213800L23DJLALFC4O95-2025-06-30-T01

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

STRATEGIC REPORT

The Directors present their strategic report for the year ended 30 June 2025.

Principal activities

Diageo Capital plc (the ”company”) is engaged in the provision of treasury risk and cash management

for Diageo plc and its subsidiary undertakings (the ”group”). Diageo Capital plc's principal activity is to

raise external funds, principally using the London and New York financial markets. The company

finances other companies of the group via intragroup loans and deposits. Foreign exchange translation

hedging, interest rate risk management and cash management are also performed by the company.

Business review

Development and performance of the business of the company during the financial year and position of

the company as at 30 June 2025.

The results of the company and the development of its business are influenced to a considerable extent

by group financing requirements. Further information on the risk management policies of the group is

included in the Annual Report 2025 of Diageo plc (see note 16 of the consolidated financial statements

of Diageo plc).

Net finance income was $119 million in the year ended 30 June 2025, which is a $92 million decrease

from net finance income of $211 million in the year ended 30 June 2024.

External borrowings decreased by $954 million to $8,584 million at 30 June 2025 from $9,538 million

at 30 June 2024, which was mainly driven by the company repaying bonds of $600 million and

commercial paper of $479 million during fiscal 25.

Financial and other key performance indicators

As the company forms part of the group’s treasury operations, the company’s performance is measured

at the group level.

The company receives management fee income from Diageo plc to reimburse the expenses incurred in

relation to treasury services provided to the group.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

STRATEGIC REPORT (continued)

Business review (continued)

Principal risks and uncertainties facing the company for the year ended 30 June 2025

The principal risks identified by the group are disclosed on pages 63 to 71 of Diageo plc's 2025 Annual

Report. The most relevant of the group risks to this entity are the ones we have selected and articulated

below, together with specific considerations relating to the company’s operations and environment. If

any of these risks occur, the company’s business, financial condition and operational results could be

impacted. As the company forms part of the group’s investment holding and financing structure, the

financial risk management measures used by management to analyse the development, performance

and position of the company’s business are mainly similar to those facing the group as a whole. The

directors consider that the following risks might impact the performance and the solvency or liquidity

of the company through its investments and /or intercompany financing structure.

Geopolitical and macroeconomic volatility

Geopolitical forces, driven by external events (such as war, public health threat or natural hazard),

coupled with macro-economic volatility, increase the likelihood of international and domestic tensions,

disputes and conflict that might impact the business. Macroeconomic conditions include inflationary

pressures, unemployment and global trade tensions. Financial volatility risk could arise from variability

in financial markets, interest rate fluctuations, currency instability and increased risks from tariffs and

counter-tariffs. Failure to react quickly enough to changing economic and/or political conditions, e.g.

inflationary pressures, currency instability, global trade tensions, heightened political protectionism,

changes to customs duties and tariffs, and/or eroded consumer confidence, may impact on the freedom

to operate in a market and could adversely impact financial performance.

The group monitors key business drivers and performance, to prepare for rapid changes in the external

environment and there is an enhanced group-level strategic analysis and scenario planning to strengthen

market strategies and risk management.

The group has continued to improve long-term forecasting and planning capabilities, to better assess

and respond to long-term opportunities and risks. The group has also continued to operate the strategic

planning and performance function with a stronger governance model for financial and non-financial

decision-making. This will enable closer monitoring of external volatility/risk and multi-country

investment strategy with central hedging and currency monitoring to manage volatility.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

STRATEGIC REPORT (continued)

Business review (continued)

Cyber and IT resilience

As technology evolves rapidly, maintaining robust cyber security measures is essential to safeguard the

business operations and stakeholders. There is an increased risk from AI-enabled cyber-attacks, which

could result in theft of assets, operational disruption, financial loss, regulatory penalties and

reputational damage.

A generative AI-chatbot is used for real-time learning, revised ransomware response protocols and

improved phishing simulation outcomes, while deploying Privileged Identity Management to enhance

cloud security and deliver regular mandatory, general, and targeted cybersecurity training and

education. Cyber resiliency efforts include assessing IT recovery processes, third-party assessment,

increasing vulnerability scanning frequency, patch compliance monitoring, alert management

enhancements. Initiatives are underway for application governance enhancements and multi-factor

authentication improvements to bolster cyber security measures across the business.

Climate change and sustainability

Considering that the company forms part of the group’s treasury operations, the probability of climate

change related risks having a significant and direct impact on the activities and operation of the

company is remote. The Directors believe that the risk mitigation actions taken in relation to climate

risk by the group are appropriate measures in managing direct or indirect risks posed by climate

change. Including the risk to the company of being able to access financing at competitive rates where

borrowings could become sustainability linked. Based on the climate risk assessment performed by the

group, the risk attached to the recoverability of intercompany balances is considered to be remote.

Further information on the group's risk assessment and risk management measures in relation to climate

change is disclosed on pages 46-62 and 65 of Diageo plc's 2025 Annual Report.

Over time the group will continue to refine and update it's Climate Change Risk Assessment to reflect

real time developments resulting from climate change.

Business transformation

There are a number of group strategic business transformation projects, namely the implementation of

Accelerate, SAP S/4 HANA, and Supply Chain Agility programme and our portfolio of digital

capability builds that could result in delays or changes to their expected benefits which may have an

adverse impact on the business processes or on the group’s operating and financial performance.

To mitigate the risk, the business transformation project has steering groups in place led by a senior

executive and regular progress updates are provided to the Executive Committee and Board.

The group has hired additional employees fully dedicated to the projects and external consultants and

partners who also bring in new skills, which includes a focus on process improvement, business

resilience and controls.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

STRATEGIC REPORT (continued)

Business review (continued)

Statement on Section 172(1) of the Companies Act 2006

Section 172(1) of the Companies Act 2006 requires the directors to promote the success of the company

for the benefit of the members as a whole, having regard to the interests of stakeholders in their

decision-making. In making decisions, the directors consider what is most likely to promote the success

of the company for its shareholders in the long term, as well as the interests of the group’s stakeholders.

The directors understand the importance of taking into account the views of stakeholders and the

impact of the company’s activities on local communities, the environment, including climate change,

and the group’s reputation.

The company is a member of the group of companies (the “group”) whose ultimate holding company is

Diageo plc (“Diageo”). In accordance with the requirements of UK company law, Diageo has included

in its 2025 Annual Report and Accounts on page 2 a statement as to how the directors of Diageo have

had regard to the matters set out in Section 172(1) of the Companies Act 2006.

In order to ensure consistency in how the group operates with regard to its wider stakeholders, the

group has adopted an internal Code of Business Conduct alongside a comprehensive framework of

global policies and standards that are designed to ensure, amongst other things, that all companies

throughout the group, including the company, have regard to its wider stakeholders in a consistent

manner.

The company has therefore had regard to the matters set out in Section 172(1) of the Act in a manner

that is consistent with the approach adopted by Diageo, while at the same time ensuring the directors of

the company are fulfilling their duties.

Main activities of the Board

The principal activities of the Board during the year include:

• approval of financial statements for the year ended 30 June 2024;

• approval of the appointment of its external auditor; and

• approval of the entry into facility agreements by the company.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

STRATEGIC REPORT (continued)

Business review (continued)

Business Relationship Statement

The business of the Company is that of a treasury and capital management company and as such it has a

more limited number of third-party business relationships than other companies within the Group.

However, in order to ensure consistency in how the Group operates, the Company has adopted an

internal Code of Business Conduct alongside a comprehensive framework of global policies and

standards that are designed to ensure, amongst other things, that all companies throughout the Group,

including the Company, have regard to its wider stakeholders, including those in a business relationship

with the Company, in a consistent manner. Decisions taken by Directors are informed by the interests

of its wider stakeholders, including those in a business relationship with the Company, as guided by,

amongst other things, the Code of Business Conduct and framework of policies and standards.

On behalf of the Board

J M C Edmunds

Director

11 Lochside Place

Edinburgh

Scotland

EH12 9HA

22 October 2025

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

DIRECTORS' REPORT

The directors are pleased to submit their directors' report together with the audited financial statements

for the year ended 30 June 2025.

The company is incorporated and domiciled as a public company limited by shares in Scotland, United

Kingdom. The registered address is 11 Lochside Place, Edinburgh, Scotland, EH12 9HA.

Going concern

The company’s business activities, together with the factors likely to affect its future development and

position, are set out in the business review section of the strategic report on pages 2-6. The company’s

business activities, together with the factors likely to affect its future development and position, are set

out in the business review section of the strategic report. The company is expected to continue to

generate profit for its own account and to remain in a positive net asset position for the foreseeable

future. The company participates in the group’s centralised treasury arrangements and the parent has

committed to provide financial support for at least 12 months from signing. The directors have no

reason to believe that a material uncertainty exists that may cast significant doubt about the ability of

the company to continue as a going concern. On the basis of their assessment, the company’s directors

have a reasonable expectation that the company will be able to continue in operational existence for a

period of at least 12 months from the date the financial statements are approved and signed, as Diageo

plc has agreed its policy to provide financial support for a period of at least 12 months from the date the

financial statements are approved and signed. Thus they continue to adopt the going concern basis of

accounting in preparing the annual financial statements.

In arriving at this conclusion, the directors have also considered the potential impact that the principal

risks outlined on the Directors’ report may have on the company and believe that any impact would be

minimal.

Financial performance

The result for the year ended 30 June 2025 is shown on page 17.

The profit for the year was $128 million (2024 - $201 million profit) and the other comprehensive

income for the year is $2 million (2024 - $8 million expense).

No dividend was paid during the year (2024 - $nil) and there was no dividend proposed to be

distributed to the shareholders in regard to the financial year (2024 - $nil).

Net financial assets were $675 million at 30 June 2025 (2024 - $544 million), more details on financial

instruments and risk management can be found under note 10.

Directors

The Directors of the company who were in office during the year and up to the date of signing the

financial statements were:

M Pais

J M C Edmunds

K E Major

I Thrustle

C-L Jordan

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

DIRECTORS' REPORT (continued)

Directors’ remuneration

None of the Directors received any remuneration during the year in respect of their services as directors

of the company (2024 - $nil). The Directors were paid by fellow group undertakings, and no cost was

recharged to the company.

Directors’ indemnity

The Articles of Association permit qualifying third-party indemnities for the directors as defined by

Section 234 of the Companies Act 2006. No such indemnity was in force during the last financial year,

nor is any currently in force.

Secretary

The secretary of the company who was in office during the year and up to the date of signing the

financial statements was:

J M C Edmunds

Internal control and risk management over financial reporting

The company operates under the financial reporting processes and controls of the group. Diageo plc’s

internal control and risk management systems including its financial reporting process, which include

those of the company, are discussed in the group's Annual Report 2025 on page 95 at www.diageo.com,

which does not form part of this report.

Independent auditors

Pursuant to Section 487 of the Companies Act 2006, the independent auditors, PricewaterhouseCoopers

LLP, have been reappointed and will continue in office as auditors of the company.

Disclosure of information to the independent auditors

The Directors who held office at the date of approval of this Directors’ report confirm that, so far as

they are each aware, there is no relevant audit information of which the company’s auditors are

unaware; and each director has taken all the steps that they ought to have taken as a director to make

themselves aware of any relevant audit information and to establish that the company’s auditors are

aware of that information.

On behalf of the Board

J M C Edmunds

Director

11 Lochside Place

Edinburgh

Scotland

EH12 9HA

22 October 2025

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE

FINANCIAL STATEMENTS

The directors are responsible for preparing the annual report and the financial statements in accordance

with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that

law the directors have prepared the financial statements in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced

Disclosure Framework”, and applicable law).

Under company law, directors must not approve the financial statements unless they are satisfied that

they give a true and fair view of the state of affairs of the company and of the profit or loss of the

company for that period. In preparing the financial statements, the directors are required to:

•select suitable accounting policies and then apply them consistently;

•state whether applicable United Kingdom Accounting Standards, comprising FRS 101 have

been followed, subject to any material departures disclosed and explained in the financial

statements;

•make judgements and accounting estimates that are reasonable and prudent; and

•prepare the financial statements on the going concern basis unless it is inappropriate to presume

that the company will continue in business.

The directors are responsible for safeguarding the assets of the company and hence for taking

reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are also responsible for keeping adequate accounting records that are sufficient to show

and explain the company’s transactions and disclose with reasonable accuracy at any time the financial

position of the company and enable them to ensure that the financial statements comply with the

Companies Act 2006.

Directors’ confirmations

In the case of each director in office at the date the Directors’ report is approved:

• so far as the director is aware, there is no relevant audit information of which the company’s

auditors are unaware; and

• they have taken all the steps that they ought to have taken as a director in order to make

themselves aware of any relevant audit information and to establish that the company’s auditors

are aware of that information.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

Independent auditors’ report to the

members of Diageo Capital plc

Report on the audit of the financial statements

Opinion

In our opinion, Diageo Capital plc’s financial statements:

• give a true and fair view of the state of the company’s affairs as at 30 June 2025 and of its

profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced

Disclosure Framework”, and applicable law); and

• have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual report and financial statements

(the “Annual Report”), which comprise: the balance sheet as at 30 June 2025; the income statement,

the statement of comprehensive income and the statement of changes in equity for the year then

ended; and the notes to the financial statements, comprising material accounting policy information

and other explanatory information.

Our opinion is consistent with our reporting to the board of directors.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and

applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’

responsibilities for the audit of the financial statements section of our report. We believe that the

audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the company in accordance with the ethical requirements that are

relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard,

as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in

accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s

Ethical Standard were not provided.

We have provided no non-audit services to the company in the period under audit.

Our audit approach

Overview

Audit scope

• As part of designing our audit, we determined our materiality and assessed the risks of

material misstatement in the financial statements. In particular, our work was focused on

hedge accounting and the valuation of derivatives, given the nature of the entity.

Key audit matters

• Hedge accounting and valuation of derivatives.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

Materiality

• Overall materiality: $101,000,000 (2024: $109,000,000) based on 1% of total assets.

• Performance materiality: $76,000,000 (2024: $82,000,000).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material

misstatement in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most

significance in the audit of the financial statements of the current period and include the most

significant assessed risks of material misstatement (whether or not due to fraud) identified by the

auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of

resources in the audit; and directing the efforts of the engagement team. These matters, and any

comments we make on the results of our procedures thereon, were addressed in the context of our

audit of the financial statements as a whole, and in forming our opinion thereon, and we do not

provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.


Key audit matter	How our audit addressed the key audit matter
Hedge accounting and valuation of derivatives Refer to Note 1 (Accounting policies) and Note 10 (Financial instruments and risk management) in the financial statements. The company has external borrowings of $8,584m (2024: $9,538m), derivative assets of $1m (2024: nil) and derivative liabilities of $177m (2024: $294m) at 30 June 2025. The company enters into derivative transactions to hedge the Diageo group’s interest rate risk on external borrowings. The company applies hedge accounting in its financial statements in accordance with IFRS 9. The nature of the company’s hedge relationships is typically straightforward and non-complex, and the methods applied to valuing derivatives are not considered to be judgemental and can be independently validated.	With the support of our treasury specialists, our audit procedures to assess hedge accounting and the valuation of derivatives included: • assessing the design and testing the operating effectiveness of key controls and systems relating to hedge accounting and the valuation of derivatives; • evaluating and testing the appropriateness of management’s hedge documentation in accordance with IFRS 9; • evaluating management hedge effectiveness assessment; obtaining • external data to independently recalculate the valuation of derivatives and the fair value adjustment to external borrowings in hedge relationships; and evaluating and • testing the disclosures made in the Annual Report

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an

opinion on the financial statements as a whole, taking into account the structure of the company, the

accounting processes and controls, and the industry in which it operates.

The entity is engaged in the provision of treasury risk and cash management for Diageo plc and its

subsidiary undertakings. Given the nature of the entity, our work was focused on external borrowings

held by the entity and the related hedge accounting and derivative transactions.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the extent of the potential

impact of climate risk on the company’s financial statements, and we remained alert when performing

our audit procedures for any indicators of the impact of climate risk. Our procedures did not identify

any material impact

as a result of climate risk on the company’s financial statements.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative

thresholds for materiality. These, together with qualitative considerations, helped us to determine the

scope of our audit and the nature, timing and extent of our audit procedures on the individual

financial statement line items and disclosures and in evaluating the effect of misstatements, both

individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a

whole as follows:


Overall company materiality	$101,000,000 (2024: $109,000,000).
How we determined it	based on 1% of total assets.
Rationale for benchmark applied	We have considered the principal activities of the company, being treasury risk and cash management for the Diageo group and have determined that total assets is an appropriate benchmark for the calculation of materiality.

We use performance materiality to reduce to an appropriately low level the probability that the

aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we

use performance materiality in determining the scope of our audit and the nature and extent of our

testing of account balances, classes of transactions and disclosures, for example in determining

sample sizes. Our performance materiality was 75% (2024: 75%) of overall materiality, amounting to

$76,000,000 (2024: $82,000,000) for the company financial statements.

In determining the performance materiality, we considered a number of factors - the history of

misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded

that an amount at the upper end of our normal range was appropriate.

We agreed with the board of directors that we would report to them misstatements identified during

our audit above $5,000,000 (2024: $5,000,0000) as well as misstatements below that amount that, in

our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going

concern basis of accounting included:

• obtaining the directors’ going concern assessment and evaluating the key assumptions used in

the cash flow forecasts, including corroborating key assumptions to underlying

documentation and ensuring this was consistent with our audit work performed;

• reviewing the letter of support received from the parent company, Diageo plc and assessing

the ability of the parent company to provide support; and

• reading and evaluating the adequacy of the disclosures made in the financial statements in

relation to going concern.

Based on the work we have performed, we have not identified any material uncertainties relating to

events or conditions that, individually or collectively, may cast significant doubt on the company’s

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

ability to continue as a going concern for a period of at least twelve months from when the financial

statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern

basis of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a

guarantee as to the company's ability to continue as a going concern.

Our responsibilities and the responsibilities of the directors with respect to going concern are

described in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial

statements and our auditors’ report thereon. The directors are responsible for the other information.

Our opinion on the financial statements does not cover the other information and, accordingly, we do

not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any

form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent with

the financial statements or our knowledge obtained in the audit, or otherwise appears to be

materially misstated. If we identify an apparent material inconsistency or material misstatement, we

are required to perform procedures to conclude whether there is a material misstatement of the

financial statements or a material misstatement of the other information. If, based on the work we

have performed, we conclude that there is a material misstatement of this other information, we are

required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic report and Directors' report, we also considered whether the disclosures

required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to

report certain opinions and matters as described below.

Strategic report and Directors' report

In our opinion, based on the work undertaken in the course of the audit, the information given in the

Strategic report and Directors' report for the year ended 30 June 2025 is consistent with the financial

statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the company and its environment obtained in the

course of the audit, we did not identify any material misstatements in the Strategic report and

Directors' report.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of directors' responsibilities in respect of the financial

statements, the directors are responsible for the preparation of the financial statements in

accordance with the applicable framework and for being satisfied that they give a true and fair view.

The directors are also responsible for such internal control as they determine is necessary to enable

the preparation of financial statements that are free from material misstatement, whether due to

fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability

to continue as a going concern, disclosing, as applicable, matters related to going concern and using

the going concern basis of accounting unless the directors either intend to liquidate the company or to

cease operations, or have no realistic alternative but to do so.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report

that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee

that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when

it exists. Misstatements can arise from fraud or error and are considered material if, individually or in

the aggregate, they could reasonably be expected to influence the economic decisions of users taken

on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in

respect of irregularities, including fraud. The extent to which our procedures are capable of detecting

irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we identified that the principal risks of

noncompliance with laws and regulations related to Companies Act 2006 and UK tax legislation, and

we considered the extent to which non-compliance might have a material effect on the financial

statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of

the financial statements (including the risk of override of controls), and determined that the principal

risks were related to posting inappropriate manual journal entries and potential management bias in

accounting estimates. Audit procedures performed by the engagement team included:

• evaluating and testing the design and implementation of controls designed to prevent and

detect irregularities and fraud;

• discussions with management, Internal Audit and the group’s legal counsel regarding

consideration of known and suspected instances of non-compliance with laws and regulation

or fraud;

• identifying and testing journal entries, in particular any journal entries posted with unusual

account combinations, post close journal entries and unusual user journal entries; and

• challenging management’s significant estimates in particular those related to hedge

accounting and the valuation of derivatives.

There are inherent limitations in the audit procedures described above. We are less likely to become

aware of instances of non-compliance with laws and regulations that are not closely related to events

and transactions reflected in the financial statements. Also, the risk of not detecting a material

misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud

may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or

through collusion.

Our audit testing might include testing complete populations of certain transactions and balances,

possibly using data auditing techniques. However, it typically involves selecting a limited number of

items for testing, rather than testing complete populations. We will often seek to target particular

items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to

enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the

FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’

report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a

body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose.

We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any

other person to whom this report is shown or into whose hands it may come save where expressly

agreed by our prior consent in writing.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the company, or returns adequate for our

audit have not been received from branches not visited by us; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• the financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the board of directors, we were appointed by the members on 15

October 2015 to audit the financial statements for the year ended 30 June 2016 and subsequent

financial periods. The period of total uninterrupted engagement is 10 years, covering the years ended

30 June 2016 to 30 June 2025.

Other matter

The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency

Rules to include these financial statements in an annual financial report prepared under the

structured digital format required by DTR 4.1.15R - 4.1.18R and filed on the National Storage

Mechanism of the Financial Conduct Authority. This auditors’ report provides no assurance over

whether the structured digital format annual financial report has been prepared in accordance with

those requirements.

Frances Cucinotta (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

22 October 2025

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

INCOME STATEMENT


		Year ended	Year ended
		30 June 2025	30 June 2024
	Note	$ million	$ million

Other operating income/(costs)	2	9	(10)
Finance income	4	739	828
Finance costs	4	(620)	(617)
Operating profit		128	201

Profit before taxation on ordinary activities		128	201

Tax on profit	5	—	—

Profit for financial year		128	201

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

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

STATEMENT OF COMPREHENSIVE INCOME


		Year ended	Year ended
		30 June 2025	30 June 2024
	Note	$ million	$ million

Other comprehensive income/(expense) Items that may be recycled subsequently to the income statement
Effective portion of changes in fair value of cash flow hedges
-gains taken to other comprehensive income	12	10	—
-recycled to income statement	12	(7)	(10)
Tax credit on effective portion of changes in fair value of cash flow hedge	12	(1)	2
Total other comprehensive income/(expense), net of tax		2	(8)

Profit for the year		128	201

Total comprehensive income for the year		130	193

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

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

BALANCE SHEET


		30 June 2025	30 June 2024
	Note	$ million	$ million
Non-current assets
Other receivables	7	10,158	11,083
Other financial assets	6	1	—
		10,159	11,083
Current assets
Trade and other receivables	7	6	3
Total assets		10,165	11,086

Current liabilities
Trade and other payables	11	(729)	(710)
Other financial liabilities	6	(8)	—
Borrowings	9	(1,250)	(1,079)
		(1,987)	(1,789)
Non-current liabilities
Borrowings	9	(7,334)	(8,459)
Other financial liabilities	6	(169)	(294)
Deferred tax liability	8	(37)	(36)
		(7,540)	(8,789)
Total liabilities		(9,527)	(10,578)

Net assets		638	508

Equity
Share premium		315	315
Cash flow hedging reserves	12	110	108
Other reserves		88	88
Retained earnings/(Accumulated losses)		125	(3)
Total equity		638	508

The accounting policies and accompanying notes on pages 20 to 44 are an integral part of these

financial statements.

These financial statements on pages 16 to 44 were approved by the Board of Directors on 22 October

2025 and were signed on its behalf by:

J M C Edmunds

Director

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

STATEMENT OF CHANGES IN EQUITY

ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY


					(Accumulated
				Subtotal	losses)/
	Share	Hedging	Other	Other	Retained
	premium	reserve	reserves	reserves	earnings	Total
	$ million	$ million	$ million	$ million	$ million	$ million

Balance at 30 June 2023	315	116	88	204	(204)	315
Other comprehensive expense for the year	—	(8)	—	(8)	—	(8)
Profit for the year	—	—	—	—	201	201

Balance at 30 June 2024	315	108	88	196	(3)	508
Other comprehensive income for the year	—	2	—	2	—	2
Profit for the year	—	—	—	—	128	128

Balance at 30 June 2025	315	110	88	198	125	638

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

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES

Basis of preparation

These financial statements are prepared in accordance with Financial Reporting Standard 101 Reduced

Disclosure Framework (FRS 101).

In preparing these financial statements, the company applies the recognition, measurement and

disclosure requirements of International Financial Reporting Standards as adopted by the UK (IFRS)

but makes amendments where necessary in order to comply with Companies Act 2006 and sets out

below where the FRS 101 Reduced Disclosure Framework disclosure exemptions have been taken. The

accounting policies have been applied consistently, other than where new policies have been adopted.

These financial statements are prepared on a going concern basis under the historical cost convention,

except that certain financial instruments are stated at their fair value.

The company is a wholly owned subsidiary of Diageo plc and is included in the consolidated financial

statements of Diageo plc which are publicly available.

The company has taken advantage of the following exemptions from the requirements of IFRS in the

preparation of these financial statements, in accordance with FRS 101:

• A cash flow statement and related notes as per IAS 1 and IAS 7; and

• Related party disclosures in respect of transactions with wholly owned subsidiaries within the

Diageo plc group as per IAS 24;

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

1. ACCOUNTING POLICIES (continued)

New accounting standards and interpretations

The following amendments to the accounting standards, issued by the IASB and endorsed by the UK,

were adopted by the group and therefore by the company from 1 July 2024 with no material impact on

the company’s results, financial position or disclosures:

• Amendments to IAS 1 – Classification of Liabilities and Non-current Liabilities with

Covenants

• Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback

The group has also adopted amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements and

presents the relevant transactions accordingly. The company omits the disclosures required by these

amendments, provided that they are included in the group’s consolidated financial statements.

The following standard and amendments issued by the IASB have been endorsed by the UK and have

not been adopted by the company, which are not expected to have material impact on the company's

results or financial position:

• Amendments to IAS 21 – Lack of exchangeability (effective from the year ending 30 June

2026)

• Amendments to IFRS 7 and IFRS 9 regarding the classification and measurement of financial

instruments (effective from the year ending 30 June 2027)

New standard related to IFRS 18 - Presentation and Disclosure in Financial Statements - The objective

of IFRS 18 is to set out requirements for the presentation and disclosure of information in general

purpose financial statements to help ensure they provide relevant information that faithfully represents

an entity’s assets, liabilities, equity, income and expenses.

New standard related to IFRS 19 - Subsidiaries without Public Accountability: Disclosures - The

standard specifies reduced disclosure requirements that an eligible entity is permitted to apply instead

of the disclosure requirements in other IFRS Accounting Standards.

The new requirements might have significant impact on disclosures of the company; therefore a

dedicated project will be started in coming years to align with the needs of both IFRS 18 and IFRS 19.

There are a number of other amendments and clarifications to IFRSs, effective in future years, which

are not expected to significantly impact the company’s results or financial position.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

1. ACCOUNTING POLICIES (continued)

Functional and presentation currency

These financial statements are presented in US dollar ($), which is the company’s functional currency.

All financial information presented in US dollar has been rounded to the nearest million unless

otherwise stated.

Finance costs

Finance costs are recognised in the income statement based on the effective interest method.

Going concern

The financial statements have been prepared on a going concern basis as the ultimate parent

undertaking has agreed its policy is to provide financial support for a period of at least 12 months from

the date the financial statements are approved and signed.

Foreign currencies

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into US dollar at the

financial year end exchange rates and these foreign exchange differences are recognised in the income

statement.

Financial assets and liabilities

Financial assets and liabilities are initially recorded at fair value including, where permitted by IFRS 9,

any directly attributable transaction costs. For those financial assets that are not subsequently held at

fair value, the company calculates allowance losses by reviewing lifetime expected credit losses using

historic and forward-looking data on credit risk. The company classifies its financial assets and

liabilities into the following categories: financial assets and liabilities at amortised cost, financial assets

and liabilities at fair value through profit and loss and financial assets at fair value through other

comprehensive income. Under IFRS 9, classification and measurement of financial assets depend on

the company’s business model for managing the asset and the cash flow characteristics of the assets.

The business model and cash flow characteristics assessment is carried out on an instrument by

instrument basis. Financial assets measured at amortised cost recognise finance income using effective

interest method.

Trade and other receivables are amounts owed by other group companies are initially measured at fair

value and are subsequently reported at amortised cost. Non-interest bearing trade receivables are stated

at their nominal value as they are due on demand. Allowance for expected credit losses are made based

on the risk of non-payment taking into account ageing, previous experience, economic conditions and

forward-looking data. Such allowances are measured as either 12-months expected credit losses or

lifetime expected credit losses depending on changes in the credit quality of the counterparty.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

1. ACCOUNTING POLICIES (continued)

Borrowings are initially measured at fair value net of transaction costs and are subsequently reported at

amortised cost. Certain bonds are designated as being part of a fair value hedge and/or a cash flow

hedge relationship. In case of FV hedge relationships, the amortised cost is adjusted for the fair value of

the risk being hedged, with changes in value recognised in the income statement. The fair value

adjustment is calculated using a discounted cash flow technique based on unadjusted market data.

Trade and other payables are amounts owed to other group companies are initially measured at fair

value and are subsequently reported at amortised cost.

Derivative financial instruments

Derivative financial instruments are carried at fair value using a discounted cash flow model based on

market data applied consistently for similar type of instruments. Gains and losses on derivatives that do

not qualify for cash flow hedge accounting treatment are taken to the income statement as they arise.

The company designates and documents certain derivatives as hedging instruments against changes in

fair value of recognised assets and liabilities (fair value hedges) and the cash flow risk from a change in

exchange or interest rates (cash flow hedges). The effectiveness of such hedges is assessed at inception

and at least on a quarterly basis, using prospective testing. Methods used for testing effectiveness

include critical terms, regression analysis and hypothetical derivative method. Fair value movements of

foreign exchange derivatives are included other operating income line and fair value movements of

interest instruments and interest payments of interest instruments are included within finance charges.

Fair value hedges are used to manage the currency and/or interest rate risks to which the fair value of

certain assets and liabilities are exposed. Changes in fair value of the derivatives are recognised in the

income statement, along with any changes in the relevant fair value of the underlying hedged asset or

liability.

If such a hedge relationship is de-designated or no longer meets hedge accounting criteria, fair value

movements on the derivative continue to be taken to the income statement while any fair value

adjustments made to the underlying hedged item to that date are amortised through the income

statement over its remaining life using the effective interest rate method.

Cash flow hedges are used to hedge the foreign currency risk of highly probable future foreign

currency cash flows, as well as the cash flow risk from changes in exchange or interest rates. The

effective portion of the gain or loss on the hedges is recognised in the other comprehensive income,

while any ineffective part is recognised in the income statement. Amounts recorded in the other

comprehensive income are recycled to the income statement in the same period in which the underlying

foreign currency or interest exposure affects the income statement. When a hedge relationship no

longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity is either

transferred to the income statement or amortised over its remaining life using the effective interest rate

method.

Derivative financial instruments are presented in the financial statements as ‘Intra-group derivative

assets/(liabilities)’ as these transactions are entered into by Diageo Finance plc, a fellow group

undertaking, and subsequently passed to the company.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

1. ACCOUNTING POLICIES (continued)

Taxation

Current tax is based on taxable profit for the year. Taxable profit is different from accounting profit due

to temporary differences between accounting and tax treatments, and due to items, that are never

taxable or tax deductible. Tax benefits are not recognised unless it is probable that the tax positions are

sustainable. Once considered to be probable, tax benefits are reviewed each year to assess whether a

provision should be taken against full recognition of the benefit on the basis of potential settlement

through negotiation and/or litigation. Tax provisions are included in current liabilities. Penalties and

interest on tax liabilities are included in profit before taxation.

Full provision for deferred tax is made for temporary differences between the carrying value of assets

and liabilities for financial reporting purposes and their value for tax purposes. The amount of deferred

tax reflects the expected recoverable amount and is based on the expected manner of realisation or

settlement of the carrying amount of assets and liabilities, using the basis of taxation enacted or

substantively enacted by the balance sheet date. Deferred tax assets are not recognised where it is more

likely than not that the asset will not be realised in the future.

Judgements in applying accounting policies and key sources of estimation uncertainty

The Directors make estimates and judgements concerning the future of the company. The resulting

accounting estimates will, by definition, seldom equate to actual results. The company's Directors are of

the opinion that there are no estimates and assumptions, nor significant judgements that have a

significant risk of casting material adjustment to the carrying value of the assets and liabilities for the

company within the next financial year due to the nature of the business other than those discussed

below.

The critical accounting policy, which the Directors consider is of greater complexity and particularly

subject to estimates, is set out in detail in the accounting policy for derivative financial instruments. A

critical accounting estimate, specific to the company, is the estimation of fair valuation of derivative

assets and liabilities (see detailed description under note 10. Financial instruments and risk management

(f) Fair value measurements).

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

2. OTHER OPERATING INCOME/(COSTS)


	Year ended	Year ended
	30 June 2025	30 June 2024
	$ million	$ million
Intercompany management income	9	8
Foreign exchange loss on operations	—	(18)
	9	(10)

The auditors’ remuneration of $15,977 (2024 - $15,572) was paid on behalf of the company by a fellow

group undertaking. There were no fees payable to the auditors in respect of non-audit services (2024 -

$nil).

3. EMPLOYEES

The company did not employ any staff during either the current or prior year.

None of the Directors received any remuneration during the financial year in respect of their services as

directors of the company (2024 - $nil) as the directors are paid by fellow group undertakings and no

cost was recharged to the company.

4. FINANCE INCOME AND COSTS


	Year ended	Year ended
	30 June 2025	30 June 2024
	$ million	$ million

Finance income from fellow group undertakings	612	773
Amortisation of fair value changes	8	13
Fair value gain on intra-group derivative financial instruments1	119	42
Total finance income	739	828

Finance charge to fellow group undertakings	(139)	(194)
Finance charge on all other borrowings	(356)	(373)
Fair value loss on intra-group derivative financial instruments1	(1)	—
Fair value adjustment on borrowings1	(116)	(43)
Discount and fee amortisation	(8)	(7)
Total finance costs	(620)	(617)

Net finance income	119	211

1 Changes in the fair value of derivatives designated in hedge relationships and the corresponding

changes in the fair value of the hedged items are presented on separate lines within finance income

and expense.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

5. TAXATION ON PROFIT


	Year ended	Year ended
	30 June 2025	30 June 2024
	$ million	$ million
(a) Analysis of taxation for the year
Current tax	—	—
Deferred tax	—	—
Taxation on profit on ordinary activities	—	—

	Year ended	Year ended
	30 June 2025	30 June 2024
	$ million	$ million
(b) Tax included in other comprehensive income
Current tax	—	—
Deferred tax - current year	(1)	2
Deferred tax - rate change	—	—
Total tax credit included in other comprehensive income/ (expense)	(1)	2

	Year ended	Year ended
	30 June 2025	30 June 2024
	$ million	$ million
(c) Factors affecting total tax for the year
Profit before tax	128	201
Taxation on profit at UK corporation tax rate of 25% (2024 - 25%)	(32)	(50)
Group relief received for nil consideration	32	50
Total tax charge for the year	—	—

The UK corporation tax rate is 25%, effective from 1 April 2023, which applies for the year ended 30

June 2025. Legislation increasing the corporation tax rate to 25%.

Deferred taxes at 30 June 2025 have been measured using this increased tax rate and reflected in these

financial statements.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

6. OTHER FINANCIAL ASSETS AND LIABILITIES


	Assets	Assets due	Liabilities	Liabilities
	due after	within one	due within	due after one
	one year	year	one year	year
	$ million	$ million	$ million	$ million
30 June 2025
Intra-group derivative assets/(liabilities)
Designated in fair value hedge	—	—	(8)	(168)
Not designated in a hedge relationship	1	—	—	(1)

Total derivative assets/(liabilities)	1	—	(8)	(169)

Diageo Finance plc, a fellow group undertaking, entered into external interest rate swaps on behalf of

Diageo Capital plc, the market value of which amounted to net $176 million liability at the balance

sheet date (2024 - $294 million liability). The external deals are mirrored through Diageo plc to Diageo

Capital plc, the ultimate beneficiary.


	Assets	Assets due	Liabilities	Liabilities
	due after	within one	due within	due after one
	one year	year	one year	year
	$ million	$ million	$ million	$ million
30 June 2024
Intra-group derivative liabilities
Designated in fair value hedge	—	—	—	(294)

Total derivative liabilities	—	—	—	(294)

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

7. TRADE AND OTHER RECEIVABLES


	30 June 2025		30 June 2024
	Due within one	Due after one	Due within one	Due after one
	year	year	year	year
	$ million	$ million	$ million	$ million
Amounts owed by fellow group
undertakings	5	10,158	2	11,083
Prepayments	1	—	1	—
	6	10,158	3	11,083

Amounts owed by fellow group undertakings include accrued and capitalised interest on the underlying

balances at 30 June 2025 and at 30 June 2024. These balances bear interest at fixed and variable rates

from 1.3750% to 6.0609% for the year ended 30 June 2025 (2024 - from 0.2659% to 7.01%).

Amounts owed by fellow group undertakings represent transactions with companies in the group with

which the company has a long-term financing relationship. These financing relationships are expected

to continue for the foreseeable future. Certain amounts owed by fellow group undertakings are

repayable on demand, but reclassified to non-current assets as they are not expected to be repaid in the

foreseeable future. Amounts owed by group undertakings are considered to have a fair value which is

not materially different to the book value. Expected credit loss is immaterial for amounts owed by

fellow group undertakings.

8.DEFERRED TAX LIABILITY


	Fair value and hedging reserves	Total
	$ million	$ million
At 30 June 2023	38	38
Recognised in other comprehensive expense	(2)	(2)
At 30 June 2024	36	36
Recognised in other comprehensive expense	1	1
At 30 June 2025	37	37

The deferred tax liability arose from temporary timing differences on fair value amortization of

crystallized cash flow hedge reserve. The amount of deferred tax liability on temporary differences is

$37 million (2024 - $36 million).

In December 2021, the OECD released a framework for Pillar Two Model Rules which introduced a

global minimum corporate tax rate of 15%, applicable to multinational enterprise groups with global

revenue over €750 million. The legislation implementing the rules in the United Kingdom applies to

Diageo from the financial year ended 30 June 2025. Diageo is continuously reviewing the amendments

to the legislation and also monitoring the status of implementation of the model rules outside of the

United Kingdom.

Diageo has applied the temporary exception under IAS 12 in relation to the accounting for deferred

taxes arising from the implementation of the Pillar Two Model Rules.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

8.DEFERRED TAX LIABILITY (continued)

The top-up tax liability arising from the Pillar Two Model Rules in the United Kingdom is recognised

in the standalone financial statements of Diageo Scotland Limited that is responsible for the filing of

the GloBE Information Return and the settlement of the top-up tax liability as designated filing entity.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

9. BORROWINGS


	30 June 2025	30 June 2024
	$ million	$ million
Commercial paper	—	479
US$ 750 million 1.375% bonds due 2025	750	—
US$ 500 million 5.2% bonds due 2025	500	—
US$ 600 million 2.125% bonds due 2024	—	600
	(1,250)	(1,079)
Borrowings due within one year	1,250	1,079

US$ 750 million 1.375% bonds due 2025	—	749
US$ 500 million 3.875% bonds due 2028	498	498
US$ 1,000 million 2.375% bonds due 2029	993	993
US$ 1,000 million 2% bonds due 2030	995	995
US$ 750 million 2.125% bonds due 2032	745	744
US$ 600 million 5.875% bonds due 2036	595	594
US$ 500 million 3.875% bonds due 2043	492	492
US$ 750 million 5.3% bonds due 2027	749	748
US$ 500 million 5.2% bonds due 2025	—	499
US$ 750 million 5.5% bonds due 2033	745	744
US$ 800 million 5.375% bonds due 2026	799	797
US$ 900 million 5.625% bonds due 2033	895	894
Fair value adjustment to borrowings	(172)	(288)
	(7,334)	(8,459)
Borrowings due after one year	7,334	8,459
	(8,584)	(9,538)
Total external borrowings	8,584	9,538

The interest rates of external borrowings shown in the table above are those contracted on the

underlying borrowings before taking into account any interest rate hedges. Bonds are stated net of

unamortised finance costs of $43 million (2024 - $51 million). Bonds are reported at amortised cost

with a fair value adjustment shown separately. These fair value adjustments are determined using

discounted cash flow method based on observable market input (Level 2). All bonds, medium-term

notes and commercial paper issued by the company are fully and unconditionally guaranteed by Diageo

plc.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The company’s funding, liquidity and exposure to foreign currency and interest rate risks are managed

at group level by the group’s treasury department.

The treasury department uses a range of financial instruments to manage these underlying risks.

Treasury operations are conducted within a framework of Board-approved policies and guidelines,

which are recommended and monitored by the finance committee, chaired by the Chief Financial

Officer. The policies and guidelines include benchmark exposure and/or hedge cover levels for key

areas of treasury risk, which are periodically reviewed by the Board following, for example, significant

business, strategic or accounting changes. The framework provides for limited defined levels of

flexibility in execution to allow for the optimal application of the Board-approved strategies.

Transactions arising from the application of this flexibility are carried at fair value, gains or losses are

taken to the income statement as they arise and are separately monitored on a daily basis using Value at

Risk analysis. In the years ended 30 June 2025 and 30 June 2024, net gains and losses on these

transactions were not material. The company does not use derivatives for speculative purposes. All

transactions in derivative financial instruments are initially undertaken to manage the risks arising from

underlying business activities.

The Finance Committee receives monthly reports on the key activities of the treasury department,

including any exposures different from the defined benchmarks.

(a) Currency risk

No material foreign currency exposure existed at 30 June 2025 and 30 June 2024.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(b) Interest rate risk

The company has an exposure to interest rate risk, arising principally on changes in US dollar interest

rates. To manage interest rate risk, the group manages its proportion of fixed to floating rate borrowings

within limits approved by the Diageo plc Board, primarily through issuing fixed and floating rate

borrowings, and by utilising interest rate swaps. These practices aim to minimise the company’s net

finance charges with acceptable year-on-year volatility. To facilitate operational efficiency and

effective hedge accounting, the current group policy is to maintain fixed rate borrowings within a band

of 70% to 90%. For these calculations, net borrowings exclude interest rate related fair value

adjustments. The majority of the company’s existing interest rate derivatives are designated as hedges

and are expected to be effective. Fair value of these derivatives is recognised in the income statement,

along with any changes in the relevant fair value of the underlying hedged asset or liability. The

potential risk of the increasing interest rates and resulting potential increase in cost of borrowing is

considered to be limited as the company forms part of the group’s financial operations and as such it

will be reimbursed for any potential increase in the charges of its financial instruments.

The company uses a sensitivity analysis that estimates the impacts on the income statement and other

comprehensive income of either an instantaneous increase or decrease of 0.5% in market interest rates

from the rates applicable at 30 June 2025 and 30 June 2024, for each class of financial instruments with

all other variables remaining constant. The sensitivity analysis excludes the impact of market risks on

the corporate tax payable. This analysis is for illustrative purposes only, as in practice interest and

foreign exchange rates rarely change in isolation.

The sensitivity analysis estimates the impact of changes in interest rates. All hedges are expected to be

highly effective for this analysis and it considers the impact of all financial instruments, including

financial derivatives, cash and cash equivalents, borrowings and other financial assets and liabilities.

The results of the sensitivity analysis should not be considered as projections of likely future events,

gains or losses as actual results in the future may differ materially due to developments in the global

financial markets which may cause fluctuations in interest and exchange rates to vary from the

hypothetical amounts disclosed in the table below.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)


	0.5%	0.5%
	decrease in	increase in
	interest rates	interest rates
	$ million	$ million
30 June 2025

Impact on income statement -
gain/(loss)	60	(60)

30 June 2024

Impact on income statement -
gain/(loss)	67	(67)

Impact on the statement of comprehensive income includes the impact on the income statement.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(d) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in

financial loss to the company. Credit risk arises on cash balances (including bank deposits and cash and

cash equivalents), derivative financial instruments, trade and other receivables, loans, financial

guarantees and committed transactions. The carrying amount of financial assets represents the

company’s exposure to credit risk at the balance sheet date as disclosed in section (h), excluding the

impact of any collateral held or other credit enhancements. A financial asset is in default when the

counterparty fails to pay its contractual obligations. Financial assets are written-off when there is no

reasonable expectation of recovery. The gross carrying amount of the financial asset has to be reduced

(written-off) in case there is no reasonable expectation of recovering the contractual cash flows on the

asset in its entirety or its portion only. Expected recovery of contractual cash flows is assessed

individually, on instrumental basis. Credit risk is managed separately for financial and business related

credit exposures.

Financial credit risk

The company aims to minimise its financial credit risk through the application of risk management

policies approved and monitored by the Board. Counterparties are limited to major banks and financial

institutions, primarily with a long-term credit rating within the A band or better, and the policy restricts

the exposure to any one counterparty by setting credit limits taking into account the credit quality of the

counterparty. The group’s policy is designed to ensure that individual counterparty limits are adhered to

and that there are no significant concentrations of credit risk. The Board also defines the types of

financial instruments which may be transacted. The credit risk arising through the use of financial

instruments for currency and interest rate risk management is estimated with reference to the fair value

of contracts with a positive value, rather than the notional amount of the instruments themselves. The

group annually reviews the credit limits applied and regularly monitors the counterparties’ credit

quality reflecting market credit conditions.

Business related credit risk

Since trade and other receivables principally include balances with fellow group undertakings, the risk

of non-performance is considered remote. Under IFRS 9, the significant increase in credit risk of

financing relationships with fellow group undertakings is determined based on the group’s internal

credit rating assessment. The assessment practice takes into account as inputs the historical default of

the financial instruments, currently available information about fellow group undertakings’ financial

performance and forward-looking information. The total balance of trade and other receivables is

qualified as performing in accordance with internal credit rating assessment. As a result of low risk

credit risk these financial assets have a very low risk of default (probability of default (PD)) and the 12-

months expected credit loss is considered to be immaterial.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(e) Liquidity risk

Liquidity risk is the risk that the company may encounter difficulties in meeting its obligations

associated with financial liabilities that are settled by delivering cash or other financial assets. The

company uses short term commercial paper to finance Diageo group's day-to-day operations. The

group’s policy with regard to the expected maturity profile of borrowings is to limit the amount of such

borrowings maturing within 12 months to 50% of gross borrowings less money market demand

deposits, and the level of commercial paper to 30% of gross borrowings less money market demand

deposits. In addition, the group’s policy is to maintain backstop facilities with relationship banks to

support commercial paper obligations. The following tables provide an analysis of the anticipated

contractual cash flows including interest payable for the company financial liabilities and derivative

instruments on an undiscounted basis. Where interest payments are on a floating rate basis, rates of

each cash flow until maturity of the instruments are calculated based on the forward yield curve

prevailing at 30 June 2025 and 30 June 2024. All other derivative contracts are presented on a net basis.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(e) Liquidity risk (continued)

Contractual cash flows


						Carrying
		Due	Due			amount
	Due	between	between	Due		at balance
	within 1	1 and 3	3 and 5	after 5		sheet
	year	years	years	years	Total	date^
	$ million	$ million	$ million	$ million	$ million	$ million
2025
Borrowings	(1,250)	(2,050)	(2,000)	(3,500)	(8,800)	(8,584)
Interest on borrowings	(326)	(532)	(401)	(814)	(2,073)	(79)
Trade and other financial
liabilities	(650)	—	—	—	(650)	(650)
Non-derivative financial
liabilities	(2,226)	(2,582)	(2,401)	(4,314)	(11,523)	(9,313)

Other derivative instruments (net)	(56)	(71)	(69)	—	(196)

Derivative instruments	(56)	(71)	(69)	—	(196)	(176)

2024
Borrowings	(1,079)	(2,050)	(1,250)	(5,500)	(9,879)	(9,538)
Interest on borrowings	(351)	(613)	(452)	(1,008)	(2,424)	(84)
Trade and other financial
liabilities	(626)	—	—	—	(626)	(626)
Non-derivative financial
liabilities	(2,056)	(2,663)	(1,702)	(6,508)	(12,929)	(10,248)

Other derivative instruments (net)	(108)	(106)	(85)	(35)	(334)

Derivative instruments	(108)	(106)	(85)	(35)	(334)	(294)

^ Difference between total contractual cash flow amount and carrying amount at balance sheet date is due to the

unamortised discount and fee balances and fair value adjustments of bonds in fair value hedge relationships.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(e) Liquidity risk (continued)

On 30 June 2025 the Diageo group had available undrawn committed bank facilities of $3,500 million

(2024 - $3,250 million).

The facilities can be used for general corporate purposes and, together with cash and cash equivalents,

support the group’s commercial paper programmes. There are no financial covenants on either of the

group’s or the company's material short- and long-term borrowings. Certain of these borrowings

contain cross default provisions and negative pledges. The committed bank facilities of the group are

subject to a single financial covenant, being minimum interest cover ratio of two times (defined as the

ratio of operating profit before exceptional items, aggregated with share of after tax results of associates

and joint ventures, to net interest). They are also subject to pari passu ranking and negative pledge

covenants. Any non-compliance with covenants underlying group’s financing arrangements could, if

not waived, constitute an event of default with respect to any such arrangements, and any non-

compliance with covenants may, in particular circumstances, lead to an acceleration of maturity on

certain borrowings and the inability to access committed facilities. Both the group and the company

were in full compliance with its financial, pari passu ranking and negative pledge covenants in respect

of its material short- and long-term borrowings throughout each of the years presented.

(f) Fair value measurements

Fair value measurements of financial instruments are presented through the use of a three-level fair

value hierarchy that prioritises the valuation techniques used in fair value calculations.

The group and the company maintains policies and procedures to value instruments using the most

relevant data available. If multiple inputs that fall into different levels of the hierarchy are used in the

valuation of an instrument, the instrument is categorised on the basis of the most subjective input.

Foreign currency forwards and swaps, cross currency swaps and interest rate swaps are valued using

discounted cash flow techniques. These techniques incorporate inputs at levels 1 and 2, such as foreign

exchange rates and interest rates. These market inputs are used in the discounted cash flow calculation

incorporating the instrument’s term, notional amount and discount rate, and taking credit risk into

account. As significant inputs to the valuation are observable in active markets, these instruments are

categorised as level 2 in the hierarchy. There were no significant changes in the measurement and

valuation techniques, or significant transfers between the levels of the financial assets and liabilities in

the year ended 30 June 2025.

The company’s financial assets and liabilities measured at fair value are categorised as follows:


	30 June 2025	30 June 2024
	$ million	$ million
Derivative assets	1	—
Derivative liabilities	(177)	(294)

Valuation techniques based on observable market input	(176)	(294)
(Level 2)

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(g) Results of hedge relationships

The company targets a one-to-one hedge ratio. Strengths of the economic relationship between the

hedged item and the hedging instrument is analysed on an ongoing basis. Ineffectiveness can arise from

subsequent change in the forecast transactions as a result of timing, cash flows or value except when the

critical terms of the hedging instrument and hedged item are closely aligned. The change in the credit

risk of the hedging instruments or the hedged items is not expected to be the primary factor in the

economic relationship.

The notional amounts, contractual maturities and rates of the hedging instruments designated in

hedging relationship as of 30 June 2025 and 30 June 2024 by the main risk categories are as follows:


	Notional		Range of
	amounts	Maturity	hedged
	$ million		rates
2025
Fair value hedges
Derivatives in fair value hedge	2,600	September 2025 - April 2030	SOFR 0.2659 - 1.6109%
(interest rate risk)1


	Notional		Range of
	amounts	Maturity	hedged
	$ million		rates
2024
Fair value hedges
Derivatives in fair value hedge	2,600	September 2025 - April 2030	SOFR 0.2659 - 1.6109%
(interest rate risk)1

1 In case of derivatives in fair value hedges, the range of the floating interest rates of the derivatives are

presented. SOFR rate reflects Secured Overnight Financing Rate.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(g) Results of hedge relationships (continued)


	At the
	beginning	Income	Other	At the end
	of the year	statement	movement s	of the year
	$ million	$ million	$ million	$ million
2025

Fair value hedges
Derivatives in fair value hedge (interest rate risk)	(294)	118	—	(176)
Fair value hedge hedged item	288	(116)	—	172
Instruments in fair value hedge relationship	(6)	2	—	(4)

2024

Cash flow hedges
Derivatives in cash flow hedge (foreign currency debt)	438	—	(438)	—

Fair value hedges
Derivatives in fair value hedge (interest rate risk)	(336)	42	—	(294)
Fair value hedge hedged item	331	(43)	—	288
Instruments in fair value hedge relationship	(5)	(1)	—	(6)

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(h) Reconciliation of financial instruments

The table below sets out the company’s accounting classification of each class of financial assets and

liabilities.


	Fair		Not
	value	Assets and	categorised
	through	liabilities at	as a
	income	amortised	financial			Non-
	statement	cost	instrument	Total	Current	current
	$ million	$ million	$ million	$ million	$ million	$ million
2025
Trade and other	—	10,163	1	10,164	6	10,158
receivables
Intra-group derivatives	1	—	—	1	—	1
Total financial assets	1	10,163	1	10,165	6	10,159

Borrowings	—	(8,584)	—	(8,584)	(1,250)	(7,334)
Trade and other	—	(729)	—	(729)	(729)	—
payables
Intra-group derivatives	(176)	—	—	(176)	(8)	(168)
in fair value hedge
Intra-group derivatives	(1)	—	—	(1)	—	(1)
Total financial
liabilities	(177)	(9,313)	—	(9,490)	(1,987)	(7,503)

Total net financial
(liabilities)/assets	(176)	850	1	675	(1,981)	2,656

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(h) Reconciliation of financial instruments (continued)


	Fair		Not
	value	Assets and	categorised
	through	liabilities at	as a
	income	amortised	financial			Non-
	statement	cost	instrument	Total	Current	current
	$ million	$ million	$ million	$ million	$ million	$ million
2024
Trade and other	—	11,085	1	11,086	3	11,083
receivables
Total financial assets	—	11,085	1	11,086	3	11,083

Borrowings	—	(9,538)	—	(9,538)	(1,079)	(8,459)
Trade and other	—	(710)	—	(710)	(710)	—
payables
Intra-group derivatives	(294)	—	—	(294)	—	(294)
in fair value hedge
Total financial
liabilities	(294)	(10,248)	—	(10,542)	(1,789)	(8,753)

Total net financial
(liabilities)/assets	(294)	837	1	544	(1,786)	2,330

At 30 June 2025 and 30 June 2024, the carrying values of cash and cash equivalents, other financial

assets and liabilities approximate to fair values. At 30 June 2025, the fair value of borrowings, based on

unadjusted quoted market data (Level 1 sources as categorised by IFRS 13), was $8,565 million (2024 -

$9,417 million).

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(i) Capital management

The group’s management is committed to enhancing shareholder value in the long term, both by

investing in the businesses and brands so as to deliver continued improvement in the return from those

investments and by managing the capital structure. The group manages its capital structure to achieve

capital efficiency, provide flexibility to invest through the economic cycle and give efficient access to

debt markets at attractive cost levels.

11. TRADE AND OTHER PAYABLES


	30 June 2025	30 June 2024
	$ million	$ million
Amounts owed to fellow group undertakings	650	626
Interest payable	79	84
	729	710

Amounts owed to fellow group undertakings include accrued and capitalised interest on the underlying

balances at 30 June 2025 and at 30 June 2024. These balances are repayable on demand and bear

interest at fixed and variable rates from 3.7052% to 5.3505% for the year ended 30 June 2025 (2024 -

from 0% to 5.4803%).

Amounts owed to fellow group undertakings represent transactions with companies in the group with

which the company has a long-term financing relationship. These financing relationships are expected

to continue for the foreseeable future. Amounts owed to group undertakings are considered to have a

fair value which is not materially different to the book value.

Diageo Capital plc

Registered number: SC040795

Year ended 30 June 2025

NOTES TO THE FINANCIAL STATEMENTS (continued)

12. CALLED UP SHARE CAPITAL AND RESERVES

(a) Share capital


	30 June 2025	30 June 2024
	$	$
Authorised allotted, called up and fully paid:
200,000 ordinary shares of £1 each (2024: 200,000)	252,000	252,000

(b) Hedging reserve


		Hedging reserve
		$ million

At 30 June 2023		116
Effective portion of changes in fair value of cash flow hedges
- recycled to income statement		(10)
Tax credit on effective portion of changes in fair value of cash flow hedge		2

At 30 June 2024		108
Effective portion of changes in fair value of cash flow hedges
- loss taken to other comprehensive income		10
- recycled to income statement		(7)
Tax charge on effective portion of changes in fair value of cash flow hedge		(1)
		2
At 30 June 2025		110

Other reserves represent capital contribution from the immediate parent company.

On 30 June 2010 Diageo plc invested further equity of $88 million into the company as capital

contribution. No new shares were issued, the ownership level did not change.

13. IMMEDIATE AND ULTIMATE PARENT UNDERTAKING

The immediate and ultimate parent undertaking of the company is Diageo plc which is the ultimate

controlling party of the group. The ultimate parent undertaking and the smallest and largest group to

consolidate these financial statements is Diageo plc. Diageo plc is incorporated and registered in

England, United Kingdom. The consolidated financial statements of Diageo plc can be obtained from

the registered office at Diageo, 16 Great Marlborough Street, London, W1F 7HS, United Kingdom.