Diageo Capital plc ## Annual report and financial statements ## 30 June 2025 Registered number: SC040795 1 Diageo Capital plc Registered number: SC040795 Year ended 30 June 2025 CONTENTS        PAGE | | | | --- | --- | | | | | [STRATEGIC REPORT](#i8afba6a523be43e6abeabd90d074ff52_10) | [2](#i8afba6a523be43e6abeabd90d074ff52_10) | | [DIRECTORS' REPORT](#i8afba6a523be43e6abeabd90d074ff52_19) | [7](#i8afba6a523be43e6abeabd90d074ff52_19) | | [STATEMENT OF DIRECTORS' RESPONSIBILITIES](#i8afba6a523be43e6abeabd90d074ff52_46) IN RESPECT OF THE FINANCIAL STATEMENTS | [9](#i8afba6a523be43e6abeabd90d074ff52_46) | | [INDEPENDENT AUDITORS' REPORT TO THE DIRECTORS OF DIAGEO](#i8afba6a523be43e6abeabd90d074ff52_49) [CAPITAL PLC](#i8afba6a523be43e6abeabd90d074ff52_49) | [10](#i8afba6a523be43e6abeabd90d074ff52_49) | | [INCOME STATEMENT](#i8afba6a523be43e6abeabd90d074ff52_64) | 16 | | [STATEMENT OF COMPREHENSIVE INCOME](#i8afba6a523be43e6abeabd90d074ff52_67) | [17](#i8afba6a523be43e6abeabd90d074ff52_67) | | [BALANCE SHEET](#i8afba6a523be43e6abeabd90d074ff52_70) | [18](#i8afba6a523be43e6abeabd90d074ff52_70) | | [STATEMENT OF CHANGES IN EQUITY](#i8afba6a523be43e6abeabd90d074ff52_73) | [19](#i8afba6a523be43e6abeabd90d074ff52_73) | | [NOTES TO THE FINANCIAL STATEMENTS](#i8afba6a523be43e6abeabd90d074ff52_76) | [20](#i8afba6a523be43e6abeabd90d074ff52_76) | | | | 2 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. 3 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. 4 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. 5 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. 6 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 7 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 8 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 9 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. 10 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. 11 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. 12 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 13 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. 14 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. 15 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 16 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. 17 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. 18 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 19 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. 20 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; 21 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. 22 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. 23 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. 24 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). 25 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. 26 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. 27 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) | 28 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. 29 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. 30 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. 31 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. 32 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. (c) Market risk sensitivity analysis 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. 33 Diageo Capital plc Registered number: SC040795 Year ended 30 June 2025 NOTES TO THE FINANCIAL STATEMENTS (continued) 10.  FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued) (c) Market risk sensitivity analysis (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. 34 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. 35 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. 36 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. 37 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) | | | | | 38 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. 39 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) | 40 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 | 41 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). 42 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. 43 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 | (c) Other reserve 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. 44 Diageo Capital plc Registered number: SC040795 Year ended 30 June 2025 NOTES TO THE FINANCIAL STATEMENTS (continued) 14.  POST BALANCE SHEET EVENTS The company repaid $750 million 1.375% fixed rate bond on 29 September 2025, in line with the original maturity schedule.