Blueprint
Exhibit 1.01
Conflict Minerals Report of RELM Wireless Corporation
In Accordance With Rule 13p-1 under the Securities Exchange Act of
1934
This is
the Conflict Minerals Report of RELM Wireless Corporation ("RELM")
for calendar year 2016 in accordance with Rule 13p-1 under the
Securities Exchange Act of 1934 (“1934 Act”). Please
refer to Rule 13p-1, Form SD and the 1934 Act Release No.
34-677161 for definitions to the terms used in this
report, unless otherwise defined herein. The date of filing of this
Conflict Minerals Report is May 31, 2017.
References in this report to “RELM,” “we,”
“our,” or “us” mean RELM Wireless
Corporation, together with its subsidiaries, except where the
context otherwise requires.
Applicability of the Conflict Minerals Rule to Our
Company
As a
company engaged in the manufacture of land mobile radio
communications equipment, our products utilize certain electronic
components that potentially contain Conflict Minerals. A review of
the products was completed for 2016. It was determined that
potential Conflict Minerals could feasibly be found within, or as
part of, the production process of our products.
We are
many levels removed from mines, smelters and refiners and have
limited influence over the mines, smelters, refiners and many of
the other vendors in our supply chain. However, through the efforts
described in Form SD and this Conflict Minerals Report included as
an exhibit to Form SD, we seek to ensure that our sourcing
practices are consistent with our Conflict Minerals Policy and to
encourage conflict free sourcing in our supply chain.
While
RELM takes its conflict minerals compliance very seriously, as a
company engaged in the manufacture of land mobile radio
communications equipment, related components and subsystems, RELM
is several levels removed from the actual mining of any potential
conflict minerals that may be contained in its final products.
Furthermore, RELM does not purchase raw ore or unrefined conflict
minerals, or make purchases from the Covered Countries. Thus, RELM
cannot determine the origin of any potential conflict minerals that
may be in its final products with any certainty once the raw ores
are smelted, refined and converted to ingots, bullion or other
conflict mineral-containing derivatives. The smelters and refiners
in RELM's supply chain -- who RELM typically does not know due to
being so far removed from them in the supply chain -- are in the
best position to know the origin of the ores.
Our Conflict Minerals Policy
RELM
fully supports the goals and objectives of Section 1502 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the
"Act"), which aims to prevent the use of certain "conflict
minerals" that directly or indirectly finance or benefit armed
groups in the Democratic Republic of the Congo ("DRC") or adjoining
countries (including Angola, Burundi, The Central African Republic,
The Republic of Congo, Uganda, Rwanda, South Sudan, Tanzania, and
Zambia) (the "Covered Countries"). Conflict minerals include:
columbite-tantalite ("tantalum"), cassiterite ("tin"), wolframite
("tungsten"), and gold.
We
fully support Rule 13p-1 under the Securities Exchange Act of 1934,
as amended, and Form SD (collectively, the "Conflict Minerals
Rule") and are committed to responsible sourcing of Conflict
Minerals (as defined below) as well as compliance with the
requirements of the Conflict Minerals Rule. RELM has implemented
procedures designed to identify the potential conflict minerals
which are necessary to the functionality or production of a product
manufactured by RELM or for RELM by a contract manufacturer and
determining the country of origin of any potential conflict
material. Furthermore, we embrace the Electronic Industry
Citizenship Coalition’s (“EICC”) due diligence
and reporting processes that seek to ensure supply chain
transparency.
In
furtherance of the foregoing, we have adopted and communicated to
our suppliers and the public a company policy (the "Conflict
Minerals Policy") for the supply chain of Conflict Minerals. As
used herein and in the Conflict Minerals Policy, "Conflict
Minerals" are columbite-tantalite (coltan), cassiterite, gold,
wolframite and the derivatives tantalum, tin and tungsten, without
regard to the location of origin.
The
Conflict Minerals Policy includes our expectations that our
suppliers:
1.
Assist us in
complying with the conflict minerals Rule, by declaring any
components, parts and products that contain Conflict Minerals and
further providing associated country of and other origin
information;
2.
Implement controls
on their supply chains consistent with our responsible sourcing
commitment, so that they are able to provide us with the foregoing
information and so that all of the conflict minerals in the
components, parts and products that we purchase from them are
conflict free;
3.
Source conflict
minerals from ethically and socially responsible sources that do
not directly or indirectly contribute to conflict, including
sources that do not directly or indirectly benefit or finance armed
groups in the DRC or its adjoining countries; and
4.
Otherwise
implement, and require their direct and indirect suppliers to
implement, policies, protocols, standards, systems, frameworks and
procedures that are consistent with the Conflict Minerals Rule and
the Organization for Economic Co-operation and Development's Due
Diligence Guidance for Responsible Supply Chains of Minerals from
Conflict-Affected and High-Risk Areas.
Our
Conflict Minerals Policy indicates that suppliers will be reviewed
and evaluated accordingly for future business and sourcing
decisions. In addition, our suppliers are expected to comply with
our code of business conduct and ethics.
Reasonable
Country of Origin Information
In
connection with the reasonable country of origin inquiry (RCOI)
required by the Conflict Minerals Rule, RELM utilized the same
process and procedures established for our due diligence. We
designed our due diligence measures relating to Conflict Minerals
to conform with, in all material respects, guidance established by
the Electronic Industry Citizenship Coalition (EICC) for
responsible sourcing of minerals, and on the Organisation for
Economic Co-operation and Development's (OECD) Due Diligence
Guidance for Responsible Supply Chains of Minerals from
Conflict-Affected and High-Risk Areas.
As a
result of RELM's RCOI and ongoing due diligence (as described
below), RELM does not have sufficient information to determine the
country of origin of the conflict minerals used in our products or
identify the facilities used to process those conflict minerals.
Therefore, we cannot exclude the possibility that some of these
conflict minerals may have originated in the Democratic Republic of
the Congo or an adjoining country and/or are not from recycled or
scrap sources.
As
such, RELM's products produced in calendar year 2016 are "DRC
Conflict Undeterminable." As a result we have filed a Conflict
Minerals Report.
Due Diligence
In
accordance with Rule 13p-1, RELM undertook due diligence reasonably
designed to (i) identify whether there are any conflict minerals
necessary to the functionality or production of products
manufactured by RELM or contracted by RELM to be manufactured, and
if so (ii) determine whether any of the minerals originated in the
DRC or an adjoining country, or are from recycled or scrap sources.
RELM designed its due diligence based on guidance issued by the
Conflict Free Sourcing Initiative ("CFSI") established by the
Electronic Industry Citizenship Coalition (EICC) and the Global
e-Sustainability Initiative ("GeSI") ("EICC-GeSI Guidance"), and on
the Organization for Economic Co-operation and Development's
("OECD") Due Diligence Guidance for Responsible Supply Chains of
Minerals from Conflict-affected and High-risk Areas ("OECD
Guidance").
RELM
has taken the following measures to exercise due diligence on the
source and chain of custody of the potential conflict minerals in
its products. With respect to the period covered, the design of the
due diligence measures described herein for tin, tungsten,
tantalum, and gold was based on EICC-GeSI Guidance and OECD
Guidance, and involved the following:
1.
RELM has
established a management system for conflict minerals.
a.
RELM has structured
internal management to support supply chain due
diligence.
i.
RELM has adopted
and implemented a conflict minerals compliance policy and
procedures that are consistent with that of the EICC-GeSI Guidance,
for its supply chain.
ii.
A cross-functional
team has been formed to administer the conflict minerals management
program. The team is comprised of senior Company employees,
including management, and reports to the Company’s Executive
Vice President and Chief Financial Officer.
b.
RELM conducts
surveys of its direct suppliers to determine whether the products
they provide to RELM contain potential conflict minerals, using the
Conflict Minerals Reporting Template issued by the EICC and GeSI
(the "EICC-GeSI Template"). We follow-up with suppliers that submit
an incomplete response or a response that we determine contains
inaccuracies, inconsistencies or red flags, or that otherwise
provide a EICC-GeSI Template determined not to be suitable by us,
in each case requesting the supplier to submit a revised EICC-GeSI
Template or provide us with additional information. We follow up
with other suppliers where determined to be appropriate by
us.
c.
RELM incorporates
its conflict minerals compliance efforts into its contractual
procurement terms and conditions. For example, RELM’s
purchase orders contain terms and conditions that require the
supplier to certify that its product is "conflict
free."
2.
RELM has designed
and implemented a strategy to respond to identified risks. RELM's
strategy includes the following:
a.
Findings of supply
chain risk assessment are reported by the Conflict Minerals Team to
the team lead (EVP & CFO) and the Company’s
President.
b.
RELM works with
suppliers to identify and use alternate suppliers for any component
deemed to include conflict minerals from a Covered
Country.
c.
RELM employees can
report violations of its conflict minerals policies. RELM has also
provided training to relevant employees on its conflict minerals
policies.
d.
RELM has
incorporated terms and conditions in its procurement documents
(e.g., purchase order contracts), which require suppliers to
certify their product to be conflict free.
3.
RELM complies with
Step 4 of the OECD Guidance through encouraging its direct
suppliers to purchase from EICC's Conflict Free Smelter ("CFS")
Compliant Smelters.
4.
RELM complies with
Step 5 of the OECD Guidance through making its conflict mineral
reports ("CMR") available on its website.
The due
diligence outlined above mitigates the risk that components
necessary to the function or production of RELM's products are made
from conflict minerals. RELM is expanding its due diligence to
improve upon the information gathered and further mitigate any risk
that RELM's products contain any necessary conflict minerals from
Covered Countries. We intend to take the following additional steps
to mitigate the risk that the necessary conflict minerals contained
in our products benefit armed groups:
1.
Continue to
encourage suppliers to source only from smelters and refiners that
are compliant or active.
2.
Engage with
suppliers that provided incomplete responses for 2016 to help
ensure that they provide adequate information for
2017.
3.
Monitor and
encourage the continuing development and progress of traceability
measures at suppliers that indicated for 2016 that the source of
conflict minerals was unknown or undeterminable.
4.
Communicate to new
suppliers our sourcing expectations, including through the
dissemination of the Conflict Minerals Policy to them and required
adherence to contractual sourcing requirements. In addition, as new
suppliers are added, work with these suppliers to ensure that they
understand the requirements of the Conflict Minerals Rule and the
OECD Guidance.
As a
result of RELM's due diligence efforts for the year covered by this
Report, RELM determined that its two-way land mobile radios,
repeaters and base stations contain potential conflict minerals.
Two-way land mobile radios can be units that are hand-held or
installed in vehicles. Repeaters expand the range of two-way land
mobile radios, enabling them to operate over a wider area. Base
station components and subsystems are installed at radio
transmitter sites to improve performance by enhancing the signal
and reducing or eliminating signal interference. RELM has concluded
in good faith that, with respect to two-way land mobile radios,
repeaters and base stations, the potential conflict minerals that
these final products contain are "DRC Conflict
Undeterminable."
Product Description
Based
on RELM's due diligence, RELM determined for the period covered by
this Report that the RELM products listed below have production
processes which utilize potential conflict minerals, and that the
final products are "DRC Conflict Undeterminable."
1.
Products –
RELM designs, manufactures, and markets wireless communications
equipment consisting of two-way land mobile radios, repeaters, base
stations, and related components and subsystems. Two-way land
mobile radios can be units that are hand-held (portable) or
installed in vehicles (mobile). Repeaters expand the range of
two-way land mobile radios, enabling them to operate over a wider
area. Base station components and subsystems are installed at radio
transmitter sites to improve performance by enhancing the signal,
reducing or eliminating signal interference and enabling the use of
one antenna for both transmission and reception. We employ both
analog and digital technologies in our products. Our digital
products are compliant with P-25 specifications. Our P-25 digital
products and our analog products function in the VHF (136MHz
– 174MHz), UHF (380MHz – 470MHz, 450MHz –
520MHz), and 700-800 MHz.
2.
RELM, as a
purchaser of finished components, and its suppliers of which it is
aware, are several layers removed from the mining of any potential
conflict minerals that may be contained in the products.
Accordingly, RELM is unable to determine the origin of these
minerals with certainty.