EXHIBIT 1.01
LITTELFUSE, INC.
Conflict Minerals Report
For the Year Ended December 31, 2016
This Conflict Minerals Report (“Report”) of Littelfuse, Inc. and its consolidated subsidiaries (collectively, “Company,” “we” or “our”) for the year ended December 31, 2016, is filed in accordance with Rule 13p-1 under the Securities Exchange Act of 1934, as amended (the “Rule”). The Rule requires the disclosure of certain information if a registrant manufactures or contracts to manufacture products for which certain “Conflict Minerals” (as defined below) are necessary to the functionality or production of such products. Conflict Minerals are defined as (i) cassiterite, columbite-tantalite, gold, wolframite, or their derivatives, which are limited to tin, tantalum, tungsten, and gold, or (ii) any other mineral or its derivatives determined by the U.S. Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country (collectively, the “Covered Countries”).
The Company’s operations, including through its subsidiaries, may at times manufacture, or contract to manufacture, products for which Conflict Minerals are necessary to the functionality or production of those products. Pursuant to the acquisition and integration during 2016 of three key businesses, the number of suppliers in our supply chain greatly increased during the year. Therefore, we broadened the scope of our reasonable country of origin inquiry (“RCOI”) regarding the Conflict Minerals in our manufactured products during 2016.
This RCOI was reasonably designed to determine whether any of the Conflict Minerals originated from the Covered Countries and whether any of the Conflict Minerals may be from recycled or scrap sources. The results of our reasonable country of origin inquiry regarding the Conflict Minerals, as well as our additional due diligence regarding the sources of the Conflict Minerals, are contained in this Report.
The report presented herein is not audited.
1. | Company Overview |
We are one of the world’s leading suppliers of circuit protection products for the electronics, automotive, and industrial markets, with expanding platforms in sensors and power control components and modules. In addition to circuit protection products and solutions, the Company offers electronic reed switches and sensors, automotive sensors for comfort and safety systems and a comprehensive line of highly reliable electromechanical and electronic switch and control devices for commercial and specialty vehicles, as well as protection relays and power distribution centers for the safe control and distribution of electricity.
The Company’s reporting segments consist of the Electronics segment, the Automotive segment and the Industrial segment, as described more fully in Part I, Item 1 of the Company’s annual report on Form 10-K for the year ended December 31, 2016. Such annual report is available free of charge through the Investor Relations section of the Company’s website at http://investor.littelfuse.com/annuals.cfm. The information contained in the Company’s website is not incorporated by reference into this Report and should not be considered part of this report.
Supply Chain
The Company manufactures, or contracts for the manufacture of, a wide range of products that contain Conflict Minerals but we do not purchase ore or unrefined Conflict Minerals directly from mines, smelters or refiners and generally are many levels downstream from these market participants. For this reason, we rely on the information provided by our direct suppliers along with appropriate due diligence processes. Through the process described in this Report, we seek to ensure that our sourcing practices are consistent with our guiding principles on responsibly sourcing the Conflict Minerals and to encourage responsible minerals sourcing in our supply chain.
2. | Reasonable Country of Origin Inquiry |
Our RCOI began with a review of all our materials suppliers that, due to the nature of their business, utilize Conflict Minerals (referred to as “direct suppliers”). Direct suppliers were contacted to complete the Electronic Industry Citizenship Coalition-Global e-Sustainability Initiative Conflict Minerals Common Reporting Template (the “EICC/GeSI Template”). The EICC/GeSI Template is regarded as the most commonly accepted reporting tool for conflict minerals content and sourcing information worldwide. Our suppliers were also provided with training materials on how to complete the EICC/GeSI Template. The EICC/GeSI Template asked the suppliers, among other things, to disclose the origin of any Conflict Minerals used in their manufacturing processes and to identify the Conflict Minerals processing facilities within their supply chains.
This survey of direct suppliers represented 36% of our 2016 expenditure for direct materials. The Company obtained responses from 91% of our direct suppliers. Based on the survey responses obtained, we have reason to believe that some of the Conflict Minerals supplied to us may have originated in the Covered Countries, and we have reason to believe that certain of the Conflict Minerals came from recycled or scrap sources.
Our RCOI process was reasonably designed and performed in good faith, however, 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.
3. | Due Diligence Process |
Summarized below is our due diligence process, the components of which conform to, in all material respects, the framework in the Third Edition of the Organization for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and related supplements for gold, tantalum, tin and tungsten.
a) | Establish Company Management System |
● | Adopted a Conflict Free Statement which provides that the Company expects its suppliers to continuously monitor both direct and indirect supply chains to avoid procurement of materials from Covered Countries, and to be forthright in sharing compliance information with the Company. We will show preference to suppliers that meet or exceed these requirements. |
● | Established an internal Conflict Minerals working group. |
● | Communicated with our direct suppliers through the above-described RCOI. |
● | Incorporated conflict-free sourcing requirements into our purchase order terms and conditions and supplier quality manual. |
● | Maintained a supplier qualification program and an ongoing supplier audit program that includes, among other compliance inquiries, questions regarding the suppliers’ conflict minerals programs. |
b) | Identify and Assess Supply Chain Risks |
● | Implemented a process to identify suppliers of direct materials and categorize such materials by commodity. This assisted in the determination of the direct suppliers of products that may contain Conflict Minerals. |
● | Surveyed all direct suppliers to determine suppliers that provide products to the Company with Conflict Minerals. |
● | Conducted the RCOI described above to identify the smelters and refiners that contribute Conflict Minerals to the Company’s products. |
● | Reviewed and compared the smelters and refiners identified by direct suppliers against the list of smelter and refiner facilities that have received a “conflict free” designation through the EICC/GeSI Conflict Free Smelter Program. |
c) | Design and Implement a Strategy to Respond to Identified Risk |
● | Conducted follow-up with direct suppliers that did not respond to the survey. |
● | Collaborated with our direct suppliers to investigate any smelter that did not have a conflict free designation through the EICC/GeSI Conflict Free Smelter Program or was not in the process of recertifying for such designation. |
d) | Carry out Independent Third Party Audit |
● | The Company does not have a direct relationship with smelters and refiners and does not perform or direct audits of these entities within our supply chain. However, we do rely upon industry efforts to influence smelters and refiners to be audited and certified through the Conflict-Free Sourcing Initiative (“CFSI”). |
e) | Report on Supply Chain Due Diligence |
● | This Report is available on our website athttp://investor.littelfuse.com/governance.cfm. In addition to this Report, our Conflict Free Statement is also available on our website athttp://www.littelfuse.com/about-us/supplier-quality/conflict-free-statement.aspx. |
4. | Due Diligence Results |
We solicited 457 direct suppliers and received a response from 91% of them. 95% of our responding direct suppliers responded to us that the material they supply does not contain Conflict Minerals that originated from the Covered Countries.
From the information provided to the Company by its direct suppliers, we identified 155 unique smelters or refiners in our supply chain. 108 (70%) are participating in the CFSI and are either in compliance with the CFSI audit protocols or active in the application process. We continue to monitor and evaluate all our direct suppliers and the smelters and refiners they report with the ultimate goal of becoming 100% conflict free.
The smelters or refiners participating in the CFSI, as reported by our suppliers, were as follows:
Metal | Smelter ID | Smelter Name | Location Country | Status* |
Tin | CID000295 | Cooperativa Metalurgica de Rondonia Ltda. | Brazil | Expired |
Tin | CID000438 | EM Vinto | Bolivia (Plurinational State of) | Compliant |
Tin | CID001105 | Malaysia Smelting Corporation (MSC) | Malaysia | Recertification in Process |
Tin | CID001173 | Mineracao Taboca S.A. | Brazil | Compliant |
Tin | CID001182 | Minsur | Peru | Compliant |
Tin | CID001453 | PT Mitra Stania Prima | Indonesia | Compliant |
Tin | CID001477 | PT Timah (Persero) Tbk Kundur | Indonesia | Compliant |
Tin | CID001482 | PT Timah (Persero) Tbk Mentok | Indonesia | Compliant |
Tin | CID001490 | PT Tinindo Inter Nusa | Indonesia | Compliant |
Tin | CID001898 | Thaisarco | Thailand | Compliant |
Tin | CID002036 | White Solder Metalurgia e Mineracao Ltda. | Brazil | Compliant |
Tin | CID002180 | Yunnan Tin Company Limited | China | Compliant |
Metal | Smelter ID | Smelter Name | Location Country | Status* |
Tin | CID002593 | CV Tiga Sekawan | Indonesia | Recertification in Process |
Tin | CID002773 | Metallo Belgium N.V. | Belgium | Compliant |
Gold | CID000707 | Heraeus Metals Hong Kong Ltd. | China | Compliant |
Tin | CID001399 | PT Artha Cipta Langgeng | Indonesia | Compliant |
Tin | CID001460 | PT Refined Bangka Tin | Indonesia | Compliant |
Tin | CID001539 | Rui Da Hung | Taiwan, Province of China | Compliant |
Tin | CID002455 | CV Venus Inti Perkasa | Indonesia | Compliant |
Gold | CID001157 | Metalor USA Refining Corporation | United States of America | Compliant |
Gold | CID001534 | Royal Canadian Mint | Canada | Compliant |
Tin | CID000538 | Gejiu Non-Ferrous Metal Processing Co., Ltd. | China | Compliant |
Tin | CID001337 | Operaciones Metalurgical S.A. | Bolivia (Plurinational State of) | Compliant |
Tin | CID000292 | Alpha | United States of America | Compliant |
Tin | CID000468 | Fenix Metals | Poland | Recertification in Process |
Tin | CID001419 | PT Bangka Tin Industry | Indonesia | Compliant |
Tin | CID001421 | PT Belitung Industri Sejahtera | Indonesia | Compliant |
Tin | CID001468 | PT Stanindo Inti Perkasa | Indonesia | Compliant |
Tin | CID002776 | PT Bangka Prima Tin | Indonesia | Compliant |
Tin | CID002835 | PT Menara Cipta Mulia | Indonesia | Compliant |
Gold | CID001916 | The Refinery of Shandong Gold Mining Co., Ltd. | China | Expired |
Gold | CID000035 | Allgemeine Gold-und Silberscheideanstalt A.G. | Germany | Compliant |
Gold | CID000694 | Heimerle + Meule GmbH | Germany | Compliant |
Gold | CID000711 | Heraeus Precious Metals GmbH & Co. KG | Germany | Expired |
Tin | CID001428 | PT Bukit Timah | Indonesia | Compliant |
Gold | CID001078 | LS-NIKKO Copper Inc. | Korea, Republic of | Recertification in Process |
Gold | CID001153 | Metalor Technologies S.A. | Switzerland | Compliant |
Gold | CID001193 | Mitsui Mining and Smelting Co., Ltd. | Japan | Recertification in Process |
Gold | CID002030 | Western Australian Mint (T/a The Perth Mint) | Australia | Compliant |
Tin | CID000315 | CV United Smelting | Indonesia | Compliant |
Tungsten | CID000875 | Ganzhou Huaxing Tungsten Products Co., Ltd. | China | Compliant |
Tin | CID001191 | Mitsubishi Materials Corporation | Japan | Compliant |
Tin | CID001434 | PT DS Jaya Abadi | Indonesia | Compliant |
Tungsten | CID002082 | Xiamen Tungsten Co., Ltd. | China | Compliant |
Tin | CID001438 | PT Eunindo Usaha Mandiri | Indonesia | Compliant |
Tin | CID001458 | PT Prima Timah Utama | Indonesia | Compliant |
Tin | CID001463 | PT Sariwiguna Binasentosa | Indonesia | Compliant |
Gold | CID001147 | Metalor Technologies (Suzhou) Ltd. | China | Compliant |
Gold | CID001149 | Metalor Technologies (Hong Kong) Ltd. | China | Compliant |
Metal | Smelter ID | Smelter Name | Location Country | Status* |
Gold | CID001152 | Metalor Technologies (Singapore) Pte., Ltd. | Singapore | Compliant |
Tin | CID001070 | China Tin Group Co., Ltd. | China | Recertification in Process |
Tin | CID001402 | PT Babel Inti Perkasa | Indonesia | Compliant |
Tin | CID002530 | PT Inti Stania Prima | Indonesia | Compliant |
Gold | CID001875 | Tanaka Kikinzoku Kogyo K.K. | Japan | Compliant |
Gold | CID000185 | CCR Refinery - Glencore Canada Corporation | Canada | Expired |
Gold | CID000920 | Asahi Refining USA Inc. | United States of America | Recertification in Process |
Gold | CID001161 | Metalurgica Met-Mex Penoles S.A. De C.V. | Mexico | Recertification in Process |
Gold | CID001980 | Umicore S.A. Business Unit Precious Metals Refining | Belgium | Expired |
Gold | CID002510 | Republic Metals Corporation | United States of America | Compliant |
Tin | CID000309 | PT Aries Kencana Sejahtera | Indonesia | Compliant |
Tin | CID000313 | CV Serumpun Sebalai | Indonesia | Compliant |
Gold | CID000401 | Dowa | Japan | Compliant |
Gold | CID000807 | Ishifuku Metal Industry Co., Ltd. | Japan | Expired |
Gold | CID001188 | Mitsubishi Materials Corporation | Japan | Compliant |
Gold | CID001761 | Solar Applied Materials Technology Corp. | Taiwan, Province of China | Compliant |
Gold | CID001622 | Shandong Zhaojin Gold & Silver Refinery Co., Ltd. | China | Expired |
Tin | CID002158 | Yunnan Chengfeng Non-ferrous Metals Co., Ltd. | China | Compliant |
Tin | CID001457 | PT Panca Mega Persada | Indonesia | Recertification in Process |
Tin | CID002503 | PT ATD Makmur Mandiri Jaya | Indonesia | Compliant |
Tin | CID002570 | CV Ayi Jaya | Indonesia | Compliant |
Tin | CID002816 | PT Sukses Inti Makmur | Indonesia | Compliant |
Tin | CID001908 | Gejiu Yunxin Nonferrous Electrolysis Co., Ltd. | China | Compliant |
Gold | CID000058 | AngloGold Ashanti Corrego do Sitio Mineracao | Brazil | Expired |
Gold | CID000077 | Argor-Heraeus S.A. | Switzerland | Expired |
Gold | CID000113 | Aurubis AG | Germany | Recertification in Process |
Gold | CID000128 | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) | Philippines | Recertification in Process |
Gold | CID000157 | Boliden AB | Sweden | Recertification in Process |
Gold | CID000176 | C. Hafner GmbH + Co. KG | Germany | Compliant |
Gold | CID000233 | Chimet S.p.A. | Italy | Expired |
Gold | CID000814 | Istanbul Gold Refinery | Turkey | Expired |
Gold | CID000924 | Asahi Refining Canada Ltd. | Canada | Recertification in Process |
Gold | CID000969 | Kennecott Utah Copper LLC | United States of America | Recertification in Process |
Gold | CID001352 | PAMP S.A. | Switzerland | Expired |
Metal | Smelter ID | Smelter Name | Location Country | Status* |
Gold | CID001993 | United Precious Metal Refining, Inc. | United States of America | Recertification in Process |
Tin | CID001142 | Metallic Resources, Inc. | United States of America | Compliant |
Gold | CID000019 | Aida Chemical Industries Co., Ltd. | Japan | Recertification in Process |
Gold | CID000082 | Asahi Pretec Corp. | Japan | Compliant |
Gold | CID000090 | Asaka Riken Co., Ltd. | Japan | Compliant |
Tin | CID000244 | Jiangxi Ketai Advanced Material Co., Ltd. | China | Compliant |
Tin | CID000402 | Dowa | Japan | Compliant |
Gold | CID000937 | JX Nippon Mining & Metals Co., Ltd. | Japan | Compliant |
Gold | CID000981 | Kojima Chemicals Co., Ltd. | Japan | Recertification in Process |
Gold | CID001119 | Matsuda Sangyo Co., Ltd. | Japan | Compliant |
Gold | CID001259 | Nihon Material Co., Ltd. | Japan | Expired |
Gold | CID001325 | Ohura Precious Metal Industry Co., Ltd. | Japan | Compliant |
Gold | CID001798 | Sumitomo Metal Mining Co., Ltd. | Japan | Compliant |
Gold | CID001938 | Tokuriki Honten Co., Ltd. | Japan | Expired |
Tungsten | CID000568 | Global Tungsten & Powders Corp. | United States of America | Compliant |
Gold | CID001585 | SEMPSA Joyeria Plateria S.A. | Spain | Expired |
Tin | CID001758 | Soft Metais Ltda. | Brazil | Compliant |
Gold | CID002224 | Zhongyuan Gold Smelter of Zhongjin Gold Corporation | China | Expired |
Tin | CID002500 | Melt Metais e Ligas S.A. | Brazil | Compliant |
Gold | CID001113 | Materion | United States of America | Compliant |
Tungsten | CID002044 | Wolfram Bergbau und Hutten AG | Austria | Compliant |
Tin | CID002468 | Magnu's Minerais Metais e Ligas Ltda. | Brazil | Compliant |
Tungsten | CID000004 | A.L.M.T. TUNGSTEN Corp. | Japan | Compliant |
Tungsten | CID000105 | Kennametal Huntsville | United States of America | Compliant |
Tungsten | CID000218 | Guangdong Xianglu Tungsten Co., Ltd. | China | Compliant |
Tungsten | CID000258 | Chongyi Zhangyuan Tungsten Co., Ltd. | China | Compliant |
Tantalum | CID000410 | Duoluoshan | China | Expired |
Gold | CID000425 | Eco-System Recycling Co., Ltd. | Japan | Compliant |
Tantalum | CID000456 | Exotech Inc. | United States of America | Compliant |
Tantalum | CID000460 | F&X Electro-Materials Ltd. | China | Compliant |
Tungsten | CID000499 | Fujian Jinxin Tungsten Co., Ltd. | China | Compliant |
Tungsten | CID000769 | Hunan Chunchang Nonferrous Metals Co., Ltd. | China | Compliant |
Tantalum | CID001192 | Mitsui Mining and Smelting Co., Ltd. | Japan | Compliant |
Tantalum | CID001277 | Ningxia Orient Tantalum Industry Co., Ltd. | China | Compliant |
Gold | CID001512 | Rand Refinery (Pty) Ltd. | South Africa | Recertification in Process |
Tantalum | CID001769 | Solikamsk Magnesium Works OAO | Russian Federation | Compliant |
Tantalum | CID001869 | Taki Chemical Co., Ltd. | Japan | Recertification in Process |
Tantalum | CID001969 | Ulba Metallurgical Plant JSC | Kazakhstan | Recertification in Process |
Gold | CID002003 | Valcambi S.A. | Switzerland | Compliant |
Gold | CID002100 | Yamamoto Precious Metal Co., Ltd. | Japan | Compliant |
Metal | Smelter ID | Smelter Name | Location Country | Status* |
Gold | CID002129 | Yokohama Metal Co., Ltd. | Japan | Compliant |
Tungsten | CID002320 | Xiamen Tungsten (H.C.) Co., Ltd. | China | Compliant |
Tungsten | CID002494 | Ganzhou Seadragon W & Mo Co., Ltd. | China | Compliant |
Tungsten | CID002513 | Chenzhou Diamond Tungsten Products Co., Ltd. | China | Compliant |
Tungsten | CID002541 | H.C. Starck Tungsten GmbH | Germany | Compliant |
Tantalum | CID002545 | H.C. Starck Tantalum and Niobium GmbH | Germany | Compliant |
Tantalum | CID002548 | H.C. Starck Inc. | United States of America | Compliant |
Tantalum | CID002557 | Global Advanced Metals Boyertown | United States of America | Compliant |
Tungsten | CID002317 | Jiangxi Xinsheng Tungsten Industry Co., Ltd. | China | Compliant |
Gold | CID001977 | Umicore Brasil Ltda. | Brazil | Expired |
Tungsten | CID002542 | H.C. Starck Smelting GmbH & Co. KG | Germany | Compliant |
Tin | CID002774 | Metallo Spain S.L.U. | Spain | Compliant |
Tin | CID002870 | PT Lautan Harmonis Sejahtera | Indonesia | Compliant |
Tungsten | CID000966 | Kennametal Fallon | United States of America | Compliant |
Gold | CID000041 | Almalyk Mining and Metallurgical Complex (AMMC) | Uzbekistan | Recertification in Process |
Gold | CID000328 | Daejin Indus Co., Ltd. | Korea, Republic of | Expired |
Gold | CID000359 | DSC (Do Sung Corporation) | Korea, Republic of | Expired |
Gold | CID000493 | OJSC Novosibirsk Refinery | Russian Federation | Recertification in Process |
Gold | CID000823 | Japan Mint | Japan | Recertification in Process |
Gold | CID000855 | Jiangxi Copper Co., Ltd. | China | Expired |
Gold | CID000927 | JSC Ekaterinburg Non-Ferrous Metal Processing Plant | Russian Federation | Expired |
Gold | CID000929 | JSC Uralelectromed | Russian Federation | Recertification in Process |
Gold | CID000957 | Kazzinc | Kazakhstan | Expired |
Gold | CID001029 | Kyrgyzaltyn JSC | Kyrgyzstan | Expired |
Gold | CID001204 | Moscow Special Alloys Processing Plant | Russian Federation | Expired |
Gold | CID001220 | Nadir Metal Rafineri San. Ve Tic. A.S. | Turkey | Expired |
Gold | CID001326 | OJSC "The Gulidov Krasnoyarsk Non-Ferrous Metals Plant" (OJSC Krastsvetmet) | Russian Federation | Expired |
Gold | CID001386 | Prioksky Plant of Non-Ferrous Metals | Russian Federation | Recertification in Process |
Gold | CID001397 | PT Aneka Tambang (Persero) Tbk | Indonesia | Expired |
Gold | CID001498 | PX Precinox S.A. | Switzerland | Expired |
Gold | CID001573 | Schone Edelmetaal B.V. | Netherlands | Expired |
*Based on information available from the Conflict-Free Sourcing Initiative as of May 11, 2017.
5.Future Risk Mitigation Efforts
The Company has taken or intends to undertake the following additional steps during the next compliance period. These steps are intended to improve the due diligence conducted to further mitigate the risk that our Conflict Minerals benefit armed groups:
● | In connection with the continued integration efforts of the three key businesses we acquired in 2016, we are in the process of centralizing our Conflicts Minerals working group and further ensuring that our processes are consistent throughout the Company. |
● | Continue to engage our direct suppliers and follow industry standards for 2017 outreach. |
● | Continue to request that our direct suppliers encourage non-validated smelters or refiners in their supply chain to pursue compliance with an independent conflict-free program, such as the CFSP. |
● | Become members of the Conflict-Free Sourcing Initiative. |
● | Planned expansion of the Conflict Minerals working group to increase resources available to assist with supplier communications. |
Forward Looking Statement
This report contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements in this report that are not historical facts are intended to constitute "forward-looking statements" entitled to the safe-harbor provisions of the PSLRA. Forward-looking statements give the Company’s current expectations or forecasts in future events. These forward-looking statements generally can be identified by the use of such words as “believe,” “could,” “estimate,” “expect,” “hope,” “may,” “plan,” “project,” “will,” and variations of such words and similar expressions. Examples of forward-looking statements include, but are not limited to, statements concerning the additional steps that we intend to take to mitigate the risk that our necessary Conflict Minerals finance or benefit armed groups.
Such forward-looking statements are subject to risks and uncertainties that are often difficult to predict, are beyond the Company’s control and could cause actual actions or performance to differ materially from those expressed in the forward-looking statements. These risks and uncertainties include, but are not limited to, (1) the continued implementation of satisfactory traceability and other compliance measures by our direct suppliers on a timely basis or at all, (2) whether smelters and refiners and other market participants responsibly source subject metals, and (3) political and regulatory developments, whether in the Covered Countries, the United States or elsewhere. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of filing of this report. The Company undertakes no obligation to publicly update or revise forward-looking statement whether as a result of new information, future events, or otherwise, except as required by law or rules of the NASDAQ Global Select MarketSM.
8