Havering Ltd is involved in the manufacture of high technology computer chips and is based in Stockton
Question:
Havering Ltd is involved in the manufacture of high technology computer chips and is based in StocktononTees.
It is considered to be one of the UKs premier hightech companies and have proved to be exceptionally profitable in the past. You have ascertained the following information about Havering Ltds activities.
It imports most of its raw materials from Japan. Its Japanese supplier insists on prompt payments, in Yen. All other costs are incurred locally and paid for in sterling.
The major customers of Havering Ltd are spread throughout the world, although of their revenue originates in Western Europe, where local companies insist on being billed in Euros and require day credit terms.
A major customer based in Iceland has fallen behind in payment of the amounts it owes to Havering Ltd
Havering Ltd have invested heavily in modern plant, most of which was financed by loans in sterling. Loans are primarily a mixture of floating rate instruments, although there is also a substantial fixed rate debenture.
At the end of the accounting year, Havering Ltd had some spare cash and had invested it in a portfolio of London Stock Exchange listed companies in entirely unrelated fields.
Required
With reference to the specific circumstances of Havering Ltd discuss the categories of risk that Havering Ltd are exposed to in connection with the disclosure requirements of IFRS Financial Instruments.
Managerial Economics Theory Applications and Cases
ISBN: 978-0393912777
8th edition
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield