Student: Ngô Thị Kiều Loan

ID : 11182975
Class : E-BBA 10.4

INDIVIDUAL ASSIGNMENT

A. Company and its audited financial report.

I. Company
- Company chosen is Vietnam Ocean Shipping Joint Stock (Công ty Cổ phần Vận tải Biển Việt Nam) which
is listed in the HOSE with stock symbol is VOS.
- Head office: 215 Lach Tray Str., Dang Giang, Ngo Quyen District, Hai Phong, Viet Nam.
- Company’s business: Shipping is its corebusiness. Aside from being shipowners, ship managers and ship
operators, company is engaged in the chartering, sale & purchase and related services throught subsidied
companies/branch office such as Agency, freight forwarding & logistic; ship repair service; supplying lubs-oil
and store; supply seafarers... as well as shipping cooperation & joint ventures.
II. Company’s audited financial reports
- Audited financial report 2018: https://www.vosco.vn/uploads/voscovn/news/2019_03/bctc-hop-nhat-kiem-
toan-2018_679.pdf
- Audited financial report 2019:
https://www.vosco.vn/uploads/voscovn/news/2020_04/bctc-hop-nhat_796.pdf

B. Foreign exchange risk identification of the company

Foreign-exchange risk is the risk that an asset or investment denominated in a foreign

currency will lose value as a result of unfavorable exchange rate fluctuations between the investment's foreign
currency and the investment holder's domestic currency.
For the case of VOS, company do business in both domestic and foreign countries. Therefore, foreign
exchange has great impact on company, especially when the firm exchange goods with foreign company.

I. Transaction exposure
1. Definition
Transaction exposure can be defined as the sensitivity of “realized” domestic currency values of the
firm’s contractual cash flow denominated in foreign currencies to unexpected exchange rate changes.
2. Transaction exposure of the company
- Because the company serves not only shipping services but also import and export goods such as:
multi - model transportation& logistic services, the supplying of highly qualified seafarers to foreign
shipowners,….so that company will deal with some risk when foreign exchange rate fluctuate.
Therefore, it might be a source of risk for company. The alteration in foreign currency exchange rate
against domestic currency changes the expected value of foreign currency revenues and expenditures in
 the future, making the company's business activities significantly affected.
+ For example, in terms of company’s liabilities denominated in foreign currency, when foreign
exchange rate USD/VND increases, VOSCO must spend more domestic currency (VND) to buy foreign
currency (USD) to paid payable account.
The table below show the assets/ liabilities denominated in foreign currency in 2018 and 2019

2019 2018

- Additionally, VOSCO still was having unexpired loans in foreign currency, so company is exposed risk
when value of the debts change due to exchange rate fluctuate, especially when home currency depreciates.

+ 2018:
+ 2019:

- Due to the fluctuation of USD/VND exchange rate, at the end of fiscal year ( 2018 and 2019), after
revaluation revaluation of items denominated in foreign currency , VOSCO had faced with the losses:

2018 2019

II. Translation exposure

Translation exposure is a type of foreign exchange risk faced by multinational corporations that have
subsidiaries operating in another country. However, for VOSCO, they just have one subsidary is VOSCO
Shipping Agency and Logistic Limited Company ( Công ty TNHH MTV Đại lý tàu biển và LOGISTICS
VOSCO) operating in Vietnam. Thus, VOSCO might not be deal with translation exposure.
C. Foreign exchange risk control
Foreign exchange risk management is crucial when doing international business. There are somw methods
to reduce risk:
- Foreign currency options: These enable company to purchase or sell foreign currency under an
agreement that allows for the right but not the obligation to undertake the transaction at an agreed future date.
By this way, company can reduce losses when foreign currency appriciate.
- Forward exchange contract: By entering into this contract, VOSCO can protect itself from subsequent
fluctuations in a foreign currency's exchange rate.
Understanding these risk, they had already listed it in their financial report. Moreover, they also offered
some solutions to manage foreign exchange risk.