9th Nov 2005 10:10
Diageo PLC09 November 2005 9 November 2005 2005 IFRS Information At its preliminary results in September 2005 Diageo issued supplementaryschedules giving information in respect of its transition to financial reportingin accordance with International Financial Reporting Standards (IFRS). Thisdata included unaudited restated financial information prepared in accordancewith IFRS in relation to the year ended 30 June 2005 (the 2005 IFRSInformation). The International Accounting Standards Board, at its meeting in October 2005,considered a technical correction to eliminate an inconsistency in one of thestandards. IFRS requires that deferred tax liabilities should be recognised inrespect of separable intangibles where there is a difference between theaccounting and tax values for these assets. Normally recognition of thisdeferred tax liability would result in a corresponding increase in goodwill.Diageo reflected this treatment in the 2005 IFRS Information issued on 1September 2005 in respect of deferred tax liabilities of £438 million relatingto intangibles acquired in business combinations prior to the IFRS transitiondate (1 July 2004). This was also the treatment considered as a technicalcorrection by the IASB. However, following the decision by the IASB not topropose a technical correction, the provisions of IFRS1 applicable to pretransition date business combinations require that deferred tax liabilitiesexisting at the transition date in respect of these assets should reduce equityby an equivalent amount and not increase goodwill. Under UK GAAP, net assets at 1 July 2004, 31 December 2004 and 30 June 2005 were£4,183 million, £4,284 million and £3,834 million respectively. Under IFRS, netassets at 1 July 2004, 31 December 2004 and 30 June 2005 were £5,229 million,£4,997 million and £4,626 million respectively after making the aboveadjustment. This compares to £5,667 million, £5,435 million and £5,074 million,respectively disclosed in the 2005 IFRS information issued on 1 September 2005.This adjustment has no impact on the IFRS income statement or cash flows.Updated IFRS financial information is attached. The IFRS financial informationand reconciliations with UK GAAP are available at www.diageo.com. As described in the 2005 IFRS Information published on 1 September, IFRS aresubject to ongoing review and endorsement by the EU and possible amendment byinterpretative guidance from the International Accounting Standards Board (IASB)and are therefore still subject to change. Diageo's IFRS information will beupdated as necessary for any such changes, should they occur. Diageo is required to present its first financial statements in accordance withIFRS in respect of the year ending 30 June 2006. The group will also presentits interim financial information for the six months ending 31 December 2005 inaccordance with IFRS. -ends- Contacts: Investor Relations: Catherine James +44 (0)207 927 5272 [email protected] Media Relations: Isabelle Thomas +44(0)207 927 5967 [email protected] Notes to Editor: Diageo is the world's leading premium drinks business. With its global vision,and local marketing focus, Diageo brings to consumers an outstanding collectionof beverage alcohol brands across the spirits, wine and beer categoriesincluding Smirnoff, Guinness, Johnnie Walker, Baileys, J&B, Cuervo, CaptainMorgan and Tanqueray, and Beaulieu Vineyard and Sterling Vineyards wines. Diageotrades in some 180 countries around the world and is listed on both the New YorkStock Exchange (DEO) and the London Stock Exchange (DGE). For more informationabout Diageo, its people, brands and performance, visit us at www.diageo.com SUPPLEMENTAL SCHEDULES RE IFRS ADOPTION Information relating to the restatement of the International Financial ReportingStandards (IFRS) Introduction Diageo formerly prepared its primary financial statements under UK generallyaccepted accounting principles (UK GAAP). The group is now required to prepareits consolidated financial statements in accordance with InternationalAccounting Standards (IAS) and International Financial Reporting Standards asadopted by the European Union (EU). Diageo's first IFRS results will be for thesix months ending 31 December 2005 and the year ending 30 June 2006. Thosefinancial statements will present comparative information for the year ended 30June 2005 prepared under IFRS. This involves preparation of an opening IFRSbalance sheet at 1 July 2004, which is the group's date of transition to IFRSreporting. Basis of preparation The unaudited restated financial information has been prepared in accordancewith IFRS standards applicable at 30 June 2005. These are subject to ongoingreview and endorsement by the EU or possible amendment by interpretativeguidance from the International Accounting Standards Board (IASB) and aretherefore still subject to change. The restated information will be updated asnecessary for any such changes, should they occur. Certain amounts in these tables have been restated from the amounts published on1 September 2005 as described on page 2. Unaudited consolidated balance sheet - restated under IFRS 30 June 2005 31 December 2004 1 July 2004 (restated*) (restated*) (restated*) £ million £ million £ million £ million £ million £ million Non-current assetsIntangible assets 4,392 4,050 4,104Property, plant and equipment 1,936 1,794 1,815Biological assets 14 6 13Investments in associates 1,261 1,308 1,188Other investments 719 1,048 2,184Post employment benefit assets 12 10 11Deferred tax assets 778 955 1,137Trade and other receivables 68 116 151 9,180 9,287 10,603 Current assetsInventories 2,347 2,245 2,192Trade and other receivables 1,607 2,114 1,402Cash and cash equivalents 787 1,082 742 4,741 5,441 4,336Total assets 13,921 14,728 14,939Current liabilitiesBorrowings and bank overdrafts (869) (2,109) (2,001)Trade and other payables (1,912) (2,107) (1,705)Corporate tax payable (746) (795) (803)Provisions (88) (173) (138) (3,615) (5,184) (4,647)Non-current liabilitiesBorrowings (3,677) (2,911) (3,316)Other payables (95) (60) (106)Deferred tax liabilities (298) (387) (329)Post employment benefit liabilities (1,306) (1,056) (1,128)Provisions (304) (133) (184) (5,680) (4,547) (5,063)Total liabilities (9,295) (9,731) (9,710)Net assets 4,626 4,997 5,229 EquityCalled up share capital 883 883 885Share premium 1,337 1,334 1,331Treasury and own shares (987) (674) (331)Other reserves 3,060 3,060 3,058Retained earnings/(deficit) 166 236 (181)Equity attributable to equity shareholders ofthe company 4,459 4,839 4,762Minority interests 167 158 467Total equity 4,626 4,997 5,229 *Intangible assets (goodwill), total assets, net assets, retained earnings,equity attributable to equity shareholders and total equity at 30 June 2005 haveeach been reduced by £448 million (31 December 2004 - £438 million; 30 June 2004- £438 million) compared with information published on 1 September 2005, toreflect the recognition of deferred tax liabilities on intangibles existing atthe transition date as an adjustment to retained earnings rather than as anincrease to goodwill, in accordance with IFRS 1. Unaudited consolidated statement of recognised income and expense - restatedunder IFRS Year ended Six months ended 30 June 2005 31 December 2004 (restated*) £ million £ millionNet income recognised directly in equityExchange adjustments - group 85 (19) - associates 21 54Actuarial losses on post employment plans (205) - Profit for the period - group 1,288 904 - associates 121 71 Total recognised income and expense for the period 1,310 1,010 Attributable to 1,250 982 - equity shareholders 60 28 - minority interests 1,310 1,010 *Exchange adjustments - group, total recognised income and expense for theperiod and amount attributable to - equity shareholders have been reduced by £10million, representing the exchange effect of the correction described on page 2. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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