Objective
L&T’s risk management aims to identify significant risk factors, prepare for them and manage them in an optimal way so that company’s objectives are achieved. Comprehensive risk management endeavours to manage the Group’s risk as a whole and not just individual risk factors.
Responsibilities
The principles of L&T’s risk management are approved by the company’s Board of Directors. The Board monitors the implementation of risk management and assesses the efficiency of the methods employed. The President and CEO is responsible for the organisation and implementation of risk management.
Principles for financial risk management are defined in the Financial Policy.
Identification, assessment and reporting of risks
Risk management forms an integrated part of L&T’s management, monitoring and reporting system. Regular monitoring and reporting of risks take place at the group, division and product line levels, in units outside Finland as well as within centralised functions defined as being critical, as part of the annual strategy process.
The management of each of the divisions and centralised functions identifies and assesses the most significant risks for its own area of responsibility, prepares contingency plans and determines responsibilities for risk management measures within its organisation. Risk identification and planning primarily take place within divisions, product lines and units responsible for business operations. Any risks identified and preparations for them are regularly reported to the President and CEO.
The risk management process is determined in L&T’s Integrated Management System.
A risk assessment in all divisions, product lines, foreign units as well as centralised functions defined as being critical, is carried out annually to assess strategic, financial, damage-related and operational risk factors. The significance of risks is assessed using a risk matrix, and contingency plans for significant risks are prepared on this basis.
Further information: 
Annual Report 2009