Internship Report

Internship Report – August 2011 Foreign Trade University

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PREFACE

External economic, in general, and the importing and exporting activities,

for specific play an important role in developing and improving the national

economy and society. Vietnam is in the process of integrating into the world

economy; therefore, strengthen and encourage the external business is of the first

priority of our countries. Phu An Loc Company is a company of exporting hand

embroidery is the firm that I will have a chance to explore in this internship

program.

The department that I have applied for the internship program is the Export

and Import- one of the most important functions of the Company. After one-month

internship, I would like to present in this report the real situation of this a young

entrepreneur. The question raised is simply how effective the company is operate

and how to improve the overall performance in the near future.

This internship has finished; however, there are still many regrets as well as

things which is not as expectation. In short, due to the limit of time and personal

restrictions, this paper must have contained a lot of mistakes. Therefore, I

appreciate all the comments and contributions in order that I can do a better job in

the next papers.

I send my sincere thanks to my supervisor teacher, Mrs Trinh Thi Thu

Huong and the whole staff of Import and Export department - Phu An Loc

Company, especially my direct instructor – Mrs Pho Thi Bich Huong, have helped

me a lot during the internship program and the progress when I complete this

report.

Hanoi, 2nd August 2011


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MAIN PART

CHAPTER 1 - AN INTRODUCTION OF PHU AN LOC

LIMITED COMPANY

1.1 The establishment and development of the Phu An Loc Ltd. Co

1.1.1 Phu An Loc Ltd Company

Established in 2008 with factory located in Tuan Cao village - Ninh Thang,

Hoa Lu, Ninh Binh province - the ancient capital of Vietnam 1000 years ago,

which is 100 km to the South of Hanoi, Phu An Loc is one of the biggest factories

of Hand-Embroidery in Vietnam. This place is a village of traditional hand-

embroidery, which has the most skillful workers and craft man. With its own

specific characteristics of Hand-Embroidery, most of products are produced at

households.

In the context of the development of international business and realizing

that the skillful hand-embroidery is of great demand in the global market, the

company is confident in expanding the operation especially investing in the chain

of manufacturing. After many years of operation, this company has experienced a

lot of difficulties as well as some achievements. The following is some basic

information of the company:

Vietnamese name Cong ty TNHH MTV Phu An Loc

International name Phu An Loc Limited Company

Address Tuan Cao, Ninh Thang, Hoa Lu, Ninh Binh

Hanoi head office G11, Lang Quoc Te Thang Long, Dich Vong, Cau Giay, Ha

Noi

Telephone 0084 43 7912 407


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Fax 0084 43 7931347

Email [email protected]

Website http://anloc.ninhbinhcraft.com.vn/?mdl=home&IdStand=243

General Director Ms Vu Thi Tue

Deputy General

Director

Mr Le Tuan Anh

Company size 20 staffs in Hanoi office, 65 full-time worker in Ninh Binh

factory and over 1000 craft men in households

Phu An Loc Company is the private company, has the legal entity and

independent accounting system. Its forerunner was An Loc Ltd Company which is

established according to the decision 3823/TLDN of the Committee of Hanoi. Phu

An Loc was officially operated in February 2009. The business license number is

05060167831 issued by Hanoi Department of Planning and Investment. (Phu An

Loc’s profile)

The motto of company is “to establish and maintain good, long-term, stable

business with clients basing on the spirit of mutual understanding, benefit and

support”. In the process of development, the company always takes care of the

quality to assure that all the standard are met as well as the requirement of

international customers are satisfied. To assure the quality, Phu An Loc have many

skillful workers at our factory specializing in inspecting quality during the

processing time or in-line. To have proof of quality, the Company also co-operate

with international- independent QC companies such as ITS, Bureaus Veritas,

SGS(Phu An Loc profile). In 2010, Phu An Loc was planning to apply ISO 9001-

2000 quality system for the hand-embroidery products with aim of maintaining

satisfactory and stable quality for clients. Phu An Loc well understands the

importance of quality. The company’s commitment to quality is first priority.

Additionally, in order to widen the range of buyers’ choice, company has

already started to develop machine embroidery and this will soon contribute to our


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turnover. Attending Heimtextile fair in Frankfurt in this January will help Phu An

Loc see client’s feedback and look for new buyers. The head office of Phu An Loc

located in Hanoi, capital of Vietnam has take advantage of communicating with

clients from many countries in the world

1.1.2 Functionality, responsibility and the scope of operation

1.1.2.1 Functionality

The company specializes in high-class Hand-Embroidery products such as

bed linen (flat sheet, bedcover, duvet cover, quilt …), table linen,(tablecloth,

napkin, placemat, runner…). Besides, the company supply many other textile

embroidery products like apron, kitchen towel, bath towel, hand towel, laundry

bag, decorative products, gifts and others…Aiding and lowering cost for clients,

Phu An Loc work as direct importer, producer and exporter: At client’s request,

company import raw materials such as fabric, thread…from Thailand, China, Italy

for production and export finished products to them. During the past years, Phu

An Loc’s products have been on good sales in United Kingdom, Spain, Italy …

especially due to the fact that their quality are always highly appreciated.

1.1.2.2 Responsibility

Setting and organizing business plan in alignment with the current policies

in order to fulfill the goals and objectives that the Company has set. Ensuring that

the capital is guaranteed and supplied on the basic of self-raising capital in order to

finance for the whole activities of the company and reasonably use it, following

the regime of government and complete the responsibility of paying tax for the

State.

Strictly following the financial management system, asset management and

implementing all the policies related to the labor and working right, the company

also continues to improve the requirement for all staffs in order to meet the

demand and complete all the business responsibilities at a higher standard.


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1.1.2.3 Scope of operation

The company has constructed a good relationship with international partner

from the Asia to European and America. The company not only takes advantage of

domestic raw material but also import from Thailand, China and Italy for the

variety of input for production.

The company manufactures and sells a wide range of products including

the following kinds:

- Table cloth

- Runner

- Duvet cover, flat sheet, pillow case

- Napkin


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- Cushion caver

- Bag

- Lavender sachet

1.2 Company structure and the role of each departments

1.2.1 Company structure

The following is the model of the structure of Phu An Loc Ltd Co. As a

young entrepreneur, Phu An Loc has not too many employees; however, all the

department are well organized and they has a close relationship.


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Figure 1: Organisation structure of Phu An Loc Company

(Source: Phu An Loc profile)

1.2.2 Task and role of each function

- General Director

General Director now is Mrs Vu Thi Tue. She plays the critical role in guiding,

organizing and managing all aspects of the company’s business activities

including manufacturing, exporting, importing, investing. General Director has to

manage and make sure that available resources are utilized and the company will

be able to grasp opportunities, fulfill or even outstrip the targets. Then, the

company can improve its image and brand name, promote the corporate capacity,

outnumber in the market share.

- Deputy General Director

General Director

Deputy General Director

Export and Import Department

Designing Department

Accounting and Finance Department

Organisation Administration Office

Factory


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He has to be responsible for assisting the general director in managing the

operation of business activities of the whole company.

- Export and Import Department

+ Conduct production and consumption plans

+ Implement marketing promotion and sale strategy to different kinds

of products

+ Managing materials for input of production, ensuring the stable and

high quality material for manufacturing

+ Importing material when necessary

+ Exporting products, following all the steps in conformity with

+ Searching for new markets

- Designing Department

+ Design the products according to the requirement of customers

+ Do the research and give out new products with more fashion styles

- Accounting and Finance Department

+ Managing financial situation of the company to ensure that the core

business of the company are sufficiently and effectively financed.

+ Strictly follow the Law of Accounting and Finance issued by the

State

+ Record and reflect accurately, systematically the Company’s

financial situation and effectiveness of its operation, suggesting plans for

future plans.

+ Carry out internal and external payments

+ Inform the Company Directors and Board of Director clearly and

timely the loss and profit, capital resource to that they can have plan for

settlement.

- Organization Administration Office

+ Implementing the responsibility of managing organisation and

personnel.


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+ Complying with the Constitutions and State Laws

- Factory

+ Implement the producing plans of the company in accordance to the

design and assure producing progress

1.3 Overview of business performance

1.3.1 Overview

Company is the young entrepreneur and it started to operate only since

2009. Although complying with a lot of difficult at the beginning, the company

still continues to develop. Company invests in manufacturing line, bring the

market with more and more high quality products. Business result also gains

considerable achievement.

1.3.2 Business performance result for the periods from 2009-2010

In two years, 2009 and 2010, the business performance of the company has

achieved good results:

+ In 2009, the gross revenue is 15,803 million Vietnamdong

+ In 2010, the gross revenue is 33, 624 million Vietnamdong

Năm

Data

2009 2010

Revenue 15,803,509,814 33,624,896,764

Earning before Tax (372,339,846) 85,568,255

Earning after Tax (372,339,846) 64,176,191

It can be seen that the company has grown quickly for the one year time.

Interestingly, in 2009, the company has suffered from a loss of 372 million vnd.

It’s due to the project of building factory and equips it with modern machines to

increase the productivity and the quality of the products. However, thanks to the

Table 1: Business result in 2009 and 2010


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increase in all aspects of business activities, the company has gained a high growth

rate and it’s hoped that the company will achieve quickly development in the

future. Also, the company also invests in some other finance activities (See also

Appendix A)

Next, the following is the balance sheet which presents the real situation of

the firm in two years 2009 and 2010.

2010 2009

I. Current assets and short term

investment 23,843,906,753 13,662,341,980

1. Cash 4,162,309,230 1,688,184,884

2. Short term investment 0 0

3. Account receivable 8,258,420,832 5,967,872,995

4. Inventories 10,706,704,388 5,864,824,275

5. Other current assets 716,472,303 141,459,826

6. Investment (Securities, CK KD, CK

nợ, Ldoanh) 0 0

II. Non-current assets and Long term

investment 521,629,143 526,316,332

1. Tangible non-current asset 410,450,942 434,534,776

2. Intangible non-current asset 0 0

3. Long term investment 0 0

4. Other non-current assets 111,178,201 91,781,556

Total assets 24,365,535,896 14,188,658,312

III. Liabilities 21,702,648,709 11,589,947,316

1. Short-term liability 21,702,648,709 11,589,947,316

2. Account Payable 0 0

3. Long-term liabilities 0 0

4. Other debt 0 0


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IV. Shareholder’s equity 2,662,887,187 2,598,710,996

1. Total shareholder’s equity 2,662,887,187 2,598,710,996

2. Other fund 0 0

Total equity 24,365,535,896 14,188,658,312

According to the above balance sheet, it can be seen that the total asset of

the company has increased by VND 10,176 million in 2010, or increase by

71,73%. In there, current assets and short term investment in 2010 has gone up by

74.52% in comparison with 2009. Especially, cash and cash equivalent increased

146% rather than the number in 2009; whereas, short term investment experience

little change. Account receivable increase to VND 2,290 million or 38.38%.

Inventory also increases by 82.56%. Other current asset also increases by

406.56%. Liabilities of the company increase two times. In overall, assessing the

balance sheet, it can be seen that high liquidity assets, like cash, increase, reflect

the high liquidity of the firm. The account receivable increases with a low rate,

proving that the ability to recovery the debt of the company is good or maybe the

policy of credit sale of the company is strictly. However, looking at the balance

sheet and income statement, the financial situation of the company does not

contain a lot of problem. However, company also has to learn more to be able to

manage finance wisely, in order to take advantage of more huge finance resource,

utilize the capitals to invest in manufacturing and exporting.

1.3.3 Exporting fact and figure in Phu An Loc Company (2009-2010)

Although it has just been established for nearly 3 years; however, the

company has experienced a good sale of handicraft products in the global market.

The exporting revenue of Phu An Loc sustainably increases years on years. The

following table will illustrate the revenue from exporting activities in year 2009

and 2010.


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Quarter 2009 2010 Increased by

Revenue

(USD)

% Revenue

(USD)

% (%)

I 30,530.74 3,5 368,394.54 20,5 1106.6

II 210,833.33 24,1 340,240.8 18,9 61

III 212,194.74 24,3 445,318.24 24,7 109,9

IV 421,044.15 48,1 647,229.53 35,9 53,7

Total 874,602.96 100 1,801,183.11 100 105,9

Table 2: Export situation in 2009 and 2010

(Source: Report by Phu An Loc Ltd.Co)

If we categorized the number of exported products by products, it can be seen the

significant increase in each types of products by Phu An Loc. Specifically, having

the highest growth in revenue (132%), the bed linen seem to be favored in the

international market. Other products of table linen such as table cloth also had a

very high growth (123.7 %) (See also Appendix B)

Phu An Loc Company use mainly two modes of exporting, namely direct

export and commercial processing. Commercial processing including two types:

processing export and producing export. Firstly, direct export is the mode of

export in there sellers export the finished products to buyers. In this case, products

are made by Phu An Loc from the designing to processing. Secondly, Processing

export is kind of exporter receive the material from importer and finally producing

export is the mode of export in which the exporter only produces in accordance

with the design and standards from importers. Also, materials are imported from

other countries.

Because the core business of Phu An Loc is hand-embroidery exporting,

it’s necessary to have an overview of the business performance and exporting

situation. It’s helpful for me in analyzing the real situation and giving some

suggestions for the development of company in the future.


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CHAPTER 2 - INTERNSHIP DIARY

[Duration: 1/7/2011 – 30/7/2011]

[Instructor: Mrs Pho Thi Bich Huong]

[Position: Head of Export and Import Department]

Week 1

Before I started my internship I was nervous about what my department and

manager would be like. I was also very excited about finding out what the real

operation in an importing and exporting firm would be. The night before I had

called a friend, who also apply for the internship in Phu An Loc Company and we

spend time discussing what to wear in the next day or what we would bring for the

first day of intern period.

I decided to choose official clothes with white blouses and black trousers. I

also prepare a file of some necessary documents including my CV, my references

in case the director would like to see it.

In the first day, I and my friend spent a morning with a staff in human

resource department whose name is Phuong. She provided us with information

about the history of the company, the core business of the company, some policies,

code of conduct. Next, a receptionist, named Nhung, was asked to take us a tour of

all departments. The import and export department is the first room in the second

floor and it’s quite large. We entered the room. I noticed that the head of this

department is a young woman. Ms Nhung informed the woman of two new

interns, Thu, my name and Phuong, the name of my friend. This is the first time

the company receive intern students, especially from the Foreign Trade University,

they are both friendly and eager. The atmosphere is cozier when the head of

department talk to us. Her name is Pho Thi Bich Huong. She is 35 years old;

however, her appearance can not say any thing about her age. She asked me some

things about my study at university. We truthfully answer the entire questions with

the regarding that I wonder whether we study exactly as the real import and export


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operation. She smiles and say that she hoped that in this internship we can answer

those question.

The next two days we continued to go to the office and we sit in the import

and export department. In those today, we often sit in a blank desk in the corner of

the room. Mrs Bich Huong gave us some documents related to the products of

company, some performance results of the Phu An Loc for recent years. We

spend most of time looking at the documents. People in the department are still

busy doing their works.

At the end of the week, we asked Mrs Hương for a drink at the end of the

last working day. She accepted and we went for coffee and we had a chat about

her background in the past, her own family and her working experiences. She

shares with us some things related to her internship before when she was a student

in Ha Noi National Economic University. She said that at that time, during the

internship periods, she was almost neglected and she was often asked to do some

work like making tea or coffee. She said that at this time the import and export

department is quite busy. Each person has their own job to do; therefore, we need

to carefully take a look and we can learn some things.

In overall, for the first week, I come to the company in four working days

from Tuesday (5/7) to Friday (8/7). I spend all the day at the office and most of the

time, we used to read the document and get acquainted with people in the

department through some short conversations

Week 2

In the second week, we were asked to come in just two days (Thursday and

Friday )since the department is busy working for a contract to export their product

to EU and there would be nothing to do, even, we can disturb people, I guess so.

For the last two days coming to the office, we are allowed to bring our own

laptops, assessing the internet. We have visited the Website of Phu An Loc

Company and find that there is little information. The website was recently


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constructed; therefore, the information is still insufficient. After two week, I find

myself get familiar with all the department staffs and all of them are very friendly.

Week 3

It’s the third week of this internship periods and I found myself gain

nothing much the day before. We has investigated all the documents and most of

information are about the range of products and some thing about the partner, the

supplier and import and export market that the company is looking for. It’s time

for us to think about a specific topic so that we can focus on the core content and

by that way, we can also learn some thing. My friend, Phuong, is searching for

make the report related to the “mode of export” of the company. According to her

saying, she choose this topic in order to know more about the import and export

operation of the company in the reality. Moreover, it’s suitable for the Foreign

Trade University Student, majoring in international economics and business. For

me, choosing a topic for the final report becomes more difficult since I don’t want

to choose a topic which is similar to her. Also, my friend suggest that we should

not choose such topic like the import and export contracts, the process of import

and exporting because a lot of students also report about this issues. Studying the

business, I look back about all the subjects in the university program. Finally, I

made up my mind with the topic about the real situation of a exporting and

importing firms. In my opinion, assessing the financial situation of a firm is the

best way to know how well the company is operating and I can evaluate the

efficiency of the company in exporting and importing performance.

Later in the week after establishing where my direction to the internship

report is, I brainstormed the task ahead and start searching about what I need to

fulfill the report. From this time, I created a schedule for the following two weeks,

to ensure I utilize my time in the most effective manner. I set my goals is to find

appropriate source of information about the topic.


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In this week, I and my friends come in two days (Monday and Tuesday).

We asked Mrs Huong to give me some documents and we can read at home and

think about the topic that we need to focus in the final report.

Week 4

With the specific topic, I asked Mrs Bich Huong for more suggestions. She

talks some things about the financial issue of the company for recent years in

association with the exporting operation of Phu An Loc. She promised that she

will help me to have the data of the company. The rest of the week consisted of

collating all the data surrounding the company’s operation and financial

statements.

The Head of accounting department seems to be quite strictly and it’s

hardly to ask for the financial statement of the company at the beginning.

However, at the end of the week, we have provided the financial statement of the

company for the latest three years. I feel as a relief that finally, there is little

obstacles in order to complete this internship program.

At the end of the week, we come to say goodbye to everyone. The director

of Phu An Loc asked both of us for the feelings when having internship programs

here. Although the limited time was spent on this period and we are actually not

allowed to do any thing, we still say that this internship is very useful and send the

wish for prosperous development of Phu An Loc Company in the future. We

brought some kinds of fruits to thank for the warmly welcome and the help of all

people in the Export and import department, especially Mrs Huong. I thanked her

for the help with the financial statements and ask for another coffee drink

whenever she has free time.


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CHAPTER 3

PROBLEMS AND SOME SUGGESTIONS

3.1 Some existing problems

3.1.1 Some drawbacks from the mode of exports

As mentioned in the previous chapter, Phu An Loc currently uses three

mode of export including: direct export, processing export and producing export.

Among them, producing export is the most used mode of export (91% in 2009 and

94.66% in 2010) and direct export is the less used one (2.57% in 2009) (Phu An

Loc’s custom declaration, 2009-2010, See also Appendix C). Also, the company

achieves many successes; however, a larger proportion of producing export used

can results in some shortcomings. Producing export is the model in which the

exporter will receive the request from the importer and then produce in alignment

with those requirements from the material and designs.

Therefore, Company can not take advantages of cheap domestic material

and the ability of design department can not be utilized. So, it’s not the best way

for the sustainable development of any enterprises because they can not build their

competitive strength in the context of this intensively competitive world.

3.1.2 Problems with human resource

Human resource is of great importance to any organization. Phu An Loc is

lack of creative designers, and skilled workers. The number of people to be called

“craftsman” in factory is in need. The weak human capital can results in the

deterioration in the quality of products. Phu An Loc design lacks of creativeness

and fashion in order that it can attract foreign customer and promote the direct

exporting.


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3.1.3 Problems with government’s policies and macroeconomic

issues

Phu An Loc’s performance is not only affected by internal factors but also

external factors especially the unstable macroeconomic situation recently. The

fluctuation of foreign exchange rate, the high interest rate, high inflation cause

many difficult for the firm in searching and approaching both domestic and

foreign market. As an exporting and importing firms, Phu An Loc will has to

suffer from such issues as the exchange rate risk. Small and young enterprise as

Phu An will find it hard to assess the loans with the high interest rate. Therefore,

the firm will can not invest more in the R&D activities as well as increase the

production scale.

3.2 Recommendation

The following are some recommendations to these mentioned problems.

3.2.1 Strengthen internal resources

Internal resources include finance health, human asset and management

skills. Those factors should be improved since business environment nowadays is

more and more vulnerable and competition between enterprises becomes

intensified.

+ Finance should be wisely managed and staffs in the accounting and

finance department must be willing to learn and increase their capabilities to serve

the best for the general director in making efficient decision to ensure that

Company also have a healthy finance.

+ Human resource has to be improved by selecting good qualified

candidates. Knowledge and skills such as export and import expertise, computer

literacy, excellent foreign language usage has to be highly appreciated in

accordance with encouraging the creativeness of staffs and urge them to contribute


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positive ideas for the development of enterprise. Old employees should

continuously improve their ability; otherwise, they will be out of the firm.

+ Management skills are about to be mastered by those who are at the

top management level. Mrs Tue and Mr Tuan Anh should continuously learn

effective management expertise in order to lead the company to success.

3.2.2 Setting a vision and a specific development plans

After identifying the problems of enterprise, top managers should have a

vision for the future development. Then, a specific plan should be conducted with

changes and innovation. For example, the firm has to have the plan to

continuously improve the product quality in many aspects. Such issues as

investing in technology and human resource and applying international standards

should have a specific roadmap and once it is carried out, company has to ensure

that it will success.

3.2.3 Solving problems related to government actions and policies

carefully and purposely and wisely

As a part of the whole economy, dealing with the real situation of Vietnam

economy, the firms has to be active. Instability in the economy should be taken

care of in order that the firm will not be seriously affected. For example, the

company should have plans to deal with fluctuation of exchange rate or the

inflation. Risk management should be highly considerate


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CONCLUSION

The internship program has finished; however, it instilled in me a lot of

feelings and excitement. I have ever engaged in some part time jobs; but, those

works are not related to what we learned at school. Before starting the internship, I

feel nervous about whether I can ask for the intern vacancy in an enterprise or not.

At the beginning, I aimed at the internship program in a bank. However, a friends

advise me that internship in a exporting and importing company should be more

effective since this is our major at university. During the internship, I have learned

some things.

Firstly, It’s not true that all what we have learnt at school will be used when

going into work. What we use to work is just a small part of knowledge that the

subjects provide us

Secondly, soft skills are very important when we do a job. For example, a

wide network of contact will help me in searching for information, finding a

company in this internship. When going to the company, I realized that

relationship between staffs inside the company is quite complicated. It’s the

relation which based on the mutual benefits in term of both economic and social

benefit. Sometimes, I realized that if a corporate does not build it own value and

culture, people with different benefits can destroy that firm in a certain way.

That’s when people do not work for the common goals and objectives

Thirdly, a manager in a enterprise has to deal with tons of problems. She

must have not only knowledge and skills but also experiences and a strong spirit.

In addition, I realized that management expertise is very essential for each

individual because each one has to be self managed in order to complete the

objective in their lives.

In short, this is a useful internship. Although, what I have learnt maybe not

strongly related to the professional knowledge; however, I think that this

experiences are helpful for me in the future.

Documents

Internship Report