EXHIBIT 1.02
LEAPFROG ENTERPRISES, INC.
Conflict Minerals Report For the reporting period from January 1 to December 31, 2013 |
This Conflict Minerals Report (the “Report”) of LeapFrog Enterprises, Inc. (the “Company”) has been prepared pursuant to Rule 13p-1 and Form SD (the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period from January 1 to December 31, 2013.
The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products and the minerals specified in the Rule are necessary to the functionality or production of those products. The specified minerals, which we collectively refer to in this Report as the “Conflict Minerals,” are gold, columbite-tantalite (coltan), cassiterite and wolframite, including their derivatives, which are limited to tantalum, tin and tungsten. The “Covered Countries” for the purposes of the Rule and this Report are the Democratic Republic of the Congo, the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola. As described in this Report, the Company contracts to manufacture products for which the Conflict Minerals are necessary to the functionality or production of those products.
Company Products Covered by this Report
This Report relates to products: (i) for which Conflict Minerals are necessary to the functionality or production of that product; (ii) that were manufactured, or contracted to be manufactured, by the Company; and (iii) for which the manufacture was completed during the period from January 1 to December 31, 2013.
These products, which are referred to in this Report collectively as the “Covered Products,” are the following:
LeapPad Learning Tablet Systems. The LeapPad learning tablets are a line of children’s learning tablets designed for children ages three to nine and are used with game cartridges as well as digital content available in the Company’s App Center.
Leapster Learning Game Systems. Our line of Leapster handheld learning game systems are handheld gaming consoles designed for children ages four to nine and are used with game cartridges as well as digital content available in the Company’s App Center.
LeapReader Learning Systems. The LeapReader learning systems line of products consists of the LeapReader reading and writing system, a stylus-based learn-to-read-and-write product, designed for children ages four to eight, and the LeapReader Junior reading system, a ready-to-read system for children ages one to four.
Cartridges. We sell over 50 educational learning games in cartridge format, which are compatible with our LeapPad and Leapster systems. Our cartridges cover educational cornerstones such as math, reading, writing, geography and sciences, as well as other topics such as life skills, creativity through art, music and imaginative play.
Learning Toys. We have a variety of learning toys designed for children from birth to age four that support a wide variety of important educational skills for infants and young children, including phoneme, letter, number and color recognition, musical awareness and fine motor skills.
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The Company’s Due Diligence Process
The Company conducted a good faith reasonable country of origin inquiry (the “RCOI”) regarding the Conflict Minerals. The RCOI was reasonably designed to determine whether any of the Conflict Minerals originated in the Covered Countries and whether any of the Conflict Minerals may be from recycled or scrap sources. The result of the RCOI was that the Company determined that it had reason to believe that the Conflict Minerals may have originated in the Covered Countries and were not from recycled or scrap sources.
As a result of this determination, as required by the Rule, the Company then exercised due diligence on the source and chain of custody of the Conflict Minerals used in the Covered Products. The Company’s due diligence measures were designed to conform to the framework in theOECD Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High Risk Areas: Second Edition, including the related supplements on gold, tin, tantalum and tungsten (the “OECD Guidance”), published by the Organisation for Economic Co-operation and Development (the “OECD”).
The due diligence process was divided into three phases, consistent with the OECD Guidance: Establishment of Company Management Systems, Risk Identification and Risk Assessment.
Establishment of Company Management Systems
The Company developed and adopted a policy relating to Conflict Minerals, incorporating the standards set forth in the OECD Guidance. The policy provides that the Company is committed to identifying any Conflict Minerals contained in our products as a part of our social responsibility and in order to achieve compliance with the Rule. In addition, the policy states that LeapFrog supports, contributes to and will rely on industry initiatives, such as the Conflict Free Smelter Program, to validate that the metals used in our products are not contributing to conflict. The policy is posted on our website at www.leapfrog.com/en-us/legal/conflict-minerals.
Next, the Company identified the key stakeholders within the Company, which included a cross-functional team of employees from various departments, in order to structure internal management to support supply chain due diligence. Members of the Company’s Legal, Internal Audit and Global Supply Chain departments in the United States and Hong Kong were assigned roles and responsibility for supply chain due diligence and compliance with the Rule. The Company conducted awareness training and education to members of this team regarding the key regulatory, environmental and human rights issues involved in the Rules.
The Company then sought to establish a system of controls and transparency over its Conflict Mineral supply chain. The Company’s supply chain with respect to the Covered Products is complex, and there are many third parties in the supply chain between the Company and the original sources of Conflict Minerals. The Company contracts to manufacture all of the Covered Products from contract manufacturers (“Contract Manufacturers”) and does not manufacture any of the Covered Products directly.
Similarly, the Company does not purchase the majority of the components of the Covered Products directly since it does not manufacture the Covered Products. However, the Company does negotiate for and purchase certain limited key components directly from suppliers (“Key Suppliers” and, together with the Contract Manufacturers, the “Covered Suppliers”). However, the vast majority of the components of the Covered Products are sourced and purchased by our Contract Manufacturers. The Company does not purchase any Conflict Minerals directly from mines, smelters or refiners.
The Company must therefore rely on the Covered Suppliers to provide information regarding the origin of Conflict Minerals that are included in the Covered Products. Moreover, the Company believes that the smelters and refiners of such Conflict Minerals are best situated to identify the sources of Conflict Minerals, and therefore has taken steps to identify the applicable smelters and refiners of Conflict Minerals in the Company’s supply chain.
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For these reasons, the Company adopted the Conflict Minerals Reporting Survey Template (version 2.03a, the “EICC-GeSI Survey”), co-published by the Electronic Industry Citizen Coalition and the Global e-Sustainability Initiative (“EICC-GeSI”). The EICC-GeSI Survey is a standardized reporting template developed by the Conflict-Free Sourcing Initiative that facilitates the transfer of information through the supply chain regarding mineral country of origin and smelters and refiners being utilized. The EICC-GeSI survey enables the Company to obtain greater control and transparency over its mineral supply chain.
Next, the Company communicated information regarding the Company’s supply chain due diligence process to the Covered Suppliers. This consisted of the distribution of written material to the Covered Suppliers, providing: (i) an introduction to and overview of the Rule, (ii) LeapFrog’s commitment to ensuring that the Conflict Minerals contained in the Covered Products were sourced with due respect for human rights, and (iii) the due diligence process the Company was going to undertake to comply with the Rule. After the initial communication was distributed, the Company conducted training on the topic for its Covered Suppliers.
Next, the Company drafted legal provisions to include in its contractual agreements with its Contract Manufacturers. These provisions required Contract Manufacturers to agree to (i) adopt policies and establish systems to procure Conflict Minerals to be used in the Covered Products from sources that have been verified as conflict free, (ii) communicate and enforce such conflict minerals policy on their sub-suppliers, and (iii) assist LeapFrog in conducting its due diligence on its supply chain.
After these initial steps, the Company sent the EICC-GeSI survey to all of its Covered Suppliers. The Company reviewed and verified the completeness of the survey responses. In numerous instances the Company received, even after repeated inquires, conflicting or incomplete information regarding those facilities utilized to process the Conflict Minerals, as well as insufficient information regarding the mine(s) or source(s) of origin of the Conflict Minerals. The Company rejected incomplete or incorrectly completed surveys and instructed suppliers on the correct manner to complete the survey. The Company received a response rate of 65% of its Covered Suppliers.
Risk Identification
The next step in the due diligence process involved the identification of risks in the supply chain, beginning with the identification of the smelters and refiners in the Company’s supply chain. Based on the information that was provided by the Covered Suppliers and otherwise obtained through the due diligence process, the Company believes that, to the extent reasonably determinable by the Company, the facilities that were used to process the Conflict Minerals contained in the Covered Products included the smelters and refiners listed below in the table below.
| Metal | Smelter or Refiner Facility Name |
| Gold | Aida Chemical Industries Co. Ltd. |
| Gold | Allgemeine Gold- und Silberscheideanstalt A.G. |
| Gold | Almalyk Mining and Metallurgical Complex (AMMC) |
| Gold | AngloGold Ashanti Mineração Ltda |
| Gold | Argor-Heraeus SA |
| Gold | Asahi Pretec Corporation |
| Gold | Asaka Riken Co Ltd |
| Gold | Asarco |
| Gold | Atasay Kuyumculuk Sanayi Ve Ticaret A.S. |
| Gold | Aurubis AG |
| Gold | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) |
| Gold | Boliden AB |
| 3 |
| Gold | Caridad |
| Gold | Cendres & Métaux SA |
| Gold | Central Bank of the DPR of Korea |
| Gold | Chimet SpA |
| Gold | Chugai Mining |
| Gold | Codelco |
| Gold | Cooson Sempsa |
| Gold | Daejin Indus Co. Ltd |
| Gold | DaeryongENC |
| Gold | Do Sung Corporation |
| Gold | Dowa |
| Gold | Eco-System Recycling Co. Ltd. |
| Gold | FSE Novosibirsk Refinery |
| Gold | Guangdong Jinding Gold Co.,Ltd |
| Gold | Harima Smelter |
| Gold | Harmony Gold Refinery |
| Gold | Heimerle + Meule GmbH |
| Gold | Heraeus Ltd Hong Kong |
| Gold | Heraeus Materials Technology GMBH&CO.KG |
| Gold | Heraeus Zhaoyuan Precious Metal Materials Co.,Ltd. |
| Gold | Hisikari Mine |
| Gold | Hwasung CJ Co. Ltd |
| Gold | Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited |
| Gold | Ishifuku Metal Industry Co., Ltd. |
| Gold | Istanbul Gold Refinery |
| Gold | Japan Mint |
| Gold | Japan Pure Chemical |
| Gold | Jiangxi Copper Company Limited |
| Gold | Jinlong Copper Co., Ltd. |
| Gold | Johnson Matthey Inc |
| Gold | Johnson Matthey Limited |
| Gold | JSC Ekaterinburg Non-Ferrous Metal Processing Plant |
| Gold | JSC Uralectromed |
| Gold | JX Nippon Mining & Metals Co., Ltd |
| Gold | Kanfort Industrial (Yantai) Co. Ltd. |
| Gold | Kazzinc Ltd |
| Gold | Kennecott Utah Copper |
| Gold | Kojima Chemicals Co. Ltd |
| Gold | Korea Metal Co. Ltd |
| Gold | Kyrgyzaltyn JSC |
| Gold | L' azurde Company For Jewelry |
| Gold | London Bullion Market Association |
| Gold | LS-Nikko Copper Inc |
| Gold | Materion |
| Gold | Matsuda Sangyo Co. Ltd |
| Gold | Metalor Technologies (Hong Kong) Ltd |
| Gold | Metalor Technologies SA |
| Gold | Metalor USA Refining Corporation |
| Gold | Met-Mex Peñoles, S.A. |
| Gold | Mitsubishi Materials Corporation |
| Gold | Mitsui & Co. Precious Metals Inc. Hong Kong Branch |
| Gold | Mitsui Mining and Smelting Co., Ltd. |
| Gold | MKE |
| Gold | Moscow Special Alloys Processing Plant |
| Gold | Nadir Metal Rafineri San. Ve Tic. A.Ş. |
| 4 |
| Gold | Navoi Mining and Metallurgical Combinat |
| Gold | Nihon Material Co. LTD |
| Gold | Niihama Nickel Refinery |
| Gold | Ohio Precious Metals LLC. |
| Gold | OJSC Kolyma Refinery |
| Gold | PAMP SA |
| Gold | Pan Pacific Copper Co. LTD |
| Gold | Prioksky Plant of Non-Ferrous Metals |
| Gold | PT Aneka Tambang (Persero) Tbk |
| Gold | PX Précinox SA |
| Gold | Rand Refinery (Pty) Ltd |
| Gold | Royal Canadian Mint |
| Gold | Sabin Metal Corp. |
| Gold | SAMWON METALS Corp. |
| Gold | Schone Edelmetaal |
| Gold | SEMPSA Joyeria Plateria SA |
| Gold | Senju Metal Industry Co., Ltd. |
| Gold | Shandong Zhaojin Gold & Silver Refinery Co. Ltd |
| Gold | Shanghai Gold Exchange |
| Gold | So Accurate Refing Group |
| Gold | SOE Shyolkovsky Factory of Secondary Precious Metals |
| Gold | Solar Applied Materials Technology Corp. |
| Gold | Sumitomo Metal Mining Co. Ltd. |
| Gold | Suzhou Xingrui Noble |
| Gold | Tanaka Kikinzoku Kogyo K.K. |
| Gold | The Great Wall Gold and Silver Refinery of China |
| Gold | Timah Company |
| Gold | Tokuriki Honten Co. Ltd |
| Gold | Tongling nonferrous holding group co. ltd. |
| Gold | Torecom |
| Gold | Umicore Brasil Ltda |
| Gold | United Precious Metal Refining, Inc. |
| Gold | VALCAMBI SA |
| Gold | Western Australian Mint trading as The Perth Mint |
| Gold | Wuxi Middle Treasure Materials |
| Gold | Xstrata Canada Corporation |
| Gold | Yamamoto Precious Metal Co. Ltd. |
| Gold | Yantai Zhaojin Lifu Precious Metals Co., Ltd. |
| Gold | Yokohama Metal Co Ltd |
| Gold | Zhaojin Gold Argentine refining company limited |
| Gold | Zhongyuan Gold Smelter of Zhongjin Gold Corporation |
| Gold | Zijin Mining Group Co. Ltd |
| Tantalum | CIF |
| Tantalum | Conghua Tantalum and Niobium Smeltry |
| Tantalum | Ethiopian Minerals Development Share Company |
| Tantalum | Exotech Inc. |
| Tantalum | F&X |
| Tantalum | Fujian Nanping |
| Tantalum | Global Advanced Metals |
| 5 |
| Tantalum | H.C. Starck GmbH |
| Tantalum | Jiangxi Rare Earth Metals Tungsten Group Corp. |
| Tantalum | JiuJiang JinXin Nonferrous Metals Co. Ltd. |
| Tantalum | Metal Do |
| Tantalum | Metallurgical Products India Pvt. Ltd. |
| Tantalum | Mitsui Mining & Smelting |
| Tantalum | Ningxia Orient Tantalum Industry Co., Ltd. |
| Tantalum | Nippon Mining & Metals Co.,Ltd. |
| Tantalum | NTET, Thailand |
| Tantalum | PT Putra Karya |
| Tantalum | Solikamsk Metal Works |
| Tantalum | Taki Chemicals |
| Tantalum | Ulba |
| Tantalum | Zhuzhou Cement Carbide |
| Tin | AIM |
| Tin | Alpha Metals Korea Ltd. |
| Tin | Amalgamet Inc |
| Tin | American Iron and Metal |
| Tin | An Xin Xuan Xin Yue You Se Jin Shu Co. Ltd. |
| Tin | Aoki Labatories Ltd. |
| Tin | Asahi Solder Tech (Wuxi) Co. Ltd. |
| Tin | ATI Metalworking Products |
| Tin | Best Metals |
| Tin | Butterworth |
| Tin | Chengfeng Metals Co Pte Ltd |
| Tin | CNMC (Guangxi) PGMA Co. Ltd. |
| Tin | Cookson |
| Tin | Cooper Santa |
| Tin | CV Duta Putra Bangka |
| Tin | CV Jus Tindo |
| Tin | CV Makmur Jaya |
| Tin | CV Nurjanah |
| Tin | CV Prima Timah Utama |
| Tin | CV Serumpun Sebalai |
| Tin | CV United Smelting |
| Tin | Dae Kil |
| Tin | Daewoo International |
| Tin | Electroloy Sdn Bhd |
| Tin | EM Vinto |
| Tin | F&X Electro-Materials Limited |
| Tin | Feinhütte Halsbrücke GmbH |
| Tin | FSE Novosibirsk Refinery |
| Tin | Furukawa Electric |
| Tin | Ganzhou Huaxing Tungsten |
| Tin | Gejiu Non-ferrous Metal Processing Co. Ltd. |
| Tin | Gejiu Yunxi Croup Corp |
| Tin | Gejiu Zi-Li |
| Tin | Gold Bell Group |
| Tin | Goodway |
| Tin | GRANDE |
| Tin | Guang Xi Hua Xi Corp |
| 6 |
| Tin | Hana-High Metal |
| Tin | Heesung Metal Ltd. |
| Tin | Heraeus Materials Singapore Pte, Ltd. |
| Tin | Heraeus Oriental Hitec Co., Ltd. |
| Tin | Heraeus Precious Metals GmbH & Co. KG |
| Tin | Heraeus Technology Center |
| Tin | Heraeus Zhaoyuan Changshu Electronic Material Co.,Ltd |
| Tin | High Quality Technology Co., Ltd |
| Tin | Hitachi Cable |
| Tin | Huaxi Guangxi Group |
| Tin | Huichang Shun Tin Kam Industries, Ltd. |
| Tin | Hyundai-Steel |
| Tin | IBF IND Brasileira de Ferroligas Ltda |
| Tin | Indonesian State Tin Corporation |
| Tin | Ishihara Chemical Co. Ltd. |
| Tin | JalanPantai/Malaysia |
| Tin | Jean Goldschmidt International |
| Tin | Jiangxi Nanshan |
| Tin | Jiangxi Shunda Huichang Kam Tin Co., Ltd. |
| Tin | Kaimeng(Gejiu) Industry and Trade Co., Ltd. |
| Tin | Ketabang |
| Tin | Koba |
| Tin | Koki Japan |
| Tin | KOVOHUTĚ PŘÍBRAM NÁSTUPNICKÁ, A.S. |
| Tin | Kupol |
| Tin | Laibin Smeltery of Liuzhou China Tin Group Co., Ltd. |
| Tin | Lingbao Jinyuan Tonghui |
| Tin | Linwu Xianggui Smelter Co |
| Tin | Liuzhou China Tin |
| Tin | Malaysia Smelting Corporation (MSC) |
| Tin | MCP Metal Specialist Inc. |
| Tin | Metallo Chimique |
| Tin | Mineração Taboca S.A. |
| Tin | Ming Li Jia Smelt Metal Factory |
| Tin | Minsur |
| Tin | Mits-Tec (Shanghai) Co. Ltd. |
| Tin | Mitsubishi Materials Corporation |
| Tin | Nankang Nanshan Tin Manufactory Co., Ltd. |
| Tin | Nathan Trotter & Co |
| Tin | Nghe Tin Non-Ferrous Metal One Member State company Ltd. |
| Tin | Nihon Superior Co. Ltd |
| Tin | Nihon Genma MFG Co., Ltd. |
| Tin | Nihon Kagaku Sangyo Co., Ltd |
| Tin | Nippon Filler Metals Ltd |
| Tin | Novosibirsk Integrated Tin Works |
| Tin | OMSA |
| Tin | PL Timah Tbk |
| Tin | Poongsan |
| Tin | Posco |
| Tin | PT Alam Lestari Kencana |
| Tin | PT Artha Cipta Langgeng |
| Tin | PT Babel Inti Perkasa |
| Tin | PT Babel Surya Alam Lestari |
| 7 |
| Tin | PT Bangka Kudai Tin |
| Tin | PT Bangka Putra Karya |
| Tin | PT Bangka Timah Utama Sejahtera |
| Tin | PT Belitung Industri Sejahtera |
| Tin | PT BilliTin Makmur Lestari |
| Tin | PT Bukit Timah |
| Tin | PT DS Jaya Abadi |
| Tin | PT Eunindo Usaha Mandiri |
| Tin | PT Fang Di MulTindo |
| Tin | PT HP Metals Indonesia |
| Tin | PT Koba Tin |
| Tin | PT Mitra Stania Prima |
| Tin | PT Refined Banka Tin |
| Tin | PT Sariwiguna Binasentosa |
| Tin | PT Stanindo Inti Perkasa |
| Tin | PT Sumber Jaya Indah |
| Tin | PT Tambang Timah |
| Tin | PT Timah |
| Tin | PT Timah Nusantara |
| Tin | PT Tinindo Inter Nusa |
| Tin | PT Yinchendo Mining Industry |
| Tin | PT. Supra Sukses Trinusa |
| Tin | Pure Technology |
| Tin | Rahman Hydrulic Tin Sdn Bhd |
| Tin | RBT |
| Tin | REDSUN |
| Tin | Rohm & Hass |
| Tin | Rui Da Hung |
| Tin | S Company |
| Tin | Samhwa Non-Ferrorus Metal Ind. Co. Ltd. |
| Tin | Seirenngyousya |
| Tin | Senju Metal Industry Co. Ltd. |
| Tin | SGS Bolivia S.A. |
| Tin | Shan Tou Shi Yong Yuan Jin Shu Zai Sheng Co. Ltd. |
| Tin | Shanghai Yuanhao Surface Finishing Co. Ltd. |
| Tin | ShangHai YueQiang Metal Products Co., LTD |
| Tin | Shuer Der Industry (Jiangsu) Co. Ltd. |
| Tin | Sinitron, Shenmao Solder (M) Sdn. Bhd. |
| Tin | Soft Metals Ltda |
| Tin | Taicang Nancang Metal Materials Co., Ltd |
| Tin | Taiwan Total Co. Ltd. |
| Tin | Tamura |
| Tin | Tanaka Kikinzoku Kogyo K.K |
| Tin | Thailand Smelting and Refining Co. Ltd. |
| Tin | Tong Ding Metal Company. Ltd. |
| Tin | Traxys |
| Tin | Umicore Precious Metal (S) Pte. Ltd. |
| Tin | Unit Metalurgi PT Timah (Persero ) Tbk |
| Tin | Unit Timah Kundur PT Tambang |
| Tin | Unvertical International(Suzhou)Co.,Ltd |
| Tin | White Solder Metalurgia |
| Tin | Wilhelm Westmetall |
| Tin | Wu Xi Shi Yi Zheng Ji Xie She Bei Company |
| Tin | XiHai - Liuzhou China Tin Group Co ltd - list as "China Tin" |
| 8 |
| Tin | Xin Wang copper smelter |
| Tin | Yifeng Tin Industry (Chenzhou) Co Ltd |
| Tin | Yokohama Metal Co Ltd |
| Tin | YQ |
| Tin | YTMM |
| Tin | Yunnan Chengfeng |
| Tin | Yunnan Tin Company Limited |
| Tin | Yuntinic Chemical GmbH |
| Tin | YunXi |
| Tin | Yutinic Resources |
| Tin | Zhejiang Huangyan Xinqian Electrical Parts Factory |
| Tin | Zhongjin Gold Corporation Limited |
| Tin | Zhuhai Horyison Solder Co.,Ltd |
| Tin | Zhuzhou Smelter Group Co. Ltd. |
| Tungsten | A.L.M.T. Corp. |
| Tungsten | Air Products |
| Tungsten | Alldyne Powder Technologies |
| Tungsten | Alta Group |
| Tungsten | Altlantic Metals |
| Tungsten | ATI Tungsten Materials |
| Tungsten | Axis Material Limited |
| Tungsten | Beijing Zenith Materials |
| Tungsten | Buffalo Tungsten |
| Tungsten | ChangChun up-optech |
| Tungsten | Chaozhou Xianglu Tungsten Industry Co Ltd |
| Tungsten | China Minmetals Non-ferrous Metals Co Ltd |
| Tungsten | China National Non-ferrous |
| Tungsten | Chongyi Zhangyuan Tungsten Co Ltd |
| Tungsten | CWB Materials |
| Tungsten | Dayu Weiliang Tungsten Co., Ltd. |
| Tungsten | Fujian Jinxin Tungsten Co., Ltd. |
| Tungsten | Ganzhou Grand Sea W & Mo Group Co Ltd |
| Tungsten | Ganzhou Hongfei W&Mo MATERIALS CO.,LTD. |
| Tungsten | Global Tungsten & Powders Corp |
| Tungsten | Golden Egret |
| Tungsten | HC Starck GmbH |
| Tungsten | Hitachi Ltd. |
| Tungsten | Hunan Chenzhou Mining Group Co |
| Tungsten | Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd. |
| Tungsten | IES Technical Sales |
| Tungsten | Jada Electronic limited (JX Nippon Mining&Matel Co., Ltd) |
| Tungsten | Japan New Metals Co Ltd |
| Tungsten | Jiangxi Rare Earth & Rare Metals Tungsten Group Corp |
| Tungsten | Jiangxi Tungsten Industry Group Co Ltd |
| Tungsten | Kanto Denka Kogyo Co., Ltd. |
| Tungsten | Kennaemetal Inc. |
| Tungsten | Meterion Advanced Materials Thin Film Products |
| Tungsten | Midwest Tungsten Wire Co. |
| Tungsten | Nanchang Cemented Carbide Limited Liability Company |
| Tungsten | NingHua XingLuoKeng TungSten Mining CO.,LID |
| Tungsten | North American Tungsten |
| Tungsten | Plansee |
| Tungsten | Sichuan Metals & Materials Imp & Exp Co |
| Tungsten | Sincemat Co, Ltd |
| Tungsten | Solar Applied Materials Technology Corp. |
| Tungsten | Sumitomo Metal Mining Co., Ltd. |
| Tungsten | Sylham |
| Tungsten | Taegutec |
| Tungsten | Tejing (Vietnam) Tungsten Co Ltd |
| Tungsten | Triumph Northwest |
| Tungsten | Wolfram Bergbau und Hütten AG |
| Tungsten | Wolfram Company CJSC |
| Tungsten | Wort Wayne Wire Die |
| Tungsten | Xiamen Golden Egret Special Alloy Co. Ltd. |
| Tungsten | Xiamen Honglu Tungsten Molybdenum Industry Co., Ltd. |
| Tungsten | Xiamen Tungsten Co Ltd |
| Tungsten | Zhuzhou Cemented Carbide Group Co Ltd |
| 9 |
Based on the information obtained pursuant to the due diligence process, the Company does not have sufficient information, with respect to the Covered Products, to determine the country of origin of all of the Conflict Minerals in the Covered Products. However, based on the information that has been obtained, the Company has reasonably determined that countries of origin of the Conflict Minerals include the following countries: American Samoa, Australia, Austria, Belgium, Bolivia, Brazil, Canada, Chile, China, Czech Republic, Ethiopia, France, Germany, Hong Kong, India, Indonesia, Italy, Japan, Kazakhstan, Republic of Korea, Kyrgyzstan, Malaysia, Mexico, Netherlands, Peru, Philippines, Russian Federation, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, United States of America, Uzbekistan and Vietnam.
Next, the Company identified the scope of the risk assessment of the mineral supply chain by establishing a 5-step framework for a risk assessment of the due diligence of the supply chain. As part of its 5-step framework, the Company prepared a risk inventory, in which it sought to identify the potential risks of Conflict Minerals from the Covered Countries entering into the supply chain. The Company established risk rating criteria, to determine whether the identified risks were “High,” “Medium” or “Low” and it rated each of the risks identified in the risk inventory pursuant to this criteria. The risk assessment also included the establishment of key risk indicators, with threshold levels for each of the identified risks and a risk dashboard for the tracking of those risks. Finally, the Company established a mechanism of risk monitoring and reporting.
Risk Assessment – DRC Conflict Undeterminable
Based on the information obtained pursuant to the due diligence process, including the risk assessment, the Company believes there is a risk that the Covered Products contain Conflict Minerals from the Covered Countries. The Company’s due diligence into the supply chain did not determine conclusively whether any of the Covered Products did or did not contain any Conflict Minerals from any Covered Country which directly or indirectly financed or benefitted armed groups, as defined in the Rules. Accordingly, the Company has reasonably determined that each of the Covered Products is “DRC Conflict Undeterminable” as defined in the Rule.
Efforts to Locate Specific Mines of Origin
Our efforts to determine the mine or location of origin of the Conflict Minerals in the Covered Products with the greatest possible specificity consisted of the due diligence measures described in this Report. In particular, due to the complex nature of the Company’s supply chain, we relied on the information made available by our Covered Suppliers, who were in a better position than the Company to identify the smelters and refiners in the Company’s supply chain.
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Remediation
The Company intends to further mitigate the risk that the necessary Conflict Minerals contained in the Company’s products finance or benefit armed groups in the Covered Countries by continuing to improve its due diligence processes. In particular, the Company intends to continue to engage its suppliers to improve the transparency of its supply chain and to explore the feasibility of working with suppliers who are able to obtain a “conflict free” designation for their components. In addition, the Company intends to begin an independent third party audit program to audit its supply chain due diligence practices within the next two years.
Websites Not Incorporated by Reference
The content of any website referred to in this Report is included for general information only and is not incorporated by reference in this Report.
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