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KARNATAKA (INDIA) - ISRAEL PROGRAM
FOR INDUSTRIAL R&D (KIRD)

A Bilateral Framework providing financial support for collaborative
industrial R&D ventures between Karnataka and Israeli companies

3rd Call for Proposals

GUIDELINES - 3RD CALL FOR PROPOSALS

1. ABOUT THE PROGRAMME

With the goal of supporting joint industrial R&D projects between Israeli and Karnataka-based companies, a Memorandum of Understanding was signed in March 2013 between MATIMOP - The Israeli Industry Centre for R&D, on behalf of the Office of the Chief Scientist (OCS) in Israel; and the Karnataka Science and Technology Promotion Society (KSTePS) and the Karnataka State Council for Science and Technology (KSCST), autonomous organizations under the Department of Science and Technology, Government of Karnataka, in India. Under the MOU, a program was established, referred to hereinafter as the Karnataka - Israel Program for Industrial R&D (KIRD), to create mechanisms through which small/medium scale industries located in Karnataka, may seek funding support for joint bilateral research and development (R&D) projects, involving at least one company from Israel.

This bilateral framework is jointly implemented and promoted by KSTePS & KSCST, under the Department of Science and Technology, Government of Karnataka, in Karnataka, India; and the Israel Innovation Authority (the Innovation Authority) in Israel (formerly known as MATIMOP, the Israeli Industry Centre for R&D, and the Office of the Chief Scientist of the Ministry of Economy).
This program is specific to the Karnataka - Israel Program for Industrial R&D (KIRD), for projects submitted under a current Call for Proposals (CFP). KSCST & KSTePS and the Innovation Authority invite Karnataka-based companies and Israeli companies to submit proposals for bilateral industrial research and development projects.

2. AREAS IN WHICH APPLICATIONS ARE INVITED

This call is open to projects, based on merit, that include science and technology (S&T) development and product adaptation leading to commercial success, social good and benefit to both countries, in all technology fields. However, the following areas would be given priority for the current Call for Proposals:

• Mobile applications

• Bio-Informatics

• Product Adaptation of existing Israeli products of value to Karnataka

• Green Technologies

• Nanotechnology

3. WHO IS ELIGIBLE TO APPLY

3.1 General

• Each proposal must include an eligible lead industrial partner each from the State of Karnataka and Israel.

• Although it is not mandatory, projects that engage a technology developer and a technology end-user/first customer are strongly encouraged.

• The program provides partner-matching assistance wherever needed.

3.2. Karnataka Applicants

Eligible Karnataka applicants include: researchers and managers representing Karnataka-based companies which operate and are headquartered in the State of Karnataka.

• Under this scheme only companies/firms that qualify as "small" / "medium" as per the Micro, Small and Medium Enterprises Development Act, 2006 (Under the said Act a "small" enterprise means a company having an investment in plant and machinery between Rs. 25.00 Lakhs and
  Rs. 5.00 Crores and a 'medium' enterprise is one which has investment more than Rs. 5.00 Crores but not exceeding Rs. 10.00 Crores.) are eligible.

• Companies to qualify under this scheme must have their own R&D Center/must show inclination to set up dedicated R&D centre within the first year of the project - specifically with people and activities to support the project.

• Sole proprietors and partnership firms are not eligible for support under this Call for Proposals (CFP);

• Companies must be incorporated under the provisions of the Companies Act, 1956 and should maintain a minimum of 51%Indian ownership.

• The company should be registered with the Registrar of Companies, Karnataka at Bangalore and should have their registered office/Head Quarters in the State of Karnataka.

• The company should be achieving a minimum of 30% Domestic Value Addition for a specific product segment.

• Company should have employed at least 50% of its work force from Karnataka.

• Representatives from subsidiaries of firms headquartered and owned outside Karnataka are not eligible to receive funding or subsidies from this program.

• Would be required to commit investment of minimum 50% of the sanctioned project cost from its own sources of funds and 20% of 50% from their own assets.

3.3 Israeli Applicants

Eligible applicants will be R&D performing Israeli registered companies operating in Israel. Only those industries in Israel, who wish to collaborate with industries in Karnataka, are eligible for receiving grants from the Israeli Government under the KIRD program. They would be required to commit investment of minimum 50% of the sanctioned project cost from its own sources of funds and 20% of 50% from their own assets.

4. KEY CRITERIA FOR SELECTION

a) An eligible company/ cluster of companies within the province of Karnataka or Israel will be responsible for the development and submission of the joint application.  At least one company each, from either of the respective State/country engaged in S&T product development &/or processes, should express a desire to cooperate in the research and development of a new product or a new process or in the adaptation/customization of an existing product/process to the Indian market.

b) Projects seeking funds under this scheme should have at least one company from Karnataka fulfilling the criteria specified at point 2 at section 3.2.

c) The project may involve more than one company from each side; academic/research entities are eligible to join as support systems/subcontractors to fulfil the objectives of the projects submitted for consideration. (SUB CONTRACTING SHOULD BE MENTIONED IN THE FPP)

d) The product proposed to be developed should either be:

- Innovative with significant commercial potential and utility to both the partnering state/country and fairly ready for the market within a reasonably short turnaround time (12 - 24 months). The joint industrial R&D project should aim at development of products/processes leading to commercialisation in the global market, besides societal benefits for their region.
 
-OR-
Focused on the adaptation/customization of an existing product/process, belonging to the Israeli partner, in order to meet the needs and conditions of the Indian market, including but not limited to:

• Adaptation of product in consideration of local cultural considerations

• Adaptation to local conditions, such as climate, infrastructure etc.

• Regulatory considerations, particularly for foods and drugs

• Reduction of price to customer by the utilization of local components

• Reduction of price to customer by downgrading performance

• Establishment of beta-sites

• Security considerations, such as removal of components requiring permission from the Ministry of Defence

*The project partners should agree in advance on the IP rights (both existing and new) and on the commercialisation strategy of the product or process.(*Note: For the submission phase, only a preliminary agreement or MoU is required, however the final agreement has to be presented to the funding authorities, subsequently.)

e) The project should demonstrate the contribution of the participants from both the sides.

f) The project must be balanced between participants and significant to both partners.

g) The project period is generally between 12 and 24 months. However, wherever warranted, there can be an extension, after due scrutiny, for a further period. The entire project period shall, under no circumstance, extend beyond 36 months.

Any partner whose cooperative R&D or product adaptation project is consistent with the aforesaid criteria can apply to the present Call for Proposal (CFP) in accordance with the national Laws, Rules, Regulations and Procedures in effect.

5.FUNDING SUPPORT & TERMS OF REPAYMENT

Funding support will be provided to each partner through its own Implementing & Funding Organisation (either KSTePS & KSCST/DST-GOK in Karnataka or Innovation Authority in Israel) as per approval of the competent authority, in accordance with the national laws, rules, regulations and procedures in effect for the respective countries.

5.1 In Karnataka

1. The total project cost under this scheme is limited to Rs. 1000 Lakhs per call for proposals.

2. Funding by the Government will be limited to a maximum of Rs. 250 lakhs per project on the Karnataka side.

3. Government of Karnataka funds will be in the form of Conditional Grant. The grant has to be repaid along with interest @ 3% per annum and within a stipulated period of ten years. A moratorium period of two years from the date of commencement of production will be applicable

4. Karnataka industry desirous of being considered under this scheme has to indicate investment from its own source, by way of fixed assets (like land, building and relevant machinery), bank/FI loan, promoter contribution etc. along with a minimum of 25% by way of its own finance (Cash) to ensure availability of adequate funds while implementing the project without any difficulty.

5. An agreement with the funding agency has to be signed by the selected beneficiary Company/Industry along with a Bank Guarantee to be submitted prior to the release of the first instalment of the conditional grant.

6. In some specific cases, as per the recommendation of the Project Evaluation Committee, the grantee company may have to commit to a specific proportion (amounting to not less than 10% of the revenue generated) of the grant received, to be repaid in the form of products developed under the project to support fulfilling the social responsibility of the government

7. The Government may consider extending support in up scaling the activity wherever the supported project has shown a very promising product or technology having commercial/social value thereby leading to direct/indirect benefits to the state and its people.

5.1.1 Methods of Assessment - In case of existing units

Process involves examining the financial strength of the promoters and the financial feasibility/viability of the Project with respect to the following criteria,

a. Organizational structure of the unit - proprietorship, partnership firm or a registered Company (Public or Private Limited) and its track record since inception;

b. Detailed Project Report (DPR) for the new project covering all aspects viz. Promoters, infrastructure requirements - land, building, plant & machinery, power & water requirements, labour & raw material requirement and its availability, production capacity, market demand forecast & marketing arrangements, cost of the project & means of financing and financial projections for the period over which loans are to be repaid;

c. Review of the partnership deed (for partnership firms) or memorandum & articles of association (in case of Public or Private Limited Companies) to understand the legal status covenant and restrictions in terms of management, taking up new projects, borrowing powers of the entity and related aspects;

d. Income Tax return copies for the previous year/s and last three years, in case of units more than 3 years old;

e. Obtaining of credit report from the Bankers of the unit and ensure that the credit facilities availed from the Banks/FIs are regular and performing(In case term loans are availed, repayment is irregular);

f. Networth statement of the promoters;

g. If the unit is proposing to implement the new project with loan assistance from Banks/FI, in principle sanction letter from the Bank/FI to support the project and provide the required credit facilities (It is possible that the Bank/FIs may insist on similar in principle support letter from the KSTePS /KSCST for providing 50% conditional grant assistance under KIRD);

h. Details of pending suits/legal actions and statutory/tax dues in the name of the entity and likely impact, if the suits/actions are decided against the unit.

5.1.2. Methods of Assessment - in case of new units/ first time entrepreneurs

a. If the project is sought to be implemented by first time entrepreneurs, obviously they have no track record on which one could rely upon. In such an event, due diligence would have to focus more on the abilities of the promoter/s to implement the project and make a success of the same (technical and financial capabilities to be assessed carefully)

b. All details/statements as above would be required to be obtained and reviewed(except review of financial statements for the earlier years or three years, as the case may be, status of the existing credit facilities & they are regular/performing and status of pending legal suits/actions as also statutory dues/taxes, which are applicable for existing units).

c. The funds would be released in phases with completion of agreed upon landmarks/fulfilment of objectives.

5.2. In Israel

1. Funding will be provided in the form of a conditional grant to the projects selected under the Call for Proposal (CFP)

2. The total funding from the Government of Israel via the Israel Innovation Authority will not exceed 50% of the eligible and approved costs of the R&D, in accordance with the national laws and regulations.

3. When a project results in sales of a product, service or process, the financial support must be repaid to the Israel Innovation Authority according to its regulations (In general, royalties are paid at rates beginning at 3% of sales, depending on various criteria. Royalties are payable until 100% of the amount of the grant has been repaid with interest as provided in the applicable regulations).

4. For more information on funding conditions, applicants should visit the website of the Israel Innovation Authority R&D Fund:

http://www.economy.gov.il/RnD/Programs/Pages/Mop_Fund.aspx

6. THE APPLICATION PROCESS

APPLICATIONS

To ensure the effective delivery of the Call for Proposal (CFP) and reinforce the principles of bilateral partnership, the Innovation Authority in Israel and KSCST, in consultation with KSTePS, will employ a joint, two-step application process for each Call for Proposals.

6.1 PARTNER-MATCHING SERVICE

The Karnataka - Israel Program for Industrial R&D (KIRD) would offer partner matching service for companies who seek project partners for joint submission. Interested parties will have to submit a "Partner Search Form" to the program manager. The partner search form should be submitted as soon as the call is launched - prior to the Bilateral Application Form (BAF).

6.2 BILATERAL APPLICATION FORM (BAF)

A BAF provides a summary of the proposed project with enough detail for the reviewers to make an initial assessment of the merits of the project. Submission of a BAF is mandatory, and is the first required document that companies must submit. The form should be filled out by both applicants together, and identical copies should be submitted to the program managers in Karnataka and Israel on or before the mutually agreed upon deadline to be eligible for further consideration.

The BAF must be sent in softcopy via email simultaneously to both the Implementing Organisations - KSCST in Karnataka, India and the Innovation Authority in Israel -within the deadline of the particular call period. The BAF must be signed by both Karnataka and Israeli partners, and must include a Letter of Intent or MOU detailing IP plans for the project. Incomplete BAF template or BAFs submitted in any other format will not be accepted. KSCST and the Innovation Authority will acknowledge the receipt of all BAF with in five working days of receipt.

The BAF would then be referred for technical review. This process may take around 30 to 45 days from the date of receipt of the BAF. Upon obtaining the referees recommendations, the companies will receive notification with regard to their movement to the next stage in the application process. In next stage the companies will be requested to submit a full project proposal to their local implementing agency - separately but in parallel, in Karnataka and Israel, based on local requirements, normally within 45 days.

6.3 : KIRD Full Project Proposal (FPP)

Partners meeting all eligibility criteria and whose BAFs are approved will be invited to submit the KIRD Full Project Proposal (FPP) no later than the agreed upon deadline, according to the procedures and rules that apply in their country/state - for Karnataka-based companies, based on the rules and instructions of KSCST/KSTePS and the Department of Science & TechnologyGovernment of Karnataka; and for Israeli companies, based on the rules and regulations of the Israel Innovation Authority respectively.

Applicants are required to follow the local requirements and use the provided application format with instructions (placed in the KSCST website for downloading) and submit their proposal. Proposals that are not in the approved format will not be accepted.

6.3.1. In Karnataka

The Karnataka partner is required to submit 5 hard copies and a soft copy in PDF format of the completed and signed KIRD Full Project Proposal (As per the Format) to KSCST at the contacts provided at the end of the document. Instructions and required forms will be provided to applicants.

Each application must be signed by an official who is legally responsible for the project and endorsed by the chief executive or leader of the applicant organization. Electronic signatures will be accepted on applications submitted to KSCST and the Innovation Authority.

6.3.2. In Israel

The Israeli partner is required to submit application forms to the Innovation Authority’s R&D Fund in accordance with the Authority regulations, through an online system. A signed copy of the Bilateral Application Form is required to be uploaded as well. Please review the "Guidelines for Israeli Companies" document for more information.

7. EVALUATION AND SELECTION OF THE PROJECTS

Karnataka State Council for Science and Technology (KSCST) in Karnataka, India and the Innovation Authority in Israel will carry out an independent evaluation of the joint R&D application and will select the eligible project to be financially supported in accordance with their State Laws and Regulations. The successful projects will be jointly selected by the two funding organizations at a "KIRD Joint Committee Meeting" based on the project criteria and requirements specified in the application form. Companies who receive joint approval will be notified by their local implementing or funding agency.

7.1. EVALUATION PROCESS (Phase-I and Phase-II)

PHASE I

a) Receipt of BAF (Bilateral Cooperation Form) from applicants with letter of intent or MoU.

b) Preliminary evaluation and grading by the experts (experts are chosen from prominent academic institutions/ industries / government departments.

c) Recommendations based on the grading by the experts.

PHASE II

a) Receipt of FPP (Full Project Proposal) duly incorporating the recommendations of Experts on BAF with letter of intent or MoU.

b) Second evaluation of accepted proposals by experts and further qualitative and quantitative assessment, based on KIRD criteria. FPP will independently be evaluated again by the experts.

c) Applicants also make presentations before experts.

d) Visit to the companies by the experts to assess infrastructure and other facilities available at the companies (to support their evaluation).

e) Approved FPPs to be screened by the Committees.

7.2 SELECTION PROCESS

3. The Screening Committee will discuss the approved FPPs and decide on acceptance of proposals for funding and forward it to the Joint Committee

4. The Joint Committee will take the final decision on funding.

5. Parties whose projects have been selected will be informed of the result and the amount of funding for the successful projects by their respective implementing organization in a timely manner.

Please Note: These are General Guidelines and they do not include terms and conditions as may be applicable at the time of sanctioning the project

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This page was updated on : Friday, August 28, 2020 02:31 PM