We have audited the consolidated financial statements of Diageo plc for the year ended 30 June 2008 which comprise the consolidated income
statement, the consolidated statement of recognised income and expense, the consolidated balance sheet, the consolidated cash flow statement and
the related notes. These consolidated financial statements have been prepared under the accounting policies set out therein.
We have reported separately on the parent company financial statements of Diageo plc for the year ended 30 June 2008 and on the information in
the directors’ remuneration report that is described as having been audited.
This report is made solely to the company’s members, as a body, in accordance with section 235 of the Companies Act 1985 and, in respect of the
separate opinion in relation to International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), on
terms that have been agreed by the company. Our audit work has been undertaken so that we might state to the company’s members those matters
we are required to state to them in an auditor’s report and, in respect of the separate opinion in relation to IFRS as issued by the IASB, those matters
that we have agreed to state to them in our report, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditor
The directors’ responsibilities for preparing the annual report and the consolidated financial statements in accordance with applicable law and IFRS as
adopted by the EU are set out in the statement of directors’ responsibilities. Our responsibility is to audit the consolidated financial statements in
accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the consolidated financial statements give a true and fair view and whether the consolidated financial
statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation. We also report to you
whether, in our opinion, the information given in the directors’ report is consistent with the consolidated financial statements. The information given in
the directors’ report includes that specific information presented elsewhere in the annual report that is cross referenced from the directors, business
review and other information sections of the directors’ report.
We also report to you if, in our opinion,we have not received all the information and explanations we require for our audit, or if information
specified by law regarding directors’ remuneration and other transactions is not disclosed.
We review whether the corporate governance statement reflects the company’s compliance with the nine provisions of the 2006 Combined Code
specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether
the board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the group’s corporate governance
procedures or its risk and control procedures.
We read the other information contained in the annual report and consider whether it is consistent with the audited consolidated financial
statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the
consolidated financial statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the consolidated financial statements. It also includes an
assessment of the significant estimates and judgements made by the directors in the preparation of the consolidated financial statements, and of
whether the accounting policies are appropriate to the group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance that the consolidated financial statements are free from material misstatement, whether caused
by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the
consolidated financial statements.
Opinion
In our opinion:
- the consolidated financial statements give a true and fair view, in accordance with IFRS as adopted by the EU, of the state of the group’s affairs as at
30 June 2008 and of its profit for the year then ended;
- the consolidated financial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation;
and
- the information given in the directors’ report is consistent with the consolidated financial statements.
Separate opinion in relation to IFRS
As explained in the accounting policies set out in the consolidated financial statements, the group, in addition to complying with its legal obligation
to comply with IFRS as adopted by the EU, has also complied with IFRS as issued by the IASB.
In our opinion, the consolidated financial statements give a true and fair view, in accordance with IFRS as issued by the IASB, of the state of the
group’s affairs as at 30 June 2008 and of its profit for the year then ended.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
London, England
27 August 2008