Exhibit 1.01
CalAmp
Corp.
Conflict Minerals Report
For the Calendar Year Ended December 31, 2014
1. Introduction
This Specialized Disclosure
Report on Form SD for the calendar year ended December 31, 2014 is presented to
comply with Rule 13p-1 under the Securities Exchange Act of 1934, as amended
(the “Rule”). The Rule was adopted by the Securities and Exchange Commission
(the “SEC”) to implement reporting and disclosure requirements related to
certain minerals (described below) as directed by the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”). The Rule
imposes certain reporting obligations on SEC registrants that manufacture or
contract to manufacture products containing minerals known to fund armed
conflict in certain African countries that are necessary to the functionality or
production of those products. These so-called “conflict minerals” consist of
cassiterite, columbite-tantalite, wolframite, their derivatives tin, tantalum
and tungsten, and gold (collectively, “3TG”). These requirements apply to
registrants whatever the geographic origin of the 3TG materials and whether or
not they fund armed conflict in the Democratic Republic of the Congo (“DRC”) and adjoining countries (collectively and with DRC, the “Covered Countries”).
Registrants that, following
a reasonable county of origin inquiry, have reason to believe that the 3TG
materials contained in their products may have originated in the Covered
Countries and may not have come from recycled or scrap sources must exercise due
diligence on the 3TG materials’ source and chain of custody. Such registrants
must annually submit a Conflict Minerals Report (“CMR”) to the SEC that includes
a description of the registrant’s due diligence procedures. We are submitting
this CMR because following our reasonable country of origin inquiry, we could
not rule out the possibility that the 3TG materials in our products may have
originated in the Covered Countries or may have not come from recycled or scrap
sources, and we therefore conducted due diligence procedures on the source and
chain of custody of the 3TG materials in our products.
2. Company
overview
This CMR has been prepared
by the management of CalAmp Corp. (herein referred to as “CalAmp,” the
“Company,” “we,” “us,” or “our”). We are a provider of wireless communications
solutions for a broad array of applications to customers globally. Our business
activities are organized into our Wireless DataCom and Satellite business
segments. Our Wireless DataCom segment offers solutions to address the markets
for Machine-to-Machine (“M2M”) communications, Mobile Resource Management
(“MRM”) applications, and other emerging applications that require anytime and
everywhere connectivity. The Company’s M2M and MRM solutions enable customers to
optimize their operations by collecting, monitoring, and efficiently reporting
business-critical data and desired intelligence from high-value remote and
mobile assets. The MRM products include Location Messaging Units (“LMUs”) which
are products utilizing cellular and GPS technologies to provide location and
performance information from vehicles, and other mobile assets, back to
centralized control centers. The M2M products include GPS devices and/or
cellular modules that perform similar tasks to the MRM products, along with the
addition of routers, gateways, and base stations, to enable M2M capabilities.
The Company’s satellite products include Low Noise Block (“LNB”) down converters
that are part of the outdoor customer premise equipment and devices for in-house
distribution of video programming and that are sold to Echostar Corporation, an
affiliate of Dish Network, for incorporation into complete subscription satellite television systems. Our
portfolio of wireless communications products includes asset tracking devices,
targeted telematics platforms, fixed and mobile wireless gateways, and
full-featured, multi-mode wireless routers. All of the products listed above
contain electronic assemblies that include printed circuit boards, integrated
circuits and solder. The nature of these technologies requires the usage of 3TG
materials for primary functionality. Thus, 3TG materials may be considered
necessary to the functionality or production of our products as described
above.
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A substantial portion of
our products, components, and subassemblies are currently procured from foreign
suppliers located primarily in Hong Kong, mainland China, Taiwan, other Pacific
Rim countries, and Europe. We do not purchase 3TG materials directly from mines,
smelters, or refiners and, as a result, we must rely on our suppliers to provide
information on the origin of the 3TG materials contained in the components and
materials that they supply to us, including sources of 3TG materials supplied to
them from their upstream suppliers.
We surveyed our
suppliers to obtain information on 3TG materials. This CMR includes, to the
extent applicable or determinable, a description of:
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the measures we took to exercise due diligence
on the 3TG materials’ source and chain of custody, |
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the products we contracted to be
manufactured, |
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the facilities used to process the 3TG
materials, |
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the country of origin of the 3TG materials,
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the efforts to determine the mine or location
of origin of the 3TG materials. |
3. Design of
our due diligence process
Our due diligence measures
have been designed to conform, in all material respects, to the framework in the
Organization for Economic Co-operation and Development (“OECD”) Due Diligence
Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and
High-Risk Areas (“OECD Guidance”) and the related Supplements for gold and for
tin, tantalum, and tungsten.
3.1 Management
systems
Conflict Minerals Policy
We have adopted the
following Conflict Minerals Policy, which is also publicly available on our
website at www.calamp.com/supply-chain:
CalAmp strongly disapproves
of the violence in the Democratic Republic of Congo (“DRC”) and adjoining countries (collectively and with DRC, the “Covered Countries”), and is committed to
supporting responsible sourcing of the subject minerals (cassiterite,
columbite-tantalite, wolframite, their derivatives tin, tantalum and tungsten,
and gold (collectively “3TG”) to help ensure that
they do not fund armed conflict in the Covered Countries.
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In furtherance of the goal
of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010, CalAmp expects its suppliers to supply us with components and materials
that are “DRC conflict-free.” This means: (1) any 3TG materials necessary to the
functionality and production of supplied components and materials do not
directly or indirectly finance armed groups through mining or mineral trading in
the Covered Countries, or (2) any 3TG materials in supplied components and
materials are from recycled or scrap sources.
CalAmp uses the Conflict
Minerals Reporting Template (the “Template”), maintained by
the Conflict-Free Sourcing Initiative (“CFSI”), to solicit
information on 3TG materials from its suppliers. CalAmp also expects its
suppliers to adopt policies with respect to conflict minerals in support of this
Policy and to require their upstream suppliers to adopt similar policies.
Internal management team
and subject matter experts
CalAmp has assembled an
internal conflict minerals team that includes the Company’s Vice President of
Operations, Senior Vice President of Corporate Development, and the Vice
President and Legal Counsel, sponsored by our President and Chief Executive
Officer and our Executive Vice President and Chief Financial Officer, together
with other management-level representatives and a team of subject matter experts
from relevant functions. The team of subject matter experts is responsible for
implementing our Conflict Minerals compliance strategy and is led by the Vice
President of Operations, who acts as the Conflict Minerals Program Manager.
Senior management is briefed about the results of our due diligence efforts on a
periodic basis.
Control
systems
Due to the complexity of
CalAmp’s supply chain, the Company relies on its first tier suppliers to provide
information on the origin of 3TG
materials supplied to the Company. In
addition, the Company relies on the CFSI Template sent to its suppliers to
gather information on the chain of custody of the necessary 3TG materials
included in the Company’s products. The Template was developed by the Electronic
Industry Citizenship Coalition (EICC) and Global e-Sustainability Initiative
(GeSI), who were the founding members of CFSI, and is designed to help identify
the smelters and refiners that process 3TG materials in a company’s supply
chain.
Supplier
engagement
With respect to the OECD
requirement to strengthen engagement with suppliers, we have: (a) informed all
of our first tier suppliers that CalAmp expects its suppliers to only supply any
components or materials that are DRC conflict-free in accordance with our
Conflict Minerals Policy; and (b) requested all of our first tier suppliers of
components and materials that contain 3TG materials to complete and submit the
Template to CalAmp for our review and assessment.
3.2 Identification
and assessment of risk in the supply chain
Because of our size, the
complexity of our products, and the depth, breadth, and ongoing evolution of our
supply chain, it is difficult to identify suppliers upstream from our direct
suppliers. Accordingly, we used the Template to gather sourcing information for
3TG materials from our suppliers. As discussed above, we rely on our suppliers
to provide us with information about the origin of conflict minerals contained
in the components and materials they supply to us. In turn, our direct suppliers
are similarly reliant upon information provided to them by their upstream suppliers. Many of our largest suppliers
are also SEC registrants and thus, subject to the Rule.
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For the 2014 reporting
year, out of our 275 direct suppliers, we identified 202 suppliers of components
and materials that contain 3TG materials. We surveyed those 202 direct suppliers
using the Template. The Template was developed to facilitate disclosure and
communication of information regarding smelters that provide material to a
company’s supply chain. The Template includes questions regarding a company’s
conflict minerals policy, engagement with its direct suppliers, and a listing of
the smelters the company and its suppliers use to source materials. In addition,
the Template contains questions about the origin of 3TG materials included in
their products, as well as supplier due diligence. Written instructions and a
recorded training presentation illustrating the use of the tool are available on
CFSI’s website. We reviewed the supplier responses against criteria developed to
determine which suppliers required further engagement and follow-up. These
criteria included untimely or incomplete responses as well as inconsistencies
within the data reported in the Template.
3.3 Design and
implementation of a strategy to respond to identified risks
We work directly with
suppliers to obtain revised responses and updates as considered
necessary.
3.4 Support for the
development and implementation of independent third party audits
As discussed above, we do
not have direct relationships with smelters or refiners, and we do not perform
direct audits of these entities’ supply chains of 3TG materials. However, we
support the development and implementation of independent third party audits of
smelters’ and refiners’ sourcing, such as the CFSI’s Conflict-Free Smelter
Program.
3.5 Report on supply
chain due diligence
This CMR and our Conflict
Minerals Policy are publicly available on our website at www.calamp.com/supply-chain.
4. Results of
our due diligence
We received responses from
69.5% of our 275 suppliers surveyed. Based on the due diligence measures
described in this CMR, we could not rule out the possibility that the 3TG
materials in our products may have originated in the Covered Countries or may
have not come from recycled or scrap sources. Our efforts to determine the mine
or location of origin of the 3TG materials in these products with the greatest
possible specificity consisted of the due diligence measures described in this
CMR, including our efforts to obtain information from suppliers using the
Template.
5. Steps to be
taken to mitigate risk
We have been taking and
intend to continue taking the following steps to improve the due diligence
conducted and in order to further mitigate any risk that the 3TG materials in
our products could benefit armed groups in the Covered Countries:
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continue including a conflict minerals
“flow-down” clause in new or renewed supplier contracts, requiring
suppliers to comply with our Conflict Minerals Policy and provide
information about the source of any 3TG materials and their processing
facilities; |
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engage with our suppliers and direct them to
resources in an attempt to increase the response rate and improve the
content of the supplier survey responses; and |
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engage any of our suppliers found to be
supplying us with 3TG materials from sources that support conflict in the
DRC or any other Covered Country to establish an alternative source of 3TG
materials that does not support such
conflict. |
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