Relevant entities,

The Measures is formulated in accordance with the spirits of the relevant documents of the State and Beijing Municipality, and in combination with the actual conditions of Fengtai District, to regulate the management of the innovation fund for technology-based SMEs in Fengtai District and improve the efficiency of the use of funds. You are required to implement the Measures. The original Administrative Measures for the Innovation Fund for Technology-based SMEs in Fengtai District (Feng Ke Zi [2009] No.4) shall be terminated.

Fengtai District Commission of Science and Technology of Beijing Municipality

October 13, 2016

Administrative Measures for the Innovation Fund for Technology-based SMEs in Fengtai District

(Revised in 2016)

Chapter 1 General Provisions

1. The “Innovation Fund for Technology-based SMEs in Fengtai District” (hereinafter referred to as the “Innovation Fund”) is established to further carry out and implement the spirits of the Several Opinions of the Fengtai District Committee of the CPC and the Fengtai District People’s Government on Strengthening the Construction of Technological Innovation Capability in Fengtai District (Jing Feng Fa [2012] No.29) and the Opinions on Consolidating and Establishing the Special Fund for Economic Development of Fengtai District (Feng Zheng Fa [2012] No.37), and encourage and support the technological innovation activities of technology-based SMEs in Fengtai District. The Measures is hereby formulated to regulate the management of the Innovation Fund, and improve the efficiency of the use of funds.

2. The Innovation Fund is a special fund established upon approval by the Fengtai District People’s Government to support the technological innovation of technology-based SMEs and promote the transformation of scientific and technological achievements. The Innovation Fund is established to enhance the independent innovation capabilities of technology-based SMEs, instruct enterprises, investment institutions, and financial institutions to invest in the independent innovation of technology-based SMEs, and gradually establish the mechanism and models for supporting the independent innovation of technology-based SMEs in Fengtai District.

3. The Fengtai District Commission of Science and Technology is the department organizing the implementation of the Innovation Fund, and the Fengtai District Bureau of Finance is the department supervising and administrating the Innovation Fund.

4. The use and management of the Innovation Fund shall comply with the relevant laws, administrative regulations, and rules and regulations, and follow the principles of honest application, fair acceptance, scientific management, support by merit, openness and transparency, and special funds used for special purposes.

Chapter 2 Support Conditions, Range, and Methods

5. A project applying for support from the Innovation Fund shall meet the following conditions:

(I) The project shall meet the industrial and technological policies of the State and Fengtai District;

(II) The project shall have high technological content and strong technological innovation;

(III) The project product shall have large market capacity and strong market development prospects; and

(IV) The project shall have no intellectual property disputes.

6. An enterprise undertaking a project shall meet the following conditions:

(I) It has been established according to law for one year or longer, registered with the industry and commerce and tax authorities in Fengtai District, had independent enterprise legal person qualification, and had no record of major violations of laws and regulations in the past three years;

(II) It is mainly engaged in the research, development, production and service businesses of high-tech products;

(III) Its management has a high level of operation and management and strong market development abilities;

(IV) It has no more than 500 employees, no less than 30% of which are scientific and technological personnel with college degree or above, and no less than 10% of which are scientific and technological  personnel directly engaging in research and development;

(V) It has good business performances and a reasonable asset-liability ratio; and its annual expenditures for research and development of high-tech products are not less than 5% of sales; and

(VI) It has a sound financial management organization, a strict financial management system, and qualified financial personnel.

7. The Innovation Fund gives priority to projects meeting the following conditions:

(I) Projects of enterprises participating in the formulation of international, national, industrial, and local standards;

(II) Projects with independent intellectual property rights, good market prospects, and a large market capacity;

(III) Projects of transformation of scientific and technological achievements, projects that transform traditional industries by using high and new technologies, and high-tech projects that are highly competitive in the international market and can earn foreign exchange through exports;

(IV) New-type projects with innovation in industry-university-research in which enterprises play the leading role;

(V) Projects of incubated enterprises within incubators for scientific and technological enterprises and crowd-making spaces of Fengtai District;

(VI) High-tech service projects carried out in key fields of Fengtai District;

(VII) Projects introducing, digesting, absorbing, and innovating intellectual property rights to obtain independent ones; and

(VIII) Projects of industry-university-research and regional cooperation.

8. The Innovation Fund supports the technological innovation activities of technology-based SMEs gratuitously.

(I) The Fund is mainly used for providing necessary subsidies for the R&D and pilot scale experiment expansion stages of new projects, new technologies and new products in technological innovation of technology-based SMEs, and supporting projects in which the products are technologically innovative to certain extent, require pilot scale or scale-up experiment, and for the small batch production;

(II) The new investment in a project is generally below RMB10 million, the sources of funds are basically determined, the investment structure is reasonable, and the project implementation cycle does not exceed 2 years;

(III) The enterprise concerned shall have in place proprietary funds equivalent to 60% or more of the funding support from the Innovation Fund under application;

(IV) The amount of gratuitous support shall not exceed RMB1 million generally, or RMB2 million for a major project.

9. In one year, an enterprise can only apply for support for one project, and cannot file repeated applications.

Chapter 3 Project Declaration and Initiation

10. The Fengtai District Commission of Science and Technology shall formulate an annual project solicitation notice each year, determine declaration conditions, key support directions, etc., and issue the notice through its website (www.ftkw.gov.cn) to openly solicit projects in the entire Fengtai District.

11. The Fengtai District Commission of Science and Technology shall organize the acceptance of project applications, conduct preliminary examination of projects, organize expert evaluations, and carry out field investigation. Based on the project evaluation and investigation conclusions, the Fengtai District Commission of Science and Technology shall propose annual projects supported by the Innovation Fund and funding arrangements. After consultation with the Fengtai District Commission of Development and Reform and the Fengtai District Bureau of Finance and with their consent, the Fengtai District Commission of Science and Technology shall report the projects and arrangements to the District Chief in charge of the Fengtai District Commission of Science and Technology and the District Chief in charge of the Fengtai District Bureau of Finance for examination and approval, have the Fengtai District Bureau of Finance arrange the fund appropriation matters, and report the same to the Fengtai District Commission of Development and Reform for the record.

12. A project initiation announcement shall be issued for approved projects on the website of the Fengtai District Commission of Science and Technology (www.ftkw.gov.cn). The objection period shall be 1 week from the date of issue of the announcement.

Chapter 4 Project Initiation, Fund Appropriation and Range of Expenditures

13. The funds allocated from the Innovation Fund shall be managed by contract. The project undertaker shall sign contracts with the Fengtai District Commission of Science and Technology and the Fengtai District Bureau of Finance, determine clauses on the technological and economic indicators, stage assessment objectives,  completion deadlines, etc. of the project (the contract text is attached hereto).

14. The Fengtai District Bureau of Finance shall direct allocate project funds from the Innovation Fund to project undertakers in accordance with signed project contracts.

15. The Innovation Fund is mainly used to support the expenditures for technological innovation activities of technology-based SMEs. The specific range of expenditures shall include project fees and management fees.

16. The project fees shall include the expenditures for subjects such as experimental outsourcing fees, cooperation and exchange fees, equipment purchase fees, material fees, documents and printing fees, survey fees, rental fee, and fees of other items, and shall not be used for expenditures irrelevant to the approved projects.

17. The management fees shall refer to the expenses incurred by the Fengtai District Commission of Science and Technology for organizing the initiation, demonstration, evaluation, inspection, acceptance, and publicity of projects, including the expenses for entrusting third-party institutions. The management fees shall not exceed 5% of the total amount of the Innovation Fund.

Chapter 5 Supervision and Administration and Project Acceptance

18. The Fengtai District Commission of Science and Technology shall be responsible for the daily supervision, administration, and acceptance of projects; the Fengtai District Bureau of Finance shall be responsible for the supervision and inspection of funds, and participate in the acceptance of projects.

19. The supervision and administration of a project shall mainly include:

(I) Use of funds for the project;

(II) Progress of the implementation of the contract plan;

(III) Technological, economic, and quality indicators achieved by the project; and

(IV) Main problems of the project and solutions thereto.

20. The main methods of the project management shall include:

(I) The project undertaker shall regularly fill in and submit the project implementation questionnaire every six months;

(II) The Fengtai District Commission of Science and Technology shall carry out field inspection of the project according to needs; and

(III) The Fengtai District Bureau of Finance shall regularly make spot check of implementation of the project, and supervise and inspect the operation and use of funds according to needs.

21. The project undertaker shall strictly follow the signed Project Contract. In general, no adjustment shall be made. When adjustment is indeed necessary, it shall file a written application with the Fengtai District Commission of Science and Technology for examination and approval.

22. In principle, the acceptance of projects supported by the Innovation Fund shall be completed within six months upon expiration of the Project Contract. For projects that require early or postponed acceptance, the undertaker shall, three months prior to the expiration of the project, file a written application with the Fengtai District Commission of Science and Technology for examination and determination.

23. The acceptance of a project shall mainly include:

(I) Progress of the implementation of the project plan;

(II) Completion of the economic and technological indicators of the project;

(III) Achievements made in the project R&D;

(IV) Implementation and use of funds; and

(V) Changes in overall development of the enterprise after implementation of the project.

24. The Fengtai District Commission of Science and Technology shall organize the acceptance and evaluation of projects. During project acceptance, the enterprise concerned shall provide acceptance materials as required, including: project work summary (project implementation report), Project Summary Report, Project Effect Form, and project audit report. After completion of the project acceptance, an annual evaluation report for the project shall be formed and reported to the District Government.

25. Enterprises supported by the Innovation Fund shall not apply for new projects before they have passed the acceptance of initiated projects.

26. Project undertakers shall strictly follow the relevant financial and economic regulations as well as financial rules and regulations, earnestly fulfill contracts, arrange and use funds allocated from the Innovation Fund in a scientific, reasonable, and effective manner, ensure special purposes for special funds, and strictly prohibit the interception and embezzlement.

27. Project undertakers shall separately account for project funds, and accept the supervision, administration, and inspection by the relevant departments.

28. The assets which are formed by funds of scientific and technological projects of financial support shall be state-owned assets, and the rights to use and operate such assets shall be generally vested in project undertakers. The disposal of assets shall be carried out in accordance with the relevant provisions of the State to prevent the loss of state-owned assets.

29. If a project undertaker fails to use project funds in accordance with the contracts and the relevant provisions, or the project fails to achieve its intended purpose due to subjective reasons, the remaining funds shall be withheld. No support of funds of scientific and technological projects will be given within two years.

Chapter 6 Supplementary Provisions

30. The Measures shall be interpreted by the Fengtai District Commission of Science and Technology and the Fengtai District Bureau of Finance.

31. The Measures shall come into force 30 days after the date of promulgation. The original Feng Ke Zi [2009] No.4 shall be abolished simultaneously.