EU Funding: The Good, the Bad & the Ugly Dr Andrew Robertson – Senior Vice President

1. EU Funding: The Good, the Bad & the Ugly Dr Andrew Robertson – Senior Vice President October 7 2013

2. EU Funding Overview • Advantages (Good) • Disadvantages (Bad) • Process (Ugly) • Examples

3. Advantages • Money for R&D • Labour & materials • Management & dissemination • % funding differs for large company, SME & University • But basically it pays for itself • Projects large & long-term (2, 3, or 4 years) • Excellent visibility • Security of funding (large fraction given up front) • EU project management very “light touch” • Good training ground for junior engineers • Project management • Alignment Strategy Roadmap with customer requirements • Take on more risky development programs

4. Disadvantages • Extremely competitive • No money for proposal writing • Good proposals take time • Particularly if you are project co-ordinator • May involve travel • From initial call for proposal to project start can be 1-2 years • 8-12 months probably best • 2 years plus if project idea recycled • Once you have project you are committed to do project • Your objectives may have changed • You may be another company! • Changing direction of project difficult • Sometimes difficult for universities to grasp • Proposal writing and reporting process very daunting • If you have several, they tend to have the same annual pattern • Meetings, reports all at same time

5. The process – part I • Setting up consortium needs time & effort • Proposal writing process takes some getting used to • EU Participant Portal • Writing the proposal has two parts • Technical proposal (~100 pages) • Management (Work-package breakdown, financial) • Needs multiple people involved (from each partner) • Legal representative (contract manager) • Technical lead • Management lead • EU gets nervous if same person has multiple roles! • Need to provide audited accounts • Need to demonstrate resource capability • If project co-ordinator – you have to herd the cats (partners)

6. The process – part II • Projects reviewed by independent EU technical experts • Given mark out of 15 (if less than 14 – success unlikely) • If you fail • bid can be recycled on a later call • If borderline • co-ordinator will be asked to go to Brussels • Dance-off between borderline projects • If you pass • You enter “negotiation” phase • Trip to Brussels to meet Project Officer (PO) • Grant Preparation Forms (GPFs) to be prepared • Consortium Agreement (CA) to be agreed (IP) • Negotiation phase • EU PO provides review document with ~30-40 changes • As simpleconsortium member – relatively painless • As project co-ordinator – you do all the work • EU sign-off • Typically Sept for October start

7. The process – part III • Establish payment schedule (e.g. 65% up front) • Organize meetings – best done up front • Kick-off, EU reviews (9 month, 21 month, 36 month) • Maintain regular contact/meetings over 1st 6 months • Conference call every week or every 2 weeks • You get to know the partners • You quickly identify the weaknesses/problems • Leave it too late and problems difficult to recover! • Establish time-sheet procedure for claiming • Organize material spend timeline (load at project front-end) • EU Review meetings • These are serious go/no-go decisions • Boxes ticked related to milestones/timelines • Claim the money! • Claim periods can be 6, 12, 18, 21 months • Spend the money then claim • 15% held back at the end of project • Only receive last payment once all partners have claimed

8. Tips • If you are newcomer • Do not take on co-ordinator role! • Tag on to decent consortium • Include companies specialising in project management • They know latest EU process/paperwork/portal • They will manage project best – it is their job • Get commitment from all stakeholders within your company • Financial – are there resources that can be committed? • Technical – can you really do the project? • Leadership – is this aligned with long-term strategy? • Ensure project is written the way you can benefit • Keep milestones vague enough for some flexibility • Keep timelines sensible (large gaps between milestones) • Ensure riskiest work is not at beginning of project • Schedule 2 full days for EU review meetings • Day 1 dry-run without EU • Get story straight prior to EU review!

9. G&H today - a vertically integrated photonics business • Revenues: $100m • Headcount: 600 • 8 manufacturing sites: 6 in the US • 2 in the UK • European CM partner Crystal Growth

10. Funded Programs • UK and Europe • 10 programs totaling ~ £600k/year. These span all 4 Main Markets • Seed Funding for New Technology • STG program management, Torquay and Ilminster engineering

11. Example : ISLA 2mm Wavelength Fibre Lasers • Program Description • Develop a common set of “building blocks” for 2um fibre lasers • High power CW lasers, ns pulses and ultrafast • Target designs for ROFIN-Sinar Laser Industrial material processing • G&H Activity • 3 year funding of £597k, Sep 2011- Sep 2014 • Complete alignment with internal R&D programmes • Future Prospects • Marking of plastics, free space communications, Directed Energy Weapons G&H’s 2um Faraday Isolator G&H 2 um Fibre-Q Module

12. Example : TESLA Optel-m Project • Program Description • Satellite to ground optical communications • Miniature fibre optic amplifier • High efficiency, high reliability, low weight • G&H Activity • 6 month funding of £80K, May 2013 – October 2013 • Designing optical fibre amplifier, and electrical drive circuit • Future Prospects • All future satellites likely to have optical comms • G&H have technology to provide end to end comms system (fibre optics, free space optics) • Commercial airframe manufacturers considering fibre optics for IFE and other avionic systems G&H’s Program Partners G&H EDFA Module design

13. Good Luck! www.ghphotonics.com