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Sylphid Co., Ltd.
Sylphid Green Bond
Green Bond eligibility pre-issue assessment report

DNV GL second party opinion

Feb. 2021

DNV GL Business Assurance Japan K.K.

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INDEX
Executive Summary

3

Introduction

4

Ⅱ Scope and Objectives

6

Basis of DNV GL’s opinion

7

Ⅲ Work Undertaken

8

Ⅳ Findings and DNV GL’s opinion

9

Schedule-1 Sylphid Green Bond Nominated Projects and Assets

16

Schedule-2 Green Bond Eligibility Assessment Protocol

17

GBP-1 Use of proceeds

17GBP-2 Process for Project Selection and Evaluation

19

GBP-3 Management of Proceeds

21GBP-4 Reporting

22

Schedule-3 Green bond guidelines eligibility assessment

23

GBGLs-1 Use of proceeds

23

GBGLs-2 Process for Project Evaluation and Selection

27

GBGLs-3 Management of proceeds

30

GBGLs-4 Reporting

32

GBGLs-5 External Review

34

CBS-SE-1 Climate Bonds Standard & Certification Scheme Sector Criteria for Solar (version 2.1)
Criteria for Eligible Projects & Assets – Solar (Eligible Activities)

36

CBS-SE-2 Climate Bonds Standard & Certification Scheme Sector Criteria for Solar (version 2.1)
Criteria for Eligible Projects & Assets – Solar (non solar fuel use)

37

CBS-SE-3 Climate Bonds Standard & Certification Scheme Sector Criteria for Solar (version 2.1)
Assets and projects not eligible under the Solar Criteria

37

CBS-WE-1 Wind Sector Eligibility Criteria of the Climate Bonds Standard Version 1.1, Illustrativeuse of bond proceeds eligible under the wind criteria (Table-1)

38

CBS-WE-2 Wind Sector Eligibility Criteria of the Climate Bonds Standard Version 1.1, Assets andprojects not eligible for certification under the wind criteria
Appendix-1

39

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Executive Summary
After its establishment in February 2011, Sylphid Co., Ltd. (hereinafter Sylphid) became a subsidiary(100% owned subsidiary) of Daiki Axis Co., Ltd. (hereinafter, Daiki Axis) in April 2012, and is in engaged
in research and development of small wind power generators that are resistant to natural disasters suchas flash to ground and typhoons and that suppress noise and vibration to a level that does not affect theliving area, and the electric power selling business related to solar power and small wind power
generation. In addition, these businesses and goals of Sylphid are in line with the Daiki Axis Group’s“renewable energy-related business”, the Group’s management philosophy, promotion of ESG
management and contribution to the SDGs.
Sylphid has established its ‘Sylphid Green Bond Framework’ and will raise the proceeds from the bond
1.0 billion JPY to refinance to Solar power project and Small scale wind power project. Sylphid engages
DNV GL business assurance Japan K.K. (hereinafter “DNV GL”) as external reviewer to assess its
eligibility as green bond. Eligible projects falling into this green bond are described in following table.
The Sylphid Green Bond projects contribute to 2 UN Sustainable Development Goals (7.Affodable andClean Energy, 13.Climate Action) both directly and indirectly, as well.
Eligible ProjectGreen Project

Social Project
Category*

Category & fund amount

Project 01 :Solar PVs
project

Category ;Renewable Energy*1(contributes to CO2Emission reduction
from primary energy
source)Fund amount ;0.7 billion JPY

Project 02 :Small ScaleWind Powerproject(bond term : 10 years)(will be fully allocatedas refinance)

Category ;Renewable Energy*1(contributes to CO2Emission reduction
from primary energy
source)Fund amount ;0.3 billion JPY(bond term : 10 years)(will be fully allocatedas refinance)- Outline
Solar PVs are equipped on the roof top of the DCM
group home-center retail premises. Wind power
generation business undertaken by the Daiki Axis
Group. Roof-mounted solar power generationequipment that does not require new landdevelopment.
- Capacity *total approx. 11 facilities
200kW~800kW/facility total :approx. 5,200kW*- Location *total approx. 11 facilities
Chubu:10, Kanto:1

Contribution
to SDGs
7.Affodable andClean Energy
13.Climate
Action- Outline
Horizontal axis small scale wind power as Daiki Axis
group business- Capacity *total approx. 22 towers
10kW class×2towers/site total :approx.
220kW(max)*- Location total approx. 11 site
Aomori, Hokkaido, etc*1:Refer to The Green Bond Principles (ICMA, 2018), Green Bond Guidelines(MOE, 2020) and Climate
Bonds Standard v3.0 representative eligible project category
DNV GL provides its eligibility in our independent opinion against the Green Bond Principle (ICMA, 2018
hereinafter GBP), Green Bond Guidelines (MOEJ, 2020 hereinafter GBGLs) and sector criteria of CBS (CBIv3.0) using DNV GL assessment protocol. Assessment summary against 4 core components arefollowing.

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1. Use of Proceeds :Proceeds raised from green bond, 1.0 billion JPY, would be fully allocated to Renewable
Energy. Proceeds will be disbursed as refinance to maintain Solar PVs equipped on the roof top
the DCM group home-center and small scale wind power in Japan. Eligible projects contribute toemission reduction of primary energy source.
2. Process for Project Evaluation and Selection :Projects would aligned with corporate philosophy andmid-term management plan(promotion of ESG management) of the parent company Daiki
Axis. Project which has been selected and evaluated based on the protocol of Sylphid against
the GBP, GBGLs and UN SDGs. Projects are considered that candidates for eligible projects do
not overlap with those previously funded by Daiki Axis, and considered the environmental law
and regulation, estimation of life-cycle GHG emission reduction. In addition, explanations areprovided to the local community as necessary and it confirmed that the project execution willcontribute to the environmental benefit.
3. Management of Proceeds :Sylphid would manage the proceeds based on its internal protocol. Net
proceeds from green bond will be allocated as refinance soon after bond issuance. Proceeds
will be managed by Finance dpt. as cash or cash equivalent until disbursement, based on theaccount procedure of Sylphid.
4. Reporting :Sylphid will disclose annual report/information on the website of parent company Daiki Axis
include status of fund allocation, project progress and environmental impact, at least once a
year with external review by DNV GL until about two years after the allocation of most of thefunds raised is expected to be completed for its conformance with integrity and objectivity
against green bond
DNV GL confirmed Sylphid green bond framework, related documents and information that Sylphid green
bond conforms relevant criteria then is supposed to be appropriately executed.

Introduction
Basic Information
After its establishment in February 2011, Sylphid Co., Ltd. (hereinafter Sylphid) became a subsidiary(100% owned subsidiary) of Daiki Axis Co., Ltd. (hereinafter, Daiki Axis) in April 2012, and is in engaged
in research and development of small wind power generators that are resistant to natural disasters suchas flash to ground and typhoons and that suppress noise and vibration to a level that does not affect theliving area, and the electric power selling business related to solar power and small wind power
generation. Sylphid has established its ‘Sylphid Green Bond Framework’ and will raise the proceeds fromthe bond 1.0 billion JPY to refinance to Solar PVs project and Small Scale Wind Power project. Sylphid
engages DNV GL business assurance Japan K.K. (hereinafter “DNV GL”) as external reviewer to assess
and provides its eligibility in our independent opinion against the Green Bond Principle (ICMA, 2018
hereinafter GBP), Green Bond Guidelines (MOEJ, 2020 hereinafter GBGLs) and sector criteria of CBS (CBIv3.0) using DNV GL assessment protocol.
DNV GL confirmed Sylphid green bond framework, related documents and information that Sylphid green
bond conforms relevant criteria then is supposed to be appropriately executed.
Issuer name:
Framework Name:
Review provider’s name:Completion date of this form:
Publication date of review publication:

Sylphid Co., Ltd.
Sylphid Green Bond Framework
DNV GL business assurance Japan K.K.
22st Feb. 2021
26st Feb. 2021

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About issuers’ environmental efforts and green bond issuance
As a member of the Daiki Axis Group, Sylphid promotes "renewable energy-related
businesses" such as the solar power generation business, small wind power generator
business, and biodiesel fuel-related business that the group is working on. In addition,
among the Group Management Philosophy * 1 (Daiki Axis Group slogan: PROTECT x CHANGE"Protect the environment. Change the future." Create a new future by continuing to develop
as an environment creation and development type company.), the promotion of ESG
management*2 (promotion of renewable energy-related businesses centered on the solar
power generation business and small wind power generator business) and the contributionof SDGs through the group business activities shown in the table below, it was confirmedthat this issue of green bonds is an initiative that directly and indirectly contributes to "7.
Affordable and Clean Energy" and "13. Climate Action".
SDGs

business

Daiki Axis group activities
 Introduction manufacturing facility basefor Johkasou (septic tank) to large

Water-related
business

population area (China, India andIndonesia)
 Local sales office contraction in Asia region(Vietnam, Myanmar and Sri Lanka) and
Africa (Kenya)

Renewableenergyrelatedbusiness

 CO2

emission

reduction

through

Renewable energy business (solar powerand small scale wind power) Introduction of Energy efficient products

Sylphid
respective
business(Corporate
administration)

 Promotionof 100 ％introductionofrenewable energy electricity covering Daiki
Axis business activities
Reform working system and diversity
 Promotion women to board member
 Certification of ‘KURUMIM’ (MHLW) for
Women’s career promotion* The relevance to SDGs is complementary to the issuance of green bonds with reference toGreen, Social and Sustainability Bonds: A High-Level Mapping to the Sustainable
Development Goals published by ICMA, which defines the Green Bond Principles, is notdirectly related for funding purposes.
＊1：Corporate Slogan：http://www.daiki-axis.com/english/index.html＊2：ESG promotion http://www.daiki-axis.com/ir/info/index09.html＊3：Promotion of ESG management, efforts for SDGs, financial results briefing for thesecond quarter of the fiscal year ending December 2019 (August 29, 2019)

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Ⅱ Scope and Objectives
Sylphid has commissioned DNV GL Business Assurance Japan K.K. (hereinafter “DNV GL”) to conduct
green bond assessment of Sylphid green bond (hereinafter “BOND”), pre-issuance assessment andperiodical review. The objective of DNV GL’s assessment is to implement an assessment to confirm thatthe BOND meets the identified criteria of the GBP, GBGLs and the associated technical criteria related ofsolar energy and wind energy in CBS, as set out below, and to provide the Issuer with independent
second-party opinion on the eligibility of the BOND.
In this report, no assurance is provided regarding the financial performance of the BOND, the value of
any investments in the BOND, or the long-term environmental benefits of the transaction.

(1) Scope of review
The review assessed the following elements and confirmed their alignment with the gist of GBP:☒

Use of Proceeds☒

Process for Project Evaluation and Selection☒

Management of Proceeds☒

Reporting(2) Role(s) of review provider☒

Consultancy (incl. 2nd opinion)☒

Certification☐

Verification☐

Rating☐Other (please specify):(3) Standards/guidelines to be applied
No.

Standards/guidelines

Scheme owner

Applied level

1.

The Green Bond Principles 2018

International Capital Market Association

apply

2.

Green Bond Guidelines

Ministry of Environment Japan, 2020

apply

3.

Climate Bonds Standard version3.0(Sector criteria)

Climate Bond Initiative

Apply(Available sector)

4.

Green and Social Bonds: A High Level
Mapping to the Sustainable
Development Goals (June 2018)

International Capital Market Association

Reference

5.

Handbook Harmonized Framework for
Impact Reporting June 2019

International Capital Market Association

Reference

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Basis of DNV GL’s opinion
To provide as much flexibility for the issuer, Sylphid as possible, we have adapted our green
bond assessment methodologies, which incorporates the requirements of the GBP and
GBGLs, to create a Sylphid-specific Green Bond Eligibility Assessment Protocol (henceforthreferred to as “Protocol”).
Our Protocol includes a set of suitable criteria that can be used to underpin DNV GL’s
opinion. The overarching principle and guidelines behind the criteria is that a green bondshould “enable capital-raising and investment for new and existing projects withenvironmental benefits”.
As per our Protocol, the criteria against which the BOND has been reviewed are grouped
under the four Principles:•

Principle One: Use of Proceeds. The Use of Proceeds criteria are guided by therequirement that an issuer of a green bond must use the funds raised by green bondsfor eligible green projects. The eligible activities should produce clear environmental
benefits.

•

Principle Two: Process for Project Evaluation and Selection. The ProjectEvaluation and Selection criteria are guided by the requirements that an issuer of agreen bond should outline the process it follows when determining eligibility of aninvestment using green Bond proceeds, and outline any impact objectives it willconsider.

•Principle Three: Management of Proceeds. The Management of Proceeds criteria
are guided by the requirements that a green bond should be tracked within theissuing organization, that separate portfolios should be created when necessary andthat a declaration of how unallocated funds will be handled should be made.

•Principle Four: Reporting. The Reporting criteria are guided by the recommendationthat at least Sustainability Reporting to the bond investors should be made of the useof bond proceeds and that quantitative and/or qualitative performance indicators
should be used, where feasible.

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Ⅲ Work Undertaken
Our work constituted a high level of review of the available information, based on theunderstanding that this information was provided to us by the Issuer in good faith. We havenot performed an audit or other tests to check the veracity of the information provided to us.
The work undertaken to form our opinion included:
Initial (Pre-Issuance) Assessment:•

Creation of the Issuer-specific Protocol, adapted to the purpose of the BOND, asdescribed above and in Schedule-2 to this Assessment.

•

Assessment of documentary evidence provided by the Issuer on the BOND andsupplemented assessment by a high-level desktop research. These checks refer tocurrent assessment best practices and standards methodology;•

Discussions with the Issuer, and review of relevant documentation;•

Documentation of findings against each element of the criteria.

Periodic (Annual) Assessment: *periodic assessment is not included in this report•

Evaluation of the supporting documents provided by the Issuer related to the BOND,
high level desktop surveys, document reviews, and interviews with key personnel ofthe issuer. These checks refer to current assessment best practices and standard
methodologies.

•

Discussion with the Issuer management and review of relevant documentation.

•

Field survey and inspection, if required.

•

Review of the nominated projects and assets as described in Schedule 2 as at thetime of periodic assessment•

Review and testing where possible of reporting data;•

Documentation of findings for Periodic assessment as detailed in this document.

Our opinion as detailed below is a summary of these findings.

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Ⅳ Findings and DNV GL’s opinion
DNV GL’s findings are listed below:(1) Use of Proceeds
DNV GL has confirmed that the net proceeds raised by the BOND (1.0 billion JPY, fully
be disbursed as refinance) is planned to be allocated to the nominated two green
projects (table-1) that meet the representative green project category in GBP and
GBGLs criteria below:
Renewable Energy
This green project category is divided into 2 projects;- Project 01 : Solar power business
Roof top type, approx. 5,200kW(200~800kW/site, max)

- Project 02 : Small scale wind power business
Horizontal Axis type, approx. 220kW(10kW class/tower)

Table-1 Daiki Axis green project (details are shown in Schedule-1)
Eligible ProjectGreen Project
Category & fund amount

Project 01 :Solar PVs
project

Category ;Renewable Energy*(contributes to CO2Emission reduction fromprimary energy source)

Fund amount ;0.7 billion JPY(will be fully allocatedas refinance)

Project 02 :Small ScaleWind Powerproject

Category ;Renewable Energy*(contributes to CO2Emission reduction fromprimary energy source)
Fund amount ;0.3 billion JPY(Redemption period: 10
years)
will be fully allocated asrefinance

Social Project
Category*- Outline
Solar PVs are equipped on the roof topof the DCM group home-center retailpremises without further landdevelopment- Capacity *total approx. 11 facilities
200kW~800kW/facility total: approx.
5,200kW*- Location *total approx. 11 facilities
Chubu:10, Kanto:1- Outline
Horizontal axis small scale wind poweras Daiki Axis group business- Capacity *total approx. 22 towers
10kW class×2towers/site
total :approx. 220kW (max)*- Location total approx. 11 sites
Aomori, Hokkaido, etc

Contribution toSDGs
7.Affodable andClean Energy
13.Climate Action

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Use of proceeds categories as per GBP:☒☐

Renewable energy☐

Energy efficiency

Pollution prevention and control☐

Sustainable management of living☐

Terrestrial and aquatic biodiversity

natural resources☐

Clean transportationconservation☐

Sustainable water management☐

Climate change adaptation☐

Eco-efficient products, production☐

Other (please specify):

technologies and processes☐

Unknown at issuance but currently expected to conform with GBP categories, orother eligible areas not yet stated in GBPs

(2) Process for Project Evaluation and Selection
DNV GL has confirmed that the nominated two green projects described in the Schedule-1, were
evaluated and selected through the appropriate determined process by the relevant sections of
the issuer based on corporate philosophy (corporate slogan) and mid-term management plan
(promotion ESG management) of Daiki Axis. Issuer applies eligibility criteria listed Section Ⅱ (3)and considers the negative effect to environment or society based on its ‘selection prerequisites’
described below, as well.
< Green project selection prerequisites >-Compliance to environmental law and regulations (e.g. Environmental Impact Assessment)-

Evaluation of GHG emission reduction considering lifecycle-

Communication with local communities

Evaluation and selection☒

Credentials on the issuer’s green☒

Defined and transparent criteria for☒☒objectives

Documented process to determine thatprojects fit within defined categories☒

Documented process to identify andprojects eligible for Social Bond

manage potential ESG risks associatedproceeds

with the project

Summary criteria for project
evaluation and selection publicly
available☐

Other (please specify):

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Information on Responsibilities and Accountability:☒

Evaluation / Selection criteria subject☒

In-house assessment

to external advice or verification☐

Other (please specify):(3) Management of Proceeds
DNV GL has reviewed and confirmed evidence showing how the Issuer has traced/managed
the proceeds from the BOND, from the time of issuance to the time of disbursement. DNV
GL has confirmed that the Issuer would allocate the proceeds to the green project promptly.
Sylphid account dept. will manage the fund based on the internal account protocol. Issuer
periodically reviews the outstanding balance of the BOND at the end of each Financial year fordisclosure.
Note that, as stated above, DNV GL provides no assurance regarding the financial performance of
the BOND, the value of any investments in the BOND, or the long-term environmental benefits ofthe transaction.

Tracking of proceeds:☒

Green Bond proceeds segregated or tracked by the issuer in a systematic manner☒Disclosure of intended types of temporary investment instruments for unallocated☐proceeds
Other (please specify):

Additional disclosure:
Allocations to future investments only☐

Allocations to both existing and future☐

Allocation to individual disbursements☒

Allocation to a portfolio of disbursements☐

Disclosure of portfolio balance of☐

unallocated proceeds☒

investments
Other (please specify): Refinance only

Page 12 of 40(4) ReportingDNV GL has confirmed that the Issuer would report to stakeholders the specific information
required by the GBP and GBGLs annually on the website of parent company Daiki Axis. These
include description of the allocation and management of the proceeds, project lists and theirprogress, as well as the associated qualitative and quantitative environmental impacts which arereferred to the GBP’s reporting section reference ‘Handbook Harmonized Framework for Impact
Reporting June 2019’. Details are planned as follows;-1- Fund Allocation and management of the proceeds(1) Funds amount of the capital investment to facilities which started supplying electricity.
(2) Refinancing amount or share of the proceeds(3) The amount of unallocated proceeds.
-2- Project lists and their progress(1) Number of the power generation facilities of eligible projects allocated the proceeds
which have completed interconnection work to the grid.
(2) Progress of funded eligible project (e.g. progress of construction work, completion date)-3- Environmental impact(1) Total electric power generation output (kWh) capacity(kW) and the amount of CO2
emission reduction (kg-CO2) from eligible project be allocated the proceeds.
Evaluation of environmental impact is calculated by the following formula.
CO2 emission reduction(Δkg-CO2)= integrated output(kWh)×CO2 emission coefficient(kg-CO2/kWh)
integrated output: actual data from solar power and wind power
CO2 emission coefficient : MOE data (average value of domestic power plant)

Note that, until the completion of fund allocation to the green project planned 2 years later(FY2021), Sylphid engages DNV GL as external reviewer to conform its eligibility as green bondwith integrity and objectivity. DNV GL will conduct assessment and provide independent opinion.

Use of proceeds reporting:☐

Project-by-project☒

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):☐

GB refinanced share of total investment

Information reported:☒

Allocated amounts

Page 13 of 40☐

Other (please specify):

Frequency:☒

Annual☐Other (please specify):☐

Semi-annual

Impact reporting:☒

Project-by-project☒

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):☐

Semi-annual☐

Energy Savings

Frequency:☒

Annual☐Other (please specify):

Information reported (expected or ex-post):☒

GHG Emissions / Savings☐

Other ESG indicators (please specify):

Means of Disclosure☐

Information published in financial report☐

Information published in sustainability report☐

Information published in ad hoc documents☒

Other (please specify):Daiki Axis web site☒

Reporting reviewed (if yes, please specify which parts of the reporting are subject to external review):

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Assessment Conclusion
On the basis of the information provided by Sylphid and the work undertaken, it is DNV GL’s
opinion that the Sylphid green bond meets the criteria established in the Protocol and that it
is aligned with the stated definition or purpose of green bond within the Green Bond
Principles and Green Bond Guidelines, which is to “enable capital-raising and investment for
new and existing projects with environmental benefits”.
DNV GL Business Assurance Japan K.K.
22st Feb. 2021

Mark Robinson

Naoki Maeda

Manager, Sustainability Services

Managing Director

DNV GL – Business Assurance, Australia

DNV GL – Business Assurance Japan K.K.

Masahito Seiwa

Masato Kanedome

Assessor

Project Leader

DNV GL – Business Assurance Japan K.K.

DNV GL – Business Assurance Japan K.K.

About DNV GL
Driven by our purpose of safeguarding life, property and the environment, DNV GL enables organisations to advance thesafety and sustainability of their business. Combining leading technical and operational expertise, risk methodology andin-depth industry knowledge, we empower our customers’ decisions and actions with trust and confidence. We
continuously invest in research and collaborative innovation to provide customers and society with operational andtechnological foresight.
With our origins stretching back to 1864, our reach today is global. Operating in more than 100 countries, our 16,000
professionals are dedicated to helping customers make the world safer, smarter and greener.

Page 15 of 40

Disclaimer
Responsibilities of the Management of the Issuer and the Second-Party Opinion Providers, DNV GL: The management ofIssuer has provided the information and data used by DNV GL during the delivery of this review. Our statement
represents an independent opinion and is intended to inform the Issuer management and other interested stakeholders in
the Bond as to whether the established criteria have been met, based on the information provided to us. In our work wehave relied on the information and the facts presented to us by the Issuer. DNV GL is not responsible for any aspect of
the nominated assets referred to in this opinion and cannot be held liable if estimates, findings, opinions, or conclusions
are incorrect. Thus, DNV GL shall not be held liable if any of the information or data provided by the Issuer’s management
and used as a basis for this assessment were not correct or complete

Page 16 of 40

Schedule-1 Sylphid Green Bond Nominated Projects and Assets
No.

Green Bond
Project Portfolio

Green Project
Category[Environmental
Impact]Renewable Energy
Renewable Energy
Business

02

Roof top type on theretail premises[CO2 Emission
reduction fromprimary energy
source]

Small
Scale
Wind
Power
Business

Fund amount (plan)

Solar PVs (onshore)

Solar
Power
Business

01

Green Project
Sub Category

1.0billion-JPY

0.7 billion
JPY(Refinance)

Green
Bond
term : 10
yearsWind power(onshore)
Small scale(10kW class)

0.3 billion
JPY(Refinance)

Remarks(outline、capacity・size、location、etc)-Outline
Solar Panel equipped on the roof top of DCM
group home-center retail premises-Capacity・size total approx. 11 facilities
200kW~800kW/facility, total : approx.
5,200kW*-Location total approx. 11 facilities
Chubu:10, Kanto:1-Other information
Solar Panels facilitated without any landdevelopment. refinance to the previous cost of
installation work, operation and maintenance.
Construction of the solar power generation
facility will be carried out at the parent
company Daiki Axis. With the start of power
generation, the power generation facility willbe transferred to Sylphid, and Sylphid will
operate the power generation business.
-Outline
Horizontal axis small scale wind power as
Daiki Axis group business.
-Capacity・size total approx. 22 towers
10kW class×2towers/site
total : approx. 220kW*-Location total approx. 11 sites
Aomori, Hokkaido, etc-Other information
Construction of wind power generation
facilities, including land acquisition, facility

Page 17 of 40

No.

Green Bond
Project Portfolio

Green Project
Category[Environmental
Impact]Green Project
Sub Category

Fund amount (plan)

Remarks(outline、capacity・size、location、etc)
development and installation, will be carriedout at Sylphid.

Schedule-2 Green Bond Eligibility Assessment Protocol
GBP-1 Use of proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV GL Findings

1aType ofbond

The bond must fall in one of the following
categories, as defined by the Green Bond
Principles:•Green Use of Proceeds Bond•
Green Use of Proceeds Revenue Bond•
Green Project Bond
OthersDocument reviewed :- Sylphid Green Bond
Framework (hereinafter
Sylphid Framework)
Discussions with Sylphid
management

The reviewed evidence confirms that the Bond falls in the
category:

The cornerstone of a Green bond is theutilization of the proceeds of the bondwhich should be appropriately describedin the legal documentation for the BOND.

Document reviewed :- Sylphid Framework- Request letter- Materials for financial
results briefing for the
fiscal year ending
December 2019
- Daiki Axis Website(planned)
Discussions with Sylphid
management

As identified by the Bond project list in Framework, the purposeof the Bond is to use the proceeds to bond eligible projects fallingunder the following categories as representative project category
in GBP and GBGLs:“Renewable Energy”
Sylphid will allocate the proceeds (as refinance) to following 2
eligible projects as its promotion business, Renewable Energy
Business.

1b

Green
Project
Categories•

Green Use of Proceeds Bond

- Solar Power Business- Small Scale Wind Power BusinessPage 18 of 40
Ref.

Criteria

Requirements

Work Undertaken

DNV GL Findings

1c

Green
benefits

All designated Green Project categories
should provide clear greenly sustainable
benefits, which, where feasible, will bequantified or assessed by the issuer.

Document reviewed :- Sylphid Framework- Daiki Axis Website (IRinformation/timely
disclosure information,monthly information
related to solar powerbusiness)
Discussions with Sylphid
management

DNV GL considers that eligible projects contribute to CO2emission reduction from primary energy source. Issuer disclose
its environmental impact (performance) on the parent company
website that the issuer plans to disclose with calculation formulaand evaluation result as monthly report as described in work
undertaken.
DNV GL assessment concluded that these assets would present a
low risk of GHG emission and following environmental impact
then be inclusion under the eligibility of GBP and GBGLs

1d

Refinancing
share

In the event that a proportion of theproceeds may be used for refinancing, it
is recommended that issuers provide anestimate of the share of financing vs. refinancing, and where appropriate, also
clarify which investments or project
portfolios may be refinanced.

Document reviewed :- Sylphid Framework- Solar power generationand small wind power
generation project list
Discussions with Sylphid
management- Solar PVs are introduced to roof top of existing retail premises
without any land development- Wind power facility includes land development but relatively
limited.
The proceeds of the Bond, will be fully refinanced to the both ofthe projects (solar power and small scale wind power business)listed in schedule-1

Page 19 of 40

GBP-2 Process for Project Selection and Evaluation
Ref.

Criteria

Requirements

Work Undertaken

DNV GL Findings

2aInvestmentdecision
process

The issuer of a Green bond should
outline the decision-making process it
follows to determine the eligibility of
projects using Green bond proceeds.
This includes, without limitation:• A process to determine how the
projects fit within the eligible Green
Projects categories;• The criteria making the projects
eligible for using the Green bondproceeds; and• The environmental sustainability
objectives

Document reviewed :- Sylphid Framework- Sylphid internal
document (process ofproject selection)
Discussions with Sylphid
management

As per the Sylphid Framework, the issuer has set out the following criteria
for project selection:
Eligible Green Project means:- The nominated two green projects described in the Schedule-1, were
evaluated and selected through the appropriate determined process by
the relevant sections of the issuer based on corporate philosophy(corporate slogan) and mid-term management plan (promotion of ESG
management) of parent company Daiki Axis (refer to the section Ⅰ‘About Issuer’).
- Issuer applies eligibility criteria listed Section Ⅱ (3) and considers thenegative effect to environment or society based on its ‘selection
prerequisites’ described below, as well.

In addition to information disclosed
by an issuer on its Green bondprocess, criteria and assurances,
Green bond investors may also take
into consideration the quality of theissuer’s overall framework andperformance regarding green
sustainability.

Document reviewed :- Sylphid Framework- Daiki Axis corporate
philosophy, mid-term
management plan, etc- Daiki Axis website (IRnews, Monthly reportof Solar powerbusiness)
Discussions with Sylphid
management

2bIssuer’s
environmental, social andgovernanceframework< Green project selection prerequisites >- Compliance to environmental law and regulations (e.g. Environmental
Impact Assessment)- Evaluation of GHG emission reduction considering lifecycle- Communication with local communities
DNV GL reviews and notes that issuer demonstrates that issuer intends tocontribute environmentally sustainability through renewable energy
business which is aligned with corporate philosophy (corporate slogan) andmid-term management plan (promotion of ESG management) of parent
company Daiki Axis and has already implemented.
Daiki Axis has already disclosed environmental impact of CO2 emission
reduction performance in its website with calculation formula and evaluation
result as monthly report as described in work undertaken.
http://www.daiki-axis.com/ir/004/index.html#008

Page 20 of 40
Ref.

Criteria

Requirements

Work Undertaken

DNV GL Findings
Also based on the discussion and document review we had with Sylphid, we
found nothing to suggest that Sylphid’s green projects and its framework
are not in line with good practice of the industry business in which it
operates.

Page 21 of 40

GBP-3 Management of Proceeds
Ref.

Criteria

3a

Tracking
procedure-1

3b

Tracking
procedure-2

3c

Temporaryholdings

Requirements

Work Undertaken

DNV GL Findings

The net proceeds of Green bondshould be credited to a sub-account,
moved to a sub- portfolio or otherwise
tracked by the issuer in an
appropriate manner and attested toby a formal internal process that will
be linked to the issuer’s lending andinvestment operations for Green
Projects.

Document reviewed :- Sylphid Framework- Sylphid internal process
documents, etc
Discussions with Sylphid
management

The evidence reviewed shows how Sylphid plans to trace the
BOND’s proceeds from the time of issuance to the time of
disbursement.
The full amount of the proceeds will be deposited into a Sylphid’s
general account, and thereafter managed its internal accountprocedure which can identify the project and disbursed inaccordance with the obligations.

So long as the Green bondoutstanding, the balance of the
tracked proceeds should beperiodically reduced by amounts
matching eligible green investments
made until green benefit appearance
or completion of proceeds allocation.

Document reviewed :- Sylphid Framework- Sylphid internal process
documents, etc
Discussions with Sylphid
management

The evidence reviewed shows that Sylphid plans to trace theproceeds from the BOND, from the time of disbursement, andreduce the net balance of proceeds by amounts in line with theassets as scheduled (promptly allocation to the eligible project as
refinance). At the end of each financial period, the outstandingbalance of the BOND will be reviewed.

Pending such investments or
disbursements to eligible Green
Projects, the issuer should makeknown to investors the intended typesof temporary investment instruments
for the balance of unallocatedproceeds.

Document reviewed :- Sylphid Framework- Sylphid internal process
documents, etc
Discussions with Sylphid
management

DNV GL confirmed through document reviews and interviews thatthe net proceeds of the BOND would be fully refinanced promptly
based on its internal account protocol. In addition, it was
confirmed that Sylphid would manage the unallocated funds as
cash or cash equivalents until the full amount of the raised funds isallocated.

Page 22 of 40

GBP-4 Reporting
Ref.

Criteria

4aPeriodical
reporting

Requirements

Work Undertaken

DNV GL Findings

In addition to reporting on the use of proceeds and thetemporary investment of unallocated proceeds, issuers
should provide at least annually a list of projects towhich Green bond proceeds have been allocatedincluding- when possible with regards to confidentiality and/or
competitive considerations- a brief description of the projects and the amounts
disbursed, as well as the expected greenly sustainable
impact.

Document reviewed :- Sylphid Framework
Discussions with Sylphid
management
Others : Daiki Axis website

Sylphid will disclose information as annually which
includes a dedicated section on the Green Bond in
Daiki Axis’s website. This will include descriptionof the project and value of the proceeds invested,
as well as the associated qualitative andquantitative environmental impacts. Sylphid plans
to disclose CO2 emission reduction (t-CO2)
evaluation results according to the performance(output) of the renewable energy business listed inschedule-1 in Daiki Axis’s website.

Page 23 of 40

Schedule-3 Green bond guidelines eligibility assessment
Following check list (GBG-1 ~ GBG-5) is based on the Green Bond Guidelines (GBG, MOE, 2020).
According to the GBG, Requirements/Evaluation aspects are divided into following two terms, Should:◎ recommend:〇
The reference No. /01/, /02/~/XX/ in the ‘work undertaken’ are confirmed evidence information (document).
There are evidences information through the discussion with management of Sylphid are also includes in work undertaken other than ‘Document reviewed’

GBGLs-1 Use of proceeds
Ref.

Criteria

Requirements/Contents◎

1-①

Green Bond proceeds shouldbe allocated to Green Projects
that state the clear
environmental benefits, whichshould be assessed by theissuerYes

Environmental benefit ofGreen Bond proceeds, where
feasible, quantification isrecommended.

Yes

In advance, issuers should
provide investors withinformation regarding the use

Yes

〇

◎

1-①

1-④

Requirement
check

No
Not Applicable

Work Undertaken

DNV GL Findings

Document reviewed :- /01/, /03/
Discussions with Sylphid
management

The projects which will be allocated by the proceeds areclearly written in the frame work; Renewable energy [Solar
PVs (onshore), Wind power projects (onshore) power
station].
These projects contribute to primary energy source CO2
emission reduction directly which is assessed/confirmed by
the issuer. The requirements are fulfilled.

No
Not Applicable

No

Document reviewed :- /01/, /03/, /06/
Discussions with Sylphid
management

Issuer discloses its environmental impact as CO2 emission
reduction with calculation formula on the Daiki Axis websiteof the group parent company. Therefore, the requirements
are fulfilled.

Document reviewed :- /01/, /05/, /06/

It was confirmed that Sylphid has plan to provide an
explanation to investors of the use of proceed by
Framework. The requirements are fulfilled.

Page 24 of 40
Ref.

◎

〇

Criteria

1-⑤

1-⑤

Requirements/Contents

Requirement
checkWork Undertaken

DNV GL Findingsof Green Bond proceeds
through legal documentation(such as a prospectus) orother documents.

Not Applicable

Discussions with Sylphid
management

The provision of theinformation regarding the useof proceeds should specify theGreen Project categories.

Yes

Document reviewed :- /01/, /05/
Discussions with Sylphid
management

It was clearly prescribed in the frame work that renewableenergy [Solar PV (onshore), Wind power projects (onshore
power station] is selected as green bond projects.
The requirements are fulfilled.

In the cases where individual
Green Projects have been
specified, it is recommended
that issuers clearly present the
projects to investors.

Yes

Document reviewed :- /01/, /05/, /06/
Discussions with Sylphid
management

The nominated projects are listed and showed to theexternal reviewer, the selected based on its internal
protocol (GBGLs-2). Project outline (some representative
specific project information), etc will be disclosed to investor
in framework.

No
Not ApplicableNo
Not Applicable

The requirements are fulfilled.
◎

1-⑥

In cases where Green Projects
have incidental negativeenvironmental impacts alongwith the alleged environmental
benefits, the issuers should
include information regardingthese negative impacts (e.g.,
how they are assessed, what
the issuers do to curb them)to investors so that theinvestors and market

Yes
No
Not Applicable

Document reviewed :- /01/, /05/
Discussions with Sylphid
management

The negative aspects of the projects are explicitly
explained in the framework as “prerequisites”. It isconsisted in following 3 condition. The requirements are
fulfilled.
< Green project selection prerequisites >-Compliance to environmental law and regulations (e.g.
Environmental Impact Assessment)-Evaluation of GHG emission reduction considering lifecycle-Communication with local communities

Page 25 of 40
Ref.

Criteria

Requirements/Contents

Requirement
checkWork Undertaken

DNV GL Findings

Document reviewed :- /01/,
Discussions with Sylphid
management

In the framework, it is stated whether each project
categories in corresponds to refinancing or not. In the caseof refinancing, the amount (plan) is stated.
The requirements are fulfilled.

Document reviewed :- /01/
Discussions with Sylphid
management

It was confirmed through the discussions with issuer thatthe maximum age of the target asset is 2 years and theremaining useful life is 10 years. In addition, it is stated in
the framework that the progress and environmental
improvement effects funded by refinancing for the asset
will be disclosed and is in conformity.

participants can appropriately
evaluate these impacts.
〇

◎

1-⑦

1-⑧

(In case of where a part ofGreen Bond proceeds are used
to refinance existing Green
Projects,) it is recommended
that the issuers provide
information to the investors
regarding (1) the amount (orthe share) of the bondproceeds being allocated forrefinancing, and (2) which
Green Projects (or Green
Project categories) may be
refinanced.

Yes

When refinancing through theissuance of multiple green
bonds for assets that need tobe maintained over the longterm, the elapsed years,
remaining useful life andrefinancing amount of theasset should be clearly
disclosed. In addition, thesustainability of the long-term
environmental improvement
effect should be evaluated andYes

No
Not ApplicableNo
Not ApplicablePage 26 of 40
Ref.

Criteria

Requirements/Contents
if necessary, it should be
evaluated and confirmed by an
external organization.

Requirement
checkWork Undertaken

DNV GL Findings

Page 27 of 40

GBGLs-2 Process for Project Evaluation and Selection
Ref.

Criteria

Requirements/Evaluation aspects

Requirement
checkWork Undertaken

DNV GL Findings◎

2-①

In advance, issuers should provide
investors with information regarding
the following:
The environmental sustainability
objectives that the issuers intend toachieve through Green Bonds.

Yes

Document reviewed :- /01/, /03/, /05/
Discussions with
Sylphid management

In the Framework, CO2 emission reduction from primaryenergy source is cited as an environmental merit(environmental benefit) to be realized through the Green
Bond. It plans to directly contribute to CO2 reduction
through project implementation. It is planned to explain
to investors through the Framework and Request letter,in advance. The requirements are fulfilled.

In advance, issuers should provide
investors with information regarding
the following:
The environmental sustainability
objectives that the issuers intend toachieve through Green Bonds.

Yes

Document reviewed :- /01/
Discussions with
Sylphid management

It was confirmed that the framework and request letter
describe what evaluation criteria the project selection isbased on. It is clearly stated that they apply the GBP,
GBGLs and CBSv3.0. It is planned to explain to investors
through the Framework and Request letter in advance.
The requirements are fulfilled.

In advance, issuers should provide
investors with information regarding
the following:
The process for determining how
Green Projects fit the criteria for theachievement of the environmental
sustainability objectives(The process
for the determination refers to thereason why issuers determine that
Green Projects can provide
environmental benefits appropriately inlight of the objectives and criteria for
the use of Green Bond proceeds, how
and by whom are the criteria appliedand used to determine whether Green

Yes

Document reviewed :- /01/
Discussions with Sylphid
management

It was confirmed that the framework describes what kindof process the selection of the project was based on.
Specifically, it was confirmed that the finance department
evaluated/selected qualified projects based on the GBP,
GBGLs and the technical criteria against the CBS v3.0
considering ‘selection prerequisites’ environmentally andsocially.
It is planned to explain to investors through the
Framework and Request letter in advance. The
requirements are fulfilled.

◎

◎

2-①

2-①

No

Not ApplicableNo

Not ApplicableNo

Not ApplicablePage 28 of 40
Ref.

Criteria

Requirements/Evaluation aspects

Requirement
checkWork Undertaken

DNV GL Findings

When evaluating and selecting green
bonds, it is recommended to explain
to investors in advance if there areenvironmental standards andcertifications to be referred to.

Yes

Document reviewed :- /01/
Discussions with
Sylphid management

It was confirmed that the framework describes whatkind of evaluation criteria the project selection is basedon. Specifically, it is clearly stated that the reference
was made based on the Green Bond Principles 2018,
Green Bond Guidelines 2020 (Ministry of theEnvironment) and Climate Bond Standards (v3.0). It isplanned to explain to investors through the Framework
and Request letter in advance. The requirements are
fulfilled.

When setting exclusion criteria to
identify and control the potentiallysignificant environmental and social
risks of a green project, it should be
informed to investors in advance as
one of the criteria.

Yes

Document reviewed :- /01/, /07/
Discussions with Sylphid
management

The negative aspects of the projects are explicitly
explained in the framework as “prerequisites”. It isconsisted in following 3 condition. The requirements are
fulfilled.

It is recommended that internal
departments who have expertise, suchas the environment related
department, or external institutions
check whether the determination
process is suitable from anenvironmental point of view.

Yes

Projects are appropriate in light of theobjectives, and the like)
〇

◎

〇

2-⑥

2-⑦

2-⑨

No

Not ApplicableNo

Not ApplicableNo

Not Applicable

Document reviewed :- /01/- CBS-SE, CBS-WE
Discussions with Sylphid
management< Green project selection prerequisites >-Compliance to environmental law and regulations (e.g.
Environmental Impact Assessment)-Evaluation of GHG emission reduction considering
lifecycle-Communication with local communities
Eligible projects were confirmed to align against thetechnical criteria of CBS v2.1 which means that it is clear
to contribute environmental benefit. Therefore,
assignment of expertise section is not required.

Page 29 of 40
Ref.

Criteria

Requirements/Evaluation aspects〇

2-⑪

After positioning information on
environmental sustainability goals,
strategies, policies, etc. (medium-term
management plan, sustainability
strategy, CSR strategy, etc.), it isrecommended to explain to investors.

Requirement
check
Yes

No

Not Applicable

Work Undertaken

DNV GL Findings

Document reviewed :- /01/
Discussions with Sylphid
management

It was confirmed that the eligible green project was
excuted in accordance with the management philosophy(corporate slogan) and medium-term management planof the parent company Daiki Axis Group, and was
explained in the Request letter. The requirements are
fulfilled.

Page 30 of 40

GBGLs-3 Management of proceeds
Ref.

CriteriaRequirements/Evaluation aspects

◎

3-①

◎

◎

◎

3-②

3-②

3-⑤

Requirement
checkWork Undertaken

DNV GL Findings

Issuers should track and manage the net Green
Bond proceeds in an appropriate manner.
These tracking and managing activities should
be controlled by the issuer’s internal process.

Yes

Document reviewed :- /01/
Discussions with
Sylphid management

Documents review confirmed that traceable flowof business processing and check point are inplace. The requirements are fulfilled.

As long as the Green Bonds are outstanding,issuers should make sure that the amountallocated to the green project matches orexceeds the funds raised by the green bond , orperiodically adjust to match the amount of thetotal Green Bond proceeds to the sum of theamount of the proceeds allocated to Green
Projects and the amount of the unallocatedproceeds.

Yes

Document reviewed :- /01/
Discussions with
Sylphid management

Documents review confirmed that periodical
adjustment procedure (timely and at least
annually) was prepared.
The requirements are fulfilled.

If unallocated funds are temporarily generated,issuer should inform to investors the possible
investment methods for the balance of
unallocated funds, and should strive to allocate
unallocated funds to green projects as soon as
possible.

Yes

Document reviewed :- /01/
Discussions with
Sylphid management

Green bond proceeds will be promptly allocatedas refinancing, so no unallocated funds will be
generated. This is described in Framework
Section 2.3.

In advance, issuers should provide investors
with information on how Green Bond proceeds
will be tracked and managed.

Yes

Document reviewed :- /01/
Discussions with
Sylphid management

The review of the framework confirmed that thefinancial dept. will be in charge of managementof proceed.
The requirements are fulfilled.

No

Not ApplicableNo

Not ApplicableNo

Not ApplicableNo

Not ApplicablePage 31 of 40
Ref.

CriteriaRequirements/Evaluation aspects

〇

3-⑥

◎

〇

3-⑧

3-⑨

Requirement
checkWork Undertaken

DNV GL Findings

It is recommended that issuers keep evidenced
documents appropriately that demonstrate how
they tracked and managed Green Bond
proceeds.

Yes

Document reviewed :- /01/
Discussions with
Sylphid management

Management procedure of critical documents
and the storage period are stipulated.

In advance, issuers should provide investors
with information on how unallocated Green
Bond proceeds will be managed when theGreen Projects that will receive the Green Bond
proceeds have not been determined, or whensuch Green Projects have been determined but
the proceeds have not been allocated because
the allocation timing has not yet arrived.

Yes

Document reviewed :- /01/
Discussions with
Sylphid management

DNV GL confirmed through document review
and interviews that Sylphid plans to refinanceand spend the entire amount immediately after
raising funds based on the issuer’s internal
control regulations, and until the full amount of
the raised funds is allocated, Sylphid would
manage unallocated funds as cash or cash
equivalents.

It is recommended that issuers manage
unallocated Green Bond proceeds as an asset
with high liquidity and safety such as cash, cash
equivalents, or short-term financial assets

Yes

No

Not ApplicableNo

Not ApplicableNo

Not Applicable

Document reviewed :- /01/
Discussions with
Sylphid management

Page 32 of 40

GBGLs-4 Reporting
Ref.

Criteria

Requirements/Evaluation aspects

◎

4-①

◎

◎

4-②

4-③

Requirement
checkWork Undertaken

DNV GL Findings

Issuers should publicly disclose the latest
information on the use of Green Bond
proceeds after issuance

Yes

Document
reviewed :- /01/
Discussions with
Sylphidmanagement

It is planned to report annually on the period from one
year after issuance of Green Bond to redemption period,
the status of appropriation for use of proceeds bytakeover of Green Bond issue, and the environmental
benefits. Monthly and Annual reporting will be disclosed
in the Daiki Axis website.
The requirements are fulfilled.

Issuers should disclose the latest information
at least once a year until full allocation of theproceeds and as necessary thereafter in theevent of new developments.

Yes

Document
reviewed :- /01/
Discussions with
Sylphidmanagement

It is planned to report annually on the period from one
year after issuance of Green Bond to redemption period.

Document
reviewed :- /01/
Discussions with
Sylphidmanagement

It is scheduled to report the projects outline(consolidation information) for easy understanding byinvestor, fund proceeding, environmental benefits
described in Framework.
The requirements are fulfilled.

Disclosed information should include thefollowing contents:<Contents>
 A list of the Green Projects to which Green
Bond proceeds have been allocated A brief description of each Green Project(including up-to-date progress)
 The amount allocated to each Green Project The expected environmental benefits ofeach Green Project Information regarding unallocated Green
Bond proceeds (the amount of the unallocatedproceeds or the share of the unallocatedproceeds to the total amount of the proceeds,No

Not ApplicableNo

Not Applicable

Yes

No

Not Applicable

In case of considerable change happened to the plan(e.g. fund allocation), Daiki Axis would disclose its
information.
The requirements are fulfilled.

Page 33 of 40
Ref.

〇

〇

◎

〇

Criteria

4-④

4-⑤

4-⑦

4-⑧

Requirements/Evaluation aspects
when the unallocated proceeds are expected to
be allocates to Green Projects, and how theunallocated proceeds are managed until
allocation)
If Green Bond proceeds have been allocated to
the refinancing of existing projects, it isrecommended that disclosed information
include: 1) the approximate amount (or theshare) of the allocated proceeds used forrefinancing, and 2) a list of the Green Projects(or the project categories) refinanced.

Requirement
check

Yes

No

Not Applicable

While it is recommended to disclose 4-③ and4-④ on a project-by-project basis, if there areconfidentiality agreements, competitive
considerations, or a large number ofunderlying projects that limit the disclosure ofdetails, it is considered that information ispresented in generic terms or in an aggregatedportfolio.

Yes

When disclosing information regarding the
expected environmental benefits of projects,
issuers should use appropriate indicators while
ensuring consistency with the “environmental
sustainability objectives,” the “criteria” forGreen Projects specified in Section 2, “Process
for Project Evaluation and Selection,” and thecharacteristics of Green Projects.

Yes

When disclosing the expected environmental
benefits of projects, it is recommended that

Yes

No

Not ApplicableNo

Not ApplicableNo

Not Applicable

Work Undertaken

DNV GL Findings

Document
reviewed :- /01/
Discussions with
Sylphidmanagement

Proceeds will be fully used as refinance to the existing
projects. Proceeds amount and share (if happened) will
be disclosed in the annual report.
The requirements are fulfilled.

Document
reviewed :- /01/
Discussions with
Sylphidmanagement

The information is scheduled to be disclosed on theannual report in a reasonable disclosure
category/classification (the status of allocation ofproceeds and the environmental benefit by each project
portfolio).
The requirements are fulfilled.

Document
reviewed :- /01/
Discussions with
Sylphidmanagement

Regarding to the environmental benefits, the framework
clearly states that CO2 reduction: directly based on the
reduction of electric power energy supply by renewableenergy business (solar PVs and wind power).
The requirements are fulfilled.

Document
reviewed :Environmental benefit will be calculated based on theactual performance (electricity output from renewable

Page 34 of 40
Ref.

Criteria

Requirements/Evaluation aspects
issuers, where feasible, use quantitative
indicators and disclose information on
methodologies and/or assumptions as well as
these indicators.

Requirement
checkWork Undertaken

DNV GL Findings- /01/
Discussions with
Sylphidmanagement

energy). Issuer disclose the formula and coefficient in its
framework for calculation. Issuer also already disclose theenvironmental benefit (performance) of operating solar
PVs power every month.

GBGLs-5 External Review
Ref.

Criteria

Requirements/Evaluation aspects〇

5-(1)①

It is recommended that issuers utilize an external review in case that they need an
objective assessment of the alignment of their approaches with the framework for Green
Bond issuances.

Yes

If issuers have their Green Bonds reviewed, they should disclose the documents showing
the review results

Yes

Not Applicable

DNV GL has confirmed that theissuerwill
discloseits
assessment of green bondeligibility on the web.

5-(1)①⑤External reviewers should follow the basic criteria below when giving reviews.

Yes

DNV GL's Code of Conduct is inline with the basics described.

5-(2)⑥⑦

External review providers should have a sufficient organization structure to appropriately
undertake external reviews and should hire a reasonable number of people who haveprofessional experience and qualifications necessary to cover the areas subject to the

◎

◎

◎

5-(1)④Integrity, ②Fairness, ③Abilities and due care as professionals, ④ Duty of confidentiality
and ⑤Actions as professionals

Work UndertakenNo

Not ApplicableNo

No

Not ApplicableYes

No

Not Applicable

Confirmation result againstto theRequirements/Evaluation
aspects
Issuer engages DNV GL* as
external reviewer to confirm
its eligibility with integrity andobjectively of green bond.

DNV GL has an organizational
structure Certificate &Sustainability Department

Page 35 of 40
Ref.

Criteria

Requirements/Evaluation aspects

Work Undertaken

external reviews to be performed.

◎

◎

◎

◎

◎

5-(2)⑨5-(2)⑩

5-(2)⑪

5-(2)⑫5-(2)⑬

Dependent on the type of external review, the external reviewers will evaluate that 1) the
intended environmental benefits of the Green Project for which the funds are to be used, 2)
the consistency with the four elements expected of Green Loans and 3) as needed, evaluate
potential material environmental risks (negative impacts) of the Green Project specified by
the issuer.

Yes

External review providers should include a general description of the purpose of an external
review, scope of the review, qualifications of persons who conduct the external review andexpertise as external review providers.

Yes

External review providers should include in the documents and so on concerning theirreview results a statement on their independence from the borrower and their policy on
conflicts of interest.

Yes

External review providers should clearly explain in the documents and so on concerning
their review results the definitions they used and their analytical approach andmethodologies including the evaluation criteria applied to respective items.

Yes

External reviews should include a conclusion and output including marginal items evaluatedin external reviews.

Yes

No

Not ApplicableNo

Not ApplicableNo

Not ApplicableNo

Not ApplicableNo

Not Applicable

Confirmation result againstto theRequirements/Evaluation
aspects
composed of members with
sufficient expertise to review
sustainability reports.
DNV GL conducted a pre-issue
assessment and evaluated thethree points on the left.

DNV GL describes therequirements on the left in
Sections II-IV of this report.
DNV GL states in this reportthat it does not provide any
guarantees regarding thefinancial performance ofbonds, the value of theirinvestments or their long-term
environmental benefits.
DNV GL describes theevaluation criteria in thisreport, “Section II Scope andObjectives (3) Applicable
Criteria or Guidelines”.
。DNV GL states its conclusions
in this report, “Section IV
Findings and DNV GL’s
Opinion”.

Page 36 of 40

CBS-SE-1 Climate Bonds Standard & Certification Scheme Sector Criteria for Solar (version 2.1) Criteria for Eligible
Projects & Assets – Solar (Eligible Activities)

ClauseRequirements

1.1.1.

Onshore solar electricity generation
facilities

1.1.2.

1.1.3.

Requirement checkYes

No

Not Applicable

Wholly dedicated transmission
infrastructure and other supporting
infrastructure for onshore solar
electricity generation facilities including
inverters, transformers, energy storage
systems and control systems.

Yes

Onshore solar thermal facilities such as
solar hot water systems.

Yes

No

Not ApplicableNo

Not Applicable

Work Undertaken

DNV GL Findings

Document reviewed :- Sylphid Framework- Project list )solar PVs
and small wind
power)
Discussions with
Sylphid management

The selected projects are all onshore Solar PVs
power generation facilities. Count of the Eligible
projects is approx. 11 sites. Solar PVs are equipped

Document reviewed :on the roof top of the DCM group home-center retailpremises without further land development.
Chubu:10

Kanto：1

Discussions with
Sylphid management

PCS(Power Conditioning System) , HV powerreceiving equipment, Remote monitoring andleading-in pole which are dedicated infrastructureof solar PVs are included in use of the proceeds.

--

Page 37 of 40

CBS-SE-2 Climate Bonds Standard & Certification Scheme Sector Criteria for Solar (version 2.1) Criteria for Eligible
Projects & Assets – Solar (non solar fuel use)

ClauseRequirements

2.1.

Eligible Project & Assets that have activities in solar
electricity generation facilities or solar thermal facilities
shall have a minimum of 85% of electricity generated
from solar energy resources

Requirement checkYes

No

Not Applicable

Work Undertaken

DNV GL Findings

Document reviewed :- Sylphid Framework- Project list )solar PVs andsmall wind power)

Non of the solar PVs has abackup power supply facility
etc. inside the power plant. It
is clear that solar power
generation source share isover 85%.
The requirements are fulfilled.

Discussions with Sylphid
management

CBS-SE-3 Climate Bonds Standard & Certification Scheme Sector Criteria for Solar (version 2.1) Assets and projects not
eligible under the Solar Criteria

ClauseRequirements

1.1.1.

Offshore solar electricity generation facilities

Requirement check
Yes

No

Work Undertaken

DNV GL Findings

-

-

-

-

-

-

Not Applicable
1.1.2.

1.1.3.

Wholly dedicated transmission infrastructure and othersupporting infrastructure for offshore solar electricity
generation facilities including inverters, transformers,
energy storage systems and control systems.

Yes

Offshore solar thermal facilities such as solar hot water
systems.

Yes

No

Not ApplicableNo

Not ApplicablePage 38 of 40

CBS-WE-1 Wind Sector Eligibility Criteria of the Climate Bonds Standard Version 1.1, Illustrative use of bond proceeds
eligible under the wind criteria (Table-1)

AssetsNo.

Onshore wind
Onshore wind
Assets that
operate or are
underconstruction
to operate:1

Requirement
checkWork Undertaken

DNV GL Findings

Onshore wind energy

Yes

Document reviewed :generation facilities

Not Applicable

The selected projects are all onshore Small horizontal axis
wind power generation facilities. Count of the Eligible
projects is approx. 22 (10kW×2towers/site) Site location is

Criteria

No-Sylphid Framework-Project list )solar PVs
and small wind power)

Aomori, Hokkaido, etc (existing assets and / or future projects).

Discussions with Sylphid
management23

Dedicated transmission
infrastructure and support
facilities (e.g. transformers,
backbone, transmission
terminus, grid connections,dedicated facilities for support
vessels and vehicles,
equipment storage, onshore
assembly)

Yes

Dedicated operational
production, manufacturing or
distribution facilities for key
components, such as windturbines, platforms etc.

Yes

No

Not ApplicableNo

Not Applicable

Document reviewed :Discussions with Sylphid
management

PCS(Power Conditioning System) , Transformer, Remotemonitoring and Truss type tower which are dedicatedinfrastructure of wind power are included in use of theproceeds.

Page 39 of 40
AssetsNo.

Criteria

Requirement
checkWork Undertaken

DNV GL Findings

Assets listed in Table 1 (with an associated green circle in the mitigation column) automatically meet the Mitigation requirement of the Climate Bonds Standard.
This extends to:• Wind energy generation shall be projects & assets that operate or are under construction to operate in one or more of the following activities:- The development, construction and operation of wind farms- Operational production or manufacturing facilities wholly dedicated to wind energy development- Wholly dedicated transmission infrastructure for wind farms.

CBS-WE-2 Wind Sector Eligibility Criteria of the Climate Bonds Standard Version 1.1, Assets and projects not eligible forcertification under the wind criteria

AssetsNo.

Criteria

Offshore wind

1

Offshore wind facilities, dedicated transmission
infrastructure, dedicated support facilities,
manufacturing facilities and distribution facilities are noteligible for Certification under the Wind Criteria.
Offshore wind is eligible for Certification under the
Marine Renewable Energy Criteria.

Requirement checkYes

No

Not Applicable

Work Undertaken

DNV GL Findings－－

Page 40 of 40

Appendix-1/01/ Sylphid green bond framework/02/ Project list (Solar power business and Small scale wind power)/03/ CO2 emission coefficient -R2.09.15MOE&METI R1 issued/05/ Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December
2019 (August 29, 2019)/06/ Daiki Axis website https://www.global-mobility-service.com/index.html