NEW ZEALAND GAZETTE, No. 132 — 3 DECEMBER 2015

progress in the businesses’ R&D programme over time.

Alternatively, a business that has not previously received an R&D Growth Grant may be eligible under the
transitional eligibility criteria (stated below).

For R&D projects that were partially funded by government grants, the funding for the project that came from
non-government sources is considered eligible R&D expenditure for the purpose of determining business
eligibility.

While eligibility requires that applicants submit an R&D plan, the merits of the R&D programme described in the
plan will not influence eligibility.

Entities that conduct or commission R&D activities mainly for other persons or businesses are likely to be
ineligible due to insufficient eligible R&D expenditures.

Parameters Specific to This Initiative

All eligible applicants will receive an R&D Growth Grant for three years. Grant holders will receive up to 20 per
cent of all eligible R&D expenditures incurred over the grant period up to a maximum of $25 million of eligible
expenditures per business per year (maximum grant funding of $5 million per business per year).

Businesses will be required to submit annual updates to their R&D plan and estimates. These plans must
continue to be sufficiently detailed and clear.

Any business receiving an R&D Growth Grant that is found to be wilfully misreporting R&D expenditure at any
point will be immediately removed from the initiative and will be ineligible to reapply for three years.

Parameters Specific to This Initiative – Extensions

Two years into the grant period, grant holders will have the option of applying for a two-year extension on the
grant. Grant holders will receive an extension if:

• the business’ reported expenditure over the previous two years is found to meet the definition of eligible
  R&D expenditure (stated below);
• the business continues to meet the eligibility criteria; and
• the business has maintained or increased eligible R&D expenditure over the two years of the grant period as
  compared to the two years prior to the grant period.

If the business has reduced eligible R&D expenditure but meets the other requirements, the Callaghan Innovation
Board may still choose to grant the business an extension at its discretion. The Board should only do so in
exceptional circumstances.

Businesses may continue to apply for, and receive, extensions every two years provided they continue to meet the
requirements.

Businesses that fail to receive an extension will receive a final year of grant funding and subsequently exit the
initiative. Businesses that exit the initiative are not eligible to apply for another R&D Growth Grant for two years.

Eligibility Criteria (Transitional)

Transitional eligibility criteria will only apply for a business that has not previously received an R&D Growth
Grant. No funding is payable by Callaghan Innovation unless the business actually reaches both the intended
spend levels of at least $300,000.00 per year on eligible R&D expenditure and at least 1.5 per cent of revenues
per year on eligible R&D expenditure within the first year of the grant.

Notwithstanding the above Eligibility Criteria for R&D Growth Grants, and in addition to the Business Eligibility
Criteria stated earlier, a business may be eligible to receive funding if the business:

• intends to spend at least $300,000.00 per year on eligible R&D expenditure (stated below);
• has the necessary finance to spend at least $300,000.00 per year on eligible R&D expenditure;
• intends to spend at least 1.5 per cent of revenues per year on eligible R&D expenditure;
• meets financial and management due diligence requirements sufficient to justify three years of funding; and
• provides Callaghan Innovation with an R&D plan including an estimate of R&D expenditures over the next
  three years.

Businesses must compile the R&D plan to a level of detail and clarity sufficient to assess progress in the
businesses’ R&D programme over time; and commit to and provide three-monthly progress reports to Callaghan
Innovation against the R&D plan for the first two years. If the business does not achieve the intended spend
levels within the first year of the grant, it will receive no funding and exit the initiative. The business will be

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