WORLD TRADE  
ORGANIZATION  WT/L/581 
21 September 2004 
 (04-3975) 
 Original:   English 
 
  
FINANCIAL REPORT OF THE TAIWAN TOBACCO AND LIQUOR CORPORATION  
FISCAL YEAR 2002 
 
  The following submission is being circulated at  the request of the Delegation of the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu.  
_______________ 
 WT/L/581 
Page 2 
  - Report of Independent Accountants 
 
We have audited the 31 December 2002 balance sheet  of the Taiwan Tobacco and Liquor Corporation 
of and the statements of income, of changes in stockholders' equity and of cash flows for the period 
from 1 July to 31 December 2002.  These financial statements are the responsibility of the Company's 
management. Our responsibility is to express an opinion on these financial statements based on our 
audits.  The balance sheet of Taiwan Tobacco a nd Liquor Corporation of 31 December 2001 and the 
statements of income, of changes in stockholders' equity and of cash flows for the year ended in 2001 
in accordance with the reclassified amount examin ed by the Ministry of Audit for the financial 
statements without accountant's audit.  The enclosure is for reference only. 
We conducted our audits in accordance with "The  Rules Governing Examination of Financial 
Statements by Certified Public Accountants" an d generally accepted auditing standard.  Those 
standards require that we plan and perform the a udit to obtain reasonable assurance about whether the 
financial statements are free of material misstatemen t. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements.  An audit also includes 
assessing the accounting principles used and signifi cant estimates made by management, as well as 
evaluating the overall financial statement presentati on.  We believe that our audits provide a 
reasonable basis for our opinion. 
In our opinion, the financial statements mentioned as the first paragraph present fairly, in all material 
respects, the financial position of Taiwan Tobacco  and Liquor Corporation as of 31 December 2002 
and the results of its operations and its cash flow s for the period from 1 July to 31 December 2002 in 
conformity with "The Rules Governing Compilation of Financial Statements by Securities Issuers" 
and generally accepted accounting principles. 
As note 2 indicated in the financial statement, the statement that was issued  by Taiwan Tobacco and 
Liquor Corporation on 31 December 2001 is subject to  the final accounts examined by the Ministry of 
Audit.  The accountant was entrusted to audit the financial statement from 1 July to 31 December 
2002, which the initial balance was based on the bala nce unexamined by the Ministry of Audit of 
30 June 2002.  As note 2 indicated in the financial statement, the fi scal year of Taiwan Tobacco and 
Liquor Corporation was changed from reorganiza tion of Taiwan Tobacco and Wine Monopoly 
Bureau on 1 July 2002.  The fiscal year 2002 was only from 1 July to 31 December 2002.  The 
compared historical information for the corporation is used for the presentation on 12 months basis, 
i.e. from 1 January to 31 December 2001.  The corp oration composed a Pro forma income statement, 
a Pro forma statement of changes in stockholders' equity and a Pro forma cash flows, which was 
composed on the basis of the related financia l statement audited by the accountant for the 
corporation's own final accounts.  Enclosure 3 is for reference only. 
Hereby audit the financial statements for the Taiwan Tobacco and Liquor Corporation 
Deloitte and Touche  
Accountant Chang Jing-Ren  Deloitte and Touche 
Accountant Chen Chin-Hsiang 
 
This report is to certify Chang Jing-Ren with member certification No. 1742 of CPA Association, 
Taipei and Approval No. 65130, (84) Taichaicheng 
(6) issued by the Securities and Futures Commission, Ministry of Finance 
 
Accountant of the Deloitte and Touche 
11 March 2003  Chen Chin-Hsiang with me mber certification No. 965 
of CPA Association, Taipei and Approval No. 21939, 
(78) Taichaicheng (1) issu ed by the Securities and 
Futures Commission, Ministry of Finance  
 
Accountant of the Deloitte and Touche  
11 March 2003   WT/L/581
 Page 3Taiwan Tobacco and Liquor Corporation Balance Sheet 
31 December 2002 (Attachment 1) 
Comparison with Previous Year Attached)  
Unit:  Per value in I NT Dollar , 
Others in 1,000 NT Dollars 
ASSETS End of Fiscal Year 2002 End of Fiscal Year 2001 
(Examined)  Liabilities & Stockholders’ Equity End of Fiscal Year 
2002 End of Fiscal Year 2001 
(Examined)  
Current assets Amount % Amount %  Current Liabilities Amount % Amount % 
1100 Cash and cash equivalents (Not e 2,3) 1,095,562 1 11,005,733 5 2140 Accounts payable 603,510 - 1,314,962 1 
1110 Short-term investments (Note 2,4) 42,915,444 32 37,212,632 16 2160 Income tax payable (note 2, 12) 964,606 1 - - 
1140 Accounts receivable 508,465 - 627,872 - 2170 Accrued expens es 4,912,373 4 5,118,033 2 
1210 Inventories- net am ount (Note 2,5) 13,139, 005 10 13,721,936 6 2228 Tobacco & Wi ne tax payable 2,744,819 2 - - 
1261 Prepayments 1,467,902 1 1,887,397 1 2216 Dividend payable (Monopoly      
1268 Other prepayments (Monopoly       revenues payable) (note 11) - - 6,209,461 3 
 revenues) (Note 11) 83, 508 - 20,000,000 8 2298 Advance receipts & other current 
liabilities 552,044 - 239,258 - 
1286 Deferred income tax assets (Note 2, 12) 432,393 - - - 21XX Total Current Liabilities 9,777,352 7 12,881,714 6 
1291 Restricted asset (Note 15) 1,133,023 1 2,313,206 1       
1298 Other current assets 211,814 - 389,875 -  Other liabilities     
11XX Total current assets 60,987,116 45 87,158,651 37 2810 Accrued pension liabilities (note 2, 
10) 17,034,535 13 16,780,781 7 
      2880 Others 435,336 - 432,269 - 
14XX Long-term investment (Note 2,  6) 600,000 - 400,000 - 28XX Total ot her liabilities 17,469, 871 13 17,213,050 7 
 Property, plant and equipment (Note 2, 7)     2XXX Total liabilitie s 27,247,223 20 30,094,764 13 
 Cost           
1501 Land 42,515,579 31 7,233,448 3  Stockholders’ equity     
1511 Land improvements 799,318 1 874,719 1 3110 Capital stock － NT10 par value     
1521 Buildings 18,580,930    14   
20,058,243 9  5,000,000 shares authorized and 
issued in 2002 50,000,000 37 2,681,058 1 
1531 Machinery and equipment 43, 066,707 32 43,301,838 18  Additi onal paid-in capital     
1551 Transportation facility & equipmen ts 494,818 - 588,354 - 3210 Paid-in capita l in excess of par 58,579,568 43 - - 
1681 
15X1 Other equipment 
 Total Cost 244,036 
105,701,388      - 
    78 257,513 
72,314,115 - 
31 3240 
 Capital surplus from gain on 
disposal of assets  - - 2,590,528 1 
15X8 Revaluation increments -   -   102,404,210   43   3230 Capital surplus from assets 
revaluation  - - 116,736,628 49 
15XY Cost & Revaluation increments 105,701,388   78 174,718,325 74 3250 Donated assets - - 16,710 - 
15X9 Less% Accumulated depreci ation 34,629,795 25  35,046,833
  15 32XX Total capital surplus 58,579,568 43 119,343,866 50 
  71,071,593  53 139,671,492 59  Retained earnings     
     - 3310 Legal reserve 593,800 1 55,592,877 23 
1671 Construction in progress 359,470 - 331,986 -
  3320 Special reserve - - 10,288,908 4 
1672 Prepayment for equipment 12,351 - 460,107  3350 Unappropriated earnings  - - 20,000,000 9 
15XX Net property and equipment 71,443,414 53 140,463,585 59 33XX Total retained earnings 593,800 1 85,881,785 36 
      3430 Net loss not recognized as pension 
cost (1,001,335 ) (1) - - 
 Intangible assets     3XXX Total st ockholders’ equity 108, 172,033 80 207,906,709 87 
1770 Deferred pension costs (Note 2,10) 1,975,440 2 - -       
 Other assets           
1860 Deferred income tax assets (Note 2, 12) 299,312 - - -       
1808 Assets leased to others net (Note 2, 7, 8) 76,439 - 2,794,542 1       
1801 Idled assets net (Note 2,7, 9) - - 6,263,343 3        WT/L/581 
Page 4 ASSETS End of Fiscal Year 2002 End of Fiscal Year 2001 
(Examined)  Liabilities & Stockholders’ Equity End of Fiscal Year 
2002 End of Fiscal Year 2001 
(Examined)  
Current assets Amount % Amount %  Current Liabilities Amount % Amount % 
1843 Long-term accounts receivable - - 881,995 -       
1880 Others (Note 15) 37,535 - 39,357 -       
18XX Total other assets 413,286 - 9,979,237 4       
1XX
X Total assets 135,419,256 100 238,001,473 100  Total Liabilities and Stockholders’ 
Equity 135,419,256 100 238,001,473 100 
 
 The Attachment and Sheets are an Integral Part of This Financial Statement (Deloitte and Touche, Audi ting Report 11 March 2003) 
Person in Charge: Manager Accountant. 
 
  WT/L/581 
 Page 5 
  
Taiwan Tobacco and Liquor Corporation
 
Income Statement  
(Comparison with 1 January to 31 December 2001 Attached)  
 
Unit: Earning per share in 1 NT Dollar, Others in 1,000 NT Dollars 
July 1 to 31 December 2002 Fiscal Year 2001 (Examined)  Operating revenues Amount ％ Amount ％ 
4110 Total sales revenue (Note 2) 32,991,365 100 73,562,288 74
4170 Less Sales return and allowances 148,532 - 71,352 -
4100 Net sales revenue 32,842,833 100 73,490,936 74
4800 Other operating revenue - - 26,283,051 26
4000 Total operating revenue  32,842,833 100 99,773,987 100
5110 Operating costs 26,835,552 82 27,811,036 28
5910 Gross profit 6,007,281 18 71,962,951 72
Operating expenses 
6100 Selling expenses 2,397,014 7 7,384,102 7
6200 General and administrative 
expenses 412,378 1 1,615,781 2
6300 R&D expenses 152,206 1 423,408 1
6000 Total operating expenses 2,961,598 9 9,423,291 10
6900 Operating income 3,045,683 9 62,539,660 62
Non-operating income 
7120 Gain on disposal of investments  627,849 2 931,390 1
7110 Interest revenue 27,461 - 1,817,032 2
7210 Rent income 7,408 - 63,082 -
7160 Foreign exchange gain 692 - 16,704 -
7150 Gain on physical inventory 564 - 28,781 -
7480 Others 294,388 1 905,778 1
7100 Total non-operating revenues 958,362 3 3,762,767 4
7570 Loss for market price decline on 
inventories (Note 2) $1,729,574 5 $2,327,342 2
7610 Tobacco farmer comp ensations - - 1,977,480 2
7530 Loss on disposal of property and 
equipment - - 31,848 -
7880 Others 533,051 2 728,511 1
7500 Total non-operating expenses  2,262,625 7 5,065,181 5
7900 Income before income tax 1,741,420 5 61,237,246 61
8110 Income tax expense (Note 2, 12) 242,194 - - -
9600 Net income $1,499,226 5 $61,237,246 61
 
 
9950 Earnings per share (Note 13) Before Tax After Tax 
 Basic earnings per share $0.35 $0.30 
 
The accompanying notes are an integral part of the financial statements. (Deloitte and Touche, Audi ting Report 11 March 2003) 
Person in Charge:  Manager Accountant  WT/L/581 
Page 6 Taiwan Tobacco and Liquor Corporation  
Statement of Changes in Stockholders' Equity  
Comparison with January 1 to 31 December 2001 Attached  
Unit: 1,000 NT Dollars 
Additional paid-in capital (note 7, 11) Retained Earnings 
(Note 11) 
Stock Net from 
Gain on 
disposal of 
assets  
Share 
Number 
(In 1,000 
Shares) Amount Capital Paid-in 
capital in 
excess of parReserve of 
Income Asset 
Revaluation 
Increments Donated 
Assets Total Legal ReserveSpecial 
Reserve Retained 
Earnings 
unappropriatedTotal Net loss not 
recognized 
as pension 
costs 
(note 2, 10) Total 
Shareholders 
Equity 
Balance at 1 July 2002 5,000,000 50,000,000 - 58,579,568 - - - 58,579,568 - - - - - 108,579,568 
Net income, 1 July to 31 
December 2002 - - - - - - - - - - 1,499,226 1,499,226 - 1,499,226 
Retained Earnings 
Appropriated, 1 July to 
31 December 2002    
Legal Reserve - - - - - - - - 593,800 - (593,800) - - - 
Bonus dividends - - - - - - - - - - (905,426) (905,426) - (905,426) 
Minimum pension cost 
liability - - - - - - - - - - - - (1,001,335 ) (1,001,335 ) 
Balance at 
31 December 2002 5,000,000 50,000,000 - 58,579,568 - - - 58,579,568 593,800 - - 593,800 (1,001,335) 108,172,033 
Balance at 1 January 2001 - - 2,681,058 - 2,590,528 116,736,628 16,710 119,343,866 71,918,642 10,288,908 - 82,207,550 - 204,232,474 
Net Income for 2001 - - - - - - - - - - 61,237,246 61,237,246 - 61,237,246 
Appropriation of 2001 
income    
Legal Reserve - - - - - - - - 3,674,235 - (3,674,235 ) - - - 
Monopoly Revenues to 
Government - - - - - - - - - - (57,563,01 ) (57,563,011) - (57,563,01 ) 
Legal reserve transferred to 
retained earnings- 
unappropriated - - - - - - - - (20,000,00 ) - 20,000,000 - - - 
Balance at 
31 December 2001 (Examined) - - 2,681,058 - 2,590,528 116,736,628 16,710 119,343,866 55,592,877 10,288,908 20,000,000 85,881,785 - 207,906,709 
 
The Attachments and Sheets are an Integral Part of this Financial Statement (Deloitte and Touche, Report of Inde pendent Accountant s on 11 March 2003) 
    WT/L/581 
 Page 7 
  
Taiwan Tobacco and Liquor Corporation
 
Statement of Cash Flow  
1 July to 31 December 2002  
(Comparison with January 1 to 31 December 2001 Attached)  
 
Unit: 1,000 NT dollars 
Cash Flows From Operating Activities 1 July to 
31 December 2002 Fiscal Year 2001 
(Examined) 
Net income 1,499,226 61,237,246 
Depreciation and amortization 1,593,533 3,890,386 
Allowance for reduction of inventory to market 1,729,574 2,327,342 
Loss on disposal of fixed assets  - 31,848 
Deferred income tax  (731,705 ) - 
Accrued pension liabilities (2,278,151) 799,122 
Others 113 2,754 
Change in operating assets and liabilities   
Short-term investments 737,856 (14,991,885) 
Accounts receivable (8,673) (282,584 ) 
Inventories 2,422,394 1,984,083 
Prepaid expenses 650,944 (909,059 ) 
Other current assets 1,473,700 (2,381,279) 
Accounts payable (2,022,690) 285,324 
Income tax payable 964,606 - 
Accrued expenses 747,842 (3,472,336) 
Alcohol and tobacco ta x payable 444,398 - 
 Advance receipts and other cu rrent liabilities 107,260 111,007 
Net cash provided by operating activities 7,330,227 48,631,969 
Cash flows from Investing Activities   
Purchase of property, plant 
 and equipment  (996,057 ) (1,476,609) 
Proceeds from disposal of property, plant and
equipment  - 15,451 
Decrease in long term accounts receivable - 25,935 
Decrease in other assets 15,551 1,899,932 
Net cash used in investing activities (980,506 ) 464,709 
Cash dividends (Monopoly Revenues to 
government) (5,427,711) (67,937,386) 
Reduction of other debts (2,355,093) (74,394) 
Cash out-flow due financing (7,782,804) (68,011,780) 
Net decrease in cash and cash equivalents (1,433,083) (18,915,102) 
Beginning balance of cash and cash equivalents 2,528,645 29,920,835 
Ending balance of cash and cash equivalents 1,095,562 11,005,733 
Supplemental disclosure of Cash Flow Information   
Cash paid during the year for Interest (Excluding 
Capitalization Interests) - - 
Cash paid for income taxes  - - 
Cash paid for property and equipment purchase   
Increase in property and equipment  1,046,327 1,476,609 
Increase in accounts payable for equipment (50,270) - 
Cash payments 996,057 1,476,609 
Non-Cash Flow Investment and Financing   
Property and equipment listed as rental assets - 2,794,542 
Property and equipment listed as idle assets - 5,644,946 
 
The Attachments and Sheets are an Integral Part of this Financial Statement (Deloitte and Touche, Audi ting Report 11 March 2003) WT/L/581 
Page 8 
 Taiwan Tobacco and Liquor Corporation  
Notes and Enclosures of Financial Statement  
(Expressed in thousands of new Taiwan Dollars, except as indicated)  
1.  History 
The corporation was reorganized from Taiwan T obacco and Wine Monopoly Bureau on 1 July 2002, 
and is a public enterprise, in which the Department  of National Treasury of the Ministry of Finance 
owns 100 per cent stock rights and mainly deals with production and sales business for tobaccos and 
liquor. 
2. Summary of significant accounting policies 
- Normal accounting affairs  
The corporation is a public enterprise. Accounting pr ocesses and financial statements are managed in 
accordance with the laws i ssued by the Ministry of Finance and the Ministry of Audit for accounting 
affairs of public enterprises.  The annual final acc ounts should be audited by the Directorate General 
Budget Accounting and Statistics and the Audit De partment of the Control Yuan.  The above 
verification includes audit on the execution for the corporation's budget projects approved by the government.  The corporation's accounts are finally  confirmed through the verification.  The account 
book of the corporation (the former Taiwan Tob acco and Wine Monopoly Bureau) until the end of 
2001 had been audited accordingly. The account book from 1 January to 30 June 2002 was composed 
the final accounts, which was unexamined by the Audit Department of the Control Yuan.  The 
accounting process by 30 June 2002 must comply w ith the government's relating laws, or must 
comply with generally accepted accounting principl es if there were no any regulations of laws. 
According to the regulations of the Securities and Futures Commission, Ministry of Finance (SFC in 
abbreviation), the corporation must compose the financial statements to match necessary 
supplementary process for public wholesales fro m fiscal 2002 in accordance with the composition 
principles for the security wholesalers' financial reports and normal certified accounting principles.  
The accountant was entrusted to audit the financia l statement in 2002, for which the initial balance 
was based on the final balance without being examined  by the Ministry of Audit on 30 June 2002.  To 
match the presentation in 2002, some charts of acco unts were reclassified in the financial report as 
enclosed. 
The financial statement of the corporation in 2002  that was unexamined by the Department of Audit 
has been adjusted the available important accounting titles in accordance with the composition 
principles for the security wholesalers' financial report and normal certified accounting principles. 
- Fiscal year
 
The corporation was reorganized from Taiwan Tob acco and Wine Monopoly Bureau on 1 July 2002.  
The financial statement in the fiscal 2002 that was audited by the accountant only includes the period 
from 1 July to 31 December 2002. 
- Cash Equivalents    
It means the due date in three months for commer cial paper issued from the date of investment. 
- Short-term investment  
It means the due date in three months for commercial paper and the beneficiary certificate for the trust 
fund of security investment to be invested from the date of investment.  WT/L/581 
 Page 9 
 
 
 The commercial paper is evaluated on the cost basis.  The beneficiary certificate for the trust fund of 
security investment is evaluated the lower one between  total cost and the market price. If the market 
price is lower than the cost, bad debts depreciation loss will be booked; if the market price rises again, 
the loss will be written-off.  
The cost of commercial paper on sale is calculated based on the Specific Method, and other costs are 
based on the Average Method. 
- Inventories  
Inventories are stated at the lower of cost or market value. (Raw materials and container as per 
replacement cost, others as per net realizable value.) 
- Long-term investment  
Long-term stock right investment is evaluated on the basis of the Costing Method, which invests 
unlisted and under-the-counter stock right.  If the investment value has decreased and has little 
opportunity to rise again, the book value is certified as investment loss.  If the investment company pays out a stock dividend, the income on investme nt is booked; paying-out stock interest is not 
booked as investment income but noted as increased stock numbers, and the cost or book value per 
stock will be re-evaluated after receipt of  total stock numbers of stock interests. 
Sales cost of stock is calculated on the basis of the Weighted Averages Method. Face value + (or -) non-amortization premium (non- amortization discount) is on the basis of 
evaluation for long-term investment on creditor's righ t.  Premium or discount is amortized as per the 
balance period of holding the bonds, and booked in the account of current interest revenue. 
- Property and equipment and assets to rent
 
Cost (or cost + appreciation increases) – accumula ted depreciation is based on the evaluation of 
Property and equipment and assets to rent.  Impor tant renewal and improvement are booked as capital 
expense; repair and maintenance expe nse are booked as the current expense. 
According to "Standard Classification of Assets" issu ed by the government, the minimum years of use 
for Property and equipment and depreciation of assets to rent are listed as per the Straight Method:  
10-30 years for land improvement; 10-60 years for houses and building; 6-10 years for machinery 
equipment; 6-15 years for traffic and transporta tion equipment; 3-10 years for other equipment. 
Besides writing-off the related cost, re-evaluated  appreciation and accumulated depreciation, the 
profit and loss produced while processing the Propert y and equipments and assets to rent are booked 
the current non-operating incomes and expenditure. 
- Idle assets  
Idle assets is evaluated the lower one between th e net cashable value and original book value. 
- Employee's pension  
According to Regulation SFAS No. 18 (Accounting for pensions), the corporation shall be privately-
run on 31 July 2004.  The employees on the jobs will  be processed their final accounting as per year 
numbers on the jobs, and 31 December 2002 was used to set up for the weighted date while 
conducting the privately-run to re-evaluate the fi nal accounting as per year numbers on the jobs, WT/L/581 
Page 10  
 
 pension and actuarial compensation for employees' ri ghts, etc.  Regarding net transitional settlement 
obligation and previous non-booking service cost due to the change of retirement method, the corporation processed the final accounting as per year  numbers on the jobs to proportion this period to 
the year numbers while conducting pr ivately-run business on 31 July 2004. 
- Income tax
 
Income tax was proportioned across the period and in the same period, i.e., book the reducible 
temporary differences, previous unused deduction loss in the fiscal year and influential numbers 
income tax for unused deduction investment as the deferred income tax assets, and evaluate the 
achievability to book the related bad debts evalua tion; and book influential numbers of temporary 
taxable differences as the deferred income tax debt s.  Distribute the deferred income tax assets and 
debts into working and non-working accounts. 
Adopt the Current Booking Method for deduction income text produced from the purchase of 
equipment or technique, research and development,  personnel training and stock right investment. 
- Book the revenue account  
When ownership and risk of goods  are transferred and most process of earning profits is finished, 
sales revenue is booked profitable or will be prof itable; sales rebates and allowance are booked the 
minus account against the sales account that occurs in  the current fiscal year, and the related sales cost 
is booked the minus account against the sales cost account. 
- Transaction account based on the foreign currency  
Transaction account (non-derivative products contracts)  based on the foreign currency is entered into 
the account book at the current exchange rate on the date of transaction.  Foreign currency assets and 
debts are practically received and settled in the curre ncy of NT dollars.  What loss or profit produced 
from different exchange rates is booked in the bala nce sheet for the receiving and settling in the fiscal 
year.  The balance foreign exchange currency and debt s in the end of year are conversed and adjusted 
at the current exchange rate in the end of year .  Exchange difference is booked the current loss and 
profit. 
3.  Cash and Cash Equivalents 
Cash End of 2002 End of 2001 
Cash on hands and revolving funds 3,310 1,925 
Bank check and demand deposit 46,164 863,808 
Time deposit, annual Interest Rate 4.15-5.75% - 10,140,000 
 49,474 11,005,733 
Cash Equivalents   
Commercial paper -annual rate 1.53-2.00% 1,046,088 - 
 1,095,562 11,005,733 
 
4.  Short-term Investments 
 End of 2002 End of 2001 
Beneficiary Certificate 42,816,290 31,220,900 
Commercial Paper - Annual Rate 2.00% in 
2002, Rate 3.00-5.77% in 2001   99,154 5,991,732 
 42,915,444 37,212,632 
  WT/L/581 
 Page 11 
 
 
 5.  Inventories 
 
 End of 2002 End of 2001 
Merchandise Inventory 647,400 361,414 
Finished Goods 3,028,190 727,496 
Work in process 9,923,808 9,739,974 
Containers 324,611 481,470 
Raw Materials 11,218,946 12,254,608 
Supplies 192,254 623,604 
 25,335,209 24,188,566 
Less: Allowance for reduction of inventory to 
market 12,196,204 10,466,630 
 13,139,005 13,721,936 
 
Inventories Insurance NT$9,173,801,000 – up to the end of 2002. 
6.  Long-Term Investments 
 
Long-Term Equity Investment  End of 2002 End of 2001 
Unlisted Shares 
 – Price based on Cost   
Taishin Financial Holding Co, LTD.– Preferred 
Stock  400,000 400,000 
Long Term Bond Investment   
Bank Debenture   
Taiwan Business Bank  200,000 - 
 600,000 400,000 
 
7.  Property, Plant and Equipment 
 
 End of 2002 End of 2001 
Cost 105,701,388 72,314,115 
Revaluation increments   
Land - 101,248,054 
Land improvements - 21,657 
Buildings - 843,034 
Machinery and equipment - 290,918 
Transportation equipment - 119 
Other equipment - 428 
 - 102,404,210 
Cost and Revaluation increments 105,701,388 174,718,325 
Less: Accumulated Depreciation   
Land improvements 579,436 633,334 
Building  5,953,569 6,790,436 
Machinery and equipment 27,500,109 26,928,579 
Transportation and Facilities 433,273 507,063 
Other Equipment 163,408 187,421 
Accumulated* depreciation total 34,629,795 35,046,833 
 71,071,593 139,671,492 
Unfinished Projects 359,470 331,986 
Prepayment for equipment 12,351 460,107 
Net of property, plant and equipment. 71,443,414 140,463,585 
 WT/L/581 
Page 12  
 
 The former Taiwan Tobacco and Wine Monopoly Bur eau processed revaluation of lands in terms of 
relating laws in 1956, 1966, 1 968, 1974, 1978, 1988, 1992, 1998, 2001 and 2002, and processed 
assets other than lands in 1961,1974, 1975 and 1 982. Besides adding to Property, Plants and 
equipment, revaluation increments also credited to  capital reserves.  The former Taiwan Tobacco and 
Wine Monopoly Bureau transferred total NT$75,540, 972 for the property, plant and equipment, assets 
to rent and idle assets to National Property Bureau of the Ministry of Finance.  Besides decreasing 
property, plant and equipment, assets to rent and id le assets, also debited additional paid-in capital. 
The corporation applied for government's approva l to reorganize as a corporation structure on 
1 July 2002.  The government on behalf of the Taiwan Tobacco and Wine  Monopoly Bureau through 
the Ministry of Finance invested in the corporati on based on the net assets value at that moment, and 
investment on the lands and buildings was NT$ 61, 891,438.  The lands and buildings were national 
property, while their management was registered  under Taiwan Tobacco and Wine Monopoly Bureau. 
The registration of the usage for most of lands we re changed from farming to "other uses of lands" 
before their ownership were transferred.  So far, the ownership registration of some parts of the lands 
and buildings has not yet been transferred comple tely.  Depreciation expenditure for the Property, 
plant and equipment and assts to rent was NT$ 1, 592,591 and NT$ 3,886,789 respectively from 1 July 
to 31 December 2002 and fiscal 2001. 
Insured amount for the Property, plant and equi pment and assts to rent was about NT$ 26,620,946 
until the end of the 2002. 
8.  Rental Assets 
Cost End of 2002 End of 2001 
Land 37,068 156,772 
Buildings  64,652 101,409 
 101,720 258,181 
Revaluation increments   
Land - 2,566,006 
Buildings - 7,716 
 - 2,573,722 
Cost and revaluation increments total 101,720 2,831,903 
Less: Accumulated depreciation - buildings  25,281 37,361 
 76,439 2,794,542 
 
9.  Idle Assets 
Cost End of 2002 End of 2001 
Land - 6,263,343 
Machinery equipment 4,784 181,804 
Other equipment 38 38 
 4,822 6,445,185 
Accumulated Depreciation   
Machinery equipment 4,784 181,804 
Other equipment 38 38 
 4,822 181,842 
 - 6,263,343 
 
10.  Employee's pension 
Employee's pension is paid as per different iden tity for employee's resignation, which respectively 
applies to the regulation of "the Rules of resignati on, consolation and lay-off for the employees in the  WT/L/581 
 Page 13 
 
 
 subsidiary province-run business of the Taiwan Pr ovince, the Labour Standards Law, the Rules of 
Resignation, Consolation and Lay-off for the Atte ndants of the Corporation for the calculation. 
According to different identity, employees include st aff and workers. Staff's pension was set aside the 
budget numbers and actuarial result approved by the C ontrol Yuan as their pension, and transferred to 
the management commission of employees' pension funds for the storage, operation and division by 
depositing in the bank institutions and buying short-te rm bills on behalf of the commission; worker's 
pension was set aside 2 per cent-6 per cent of worker 's pay as their pension, and transferred on behalf 
of supervisor commission of workers' pension re servation to the Central Trust of China for the 
payment, storage and operation. 
- Retirement Payment  
Disclosure of Company Retirement Payment Relevant information: 
Net periodic pension cost: 
 1 July to 31 December 2002 Fiscal year 2001 
Service cost 300,848 456,971 
Interest cost 369,958 726,665 
Expected rate of return on pension fund (3,632) (7,477) 
Amortization 227,339 323,476 
Compact project on pension cost  - 2,236,145 
Net periodic pension cost  894,513 3,735,780 
   Adjustments of Pension Fund and Accrued Pension Liabilities Listed: 
Payment obligation End of 2002 End of 2001 
Payment earning obligation 8,526,994 7,307,665 
Non-payment earning obligation 11,641,034 7,710,557 
Cumulative payment obligation 20,168,028 15,018,222 
Future salary increase factor 1,414,926 6,122,259 
Forecast payment obligation 21,582,954 21,140,481 
Retirement fund asset fair value (3,133,493) (242,101 ) 
Appropriation 18,449,461 20,898,380 
Un-appropriated balance Advance service cost (405,408 ) (608,112 ) 
Transition net payment obligation (1,570,032) (1,690,803) 
Un-appropriated balance of retirement fund  (2,416,261) (2,901,268) 
Supplement listing of retirement fund debt 2,976,775 - 
Listing of retirement fund debt 17,034,535 15,698,197 
Vested benefits 8,564,000 8,973,000 
 
The assumptions for calculating Net Retirement Fund Cost and Retirement Payment Obligation 
 End of 2002 End of 2001 
Cashing rate 3.0% 3.5% 
Future salary increase rate 2.0% 3.5% 
Expected investment return rate on Pension Fund   
Staffs Pension Fund 2.5% 3.0% 
Labour Pension Fund Reserve 2.5% 3.0% 
 WT/L/581 
Page 14  
 
 Retirement Fund Appropriation and Payment 
 1 July to 31 December 2002 Fiscal year 2001 
Appropriation this Term 3,214,731 345,736 
Payment this Term 495,389 2,135,730 
 
To meet privately-run, the corporation is request ed to additionally budget payment for year numbers 
on the jobs.  If the central government balanc es the final accounts in accordance with the 
government's instruction, the corporation can c onsider booking the balance on year numbers on the 
jobs and processing within the premium range of  final accounts in a consolidated statement. 
11.  Stockholder's Equity 
According to the Law of Corporation, capital reserves only can be used to make up the loss or transfer 
to the capital stock.  If the capital reserves from the stock premium are used to transfer to the capital 
stock, a certain percentage is to be set aside annually. 
According to the Laws of Corporations, if the annu al final accounts have earnings left, the corporation 
should pay income taxes in conformity with laws to  make up the loss in previous years, transferring 
10 per cent as legal earning reserve and allocating stoc k interests and bonuses.  Distribution of earning 
in the fiscal 2002 was already booked in the current  financial statement, but the distribution still 
would be resolved by the board of dir ectors to pass through on the next year. 
The Company is a nationalized enterprise and pays the national treasury stock interests and bonuses in 
accordance with "Notice for paying business earning to the nationalize enterprise.  "Net profit 
NT$ 5,938,003 from the year 2002, of which NT$ 5 93,800 was transferred as a legal earnings reserve 
and paid earning NT$ 5,427,711 to the national treasury, and the surplus NT$ 83,508 was accounted for prepaid dividend.  Net profit NT$ 61,237,246 from the year 2001, which was transferred 
NT$ 3,674,235 as legal earning reserve and paid ear ning NT$ 51,353,550 to the national treasury, and 
a deficiency of NT$6,209,461 was accounted for as a dividend payable (payable monopoly profit) 
account. 
According to Tai-90-Hsiaoshou-2-No.06115, an official  letter issued by the government, the former 
Taiwan Tobacco and Wine Monopoly Bureau was asked  to transfer a legal reserve to retained 
earnings-unappropriate NT$20,000,000 and paid unappropriated retained earnings to the national 
treasury in the fiscal year 2001.  Because the earning didn't include in the budget for the former 
Taiwan Tobacco and Wine Monopoly Bureau in  2001, it was booked as payable stock interest 
(Prepaid monopoly revenues). 
According to the Laws of Corporations, the legal ear nings reserve should be transferred to balance up 
to total capital stock.  The legal reserve can be used to make up the loss; when the reserves reach 
50 per cent of the capital stock, half of the r eserves can be transferred to the capital stock. 
12.  Income Tax 
Book listing of pre-tax income b ased on legal tax rate calculated income tax and current period 
income tax obligation, the tax charge is adjusted as follows: 
 1 July to 31 December 2002 
Income tax expense calculated on Pre-Tax Income based on Legal Tax 
Rate (25% ）  435,345 
Income Tax factor with Adjusted Items  
Permanent Differences (162,308 )  WT/L/581 
 Page 15 
 
 
  1 July to 31 December 2002 
Temporary Differences 731,705 
Investment Reduction (30,843) 
Current period income tax obligation 973,899 
 
At the End of 2002, the balance of company tax obligation less prepaid. Income tax is NT$9,293.  
Items of the Income Taxes are: 
 1 July to 31 December 2002 
Current income tax obligation 973,899 
Deferred income tax (731,705 ) 
 242,194 
 
Deferred income tax assets was as follows:  
Current End of 2002 
Un-realized reduction of inventories to market  432,393 
  
Non-current  
Deferred over limit pension  299,312 
 
In 2002, the Company Income Tax Deduction Related Information: 
 
Legal Base Deduction Items Total Deductible 
Amount Deducted Amount 
Statute for upgrading industries Equipment 19,612 19,612 
 Personnel training 11,231 11,231 
 
Company deferred income tax calculation is  based on tax rate about 25 per cent. 
Combined Taxation Information  
 End of 2002 
Balance of deductible tax account  14,706 
 
13.  Earnings per Share 
 
Unit: NT$ 1 dollar 
1 July to 31 December 2002  
Before-Tax After Tax 
Basic earning per share 0.35 0.30 
 
Disclosure of earnings per share, calculation denominator and factors were as follows: 
 
Amount  
(Numerator) Share Number 
(Denominator)Earning per Share  
(NT dollars) 1 July to 31 December 2002  
Before-Tax  
After Tax Thousands of 
shares  
Before -Tax After Tax 
Basic earning per share 1,741,420 1,499,226 5,000,000 0.35 0.30
 
14.  Transaction items for related parties 
The corporation is a state-run institution, and provides each government unit, institution and other 
state-run institutions with tobacco and wine business under normal transaction condition.  So, 
government and the subsidiary re lated institutions are the customers of the corporation.  The WT/L/581 
Page 16  
 
 corporation didn't summarize the above transacti on and disclose revenues from the government and 
the subsidiary related instituti ons, but the revenue and cost ar e already booked in the account. 
15.  Restricted Assets 
Current restricted assets End of 2002 End of 2001 
Cash in banks 1,133,023 2,283,206 
Time deposit mortgaged - 30,000 
 1,133,023 2,313,206 
Non-current restricted assets  (belonging to other assets-
other)   
Time deposit mortgaged 5,000 5,000 
Cash in banks 1,422 760 
 6,422 5,760 
 1,139,445 2,318,966 
 
The aforesaid saving is contracted with bank, and the delegated bank shall not charge any commission 
but deposit the capital into bank. Hypothecation is provided to be collateral when our company takes 
goods from custom or for any litigation. 
16.  Major commitments or events 
Up to the end of 2002, our company has committed:  - Products that are already contracted but have not begun to sell are about NT$ 250,345;  
- Materials that are already contracted but have not begun to sell are about NT$ 3,934,369; and  
- Civil works already contracted but have not paid are about NT$ 315,382.  
The sum of issued letters of credit is listed in details as below:  
Currency Amount 
Dollars (in 1,000 US$) 3,191 
Japanese Yen (1,000 Y) 1,657 
Pound Sterling (1,000 L)   132 
Euro-dollars (1,000 EU$)   98 
 
17.  Fair value of financial products 
From 1 July to 31 December 2002, TTL did not carry or issue any derivative financial products.  Its 
fair value in accordance with Regulation SFAS No. 27 is listed as below: 
End of 2002 End of 2001  
Non-Derivative Financial Products 
Assets Book Value Fair Value Book Value Fair Value 
Cash and cash equivalents 1,095,562 1,095,562 11,005,733 11,005,733 
Short-term investments 42,915,444 42,931,161 37,212,632 37,284,770 
Account receivable 508,465 508,465 627, 872 627,872 
Long-term investment 600,000 600,000 400,000 400,000 
     
Liabilities     
Accounts payable 603,510 603,510 1,314,962 1,314,962 
Guarantee deposit received 195, 627 195,627 17 9,144 17 9,144 
  
The method and hypothesis of estimating the rate of financial products by our company is as below:   WT/L/581 
 Page 17 
 
 
 The rate of short-term financial products is estimat ed by the value showed in  balance sheet, since the 
due date of this sort of product is very close, th e value in the balance sheet shall be reasonable and 
fairly estimated as the market price.  
If there is any market price available on the ma rket for short-term investment and long-term 
investment, and then the market pr ice shall be prior to be adopted.  If there is no any market price 
available, it shall be estimated in accordance with the value showed in balance sheet.  
Deposit shall be valued in accordance with  the value showed in balance sheet.  
18.  Supplementary disclosure  
Except note 17 and Appendix 1 and 2, there are no other major deals, investment, or investment in 
Mainland China and information shall be disclosed.  
19.  Departmental Financial Statements 
- Information of each industry  
Our company solely operates tobacco and alcohol bu siness and its relevant business.  Accordingly, 
our company is single operative industry, so this is not applicable in this case.  
- Information of each area  
Up to the end of 2002, our company did not have any overseas departments.  
- Information of export  
The income from exports did not reach 10 per cent of the total income in our company.  
- Information of major client  
None of our clients surpasses 10 per cent of the total income.  
20.  The disclosure of pro forma financial statement 
As it is illustrated in Note 2, the financial re port of our company only contained the duration from 
1 July to 31 December 2002.  For the purpose of reference, our company has produced a pro forma 
financial statement for the duration from 1 Janua ry to 31 December 2002 (Appendix 3), which is 
produced by the amount determined by our compan y and the relevant CPA Auditing Check Report.  
 WT/L/581 
Page 18 Taiwan Tobacco and Liquor Co rporation Sales Report for 2002  
 
Unit: box for cigarettes, hectolitre for alcohol products  
Audited Volume for 2002 Settlement Volume for 2003 Products Domestic Sales Export Total Domestic Sales Export Total 
Cigarettes 1,742,562 86,669 1,829,231 1,898,894 83,650 1,982,544 
Beer 3,504,729 4,355 3,509,084 3,608,227 2,877 3,611,104 
Fermented Cereal Beverages 135,564 9,329 144,893 132,608 8,594 141,202 
Rice Wine (Mijui, by amylo process) 46,127 553 46,680 38,755 4,160 42,915 
Cooking Wine 159,481 2,137 161,618 75,920 620 76,540 
Distilled Spirits 13,653 75 13,728 15,438 58 15,496 
Distilled Cereal Beverages 73,063 3,555 76,618 87,274 14,725 101,999 
Fermented Fruit Beverages 20,134 1,331 21,465 22,193 1,165 23,358 
Liqueurs and Cordials 38,636 494 39,130 43,267 431 43,698 
 
Notes: The settlement volume should be subject to further audition by certified accounting agencies or the Ministry of Audit.  
  WT/L/581
 Page 19Taiwan Tobacco and Liquor Co rporation Tax Report for 2002  
 
Items Operation Expenditures  Capital Expenditures  Charges Collected on Commission  Total  
Categories Tax Code Inspection 
No. Central 
Government Local  
Government Central 
Government Local  
Government Central 
Government Local  
Government Central 
Government Local  
Government 
Examined Final Accounts for 2002 
Income taxes     242,549,779.00           245,549,779.00   
 Business 
Income Tax     242,215,929.00           242,215,929.00   
Interest 
Income Tax                 333,850.00   
Land taxes      61,400,762.00           61,400,762.00 
Land Tax 
for General Uses 622     61,041,111.00           61,041,111.00 
Land Tax 
for Employee Dormitory 623     359,651.00           359,651.00 
Land Tax 
for Non-business Operation 
Uses 624                   
Deed taxes 63     9,882,732.00           9,882,732.00 
Deed Tax 631     9,882,732.00           9,882,732.00 
House 
taxes 64     14,390,699.00           14,390,699.00 
House Tax 
for General Uses 641     14,183,425.00           14,183,425.00 
House Tax 
for Employee Dormitory 642     207,274.00           207,274.00 
House Tax 
for Non-business 
Operation 
Uses 643                   
Consumpti
on taxes 65   27,759,509,677.60 2,786,839.00   543,429.00     27,759,509,677.60 3,330,268.00 
Customs 
Duties 651   352,563,013.00           352,563,013.00    
 WT/L/581 
Page 20 Items Operation Expenditures  Capital Expenditures  Charges Collected on Commission  Total  
Categories Tax Code Inspection 
No. Central 
Government Local  
Government Central 
Government Local  
Government Central 
Government Local  
Government Central 
Government Local  
Government 
Deduction: Tax Exemptions for Exports                     
Alcohol 
and Tobacco Tax 653   25,083,663,999.60           25,083,663,999.60   
Business 
Tax 657   2,323,282,665.00           2,323,282,665.00   
Stamp Tax 658     367,923.00   543,429.00       911,352.00 
Licence 
Tax 659     2,418,916.00           2,418,916.00 
Special 
taxes       4,436,220,015.00           4,436,220,015.00 
Health and 
Welfare Surcharge on Tobacco       4,436,220,015.00           4,436,220,015.00 
User 
charges 68   2,485,426.00 209,723,714.00         2,485,426.00 209,723,714.00 
Administrat
-ion User Charge 681     209,191,066.00           209,191,066.00 
Fuel 
Charge 683   2,485,426.00           2,485,426.00 0.00 
Harbour 
Services 
Fee 684     525,491.00           525,491.00 
Others 689     7,157.00           7,157.00 
Total     28,004,544,882.60 4,734,404,761.00 0.00 543,429.00     28,004,544,882.60 4,734,948,190.00 
Budget for 2002 
Income 
taxes     1,792,272,000.00           1,792,272,000.00   
 Business 
Income Tax     1,792,272,000.00           1,792,272,000.00   
Interest 
Income Tax                     
Land taxes      377,117,000.00           377,117,000.00 
Land Tax 
for General Uses 622     277,370,000.00           277,370,000.00  
  WT/L/581
 Page 21Items Operation Expenditures  Capital Expenditures  Charges Collected on Commission  Total  
Categories Tax Code Inspection 
No. Central 
Government Local  
Government Central 
Government Local  
Government Central 
Government Local  
Government Central 
Government Local  
Government 
Land Tax for Employee Dormitory 623     99,747,000.00           99,747,000.00 
Land Tax 
for Non-business Operation 
Uses 624                   
Deed taxes 63                   
Deed Tax 631                   
House 
taxes 64     155,279,000.00           155,279,000.00 
House Tax 
for General Uses 641     154,458,000.00           154,458,000.00 
House Tax 
for Employee 
Dormitory 642     821,000.00           821,000.00 
House Tax 
for Non-
business 
Operation Uses 643                   
Consumpti
on taxes 65   36,296,795,000.00 3,350,000.00     3,082,142,000.00   39,324,937,000.00 3,350,000.00 
Customs 
Duties 651   341,682,000.00           341,682,000.00   
Deduction: 
Tax Exemptions 
for Exports                     
Alcohol 
and Tobacco 
Tax 653   35,953,913,000.00           35,953,913,000.00   
Business 
Tax 657   1,200,000.00           3,029,342,000.00   
Stamp Tax 658     450,000.00     3,082,142,000.00     450,000.00 
Licence 
Tax 659     2,900,000.00           2,900,000.00 
Special 
taxes     0.00 4,852,875,000.00           4,852,875,000.00  
 WT/L/581 
Page 22 Items Operation Expenditures  Capital Expenditures  Charges Collected on Commission  Total  
Categories Tax Code Inspection 
No. Central 
Government Local  
Government Central 
Government Local  
Government Central 
Government Local  
Government Central 
Government Local  
Government 
Health and Welfare Surcharge on Tobacco       4,852,875,000.00           4,852,875,000.00 
User 
charges 68   3,331,000.00 124,244,000.00         3,331,000.00 124,244,000.00 
Administrat
ion User Charge 681     111,263,000.00           111,263,000.00 
Fuel 
Charge 683   3,331,000.00 0.00         3,331,000.00   
Harbour 
Services 
Fee 684     12,981,000.00           12,981,000.00 
Others 689                   
Total     38,092,398,000.00 5,512,865,000.00     3,028,142,000.00   41,120,540,000.00 5,512,865,000.00 
  
  WT/L/581
 Page 23 
Domestic production Import Total Year Volume % growth rate Volume % growth rate Volume % growth rate 
Volumes of Cigarettes  Containing Tobacco  
2001 22,777,383.37 49.25 NA 23,470,049.00 50.75 NA 46,247,432.37 100 NA 
2002 18,628,741.46 53.68 -18.21 16.073,466.52 46.32 -31.51 34,702,207.98 100 -24.96 
2003(January  to  October) 16,747,539.92 48.22 NA 17,983,446.18 51.78 NA 34,730,984.10 100 NA 
Volumes of Tobacco other than cigarettes containing tobacco 
2001 NA NA NA 72120 100 NA 72120 100 NA 
2002 NA NA NA 387,140.96 100 436.8 387,140.96 100 436.8 
2003(January  to  October) NA NA NA 446,290.12 100 NA 446,290.12 100 NA 
Volumes of alcoholic products 
2001 6,573,771.74 86.11 NA 1,060,435.35 13.89 NA 7,634,207.09 100 NA 
2002 4,369,907.00 72.06 -33.53 1,694,527.57 27.94 59.8 6,064,435.51 100 -20.56 
2003(January  to  October) 3,920,700.83 70.95 NA 1,605,588.34 29.05 NA 5,526,289.17 100 NA 
 
 
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