AN ORGANIZATION STUDY ON

HAILEYBURIA TEA ESTATES LTD.

WILLINGDON ISLAND, KOCHI

By

Mr. ANEES ELYAS

REGN.NO.101462
Submitted to the

MAHATMA GANDHI UNIVERSITY

In partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of

Dr. RESHMI A. RAJAN

Assistant Professor

SCMS SCHOOL OF TECHNOLOGY AND MANAGEMENT

ALUVA, COCHIN, KERALA-683106
SCMS SCHOOL OF TECHNOLOGY AND MANAGEMENT

ALUVA, COCHIN, KERALA-683106

CERTIFICATE

This is to certify that the report entitled, An Organization study on

HAILEYBURIA TEA ESTATES Ltd., is a bonafide record submitted by

MR. Anees Elyas, (Reg. No. 101462), in partial fulfilment of the

requirements for the award of the degree of Master of Business

Administration during the academic years 2017-2019.

Date: Dr. G. SASHIKUMAR

PRINCIPAL
SCMS SCHOOL OF TECHNOLOGY AND MANAGEMENT
ALUVA, COCHIN, KERALA-683106

CERTIFICATE

This is to certify that the report entitled, An Organization study on,

HAILEYBURIA TEA ESTATESLtd., has been successfully completed by

Mr. Anees Elyas, Reg. No. 101462, in partial fulfilment of the

requirements for the award of the degree of master of Business

Administration during the academic years 2017-2019.

Date: Dr. RESHMI A. RAJAN

ASSOCIATE PROFESSOR
 DECLARATION

I, Mr.Anees Elyas., hereby declare that the report entitled, An

Organizational study on HAILEYBURIA TEA ESTATES LTD.

WILLINGDON ISLAND, KOCHI, is my original work. I further declare

that this report on the study is based on the information collected by me

and has not previously been submitted to any other university or

academic body.

Date: Anees Elyas

Reg. No. 101462
 ACKNOWLEDGEMENT

First and foremost I wish to express my deep gratitude and thanks to God who helped
me in completing the organization study successfully.

I shall remain grateful to. Mr.Sashi, Assistant General Manager of Haileyburia Tea
Estates Ltd, who grant me permission to do my organization study.

I also express my profound gratitude to project guide Mr.Antony N.A. (Accounts

Manager) for his valuable guidance and timely advice and well-wishers for
Encouragement given during the course of the study. I wish to express my profound
gratitude to our director, Dr. Radha P. Thevannoor and our Principal, Dr. G.
Sashikumar for their overwhelming support in my study.

I express my sincere thanks to my guide and supervising faculty, Dr.Reshmi A Rajan

for her constant guidance and support for the successful completion of the
organization study.

I also thank my beloved family members who encouraged me at every stage of my

work. Finally yet importantly I would thank all my friends who helped me in various
ways during the study.

ANEES ELYAS

vi
 EXECUTIVE SUMMARY

An Organisation Study was done at HAILEYBURIA TEA ESTATES LTD, Kochi

during the period of 03-04-2018 to 04-05-2018. The main objective of the study was
to understand the actual functioning of the organisation and there by strengthen the
knowledge about the view of a business firm. The company has got better goodwill
and has 5 Departments, which produce quality Crush Tear Curl (CTC) tea.

The main objective of the study is to see and understand the actual functioning and
management of the organization and to understand the organizational structure and
the practical aspects of the management. Also to understand the functioning of each
and every departments and to study about the employee-employer relationships. To
conduct SWOT analysis of the organization and to suggest some means of improving
the performance of various departments of the organization.

The company has got the ability to withstand even at loss and it has got
competitive advantage over domestic players in this area with the brand
name„CHINNAR‟.The company has a modernized factory and operate four estates.

vii
 TABLE OF CONTENTS
Chapter No Title Page no.

Acknowledgement vi

Executive Summary vii

List of Tables and Figures ix

1 Introduction

1.1 An Introduction to the Study 1

1.2 Scope of the study 2

1.3 Objectives of the study 3

1.4 Methodology 4

1.5 Limitations of the Study 5

2 Analysis of Business Environment

2.1Analysis of remote external environment 6

2.2 Industry Profile 9

2.3 Competitors 15

3 Organizational Analysis

3.1 Overview of the organization 18

3.2 Organizational structure and functional 19

Analysis

4 Observations and Conclusion 55

BIBLIOGRAPHY 57
 LIST OF TABLES AND FIGURES
Tables Page
No.
Table 1 Financial Highlights 23

Table 2 Total Liabilities 24

Table 3 Shareholder‟s fund 25

Table 4 Packs and prices of CHINNAR TEA 28

Table 5 Details of excutives 31

Table 6 Details of staff 31

Table 7 Details of factory staff 32

Table 8 Details of estate office staff 32

Table 9 Details of executives and staffs of registered office 33

Table 10 Details of hospital staff 33

Table 11 Details and specifications of withering troughs 41

Table 12 Details and specifications of CTC machine 42

Table 13 Details and specifications of fermenting drums 43

Table 14 Details and specifications of heaters 44

Table 15 Details and specifications of dryers 45

Table 16 Details and specifications of Transformers 46

Table 17 Details and specifications of electrical systems 47

ix
 Page
Figures
No.
Figure 1 Organisational Structure 20

Figure 2 Structure of Finance department 21

Figure 3 Structure of Marketing and sales department 30

Figure 4 Structure of HR department 35

Figure 5 Withering troughs 41

Figure 6 CTC Machine 42

Figure 7 Fermenting drums 43

Figure 8 Heaters 44

Figure 9 Dryers 45

Figure 10 Power supply 46

Figure 11 Structure of Factory department 48

Figure 12 Structure of Chinnar and Semnivalley Estate 50

divisions

Figure 13 Structure of Haileyburia Top and Vallakadav Estate 51

divisions

x
 CHAPTER ONE
INTRODUCTION
CHAPTER -1 INTRODUCTION

1.1 Introduction to the Study

An organisation is a planned coordination of a number of people and their

activities for the achievement of some specific goals through diversion of labour, and
hierarchy of authority. An organisation study involves the study of the structure and
functioning of its departments. Organising is one of the important functions of
management. Almost all the organisations are different but they have certain common
features. All are collection of people, linked together by formal and informal
relationships, they have hierarchical orders that are engaged in co-operative activities
and they all have identical boundaries.

The study of the people in organization is important for future managers. Structure of
an organisation is very important for its functioning and growth. It provides the basic
framework for its progress and expansion for future managers. It is important to study
about the organisational structure and functioning of organisations so that they as
future managers may guide organisations towards success and profitable functioning.

The organisation selected for the study was “Haileyburia Tea Estates Limited”
Willingdon Island, Kochi. The company has 95 years of experience in the industry
which makes it a body of knowledge and expertise.

This report consists of a detailed study of the history of the industry, company,
product profile, organisational hierarchy, various departments and their functioning
etc. This study helps to familiarize about the organisation and its current scenario of
Tea industry both in the country and state wise.

1
1.2 Scope of the Study

The study is intended to acquire experience of overall functioning of the organization.

It provides an opportunity to see the practical constraints faced by the managers while
putting theory into practice. It also helps to understand the functioning of various
departments such as finance, marketing, operations etc. and how each departments are
linked for the total functioning of the organisation.

2
1.3 Objectives of the Study

1.To know about the functional areas of the company.

2. To study the mission, vision and corporate objectives,

3. To understand the organizational structure and the practical aspects of the

management
4. To understand how the key business processes are carried out in organisations.

5. To study the Strengths, weaknesses, opportunities and threats of the organization

and to suggest some measures for improving the performance of the organization.

3
1.4 Methodology of Study

The method used to conduct the organizational study is the qualitative form of
analysis. Qualitative methods of study helped to generate unique insights of the study.
The study covers topics like company profile, product profile, functioning of various
departments etc. The collection of data was both from both primary and secondary
data.

Data observed or collected directly from first-hand experience is called primary data.
Published data and the data collected in the past or other parties is called secondary
data. The primary data were collected by direct interviews with Departmental heads,
Managerial staffs & Workers. The data is collected also through direct observation.
The secondary data are collected mainly from Company supplements, Annual reports,
Web information & Departments guidelines. The attempt to collect accurate data has
been concentrated throughout the study.

4
1.5 Limitations of the Study

 The time allocated for the study was inadequate for a detailed analysis of the
management and functioning of the organization.
 The method used for data collection mainly provides qualitative data, and
therefore may lack precision.
 Direct interactions with all managers and executives were not possible.
 Some data and documents are considered confidential and were not available

5
 CHAPTER TWO
ANALYSIS OF THE
BUSINESS
ENVIRONMENT
CHAPTER – 2 ANALYSIS OF THE BUSINESS ENVIRONMENT
2.1 Analysis of the Remote External Environment

The external environment of an organization comprises of all the entities that exist
outside its boundary, but have significant influence on its growth and survival. An
organization has little or no control over the environment but needs to constantly
monitor and adapt to these external changes, a preventive or reactive response leads to
significantly different outcome. The external environment provides the paradigm, the
impetus and the most essential factor that shapes an organization. Any organization
that easily adapts to the environment essentially survives and the one that do not are
the ones that are eliminated in the competition. The informational resources on
external environmental forces are critical in an organization‟s stability and
survivability.

2.1.1 PEST Analysis

The external environmental factors that affect the company‟s business could be
analyzed using PEST analysis. This analysis is one important tool that executives can
rely to organize factors within the general environment and to identify how these
factors influence these organization. PEST is an anagram, which means it is a word
that is created by using parts of other words.

Political factors - The tea industry in India is highly regulated. Under the Tea Act,
1953, the Tea Board has been constituted by the Government of India (GOI) to
regulate the production and extent of cultivation of tea; improve the quality of tea;
promote cooperative efforts among growers and manufacturers of tea; secure better
working conditions and the provisions and improvement of amenities and incentives
for workers; etc. Permission has to be obtained from the Tea Board for planting of tea
on any land not planted with tea.

Any changes in the acts such as Factories act, 1948, Plantations Labour act, 1951,
companies act, 2013 can affect the functioning of the company. Also the
implementation of GST and demonetization has an impact on the company. Now the
rate of tax for tea is 5% .

7
Economic factors - One of the important economic factors that affect the company is
the monopoly by the large companies like Unilever, Tata global beverages etc. which
owns number of tea brands. This is a hindrance for the company to increase its market
share in the consumer product division. Another factor is the general economic
condition of the country‟s economy. Even though India‟s economy is growing, the
pace at which it grow is not satisfactory. This can be because of the global economic
condition as well as other factors. The reflection of this state of economy is visible in
the performance of the company also.

Environmental factors - Tea has a great impact on the environment. Tea is grown in
monoculture, which reduces bio diversity. In the absence of other plants to maintain
the ecological balance, intensive use of pesticides and fertilizers is needed to protect
the plants against pest infestation and to enhance productivity, leading to the soil
being leached out. The unsafe use of chemicals not only puts the workers and the
environment in danger, but also leaves traces of harmful pesticides and insecticides in
the processed tea. According to a report published in the Economic Times, the
European Tea Committee in its findings claimed a high incidence of pesticides in
Indian tea exported to overseas markets.

The cultivation of tea require certain environmental factors favorable, they are

 Temperature: 21°C to 29°C is ideal for the production of tea. High

temperature is required in summer. The lowest temperature for the growth of
tea is 16°C.

 Rainfall: 150-250 cm of rainfall is required for tea cultivation.

 Soil: Tea shrubs require fertile mountain soil mixed with lime and iron. The
soil should be rich in humus.

 Land: Tea cultivation needs well drained land. Stagnation of water is not good
for tea plants. Heavy rainfall but no stagnancy of water, such mountain slopes
are good for tea cultivation.

8
 Any particular changes in the environment which affect the above mentioned
factors can have impact on the production of the company thereby affecting the
overall performance.

Social factors - Tea is a globally consumed beverage, however a major portion

the tea produced in India is consumed domestically. Any change in the
consumption can directly affect the company. Also any decline in the domestic
consumption will force the company to depend more on foreign markets. Tea
production is basically labor intensive which require a large number of workers
and decline in availability of workers for tea plantations as a result of improved
education and living conditions will have direct impact on the company.

Technological factors - The labor force accounts for about 50% of the cost of
production, as plucking of the leaves requires expertise and these leaves are
responsible for producing superior quality tea.

The technology that is used in tae production is not very advanced. Tea industry is
not an industry where overnight changes have to be made or production is affected
due to new technology. Being highly labor intensive technological factors is least
affecting the tea industry. However any innovative technologies in the area of
plucking and maintenance of tea which can reduce the number of workers can
definitely improve the profitability of the business.

9
2.2 Industry Profile

Tea is one of the most refreshing and popular beverages around the world. India is
one of the largest tea producers with the finest quality in the world. The Indian tea
industry has an important and special place in the Indian economy. Tea is India‟s
primary beverage, with almost 85% of total households in the country consuming tea.
India is the world‟s largest producer and consumer of tea, with India according to
27% of the world tea production. India‟s expenses on beverages and processed foods
accounts for 8% of food expense in rural areas, and 15% in urban areas. India is an
important tea exporter, accounting of around 12-13% of world tea exports. Today
Indian tea industry is having 1962 registered tea manufacturers, 2200 registered tea
exporters, 5548 number of registered tea buyers and nine tea auction centres.

Tea is an aromatic beverage commonly prepared by pouring hot or boiling water over
cured leaves of the camellia sinensis, an evergreen (bush) native to Asia. After water,
it is the most widely consumed drink in the world. There are many different types of
tea; some, like Darjeeling and Chinese Greens, have a cooling, slightly bitter, and
astringent flavour, while others have vastly different profiles that include sweet, nutty,
floral or grassy notes.Tea originated in South West China, where it was used as a
medicinal drink. It was popularized as a recreational drink during the Chinese Tang
Dynasty and tea drinking spread to other East Asian countries. Portuguese priests and
merchants introduced it to Europe during the 16th century. During the 17th century,
drinking tea became fashionable among Britons, who started large-scale production
and commercialization of the plant in India to bypass the Chinese monopoly.
Combined, China and India supplied 62% of the world's tea in 2016.

2.2.1 Global Scenario

Tea is one of the most popular and lowest cost beverages in the world and consumed
by a large number of people. Owing to its increasing demand, tea is considered to be
one of the major components of world beverage market. . Tea cultivation is confined
only to certain specific regions of the world due to specific requirements of climate
and soil. Majority of the tea producing countries are located in the continent of Asia
where China, India, Sri Lanka are the major producers. African tea growing countries
are located mostly around the tropical regions where Kenya, Malawi, Rwanda,
10
Tanzania, Uganda are major producers. Apart from these regions, some quantities of
tea are also being produced in South America (Argentina, Brazil and others), the Near
East (Iran and Turkey) and the CIS (Russia and Georgia). . Amongst tea producing
countries, the principal producers are China, India, Sri Lanka, Kenya and Indonesia.

Tea is the most widespread beverage across the world, adored by all age groups. Tea
contains antioxidants which prevents diseases and promotes good health. The global
tea market is divided into four major geographies - Asia Pacific, Europe, North
America and Rest of the World. As of 2016, globally, per capita consumption of tea is
highest in Turkey, followed by Ireland, the United Kingdom, Russia and Morocco.

Asia Pacific region is the highest tea producer and is forecasted to reach a market
value of approximately USD 29 billion by 2020. India is one of the key producers and
consumers of tea globally. In 2016, approximately 216.79 million kg of tea was
exported from India. It is projected that Indian tea exports will grow to 260 million kg
amounting to USD 756 million by 2019-2020.

In the year 2015-2016, India witnessed increase in tea production by 3% year-on-year.

While Assam generated 652.95 million kgs of tea, an increase of 7.61% from 2014-
2015, west Bengal witnessed 1.68% rise in production year-on-year. On the other
hand Tamil Nadu experienced a drop in production by 3.54% year-on-year due to
severe drought. Kerala's drop in production by 15.73% was due to erratic weather
conditions and labour unrest.

More than 36 countries spread over all the continents except North America with
wide range of agro climatic conditions between 42‟ N (Georgia) and 35‟S latitude
(Argentina) row tea. The global tea production and consumption of 2016 was 5503
million kg and around 5206 million kg respectively. Total exports from the producing
countries during 2016 added upto 1802 million kg. Major tea producing and exporting
countries are India, China, Kenya, and Sri Lanka and they account for 80% and 73%
of world production and exports respectively.

11
Production

The trend of world tea production was almost the same trend as in case of area. The
production in 1991 was 2631.05 million Kg which remained almost same till 1997.
However, in 1998 world tea production touched a new height of 3026.13 million kg.
In 2000, it dropped to 2928.67 m kg with a compound growth rate of 1.20% during
the period of 1991 - 2000. Again, from 2001 onwards production of tea increased
steadily and reached 4162.33 m kg with a compound growth rate of 3.48% during the
period 2001 – 2010

Total tea production during 2016 increased by 222M.kgs as compared to the year
2015. Black tea production increased in all producing countries except Sri lanka.

2.2.2 Indian Scenario

Indian Tea Industry is about 172 years old. The industry occupies an important place
and plays a very useful part in the national economy. In 1823 Robert Bruce invented
tea plants growing wild in upper Brahmaputra Valley.

The first Indian tea from Assam was sent to United Kingdom for Public Sale. Then
later in it extended to other parts of country between 50's and 60's of the last century.

Tea plantations are mainly located in rural hills and backward areas of Northern
Eastern and Southern states. The major tea growing areas in India are concentrated in
Assam, West Bengal, Tamilnadu and Kerala. The other areas growing tea to the
extent is Karnataka, Tripura, Himachal Pradesh, Uttranchal, Arunachal Pradesh,
Manipur, Sikkim, Nagaland, Meghalaya, Mizoram and Bihar. In India Tea is
indigenous and is an area where the country can take a lot of pride. It is mainly due to
its pre-eminence as a foreign exchange earner and its contributions to the country's
GNP.

India has emerged as world leader in all aspects of tea production, consumption and
export mainly because it accounts for 31% of global production. For last 150 years
perhaps the Tea Industry is the only one where India has retained its leadership over.
The range of tea offered by India - from the original Orthodox to CTC and Green Tea,

12
from the aroma and flavour of Darjeeling Tea to the strong Assam and Nilgiri Tea-
remains unparalleled in the world.

The initial attempts to encourage tea cultivation 1n India were made by Governor
General Warren Hastings in 1776. He instructed Sir Joseph Banks to prepare a series
of notes on cultivation of new crops in India for The East India Company. He
considered tea “an article of the greatest national importance” to the British. However,
despite the detailed studies made by Sir Banks, no headway was made until tea syrups
were discovered a few decades later in Assam. Though there were two clrumants for
the discovery of tea in India, it was C. A. Bruce in particular, who maintained that he
was the first European to locate the tea site in Assam. Lieutenant Charlton had
claimed that he had sent tea plants to the Agricultural and Horticultural Society of
India in 1831 from Assam, where he had been working. However, most authorities
inclined to give the honour to Bruce. The collapse of the trade agreement between the
British and China finally led to the introduction of tea cultivation in India. The British
East India Company had the monopoly of tea trade with China, which was
discontinued in 1833. This forced the Company to look for alternative areas for tea
cultivation. Lord William Bentinck appointed a Committee to explore the possibility
of tea cultivation in India. The committee headed by a British botanist Dr. N. Wallich
made proposals for tea cultivation and directed that G. J. Gordon should visit China to
obtain more information about the cultivation of tea. In 1835, the secretary of the
Committee dispatched tea seeds from China. The Government experimented with the
Chinese tea seed at Sadiya area in North-Eastern India. Later, another experimental
tea garden was opened at Chabua with indigenous seeds of Assam. Experiments were
also conducted in South India under the auspices of the Tea Committee. Dr. Christi
pioneered the tea industry 1n South India. He experimented with effective planting
methods of tea in the Nilgiri in 1834. The plants were dispatched from Calcutta not
only to Nilgiri but also to other areas like Coorg, Mysore, and Coimbatore (Valparai)
districts in South India as a subsidiary crop in the coffee estates. The collapse of
coffee on a large scale due to the widespread leaf ailment during the last quarter of the
19th century compelled the planters to think of an alternative to coffee, and thus it led
to the cultivation of tea on a large scale. With the growth of the tea industry in the
Brahmaputra valley in Assam, other suitable areas of North-East India were also

13
brought under tea cultivation. Tea was first planted in the district of Drujeeling in
West Bengal in 1839 and was spread over to Terai in 1862 and to Dooars in 1874. In
1838, the first commercial sample of Assam tea containing twelve chests weighing
around 140 kilograms was sent to England and eight of them were auctioned on the
lOth of January, 1839. To facilitate the production and manufacture of tea, the Bengal
Tea Association was set up in early 1839. In 1850, the area under tea in Assam was
approximately 760 hectares and its production was about 87,500 kilograms.

Production

In India tea is cultivated in 15 states of which Assam, West Bengal, Tamil Nadu and
Kerala are the major tea growing states. They account for 97% of the total production
other traditional states where tea is grown are Tripura, Himachal Pradesh,
Uttarakhand ,Bihar and Karnataka.

During 2016-17, overall tea production increased by 17.35m.g over 2015-16 because
of better climatic conditions that prevailed in major tea growing areas in North India.

Top tea producing states in India

 Assam

 West Bengal

 Tamil Nadu

 Kerala

 Tripura

 Arunachal Pradesh

 Himachal Pradesh

 Karnataka

 Sikkim

 Nagaland

14
  Uttarakhand

 Manipur

 Mizoram

 Meghalaya

 Bihar

 Orissa

Challenges faced by Indian tea industry

 Labour intensive industry

 Competition with other beverages like soft drinks, Horlicks, bourn vita, coffee
etc.
 High percentage of aging bushes leading to low productivity and low rate of
uprooting and replanting.
 High production cost: almost 80% of the cost is on fixed expenses like fuel,
power & labour.


2.3 Competitors

Green Shola Tea And Agro Products

Harrissons Malayalm ltd
Parry Agro Industries ltd
Tata Global Bewerages ltd
High Range Spices
Goodly Plantations
AVT Co ltd
McLeod Russel India Ltd
A.Tosh & Sons (India)Ltd.
Private Limited
Dora Global Tea Co.
Majestic Commodities Private
Limited
J Thomas & Company Private
limited
Parry Agro Inds ltd
Tata Global Bewerages ltd
Bhansali & Co
Jayshree Tea & Industries Ltd

15
.
M.K.Shah Exports Ltd.
Tata Tetley Pvt.Ltd.
Goodricke Group Ltd
L.M.J.International Ltd.
Siewert And Dholakia
Overseas Private Limited
The Bombay Burmah Trading
Corpn. Ltd
Assam Company India
Limited
Blue Mountain Tea And
Commodities Pvt. Ltd.
Tata Tea Limited
Indian Products Ltd.
The North-Western Cachar
Tea Co.Ltd
New Tea Exports Private
Limited
Avt Natural Products Limited
AL-Gayathri Trading
CO.(P)Ltd.
Glenworth Estate Limited
Apeejay Tea Limited
Vikrma Impex (P) Ltd.
Jfk International
Narendra Tea Co.(P).Ltd.
G.A.Randerian Pvt.Ltd.
Godfrey Phillips India Ltd.
Anita Exports
Balaji Agro Pvt.Ltd.
Havukal Tea & Produce Co.
Pvt. Ltd.
Asian Tea Company Private
Limited
Chamong Tea Exports
Pvt.Ltd.
Asian Tea & Exports Ltd.
Gillanders Arbuthnot & Co.
Ltd.
Neelamalai Agro Industries
Ltd.
16
 CHAPTER THREE

ORGANIZATIONAL ANALYSIS
CHAPTER-3 ORGANISATIONAL ANALYSIS

3.1 Overview of the Organisation

Haileyburia Tea Estates Ltd is a public limited company incorporated in 1923. It

operates three estates-Haileyburia,Semnivalley & Chinnar, in Idukki District of
Kerala, India and employs around 1000 people. The major crop in these estates is tea
while it also grows coffee and spices in smaller quantities. The registered office of the
company is in Willingdon Island, Kochi. It has a modern factory in Semnivalley
Estates which produces CTC tea from the tea leaf grow in their estates. The factory
has a capacity of 18 lakh tones of CTC black tea per year. The tea produced here is
sold under the brand name “Chinnar” which is very popular in the south Indian
market. The company sells its products through Cochin auction and also through its
consumer product division.The company is listed in Calcutta Stock Exchange.

Directors

1. Mr.Vinod Kumar Dugar (Chairman)

2. Mr.Ashok Kumar Dugar (Managing Director)

3. Mr.Sudhir Prakash (Director)

4. Mr.Kozhy Mathew (Independent Director)

5. Mr.Chacko P.I (Independent Director)

6. Mr.Zacharias P (Independent Director)

7. Mrs.Sarita Dugar (Director)

Mr.Ashok Kumar Dugar is the Executive Director of the Company. The Company
shares are listed in Kolkata Stock Exchange. 74.45% of the shares are held by
Mr.Ashok Kumar Dugar and his family members. Mr.Ashok Kumar Dugar‟s family
had taken control of the business since 2000. His and his family‟s experience in the
business is vast and his two sons are directly involved in the business during the last 4
years. Mr. Shreshth Dugar is the Chief Marketing Officer of the company.

18
3.2 Organisational Structure and Functional Analysis

An organizational structure is a system that outlines how certain activities are directed
in order to achieve the goals of an organization. These activities can include rules,
roles and responsibilities. The organizational structure also determines how
information flows from different levels of management within the company. There are
different types of organizational structures among which functional structure is the
most commonly seen type. In functional structure organization is divided based on
different functional areas such as finance, marketing, operations etc.

The organization also follows a functional structure. The whole organization is

divided into five major departments based on functional areas.

a. Finance and Accounting

b. Marketing and Sales

c. Human Resource

d. Estates

e. Factory

The company has a Chief Financial Officer who is responsible for all the financial
and operational aspects of the company. There is a Chief Marketing Officer who is
responsible for all the marketing activities of the company. All the functional
departments are headed by senior managers who have to report to the general
manager.

19
 3.2.1 Organizational Structure

BOARD OF DIRECTORS

CHAIRMAN

MANAGING DIRECTOR

CFO CMO

GENERAL MANAGER

ACCOUNTS MARKETING
FACTORY ESTATE HR AND SALES
MANAGER MANAGER MANAGER MANAGER
MANAGER

Figure1 Organizational structure

20
 3.2.2 Finance Department

The finance and accounting of the company is completely managed in registered

office in kochi. Unlike other departments, finance department is directly controlled by
the general manager. There is an accounts manager who is responsible for the
accounting works of the whole organization and there are three accounts assistants
and one gatekeeper under him.

Structure of Finance Department

General Manager

Accounts Manager

Accounts Accounts Accounts Gate

Assistants Assistants Assistants Keeper

Figure 2 Structure of finance department

Functions of Finance Department

 To record, analyze and interpret financial information of the organization and

to make it available to all the board of directors, shareholders and other
stakeholders.

 To make funds available to different departments of the organization at

required time.

 To provide information to functional managers for making strategic decisions.

21
  Basic book keeping.

 To formulate credit policies for the customers of the company and payment
policies for suppliers of the company.

 Manage cash flow of the company.

 Make arrangements for long term funds for financing new projects or
investments.

 Communicate with departmental heads and to make forecasts and budgets.

Also the actual results are compared with the forecasts and budgets made.

 Computation and filing of tax returns.

 To ensure compliance with the companies act, 2013, rules and regulations of
SEBI and Calcatta Stock Exchange.

Basis of Accounting

The financial statements are prepared under historical cost convention, on accrual
basis of accounting in conformity with the accounting principles generally accepted in
India.

Depreciation

Property, plant and equipment except land are recognized as per cost model that is
assets are valued at historical cost less accumulated depreciation and any accumulated
impairment losses. Land is valued under revaluation model that is revalued amount
less subsequent impairment losses. Items such as spare parts, stand-by equipment and
servicing equipment are valued in accordance with accounting standard 10 when they
meet the definition of property, plant and equipment. Otherwise , such items are
classified as inventory.

22
Inventories

 Stores are valued at lower of cost or at net realizable value whichever is

lower.

 Stock-in-trade is valued at lower of cost or at net realizable value

Financial Highlights
Table 1
Financial highlights

financial highlights 12 - 13 13 - 14 14 - 15 15 - 16 16 - 17

Total Income 1388.4 1323.3 1658.0 1542.2 2020.4

Personal Cost 752.12 789.59 834.52 952.34 1151.8

RM & Purchases 132.92 121.96 156.85 53.47 8.31

Power & Fuel 148.88 167.22 168.19 170.08 128.4

Cultivation &
16.03 12.55 11.83 22.19 166.9
Other Op. expenses

Depreciation 27.38 35.68 89.81 49.84 37.58

Selling Expenses 15.55 14.75 24.70 31.99 39.59

Other Expenditure 366.65 178.04 600.67 568.92 751.71

PBT -71.12 3.56 -228.54 -306.61 -263.98

PAT -71.12 3.56 -228.54 -306.61 -263.98

Earning per share

-4.52 0.23 -14.51 -19.47 -16.76
of Rs.10/- (in Rs)

Dividend per share rs.10 (in Rs) - - - - -

23
 From the above financial statements we can understand that the company has
been incurring losses for the past five years except in the year 2013-14 where it made
a profit of 356,743. The loss was 30,660,723 in the year 2015-16 which is the highest
among these five years.

Capital Structure

The capital structure is how a firm finances its overall operations and growth by using
different sources of funds. A firm's capital structure can be a mixture of long-term
debt, short-term debt, common equity and preferred equity. A company's proportion
of short and long-term debt is considered when analyzing capital structure. The assets
listed on the balance sheet are purchased with this debt and equity. Debt to equity
ratio is commonly used as a measure of capital structure.

Debt equity ratio = Debt / Equity or Total Liabilities / Shareholders' Equity

Total liabilities
Table 2
Total liabilities

Non-current Liabilities
a. Long term borrowings
1,369,994
b. Other long term liabilities
187,120
c. Long term provisions
44,585,935
A. Total
46,143,049
Current Liabilities
a. short-term borrowings
45,576,458
b. Trade payables
4,117,705
c. Other current liabilities
59,668,913

24
 d. Short-term provisions
6,792,462
B. Total
116,155,538
Total A+B 162,298,587

Shareholders’ Fund
Table 3
Shareholder’s fund

Shareholders' Funds
a. Share capital 15750000
b. Reserves and surplus 809556788
Total 825306788

Debt equity ratio = Total Liabilities / Shareholders' Equity

= 162,298,587 / 825,306,788

= 0.1967 : 1

Here the debt equity ratio of the company is very low which means that major portion
of the assets are financed with equity funds, only a small portion of the assets are
financed with debt funds. This indicates a conservative financing policy with an
opportunity to borrow in the future at no significant risk.

25
3.2.3 MARKETING AND SALES

This department is responsible for the all activities relating to marketing and sales
of the company‟s products. The department executes sales in two ways,

 Through Cochin auction

 Through Consumer product division
Cochin auction

This is a centralized auction mechanism developed and regulated by the tea board
of India. It provides buyers and suppliers of tea a platform to meet and to buy and sell
tea. There are five other auction centers in India which are, Kolkata, Siliguri,
Guwahati, Coimbatore and Coonoor. Auctions are conducted on every Tuesdays and
Wednesdays. A major portion of the CTC tea produced by the company is sold
through the auction. The auction is carried down in cochin tea trade association,
Indira Gandhi Rd, Willingdon Island, Kochi, Kerala 682003.

Auction system

Auction makes it possible to distribute a large quantity of tea within a shortest period
and with an organized manner. Furthermore it provides reliable means of selling and
buying tea. In India out of 800 mkg bulk packaged tea, 500 mkg is sold through
public auction annually. Auction takes place among five important stake holders.
They are as follows:

 Auction Organizers

 Seller/ Manufacturers

 Brokers/ Auctioneers

 Buyers

 Warehouse keepers

26
 In the auction process auction organizers monitor the whole auction mechanism
and publish reports of the sale. Sellers or manufacturers do not have any active role in
this system. They simply give the authority of their tea to concern broker and this
broker used to sell tea after tasting and grading. These brokers are the controller of the
whole selling process. They collect samples of tea from the warehouses and send
them to registered buyers. Accepting or rejecting a bid for a particular lot of tea is also
in their hands. Besides these, a buyer cannot bring tea from warehouse without the
permission of brokers. Buyers are the bidder for tea in auction. Tea is kept in
registered warehouses and warehouse keeper has to take all the responsibility of this
tea. After the selling process is over at the auction, brokers use to issue a permission
receipt to the buyer to collect the particular amount of tea from concern warehouse.

As brokers play the major role in the process of auction, the important function of
the marketing and sales department is to find and appoint brokers. Also it is the duty
of the department to make arrangement for tasting and grading by the broker and to
ensure adequate stock in the warehouse when the buyers approach for delivery.
Presently the department has appointed three brokers to assist and promote sales.
Since price is determined on the basis of demand and supply in the auction the
managers or the sales department has little room for fixing the price. Also no
particular promotional activities are required for selling in auction.

The major auction buyers are:

 Anjaneya enterprizes
 Devagri tea & produces
 Energy coffee manufacturing Co.
 Kerala state civil supplies corpn ltd
 Shan tea
 Vimal tea company
 Azhikal brothers
 Salims tea
 Cochin tea syndicate

27
  Manali enterprises
 New tea exports private ltd
 V. Dara prabhu & sons
 Shyam vital & co.
 Sell well tea agencies

Consumer Product Division

The company has started to sell packet tea through its 35 distributors spread across
the state under the brand name CHINNAR. It has appointed M/s Esquire Business
Corporation, Palakkad as the super Stockist. The company targets to improve its
market share and to achieve a sales growth of 5% every month. For this the company
is doing different promotional activities like setting up display boards, branded
distributor vehicles plying across the state etc. Even though the company is doing
promotional activities across the state to improve its pressence, more importance is
given for Ernakulam Trissur, Palakkad, Kottayam, Alleppey, Kollam and Trivandrum
Districts. In the financial year 2016-17 it sold around 60 tons of tea under the
consumer product division and its targeting a sale of 180 tons this year.

Packs and Prices of CHINNAR TEA

Table 4

Prices and packs of CHINNAR TEA

Available Packs Price

4 kg Rs. 880

1 kg Rs. 235

500g Rs. 150

250g Rs. 75

100g Rs. 30

35g Rs. 10

28
Major Retail Buyers of CHINNAR TEA

 Malabar Marketing,Kochi
 Aishwarya Enterprises,Cochin
 Riddhi Siddhi Enterprises, Trivandrum
 Kala Agencies, Palakkad
 Paulson Agencies,Angamaly
 Cm Agencies, Kunnamkulam
 Cse Trading,North Paravoor
 Anu Agencies, Thodupuzha
 Green Valley Traders, Neyyattinkara
 Sri Enterprises,Ernakulam
 Kala Agencies, Palakkad
 Cse Trading,North Paravoor
 Thaslim Stores &Amp, Agencies, Alappuzha
 Gurukripa Enterprises,Kannur
 N.S.Agencies, Thrissur
 Ss Combines,Ernakulam

The main functions of marketing and sales department in consumer product division
are as follows.

 To find and appoint stockists and distributors for the products and to enter into
agreements with them.
 To fix price for different variants of products.
 To plan, execute and control promotional activities.
 To analyze present sales and to make estimate about future sales.
The marketing and sales department of the company is headed by the chief
marketing officer Mr. Shreshth Dugar. There is a marketing manager under the CMO
and there are four marketing executives under the marketing manager. The state is
divided into four different zones and each zone is assigned to a particular executive.

29
 The executives are accountable to the manager as well as the CMO for sales in their
respective zones.

Structure of Marketing and Sales Department

Chief Marketing Officer

Marketing and Sales Manager

Marketing Marketing Marketing Marketing

Executive Executive Executive Executive

Figure 3 Structure of marketing and sales department

30
3.2.4 HUMAN RESOURCE DEPARTMENT

Tea production is a labor intensive activity, which require large number of

employees especially for its cultivation and harvesting. The factory also require a
decent number of people for its operations. Since the company is cultivating and
manufacturing tea, it also has a large number of employees and the Human Resource
department is responsible for the management of these employees.

Details of Total Workforce

Executives
Table 4
Details of executives

1 Senior Manager 2

2 Manager 3

Staff
Table 5
Details of staff

1 Field Staff 6

2 Supervisors 22

3 Workers 700

4 Casual Laborers 250

31
Factory
Table 6
Details of factory staff

1 Senior Manager 1

2 Staff 3

3 Mechanic 2

4 Electrical Staff 1

5 Skilled Workers 3

6 Drivers 8

Office Staff Estate

Table 7
Details of estate office staff

1 Staff 5

2 Peon 2

32
Registered Office (Cochin)
Table 8
Details of executives and staffs of registered office

1 Chief Marketing Officer 1

2 Assistant General Manager 1

3 Finance and Accounts 1

Manager

4 Godown Keeper 1

5 Accounts Assistants 3

Hospital
Table 9
Details of hospital staffs

1 Doctor (visiting) 1

2 Nurse 3

3 Attender 2

Among the work force the HR department directly controls and manages all
employees other than the executives and mangers. The HR manager only provides
legal advice to the top level management about matters regarding the executives and
managers.

33
Functions of HR Department

 Recruitment and Training: Recruiting involves advertising open positions,

interviewing, selection and placement. Training is provided to new as well as
existing employees. For existing employees training is mainly given when
there is any change in job or method used.
 Payroll and benefits: The payment of wages and benefits are based on the
Plantations Labor act,1951 and Factories act,1948. The former is for
plantation workers while the later is for the factory employees. Other benefits
are also based on these laws. For plantation workers a slab rate is fixed for
daily tea leaf collection and workers who collect above the slab will be
rewarded.
 Working conditions: The HR department is responsible to ensure compliance
with the above mentioned laws regarding the working conditions of the
employees.
 Housing facilities: The company is providing bunglows and quarters for the
executives and staffs. Also lines are provided for permanent workers. The HR
department is responsible for the allotment and maintenance of these facilities.
 Hospital: The company runs a hospital for its employees. The maintenance of
this is done by the HR department.
 Record keeping: The HR department is responsible for keeping records
regarding employees appointment, payment of benefits and incentives,
provident fund etc.

The HR department consists of a HR manager and five assistants working under

him.

34
 Structure of HR Department

Human Resource Manager

HR HR HR HR HR
Assistants Assistants Assistants Assistants Assistant

Figure 4 Structure of HR department

35
3.2.5 FACTORY DEPARTMENT

Raw Materials

The basic raw material of tea manufacturing is tea leaf. The Company is having 3
estates, Semnivalley, Chinnar & Haileyburia on 2600 acres of patta land in Elappara
Village of Idukki District of Kerala. Among this tea area is around 627.37 hectres. It
uses tea leaf from these estates and also purchase tea leaf from other estates for the
production. In the financial year 2016-17 the yield from the company‟s own estates
were 4,509,815 kgs and it also purchased 59,246 kgs of leaf from outside.

Production Process

Tea manufacturing is normally carried out in two ways, (i) CTC and (ii) orthodox.
CTC refers to the Crush, Tear & Curl process where the withered green leaves are
passed in-between two rollers rotating in opposite directions. There is complete
maceration of the leaves and the resulting powdery material is referred to as “cut
dhool“. Enzymatic action is higher in the CTC type of manufacture. In orthodox type
of manufacture, the withered leaves are rolled on specially designed orthodox rollers
which twist and crush the leaves thereby rupturing the cells. The maceration is less as
against CTC processing. But this process results in teas with good flavor and aroma.
The company follows CTC production process and the various steps in CTC tea
manufacture includes, withering of harvested crop, green leaf shifting, reconditioning,
rolling, fermentation, drying, grading & sorting and packing.

Withering

Withering is the first and fore most steps involved in tea manufacture. The
evaporation of moisture in the green leaf is brought about by blowing or moving air
over the leaf in the withering trough. The current of air performs a two functions viz.,
conveying heat from the leaf as well as carrying away the water vapor through a bed
of green leaves to achieve physical withering. Whenever the hygrometric difference is
below 3°C, hot air is mixed in suitable proportion or heat energy is supplied to
increase the hygrometric difference with the concomitant rise in the dry bulb
temperature of air. But the dry bulb temperature of air after mixing should not exceed
35°C.
36
Green Leaf Sifting

Extraneous matter such as stones, sand or metal pieces may find their way in the
leaves brought into the factory; if such materials are fed into the fine-tuned,
continuous machines, the moving parts will be severely damaged. Similarly if the
leaves were not fed evenly into these machines, they could become jammed or would
not function efficiently. Hence green leaf sifting is essential prior to processing. The
green leaf sifter is essentially a device for introducing a continuous even flow of
withered leaf to the CTC processing section. It is a vibrating tray, which is perforated
with holes or is of a wire mesh. Powerful magnets have been provided in the green
leaf sifter to remove any iron pieces present along with the leaf.

Reconditioning

Secondary grades and other residues which are obtained while cleaning the primary
grades are ground and recycled with the withered leaf. This process is known as
reconditioning. The primary objective of this practice is to produce grainy grades as
well as tea of high density. It also helps to minimize or eliminate secondary grade
teas. The quantity of recycled material, known as recondition dust, depends on the
quality of green leaf, the moisture content of the withered leaf and the standard of
machinery available. The percentage of RC is mostly expressed on the weight of
green leaf or made tea basis. However, there is a wide variation in the moisture
content of green leaf and thereby the quantity of made tea produced. So quantifying
the amount of RC material for the made tea to be produced depending upon the green
leaf conditions is difficult. The best practice is that the amount of RC should be
calculated on the withered leaf weight basis. However, as already mentioned variation
in the moisture content of the withered leaf should be controlled to a narrow range say
2 to 3%.

37
Leaf Conditioning

The leaf shredder and rotor vane combination has been found to be ideal to pre-
condition the leaf for CTC processing. The output of both these machines should
match with the CTC as well as drier capacities. Shredding of withered leaf into fine
particles increases the rotorvane capacity and helps efficient mixing of the leaf with
reconditioned dust in the rotorvane. The macerated leaf from the shredder has to be in
the form of „chutney‟. To ensure this the shredder blades have to be changed every
week. It is important that the weight of each blade should be less than one Kg. and
properly balanced on the knife edge. Reduction of gap between two blades
progressively helps to achieve better results. Rotorvane is a large mincing machine
and is imperative to precondition the leaf suitable to be fed into the CTC machine as
well as for better fusion of RC material with withered leaf. The leaf is processed in
this cylinder in which a rotor provided with vanes rotates between resistors thereby
propelling the leaf forward and discharging through an end plate. The leaf is distorted
and shredded as it moves along the cylinder and cut into small pieces by the revolving
cutter through which it must pass before it can leave through the apertures of an iris
diaphragm. For good results the rotorvane should crush the leaf along with the RC
dust at the maximum possible pressure. The leaf is discharged between the gap of the
cone and the cylinder; the inner of the cylinder and cone are provided with battens in
order to increase the efficiency of crushing.

Rolling

After preconditioning, the leaf is passed through four or five CTC machines arranged
in tandem. The CTC machine essentially consists of two contra-rotating toothed
rollers of equal diameters (20.3 cm or 8″). The two rollers rotate at different speeds. A
slow speed roller; high speed roller ratio of 1:10 with speeds between 70:700 rpm and
100:1000 rpm have good effect. The slow speed roller acts initially as a conveyor
apart from providing a surface for cutting. In order to derive the maximum benefit of
a good cut, the drop point should be adjusted behind the crown of the slow speed
roller, so that the leaf is conveyed into the cutting area. Otherwise, a portion of the
leaf gets thrown over the high speed roller, thereby, losing the benefit of cut.
38
A number of hollow segments of 2″ width are mounted side by side on a mandrel to
form a roller. Even spaced, helical grooves are formed along the circumference by a
standard angular milling cutter. The teeth are formed by cutting circumferential
grooves on the roller which has the helical grooves. Each tooth has two longitudinal
characteristics, the shoulder and the back slope. The ratio of the length of the shoulder
to the back slope projection is known as the profile or style ratio which influences
quality. As a general rule, a style ratio of 5:3 will produce a grainy tea with higher
dust percentage. Sharpening of segments is done precisely and on schedule on to
ensure quality CTC tea. The speed of the high speed and low speed roller in CTC
roller will be 700 to 750 and 70 to 75 RPM, respectively.

Fermentation

It is the practice of passing the CTC through a large revolving drum for 60-90
minutes with conditioned air. Rotation of the fermentation drum facilitates
granulation of the tea particles and increases the bulk density. Rotation of the
fermentation drum facilitates granulation of the tea particles and increases the bulk
density which is desirable for south Indian CTC teas. In drum fermentation, the whole
process is dynamic and the leaves are constantly rotating. Every bit of tea that is being
fermented is constantly layered and exposed to the fresh air or conditioned air.
Rubbing of leaf against leaf takes place and the juices present in the micro cells of
leaf are evenly coated on the exterior of the tea leaf.

Drying

Drying is the most expensive process in the manufacture of tea. Objective of drying
are to arrest the fermentation process and to remove the moisture and to produce tea
with good keeping qualities. The principle involved in the conventional driers is that
fermented leaf is subjected to a blast of hot air in such a manner that the hottest air
first comes in contact with the tea having the least moisture content. In these driers,
the fermented leaf falls on a series of moving perforated trays on which it is passed
and repassed through a moving stream of hot air. The perforated trays are mounted on
39
an endless chain and arranged in a tier of six or eight units which alternate in the
direction of motion. The Design is such that at each stage of the drying operation, the
leaf is subjected to a different temperature. As the leaf passes from tray to tray, it
progressively comes into contact with higher temperatures. When the air takes up
moisture, the dry bulb temperature falls. A final moisture content of between 2.5 and
3.0% should be the aim. If the tea is dried below 1.0%, it loses some quality. Tea
dried to 3.5% moisture content and above does not keep well.

The optimal inlet temperature for CTC processed leaf is 100 ± 5°C. The exhaust
temperature should be maintained at 54.4 ± 2.7°C (130 ± 5°

Packing

Teas are packed in airtight containers in order to prevent absorption of moisture,

which is one of the main causes for loss of flavour during storage. Packing is done in
two different ways, one is for consumer product division which involves small
packets while other is for selling in auction which involves large sacks and carton
boxes.

Details of Machinery Used in Factory

The company has its factory in Semnivalley, Elappara which is specialized in dust and
leaf grades of CTC manufacturing. Grades including primary and secondaries like
PD,RD,SRD, SFD, FD, GD SD and PF BOPF,BP & BOP. This was built in 2002
with a crop in take capacity of 4000 kg of green leaf. It has an annual output capacity
of 18 lakhs kgs of tea.

40
 Withering Troughs
Table10
Details and specifications of withering trough

a No 9

100ft length x 15 ft
b Dimension width

c Fan Make Kirloskar

Impeller
d Dimension 48 inch

e RPM 960

4000-5000 green leaf/

f Storage Capacity trough

Figure 5 Withering troughs

41
CTC Machine
Table 11
Details and specifications of CTC machine

a Make Vikran T & I Global

b Model Jumbo Plus Sennova

c Roller width 13” dia & 36”lenghth 13” dia & 30”lenghth

d Capacity 1000kg/hr 800 kg/hr

Figure 6 CTC machine

42
Fermenting Drums
Table 12
Details and specifications of fermenting drum

a Make Kirloskar GEC Duplex

b Number 5 1

Storage 1000 kg of CTC 1500 kg of CTC

c capacity dhool dhool

d Length 5 ft 6 ft

Figure 7 Fermenting drums

43
 Heaters
Table 13
Details and specifications of heaters

a Make Parucco Parucco Andrewyule

b Model 18 series 16 series 16 SED/HPL

Doublepass

c Number 1 1 1

d Output (Hot 42000 kg/hr 33000kg/hr 20000kg/ hr

Air
@140*C

e Heat 1300000- 900000- 500000-1000000

Output 1450000kcal/hr 1050000kcal/hr kcal/hr

f Fuel 1.2m3/kg 0.8m3/kg 0.553/kg

Burning
Capacity

Figure 8 heaters
44
Dryers
Table 14
Details and specifications of dryers

a Make Kilburn Kilburn

13” dia &

36”lenghth VFBD VFBU Standard EE
b Model Senior FF III

c Number 1 1

d Output 500-600 kg/hr

250-350 /hr

Figure 9 Dryers

45
Transformer
Table15
Details and specifications of transformers

a Make Intrans

b Type 750KVAOLTC

c Voltage 415

d Amps 1000

e Load 1146 horsepower

Figure 10 Power supply

46
Power supply
Table 16
Details and specifications of other electrical systems

Make Cummins Cummins Cummins

KVA 180 250 250
Starter Stamford Stamford Stamford
Amps 250 348 348

Ancilliary Equipments

a. Moisture Analysor

b. Vaccum Packaging Machine

c..Workshop for maintenance is having special purpose of Milling machine

and chasing machine for CTC rollers by T&I and Sigma

d .High pressure washers

e. Grinding machine etc.

Fire and Safety

The company has taken various measures to deal with any accidents or fire. It is
equipped with fire extinguishers and water spray tubes. Also workers are given
firefighter jackets and training for managing any kind of accidents. The factory has its
first aid kit, and in case of any injury or any other medical condition first aid will be
given in the factory premises itself and after that the person will be taken to the
company hospital.

The factory department has a senior manager who is responsible for the
manufacturing activities. There is an assistant manager, and under him there are field
officers. The skilled workers of the factory work under the field officers.

47
Functions of Factory Department

 To bring adequate raw materials required for the production from different
estates at proper time.

 Maintenance of machineries at proper intervals and to ensure availability of

tools for production.

 To prepare schedule of production and to assign works to different

individuals.

 To ensure the quality of the tea produced.

 To manage the waste produced during the process.

 To keep record of different aspects such as quantity produced, different

grades of tea produced, electricity consumed, average quantity produced from
each unit of electricity etc.

Structure of Factory Department

Factory Senior Manager

Assistant Manager

Field Officers

Workers

Figure 11 Structure of factory department

48
3.2.6 ESTATE DEPARTMENT

The company has four tea estates in Idukki district of kerala. These estates are
operated as separate divisions.

Four Divisions

1. Semnivalley Division
2. Chinnar Division
3. Haileyburia Top Division
4. Vallakadavu Division
The Semnivalley and Chinnar divisions are managed by a senior manager and the
Haileyburia Top and Vallakadavu divisions are managed by another senior manager.

Functions of Estate Department

The functions of estate department comprises of activities from planting of tea till
the tea leafs reach the factory.

 Scheduling and conducting pruning of tea plants.

 Conduct trimming of plants to keep it at a particular height
 Managing plucking of tea leaf at proper intervals
 Supply of adequate tools to the workers.
 Planting trees for shade.
 Weeding of gardens.

49
Structure of Chinnar and Semnivalley Estate Divisions

Semnivalley Division Chinnar Division

Senior Manager

Assistant Manager Assistant Manager

Field Officers Field officers

Assistant Field Officers Assistant Field Officers

Supervisors
Supervisors

Workers

Figure 12 Structure of Chinnar and Semnivalley Estate divisions

50
Structure of Haileyburia Top and Vallakadav Estate Divisions

Haileyburia Top
Division Vallakadav Division

Senior Manager

Assistant Manager
Assistant Manager

Field Officers Field officers

Assistant Field Officers

Assistant Field Officers

Supervisors Supervisors

Workers

Figure 13 Structure of Haileyburia Top and Vallakadav estate divisions

51
3.2.7 SWOT ANALYSIS

Strengths

 The brand „CHINNAR‟ is one among the popular brands of CTC tea in South
India.
 95 year old Company with proven track record. The promoters are in the field
of tea manufacturing and trading for the last 18 years.
 Relationship with UPASI Tea Research Foundation in quality control and
research.
 Tea area of around 627.37 hectres.
 Dedicated work force.
Weakness

 Fire in one of the factories which completely destroyed the factory. Now the
company have to depend on one single factory for its whole production.
 The auction prices are completely depended on market forces. The company
has no role in determining the price. Also there is very little room for value
additions.
 Being agriculture oriented the availability of raw material which is green leaf
depends largely on vagaries of nature which are uncontrollable by the
company.
 Estates being highly labour oriented the increase in wages is a deterring factor.
Opportunities

 Cost of green leaves (which constitute around 85% of the cost of production)
is a major factor affecting profitability. During season cost will be much less
and leaf will be available at very low price. The Company can make use of
this opportunity through additional processing capacity.
 The company has its established brand “CHINNAR” which can make its
efforts to penetrate into the packet tea segment much easier.

52
THREATS

 As tea is a well-organized and established industry , there are large number of

direct competitors.
 Climate plays a major role in production of green leaf.
 Movement of trained manpower to other industries due to better working
conditions may leads to shortage of manpower

53
 CHAPTER FOUR

4.OBSERVATIONS AND CONCLUSION

CHAPTER-4 OBSERVATIONS AND CONCLUSION

4.1 OBSERVATIONS

 The company has been incurring losses for the past five years except in the
year 2013-14.
 The main reason for company‟s loss making is the increased wages of
plantation workers which results in increased cost of production.
 The company is not able to utilize the opportunity of procuring and processing
green leaf during seasons when price is low. This is because of the fire in one
of its factories.
 Sales through auctions only won‟t help company to achieve profitability.
 Company‟s efforts to penetrate into the packet tea segment can make positive
changes in its performance.
 Climatic factors such as rainfall affect the overall operations of the company.
 The demonetization effect had created set back in country‟s tea markets
resulting into lower off take and higher inventory.
4.2 SUGGESTIONS

 The company can switch to mechanized harvesting which can result in higher
pluckers productivity.
 Company can take more efforts to increase market space of its „CHINNAR‟
brand retail packs, which can result in value addition and building brand
image.
 The company should introduce improved safety systems to manage fire and
other accidents in its factories.

55
4.3 CONCLUSION
Haileyburia Tea Estates Limited is a 95 year old Limited Company with tea
as its primary product. . The company‟s „CHINNAR‟ brand is one among the
popular brands of CTC tea in South India. The study was successful in the
specific objectives.It helped me to familiarize with the organisation structure
and its functioning. It also gave me an opportunity to observe and learn
functions and activities of different functional departments of the organisation.
The study also helped me to understand the current situation of tea industry
and its future prospects.
I express my sincere thanks to all those who helped me to complete the
study.

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4.4 BIBLIOGRAPHY

Aswanthappa, K. (2008). Human Resource Management, 5th edition, Tata McGraw –

Hill Publishing Company Ltd

Prasad, L M. (2010). Principles and practices of Management. New Delhi: Sultan

Chand Publishers Private Limited

Rao, V.S.P., (2006). Human Resource Management 2nd edition. New Delhi: Excel

books Private limited

Haileyburia Tea Estates Limited. (2017). Annual Report 2016-2017,Kannur.

Retreived from:

www.haileyburiateaestates.com on 20 april 2018

www.teacoffeespiceofindia.com on 02 may 2018

www.upasitearesearch.org on 02 may 2018

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