Managing corporate responsibility is part of the normal management and development of business operations at L&T, and it is controlled via strategic and annual planning and the company’s management system. L&T’s management system has been certified in accordance with the ISO 9001, ISO 14001 and OHSAS 18001 standards.
Our corporate responsibility programme defines the objectives for the material aspects of our responsibility. The steering group of corporate responsibility, which is chaired by the President and CEO, regularly monitors the progress of the programme and the projects launched to support its implementation. The steering group also evaluates and, if necessary, updates the targets of the programme annually.
The Corporate Responsibility Programme describes the key objectives related to responsibility as well as major achievements and actions in 2016. The programme is built around the expectations of our key stakeholders, and we have taken into account the particular nature of the business operations and operating environment of a service business in the environmental sector.
To implement the different components of the Corporate Responsibility Programme, we have 16 projects underway with goals including the development of a responsible supply chain, occupational safety, internal environmental expertise, the energy efficiency of properties, and the reduction of emissions. The progress of the projects is monitored by the corporate responsibility steering group.
L&T’s corporate responsibility programme and activities are described in more detail in the 2016 corporate responsibility report, which is published as part of the company’s Annual Report 2016. The report is produced in accordance with the recommendations of the Global Reporting Initiative (GRI) guidelines.
Research and development
Research expenditure is recognised as an expense during the period in which it is incurred. Development expenditure is capitalised when the company can demonstrate the technical feasibility and commercial potential of the product under development and when the acquisition cost can be reliably determined. Other development expenditure is recognised as an expense.
The company’s current capitalised development expenditure is mainly related to software and system projects. Development expenditure of EUR 7.6 million on software projects was capitalised in the balance sheet (6.0; 2.3). Costs of software projects are capitalised starting from the time when the projects move out of the research phase into the development phase and the outcome of the project is an itemisable intangible asset.
For the most part, the goal of product development recognised as an expense in the income statement is to give L&T’s service offering a competitive edge and thereby to help the company achieve its growth targets.
L&T also participated in many research projects. The objectives of these projects were to develop waste recycling and recovered fuels, to assess and reduce environmental impacts and to develop new environmental business activities.