Innovation &TechnologyConference - April 2014

Innovation &

Technology

Conference

April 2014

www.francisclark.co.uk

Agenda

• Welcome & Introduction

• Facility Tour

• Coffee

• Attracting & Retaining Key People

• The Witty Report

• An In Depth Patent Application Case Study

• John Piper


The Importance of Innovation

• An ‘export led recovery’ (George Osborne - 2010)

• The Dyson Report (2010)

• BIS Internationalisation of Innovative SMEs (2010)

• BIS Strategy for Growth (2011)


Innovation & Tech Business Lifecycle


R&D / Patent Box Update

• Increasing number of claims in ‘food and drink

technology’

• Continued confusion around ‘notified state aid’

• Capital v revenue on software guidance to be

updated

• Increasing number of patents being applied for

• Limited interest in ‘Patent Box’ by SMEs

• EU review of Patent Box in progress


Innovation & Technology Conference

Facilities Tour

1. Marine Building

2. Electron Microscopy

Attracting and Retaining

Key Members of your Team

Andrew Squires

April 2014


‘The Package’

• Pension payments

• Employee medical screening

• A mobile phone

• Childcare vouchers

• Parking at/near work place

• Cycle for work

• Training


‘The Package’ – continued…

• Company cars

• Loans to staff

• Suggestion schemes


Background

• Cabinet Office commitment to create and stimulate a “John Lewis

economy”

• Clegg: “one of the Government’s top two priorities for growth”

• Cass Business school report shows where employees own a stake:

• higher rates of staff satisfaction

• lower rates of absence

• higher rates of staff loyalty


Successful Start-ups

• Often grow quickly

• Plans to sell

• Key staff need to stay on side

• Important in the early days

• Staff need to be kept, and motivated

• Employees share ownership seen as key


Corporation Tax Relief

• From 2003

• Transformed ‘tax planning landscape’

• Relief is

• amount of share option gains

• amounts upon which employees suffer income tax

• Relief even where no income tax charge

• Comprehensive relief but traps exist


Reasons for Adopting an Employee

Share Scheme

• Incentive reasons

• “High-tech” or “Low-tech” activities

• Need to attract and retain key individuals

• Something more than salary

• “Golden handcuffs”

• Leading to a shared vision of the future



Share Scheme

• Participatory reasons

• Short-term vs long-term

• take home pay

• long-term objectives of the company

• “a stake in the business”

• more likely to acquiesce to decisions of management

• own long-term prospects closely tied to shareholders



Share Scheme

• Opportunistic reasons

• Realisation of capital

• sale to an employee trust

• passing of shares to employees

• “good employer”

• use of company funds – with a tax deduction

• Management buy-out

• establish an employee trust

• shares to be held for employees generally

• helps to seek support of the workforce


Evidence of Success

• Britain’s most successful companies cite employee

ownership as a key factor

• Lessons to be learned:

• breaking down the “them-us” divide

• success dependent on nature/extent of employee

communication

• current perception more important than tangible results

• most effective when part of ‘culture’ generally

• Pay is as much about fairness and recognition as it

is about incentive…


Some observations

• Most people chose fixed pay over a bonus of a higher value

• Employees need to value the chance to participate

• Make it easy!


“Remuneration Package”

• Reward and motivation key, but what about security,

a sense of participation and incentive to stay…

• Typical package:

• cash element, fixed and variable

• short-term focus cash incentive

• medium-term focus cash or share incentive

• security benefits

• perks

• other benefits

• Financial commitments and lifestyle aspirations


Enterprise Management Incentive –

The basics

• EMI share options

• Tax favoured scheme

• No IT or NIC charge arises at grant

• No IT or NIC at exercise if option price is not less than MV

at grant

• CGT at 10% on disposal



an example

Lee starts working for Westwood Limited in 2013. The

company has limited funds but sees Lee as key to its future

development. It grants Lee options over 5,000 £1 ordinary

shares at an option price of £1/share (the agreed MV at

grant).

He exercises the options five years later, just before the

company is sold, when the share value is £10/share. He pays

£5,000 for the shares and sells them shortly afterwards for

£50,000 – the gain is taxed to CGT and he will qualify for

Entrepreneurs’ Relief – a CGT tax rate of 10%.

The company can claim a deduction for CT purposes equal to

the market value of the shares less the amount paid – here it

would be £45,000.



The company

• It must carry on a commercial ‘qualifying trade’ – some

business activities are excluded

• The company must have:

• gross assets of < £30million

• < 250 full-time equivalent employees

• The company must not be controlled by any other company



The employees

• Employees can qualify for EMI options if:

• they are employees of the company (including directors);

• they have no material interest in the company; and

• They work for the company for at least

• 25 hours per week; or

• 75% of their working time


Enterprise Management Incentive -

The options

• The options to purchase must be:

• to acquire unredeemable, fully paid-up, ordinary shares

• exercisable within 10 years of grant non-assignable

and they may be:

• issued with performance conditions limiting the right of the

employee to exercise them (e.g. the company achieving a

specified share price/turnover/profit)


EMI and Entrepreneurs’ Relief

Recent changes

• What was the problem?

• Welcome changes:

- No 5% requirement

- ER accrues one year post option grant

- Still need to be employed

- Trading company requirement

• For ‘ees getting <5%?

• Issue immediately exercisable EMI options


Share schemes

• There are a number of tax-advantaged schemes available

• EMI is least restrictive

• All share/share option schemes are intended to be used as a

way to ‘incentivise’ employees over a medium to long-term

period

• Some schemes can impose a relatively heavy administration

burden (e.g. SIPs) whilst other (e.g. EMI) come with much

lower requirements


Share schemes- CSOPs

• Popular if do not meet EMI conditions eg company’s size,

qualifying trade or control/ownership

• Company Share Option Plan (CSOP) is an alternative

• Generally whilst a greater range of companies can use a

CSOP, an EMI scheme is more flexible concerning

participants, targets etc

• Tax benefits of a CSOP are very similar to those of an EMI

scheme


Share schemes -

‘Employee Shareholder’

• Employees can ‘surrender’ some employment rights in exchange

for shares in their employer

• Individuals can receive between £2,000 and £50,000 of shares

which will be exempt from CGT on sale

• No exemption from IT and NIC on issue – an immediate tax charge

may accrue.

• Only the first £2,000 worth of shares will be IT & NIC exempt.

• For CT purposes a CT deduction will be available, based on the

value of shares acquired by employees.


Other arrangements

• Deferred payment plans

• Growth shares

• SIP

• Schedule 33 Finance Bill 2014


Innovation & Technology Conference

Digesting The Witty Report

Katie Farley – Francis Clark


Digesting the Witty Report

• ‘Universities generating cutting edge research and

resulting insights may be likened to the tip of an

arrow, with the arrowhead behind it representing

the economic activity enabled by research-led

innovation. Maximising the size of these

arrowheads and their economic benefit to the UK,

specifically, is fundamental….’

Review Preliminary Findings, July 2013.



• UK universities have ‘an extraordinary wealth of

ideas, technology and human energy – much of

which is world leading and capable of seeding not

just new companies but whole industries.’

• But without better-focused funding, organisation

and collaboration, he says, there is a risk of delay

and of ‘British inventions building foreign

industries.’



• Sir Andrew Witty, CEO GlaxoSmithKline

• October 2013

• Review of Business-University Collaboration 2012 Sir Tim Wilson

• Lambert Review of Business-University collaboration 2003

• Annual investment in research in UK universities and research

centres excluding businesses’ internal spend is circa £10 billion

• Universities should be incentivised pro-actively to seek out

innovative and potentially innovative SMEs and to support them

with technology, expertise, talent and know-how



• Strong record in university-business collaboration.

The World Economic Forum (WEF) ranks UK 5th in

the world and 2nd in EU for university-business

collaboration in R&D

• Universities have bid for, and applied, over

£300million of ERDF funds since 2007, frequently

in multi-party engagements with businesses and

others.



South West Examples

• GAIN growth hub founded by Plymouth University, with Plymouth City Council and

Tamar Science Park. Brings together more than £120 million of business infrastructure,

world class research facilities and expertise in a network focused on growth and

investment.

• SETsquared is a collaboration between the universities of Bath, Bristol, Exeter,

Southampton and Surrey which partners in enterprise activities. It currently supports

approximately 250 technology start-ups and has given birth to around 1,000 high-tech

start ups since its inception ten years ago. In July 2013 the University Business

Incubator Index ranked it the best in Europe and fourth in the world.

• University of West of England plays a leading role in ERDF-funded regional innovation

networks in the South west supporting SMEs in Aerospace and Advanced Engineering,

Creative Industries, Biomedical Sciences, Environmental Technologies and

Microelectronics; more than 700 businesses have been supported over a 3 year period.

Expert Advisory Group

Professor Wendy Purcell, Vice-Chancellor and President of Plymouth University, Board

member of Heart of South West Local Enterprise Partnership



Recommendations

• Increased funding for ‘Third Mission’ activity

• Increased Reporting on Research and Knowledge Exchange

• Greater Use of Metrics to Identify Areas of Research Excellence

• Greater Emphasis on Engagement with SMEs

• New Stakeholder Relationships – LEPs and UKTI

Universities at the Heart of Economic Growth

Delivering Witty

Adrian Dawson

Our mission

• To be the enterprise university

– - build and sustain connections with local,

national and international partners to

enrich our academic experience.

– - raise aspiration amongst groups under-

represented in higher education

– - provide opportunities for our students,

staff and the communities we serve

through economic development, social

inclusion, community outreach and

strategic partnerships.

Our tools:

• Expertise & knowledge – 800 academics and

technical specialists

• World class facilities (Coast, ISO accredited labs)

• Resources – 30,000 Students, plus graduates

Economic Growth

Teaching Students

=

Skilled workforce

World-class Research

=

Innovation & Business

Development

Civic leadership & Community

=

Place

Universities’ contribution to economic growth is multi-faceted…

Creating innovation environments

• Innovation Centres

• Formation Zones

Driving Innovation through talent

Knowledge Transfer Partnerships

Funding Innovation

Plymouth University & Western Morning News

Growth Fund (PWGF) & now GAIN Growth Fund

The Growth Acceleration & Investment Network

• A community of support providers that brings into one place everything and everyone that a business needs to grow;

- supports people with ideas, businesses that want to grow, and investors

- joins up physical assets ensuring they are more than the sum of the parts;

- connects universities and colleges, innovation centres and science parks, centres of expertise and research with the region’s business base;

- Adds value to existing networks and projects

POWER BUSINESS

DYNAMIC WITH GRADUATES

YOUR

Our aims:

• Supporting local business to innovate and grow • Providing opportunities for graduate talent in

the South West • Encouraging more interaction and collaboration

with the Knowledge Base

Unlocking innovation

Meet RouteShoot

They developed an innovative app which enables users to create their own GPS referenced video with multiple potential business customer applications. However they realised they needed to invest more time, resource and expertise into their Android platform. That’s where Ben comes in! He’s a Computer Science graduate from Plymouth University. We worked with RouteShoot to shape the job description and manage the recruitment process and he started in post with them in February. In the short time that he has been with the company his energy, knowledge and work ethic have transformed the capability and response times of the business, helping get them onto the front foot in a competitive market

“We’re excited about our future. As a business experiencing such growth and interest in our product, Grads for Growth’s help has been invaluable and we look forward to their further support” Gary Wilson, MD

What’s in it for me?

• We’ll help you to define and recruit the role, advertise, shortlist and interview

• We offer a dedicated business development team as well as a significant project investment fund of either £1800 or £2400 depending on the length of the project

• You’ll also enjoy access to the latest academic thinking through our relationships with leading universities in the South West

GET IN TOUCH TODAY TO TALK TO US ABOUT HOW WE CAN DRIVE YOUR BUSINESS FORWARD.

T: 0845 600 3660 E: [email protected] Visit: www.gradsforgrowth.co.uk

Innovation & Technology

Conference 2014

Case study – a patent application

in depth

Dr Matthew Greenwood - Bryers

A patent is an intellectual property right

that protects inventions with a monopoly

that lasts up to 20 years.

“Pat-ent” or “Paytent”?

Pipex Limited was established in 1975 by

its current Chairman Mr Alan Smith MBE,

and today remains a successful privately

owned, family run, specialist UK based

manufacturing, engineering & construction

business.

www.pipexpx.com

http://www.pipexpx.com/

MARRS® OFFSHORE

Advanced FRP Phenolic Handrail

Systems

© Pipex Ltd

© Pipex Ltd

STAGE 1

Information Collection

1. Corner Connectors

2. Adjustable Top Rail Connector

3. Offshore FRP Rail System

4. Continuous Handgrip

UK Patent Application filed 8 February 2010

STAGE 2

First Anniversary – 8 February 2011

PCT International Patent Application filed 2 February 2011

The Patent Cooperation Treaty (PCT) assists applicants in

seeking patent protection internationally for their inventions.

By filing one international patent application under the PCT,

applicants can simultaneously seek protection for an invention

in 148 countries throughout the world.

STAGE 3

PCT National Phase

May 2012

UK National Phase Patent

Application filed 16 May 2012

Request for accelerated

prosecution

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=KccvXMsbMnn--M&tbnid=SKXzQmF3QCGbsM:&ved=0CAUQjRw&url=http://www.inspire21.com/stories/educationstories/AccelerationExplained&ei=ZxBAU5PaK4aj0QX4qoGoCw&bvm=bv.64125504,d.ZG4&psig=AFQjCNHIgAPTpTzW96N41BSbMjO9Mzoocg&ust=1396793816918507

CLAIM 1

1. An offshore handrail system

comprising a top rail and one or

more support posts, in which the

rail and post/s are formed from a

phenolic-based FRP material.

Stage 4 - June 2012

Patent Office Examiner issues her first

Examination Report, including a

discussion of the “prior art”

June 2012

Conversations with the Examiner

Arguments used:

1. The prior art shows FRP handrails, but does not show

phenolic-based FRP handrails or their use specifically for

offshore applications.

2, It is surprising that phenolic-based FRP can be used for

handrail structures.

3, Commercial success – the product was hugely successful

4. Long-felt want – the success was immediate, suggesting

everyone had been waiting for this product and had not been

able to acquire it previously.

Success!!!!!!!!

August 2012

Useful tips illustrated by this case:

1. Put as much information as possible in the

application

2. The PCT system is incredibly useful

3. Accelerated prosecution can be very useful

and it really works in UK

4. Patent Examiners are real people – don’t

be afraid to speak to them and be nice to

them!!!

5. Use “secondary indicia” to help

Any Questions?

Contact Details:

Dr Matthew Greenwood

Bryers

7 Gay Street

Bath

BA1 2PH

[email protected]

01225 428877

mailto:[email protected]

©

From F1 to J1 John Piper

Founder, Pipermoto

Presentation to Francis Clark 8th April 2014

©

— Background: where I’ve been to get here……..

— Pipermoto: a new start……..

Introduction

©

The working weekend

— fresh from Uni with a

degree in mechanical

engineering

— age 25yrs beer money

mechanic

©

It never rains…..it pours

©

— F3: my first proper job in motor

racing

— F1 mechanic to Giacomo Agostini

in a privately run Williams

©

From the toolbox to the drawing board

©

— 5 years as design engineer at

Williams'

— Prototype Metro 6R4 Group B rally

car

©

“Making plans for Nigel!”

©

— F1 gearbox design

— Race engineer during Mansell’s

debut season

©

Colourful work

— Benetton F1 Gearbox design for 4

seasons

— Suspension damper design and

supply

©

©

Finns ain’t what they used to be……

©

— Founding Technical Director

Prodrive Engineering

— Design of the first Subaru WRC 4

wheel drive system

©

Going the distance

©

— Recruited by Ross Brawn as Chief

Designer for the TWR Jaguar Gp C

sports cars

— Winning Le mans in 1990 and the

World Sportscar Championship

1991 with the ground breaking

XJR14

©

Bearing the cost……

©

— Race engineer for the Harrods

McLaren

— On the podium at Le Mans

©

Deeper Blue

— Concept car comissioned by Jac

Nasser

— Winner of the ‘Best Car in Show’

©

©

Racing from the front

©

— Panoz GT1 Le Mans car

— Technical Director of Reynard

Special Vehicles

©

“ I don’t have the foggiest”

— Set up Piper Design in London

— Foggy Petronas World Superbike

©

©

Consuming interest

— Cadillac concept car , Electric Smart

Car, M&S fuel saving aerodynamics,

Rolls Royce interior gadgets, Virgin

Atlantic lay flat seat, and more…….

©

‘Salt fever’ - 350mph at Bonneville in a JCB

©

— Bonneville Salt Flats

— Setting a new world record using

two JCB digger engines

— Chief Designer of the worlds fastest

diesel powered car

©

“Don’t stop me now..”

1. bullets

2. Compile styling design

direction

— Bloodhound SSC Engineering

Director for the first 21/2 years

— Setting up the engineering team and

design base in Bristol

© ©

— Non Executive Director on the

Marussia F1 board.

— Technical representative for the

LDC investment

Keeping an eye on the cost

©

Faster than a Veyron Cleaner than a Prius

©

— Lead Engineer setting up the

Powertrain Team

— 0-60 3.4 seconds

— CO2 28g/km

©

©

The Marketplace – the industry

©

— In contrast to the overall downturn in sales

since 2008 premium bikes are on the increase.

— There is an appetite for premium, specialist,

limited edition bikes as demonstrated by the

launch of the Lotus C-01.

©

The Marketplace – the bikes

— Greater appreciation for artisan hand built

products – something that hasn’t come off a

production line.

— A desire for something personal, unique to me.

— Major bike manufacturers are now

commissioning studies from artisan makers e.g.

Yamaha and Wrenchmonkees

©

— Founded in 2012

— We specialise in the design and manufacture of hand-built motorcycles and

scooters.

— Our approach to bike-building combines the craft of an artisan with the

precision engineering and perfection of top level motor-sport.

— We want our products to be desired by those who share our passion.

Everything we do is designed and detailed with the enthusiast in mind.

— We treat every product opportunity as bespoke. Starting from scratch,

designing and sourcing the best components to deliver each and every bike.

About us

©

Our position

©

NO FRILLS/PURITY

PRAGMATIC

HUMOUR &

INTEGRITY

DESIGNED TO PERFORM

BEAUTIFULLY FINISHED

HAND BUILT FORM FOLLOWS FUNCTION

— Our mission is to create the most

beautiful and most capable bikes

on the road.

— Always faithful to what we believe

to be the motivating forces behind

a life on two wheels

— We are absolute purists in our

pursuit of performance handling.

— We are proud to be part of a great

British engineering tradition

©

The most beautiful and most capable bikes on the road. What we do.

©

©

What we do

©

We offer full bike design from concept thru prototype and validation to low

volume manufacture. Including:

— Styling

— Clay and digital modeling

— Frame and mechanical parts engineering CAD design

— Suspension kinematics

— Aerodynamics

— Systems (fuel, cooling, exhaust, electrical/electronic) engineering.

©

Concepts

©

1. Define vehicle

specification

2. Compile styling

design direction

3. Originate design

ideas

4. Establish

mechanical

package

requirements

5. Draw sketch

proposals

6. Establish

ergonomic

positions

7. Create styling

renderings

©

Design Development

©

1. Establish basic vehicle

layout geometry

2. Analyse suspension

kinematics solutions

3. CAD package

mechanical

components

4. Create design ‘hard

points’

5. Develop systems (fuel,

exhaust, cooling, air-

box) design

6. Draw clay model

armature

7. Develop styling and

mechanical design

8. Produce detail manu-

facturing drawings for

prototype parts

©

Prototype Manufacture

©

1. Build and refine

styling clay

model

2. Lasers scan clay

to create surface

CAD data

3. Prototype mould

bodywork

4. Manufacture

prototype parts

5. Prototype vehicle

build

©

1. Circuit Testing

2. Aero testing

3. Road riding

©

Pipermoto J1

Our first product

©

©

The Spirit of Scootering

— Inspired by the past without the desire to

revisit or recreate it.

— By design, reflect the aspirations and

expectations of the modern rider.

— You can have a beautiful machine without

sacrificing enjoyment or functionality

— The simplicity, convenience and spontaneity

of a bike that can take you anywhere at any

time.

©

Our first product

— A true ‘Super Scooter’

— Classic step-through layout

— 690cc 70Hp engine

— 17” wheels

— 52deg lean angle

— 50/50 weight distribution

— Sub 185kgs

— Composite bodywork

— Upside down forks

— Low weight Ali rear swingarm with pushrod

operated three way rear spring damper

— Brembo brakes

Pipermoto J1

©

Pipermoto J1

©

Realisation 1. Rear

suspension

2. Bodywork fit

3. Exhaust, fuel

&gear systems

4. Frame/Front

suspension

©

Business start up – the challenges

©

- Funding the project myself.

- Tackling every aspect of the bringing the

business to reality.

- Progressing from prototype to production.

- Francis Clarke have supported me with

company set up and R & D Tax planning.

©

Taking orders today!

Thank you


Questions


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