Dear Members,

Your directors are pleased to present the 25^th Board?s Report of your Company and the audited financial statements for the year ended 31^st March 2024.

Rs in crore

During the current year revenue from operations decreased by 7.9% on standalone basis and by 6.5% on consolidated basis. Profit after tax has increased by 24.7% on standalone basis and by 25.0% on consolidated basis. The challenges which United Spirits Limited (‘USL? / ‘Company?) faced during the year and the environment in which the Company operates have been detailed in the Management Discussion and Analysis Report which is forming part of this Annual Report (‘Report?).

1. P erformance of the Company

D uring the year under review, your Company?s sales was 61.4 million cases resulting in a drop of 15.2% compared to previous year. This is largely on account of the slump sale of the business undertaking in the base year associated with 32 brands and franchising of 11 Popular brands to an unrelated party. The transaction was a conclusion of the strategic review of the select popular segment brands and was approved by the Board on 27^th May 2022. The slump sale was concluded by end of September 2022.

Net sales/income from operations (net of excise duties and taxes) of your Company increased by 3.1% in the financial year ended 31^st March 2024 which stood at Rs 10,692 crore (previous year Rs 10,374 crore). With continuous focus on premiumization, overall Prestige & Above segment represented 82% of total volumes (Vs 66% in the previous year) and 87% of total net sales (Vs 80% in the previous year) during the financial year ended 31^st March 2024. The Prestige and Above segment?s net sales were up by 11.9% with strong double-digit growth across the higher value sub-segments. The Popular segment represented 18% (Vs 34% in the previous year) of total volumes and 10% (Vs 18% in the previous year) of total net sales during the financial year ended 31^st March 2024. The Popular segment?s net sales declined by 39.4% during the financial year ended 31^st March 2024. The decline this year was largely on account of the slump sale and franchising transaction mentioned above.

2. Ma terial geschan and commitments / events subsequent to the date of the financial statements

T here have been no material changes and affecting the financial position of the Company that have occurred between the close of the financial year 2023-24, to which the Financial Statement relate and the date of this Report.

3. Cha nge in nature of business, if any

T he Company did not undergo any change in the its business during the financial year. The details of the nature of business are provided in the Management Discussion and Analysis Report and the Report on Risk Management forming part of this Report.

4. Dividend

T he Board declared and paid an interim dividend Rs 4 perof equity share (face value Rs 2/- each) during the financial year 2023-24. The Board of Directors have also recommended a final dividend of Rs 5 per equity share (face value Rs 2/- each) subject to the approval of members at the ensuing Annual General Meeting.

T he Company would pay/distribute dividend after deducting volume applicable withholding taxes. The record date for the final dividend is 12^th July 2024 and payment will be made on or after 6^th August 2024.

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015, (‘Listing Regulations?) the Board of Directors of the Company (the ‘Board?) formulated and adopted a new dividend Distribution Policy (the ‘Policy?), is made available on website of the Company at https://media.diageo.com/ diageo-corporate-media/media/kychm2c0/dividend-policy. pdf

5. T ransfer to reserve

D uring the year review, there was no amount transferredunder to the reserves of the Company.

6. C apital

T here is no change in the capital during the financial year

2023-24.

7. D etails of subsidiary companies and associate companies and their financial position

T he performance of subsidiaries, associate company and joint venture company and their contribution to the overall performance of the Company is covered as part of the consolidated financial statement. The salient features of the financial statement of the subsidiary and associate company(s) is appended in form AOC-1 to this Report as Annexure–1. Out of nine subsidiary companies, eight subsidiary companies were non-operative. i. Royal Challengers Sports Private Limited (RCSPL), a wholly owned subsidiary of your Company, reported of a revenue from operations of Rs 635 crore during the financial year which has grown by 160%, primarily on account of increase in central rights income from the Board of Control for Cricket in India (BCCI). During the financial year, RCSPL reported a profit of Rs 222 crore against the loss of Rs (12) crore in the previous financial year, primarily on account of profit from increase in central rights income. RCSPL had declared and paid an interim dividend aggregating to Rs 125 crore to USL in March 2024. ii. During the previous financial year, your Company acquired the interest in Nao Spirits & Beverages Private Limited ("Nao Spirits") by investing Rs 32 crore by subscribing to 8,094 Compulsory Convertible Preference Shares and 4,670 equity shares. During the current financial year, your Company infused additional amount of Rs 15 crore by subscribing to 6,078 compulsorily convertible preference shares. Your Company holds 30% (FY2023: 22.5%) ownership interest on a fully diluted basis as at 31^st March 2024. The Management has considered Nao Spirits to be an associate since the Company has significant influence over its operating and financing decisions. iii. The Board of directors at their meeting held on 4^th April 2024, approved the investment in the Inspired Hospitality Private Limited ("Pistola") by subscribing to 3,494 Compulsory Convertible Preference Shares ("CCPS") and 10 equity shares of Pistola equivalent to 15.0% of its issued and paid-up share capital on a fully diluted basis for an aggregate consideration of

Rs 5.65 crore. The aforesaid transaction was completed on 9^th May 2024. The Management has considered Pistola to be a joint venture company.

During the year, the Company has obtained a certificate from the Statutory Auditors certifying that the Company is in compliance with the FEMA Regulations with respect to the downstream investment made in Nao Spirits. The Company?s policy for determining material subsidiaries is available at the Company?s website at https://media.diageo.com/diageo-corporate-media/ media/fcap5yuo/policy-on-material-subsidiary.pdf In accordance with the third proviso to section 136(1) of the Companies Act, 2013 (‘the Act?), the annual report and financial statements of each of the subsidiary companies have also been placed on the website of the Company at https://www.diageoindia.com/en/ investors/subsidiaries-financial.

8. Pr ospects/Outlook

The d etails about prospects/outlook of your y are provided under the Management Discussion and Analysis Report, forming part of this Report.

9. Boar d meetings, Board of Directors, Key Personnel & Committees of Directors:

Mr. John Kennedy, Director of the Company, resigned as a Non-Executive Director of the Company effective from end of the day 30^th June 2023.

( Appointment of Ms. Emily Kathryn Gibson ii)

Ms. Emily Kathryn Gibson was appointed as Non-Executive Non-Independent Director of the Company with effect from 7^th September 2023.

Dr. Indu Bhushan was appointed as an Independent Director of the Company with effect from 1^st March 2024.

Mr. Mukesh Hari Butani was appointed as an Independent Director of the Company with effect from 1^st March 2024.

As per the provisions of the Act Mr. Pradeep Jain retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offered himself for re-appointment. Members may please note that Mr. Pradeep Jain, was appointed as an Executive Director and Chief Financial Officer on 1^st February 2023. He is not debarred from holding the directorship under any statutory regulations.

YourCompanyappointedtwonewIndependentDirectors namely Dr. Indu Bhushan and Mr. Mukesh Hari Butani during the financial year 2023-24. Criteria for selection/ appointment or re-appointment of Independent Directors include skills, expertise, qualifications, experience and domain knowledge of the Director. The required skills of Independent Directors are leadership, managerial experience, diversity, risk management and corporate governance. All our Independent Directors viz., Mr. Mahendra Kumar Sharma, Mr. V K Viswanathan, Mr. D Sivanandhan, Mr. Rajeev Gupta, Dr. Indu Shahani, Dr. Indu Bhushan and Mr. Mukesh Hari Butani possess such the aforesaid skills. In the opinion of the Board, the Independent Directors appointed during the year possess requisite integrity, expertise, experience and proficiency.

The Company at its Board meeting held on 24^th May 2024, has also approved appointment of Ms. Amrita Gangotra as an Independent Director of the Company with effect from 1^st September 2024. The aforesaid appointment is subject to approval of members at the ensuing Annual General Meeting.

All Independent Directors have given a declaration pursuant to sub-section (6) of section 149 of the Act. In the opinion of the Board, Independent Directors fulfill the conditions specified in Listing Regulations and are independent of the management.

The details of the Board Meetings and other Committee Meetings held during the financial year 2023-24 are stated in the Corporate Governance Report which is forming part of this annual report.

The Company has the following Committees of the Board:

Audit Committee

Risk Management Committee

Nomination and Remuneration Committee

Stakeholders Relationship and General Committee

Corporate Social Responsibility and Environmental, Social and Governance Committee

Committee of Directors

The composition of each of the above Committees, their respective roles and responsibilities are provided in the Corporate Governance Report which forms part of this annual report.

The Company has adopted all policies as required under the provisions of the Act, and Listing Regulations. The same are uploaded on the website of the Company at https://www.diageoindia.com/en/ investors/shareholder-centre/policies

All the recommendations of the Audit Committee and of the other committees were accepted by the Board.

As required under section 197 of the Act information relating to remuneration paid to Directors during the financial year 2023-24 is provided in the Corporate Governance Report.

As stated in the Corporate Governance Report, sitting fees is paid to Independent Directors for attending Board/Committee meetings. They are also entitled to reimbursement of actual travel expenses, boarding and lodging, conveyance and incidental expenses incurred in attending such meetings. In addition, the Independent Directors are also eligible for commission every year as may be recommended by the Nomination and Remuneration Committee and approved by the Board within the overall limit of Rs 4 Crore or 1% of the net profits of the Company calculated in accordance with section 198 of the Act, whichever is lower. The approval of the members was sought at the 23^rd Annual General Meeting held on 9^th August 2022. Criteria for payment of remuneration to Independent Directors are as given below: i. Membership of Committees ii. Chairpersonship of the Committees/Board iii. Board and Committee meeting attendance iv. Benchmarking with other companies

The Board of Directors have approved payment of commission of Rs 2,33,00,000 crore to seven Independent Directors after applying the criteria stated above for the financial year 2023-24. The Commission to Dr. Indu Bhushan and Mr. Mukesh Hari Butani was approved on pro-rata basis.

The criteria for payment of remuneration to executive directors is determined by the Nomination and Remuneration Committee based on various criteria. The Company?s policy on Directors? appointment and remuneration is available on the Company?s website at https://media.diageo.com/diageo-corporate-media/ media/chwfdoi0/nomination-remuneration-policy.pdf.

I. Board evaluation criteria and other Pursuant to the provisions of the Act and regulation 17 of the Listing Regulations, the Board has carried out an annual performance evaluation, based on parameters which, inter alia, include performance of the Board on deciding strategy, rating the composition & mix of board members, discharging of their duties, handling critical issues, contribution made at the Board meeting, attendance, instances of sharing information on best practices applied in other industries, domain knowledge, vision, strategy and engagement with senior management etc.

The Independent Directors at their separate meetings, review the performance of non-independent directors and the Board as a whole. Chairperson of the Company after taking into account the views of executive directors and non-executive directors, reviews the quality, quantity and timeliness of flow of information between the management and the Board, for the Board to effectively and reasonably perform their duties. Based on the outcome of the performance evaluation exercise, areas have been identified for the Board to engage itself with and the same would be acted upon.

The details of the evaluation process are set out in the Corporate Governance Report which forms part of this annual report.

Schedule IV of the Act, Listing Regulations and Secretarial Standard - 1 on Meetings of the Board of Directors mandates that the Independent Directors of the Company hold at least one meeting in a year, without the attendance of Non-Independent Directors. The Independent Directors met amongst themselves without the presence of any other persons on 17^th May 2023, 19^th July 2023, 7^th November 2023 and 19^th January 2024.

Y our Companyhas established whistle-blower mechanism known as SpeakUp, which is being independently operated by an independent agency. We encourage our employees or representatives acting on behalf of the Company, to raise the concerns through this mechanism, apart from other internal reporting channels viz. Line Manager, HR Business Partner, Legal Business Partner and Business Integrity partner.

The SpeakUp channel is available on the Company?s website at https://www.diageoindia.com/en/about-us/corporate-governance/speak-up with services available in English and 5 other regional languages, and compliance concer ns can be raised by any aggrieved person through web page or toll-free number.

The quality of investigation reports and remedial actions are reviewed and monitored by the Global Business Integrity team and Diageo India Business Integrity team. The decision on sanctions on the reported breaches are determined and monitored by a Compliance Committee for significant breaches and the Grievance Committee for other breaches, ensuring there is a collective, transparent and an unbiased decision- making process and that consistent action is undertaken in a timely manner to resolve the identified breach es.

A structured Breach Management Standard is in place which is in line with the Global Standard, for timely and conclusive resolution of compliance concerns raised through the whistle blower mechanism.

This vigil mechanism has been established to provide adequate safeguards against the victimization of employees, who avail this mechanism for reporting complaints and grievances in good faith and without fear of being punished for doing so. Access to the Chairperson of the Audit Committee is provided as required under the Act and the Listing Regulations.

T he Company?s policy on dealing with related party transactions was adopted by the Board on 15^th June 2015 and further amended from time to time. This policy is available on the Company?s website at https://media.diageo.com/diageo-corporate-media/media/1nbled1w/rpt-policy_april-2022.pdf. The disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Act in Form AOC-2 pursuant to section 134(3)(h) of Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in the Annexure-2 to this Report.

All related party transactions that were entered into during the financial year 2023-24, were at arm?s length basis and were in the ordinary course of business. There were no material significant related party transactions entered into by the Company with promoters, directors, key managerial personnel or other designated persons which may have a conflict of interest with the Company at large. Pursuant to Listing Regulations, the resolution for seeking approval of the members on material related party transaction is being placed at the 25^th AGM of the Company.

M/s. Price Waterhouse & Co. Chartered Accountants LLP (FRN 304026E/E-300009) Statutory Auditors of your Company, were re-appointed for a second term of five years as Auditors of your Company from the conclusion of the 22^nd AGM held on 26^th August 2021 till the conclusion of 27^th AGM of the Company required under section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014.

The statutory auditors have given unqualified opinion on the financial statements for the financial year ended 31^st March 2024.

Pursuant to section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit has been carried out by Mr. Sudhir V Hulyalkar, Practicing Company Secretary (FCS: 6040 and CP No. 6137) and his report is annexed as Annexure–3.

The secretarial Audit report does not contain any qualification, reservation or adverse remark or disclaimer.

In addition, Pursuant to Regulation 24A of the Listing

Regulations, the Secretarial Compliance Report for the financial year ended 31^st March 2024, in relation to compliance of all applicable SEBI Regulations/ circulars/guidelines issued thereunder, is annexed as Annexure–3A. The Secretarial Compliance Report has been voluntarily disclosed as part of this Report as good governance practice. The said report has been submitted to the stock exchanges and is also available on the Company?s website at https://www.diageoindia. com/en/investors/shareholder-centre/notice-board

( Cost audit iii)

The Company is maintaining requisite cost records for its applicable products. M/s. Rao, Murthy & Associates, Cost Accountants, were appointed as cost auditors for the applicable products of the Company for the financial year 2023-24. They are required to submit the report to the Central Government within 180 days of the end of the financial year.

D uring the year under review, neither the statutory auditors nor the secretarial auditor have reported to the Audit Committee or the Board, under section 143(12) of Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in this Report.

A C orporate ernance Report for the year under review isGov annexed separately which forms part of this annual report. Board confirms compliance with the Secretarial Standards.

T he Management Discussion and Analysis Report for yearthe under review is annexed separately which forms part of this annual report.

D uring the year the Company has not accepted any fixed deposits, including from public and no amount of principal or interest is outstanding and due to be transferred to Investor Education and Protection Fund (IEPF).

I n accordance with section 92(3) of the Act read with the

Companies (Management and Administration) Rules, 2014, a draft annual return in e-form MGT-7 for financial year 2023-24 uploaded on Company?s website https://media.diageo.com/ diageo-corporate-media/media/tnbnohj0/draft-annual-return-2023-24.pdf.

Members may also note that the annual return uploaded on the website is a draft and the final annual return will be uploaded after the same is filed with the Ministry of Corporate Affairs (‘MCA?).

N o unclaimed dividend and shares were required to be transferred to IEPF during the year ended 31^st March 2024 to IEPF pursuant to section 124 of the Act.

E mployee ions remained cordial at all the locations of therelat Company. Particulars of employees drawing an aggregate remuneration of Rs 1,02,00,000/- or above per annum or

Rs 8,50,000/- or above per month, as well as additional information on employee remuneration as required under the provisions of rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as part of this Report in Annexure–4 hereto.

Y our Company has not edoffer any stock options to its employees during the financial year 2023-24 within the meaning of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

L oans, guarantees and investments covered under tionsec 186 of the Act are detailed in Notes to the financial statements under Note 4 relating to investments and Note 5 relating to loans given as per the standalone financial statements for the year ended 31^st March 2024.

The Board of directors at their meeting held on 4^th April 2024, approved the investment in Pistola by subscribing to 3,494

Compulsory Convertible Preference Shares ("CCPS") and 10 equity shares of Pistola equivalent to 15.0% of its issued and paid-up share capital on a fully diluted basis for an aggregate consideration of Rs 5.65 crore. The aforesaid transaction was completed on 9^th May 2024.

The Company also further invested by subscribing to 6,078 Compulsory Convertible Preference Shares ("CCPS") for an aggregate consideration of Rs 15 crore in Nao Spirits

& Beverages Private Limited, an associate company. The Company?s shareholding in Nao Spirits & Beverages Private Limited has increased to 30% of the equity share capital on a fully diluted basis.

D etails on Risk Management is xed as Annexure–5 to thisanne Report.

D uring the year under review, Governance Risks and

(GRC) team has conducted detailed review of policies as per the direction of the management of the Company, to simplify the process and ensuring adherence. The GRC team also undertook comprehensive review of existing controls (SOX & non-SOX controls) and added attributes wherever required to ensure that controls are in alignment with the laid down policies and practices and meeting the global benchmark. It has been shared with the statutory auditors and obtained their confirmation. The Board after considering the materials placed before it reviewed the confirmation received from external parties and reviewed the effectiveness of the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of its business, including adherence to Company?s policy, safeguarding its assets, prevention and detection of frauds and errors and completeness of accounting records and timely preparation of financial statements. The Board has satisfied itself that the Company has laid down internal financial controls which are commensurate with the size of the Company and that such internal financial controls are broadly adequate and are operating effectively. The certification by the statutory auditors on internal financial control forms part of the audit report. A statement to this effect is also appearing in the Directors? Responsibility Statement.

I nformation on the composition of the Corporate

Responsibility and Environmental, Social and Governance Committee (CSR & ESG) is provided in the Corporate Governance Report that forms part of this annual report. Furthermore, as required by section 135 of the Act and the rules made thereunder, additional information on the policy and implementation of CSR activities by your Company during the year are provided in Annexure–6 to this Report.

T he culars prescribed under section 134(3)(m) of the Actparti read with Rule 8 of the Companies (Accounts) Rules, 2014, are set out in Annexure–7 to this Report.

T he Company has not edreceiv any significant or material order passed by regulators or courts or tribunals impacting the Company?s going concern status or the Company?s operations in future. The details of notices received from regulatory authorities and related matters have been disclosed as part of note no. 40 to the audited standalone financial statements for the year ended 31^st March 2024 and as note no. 41 of the consolidated financial statements for the year ended 31^st March 2024.

A s per requirements of the Sexual Harassment of Women at

Workplace (Prevention, Prohibition and Redressal) Act, 2013 (SHWWA), the Company has designed and implemented a comprehensive policy and framework to promote a safe and secure work environment, where every person at the workplace is treated with dignity and respect. Moreover, the Company?s policy is inclusive and gender neutral. Further, the complaint redressal mechanism detailed in the policy ensures complete anonymity and confidentiality to the parties.

Internal Committees (IC) have been constituted and each

Internal Committee has appointed members who are employees of the Company and an independent external member, having extensive experience in the field. The Internal Committees meet on a half yearly basis to discuss matters on policy awareness, best practices, judicial trends, etc. During the year, Internal Committees have also been trained on nuances of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Social

The Internal Committees? role is to consider and resolve the complaints reported on sexual harassment at workplace. Investigation is conducted and decisions are made by the Internal Committees at the respective location, and a senior woman employee is the presiding officer on every case. i) Number of complaints filed during the financial year: 2 (Two) complaints received i Number of complaints disposed off during the financiali) year: 3 (Three) [One complaint received in the previous financial year] iii) Number of complaints pending as on end of the financial year: None To build awareness in this area, the Company has been publishing newsletters, emailers, posters, conducting online training modules and monthly induction training for newly joined employees. Besides the refresher, virtual training programs are conducted in the organization on a continuous basis for employees (including blue collared employees), consultants, contractual employees and permanent/ contractual workers in regional languages. The Internal Committee has also conducted informal sessions to check the pulse at the grassroot levels.

B usiness Responsibility and Sustainability Report accordance with the Listing Regulations, the BRSR along with the reasonable assurance report on BRSR Core KPIs for FY 2023-24 is being finalised and the same will be made available on the website of the Company at https://media. diageo.com/diageo-corporate-media/media/u15nzkdc/ reasonable-assurance-report-on-brsr-core-kpis-and-business-responsibility-sustainability-report-2023-24.pdf

29. Ot her Disclosures a The. Company has not issued equity shares with differential rights as to dividend, voting or otherwise. b. The Company has not issued any sweat equity shares to its directors or employees. c. No application has been made under the Insolvency and

Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable. d. The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable. e. There are no deposits accepted by Company which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

P ursuant sectionto 134 (5) of the Act in relation to financial statements (together with the notes to such financial statements) for the financial year 2023-24, the Board of Directors report that: (i) in the preparation of the annual accounts for the financial year 2023-24, the applicable accounting standards have been followed and there is no material departures; (ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2024 and of the profit of the Company for year ended on that date; (iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) the Directors have prepared the financial statements on a going concern basis; (v) the Directors have laid down internal financial controls to be followed by the Company commensurate with the size and nature of its business and the complexity of its operations and that such internal financial controls are adequate and are operating effectively.

(vi) Proper systems have been devised to ensure compliance with the provisions of all applicable laws byimplementing an automated process having comprehensive systems and securing reports of statutory compliances periodically from the functional units and that such systems are adequate and are operating effectively. The Board of Directors place on record sincere gratitude and appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.