ESG Risk Policy.

SAV is a fund incorporated with the purpose to acquire and manage shareholdings in certain enterprises with a focus on companies in areas covered by the societal challenges and industrial leaderships of Horizon 2020 such as life sciences, clean energy, Information and Communication Technology or technology in enterprises compliant with certain eligibility criteria.

SAV invests in companies in the Early Stage at the time of first investment. Early Stage means the early phase of development of an enterprise and includes Proof of Concept, (Pre-) Seed Stage and Start-up Stage and Other Early Stage.

At the Early Stage of development companies usually do not have well developed procedures to assess and prevent certain ESG risks such as Social (data protection under GDPR) and Governance (corporate governance structures such as Board or executive compensation committees).

In addition, the entrepreneurs usually establish a new company with the aim of solving many of the Environmental challenges.

The SAV team is highly committed to supporting its portfolio companies to adopt the appropriate ESG policies in a way which reflects their operations and at a cost which is reasonable for them.

Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector imposes explicit obligations for transparency of adverse sustainability impacts at entity level, as the financial market participant are obliged to publish and maintain on their websites information whether they consider principal adverse impacts of investment decisions on sustainability factors during the entire investment process, considering their size, nature, activities, financial products, etc.

With respect to those impacts, the European legislation introduces an alternative to the financial market participants with the option not to specifically consider adverse impacts of investment decisions on sustainability factors, but to provide clear reasons why, including relevant information as to whether and when they intend to consider such adverse impacts.

SAV is incorporated with the participation and support of European Investment Fund (the “EIF”) in cooperation with the European Commission (the “EC”), under the framework of an EFSI Equity Instrument supported by European Fund For Strategic Investments (“EFSI”) and Horizon 2020 programme under the rules of Open call for expression of interest to select financial intermediaries under the EFSI equity instrument (published on 14th October 2016 and updated on 25th April 2018 and on 29th May 2019) and has been selected in due consideration of the general principles of transparency, equal treatment and non-discrimination, in compliance with EIF’s policies, rules, procedures and statute and in conformity with best business and market practices, however no ESG requirements were implemented or requested from SAV within the process of selection.

Based on that, no ESG considerations are explicitly embedded in the SAV investment policies and internal procedures although SAV generally does not seek to invest in companies that could present significant ESG risks.

SAV determines whether a company could be exposed to ESG risks during the due diligence process.

In this regard SAV does not take explicitly into consideration the adverse impacts of investment decisions on sustainability factors in the manner prescribed by Article 4 of the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial sector and is fully compliant with Article 4, point (b) of paragraph 1 of the Regulation (EU) 2019/2088.

However, our team aligns the SAV investment policy with the ESG principles and tendencies and is constantly improving the level of knowledge, understanding and integration of ESG standards and is dedicated to achieve and maintain best practices in all investment related activities, both in the due diligence process and the entire lifecycle of each investment, including in regard to the ESG related standards when applicable and not contradictory to the obligatory regulations imposed by the applicable EU legislation and EIF constituting documentation.

With respect to the application of Article 4, point (b) of paragraph 1 of the Regulation (EU) 2019/2088 none of SAV, its fund managers or any related party is entitled to receive any remuneration tied to ESG compliance and performance.

Pursuant to the requirements of Article 4, point (b) of paragraph 1 of the Regulation (EU) 2019/2088, SAV shall seek to introduce ESG requirements at a later stage when the respective portfolio company has reached revenues of BGN 5,000,000 per calendar year.