Ryanair 2008 Annual Report Download - page 71

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71
The Company finances its working capital requirements through a combination of cash generated
from operations and bank loans for the acquisition of aircraft. The Company had cash and liquid resources at
March 31, 2008 of 12,169.6m (2007: 12,198.0m). During the year, the Company funded its 1937.1m in
purchases of property, plant and equipment, a 1300m share buy-back programme and the acquisition of an
additional stake in Aer Lingus at a cost of 158.1m. Cash generated from operations has been the principal
source for these cash requirements, supplemented primarily by aircraft-related financing structures.
The Board of Directors periodically reviews the capital structure of the Group, considering the cost
of capital and the risks associated with each class of capital. The Board approves any material adjustments to
the capital structure in terms of the relative proportions of debt and equity.
Ryanair has generally been able to generate sufficient funds from operations to meet its non-aircraft
acquisition-related working capital requirements. Management believes that the working capital available to
the Company is sufficient for its present requirements and will be sufficient to meet its anticipated
requirements for capital expenditures and other cash requirements for the 2009 fiscal year.
(h) Guarantees
Details of the Group’s guarantees and the related accounting have been given in note 23.
(i) Sensitivity analysis
(i) Interest rate risk: Based on the levels of and composition of year end interest bearing assets and
liabilities, including derivatives, at March 31, 2008, a plus or minus one percentage point movement in
interest rates would result in a respective increase or decrease of 15.7m (net of tax) in the interest charge in
the income statement. All of the Group’s interest rate swaps are used to swap variable rate debt to fixed rate
debt, consequently any changes in interest rates would have an equal and opposite income statement effect
for both the interest rate swaps and the debt. A 1% movement in interest rates would have an effect of less
than 11 million on the amounts held in the cash flow hedge reserve in equity.
(ii) Foreign currency risk: A plus or minus change of 10% in relevant foreign currency exchange rates,
based on outstanding foreign currency denominated financial assets and financial liabilities at March 31,
2008 would have a respective positive or negative impact on the income statement of 15.7 million (net of
tax) and on equity of 1145.6m (net of tax).
(iii) Equity price risk: A decrease of 10% in the Aer Lingus share price as March 31, 2008 would result
in a decrease of 131m in the fair value of the available for sale financial assets. The decrease would be
recognised as an impairment in the income statement. An increase of 10% in the Aer Lingus share price at
March 31, 2008 would result in an increase of 131m in the fair value of the available for sale financial
assets. Such increase would be recognised directly in reserves.