DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)

SECOND PARTY OPINIONDAIKI AXIS SUSTAINABLE POWER CO.,LTD.
GREEN BOND PERIODICAL REVIEW (2nd)

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 24 February 2023
Ref. Nr.: PRJN-350339-2022-AST-JPN-02

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)

CONTENTS
Ⅰ. Scope and Objectives

3

Ⅱ．Outline of the project4

Ⅲ. Responsibilities of the Management of Daiki Axis Sustainable Power and DNV

5

Ⅳ. Basis of DNV’s Opinion

6

Ⅴ. Work Undertaken

7

Ⅵ. Findings and DNV’s Opinion

8

Schedule-1 Green Bond Nominated Projects

13

Schedule-2 Green Bond Eligibility Assessment Protocol

15

GBP-1 Use of Proceeds

15

GBP-2 Process for Project Selection and Evaluation

17

GBP-3 Management of Proceeds

18GBP-4 Reporting

19

Revision history
Date of issue or

Main changes

publication
22 February 2021

Green Bond Pre-Issuance Second Party Opinion
Green Bond Periodical Review(1st)•Change of company name from "Sylphid Co., Ltd" to

25 February 2022

"Daiki Axis Sustainable Power Co., Ltd" as of 1 July 2021
•Review of funding and application of funds•Review of the environmental impacts of the project

25 February 2022

Revision of Project-01 summary information and environmental benefit
Green Bond Periodical Review(2nd)

24 February 2023

•Review of funding and application of funds•Review of the environmental impacts of the project

Disclaimer
Our assessment relies on the premise that the data and information provided by Issuer to us as part of our review procedures have been provided in good faith. Because of
the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable risk that errors or
irregularities, possibly significant, may not have been detected. Limited depth of evidence gathering including inquiry and analytical procedures and limited sampling at
lower levels in the organization were applied as per scope of work. DNV expressly disclaims any liability or co-responsibility for any decision a person or an entity may makebased on this Statement.

Statement of Competence and Independence
DNV applies its own management standards and compliance policies for quality control, in accordance with ISO/IEC 17021:2011 - Conformity Assessment Requirements forbodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control, including documented policies andprocedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We have complied with the DNV Codeof Conduct1 during the assessment and maintain independence where required by relevant ethical requirements. This engagement work was carried out by an independent
team of sustainability assurance professionals. DNV was not involved in the preparation of statements or data included in the Framework except for this Statement. DNV
maintains complete impartiality toward stakeholders interviewed during the assessment process.

1 DNV Code of Conduct is available from DNV website (www.DNV.com)

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)Ⅰ. Scope and Objectives
Daiki Axis Sustainable Power Co., Ltd. (formerly known as Sylphid Co., Ltd.) has
commissioned DNV to conduct a periodic review of the " Daiki Axis Sustainable Power(formerly known as Sylphid) Green Bond." The objective of the periodical review of DNV is
to conduct an assessment to confirm that Daiki Axis Sustainable Power Green Bond meetsthe criteria such as Green Bond Principles (GBP), Green Bond Guidelines (GBGLs), related
technical standards (solar and wind) of Climate Bonds Standard 3.0v (CBS), which will be
described later, and other related standards or guidelines (see the table in (3) below), andto provide a second party opinion on the eligibility of this Green Bond.
Daiki Axis Sustainable Power issued the Green Bond on May 31, 2021, with the amount ofissuance of 1 billion yen. DNV's review team conducted the periodical review (2nd) for
FY2022 (March 2022 to February 2023) in accordance with GBP/GBGLs.
DNV, as an independent external reviewer, has identified no real or perceived conflict ofinterest associated with the delivery of this second-party opinion for Daiki Axis Sustainable
Power.
In this paper, no assurance is provided regarding the financial performance of the BOND,
the value of any investment in the BOND, or the long-term environmental benefits of thetransaction.
(1) Scope of Review
The review assessed the following elements and confirmed their alignment with four core elements in 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): Providing review as a green bond issuance supporter (External Review
Division)(3) Standards/Guidelines to be Applied
No.

Standards/Guidelines

1.

Green Bond Principles (GBP)

2.

Green Bond Guidelines (GBGLs)

3.

Climate Bonds Standard 3.0v (CBS)Sector Criteria
Solar Eligibility Criteria 2.1v (CBS-SE)
Wind Eligibility Criteria 1.1v (CBS-WE)

Scheme owner
International Capital Market
Association (ICMA), 2021
Ministry of the Environment
Government of Japan, 2020
Climate Bonds Initiative

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Applied level*1*2
Apply
Apply
Refer (applicabletechnical criteria)

DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)Green and Social Bonds: A High-Level
Mapping to the Sustainable Development
Goals
Handbook Harmonized Framework for
Impact Reporting

4.
5.

International Capital Market
Association (ICMA), 2020

Refer

International Capital Market
Association (ICMA),2021

Refer

Ⅱ．Outlines of the projects
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 was engaged in research and development of small
wind power generators that are resistant to natural disasters such as flash to groundand typhoons and that suppress noise and vibration to a level that does not affectthe living area, and the electric power selling business related to solar power andsmall wind power generation. At a meeting of the Board of Directors of Daiki Axis
held on 26 March 2021, it was decided to change the company name to "Daiki Axis
Sustainable Power" and the new name was adopted on 1 July 2021.
These businesses and goals of Daiki Axis Sustainable Power 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.
Daiki Axis Sustainable Power has established its ‘Sylphid Green Bond Framework’ andraised the proceeds from the bond 1.0 billion JPY (995 million yen after deducting
issuance costs from the bond issue amount).
Of this amount, 682 million yen was allocated to the solar power generation businessand 313 million yen to the small wind power generation business, both of whichwere used to refinance initial costs such as construction costs. The status of theappropriation of the procured funds is reported and announced on the website of
Daiki Axis on an annual basis.
A summary of the projects and assets allocated is shown in Table-1 below.
Table-1: Daiki Axis Sustainable Power Green Project(as of February 2023) (details are shown Schedule1)

No.

Project

Project Outlines- Outline

Solar PVs
01

Project (onshore)
Roof-mounted solar
power generation

Solar Panel equipped on the roof top of DCM group homecenter retail premises-Location
11 facilities (Ibaraki, Shizuoka, Toyama, Ishikawa)-Capacity, Size
Total: 5,200kW (200kW~800kW/facility)

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)No.

Project

Project Outlines- Funded Amount
682 million yen(no allocation in FY2022)-Outline
Horizontal axis small scale wind power

Wind Power
Generation(onshore)
02

Small ScaleWind Power
Project-Location
13 sites (Aomori, Hokkaido)-Capacity, Size
Total: 254.8kW (9.8kW class×2towers/site)- Funded Amount
313 million yen(35 million yen allocated in FY2022)

The environmental impacts in the table above are calculated in the following way:
CO₂ reduction = electricity generated (kWh) x CO₂ emission factor (kg-CO/kWh)*Electricity generated: Actual figures for photovoltaic and wind power generation projects*CO₂ emission factor: National average of CO₂ emission factors from "Emission factors by business
operator based on the Law Concerning the Promotion of Measures to Cope with Global Warming".

Ⅲ. Responsibilities of the Management of Daiki Axis Sustainable Powerand DNVThe management of Daiki Axis Sustainable Power has provided the information and data
used by DNV during the delivery of this review. Our statement represents an
independent opinion and is intended to inform Daiki Axis Sustainable Power
management and other interested stakeholders in the Bond as to whether theestablished criteria have been met, based on the information provided to us. In ourwork, we have relied on the information and the facts presented to us by Daiki Axis
Sustainable Power. DNV is not responsible for any aspect of the projects or assets
referred to in this opinion and cannot be held liable if estimates, findings, opinions, orconclusions are incorrect. Thus, DNV shall not be held liable if any of the information ordata provided by Daiki Axis Sustainable Power management and used as a basis for thisassessment were not correct or complete.

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)

Ⅳ. Basis of DNV’s Opinion
To provide as much flexibility as possible for Daiki Axis Sustainable Power, DNV has
adapted our green bond assessment methodology, which incorporates the requirementsof GBP and GBGLs, to create Daiki Axis Sustainable Power Green Bond Eligibility
Assessment Protocol (hereinafter “DNV’s Protocol”). Please refer to Schedule-2. The
Protocol is applicable to Green Bonds under the GBP and GBGLs.
DNV's Protocol includes a set of suitable criteria that can be used to underpin DNV’sopinion. The overarching principle behind the criteria is that a green bond should “enable
capital-raising and investment for new and existing projects with environmental
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 to financeeligible activities. 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 annual reporting to the bond investors should be made of the use ofbond proceeds and that quantitative and/or qualitative performance indicators should
be used, where feasible.

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)Ⅴ. Work Undertaken
Our work constituted a high-level review of the available information, based on theunderstanding that this information was provided to us by Daiki Axis Sustainable Power ingood faith. We have not performed an audit or other tests to check the veracity of theinformation provided to us. The work undertaken to form our opinion included:

i.

ii.

Pre-Issuance Assessment of Green Bond(*not included in this report)•

Creation of a Daiki Axis Sustainable Power Green Bond Eligibility Assessment Protocol,
adapted to the purpose of the Bond, as described above and in Schedule-2 to thisassessment.

•

Assessment of documentary evidence provided by Daiki Axis Sustainable Power on
the Bond and supplemented by a high-level desktop research. These checks refer tocurrent assessment best practices and standards methodology.

•

Discussions with Daiki Axis Sustainable Power management, and review of relevant
documentation and evidence related to the criteria of the Protocol.

•

Documentation of findings against each element of the criteria.

Post-Issuance Assessment of Green Bond (*included in this report)•

Assessment of evidential documents provided by the Daiki Axis Sustainable Powerafter issuance of the BOND, and supplemental assessment by desk review from ahigher perspective.

•

Interview with key personnel of Daiki Axis Sustainable Power, and review of therelevant documentation.

•

Field research and inspection (if necessary).

•

Review of the nominated projects and assets at the time of the post-issuanceassessment (update of the details mentioned in Schedule-1).

•

Document creation of post-issuance assessment results.

DNV’s Opinion (detailed later) summarizes these.

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)

Ⅵ. Findings and DNV’s Opinion
DNV’s findings and opinions are listed below:(1) Use of Proceeds
DNV has confirmed that the net proceeds raised by the Bond (1.0 billion JPY, fully be
disbursed as refinance) was allocated to the nominated two green projects (table-１)
that meet the representative green project category in GBP and GBGLs criteria below:"Renewable energy business"
This green project category is divided into 2 projects;- Project 01 : Solar power business
Roof top type, Total: 5,200kW (200~800kW/site)- Project 02 : Small scale wind power business
Horizontal Axis type, Total: 254.8kW (9.8kW class/tower)
Table-1: Daiki Axis Sustainable Power Green Project (details are shown Schedule1)
Eligible Project

Project 01 :Solar PVs
Project

Project 02 :Small ScaleWind Power
Project

Green ProjectGreen Project
Category*

Category & Amount allocated- Outline
Solar Panel equipped on the roof top of DCM grouphome-center retail premises

Renewable Energy*(contributes to CO2Emission reduction fromprimary energy source)-Location
11 facilities (Ibaraki, Shizuoka, Toyama, Ishikawa)

Funded Amount:
682 million JPY-Capacity, Size
Total: 5,200kW (200kW~800kW/facility)(no allocation in FY2022)
Renewable Energy*(contributes to CO2Emission reduction fromprimary energy source)-Outline
Horizontal axis small scale wind power-Location
13 sites (Aomori, Hokkaido)

Funded Amount:
313 million JPY(35 million JPY allocated in
FY2022)-Capacity, Size
Total: 254.8kW (9.8kW class×2towers/site)

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)(2) Process for Project Evaluation and Selection
DNV has confirmed that nominated two green projects described in 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 through the review.
Issuer applies eligibility criteria listed in ClauseⅠ”Objectives and Scope(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 through its lifecycle-

Communication with local communities(3) Management of Proceeds
DNV confirmed how Daiki Axis Sustainable Power will track and manage the proceedsfrom bond issuance to redemption period. DNV has confirmed that the Issuer would
allocate the proceeds to refinancing of eligible projects, of which grid connection wascompleted. Daiki Axis Sustainable Power account dept will manage the fund based on theinternal account protocol. DNV has confirmed that Daiki Axis Sustainable Power has
completed the allocation of 1 billion yen (the amount of the bond issuance excluding thecost of issuance: 995 million yen) raised through the green bond as refinancing for the"Solar PVs Project" and the "Small Scale Wind Power Project".
Note that, as stated above, DNV provides no assurance regarding the financial
performance of the Bond, the value of any investments in the Bond, or the long-term
environmental benefits of the transaction.
(4) Reporting
DNV has confirmed that the Daiki Axis Sustainable Power would report to stakeholders
the specific information required by the GBP and GBGLs annually on the issuer’s
integrated report or Daiki Axis’s website of its parent company the issuer
DNV has confirmed that, until redemption, Daiki Axis Sustainable Power will reportannually on the web of its parent company Daiki Axis with regard to certain green bondinformation required by the GBP and GBGLs. We confirmed that these disclosures will
include, for each project (solar PV and small wind projects), a description of the use andmanagement of the funds raised, the projects covered and their progress, and theassociated qualitative and quantitative environmental impacts.
The environmental impacts of each appropriated project are as follow:

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)No.

Project
Solar PVs

01

Project(onshore)
Roof-mounted
solar power
generation
Wind Power
Generation(onshore)

02

Small ScaleWind Powerproject

Project Outline- Outline
Solar Panel equipped on the roof top of DCM
group home-center retail premises-Location
11 facilities(Ibaraki, Shizuoka, Toyama, Ishikawa)-Capacity, Size
Total: 5,200kW (200kW~800kW/facility)-Outline
Horizontal axis small scale wind power.
-Location
13 sites (Aomori, Hokkaido)-Capacity, Size
Total: 254.8kW (9.8kW class×2towers/site)

Environmental Benefit*1*2

Annual power generation:
7,947,122 (kWh)CO₂ reduction:
3,456,998 (kg-CO₂)

Annual power generation:
106,731 (kWh)CO₂ reduction:
46,428 (kg-CO₂)

The environmental impacts in the table above are calculated in the following way:
CO₂ reduction = electricity generated (kWh) x CO₂ emission factor (kg-CO/kWh)*Electricity generated: Actual figures for photovoltaic and wind power generation projects*CO₂ emission factor: National average of CO₂ emission factors from "Emission factors by business
operator based on the Law Concerning the Promotion of Measures to Cope with Global Warming".
*1: Environmental benefits (annual power generation and environmental benefit) are prorated as apercentage of the total capital investment allocated to each location.
*2: Some of the wind power generation locations have been suspended for a long period of time due tounplanned maintenance and equipment replacement work (delivery of materials has been delayed due tothe novel coronavirus), which is being handled by Daiki Axis Sustainable Power.

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)Assessment Conclusion
On the basis of the information provided by Daiki Axis Sustainable Power and the work
undertaken, it is DNV’s opinion that the Daiki Axis Sustainable Power green bond meets thecriteria established in the Protocol and that it is aligned with the stated definition or purposeof green bond within the GBP and GBGLs, which is to “enable capital-raising and investment
for new and existing projects with environmental benefits”.

DNV Business Assurance Japan K.K.
24th February 2023

Mark Robinson

Naoki Maeda

Manager, Sustainability Services

Managing Director

DNV Business Assurance, Australia

DNV Business Assurance Japan K.K.

Masato Kanedome

Masahito Seiwa

Project Leader

Assessor

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

About DNV
Driven by our purpose of safeguarding life, property and the environment, DNV 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
Disclaimer
Responsibilities of the Management of the Issuer and the Second-Party Opinion Providers, DNV: The management ofIssuer has provided the information and data used by DNV 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 we haverelied on the information and the facts presented to us by the Issuer. DNV is not responsible for any aspect of thenominated assets referred to in this opinion and cannot be held liable if estimates, findings, opinions, or conclusions are

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)incorrect. Thus, DNV shall not be held liable if any of the information or data provided by the Issuer’s management andused as a basis for this assessment were not correct or complete

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)

Schedule-1 Green Bond Nominated Projects
No.

Green Bond
Project Portfolio

Green Project Category[Environmental Impact]

Green
Project
Sub Category

Proceeds
AmountFundedAmountRemarks(Outline、Location、Capacity, Size、etc)-Outline
Solar Panel equipped on the roof top of DCM
group home-center retail premises-Location

Solar PVs

01

Project(onshore)

Solar PowerBusiness
Renewable Energy

682 million JPY(Refinance)

Roof-mounted
solar
power
generation

Small Scale Wind
Power Business-Outline

313 million JPY

Small Scale(35 million JPY
allocated in
FY2022)

Project

Total: 5,200kW (200kW~800kW/facility)

Solar Panels facilitated without any landdevelopment. refinance to the previous costof installation work, operation andmaintenance.

Wind Power
Generation(onshore)Wind Power-Capacity, Size

-Other information

995million JPY(Net proceeds)[CO2 Emission reduction fromprimary energy source]

02(no allocation in
FY2022)

11 facilities (Ibaraki, Shizuoka, Toyama,
Ishikawa)(Refinance)

Horizontal axis small scale wind power-Location
13 sites (Aomori, Hokkaido)-Capacity, Size
Total: 254.8kW (9.8kW class×2towers/site)

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)No.

Green Bond
Project Portfolio

Green Project Category[Environmental Impact]

Green
Project
Sub Category

Proceeds
AmountFundedAmountRemarks(Outline、Location、Capacity, Size、etc)-Other information
Construction of wind power generation
facilities, including land acquisition, facility
development and installation, was carried out
at Daiki Axis Sustainable Power.

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DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)

Schedule-2 Green Bond Eligibility Assessment Protocol
The following GBP-1 ~ GBP-4 are DNV's Green Bond Eligibility Assessment Protocol created for Daiki Axis Sustainable Power based on therequirements of GBP. "Document review" in the work undertaken includes internal documents of issuer and is provided by Daiki Axis Sustainable
Power as evidence of eligibility judgment for DNV.

GBP-1 Use of Proceeds
Ref.
1a

1b

Criteria

Requirements

Work Undertaken

Type of bond

The bond must fall in one of the following categories, as definedby the Green Bond Principles:•Green Use of Proceeds Bond•
Green Use of Proceeds Revenue Bond•
Green Project Bond•
OthersDocument reviewed :- Daiki Axis Sustainable
Power Green Bond
Framework(hereinafter
Framework)
Discussions with Daiki
Axis Sustainable Power
management

The reviewed evidence confirms that the Bondfalls in the category:

The cornerstone of a green bond is the utilization of theproceeds of the bond which should be appropriately described in
the legal documentation for the BOND.

Document reviewed :- Framework- List of projects- GB Fund usage
summary sheet- Daiki Axis Sustainable
Power Website
Discussions with Daiki
Axis Sustainable Power
management

As identified by the Bond project list in
Framework, the purpose of the Bond is to use theproceeds to bond eligible projects falling under
the following categories as representative project
category in GBP and GBGLs:“Renewable Energy”
Daiki Axis Sustainable Power will allocate theproceeds (as refinance) to following 2 eligible
projects as its promotion business, Renewable
Energy Business.
- Solar Power Business- Small Scale Wind Power Business

Green
Project
Categories

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DNV Findings•

Green Use of Proceeds BondDAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)Ref.
1c

CriteriaGreen
benefits

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

Work Undertaken

DNV Findings

Document reviewed :- Framework- Daiki Axis Website
Discussions with Daiki
Axis Sustainable Power
management

DNV considered that eligible projects contribute to
CO2 emission reduction from primary energy
source. Issuer discloses its environmental impact(performance) on the parent company websitethat the issuer plans to disclose with calculation
formula and evaluation result as monthly report
as described in work undertaken.
DNV assessment concluded that these assets
would present a low risk of GHG emission andfollowing environmental impact then be inclusion
under the eligibility of GBP and GBGLs- Solar PVs are introduced to roof top of existingretail premises without any land development- Wind power facility includes land development
but relatively limited.

1d

Refinancing
share

In the event that a proportion of the proceeds may be used forrefinancing, it is recommended that issuers provide an estimateof the share of financing vs. re-financing, and whereappropriate, also clarify which investments or project portfolios
may be refinanced.

Document reviewed :- Framework- GB Fund usage
summary sheet- List of projects
Discussions with Daiki
Axis Sustainable Power
management

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Out of the proceeds of the Bond, 995 million yen(the amount of the bond issuance excluding thecost of issuance) was fully refinanced to the bothof the projects (solar power and small scale wind
power business) listed in Schedule-1.

DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)GBP-2 Process for Project Selection and Evaluation
Ref.
2aCriteria

Requirements

Work Undertaken

Investmentdecision
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 theeligible Green Projects categories;• The criteria making the projects eligible for using the Greenbond proceeds; and• The environmental sustainability objectives

Document reviewed :- Framework- Selection ofcandidates for use offunds raised by Green
Bond
Discussions with Daiki
Axis Sustainable Power
management

DNV Findings
As per Framework, the issuer has set out thefollowing 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) andmid-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 the negative effect toenvironment or society based on its ‘selection
prerequisites’ described below, as well.
< Green project selection prerequisites >- Compliance to environmental law andregulations (e.g. Environmental Impact
Assessment)- Evaluation of GHG emission reduction
considering lifecycle- Communication with local communities

2b

Issuer’s
environmental, social andgovernanceframework

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

Document reviewed :- Framework- Daiki Axis website(Daiki Axis corporate
philosophy, mid-term

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DNV reviews and notes that issuer demonstrates
that issuer intends to contribute environmentally
sustainability through renewable energy business
which is aligned with corporate philosophy(corporate slogan) and mid-term management
plan (promotion of ESG management) of parent

DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

management plan,etc)
Discussions with Daiki
Axis Sustainable Power
managementcompany Daiki Axis and has already
implemented.
In addition, DNV confirmed that theenvironmental benefits of the Green Project, suchas the reduction of CO₂, were clearly

GBP-3 Management of Proceeds
Ref.

Criteria

3a

Tracking
procedure-1

3b

Tracking
procedure-2

Requirements

Work Undertaken

DNV Findings

The net proceeds of Green bond should be credited to a subaccount, moved to a sub- portfolio or otherwise tracked by theissuer in an appropriate manner and attested to by a formalinternal process that will be linked to the issuer’s lending andinvestment operations for Green Projects.

Document reviewed :- Framework- GB Fund usage
summary sheet- Accounting rules- Document management
regulations
Discussions with Daiki
Axis Sustainable Power
management

The evidence reviewed shows how Daiki Axis
Sustainable Power plans to trace the Bond’s
proceeds from the time of issuance to the timeof disbursement.
The full amount of the proceeds was deposited
into a Daiki Axis Sustainable Power’s generalaccount, and thereafter managed its internal
account procedure which can identify the projectand disbursed in accordance with the
obligations. DNV confirmed that Daiki Axis
Sustainable Power has completed the allocationof the proceeds raised by the green bond as
refinancing.

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

Document reviewed :- Framework- GB Fund usage
summary sheet- Accounting rules

The evidence reviewed shows that Daiki Axis
Sustainable Power plans to trace the proceedsfrom the Bond, from the time of disbursement,
and reduce the net balance of proceeds byamounts in line with the assets as scheduled(promptly allocation to the eligible project asPage 18 of 20

DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)
Ref.

3C

Criteria

Temporaryholdings

Requirements

Pending such investments or disbursements to eligible Green
Projects, the issuer should make known to investors theintended types of temporary investment instruments for thebalance of unallocated proceeds.

Work Undertaken

DNV Findings- Document management
regulations
Discussions with Daiki
Axis Sustainable Power
management

refinance). DNV confirmed that Daiki Axis
Sustainable Power has completed the allocationof the proceeds raised from the green bond as
refinancing.

Document reviewed :- Framework- GB Fund usage
summary sheet- Accounting rules- Document management
regulations
Discussions with Daiki
Axis Sustainable Power
management

DNV confirmed through document reviews andinterviews that the net proceeds of the Bond
would be fully refinanced promptly based on its
internal account protocol. In addition, it was
confirmed that Daiki Axis Sustainable Power
managed the unallocated funds as cash or cash
equivalents until the full amount of the raised
funds is allocated. DNV confirmed that Daiki Axis
Sustainable Power has completed the allocationof the proceeds raised from the green bond as
refinancing.

GBP-4 Reporting
Ref.
4a

Criteria
Periodical
reporting

Requirements

Work Undertaken

DNV 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 to which Green bondproceeds have been allocated including- 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 :- Framework- Daiki Axis website
Discussions with Daiki
Axis Sustainable Power
management

Daiki Axis Sustainable Power was disclosed
information as annually which includes a
dedicated section on the Green Bond in Daiki
Axis’s website.
This will include description of the project andvalue of the proceeds invested, as well as theassociated qualitative and quantitativeenvironmental impacts.

Page 19 of 20

DAIKI AXIS SUSTAINABLE POWER CO.,LTD. GREEN BOND PERIODICAL REVIEW SECOND PARTY OPINION (2nd)
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Daiki Axis Sustainable Power disclosed CO2
emission reduction (t-CO2) evaluation results
according to the performance (output) of therenewable energy business listed in schedule1 in Daiki Axis’s website.

Page 20 of 20