Amity Business School

Amity University
Uttar Pradesh

Date: 27th Jan ‘09

A Project work on
Tata-Ford Deal on Jaguar and Land Rover

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 INTRODUCTION

We have been learning about the companies coming together to from another company
and companies taking over the existing companies to expand their business.

With recession taking toll of many Indian businesses and the feeling of insecurity
surging over our businessmen, it is not surprising when we hear about the immense
numbers of corporate restructurings taking place, especially in the last couple of years.
Several companies have been taken over and several have undergone internal
restructuring, whereas certain companies in the same field of business have found it
beneficial to merge together into one company.

In this context, it would be essential for us to understand what corporate restructuring

and mergers and acquisitions are all about.

All our daily newspapers are filled with cases of mergers, acquisitions, spin-offs, tender
offers, & other forms of corporate restructuring. Thus important issues both for business
decision and public policy formulation have been raised. No firm is regarded safe from a
takeover possibility. On the more positive side Mergers & Acquisitions may be critical for
the healthy expansion and growth of the firm. Successful entry into new product and
geographical markets may require Mergers & Acquisitions at some stage in the firm's
development.

The objectives of our caselet can be described as:

1. To understand the pros and cons of Mergers and Acquisitions.
2. To understand the legal formalities undertaken in the acquisition process.

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 WHAT IS LAW?

Law denotes rules and principles either enforced by an authority or self imposed
by the members of a society to control and regulate people’s behavior with a
view to securing justice, peaceful living and social security.

Mercantile law is that branch of law which comprises law concerning trade,
industry and commerce.

INDIAN CONTRACT ACT, 1872

A contract is an exchange of promises between two or more parties to do or refrain

from doing an act which is enforceable in a court of law. Section 2(h) defines a contract
as an agreement enforceable by law.
Contract= Agreement + Enforceability at law

Section2 (e) defines every promise and every set of promise forming consideration for
each other as an agreement.
Agreement= Offer+ Acceptance
And,
Agreement=Social agreement + Legal agreement

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 Offer and Legal
Acceptance Relationship

Legal Lawful
Formalities Essential Consideration
Elements
Possibility of of Competency
performance Capacity
Contract
Certainty of
object Free Consent
Legality of
object

MERGER

Merger is defined as combination of two or more companies into a single company

where one survives and the others lose their corporate existence. The survivor acquires
all the assets as well as liabilities of the merged company or companies. Generally, the
surviving company is the buyer, which retains its identity, and the extinguished company
is the seller.

Merger is also defined as amalgamation. Merger is the fusion of two or more existing
companies. All assets, liabilities and the stock of one company stand transferred to
Transferee Company in consideration of payment in the form of:

• Equity shares in the transferee company,

• Debentures in the transferee company,
• Cash, or
• A mix of the above modes.

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 ACQUISITON

Acquisition in general sense is acquiring the ownership in the property. In the context of
business combinations, an acquisition is the purchase by one company of a controlling
interest in the share capital of another existing company.
Methods of Acquisition:
An acquisition may be affected by:
(a) agreement with the persons holding majority interest in the company
management like members of the board or major shareholders commanding
majority of voting power;
(b) purchase of shares in open market;
(c) to make takeover offer to the general body of shareholders;
(d) purchase of new shares by private treaty;
Acquisition of share capital through the following forms of considerations viz. means of
cash, issuance of loan capital, or insurance of share capital

ACQUISITION PROCESS

The acquisition process can be divided into a planning stage and an implementation
stage. The planning stage consists of the development of the business and the
acquisition plans. The implementation stage consists of the search, screening,
contacting the target, negotiation, integration. Process of acquisition can be in the
following steps:

1. Developing the business plan

A merger or acquisition decision is a strategic choice. The acquisition strategy should fit
the company’s strategic goals of increasing the cash flows and reduce risk.
Business plan communicates a mission or a vision for the firm and a strategy for
achieving that mission.

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Business plan consists of the following activities:

€ Determining where to compete i.e. The industry or the market in which the firm
desires to compete.

€ Determining how to compete. An external analysis can be made to determine

how the firm can most effectively compete in its chosen market.

€ Self assessment of the firm by conducting an internal analysis of the firm’s

strengths and weaknesses relative to the competition.

€ Defining the mission statement by summarizing where and how the firm has
chosen to compete

€ Setting objectives by developing competitive measures of performance.

€ Selecting the most likely strategy to achieve the objectives within a reasonable
time period subject to the constraints in the self assessment.

The strategic planning process identifies the company’s competitive position and sets
objectives to exploit its relative strengths while minimizing the effects of its weaknesses.

2. The Search Process

The search for the potential acquisition takes place in two stages:-

€ It involves establishing a primary screening process. The primary criteria based

on which the search process is based include factors like the industry, size of the
transaction and the geographic location. The size of the transaction is best
defined in terms of the maximum purchase price of a firm is willing to pay.

€ This involves developing the search strategy. It uses computerized database and
directory services to identify the prospective candidates.

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The screening process The screening process starts with the reduction of the initial list
of potential candidates identified by using the primary criteria such as the size and the
type of industry.

First contact It involves meeting the acquisition candidate and putting forward the
proposal of acquisition. It depends on the size of the company and whether it is publicly
or privately held.

3. Preliminary legal documents

€ Confidentiality agreement
€ Letter of intent

4. Negotiation
Process consists of many activities conducted simultaneously by various members of
the acquisition team. The actual purchase consideration is determined during this
phase.

Defining the purchase price: The purchase consideration can be defined in

 The total consideration

 Total purchase price
 The net purchase price

5. Structuring the deal

It involves meeting the needs of both parties by dealing with issues of risk and reward
by legal, tax and accounting structures.

Due diligence required by law

 According to Cadbury report, the due diligence report is required for

acquisitions because the full board of directors of the purchasing company
should review significant acquisitions.

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  In India, a merchant banker has to conduct due diligence to ensure the
acquirer’s financial position and chance of implementation of terms of merger
condition by the parties by giving a due diligence certificate to the SEBI.

 In a merger, both the parties will conduct due diligence. Due diligence can be
conducted from different perspectives.

Financial – historical records, review of management and systems.

Legal- various contractual acts in the country
Commercial –market conditions
Tax- existing tax levels, liabilities and arrangements.
Management –mgmt quality, organizational structure

6. Closing the Deal

Closing is the final legal procedure where the company changes hands. It consists of all
necessary shareholder, regulatory and third party. All the necessary approvals are
attained at this stage.
Conditions for closing
Certain pre conditions set in the definitive agreement have to meet before the close of
the contract. The pre conditions include the assumption that the seller would abide by
the representations and warranties and will live up to the obligations.

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Documents required completing the transaction of a merger
or an acquisition is:-

• Loan agreements, trademarks and trade names

• Supplier and customer contracts
• Distributor and sales representative agreements
• Insurance policies and claim pending
• Articles of incorporation, bylaws and corporate seals.
• Employee incentive programs

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TATA GETS JAGUAR AND ROVER
UNDER ITS PAW!

ABSTRACT
Creating history, India’s top corporate Tata’s on Wednesday acquired luxury auto
brands—Jaguar and Land Rover—from Ford Motors for $ 2.3 billion, stamping their
authority as a takeover tycoon.
Beating compatriot Mahindra and Mahindra for the prestigious brands on 2nd June 2008
announced the deal they signed with Ford, which on its part would chip in $600 million
towards JLR’S pension plan.
“We are very pleased at the prospect of Jaguar and Land Rover being a significant part
of our automotive business”, Group Chairman Ratan Tata said after making the deal
public.
Tata Motors' acquisition of two iconic British brands - Jaguar and Land Rover - was
finally completed earlier this week. Well, it is true that their immediate previous owners
were American, but the flavour of the two companies continues to be very Brit. Tata has
acquired the two companies for about half the price that Ford paid their original owners

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when the latter acquired them in 1989. Though that sounds like a good deal, it is not
going to be all rosy for Tata Motors after the acquisition. The real work starts now for
this global Indian, trying to pull together the two brands and making them more
profitable while still being weighed down by their historical issues. Jaguar and Land
Rover are both special, super premium brands that have a huge fan following. The
ownership of the two brands has changed hands, but the brands themselves will remain
untarnished. And Tata Motors itself has just become more global. Calls to separate the
passenger car business from the rest of the company will only get shriller now.

Tata Motors is now officially the proud parent of the Jaguar, and its sister Land Rover.
The deal is a fulfillment of Mr. Tata’s personal vision and is intended to catapult Tata
Motors, the owner of the cute li’l Nano, into the global big league of auto majors. It will
also reinforce the global perception of India Inc as a leader in international business,
and not just in IT.
Yet, the final lap of Group Tata’s long-drawn-out bid to acquire Jaguar-Land Rover
(JLR) from Ford for $2.3 billion in cash was a bit of an anti-climax. Compared with the
Corus deal, this was almost hush-hush. In open-for-business Britain, the headlines are
already calling the Tata’s the ‘Corus owners’, and not the ‘Indian auto company’.
The key challenge for the new owner of Jaguar and Land Rover will be to grow and
maintain sales of the two brands in a global downturn and credit crunch.
Tata Motors will have to commit significant managerial and financial resources to
engineer a turnaround. It will have to significantly step up its R&D budget as well as
increase operating expenditure and capital expenditure to meet JLR’s requirements.
Auto analysts tracking the development say the acquisition was just the first step; the
real challenge lies in running JLR. The acquisition cost of $2.3 billion is financed by a
bridge loan, which will be raised through a syndicate of banks. The bridge money will be
replaced by a combination of long-term debt and equity at an appropriate time. The
company will raise funds to finance its equity contribution by selling a portion of its stake
in some of its subsidiaries in the next few months. Largest cross-border auto takeover
SOURCES indicate that initially two joint ventures with Hitachi for axles and
transmission—HVAL and HVTL—and auto component maker TACO are some of the
subsidiary companies Tata Motors is looking to divest.
Citigroup and JPMorgan are the lead advisors to the deal, which is the largest cross-
border auto acquisition by an Indian company. The deal is expected to close by the end
of June 2008, subject to regulatory approvals and the achievement of financial closure.
The transaction is significant for a number of reasons. Coming as it does amidst a
global freeze in credit markets; it shows that top-notch Indian companies have the ability
to raise large amounts of money at reasonably low rates of interest.

Besides the two US banks, the bridge loan is being underwritten by a consortium of
eight banks — State Bank of India, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, ING,

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Mizuho and Standard Chartered. The loan has been structured in the form of step-up
financing: for the first six months, the interest charge would be Libor (London Inter-Bank
Offered Rate) plus 70 basis points and for the next six months, it would be 140 basis
points over the benchmark rate. The six-month Libor is currently at 2.63%. The bridge
loan is being raised by a special purpose vehicle — Tata Motors UK, which will own
these two brands, banking sources said. Tata Motors UK is 100% owned by Tata
Motors.

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 The company profile:
TATA

Tata Motors Limited is India’s largest automobile company, with revenues of Rs.
35651.48 crores (USD 8.8 billion) in 2007-08. It is the leader in commercial vehicles in
each segment, and among the top three in passenger vehicles with winning products in
the compact, midsize car and utility vehicle segments. The company is the world’s
fourth largest truck manufacturer, and the world’s second largest bus manufacturer.

The company’s 23,000 employees are guided by the vision to be “best in the manner in
which we operate best in the products we deliver and best in our value system and
ethics.”

Established in 1945, Tata Motors’ presence indeed cuts across the length and breadth
of India. Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in
1954. The company’s manufacturing base in India is spread across Jamshedpur
(Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh) and Pantnagar
(Uttarakhand). Following a strategic alliance with Fiat in 2005, it has set up an industrial
joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both
Fiat and Tata cars and Fiat powertrains. The company is establishing two new plants at
Dharwad (Karnataka) and Sanand (Gujarat). The company’s dealership, sales, services
and spare parts network comprises over 3500 touch points; Tata Motors also distributes
and markets Fiat branded cars in India.

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Tata Motors, the first company from India’s engineering sector to be listed in the New
York Stock Exchange (September 2004), has also emerged as an international
automobile company. Through subsidiaries and associate companies, Tata Motors has
operations in the UK, South Korea, Thailand and Spain. Among them is Jaguar Land
Rover, a business comprising the two iconic British brands that was acquired in 2008. In
2004, it acquired the Daewoo Commercial Vehicles Company, South Korea’s second
largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has
launched several new products in the Korean market, while also exporting these
products to several international markets. Today two-thirds of heavy commercial vehicle
exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a
21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, with
an option to acquire the remaining stake as well. Hispano’s presence is being expanded
in other markets. In 2006, it formed a joint venture with the Brazil-based Marcopolo, a
global leader in body-building for buses and coaches to manufacture fully-built buses
and coaches for India and select international markets. In 2006, Tata Motors entered
into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to
manufacture and market the company’s pickup vehicles in Thailand. The new plant of
Tata Motors (Thailand) has begun production of the Xenon pickup truck, with the Xenon
having been launched in Thailand at the Bangkok Motor Show 2008.

Tata Motors is also expanding its international footprint, established through exports
since 1961. The company’s commercial and passenger vehicles are already being
marketed in several countries in Europe, Africa, the Middle East, South East Asia,
South Asia and South America. It has franchisee/joint venture assembly operations in
Kenya, Bangladesh, Ukraine, Russia and Senegal.

The foundation of the company’s growth over the last 50 years is a deep understanding
of economic stimuli and customer needs, and the ability to translate them into customer-
desired offerings through leading edge R&D. With over 2,500 engineers and scientists,
the company’s Engineering Research Centre, established in 1966, has enabled
pioneering technologies and products. The company today has R&D centres in Pune,
Jamshedpur, Lucknow, in India, and in South Korea, Spain, and the UK. It was Tata
Motors, which developed the first indigenously developed Light Commercial Vehicle,
India’s first Sports Utility Vehicle and, in 1998, the Tata Indica, India’s first fully
indigenous passenger car. Within two years of launch, Tata Indica became India’s
largest selling car in its segment. In 2005, Tata Motors created a new segment by
launching the Tata Ace, India’s first indigenously developed mini-truck

In January 2008, Tata Motors unveiled its People’s Car, the Tata Nano, which India and
the world have been looking forward to. A development, which signifies a first for the
global automobile industry, the Nano brings the comfort and safety of a car within the

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reach of thousands of families. When launched in India later in 2008, the car will be
available in both standard and deluxe versions. The standard version has been priced
at Rs.100,000 (excluding VAT and transportation cost).

Designed with a family in mind, it has a roomy passenger compartment with generous
leg space and head room. It can comfortably seat four persons. Its mono-volume design
will set a new benchmark among small cars. Its safety performance exceeds regulatory
requirements in India. Its tailpipe emission performance too exceeds regulatory
requirements. In terms of overall pollutants, it has a lower pollution level than two-
wheelers being manufactured in India today. The lean design strategy has helped
minimize weight, which helps maximize performance per unit of energy consumed and
delivers high fuel efficiency. The high fuel efficiency also ensures that the car has low
carbon dioxide emissions, thereby providing the twin benefits of an affordable
transportation solution with a low carbon footprint.

The years to come will see the introduction of several other innovative vehicles, all
rooted in emerging customer needs. Besides product development, R&D is also
focusing on environment-friendly technologies in emissions and alternative fuels.

Through its subsidiaries, the company is engaged in engineering and automotive

solutions, construction equipment manufacturing, automotive vehicle components
manufacturing and supply chain activities, machine tools and factory automation
solutions, high-precision tooling and plastic and electronic components for automotive
and computer applications, and automotive retailing and service operations.

True to the tradition of the Tata Group, Tata Motors is committed in letter and spirit to
Corporate Social Responsibility. It is a signatory to the United Nations Global Compact,
and is engaged in community and social initiatives on labor and environment standards
in compliance with the principles of the Global Compact. In accordance with this, it plays
an active role in community development, serving rural communities adjacent to its
manufacturing locations.

With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.

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Tata Code of Conduct
This comprehensive document serves as the ethical road map for Tata employees and
companies, and provides the guidelines by which the group conducts its businesses.
Clause 1 Clause 2 Clause 3 Clause 4 Clause 5
Clause 6 Clause 7 Clause 8 Clause 9 Clause 10
Clause 11 Clause 12 Clause 13 Clause 14 Clause 15
Clause 16 Clause 17 Clause 18 Clause 19 Clause 20
Clause 21 Clause 22 Clause 23 Clause 24 Clause 25

Clause:1
National interest
The Tata group is committed to benefit the economic development of the countries in
which it operates. No Tata company shall undertake any project or activity to the
detriment of the wider interests of the communities in which it operates.

A Tata company’s management practices and business conduct shall benefit the
country, localities and communities in which it operates, to the extent possible and
affordable, and shall be in accordance with the laws of the land.

A Tata company, in the course of its business activities, shall respect the culture,
customs and traditions of each country and region in which it operates. It shall conform
to trade procedures, including licensing, documentation and other necessary formalities,
as applicable.

Clause:2
Financial reporting and records
A Tata company shall prepare and maintain its accounts fairly and accurately and in
accordance with the accounting and financial reporting standards which represent the
generally accepted guidelines, principles, standards, laws and regulations of the country
in which the company conducts its business affairs.

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Internal accounting and audit procedures shall reflect, fairly and accurately, all of the
company’s business transactions and disposition of assets, and shall have internal
controls to provide assurance to the company’s board and shareholders that the
transactions are accurate and legitimate. All required information shall be accessible to
company auditors and other authorized parties and government agencies. There shall
be no willful omissions of any company transactions from the books and records, no
advance-income recognition and no hidden bank account and funds.

Any willful, material misrepresentation of and / or misinformation on the financial

accounts and reports shall be regarded as a violation of the Code, apart from inviting
appropriate civil or criminal action under the relevant laws. No employee shall make,
authorize, abet or collude in an improper payment, unlawful commission or bribing.

Clause:3
Competition
A Tata company shall fully support the development and operation of competitive open
markets and shall promote the liberalization of trade and investment in each country
and market in which it operates. Specifically, no Tata company or employee shall
engage in restrictive trade practices, abuse of market dominance or similar unfair trade
activities.

A Tata company or employee shall market the company’s products and services on
their own merits and shall not make unfair and misleading statements about
competitors’ products and services. Any collection of competitive information shall be
made only in the normal course of business and shall be obtained only through legally
permitted sources and means.

Clause:4
Equal opportunities employer
A Tata company shall provide equal opportunities to all its employees and all qualified
applicants for employment without regard to their race, caste, religion, color, ancestry,
marital status, gender, sexual orientation, age, nationality, ethnic origin or disability.

Human resource policies shall promote diversity and equality in the workplace, as well
as compliance with all local labour laws, while encouraging the adoption of international
best practices.

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Employees of a Tata company shall be treated with dignity and in accordance with the
Tata policy of maintaining a work environment free of all forms of harassment, whether
physical, verbal or psychological. Employee policies and practices shall be administered
in a manner consistent with applicable laws and other provisions of this Code, respect
for the right to privacy and the right to be heard, and that in all matters equal opportunity
is provided to those eligible and decisions are based on merit.

Clause:5
Gifts and donations
A Tata company and its employees shall neither receive nor offer or make, directly or
indirectly, any illegal payments, remuneration, gifts, donations or comparable benefits
that are intended, or perceived, to obtain uncompetitive favors for the conduct of its
business. The company shall cooperate with governmental authorities in efforts to
eliminate all forms of bribery, fraud and corruption.

However, a Tata company and its employees may, with full disclosure, accept and offer
nominal gifts, provided such gifts are customarily given and are of a commemorative
nature. Each company shall have a policy to clarify its rules and regulations on gifts and
entertainment, to be used for the guidance of its employees.

Clause:6
Government agencies
A Tata company and its employees shall not, unless mandated under applicable laws,
offer or give any company funds or property as donation to any government agency or
its representative, directly or through intermediaries, in order to obtain any favourable
performance of official duties. A Tata company shall comply with government
procurement regulations and shall be transparent in all its dealings with government
agencies.

Clause: 7
Political non-alignment
A Tata company shall be committed to and support the constitution and governance
systems of the country in which it operates.

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A Tata company shall not support any specific political party or candidate for political
office. The company’s conduct shall preclude any activity that could be interpreted as
mutual dependence / favour with any political body or person, and shall not offer or give
any company funds or property as donations to any political party, candidate or
campaign.

Clause:8
Health, safety and environment
A Tata company shall strive to provide a safe, healthy, clean and ergonomic working
environment for its people. It shall prevent the wasteful use of natural resources and be
committed to improving the environment, particularly with regard to the emission of
greenhouse gases, and shall endeavour to offset the effect of climate change in all
spheres of its activities.

A Tata company, in the process of production and sale of its products and services,
shall strive for economic, social and environmental sustainability.

Clause:9
Quality of products and services
A Tata company shall be committed to supply goods and services of world class quality
standards, backed by after-sales services consistent with the requirements of its
customers, while striving for their total satisfaction. The quality standards of the
company’s goods and services shall meet applicable national and international
standards.

A Tata company shall display adequate health and safety labels, caveats and other
necessary information on its product packaging.

Clause:10
Corporate citizenship
A Tata company shall be committed to good corporate citizenship, not only in the
compliance of all relevant laws and regulations but also by actively assisting in the
improvement of quality of life of the people in the communities in which it operates. The

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company shall encourage volunteering by its employees and collaboration with
community groups.

Tata companies are also encouraged to develop systematic processes and conduct
management reviews, as stated in the Tata ‘corporate sustainability protocol’, from time
to time so as to set strategic direction for social development activity.

The company shall not treat these activities as optional, but should strive to incorporate
them as an integral part of its business plan.

Clause:11
Cooperation of Tata companies
A Tata company shall cooperate with other Tata companies including applicable joint
ventures, by sharing knowledge and physical, human and management resources, and
by making efforts to resolve disputes amicably, as long as this does not adversely affect
its business interests and shareholder value.

In the procurement of products and services, a Tata company shall give preference to
other Tata companies, as long as they can provide these on competitive terms relative
to third parties.

Clause:12
Public representation of the company and the group
The Tata group honours the information requirements of the public and its stakeholders.
In all its public appearances, with respect to disclosing company and business
information to public constituencies such as the media, the financial community,
employees, shareholders, agents, franchisees, dealers, distributors and importers, a
Tata company or the Tata group shall be represented only by specifically authorised
directors and employees. It shall be the sole responsibility of these authorised
representatives to disclose information about the company or the group.

Clause:13
Third party representation
Parties which have business dealings with the Tata group but are not members of the

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group, such as consultants, agents, sales representatives, distributors, channel
partners, contractors and suppliers, shall not be authorised to represent a Tata
company without the written permission of the Tata company, and / or if their business
conduct and ethics are known to be inconsistent with the Code.

Third parties and their employees are expected to abide by the Code in their interaction
with, and on behalf of, a Tata company. Tata companies are encouraged to sign a non-
disclosure agreement with third parties to support confidentiality of information.

Clause:14
Use of the Tata brand
The use of the Tata name and trademark shall be governed by manuals, codes and
agreements to be issued by Tata Sons. The use of the Tata brand is defined in and
regulated by the Tata Brand Equity and Business Promotion Agreement. No third party
or joint venture shall use the Tata brand to further its interests without specific
authorisation.

Clause:15
Group policies
A Tata company shall recommend to its board of directors the adoption of policies and
guidelines periodically formulated by Tata Sons.

Clause:16
Shareholders
A Tata company shall be committed to enhancing shareholder value and complying with
all regulations and laws that govern shareholder rights. The board of directors of a Tata
company shall duly and fairly inform its shareholders about all relevant aspects of the
company’s business, and disclose such information in accordance with relevant
regulations and agreements.

Clause:17
Ethical conduct

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Every employee of a Tata company, including full-time directors and the chief executive,
shall exhibit culturally appropriate deportment in the countries they operate in, and deal
on behalf of the company with professionalism, honesty and integrity, while conforming
to high moral and ethical standards. Such conduct shall be fair and transparent and be
perceived to be so by third parties.

Every employee of a Tata company shall preserve the human rights of every individual
and the community, and shall strive to honour commitments.

Every employee shall be responsible for the implementation of and compliance with the
Code in his / her environment. Failure to adhere to the Code could attract severe
consequences, including termination of employment.

Clause:18
Regulatory compliance
Employees of a Tata company, in their business conduct, shall comply with all
applicable laws and regulations, in letter and spirit, in all the territories in which they
operate. If the ethical and professional standards of applicable laws and regulations are
below that of the Code, then the standards of the Code shall prevail.

Clause:19
Concurrent employment
Consistent with applicable laws, an employee of a Tata company shall not, without the
requisite, officially written approval of the company, accept employment or a position of
responsibility (such as a consultant or a director) with any other company, nor provide
freelance services to anyone, with or without remuneration. In the case of a full-time
director or the chief executive, such approval must be obtained from the board of
directors of the company.

Clause:20
Conflict of interest
An employee or director of a Tata company shall always act in the interest of the
company, and ensure that any business or personal association which he / she may

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have does not involve a conflict of interest with the operations of the company and his /
her role therein.

Independent directors of a Tata company shall comply with applicable laws and
regulations of all the relevant regulatory and other authorities. As good governance
practice they shall safeguard the confidentiality of all information received by them by
virtue of their position, but they need not be bound by all other conflicts that are
applicable to employees or executive directors, as indicated below.

An employee, including the executive director (other than independent director) of a

Tata company, shall not accept a position of responsibility in any other non-Tata
company or not-for-profit organisation without specific sanction.

The above shall not apply to (whether for remuneration or otherwise):

a) Nominations to the boards of Tata companies, joint ventures or associate companies.

b) Memberships / positions of responsibility in educational / professional bodies,

wherein such association will benefit the employee / Tata company.

c) Nominations / memberships in government committees / bodies or organizations.

d) Exceptional circumstances, as determined by the competent authority.

Competent authority, in the case of all employees, shall be the chief executive, who in
turn shall report such exceptional cases to the board of directors on a quarterly basis. In
case of the chief executive and executive directors, the Group Corporate Centre shall
be the competent authority.

An employee or a director of a Tata company shall not engage in any business,

relationship or activity which might conflict with the interest of his / her company or the
Tata group. A conflict of interest, actual or potential, may arise where, directly or
indirectly…

a) An employee of a Tata company engages in a business, relationship or activity with

anyone who is party to a transaction with his / her company.

b) An employee is in a position to derive an improper benefit, personally or to any of his

/ her relatives, by making or influencing decisions relating to any transaction.

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c) An independent judgement of the company’s or group’s best interest cannot be
exercised.

The main areas of such actual or potential conflicts of interest shall include the
following:

a) An employee or a full-time director of a Tata company conducting business on behalf

of his / her company or being in a position to influence a decision with regard to his / her
company’s business with a supplier or customer where his / her relative is a principal
officer or representative, resulting in a benefit to him / her or his / her relative.

b) Award of benefits such as increase in salary or other remuneration, posting,

promotion or recruitment of a relative of an employee of a Tata company, where such
an individual is in a position to influence decisions with regard to such benefits.

c) The interest of the company or the group can be compromised or defeated.

Notwithstanding such or any other instance of conflict of interest that exist due to
historical reasons, adequate and full disclosure by interested employees shall be made
to the company’s management. It is also incumbent upon every employee to make a full
disclosure of any interest which the employee or the employee’s immediate family,
including parents, spouse and children, may have in a family business or a company or
firm that is a competitor, supplier, customer or distributor of or has other business
dealings with his / her company.

Upon a decision being taken in the matter, the employee concerned shall be required to
take necessary action, as advised, to resolve / avoid the conflict.

If an employee fails to make the required disclosure and the management of its own
accord becomes aware of an instance of conflict of interest that ought to have been
disclosed by the employee, the management shall take a serious view of the matter and
consider suitable disciplinary action against the employee.

Clause:21
Securities transactions and confidential information
An employee of a Tata company and his / her immediate family shall not derive any
benefit or counsel, or assist others to derive any benefit, from access to and possession

BEL Page 24
of information about the company or group or its clients or suppliers that is not in the
public domain and, thus, constitutes unpublished, price-sensitive insider information.

An employee of a Tata company shall not use or proliferate information that is not
available to the investing public, and which therefore constitutes insider information, for
making or giving advice on investment decisions about the securities of the respective
Tata company, group, client or supplier on which such insider information has been
obtained.

Such insider information might include (without limitation) the following:

• Acquisition and divestiture of businesses or business units.

• Financial information such as profits, earnings and dividends.
• Announcement of new product introductions or developments.
• Asset revaluations.
• Investment decisions / plans.
• Restructuring plans.
• Major supply and delivery agreements.
• Raising of finances.

An employee of a Tata company shall also respect and observe the confidentiality of
information pertaining to other companies, their patents, intellectual property rights,
trademarks and inventions; and strictly observe a practice of non-disclosure.

Clause:22
Protecting company assets
The assets of a Tata company shall not be misused; they shall be employed primarily
and judiciously for the purpose of conducting the business for which they are duly
authorised. These include tangible assets such as equipment and machinery, systems,
facilities, materials and resources, as well as intangible assets such as information
technology and systems, proprietary information, intellectual property, and relationships
with customers and suppliers.

Clause:23
Citizenship
The involvement of a Tata employee in civic or public affairs shall be with express

BEL Page 25
approval from the chief executive of his / her company, subject to this involvement
having no adverse impact on the business affairs of the company or the Tata group.

Clause:24
Integrity of data furnished
Every employee of a Tata company shall ensure, at all times, the integrity of data or
information furnished by him/her to the company. He/she shall be entirely responsible in
ensuring that the confidentiality of all data is retained and in no circumstance transferred
to any outside person/party in the course of normal operations without express
guidelines from or, the approval of the management.

Clause:25
Reporting concerns
Every employee of a Tata company shall promptly report to the management, and / or
third-party ethics helpline, when she / he becomes aware of any actual or possible
violation of the Code or an event of misconduct, act of misdemeanour or act not in the
company’s interest. Such reporting shall be made available to suppliers and partners,
too.

Any Tata employee can choose to make a protected disclosure under the whistleblower
policy of the company, providing for reporting to the chairperson of the audit committee
or the board of directors or specified authority. Such a protected disclosure shall be
forwarded, when there is reasonable evidence to conclude that a violation is possible or
has taken place, with a covering letter, which shall bear the identity of the whistleblower.

The company shall ensure protection to the whistleblower and any attempts to
intimidate him / her would be treated as a violation of the Code.

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 The TATA - Values and purpose

Purpose
At the Tata group our purpose is to improve the quality of life of the communities we
serve. We do this through leadership in sectors of economic significance, to which the
group brings a unique set of capabilities. This requires us to grow aggressively in
focused areas of business.

Our heritage of returning to society what we earn evokes trust among consumers,
employees, shareholders and the community. This heritage is being continuously
enriched by the formalization of the high standards of behavior expected from our
employees and companies.

The Tata name is a unique asset representing leadership with trust. Leveraging this
asset to enhance group synergy and becoming globally competitive is our chosen route
to sustained growth and long-term success.

Core values
The Tata group has always been a values-driven organisation. These values continue
to direct the group's growth and businesses. The five core Tata values underpinning the
way we do business are:

• Integrity: We must conduct our business fairly, with honesty and transparency.
Everything we do must stand the test of public scrutiny.
• Understanding: We must be caring, show respect, compassion and humanity for
our colleagues and customers around the world, and always work for the benefit
of the communities we serve.
• Excellence: We must constantly strive to achieve the highest possible standards
in our day-to-day work and in the quality of the goods and services we provide.
• Unity: We must work cohesively with our colleagues across the group and with
our customers and partners around the world, building strong relationships based
on tolerance, understanding and mutual cooperation.
• Responsibility: We must continue to be responsible, sensitive to the countries,
communities and environments in which we work, always ensuring that what
comes from the people goes back to the people many times over.

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Company profile:

The Ford Motor Company (NYSE: F) is an American multinational corporation and the
world's fourth largest automaker based on worldwide vehicle sales, following Toyota,
General Motors, and Volkswagen. Based in Dearborn, Michigan, a suburb of Detroit, the
automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition
to the Ford, Lincoln, and Mercury brands, Ford also owns Volvo Cars of Sweden, and a
small stake in Mazda of Japan and Aston Martin of England. Ford's former UK
subsidiaries Jaguar and Land Rover were sold to Tata Motors of India in March 2008.

In 2007, Ford fell from the second-ranked automaker to the third-ranked automaker in
US sales for the first time in 56 years, behind General Motors and Toyota. Based on
2007 global sales, Ford fell to the fourth-ranked spot behind Volkswagen. Ford is the
seventh-ranked overall American-based company in the 2007 Fortune 500 list, based
on global revenues in 2007 of $172.5 billion. In 2007, Ford produced 6.553 million
automobiles and employed about 245,000 employees at around 100 plants and facilities
worldwide. Also in 2007, Ford received more initial quality survey awards from J. D.
Power and Associates than any other automaker. Five of Ford's vehicles ranked at the
top of their categories and fourteen vehicles ranked in the top three.

Ford introduced methods for large-scale manufacturing of cars and large-scale

management of an industrial workforce using elaborately engineered manufacturing
sequences typified by moving assembly lines. Henry Ford's methods came to be known
around the world as Fordism by 1914.

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Corporate governance:

Members of the board as of early 2007 are: Chief Sir John Bond, Richard Manoogian,
Stephen Butler, Ellen Marram, Kimberly Casiano, Alan Mulally (President and CEO),
Edsel Ford II, Homer Neal, William Clay Ford Jr., Jorma Ollila, Irvine Hockaday Jr.,
John L. Thornton and William Clay Ford (Director Emeritus).[7]

The main corporate officers are: Lewis Booth (Executive Vice President, Chairman
(PAG) and Ford of Europe), Mark Fields (Executive Vice President, President of The
Americas), Donat Leclair (Executive Vice President and CFO), Mark A. Schulz
(Executive Vice President, President of International Operations) and Michael E.
Bannister (Group Vice President; Chairman & CEO Ford Motor Credit). Paul
Mascarenas (Vice President of Engineering, ssthe Americas Product Development).

Our Progress
We get it. We need a new way of doing business. You'll be glad to know Ford has been
making great progress … we're sure you will agree.

Ford Motor Company, Honda Motors and Toyota Motors quality ratings are in a dead
heat.

Our cars, trucks and SUVs deliver fuel economy that's competitive with that of all other
automakers.

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 EVENTS OF THE TATA-FORD DEAL

1. FORD STARTS FACING PROBLEM WITH PENSION COSTS AND FALLING

SALES IN NORTH AMERICA.

Ford has been forced to sell two company’s based at Solihill and Castle Bromwich in
the West Midlands and Halewood on Merseyside in order to concentrate on it’s loss-
making core US car business, which it hopes to turn around in the next two years. The
largest loss of a $127 billion, overseen by Allan Mullay, who took over as a Chief
Executive Officer in the same year, decided to sell its iconic Aston Martin Brand to a
U.K based investment consortium in a deal worth $955.2 million in 2007. Ford mission
became to integrate the Ford brand globally, and create a strong Ford motor company
that delivers profitable growth to all.

2. FORD INDICATES THAT IT MIGHT LOOK FOR BUYERS FOR JAGUAR AND
LAND ROVER MARQUES

After the losses drained out cash and resources out of the Ford Company, Ford Motor
gave a lucid indication for buyers of its two other brands- Jaguar and Land Rover, as
luxury car sales went down across the globe. Jaguar sales dropped 33% in the US and
Europe in the first two months of the year while Land Rover sales fell 13% in the US
and 7.7% in Europe during the period. Ford bought Jaguar for $2.5 billion in 1989 and
Land Rover for $2.7 billion in 2000. But it has been struggling and wants to focus on its
main brands. It has now sold the marques for less than what it paid then.

3. TATA CONFIRMS THE NEWS TO PARTICIPATE IN THE BID

The head of India's Tata conglomerate confirmed Friday that his group was interested in
bidding for luxury UK car brands Jaguar and Land Rover, in an interview with an Indian
news channel. Tata Motors, India's biggest car company, has appointed advisors to
evaluate a bid and signed a confidentiality agreement with Ford to access financial
details of the two brands which have a combined British workforce of 19,000, the
Business Standard daily quoted unnamed sources as saying last month. The move
would be in keeping with Tata group's growing appetite for overseas acquisitions.

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4. MAHINDRA-MAHINDRA FAILED TO MAKE IN TO BID

Mahindra & Mahindra has pulled out of the race to acquire iconic British brands Jaguar
and Land Rover, which have been put on the block by Ford, citing complexities in the
way the deal was structured. The development strengthened the case for Tata Motors,
which is now pitted against private equity firm One Equity Partners that has roped in
former Ford boss Jacques Nasser as an advisor. Sources close to the negotiations said
M&M — though a serious contender in the beginning — decided against pursuing the
deal as there were concerns related to Intellectual Property Rights (IPR) associated with
the two brands. "The whole deal was considered to be very complex, prompting the
company not to pursue it," a source said. M&M thought that it would have to go back to
Ford on many crucial issues related to use of technology even after bagging the two
brands. Crucial IPRs related to the brands are locked in with the US auto major, making
it difficult for the eventual winner to "derive full benefits unhindered and Ford's
continuing involvement was a crucial concern".

5. FORD ANNOUNCES TATA AS “PREFERRED BUYER”.

On 1 January 2008, Ford made a formal announcement which declared Tata as the
preferred bidder. Tata Motors also received endorsements from the Transport And
General Worker's Union (TGWU)-Amicus combine as well as from Ford. According to
the rules of the auction process, this announcement would not automatically disqualify
any other potential suitor. However, Ford (as well as representatives of Unite) would
now be able to enter into more focused and detailed discussions with Tata to iron out
issues ranging from labour concerns (job security and pensions), technology (IT
systems and engine production) and intellectual property as well as the final sale price.
Ford would also open its books for a more comprehensive diligence by Tata. On 18
March 2008, Reuters reported that American bankers Citigroup and JP Morgan shall be
due underwriting a loan of USD 3 billion in order to finance the deal.

6. EUROPEAN COMMISION CLEARS ACQUISITION OF JAGUAR AND LAND

ROVER BY INDIAN COMPANY, TATA MOTORS.

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 On 26th April 2008,The European Commission (EC), the executive panel of the 27-
member European Union, cleared the acquisition of the Jaguar and Land Rover
business (JLR) of US-based Ford Motor Company by India's Tata Motors Ltd The EC
announced in Brussels. that it has granted clearance under the EU Merger Regulation
Procedure.

THE DEAL

The definitive agreement was agreed by Tata Motor’s Ltd., on 26th March 2008 to
acquire luxury British marques, Jaguar and Land Rover.

The all-cash deal, which was agreed in March, includes all necessary intellectual
property rights, manufacturing plants, two advanced design centers in the UK and a
worldwide network of sales companies. Included in the deal were the rights to three
other British brands, Jaguar's own Daimler, as well as two dormant brands Lanchester
and Rover. On 2 June 2008 the sale to Tata was completed by both parties

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TRANSITION SUPPORT

Other areas of transition support from Ford include IT, accounting and access to test
facilities. The companies will also cooperate in areas such as design and development
through sharing of platforms and joint development of hybrid technologies and power
train engineering, Tata Motors said.

TIMELINE OF THE HISTORIC DEAL

-
2005 Ford starts facing problems with pension and health care
costs and falling sales in North America.
Starts reporting losses from the second quarter

-
2006 Alan Mullaly takes over as chief executive and oversees a
$12.7 billion loss, the largest in the
company's history Ford decides to sell its Aston Martin brand

-
May, 2007 Ford closes the Aston Martin sale for $848 million

-
June, 2007 Ford indicates that it might look at buyers for Jaguar and
Land Rover marques

-
July, 2007 Ford receives preliminary bids for the brands. Reports say
that TPG Inc., Cerberus Capital Management Lp. Ripplewood
Holdings, One Equity Partners Llc are in the fray, along with
Tata Motors
Ltd and Mahindra & Mahindra

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 -
August, 2007 Ratan Tata, chairman of Tata Motors Ltd, confirms that his
company was bidding for the premium car
Makers

-
November, Investment bankers say that Apollo Alternative Assets is
2007 teaming up with Mahindra & Mahindra
Reports say that Ford has shortlisted three bidders—Tata,
Mahindra and One Equity—for further negotiations with its
trade unions Unite, the trade union representing Land Rover
and Jaguar workers, says it supports Tata Motors' bid

-
December, The three bidders submit their bid
2007

-
January , Ford names Tata as "preferred buyer"
2008
-
March, 2008 Tata, Ford sign deal

-
June, 2008 Deal finally completed by both the parties.

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BEL Page 35
STUDENT’S ANALYSIS
• OFFER AND ACCEPTANCE

Offer and acceptance: there must be two parties to an agreement, i.e., one party
making the offer and the other party accepting it. The terms of the offer must be
definite and the acceptance of the offer must be absolute and unconditional. The
acceptance must also be according to the mode prescribed and must be
communicated to the offeror.

The deal was offered by Tata and finally accepted on 2nd June 2008 by William Clay
Ford (Chairman of Ford) and Allan Mulally (CEO of Ford)

OFFER BY TATA  ACCEPTANCE BY FORD

• LEGAL RELATIONSHIP

Intention to create legal relationship: When the two parties enter into an agreement,
there intention must be to create a legal relationship between them. If there is no
such intention on the part of the parties, there is no contract between them.

Both the parties have the intention to create legal Relationship between them and were
agreed to legalize the deal in written

• LAWFUL CONSIDERATION

1. Lawful consideration: An agreement to be enforceable by law must be supported

by consideration. ‘Consideration’ means an advantage or benefit moving from
one party to another. It is the essence of a bargain. In simple words, it means
‘something in return’. The agreement is legally enforceable only when both the
parties give something and get something in return. Consideration need not
necessarily be in cash or kind. It may be an act, abstinence, or promise to do or

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 not to do something. It may be past, present or future. But it must be real and
lawful.

Consideration is lawful in the deal. Mr. Ratan Tata (Chairman of Tata) gets the Ford
Company as his consideration.

• CAPACITY OR COMPETENCY OF PARTIES

Capacity of parties- competency: The parties to the agreement must be capable of

entering into a valid contract. Every person is competent to contract if he (a) is the
age of majority, (b) is of sound mind, and (c) is not disqualified from contracting by
any law to which he is subject.

There are three conditions that are required for a party to become competent to contract
were fulfilled:-
-Both the parties attains the age of majority at the time of contract.
-Both the parties are of sound mind
-Both Tata and Ford were not disqualified by any law from signing any contract.

• FREE CONSENT

Free and genuine consent: It is essential to the creation of every contract that there
must be free and genuine consent of the parties to the agreement. The consent of
the parties is said to be free when they are of the same mind on all the material
terms of the contract. The parties are said to be of the same mind when they agree
about the subject matter of the contract in the same sense and at the same time.
There is absence of free consent if the agreement is induced by coercion, undue
influence, fraud, misinterpretation, etc.

In this case the consent of both the parties are free i.e. It is not caused by-
• Coercion

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 • Undue Influence
• Fraud
• Misrepresentation
• Mistake
Thus the contract is genuine.

• LEGALITY OF OBJECT

Lawful object: The object of the agreement must be lawful. In other words, it means that
the object must not be (a) illegal, (b) immoral, or (c) opposed to public policy. If an
agreement suffers from any legal flaw, it would not be enforceable by law.

In Tata Ford deal nothing was illegal, immoral or opposed to public policy hence legality
of object criteria also got fulfilled.

• POSSIBILITY OF PERFORMANCE

Certainty and possibility of performance: The agreement must be certain and not
vague or indefinite. If it is vague and it is not possible to ascertain its meaning, it
cannot be enforced. The term of the agreement must also be such as are capable of
performance. Agreement to do an act impossible in itself cannot be enforced.

In this deal both the parties were perform there respective promises so the deal is
successful.

• LEGAL FORMALITIES

Legal formalities: A contract may be made by words spoken or written. As regards

the legal effects, there is no difference between a contract by writing and a contract
made by word of mouth. It is in the interest of the parties that the contract should be

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 in the writing. There are some other formalities also which have to be complied with
in order to make an agreement legally enforceable. In some cases, the document in
which the contract is incorporated is to be stamped. In some other cases, a contract,
besides being a written one, has to be registered. Thus, where there is a statutory
requirement that a contract should be made in writing or should be made in the
presence of witnesses or registered, the required statutory formalities must be
compiled with.

In this deal all the legal formalities like registration etc. are fulfilled hence the deal is
successful.

Thus, all the elements which are essential for an agreement to become a contract are
present.

Thus Contract is a Valid Contract

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 Interview with the HR:
DS Group
A-85, Sector 2,
Noida 201301

We are the budding managers of tomorrow’s corporate world so we are supposed to

know the law of land to be an efficient professional. We were assigned to take an
interview of an HR manager to make a clear understanding of the practical knowledge
of laws Practiced by them.
We took interview of Ms Meeta Sharma Deputy Manager HR of DS GROUP.
She has done her MBA from AIMA and has work experience of 5 years. It was great
learning experience for us as she gave proper attention to all our queries and was
encouraging us to ask for more questions.

We asked following question:

Q: What are the contracts signed by HR Manager?

Ans: She told the main function of HR manager is recruitment and selection so the
major contracts signed by a manager is the employment contract. A contract of
employment is usually defined to mean the same as a “contract of service.” A contract
of service has historically been distinguished from a "contract for servicce”, the
expression altered to imply the dividing line between a person who is "employed" and
someone who is "self employed". The purpose of the dividing line is to attribute rights to
some kinds of people who work from others. This could be the right to a minimum wage,
holiday pay, sick leave, fair dismissal, a written statement of the contract, the right to
organise in a union, and so on. The assumption is that genuinely self employed people
should be able to look after their own affairs, and therefore work they do for others
should not carry with it an obligation to look after these rights.

The terminology is complicated by the use of many other sorts of contracts involving
one person doing work for another. Instead of being considered an "employee", the
individual could be considered a worker (which could mean less employment legislation
protection) or as having an "employment relationship" (which could mean protection
somewhere in between) or a "professional" or a "dependent entrepreneur", and so on.

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Different countries will take more or less sophisticated or complicated approaches to the
question

The focus of most employment contracts is wages for work. Essential terms might be
notice periods in the event of dismissal, holiday pay rights, the place of work and
pension schemes. Many jurisdictions require these factors to be set out in a written
contract.In terms of pay, the employee may be compensated through wages, a salary,
or by commission. In addition to monetary compensation, the employment contract
often specifies a fringe benefit package, including a retirement plan, employeestock
options, holiday entitlement, required hours of work, and (especially in the US) health
insurance benefits.

Normally, such contracts provide for termination of employment, by either party, and
include associated matters such as notice period, compensation arrangements and,
sometimes, garden leave.

Some employers use non-disclosure and non-compete clauses to protect their trade
secrets from being dispersed when employees leave. Depending on where people live,
the laws regarding enforceability of these clauses vary widely.

UK law holds that employment contracts have implied terms (assumed, unspoken,
essential terms ), as well as explicit terms (typically those in writing). Legal precedent
provides for example that there is an implied contractual term of trust and confidence,
meaning each party to the contract is expected to behave in a manner allowing the
other to maintain trust and confidence in the other.

The terms and conditions of an Employment contract signify the working style and
culture of an organization. While employing a person in your organization or commercial
set up, you need to define the relationship in a fair and unambiguous manner. Our
Employment contract helps you protect the interests of the organization while being fair
to the employee.

Q: What are the negotiable instruments used in an organization.

ANS: The negotiable instruments used in a company are for following purpose
Job Description;
Probation;
Place of work;
Salary and perquisites;

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 Medical; Retirement;
Training and work outside the country of employment;
Working and Holidays;
Intellectual Property;
Confidentiality
Notice Period;
Summary Termination;
governing law;

Negotiable instrument
Unconditional order or promise to pay an amount of money, easily transferable from one
person to another. Examples: check, promissory note, draft (bill of exchange). The
Uniform Commercial Code requires that for an instrument to be negotiable it must be
signed by the maker or drawer, must contain an unconditional promise or order to pay a
specific amount of money, must be payable on demand or at a specified future time,
and must be payable to order or to the bearer. . When a person cashes a check, he
negotiates the check by signing his name on the back and presenting it to a bank,
thereby becoming the legal owner of funds represented by the writing on the face of the
check. He may take the funds as cash or deposit the money into an account. Checks
are negotiable by endorsement and delivery (also called PRESENTMENT) to the paying
bank, which is then obligated to pay the check. If an instrument is payable to the bearer,
for example, a bearer stock or bearer bond, negotiation is done by simply presenting the
instrument.
Under Article 3 of the Uniform Commercial Code (UCC) , an instrument is negotiable if it
is: (1) a written instrument signed by the endorser or maker; (2) an unconditional
promise to pay a certain amount of money, either on demand or at a future date; and (3)
payable to the holder or bearer.

person who becomes a holder in due course of a negotiable instrument by delivery, or

by delivery and endorsement, has an unrestricted claim to the instrument, and can sue
other people in his or her own name.. When a person cashes a check, he negotiates the
check by signing his name on the back and presenting it to a bank, thereby becoming
the legal owner of funds represented by the writing on the face of the check. He may
take the funds as cash or deposit the money into an account. Checks are negotiable by
endorsement and delivery (also called PRESENTMENT) to the paying bank, which is

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then obligated to pay the check. If an instrument is payable to the bearer, for example, a
bearer stock or bearer bond, negotiation is done by simply presenting the instrument.
Under Article 3 of the Uniform Commercial Code (UCC), an instrument is negotiable if it
is: (1) a written instrument signed by the endorser or maker; (2) an unconditional
promise to pay a certain amount of money, either on demand or at a future date; and (3)
payable to the holder or bearer. Person who becomes a holder in due course of a
negotiable instrument by delivery, or by delivery and endorsement, has an unrestricted
claim to the instrument, and can sue other people in his or her own name.

Q: Wheather the HR Head participate in meeting of board of directors?

ANS: She told that yes the head of HR department plays crucial role in the decision
making process of company. In her views the strategic importance of human resource
department has grown manifolds and especially in this period of recession.

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