1. DRAFT
National Agricultural Innovations
Project (NAIP)
Business Planning & Development
(BPD) Units
REFERENCE GUIDE
March 2010
NAIP Project
Handholding & Mentoring of BPD Units of NARS
Agri-Business Incubator, ICRISAT, Pathancheru, Andhra Pradesh, 502 324 INDIA
Tel: +91-40-30713414/19, Fax: +91-40-30713074/75,
E-mail: k.sharma@cgiar.org, Website: www.abiicrisat.org
Page 1 of 82

2. DRAFT
REFERENCE GUIDE FOR INCUBATORS
INDEX
1. BACKGROUND..............................................................................................4
1.1 What is Incubation..........................................................................................................4
1.2 Who is an eligible incubatee...........................................................................................4
2. PRE INCUBATION........................................................................................5
2.1 Submission of application...............................................................................................5
2.2 Review by expert Committee:........................................................................................5
2.3 Post Admission Process:.................................................................................................5
2.4 Issues to be considered by the incubatee in the Pre-incubation phase.......................6
2.4.1 Personal SWOT Analysis...........................................................................................6
2.4.2 Personal Objectives...................................................................................................6
2.4.3 How to choose your legal form..................................................................................6
2.4.4 Business Plans...........................................................................................................7
2.4.5 Avoiding Common Business Plan Mistakes...............................................................9
2.4.6 Choosing the right Business Incubator (BI)..............................................................9
3. INCUBATION...............................................................................................10
3.1 Period of Incubation:....................................................................................................10
3.2 Prototyping:...................................................................................................................10
3.3 Pilot phase and successful competition of pilot phase:..............................................10
3.4 Estimating financial needs during incubation phase:................................................10
3.5 Start up financing:........................................................................................................11
3.6 Issues involved during incubation...............................................................................12
3.6.1 Accounting and Bookkeeping:.................................................................................12
3.6.2 Treatment & Recording of Research & Development (R & D) expenditure:..........12
3.6.3 Human Resources:...................................................................................................13
3.6.4 Legal........................................................................................................................14
3.6.5 Statutory registration and compliances:.................................................................14
3.7 Advocating the need for outsourcing of accounts, HR & Legal functions...............15
3.8 Tax exemptions for an Incubatee within STEP Incubators......................................16
4. GRADUATION.............................................................................................16
Page 2 of 82

3. DRAFT
5. SUSTENANCE AND GROWTH.................................................................16
5.1 Deciding on the next stage financing for expansion and Growth.............................17
5.2 Avenues of raising the capital for expansion..............................................................17
5.3 Issues to be considered during Growth Phase............................................................18
5.4 Financial Models in Incubation...................................................................................19
6. CONCLUSIONS............................................................................................20
Annexes:
Annexure 01 : Template of Business Plan Model
Annexure 02 : Template of Sample TePP Application Form
Annexure 03 : Template of Sample BI Application Form
Annexure 04 : Templates of Partnership Agreement
Annexure 05 : Application for enrollment in ABI
Annexure 06 : Monthly reporting format
Annexure 07 : Incubation Agreement Format
Annexure 08 : Incubation Rules & Guidelines (terms of residency membership)
Annexure 09 : Criteria for identifying commercial viability of a technology
Annexure 10 : Indicative tariff rates of ABI-ICRISAT for clients
Page 3 of 82

4. DRAFT
1. BACKGROUND
1.1 What is Incubation
Incubation is a business support process that accelerates the successful development of start-
up and fledging companies, also referred to as clients (of the Business Incubator; BI), by
providing entrepreneurs with an array of targeted resources and services. These services are
usually developed or orchestrated by incubator managements and offered both in the business
incubator and through its network of contacts.
Business Incubation thus can be said to refer to complex services and special environment
provided temporarily for start-up enterprises with the aim of improving their chance of
survival in the early phase of the life span and establishing their later intensive growth.
1.2 Who is an eligible incubatee
The project of an incubatee should fulfill the following criteria to be eligible to enroll under
the incubation program. The criteria given below are not exhaustive and can only be an
indicative one. Individual incubators may have their own selection grids which might include
their incubation priority areas for incubation. For example, some of the incubators may have
special emphasis for green incubation, affirmative action or thrust area focus.
The selection of entrepreneurs for membership in BI will be based on the recommendations of
an expert committee specifically set up for the purpose. The general criteria for acceptance are
the following:
1. The business activity proposed is in advance technology area. The company must meet
the definition of a “ technology – based company” (An organization which pursues
commercial applications of science / technology – based innovations; employs a high
percentage of technicians, engineers or scientists; or required extensive R & D to
produce new products or services)
2. The proposed venture is either a company or a partnership or a sole proprietorship.
3. Demonstrate a need for incubation services.
4. Demonstrate capability for business viability and growth.
5. The business plan submitted by the entrepreneur is sound and passes the review of the
expert committee.
6. In the absence of a proper business plan, the request for membership will be accepted
provisionally if the business proposal looks prima-facie promising to the expert
committee.
7. The business proposed should have significant technology content / employment
potential / revenue generation potential / export earning potential.
8. The entrepreneurs may or may not have a track record in undertaking entrepreneurial
ventures.
9. A first time entrepreneur should have the requisite aptitude in promoting the venture
(The expert committee will assess this through personal interview, review of past
activities, background check, references etc.).
Page 4 of 82

5. DRAFT
2. PRE INCUBATION
The enrolment into the BI programme involves the following:
a. Submission of application.
b. Review by expert committee.
c. Post admission process.
2.1 Submission of application
Submission of application package includes:
a. Prescribed application form.
b. Entrepreneur’s business plan.
c. Entrepreneur’s tax returns for prior three years, if applicable.
d. Venture Team Profile.
e. Constitution of the incubate company.
2.2 Review by expert Committee:
The expert committee reviews the application based on the following but not limited to the
following criteria:
a. Merit of the business proposal.
b. Background and experience of the entrepreneur.
c. Financial viability.
d. Status of the business plan, market research and feasibility studies.
e. Growth potential.
f. Applicant’s commitment – both financial and personal time – to the venture.
g. Business references.
h. Make up of the management team.
i. To what extent is the entrepreneur developing technology, or using technology for a
unique business purpose?
j. How effectively does the entrepreneur demonstrate an understanding of the
environment facing the venture in its target markets, and a reasonable strategy to
achieve stability and growth?
k. How clear is the entrepreneur’s need for the types of services that the incubate offers?
l. Is the venture product or service – based?
m. Market knowledge and experience (market, definition, markets, serviced, competition,
SWOT analysis etc.).
2.3 Post Admission Process:
Once the decision is made to admit the entrepreneur to the incubation programme of the BI,
the following activities are undertaken:
• License agreement is executed between BI and the entrepreneur.
• BI and the entrepreneur sign a mutual non-disclosure agreement (NDA).
• Jointly set short-term objectives for the venture’s performance.
• Develop a written plan of work for the venture with milestones.
• Set up the venture’s financial management and budgeting systems.
Page 5 of 82

6. DRAFT
• Identify mentors, consultant’s service providers or resource centers to assist the
entrepreneur in achieving his goals.
This marks the enrolment of the incubatee into the BI programme.
2.4 Issues to be considered by the incubatee in the Pre-incubation phase
Choosing to be an incubatee is a big decision and should be viewed seriously. While the
rewards seem self-evident, the challenges are substantial also. Following are the list of issues
to be considered by the incubatee in the pre-incubation phase:
• Personal SWOT analysis.
• Personal objectives.
• Deciding the legal form of the business.
• Business Plans.
• Avoiding common business plan mistakes.
• Choosing the right Business Incubator (BI).
The first step involved in the process is to undertake a Personal SWOT analysis.
2.4.1 Personal SWOT Analysis
A personal business SWOT analysis involves looking at the strengths, weaknesses,
opportunities and threats you bring to running a business. Each of these factors needs to be
carefully considered as it applied to your personal situation in order to assess the best path in
business for the incubatee. Opportunities and threats relate to the world you live in. While it
is important to consider what is happening in your immediate environment, don’t leave out
major world trends either.
This should be followed by a determination of ones Personal Objectives outlines as below:
2.4.2 Personal Objectives
1. Writing down your personal goals for the business.
2. Income level expected.
3. Targeted growth level.
With the above in place one has to decide upon the legal form of business best suited to meet
the above objectives
2.4.3 How to choose your legal form
To operate a business legally, one needs to meet all the laws for operating a business in India
and the local laws. One of the first decisions that you will have to make as a business owner is
how the company should be structured. This decision will have long-term implications. In
making a choice, you will want to take into account the following:
The size and scope of business, the level of control, structure, business’s vulnerability to law
suits, tax implications of the different ownership structures.
Page 6 of 82

7. DRAFT
When organizing a new business, one can choose to operate as:
• a sole proprietor – If you want to be by yourself.
• a partnership – If you want a simple business and tax structure with more than one
person.
• a limited liability partnership.
• a limited company – If you want to limit your personal liability for debts.
2.4.4 Business Plans
Ask my business expert for advice on what is most important for the success of a business and
the vast majority will cite writing and using a business plan as a critical component for
success. Almost every lender will require some type of plan before lending any money to a
business. A well – written business plan is the story of how you are going to run your
business. It is your opportunity to chart the path for where you want to go.
Your business plan establishes your checkpoints and goals along with setting a timeline for
accomplishing certain objectives. The essential components of a business plan are:
i) Executive Summary
It provides a concise overview of the entire plan along with a history of your company. This
section tells your reader where your company is and where you want to take it. It’s the first
thing your company is and where you want to take it. It’s the first thing your readers see.
Therefore, it is the things that will either grab their interest and make them want to keep
reading or want to put it down and forget about it.
Contents of the Executive Summary:
i). The Mission Statement:
The mission statement briefly explains the goal of your business. It should be as direct and
focused as possible and it should leave the reader with a clear picture of what your
business is all about:
• Names, qualifications and experience of founders and the functions they perform.
• Number of employees.
• Location of business and any branches or subsidiaries.
• Description of plant or facilities.
• Products manufactures / services rendered.
• Banking relationships and information regarding current investors.
ii) Market Analysis:
The market analysis section should illustrate your knowledge about the particular industry
your business is in. It should also present general highlights and conclusions of any
marketing research data that, you have collected:
• An industry description and outlook
• Target market information
• Market test results.
• Lead times
• An evaluation of your competition.
Page 7 of 82

8. DRAFT
iii) Organization and Management:
Organizational structure: Create an organizational chart along with a narrative
description of what the chart means. This chart should lay out the structure of your
company.
Ownership information: This section should also include the legal structure of your
business along with the subsequent ownership information it relates to Management
profiles and board of directors qualifications
iv) Marketing and sales strategies:
Marketing is the process of creating customers. The marketing strategy should be part of
an ongoing self evaluation process, and unique to your company. An overall marketing
strategy will include:
• Market penetration strategy.
• Strategy for growing business.
• Channels of distribution strategy.
• Communication strategy.
• Sales force strategy.
• Your sales activities.
v) Service or product line:
Describe your service or product, emphasizing the benefits to potential and current
customers. Focus on the areas where you have distinct advantage, Identify the problem in
your target market for which your service or product provides a solution. Give the reader
hard evidence that people are, or will be, willing to pay for your solution versus others.
Overall this section should include:
• A detailed description of your product or service
• Information related to your products life cycle
• Research and development activities you are involved in or are planning to be
involved in
vi) Funding request:
In this section, you will request the amount of funding you will need to start or expand
your business. You include your current funding requirement; your future funding
requirements; your future funding requirements over the next five years; how you will use
the funds you receive; and any long range financial strategies that you are planning that
would have any type of impact on your funding request.
vii) Financials:
The financials should be developed after you’ve analyzed the market and set clear
objectives:
• Historic financial data: The historical financial data you would want to include would
be your company’s income statements, balance sheets and cash flow statements for
each year your have been in business.
Page 8 of 82

9. DRAFT
• Prospective financial data: All business whether start – up or growing will be required
to supply prospective financial data. Each year’s documents should include forecasted
income statements, balance sheets, cash flow statements, and capital expenditure
budgets. Finally, include a short analysis of your financial information. Include a ratio
and trend analysis of all of your financial statements (both historical and prospective).
2.4.5 Avoiding Common Business Plan Mistakes
Often you may hear about what a business plan needs to contain. While including the
necessary items is very import, you also want to make sure you don’t commit any of the
following common business plan mistakes:
a. Put is off: Don’t wait to write a plan until you absolutely have to.
b. Cash flow casualness: Cash flow is more important than sales, profits or anything else
in the business, but most people think in terms of profits instead of cash.
Unfortunately, we don’t spend the profits in a business. We spend cash. So,
understanding cash flow is critical.
c. Idea inflation: Plans don’t sell new business ideas to investors. People do. The plan,
through necessary, is only a way to present information. Investors invest in people, not
ideas.
d. One size fits all: Tailor your business plan, action plans, financial plans, marketing
plans, and even personnel plans to its real business purpose.
The financial projections in the Business Plan during the pilot phase, that should not
exceed 15 / 18 months, should be on a monthly basis. Since no income is envisaged
during this period, the cumulative cash deficit on a month-on-month basis would be the
quantum that needs financing. Determining this need is very crucial. Most of the times the
incubatee is not in a position to raise the funds through own capital. The source for this
pre-pilot and pilot phase funding shall be by way of seed financing or seed support.
Generally this is financed by the Business Incubator (BI). The seed funding is generally
given by the BI by way of soft loans or outright grants or a combination of equity and soft
loans.
2.4.6 Choosing the right Business Incubator (BI)
The next crucial step is to identify the right business incubator based on the lien of
business, its legal form etc. Certain additional criteria to be considered by an incubatee
while choosing his business incubator could be:
a. One to one counseling facilities in development of the business plan.
b. Networking support.
c. Assistance provided by the technical and domain experts.
d. Infrastructure support in terms of providing the Seminar hall, power back up etc.
e. Laboratory and testing equipment facility, mentoring support and facilities of
funding support.
f. Level of provision of management guidance, technical, assistant and consultation.
Page 9 of 82

10. DRAFT
3. INCUBATION
3.1 Period of Incubation:
The period of incubation is generally for 2-3 years.
3.2 Prototyping:
This phase involves proof of business concept including prototyping:
• prototype typically simulates only a few aspects of the features of the eventual
business proposal and may be completely different from the eventual
implementation.
• Prototyping has several benefits: The incubatee and incubator can obtain feedback
from the users early in the business proposal.
3.3 Pilot phase and successful competition of pilot phase:
When an organization has selected a new technology, products, process or concept, a pilot
project best demonstrate the potential in the opportunity.
• New Technological Advancements
• New Environmental Initiatives
• New Product Launches
• New Process Deployments
Pilot project employs the best industry and project leaders who develop, deploy and
evaluate new processes and technology that benefit and advance business, industry and the
environment.
Pilot or prototype design projects need to be managed in ways which are very different
from conventional projects. Pilot or prototype projects have as their primary objective the
creation of a “first version” of something, either in the workplace in general, or inside an
organization which has never done such a piece of work before. As such, it is difficult to
judge what their scope, size and work flow of the organization should be. In fact, this type
of project is often undertaken for the very purpose of acquiring the type of experience
needed to set or estimate such traditional project management parameters.
3.4 Estimating financial needs during incubation phase:
Financial Management is the process of managing the financial resources, including
accounting and financial reporting, budgeting, collecting accounts receivable, risk
managements, insurance for a business. The financial management system for a small
business includes both how you are financing it as well as how you manage the money in
the business. In setting up a financial management system your first decision is whether
you will manage your financial records yourself or whether you will have someone else
do it for you. Some accounting firms also handle bookkeeping functions.
Page 10 of 82

11. DRAFT
While poor management is cited most frequently as the reason why business fail,
inadequate or ill – timed financing is a close second. Whether you’re starting a business or
expanding one, sufficient ready capital is essential. It is not, however, enough to simply
have sufficient financing; adequate knowledge and meticulous planning are required to
mange it well. These qualities ensure that entrepreneurs avoid common mistakes like
securing the wrong type of financing, miscalculating the amount required, or
underestimating the cost borrowing money.
3.5 Start up financing:
Finding the right financing that fits with a business’ goals is a continuing challenge for
almost every small business. For startup businesses this can be one of the biggest hurdles
in getting off the ground. Some entrepreneurs can be incredibly creative in finding ways to
fund their ideas. Many consider another job as a way to fund their personal business.
Using personal funds is very common, partly because few banks will loan to people who
do not risk some of their own funds. However, in the long run, most businesses will need
external funding of some type. The conventional wisdom in starting a business is that it is
no one will loan money to a startup. With no history and no assets, one either needs to
have savings, friends and family who are willing to help or an angel.
Financing your business is often the critical component to success. The hardest question to
answer is what kind of capital should you seek? Often we are not aware of options
available to us or don’t have the time to explore what is possible. It turns out there are a
vast menu of choices each with their pluses and minuses.
The some of the options available during the Incubation stage are as listed below:
• Bootstrapping.
• Seed funding by way of loans / grants by Business Incubation (BI).
• Borrowing from friends and acquaintances.
• Angel investors / small business investment companies.
Bootstrapping: Using personal or gamily funds to finance a business is called
Bootstrapping the business. Bootstrapping can involve personal investment by the
founders, their family and friends and / or the owners foregoing salary. It is wises for
every business owner to have atleast some personal funds at risk since that shows other
potential investors that you are committed to the success of the business.
Seed funding by way of loans / grants by Business Incubator (BI): Generally the
Business Incubator (BI) makes available seed funding in the form of grants or softloans or
partly by way of equity and partly by way of soft loans. The Technology Development
Board (TDB) and National Science and Technology Entrepreneurship Development Board
(NSTEDB), Department of Science and Technology (DST) has been providing the seed
funding to the Technology Business Incubator (TBIs). This funding is available to meet
the financing needs during the Incubation phase. The amount available by way of seed
funding is generally upto Rs. 50 lakhs. It is available either as equity, or as a softloans or a
combination of both.
Page 11 of 82

12. DRAFT
Borrowing from friends and acquaintances: These are funds borrowed from friends
and acquaintances with some commitments towards repayment period and interest.
However, because of the risks involved there are limitations to this method of fund
raising.
Angel investors / small business investment companies: This source is available only if
the project is very innovative and can attract the attention of Angel Investor.
3.6 Issues involved during incubation
3.6.1 Accounting and Bookkeeping:
Bookkeeping refers to the daily operation of an accounting system, recoding routine
transactions within the appropriate accounts. An accounting system defines the process of
identifying, measuring, recording and communicating financial information about the
business. So, in a sense, the bookkeeping function is a subset of the accounting system. A
bookkeeper complies the information that goes into the system. An accountant takes the
data and analyzes it in ways that give you useful information about your business. They
can advise you on the systems needed for your particular business and prepare accurate
report certified by their credentials.
The common mistake committed is to pay inadequate attention to this very important
function of allocating. The general notion is that accounting is taken care of by installing
the tally software and appointing a person to do the data entry. The term and finalization is
done with the help of the Chartered Accountant just before the statutory tax filing date.
The important aspect of getting real time and useful business information for informal
decision making is lost sight of.
The following points merit consideration:
• Defining and using accounting software suited to the business.
• Defining the chart of accounts to get customized information and reports
• Defining the accounting procedures and controls.
• Proper review mechanism.
3.6.2 Treatment & Recording of Research & Development (R & D) expenditure:
The accounting of R & D expenditure needs to adhere to the defined Accounting
Principles and Standards.
“Research” is original and planned investigation undertaken with the prospect of gaining
new scientific or technical knowledge and understanding.
“Development” is the application of research findings or either knowledge to a plan or
design for the production of new or substantially improved materials, devices, products,
processes systems or services prior to the commencement of commercial production or
use.
Research Phase: Expenditure on Research should be recognized as an expense when it is
incurred since at this stage an enterprise cannot demonstrate that an intangible asset exists
Page 12 of 82

13. DRAFT
from which future economic benefits are probable. Therefore, this expenditure is
recognized as an expense when it is incurred. No intangible asset arising from research
should be capitalized as an asset. In simple terms it means that this is a loss which needs
to be recognized by debiting to the profit and loss account.
Development Phase: Expenditure during the development phase can be capitalized and
recognized as an asset if, and only if, an enterprise can demonstrate all of the following:
a) The technical feasibility of completing the intangible asset so that it will be available
for use or sale.
b) Its intention to complete the intangible asset and use or sell it.
c) Its ability to use or sell the intangible asset.
d) How the intangible asset shall generate probable future economic benefits. Among
the other things the enterprise should demonstrate the existence of market for the
output of the intangible asset or its capability to be used internally.
e) The availability of adequate technical financial and other resources to complete the
development and to use or sell the intangible asset.
f) Ability to measure the expenditure attributable to the intangible asset during its
development with reliability.
The cost of development (the value with which it will be capitalized as an asset) will
include expenditure on materials and services used or consumed in generating the
intangible asset, salaries, wages and other employment related costs directly engaged in
generating the asset, any expenditure like patenting etc. and overheads that can be
allocated on a reasonable and consistent basis like depreciation, insurance premium, rent
borrowing costs etc.
3.6.3 Human Resources:
Human Resources refer to the labor, physical and mental abilities that the people in your
organization contribute to producing the goods and services of your business. The
administration of human resources involves:
• Identifying the team: Making the leap to hiring someone to help is a big one because
all of a sudden you need to worry about payroll, benefits and what seems like a myriad
of other details. And, this does not even take into consideration the host of problems
that can arise from personality conflicts and loss of control of all the process in
running your business.
• Organizational Policies:
 Staffing
 Training and Development
 Policies and Procedures
 Record Keeping
 Wage and Salary Administration
Page 13 of 82

14. DRAFT
3.6.4 Legal
• Patents copyrights, trademarks, wetting of contracts: Many businesses need some kind
of legal protection for their business product, but have no idea what. The terms “Patent”
‘“Copyright” and “Trademark” are used usually in relation to an invention, new idea or
domain name.
• A patent applies to an invention.
• A copyright protects an original artistic or literary work.
• A trademark applied to a log or other identifying mark related to the sale of goods.
• To protect ones rights, it is advisable to go in for the applicable legal registration.
• Vetting of contracts: It is advisable for any new or established venture to have the
contracts vetted so as to avoid any loopholes in the execution of the same. The typical
contracts need to be vetted are:
 Building and other leases
 Contract with employees, customers, suppliers
 IPR
 Financing and credit
 Advertising
 Statutory compliance
 Succession planning
3.6.5 Statutory registration and compliances:
1. LEGAL REGISTRATIONS
2. DIRECT TAXES
3. Income tax Act
4. Permanent Account Number
Permanent Account Number (PAN) is a ten-digit alphanumeric number. It is mandatory to
quote PAN on returns of income and all the relevant correspondence with any income tax
authority. PAN application should be made on Forum 49A along with the address proof
and identify proof.
5. Tax deduction Account Number
TAN or Tax Deduction and Collection Account Number is a 10 digit alpha numeric
number required to be obtained by all persons who are responsible for deducting or
collecting tax.
6. Shop and Establishment Act
It is a state legislation; each state has framed its own rules for the Act. It is applicable to
all persons employed in establishments with or without wages, except the members of the
employer’s family. This Act lays down the following rules:
• Compulsory registration of shop / establishment within thirty days of commencement
of work.
• Communications of closure of the establishment with 15 days from the closing of the
establishment.
• Lays down the hours of work per day and week.
Page 14 of 82

15. DRAFT
• Lays down guidelines for spread over rest interval opening and closing hours, closed
days, national and religious holidays, and overtime work.
• Rules for employment of children, young persons and women.
• Rules for annual leave, maternity leave, sickness, casual leave etc.
• Rules for employment termination of service.
7. Profession Tax
The Profession Tax Act is a State Enactment. This Act is enacted for the benefit of the
State for raising additional resources needed for implementing the Employment Guarantee
Scheme of the State Government.
8. Provident Fund and ESI
The Provident Fund and ESI Act are applicable when the employee strength exceeds ten.
9. Indirect Taxes
Service TAX: Businesses rendering specified services are liable to a Service Tax. One
must see the currently prevailing Service Tax rules. The Service Tax applicable as of
today is at no percent plus education cess 3% on the liable value. The responsibility of
payment of the tax is cast on the service provider. They are required to deposit the tax
collected on monthly basis. The service providers need to get themselves registered.
However for incubator operating in DST promoted incubators there is an exemption of
Service Tax for first 3 years or upto Rs. 50 lakhs turnover, whichever is the least. For full
information the concerned incubation manager needs to be approached.
Excise Duty: Manufacturing units need to pay an excise duty on goods produced /
manufactured in India. The products attract duty from 8% t0 16%.
Value Added Tax: Businesses trading in goods between states are liable to change CST
whereas those trading within the same state are subject to VAT. The rate of VAT / CST
varies according to products and states.
Directorate General Foreign Trade: Incase the company would like to indulge into
import or export of goods, it has to get itself registered with the Directorate General of
Foreign Trade (DGFT) as per the Import Export Procedures and obtain a unique number
called Import Export Code (IEC).
10. Semi-Annual Review of the Incubatee Performance
Two formal performance reviews of each company are required every year. The expert
committee gauges the progress of the company against its objectives. The expert
committee also evaluates the quality and impact of the business assistance provided by BI.
Any further assistance in the form of mentors, consultants, service providers or resource
centers required by the entrepreneur is identified during this review.
3.7 Advocating the need for outsourcing of accounts, HR & Legal
functions
During the incubation phase the constitution of the incubatee is either a sole proprietorship
or a partnership firm. Business Incubation is also useful for businesses that are starting up
and can’t afford secretarial support and the other necessities for handling office functions.
Comprehensive support for fledging business in the form of reduced rent, flexible space,
Page 15 of 82

16. DRAFT
shared services, access to professional services and right kind of business ambience are
commonly found in business incubators. It is also advisable that a full scale setup need not
be established due to the uncertain environment. In order to concentrate on its core
business and to derive optimum growth of any venture it is advisable to outsource the
support functions to a professional and reliable outsourced service provider.
The benefits of outsourcing as follows:
• Operational from day one
• Utilization of the infrastructure of the service provider
• Domain knowledge expertise and proactive Consulting available as a single window
solution.
• Flexibility as quickly scalable, quick down sizing or up sizing possible.
• On time, committed performance
• Cost effective
3.8 Tax exemptions for an Incubatee within STEP Incubators
Some of the benefits available to an incubatee enrolled in a business incubation program
of a STPI (Software Technology Parks of India) are listed below:
• Approval under single window clearance mechanism.
• 100 per cent foreign equity permitted.
• Imports in the STPI units are completely duly free.
• Exemption of local taxes for domestic purchases.
• The sales in the domestic market are permissible upto 50 percent of the exports.
• Exemption from corporate income tax for a block of 10 years.
• Minimal export obligation with positive Net Foreign Exchange.
4. GRADUATION
The venture shall graduate from the incubation programme when any one of the following
conditions is fulfilled:
I. The revenue stream of the company is adequate for self-sustenance.
II. The entrepreneurs have been able to tie up investors to finance the expansion plans
of the venture and the incubator support is no longer necessary.
III. The entrepreneurs have sold the venture to a longer company.
IV. Expiry of the period specified in the license agreement.
If any of the above events takes place, the venture will be treated as graduated from
incubation programme and the membership in the incubator will be discontinued.
5. SUSTENANCE AND GROWTH
Graduation is only one of the milestones in the journey to eventual sustenance and growth.
During incubation most of the entries take the form of a sole proprietorship or partnership,
Page 16 of 82

17. DRAFT
which entails restrictions on the quantum of capital than can be raised as well as the on the
equity of management of the organization.
5.1 Deciding on the next stage financing for expansion and Growth
To enable an entity to grow adequately, it is advisable to convert it into a limited
company. The following are the methods of conversion:
Normal take-over of the partnership firm by a private limited company. This is the
simplest form but has income-tax implications and hence is not recommended.
I. Transfer by recourse to conversion under section 47 (XIII) of the Income tax 1961. In
this case the capital gain is exempt from income tax subject to following conditions:
a. All the assets and liabilities of the firm shall become the assets and liabilities of the
company.
b. All the partners of the firm become the shareholders of the company in the same
proportions.
c. The partners of the firm do not receive any consideration other than by way of
allotment of shares in the company.
d. The partners of the firm hold not less than 50% of the total voting power for a
minimum period of five years.
III Conversion under Part IX of the Companies Act:
The firm can be converted into a company by following the provisions of Part IX of
the Companies Act. 1956, However, for registering the company the partnership firm
needs to have a minimum of seven partners. No agreement for transfer is needed as
this is a conversion under the law and all the assets and liabilities of the firm become
that of the company as on the date of incorporation. It enjoys certain additional
advantages over and above the earlier stated method of conversion.
The options II & III mentioned above impose certain conditions but have tax
advantages and therefore are more advisable:
5.2 Avenues of raising the capital for expansion
Raising of external capital at the optimum cost is a major challenge in this phase and calls
for Capital Structuring. The external means of finance to fund the expansion and growth
involves dilution of the Promoters stake in the incubate company. Protecting the majority
stake of the Promoter /s is a delicate balancing act and needs to be thought through
carefully.
External funds can be raised through Grants, Loans, Investors, Angel, Investors, Equity
Financing, Small Business Investment Companies (SBICs), Venture Capital, Mergers,
Going Public.
The following are some of the avenues for raising external capital:
Equity Financing: The most common source of professional equity funding comes from
venture capitalists. There are institutional risk takers and may be groups of wealthy
individuals, government assisted sources or major financial institutions. Venture
Page 17 of 82

18. DRAFT
capitalists may scrutinize thousands of potential investments annually, but only invest in a
handful. The possibility of a public stock offering is critical to venture capitalists. Quality
management, a competitive or innovative advantage, and industry growth are also major
concerns.
Debt Financing: Banks and commercial finance companies are the most common sources
for debt financing State and local governments also step to encourage the growth of small
business in recognition of their positive effects on the economy.
5.3 Issues to be considered during Growth Phase
5.3.1. Business Valuation: In order to obtain funding it is important to know how much
your business is worth. There are a variety of methods that can be used. It is
necessary to properly value one’s Intellectual Property Rights (IPR) as well as
other intangible assets in order to create capital in kind.
5.3.2. Organizational Planning and Management: The need for professional
management as a pre-requisite for achieving the targeted growth and sustenance
cannot be over emphasized. Management comprises of the following important
process:
5.3.3. Planning: It involves determining the appropriate objectives for the business and
the means to accomplish them.
5.3.4. Organizing: Deals with structuring of the resources and activities of the business
to accomplish the desired objectives.
5.3.5. Staffing: It involves hiring the right people to do the job and rewarding them
appropriately and retaining them.
5.3.6. Directing: Relates to motivating employees to effective achieve the business
objectives.
5.3.7. Controlling: It is the process of evaluation and correction to ensure that the
business stays on tract towards its goals.
5.3.8. Board and Directors: A company’s Board of Director’s held management
develop business plans, policy, objectives, and business strategy. Not all small
businesses have or need a board of directors, but as the business grows and
matures in the marketplace, a board can be a valuable tool to help management set
the directors for growth and provide valuable insights from a different perspective
and knowledge base.
Directors monitor a company’s financial performance and the sources of the
products, services and strategy. They are expected to follow developments that
affect the business, and set aside any potential conflict between their personal or
individual business interests to support the well-being of the business which they
Page 18 of 82

19. DRAFT
serve. The most effective board of directors will be a group of professionals who
bring a breadth of skills, experience and diversity to your company.
5.3.9. Corporate Governance: Corporate governance is the set of processes, customs,
policies and laws affecting the way to corporation is directed and administered. It
is based on the principle that companies are accountable for their actions and
therefore broad based systems of accountability need to be built into the
governance structures of companies. It lays emphasis on the total transparency
integrity and accountability of the management. It implies a voluntary code of
conduct that company directors are expected to follow in managing a company.
The code contains expectations and provisions that are more extensive than any
statutory, professional, or capital market requirements. The objective is to control
the company’s managements and to crease mechanisms to oblige executives to act
in the interests of their shareholders.
5.4 Financial Models in Incubation
5.4.1 Capital gains model
This model is useful for creating big impact on highly proprietary technologies. This is useful
to the start-up companies with strong entrepreneurship capabilities. It requires less
management support but great new technology development support from Host institute. The
funds shall be invested through equity. The modus operandi of the capital gains model is:
• Entry Strategy-reviewing the team, market potential, financial return and technology of
the project proposal
• Routes of VC funding through shares, equity, preference share, convertible debentures
and royalty linked loans
• Continue early stage investment in India and would be the first investors in all deals
• Detailed due-diligence and decision making process to facilitate deal making
• Enhance likelihood of a strategic acquisition at the time of investment itself
Exit through IPO, buy-back by the promoters, company offloading to another VC company
and strategic mergers and acquisitions. E.g. Innovative ventures, Ag-biotech ventures.
5.4.2 Revenue generation model
It is a kind of franchisee model wherein incremental technologies or pure services are needed.
It is useful to numerous small businesses and entrepreneurs who need significant management
support but does not require strong technology inputs. This basically needs investments in
technology transfers, branding and marketing. The revenue generated is through
Services/royalties and one time fees. E.g. Seed Ventures, farm ventures etc.
Page 19 of 82

20. DRAFT
CAPITAL GAINS MODEL
FRANCHISE / REVENUE GEN. MODEL
Big impact highly proprietary
Incremental technologies / pure services.
technologies
Type of incubatees
Types of incubatees Numerous small businesses / entrepreneurs
Start-ups with solid entrepreneurs
Characteristics:
Characteristics: Needs significant ABI mgmt support
Needs less ABI mgmt support Does not need great new tech inputs
Needs great new tech development support Needs investment in technology transfer
from ICRISAT.. Needs investment in branding / marketing
Equity payment primarily Service / royalties / one time fees
Focus Sectors: Focus Sectors:
High technology agri-ventures Seed business
Biofuels Farming business
Ag-biotech ventures
40 Ventures in five years
10 Ventures in five years
6. CONCLUSIONS
Before any conclusion is drawn, it would be interesting to take note of the number –one
attribute that Warren Buffet, arguably one of the most successful investors in the world,
looks for in a company. It is “Sustainable Competitive Advantage”. Competitive
advantage is what your company does better than anyone else. The sustainable part refers
to your ability to continue to do those things over a long period of time. Thus it is essential
to be able to develop one or more competitive advantages for achieving sustainable
growth.
Not only a competitive advantage, as a term, widely overused, it is also widely
misunderstood. You are not alone it you have ever wondered what a competitive
advantage really in and what you do with it.
What competitive advantage is and isn’t?
Often starting with what something isn’t is easiest. Your competitive advantage is not a
list of your strengths. Not to downplay strengths as these are important too. But if your
completive advantage(s) list is only comprised of strengths it is not a “competitive”
advantage. Key word - competitive. If you don’t have a competitive advantage comprised
or more than strengths, you don’t compete.
The management team from a mid-sized financial services group reported that its
competitive advantages were:
• Good reputation in the community
• Skilled staff
• Outstanding team and well-respected leader
• Knowledgeable
• Strong client list and loyalty
Page 20 of 82

21. DRAFT
• Flexible and responsive
The above is just a list of strengths. It is not the competitive advantages.
A competitive advantage is something you do that is unique. The key here is to compete
you have to have a unique advantage. Looking at the list from the financial services firm
above, you can see that his is not a list of unique staff. Basically anyone is business today
needs to achieve that level of competency just to be in the game.
Think of your competitive advantage as your organization’s DNA – a collection of games
or assets that makes you unique. When you are true to your DNA, you are healthy, fit and
successful. When you compromise your DA, you feel uncomfortable, slow and are
exerting more effort than you should.
Page 21 of 82

22. DRAFT
Annexure 1: Template of Business Plan Model
Page 22 of 82

23. DRAFT
Page 23 of 82

24. DRAFT
Page 24 of 82

25. DRAFT
Page 25 of 82

26. DRAFT
Page 26 of 82

27. DRAFT
Page 27 of 82

28. DRAFT
Page 28 of 82

29. DRAFT
Page 29 of 82

30. DRAFT
Page 30 of 82

31. DRAFT
Page 31 of 82

32. DRAFT
Annexure 2: Template of Sample TePP Application Form 2009-2010
Government of India
Department of Scientific and Industrial Research
TECHNOPRENEUR PROMOTION PROGRMME (TePP)
Phase-I: TePP Project Fund (TPF)
Guidelines
Eligibility
 Unattached independent innovators like micro and small entrepreneurs working on
new designs.
 Start-up firms / incubated firms with turnover less than Rs 45 lakhs.
 Independent innovators scouted, documented, mentored by various agencies like
NIF,RIN,RIF, ISB, SPJIMR,CIIE, CII, FICCI, Stanford Bio Design.
 Finalists of competitions like Techfest, GE Edison Challenge, Tata NEN, Proto.in,
Indian Angel Network, TiE, Eureka, India Innovation Pioneers Challenge, Lockheed
Martin India Innovation growth program, Innovation for India awards, Piramal Prize ,
Economic Times, National Geographic.
 Medical doctors coming out with low cost tools.
Scope & Support
 Proposals to convert an original idea/invention/know-how into working
prototype/process.
 Proposals to demonstrate novel delivery models to take S&T innovations to rural
India.
 Maximum support under this category is Rs 15,00,000/- subject to 90% of approved
project cost.
Mechanism
 The proposals can be submitted online (http://oscar.iitb.ac.in/TEPP) or submitted off
line to the nearest TUC (TePP Outreach centre). The innovators can meet
coordinators of TUCs and take their advise before submitting the application.
Addresses of TUCs is given on www.dsir.gov.in.
 The proposals will be screened locally at TUC and proposals with complete details
will be referred to experts for evaluation. To facilitate expert evaluation, innovator is
required to complete part of Technology Angel evaluation form and submit it along
with application. Proposals received at DSIR end will also be forwarded to concerned
TUC for counselling/ local screening.
 Evaluated proposals received from TUCs are assigned to officers at DSIR for further
evaluation as required.
 The evaluated proposals are put forth to TSC for consideration. The TSC
recommends the proposal for TePP support, which are processed for approval by
TePP officials.
Page 32 of 82

33. DRAFT
 The applicant has to sign "Terms & Conditions" prior to the actual release of grants-
in-aid.
 For grant above Rs 5 lakhs, project will be divided into phases with clear deliverables
at the end of each phase. The project will be continued into the next phase only if the
performance in the preceding phase was satisfactory.
 The first release is based on assessment of need by TePP official and subsequent
releases are based on assessment by project monitoring committee/ authorized TUC.
 Project completion/ closure will be reported to TSC for feedback and record.
Limiting conditions
 The proposals involving software development, only patenting and for basic scientific
research having no immediate commercial implications will not be accepted for
consideration under TePP. Software Embedded projects and patenting along with
prototype development are eligible for support. Innovative S&T delivery models will
also be eligible.
 Faculty/ scientist start-ups will be eligible if they have the rights to Intellectual
property. Where IP is taken on license from institute, their proposals can be
considered only in Phase-11 S3T category.
 Student innovators making to the final of any competition are eligible but to ensure
that their studies are not adversely affected, they are encouraged to take the project
as full time activity after graduation.
 Proposals scouted, documented and mentored by other ( other than TUCs) agencies
need to be submitted with evaluation by the assisting agency.
 Proposals to scientifically test the efficacy and toxicity of herbal formulations
developed by innovator will be eligible for support. Process standardization will also
be eligible for support after proving efficacy and non-toxicity.
 The proposals from the owner of a ‘Start-up’ company/industry may be considered for
TePP support, if the annual turnover of the company/industry doesn’t exceed Rs.
45.00 lakhs per annum.
 Individuals working in organizations & having innovative ideas may apply for TePP
support by furnishing a ‘No Objection Certificate’ from their employer.
 Manpower (like technical assistant) costs are based on actual & not exceeding 20%
of the total project cost. Innovator’s salary and rental expenses for use of own
facilities are not eligible for support.
 Travel costs are based on actual & not exceeding 5% of the total project cost.
Page 33 of 82

34. DRAFT 2009-2010
Government of India
Department of Scientific and Industrial Research
TECHNOPRENEUR PROMOTION PROGRMME (TePP)
Phase-I: TePP Project Fund (TPF)
Application form
1. Title of the proposed project:
2. a. Name of the applicant :
b. Father’s name/Husband’s name:
c. Postal address:
Present :
Permanent :
1. Please provide Pin Code, Telephone numbers, mobile number and e-mail address
2. (Please enclose residence certificate issued by Sub-Divisional Magistrate(SDM)/District
Magistrate(DM) or a copy of ration card or any other document regarding proof of residence as
Annexure-1.
d. Profession  Micro & small business
(Please tick as applicable)  Start-up
 Incubating firm
 Faculty Doctor  Scientist
 Housewife Student
 Farmer
Any other _ _ _ _ _ _ _ _ _ _ _ _
(specify)
f. Date of Birth: _____________________
YY /MM/DD
g. Educational status: _____________________
h. Experience / Employment
status of the applicant
(if employed 'No Objection Certificate' from the employer is to be enclosed. Use
prescribed format)
i. Annual Income of the applicant:
(If you are an Income Tax Payer, provide your PAN No. and attach a copy of the
latest Income Tax Returns you filed)
3. Brief write-up giving broad details of the original idea/ invention/ IPR/ Know
how available with the individual, highlighting its originality/Novelty and the
Page 34 of 82

35. DRAFT
scientific principle involved therein
(Use Technology Angels evaluation form. Fill left column. And enclose as Annexure -II)
4 .Status of the work already carried out such as;
 Literature survey/patent search
Development work done so far, including involvement of
agencies, consultation with experts.
 Patenting of the innovation
 Tie-up for design, fabrication etc with any external agencies,
 Techno-economic / market feasibility studies /reports, if any,
 Consumers / users feedback, if any.
(This is an important document. Enclose documentary proof of work done by way of
photographs, video clips etc. as Annexure-III. If significant prior work was not done, submit
application for TS category)
5.(a) End product / process / output-resulting from the idea/ invention/
innovation
(including targeted specifications, performance requirements/standards.)
(b) Major applications and users
6. Activity details:
Page 35 of 82

36. DRAFT
Activity Assisting Agency Duration
(months)
Design engineering (for
product innovation) or
Research consultancy
(for processes
innovation)
Working model/prototype
development (for product
innovation) or
Lab/bench scale process
development (for
process innovation)
Product testing or
Process demonstration
Any others (please
specify)
7) Proposed costs and time frame:
Project Cost
Sl. Items Own TePP * Basis of
No. Share support estimation/
sought justification
1 Design / Consultancy charges
2 Rental charges for facilities
3 ** Essential facilities that cannot be
taken on rent or work sub contracted
3 Material cost
4 Work sub contracted
5 Manpower cost of technical
assistants
(Based on actual &not exceeding
20% of the total project cost)
6 Testing and trials
7 Travel (Based on actuals & not
exceeding 5% of the total project
cost)
8 Any other
Total Cost
(* indicate basis of above cost with justification against each item in a separate
Annexure).
(** Please attach a list of equipment/instruments etc. and with their respective costs in a
separate Annexure. Please note that as far as possible, the equipment required for the
project may be on rental basis unless it is absolutely essential to purchase them. The
reasons for such purchase should be given.
8. Any other information relevant to the project:
Page 36 of 82

37. DRAFT
9. Referees (two -with complete address, phone number and e mail ID):
10. Declaration :
I declare that all the statements made in this application are true, complete
and correct to the best of my/our knowledge and belief. In the event of any
information, found false or incorrect, my/our candidature will stand cancelled
and all my claims will be forfeited.
Place: Signature of the applicant
Date:
Page 37 of 82

38. DRAFT
Evaluation by Technology Angel
1.Name of Expert :
(e-mail ID, mobile no., contact address):
2.Name of Innovator :
3.Proposal title :
Part A ( to be filled by first by innovator and later by expert)
4.Expert comments on proposed innovation
Innovator Expert
(to be completed by innovator) (to be completed by
expert)
Description of
working of the
innovation
( use sketch,
drawing, patent,
photograph,
video to explain
the working)
Description of
science behind
the innovation.
Technology
trends from
literature survey
and patent
search.
Enclosures
(relevant
literature, patent,
substitute
products etc.)
Page 38 of 82

39. DRAFT
Part B (To be filled by expert only)
5.Expert comments on proposed innovation (Part B)
Expert comments
Assessment of
technology merits
of proposed
innovation
Technological
challenges in
design and
prototype
manufacture
based on
innovators known
skill set
Recommendations
to TePP
Page 39 of 82

40. DRAFT
No Objection Certificate for faculty / students
The innovator ------------------------- is ------------- in our organisation
since…………….. His/her current areas of research are:
His/ Her work resulted in intellectual property on .......................................
which is currently assigned to self/ institute. The organisation has no objection
to the faculty/ student innovator taking his/her innovation to the market with
financial support under TePP.
The complementary IP available with the institute will be licensed to the faculty
/ student innovator to facilitate productising his/her Intellectual property. The
institute library and labs will be made available on chargeable basis to the
faculty / student innovator for executing his/her TePP project. The institute will
enter into bilateral agreement with the faculty/ student innovator on sharing the
benefits of commercialization.
Competent authority
.................................
Page 40 of 82

41. DRAFT
No Objection Certificate for employees who are not researchers
The innovator ------------------------- is working in our organisation
since…………….. His/her current areas of work are:
The organisation has no objection to the employee innovator taking his/her
innovation to the market with financial support under TePP. Necessary leave
will be provided to the employee innovator to carry out the development.
It is certified that employer will have no rights on the Intellectual Property
owned/ generated by the employee as a part of TePP project.
Competent authority
.................................
Page 41 of 82

42. DRAFT
Covering letter to the TePP application
date………………..
To:
TePP Outreach Centre
-------------------
-----------------
Sub : Proposal for development of ………………..
Dear Sir/Madam
I am herewith submitting my application for support under TePP. The following
documents are enclosed.
Signed copy of application,
Proof of residence,
Literature survey & patent search results,
Targeted Product specification/ process performance,
A one page description of potential user, why would he/she buy this new
product and how would the innovator access the user,
Documentary proof of prior work ( video, photo, test report, TUC site report,
press coverage etc)
Cost justification,
Bar chart with mile stones for project schedule.
Technology Angels evaluation form ,
.
Innovator
Page 42 of 82

43. DRAFT 2009-2010
Government of India
Department of Scientific and Industrial Research
TECHNOPRENEUR PROMOTION PROGRMME (TePP)
Phase-I: TePP Project Fund (TPF)
Terms & Conditions for TePP Project Fund (TPF)
(to be signed by innovator after approval before release of sanction)
Name of the project -
Name of the applicant -
Amount approved -
Approved project cost -
Duration of the project -
FINANCIAL CONDITIONS:
1. Approval of the sanctioned project and the amount being provided thereof is for the
specific project sanctioned and the amount approved should be exclusively spent on
the project within the project period. Any unspent balance out of the amount
sanctioned must be surrendered to the Department of Scientific and Industrial
Research (DSIR). However, depending on the progress of the project, unspent funds
may be carried forward to the next financial year for utilization for the same project
but only with the specific prior approval of the DSIR.
2. Approval of the sanctioned project and the release of amount to individual innovators
employed in industry / any other organization is subject to a “No Objection Certificate”
which should include specific permission to Technopreneur by the employer to accept
the financial assistance under the programme and which should be submitted to
DSIR by the innovator while applying for assistance under TePP.
3. The project will become operative w.e.f. the date on which the first financial sanction
is issued by the DSIR.
4. The amount received from the DSIR would be kept in a separate account, the details
of which shall be intimated to the DSIR. Transactions from the account shall only be
for the purpose of the approved project. Any interest earned on the amount granted
is adjustable by the DSIR, against the cost of the project. It is necessary that
separate audited books of accounts be maintained for the expenditure incurred on the
project and these books should be freely available to Government Auditors whenever
required by them. To facilitate electronic transfer of funds please communicate to
DSIR the following details of the account created: 1). Name of account holder as in
bank records, 2).Account Number 3).Name of bank, branch and address in full,
4).Branch code 5).IFS code, 6).MICR Number.
Page 43 of 82

44. DRAFT
5. For permanent and semi-permanent assets, acquired wholly or partly out of the grant,
an audited record should be maintained in the form of a register which should be
made available to Government Auditors whenever demanded. The term “assets” will
mean: (i) all immovable property; and (ii) movable property of a capital nature where
the value exceeds Rs.10,000/-. The amount will not be utilized for construction of any
building / acquiring land by purchase; lease etc. / permanent asset like machinery
required for augmenting general production facilities. Pilot plants, test equipments,
test rigs, jigs, tools and fixtures, etc., required for building prototypes and testing the
same can, however, be built/made/acquired out of the DSIR grant, if so identified in
the approved project proposal or subsequently approved by the DSIR.
6. The assets, if any, wholly or partly acquired out of the DSIR amount during the course
of implementation of the project, shall not be disposed off without the specific written
permission of the DSIR. The sale proceeds, if any, arising out of such disposal shall
be intimated to the DSIR and shall be deposited in the account maintained for the
amount received from the DSIR.
The above mentioned assets acquired from the amount released by the DSIR will be
deemed to be owned by the Technopreneur only after the project is declared
successful by the DSIR.
TRANSFERABILITY OF THE PROJECT:
7. While the whole project cannot be transferred to any other organization, a part of the
work of the project can be sub-contracted, based on needs, to a research institute or
industrial unit, in which case the payment made to such organization shall be on the
basis of the quantum of work done for the project without seeking any further
escalation in the DSIR’s financial support in the sanctioned project.
MONITORING:
8. The project will be periodically monitored by Project Monitoring Committee /
authorised TUC.
USE AND LICENSING OF KNOW HOW:
9. Ownership of the IPR generated through the project, patent rights, licensing the
know-how and the use of the know-how generated through the project shall rest with
the individual innovator. The DSIR does not own any responsibility of disputes
arising out of the IPR issues, however, the rules and regulations of NRDC or PFC of
TIFAC will apply for those projects supported for patents by them.
REPORTING:
10. It is required that Statement of Accounts duly audited by a Chartered Accountant,
should be sent to the DSIR, as of 30th September of each financial year, so as to
reach the DSIR by 31st October of that year. The audited annual statement of
accounts of the project along with utilization certificate also shall be sent to the DSIR
within 90 days of the close of each financial year. Annual reports of the progress of
technical and physical work content of the project shall also be sent to the DSIR.
11. A Completion Report shall be submitted to the DSIR within 30 days of the conclusion
of the project. This Report shall be in two parts (i) Technical and (ii) Financial, the
latter consisting of a consolidated audited statement of accounts of all monies spent
on the project, from the DSIR project amount released and Certificate of Utilisation of
all such monies (Annexure-I), along with a certificate from the auditors.
Page 44 of 82

45. DRAFT
ESCALATION:
12. Any escalation in the cost of the project above the approved cost of the project will be
borne by the innovator / sponsoring agency.
TERMINATION OF THE PROJECT:
13. DSIR will have the right to terminate / close the project at any stage
- if it is convinced that the monies released have not been properly utilized, or
- appropriate progress on the project is not being made, or
- the project is not being carried out as per the terms and conditions and / or as
per the nature and scope of the work as defined in the approved project
proposal.
In case of termination of the project for not proper utilization / unsatisfactory progress
of the project / violation of terms as given above, the entire amount of the grant
together with interest, as applicable under the provision of GFR, and the amount
received by disposal of the assets will be returned to DSIR.
The DSIR will have the right to recover, at any time, the entire money disbursed by
the DSIR for the project along with the interest accrued, if any, as per the GFR of the
Govt. of India if the project is abandoned without prior approval of the DSIR.
If the project is abandoned for any techno-economic or any reason other than the
above, based on the recommendations of the monitoring committee set up by the
DSIR and approved by the DSIR, any unspent money from DSIR grant released to
the project as well as any interest accrued thereon and / or any amount recoverable
by way of disposal of assets procured out of funds released by the DSIR shall be paid
back to the DSIR.
MODIFICATION OF TERMS & CONDITIONS:
14. The above terms and conditions may be modified by the DSIR through mutual
agreement.
UNDERTAKING OF THE INNOVATOR
I agree to the above terms and conditions in connection with DSIR grants to my project
concerning _______________________________________________
Name : Signature
Place: Date:
Affix a duly attested,
latest Passport size
Photograph of the
Innovator
Page 45 of 82

46. DRAFT
UTILISATION CERTIFICATES (TWO COPIES)
FOR THE FINANCIAL YEAR -------------- (ENDING 31ST MARCH)
1. Title of the project
2. Name of the Innovator
3. DSIR Letter No. & date
of sanctioning the project
4. Head of account as given in the original
sanction letter
5. Amount brought forward from the (i) Amount
previous financial year quoting the
DSIR’s letter no. & date in which the (ii) Letter No.
authority to carry forward the said
amount was given. (iii) Date
6. Amount received during the financial (i) Amount
year (please give No. & date of the (ii) Letter No.
DSIR’s sanction letter for the amount (iii) Date
7. Total amount that was available for
expenditure (excluding commitments) Rs.
during the financial year.
(Sl. No. 6+7)
8. Actual expenditure (excluding
commitments) incurred during the Rs.
financial year up to 31st March.
9. Balance amount available at the Rs.
end of the financial year.
10. Unspent balance refunded to the
DSIR if any (Please give details of Rs.
Cheque No. etc.)
11. Amount to be carried forward to Rs.
the next financial year
(if applicable)
Page 46 of 82

47. DRAFT
UTILISATION CERTIFICATE
Certified that out of Rs.______________ of grants-in-aid sanctioned during the year
________________ in favour of ________________________________________ through
the DSIR’s letter No.__________________ and Rs.__________________ on account of
unspent balance of the previous year carried forward, a sum of Rs.___________ has been
utilized for the purpose of ________________________________________________
________________________________________________ for which it was sanctioned that
the balance of Rs._________________ remaining unutilized at the end of the year has been
surrendered to Government (vide challan no.______________ dt.___________) / will be
adjusted towards the grants-in-aid payable during the next year / will be carried forward to
the next year.
Signature of innovator Signature of
Chartered Accountant/
with Date and Seal
2. Certified that I have satisfied myself that the conditions on which the grants-in-aid
was sanctioned by the DSIR have been fulfilled / are being fulfilled and that I have exercised
the following checks to see that the money was actually utilized for the purpose for which it
was sanctioned.
Kinds of checks exercised.
1.
2.
3.
4.
5.
Signature of Chartered Accountant
with Date and Seal
Page 47 of 82

48. DRAFT
Page 48 of 82

49. DRAFT
Page 49 of 82

50. DRAFT
Page 50 of 82

51. DRAFT
Page 51 of 82

52. DRAFT
Page 52 of 82

53. DRAFT
Page 53 of 82

54. DRAFT
Page 54 of 82

55. DRAFT
Page 55 of 82

56. DRAFT
Page 56 of 82

57. DRAFT
Page 57 of 82

58. DRAFT
Page 58 of 82

59. DRAFT
Page 59 of 82

60. DRAFT
Annexure - 05
AGRI-BUSINESS INCUBATOR@ICRISAT
Application for enrolment in Agri-Business Incubator
Founder 1: first name, last name, academic title
Founder 2: first name, last name, academic title
Project name:
Please describe your start-up project generally understandable and as concisely as
possible (maximum 10 pages, font-size 10). Answer each of the following categories
according to your current knowledge. Leave out general statements to the economic
situation.
Contact Details
Address
Telephone / Mobile
Fax
Email
Web
All in italics written questions should help you to find the right answers.
Pitch Definition
(Describe in max. 300 characters what your idea / project does or will do)
1. Concept of Product/Service
(What is new about your technology? Which problem solves your project / idea? How
innovative is your idea compared to today’s solutions? What is your main application?
etc.)
2. Founder Profile
(Project specific skills, references, business skills etc. A detailed CV should be attached
(max. 1 page)).
3. Potential Market / Market Segment (“your market”)
(Who is your customer? How big is the market? Is the market growing or saturated? Is
60

61. DRAFT
the market already profitable? Please indicate sources of information by using
footnotes.)
4. Expected Benefits/ Additional Benefits for Potential Customer
(How will your future customers profit from your idea? What do they specifically get out
of it?)
5. Competition in this Market
(How many providers are already in this market? What are the key factors for a success?
Are there any entry barriers for new provider? How can you characterize your
competition? How much lead / advantage do you have compared to your competitors?
How fast can they offer a comparable solution? What price can be achieved? Please
indicate sources of information by using footnotes.)
6. Unique Position / Positioning
(How does your planned company differ in a sustainable way from your competitors?
How should you position yourself compared to your competitors? If you have to explain to
somebody in one sentence what you are doing, how would you describe it?
7. Development Stage / Plan
(In which stage of development is your technology? Is there already a pilot project? Do
patents exist? What kind of developing steps are still necessary to be ready for the market
(technological, business plan)? What are the most important technological risks? Outline
your planned project steps during tech2b) and also the time frame
8. Financial Details
Actual Investment
Source of Funds
(Debt / Equity / Grant etc. Investor details)
Share holding pattern
(Name & Percentage)
Future Investment Plan
(If any please give details)
9. Property Rights
(Who has the intellectual property rights of the idea? Who is the owner of the product /
development? Do you have the necessary utilization rights?)
61

62. DRAFT
10. Requirements of Incubation
A. Infrastructure & Facilities
Office
(Space in Sq. Mts & specifies A/c, Non A/c, Shed)
Laboratory & Infrastructure
(Biotech / Molecular / Bio control / Cold Store / Green House etc.)
Facilities
(Telephone / Internet etc.)
Others
B. Technology Consultancy
(Scientific Consultancy / Tech Transfer etc.)
C. Other services Required
(Business Development / Training / Funding etc.)
11. Enclose the following
• ID Proof (Household Card / Driving License / Pan Card / Passport)
• Company Registration details
• Last one year IT Returns
• Brochure/Testimonials
12. Declaration
I declare that all the information stated in this application and the attachments are true.
Date: Signature:
Name: Designation:
62

63. DRAFT
Annexure 6
AGRI-BUSINESS INCUBATOR
Monthly Report for the month of _____________ 2010
1. Name and Designation :
2. Walk-in enquiries attended
S.No. Name and Address Reason of visit Remarks
3. New Membership
S.No Name and Name of Name of Remarks
address of the the Incubation
the new Contact Venture Services
member person & Requested
Mobile
Number
4. Services provided to existing members
S.No. Date Name of the Service Provided
member
5. (a) Trainings/meetings organized
S.No Title Period Location No. of
participant s
5 (b) Trainings/Meeting/Conferences/Symposia/Seminar participated
S.No. Tilte Place Period
6. Technology commercialization /Consultancy
S.No Title of the Status
technology
commercialized
/consultancy
7. Revenue generated
Revenue
S.No Title
generated in Rs
63

64. DRAFT
8. Tour / Leave details
a) Leave
. No. of days Nature of Leave
(ML/EOL/LOP)
- -
b) Tour
S.No. Dates Place Purpose
9. Other Activities
10. Proposed work plan for the following month:
Date:…………….
Signature……………………….
64

65. DRAFT
Annexure 7
Memorandum of Agreement
between
Agri-Business Incubator (ABI) at …………………….
and
-------------------------------------- India Pvt. Ltd.
Preamble
Agri-Business Incubator (ABI) operates under aegis of the International Crops Research
Institute for the Semi-Arid Tropics (ICRISAT) (Hereafter referred to as ‘ABI’) at
Patancheru, Andhra Pradesh 502 324, India. ABI was established in ICRISAT with
financial support from the National Science and Technology Entrepreneurship
Development Board of the Department of Science and Technology, Government of India.
The mission of ABI is to promote commercialization of agriculture technology and
promote entrepreneurship development.
-------------------------------------- India Pvt. Ltd. (Hereafter referred to as
‘--------------------------------------’) is a company registered under the Company Act. of
1956, with the Government of India. -------------------------------------- is intending to
pursue research activities in the field of Molecular Biology for the value addition of their
products.
This Memorandum of Agreement (MoA) defines the scope of work, roles and
responsibilities between the parties for incubator membership at ABI for the
advancement of agriculture technology. The “The Standard Guidelines and Regulations
for Entrepreneur Members of ABI” will govern this MoA for administrative, operational
and financial responsibilities.
Scope of Work
In further implementation of this MoA, ABI at ………….. agrees to:
A) To assist -------------------------------------- for this technology.
B) To assist -------------------------------------- to develop
C) To assist -------------------------------------- on the technology front in this project
by means of consultancy and / or a collaborative project.
D) To assist -------------------------------------- in developing
E) To provide guidance to -------------------------------------- their
------------products(s).
A) Assist -------------------------------------- by providing lab, greenhouse, office, land,
and cold-storage facilities necessary for the project based on the availability of
such space.
65

66. DRAFT
-------------------------------------- for its part agrees to:
A) Provide workplan to ABI and adheres to it following its approval by ABI Standing
Advisory Committee (SAC). Further, it shall provide the necessary information on
request by ABI without diligence and accept the terms and conditions of ABI
guidelines.
B) Adhere to the biosafety guidelines of the Institute Biosafety Committee (IBSC) of
ICRISAT and Government of India.
C) Carry out all the research and operations as per the standing rules and guidelines set
by ABI. A copy of such guidelines will be provided.
D) Compensate ABI for its efforts in the following manner:
S. No. Particulars Tariff Charges to Remarks
(per month) Member**
(Lakhs
/Yr)
50% of annual payment
1. Consultancy in advance and remaining
on half yearly basis
Greenhouse
-1 bay of P1/regular -Payments to be made on
(54 sq. m @ US $ monthly basis on 1st of
2. 335/-) each month in advance.
-Payments can vary
based on the number of
bays utilized
Laboratories*
Molecular biology lab - Payments to be made on
on sharing basis monthly basis on 1st of
each month in advance.
3. Bio technology Lab - do-
(Molecular marker+
Genetic
transformation) on
sharing basis
Office and exclusive -do-
lab space for _72___sq.
4 m with central AC in The rentals will vary
Bldg. 303GF according to the Space
utilization
Utilities All services will be
[Network/electricity/w charged by ABI on actual
5 Actual
ater/phone/ basis
labour/Misc.]
ABI annual
6
membership fee
66

67. DRAFT
E) Endeavor to maintain its areas in such a way that it gives credit to the host Institute.
F) Shall not carry out any production process or up-scaling seed production without
prior approval from ABI.
G) Agree to ABI for retaining its deposit of Rs. (Rupees ------only) as advance , which
will be adjusted against the final payment at the end of the agreement period.
Amendment
This MoA may be amended by express consent of both parties. Amendments will be
recorded by exchange of letters between the parties. Such letters, as and when exchanged,
will form part of this MoA.
Specific administrative, financial and operational arrangements will be agreed through a
separate agreement and exchange of letters as required, and they will also form part of
this MoA.
Duration
The duration of this MoA is for three years from ---------to --------------- and is extendable
further under special circumstances and evaluation of the progress by the ABI-SAC and
Advisory Board.
Termination
Either party may terminate this MoA at any time prior to the full term of the MoA period
provided a written notice is given to the other party 6 months in advance. Such
termination will not affect payment/consideration for any/all services, orders, materials,
or facilities committed in good faith prior to the effective date of termination.
Intellectual Property
ABI and -------------------------------------- recognize the importance of Intellectual
Property as a component part of the agricultural research agenda. Both parties reserve
any and all intellectual property rights, without limitation discovered or produced as a
result of the cooperation related to this MoA. ABI and --------------------------------------
will make available to its developing country partners results of its activities by the most
appropriate mechanism, which may include seeking of statutory IP protection where
appropriate. No information or invention developed as a result of this cooperation will be
protected through any form of statutory or non-statutory intellectual property right
mechanism by either collaborator without express written approval from the other.
The exchange of materials, if any, for research under this MoA will be carried out
following the ICRISAT Material Transfer Agreement.
The parties agree that:
67