Annual Report - SABMiller India

Notes to the consolidated financial statementscontinued22. Financial risk factors continuedAt 31 March 2008 the cash flow interest rate risk sensitivities on variable debt and interest rate swaps were:OtherEuropean ColombianUS dollars SA Rand Euro currencies peso Other TotalUS$m US$m US$m US$m US$m US$m US$mNet debt* 4,418 268 1,841 526 1,773 159 8,985Less fixed rate debt (3,583) (200) – (89) – (22) (3,894)Variable rate debt 835 68 1,841 437 1,773 137 5,091Adjust for:Financial derivatives 19 200 (184) 546 400 – 981Net variable rate debt exposure 854 268 1,657 983 2,173 137 6,072+/- 100 basis points changePotential impact on earnings 19 1 19 4 19 2 64+/- 100 basis points changePotential impact on equity 1 – – 1 – – 2At 31 March 2007 the cash flow interest rate risk sensitivities on variable debt and interest rate swaps were:OtherEuropean ColombianUS dollars SA Rand Euro currencies peso Other TotalUS$m US$m US$m US$m US$m US$m US$mNet debt* 4,377 364 239 151 1,317 302 6,750Less fixed rate debt (3,494) – – (64) – (15) (3,573)Variable rate debt 883 364 239 87 1,317 287 3,177Adjust for:Financial derivatives 107 200 (174) 559 400 – 1,092Net variable rate debt exposure 990 564 65 646 1,717 287 4,269+/- 100 basis points changePotential impact on earnings 22 4 3 2 12 2 45+/- 100 basis points changePotential impact on equity 2 – 2 – – – 4* Excluding net borrowing-related derivative instruments.Fair value sensitivity analysis for fixed income instrumentsChanges in the market interest rates of non-derivative financial instruments with fixed interest rates only affect income if these aremeasured at their fair value. As such, all financial instruments with fixed rates of interest that are accounted for at amortised cost arenot subject to interest rate risk as defined in IFRS 7.The group holds derivative contracts with a nominal value of US$1,100 million as at 31 March 2008 (2007: US$1,100 million) whichare designated as fair value hedges. In the case of these instruments and the underlying fixed rate bonds, changes in the fair values ofthe hedged item and the hedging instrument attributable to interest rate movements net-off almost completely in the income statementin the same period. As a result, these instruments are also not exposed to interest rate risk.Cash flow sensitivity analysis for variable rate instrumentsA change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and the incomestatement by the amounts shown above. This analysis assumes all other variables, in particular foreign currency rates, remain constant.The analysis is performed on the same basis for 2007.100 Notes to the consolidated financial statementsSABMiller plc Annual Report 2008