4 classification as family company 5 failure to

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4) Classification as family company 5) Failure to acquire application of tax reduction measures in accordance with property acquisitions 6) Changes in tax systems 7) Failure to control unitholders who owns PIC's investment units 8) Application of impairment accounting 9) Failure to pay dividends from profits due to inadequate funds 10) Accrual of tax in arrears due to delays of tax payments Other risks concerning: 1) Failure to incorporate properties planned for acquisition to PIC's portfolio 2) Impact of bankruptcies and other events on the part of sellers 3) Risks related to key events, etc. Top
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2. Briefing on Major Risks 1) Dilution of per-unit value through additional issuance of investment units Risk Countermeasure PIC will issue investment units when necessary in order to raise funds required for acquiring properties, conducting renovation and repairs of properties, repaying loans and other purposes. When new investment units are issued, there is a possibility that the proportion of investment units owned by existing unitholders against the total number of PIC's investment units will be diluted. When deciding to issue new investment units, given favorable market conditions, PIC will do its utmost to avoid dilution in the form of a reduction in dividend per unit by using the obtained funds in the most effective way for increasing revenues as well as conducting other measures. Top 2) LTV (loan-to-value) ratio Risk Countermeasure When the loan-to-value (LTV) ratio rises, the distributable amount of funds tends to become more vulnerable to changes in interest rates. If there is a sudden change in interest rates, unitholders may receive reduced dividends. PIC has set the ceiling of its LTV ratio at around 60% as a target, and works to control and keep the LTV at a lower level through its prudent financial strategies. Top 3) Borrowings and corporate bonds Risk Countermeasure When PIC wishes to receive new loans, issue corporate bonds or conduct refinancing of existing loans, there is no guarantee that PIC can implement these financial arrangements at the times and conditions it desires. Moreover, when conducting these debt financing arrangements, PIC may be subject to financial covenants, negative pledges or restrictions on acquiring assets imposed by lenders to a certain degree. If such imposed conditions are violated, or depending on interest rates and other financial factors, PIC may be forced to sell its assets or offer its assets as security, at times and conditions it does not desire, in order to repay borrowings or redeem corporate bonds. Building on the high credibility of NTT Urban Development, its main sponsor, PIC works to secure fund procurement by maintaining and evolving stable relationships with existing financial institutions while enriching its formation of lenders through starting business with other financial institutions. In an effort to avert financial risks, PIC procures funds by taking into account the balance of short-term loans that provide flexibility and long-term loans that assure
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