Exhibit 1.01
Multi-Fineline Electronix, Inc.
Conflict Minerals Report
for the Year Ended December 31, 2014
Conflict Minerals Report
| I. | Introduction |
Multi-Fineline Electronix, Inc. (“MFLEX” or “we,” “our” or “us”) is a global manufacturer and assembler of flexible printed circuit boards and assemblies. Certain of the products that we manufacture or contract to manufacture contain materials or components containing tin, tantalum, tungsten and/or gold (“3TG”) that are necessary to the functionality of those products.
As a result, we are obligated to comply with Rule 13p-1 under the Securities Exchange Act of 1934 (the “Rule”). If a company is subject to the Rule, the company must generally investigate the origin of the 3TG in its products. If it appears the company’s 3TG may have originated in the Democratic Republic of the Congo or an adjoining country (the “Covered Countries”) and is not from scrap or recycled sources, the company must then exercise due diligence over the source and chain of custody of such 3TG and disclose certain information about its due diligence efforts in this separate Conflict Minerals Report.
Due to the depth of our supply chain, MFLEX is far removed from the sources of ore from which these 3TG are produced and the smelters/refiners that process those ores; our efforts undertaken to identify the country(ies) or origin of those ores as described in this Conflict Minerals Report reflect our circumstances and position in the supply chain. We believe the amount of information that is available globally on the traceability and sourcing of these ores remains limited at this time. We also believe this situation is not unique to MFLEX.
Our efforts to comply with the Rule were undertaken on the products manufactured directly by MFLEX as well as those manufactured for MFLEX by third parties in 2014.
| II. | Reasonable Country of Origin Inquiry |
MFLEX understands that there are many layers between itself and a smelter or refiner. The number of tiers depends on the components provided to us by our suppliers. We continue to make efforts to fully understand our supply chain and our relationships to the smelters, refiners and countries of origin of our 3TG. Therefore, it is inherently difficult to ascertain the ultimate source of 3TG contained in the products we manufacture or contract to manufacture.
We rely on our direct suppliers to provide information on the origin of 3TG contained in components and materials supplied to us, including sources of 3TG that are supplied to them from lower-tier suppliers. We asked our direct suppliers to provide answers to the Conflict-Free Sourcing Initiative’s Conflict Minerals Reporting Template (the “Template”) to reflect MFLEX’s position on the supply chain. The Template is generally regarded as the most common reporting tool for conflict minerals content and sourcing information worldwide.
We reviewed the responses to the questionnaires that we received from our direct suppliers both for completeness and internal consistency of the responses contained in each
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questionnaire. Where necessary, we required our suppliers to provide corrections and clarifications to correct any internal inconsistencies in the responses contained in their respective questionnaires.
As such, we believe our reasonable country of origin inquiry and process was reasonably designed and performed in good faith, but there are inherent limitations in the information provided to us by third parties, including the possibility of information being inaccurate, incomplete or falsified despite our efforts to validate and confirm the information.
After reviewing the results of our reasonable country of origin inquiry, we determined that we had reason to believe that some of the 3TG necessary for the functionality or production of our products may have originated in a Covered Country during calendar year 2014, all within the meaning of the Rule. Therefore, we determined that the Rule required that we exercise due diligence on the source and chain of custody of such 3TG. We also identified scrap and recycled minerals as sources of materials in our supply chain.
| III. | Design of Due Diligence Framework |
We designed our overall conflict minerals due diligence framework to conform in all material respects with theOECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, Second Edition (the “Guidance”).
| IV. | Due Diligence Measures Performed by MFLEX |
The following are the due diligence measures that were performed by MFLEX on the source and chain of custody of the necessary 3TG contained in our products that we had reason to believe may have originated from the Covered Countries:
| • | Reported to senior management on direct suppliers’ responses to our conflict minerals information requests, including updates on monitoring and tracking corrective action and risk mitigation efforts (where applicable). |
| • | Maintained a company policy on Conflict Minerals (our “Conflict Minerals Policy”), which can be located on our website at http://www.mflex.com/Content/PDF/Conflict%20Minerals%20Policy.pdf, and communicated our Conflict Minerals Policy to our direct suppliers. |
| • | Communicated the commitments and requirements expected of MFLEX suppliers via our Supplier Code of Conduct, supported by email and phone dialogues. |
| • | Compared smelters and refiners identified by the supply chain survey against the U.S. Department of Commerce’s list of all known mineral processing facilities worldwide, published in September 2014, as well as the list of conflict-free smelters and refiners maintained by the Conflict-Free Sourcing Initiative. |
| • | Supported the development and implementation of independent third-party audits of smelters’ and refiners’ sourcing through our policy and procurement practices that encourage suppliers to purchase materials from audited smelters or refiners. |
| • | Pursued risk mitigation efforts for a limited number of our direct suppliers who have indicated that a portion of the 3TG originated from sources in the Covered Countries not verified as conflict free. |
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| V. | Due Diligence Results |
Our due diligence results are inherently limited. As a downstream purchaser of 3TG, our due diligence measures can provide only reasonable, not absolute, assurance regarding the source and chain of custody of the necessary 3TG. Our due diligence processes are based on the necessity of seeking data from our direct suppliers and those suppliers seeking similar information within their supply chains to identify the original sources of the necessary 3TG. We also rely, to a large extent, on information collected and provided by independent third party audit programs. Such sources of information may yield inaccurate or incomplete information and may be subject to fraud.
We received inconclusive information from some of our direct suppliers. We also received information from a number of our direct suppliers indicating that some of the 3TG originated from verified conflict-free sources in the Covered Countries. In addition, we received information from a limited number of our direct suppliers indicating that a portion of the 3TG originated from sources in the Covered Countries not verified as conflict free. For that limited number we are actively pursuing risk mitigation efforts. Overall, sourcing information about our products in their entirety is not yet available. However, after reviewing the results of our due diligence, we did not find evidence to suggest that any of the 3TG in our supply chain funded or benefited armed groups in the Covered Countries.
Based on the information provided by our suppliers and our own due diligence efforts, we believe that, to the best of our knowledge, the facilities that may have been used to process the 3TG in our products include the smelters and refiners listed in Table 1 below. As many of the responses received from our suppliers were at a level higher than only those products procured to us, it is possible that the list includes smelters and refiners which do not provide 3TG utilized in our manufactured products. Although we do not have sufficient information to conclusively determine the countries of origin of the 3TG in our products, based on the information provided by our suppliers and other publicly available information, we believe that the countries of origin of the 3TG in our products include the countries listed in Table 2 below.
Additionally, we cross-checked the list of smelters and refiners in Table 1 with the list of smelters and refiners who are compliant with the Conflict-Free Sourcing Initiative’s Conflict-Free Smelter Program.
Table 1: Smelters and Refiners
A.L.M.T. Corp.
Aida Chemical Industries Co. Ltd.
Allgemeine Gold-und Silberscheideanstalt A.G.
Almalyk Mining and Metallurgical Complex (AMMC)
Alpha
AngloGold Ashanti Córrego do Sítio Minerção
Argor-Heraeus SA
Asahi Pretec Corporation
Asaka Riken Co Ltd
Atasay Kuyumculuk Sanayi Ve Ticaret A.S.
Aurubis AG
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Bangko Sentral ng Pilipinas (Central Bank of the Philippines)
Bauer Walser AG
Boliden AB
C. Hafner GmbH + Co. KG
Caridad
CCR Refinery – Glencore Canada Corporation
Cendres + Métaux SA
Changsha South Tantalum Niobium Co., Ltd.
Chenzhou Diamond Tungsten Products Co., Ltd.
Chimet S.p.A.
China National Gold Group Corporation
China Rare Metal Materials Company
China Tin Group Co., Ltd.
Chongyi Zhangyuan Tungsten Co., Ltd.
Chugai Mining
CNMC (Guangxi) PGMA Co. Ltd.
Codelco
Colt Refining
Conghua Tantalum and Niobium Smeltry
Cooper Santa
CV Duta Putra Bangka
CV Gita Pesona
CV JusTindo
CV Makmur Jaya
CV Nurjanah
CV Prima Timah Utama
CV Serumpun Sebalai
CV United Smelting
Daejin Indus Co. Ltd
Daye Non-Ferrous Metals Mining Ltd.
Dayu Weiliang Tungsten Co., Ltd.
Do Sung Corporation
Doduco
Dowa Mining Co., Ltd.
Duoluoshan Sapphire Rare Metal Co., Ltd.
Eco-System Recycling Co., Ltd.
Empresa Metallurgica Vinto
Estanho de Rondônia S.A.
Exotech Inc.
F&X Electro-Materials Ltd.
Feinhutte Halsbrucke GmbH
Fenix Metals
Foshan Nanhai Tong Ding Metal Company. Ltd.
FSE Novosibirsk Refinery
Fujian Jinxin Tungsten Co., Ltd.
Gansu Seemine Material Hi-Tech Co Ltd
Ganxian Shirui New Material Co., Ltd.
Ganzhou Huaxing Tungsten Products Co., Ltd.
Ganzhou Jiangwu Ferrotungsten Co., Ltd.
Ganzhou Non-ferrous Metals Smelting Co., Ltd.
Ganzhou Seadragon W & Mo Co., Ltd.
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Gejiu Kai Meng Industry and Trade LLC
Gejiu Non-Ferrous Metal Processing Co. Ltd.
Gejiu Zi-Li
Global Advanced Metals Aizu
Global Advanced Metals Boyertown
Global Tungsten & Powders Corp.
Golden Egret Special Alloy Co. Ltd
Guangdong Jinding Gold Limited
Guangdong Xianglu Tungsten Industry Co., Ltd.
Guangdong Zhiyuan New Material Co., Ltd.
H.C. Starck Co., Ltd.
H.C. Starck GmbH
H.C. Starck GmbH Goslar
H.C. Starck GmbH Laufenburg
H.C. Starck Hermsdorf GmbH
H.C. Starck Inc.
H.C. Starck Ltd.
H.C. Starck Smelting GmbH & Co.KG
Heimerle + Meule GmbH
Hengyang King Xing Lifeng New Materials Co., Ltd.
Heraeus Ltd. Hong Kong
Heraeus Materials Technology GmbH & Co. KG
Heraeus Precious Metals GmbH & Co. KG
Hi-Temp Specialty Metals, Inc.
Huichang Jinshunda Tin Co. Ltd
Hunan Chenzhou Mining Group Co., Ltd.
Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd.
Hwasung CJ Co. Ltd
Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited
Ishifuku Metal Industry Co., Ltd.
Istanbul Gold Refinery
Japan Mint
Japan New Metals Co., Ltd.
Jean Goldschmidt International SA
Jiangxi Copper Company Limited
Jiangxi Gan Bei Tungsten Co., Ltd.
Jiangxi Minmetals Gao’an Non-ferrous Metals Co., Ltd.
Jiangxi Nanshan
Jiangxi Rare Earth & Rare Metals Tungsten Group Corp
Jiangxi Richsea New Materials Co., Ltd.
Jiangxi Tonggu Non-ferrous Metallurgical & Chemical Co., Ltd.
Jiangxi Tungsten Industry Group Co Ltd
Jiangxi Xinsheng Tungsten Industry Co., Ltd.
JiuJiang JinXin Nonferrous Metals Co., Ltd.
Jiujiang Tanbre Co., Ltd.
Johnson Matthey Inc.
Johnson Matthey Ltd
JSC Ekaterinburg Non-Ferrous Metal Processing Plant
JSC Uralelectromed
JX Nippon Mining & Metals Co., Ltd.
Kai Unita Trade Limited Liability Company
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Kazzinc Inc.
KEMET Blue Metals
KEMET Blue Powder
Kennametal Fallon
Kennametal Huntsville
Kennecott Utah Copper LLC
King-Tan Tantalum Industry Ltd
Kojima Chemicals Co., Ltd
Korea Metal Co. Ltd
Kyrgyzaltyn JSC
L’ azurde Company For Jewelry
Lingbao Gold Company Limited
Lingbao Jinyuan Tonghui Refinery Co. Ltd.
Linwu Xianggui Smelter Co
LSM Brasil S.A.
LS-NIKKO Copper Inc.
Luoyang Zijin Yinhui Metal Smelt Co Ltd
Magnu’s Minerais Metais e Ligas LTDA
Malaysia Smelting Corporation (MSC)
Malipo Haiyu Tungsten Co., Ltd.
Materion
Matsuda Sangyo Co., Ltd.
Melt Metais e Ligas S/A
Metallo-Chimique
Metallo-Chimique N.V.
Metallurgical Products India (Pvt.) Ltd.
Metalor Technologies (Hong Kong) Ltd
Metalor Technologies (Singapore) Pte. Ltd.
Metalor Technologies (Suzhou) Co Ltd
Metalor Technologies SA
Metalor USA Refining Corporation
Met-Mex Peñoles, S.A.
Mineração Taboca S.A.
Minsur
Mitsubishi Materials Corporation
Mitsui Mining and Smelting Co., Ltd.
Molycorp Silmet A.S.
Moscow Special Alloys Processing Plant
Nadir Metal Rafineri San. Ve Tic. A.Ş.
Navoi Mining and Metallurgical Combinat
Nghe Tinh Non-Ferrous Metals Joint Stock Company
Nihon Material Co. LTD
Ningxia Orient Tantalum Industry Co., Ltd.
Novosibirsk Integrated Tin Works
Nui Phao H.C. Starck Tungsten Chemicals Manufacturing LLC
O.M. Manufacturing (Thailand) Co., Ltd.
O.M. Manufacturing Philippines, Inc.
Ohio Precious Metals, LLC
Ohura Precious Metal Industry Co., Ltd
OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastvetmet)
OJSC Kolyma Refinery
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Operaciones Metalurgical S.A.
PAMP SA
Penglai Penggang Gold Industry Co Ltd
Plansee SE Liezen
Plansee SE Reutte
Prioksky Plant of Non-Ferrous Metals
PT Alam Lestari Kencana
PT Aneka Tambang (Persero) Tbk
PT Artha Cipta Langgeng
PT ATD Makmur Mandiri Jaya
PT Babel Inti Perkasa
PT Babel Surya Alam Lestari
PT Bangka Kudai Tin
PT Bangka Putra Karya
PT Bangka Timah Utama Sejahtera
PT Bangka Tin Industry
PT Belitung Industri Sejahtera
PT BilliTin Makmur Lestari
PT Bukit Timah
PT DS Jaya Abadi
PT Eunindo Usaha Mandiri
PT Fang Di MulTindo
PT HP Metals Indonesia
PT Inti Stania Prima
PT Justindo
PT Karimun Mining
PT Koba Tin
PT Mitra Stania Prima
PT Panca Mega Persada
PT Pelat Timah Nusantara Tbk
PT Prima Timah Utama
PT Refined Banka Tin
PT Sariwiguna Binasentosa
PT Seirama Tin investment
PT Stanindo Inti Perkasa
PT Sumber Jaya Indah
PT Supra Sukses Trinusa
PT Tambang Timah
PT Timah (Persero), Tbk
PT Tinindo Inter Nusa
PT Tommy Utama
PT Yinchendo Mining Industry
Pure Technology
PX Précinox SA
QuantumClean
Rand Refinery (Pty) Ltd
Republic Metals Corporation
RFH Tantalum Smeltry Co., Ltd
Royal Canadian Mint
RUI DA HUNG
Sabin Metal Corp.
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Samduck Precious Metals
SAMWON METALS Corp.
Schöne Edelmetaal B.V.
SEMPSA Joyería Platería SA
Shandong Zhaojin Gold & Silver Refinery Co. Ltd
Shanghai Jiangxi Metals Co., Ltd.
So Accurate Group, Inc.
SOE Shyolkovsky Factory of Secondary Precious Metals
Soft Metais, Ltda.
Solar Applied Materials Technology Corp.
Solikamsk Metal Works
Sumitomo Metal Mining Co., Ltd.
Super Dragon Technology Co., Ltd.
Taki Chemicals
Tanaka Kikinzoku Kogyo K.K.
Tejing (Vietnam) Tungsten Co., Ltd.
Telex
Thaisarco
The Great Wall Gold and Silver Refinery of China
The Refinery of Shandong Gold Mining Co. Ltd
Tokuriki Honten Co., Ltd
TongLing Nonferrous Metals Group Holdings Co., Ltd.
Torecom
Ulba
Umicore Brasil Ltda
Umicore Precious Metals Thailand
Umicore SA Business Unit Precious Metals Refining
United Precious Metal Refining, Inc.
Valcambi SA
Vietnam Youngsun Tungsten Industry Co., Ltd
Western Australian Mint trading as The Perth Mint
White Solder Metalurgia e Mineração Ltda.
Wolfram Bergbau und Hütten AG
Wolfram Company CJSC
Xiamen Honglu Tungsten Molybdenum Industry Co. Ltd
Xiamen Tungsten (H.C.) Co., Ltd.
Xiamen Tungsten Co., Ltd.
Xinhai Rendan Shaoguan Tungsten Co., Ltd.
Yamamoto Precious Metal Co., Ltd.
Yichun Jin Yang Rare Metal Co., Ltd
Yokohama Metal Co Ltd
Yunnan Chengfeng Non-ferrous Metals Co., Ltd.
Yunnan Copper Industry Co Ltd
Yunnan Tin Company Limited
Zhongyuan Gold Smelter of Zhongjin Gold Corporation
Zhuzhou Cement Carbide
Zijin Mining Group Co. Ltd
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Table 2: Countries of Origin for 3TG
Angola
Australia
Austria
Belarus
Belgium
Bermuda
Bolivia
Burundi
Brazil
Canada
Chile
China
Democratic Republic of Congo
Estonia
Ethiopia
France
Germany
India
Indonesia
Italy
Japan
Jersey
Kazakhstan
Kyrgyzstan
Malaysia
Mexico
Morocco
Mozambique
Namibia
Netherlands
Niger
Peru
Philippines
Poland
Portugal
Rwanda
Russian Federation
Saudi Arabia
Sierra Leone
Singapore
South Africa
South Korea
Spain
Sweden
Switzerland
Taiwan
Tanzania
Thailand
Turkey
United Arab Emirates
United States
Uzbekistan
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Vietnam
Zambia
Zimbabwe
| VI. | Process Considerations |
We will continue to communicate our expectations regarding compliance with our Conflict Minerals Policy to our direct suppliers. We will continue to make inquiries to our direct suppliers and provide training and guidance to them regarding our Conflict Minerals Policy when appropriate. We will also continue to undertake additional fact and risk assessments where necessary, and monitor changes in supplier circumstances that may impact their compliance with our Conflict Minerals Policy, which in turn may impact our continued engagement of and relationship with certain suppliers. As part of our risk mitigation efforts, we expect our suppliers who do not currently comply with our Conflict Minerals Policy, particularly those using smelters or refiners that are not verified as conflict free and who have not begun the audit process, to publicly demonstrate progress toward a conflict-free supply chain. If we become aware of suppliers whose sourcing of 3TG or ability to comply with our Conflict Minerals Policy does not improve, we may suspend orders or terminate the business relationship with those suppliers. We expect our suppliers to take similar measures with their suppliers to ensure alignment with our sourcing philosophy throughout the supply chain.
| VII. | Independent Private Sector Audit |
Not required for calendar year 2014.
This Form SD (“Form”) contains forward-looking statements that involve a number of risks and uncertainties. These forward-looking statements include, but are not limited to, statements and predictions as to our expectations regarding our conflict mineral compliance plans, our customers’ requirements and the impact of compliance, including any statement which is preceded by the word “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “anticipate,” “estimate,” “predict,” “aim,” “potential,” “plan,” or similar words. For all of the foregoing forward-looking statements, we claim the protection of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from our expectations. Important factors that could cause actual results to differ materially from those stated or implied by our forward-looking statements include, but are not limited to, our ability to successfully meet our customers’ demands, our effectiveness in managing the conflict minerals RCOI and due diligence processes, costs of our compliance, the degree to which we are able to determine our vendors’ use of conflict-free smelters and refiners, and the impact of industry wide initiatives such as the Conflict-Free Smelter Program. These forward-looking statements represent our judgment as of the date hereof. We disclaim any intent or obligation to update these forward-looking statements.
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