EX-1.01 2 tv495247_ex1-01.htm EXHIBIT 1.01

Exhibit 1.01

 

Dynasil Corporation of America

Conflict Minerals Report

For the reporting period from January 1, 2017 to December 31, 2017

 

This Conflict Minerals Report (the “Report”) of Dynasil Corporation of America (“Dynasil” or the “Company”) has been prepared pursuant to Rule 13p-1 and Form SD (the “Rule”) promulgated under the Securities Exchange Act of 1934 for the reporting period January 1, 2017 to December 31, 2017.

 

The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products for which 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, certain of the Company’s operations manufacture, or contract to manufacture, products for which the Conflict Minerals are necessary to the functionality or production of those products.

 

Description of the Company’s 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 calendar year 2017.

 

These products, which are referred to in this Report collectively as the “Covered Products,” are the following:

 

1.       Optical thin films

2.       Crystals for X-ray detection

3.       Optical gratings

4.       Optical filters

5.       Radiation detection instruments

 

RCOI and Due Diligence

 

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 ultimate manufacture of the Covered Products and the original sources of Conflict Minerals. In this regard, the Company does not purchase Conflict Minerals directly from mines, smelters or refiners. The Company must therefore rely on its 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 the 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.

 

Conflict Mineral Policy

Dynasil adopted a policy relating to the Conflict Minerals (the “Company Policy”), incorporating the standards set forth in the Organization for Economic Co-operation and Development 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”). The Company Policy outlines the Company’s commitment to the responsible sourcing of its products and its expectations that its suppliers will be similarly committed to responsible sourcing in the supply chain. The Company Policy states, among other things, that suppliers: (i) should not supply us with any products or other materials that directly or indirectly finance or benefit armed groups in the Covered Countries; (ii) are expected to source Conflict Minerals only from sources that are DRC conflict-free; (iii) should develop policies, due diligence processes and management systems that are reasonably designed to prevent products or materials that are not DRC conflict free from entering the Company’s supply chain; and (iv) are expected to take steps to identify the smelter, refiner or mine from which Conflict Minerals originate, and to provide information to the Company necessary to facilitate its compliance efforts with respect to the Rule.

 

 

 

 

Our policy is publicly available on our website at www.dynasil.com under “Investors/Corporate Governance”.

 

Reasonable Country of Origin Inquiry

 

The Company conducted a good faith reasonable country of origin inquiry (“RCOI”) regarding the Conflict Minerals as described in the Company’s Form SD to which this Report is an exhibit. This good faith RCOI was 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 Company’s RCOI consisted of the following:

 

1.Educating internal employees about Conflict Minerals and the Company’s reporting obligation;
2.Listing all products and the component parts and materials containing Conflict Minerals, or using engineering knowledge, that would be expected to use Conflict Minerals during production;
3.Excluding parts which were manufactured before 2017 since any Conflict Minerals contained in these products were smelted before 2017;
4.Identifying the suppliers from which the Company purchases Conflict Minerals;
5.Communicating the Company’s sourcing policy and commitments to suppliers;
6.Educating suppliers about the Conflict Minerals reporting obligation;
7.Requesting information from suppliers regarding the Conflict Mineral content of the components they provide and their knowledge on the source of any Conflict Minerals, including whether the Conflict Minerals come from recycled or scrap sources (the “Survey”); and
8.Collecting and analyzing information from suppliers who responded to the Survey.

 

We identified and contacted a total of eighteen suppliers of Conflict Mineral related products and materials. All of these suppliers responded to our request for country of origin information, although not all of these suppliers were able to provide the actual country of origin. As a result of the RCOI, the Company was unable to determine that none of the Conflict Minerals contained in the Covered Products originated in the Covered Countries or were from recycled or scrap sources.

 

Due Diligence Process

 

Based on the results of the RCOI, the Company exercised due diligence on the source and chain of custody of the Conflict Minerals. The Company’s due diligence process was designed to both gather information on the country of origin and to educate our internal staff and suppliers regarding this initiative.

 

The Company’s due diligence process is based on the following five-step framework provided by the OECD Guidance:

 

·Establishing strong company management systems
·Identifying and assessing risks in the supply chain
·Designing and implementing a strategy to respond to identified risks
·Carrying out an independent third-party audit of supply chain due diligence at identified points in the supply chain
·Reporting annually on supply chain due diligence

 

 

 

 

Findings and Conclusions

 

Based on the information obtained pursuant to the RCOI and the due diligence process, Dynasil does not have sufficient information with respect to the Covered Products to determine the country of origin of all the Conflict Minerals in the Covered Products; however, based on the information that was provided by the responding suppliers and otherwise obtained by Dynasil 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 some of the Covered Products included the smelters and refiners listed below:

  

Metal Refiner or Smelter Name Country Location
Gold Advanced Chemical Company UNITED STATES OF AMERICA
Gold Argor-Heraeus S.A. SWITZERLAND
Gold Asahi Pretec Corp. JAPAN
Gold Asahi Refining USA Inc. UNITED STATES OF AMERICA
Gold CCR Refinery - Glencore Canada Corporation CANADA
Gold Heraeus Precious Metals GmbH & Co. KG GERMANY
Gold Kennecott Utah Copper LLC UNITED STATES OF AMERICA
Gold Materion UNITED STATES OF AMERICA
Gold Metalor Technologies S.A. SWITZERLAND
Gold Metalor USA Refining Corporation UNITED STATES OF AMERICA
Gold Royal Canadian Mint CANADA
Gold Shandong Zhaojin Gold & Silver Refinery Co., Ltd. CHINA
Gold The Refinery of Shandong Gold Mining Co., Ltd. CHINA
Gold United Precious Metal Refining, Inc. UNITED STATES OF AMERICA
Gold Western Australian Mint (T/a The Perth Mint) AUSTRALIA
Tantalum Ningxia Orient Tantalum Industry Co., Ltd. CHINA
Tin Alpha UNITED STATES OF AMERICA
Tin China Tin Group Co., Ltd. CHINA
Tin CV Gita Pesona INDONESIA
Tin CV Serumpun Sebalai INDONESIA
Tin CV United Smelting INDONESIA
Tin CV Venus Inti Perkasa INDONESIA
Tin Dowa JAPAN
Tin EM Vinto BOLIVIA
Tin Fenix Metals POLAND
Tin Gejiu Kai Meng Industry and Trade LLC CHINA
Tin Gejiu Non-Ferrous Metal Processing Co., Ltd. CHINA
Tin Huichang Jinshunda Tin Co., Ltd. CHINA
Tin Jiangxi Ketai Advanced Material Co., Ltd. CHINA
Tin Magnu's Minerais Metais e Ligas Ltda. BRAZIL
Tin Malaysia Smelting Corporation (MSC) MALAYSIA
Tin Melt Metais e Ligas S.A. BRAZIL
Tin Metallo Belgium N.V. BELGIUM
Tin Mineracao Taboca S.A. BRAZIL
Tin Minsur PERU
Tin Mitsubishi Materials Corporation JAPAN
Tin O.M. Manufacturing (Thailand) Co., Ltd. THAILAND
Tin O.M. Manufacturing Philippines, Inc. PHILIPPINES
Tin Operaciones Metalurgical S.A. BOLIVIA
Tin PT Aries Kencana Sejahtera INDONESIA
Tin PT Artha Cipta Langgeng INDONESIA
Tin PT ATD Makmur Mandiri Jaya INDONESIA
Tin PT Babel Inti Perkasa INDONESIA

 

 

 

 

Tin PT Bangka Tin Industry INDONESIA
Tin PT Belitung Industri Sejahtera INDONESIA
Tin PT Bukit Timah INDONESIA
Tin PT DS Jaya Abadi INDONESIA
Tin PT Eunindo Usaha Mandiri INDONESIA
Tin PT Inti Stania Prima INDONESIA
Tin PT Karimun Mining INDONESIA
Tin PT Mitra Stania Prima INDONESIA
Tin PT Panca Mega Persada INDONESIA
Tin PT Prima Timah Utama INDONESIA
Tin PT Refined Bangka Tin INDONESIA
Tin PT Sariwiguna Binasentosa INDONESIA
Tin PT Stanindo Inti Perkasa INDONESIA
Tin PT Sumber Jaya Indah INDONESIA
Tin PT Timah (Persero) Tbk Kundur INDONESIA
Tin PT Timah (Persero) Tbk Mentok INDONESIA
Tin PT Tinindo Inter Nusa INDONESIA
Tin PT Tommy Utama INDONESIA
Tin Resind Industria e Comercio Ltda. BRAZIL
Tin Rui Da Hung TAIWAN, PROVINCE OF CHINA
Tin Soft Metais Ltda. BRAZIL
Tin Thaisarco THAILAND
Tin White Solder Metalurgia e Mineracao Ltda. BRAZIL
Tin Yunnan Tin Company Limited CHINA
Tungsten Chongyi Zhangyuan Tungsten Co., Ltd. CHINA
Tungsten Ganzhou Huaxing Tungsten Products Co., Ltd. CHINA
Tungsten Global Tungsten & Powders Corp. UNITED STATES OF AMERICA
Tungsten H.C. Starck Smelting GmbH & Co. KG GERMANY
Tungsten H.C. Starck Tungsten GmbH GERMANY
Tungsten Hunan Chenzhou Mining Co., Ltd. CHINA
Tungsten Hunan Chunchang Nonferrous Metals Co., Ltd. CHINA
Tungsten Japan New Metals Co., Ltd. JAPAN
Tungsten Jiangxi Gan Bei Tungsten Co., Ltd. CHINA
Tungsten Jiangxi Xinsheng Tungsten Industry Co., Ltd. CHINA
Tungsten Jiangxi Yaosheng Tungsten Co., Ltd. CHINA
Tungsten Kennametal Huntsville UNITED STATES OF AMERICA
Tungsten Tejing (Vietnam) Tungsten Co., Ltd. VIET NAM
Tungsten Wolfram Bergbau und Hutten AG AUSTRIA
Tungsten Xiamen Tungsten (H.C.) Co., Ltd. CHINA
Tungsten Xiamen Tungsten Co., Ltd. CHINA
Tungsten Xinhai Rendan Shaoguan Tungsten Co., Ltd. CHINA

 

Our efforts to determine the mine or location of origin of the Conflict Minerals in the Covered Products consisted of the due diligence measures described in this Report. In particular, because independent third party audit programs validate whether sufficient evidence exists regarding country, mine and/or location of origin of the Conflict Minerals that the audited smelter or refiner facilities have processed, we relied on the information made available by such programs for the smelters and refiners in our supply chain. Dynasil was unable to ascertain the country of origin and/or chain of custody of all necessary Conflict Minerals processed by these facilities because, for this reporting period, certain smelter and refiner facilities had not yet received a “conflict free” designation from an independent third party audit program. Incomplete Survey responses, even when combined with the Company’s further diligence efforts, meant that the Company was not able to conclude whether the Conflict Minerals originated in the Covered Countries, and if so, whether the Conflict Minerals were from recycled or scrap sources, were DRC conflict-free or had not been found to be DRC conflict-free.

 

 

 

 

Independent Private Sector Audit

 

This Report has not been subject to an independent private sector audit as permitted under Rule 13p-1 and recent SEC guidance.

 

Risk Mitigation Steps

 

Dynasil has taken and expects to continue to take the following steps, among others, to improve its due diligence measures and to further mitigate the risk that the necessary Conflict Minerals contained in our products benefit armed groups in the Covered Countries:

 

-continue to engage suppliers to obtain current, accurate and complete information about the supply chain;

 

-encourage suppliers to implement responsible sourcing and to have them encourage smelters and refiners to obtain a “conflict-free” designation from an independent, third-party auditor; and

 

-engage in industry initiatives encouraging “conflict-free” supply chains.