Enzymology Lab Report Example | Topics and Well Written Essays - 1000 words

Enzymology - Lab Report Example Enzymes do accelerate reaction rate by more than 1 million g=folds, in that reactions would take a very long time to occur. Appropriate enzymes catalyze in few seconds and there activities, in many cases occur inside the cell, within the membranes of the cell. The rate of reaction when Ph, temperature, time and the substrate are at a constant is determined by the enzyme availability. Effects of enzymes in substrate concentration can be analysed as below. The concentration of enzymes is a factor in determining the rate of reaction. The substrate needs to be present in excess. That is to say that each reaction should be independent of the concentration of the substrate. Any possible change in product amount over a given time period depends upon present enzyme level. A and E reacting leads to B at a constant rate k1, this turns to C and generates E again at a constant rate k2. At that instance, B has the possibility of turning into A and E again at a constant rate k-1. Michaelis-Menten enzymatic catalysis mechanism follows this path. Competitive inhibition has a molecule similar to the present or available substrate but not able to be acted on by those enzymes that compete with them for sites that are active. Fewer active sites readily act on the substrate because of the inhibitor presence. Given the structure of the enzyme is not affected by the enzyme inhibitors; they will still act as catalysts for the reaction. In inhibition that is uncompetitive, molecules tend to bind to enzymes instead of sites that are active. That makes the three dimensional enzyme structures to change in that its site that is active still binds to the substrate in affinity that is usual, though not in the optimal arrangement of stabilizing the rate of transition and in turn catalyzing the reaction. Lineweaver Burk plots are significant in a number of ways. For instance, in the case where it is

Overview of the US subprime market Essay Example for Free

Overview of the US subprime market Essay With regards to the U. S. subprime market, the term itself refers to the status of the borrower, alternative terms for which are B-paper, near-prime, or second chance lending, all refer to the practice of giving loans to borrowers who have a faulty credit history and hence do not qualify for the prevalent market rates. Subprime lending and borrowing is risky as it is associated with conditions of high interest rates, dodgy credit history and much less-than-perfect financial situations. To gain access to this expanding market, lenders often assume risks associated with lending to people with poor credit ratings. They offset their risk by charging a higher interest rate, among other ways. Mortgages, car loans, credit cards, all are instruments of subprime lending. In credit cards, for example, a subprime customer may be charged higher amounts for late fees, over limit fees, annual fees, or up front fees for the card. But it offers these borrowers who have an imperfect credit record the opportunity to gain access to credit which might not have been possible otherwise. Subprime Credit Crunch and Mortgage Crisis: Since 2006, however, a severe financial crisis has developed in the subprime credit market. It is especially rampant in the subprime mortgage market which has experienced an increasing rate of foreclosures. When Interest rates rose, this led to adjustable-rate mortgages becoming more popular. But the housing bubble did not last and property values plummeted, borrowers could not fulfill their financial commitments and lenders could not recover their losses. The result is today’s harsh credit crunch which has led to big players in the subprime mortgage lending industry to shut down or file for bankruptcy. Others have been accused of encouraging deceptive income inflation on loan applications. Between December 2006 and March 2007, more than 30 subprime lenders closed operations. The rest have incurred serious losses and are in grave financial trouble. Lending standards have become more stringent and economists at Goldman Sachs have predicted this to cut annual demand for new homes to go down by one-fifth of last year’s sales. According to the September quarterly report (2007) of the Bank for International Settlements (BIS) in Basil, Switzerland, BIS warned of the `dark shadow over global financial markets caused by the collapse of the US subprime market. ` Analysis: It all started as a small setback in December 2006 but has quickly made its way all over the world, and by the summer of 2007 had had a substantial negative impact on stock and bond markets of the world. Investors have suffered heavy losses in their portfolios and now face the additional threat of a possible global recession in the near future. World economic growth is significantly tied to U. S. growth, and as analysts predict a recession in the near future, U. S. Subprime mortgages can be perceived as one of the main catalysts of the current situation. A global financial turmoil has ensued, which has made its presence felt in all corners of the world, as numerous hedge funds, banks and stock markets in remote countries such as Australia, Thailand and Germany have even felt the brunt. This has resulted in a backlash against some financial strategies employed by investors as countries were taken aback by the impact of the problems of American mortgagors and homeowners on their home markets. Funds and banks all over the world were affected because they had earlier bought either bonds, or risks related to bonds, which had bad home loans as collateral, and this entire bundle was known as a C.  D. O. or a collateralized debt obligation. JPMorgan estimates showed that global C. D. O. s accounted for about $1. 5 trillion of debt and structured-finance C. D. O. ’s, which refers to bonds which have subprime mortgages, slightly safer mortgages and commercial mortgages as collateral, accounted for about debt of $500 billion to $600 billion. When these subprime mortgages were hit badly, it led to a chain effect in an imperfect system, with ratings which did not provide an accurate prediction of risk and flawed assumptions about the impact on diversified portfolios with multiple layers of leverage. A ripple effect ensued all over the world as investors started freeing themselves of any risky investments and converting their securities into cash. As Pierre Cailleteau, Moody’s Investors Service chief economist in London said, The combination of a subprime shock, â€Å"untested financial innovation and leverage has led to a confidence crisis. Impact on Financial Markets: Financial markets have been badly affected, as financial institutions on Wall Street and all around the world attempt to cope with the disastrous state of affairs in the U. S. subprime market. In June 2007, according to a report by CNNMoney, assets worth $800 million were seized by Merrill Lynch from two hedge funds being managed by Bear Stearns, one of the largest financial institutions of the world, that were dealing with securities, mainly bonds backed by subprime loans. These troubled funds have almost worthless now. Merrill Lynch itself reported in October 2007 losses of US$5. 2 billion, revised in the same month to $8. 4 million, as a result of the subprime disaster which led to write-downs on subprime mortgages, collateralized bonds and leveraged loans. Standard Poors called this loss startling while analysts agreed that this was probably the largest loss ever to be faced by a Wall Street firm. Bankruptcies and losses are a dime a dozen in the financial world. In August 2007, the 10th largest retail mortgage lender in the U. S. , American Home Mortgage Investment Corporation filed for Chapter 11 bankruptcy. In the same month, Mortgage Guaranty Insurance Corporation, the largest provider of private mortgage insurance in the country announced that due to the billion-dollar loss it suffered on its investment in Credit-Based Asset Servicing and Securitization, it would now abandon the $4. billion deal which would result from its purchase of the Radian Group, a credit enhancement company. The impact was definitely had a global reach. In the same month one of the main banks of Europe and France, BNP Paribas announced that it will no longer value three of its funds (Parvest Dynamic ABS, BNP Paribas ABS Euribor and BNP Paribas ABS Eonia) and that investors were no longer allowed to withdraw their funds. These funds comprise of U. S. asset-backed securities which include subprime mortgages, delinquencies on which have increased while prices have fallen. It took this decision in light of the extremely troublesome plight of the U. S. subprime market as according to the bank, the complete evaporation of liquidity in certain market segments of the U. S. securitization market has made it impossible to value certain assets fairly regardless of their quality or credit rating. The examples do not end here. Global Alpha hedge fund, with a worth of $8 billion and owned by one of the worlds largest global investment banks, Goldman Sachs, fell by 26%. Citigroup suffered colossal credit losses of $700 million in July and August 2007, and while the losses can not be compared to the banks profits of more than $20 billion in 2006, it will be very difficult for the bank to restore investor confidence. In the same month of August 2007, Sentinel Management Group sold off its assets and after three days of doing so, filed for Chapter 11 bankruptcy. Stock indices in U. S. , Europe and Asia continued to decline due to turmoil in credit and housing markets. Within the same week as Sentinel, shares of Countrywide Financial, the largest U.  S. mortgage lender, dipped by 13% on the NYSE amidst fears that the tight liquidity conditions might lead to its bankruptcy. This was the largest one-day decline in the countrys history since Black Monday, the stock market crash of 1987. Just a day earlier, the company had reported that foreclosures and mortgage defaults had never been this high since early 2002. Reverberations could be felt as far as Australia: shares of Rams Home Loans Group fell by 41% on the Australian Stock Exchange, as it could not refinance its loans as buyers did not want to buy AUD$ 6. 7 billion of commercial paper, its main source of funding. Australian Hedge funds, which were highly exposed to U. S. subprime credit, such as Basis Capitals Basis Yield Alpha Fund filed for bankruptcy protection. This fund filed for bankruptcy in August 2007 while in May its assets were valued at $1 billion. According to the IMF, The rapid transmission of disturbances in one part of the financial system to other parts, sometimes through opaque and intertwined channels, has surprised both market participants and the official sector. Impact on Housing Market The Housing Market could not help but be affected by the subprime market crash: sales of previously owned homes dipped to their lowest in four years. Prices plummeted and consumer confidence declined, as the U. S. economy in general experienced a slowdown. According to David Lereah, chief economist at the National Association of Realtors, purchases of existing homes, which had been 6. 68 million in February 2007, declined to an annual rate of 6. 12 million, which has been the largest drop since January 1989. as compared to 2006, sales declined by 11. %. Ben S. Bernanke, Chairman of the Federal Reserve, as well as other policy makers have isolated housing as the sector which would act as a deterrent for the economy to achieve moderate growth. This decline in sales has led to the general sentiment that the housing recession is here to stay. Subprime mortgage defaults show no signs of decreasing and owners do not wish to reduce prices, which will eventually lead to more unsold properties in the market. The housing bubble has definitely crashed as the supply of homes for sale dipped to 3. 45 million in March 2007, which if the current sales rate is accounted for, represents 7. 3 months supply, the highest since October 2006. Industry reports reflecting the SP/Case-Shiller home- price index reported the 1 percent decline in home values in 20 metropolitan areas, which is the largest price drop since the inception of this index in 2001. According to the Commerce Department, construction of new homes has gone down by 14. 3%. The nations major housing markets all reported decline in prices and existing home sales levels dropped in 40 states. The sharper hits were felt in the markets of Arizona, Florida, California, and Virginia. April 2007 had 47% more foreclosures than a year ago, as reported by RealtyTrac Inc. 50 or so subprime mortgage companies have either been sold off or closed down which has worsened matters and let to a credit crunch. D. R. Horton Inc. , the second-largest homebuilder in the country, suffered a drop in fiscal second-quarter profits by 85% as sales declined and the company was not in a situation to buy land. Its Chief Executive Officer, Donald Tomnitz, said, I dont think the market is stabilizing. Clearly our sales are not where we wanted them to be. The housing markets in California, Florida and Arizona are becoming tougher. While regulatory agencies are now becoming wiser to the risky mechanisms which deceptively forced millions of people into houses which were out of their range of affordability, their attempts to look into these practices will not be fruitful in the short term. There exist $1 trillion in Adjustable Rate Mortgages which will reset in 2007. This is a definite recipe for more disaster as over-leveraged homeowners will not be able to make their payments and will invariably default, leading to more trouble for banks and a chain effect which will adversely affect the already-weakened economy. Banks and mortgage lenders are trying to come up with ways to ensure that people stay in their homes but the subprime market in particular with increasing foreclosures and the housing market in general is in the midst of a spectacular crash.

Effect of the Outdoors on Mental Health

Effect of the Outdoors on Mental Health Topic: Mental Health Big Ideas Overview Mental health disorders are known to affect most people at some point in their lives (Government Office of Science London 2008, as cited in Barton 2010). Indeed, rates of depression and other psychological illnesses (e.g. anxiety, etc.) are predicted to increase in the future (Maller et al. 2005, as cited in DFH 2008). Over the past several decades, research has shown that contact with nature aids mental health and restoration. Mental health improvements resulting from exposure to natural environments include increased positive emotions and mood, decreased negative emotions and stress, and increased mental balance, energy, and revitalization. Systematic literature reviews conducted in the past five years continue to show a consistent beneficial relationship between exposure to green, natural environments and mental health. Environmental contexts examined in these studies varied from urban to rural, and compared natural and synthetic environments. Exposure to natural environments might include exercising in natural environments, being within a natural place, or even looking at a view of trees from a window. For example, in a hospital, views of nature are associated with a faster recovery, decreased painkiller use, shorter hospital stays and fewer postoperative complications (Dijkstra 2006). Outdoor space and views at a workplace is associated with decreased stress (Singhal, Paney and Pandy 2013). Regular interaction with nature is connected to lengthened lifespan and decreased risk of mental health illnesses in seniors living in megacities (Takano 2002, as cited in Barton 2010). There is also mixed evidence that exercising outdoors in natural environments could have mental and physical benefits above and beyond exercising indoors. Green exercise for as little as 5 minutes has been shown to improve self-esteem and mood (Barton 2010). There is some evidence that people enjoy exercising outdoors more than indoors, and have a greater intention to repeat the activity, and improvement in social connections (Coon et al 2011). If exercising outdoors is more likely to be maintained in the long term, then motivating people to be active outdoors (e.g. gardening, walking, and biking) could be an important means of staying active. If exposure to outdoor green spaces has immediate positive mental health outcomes, then inaccessibility to such spaces could promote health inequalities. Given the associations between mental health and proximity to green spaces, there is an inherent opportunity for planning and designing both public and private open space. What the Research Says Things for Certain (or semi-Certain) Exposure to green outdoor spaces improves mental health. Examples: Barton and Pretty, 2010: The article concluded that exposure to green has positive health impacts. Coon et. Al, 2011, 1762: â€Å"Experimental research has demonstrated that exposure to views of nature can improve people’s health and wellbeing by providing restoration from stress and mental fatigue,12† Design for Health, 2007, 1: â€Å"A strong research base has continued to demonstrate how direct contact with nature (water, trees, bushes, flowers, and other vegetation, whether cultivated or wild) leads to increased mental health and psychological development.† Lee, A.C.K., R. Maheswaran, 2010, 212: â€Å"Physical and psychological benefits have been linked to green spaces through their purported effects on physical activity.7 †¦It also improves mental functioning, mental health and wellbeing16– 22 and may have long-lasting psychological benefits.23 Benefits on longevity have also been reported.24† Even just a view of nature is beneficial to mental health. Examples: Design for Health, 2007: For example, in a hospital context views of nature are associated with a faster recovery, decreased painkiller use, shorter hospital stays and fewer post-operative complications. Since older persons use hospitals more, views of nature are especially relevant to this population. Dijkstra, 2006: Sunlight and views of nature out the window had positive effects on patients’ mental and physical health. Having a sunny window with a view of nature may have a positive impact on aging patients staying at healthcare facilities. It should be noted that some varied effects happened for patients with dementia or depression. Singhal, Paney and Pandy, 2013: Green space surrounding a work environment reduces stress and benefits mental health. This has been demonstrated consistently in the literature, and anecdotally in this article. Things up in the Air General significance for public health. Example: Bowler, 2012: Overall, the studies are suggestive that natural environments may have direct and positive impacts on well-being, but support the need for investment in further research on this question to understand the general significance for public health. If greater biodiversity in nature increases mental health benefits. Example: Dean, van Dooren and Weinstein, 2011, 878-879: â€Å"Based upon this review, we identified only one original research paper that directly investigated the link between biodiversity per se and mental health allowing the authors to specifically argue that their results ‘indicate that successful management of urban green spaces should emphasize biological complexity to enhance human well-being in addition to biodiversity conservation ([33, p. 390]).† How different user groups, subcultures and types of outdoor environments differ in impact. Example: Design for Health, 2007: â€Å"†¦ more limited knowledge on aspects of nature most relevant, maintenance importance, and different user groups/subcultures. Varied definitions and types of outdoor space make it difficult to compare studies.† Whether there is a causal relationship between green space and mental health. Example: Lee, 2010, 212: â€Å"Most studies reported findings that generally supported the view that green space have a beneficial health effect. Establishing a causal relationship is difficult, as the relationship is complex. Simplistic urban interventions may therefore fail to address the underlying determinants of urban health that are not remediable by landscape redesign.† If exercising outdoors (or with a view of nature) has mental and physical benefits above and beyond exercising indoors. Examples: Coon et al., 2011: found exercising outdoors did have greater mental and physical benefits above and beyond exercising indoors, whereas Lee 2010 found mixed results at best. Implications Standards Mental health benefits can come from very little exposure to natural spaces. Just a glimpse of green will do. Example: Design for Health, 2007, 5: â€Å"Working thresholds for HIA: Provide views of green spaces, with canopy trees, from all buildings. These can be trees at the street level or, for upper-level situations, views to parklands, etc. Tree densities with greater than 22 trees per acre have a positive effect in terms of presence and sense of safety in a population of low-income, public housing residents (Kuo et al., 1998, 45). This is not a very high density of trees.† As little as 5-minutes of activity outside is enough for mental health improvements. Example: Barton and Pretty, 2010: A quantifiable exposure to green was set as a threshold. As a result, greatest changes come from 5 min of activity, and thus suggest these psychological measures are immediately increased by green exercise. Insights Exercising outdoors may be easier to stick to than exercising indoors. Example: Coon et. Al, 2011, 1762: It might be argued that physical activity in health club gyms is a viable alternative to outdoor exercise, but the failure to persevere with indoor exercise initiatives on a long-term basis is well recognized. For example, 40-50% of individuals terminate gym membership within a year of joining.19 Anecdotal evidence suggests that long-term adherence to exercise initiatives conducted in outdoor natural environments or urban green spaces may be superior to that of indoor exercise interventions.20 Urban Chinese migrants have worse mental health than non-migrants. Example: Lin et al., 2011: Rural migrants in China’s cities experience more discrimination and this discrimination is connected to worse mental health. Sources Jo Barton and Jules Pretty, What is the Best Dose of Nature and Green Exercise for Improving  Mental Health? A Multi-Study Analysis, Environmental Science and Technology, 2010 May  15;44(10):3947-55. doi: 10.1021/es903183r. Bowler, Diana E., et al. A systematic review of evidence for the added benefits to health of  exposure to natural environments. BMC Public Health 10.1 (2010): 456. Coon, J. Thompson, K. Boddy, K. Stein, R. Whear, J. Barton, and M.H. Depledge. 2011. â€Å"Does  Participating in Physical Activity in Outdoor Natural Environments Have a Greater Effect on  Physical and Mental Wellbeing than Physical Activity Indoors? A Systematic Review.†Ã‚  Environmental Science and Technology 45:1761-1772. Accessed February 20, 2014. doi: 10.1021/es102947t. Dean, Julie, Kate van Dooren, Philip Weinstein. 2011. â€Å"Does biodiversity improve mental health  in urban settings?† Medical Hypotheses 76: 877-880. Accessed February 20, 2014. doi:  10.1016/j.mehy.2011.02.040. Design for Health. 2007. Key Questions: Mental Health. Version 2.0. www.designforhealth.net Dijkstra, Karin, Marcel Pieterse, and Ad Pruyn. 2006. â€Å"Physical environmental stimuli that turn  healthcare facilities into healing environments through psychologically mediated effects:  systematic review.† Journal of Advanced Nursing 56 (2): 166-181. Accessed February 20,  2014. doi: 10.1111/j.1365-2648.2006.03990.x Lee, A.C.K., R. Maheswaran. 2010. â€Å"The Health Benefits of Urban Green Space: A Review of the  Evidence.† Journal of Public Health 33(2): 212-222. Accessed February 21, 2014. doi:10.1093/pubmed/fdq068. Lin, Danhua, Xiaoming Li, Bo Wang, Yan Hong, Xiaoyi Fang, Xiong Qin, and Bonita Stanton. 2011.  Ã¢â‚¬Å"Discrimination, Perceived Social Inequity, and Mental Health Among Rural-to-Urban  Migrants in China.† Community Mental Health Journal 47:171-180. Accessed February 21,  2014. doi:10.1007/s10597-009-9278-4. Singhal, Vijai, Deep Pandey and Pushp Deep Pandey. 2013. â€Å"Workplace Green Space for Health  and Happiness.† Rajasthan State Pollution Control Board, Jaipur India.

Mood of Passage in Snow Falling On Cedars Essay -- essays research pap

In the passage be ginning â€Å"They had picked†¦Ã¢â‚¬  from the novel Snow Falling On Cedars, the author, David Guterson, uses many techniques to give the passage a depressing, and frightening mood. He uses vivid imagery to describe Carl’s dead body. He also uses figurative language, such as metaphors and similes to show the severity of the situation. Finally, his diction shows the reader how reading about a crime scene can seem real if the word choice is right. All the techniques Guterson use help the reader to feel as if they were actually at the scene when Carl’s dead body was found in the ocean.   Ã‚  Ã‚  Ã‚  Ã‚  The words that Guterson uses create vivid images in the reader’s mind thanks to his use of imagery in the passage. For example, when one reads about the â€Å"bubbles of seawater coursing under† Carl’s shirt, and his â€Å"icy but brilliant pink† skin that looked as if the sea had parboiled in the sea, they might be disgusted. The imagery lets readers actually imagine a dead Carl in their mind, which can be very depressing. Death is also a very scary subject for some, so imagining this would even frighten some. If Guterson would have just said that he was dead and the officers pulled him out of the water, it would not have been as effective. The reader might not have even got any mood out of that, but the mood is also determined by other factors.   Ã‚  Ã‚  Ã‚  Ã‚  Figurative language is used abundantly in the passage. Guterson uses metaphors such as Carl’s h...

Business Ethics and Corporate Governance in Lic of India

OVERVIEW INSURANCE- AN INTRODUCTION Meaning: Insurance may be described as a social device to ensure protection of economic value of life and other assets. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus, collective bearing of risk is insurance. Insurance = Collective Bearing of Risks| Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. The term â€Å"risk† is used to describe the possibility of adverse results flowing from any occurrence or the accidental happenings, which produce a monetary loss. Insurance is a pool in which a large number of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. The sharing of risk among large groups of people is the basis of insurance. Related article: Disadvantages of Ethics in Business The losses of an individual are distributed over a group of individuals. Insurance is nothing but a system of spreading the risk of one onto the shoulders of many. While it becomes somewhat impossible for a man to bear by himself 100% loss to his own property or interest arising out of an unforeseen contingency, Insurance is a method or process which distributes the burden of the loss on a number of persons within the group formed for this particular purpose. Definitions: Fundamental Definition In the words of D. S. Hansell, â€Å"Insurance accumulates contributions of all parties participating in the scheme. Contractual Definition In the words of Justice Tindall, â€Å"Insurance is a contract in which a sum of money is paid to the assured as consideration of insurer’s incurring the risk of paying a large sum upon a given contingency†. Working of Insurance Insurance Industry in India : The origin of life insurance in India can be traced back to 1818 with the establishm ent of the Oriental Life Insurance Company in Calcutta. It was conceived as a means to provide for English Widows. In those days a higher premium was charged for Indian lives than the non-Indian lives as Indian lives were considered riskier for coverage. The Bombay Mutual Life Insurance Society that started its business in 1870 was the first company to charge same premium for both Indian and non-Indian lives. In 1912, insurance regulation formally began with the passing of Life Insurance Companies Act and the Provident Fund Act. By 1938, there were 176 insurance companies in India. But a number of frauds during 1920s and 1930s tainted the image of insurance industry in India. In 1938, the first comprehensive legislation regarding insurance was introduced with the passing of Insurance Act of 1938 that provided strict State Control over insurance business. Insurance sector in India grew at a faster pace after independence. In 1956, Government of India brought together 245 Indian and foreign insurers and provident societies under one nationalized monopoly corporation and formed Life Insurance Corporation (LIC) by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore. Before 1956, insurance was private with minimal government intervention. In 1956, life insurance was nationalized and a monopoly was created. In 1972, general insurance was nationalized as well. But, unlike life insurance, a different structure was created for the industry. India had the nineteenth largest insurance market in the world in 2003. Strong economic growth in the last decade combined with a population of over a billion makes it one of the potentially largest markets in the future. Insurance in India has gone through two radical transformations. One holding company was formed with four subsidiaries. As a part of the general opening up of the economy after 1992, a Government appointed committee recommended that private companies should be allowed to operate. It took six years to implement the recommendation. Private sector was allowed into insurance business in 2000. However, foreign ownership was restricted. No more than 26% of any company can be foreign-owned. A totally regulation free regime ended in 1912 with the introduction of regulation of life insurance. A comprehensive regulatory scheme came into place in 1938. This was disabled through nationalization in what follows; we examine the insurance industry in India through different regulatory regimes. But, the Insurance Act of 1938 became relevant again in 2000 with deregulation. With a strong hint of sustained growth of the economy in the recent past, the Indian market is likely to grow substantially over the next few decades. The rest of the chapter is organized as follows. First, we study the evolution of insurance business before nationalization. This is important because the denationalized structure brought back to play important legal rules from 1938. Next we analyze the nationalized era separately for life and property casualty business as they were not nationalized simultaneously. Much of post-independence history of insurance in India was the history of nationalized insurance. In the following section, we examine the new legal structure introduced after the industry was denationalized in 2000. In the penultimate section, we examine the current state of play and projected future of the industry. Important Milestones in the Life insurance business in India: * 1870: Bombay Mutual life assurance society is the first Indian owned life insurer. * 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. * 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. * 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crores from the Government of India. * 1997: Insurance regulator IRDA set up. 2000: IRDA starts giving licenses to private insurers like Kotak Life Insurance, ICICI Prudential and HDFC Standard Life insurance first private insurers to sell a policy. * 2001: Royal Sundaram Alliance first non life insurer to sell a policy. * 2002: Banks were allowed to sell insurance plans. As Third Party Administrations (TPAs) enter the scene, insurers start setting non-life claims in the cashless mode. * 2004-05: The Government proposed for increasing the foreign equity stake to 49%. * 2007: First Online Insurance portal, set up by an Indian Insurance Broker, Bonsai Insurance Broking Pvt. Ltd. LIFE INSURANCE CORPORATION ACT, 1956 An act to provide for the nationalization of life insurance business in India by transferring all such business to a Corporation established for the purpose and to provide for the regulation and control of the business of the Corporation and for matters connected therewith or incidental thereto. BUSINESS ETHICS Ethics are  moral guidelines  which govern  good behavior. So behaving ethically is  doing what is morally right. Behaving ethically in business is widely regarded as good business practice. To provide you with a couple of quotes: Ethical principles and standards in business: * Define acceptable conduct in business * Should underpin how management make decisions An important distinction to remember is that behaving ethically is not quite the same thing as behaving lawfully: * Ethics  are about what is right and what is wrong * Law  is about what is lawful and what is unlawful You will probably note the link between business ethics and corporate social responsibility (CSR). The two concepts are closely linked: * A socially responsible firm should be an ethical firm * An ethical firm should be socially responsible However there is also a distinction between the two: * CSR is about responsibility to all stakeholders and not just shareholders * Ethics is about  morally correct behavior How do businesses ensure that its directors, managers and employees act ethically? A common approach is to implement a  code of practice. Ethical codes are increasingly popular – particularly with larger businesses and cover areas such as: * Corporate social responsibility * Dealings with customers and supply chain * Environmental policy & actions * Rules for personal and corporate integrity NEED OR IMPORTANCE OF BUSINESS ETHICS These 12 points below discuss the need, importance of business ethics: 1. Stop business malpractices: Some unscrupulous businessmen do business malpractices by indulging in unfair trade practices like black marketing, artificial high pricing, adulteration, cheating in weights and measures, selling of duplicate and harmful products, hoarding etc. These malpractices are harmful to the consumers. Business ethics help to stop these business malpractices. 2. Improve customers’ confidence: Business ethics are needed to improve the customers’ confidence about the quantity, quality, price, etc of the products. The customers have more trust and confidence in the businessmen who follow ethical rules. 3. Survival of business: Business ethics are mandatory for the survival of the business. The businessmen who do not follow it will have short term success, but they will fail in the long run. This is because they can cheat a consumer only once. After that, the consumer will not buy products from that businessman. He will also tell others not to buy from that businessman. So this will defame his image and provoke a negative publicity. This will result in the failure of the business. Therefore, if the businessmen do not follow ethical rules, he will fail in the market. 4. Safeguarding consumers’ rights: The consumer has many rights such as right to health and safety, right to be informed, right to choose, right to be heard, right to redress, etc. But many businessmen do not respect and protect these rights. Business ethics are must to safeguard these rights of the consumers. 5. Protecting employees and shareholders: Business ethics are required to protect the interest of employees, shareholders, competitors, dealers, suppliers, etc. It protects them from exploitation through unfair trade practices. . Develops good relations: Business ethics are important to develop good and friendly relations between business and society. This will result in a regular supply of good quality goods and services at low prices to the society. It will also result in profits for the businessmen thereby resulting in growth of economy. 7. Creates good image: Business ethics create a good image for the business and businessmen. If the businessmen follow all ethical rules, then they will be fully accepted and not criticized by the society. The society will always support those businessmen who follow this necessary code of conduct. 8. Smooth functioning: If the business follows all the business ethics, then the employees, shareholders, consumers, dealers and suppliers will all be happy. So they will give full cooperation to the business. This will result in the smooth functioning of the business. 9. Consumer movement: Business ethics are gaining importance because of the growth of the consumer movement. Today the consumers are aware of their rights. Now they are more organized and cannot be cheated easily. They take actions against those businessmen who indulge in bad business practices. They boycott poor quality, harmful, high priced and duplicate goods. Therefore, the only way to survive in business is to be honest and fair. 10. Consumer satisfaction: Today, consumer is the king of the market. Any business simply cannot survive without the consumers. Therefore, the main aim or objective is consumer satisfaction. If the consumer is not satisfied, then there will be no sales and thus no profits too. Consumer will be satisfied only if the business follows all the business ethics, and hence are highly needed. 11. Importance of labour: Labour i. e. employees or workers play a very crucial role in the success of a business. Therefore, business must use business ethics while dealing the employees. The business must give them proper wages and salaries and provide them with better working conditions. There must be good relations between employer and employees. The employees must also be given proper welfare facilities. 12. Healthy competition: The business must use business ethics while dealing with the competitors. They must have healthy competition with the competitors. They must not do cut throat competition. Similarly, they must give equal opportunities to small-scale business. They must avoid monopoly. This is because monopoly is harmful for the consumers. CORPORATE GOVERNANCE Good corporate governance contributes to a company’s competitiveness and reputation, Corporate governance  is â€Å"the system by which companies are directed and controlled†. It involves regulatory and market mechanisms, and the roles and relationships between a company’s management, its board, its shareholders  and other  stakeholders, and the goals for which the corporation is governed. In contemporary business corporations, the main external stakeholder groups are shareholders, debt holders, trade  creditors, uppliers, customers and communities affected by the corporation's activities. . Internal stakeholders are the  board of directors,  executives, and other employees. Much of the contemporary interest in corporate governance is concerned with mitigation of the conflicts of interests between stakeholders. Ways of mitigating or preventing these conflicts of interests incl ude the processes, customs, policies, laws, and institutions which have impact on the way a company is controlled. An important theme of corporate governance is the nature and extent of  accountability  of people in the  business. IMPORTANCE OF CORPORATE GOVERNANCE The need, significance or importance of corporate governance is listed below: 1. Changing Ownership Structure: In recent years, the ownership structure of companies has changed a lot. Public financial institutions, mutual funds, etc are the single largest shareholder in most of the large companies. So, they have effective control on the management of the companies. They force the companies to use corporate governance. That is, they put pressure on the management to become more efficient, transparent, accountable, etc. They also ask the management to make consumer-friendly policies, to protect all social groups and to protect the environment. So, the changing ownership structure has resulted in corporate governance. 2. Importance of Social Responsibility: Today, social responsibility is given a lot of importance. The Board of Directors has to protect the rights of the customers, employees, shareholders, suppliers, local communities, etc. This is possible only if they use corporate governance. 3. Growing Number of Scams: In recent years, many scams, frauds and corrupt practices have taken place. Misuse and misappropriation of public money are happening everyday in India and worldwide. It is happening in the stock market, banks, financial institutions, companies and government offices. In order to avoid these scams and financial irregularities, many companies have started corporate governance. 4. Indifference on the part of Shareholders: In general, shareholders are inactive in the management of their companies. They only attend the Annual general meeting. Postal ballot is still absent in India. Proxies are not allowed to speak in the meetings. Shareholders associations are not strong. Therefore, directors misuse their power for their own benefits. So, there is a need for corporate governance to protect all the stakeholders of the company. 5. Globalization: Today most big companies are selling their goods in the global market. So, they have to attract foreign investor and foreign customers. They also have to follow foreign rules and regulations. All this requires corporate governance. Without Corporate governance, it is impossible to enter, survive and succeed the global market. 6. Takeovers and Mergers: Today, there are many takeovers and mergers in the business world. Corporate governance is required to protect the interest of all the parties during takeovers and mergers. 7. SEBI: SEBI has made corporate governance compulsory for certain companies. This is done to protect the interest of the investors and other stakeholders. PROFILE OF THE ORGANISATION LIFE INSURANCE CORPORATION OF INDIA Life Insurance Corporation of India  (LIC) is the largest  insurance group  and  investment company  in India. It’s a state-owned where  Government of India has 100% stake. LIC also funds close to 24. 6% of the Indian Government's expenses. It has assets estimated of  13. 25 trillion (US$264. 4 billion). It was founded in 1956 with the merger  of 243 insurance companies and provident societies. Headquartered in  Mumbai, financial and commercial capital of India, the Life Insurance Corporation of India currently has 8 zonal Offices and 113 divisional offices located in different parts  of India, around 3500 servicing offices including 204 8 branches, 54 Customer Zones, 25 Metro Area Service Hubs and a number of Satellite Offices located in different cities and towns of  India and has a network of 13,37,064 individual agents, 242 Corporate Agents, 79 Referral Agents, 98 Brokers and 42 Banks (as on 31. 3. 011) for soliciting life insurance business from the public. The slogan of LIC is â€Å"Yogakshemam Vahamyaham† which translates from Sanskrit to â€Å"Your welfare is our responsibility†. The slogan is derived from the Ancient Hindu text, the  Bhagavad Gita's 9th Chapter, 22nd verse. The literal translation from Sanskrit to English is â€Å"I carry what you require†. The slogan can be seen in the logo and is written in Devanagiri script below the hands holding the lamp. | Type | State-owned| Industry| Financial services| Founded| 1 September 1956| Headquarters| Mumbai,  India| Key people| D. K. Mehrotra, (Chairman)| Products| Life  and  insurance, investment,  mutual fund| Total assets| 13. 25 trillion (US$264. 34 billion)(2010)| Owner(s)| Government of India| Employees| 115,966 (2010)| Subsidiaries| LIC Housing Finance LIC Cards Services LIC Nomura Mutual Fund| Website| www. licindia. in| OBJECTIVES OF LIC OF INDIA * Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. Maximize mobilization of people's savings by making insurance-linked savings adequately attractive. * Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors a s well as the community as a whole, keeping in view national priorities and obligations of attractive return. * Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. Act as trustees of the insured public in their individual and collective capacities. * Meet the various life insurance needs of the community that would arise in the changing social and economic environment. * Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. * Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective. BOARD OF DIRECTORS Shri D. K. Mehrotra,  (CHAIRMAN, LIC ) Shri T. S. Vijayan,  (Managing Director, LIC ) Shri Thomas Mathew T. (Managing Director, LIC ) Shri Sushobhan Sarker  (Managing Director, LIC ) Shri R. Gopalan,  (Secretary, Department of Economic Affairs,   Ministry of Finance, Govt. of India. ) Shri  D. K. Mittal,  (Secretary, Department of Financial Services, Ministry of Finance, Govt. of India. ) Shri  A. K. Roy,  (Chairman cum Managing Director, GIC. ) Shri M. V. Tanksale,  (Chairman & Managing Director, Central Bank of India ) Lt. General Arvind Mahajan (Retd. ) Shri Anup Prakash Garg Shri Sanjay Jain Shri Ashok Singh Shri K. S. Sampath Shri Amardeep Singh Cheema ORGANISATION STRUCTURE OPERATIONS AWARDS WON BY LIC OF INDIA IN 2011-12 | Readers Digest â€Å"Trusted Brand† in the platinum category. | | Superbrands| | Asian Leadership Award| | LIC has been ranked :† Number One Trusted Service Brand† in the EconomicTimes Brand Equity Survey| | Rated as the â€Å"Most Preferred Life Insurance Company of the year† at the CNBC| | Dainik Bhaskar Group| | Bombay Chamber Of Commerce| | ABCI| | Star News- Customer Centric Brand Award| PROBLEMS OF LIC OF INDIA – The existing insurer, LIC and GIC, have created a large group of dissatisfied  customers due to the poor quality of service. Hence there will be shift of large number of customers from LIC and GIC to the private insurers. – LIC may face problem of surrender of a large number of policies, as new insurers will woo them by offer of innovative products at lower prices. – The corporate clients under group schemes and salary  savings schemes may shift their loyalty from LIC to the private insurers. – There is a likelihood of exit of young dynamic managers from LIC to the private insurer, as they will get higher package of remuneration. – LIC has overstaffing and with the introduction of full computerization, a large number of the employees will be surplus. However they cannot be retrenched. Hence the operating costs of LIC  will not be reduced. This will be a  disadvantage in  the competitive market, as the new insurers will operate with lean office and high technology to reduce the operating costs. – GIC and its four subsidiary companies are going to face more challenges, because their management expenses are very high due to surplus staff. They can't reduce their number due to service rules. – Management of claims will  put strain on the financial resources, GIC and its subsidiaries since it is not up the mark. LIC has more than to 60 products and GIC has more than 180 products in their kitty, which are outdated in the present context as they are not suitable to the changing needs of the customers. Not only that they are not competent enough to complete with the new products offered by foreign companies in the market. – Reaching the consumer expectations on par with foreign companies such as better yield and much  improved quality of  service particularly in the  area of settlement of  claims, issue of new  policies, transfer of the policies and revival of policies in the liberalized market is very difficult to LIC and GIC. Intense competition from new insurers in  winning the consumers by multi-distribution channels, which will  include agents, brokers, corporate intermediaries, bank branches, affinity groups and direct marketing through telesales and interest. – The market very soon will be flooded by a large number of products by fairly large number of insurers operating in the Indian market. Even with limited range of products offered by LIC and GIC, the consumers are confused in the market. Their confusion will further increase in  the face for large number of products in the  market. The  existing level of awareness of the consumers for insurance products is very low. It is so because only 62% of the Indian population is literate and less than 10% educated. Even the educated consumers are ignorant about the various products of the insurance. – The insurers will have to face  an acute problem of the redressal of the consumers, grievances for deficiency in products and services. – Increasing awareness will  bring number of legal cases filled  by the consumers against insurers is likely  to increase substantially in future. Major challenges in canalizing the growth of insurance sector are product innovation, distribution network, investment management, customer  service  and education. SWOT ANALYSIS OF LIC OF INDIA STRENGTHS: * India’s top insurance company and best among Public sector company. * Provide better infrastructure than any other Public company. * Brand Image * Govt Guarantee * Claims settlement * Pan India presence * La rge product portfolio WEAKNESSES: * Average waiting time for the customer is 15 to 20 minutes. * No separate customer care unit * Lethargic Staff * Mediocre Top Bosses Large scale Corruption in Main Office * Ultra-Slow decision making process * Internal problems between Top Management and lower cadre Employees OPPORTUNITIES: * Setup a marketing cell at the local branch. * Ensure that policies are diversified across several customer segments * Pension Market * Health Insurance * Large Real Estate portfolio THREATS: * Growth of private players has led to shifting emphasis from public sector companies. * Internal discord * New players * Red-tapism COMPETITION INFORMATION Main Competitors of LIC * SBI Life Insurance Company * ICICI Prudential Life Insurance Company Birla Sun Life Insurance Company * HDFC Standard Life Insurance Company * Reliance Life Insurance Company COMPARISON 1. Policies and Premium 2. Claims Paid 3. Profit of the year 2011-2012 4. Life Fund Policies and Premium Cla ims Paid Profit of the Year 2010-11 Research Methodology Research is the process of systematic and in depth study to search for a particular subject topic or area of investigation backed by the Collection, Compilation, Analysis or Interpretation of data. It is more systematic study or activity directed towards discovery and the development of organized body of knowledge. Success of Research depends upon the scientific methods used. There are various methods for Collecting the data. But it is not advisable and even possible to used all the methods. Every researcher must know the purpose of his study. For doing research one must set questions accordingly one has to find out and the answers through his own investigation. This Study is conducted to analyze the business ethics and corporate governance in Life Insurance Corporation of India. The data are basically segregated into two parts: a) Primary Data b) Secondary Data. a) Primary Data :- Primary Data is collected during the course of doing experiments in an experimental research. There are several methods for collecting primary data. b) Secondary Data:- Secondary  data, is data collected by someone other than the user. Secondary data are data which are collected by someone in past that includes previous year annual report, magazines, project report etc. For my project report, I  had used secondary data under which I  used annual reports which includes  balance sheets, P;L a/c, and other general information. Limitation of the Project Report Followings are the limitations of the project work taken by me: ? One of the limitations of this project study is of the time limitation. It is somehow difficult to fully know any big organization like LIC of India in this limited time  period. ? Senior managers and others officers in LIC of India are also very busy. They do not have enough time for solving our queries in details. Objective of the study The objectives have been classified by me in this project form personal to professional but here I am not disclosing my personal objectives which have been achieved by me while doing the project. Only professional objectives which are being covered by me in this project are as following- * To know about the business ethics and corporate governance of the organization. * To know the contribution of the organization to the society. * To know about the reliability of the organization. Scope of the Study So I am working on the project Business Ethics and Corporate Governance in LIC of India with the scope that I will get to know: * What ethics has the organization adopted? * What is organization doing for the welfare of the society? How reliable is the organization? Vision and Mission of LIC of India Mission â€Å"Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development. † Vision â€Å"A trans-nationally competitive financial conglomerate of significance to societies and Pride of India. † Core Values of LIC of Ind ia * Caring and Courtesy * Initiative and Innovation * Integrity and Transparency * Quality and Returns * Participation and Relationship Trustworthiness and Reliability Ethics followed by LIC of India * Provide insurance cover and financial security to every insurable person. * Conduct all aspects of business keeping in view its interest and national priorities. * Provide them prompt, efficient and courteous service. * Act as trustees of their funds and invest the fund to their best advantage. * Conduct business with utmost economy and on sound business principles. Social advantages to LIC of India †¢ Providing organizational guidelines for business integrity in turbulent times. Helping employees deal with ethical issues they face daily on the job. †¢ Building solid company teamwork and productivity. †¢ Creating an insurance policy – to help ensure that company policies and procedures are legal. †¢ Avoiding criminal â€Å"acts of omission† which can lower potential fines. †¢ Reinforcing the values associated with quality management, strategic planning, and diversity management. †¢ Promoting a strong public image. Corporate Governance in LIC of India Adherence to good Corporate Governance is an integral part of the philosophy of LIC’s business conduct. The driving forces behind institutionalizing the practices of good Corporate Governance are various proactive measures, initiatives and guidance by the Government, LIC Board and its Sub Committees along with LIC’s Human Resources and Agents. Our practice of operational transparency, information sharing, accountability and ensuring dialogue with all the stakeholders in addition to formulation of value-based policies and practices at all levels made us to imbibe good Corporate Governance. This has enabled us to enhance our Brand Equity, strengthen stake of shareholders and maintain a healthy environment within the organization. This has led to a committed organizational focus on the customer service which in turn has contributed to a good growth in business. CORPORATE SOCIAL RESPONSIBILITY Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. Sponsorship of CSR by LIC of India 2009-12 I. Group Schemes and Social Security Claims under various Social Security Schemes: 1, 02,950 claims amounting to Rs. 287. 4 crore paid under Social Security Schemes. a) Scholarships of Rs. 102. 53 crore was disbursed to 13, 78,744 students as a free add on benefit to the children of the members of Janashree Bima Yojana under Shiksha Sahayog Yojana during the year 2010-11. b) Scholarship for total amount of Rs. 81. 85 crore was distributed to 8, 40,568 students as a free add on benefit to the children of members of AABY Shiks ha Sahayog Yojana during the year 2010-11. Social Security Cover: Total 2. 57 crore lives have been given insurance cover under various Social Security Scheme during 2010-11. Aam Admi Bima Yojana Aam Admi Bima Yojana was launched on 2nd Oct. 2007 and a total of 47, 01,814 lives under 17 states were insured during the year bringing the total lives covered under the scheme since inception to 1,77,47,480. II. Investment in Social Sector The total investments of the Corporation amounted to Rs. 12, 66, 539. 04 crore as at 31st March, 2011. The Corporation subscribed an amount of Rs. 65, 521. 83 crore (face value) and Rs. 40, 254. 38 crore (face value) to the Securities of the Government of India and the new loan issues of the various State Governments respectively during 2010-2011. SOCIAL RESPONSIBILITIES: It has been the constant endeavour of the Corporation to provide security to as many people as possible and to channelise the savings mobilised for the welfare of the people at large. To meet this end, the Corporation has been promoting Social Welfare through investments in Infrastructure and Social Sector which includes: * Projects/Schemes for generation and transmission of Power, * Housing Sector, * Water Supply and Sewerage Projects/Schemes, * Development of Roads, Bridges ; Road Transport. The total Investment in these sectors during 2010-11 was Rs. 5,235. 94 crore. The investments by way of Central, State and Other Government Guaranteed Marketable securities, Loans, Debentures ; Equity investments in Infrastructure and Social Sector amounts to Rs. 7,49,150 crore. III. LIC Golden Jubilee Foundation Under ‘Corporate Social Responsibility’, and to commemorate the Golden Jubilee of LIC in the year 2006, ‘LIC Golden Jubilee Foundationâ€⠄¢ Trust was formed with the objective of promoting education, health, relief of poverty or distress and advancement of other objects of general public utility. As on 31. 3. 011 LIC has provided a Corpus of Rs. 90 crore to this Foundation and the interest earned is utilized for funding various projects for charitable purposes. As on date, LIC Golden Jubilee Foundation has supported 165 projects to the extent of Rs. 15. 66 crore. Under this Trust a scholarship scheme is also formulated by name LIC Golden Jubilee Scholarship Scheme of the Trust to give scholarships at the rate of Rs. 10000/- per annum to meritorious students belonging to economically weaker sections of society to enable them to pursue higher education at graduation level. Scholarships were given to 802, 881 and 967 students during the years 2008-2009, 2009-2010 and 2010-11 respectively. ANALYSIS 1. Market Share 2. Goodwill Value Over its existence of around 50 years, Life Insurance Corporation of India, which commanded a  monopoly  of soliciting and selling life insurance in India, created huge surpluses, and contributed around 7% of India's  GDP  in 2006. The Corporation, which started its business with around 300 offices, 5. 7 million policies and a  corpus  of INR 459 million (US$ 92 million as per the 1959 exchange rate of roughly Rs. for a US $,  has grown to 25000 servicing around 350 million policies and a  corpus  of over  8 trillion (US$145. 6 billion). The Economic Times Brand Equity Survey 2010 rated LIC as the No. 4 Service Brand of the Country [6]. Though in the year 2010 is ranked at 4, the organization is consistently among the top rated service company of the India [7]. RANK-COMPANY 1-VODAFONE, 2-airtel, 3-SBI (STAT E BANK OF INDIA), 4-LIC (LIFE INSURANCE CORPORATION). From the year 2006, LIC is continuously winning the Readers' Digest Trusted brand award [8]. According to The Brand Trust Report [9] 2011, LIC is the 8th most trusted brand of India. . Growth Visibility of LIC of India FINDINGS After doing this project I found out that- * LIC of India conduct all aspects of the business keeping in view the interests of the community and the national priorities. * Provide insurance cover and financial security to every insurable segment including the socially and economically weaker sections of the society. * LIC of India provides their customers with prompt, efficient and courteous service. * It acts as trustees to their customer’s funds and invests them to their best advantage. * It builds and maintains enduring relationship with the customers. It also keeps the customers informed about their products and services. * It also promote a sense of participation among the workforce and make th em partners in progress. * It also works towards their job satisfaction and sense of pride. * It provide and environment and opportunities for growth to enable them to realize their full potential. * It also take steps to develop professional skills of the workforce to enable them to handle their assignments more effectively. * LIC is not only the largest but the most popular life insurance company in India.   LIC has gained the consumer trust and credibility over the time that is essential to sustain in the insurance business. RECOMMENDATIONS Though, LIC of India is a very reliable and ethical company. But still there are some points which should be taken care of in future to prevent any kind of risks to the organization: * More Corporate Social Responsibility initiatives should be taken in near future in order to increase its reliability among the society. * Integrity connotes strength and stability. It means taking the high road by practicing the highest ethical standards. Demonstrating integrity shows completeness and soundness in the organization. * Blaming others, claiming victimhood, or passing the buck may solve short-term crises, but refusal to take responsibility erodes respect and cohesion in an organization. Ethical people take responsibility for their actions. * Quality should be more than making the best product, but should extend to every aspect of your work. A person who recognizes quality and strives for it daily has a profound sense of self-respect, pride in accomplishment, and attentiveness that affects everything. From organization’s memos to the presentations, everything it touch should communicate professionalism and quality. * Trust is hard to earn and even harder to get back after you've lost it. Everyone who comes in contact with the organization must have trust and confidence in how you do business. * Managers and executives should uphold the ethical standards for the entire organization. A leader is out front providing an example that others will follow. * Good ethics should be most noticeable at the top. Every employee must be accountable to the same rules. Corporate values or ethics initiative must be â€Å"sold† and â€Å"marketed† aggressively throughout the organization. Every forum and medium should be used to spread the good message. Of course, it will only be credible if the organization is practicing what it preaches. * The ethics fervor should extend to the next generation of employees. The longer it lasts, the more ingrained the principles will become. CO NCLUSION Business ethics present pertinent solutions to the concerns and dilemmas faced by global organizations. Ethical leadership is essential for the long-term survival and success of any organization. In the era of globalization, business ethics considerably influence shareholders, employees, customers, suppliers, competitors, government and civil society. Organizations should focus on the ethical issues faced by them in various functional areas like marketing, finance, human resources, production, ICT etc. The commendable work done by global corporations in inculcating and practicing business ethics underscores the importance of value based leadership in international business scenario. Corporate governance is of paramount importance to a company and is almost as important as its primary business plan. When executed effectively, it can prevent corporate scandals, fraud and the civil and criminal liability of the company. It also enhances a company’s image in the public eye as a self-policing company that is responsible and worthy of shareholder and debt holder capital. It dictates the shared philosophy, practices and culture of an organization and its employees. A corporation without a system of corporate governance is often regarded as a body without a soul or conscience. Corporate governance keeps a company honest and out of trouble. If this shared philosophy breaks down, then corners will be cut, products will be defective and management will grow complacent and corrupt. The end result is a fall that will occur when gravity – in the form of audited financial reports, criminal investigations and federal probes – finally catches up, bankrupting the company overnight. Dishonest and unethical dealings can cause shareholders to flee out of fear, distrust and disgust. BIBLIOGRAPHY * http://www. usinessdictionary. com/article/618/why-is-corporate-governance-important/ * http://www. licindia. in/ * http://www. businessreviewindia. in/top_ten/top-10-business/insurance-top-10 * http://www. licindia. in/GJF_aboutus. htm * http://www. licindia. in/Annual_Report_2011. pdf * http://www. irda. gov. in/ * https://www. google. co. in/ * http://en. wikipedia. org/wiki/Corporate_social_responsibility * http://www. mallenbaker. net/csr/definition. php * h ttp://en. wikipedia. org/wiki/Life_Insurance_Corporation_of_India

ACC Additional Theory Questions Essay

ACC Additional Theory Questions Essay ACC Additional Theory Questions Essay Chapter 2 1. The primary objective of financial reporting is to communicate information to permit users of the information to make informed decisions. 2. Qualitative characteristics make accounting information useful. Understandability: the quality of accounting information that makes it comprehensible to those willing to spend the necessary time. Relevance: the capacity of information to make a different decision. Reliability: the quality that makes accounting information dependable in representing the events that it purports to represent. Comparability: for accounting information, the quality that allows a user to analyze two or more companies and look for similarities and differences. Consistency: for accounting information, the quality that allows a user to analyze two or more accounting periods for a single company. Materiality: the magnitude of an accounting information omission or misstatement that will affect the judgment of someone relying on the information. Benefit versus cost constraint. 3. Depreciation: the process of allocating the cost of a long-term tangible asset over its useful life. Also termed amortization. 4. Materiality: the magnitude of an accounting information omission or misstatement that will affect the judgment of someone relying on the information. 5. Benefit versus cost constraint: the benefits of accounting information should exceed the costs of providing the information. 6. Classified balance sheet is helpful in evaluating the liquidity of a business. 7. Current assets: cash or sold or consumed during the operating cycle or within one year if the cycle is shorter than one year. eg, cash, accounts receivable, inventory prepaid expense. Non-current assets: any assets that do not meet the definition of a current asset. Current liabilities: an obligation that will be satisfied within the operating cycle or within one year if the cycle is shorter than one year. Long-term liabilities: any obligation that will not be paid or otherwise satisfied within the next year or the operating cycle. Shareholders equity: represents the owners’ claims on the assets of the business. 8. It is useful in any analysis of a company’s financial position by separating both assets and liabilities into those that are current and those that are non-current. 9. Income statement is used to summarize the results of operation of an entity for a period of time. Single-step income statement: an income statement in which all expenses are added together and subtracted from all revenues. 10. The statement of retained earnings provides a link between the income statement and balance sheet. Beginning retained earnings, net income, dividends declared and paid and retained earnings are included. 11. The statement of cash flows classifies cash inflows and outflows as originating from three activities: operating, investing and financing. 12. Income statement should be completed first. Income statement-Balance sheet-statement of retained earnings-cash flows statement. Working capital: current assets – current liabilities Current ratio: current assets/current liabilities Profit margin: net income/sales or revenue Chapter 3 1. Event: a happening of consequence to an entity. Transaction: any event that is recognized in a set of financial statements. 2. External event: involves interaction between the entity and its environment. eg, the payment of wages to an employee, hiring of a new employee. Internal event: occurs entirely with in the entity. eg, the use of a piece of equipment. When an event is recognized in a set of financial statement then it is a transaction. 3. Source document provides the evidence needed in an accounting system to record a transaction. Chapter 4 1. When economic events affect on the financial statement. 2. Recognition: the process of including an item in the financial statement of an entity. 3. Historical cost: the amount paid for an asset and used as a basis for recognizing it on the balance sheet and