PROJECT TITLE:  CODE OF ETHICS ANALYSIS OF A FORTUNE 500

COMPANY/NIFTY 50

SUBJECT: INDIAN ETHOS AND MIND MANAGEMENT

SUBMITTED BY: SRESTHA CHATTERJEE

FMS/MBA/2019-21/001

SECTION A.
WHY TATA STEEL?

Incorporated in the year 1907 by Jamshetji Tata, in the quaint town of Kalimati (now
Jamshedpur), TATA STEEL LIMITED was established as Asia’s first integrated private steel
company. With this, they also developed India’s first industrial city at Jamshedpur. As of 2019,
Tata Steel Ltd holds the 8th Rank in Fortune India 500 and is one of the most actively traded
stocks in Nifty 50. Tata Steel is renowned for its activities geared towards Corporate Social
Responsibility, for the great value it places to its employees and also for its efforts towards
sustainable development, making it a perfect choice for this project.

Another factor that promoted this choice is that I grew up in the city of Jamshedpur which is,
geographically, almost surrounded by the company and has always benefited the most from its
generosity in giving back to society. Tata Steel is also the company I shall be interning with, in
May 2020 and when presented with the opportunity to familiarize myself with its ethics, code of
conduct, with the values they cherish and with what drives the company, I immediately rook it
up.

ABOUT THE COMPANY

Tata Steel, formerly known as TISCO, started the production of pig iron in 1911 and moved on
to the production of steel in 1912. During the First World War (1914-1918), the company grew
by leaps and bounds and by 1939, it was able to boast of operating the largest steel plant in the
British Empire.

After a few years of steady growth, in 1951, the company engaged in modernization as well as
expansion program of a massive scale, which was later (1958) upgraded to a project of 2 million
metric tonnes per annum (MTPA).

 By 1970, the company employed around 40,000 people at Jamshedpur, and a further 20,000 in
the neighboring coal mines. In 1971 and 1979, Tata Steel had to face a few futile attempts of
nationalization and in 1990, the company began to expand and established its subsidiary, Tata
Inc., in New York. The company changed its name from TISCO to Tata Steel Ltd. in 2005. In
2006, the company entered into a merger and acquisition arrangement with Corus.
In 2015, the company announced the purchase of strip product services centers in Sweden,
Finland, and Norway from SSAB to strengthen its hold in the Nordic region and in September
2017, ThyssenKrupp of Germany and Tata Steel announced plans to combine their European
steel-making businesses. In July 2019 Tata Steel Kalinganagar (TSK) has been included in the
list of World Economic Forum’s Global Lighthouse Network, showing leadership in
applying Fourth Industrial Revolution technologies to drive financial and operational impact

Over the years the company has also evolved to include sustainable development in its growth
and is renowned for its CSR/CER activities.

COMPANY PROFILE

Tata Steel is currently the world’s second-most geographically-diversified steel producer and one
of the few fully integrated steel operations – from mining to the manufacturing and marketing of
finished products.

Tata Steel is one of the leaders in the global iron and steel industry with annual crude steel
deliveries of 27.5 million tonnes (in FY17), and the second-largest steel company in India
(measured by domestic production) with an annual capacity of 13 million tonnes after SAIL.

On the FORBES LISTS, Tata Steel is ranked:

#391 World’s Best Employers 2019

#105 Top Regarded Companies 2019

#552 Global 2000, 2019.

The company has a diversified product range including, but not limited to, steel, long steel
products, structural steel, wire products, steel casting pipes, and household goods. It also has a
global client base and a stellar reputation worldwide. Tata Steel has a longstanding reputation as
a fair and caring employer and is known to respects all human rights, both within and outside the
workplace. The company’s Raw Material Operations is spread across India and Canada which
helps them to be self-sufficient in steel production. Key manufacturing functions are performed
by the raw materials and iron-making groups, while Shared Services provides maintenance
support for smooth production.
At the end of 2018-2019 (FY), the following is Tata Steels’s Financial Highlights:

PARTICULARS AMOUNT IN CRORES FOR FY 2018-2019

Revenue from operations 70,610.92

Profit/(loss) before tax 16,227.25

Profit/(loss) after tax (including discontinued 10,533.19

operations)

Dividends 1,145.92

Retained earnings 27,694.90

Capital employed 1,10,238.18

Net worth 72,729.71

Borrowings 29,701.47

PARTICULARS RATIO

Net debt: Equity 0.42

Net worth per share as at year-end 634.68

Earnings per share:

Basic 90.41

Diluted 90.40

Dividend declared per Ordinary Share 13.00

Employees (Numbers) 32,984

Shareholders (Numbers) 8,09,578

In the year 2019, the company’s global financials were as follows:

 Revenue ₹ 1,57,668 Cr (US$22 bn)

 Operating income ₹ 29,383 Cr (US$4.1 bn)

 Net Income ₹ 10,218 Cr (US$1.4 bn)

  Total Assets ₹ 1,37,498 Cr (US$19 bn)

 Total Equity ₹ 72,729 Cr (US$10 bn)

 No, of Employees 32,984

The stocks of this company are one of the most actively traded stocks in Nifty50.

GLOBAL AND INDIAN PRESENCE

Tata Steel operates in 26 countries with key operations in India, Netherlands and the United
Kingdom and employs around 80,500 people. Its largest plant (10 MTPA capacity) is located
in Jamshedpur.

It is headquartered in Mumbai, India and has its trading headquarters located largest plant at
Jamshedpur, Jharkhand.

CODE OF ETHICS

While many laws exist to set basic ethical standards within the business community, it is largely
dependent upon a business's leadership to develop a code of ethics. A code of
ethics is important because it lays out the rules for behavior and provides the groundwork for a
preemptive warning. A well-written code of conduct clarifies an organization's mission, values,
and principles, linking them with standards of professional conduct and articulates the values the
organization wishes to foster in leaders and employees and, in doing so, defines desired
behavior.

Ethical behavior is intrinsic to the company's business and has been part of their legacy since
inception, as envisioned by the Founder, Jamsetji Tata. He believed that a business must operate
in a manner such that it respects the rights of all its stakeholders and creates overall value for
society.

The Code of conduct has existed since the very inception of the company in 1907 but it was first
written down in a structured format in 1998. Over the years the code of conduct was rigorously
followed and minor additions were made, however, with the globalization of operations the code
of conduct underwent a massive revision, and amendments were added to cover the nuances of
dealing with partners and clients across the globe. From then on, amendments were added as and
when required with another major amendment taking place in 2013, effective from the 1st of
October,2013.

Each year, the company observes the month of July as ‘Ethics Month’ across the organization to
reinforce its ethical culture. This year's theme is ‘Integrity Matters’ and it intends to further drive
a sense of personal commitment, amongst all stakeholders, towards a better and ethical
tomorrow.

The values and principles that have governed the business for a century are enshrined in the Tata
Code of Conduct (TCoC). This Code serves as the ethical roadmap for Tata employees and is a
testament to their determination to help their employees understand their duties and
commitments towards shared values and principles.

AN ANALYSIS

Tata Steels Code of Conduct is a yardstick against which the behavior of every person involved
in the workings of the company is measured. From the Tata Code of Conduct, it is clear that the
company’s ethical code outlines its commitment to each of its shareholders as well as the
community it operates in and that the company cherishes values such as

 Integrity

 Excellence

 Unity

 Pioneering

 Responsibility.

The Code is also dynamic as it has been periodically, however, it remains unaltered at its core.
The company’s stellar reputation, success as a business entity and their excellent brand image
has been defined by the powerful commitment and adherence to the core values and principles
expressed in this Code, by all their employees, directors and partners. It is one of the most
respected and trustworthy names in the industry today.

The code of ethics covers a wide field that includes, but is not limited to, some of these areas
like national interest, equal opportunity for all employees, competition, financial reporting and
records, health and safety, political non-alliance, quality of product and services, value to
customers, corporate citizenship, wistle-blower policy, use of the Tata brand, group policies and
policies regarding the stakeholders of the company.

Compliance with this code of ethics has made Tata Steel emerge as one of the most sustainable
brands in the industry. Their ethics and values have made them a brand that cares for not only its
employees but also for everyone else in the societies that it operates in. it is not just the
thousands of employees that reap benefits from the company but also the people around them as
can be seen by the industrial town of Jamshedpur.

CONCLUSION

It is tata steels strict compliance to its ethics leading to the creation of a dedicated workforce, a
loyal client base and an impeccable repute in the market that has helped the company grow and
sustain in the market, even during extremely turbulent economic times. Its code of ethics is also
one of the reasons why it is one of the most sought after employers today.

REFERENCES:

 https://www.tata.com/content/dam/tata/pdf/Tata%20Code%20Of%20Conduct.pdf

 https://www.tatasteeleurope.com/static_files/Downloads/Corporate/Sustainability/Ethical
%20behaviour/Tata_Code_of_Conduct.pdf

 https://www.ethics.org/resources/free-toolkit/code-of-conduct/

 https://www.tatasteel.com/corporate/our-organisation/ethics/

 https://www.moneyworks4me.com/best-index/nse-stocks/top-nifty50-companies-list/