<p>WATERS3 Wave & Tidal Energy: RD&D Support</p><p>Application Form</p><p>2014</p><p>CCF-P5 Business Support Application v9 efd20070801.doc Introduction The information that you provide in this application form will be treated in the strictest confidence 1 and will only be used in the evaluation of the application for grant funding within the boundaries of this call. During the course of assessment of your application information will be viewed by individuals from Scottish Enterprise (SE), Highlands & Islands Enterprise (HIE), Scottish Government (SG), Carbon Trust (CT), and the Technology Strategy Board (TSB), as well as with independent external assessors should diligence be taken forward on your proposal.</p><p>This third WATERS Call invites applications from businesses located in, or planning to locate in Scotland. Applications are on a ‘single company applicant’ basis. See Outline and Guidance document for full details of the Call.</p><p>Applicants are requested to ensure their submissions are readable and follow the logical path laid out in the application from. Any writing should be clear and concise. Assume engineering literacy and specialist knowledge where required, but ensure content is clear and well-explained from suitable basic principles. A sample contract is available for download from the WATERS3 website. We have populated this with some illustrative data to make it easier to read, to the extent that this was possible. Please note that we are reviewing the format of the contract and certain wording may change. Any offer we make will fully reflect the specific details of your offer including a detailed summary of the project and how it is expected to be delivered. </p><p>Please note that as part of the application assessment process we will undertake detailed financial diligence on both the viability of your company (and for companies which are part of a group we will also look at the parent company) and on your project costs and funding. It is essential for applicants to recognise the time commitment and information provision needed during this period to ensure a timely award. </p><p>How to submit your application: 1. Send the completed form as a Word document together with the Project Costing and Cost of Energy Spreadsheet to [email protected] . </p><p> You must provide your answers within the application form.  Small appendices to the Application Form (e.g. diagrams, drawings, photographs, etc) relating to specific Application Form questions are permissible. If this is the case please include a complete list of appendices in the Application Form. The list should include the title of each appendix, what it contains, the section of the Application Form where it is relevant, the file type and the file size. Please do not use appendices to provide text to answer Application Form questions. All text answering Application Form questions should be included in the Application Form itself.  The maximum size email you can send is 5MB.  In the subject line of the email containing the application include the following title “Application for WATERS3 Support” – (Your Company Name)”  If your application email is larger than 5MB, break the submission down into smaller sizes and ensure the subject line of the application email takes the following format “Application for WATERS3 Support– (Your Company Name) email “x of y”. Where x is the number of the email and y is the total number of emails making up the application.  Do not put any further information relating to your application in the text of the email.  Send the application form as a Word document; it will not be accepted in PDF format. Appendices can be submitted in other common file formats. </p><p>2. You will receive a response by email letting you know that your email has been received and setting out the timescale for reviewing and next steps.</p><p>3. Make sure you fill in all relevant sections in the application.</p><p>1 Except where SE requires to disclose by law or applicable regulatory requirement, including any disclosure required under the Freedom of Information (Scotland) Act 2002 and/or any code applicable from time to time relating to disclosure and access to information held by public bodies. Page 2 of 29 Submission deadline The deadline submission time and date is 12pm on Wednesday 28th May 2014. No proposals, attachments, amendments, additions or deletions will be accepted after the deadline. There are no exceptions to this. Key Dates are shown below:</p><p>Milestone Date</p><p>Official launch 2nd April 2014</p><p>Expressions of Interest By 12pm on 16th April 2014</p><p>Closing date for Full Applications By 12pm on 28th May 2014</p><p>Initial short listing By 17 June 2014 Full diligence and economic impact assessment of 18 June 2014 to 5 August 2014 selected proposals Presentation to Panel 19 August 2014</p><p>Notification of Decisions Early Sep 2014 </p><p>Projects commence 1st October 2014</p><p>Assessment The submitted Application Form will provide the basis by which Scottish Enterprise (SE), Highlands & Islands Enterprise (HIE) and Scottish Government (SG), together with other members of the assessment panel will perform an initial screening of applications. The Application Form will also be a “live” document through the application process and ultimately form the basis for any contracted work plan. Assessment will be structured in four areas:</p><p>1. Potential Outcomes – what kind of impact might your project deliver? 2. Strength of Proposal – technology innovation & potential cost of energy profile 3. Project Planning – how feasible is the overall proposal? 4. Project Management & Team – is there the capability to deliver the project?</p><p>More details on assessment criteria can be found in Appendix A to this document.</p><p>Once the initial assessment of applicants is complete, a shortlist of applicants will be invited to work with SE- appointed consultants and SE staff to undertake due diligence and an economic impact assessment of their proposal. This requires time and information from applicants during the period 18th June 2014 to 5th Aug 2014 and you must be available and willing to work with the consultants during this time. </p><p>The results of this exercise will present an opportunity for the panel of assessors to test the project plans of applicants. All short-listed applicants will be invited to present to the Panel at a meeting on 19 August 2014. This will provide an opportunity for applicants to discuss their project with the panel. It is not anticipated that all applicants participating in full diligence and economic impact assessment will receive an offer of support. As well as the criteria outlined above, awards will depend on the quality and volume of proposals against available budget for this call.</p><p>Successful applicants must work with SE and HIE about the details of the project work plan, but also more generally engage with us in a client relationship where we will wish to work with you on the growth of your overall business in Scotland. This relationship will involve monitoring the progress of your project against pre-defined project milestones for up to 5 years beyond project completion. Support is available to companies locating to Scotland through Scottish Development International (see Outline and Guidance document for further information)</p><p>Reporting requirements are set out in Appendix B to this document.</p><p>Page 3 of 29 Section 1: Company Information</p><p>Have you already contacted a (If yes, please give the individual and organisation’s name) representative of SE, HIE, or SG about your project?</p><p>Business name Business address (for correspondence) including post code Main contact details Name Position </p><p>Tel Email</p><p>Main business activities</p><p>Trading start date Company registration number and date of registration Place of Incorporation Is your company a member of a (If yes, please give the name and address, including postcode, of the ultimate group? holding company)</p><p>Please give the total number of Your business Group employees (full time equivalent) in your business and group and Number Number tell us where they are employed Location(s) Location(s)</p><p>What is your financial year end?</p><p>Page 4 of 29 1.1 List all public sector support awarded during the previous 2 accounting years and the current accounting year.</p><p>Grant Accounting Amount that is Public Sector Source & Title of Project/ Scheme or Amount Year de minimis aid Loan? 20xx/xx 20xx/xx 20xx/xx Total</p><p>Public Sector Source: e.g. Scottish Enterprise, Highlands & Islands Enterprise, Scottish Government, Department for Business, Innovation & Skills (formerly DBERR), Local Authority, Carbon Trust. Technology Strategy Board Amount that is de minimis aid: Please check if this column applies with your Scottish Enterprise contact with respect to this application. If it is not applicable enter “n/a”.</p><p>If it is applicable, prior to granting de minimis aid, Scottish Enterprise must obtain a declaration from the firm concerned, in written or electronic form, about any other de minimis aid. Therefore you are required to complete the column showing amounts of all de minimis aid granted during the previous two accounting years and in the current accounting year.</p><p>1.2 European Commission Enterprise Classification Yes No Is the applicant business a Small or a Medium-sized Enterprise (SME)?</p><p>Many of the types of assistance that the public sector provide are permitted under schemes complying with European Commission State Aid regulations if they are given to Small or Medium-sized Enterprises (SMEs). The European Commission considers a company to be an SME where they: o have fewer than 250 employees; and, o have an annual turnover not exceeding EUR 50 million or annual balance sheet total not exceeding EUR 43 million; and, o Are independent*.</p><p>*Independent enterprise: No more than 25% of the capital or voting rights are owned by one or more enterprises which fall outside the SME definition. This threshold may be exceeded when an enterprise is held by a public investment corporation, venture capital company or other institutional investors, provided they exercise no control. Any doubt regarding ‘independence’ should be highlighted in your application for referral, via a Scottish Enterprise contact, to a representative of Scottish Enterprise Legal, so that we can identify if your company is an SME.</p><p>Please refer to this website for more details on EU SME definition: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/index_en.htm</p><p>Page 5 of 29 Section 2: Proposal</p><p>2.1 Please insert the Project Title and a short paragraph (50 words max) on what the project is about. NB this may be used as part of the publicity material developed for the announcement of grant awards (if you are successful).</p><p>2.2 Give a brief (maximum 1000 words) description of the project discussing the key objectives, activities and proposed outcomes. Describe the key project phases (if more than one) and how it will be implemented. Append any more specific information which may help to define the project. </p><p>Page 6 of 29 2.3 What do you expect to achieve from this project and by when? </p><p>By When? By When? Output Without Support With Support (without (with Support) Support)</p><p>What outputs do you expect from the project? If a grant was awarded, would you expect to see an increased number of outputs, or would the outputs happen quicker? Examples may include energy production, new products/ processes introduced; new customers, etc. At least one output must be listed.</p><p>2.4 How long will it be before any product(s)/ arising from the project need to be replaced or enhanced by the company? Insert number of years</p><p>2.5 Commercialisation plan for the technology (max 500 words)  If your project is successful, what will your next steps be?  How will the technology progress to commercial scale deployment?  Describe how the results of the project will be exploited, and by whom and when?  If commercialising/exploiting the project requires the involvement of companies and organisations outside of your company, to what extent do these relationships exist already?  How will you identify additional companies and organisations (e.g. financing, industrial partners, utilities etc) that can help and engage with them?  Can the results be commercialised globally?  What is the market opportunity?</p><p>Page 7 of 29 2. 6 Will the eventual commercialisation of the project outcomes involve contracts being placed with supply chain companies for the manufacture of goods? If yes, please provide details including the likely location of supply chain providers. (max 250 words)</p><p>2.7 Please insert your company or group trading results for each of the past 3 years from Scottish operations only2 (if available)? Turnover £m Operating profit/loss £m 2013 2013 2012 2012 2011 2011</p><p>2.8 Please provide estimates for projected revenues, profit/loss data and employee costs for the Scottish operation as a result of the project over a 10 year period.</p><p>Note: where the timeframe set out is below is beyond that which is appropriate to record (i.e. lifecycle of the product/process/services is less than this period) please enter ‘n/a’ in each field as appropriate.</p><p>Year End Estimated turnover from Estimated profit/loss from Estimated employee costs Scottish-based activities Scottish based activities from Scottish based activities Annually (£m) Annually (£m) Annually (£m) 2014 2015 2016 2017 2018 2019 2020 </p><p>2 Scottish based operations refers to where revenues are taxed from a Scottish base Page 8 of 29 2021 2022 2023 2024</p><p>2. 9 Relative to these estimates of turnover what would you expect the cost of bought in goods & services to be (excluding employee costs)?</p><p>Year End As a % of turnover</p><p>This year (2014) 3 years from now (2017) 5 years from now (2019) 10 years from now (2024)</p><p>2.10 Based on the these projections, please estimate expected levels of turnover both with and without this grant support from Scottish based operations only? The turnover figures with grant support should be the same as those presented in 2.8 (under Estimated Turnover from Scottish based Activities) </p><p>Note: where the timeframe set out is below is beyond that which is appropriate to record (i.e. lifecycle of the product/process/services is less than this period) please enter ‘n/a’ in relevant fields. </p><p>Year End With grant support Without grant support</p><p>Estimated turnover from Scottish-based Using your best estimate, how much higher/lower (%) activities would your turnover from Scottish–based activities be? Annually (£m) Annually (£m) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024</p><p>2.11 With regards to project timing, will a grant award bring forward or make no difference to the achievement of the project?</p><p>Grant will make no difference to project Page 9 of 29 timing Grant will bring forward project Bring it forward by up to 1 year Bring it forward by 1 to 2 years Bring it forward by over 2 years</p><p>2.12 Please provide estimates for projected levels of employment in Scotland with and without the grant DURING THE R&D PHASE ONLY. Note: where the timeframe set out extends beyond the R&D phase please enter ‘n/a’.</p><p>A – Projected total employment with grant B – Projected total employment without grant Year End support support Posts safeguarded Posts created Posts Posts created safeguarded 2014 2015 2016 2017 2018 2019</p><p>2.13 Please provide estimates for projected levels of employment in Scotland with and without the grant DURING THE COMMERCIALISATION PHASE ONLY.</p><p>Note: where the timeframe set out either pre dates or extends beyond the commercialisation phase please enter ‘n/a’.</p><p>A – Projected total employment with grant B – Projected total employment without grant Year End support support Posts safeguarded Posts created Posts safeguarded Posts created 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024</p><p>Page 10 of 29 2.14 To what extent will a grant award result in your business replacing one R&D related employee for a new recruit to deliver the activity associated with the project?</p><p>None – we will not replace any R&D related staff as a result of the Grant Some of our R&D staff will be replaced as a result of the Grant Around half of our R&D staff will be replaced as a result of the Grant Most of our R&D staff will be replaced as a result of the Grant All of our R&D staff will be replaced as a result of the Grant</p><p>2.15 Thinking about competition in your main areas of business, which of the following statements best describes your business?</p><p>All of the businesses I compete with are based in Scotland The majority of the businesses I compete with are in Scotland Around half of the businesses I compete with are based in Scotland A minority of the businesses I compete with are based in Scotland None of the businesses I compete with are based in Scotland, or I have no competitors in Scotland</p><p>2.16 Thinking about the main supplies for your business, which of the following statements best describes your business?</p><p>Please select one All of our supplies come from Scottish-based suppliers The majority of our supplies, in terms of value, come from Scottish-based suppliers Around half of our supplies, in terms of value, come from Scottish based suppliers A minority of our supplies, in terms of value, come from Scottish-based suppliers None of our supplies, in terms of value, come from Scottish-based suppliers Don’t know</p><p>2.17 Thinking about the main supplies for your business, approximately what percent of the total value of these supplies comes from Scottish-based suppliers?</p><p>2.19 Identification of Scottish suppliers: please list the 5 most important of your Scottish suppliers (by value).</p><p>Page 11 of 29 Company Name Estimated value of supplies</p><p>Total Value (2013) £ </p><p>Page 12 of 29 Section 3: Technology</p><p>3.1 Please provide evidence of ownership of IP for the core technology associated with the project (max 250 words)</p><p>3.2 Please provide details of how the technology associated with your proposal works (max 250 words)</p><p> Briefly explain the principles of operation  What the technology needs to work (i.e. mooring system, sea states, start current, depth, etc.)  Outline the key uncertainties and development needs of the technology  What are the differences between the technology tested in the past and the technology proposed for this project?</p><p>Page 13 of 29 3.3 Please detail the key development stages of the technology to date, paying particular attention to any research and scale-testing, the outcomes from these stages and how these influenced subsequent development (max 250 words)</p><p>3.4 What makes your technology distinct, innovative and leading edge? (max 250 words)</p><p>3.5 Energy Generation Performance of the Technology (max 250 words)  What is the current/proven energy generation performance of the technology? (Please include a performance curve/plot for different operating conditions and how it was derived).  What is the performance target during the project?  What evidence base is available to prove performance at previous scales? </p><p>Page 14 of 29 3.6 Baseline cost-of-energy estimates Applicants should provide estimates of the cost of energy of their technologies according to the methodology explained in the Carbon Trust report ‘MRPF Cost Estimation Methodology – Report’ and using the spreadsheet ‘MRPF Cost Estimation Methodology – Spreadsheet’3 which can be downloaded from here. </p><p>Cost of energy estimates should be based the costing scenario set out below4.</p><p>Costing scenario 10 MW initial farm Stage of technology advancement Today’s stage of advancement. Location Nominated location Allowance for economies of scale in manufacturing and installation As appropriate for an initial 10 MW farm Project rate of return 15% Project financing period 20 years</p><p>3 When completing the spreadsheet, costs should be included:  Up to the point of onshore grid connection; and  Over the life-cycle of project development from construction to decommissioning. 4 Technology developers may consider that the 10MW costing scenario is inappropriate to their technology. (for example, because a 10 MW initial farm could not be achieved because the installed capacity of a single technology is greater than 10 MW). If this is the case, technology developers should:  Nevertheless provide cost of energy estimates to the 10 MW scenarios;  State why the 10MW scenario is inappropriate  Define a second scenario which they consider is appropriate; and  Provide an additional cost of energy estimate to this second scenario. Page 15 of 29 For the costing scenario, applicants should:  Complete and provide one copy of the spreadsheet;  Provide a base case estimate; and,  Provide estimates according to two views of certainty: A pessimistic case and an optimistic case 5, giving justifications for the parameters chosen for these cases relative to the base case.</p><p>Together with the costing scenario, technology developers should:  State all sources of input cost and performance6 data, plus any assumptions that are material to these data7;  Clearly show where there are uncertainties in costs and performance which should be reflected in the ‘cost of energy produced’ information provided; and,  State costs in pounds sterling, and if relevant state any currency exchange rates used.</p><p>Please supply estimates for cost of energy at ‘first farm’ scale. This scale would comprise a full-scale system at a typical commercial location. It may include multiple units with any supporting infrastructure (e.g. grid connections and service facilities) shared. Such a system represents a step beyond a prototype and one where many of the immediate economies of scale have been exploited. Typically we would expect this scale to be approximately 10MW or greater. These costs should include all capital, operating, maintenance and decommissioning costs for all equipment up to and including the connection to the shore-based electricity grid. These costs should reflect the full lifecycle costs of the system for its planned operational life. The energy output for the technology should be based on your chosen site.</p><p>3.7 To what extent does your project and technology incorporate industry best practice? (max 250 words)  Demonstrate awareness of current industry best practice and relevant standards (e.g. EMEC standards, DNV guidelines) and have incorporated these where relevant in their engineering design and project plans.  Describe what independent verification is available for engineering designs proposed for the proposed project?  Outline how you intend to adopt industry best practice with respect to Health, Safety and Environment.</p><p>5 The optimistic case should describe the combination of lowest costs and greatest performance, and the pessimistic case vice versa. 6 The sources of performance data should include reference to the resource conditions at an actual potential deployment site, consistent with the description of resource conditions in the engineering description. 7 For example, a fabricator’s quote might be the source of structural cost data and include assumptions about fabrication methods. Page 16 of 29 Section 4: Costs and Funding</p><p>4.1 How much will the project cost? Applicants should provide firm estimates of project cost by completing the WATERS3 Project Cost spreadsheet and forwarding along with this Application Form. Please note that an example of how this spreadsheet should be completed is also available. </p><p>A WATERS grant may support certain eligible costs. To help us identify what those costs are, please use the spreadsheet to detail the total costs of undertaking your project including staff, materials, equipment, consultancy input, travel, intellectual property etc. Please see Appendix C for a full list of eligible R&D and capital costs.</p><p>NB Support for capital will be available in respect of the investment costs necessary to achieve a higher level of environmental protection. Costs not directly linked to the achievement of a higher level of environmental protection shall not be eligible, In particular, eligible costs will be: (a) where the costs of investing in environmental protection can be identified in the total investment costs as a separate investment, the environmental protection related cost shall be the eligible costs; and (b) in all other cases, the costs of investing in environmental protection are identified by reference to a similar, less environmentally friendly investment that would have been credibly carried out without the aid. The difference identifies the environmental protection related cost and constitutes the eligible costs. </p><p>Please also attach relevant documents e.g. consultants proposals as an appendix to your application. Please note that we are unable to progress your application in the absence of this information. If you are unsure what is required please contact us to discuss. </p><p>4.2 Use of Consultants </p><p>Yes No</p><p>Is the company using external consultants to deliver this project? If using external consultants, have competitive quotes been obtained? Any declared interest from either party? If competitive quotes have not been obtained and/or there is any declared interest, please explain:</p><p>The public sector providers need to be satisfied that the project costs being supported are value for money.</p><p>4.3 Assistance required via this call</p><p>How much financial support is needed from this call to enable the project Amount £ to proceed?</p><p>The final amount granted, if any, is at the discretion of Scottish Enterprise. Please state the minimum contribution (in £s) required to allow the project to proceed i.e. the project funding gap.</p><p>4.4 Describe why you need public sector support for the project through this call (max. 250 words)</p><p>Page 17 of 29 Examples of why you may need public sector support for the project could include: o To reduce commercial risk; o To increase the scope or scale of the project; o To enable the project to proceed more quickly than would otherwise be possible.</p><p>Please indicate what might happen if the project does not gain support within this call. </p><p>4.5 Please detail the full project funding</p><p>Source of funds Amount Type Status 1 3 4 5 6 Total £ </p><p>The full project finance package needs to be explicit and all contributions to the project must be disclosed. In completing the table the 'Type' column should be 'existing cash resources', 'new-debt finance', ‘New Equity’ or 'Grant' and the 'Status' column should be 'Applied for', 'In discussion', 'Contingent (on completion of the full finance package or receipt of the WATERS3 grant)' or 'Agreed'.</p><p>Please include a full cash-flow forecast with your application form (This should be a detailed company-wide [i.e. project plus existing activities of applicant as appropriate] monthly cash-flow forecast, covering the period from the most recently completed financial year –end through to the financial year-end following completion of the project)</p><p>Please note that before any grant award is confirmed, applicants will need to provide a guarantee in writing that all necessary match-funding is confirmed and in place.</p><p>Page 18 of 29 4.6 If the full funding for the project has not been secured at time of application, please describe in detail how you plan to close the gap in funding and by when. (max. 250 words)</p><p>4.7 At what stage in your internal decision making process is this project proposal? Please describe the further stages of internal approval required before the project could be implemented. If the project has failed an internal rate of return assessment please indicate the benchmark and failure margin.</p><p>Page 19 of 29 Section 5: Project Plan</p><p>5.1 Project Schedule</p><p>Please provide a detailed project schedule for the proposed project. (Detail level should be between 50 and 200 scheduled activities/tasks with resource estimates) The Gantt chart in PDF format should be attached as an appendix. The schedule should consist of a set of integrated tasks based on critical path methodology, developed with detailed input from the project management team. It should include all major milestones, any ‘stop-go’ points in relation to people and money availability and major elements of one or more of the following: engineering design; materials & components; fabrication & construction; installation & deployment; commissioning and limited running (if applicable) This schedule should show the constraints and interdependencies in the project. The ‘cause and effect’ of changes in the schedule needs to be apparent from the structure of the schedule. If applicable, please give details in relation to grid connection and TCE licence acquisition. </p><p>Additional information if required (max. 250 words)</p><p>Page 20 of 29 5.2 Please detail financial Milestones</p><p>Key Activities Month/Year £ Profile</p><p>Start Date</p><p>End Date</p><p>Please estimate when major components of project spend will occur (that could trigger grant claims to Scottish Enterprise).</p><p>5.3 Provide details of where the technology will be deployed. What advanced planning or actions have been completed? What relevant procedure or practices are in place? (max. 250 words)</p><p>Page 21 of 29 5.4 Risk identification and management (max. 250 words) Describe all significant risks associated with your project, this should include commercial, technical, and financial risks and describe the mitigation measures in place. Should you be successful in being made an award we will seek regular assurances that all risks are being managed appropriately, through the regular submission of a risk register (template to be provided at contracting). All activities have inherent risks. In assessing which proposals should be supported we are looking for evidence that the most significant risks have been recognised by the applicants, and mitigation measures put in place. Please ensure you cover technical risks and commercial risks (e.g. significant cost overruns/project delays), but do not necessarily limit your analysis to these topics.</p><p>5.5 What consideration has been given to Health, Safety & Environmental Planning? (max. 250 words) What planning has been put in place to manage the HSE impacts of the project tasks? What planning has been put in place to manage the specific environmental impacts of deploying equipment at sea (e.g. environmental monitoring, noise emissions, emissions to water, etc.)?</p><p>Page 22 of 29 Section 6: Project Team</p><p>6.1 Project team structure (max. 250 words) Please provide an organisational chart of the project team structure. This should be accompanied by a high level resource plan showing resource contributions from the different project members and outline timings for those contributions. This will show who is responsible for leading the project and fulfilling the company’s vision for the development of the technology.. Are there any functions or roles missing? How will these gaps be addressed? </p><p>6.2 Relevant experience and competence (max. 250 words) Please provide evidence that the applicant possesses the technical ability and resources to carry out a project of this nature. This should include descriptions of previous work carried out and please attach brief CVs for project team members.</p><p>Page 23 of 29 Section 7: Declaration and Understanding </p><p>Yes No</p><p>Have you, or any other partner or director of your business, ever been disqualified from being a company director under the Company Directors Disqualification Act (1986) or been the proprietor, partner or director of a business subject to an investigation (completed, current or pending) undertaking under the Companies, Financial Services or Banking Acts? If YES, please give details on a separate sheet of paper. This does not necessarily affect your chances of obtaining a WATERS grant.</p><p>Yes No</p><p>Have you, or any other partner or director of your business, ever been bankrupt or subject to an arrangement with creditors? If YES, please give details on a separate sheet of paper. This does not necessarily affect your chances of obtaining a WATERS grant.</p><p>Yes No</p><p>Have you, or any other partner or director of your business, ever been a proprietor, partner or director of a business subject to any formal insolvency procedure such as Receivership, Liquidation, Administration or was subject to an arrangement with its creditors? If YES, please give details on a separate sheet of paper. This does not necessarily affect your chances of obtaining a WATERS grant.</p><p>Yes No</p><p>Have you, or any other partner or director of your business, ever been a proprietor, partner or director of a business requested repay a grant under any Government scheme? This includes any company requested to pay grant while subject to any insolvency procedure, where the director/company secretary knew or ought reasonably to have expected that any request to pay grant could be made? If YES, please give details on a separate sheet of paper. This does not necessarily affect your chances of obtaining a WATERS grant.</p><p>Declaration – Please read this carefully before signing</p><p>I/we understand that if I give information that is incorrect or incomplete, grant may be withheld or reclaimed and action taken against me. I/we declare that the information I/we have given on this form is correct and complete. I/we also declare that, except as otherwise stated on this form, I/we have not started the project which forms the basis of this application and no expenditure has been committed or defrayed on it.</p><p>I/we understand that Scottish Enterprise, The Scottish Government, Highlands and Islands Enterprise, the Carbon Trust and Technology Strategy Board and other associated bodies such as local delivery organisations, consultants and agents collectively referred to as “the Agencies”, will use the information that I/we provide on this application form to assess my/our suitability for support. I/we understand if my/our application is successful, the Agencies will use the information provided in this application form for administration and management purposes, including carrying out appropriate checks, audits and marketing. Your details may also be passed to auditors, the European Commission or its agents for administrative purposes.</p><p>I/we understand that any offer may be publicised by means of a press release giving brief details of the project and the grant amount. Page 24 of 29 I/we understand that should support be awarded under this call, I/we must actively engage with an individual nominated by SE/HIE who will monitor the projects progress, and who will provide more general advice towards the wider growth of the business. Said nominated individual may be an external provider to allow for technical monitoring of project milestones.</p><p>I hereby apply for grant support in the amount shown in section 2, item 7 in respect of the project described within section 2, item 1. Applications must be signed by an Executive Director or Company Secretary (in the case of a company) or by the proprietor or a partner.</p><p>Signature Date</p><p>Name (print)</p><p>Position</p><p>Company</p><p>Data Protection, with respect to this application, and a signature on behalf of the applicant company. Support provided to eligible companies may include a contribution from the European Structural Funds. If successful in securing a grant, companies will be required to provide detailed financial evidence to support their claims as a condition of the grant.</p><p>Page 25 of 29 Appendix A: Evaluation Criteria</p><p>The evaluation of the project submissions will focus on four areas. The following is an overview of the type of issues that will be evaluated under each area. a) Potential Outcomes from proposal – what kind of economic impact will it deliver?</p><p>1. Local and global commercialisation potential 2. Scottish supply chain leverage 3. Jobs created or safeguarded in Scotland 4. Leverage on Scottish marine industry development b) Technology advancement and development path</p><p>1. Is there a technological competitive advantage through innovation? 2. Is this backed up by research and a track record of development; 3. Does the cost-of-energy of the device represent a step-change advantage? 4. Does the proposal draw on industry best practice? c) Project Planning – how feasible is the overall proposal?</p><p>1. Does the project implementation plan, in relation to technical aspects, look realistic? 1. Will the projected technical performance be delivered? 2. Are the proposed location and deployment proposals realistic? 3. For grid connected projects, do timelines associated with grid connection and acquiring appropriate consents look realistic? 2. Does the budget look realistic - reliable and accurate project costs? 3. Does the commercialisation plan look realistic? 4. To what extent is the necessary internal approval for the project in place? d) Company, Team & Project Management – resources to deliver the project</p><p>1. Financial viability of the company 2. Are matched funds in place and does the company have the experience and capability to raise more funding? 3. A robust project schedule including deliverables and milestones in place? 4. Key risk assessment and management processes in place? 5. Capability and capacity of project team to deliver project and beyond 6. Appropriate business systems and processes in place to manage delivery of project and claims process. 7. Previous successful completion of other SE or publicly funded projects, e.g, R&D Grants, SMART awards etc </p><p>Page 26 of 29 Appendix B: Reporting requirements</p><p>The project team will have to complete and submit claims reports at each agreed project milestone as well as engage actively with a member of SE or HIE on the growth of their business more generally. These reports will provide the evidence that the project milestones has been reached and that the agreed grant funding should be released to the project. Regular meetings will also be held with the Project Team and SE/HIE to discuss progress, monitoring reports should be submitted in advance of these meetings, along with an annual monitoring report which seeks to capture project progress – a template will be provided to companies to capture this information. Technical monitoring may periodically be undertaken by an external provider contracted by SE or HIE to assess progress against project milestones.</p><p>Final report</p><p>The final report shall detail the forecast capital or developmental costs and actual capital or developmental costs for the entire project. This report will include details of the progress made towards the criteria identified within this call as well as a likely future timeline for achieving exploitation of project results. The report will also include details on the electrical generation performance achieved by the facility where this was a project aim. In addition, a final monitoring template will be submitted to SE at this time, detailing progress towards commercialisation and expected economic benefits.</p><p>Post-support reports</p><p>SE/HIE will require annual reports for a period up to 5 years after the completion of the project. These reports will cover the progress of the project and technology towards commercialisation, a template will be provided.</p><p>Page 27 of 29 Appendix C: Eligible Costs</p><p>Please read the full list of eligible and non-eligible items. A project costs spreadsheet is available to download. </p><p> All project costs should be noted rather than just the eligible project costs  Describe what is included under each heading in your estimates of the project costs  All expenditure lines should be fully costed. In particular, personnel should be listed by job type, their full salary noted (with NI and pension separated out) and the % time that each will be allocated to this project  A detailed breakdown of all the project costs should show expenditure on a quarterly basis  All costs should be exclusive of VAT unless your business is not registered for VAT  All costs included in the estimate must actually be incurred and paid for (defrayed) by the applicant  The following list is a guide to which costs are eligible, but list any others which you feel should be considered.</p><p>Eligible R&D Project Costs</p><p>1. Pay of Personnel Researchers, technicians and other supporting staff employed solely on the research activity (job costs are capped at £45,000 per person per annum; pension and national insurance are eligible in addition to salary and should be included under overheads. Any other labour costs incurred by a Linked company e.g. parent company or related subsidiary, and charged to the project, are capped at £45,000 as above. Where a salary is capped at £45,000, only the pro rata share of pension and national insurance contributions should be counted as eligible). Directors’ fees charged as consultants or sub-contractors to their own business are eligible, capped at £45,000 per annum (or such pro rata part thereof) – applicants must demonstrate that these are charged at a normal commercial rate and that the company’s own paperwork reflects the arrangements for the sub-contract activity.</p><p>2. Consultancy Consultancy and equivalent services used exclusively for the research activity, including the research, technical knowledge, etc. bought from outside sources.</p><p>3. Overheads Overheads incurred directly as a result of the research activity, these are restricted to: (i) Rent, (ii) rates, (iii) water, (iv) heat, (v) light, (vi) cleaning & repair, (vii) IT and network costs, (viii) insurance, (ix) security, (x) books and user manuals, (xi) pro rata share of central processing costs. Overhead costs require a monetary figure beside each category rather than a burden rate. The burden rate may be used to reverse calculate the division of overhead costs between categories, but figures should be based on known costs where possible</p><p>4. Materials Other operating expenses, e.g. Costs of materials, supplies and similar products incurred directly as a result of the research activity. Materials purchased from third parties and consumed in the development phase. If waste or scrap material has a significant residual or resale value your estimated costs should reflect this.</p><p>5. Training Training costs associated with the implementation of new technology or new skill set necessary to ensure success of the proposed development.</p><p>6. Intellectual Property (For SMEs only) Costs associated with securing/acquiring technology rights; Fees for conducting technology or patent searches; Activities involved in transferring essential complementary technology sub-components; Licensing fees for the use of complementary or sub-component technology that will form part of the developed product; Protecting intellectual property; where applicable, this may include patent(s) associated with the proposed development.</p><p>Page 28 of 29 7. Trials and Testing Costs associated with conducting formal qualification testing to ensure that the product/ process complies with the specification and market requirements. Certification fees are not eligible as they are considered to be post the ‘pre-competitive development ‘stage.</p><p>8. Accountant’s Certificate for Final Claim (SMEs only) The cost associated with certifying claims for payment associated with the project. An Independent Accountants Certificate is required to be submitted with the final claim for payment and should verify the costs and expenses of all sums claimed as Eligible Expenditure for this and all previous claims.</p><p>Ineligible R&D Project Costs</p><p>Ineligible costs incurred directly as a result of undertaking this project should be included in cost estimates in order that Scottish Enterprise can gain an overview of full project activity. These include:</p><p> Costs incurred prior to the agreed project start date  Notional costs, and contributions in kind (all costs included must actually be incurred and paid for by the applicant)  VAT  Interest and service charges arising from hire purchase, leasing or credit arrangements  Advertising and entertaining  Profit earned by a subsidiary or related enterprise or person(s) in providing materials, sub-contracting, consultancy or trials/testing  Directors’ dividends  Certification fees  Inflation and contingency allowances expressed as an arbitrary addition to project costs  The cost of printing operating, service and maintenance manuals  For large companies, the cost of protecting intellectual property arising from the project (this is an eligible cost for SMEs and is usually limited to country of first launch)  the cost of licensing in background intellectual property when the intellectual property is being licensed from a subsidiary or related enterprise or person(s)  training costs related to sales or distribution of the developed product, process or service  capital equipment and tooling for manufacturing production (eligible costs are limited to depreciation across the duration of the project)  the purchase of land and buildings  the cost of preparing an application  work undertaken after the contractual end of the project  relocation and recruitment costs  Salary overheads other than NI and Pension  Other overheads beyond those outlined in the eligible cost section above.</p><p>Eligible Capital Costs</p><p>Eligible capital costs are in relation to the design, construction, site consenting, deployment, installation, subsystem testing, commissioning and limited deployment/running of the project technology. NB: Labour costs are not eligible under this category.</p><p>Page 29 of 29</p>