This is reflected in the financial objectives, which for 2010 were a return on equity of 20 percent after tax, and that net indebtedness should never exceed 1.5 times shareholders’ equity during any given quarter.
The level for the return target is based on the margins that the various parts of the Group may be expected to generate on a sustainable basis, and on capital requirements in relation to the prevailing business focus.
To ensure that the return target is not reached by taking financial risks, net indebtedness – defined as interest-bearing liabilities less cash and cash equivalents and interest-bearing receivables – shall never exceed 1.5 times shareholders’ equity during any given quarter.
In 2010, the financial objectives were adjusted since new accounting policies started to be applied. As of January 1, 2010, NCC applies IFRIC 15, Agreements for the Construction of Real Estate.