Information on Spin-Off Companies Founded by Russian Universities and Research

Institutes

SLIDE 1

Data on Companies

No. of HEIs that founded their companies

181

No. of companies founded by HEIs

943

No. of research institutes (RI) that founded their companies

25

No. of companies founded by RIs

30

SLIDE 2

Distribution of Companies Founded under FZ-217 among Federal Districts

Item Name of the Founding Institution Recorded in the

Database of the Center for Science Research and Statistics (CSRS DB)

No. Companies Recorded in CSRS DB

No. of RIs that Founded Their

Companies

No. of Compani

es Founded by RIs

No. of Companies Founded

under FZ-217

1 2 3 5 6 7

 1 Central Federal District  278 10 12 106

2 Siberian Federal District 238 9 11 82

3 Volga Federal District 163 3 4 49

4 Urals Federal District 82  0 0  19

5 Southern Federal District 79  0  0 46

6 Northwestern Federal District 77 3 3 35

7 North Caucasus Federal District 33  0  0 8

8 Far East Federal District 23 0 0 0

TOTAL: 973 25 30 346

Departmental Affiliation of Founders and Their Companies

No. of institutions affiliated to the federal Ministry of Health and Social Development (MHSD)

9 4.35%

No. of companies founded by MHSD institutions19 1.95%

No. of institutions affiliated to the federal Ministry of Transport (MOT)

6 2.90%

No. of companies founded by MOT institutions15 1.54%

No. of institutions affiliated to the federal Ministry of Agriculture (MOA)7 3.38%

No. of companies founded by MOA institutions13 1.34%

No. of institutions affiliated to the Russian Academy of Medical Sciences (RAMS)

4 1.93%

No. of companies founded by RAMS institutions4 0.41%

No. of institutions affiliated to the Russian Academy of Sciences (RAS)16 7.73%

No. of companies founded by RAS institutions21 2.16%

No. of institutions affiliated to the Federal Fisheries Agency (FFA) 1 0.48%

No. of companies founded by FFA institutions 23 2.36%

No. of institutions affiliated to the Moscow Oblast Ministry of Education (MOME)

2 0.97%

No. of companies founded by MOME institutions 9 0.92%

No. of institutions affiliated to the federal Ministry of Education and Science (MOES)

160 77.29%

No. of companies founded by MOES institutions 863 88.69%

No. of institutions affiliated to the federal Ministry of Culture (MOC) 1 0.48%

No. of companies founded by MOC institutions 1 0.10%

No. of institutions affiliated to the Government of Russia (GOR) 1 0.48%

No. of companies founded by GOR institutions 1 0.10%

No. of institutions affiliated to the federal Ministry of Defense (MOD) 1 0.48%

No. of companies founded by MOD institutions 5 0.51%

No. of institutions that won bidding organized pursuant to Government Resolution # 219 (out of 56)

46

No. of research universities (out of 29) 26

SLIDE 3

Companies’ Authorized Capital

No. of companies that disclosed their authorized capital 856 87.98%No. of companies that did not disclose their authorized capital 117 12.2%

Total authorized capital disclosed by all companies, Rub., including:376,583,554.61

- ZAO Manel (Tomsk State University), DB # 277, Rub. 140,005,000.00

Companies’ average authorized capital, Rub. 439,934.06

Companies’ average authorized capital without ZAO Manel (TSU), DB # 277, Rub.

276,700.06

Data on Transition to STS

Companies may use the Simplified Taxation System.As of June 8, 2011, 223 entities submitted information on transition to STS,

including:

- 41 entities that did not confirm transition to STS, and- 4 entities that are not recorded in the Register (mistakes made by tax inspectorates).

Data on Companies as of June 8, 2011

346 out of 973 companies ( 35.56%) meet the requirements of FZ-217 and may be, therefore, included in the Register of Notifications on Established Companies provided they comply with the STS provision formulated in FZ-272, dated October 16, 2010.

The sample is structured using the selected criteria of compliance with FZ-217, dated August 2, 2009: 1. Completeness of information on companies as required by MOES Executive Order # 718, dated December, 2009. 2. Results of the review by Rospatent.

3. Compliance with legislation (Civil Code, Part 4; Federal Law on LLC; Federal Law on Registration of Legal Entities; …)

4. Inclusion in the Register of Notifications on Established Companies provided they meet the STS provision formulated in: FZ-310, dated November 27, 2010; FZ-272, dated October 16, 2010; and Tax Code, Art. 346.

Companies’ Legal Status

950 out of 973 entities (97.6%) are established as limited liability companies while 23 entities

(2.4%) have the status of closed joint stock companies.

Companies’ Conformity with National Science /Technology Development Priorities

(one of five priorities under Federal Law # 244, dated September 28, 2010)

Code of the National

Science/Technology

Development Priority

Name of the National Science/Technology Development Priority (one of five priorities under Federal Law # 244, dated

September 28, 2010)

No. of Entities

2 Nuclear 1  Biotechnology

13 Space

84 Medical and strategic computer technologies

305 Software

831 Energy efficiency and energy savings

108

Use of Critical Technologies by Companies

C/T Code

Critical Technology No. of entities

19 Software production technologies 48

15 Data treatment, storage, transmission and protection technologies 42

7 Nanotechnologies and nanomaterial production technologies 34

32 Technologies for establishing energy efficient systems to be used in heat/power transport, distribution and consumption

29

17 Industrial material/waste processing and utilization technologies 22

34 Technologies for environmentally sound and resource saving production and processing of agricultural raw materials and food

21

1 Basic and critical military, special-purpose and industrial technologies 20

25 Composite and ceramic material production and processing technologies 17

4 Biomedical and veterinary technologies for human and animal life support and protection

14

22 Technologies for reducing the risk and mitigating the consequences of natural and industrial disasters

14

24 Technologies for establishing intelligent navigation and control systems 14

13 New and renewable energy technologies 13

20 Technologies for fuel and energy production from organic raw materials 11

31 Technologies for establishing an electronic component base 11

21 Distributed computing/systems technologies 10

33 Technologies for producing energy efficient engines and propellers for transport systems

7

9 Bioengineering technologies 6

11 Mechanotronic and microsystems engineering technologies 6

12 Atmosphere/hydrosphere monitoring and forecast technologies 6

27 Polymer and elastomer production and processing technologies 6

35 Technologies for environmentally sound development of mineral deposits and production of mineral resources

6

18 Technologies for production of special purpose metals and alloys used in manufacturing of armaments and military equipment

5

26 Technologies for metallic crystal production and processing 5

8 Nuclear power, NFC and safe radioactive waste/spent nuclear fuel handling technologies

4

14 Technologies used to protect and support population and dangerous facilities in the case of a terrorist threat

4

28 Technologies for production and management of new types of transport systems 4

3 Biocatalysis, biosynthesis and biosensor technologies 3

10 Hydrogen power technologies 3

23 Biocompatible material production technologies 3

30 Technologies for producing next generation rocket, space, aviation and sea based equipment

3

2 Bioinformatics technologies 2

6 Cell technologies 2

16 Lithosphere/biosphere resources assessment and forecast technologies 2

29 Membrane and catalyst system production technologies 2

5 Genomic and post-genomic technologies for medicine production 0

Company Establishment and Operation Monitoring

A survey conducted in December 2010 (244 questionnaires completed by companies) and studies on the topic carried out by the MOES Center for Science Research and Statistics for 1.5 years helped identify the key operation issues facing companies established under FZ-217.

The output included a list of issues requiring further study and resolution (Table 4).

List of Operation Issues Facing Companies and Their Budget-financed Founders

Item

Company Operation Issue Governing Federal Law/Regulatory Act; Effectiveness Date

Actual Regulation

1а Profit tax, property tax and VAT (transition to STS) for companies founded before 12/31/2010

Tax Code; FZ-310, dated November 27, 2010

For 98% of companies as from January 1, 2012

1б Profit tax, property tax and VAT (transition to STS) for companies founded after 01/01/2011

Tax Code; FZ-310, dated November 27, 2010

Since January 1, 2011

2а Reduction of the insurance contribution rate from 34% to 14% for companies founded before 12/31/2010

FZ-272, dated October 16, 2010 For 98% of companies as from January 1, 2012

2б Reduction of the insurance contribution rate from 34% to 14% for companies founded after 01/01/2011

FZ-272, dated October 16, 2010 Since January 1, 2011

3 Monetary contributions to companies’ authorized capital

FZ-83, dated May 8, 2010 Since January 1, 2011

4 Low value property contributions to companies’ authorized capital;definition of low value property (200,000-500,000 Rub.)

FZ-83, dated May 8, 2010 Since January 1, 2011

5 Lease of premises in the founding HEI/RI without competition (FZ-94) and at a reduced rate

? Being planned; work in progress

2011

6 Lease of equipment in the founding HEI/RI without competition (FZ-94) and at a reduced rate

? Being planned; work in progress

2011

7 Company’s access to the HEI/RI IT infrastructure and information/intellectual/human resources

On standard terms

8 Regulation of labor relations for HEI staff, teachers and students employed by the founded company

On standard terms

9 Company’s access to the Public Contract and bidding organized by the founding HEI/RI

On standard terms

10 Status of companies founded by HEIs/RIs under FZ-217 after reorganization into autonomous institutions

On standard terms specified in the Civil Code and Federal Law on Autonomous Institutions

Loss of the status of a company established by HEI/RI under FZ-217, and, therefore, loss of special privileges

11 Preferences to companies and their founders participating in bidding within the MOES system and other federal/regional systems designed to support SMEs and innovations

Bidding terms and conditions Bidding terms and conditions

12 The fact that companies may sublicense to the third parties the right to use the intellectual property received from their budget-financed founders

Being planned; work in progress

13 For budget-financed founders: difficulties with amending the General License and the Charter

MOES work in progress

14 For budget-financed founders and companies: absence of information and analytical support from MOES

MOES Executive Order # 718, dated December 8, 2009

Systemic work is carried out by MOES CSRS

The Table summarizes the results of companies’ business activity monitoring as of December 1, 2010 (based on responses by 244 companies)

Item

  No. of Companies that Submitted Data

Aggregate Number

Average number per company

1 Total company staff 76 412 5.42

2 Number of staff engaged in R&D 67 298 4.45

3 Number of management staff 75 105 1.40

4 Number of staff engaged in production/technology activities

56 173 3.09

5 Number of staff engaged in intellectual property commercialization

59 116 1.97

6 Number of company staff with background in both Sciences (engineering, physics, mathematics, chemistry, biology, etc.) and Humanities (economics, law, sociology, political science, etc.)

17 27 1.59

7 Number of company staff with background in both Sciences (engineering, physics, mathematics, chemistry, biology, etc.) and Humanities (economics, law, sociology, political science, etc.)

48 202 4.21

8 Mean annual wage of company staff (plan) 58 4,666,102.79 80 450.05

9 Mean age of company staff 71 2,476.9 34.89

10 Share of company staff represented by students and post-graduates

46 1566% 34.04%

11 (Innovation) output, Rubles (gross product) 20 17,177,370.00 858,868.50

12 (Innovative) product sales, Rubles (revenues) 20 18,564,383.00 928,219.15

13 Mean annual operating and administrative costs per company employee, Rubles (plan)

36 3,559,120.00 98,864.44

14 Mean annual revenues per company employee, Rubles (plan)

36 7,704,686.00 214,019.06

15 Balance sheet value of companies’ intangible assets

49 12,577,684.37 256,687.44

16 Balance sheet value of companies’ plant and equipment

25 6,522,141.00 260,885.64

17 Companies’ current authorized capital 77 10,495,684.00 136,307.58

18 Amount of public investment in companies 18 25,416,000.00 1,412,000.00

19 Amount of mobilized venture investment 2 67,000.00 33,500.00

20 Amount of other private investments (business angel finance, employees’ personal money, allocations by private investment funds, reinvested profit, revaluation)

17 5,666,675.30 333,333.84

Difficulties of Company Establishment by Federal Universities and Federal Governmental Autonomous Education Institutions

Pursuant to FZ-217, dated August 2, 2009, the right to establish companies shall vest in budget-financed research and education institutions.

A number of large HEIs (Siberian Federal University, Southern Federal University,…) enjoy the status of autonomous institutions (AI). However, all national research and federal universities have been directed to become autonomous institutions.

Pursuant to the Federal Law on Autonomous Institutions (# 174-FZ, dated November 3, 2006), the latter may establish companies without meeting the provisions of Federal Law # 217 which does not apply to them as it regulates only budget-financed institutions.

Therefore, companies founded by HEIs after they acquired the AI status formally are not covered by the registration system and are not eligible for any type of program support or finance designed only for companies established under FZ-217.

The federal universities acquired the AI status in June 2010. The federal university performance assessment indicators include the number of small

innovative companies established by HEIs pursuant to FZ-217. HEIs do establish such companies but they act outside the scope of FZ-217, and the companies cannot be formally taken into account under the above criterion.

In this case, there is evident inconsistency between the substance and form that may be eliminated via amendment of Federal Law # 217: the words “budget-financed” shall be replaced by the words “federally owned” or “governmental” or “budget-financed and autonomous”.