1. ORGANIZATION STUDY OF
KANAN DEVAN HILLS PLANTATIONS COMPANY (P) LIMITED
Submitted in partial fulfillment of the requirements
for the award of the Degree of
MASTER OF BUSINESS ADMINISTRATION
Of the Mahatma Gandhi University.
Submitted by
ANOOP MOHAN
Regn No: 211210
Under the guidance of
ALPHONSE MARIA GEORGE
June 2011
DC School of Management and Technology
Pullikkanam, Vagamon, Idukki 685503
Tel: 04869 – 248322, 248323
1

2. DECLARATION
I hereby declare that the organization study of ‘KANAN DEVAN HILLS
PLANTATION PVT LTD’ submitted to Mahatma Gandhi University is a
record of the original work done by me and no part of it has been submitted
earlier for any Degree, Post Graduation or similar of any other university or
institution.
Place: Pullikkanam
Date Name: ANOOP MOHAN
2

3. Certificate on DCSMAT Letterhead
CERTIFICATE
This is to certify that the organization study titled ORGANIZATION STUDY OF
KANAN DEVAN HILLS PLANTATIONS PVT LTD is a bonafide record of the work
done by Anoop Mohan, 3rd semester MBA Student of DC School of Management and
Technology, submitted in partial fulfillment of the requirements for the award of the
Masters Degree in Business Administration of Mahatma Gandhi University, Kottayam,
Kerala.
Faculty Guide Principal
Date:
Place: Pullikkanam
_______________________________________________________________________
_
Examiner I Examiner II
Signature
Name
Date
Signature
Name
Date
Institution
Seal

4. 3
Certificate from the Company
4

5. ACKNOWLEDGEMENT
I would like to take this opportunity to express my sincere
gratitude to all those who have helped me throughout this organizational
internship study. It gives me immense pleasure to acknowledge all those
who have rendered encouragement and support for the successful
completion of this work.
I express my heartfelt thanks to Mr. SANJITH P RAJU, ASSISTANT
MANAGER-HUMAN RESOURCE DEPARTMANT, KANAN DEVAN
HILLS PLANTATIONS COMPANY for his constant encouragement and
support during the entire project work.
I also extend my sincere gratitude to Mis ALPHONSE MARIA GEORGE,
faculty, DC SCHOOL OF MANAGEMENT AND TECHNOLOGY,
Pullikkanam whose advice and guidance helped me in the successful
completion of this study.
ANOOP MOHAN
5

6. CONTENT
Chapters Title Page No.
Chapter-1 Introduction 8-10
Chapter-2 Industry profile 12-13
Chapter-3 Company profile 15-22
Chapter-4 PMS and EBO 24-25
Chapter-5 Management structure at KDHP 27-29
Chapter-6 Department profile 31-43
Chapter-7 Corporate social responsibility 45-46
Chapter-8 Environment and sustainable development 48
Chapter-9 SWOT analysis 50-51
Chapter-10 Conclusion and Recommendation 53-54
6

7. CHAPTER 1
INTRODUCTION
7

8. INTRODUCTION
An organization is a social arrangement which pursues collective goals,
controls its own performance, and has a boundary separating it from its
environment. Management is interested in organization mainly from an
instrumental point of view. For a company, organization is a means to an
end to achieve its goals - which are to create value for its stakeholders
(stockholders, employees, customers, suppliers, community).
Organizational studies encompasses the study of
organizations from multiple viewpoints, methods, and levels of analysis An
organization study involves the study of the structure and functioning
of its department. Organizing or organization is one of the important
function of the management. Generally, all the organizations are different
but, they have certain common features. They are group of people linked
together by formal and informal relationship, in hierarchical order that
are engaged in co-operative activities and everyone has identical
boundaries. So the study of people in organization is important for future
manager.
Whenever people interact in organizations, many
factors come into play. Modern organizational studies attempt to understand
and model these factors. Like all modernist social sciences, organizational
studies seek to control, predict, and explain. It is vital to study the structure
and functioning of successful organization so they will guide directorial
towards successful and profitable functioning The swift changes in the
field of science and technology has revolutionized the organizational

9. system. Such changes have become inevitable to achieve the basic objective
of the firm. 8
IMPORTANCE OF THE STUDY
1. To familiarize with a business organization.
2. To understand the operations of the various departments within the
company.
SCOPE OF THE STUDY
Internship training will help Management graduates to know about the
functioning of an organisation. It is a means for bridging the gap between
theory and practice.
OBJECTIVES OF THE STUDY
1) To know about the tea industry and its history.
2) To know about functions carried out in various departments.
3) To study the products of the company.
4) To study the structure of various departments and its function.
5) To carry out a SWOT analysis of the organization

10. 9
ASSUMPTIONS OF THE STUDY
This study is based on the following Assumption
1) The data given by the company official are true and unbiased.
2) The data collected from various secondary sources are true.
LIMITATIONS OF THE STUDY
Allotted time span has been the main limitation.
TECHNIQUES OF DATA COLLECTION
1. PRIMARY DATA
Information’s were collected by conducting personal interviews and
discussions with officials, employees of the company and also by direct
observation

11. 2. SECONDARY DATA
The secondary data can be collected through financial records,
brouchers, company records etc.
Secondary data are collected from:
• Annual reports
• Company documents &
• Company websites.
10
CHAPTER 2
INDUSTRY PROFILE

12. 11
TEA INDUSTRY IN INDIA
The tea industry in India is about 172 years old. It occupies an important
Place and plays a very useful part in the national economy. Robert Bruce in
1823 discovered tea plants growing wild in upper Brahmaputra Valley. In
1838 the first Indian tea from Assam was sent to United Kingdom for public
sale. Thereafter, it was extended to other parts of the country between 50's
and 60's of the last century. However, owing to certain specific soil and
climatic requirements its cultivation was confined to only certain parts of the
country. Tea plantations in India are mainly located in rural hills and
backward areas of North-eastern and Southern States.
Major tea growing areas of the country are
concentrated in Assam, West Bengal, Tamil Nadu and Kerala. The other
areas where tea is grown to a small extent are Karnataka, Tripura, Himachal
Pradesh, Uttaranchal, Arunachal Pradesh, Manipur, Sikkim, Nagaland,
Meghalaya, Mizoram, and Bihar. Unlike most other tea producing and
exporting countries, India has dual manufacturing base. India produces both
CTC and Orthodox teas in addition to green tea. The weightage lies with the

13. former due to domestic consumers’ preference. Orthodox tea production is
balanced basically with the export demand. Production of green tea in India
is small. The competitors to India in tea export are Sri Lanka, Kenya, China,
Indonesia and Vietnam.
Tea is an agro-based commodity and is subjected to
vagaries of nature. Despite adverse agro climatic condition experienced in
tea growing areas in many years, Indian Tea Plantation Industry is able to
maintain substantial growth in relation to volume of Indian tea production
during the last one decade. There has been a dramatic tilt in tea disposal in
favor of domestic market since fifties. While at the time of Independence
only 79 M.Kgs or about 31% of total production of 255 M.Kgs of tea was
retained for internal consumption, in 2008 as much as 802 M.Kgs or about
82% of total production of 981 M.Kgs of tea went for domestic
consumption. Such a massive increase in domestic consumption has been
due to increase in population, greater urbanization, increase in income and
standard of living etc. Indian tea export has been an important foreign
exchange earner for the country.
12
There was an inherent growth in export earnings from tea over the years. Till
70s’, UK was the major buyer of Indian tea Since 80s’ USSR became the
largest buyer of Indian tea due to existence of the trade agreement between
India and erstwhile USSR. USSR happened to be the major buyer of Indian
tea accounting for more than 50% of the total Indian export till 1991.
However, with the disintegration of USSR and abolition of Central Buying
Mechanism, Indian tea exports suffered a setback from 1992-93. However,
Indian Tea exports to Russian countries recovered from the setback since
1993 under Rupee Debt Repayment Route facilities as also due to long term
agreement on tea entered into between Russia and India. Depressed scenario
again started since 2001 due to change in consumption pattern, i.e. switch
over from CTC to Orthodox as per consumer preference and thus India has
lost the Russian market. Another reason for decline in export of Indian tea to
Russia is offering of teas at lower prices by China, South Asian countries
like Indonesia and Vietnam.
The major competitive countries in tea in the
world are Sri Lanka, Kenya, China and Indonesia. China is the major
producer of green tea while Sri Lanka and Indonesia are producing mainly
orthodox varieties of tea. Kenya is basically a CTC tea producing country.
While India is facing competition from Sri Lanka and Indonesia with regard

14. to export of orthodox teas and from China with regard to green tea export, it
is facing competition from Kenya and from other African countries in
exporting CTC teas. Because of absence of large domestic base and due to
comparatively small range of exportable items, Sri Lanka and Kenya have
an edge over India to offload their teas in any international markets. This is
one of the reasons of higher volume of export by Sri Lanka and Kenya
compared to India. Another important point is that, U.K has substantial
interest in tea cultivation in Kenya.
Most of the sterling companies, after the
implementation of FERA Act started tea cultivation in Kenya. So, it makes
business sense for U.K. to buy tea from Kenya and Kenya became the
largest supplier of tea to U.K. Tea is an essential item of domestic
consumption and is the major beverage in India. Tea is also considered as
the cheapest beverage amongst the beverages available in India. Tea
Industry provides gainful direct employment to more than a Million workers
are mainly drawn from the backward and socially weaker section of the
society. It is also a substantial foreign exchange earner and provides sizeable
amount of revenue to the State and Central Exchequer.
13
CHAPTER 3
COMPANY PROFILE

15. 14
COMPANY HISTORY
India being one of the largest producers and exporters of tea in the world
represents a unique model of plantation agriculture. HUL controls nearly
40% of packed tea market in India followed by TGB with a market share of
21% . Traditionally, Indian tea was rated as one of the best in the world and
therefore, was enjoying a good export market. But since last few years, the
tea industry has been in a perilous position with excess of production,
declining prices for its producers and severe competition from the rest of the
world.
The rising cost of production with falling prices made big tea companies sell
the plantations and exit from tea cropping activity. While HUL sold its tea
plantations to some private parties, TTL in their South Indian Plantation
Operations (SIPO) in Munnar followed a unique model of selling the
plantations to the employees of the company. A few years back in 2005, the
company had carried out the employee-buy-out (EBO) leading to the birth of
Kanan Devan Hills Plantations Company (P) Limited (KDHPCPL), which is
considered as a milestone in the history of tea plantations in India. Nearly all

16. 13,000 employees of the organisation became the shareholders of the new
company.
In sharp contrast to the situation in the tea industry experiencing closures
affecting thousands of employees, KDHPCPL could not only recover within
a year the loss of Rs 13 crore run up by TTL, but could also register a post
tax surplus of Rs 2.37 crore as on 31 March 2006. The new company was
unique in its model. The notion of participatory management (PMS) was en-
trenched in the very objectives, vision and mission statements of the
company. This seemed to be a radical shift from the past where the
management of tea plantations witnessed a typical hierarchical top-down
approach.
15
KANAN DEVAN HILLS PLANTATIONS COMPANY (P) LIMITED
The Kanan Devan Hills Plantations Company Private Limited (KDHP)
succeeded Tata Tea Limited on 1st April 2005, when the latter exited most
of its plantations in Munnar to focus on the growth of its branded tea
business. With its 7 extensive gardens covering approximately 24,000
hectares, the company is today the largest tea corporate in South India with
an annual production of 21 million kg of tea. Virtually all its 12,000 - plus
employees are its shareholders.
The company is fully conscious of the social obligations to its employees as
well as the public at large and spares no effort to fulfill these, often well
exceeding the statutory requirements. Further, it is strongly committed to
preserving the fragile ecology and rich bio-diversity of the area in which it
operates.
The company funds important initiatives and activities of the High Range
Wildlife and Environment Preservation Association, evolved specifically for
a comprehensive environment management and sustainable development, of
the High Ranges. All the officers of the company are members, and selected

17. few are designated as Honorary Wardens of specific areas under their
operation.
The efforts taken by the association in protecting the flora and fauna of the
High Ranges is a well recognized fact by the state forest officials, to the
extent that, even today the Eravikulam National Park, an environmental
hotspot is under the joint management of the association and the Kerala
Forest Department. The company also has undertaken extensive shola
regeneration and rejuvenation programmes to maintain the eco balance of
the area.
16
MISSION OF KDHP
To produce a consistently high quality product, exceeding customer
expectations, at the lowest cost and creating an environment for work
excellence, ensuring sustained growth with commitment towards social and
environmental values.
VISION OF KDHP
To collectively create a unique and sustainable business with the
commitment and involvement of all the employees as partners.
VALUES OF KDHP

18. To conduct our business with complete transparency while aiming for
treating people with care and compassion
KDHP NEWS
The KDHP news is the in house magazine of the company which is
published twice in a year.
17
TEA GARDENS AND FACTORIES OF KDHP
The tea gardens of KDHP is spread around 7 estates. They are:
Chundavurrai
Gunderale
Gundumallay
Letchmi
Madupatty
Nullatani
Nyamakad
The KDHP Company is having 16 factories. Among these 7 are orthodox
teas producing factories and 9 are ctc (crush tear curl) tea producing
factories.
They are:
Arivikad - ODX
Chittavurrai – ODX
Chokanad - CTC

19. Chundavurrai-ODX
Devikulam-ODX
Gunderale-CTC
Gundumallay-CTC
Kadalaar-ODX
Kalaar-CTC
Kanniamallay-CTC
Letchmi-CTC
Madupatty-CTC
Periavurrai-CTC
Thenmallay-ODX
Vagavurrai-CTC
Yellapatty-ODX
18
KDHP SALES OUTLET
A wide variety of products are available in the exclusive sales outlet
operated by KDHP Company. The Tea and non tea products available in the
outlet are:
Tea products
Factory fresh teas
Flavored teas
RTD mix (ready to drink)
White tea
Organic tea
Non tea products
Dry fruits
Grape seed
Chocolate preserves
Spices
Rose oil

20. Almond
Cashew
19
NON TEA OPERATIONS OF KDHP
The company is also having some non tea operations which include:
Tea museum
This is the country’s first ever tea museum; located at KDHP’s Nullatanni
estate in Munnar. The thousands of tourists who visit Munnar for sightseeing
can carry home impressions of the distant past of this tea planting district in
Idukki’s high ranges. The aim of the tea museum is to depict the growth of
these more-than-a-century-old tea plantations, from the rudimentary tea
roller to the present fully automated tea factory of Madupatty. It also gives
firsthand knowledge to tourists about tea processing and the operations that
go into the making of black tea.
Aromatic plants
On the anvil is a foray in the field of rasing various aromatic plants. The
company is in an advanced stage of propagating rose, geranium, Rosemary,
Chamomile, Clarysage, Cypruss, Acacia and Eucalyptus, Globulous and
Citradora plants for extraction, distillation and sale.
Vetiver in tea plantations

21. The Company is a pioneer in adopting VGT (vetiver grass technology)
in tea plantations and carried out extensive studies on various
aspects/applications of the same. Vetiver was introduced in tea plantations
of the High Range (Kerala), south India for preventing soil erosion and
moisture conservation by the R&D Department. Use of this technology by
establishing live hedges of vetiver grass resulted in replacement of
conventional revetments for soil and moisture conservation. When planted
as a contour hedge it acts as a continuous filtering system that slows down
rainfall runoff resulting in reduction of rilling and gullying, and collects soil
sediments at the hedge face.
Soil and nutrient loss is reduced, soil moisture and ground water improves
significantly, and natural terraces and ground leveling develops behind the
hedge. An important feature is that Vetiver grass takes up minimal space and
is virtually non competitive with adjacent crops. A germplasm with more
than 40 cultivars collected from various sources has been established and
their suitability for various technical applications is being studied
periodically
20
Bio fertilizer and control agents
KDHP Vermiderma is a an unique bio-formulation prepared with high
quality Vermicompost prepared scientifically from spent tea leaves enriched
with Trichoderma viride which is a proven non-pathogenic and ecofriendly
microbe which can control many pathogen causing damping off, root rot,
rhizome rot, stem rot and wilt in many crop species. It can be applied using
the application method described to most food crops grown in green house,
shade houses and agricultural fields. The presence of desired nutrients in the
carrier material will enhance the multiplication and viability of Trichoderma
and the number of Colony forming units (CFUs) will increase unlike other
talc-based products.
Sales outlet
The first one being attached to its corporate office displays the company’s
extensive line of products for purchase. Its location with plenty of parking
makes it a convenient shopping outlet for visitors and tourists. The sales
staff with their thorough knowledge of the products can help the customers
with their choice, from a wide product range that include Variety of tea like-
Orthodox, CTC, Green, Organic, Flavored, White Tea etc. The other outlets

22. are located at Rajamallay one of the major tourist attractions in Munnar and
at Madurai- the Temple City in Tamil Nadu.
21
ORGANISATIONAL STRUCTURE
MANAGING DIRECTOR
HEAD FACTORY OPERATIONS HEAD FIELD OPERATIONS
KALAMASSERY PLANT
NON-TEA OPERATIONS& FUEL & BROUGHT LEAF OPERATION
FINANCE &SYSTEMS AND MISD
KALAMASSERY PLANT
MARKETING DEPARTMENT
KALAMASSERY PLANT
BOARD OF DIRECTORS

23. 22
CHAPTER 4
PMS AND EBO
INDUSTRIAL RELATIONS DEPARTMENT
KALAMASSERY PLANT
HUMAN RESOURCE DEPARTMENT
KALAMASSERY PLANT
ENGINEERING DEPARTMENT
MD SECRETARIATE
KALAMASSERY PLANT
QUALITY CONTROL DEPARTMENT
KALAMASSERY PLANT
RESEARCH AND DEVELOPMENT DEPARTMENT
KALAMASSERY PLANT
PURCHASE & LOGISTICS DEPARTMENT
KALAMASSERY PLANT
ADMINISTRATION & LEGAL DEPARTMENT
KALAMASSERY PLANT

24. 23
EMPLOYEE BUY OUT (EBO)
EBO can be defined as a transaction in which the employees of a business
join with the financing institutions to buy the business from its present
owners. The highlights of EBOs in the past have demonstrated substantial
increase in motivation, participation, productivity and profitability in the
organizations following an EBO. The report further reinstates that an EBO
model may not be appropriate under all situations. A willing seller, an
effective employee team with capable management and a financially viable
proposition are critical success factors for EBO.
Elaborating the above, the owners may be forced to sell the company due to
any of the following reasons – retirement, realization of investment,
divestment, and business in distress or privatization. An EBO might also be
carried out through an Employee Share Ownership Plan (ESOP) or might
result in a cooperative or a private limited company. The study supports
many arguments in favor of an EBO. First, the fact that the employees have
a share in the company’s success leads to increased motivation and morale
of the employees. Second, equally happy would be the existing owner of the
business on selling the business to people who have been a part of the
business and are most likely to continue with the company’s traditions.

25. Third, the workforce and the status quo
of the company are maintained, eliminating the uncertainty arising from
selling the business to an outside party. Fourth, an EBO is also socially
supportive, in the sense that wealth is spread across a larger number of
people. The system can also raise more equity which would result in the
transaction being less dependent on external debt financing.
24
PARTICIPATORY MANAGEMENT STRUCTURE
Participative management has been broadly adopted as a strategy in
organizational development wherein it not only encourages workers to
identify with their own duties and improve their performance but is also seen
as a mechanism to enhance the performance of the company. Robbins
(1991) defines participative management as a kind of management style in
which the subordinates share a significant degree of decision-making power
with their supervisors. Participatory management can occupy three distinct
forms of interpretations. First, it can be seen as a socio-political concept of
industrial democracy under which the ownership is vested in employees
whose business is managed by employees or a group elected by employees
themselves.
Forms involving worker directors, collective wage earner funds and worker
cooperatives fall within this category. Second, participation is viewed as a
term to represent the processes and institutions which involve subordinate
employees in one or more aspects of organizational decision-making like
simple information giving or joint consultation and regulation. Third, it may
denote a distinct evolutionary development to promote greater employee
influence within the organisation. The tangible dimension of participatory

26. management includes parameters like productivity, quality of product,
turnover rate, absenteeism rate and labour management dispute rate.
The intangible dimension includes work morale, organizational climate,
employee motivation and job satisfaction. It is accomplished by many
authors that participatory management has a positive effect on organizational
performance. It was seen that participation in management promoted
organizational morale and work motivation which has a direct impact on
organizational performance. In addition, participatory management is said to
reduce labour management disputes and benefit overall organizational
effectiveness.
Since employees are given more power under participative management to
express opinions in the decision-making procedure, they are more likely to
carry out the decisions made, to accept technical changes and adopt
innovations. Participatory management is a good way to achieve long-term
employee satisfaction in terms of turnover, absenteeism and a positive state
of mind of the individual employees.
25
CHAPTER 5
MANAGEMENT STRUCTURE

27. 26
PARTICIPATORY MANAGEMENT STRUCTURE AT KDHP
The new company had adopted a unique model which is the first of its kind
as far as the plantation sector in the country is concerned. The notion of
participatory management was embedded in the very objectives, vision and
mission statements. The specific objectives for the functioning of the
company include providing employees a better understanding of their role
and importance in the working of the company, to involve all levels of
employees in the decision-making process whereby a sense of ownership is
fostered and their urge for self expression is satisfied.
This seems to be a radical shift from the past where the management of tea
plantations witnessed hierarchical top-down approach. What gave KDHPCL
a truly participatory nature were facts like 68% of its shares held by nearly
12,441 employees, a workers’ representative and a staff representative on
the board of directors, and several advisory and consultative participatory
management committees – comprising a cross section of employees – at
every level of functioning of the company. Most of the estates, under the
Tata’s, had been run by estate managers who in charge were responsible for
the management of plantations of TTL. But under KDHPCL, the

28. management plan was bottom up diverting from the traditional top-down
approach.
Participatory management system was made functional through a set of
committees consisting of representatives of all categories of shareholding
employees at division/factory, estate and the company levels. The
membership to the committees was limited to those employees who are
shareholders of the company who had to assume definite
advisory/consultative roles under the participatory management. A total of
82 Divisional Advisory Committees (DACs) and 16 Factory Advisory
Committees (FACs) are functioning at present. At the second level there are
Joint Estate Consultative Committees (JECC) and Joint Factory Consultative
Committees (JFCC) and at the apex level is the Central Management
Committee (CMC). The managing director of the company is the convener
of CMC. The DAC and the FAC are at the grass-roots of the functioning of
the estates/factories. They comprise six members, two women workers and
two men workers, one staff and one assistant manager or management
assistant. The members were to be elected by secret ballot from the
division/factory with the term of office for three years. The meetings of the
committees are held once in a month on a predetermined day.
27
The functions of DAC include monthly work planning, manpower
deployment, adherence to field policies, review of efficiencies, material
requirement and the follow up on action plan. In addition the DAC would
discuss on certain aspects of welfare and safety measures ensuring
continuous water supply, sanitation, other income generating opportunities,
etc. Similarly, the FAC was held responsible for making fortnightly work
planning, manpower deployment, and update on material requirement for the
factory, review the efficiency parameters and ensure that standardization
norms such as HACCP are adhered to. The DAC/FAC was to coordinate
with joint estate/factory consultative Committees.
The representatives of DAC/FAC were to be nominated to these committees
of which the estate/factory manager was the convener. The JECC comprises
of 17-26 members; 6-13 fieldworkers/supervisors, two field staff, one
medical officer, three to five assistant manager/MA, one manager, one
welfare officer, one office staff and one driver and a blacksmith. It is seen
that three to six women workers represent in the committee. To ensure full
and equal participation of the members of all DACs in JECC, their
membership to this committee will be on rotation basis, whose period of
representation will not exceed more than a few months at a time, as decided

29. by the convener of this committee. In the area of operations the JECC had to
set its own targets within the approved budgets and analyze reasons for
shortfall while reviewing the targets and make plans accordingly for
improving the same. It also had to look into the statutory compliance and
monitor and curtail absenteeism among the workers.
In addition the JECC had to implement the recommendations and decisions
of the CMC or the subcommittees formed by the CMC. The welfare
measures recommended by the DACs were to be reviewed by the JECC
while organizing and monitoring the welfare promotional activities to
improve health, hygiene and sanitation of the estate population and protect
the environment. Similarly, the JFCC comprising 9-12 members with the
factory manager as the convener had to take steps necessary at factory level
to promote Rationalize production, improve methods, layout and processes,
improve productivity, eliminate waste, eliminate defective work and
improve the quality of products, improve the upkeep and care of machinery,
tools and instruments.
28
These two consultative committees would report to the CMC which would
comprise directors representing the workers/supervisors/non-staff/staff and
heads of key departments like sales, tea production, industrial relations (IR),
finance and non-tea production. The CMC comprised 11 members. One
director from workers/supervisors, two directors from management staff,
two tea production heads, one sales heads, managing director, one IR head,
one non-tea production head, one finance head and one director from
staff/non-staff. The term of office is for three years. The CMC met once in a
quarter to study operational results and advise on the overall performance of
the company. The CMC had to advise the company on all matters
concerning the working of the industry in the fields of production and of
employee welfare and to advice on any other matter referred to it by the
JECCs and the JFCCs. However, larger issues like wages/salaries,
allowances, etc, are outside the purview of discussion in these meetings.
Other than the committees set up for the routine functioning of the
plantations and the factories, the CMC appoints 16 sub-committees to set up
for diversification and meeting special purposes which comprised members
at all levels of employment. This provided for direct representation of
problems in those areas in the CMC. The records of the meetings of all the
committees were well maintained and monitored and were scrutinized by the

30. higher authorities at every stage of functioning. The system thus provided
for participatory management, but with a hierarchical accountability.
29
CHAPTER 6
DEPARTMENT PROFILE

31. 30
TEA MANUFACTURE DEPARTMENT
The operations and the production of all the 16 factories i.e., 7 orthodox and
9 CTC factories fall under this department.
The main functions of the department are:
 Preparation of monthly manufacturing and disposal
plan for each factory
 Responsible for proper implementation of the
manufacturing policy
 Preparation of yearly and mid-term manufacturing plan
for own and bought leaf
 Yearly maintenance of the factories
 Carries out an annual inspection of all the factories on
which a detailed report for each factory is made
 It monitors stock movement from the factories on a
daily basis
 Responsible for any enquiries relating to production
from any of the factories

32.  Monitoring grade percentage and outturn achieved by
each factory
 The department generates statements on:
 Daily statement on factory-wise stock
 A fortnightly report on grade percentage
 Monthly stock check report
 Monthly statement of waste percentage of
made tea to green leaf
 Fortnightly report on sifted tea outturn
31
FIELD DEPARTMENT
The department is mainly responsible for preparation and implementation of
all agricultural policy and practices which includes:
 Preparation of guidelines for estates revenue budgets as well as
verifications
 Responsible for mid-term revision of budgets
 Annual inspection of all the 7 estates is carried out by this department
followed by a detailed report
 Handling capital expenditure of all the estates
 Daily handling of leaf diversions to the different factories from the
estates depending on the factories and market requirements based on
the manufacturing plan
 Depending upon planting and infilling requirements for all the estates,
plant allocation is done from this department

33.  All tea board inspections and sanctions for subsidy are looked after by
this department
 This department conducts in-house training programs on agricultural
practices for management staff as well as general staff, supervisors
and workers.
 Organizing and conducting training programs for new assistants
 A considerable amount of day to day correspondence between the
department, estate and other departments is handled
 Generation of reports on fuel operation policies implementation and
monitoring, felling and planting programs, allocation of firewood to
factories and estates and inter-estate transfer of firewood
32
NON TEA OPERATIONS DEPARTMENT
Though tea production is KDHP’s mainstay, to insulate itself against the
vagaries of the tea market and to sustain its profitability, the company took a
strategic step to diversify into other agricultural as well as non-agricultural
activities. Some of these projects include plantation tourism, floriculture,
horticulture, medicinal and Aromatic plant propagation and fuel operations.
The functions of this department are;
 All matters related to the non tea operations
 Matters related to the sales outlet attached to the corporate office as
well as at Rajamallay and at Madurai
 The tea museum located at Nullatanni estate is been promoted as a
major attraction and is under this department.
 Firewood for the factories is arranged by this department

34. 33
FINANCE DEPARTMENT
Finance is the life blood of business. It rightly termed as the science of
money. Without adequate finance, it is impossible for any business firm to
carry out its activities. The term finance refers to money or funds available
to a firm. There is a necessity of managing the funds properly and efficiently
for achieving the object of the business. Financial activity is concerned with
the planning and controlling of the firm financial resources. Business finance
is concerned with the acquisition and utilization of funds in a business
enterprise. It involves raising the needed funds, judicial use of funds and
controlling the funds used in business. Financial management is an integral

35. part of the overall management. This department handles all matters relating
to estates and companies accounting procedures and financial reporting. The
functions of the departments:
 All taxes related works filing of returns, income tax,
KGST/CST/VAT, etc
 Estate fund management
 Payroll preparation and reconciliation of all the departments
 Department budgeting
 Audit reports
 All stock accounts reconciliation
 PF reconciliation for all staff
 Gratuity returns
 Current bill collection and accounting
 Sundry debtor and creditor’s ledger maintenance
 Building fee collection from Munnar town
 Telephone bills remittance and reconciliation
 Inter-estate accounts and reconciliation
 Journal keying
 Tea transfer reconciliation
 Job invoice reconciliation
34
MARKETING DEPARTMENT
Marketing being the most important it is concerned with analyzing the
market , discovering the opportunities , formulating marketing strategies ,
developing the special strategies and tactics, proposing a budget and
establishing a set of control. Tea trading in the domestic market is done in
two ways, Auction and private selling. Auction sale is considered to be the
best method for sale of tea because tea is a commodity with infinite variety
and with wide spectrum of buyers. The functions of the departments are;
 Look for exports

36.  Send samples to various buyers and finalize the blend prices for
exports
 Look for tie-ups for marketing of our tea with various companies
 Try to increase the sale through other channels like consignments to
find alternate markets
 Closely monitoring of stocks at the factories to ensure that there is
minimal stock build up
 To ensure packing, blending and dispatch of poly packs
 To anticipate market movements to ensure the movement of tea
without compromising on prices
 To find new markets for value added teas like organic tea, green tea
etc
 Visit markets to get feedback from buyers and communicate the
requirements to the factories to maximize the prices
35
INDUSTRIAL RELATIONS DEPARTMENT
This department handles all matters relating to the service conditions of the
employee, disciplinary actions, industrial disputes etc. the functions of the
department are;
 All matters concerning appointment, salary, fringe benefits, statutory
benefits, transfers, retrials etc of all categories of employees.
 Co-ordinate handling of all legal matters with our legal firms

37.  Posting of acting nurses for leave vacancies in the estate hospitals
 Determination of workers as well as staff bonus and productivity
 Linked incentives
 Represents the management in case of any industrial disputes
 Handles eviction cases, compensation cases etc
 Conducts domestic enquiry courses covering all estates on how to
conduct an enquiry
 Liaison with trade unions
 Conducting DAC/FAC etc.
 All matters relating to security agencies
 Assisting community development and social welfare works and
welfare activities
 Determination of parameters for plucking incentives schemes for each
month
36
ADMINISTRATIVE AND LEGAL DEPARTMENT
This is the legal department of the company and deals with legal, land and
other legislation at all level with the government. The functions of the
department are:
 Handling of all land matters concerning TGB and KDHP
 All civil, criminal and such others cases related to KDHP
 Land survey and area certificate preparation

38.  Preparation of deeds and agreements
 All central excise matters pertaining to the company
 Factory license renewal
 Renewal of petroleum license
 Management of staff profession tax
 All matters relating to patent application, weights and measures,
pollution control acts and rules
 Matters relating to high range estate schools
 Panchayat building tax and plantation tax
 Insurance matters relating to all the estates
 Road tax remittance, company vehicles checklist
 KDHP house cash transactions
 KDHP house employees leave register
 Forest passes application and all connected works
 Filing of Kerala payment of wage returns
 Kerala factories half-yearly returns and applications of any
amendments
37
SYSTEMS DEPARTMENT
The ultimate goal of this department is complete automation of all systems.
Plantations being an industry quite different from any other industry, where
age –old traditions still exist, achieving this change seemed difficult. With
this view in mind the company started a project called ‘T-SOFT’ where the
source data once entered should be available and reachable for everyone

39. when needed. Thus under this scheme weighing machines were introduced
and each estate and factory office was fully computerized with internet
facilities. The major functions of the department are;
 Monthly preparation of an efficiency report of field and factory
 Monthly expenditure analysis
 Monthly financial reporting to the MD and chairman of the company
 Monthly generation of production reconciliation statement
 Generating budget compilation statements
 Accounting by EDP
 Generating payroll
 All trouble shooting exercise of both software and hardware
 Lending support to all the department
 Provider of intranet facility
38
QUALITY CONTROL DEPARTMENT
The qualitative assessment of tea cannot be determined by any chemical
analysis, even in today’s techno-savvy world there is no substitute for the

40. taster’s trained and sensitive taste buds, in the evaluation of the tea. The
main functions of the department are;
 End product evaluation based on various criteria like dry leaf,
appearance, infusion and liquor strength.
 Daily tasting sessions on the teas manufactured are undertaken and the
feedback on the teas with approvals to various destinations is
informed to factories through daily tasting reports
 Generates and circulates fortnightly and to-date ranking reports
 Monthly setting of benchmark and standard samples for auction marks
 Conducts monthly brokers tea tasting sessions
 Preparation and evaluation of blends and blending of teas based on the
market requirements
 Responsible for allowing only quality teas to enter the market
39
HUMAN RESOURCE DEPARTMENT
Man power or human resources or people at work of an organization
consists at all individuals engaged in any of the organization activities
regard less of levels. Manpower is one of the primary resources. Personal

41. management is that part of the process of management which is primarily
concerned the human aspects of an organ. Its purpose is to establish and
maintain good personal relations at all levels of an organization. Without
efficient use of human resources, management can never accomplish
organizational objectives. Personal management is also called personal
administration, labour management, and manpower management. The
functions of the department are:
 Planning, recruitment, selection, induction and placement
 Performance management system
 Potential assessment system
 Training and career development programs
 Implementation and follow up on various certifications that deal
with monitoring statutory compliances
 Responsible for the editorial of the in house magazine KDHP news
 Involve in special projects and tasks as and when advised by the
top management
40
ENGINEERING DEPARTMENT
The functions of the department are;
 Maintenance and repair works of all the vehicles belonging to the
company as well as TGB

42.  Distribution of vehicles stationed in the workshop
 Electrical current distribution and maintenance works for whole
Munnar town
 Land inspection near and around Munnar town area
 Maintenance of buildings and other civil works in and around area
 Preparing estimates, supervision and verification of any civil works
for both KDHP and TGB
 Matters regarding statutory requirements of factories.
41
MD’S SECRETARIAT
The functions of the department are:

43.  All matters pertaining to the functioning of the guest houses in
Munnar
 Maintenance of bungalow inventory account
 All administrative matters relating to management staff-transfer,
leave, allowance, vehicle loans, leave processing and their follow up
 All routine correspondence from MD to various estates, factories,
department and external sources
 All arrangements concerning company visitors
 Advice the finance department for crediting any reimbursement to the
management staff account
 All matters of correspondence concerning management staff
42
PURCHASE AND LOGISTIC DEPARTMENT
The purchase section is responsible for discharge of the purchase functions.
The functions of the department are:

44.  Vendor selection and development
 Preparation and dispatch of purchase orders to vendors
 Processing of purchase document after receipt of materials
 Intimation and follow up of rejection and shortage to the vendors
 Follow up of pending purchase orders
The functions of the logistic department are:
 Truck arrangement for local and auction teas without interruption
 Truck arrangement for outstation loads
 Issuance of sales tax forms to the fleet/factories and maintenance of
registers and follow up
 Arrangement of travel/accommodation/transport/bias for management
staff with follow up and verifications
 Preparation of tender on sale of scrap
 Maintains EMD statements
 Notes and minutes of the transport committee meetings
 Travel bill, verification, passing and follow up
 Sale of non performing assets after adopting the statutory formalities
 Meeting the requirements of NTO for their upcoming projects
43

45. CHAPTER 7
CORPORATE SOCIAL RESPONSIBILITY
44
CORPORATE SOCIAL RESPONSIBILITY

46. KDHP Company has always strived through its endeavors to make a
positive contribution by engaging and supporting a wide range of Socio
Economic, Educational, Sports and Health initiatives in the community that
it operates. Responsibility towards the society is one of the key objectives of
the company, a fact that is evident from its mission statement. Apart from
ensuring that it strictly abides with all statutory and welfare measures as per
provisions of the various enactments applicable to the plantations, the
company has provided welfare schemes on its own like, free electricity for
certain category of employees, assistance for procuring LPG connection,
Fuel Subsidy, facilities for cattle rearing, land for maintaining Kitchen
garden, free issue of hot tea at the work spot, sanitation workers for cleaning
the surroundings of housing provided and a whole lot of other facilities for
sports, recreation and cultural activities. Welfare of the employees of the
company has been one of the core values that the company has always
believed in.
The Participatory Management Structure has helped employees voice their
concerns and requirements from the divisional level. The company also
engages an independent expert to conduct a social audit every year and
rewards the Best Estate and Best Hospital based on the scores received in
the audit. All aspects of labour welfare are covered in this audit. Rice being
a major requirement for the work force and the instability in its price at the
local market, lead the company to intervene and procure rice in bulk directly
from the mill, and distribute it to the employees at cost price with credit
facility, which has helped in making considerable monthly savings for every
family.
Progress without complimenting development of the society does not yield a
sustainable development for any organization; a principle the company bears
in mind in all the policies that it adopts. One such initiative that the company
has given thrust upon to uplift the condition of the women and empower
them is the aid given in formation of Self Help Groups across its seven
estates. The project was carried out in such zeal that, today there are nearly
300 SHG's with total membership counting to 5150. These groups carry out
activities like micro finance, stitching bags, producing phenyl, soaps along
with carrying out welfare activities. These groups have become a blessing to
the families with low income level, and have shown our women who are the
backbone of the industry, additional ways of generating income.
45
The company has always played a supportive role towards their activities by
giving them guidance and providing training facilities. The company

47. provides free schooling up to primary level for the children of the
employees. Apart from this, it extends its appreciation for meritorious
students through rewards and felicitations every year. As part of its
recruitment policy, the company absorbs qualified children of its employees.
The company has introduced the KDHP Scholarship, which is given to the
student achieving the highest marks in twelfth standard exams from the
KDHP family. The dedicated welfare wing of the company helps employees
to avail scholarships promoted by various bodies like UPASI, Tea Board etc
for their children.
The company's Medical Department is involved in providing comprehensive
health care to the employees and their family members, which includes
maternal & Child welfare, immunization, family planning, environmental
sanitation, potable water supply, health education, occupational health,
Tribal welfare etc. The community& Social welfare development
department conducts health exhibitions in each of the estate every year. The
company provides facilities like playgrounds for football, cricket, volleyball,
badminton etc. Inter estate tournaments for Football, athletics, caroms,
badminton etc are conducted. The employees actively participate in these
annual tournaments with Zest and Zeal with the pride of representing their
respective estates.
46

48. CHAPTER 8
ENVIRONMENT AND SUSTAINABLE
DEVELOPMENT
47
ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

49. The company has put in many efforts to preserve the ecosystem of the place.
People are educated on energy efficient practices in factories and in the
households of the employees. The company took over electricity business
from TTL with effect from 1 July 2007 and since then has been distributing
electricity. The company took several initiatives to reduce electricity
distribution loss and improve quality of electricity to distant factories. The
consumption of power and fuel per unit of production reduced from 0.8
units/kg of tea in the earlier system to 0.74 units with the new company.
There were efforts to convert all the incandescent light bulbs into compact
fluorescent lamps (CFLs) which consume 75% less energy than the ordinary
bulbs. The company actively supports the High Range Wildlife and
Environment Preservation Association (HRW and EPA) which plays an
active role in preserving the natural heritage of the Kanan Devan Hills and in
protecting the environment and wildlife conservation of the area. The fuel
plantations (eucalyptus grandis) have been raised by the company to meet its
thermal energy requirements in the high range factories and fuel requirement
of the employee households.
The famous Eravikulam National Park spread over an area of 97 square
kilometers, and located in the High Ranges, is an integral part of the vast
stretch of forests extending from Anamallais to the Palani Hills of Tamil
Nadu. The park is unique with the shola grassland ecosystem at an average
elevation of 2000 Meters. The climate here is temperate. The rolling
grasslands hold the thin topsoil. And the area has remained undisturbed by
human agency from time immemorial. Considering the ecological, floral,
faunal and geo-morphological significance of this area, it is listed as one of
the environmental ‘hot-spots’ in Asia.
The Eravikulam area was under the control of the erstwhile Kanan Devan
Hills Produce Company Limited and maintained as a wildlife reserve by
the Company for the endangered Nilgiri Tahr, well before the concept of
Wildlife sanctuaries and National Parks came into force. This area was
handed over to the Government of Kerala in 1971. Before the land use could
be changed and such a rich biological hotspot misused, the timely
intervention of the HRW&EPA, enabled the area to be declared as a wildlife
sanctuary in 1975.
48

50. CHAPTER 9
SWOT ANALYZIS
49

51. SWOT ANALYZIS
STRENGTH
 Strong demand for tea in the domestic market
 Well maintained tea gardens
 Employee ownership in equity capital
 Salubrious climatic conditions for tea cultivation
 Strong production base
 Motivated manpower with experience and expertise in
tea production
 Strong research and development department
 Effective participative management structure
 Munnar gaining popularity in world tourism map
 Successful non-tea operations
 Largest tea corporate in south India
 Good export performance
WEAKNESS
 Difficulty in mechanization due to geographical
structure of land
 Bulk of Tea sales happens through auctions where the
price is highly unstable
 The company is not having an established brand in
market
 Diminishing availability of labour
 Old age of the tea bushes
50

52. OPPORTUNITIES
 New international operations
 Growing demand for tea as a health attribute
 Develop branded tea by promoting RIPPLE which is
presently in its initial stage
 The plan of company in diversification of crops
 Huge scope available for tourism and related areas
 Establish itself as a premier agri-corporate
THREATS
 Increasing labour costs and cost of production
 Changing climatic conditions can affect the yield of tea
production
 Competitions faced in the domestic as well as
international markets
 The need to support the huge man power
 Lack of manpower availability to meet labour intensive
plantation operations
51

53. CHAPTER 10
CONCLUSION AND RECOMMENDATIONS

54. 52
CONCLUSION AND RECOMMENDATIONS
The EBO and the resultant participatory management system at Tata Tea’s
southern operation in Munnar emerged as a solution to the long-standing
crisis in the tea industry. Tata’s like the HUL wanted to walk out of the
plantations operations and focus on the branded tea business. Participatory
management through the buy-out of the company shares and forming a new
company by the employees was seen as an amicable solution. The transition
was however not without efforts of the management staff of TTL.
The fact that such a huge number of employees could be convinced, though
with initial apprehension, to become the shareholders of the company
demonstrates the effectiveness of the communication cascade undertaken by
the company staff. By facilitating the formation of KDHPCPL, the company
claims to have ensured the long-term economic sustainability and better
living conditions for its workers. This was also a radical shift from the past
where the management of Tata Tea witnessed a hierarchical top-down
approach. However, while speaking of the successful years of the company
and the factors behind them, it is also essential to examine the sustainability
of such models in plantation agriculture. It is essential to note that the timing
of formation of KDHPCPL itself was quite favorable. That was the time
when global markets for tea also witnessed a recovery.
Better price of tea in the auction market benefited KDHPCPL in earning
profits in the first year of operation which was a crucial year to form
expectations for the employees and boost their confidence in the system.
This was an important achievement to take newly formed company to move
to the next level of trajectory. Though KDHPCPL to a large extent has
stabilized in terms of organizational structure, there are internal and external
factors which can be a threat to sustainability of the model. Another round of
long depression in the global tea market may threaten the financial stability
of KDHPCL.
For this diversification of crop could be a prudent measure which the
company is now venturing into. But at this point the diversification of crops
is highly limited. Second, the average age of tea plantations is around 80
years which does not give rise to good quality of tea. The best of the tea is
extracted when the bushes are 30-40 years old. However, the company is
putting in efforts to replant the bushes in a phased manner.

55. 53
Third, the company so far has experienced a good export performance as
compared to the earlier regime. However, there is much to do in this sphere
of activity. It would be worthwhile to explore the major markets where the
export share of India in those markets is quite minimal. Since the domestic
consumption of tea is also very high and there is a vast potential in the rural
markets, it would be wise to promote marketing and distribution strategies in
rural India. However, the branding efforts of the company through tie ups
with Gujarat Samachar and Elite Breads has not proved too successful. This
calls for increased attention towards building up own brands. Hence the
company has launched its own brand “RIPPLE” which is in its initial stage
of market development. Concentrated efforts are on to meet the competition
in the retail (branded) tea business.

56. 54