of
common stock for
cash
Balance at
December 31,
2022
Net profit
Other
comprehensive
income/(loss)
Total
comprehensive
income/(loss)
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Attributable to the equity holders of the parent
Issued
capital
Additional
paid-in
capital
Treasury
shares
Retained
earnings
Remeasurement
of
defined
benefit plans
Financial
assets at
FVOCI
reserve
Foreign
currency
translation
reserve
Non-
controlling
interests
Total
equity
Total
Note US$’000 US$’000 US$’000 US$’000
US$’000
US$’000 US$’000 US$’000 US$’000 US$’000
138 110,416
—
—
(38)
—
52,832
(2,642)
(1,540)
—
655
—
(4,603) 157,860
77,015 234,875
—
(2,642)
(5,870)
(8,512)
23
—
—
—
—
228
300
(8,079)
(7,551)
(6,443)
(13,994)
Dividends paid
23
—
—
—
—
—
—
(2,642)
—
228
—
300
—
(8,079)
(10,193)
(12,313)
(22,506)
—
—
(2,817)
(2,817)
23
(167)
(167)
(68)
(235)
138 110,249
—
—
(38)
—
50,190
3,874
(1,312)
955
(12,682) 147,500
61,817 209,317
—
—
—
3,874
883
4,757
23
—
—
—
—
298
(551)
(7,448)
(7,701)
(2,302)
(10,003)
Dividends paid
23
—
—
—
—
—
—
3,874
—
298
—
(551)
(7,448)
(3,827)
(1,419)
(5,246)
—
—
—
(565)
(565)
23
68
7,854
—
—
—
—
—
7,922
—
7,922
206 118,103
—
—
(38)
—
54,064
3,867
(1,014)
404
(20,130) 151,595
59,833 211,428
—
—
—
3,867
(3,565)
302
23
—
—
—
—
768
450
379
1,597
1,578
3,175
Dividends paid
23
Balance at
December 31,
2023
—
—
—
—
—
—
3,867
—
768
—
450
—
379
—
5,464
(1,987)
—
(284)
3,477
(284)
206 118,103
(38)
57,931
(246)
854
(19,751) 157,059
57,562 214,621
The accompanying notes are an integral part of these consolidated financial statements.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2023, 2022, and 2021
Operating activities:
Profit/(loss) before tax
Adjustments to reconcile profit before tax to net cash provided by operating activities:
Note
2023
US$’000
2022
US$’000
2021
US$’000
464
7,565
(9,857)
Depreciation
Impairment of property, plant and equipment
Amortization of intangible assets
Gain on disposal of property, plant and equipment
Gain on disposal of assets classified as held for sale
Gain on disposal of investment property
Adjustment for on fair value of derivatives
Dividend income
Finance income
Finance costs
Share of loss of associates
Impairment for trade receivables
Impairment (reversal of impairment) for trade receivables for related parties
Impairment (write-back of impairment) of inventories
Unrealized foreign exchange difference, net
(Gain) on lease modification
Changes in operating assets and liabilities
Trade and other receivable
Contract assets
Inventories
Prepayment and other current assets
Amounts due to/from related parties
Other non-current assets
Trade and other payables, accruals, other current liabilities and other non-current
liabilities
Net cash flows (used in)/provided by operating activities
Dividend received
Interest received
Interest paid
Income tax paid
Net cash (used in)/provided by operating activities
Investing activities:
Purchases of property, plant and equipment
Purchases of intangible assets
Purchases of investment properties
Purchases of long-term bank deposits
Purchases of short-term bank deposits
(Investment in) financial assets at fair value through OCI
Proceeds from disposal of held for sale assets
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of investment property
Proceeds from maturities of long-term bank deposits
Proceeds from maturities of short-term bank deposits
Net cash used in investing activities
15,16,17
6,157
15
18
7(a)
7(a)
7(a)
7(f)
7(f)
7(e)
7(d)
19
7(b),12(a)
7(a),7(b),7(c)
13
—
54
(39)
—
—
(196)
(97)
(205)
2,527
2
75
4,565
(10,255)
(325)
—
(21,003)
(1,236)
13,917
820
(3,772)
195
6,659
(1,693)
97
205
(2,381)
(2,318)
(6,090)
5,790
—
45
(132)
(240)
(271)
(33)
(97)
(120)
1,650
1
509
(1)
(1,119)
245
(74)
16,720
(952)
(4,389)
(35)
807
(54)
(14,035)
11,780
97
119
(1,475)
(3,955)
6,566
5,447
7
47
(318)
—
—
(259)
(106)
(123)
1,251
1
205
15
14,136
1,784
(2)
(25,739)
(1,387)
(53,857)
(886)
3,911
(169)
28,896
(37,003)
106
131
(1,078)
(3,768)
(41,612)
28
18
17
11
(4,254)
(3,746)
(8,547)
(40)
—
(87)
(407)
(240)
—
168
—
—
—
(62)
(12)
—
—
—
241
204
301
307
112
(4,860)
(2,655)
(4)
—
(38)
(1,364)
—
—
399
—
—
3,401
(6,153)
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
For the years ended December 31, 2023, 2022, and 2021
Financing activities:
Dividend paid to non-controlling shareholders of subsidiaries
Issuance of common stock for cash
Repayments of borrowings
Repayments of borrowings - related parties
Proceeds from borrowings
Principal elements of lease payments
Effect from the changes in shareholding percentage in subsidiary
Net cash (used in)/provided by financing activities
Effect of exchange rate
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Note
2023
US$’000
2022
US$’000
2021
US$’000
28
23
28
28
28
10
10
(357)
—
(7,256)
—
2,799
(691)
—
(5,505)
408
(16,047)
54,017
37,970
(565)
7,922
(19,278)
—
22,167
(616)
—
9,630
(2,036)
11,505
42,512
54,017
(2,817)
—
(11,819)
(6,000)
63,915
(632)
(235)
42,412
(4,372)
(9,725)
52,237
42,512
The accompanying notes are an integral part of these consoli000dated financial statements.
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1. PRINCIPAL ACTIVITIES AND CORPORATE INFORMATION
Asia Pacific Wire & Cable Corporation Limited (“APWC”), which is a subsidiary of Pacific Electric Wire & Cable Co., Ltd.
(“PEWC”), a Taiwanese company, was incorporated as an exempted company in Bermuda on September 19, 1996 under the
Companies Act 1981 of Bermuda (as amended) for the purpose of acting as a holding company. APWC is principally engaged in
owning operating companies engaged in the power cable, telecommunication cable, enameled wire and electronic cable industry.
APWC’s registered office is located at Victoria Place, 5th Floor, 31 Victoria Street, Hamilton HM 10, Bermuda. APWC’s
executive business office is presently located in Taipei, Taiwan.
APWC’s operating subsidiaries (the “Operating Subsidiaries”) are engaged in the manufacturing and distribution of
telecommunications, power cable and enameled wire products in Singapore, Thailand, Australia, the People’s Republic of China
(“PRC”) and other markets in the Asia Pacific region. Major customers of the Operating Subsidiaries include government
organizations, electric contracting firms, electrical dealers, and wire and cable factories. The Operating Subsidiaries also engage
in the distribution of certain wire and cable products manufactured by PEWC and third parties. The Operating Subsidiaries also
provides project engineering services in supply, delivery and installation (the “SDI”) of power cable to certain of its customers.
Since 1997, APWC has been a U.S. public company with its common shares registered with the Securities and Exchange
Commission (the “SEC” or the “Commission”). On April 29, 2011, APWC’s common shares commenced trading on Nasdaq
Capital Market tier. On February 15, 2013, APWC’s common shares started trading on the Nasdaq Global Market tier. On July
24, 2020, APWC transferred its listing of common shares to the Nasdaq Capital Market tier because of failing to meet the
minimum Market Value of Publicly Held Shares ("MVPHS") requirement to continue listing on the Nasdaq Global Market.
On January 14, 2022, APWC distributed subscription rights without charges to its shareholder to purchase additional common
shares of APWC. On February 2, 2022, APWC announced the completion of this rights offering, which was oversubscribed. In
the rights offering, APWC issued and sold 6,796,558 common shares at $1.22 per share pursuant to the exercise of subscription
rights, raising net proceeds of $7.9 million after deducting offering expenses. Following the completion of the rights offering,
APWC had 20,616,227 common shares outstanding.
PEWC is currently holding 80.96% of the equity of APWC and is APWC’s ultimate parent company.
Share Capital Repurchase Program
APWC’s Board of Directors authorized a share capital repurchase program on August 28, 2012. During 2012 and 2013, APWC
repurchased 11,100 shares with total considerations of $38 until APWC suspended the share capital repurchase program as of
June 30, 2013. APWC records the value of its common shares held in the treasury at cost.
On August 13, 2014, APWC announced that its Board of Directors authorized the future implementation of a share repurchase
program of up to $1 million worth of its Common Shares. APWC did not announce a commencement date for that future share
repurchase program, and, to date, it has not yet been implemented, and no financial liability has been recognized.
2. BASIS OF PREPARATION
2.1 The consolidated financial statements are prepared in accordance with International Financial Reporting Standard (“IFRS”)
as issued by the International Accounting Standards Board (“IASB”).
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (continued)
The consolidated financial statements have been prepared on a historical basis except where otherwise disclosed in the
accounting policies. The consolidated financial statements are presented in U.S. dollars and all values are rounded to the
nearest thousand (US$’000), except when otherwise indicated.
2.2 Basis of consolidation
The consolidated financial statements comprise the financial statements of APWC and its subsidiaries (collectively as
“our Company”) as of December 31, 2023 and 2022, and the results of operations of our Company for the years ended
December 31, 2023, 2022 and 2021.
Subsidiaries are fully consolidated from the date of acquisition (the date on which our Company obtains control), and
continue to be consolidated until the date that such control ceases. Our Company controls an entity when our Company is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of the subsidiaries are prepared for the same reporting period
as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealized gains and
losses and dividends resulting from intra-group transactions are eliminated in full.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income
statements, statements of comprehensive income, statements of changes in equity and balance sheets, respectively. Total
comprehensive income (loss) within a subsidiary is attributed to the non-controlling interest even if it results in a deficit
balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If
our Company loses control over a subsidiary, it:
u
u
u
u
u
u
u
Derecognizes the assets (including goodwill) and liabilities of the subsidiary
Derecognizes the carrying amount of any non-controlling interest
Derecognizes the cumulative transaction differences recorded in equity
Recognizes the fair value of the consideration received
Recognizes the fair value of any investment retained
Recognizes any surplus or deficit in profit or loss
Reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss or
retained earnings, as appropriate, as would be required if our Company had directly disposed of the related assets or
liability.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (continued)
2.2 Basis of consolidation (continued)
The subsidiaries of our Company are set out below:
Place of incorporation and operations
The British Virgin Islands
APWC General Holdings Limited
PRC (APWC) Holding Ltd.
Samray Inc.
Siam (APWC) Holdings Ltd.
Moon View Ltd.
Trigent Investment Holdings Limited
Crown Century Holdings Ltd.
Singapore
Sigma Cable Company (Private) Limited (“Sigma Cable”)
Epan Industries Pte Ltd.
Singvale Pte Ltd.
The People’s Republic of China (“PRC”)
Ningbo Pacific Cable Co., Ltd. (“Ningbo Pacific”)
Shanghai Yayang Electric Co., Ltd. (“SYE”)
Pacific Electric Wire & Cable (Shenzhen) Co., Ltd. (“PEWS”)
Hong Kong
Crown Century Holdings Limited (“CCH (HK)”)
Australia
Percentage of equity interest
2023
2022
100 %
100 %
100 %
100 %
100 %
100 %
100 %
98.30 %
98.30 %
100 %
97.93 %
68.75 %
97.93 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
98.30 %
98.30 %
100 %
97.93 %
68.75 %
97.93 %
97.93 %
97.93 %
Australia Pacific Electric Cable Pty Limited (“APEC”)
98.06 %
98.06 %
Thailand
Charoong Thai Wire and Cable Public Company Limited (“Charoong Thai”) (i)
Siam Pacific Electric Wire & Cable Company Limited (“Siam Pacific”)
Double D Cable Company Limited (“Double D”)
Hard Lek Limited.
APWC (Thailand) Co., Ltd.
PEWC (Thailand) Co., Ltd.
CTW Beta Co., Ltd.
Siam Fiber Optics Co., Ltd. (“SFO”)
Taiwan
Asia Pacific New Energy Corporation Limited ("APNEC") (ii)
Pacific Smart System Corporation Limited ("PSSC") (ii)
(Formerly YASHIN Energy Corporation Limited)
YADING Energy Corporation Limited ("YADING")
50.93 %
50.93 %
50.93 %
73.98 %
99.48 %
99.48 %
50.89 %
50.93 %
50.93 %
50.93 %
50.93 %
73.98 %
99.48 %
99.48 %
50.89 %
50.93 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
(i)
(ii)
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.
On December 15, 2022, APWC contributed additional capital in APNEC in the form of a cash injection of $3.9 million
(or NT$120 million). Following that, on December 16, 2022, APNEC increased the capital of its subsidiary PSSC by
injecting US$2.3 million (or NT$70 million) in cash.
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES
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Our Company has consistently applied the following accounting policies to all periods presented in these consolidated
financial statements, except as mentioned otherwise (see also Note 4.1).
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.1 Current versus non-current classification
Our Company presents assets and liabilities in the balance sheets based on current and non-current classification. An asset
is current when it is:
u
u
u
u
Expected to be realized or intended to be sold or consumed in the normal operating cycle;
Held primarily for the purpose of trading;
Expected to be realized within twelve months after the reporting period; or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
u
u
u
u
It is expected to be settled in a normal operating cycle;
It is held primarily for the purpose of trading;
It is due to be settled within twelve months after the reporting period; or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
Our Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
3.2 Operating profit
The operating profit is the profit earned from core business operations, and it does not include any profit earned from
investment and the effects of interest and taxes.
3.3 Fair value measurement
Our Company measures financial instruments at fair value at each balance sheet date. In addition, fair values of financial
instruments measured at amortized cost are disclosed in Note 11(d).
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:
u
u
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to by our Company.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.3 Fair value measurement (continued)
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use.
Our Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within
the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
u
u
u
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the assets or liability,
either directly or indirectly
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, our Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, our Company has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
3.4 Cash and cash equivalents
Cash and cash equivalents in the consolidated balance sheet comprise of cash at banks and highly liquid investments with
purchased maturities of three months or less, which are subject to an insignificant risk of change in value.
For the purpose of the consolidated statements of cash flows, cash and cash equivalents are net of outstanding bank
overdrafts as they are considered an integral part of our Company’s cash management.
3.5 Inventories
Inventories are stated at the lower of cost and net realizable value. Cost of manufactured goods is determined on the
weighted average basis and, in the case of work in progress and finished goods, comprises direct materials, direct labor
and an appropriate proportion of overheads based on the normal operating capacity. Cost of distributed goods is
determined on the weighted average basis. Net realizable value is based on estimated selling prices less any estimated
costs to be incurred to completion and the estimated cost necessary to make the sale.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.6 Property, plant and equipment
Property, plant and equipment is stated at cost, net of accumulated depreciation and any accumulated impairment losses.
Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs for long-term
construction projects if the recognition criteria are met.
Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and
maintenance, is normally charged to profit or loss in the period in which it is incurred. In situations where the recognition
criteria are satisfied, the expenditure for a major inspection is capitalized in the carrying amount of the asset as a
replacement. When significant parts of property, plant and equipment are required to be replaced at intervals, our
Company recognizes such parts as individual assets with specific useful lives and depreciates them accordingly.
Spare parts and servicing equipment are usually carried as inventory and recognized in profit or loss as consumed.
However, major spare parts and stand-by equipment qualify as property, plant and equipment when an entity expects to
use them for more than one year.
The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the
respective asset if the recognition criteria for a provision are met. A provision shall be recognized when:
(a)
(b)
an entity has a present obligation (legal or constructive) as a result of a past event;
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
and
(c)
a reliable estimate can be made of the amount of the obligation.
If these conditions are not met, no provision shall be recognized.
Depreciation
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:
► Buildings
► Building improvement
► Machinery and equipment
► Motor vehicles
► Office equipment
15-30 years
2-20 years
4-20 years
3-10 years
3-20 years
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in
the income statement when the asset is derecognized.
The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end, and adjusted
prospectively, if appropriate.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
Impairment
If circumstances arise which indicate assets might be impaired, a review should be undertaken of their cash generating
abilities through either use or sales. This review will produce an amount, which should be compared with the asset’s
carrying value, and if the carrying value is higher, the difference must be written off as an impairment adjustment in the
income statement. Further detailed methodology used for an impairment test is given in Note 3.11 - Impairment of non-
financial assets.
3.7 Leases
Our Company assesses at contract inception whether a contract is, or contains, a lease. That is, our Company assesses
whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Our Company as a lessee
Our Company, as a lessee, applies a single accounting model to recognize assets and liabilities for all leases, except for
the lease term is 12 months or less or the underlying asset has a low value. Our Company recognizes lease liabilities to
make lease payment and right-of-use assets representing the right to use the underlying assets.
(i) Right-of-use assets
Our Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognized, initial direct costs incurred, and lease payment made at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the
estimated useful lives of the assets, as follows:
►Land use right
►Buildings
►Motor vehicles
►Office equipment
2 to 37 years
2 to 3 years
2 to 3 years
3 to 5 years
If the ownership of the leased asset transfers to our Company at the end of the lease term or the cost reflects the exercise
of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies Note 3.11 impairment of non-
financial assets.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.7 Leases (continued)
(ii) Lease liabilities
At the commencement date of the lease, our Company recognizes lease liabilities measured at the present value of lease
payment to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by our Company and payments of penalties for terminating the lease, if the lease
term reflects our Company exercising the option to terminate. Variable lease payments that do not depend on an index or a
rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, our Company uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease
term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to
determine such lease payment) or a change in the assessment of an option to purchase the underlying asset.
(iii) Short-term leases and leases of low-value assets
Our Company applies the short-term lease recognition exemption to its short-term leases. It also applies the lease of low-
value assets recognition exemption to its leases that are considered of low value. Lease payments on short-term leases and
leases of low-value assets are recognized as expense on a straight-line basis over the lease term.
Our Company as a lessor
Leases for which our Company is a lessor are classified each of its leases as either an operating lease or finance lease.
Finance lease
Whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership of an underlying
asset, the lease is classified as a finance lease. Amount due from lessees under finance lease are recognized as receivables
at the amount of our Company’s net investment in the leases. Finance lease income is allocated to accounting periods so
as to reflect a constant periodic rate of return on our Company’s net investment outstanding in respect of the leases.
Operating lease
Leases in which our Company does not transfer substantially all the risks and rewards incidental to ownership of an asset
are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and
is included in other operating income in the consolidated income statements due to its operating nature. Initial direct costs
incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and
recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the
period in which they are earned.
Property (land and/or a building, or part of a building) subject to an operating lease shall be recognized as an investment
property if, and only if, the property would otherwise meet the definition of an investment property.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.8 Borrowing costs
Borrowing costs are required to be capitalized as part of the cost of the asset if they are directly attributable to the
acquisition, construction or productions of a qualifying asset (whether or not the funds have been borrowed specifically).
All other borrowing costs are recognized as an expense in the period in which they are incurred.
A qualifying asset is an asset that necessarily takes a substantial period to get ready for its intended use or sale.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Borrowing costs include:
u
u
u
interest expense calculated using the effective interest method;
finance charges in respect of lease liabilities; and
exchange differences arising from foreign currency borrowings to the extent that they are regarded as an
adjustment to interest costs. Exchange differences are generally regarded as borrowing costs only to the extent that
the combined borrowing costs, including exchange differences, approximate the amount of borrowing costs on
functional currency equivalent borrowings.
For specific borrowings, the borrowing costs eligible for capitalization are the actual borrowing costs incurred related to
funds that are borrowed specifically to obtain a qualifying asset less any investment income earned on the temporary
investment of those borrowings.
For general borrowings, the capitalization rate applied to borrowing costs on the consolidation level will be based on cash
management strategy, which might be the weighted average of the group borrowings outstanding during the period.
3.9 Investment properties
Investment properties are properties held to earn rentals and/or for capital appreciation (including property under
construction for such purposes). Investment properties are measured initially at cost, including transaction costs.
Subsequent to initial recognition, investment properties are carried at historical cost less provisions for depreciation and
impairment. Additional costs incurred subsequent to the acquisition of an asset increase the carrying amount of the asset
or recognized as a separate asset if it is probable that future economic benefits associated with the assets will flow into our
Company and the cost of an asset can be measured reliably. Routine maintenance and repairs are expensed as incurred.
While land is not depreciated, all other investment property is depreciated based on the respective assets estimated useful
lives ranging from 20 to 40 years using the straight-line method.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with
the effect of any changes in estimate accounted for on a prospective basis. An investment property is derecognized upon
disposal or when the investment property is permanently withdrawn from use and no future economic benefits are
expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in income or loss in the period in
which the property is derecognized.
International Accounting Standards (“IAS”) 40 requires disclosures about the fair value of any investment property
recorded at cost. See Note 17 – Investment Properties.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.10 Financial instruments
A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
(i) Financial assets
Classification and measurement
Except for certain trade receivables, our Company initially measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs directly attributable to the acquisition of the
financial asset. Financial instruments are subsequently measured at amortized cost, fair value through other
comprehensive income (FVOCI) or fair value through profit or loss (FVPL). The classification is based on two criteria:
the objective of our Company’s business model for managing the assets; and whether the instruments’ contractual cash
flows represent ‘solely payments of principal and interest’ on the principal amount outstanding (the ‘SPPI criterion’).
The classification and measurement of financial assets is as follows:
u
Debt instruments at amortized cost
Financial assets meeting both conditions: (i) held within a business model whose objective is to hold financial
assets in order to collect contractual cash flows, and (ii) the contractual terms of the financial assets give arise on
specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding,
are measured subsequent to initial recognition at amortized cost.
The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition
minus the principal repayments, plus the cumulative amortization using the effective interest rate (“EIR”) method
of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. Interest
income, foreign exchange gains and losses, and any impairment charges for such instruments are recognized in
profit or loss.
Our Company’s financial assets at amortized costs include cash and cash equivalents, trade receivables, other
receivable, and the receivable from related party.
u
Debt instruments at FVOCI with gains or losses recycled to profit or loss on derecognition
Financial assets that are held within a business model whose objective is to hold financial assets in order to both
collecting contractual cash flows and selling financial assets, and that the contractual terms of the financial assets
give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. Interest income, foreign exchange gains and losses, and any impairment charges on such instruments
are recognized in profit or loss. All other fair value gains and losses are recognized in OCI. On disposal of these
debt instruments, any related balance with FVOCI reserve is reclassified to profit or loss.
u
Equity instruments designated at FVOCI with no recycling of gains or losses on derecognition
These instruments are undertakings in which our Company does not have significant influence or control, generally
evidenced by ownership of less than 20% of the voting rights. Our Company designates these investments on an
instrument by instrument basis as equity securities at FVOCI because they represent investments held for long term
strategic purposes.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.10 Financial instruments (continued)
(i) Financial assets (continued)
Investments in equity instruments at FVOCI are initially measured at fair value plus transaction costs.
Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in
OCI. These investments are not subject to impairment testing and upon disposal, the cumulative gain or loss in OCI
is not reclassified to profit or loss on disposal. Dividends from such investments continue to be recognized in profit
or loss when our Company’s right to receive payments is established.
Our Company elected to classify irrevocably its non-listed equity investments under this category.
u
Financial assets at fair value through profit or loss (FVPL)
Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt
instrument that is subsequently measured at FVPL is recognized in profit or loss in the period in which it arises.
Even if an instrument meets the two requirements to be measured at amortized cost or FVOCI, our Company may,
at initial recognition, irrevocably designate a financial asset as measured at FVPL if doing so eliminates or
significantly reduces a measurement or recognition inconsistency.
Changes in the fair value of financial assets at FVPL are recognized in the statement of profit or loss as applicable.
Reclassification
When, and only, our Company changes its business model for managing financial assets it shall reclassify all affected
financial assets according to the classification and measurement criteria discussed earlier. If our Company reclassifies
financial assets, it shall apply the reclassification prospectively from the reclassification date and shall not restate any
previously recognized gains, losses (including impairment gains or losses) or interest.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognized (i.e. removed from our Company’s consolidated balance sheet) when and only when:
(a) the rights to receive cash flows from the asset have expired, or
(b) our Company has transferred its rights to receive cash flows from the asset, or has assumed an obligation to pay the
received cash flows in full without material delay to one or more recipients under a “pass-through” arrangement; and
either (i) our Company has transferred substantially all the risks and rewards of the asset, or (ii) our Company has neither
transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
When our Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates the extent to which, it has retained the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards of the asset and has not transferred the control of the
assets, our Company continues to recognize the transferred asset to the extent of its continuing involvement. In that case,
our Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a
basis that reflects the rights and obligations that our Company has retained.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.10 Financial instruments (continued)
(i) Financial assets (continued)
Derecognition (continued)
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that our Company could be required to
repay (“the guarantee amount”).
(ii) Financial liabilities
Classification and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, net of directly attributable transaction costs in the case of
loans and borrowings.
Our Company’s financial liabilities include trade and other payables, bank overdrafts and interest-bearing loans and
borrowings. These financial liabilities represent liabilities for goods and services provided to our Company and refund
liabilities arising from contracts with customers. Trade payables are non-interest bearing and are normally settled on 60-
day terms. The refund liabilities are rebate and discounts for the sale of goods to external customers in the ordinary course
of our Company’s activities. Trade and other payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognized initially at fair value and subsequently measured at amortized
cost using the EIR method.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR
method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR
amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortization is included as finance costs in the income statement.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged, cancelled, or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in
the income statement.
(iii) Foreign currency forward contracts
Non-hedging derivatives are initially recognized at fair value on the date a derivative contract is entered into and recorded
as financial assets or financial liabilities at fair value through profit or loss. They are subsequently re-measured at fair
value, and the gains or losses are recognized in profit or loss.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.10 Financial instruments (continued)
(iv) Impairment of financial instruments
The following financial instruments are included within the scope of the impairment requirements in IFRS 9 Financial
Instruments:
(a) Financial assets measured at amortized cost;
(b) Financial assets mandatorily measured at FVOCI;
(c) Loan commitments when there is a present obligation to extend credit (except where these are measured at FVPL);
(d) Financial guarantee contracts to which IFRS 9 is applied (except those measured at FVPL);
(e) Lease receivables within the scope of IFRS 16 Leases.
(f) Contract assets within the scope of IFRS 15 Revenue from Contracts with Customers.
Our Company assesses on a forward looking basis the expected credit losses (ECLs) associated with its debt instruments
carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a
significant increase in credit risk.
With the exception of purchased or originated credit impaired financial assets, ECLs are required to be measured through
a loss allowance at an amount equal to:
(a) credit risk has not increased significantly since initial recognition – recognize 12-month ECLs, and recognize interest
on a gross basis; or
(b) credit risk has increased significantly since initial recognition – recognize lifetime ECL, and recognize interest on a
gross basis.
Our Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past
due.
A loss allowance for full lifetime ECLs is required for contract assets or trade receivables that do not constitute a
financing transaction in accordance with IFRS 15. Our Company may select its accounting policy for contract assets and
trade receivables, containing a significant financing component and lease receivables to measure the loss allowance at an
amount equal to lifetime ECLs.
For trade receivables and contract assets, our Company applies the simplified approach permitted by IFRS 9, which
requires expected lifetime losses to be recognized from initial recognition of the receivables, see Note 12(c) for further
details.
Our Company recognizes in profit or loss, the amount of expected credit losses (or reversal) that is required to adjust the
loss allowance at the reporting date to the amount that is required to be recognized.
(v) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial
position if when the following conditions are met: (i) there is a currently enforceable legal right to offset the recognized
amounts; and (ii) there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.10 Financial instruments (continued)
(vi) Fair value of financial instruments
The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference
to quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without
any deduction for transaction costs.
For financial instruments not traded in an active market, the fair value is determined using appropriate valuation
techniques. Such techniques may include:
u
u
u
Recent arm’s length market transactions
Current fair value of another instrument that is substantially the same
A discounted cash flow analysis or other valuation models
3.11 Impairment of non-financial assets
Our Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, our Company estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair
value less costs to sell and its value in use. A CGU is the smallest group of assets that generates cash inflows that are
largely independent of the cash flows from other assets or groups of assets. Recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or
Company of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining
fair value less costs to sell, recent market transactions are taken into account. If no such transactions can be identified, an
appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for
publicly traded companies or other available fair value indicators.
Our Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared
separately for each of our Company’s CGUs to which the individual assets are allocated. These budgets and forecast
calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to
project future cash flows after the fifth year.
Impairment losses of continuing operations are recognized in the income statement in expense categories consistent with
the function of the impaired asset.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication
that previously recognized impairment losses no longer exist or have decreased. If such indication exists, our Company
estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was
recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognized for the asset in prior years. Such reversal is recognized in the consolidated income statement.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.12 Intangible assets
Computer software
The costs of acquiring software is capitalized separately as an intangible asset on the basis of the costs incurred to acquire
and bring to use the specific software. Acquired software (licenses) is stated at cost less accumulated amortization and
impairment losses.
Amortization of software applications is charged to operating expenses and/or cost on a straight-line basis over 2 to 10
years from the date they are available for use.
The residual values and useful lives are reviewed at each balance sheet date and adjusted, if appropriate.
3.13 Taxes
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date in the countries where our Company operates.
Current income tax relating to items recognized directly in equity is recognized in equity and not in the income statement.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
u When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; or
u
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in
joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and
any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses can be utilized, except:
u When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.13 Taxes (continued)
Deferred tax (continued)
u
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the temporary
differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent
that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases
the tax is recognized in other comprehensive income or equity. Deferred tax relating to items recognized outside profit or
loss is recognized outside profit or loss.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation
authority.
Uncertain tax position
An entity’s tax position might be uncertain; for example, where the tax treatment of an item of expense or structured
transaction may be challenged by the tax authorities.
Our Company considers each uncertain tax positions individually, by first considering whether each position taken in the
tax return is probable of being sustained on examination by the taxing authority, and recognizing a liability for each item
that is not probable of being sustained. The liability then is measured using a single best estimate of the most likely
outcome. The uncertain tax positions are presented in the current tax liabilities.
3.14 Revenue recognition
Our Company generates revenue primarily from the sales of wires and cables and supply, delivery and installation
services to its customers (see Note 5(e)).
Revenue from contracts with customers is recognized when (or as) control of the goods or services (i.e. assets) are
transferred to the customer at an amount that reflects the consideration to which our Company expects to be entitled in
exchange for those goods or services. Our Company has concluded that it is the principal in its revenue arrangements
because it controls the goods or services before transferring them to the customer. Our Company has certain contracts
with customers to perform fabrication services for its customers, converting customer-owned raw materials to wire and
cable products. Our Company is responsible for fulfilling the promise to provide the specified services.
Revenue is recognized as control is passed, either over time or at a point in time.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.14 Revenue recognition (continued)
Our Company recognizes revenue over time if one of the following criteria is met:
(a)
the customer simultaneously receives and consumes the benefits provided by our Company’s performance as the
entity performs;
(b) our Company’s performance creates or enhances an asset (for example, work in progress) that the customer controls
as the asset is created or enhanced; or
(c) our Company’s performance does not create an asset with an alternative use to our Company and our Company has
an enforceable right to payment for performance completed to date.
If our Company does not satisfy its performance obligation over time, it satisfies it at a point in time. Revenue will
therefore be recognized when control is passed at a certain point in time. Factors that may indicate the point in time at
which control passes include, but are not limited to:
(a)
the entity has a present right to payment for the asset;
(b) the customer has legal title to the asset;
(c)
the entity has transferred physical possession of the asset;
(d) the customer has the significant risks and rewards of ownership of the asset; or
(e)
the customer has accepted the asset.
When (or as) a performance obligation is satisfied, our Company recognizes as revenue the amount of the transaction
price that is allocated to that performance obligation.
While deferred payment terms may be agreed in certain circumstances, the deferral never exceeds twelve months. Our
Company applies the practical expedient not to adjust the promised amount of consideration for the effects of a significant
financing component if our Company expects, at contract inception, that the period between when our Company transfers
a promised good or service to a customer and when the customer pays for that good or service will be one year or less.
Sales of wires and cables
Revenue from sales of wires and cables is recognized at the point in time when control of the asset is transferred to the
customer, generally on delivery of the wires and cables.
Variable consideration
If the consideration in a contract includes a variable amount, our Company estimates the amount of consideration to
which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at
a contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of
cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is
subsequently resolved.
The amount of consideration can vary because of discounts, rebates, refunds, credits, price concessions, incentives,
performance bonuses, penalties or other similar items. The promised consideration can also vary if a Company’s
entitlement to the consideration is contingent on the occurrence or non-occurrence of a future event.
Our Company estimates an amount of variable consideration by using either of (a) the expected value, or (b) the most
likely amount, depending on which our Company expects to better predict the amount of consideration to which it will be
entitled.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.14 Revenue recognition (continued)
At the end of each reporting period, our Company updates the estimated transaction price (including updating its
assessment of whether an estimate of variable consideration is constrained) to represent faithfully the circumstances
present at the end of the reporting period and the changes in circumstances during the reporting period. Our Company
allocates any subsequent changes in the transaction price to the performance obligations on the same basis as at contract
inception.
SDI
Our Company’s supply, delivery and installation services are closely interrelated in terms of their ultimate purpose or use
and the customer is able to specify the major structural elements of the design. Revenue from SDI is recognized when our
Company satisfies performance obligations which occurs when the control of either goods or services are transferred to
the customer. Transfer of control to a customer can occur either over a period of time or at a single point in time, and the
transfer of controls depends on the scope of service work orders.
Service work order that involves supply of cables, installation and/or labor (e.g. maintenance or repairing service) are not
distinct and are identified to be one performance obligation satisfied over time since the elements of the service work
order are highly interrelated, customized and modified for the customer. Our Company selects an input method (cost-to-
cost) to measure the progress toward satisfaction of the performance obligation. Our Company’s estimate about revenue,
costs and progress towards complete satisfaction of a performance obligation may revise when there is a change in
circumstances. Any increase or decrease in revenue or costs due to an estimate revision is reflected in profit or loss during
the period when the management become aware of the changes in circumstances.
Custodial and transportation services under bill and hold arrangement
A bill and hold arrangement is a contract under which an entity bills a customer for a product but the entity retains
physical possession of the product until it is transferred to the customer at a point in time in the future. Our Company
identifies multiple performance obligations for its bill and hold arrangements, including sales of wires and cables,
custodial service and transportation service.
Sales of wires and cables are recognized as revenue when the products are placed into warehouse and the customer has
accepted the products because the control of the products has transferred to the customer.
Custodial service revenue and transportation service are recognized over time. The transaction price allocated to these
services is recognized as a contract liability at the time of the initial sales transaction and released on actual basis over the
period of services.
Onerous operating contracts
Onerous contract is a type of contract in which the costs of meeting the obligations under the contract are higher than the
economic benefits received under the contract. The cost of fulfilling a contract comprises the costs that related directly to
the contract. The costs that related directly to a contract to provide goods or services include both incremental costs and
allocation of costs directly related to contract activities.
Our Company has contracts to supply products that may become onerous due to changing circumstances. Our Company
establishes the unavoidable costs of meeting the obligations under the contract as an accrued liability for the contractual
responsibilities. For example, when rising copper price renders a contract onerous, the liability is calculated based on the
difference between the lock-in purchase copper price, or the copper price on the London Metal Exchange (the “LME”)
and the prices determined in the contracts, if the difference exceeds the profit of the original contract. The unavoidable
costs exceeding the profit of the contract is recognized in cost of sales or other operating expense based on the nature of
the unavoidable costs.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.15 Foreign currencies
Our Company’s consolidated financial statements are presented in USD, which is also the parent company’s functional
currency. For each entity our Company determines the functional currency and items included in the financial statements
of each entity are measured using that functional currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by our Company’s entities at their respective functional currency
spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of
exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognized in profit or loss with the exception of
monetary items that are designated as part of the hedge of our Company’s net investment of a foreign operation. These are
recognized in other comprehensive income until the net investment is disposed of, at which time, the cumulative amount
is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are
also recorded in other comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-
monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the
item (i.e., translation differences on items whose fair value gain or loss is recognized in other comprehensive income or
profit or loss are also recognized in other comprehensive income or profit or loss, respectively).
Translation to the presentation currency
The results and financial position of an entity whose functional currency are translated into a different presentation
currency using the following procedures:
a.
b.
c.
d.
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance
sheet;
income and expenses for each statement presenting profit or loss and other comprehensive income (i.e. including
comparatives) are translated at exchange rates at the dates of the transactions;
all resulting exchange differences shall be recognized in other comprehensive income; and
for equity items, the historical rate is used; therefore, these equity items are not retranslated.
3.16 Employee benefits
Our Company has both defined contribution and defined benefit obligation. The liabilities of our Company arising from
defined benefit obligations, and the related current service cost, are determined using the projected unit credit method.
For defined benefit plans, the cost charged to the income statement consists of current service cost, net interest cost and
past service cost. Remeasurements comprising of actuarial gains and losses are recognized in the period in which they
occur, directly in other comprehensive income. They are included in other comprehensive income in the statement of
changes in equity and in balance sheet. Remeasurements are not reclassified to profit or loss in subsequent periods.
Contributions to defined contribution plans are charged to the income statement as incurred. All past service costs are
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recognized at the earlier of when the amendment occurs. Past service cost is the term used to describe the change in a
defined benefit obligation for employee
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.16 Employee benefits (continued)
service in prior periods, arising as a result of changes to plan arrangements in the current period (i.e. plan amendments
introducing or changing benefits payable, or curtailments which significantly reduce the number of covered employees).
Past service costs may be either positive or negative. Gains or losses on the settlement of a defined benefit plan are
recognized when the settlement occurs. Before past service costs are determined, or a gain or loss on settlement is
recognized, the net defined benefit liability or asset is required to be remeasured.
Compensated absence
The cost of accumulating paid absences is recognized when employees render the service that increases their entitlement
to future paid absences.
The cost of accumulating paid absences is measured as the additional amount that the entity expects to pay as a result of
the unused entitlement that has accumulated at the end of the reporting period.
3.17 Earnings per share
Our Company presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS is calculated
by dividing the net income attributable to shareholders of our Company by the weighted average number of common
shares outstanding during the period, adjusted for own shares held.
In calculating diluted EPS, the number of shares should be that used in calculating the basic EPS, plus the weighted
average number of shares that would be issued on the conversion of all the dilutive potential common shares into common
shares. The earnings figure should be that used for basic EPS adjusted to reflect any post-tax effects from changes that
would arise if the potential shares outstanding in the period were actually issued.
3.18 Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognized at cost and deducted from equity. No gain or
loss is recognized in the profit or loss on the purchase, sale, issue or cancellation of our Company’s own equity
instruments. Any difference between the carrying amount and the consideration, if reissued, is recognized in additional
paid-in capital. Voting rights related to treasury shares are nullified and no dividends are allocated to them.
3.19 Investments in an associate
Our Company’s investment in its associates are accounted for using the equity method. An associate is an entity in which
our Company has significant influence. Under the equity method, the investment is initially recognized at cost. The
carrying amount of the investment is adjusted to recognize changes in our Company’s share of net assets of the associate
since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is
neither amortized nor individually tested for impairment.
The income statement reflects our Company’s share of the results of operations of the associate. Any change in other
comprehensive income of those investees is presented as part of our Company’s other comprehensive income. When there
has been a change recognized directly in the equity of the associate, our Company recognizes its share of any changes,
when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between
our Company and the associate are eliminated to the extent of the interest in the associate.
Our Company’s share of profit or loss of an associate is shown on the face of the income statement and represents profits
or loss after tax and non-controlling interests in the subsidiaries of the associate.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.19 Investments in an associate (continued)
The financial statements of the associate are prepared for the same reporting period as our Company. When necessary,
adjustments are made to bring the accounting policies in line with those of our Company.
After application of the equity method, our Company determines whether it is necessary to recognize an impairment loss
on its investment in its associate. Our Company determines at each reporting date whether there is any objective evidence
that the investment in associates is impaired. If this is the case, our Company calculates the amount of impairment as the
difference between the recoverable amount of the associate and its carrying value and recognizes the amount in share of
losses of associates in the income statement.
Upon loss of significant influence over the associate, our Company measures and recognizes any retained investment at
its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair
value of the retaining investment and proceeds from disposal is recognized in profit or loss.
3.20 Government grant
Government grants are recognized where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognized as other income on a
systematic basis over the periods that the related costs, which it is intended to compensate, are expensed. When the grant
relates to an asset, it is recognized as income in equal amounts over the expected useful life of the related asset.
For the year ended December 31, 2023, 2022 and 2021, the government grant received were $74, $639 and $271,
respectively, our Company recognized in the line item of other income, refer to Note 7(e).
In 2023, our company received government grants for enterprise technology renovation. These grants related to the
purchase of specific items of property, plant, and equipment, have been recognized $31 as other income for the year ended
December 31, 2023 and $188 included in other non-current liabilities as deferred income to be amortized over a period of
10 years as of December 31, 2023. There are no unfulfilled conditions or contingencies attached to these grants.
3.21 Non-current assets held for sale
Our Company classifies non-current assets and disposal groups as held for sale/distribution to owners if their carrying
amounts will be recovered principally through a sale/distribution rather than through continuing use. Non-current assets
and disposal groups are measured at the lower of their carrying amount and fair value less costs to sell. The criteria for
held for sale classification is regarded met only when the sale is highly probable and the asset or disposal group is
available for immediate sale in its present condition. Management must be committed to the sale, which should be
expected to qualify for recognition as a completed sale within one year from the date of classification.
Property, plant and equipment and intangible assets once classified as held for sale/distribution to owners are not
depreciated or amortized.
When equity method investments are classified as held for sale, the investor discontinues the use of the equity method
from the date that the investment (or the portion of it) is classified as held for sale; instead, the associate or joint venture is
then measured at the lower of its carrying amount and fair value less cost to sell.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.22 Finance and other income
Interest income
Interest revenue shall be calculated by using the effective interest method. This shall be calculated by applying the
effective interest rate to the gross carrying amount of a financial asset except for:
(a) purchased or originated credit-impaired financial assets. For those financial assets, the entity shall apply the credit-
adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(b) financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become
credit-impaired financial assets. For those financial assets, our Company applies the effective interest rate to the
amortized cost of the financial asset in subsequent reporting periods.
Rental income
Rental income arising from operating leases on investment properties is accounted for on a straight-line basis over the
lease terms and is included in other operating income due to its operating nature.
Dividends
Revenue is recognized when our Company’s right to receive the payment is established, which is generally when
shareholders approve the dividend.
3.23 Significant accounting judgements, estimates and assumptions
The preparation of our Company’s consolidated financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Judgements
In the process of applying our Company’s accounting policies, management has made the following judgements, which
have the most significant effect on the amounts recognized in the consolidated financial statements:
Revenue recognition - identifying single performance obligation in SDI projects
SDI projects comprise various activities such as supply cables, installation, jointing services and testing services. Those
tasks are activities to fulfil the cable management service (supply and installation) and not a separate promise within the
context of the contract. Our Company determines the supply cables and installation services are not capable of being
distinct and identifies to be one performance obligation because of (i) the customer could not benefit from the installed
cables on its own, neither using it or to sell it for an amount greater than scrap value; (ii) our Company is providing a
significant integration service, and it would not be able to fulfil its promise to transfer the cables separately from its
promise to the subsequent installation; (iii) the cables and installation are highly interrelated, and the customer could not
benefit from the cables being delivered without subsequent installation.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. Our Company based its assumptions and
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.23 Significant accounting judgements, estimates and assumptions (continued)
Estimates and assumptions (continued)
estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes or circumstances arising beyond the
control of our Company. Such changes are reflected in the assumptions when they occur.
Fair value of financial instruments
Where the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from
active markets, they are determined using valuation techniques including income approach (for example, the discounted
cash flows model) or the market approach. Changes in assumptions about these factors could affect the reported fair value
of the financial instruments. Please refer to Note 11 for more details.
Measurement of ECL allowance for trade receivables
Our Company applies the IFRS 9 simplified approach to measure lifetime expected loss allowance for trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and
the days past due. The expected loss rates are based on the payment profiles of the sales over a period of 36 months before
December 31, 2023 and the historical credit loss experience within this period. The historical loss rates are adjusted to
reflect current and forward-looking information on general economic conditions affecting the ability of the customers to
settle the receivables. Our Company has identified the default rate of the countries where it sells the goods and services as
the most relevant factor and adjusts the historical loss rates based on the expected changes accordingly.
Refer to Note 12 and Note 27 for more information regarding the impairment of trade receivables and the related credit risks.
Net realizable value of inventory
Net realized value is the estimated selling price in the ordinary course of business less estimated costs to completion and
the estimated costs necessary to make the sale. Management makes reference to actual sales prices after reporting date
when making their estimate of net realizable value.
Refer to Note 13 for more information regarding the net realizable value of inventory.
Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and
timing of future taxable income. Given the wide range of international business relationships and the long-term nature and
complexity of existing contractual agreements, differences arising between the actual results and the assumptions made,
or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded.
Our Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax
authorities of the respective countries in which it operates. The amount of such provisions is based on various factors,
such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the
taxing authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions
prevailing in the respective domicile of the companies.
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available
against which the losses can be utilized. Significant management judgement is required to
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)
3.23 Significant accounting judgements, estimates and assumptions (continued)
Taxes (continued)
determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future
taxable profits together with future tax planning strategies.
As of December 31, 2023, our Company has $32,557 (2022: $20,660) of tax losses carried forward. These losses related
to subsidiaries that have a history of losses, do not expire and may not be used to offset taxable income elsewhere in our
Company except for $3,220 (2022: $1,373) that will be realized. The subsidiaries do not have any tax planning
opportunities available that could support the recognition of these losses as deferred tax assets. On this basis, our
Company has determined that it cannot recognize deferred tax assets on the tax losses carried forward.
If our Company was able to recognize all unrecognized deferred tax assets, profit and equity would have increased by
$3,876 (2022: $3,969; 2021: $4,858). Further details on taxes are disclosed in Note 8.
Post-employment benefits under defined benefit plans
In accordance with the Thailand labor law, Charoong Thai and its subsidiaries are obliged to make payment to retiring
employees. The cost of the defined benefit pension plan and the present value of the pension obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate, future salary increases and mortality
rates. Due to the complexity of the valuation and its long-term nature, a defined benefit obligation is highly sensitive to
changes in these assumptions. All assumptions are reviewed at each reporting date.
Further details about the assumptions used, including a sensitivity analysis, are given in Note 21.
Revenue recognition of SDI projects
Revenue occurs when control transfers to the customer, either over a period of time or at a single point in time, depending
on the scope of each individual contract. When the transfer of control to the customer occurs over a period of time,
revenue of SDI is accounted for using an input method (input costs to total expected input costs) to measure the progress
used to determine the amount of related revenue. When the comparison of total contract revenue to total expected input
cost indicates a loss, a provision for the entire loss on the contract shall be made in the period in which they become
known. Due to the individual nature of the work to be performed on each SDI contract, management’s estimation of total
expected input costs is complex and requires significant judgment.
The carrying amount of our Company’s gross amounts due from customers for contract work-in-progress is disclosed in
Note 14.
4. NEW STANDARDS AND INTERPRETATIONS
4.1 Recently applied accounting pronouncements
Our Company has applied the following amendments for the first time for its annual reporting period commencing
January 1, 2023:
Definition of accounting estimate - Amendments to IAS 8
Disclosure of accounting policies - Amendments to IAS 1 and IFRS Practice Statement 2
Deferred tax related to assets and liabilities arising from a single transaction - Amendment to IAS 12
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4. NEW STANDARDS AND INTERPRETATIONS (continued)
4.1 Recently applied accounting pronouncements (continued)
The amendments listed above had no impact on the consolidated financial statements of our Company in prior periods and
are not expected to significantly affect the current or future periods.
4.2 New accounting pronouncements not effective
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of our Company’s
financial statements are disclosed below. Our Company intends to adopt these standards, if applicable, when they become
effective.
Sales or contribution of assets between an investor and its associate or joint venture – Amendments to IFRS 10 and IAS 28
In September 2014, the IASB issued amendments to IFRS 10, Consolidated Financial Statements and IAS 28,
Investments in Associates and Joint Ventures, entitled Sales or Contribution of Assets between an Investor and its
Associate or Joint Ventures. These narrow scope amendments clarify, that a full gain or loss is recognized when a
transaction involves a business (whether it is housed in a subsidiary or not), and a partial gain or loss is recognized when a
transaction involves assets that do not constitute a business. On December 17, 2015, the IASB issued an amendment that
postpones the application of the amendments to IFRS 10 and IAS 28 indefinitely.
Our Company does not expect the amendments to have an impact on its consolidated financial statements.
Classification of liabilities as current or non-current and non-current liabilities with covenant –Amendments to IAS 1
In January 2020 and October 2022, the IASB issued amendments to IAS 1 to specify to the requirements for classifying
liabilities as current or non-current. The amendments clarify:
u What is meant by a right to defer settlement
u
u
u
That a right to defer must exist at the end of the reporting period;
That classification is unaffected by likelihood that an entity will exercise its deferral right;
That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a
liability not impact its classification.
In addition, a requirement has been introduced to require disclosure when a liability arising from a loan agreement is
classified as non-current and the entity's right to defer settlement is contingent on compliance with future covenants
within twelve months. The disclosures include:
u
u
u
The carrying amount of the liability;
Information about the covenants;
Fact and circumstances, if any, that indicate that the entity may have difficulty complying with the covenants.
The amendments are effective for annual reporting periods beginning on or after January 1, 2024 and are to be applied
retrospectively. Earlier application is permitted. Our Company is based on the contractual arrangement in place at the
reporting date for the classification, therefore, our Company does not expect the
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4. NEW STANDARDS AND INTERPRETATIONS (continued)
amendment to have an impact on its consolidated financial statements. Our Company will disclose the information
required when the non-current liabilities are subject to future covenants.
4.2 New accounting pronouncements not effective (continued)
Supplier finance arrangements - Amendments to IAS 7 and IFRS 7
On May 25, 2023, the IASB issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments:
Disclosures to clarify the characteristics of supplier finance arrangements and require additional disclosure of such
arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in
understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity
risk. The amendments will be effective for annual reporting periods beginning on or after January 1, 2024. Early adoption
is permitted, but will need to be disclosed.
Our Company does not expect the amendments to have a material impact on its consolidated financial statements.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. SEGMENT INFORMATION
5(a) Basis of segments
Each segment engages in business activities which generate revenues and incur expenses. Based upon the information provided
to our Company’s chief operating decision maker (“CODM”) to make decisions on resource allocation and operating
performance evaluation, our Company has determined that it has three reportable segments.
Our Company organizes its business segments along reporting lines and has three operating segments, consisting of the North
Asia region, the Thailand region and the Rest of the World (“ROW”) region. Our Company considers the economic
characteristics similarity in determining the reportable segments.
As the three operating segments exceed the quantitative thresholds, they are also reportable segments. Segment results are
evaluated based on reported operating profit or loss from each segment. The accounting policies for segment information,
including transactions entered between segments are generally the same as those described in the summary of material
accounting policies.
Inter-segment revenues are eliminated upon consolidation and reflected in the “adjustments and eliminations” column. All other
adjustments and eliminations are part of detailed reconciliations presented further below.
5(b) Information about reportable segments
Year ended
December 31, 2023
Revenues
North
Asia
Thailand
ROW
Total
segments
Corporate
expense
adjustments
and
eliminations
Consolidated
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
External customers
58,649
166,925
200,198
425,772
—
8
—
8
—
(8)
425,772
—
Inter-segment
Segment operating
profit/(loss)
Depreciation and amortization
(including depreciation from
right of use assets)
Impairment of property, plant
and equipment
Impairment loss on financial
assets
Interest income
Interest expense
Income tax (expense)/benefit
Other disclosures
Capital expenditure
1,794
(2,119)
8,628
8,303
(2,548)
5,755
(1,506)
(3,202)
(1,424)
(6,132)
(79)
(6,211)
—
(10)
103
(30)
26
—
(4,530)
86
(1,590)
(39)
—
(100)
11
(775)
(632)
—
(4,640)
200
(2,395)
(645)
—
—
5
(4)
483
—
(4,640)
205
(2,399)
(162)
1,952
1,629
710
4,291
3
4,294
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. SEGMENT INFORMATION (continued)
5(b) Information about reportable segments (continued)
Year ended
December 31, 2022
North
Asia
Thailand
ROW
Total
segments
Corporate
expense
adjustments
and
eliminations
Consolidated
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Revenues
External customers
77,329
171,841
184,723
433,893
(5)
—
(5)
—
5
433,893
—
—
241
2,636
7,768
10,645
(3,093)
7,552
Inter-segment
Segment operating
profit/(loss)
Depreciation and amortization
(including depreciation from
right of use assets)
Impairment of property, plant
and equipment
Interest income
Interest expense
Income tax expense
Other disclosures
Capital expenditure
(1,247)
(3,058)
(1,448)
(5,753)
—
68
(91)
(354)
—
49
(787)
(420)
—
2
(608)
(1,979)
—
119
(1,486)
(2,753)
(82)
—
1
(2)
(55)
(5,835)
—
120
(1,488)
(2,808)
1,486
1,780
541
3,807
1
3,808
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. SEGMENT INFORMATION (continued)
5(b) Information about reportable segments (continued)
Year ended
December 31, 2021
Revenues
North
Asia
Thailand
ROW
Total
segments
Corporate
expense
adjustments
and
eliminations
Consolidated
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
External customers
107,032
197,779
171,848
476,659
—
7
—
7
—
(7)
476,659
—
Inter-segment
Segment operating
profit/(loss)
Depreciation and amortization
(including depreciation from
right of use assets)
Impairment of property, plant
and equipment
Interest income
Interest expense
Income tax (expense)/benefit
Other disclosures
Capital expenditure
Adjustments and eliminations
4,523
(13,537)
6,690
(2,324)
(3,009)
(5,333)
(1,074)
(2,752)
(1,566)
(5,392)
(102)
(5,494)
—
43
(285)
(2,104)
(7)
76
(380)
4,223
—
3
(340)
(1,539)
(7)
122
(1,005)
580
—
1
(92)
765
(7)
123
(1,097)
1,345
11
5,585
2,018
7,614
937
8,551
Corporate expenses, and share of gain (loss) of associates are not allocated to individual segments as the underlying instruments
are managed on a group basis.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. SEGMENT INFORMATION (continued)
5(c) Reconciliation of segment operating profit (loss)
Segment operating profit/(loss)
Corporate expenses and others
Other operating income
Other operating expenses
Net impairment loss on financial and contract assets
Operating profit/(loss)
Finance costs
Finance income
Share of loss of associates
Exchange gain/(loss)
Other income
Other expense
Profit/(loss) before tax
5(d) Segment assets and liabilities
For the year ended December 31,
2023
2022
2021
US$’000
US$’000
US$’000
8,303
(2,548)
5,755
433
—
(4,640)
1,548
(2,527)
205
(2)
679
570
(9)
464
10,645
(3,093)
7,552
1,026
(3)
(508)
8,067
(1,650)
120
(1)
143
889
(3)
7,565
(2,324)
(3,009)
(5,333)
587
(7)
(220)
(4,973)
(1,251)
123
(1)
(4,425)
671
(1)
(9,857)
North
Asia
Thailand
ROW
Total
segments
Corporate
adjustments
and
eliminations
Consolidated
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
52,519
167,888
133,437
353,844
12,820
366,664
10,320
66,385
68,365
145,070
6,973
152,043
54,534
168,423
133,516
356,473
14,546
371,019
13,649
62,584
75,863
152,096
7,495
159,591
As of December 31, 2023
Total assets
Total liabilities
As of December 31, 2022
Total assets
Total liabilities
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. SEGMENT INFORMATION (continued)
5(d) Segment assets and liabilities (continued)
Reconciliation of assets:
Segment operating assets
Corporate and other assets
Investment in associates
Deferred tax assets
Total assets
Reconciliation of liabilities:
Segment operating liabilities
Corporate liabilities
Deferred tax liabilities
Total liabilities
5(e) Disaggregated revenues and geographical information
(i)Revenue from external customers is summarized as the following major categories:
Year ended
December 31, 2023
North
Asia
Thailand
ROW
Total
segments
As of December 31,
2023
2022
US$’000
US$’000
353,844
356,473
4,211
810
7,799
6,598
805
7,143
366,664
371,019
As of December 31,
2023
2022
US$’000
US$’000
145,070
152,096
3,133
3,840
3,298
4,197
152,043
159,591
Corporate
expense
adjustments
and
eliminations
Consolidated
Revenue from external customers
Power
Enamel
SDI
Others*
Timing of revenue recognition
At a point in time
Over time
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
9
55,959
2,667
14
80,564
79,510
—
6,851
140,501
1,972
55,028
2,697
221,074
137,441
57,695
9,562
58,649
166,925
200,198
425,772
55,982
2,667
58,649
166,832
173,004
395,818
93
27,194
29,954
166,925
200,198
425,772
—
—
—
—
—
—
—
—
221,074
137,441
57,695
9,562
425,772
395,818
29,954
425,772
* include revenues from fabrication service contracts, and sale of other wires and cables products.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. SEGMENT INFORMATION (continued)
5(e) Disaggregated revenues and geographical information (continued)
(i)Revenue from external customers is summarized as the following major categories (continued):
Year ended
December 31, 2022
North
Asia
Thailand
ROW
Total
segments
Corporate
expense
adjustments
and
eliminations
Consolidated
Revenue from external customers
Power
Enamel
SDI
Others*
Timing of revenue recognition
At a point in time
Over time
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
92
46,340
135,739
76,002
1,209
102,122
—
26
23,379
—
44,722
4,262
182,171
178,124
45,931
27,667
77,329
171,841
184,723
433,893
77,287
171,613
158,510
407,410
42
228
26,213
26,483
77,329
171,841
184,723
433,893
—
—
—
—
—
—
—
—
182,171
178,124
45,931
27,667
433,893
407,410
26,483
433,893
* include revenues from fabrication service contracts, and sale of other wires and cables products.
Year ended
December 31, 2021
North
Asia
Thailand
ROW
Total
segments
Corporate
expense
adjustments
and
eliminations
Consolidated
Revenue from external customers
Power
Enamel
Fabrication
Others*
Timing of revenue recognition
At a point in time
Over time
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
—
63,629
127,891
107,027
105,749
—
5
—
28,401
—
39,476
4,481
191,520
212,776
39,476
32,887
107,032
197,779
171,848
476,659
107,032
197,544
146,991
451,567
—
235
24,857
25,092
107,032
197,779
171,848
476,659
—
—
—
—
—
—
—
—
191,520
212,776
39,476
32,887
476,659
451,567
25,092
476,659
* include revenues from fabrication service contracts, and sale of other wires and cables products.
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5. SEGMENT INFORMATION (continued)
5(e) Disaggregated revenues and geographical information (continued)
(ii)Revenue from external customers is attributed to individual countries based on the customer’s country of domicile and is
summarized as follows:
Revenues from external customers
Thailand
Singapore
Australia
China, Hong Kong, and Taiwan
India
Southeast Asia
Northeast Asia
For the year ended Current period end
2023
2022
2021
US$’000
US$’000
US$’000
152,437
135,227
62,139
62,239
973
12,741
16
153,164
118,789
60,299
82,187
779
18,663
12
168,773
95,116
67,652
118,219
1,248
25,643
8
425,772
433,893
476,659
Countries in the Southeast Asia region include Cambodia, Vietnam, Indonesia, Brunei, Laos, Malaysia and Myanmar; countries
in the Northeast Asia region include Japan and South Korea.
(iii) Major customer information
Revenue from one customer in the ROW region amounted to $80,862 in 2023 represented 18.99% of 2023 consolidated revenue.
Revenue from one customer in the ROW region amounted to $66,858 in 2022 represented 15.41% of 2022 consolidated revenue.
Revenue from one customer in the ROW region amounted to $56,579 in 2021 represented 11.87% of 2021 consolidated revenue.
5(f) Non-current assets information
The total non-current assets other than financial instruments and deferred tax assets broken down by the country of domicile are
summarized as follow:
Non-current assets by country:
Thailand
Singapore
China, Hong Kong, and Taiwan
Australia
Other
Total non-current assets
As of December 31,
2023
2022
US$’000
US$’000
36,252
5,002
10,132
7,058
132
58,576
37,653
5,304
10,313
7,141
207
60,618
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. MATERIAL PARTLY-OWNED SUBSIDIARIES
6(a) Material subsidiaries
Our Company has subsidiaries with material non-controlling interests (“NCI”). Information regarding the subsidiaries is as
follows:
Proportion of equity interest held by NCI:
Name
Country of
incorporation and
operation
As of December 31,
2023
2022
Charoong Thai and its subsidiaries (“CTW Consolidated”)
Thailand
49.07 %
49.07 %
6(b) Summarized financial information about the subsidiaries
The summarized financial information of the subsidiaries is provided below. This information is based on amounts before inter-
company eliminations:
Summarized statements of comprehensive income
Revenue
(Loss)/profit before tax
Income tax expense/(income)
(Loss)/profit for the year
Other comprehensive income/(loss)
Total comprehensive (loss)/income
(Loss)/profit attributable to non-controlling interests
Dividends paid to non-controlling interests
Summarized balance sheets
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total equity
Equity attributable to:
Equity holders of the parent
Non-controlling interests
CTW consolidated
For the year ended December 31,
2023
2022
2021
US$’000
US$’000
US$’000
166,933
(7,587)
39
(7,626)
3,252
(4,374)
(3,742)
285
171,845
2,153
420
1,733
(4,537)
(2,804)
850
563
198,316
(16,535)
(4,223)
(12,312)
(12,688)
(25,000)
(6,041)
2,815
CTW consolidated
As of December 31,
2023
US$’000
2022
US$’000
127,780
48,748
(61,226)
(5,893)
109,409
55,722
53,687
128,230
49,496
(46,681)
(16,677)
114,368
58,248
56,120
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. MATERIAL PARTLY-OWNED SUBSIDIARIES (continued)
6(b) Summarized financial information about the subsidiaries (continued)
Summarized cash flow information
Operating
Investing
Financing
Effect of changes in exchange rate on cash
Net decrease in cash and cash equivalents
7. INCOME AND EXPENSES ITEMS
7(a) Other operating income
Gain on disposal of investment property
Gain on disposal of assets classified as held for sale
Gain on disposal of property, plant, and equipment
Rental income
Other operating income – others
Total other operating income
7(b) Other operating expenses
Impairment of property, plant, and equipment
Other operating expenses – others
Total other operating expenses
CTW consolidated
For the year ended December 31,
2023
US$’000
2022
US$’000
2021
US$’000
(11,954)
(1,418)
(144)
27
(13,489)
7,389
(719)
(7,726)
(1,045)
(2,101)
(37,071)
(2,431)
41,740
(3,312)
(1,074)
2023
2022
2021
US$’000
US$’000
US$’000
—
—
39
323
71
433
271
240
132
254
129
1,026
—
—
318
179
90
587
2023
2022
2021
US$’000
US$’000
US$’000
—
—
—
—
3
3
7
—
7
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. INCOME AND EXPENSES ITEMS (continued)
7(c) Net impairment loss on financial and contract assets
2023
2022
2021
US$’000
US$’000
US$’000
Impairment for trade receivables(Note 12(a))
Impairment for trade receivables for related parties(Note 24(b))
Reversal of impairment for trade receivables for related parties
Total net impairment loss on financial and contract assets
75
4,565
—
4,640
509
—
(1)
508
205
15
—
220
7(d) Finance costs
Interest on loans and borrowings
Interest on leases liabilities
Total interest expenses
Bank charges
Total finance costs
7(e) Finance income
Interest income
Total finance income
7(f) Other income
Government grants
Net gain on financial instruments
Dividend income
Other income
Total other income
2023
2022
2021
US$’000
US$’000
US$’000
2,301
98
2,399
128
2,527
1,408
80
1,488
162
1,650
1,027
70
1,097
154
1,251
2023
2022
2021
US$’000
US$’000
US$’000
205
205
120
120
123
123
2023
2022
2021
US$’000
US$’000
US$’000
74
196
97
203
570
639
33
97
120
889
271
259
106
35
671
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. INCOME AND EXPENSES ITEMS (continued)
7(g) Depreciation, amortization and lease expense included in the consolidated income statements
Included in cost of sales:
Depreciation – property, plant and equipment
Depreciation – right of use assets
Amortization – intangible assets
Lease expenses
Included in selling expenses:
Depreciation – property, plant and equipment
Depreciation – right of use assets
Amortization – intangible assets
Lease expenses
Included in general and administrative expenses:
Depreciation – property, plant and equipment
Depreciation – right of use assets
Amortization – intangible assets
Depreciation – investment properties
Lease expenses
Included in research and development expenses:
Depreciation – property, plant and equipment
Depreciation – right of use assets
2023
2022
2021
US$’000
US$’000
US$’000
4,077
133
26
1
133
197
—
1
580
456
28
168
14
409
4
6,227
4,278
133
24
1
116
167
—
1
538
382
21
176
12
—
—
5,849
3,863
127
21
1
108
144
—
1
619
390
26
196
4
—
—
5,500
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. INCOME AND EXPENSES ITEMS (continued)
7(h) Employee benefits expenses
Included in cost of sales:
Wages and salaries
Labor and health insurance costs
Pension costs
Other employee benefits
Included in selling expenses:
Wages and salaries
Labor and health insurance costs
Pension costs
Other employee benefits
Included in general and administrative expenses:
Wages and salaries
Labor and health insurance costs
Pension costs
Director fees
Other employee benefits
Included in research and development expenses:
Wages and salaries
Labor and health insurance costs
Pension costs
Other employee benefits
Total employee benefits expenses
8. INCOME TAX
2023
2022
2021
US$’000
US$’000
US$’000
12,207
12,555
14,088
79
833
750
4,221
10
359
33
79
886
734
3,881
9
337
25
77
828
843
4,191
8
360
36
8,116
7,950
8,435
144
669
323
161
676
16
42
15
103
608
412
138
—
—
—
—
104
661
587
222
—
—
—
—
28,654
27,717
30,440
Under current Bermuda law, APWC is not subject to tax on income or capital gains, nor is withholding tax of Bermuda imposed
upon payments of dividends by APWC to its shareholders.
APWC’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 APWC.
The Operating Subsidiaries and equity investees are governed by the income tax laws of Singapore, Thailand, Australia, the PRC
and Taiwan. The corporate income tax rate in Singapore was 17% for each of the three years ended December 31, 2023, and
there is no withholding tax on dividends applicable to our Company. For Thailand, the statutory corporate income tax rate was
20% for each of the three years ended December 31, 2023 and a withholding tax of 10% is levied on dividends received by our
Company. Charoong Thai is listed on Stock Exchange of Thailand (“SET”). In Australia, the corporate income tax rate was 30%
for 2020/2021, 2021/2022 and 2022/2023 tax years. The applicable corporate income tax rate for the subsidiaries in the PRC was
25% for each of the three years ended December 31, 2023. In Taiwan, the corporate income tax rate was 20% for each of the
three years ended December 31, 2023.
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Dividends received from the Operating Subsidiaries and equity investees may be subject to withholding taxes. Under the current
Singapore corporate tax system, dividends paid by a Singapore resident company is tax exempt, and is
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAX (continued)
not subject to withholding taxes. In Australia, dividends paid to non-residents are exempt from dividend withholding taxes
except when dividends are paid out of profit that is not taxed by Australian income tax (i.e. unfranked dividends). For Thailand,
dividends paid by a company to any individual or corporate payee overseas are subject to a withholding tax of 10%. Under the
Corporate Income Tax Law of the PRC, dividend distribution of profits to foreign investor(s) is subject to withholding tax of
10%. In Taiwan, the dividends or profit distributed to non-resident shareholders are subject to 21% withholding tax.
The major components of income tax (benefits) expenses for the years ended December 31, 2023, 2022 and 2021 are:
2023
2022
2021
US$’000
US$’000
US$’000
Consolidated income statements
Current income tax:
Current income tax charge
Previously unrecognized tax loss or temporary difference used to
reduce current income tax
Adjustments for current income tax of prior years
Total current income tax
Deferred tax (benefits)/expenses:
Relating to origination and reversal of temporary differences
Previously unrecognized tax loss or temporary difference used to
reduce deferred tax expenses
Total deferred tax (benefits)/expenses
Income tax expenses (benefit) reported in the income statement
Consolidated statements of comprehensive income
Deferred tax related to items recognized in other comprehensive
income during the year:
Change in the fair value of equity instrument measured at fair value
through other comprehensive income
Recognized during the year
Effect of change in tax rate
Net income on actuarial gains and losses
Recognized during the year
Effect of change in tax rate
Income tax expense (benefit) charged to other comprehensive
income (loss)
F-48
2,798
(394)
(694)
1,710
(1,284)
(264)
(1,548)
162
221
—
377
—
598
3,547
(697)
(54)
2,796
12
—
12
2,808
(270)
—
147
—
(123)
3,078
(96)
—
2,982
(4,327)
—
(4,327)
(1,345)
147
—
112
—
259
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAX (continued)
APWC is incorporated in Bermuda, which does not have a statutory tax rate. The provision for income taxes differs based on the
tax incurred by the Operating Subsidiaries, in their respective jurisdiction. Our Company determines its statutory tax rate based
on its major commercial domicile that is its subsidiaries in Thailand. The reconciliation of difference between tax computed at
the statutory tax rate and income tax expense / (benefit) reported in the consolidated income statement is as follows:
Profit/(loss) before tax
Tax at statutory rate of 20% (2022: 20%; 2021: 20%)
Foreign income taxed at different rate
Expenses not deductible for tax purpose
Utilization of previously unrecognized tax losses/temporary
differences
Tax benefit arising from previously unrecognized tax losses
Net deferred tax asset not recognized
Tax exempt on income
Uncertain tax position
Return to provision adjustment
Deferred tax liability arising from undistributed earnings
Withholding tax on dividends
Enhanced pre-tax deductions of R&D Expenses
Others
Income tax expense/(benefit) reported in consolidated income
statement
F-49
2023
2022
2021
US$’000
US$’000
US$’000
464
93
940
9
(394)
(264)
1,727
(693)
—
(694)
(354)
38
(242)
(4)
162
7,565
1,513
1,332
241
(697)
—
382
(65)
(102)
(54)
96
163
—
(1)
(9,857)
(1,971)
1,465
94
(96)
—
327
(99)
(1,173)
—
(309)
452
—
(35)
2,808
(1,345)
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAX (continued)
Deferred tax
Deferred tax relates to the following:
Outside basis differences
(3,532)
(3,886)
(354)
96
(309)
Consolidated balance sheet
Consolidated income statement
As of December 31,
For the year ended Decembers 31,
2023
2022
2023
2022
2021
US$’000
US$’000
US$’000
US$’000
US$’000
Revaluations of financial assets at fair value through
other comprehensive income
Unutilized building allowance (net)
Unused tax losses
Allowance for doubtful accounts
Inventory impairment
Rebates and other accrued liabilities
Unpaid retirement benefits
Deferred revenue and cost of sales
Actuarial loss
Unabsorbed depreciation
Provision for loss on onerous sale contract
Leases
Others
Deferred tax expenses/(benefits)
Net deferred tax assets
Reconciliation of deferred tax assets, net
(419)
(141)
3,220
1,008
881
788
1,282
31
121
588
451
41
(198)
(8)
1,373
46
2,897
661
1,281
19
498
588
—
36
(360)
(361)
3,959
2,946
—
131
—
(13)
(1,805)
(1,158)
(945)
2,001
(119)
11
(12)
—
(4)
(443)
(6)
(3)
(1,548)
113
150
(85)
—
10
—
90
817
9
(17)
12
—
9
(162)
105
(2,914)
(170)
26
(15)
—
(67)
(897)
3
64
(4,327)
2023
2022
2021
US$’000
US$’000
US$’000
Opening balance as of January 1
Tax benefit/(expense) during the period recognized in profit or loss
Tax (expense)/benefit during the period recognized in other
comprehensive income
Exchange difference on translation foreign operations
Closing balance as of December 31
2,946
1,548
(598)
63
3,959
3,136
(12)
123
(301)
2,946
(519)
4,327
(259)
(413)
3,136
Our Company offset tax assets and liabilities if and only if it has legally enforceable right to set off current tax assets and current
tax liabilities and the deferred tax assets and deferred tax liabilities related to income taxes levied by the same tax authority.
Our Company has available unused net operating losses which arose in Thailand, China, Hong Kong, Singapore and Taiwan as
of December 31, 2023 and 2022, that may be applied against future taxable income and that expire as follows respectively:
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAX (continued)
Year of expiration
2023
2024
2025
2026
2027
2028
2032
2033
No expiration
As of December 31,
2023
2022
US$’000
US$’000
—
2,135
2,262
2,535
6,645
13,111
184
736
4,949
32,557
4,054
2,955
1,773
3,011
5,887
—
184
—
2,796
20,660
Deferred tax assets have not been recognized in respect of these losses as they may not be used to offset taxable profits
elsewhere in our Company, as they have arisen in subsidiaries that have been loss-making for some time, and there are no other
tax planning opportunities or other evidence of recoverability in the near future. Our Company did not recognize deferred tax
assets of $3,400 (2022: $3,017; 2021: $3,183) in respect of tax losses amounting to $15,928 (2022: $13,796; 2021: $14,228).
In addition, our Company did not recognize deferred assets of $476 (2022: $952; 2021: $1,675) in relation to deductible
temporary differences amounting to $2,154 (2022: $4,881; 2021: $8,931).
There are no income tax consequences attached to the payment of dividends in 2023 or 2022 by APWC to its shareholders.
As of December 31, 2023 and 2022, our Company is subject to taxation in PRC, Australia, Thailand, Singapore and Taiwan. Our
Company’s tax years from 2013 and forward are still subject to examination by the tax authorities in various tax jurisdictions.
A reconciliation of the beginning and ending amounts of uncertain tax position is as follows:
Change in Uncertain Tax Positions
Balance as of January 1
Decrease due to lapses in statute of limitations
Exchange difference
Balance as of December 31
2023
2022
2021
US$’000
US$’000
US$’000
—
—
—
—
28
(26)
(2)
—
339
(312)
1
28
Our Company is not expecting there would be any reasonably possible change in the total amounts of uncertain tax position
within twelve months of the reporting date. As of December 31, 2023, 2022, and 2021 the amount of uncertain tax position
(excluding interest and penalties) included in the consolidated balance sheets that would, if recognized, affect the income tax
expenses is $nil, $nil and $28, respectively.
Our Company recognized interest expense and penalties related to income tax matters as a component of income tax expense.
The amount of related interest and penalties our Company has provided as of the dates listed below were:
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAX (continued)
Accrued interest on uncertain tax position
Accrued penalties on uncertain tax position
Total accrued interest and penalties on uncertain tax position
As of December 31,
2023
2022
2021
US$’000
US$’000
US$’000
—
—
—
—
—
—
46
28
74
For the years ended December 31, 2023, 2022 and 2021, our Company recognized $nil, $nil and $5 in interest, respectively; and
no penalties were recognized for the three years ended December 2021 to 2023. For the years ended December 31, 2023, 2022
and 2021, our Company reversed $nil, $42 and $568 in interest and nil, $26 and $318 in penalties, respectively, due to lapses in
statute of limitations. For the years ended December 31, 2023, 2022 and 2021, the exchange difference $nil, $(4) and $12
relating to interests, $nil, $(2) and $7 relating to penalty were included in income tax expenses.
Our Company considers each uncertain tax positions individually, by first consider whether each position taken in the tax return
is probable of being sustained on examination by the taxing authority. It should recognize a liability for each item that is not
probable of being sustained. The liability then is measured using a single best estimate of the most likely outcome. The uncertain
tax positions presented in the current tax liability is the total liability for uncertain tax positions.
9. EARNINGS (LOSS) PER SHARE
Earnings (loss) per share are calculated by dividing net profit (loss) attributable to equity holders of the parent by the weighted
average number of shares outstanding during the year. APWC does not have any dilutive securities. The treasury shares
transaction resulted in an immediate reduction in outstanding shares used to calculate the weighted-average common shares
outstanding for both basic and diluted earnings (loss) per share.
The following table sets forth the computation of basic and diluted earnings attributable to common shareholders per share:
For the year ended Current period end
2023
2022
2021
US$’000
US$’000
(except for number of shares and earnings per share)
US$’000
Numerator:
Net profit (loss) attributable to APWC from continuing operations
Net profit (loss) attributable to APWC
3,867
3,867
3,874
3,874
(2,642)
(2,642)
Denominator:
Weighted-average common shares outstanding – basic and diluted
20,616,227
20,020,364
13,819,669
Earnings (loss) per share – basic and diluted
Continuing operations
Total earnings (loss) per share – basic and diluted
0.19
0.19
0.19
0.19
(0.19)
(0.19)
Income from continuing operations attributable to non-controlling interests are $(3,565), $883 and $(5,870) for the years ended
December 31, 2023, 2022 and 2021, respectively.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. CASH AND CASH EQUIVALENTS
Cash on hand and cash at banks
Balances per statement of cash flows
11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
11(a) Other financial assets and liabilities
Financial assets at fair value through other comprehensive income
Equity instrument (Note 11(d))
Financial assets at fair value through profit or loss
Foreign exchange forward contracts (Note 11(c))
As of December 31,
2023
2022
US$’000
US$’000
37,970
37,970
54,017
54,017
As of December 31,
2023
2022
US$’000
US$’000
2,902
2,902
307
307
1,553
1,553
39
39
(i)
Financial assets and liabilities at fair value through profit or loss
Financial assets and liabilities at fair value through profit or loss reflect the changes in fair value of those foreign exchange
forward contracts that are not designated in hedge relationships, but are intended to reduce the level of foreign currency risk for
expected sales and purchase transactions.
(ii)
Financial assets at fair value through other comprehensive income - unquoted equity instrument
Our Company holds unquoted equity instruments in Thai Metal Processing Co., Ltd., which is engaged in the fabrication of
copper rods, and Leijyu Co., Ltd., which is engaged in the development of a renewable energy power generation system. These
equity investments are strategically held for long-term purposes and are not expected to be sold in the short to medium term.
During the years ended December 31, 2023, 2022, and 2021, our Company received dividends of $97, $97, and $106,
respectively, from investments held at the end of the reporting period. These dividends were recorded in other income (Note
7(f)) in the consolidated income statements.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
11(b) Interest-bearing loans and borrowings
Under the line of credit arrangements for short-term debt with our Company’s banks, our Company may borrow up to
approximately $263,981 and $254,851 as of December 31, 2023 and 2022, respectively, on such terms as our 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, 2023 and 2022, the unused portion of the credit lines was approximately $187,752 and $162,074, respectively,
which included unused letters of credit amounting to $83,926 and $84,586, respectively.
Letters of credit are issued by our Company in the ordinary course of business through major financial institutions as required by
certain vendor contracts. As of December 31, 2023 and 2022, our Company had open letters of credit amounting to $38,179 and
$38,256, respectively. Liabilities relating to the opened letters of credit are included in current liabilities.
Certain of our loan agreements contain covenants that, if violated, could result in the obligations under these agreements
becoming due prior to the originally scheduled maturity dates. Our Company was in compliance with these covenants
requirements as of December 31, 2023 and 2022.
Interest bearing loans and borrowings are including current portion $53,737 and $45,576 as of December 31, 2023 and 2022,
respectively.
As of December 31,
2023
2022
Interest
Interest
rate Maturity Local currency
rate Maturity Local currency
%
‘000
US$’000
%
‘000
US$’000
4.94
Nov. 2024 AUD$4,543
3,104
4.94
Mar. 2044 AUD$4,589
3,113
—
5.11
7.27
2.75 ~
4.70
5.46 ~
5.61
—
—
Dec. 2024
SGD$6,000
Feb. 2024 THB$309,488
—
4,551
9,090
May 2024 THB$1,151,234
33,812
Apr. 2024
SGD$4,193
3,180
53,737
4.50 ~
4.90
5.42
2.23
1.60 ~
2.20
Jul. 2023 RMB$30,100
Dec. 2023
SGD$6,000
Feb. 2024 THB$312,602
4,321
4,470
9,100
Jun. 2023 THB$1,133,838
33,006
5.04 ~5.81 Apr. 2023
SGD$4,994
3,721
57,731
Interest-bearing loans and borrowings
Bank loans
Bank loans
Bank loans
Bank loans
Trust receipt
Trust receipt
Total
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
11(c) Hedging activities and derivatives
(i)
Commodity price risk
Our Company purchases copper on an ongoing basis as its operating activities require a continuous supply of copper for
manufacturing products. To reduce the exposures to copper shortage, our Company enters into purchase contracts with
commitment of monthly minimum purchase at market prices for selected operating units. The majority of these transactions take
the form of contracts that are entered into and continue to be held for the purpose of receipt or delivery of the copper based on
our Company’s expected purchase, sale or usage requirements. Such purchase commitment contracts are not deemed financial
instruments or derivatives. To date, these contract positions have not had a material effect on our Company’s financial position,
results of operations, and cash flow.
(ii)
Foreign currency risk
Our Company enters into foreign exchange forward contracts with the intention to reduce the foreign exchange risk of expected
sales and purchase transactions. These contracts are entered into the periods consistent with foreign currency exposure of the
underlying transaction, generally from one to 12 months. These contracts are not designated in hedge relationships, and are
measured at fair value through profit or loss.
As of December 31, 2023 and 2022, our Company had outstanding forward contracts with notional amounts of $13.4 million
and $10.5 million, respectively. The outstanding forward contracts at December 31, 2023 mature between January 13, 2024 and
April 17, 2024, respectively. Our Company recognized gain (loss) on forward contracts as other income (expenses) – refer to
Note 7(f).
The forward contract balance varies with the expected foreign currency transactions and changes in foreign exchange rate.
2023
2022
Assets
US$’000
Liabilities
US$’000
Assets
US$’000
Liabilities
US$’000
Foreign currency forward contracts
Fair value
307
74
39
6
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
11(d) Fair values
Set out below is a comparison of the carrying amounts and fair value of our Company’s financial instruments that are carried in
the financial statements:
Carrying amount
As of December 31,
Fair value
As of December 31,
2023
2022
2023
2022
US$’000
US$’000
US$’000
US$’000
Financial assets-current
Financial assets at fair value through profit
307
39
307
39
Financial assets at amortized cost
Cash and cash equivalents
Trade receivables
Other receivables
Due from related parties
Financial assets-non-current
Financial assets at fair value through other
comprehensive income
Financial assets at amortized cost
Long-term bank deposits*
Total
Financial liabilities-current
Liabilities at amortized cost
Interest-bearing loans and borrowings
Trade and other payables
Due to related parties
Accruals
Financial liabilities-non-current
Liabilities at amortized cost
Interest-bearing loans and borrowings
Total
* included in other non-current assets
37,970
104,955
1,670
1,368
54,017
81,982
2,397
11,018
37,970
104,955
1,670
1,368
54,017
81,982
2,397
11,018
2,902
1,553
2,902
1,553
1,454
150,626
1,354
152,360
1,454
150,626
1,354
152,360
53,737
51,743
7,941
15,250
45,576
39,891
16,613
21,218
53,737
51,743
7,941
15,250
45,576
39,891
16,613
21,218
—
128,671
12,155
135,453
—
128,671
12,155
135,453
(i) Methods and assumptions used to estimate fair value
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions
were used to estimate the fair values:
u
Due to the short-term nature of financial assets and liabilities, including cash and cash equivalents, trade receivables,
other receivables, due from related parties, trade and other payables, due to related parties, and accruals, their carrying
amounts are considered to approximate their fair value.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
11(d) Fair values (continued)
(i) Methods and assumptions used to estimate fair value (continued)
u
u
u
u
Fixed-rate and variable-rate receivables are evaluated by our Company based on parameters such as interest rates, specific
country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project. Based
on this evaluation, allowances were provided to account for the expected losses of these receivables. As of December 31,
2023 and 2022, the carrying amounts of such receivables, net of allowances, were not materially different from their
calculated fair values.
Fixed rate long-term bank deposits and fixed rate and variable-rate borrowings are evaluated using discounted cash flows
and the market rates or current rates for deposits of similar remaining maturities.
Fair value of financial liabilities at fair value through profit or loss - derivatives is derived from inputs other than quoted
prices that are observable for the asset or liability.
Fair value of interest-bearing borrowings and loans are determined by using discounted cash flow method with discount
rate that reflects the issuer’s borrowing rate as of the end of the reporting period. The non-performance risk as of
December 31, 2023 was assessed to be insignificant.
(ii)
Description of significant unobservable inputs to valuation
Valuation
technique
Significant
unobservable
inputs
Liquidity
discount
(2023 and 2022)
Financial asset
Unquoted equity instrument
Market
Approach
Method
Liquidity
Discount
30%
Sensitivity of the input to fair value
2023
2022
5% decrease
in the discount
would increase
in fair value by
$190
5% decrease in
the discount
would increase
in fair value by
$111
Our Company estimates the fair value of investment in equity instrument by using the market approach (market comparatives
approach). The key in this method is the selection of quoted comparable companies and accommodate adjustments to bring the
accounts of different companies into a broadly consistent framework for analysis. Then, select appropriate Indicators of Value.
The followings should be taken into account:
u
u
u
Enterprise Value (EV) versus Market Capitalization;
Earnings-based: EBITDA +/or EBIT versus Net Earnings +/or Net Cash Flow
Balance Sheet based: Net Total Assets versus Shareholders Funds
Discount for the lack of liquidity to reflect the lesser liquidity of this equity instrument compared with those of its comparable
public company peers. Our Company assessed the discount for the lack of liquidity to be 30 percent on the basis of relevant
studies applicable in the region and industry as well as on the specific facts and circumstances of the equity instrument. The
equity instrument’s finance performance is characterized by stable, consistent growth and profitability. Our Company believes
the liquidity discount of 30% would be appropriate.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
11(d) Fair values (continued)
(ii)
Description of significant unobservable inputs to valuation (continued)
Our Company carries the equity instrument as financial assets at fair value through other comprehensive income classified as
level 3 in the fair value hierarchy. A reconciliation of the beginning and closing balances is summarized below:
At January 1
Acquisitions
Recognized in other comprehensive income/(loss)
Exchange difference on translation
At December 31
12. TRADE AND OTHER RECEIVABLES
Trade receivables
Less: Loss allowances
Trade receivable, net
Other receivables
Less: Loss allowances
Other receivable, net
2023
2022
US$’000
US$’000
1,553
240
1,104
5
2,902
2,929
—
(1,352)
(24)
1,553
As of December 31,
2023
2022
US$’000
US$’000
106,333
(1,378)
104,955
1,670
—
1,670
83,319
(1,337)
81,982
2,397
—
2,397
As of December 31, 2023 and 2022, trade receivables were all from contracts with customers. And as of January 1, 2022, the
balance of trade receivables from contracts with customers was $103,564.
12(a) Movement in the loss allowance on trade receivables
At January 1
Charge for the year
Write-off
Unused amounts reversed
Currency translation adjustment
Reclassification
At December 31
2023
US$’000
2022
US$’000
1,337
97
(55)
(22)
21
—
1,378
841
712
(171)
(204)
(2)
161
1,337
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. TRADE AND OTHER RECEIVABLES (continued)
12(b) Aging analysis of trade receivables
Total
US$’000
Current
US$’000
1-30 days
US$’000
31-60 days
US$’000
Past due
61-90 days
US$’000
91-120 days
US$’000
>120 days
US$’000
December 31, 2023
Expected loss rate
1.30%
0.06%
0.47%
2.09%
3.43%
4.76%
75.74%
Gross carrying amount -
trade receivables
Loss allowances
Trade receivable, net
December 31, 2022
Expected loss rate
Gross carrying amount -
trade receivables
Loss allowances
Trade receivable, net
106,333
1,378
104,955
88,601
49
88,552
11,648
55
11,593
2,819
59
2,760
1,080
37
1,043
672
32
640
1.60%
0.09%
1.00%
2.40%
10.74%
37.04%
98.35%
83,319
1,337
81,982
69,607
66
69,541
10,166
102
10,064
2,127
51
2,076
298
32
266
27
10
17
1,513
1,146
367
1,094
1,076
18
12(c) Accounting policy for impairment of trade receivables
Our Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared
credit risk characteristics and the days past due. The expected loss rates are based on our Company’s historical credit loss
experience, adjusted to reflect current and forward-looking information on general economic conditions affecting the ability of
the customers to settle the receivables.
See Note 27(b) credit risk of trade receivables for discussions on how our Company manages and measures credit quality of
trade receivables that are neither past due nor impaired.
12(d) Other receivables pledged as collateral
The carrying amounts of other receivables pledged as collateral against credit facilities received from financial institutions are
disclosed in Note 27(e)(ii).
13. INVENTORIES
Raw materials and supplies
Work in progress
Finished goods
Total inventories at the lower of cost and net realizable value
As of December 31,
2023
US$’000
2022
US$’000
28,962
20,991
78,277
128,230
26,449
17,945
86,214
130,608
Inventories recognized as an expense during the year ended 2023, 2022 and 2021 amounted to $405,800, $387,227 and $441,371
respectively.
For the year ended December 31, 2023 and 2022, the amount of $10,255 and $1,119 were credited to cost of sales when the
circumstances, such as copper price fluctuation, that caused the net realizable value of inventory to be lower than its cost no
longer existed. For the year ended December 31, 2021, our Company recognized allowance for inventories of $14,136 as an
expense in cost of sales for inventories carried at net realizable value.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. CONTRACT ASSETS
14(a) Assets related to contracts with customers
Contract assets - current
As of December 31,
2023
US$’000
2022
US$’000
13,946
12,450
There were no advances received or retentions on SDI service contracts during the financial years ended December 31, 2023 and
2022. The contract assets balance increased as our Company provided more services and transferred more goods ahead of the
agreed payment schedules.
Our Company mainly conducts its SDI services contract with customers within public sector, and the expected credit loss on
contract assets is close to zero.
14(b) Unsatisfied supply, delivery, and installation (SDI) services contracts
The following table shows the aggregate amount of the transaction price allocated to the unsatisfied performance obligations.
Unsatisfied long-term SDI contracts
Expected to be recognized as revenue over 3 years
F-60
As of December 31,
2023
US$’000
2022
US$’000
194,963
109,816
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. PROPERTY, PLANT AND EQUIPMENT
Land
Buildings
Building
improvement
Machinery
and
equipment
Motor vehicle
and other
asset
Office
equipment
Construction in
progress
Total
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Cost
At January 1, 2022
6,016
48,092
Additions
Disposals
Transfer
Exchange differences
At December 31, 2022
Additions
Disposals
Transfer
Exchange differences
At December 31, 2023
Depreciation/Impairment
At January 1, 2022
Depreciation charge for
the year
Impairment
Disposals
Transfer
Exchange differences
At December 31, 2022
Depreciation charge for
the year
Impairment
Disposals
Transfer
Exchange differences
At December 31, 2023
Net book value
At December 31, 2023
At December 31, 2022
At January 1, 2022
—
—
—
(296)
5,720
—
—
—
67
210
—
4,038
(1,753)
50,587
—
—
—
437
5,787
51,024
8,667
6,837
353
—
1,280
(272)
8,198
473
(65)
16
45
88,164
454
(3,783)
10,637
(4,158)
91,314
521
(2,369)
1,256
781
91,503
5,476
298
(304)
—
(160)
5,310
307
(467)
19
51
5,220
7,547
645
(457)
200
(535)
7,400
314
(230)
12
(32)
7,464
(36,008)
(4,831)
(73,924)
(3,675)
(6,087)
(438)
—
—
—
194
(2,434)
—
3,783
—
3,557
(435)
—
242
—
88
(556)
—
452
—
438
(5,075)
(69,018)
(3,780)
(5,753)
(496)
—
65
—
(33)
(2,692)
—
2,310
—
(717)
(379)
—
399
(19)
(43)
(548)
—
228
—
22
(5,539)
(70,117)
(3,822)
(6,051)
—
—
—
—
—
—
—
—
—
—
—
—
—
5,787
5,720
6,016
(1,069)
—
—
—
1,482
(35,595)
(1,084)
—
—
—
(355)
(37,034)
13,990
14,992
12,084
16,812
1,593
(5)
(16,155)
(840)
1,405
3,034
—
(1,620)
20
2,839
—
—
—
—
—
—
—
—
—
—
—
—
—
178,944
3,553
(4,549)
—
(8,014)
169,934
4,649
(3,131)
(317)
1,369
172,504
(124,525)
(4,932)
—
4,477
—
5,759
(119,221)
(5,199)
—
3,002
(19)
(1,126)
(122,563)
3,128
3,123
2,006
21,386
22,296
14,240
1,398
1,530
1,801
1,413
1,647
1,460
2,839
1,405
16,812
49,941
50,713
54,419
15(a) Impairment of property, plant and equipment
In 2023, 2022 and 2021 our Company recorded an impairment loss of $0, $0 and $7 on property, plant and equipment at SFO
facilities. The impairment is presented within other operating expenses in consolidated income statements, other operating
expenses in Note 7(b), and the impairment of property, plant and equipment of ROW, North Asia and Thailand segments in Note
5.
Our Company considers the market demand for SFO’s products and performed an impairment test on the CGU composed of
property, plant and equipment used in the manufacturing of fiber optic cables at SFO. Our Company determined the recoverable
amount of the CGU to be $0 based on the value in use.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. PROPERTY, PLANT AND EQUIPMENT (continued)
15(b) Pledge
Information about the property, plant and equipment that were pledged to others as collaterals is provided in Note 27(e) (i).
16. RIGHT-OF-USE ASSETS
16(a) Amounts recognized in the consolidated balance sheets
Right of use assets
Land
Buildings
Motor vehicles and other assets
Office equipment
As of December 31,
As of December 31,
2023
US$’000
2022
US$’000
2,054
575
86
110
2,825
2,211
935
134
152
3,432
Our Company leases various assets including land, buildings, business vehicles and multifunction printers. Rental contracts are
typically made for periods of 2 to 37 years. Lease terms are negotiated on an individual basis and contain a wide range of
different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for
borrowing purposes.
Additions to the right-of-use assets during the 2023 financial year were $177 (2022: $863).
16(b) Amounts recognized in the consolidated income statements
Depreciation charge of right of use assets
Land
Buildings
Motor vehicles and other assets
Office equipment
Interest expenses (included in finance cost)
Expenses relating to short-term leases
Expenses relating to lease of low-value assets that are not short-term leases
The total cash outflow for lease in 2023 was $805 (2022: $710).
F-62
2023
2022
US$’000
US$’000
208
456
82
44
790
98
15
1
242
337
65
38
682
80
11
3
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. INVESTMENT PROPERTIES
17(a) Net book value of investment properties
Land not being
used for
operation
US$’000
Office
buildings
for rent
US$’000
Warehouse
US$’000
Land leasehold
right
US$’000
Other
US$’000
Total
US$’000
407
—
407
403
—
403
510
(405)
105
515
(385)
130
5,055
(545)
4,510
5,018
(397)
4,621
88
(7)
81
91
(5)
86
11
(2)
9
11
(1)
10
6,071
(959)
5,112
6,038
(788)
5,250
As of December 31, 2023
Cost
Less: Accumulated depreciation
Net book value
As of December 31, 2022
Cost
Less: Accumulated depreciation
Net book value
A reconciliation of the net book value of investment properties was as follows :
Net book value at January 1
Additions
Disposals
Depreciation (included in administrative expenses)
Exchange difference
Net book value at December 31
2023
US$’000
2022
US$’000
5,250
—
—
(168)
30
5,112
5,809
12
(30)
(176)
(365)
5,250
17(b) The amount recognized in profit or loss arising from the investment properties
2023
US$’000
2022
US$’000
2021
US$’000
Rental income derived from investment properties
Direct operating expenses (including repairs and maintenance)
generating rental income
Direct operating expenses (including repairs and maintenance) that
did not generate rental income
Net profit (loss) arising from investment properties carried at
cost
267
(168)
(1)
98
243
(157)
(21)
65
170
(174)
(23)
(27)
Undiscounted lease payments receivable to be received during the lease terms are immaterial.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. INVESTMENT PROPERTIES (continued)
17(c) Measuring investment properties at fair value
The fair value of the investment properties are stated below:
Land not being used for operation
Office buildings for rent
Warehouse
Land leasehold right
Other
As of December 31,
2023
US$’000
2022
US$’000
10,678
5,068
5,876
93
9
10,322
1,995
5,291
158
11
The fair value of aforementioned investment properties have been determined based on the valuation and is considered a level 3
measurement. The valuation has been made on the assumption to sell the property interests in the open market in the
neighborhood without the benefit of any deferred term contract, leaseback, joint venture, management agreement or any similar
arrangement, which would serve to increase the value of the property interests. The valuation adopted market comparison
approach to estimate the fair market value of the properties. Under the market comparison approach, the appraisal is based on
recent sales and listings of comparable property. Adjustments were made for differences between the subject property and those
actual sales and listings regarded as comparable. The factors which used for considering the property valuation include the
significant unobservable inputs, such as location, transportation, land uses, facilities, neighboring area, land characteristics,
potential, regulations and liquidity.
17(d) Pledge
Information about the investment properties that were pledged to others as collaterals is provided in Note 27(e) (i).
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. INTANGIBLE ASSETS
Computer software
Cost
At January 1
Additions
Disposals
Transfer
Exchange difference
At December 31
Accumulated amortization
At January 1
Amortization
Disposals
Exchange difference
At December 31
Net book value
At December 31
19. INVESTMENTS IN ASSOCIATES
19(a) Associates of our Company
Company Name
Nature of business
Shandong Pacific Rubber Cable Co., Ltd. (“SPRC”) Manufacturing of
rubber cable
Country of
incorporation
PRC
Siam Pacific Holding Company Limited (“SPHC”)
Loxpac (Thailand) Company Limited (“Loxpac”)
(Formerly known as “Loxley Pacific Co., Ltd.)
Investment & holding
company
Thailand
Providing
telecommunication
service
Thailand
Loxpac Hong Kong Co., Limited (“Loxpac HK”)
(Formerly known as “Loxley Pacific Hong Kong Co.,
Limited” )
Investment & holding
company
Hong Kong
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2023
US$’000
2022
US$’000
738
40
(19)
—
2
761
(599)
(54)
19
(3)
(637)
124
696
62
—
—
(20)
738
(567)
(45)
—
13
(599)
139
Percentage of
equity interest
As of December 31
2023
2022
25.00%
25.00%
49.00%
49.00%
21.39%
21.39%
23.10%
23.10%
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. INVESTMENTS IN ASSOCIATES (continued)
19(b) Carrying amounts of investment in associates
At January 1
Share of loss of associates
Exchange difference
At December 31
As of December 31,
2023
US$’000
2022
US$’000
805
(2)
7
810
835
(1)
(29)
805
The investments in SPRC, Loxpac and Loxpac HK have been fully impaired.
19(c) Summarized financial information for associates
The following table summarized financial information of our Company’s investments in associates:
Summarized financial information of SPHC:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Reconciliation to our Company’s investments in associates:
Percentage of equity interest
Carrying amount of the investment
As of December 31,
2023
US$’000
2022
US$’000
4
1,835
(2)
(184)
1,653
1
1,818
(2)
(176)
1,641
49%
49%
810
805
Summarized financial information of SPHC:
Revenue
Loss for the year
For the year ended December 31,
2023
US$’000
2022
US$’000
2021
US$’000
—
(4)
—
(3)
—
(2)
Reconciliation to our Company’s investments in associates:
Percentage of equity interest
Share of the associates’ loss for the year:
49%
49%
49%
(2)
(1)
(1)
As of December 31, 2023 and 2022, our Company's associates had no contingent liabilities or capital commitments.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. TRADE AND OTHER PAYABLES
Trade payables
Other payables
As of December 31,
2023
US$’000
2022
US$’000
40,977
10,766
51,743
29,258
10,633
39,891
Other payables included refund liabilities arising from contracts with customers, which amounted to $9,395 and $8,667 as of
December 31, 2023 and 2022, respectively.
21. EMPLOYEE BENEFIT LIABILITIES
As of December 31,
2023
2022
Current
Non-current
Total
Current
Non-current
Total
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
1,120
719
1,839
5,891
106
5,997
7,011
825
7,836
1,320
627
1,947
7,576
117
7,693
8,896
744
9,640
Employee benefit liabilities
Pension-Defined benefit plans
Long service leave
Total
21(a) Pension – Defined contribution plans
Our Company has several defined contribution plans covering its employees in Australia, PRC, Singapore, Thailand, and
Taiwan. Contributions to the plan are made monthly. Total charges for the years ended December 31, 2023, 2022 and 2021, were
$1,222, $1,182, and $1,200, respectively.
21(b) Pension – Defined benefit plans
The defined benefit liability recognized in the consolidated balance sheet in respect to defined benefit plans is the present value
of the defined benefit obligation at the end of the reporting period, together with adjustments for past service costs and actuarial
gains or losses. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit
method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows
using future actuarial assumptions about demographic and financial variables that affect the determination of the amount of such
benefits.
In determining the appropriate discount rate, management considers the inactive corporate bond trading in Thailand, taken into
account the yields on Thai Government Bonds and extrapolated maturity corresponding to the expected duration of the defined
benefit obligation.
The mortality rate is based on the most recent mortality investigation on policyholders of life insurance companies in Thailand.
Future salary increases and pension increases are based on expected future inflation rates derived from external economic data,
together with historical experience of Charoong Thai.
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In accordance with the Thailand labor law, Charoong Thai and its subsidiaries are obliged to make payment to retiring
employees, at rates of 1 to 13 times of their final month’s salary rate, depending on the length of service. In addition, Charoong
Thai also has the extra benefit plan to make payment to qualified retiring employees, at rates of 1 to 26 times of final month's
salary. The plan is not funded. Our Company pays to settle the obligations as and when employees retire.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. EMPLOYEE BENEFIT LIABILITIES(continued)
21(b) Pension – Defined benefit plans (continued)
The following tables summaries the components of net benefit expense recognized in the income statement and the funded status
and amounts recognized in the consolidated balance sheet for the plan:
Net benefit cost
Current service cost
Past service cost
Interest cost on benefit obligation
Net benefit cost
Other comprehensive income
Actuarial (gain) / loss – experience
Actuarial loss / (gain) – demographic assumption
Actuarial (gain) / loss – financial assumption
Actuarial gain
Change in the defined obligation
Defined benefit obligation at January 1
Current service cost
Past service cost
Interest cost on benefit obligation
Benefits paid directly by our Company
Actuarial gain in other comprehensive income
Exchange differences
Defined benefit obligation at December 31
Actuarial assumptions
For the year ended December 31,
2023
US$’000
2022
US$’000
2021
US$’000
442
—
191
633
447
48
154
649
519
—
127
646
For the year ended December 31,
2023
US$’000
2022
US$’000
2021
US$’000
(195)
(89)
(1,601)
(1,885)
(263)
74
(543)
(732)
140
(23)
(676)
(559)
For the year ended December 31,
2023
US$’000
2022
US$’000
2021
US$’000
8,896
442
—
191
(701)
(1,885)
68
7,011
9,854
447
48
154
(653)
(732)
(222)
8,896
11,300
519
—
127
(746)
(559)
(787)
9,854
The significant assumptions used in determining the actuarial present value of the defined benefit obligations for the years ended
December 31, 2023 and 2022 are as follows:
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Discount rate
Rate of salary increase
Pre-retirement mortality
apwc-20231231
2023
%
2.4-4.7
3.0~6.0
2022
%
2.5-2.7
5.0~6.0
* Thailand TMO17 Tables,
improving with the rate of
3.0% p.a.
* Thailand TMO17 Tables
* TMO represented as Thailand Mortality Ordinary Tables
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. EMPLOYEE BENEFIT LIABILITIES(continued)
21(b) Pension – Defined benefit plans (continued)
Maturity profile of defined benefit obligation
The following pension benefit payments are expected payments to be made in the future years out of the defined benefit plan
obligation:
Within the next 12 months (next annual reporting period)
Between 2 and 5 years
Between 6 and 10 years
Total expected payments
As of December 31,
2023
US$’000
2022
US$’000
1,120
2,856
3,037
7,013
1,320
1,936
4,101
7,357
Weighted average duration of defined benefit obligation
9 ~ 14 years
9 years
Sensitivity analysis
A one-percentage point change in the assumed rates would have yielded the following effects:
Discount rate – 1% increase
Discount rate – 1% decrease
Rate of salary increase – 1% increase
Rate of salary increase – 1% decrease
2023
2022
US$’000
US$’000
(552)
482
483
(543)
(699)
818
782
(685)
The sensitivity result above determines their individual impact on the plan’s year-end defined benefit obligation. In reality, the
plan is subject to multiple external experience items which may move the defined benefit obligation in similar or opposite
directions, while the plan’s sensitivity to such changes can vary over time.
21(c) Long service leave
The liability for long service leave is recognized in the provision for employee benefits and measured as present value of
expected future payments to be made in respect of services provided by employees up to the reporting date using the projected
unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and
periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate
bond with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. As of
December 31, 2023 and 2022, the amount of long service leave obligation was $825 and $744, respectively.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. OTHER CURRENT LIABILITIES
Contract liabilities
Dividend payable
Onerous contracts provisions
Other current liabilities
Total
As of December 31,
2023
US$’000
2022
US$’000
3,690
220
2,306
1,019
7,235
1,325
291
2,110
1,563
5,289
Other current liabilities include undue value added tax, unpaid withholding tax, and other miscellaneous liabilities.
22(a) Onerous contracts provisions
At January 1
Recognized
Reversed
Exchange differences
At December 31
22(b) Contract Liabilities
Current contract liabilities
Advance from customers
Custodial service
Transportation service
Total current contract liabilities
For the year ended December 31,
2023
US$’000
2022
US$’000
2,110
2,196
(2,040)
40
2,306
9,640
498
(7,763)
(265)
2,110
As of December 31,
2023
2022
2021
US$’000
US$’000
US$’000
3,585
76
29
3,690
1,222
47
56
1,325
511
50
51
612
Our Company recognizes contract liabilities when it receives advance payments from customers before performance
obligations have been performed.
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. OTHER CURRENT LIABILITIES (continued)
22(b) Contract Liabilities (continued)
Revenue recognized in relation to contract liabilities
Revenue recognized that was included in the contract liabilities balance at the
beginning of the year
Advance from customers
Custodial service
Transportation service
23. EQUITY
23(a) Common shares
Authorized shares
Common shares of US$0.01 each
Common shares issued and fully paid
At January 1, 2022
Issuance of common shares
At December 31, 2022
At December 31, 2023
Treasury shares
At January 1, 2022
At December 31, 2022
At December 31, 2023
For the year ended December 31,
2023
US$’000
2022
US$’000
1,222
44
46
1,312
511
49
49
609
As of December 31,
2023
2022
Number of shares
Number of shares
50,000,000
50,000,000
Number of shares
US$’000
13,830,769
6,796,558
20,627,327
20,627,327
Number of shares
US$’000
11,100
11,100
11,100
138
68
206
206
38
38
38
APWC announced the completion of the rights offering on February 2, 2022, which was issued and sold an aggregate of
6,796,558 common shares pursuant to the exercise of subscription rights, raising net proceeds of $7.9 million after deducting
offering expenses. Following the completion of the rights offering, APWC had 20,627,327 common shares issued and 11,100
common shares were repurchased and held by the Company as treasury shares.
23(b) Dividends
On November 11, 2016, APWC announced that the Board of Directors approved the implementation of a dividend policy as part
of APWC's ongoing commitment to increasing shareholder value and return on investment. Pursuant to the dividend policy,
subject to review and approval by the Board of Directors, APWC may pay cash dividends of at least 25% of its net post-tax
audited consolidated profits attributable to shareholders. As APWC is a holding company, its ability to pay dividends is
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dependent upon distributions that it receives from its operating subsidiaries and affiliates, which are subject to a number of
factors including operating results, capital requirements, expansion
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. EQUITY (continued)
plans, debt covenants, business prospects, consideration for non-recurring items and other factors that are deemed relevant from
time to time by the respective boards of our subsidiaries and affiliates. The dividend policy will be reviewed on an ongoing basis
and updated at the discretion of the Board of Directors as business circumstances and available capital and capital requirements
may change.
APWC did not declare or pay dividends distributed to owners for the years ended December 31, 2023, 2022 and 2021.
23(c) Other comprehensive income – net of tax
The disaggregation of changes of other comprehensive income by each type of reserve in equity is shown below:
Exchange difference on translation of foreign
operations
Re-measuring gains on defined benefit plans
Changes in fair value of financial assets at fair
value through other comprehensive income
Exchange difference on translation of foreign
operations
Re-measuring gains on defined benefit plans
Changes in fair value of financial assets at fair
value through other comprehensive income
Remeasurement
of defined
benefit plans
US$’000
For the year ended December 31, 2023
Financial
assets at
FVOCI
reserve
US$’000
Foreign
currency
translation
reserve
US$’000
—
1,508
—
1,508
—
—
883
883
784
—
—
784
Remeasurement
of defined
benefit plans
US$’000
For the year ended December 31, 2022
Financial
assets at
FVOCI
reserve
US$’000
Foreign
currency
translation
reserve
US$’000
—
585
—
585
—
—
(1,082)
(1,082)
(9,506)
—
—
(9,506)
Total
US$’000
784
1,508
883
3,175
Total
US$’000
(9,506)
585
(1,082)
(10,003)
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Exchange difference on translation of foreign
operations
Re-measuring losses on defined benefit plans
Changes in fair value of financial assets at fair
value through other comprehensive income
Remeasurement
of defined
benefit plans
US$’000
For the year ended December 31, 2021
Financial
assets at
FVOCI
reserve
US$’000
Foreign
currency
translation
reserve
US$’000
Total
US$’000
—
—
587
587
(15,028)
(15,028)
.
—
447
587
(15,028)
(13,994)
—
447
—
447
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ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. RELATED PARTY TRANSACTIONS
The related parties are defined as affiliates of our Company; entities for which investments are accounted for by the equity
method by our Company; the principal owners of our Company; its management; members of the immediate families of the
principal owners of our Company and its management.
Moon View Venture Limited (“Moon View”), PEWC, Singapore Branch, PEWC Singapore Co. (Pte) Ltd., Taiwan Submarine
Cable Co., Ltd, and PEWC (HK) are controlled by PEWC. Moon View is the immediate holding company of our Company.
Italian-Thai Development Public Company Limited (“Italian-Thai”) is the non-controlling shareholder of one of our Company’s
operating subsidiaries in Thailand. SPHC is one of our Company’s equity investees. Fujikura Limited is a non-controlling
shareholder of one of our Company’s operating subsidiaries in Thailand.
24(a) Outstanding balance with related parties
The following table provided the total amount of outstanding balance at December 31, 2023 and 2022.
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Amounts due from related parties
The ultimate parent company
PEWC
PEWC, Singapore Branch
PEWC (HK)
Taiwan Submarine Cable Co., Ltd
PACIFIC UNION CO., LTD.
Associate
SPHC
Non-controlling shareholder of subsidiary Italian-Thai and its affiliates
As of December 31,
2023
2022
US$’000
US$’000
107
14
130
—
13
171
933
1,368
147
5
4,177
65
—
170
6,454
11,018
Amounts due to related parties
The ultimate parent company
PEWC
5,849
14,814
PEWC Singapore Co. (Pte) Ltd.
PEWC (HK)
SUMI-PAC CONSTRUCTION
COMPANY, LTD.
PACIFIC UNION CO., LTD.
400
1
299
17
400
26
—
—
SPHC
1,362
1,362
13
7,941
11
16,613
—
137
Associate
Others
Contract liabilities
The ultimate parent company
PEWC
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. RELATED PARTY TRANSACTIONS (continued)
On July 10, 2020, APWC entered into a secured loan agreement with PEWC as lender. In August 2020, we borrowed the
principal amount of $6 million under the Secured Loan from PEWC, pledging our Company’s 98.3% ownership stake in Sigma
Cable as collateral. This loan was a straight loan with a fixed interest rate of 3% per annum. In June 2021, such loan was repaid
in full to PEWC, and the facility was terminated.
Our Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared
credit risk characteristics and the days past due. The expected loss rates are based on our Company’s historical credit loss
experience, adjusted to reflect current and forward-looking information on general economic conditions affecting the ability of
the customers to settle the receivables.
See Note 27(b) credit risk of trade receivables for discussions on how our Company manages and measures credit quality of
trade receivables that are neither past due nor impaired.
24(b) Transactions with related parties
The transactions undertaken with related parties are summarized as follows:
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The ultimate parent company
PEWC
SUMI-PAC CONSTRUCTION
COMPANY, LTD.
Purchases
Sales
Fabrication income
received
Construction income
received
Management fee received
Management fee paid
Information technology
service fee paid
Training fee paid
Interest expenses paid
Rental fee paid
Vehicle sale proceeds
received
Materials purchased for
interior office redecorating
Rental fee received
Service fee received
Purchases
Pacific Charity Foundation
Rental fee received
PACIFIC UNION CO., LTD.
Construction income
received
F-74
For the year ended December 31,
2023
2022
2021
US$’000
US$’000
US$’000
23,093
24,914
14
—
1,006
29
205
132
—
—
104
18
—
26
31
280
9
11
—
—
3
10
172
120
—
—
18
—
8
—
—
—
—
—
20,359
5,254
25
—
—
153
113
110
91
—
—
—
—
—
—
—
—
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. RELATED PARTY TRANSACTIONS (continued)
Chung-Tai Technology
Development Engineering
Corporation
Rental fee received
Service fee received
PEWC, Singapore Branch
Management fee received
PEWC (HK)
Sales
Service fee paid
Non-controlling shareholder of
subsidiary
Italian Thai and its affiliates
Sales
Others
Construction of factory
building expenses
Loss allowance
Fabrication cost
Vehicle sale proceeds
received
For the year ended December 31,
2023
2022
2021
US$’000
US$’000
US$’000
11
1
—
7,437
67
5,230
—
4,565
150
25
—
—
—
18,309
156
8,772
—
—
277
—
—
—
14
25,127
219
6,613
1,651
—
350
—
As of December 31, 2023, our Company has an outstanding balance from product sales to Italian-Thai, amounting to
$5.6 million. The majority of this outstanding payment, amounting to $4.6 million, was overdue by more than one year. In 2023,
our Company recognized a loss allowance of $4.6 million. This decision was based on several factors, including (1) Italian-
Thai’s 2023 financial statement being issued with a disclaimer of opinion related to scope limitation, primarily due to a going
concern issue; (2) our Company has not obtained any collateral or guarantees related to the unpaid payments; and (3) Italian-
Thai’s current financial condition, as evidenced by relevant News and credit rating information in Thailand. Considering the
aforementioned factors, our management deemed it appropriate to record a full loss allowance in 2023.
24(c) Terms and condition of transactions with related parties
The sales to and purchases from related parties are based on negotiation by the entities. Outstanding balances at the year-end are
unsecured and interest free. There have been no guarantees provided or received for any related party receivables or payables.
This assessment is undertaken each financial year through examining the financial position of the related party and the market in
which the related party operates.
Our Company purchases from PEWC copper rods as raw materials, low to high voltage power cable, and wire for distribution
purposes. The purchase price from PEWC is determined by reference to the quoted copper prices on the LME. No sales
commission was received from PEWC during the years ended December 31, 2023, 2022 and 2021.
Our Company leased office from PEWC. The lease terms and prices were both determined in accordance with mutual
agreements. The rental fee were paid to PEWC monthly; the related expenses were both classified under manufacturing, selling,
and administrative , research and development expenses.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. RELATED PARTY TRANSACTIONS (continued)
Pursuant to the composite services agreement with PEWC:
(i)
(ii)
(iii)
(iv)
(v)
PEWC will sell copper rod to our Company, upon our Company’s request, (1) 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, (2) at prices and on terms
at least as favorable as it provides copper rod to other purchasers of similar amounts of copper rod in the same markets as
PEWC and (3) will give priority in the supply of copper rod to our Company over other purchasers of copper rod from
PEWC.
PEWC grants to our Company the right to distribute any wire or cable product manufactured by PEWC in all markets in
which our Company presently distributes or develops the capability to distribute in the future, such products on such
terms as have historically been in effect or on terms at least as favorable as PEWC grants to third parties that distribute
such products in such markets. However, PEWC shall not be required to grant to our Company the right to distribute
products manufactured by PEWC in the future in markets where our 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 our Company.
PEWC will make available to our Company, upon our Company’s request and on terms to be mutually agreed between
PEWC and our Company from time to time, access to certain of PEWC’s technology (and PEWC personnel necessary to
use such technology) with respect to the design and manufacture of wire and cable products, including, without limitation,
certain fiber optic technology. Our Company benefits from research and development conducted by PEWC at little or no
cost to our Company.
PEWC will make available to our Company, upon our Company’s request and on terms to be mutually agreed between
PEWC and our 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 our Company’s employees and
managers at PEWC facilities and the secondment of PEWC employees and managers to our Company.
Each of PEWC and our Company will offer the other party the right to participate in any negotiations with a third party
concerning the establishment of any facility or similar venture to manufacture or distribute any wire or cable product
outside of the markets where our Company currently manufactures or distributes, or intends to develop the capability to
manufacture or distribute, any wire or cable product. Unless our Company and PEWC mutually agree otherwise, our
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 our Company for PEWC or such substitution would prevent the
successful completion of the facility or venture, PEWC will arrange for our Company to participate to the extent possible.
24(d) Compensation of key management personnel of our Company
Short-term employee benefits
Post-employment benefits
Total compensation paid to key management personnel
For the years ended December, 31
2023
2022
2021
US$’000
US$’000
US$’000
1,898
88
1,986
1,953
48
2,001
2,372
84
2,456
The amounts disclosed in the table were recognized as expenses during the reporting periods.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. COMMITMENTS AND CONTINGENCIES
25(a) Purchase commitments
As of December 31, 2023 and 2022, our Company had commitments to purchase raw materials totaling $127 million to $147
million and $191 million to $225 million (14,765 to 17,115 metric tons and 22,375 to 26,255 metric tons), respectively, from
third parties and PEWC at the prices stipulated in the contracts.
25(b) Capital commitments
As of December 31, 2023 and 2022, our Company had capital commitment relating to the construction of factory building
improvement and acquisition of machinery, totaling $0.7 million and $0.7 million, respectively.
25(c) Guarantees
As of December 31, 2023 and 2022, APWC provided a corporate guarantee not exceeding the sum of $29 million and $25
million, respectively, for the bond performance and banking facility of Sigma Cable.
As of December 31, 2023 and 2022, there were outstanding bank guarantees of $17 million and $14 million, respectively, issued
by the banks on behalf of Charoong Thai and its subsidiaries in respect of certain performance bonds as required in the normal
course of business of the companies. These guarantees generally expire within 1 year.
25(d) Service commitments
As of December 31, 2023 and 2022, our Company had commitments in respect of management consulting services with related
parties totaling $0.1 million and $0.1 million, respectively.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26. FAIR VALUE MEASUREMENT
Fair value information:
As of December 31, 2023
Fair value measurement using
Quoted prices
in
active markets
(Level 1)
Total
US$’000
US$’000
Significant
observable
inputs
(Level 2)
US$’000
Significant
unobservable
inputs
(Level 3)
US$’000
Financial assets (liabilities) - derivatives (Note
11.(a))
Foreign exchange forward contract
(74)
—
(74)
—
Financial assets at fair value through other
comprehensive income (Note 11.(a))
Unquoted equity instrument
Thai Metal Processing Co., Ltd.
Leijyu Co., Ltd. (transliteration)
Assets for which fair values are disclosed:
Investment properties (Note 17)
Land
Office buildings
Warehouse
Land leasehold right
Other
2,663
239
10,678
5,068
5,876
93
9
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,663
239
10,678
5,068
5,876
93
9
There have been no transfers between Level 1 and Level 2 during the year.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26. FAIR VALUE MEASUREMENT (continued)
Fair value information:
As of December 31, 2022
Fair value measurement using
Quoted prices
in
active markets
(Level 1)
Total
US$’000
US$’000
Significant
observable
inputs
(Level 2)
US$’000
Significant
unobservable
inputs
(Level 3)
US$’000
Financial assets (liabilities) - derivatives (Note
11.(a))
Foreign exchange forward contract
(6)
Financial assets at fair value through other
comprehensive income (Note 11.(a))
Unquoted equity instrument
Thai Metal Processing Co., Ltd.
Assets for which fair values are disclosed:
Investment properties (Note 17)
Land
Office buildings
Warehouse
Land leasehold right
Other
1,553
10,322
1,995
5,291
158
11
—
—
—
—
—
—
—
(6)
—
—
—
—
—
—
—
1,553
10,322
1,995
5,291
158
11
There have been no transfers between Level 1 and Level 2 during the year.
27. FINANCIAL RISK MANAGEMENT OBJECTIVES
Financial risks are those derived from financial instruments our Company is exposed to during or at the closing of each fiscal
year. The objective of our Company’s financial risk management is to minimize its risk exposure against various financial risks,
which include market risk, credit risk and liquidity risk. Our Company uses derivative instruments to cover certain risks when it
considers them necessary. It is our Company’s policy that no trading in derivatives for speculative purposes shall be undertaken.
Our Company manages its exposure to key financial risks, as described in the succeeding paragraphs.
27(a) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market prices comprise four types of risk: interest rate risk, equity price risk, foreign currency risk and
commodity price risk. Financial instruments affected by market risk include loans and borrowings, financial instruments at fair
value through profit or loss, and financial instruments at fair value through other comprehensive income.
The sensitivity analysis in the following sections relate to the position as of December 31, 2023 and 2022.
The analysis excludes the impact of movements in market variables on the carrying value of other post-retirement obligations
provisions and on the non-financial assets and liabilities of foreign operations.
(i)
Interest rate risk
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Our Company’s exposure to interest rate risk arises from borrowing at floating interest rates. Changes in interest rate will affect
future cash flows but not the fair value. Less than 33% of our Company’s financial liabilities bear floating
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
(i) Interest rate risk (continued)
interest rate, and the rest of its financial liabilities bear fixed interest rate which are close to the market rate or are non-interest
bearing.
At the reporting dates, a change of 30 basis points of interest rate in a reporting period could cause the profit for the years ended
December 31, 2023 and 2022 to increase/decrease by $115 and $128, respectively.
(ii)
Equity price risk
Our Company’s exposure to equity price risk arises from unquoted instrument held by our Company and classified in the balance
sheet as non-current financial assets at fair value through other comprehensive income.
The fair value and the sensitivity analysis of the held equity instrument are disclosed in Note 11(d).
(iii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. Our Company’s exposure to the risk of changes in foreign exchange rates arise from sales,
purchases and borrowings by operating units in currencies other than the unit’s functional currency. Our Company’s principal
operations are located in Thailand, the PRC, Singapore and Australia and a substantial portion of its revenues are denominated in
Thai Baht, RMB, Australian dollars or Singapore dollars, whereas a substantial portion of our Company’s cost of sales are
denominated in U.S. dollars, its reporting currency. Any devaluation of the functional currencies of our Company’s principal
subsidiaries against the U.S. dollar would likely have an adverse impact on the operations of our Company. Management
monitors the foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise.
(refer to NTA-11(c)(ii))
The balance of financial assets and liabilities denominated in a currency different from our Company’s each functional currency
are summarized below.
United States dollar (USD)
Thai Baht (THB)
Singapore dollar (SGD)
Taiwan dollar (TWD)
Renminbi (RMB)
Hong Kong dollar (HKD)
Euro (EUR)
Financial Assets
As of December 31,
Financial Liabilities
As of December 31
2023
2022
2023
2022
8,231
326
106
25,282
18
7,773
20
4,689
891,587
11
2,920
—
25
—
15,057
30
46
4,463
—
25
—
5,135
4,254
296
28,780
18
4,649
8
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
(iii) Foreign currency risk (continued)
Foreign currency sensitivity
The following table demonstrates the sensitivity of our Company’s profit before tax and equity to a reasonably possible change
of each foreign currency exchange rates against all other non-functional currencies, with all other variables held constant.
Change
rate
5%
-5%
5%
-5%
2023
2022
iv.
Commodity price risk
USD
THB
SGD
TWD
HKD
EUR
22
(22)
(341)
341
(1,303)
1,303
—
—
11
(11)
2
(2)
42
(42)
34
(34)
30
(30)
50
(50)
—
—
1
(1)
Our Company is affected by the volatility of certain commodities. Copper is the principal raw material used by our Company.
Our Company purchases copper at price closely related to the prevailing international spot market on the London Metal
Exchange for copper. The price of copper is influenced heavily by global supply and demand as well as speculative trading.
Consequently, a change in the price of copper will have a direct effect on our Company’s cost of sales. Our Company does not
use derivative instruments to hedge the price risk associated with the purchase of this commodity. However, we cover some of
these risks through long-term purchase contracts.
Commodity price sensitivity
The following table shows the potential effect of price changes in copper.
2023
Copper
2022
Copper
Change in
year-end
price
US$’000
Effect on profit
before tax
Effect on equity
US$’000
US$’000
-14 %
+14 %
+23 %
-23 %
(3,296)
3,296
5,981
(5,981)
N/A
N/A
N/A
N/A
On average, copper composes around 73% and 79% of the product cost in December 31, 2023 and 2022, respectively. The above
sensitivity analysis is based on the most significant fluctuation rate of the month in December 31, 2023 as compared to the same
month in 2022 and the most significant fluctuation rate of the month in 2022 as compared to the same month in 2021 and one
month manufacturing lead time to estimate its impact on profit before tax in December 31, 2023 and 2022, respectively.
27(b) Credit risk
Credit risk arises from cash and cash equivalents, bank deposits, foreign currency forward contracts, trade receivables, contract
assets, other receivables excluding bank deposits, and amounts due from related parties. Our Company’s exposure to credit risk
arises from default of counterparty, with maximum exposure equal to the carrying amount of these financial instruments.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
(i)
Risk management
Our Company maintains cash and cash equivalents, as well as bank deposits with various financial institutions located in
Singapore, Thailand, Australia, Hong Kong and the People’s Republic of China. Our Company’s policy is designed to limit its
exposure to any one institution. Our Company performs periodic evaluations of the relative credit standing of those financial
institutions that are considered in our Company’s investment strategy.
Foreign currency forward contracts are only used for economic hedging purposes and not as speculative investments. The
counterparties on these forward contracts are banks with international operations and good credit quality.
Concentrations of credit risk with respect to trade receivables and contract assets are limited due to the large number of entities
comprising our Company’s customer base. Our Company analysis the credit risk for each of the new clients before credit limits
are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past
experience and other factors. Our Company carefully assesses the financial strength of its customers and generally does not
require any collateral. Compliances with credit limits are monitored, and exceptions beyond a certain threshold are discussed
regularly. Customers’ credit terms are extend over time only when they establish good payment patterns with our Company.
Our Company enters into transactions with related parties in the ordinary course of its business. Refer to Note 24(c) for our
Company’s general credit risk management practices.
(ii)
Definition of default
Our Company considers the following as constituting an event of default for internal credit risk management purposes as
historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:
u
u
when there is a breach of financial covenants by the debtor; or
information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its
creditors, including our Company, in full (without taking into account any collateral held by our Company).
(iii) Measurement and recognition of expected credit losses
Our Company recognizes a loss allowance for expected credit losses on trade receivables and contract assets by using a
provision matrix. Refer to Note 12(c) and 24(a) for the approach used to measure expected credit losses of trade receivables,
Note 12(b) for the loss allowance recognized, and Note 12(a) for changes in the loss allowance on trade receivables. While
contract assets are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial.
Our Company applies the general approach for all other financial assets that are subject to the expected credit loss model. The
expected credit losses of the respective financial instruments for the years ended December 31, 2023 and 2022 were immaterial.
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was
also immaterial.
(iv) Write off policy
Financial instruments are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan
(iv) Write off policy (continued)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
with our Company, and a failure to make contractual payments for a period of greater than generally 90 days past due.
(v)
Concentrations of credit risk
As of December 31, 2023 and 2022, trade receivables from one customer represented 12.48% and 14.44% of total trade
receivables of our Company, respectively. The credit concentration risk of other trade receivables is insignificant.
27(c) Liquidity risk
Liquidity risk arises from the financial liabilities of our Company and their subsequent ability to meet obligations to repay their
financial liabilities as and when they fall due. Management manages our Company’s liquidity risk by closely monitoring cash
flow from the operations. Our Company has about $38 million in cash and cash equivalents, $188 million in unutilized amounts
of bank loans, and the total financial liabilities is $119 million at the reporting date, which for financial assets and liabilities
results in a net asset position. Liquidity risk is considered not high as of December 31, 2023. Refer to Note 29 for development
subsequent to year end.
The table below summarizes the maturity profile of our Company’s financial liabilities based on contractual undiscounted
payment obligations.
< 1 year
US$’000
2 to 3 years
4 to 5 years
US$’000
US$’000
> 5 years
US$’000
Total
US$’000
As of December 31, 2023
Financial liabilities
Interest-bearing loans and
borrowings
Trade and other payables
Due to related parties
Financial liabilities at fair value
through profit or loss
Lease liability
As of December 31, 2022
Financial liabilities
Interest-bearing loans and
borrowings
Trade and other payables
Due to related parties
Financial liabilities at fair value
through profit or loss
Lease liability
—
—
—
—
386
386
400
—
—
—
469
869
—
—
—
—
355
355
4,870
—
—
—
579
5,449
57,170
51,743
7,941
74
2,090
119,018
60,973
39,891
16,613
6
2,909
120,392
57,170
51,743
7,941
74
676
117,604
46,087
39,891
16,613
6
788
103,385
—
—
—
—
673
673
9,616
—
—
—
1,073
10,689
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
27(d) Capital management
The primary objectives of our Company’s capital management are to safeguard our Company’s ability to continue as a going
concern and maintain healthy capital ratios in order to support its business, maximize shareholders’ value and to maintain an
optimal capital structure to reduce the cost of capital.
Our Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions and the risks
characteristics of the underlying assets. To maintain or adjust the capital structure, our Company may adjust the dividend
payment to shareholders, return capital to shareholders, issue new shares or conduct stock repurchase programs. Our Company is
not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for
managing capital during the years ended December 31, 2023 and 2022.
In line with industry practices, our Company monitors capital using a gearing ratio, which is net debt divided by total capital
plus net debt. Our Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash
and cash equivalents.
Interest bearing loans and borrowings
Trade and other payables
Less: cash and cash equivalents
Net debt
Total Equity
Capital and net debt
Gearing ratio
As of December 31,
2023
2022
US$’000
US$’000
53,737
51,743
(37,970)
67,510
214,621
282,131
57,731
39,891
(54,017)
43,605
211,428
255,033
23.9%
17.1%
Our Company has no direct business operations other than its ownership of the capital stock of its subsidiaries and equity
investees holdings. As a holding company, our Company’s ability to pay dividends, as well as to meet its other obligations,
depends upon the amount of distributions, if any, received from our Company’s operating subsidiaries and other holdings and
investments. Our 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 our Company, including as a result of restrictive covenants contained in loan
agreements, restrictions on the conversion of local currency earnings into U.S. dollars or other hard currency and other
regulatory restrictions. For example, PRC legal restrictions permit payments of dividends by our business entities in 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 Company’s ability to fund
operations of one subsidiary with dividends and other payments received from another subsidiary.
27(e) Collateral
The credit lines of our Company were collateralized by:
(i) Mortgage of our Company’s land, buildings, machinery and equipment, investment properties and land use rights with a
total carrying amount of $10,211 at December 31, 2023 (2022: $10,541);
(ii)
Pledge of other receivables of $1,138 at December 31, 2023 (2022: $1,118) ;
(iii) Corporate guarantee issued by APWC.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. FINANCIAL RISK MANAGEMENT OBJECTIVES (continued)
27(e) Collateral (continued)
(iv) A trading facility was secured by all the assets with total carrying amount of $41,058 of a subsidiary as of December 31,
2023 (2022: $35,080).
The weighted average interest rates on bank loans and overdrafts as of December 31, 2023 and 2022 were 4.31% and 2.58% per
annum, respectively.
28. CASH FLOW INFORMATION
28(a) Investing activities with partial cash payments
(i) Purchase of PPE
Acquisition of property, plant and equipment
Add: Payable for PPE or CIP - Opening
Less: Payable for PPE or CIP - Ending
Less: Prepayment for PPE & CIP - Opening
Add: Prepayment for PPE & CIP - Ending
Cash paid during the year
(ii) Dividend paid
Dividends paid to company’s shareholders
Add: Payable for dividends-Opening
Less: Payable for dividends-Ending
Other
Cash paid during the year
F-85
For the year end December 31,
2023
2022
US$’000
US$’000
4,649
152
(56)
(599)
108
4,254
3,553
173
(152)
(427)
599
3,746
For the year end December 31,
2023
US$’000
2022
US$'000
284
291
(220)
2
357
565
670
(291)
(379)
565
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Table of Contents
apwc-20231231
ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28. CASH FLOW INFORMATION (continued)
28(b) Reconciliation of liabilities arising from financing activities
Balance at January 1, 2022
Changes in cash flows
Foreign exchange adjustments
Acquisition lease
Other changes
Remeasurement
Balance at December 31, 2022
Changes in cash flows
Foreign exchange adjustments
Acquisition lease
Other changes
Remeasurement
Interest -bearing
loans and
borrowings
Lease liabilities
Total
US$’000
US$’000
US$’000
65,387
(5,176)
(2,480)
—
—
—
57,731
(4,457)
463
—
—
—
2,487
(616)
(44)
851
(15)
(89)
2,574
(691)
21
177
(1)
1
67,874
(5,792)
(2,524)
851
(15)
(89)
60,305
(5,148)
484
177
(1)
1
Balance at December 31, 2023
53,737
2,081
55,818
29. SUBSEQUENT EVENT
29(a) CTW refinancing on a long-term basis of a liability classified as current
In February 2024, CTW entered into a bank loan agreement extension amounting to USD9 million. The repayment of the
principal amount is scheduled to be completed by March 2027, with an interest rate of 4.76% per annum. CTW is required to
mortgage its land as collateral and to comply with several covenants, including maintaining the debt-to-equity ratio must not be
less than 0 and the debt service coverage ratio not less than 1.20 times on an annual basis.
Other than the above events, our Company is not aware of any matter or circumstance that has significantly affected or may
significantly affect the operations of our Company, the results of those operations, or the state of affairs of our Company.
30. APPROVAL OF THE FINANCIAL STATEMENTS
The financial statements were approved and authorized for issuance by the board of directors on April 25, 2024.
F-86
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