EX-1.02 2 d734573dex102.htm EX-1.02 EX-1.02

Exhibit 1.02

Conflict Minerals Report

 

I. Introduction

This Conflict Minerals Report (the “Report”) of Digi International Inc. (“Company,” “we,” “us” or “our”) has been prepared pursuant to Rule 13p-1 and Form SD (the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period January 1, 2013 to December 31, 2013.

The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products and the minerals specified in the Rule are necessary to the functionality or production of those products. The specified minerals, which we refer to in this report as the “conflict minerals,” are gold, columbite-tantalite, cassiterite and wolframite, including their derivatives 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.

We are a leading provider of machine-to-machine networking hardware and solutions that enable the connection, monitoring and control of local or remote physical assets by electronic means. These networking products and solutions can connect communication hardware to a physical asset, convey information about the asset’s status and performance to a computer system and then use that information to improve or automate one or more processes. As described in this Report, certain of the products we manufacture or contract to manufacture contain components that include conflict minerals that are necessary to the functionality or production of those products. In this Report we refer to such products which were manufactured during calendar year 2013 as the “covered products.” The covered products are hardware products we sell that generally include: embedded modules, gateways, adapater cards and device and terminal servers. Neither the software or services our company sold to customers during calendar year 2013 are considered covered products as these products contain no conflict minerals.

Covered products contain components we purchased from third parties that use tin, tantalum, tungsten and/or gold. We do not source these conflict minerals directly. Due to the depth of our supply chain, we are far removed from the sources of ore from which these metals are produced and the smelters/refiners that process those ores. Our efforts undertaken to identify the countries of origin of those ores reflect our circumstances and position in the supply chain. The amount of information available globally on the traceability and sourcing of the conflict minerals is extremely limited at this time. We have taken steps to identify the applicable smelters and refiners of such conflict minerals in our supply chain; however, we believe that the smelters and refiners of the conflict minerals contained in the covered products are best situated to identify the sources of the conflict minerals.

 

II. Reasonable Country of Origin Inquiry as well as Design and Performance of Due Diligence Measures

We have conducted a good faith reasonable country of origin inquiry regarding the conflict minerals. This inquiry was reasonably designed to determine whether any of the conflict minerals originated in the covered countries and whether any of the conflict minerals may have been from recycled or scrap sources. 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 Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High Risk Areas (the “OECD Guidance”).

We maintain a policy relating to conflict minerals that incorporates the OECD Guidance. The policy is found at the following url: www.digi.com/aboutus/environment/conflictminerals. This policy has also been communicated directly to our direct suppliers.


We group components and materials included in our products based on whether they might contain a conflict mineral. In this manner we determined the scope of our covered products.

We asked direct suppliers who provide us with materials and components for our products that might contain a conflict mineral to make a reasonable determination if raw materials, consumables or purchased components they provide to us contain conflict minerals. We asked these suppliers to complete a supply chain compliance questionnaire based on the Electronic Industry Citizenship Coalition (EICC) - Global e-Sustainability Initiative (EICC-GeSI) Conflict Minerals Common Reporting Template reflecting our position on the supply chain. The EICC-GeSI Conflict Minerals Common Reporting Template is regarded as the most common reporting tool for conflict minerals content and sourcing information worldwide, developed by several of the world’s leading consumer electronics brands.

We received statements or responses from all of the direct suppliers who supply us with materials or components that we believe may contain conflict minerals as well as suppliers representing 90% of our supply chain spend. We reviewed the statements and responses we received for completeness and consistency of answers. Certain suppliers were asked to provide corrections and clarifications where needed.

Certain responses from our direct suppliers contained names of smelters who processed conflict minerals contained in our products. We reviewed the names of these smelters against the conflict-free compliant smelter list of the EICC.

The results of our due diligence were reviewed with members of our senior management team and summarized for our Board of Directors during a regularly scheduled meeting of the Board.

Based on the above statements, we believe our RCOI process and due diligence measures were reasonably designed and performed in good faith.

 

III. Product Determination

Many of our hardware products contain materials or components that include one or more of the conflict minerals. Notwithstanding our efforts described above, we have been unable to determine, after exercising due diligence, whether our hardware products are DRC conflict free and, therefore, these products are DRC conflict undeterminable. We received no information from our direct suppliers indicating that the tin, tantalum, tungsten or gold in our products originated in the covered countries, although we have been unable to confirm the sourcing status of these minerals for each of the smelters listed below.

 

IV. Smelter Information

Our suppliers also provided us with the names of approximately 80 smelters/refiners who our direct suppliers have identified as processing the necessary conflict minerals in our hardware products and who have been defined as compliant by the EICC’s Conflict-Free Mineral Program. Below is a listing of smelters, to the extent known, who our direct suppliers stated provided conflict minerals included in our hardware products that are not presently defined as compliant by the EICC, along with the smelter facility country location. The sourcing status for each of these smelters is unknown.

 

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Standard Smelter Names (*)

  

Smelter Facility Location: Country (*)

5N Plus    GERMANY
A.L.M.T. Corp.    CHINA, JAPAN
Advanced Chemical Company    UNITED STATES
Aida Chemical Industries Co. Ltd.    JAPAN
AIM    CANADA
Alldyne Powder Technologies    UNITED STATES
Almalyk Mining and Metallurgical Complex (AMMC)    UZBEKISTAN
Alta Group    UNITED STATES
Altlantic Metals    UNITED STATES
American Iron and Metal    CANADA
An Xin Xuan Xin Yue You Se Jin Shu Co. Ltd.    INDONESIA
Asaka Riken Co Ltd    JAPAN
ATI Tungsten Materials    UNITED STATES
Aurubis AG    GERMANY
Axis Material Ltd    JAPAN
Bangka    INDONESIA
Bangko Sentral ng Pilipinas (Central Bank of the Philippines)    PHILIPPINES
Baoshida Swissmetall    SWITZERLAND
Beijing Zenith Materials    CHINA
Boliden AB    SWEDEN
Buffalo Tungsten    CHINA
Cabot    UNITED STATES
Caridad    MEXICO
CB-Ceratizit CN    CHINA
Cendres & Métaux SA    SWITZERLAND
Ceratizit S.A    LUXEMBOURG
CFC Cooperativa dos Fundidores de Cassiterita da Amazônia Ltda.    BRAZIL
ChangChun up-optech    CHINA
Chaozhou Xianglu Tungsten Industry Co Ltd    CHINA
Chengfeng Metals Co Pte Ltd    CHINA
China Minmetals Nonferrous Metals Co Ltd    CHINA
China Tin Group Co., Ltd.    CHINA
China Tin Smelter Co. Ltd    CHINA
Chongyi Zhangyuan Tungsten Co Ltd    CHINA
Chugai Mining    JAPAN
CIF    BRAZIL
CNMC (Guangxi) PGMA Co. Ltd.    CHINA
Codelco    CHILE
Cookson Alpha Metals(Shenzhen) Co. Ltd    China
Cooper Santa    BRAZIL
COOPERMETAL - Cooperative Metalurgica de Rondonia Ltda.    BRAZIL
Coopersanta    BRAZIL
CV Duta Putra Bangka    INDONESIA

 

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CV JusTindo    INDONESIA
CV Makmur Jaya    INDONESIA
CV Nurjanah    INDONESIA
CV Prima Timah Utama    INDONESIA
CV Serumpun Sebalai    INDONESIA
CV United Smelting    INDONESIA
CWB Materials    UNITED STATES
Daejin Indus Co. Ltd    SOUTH KOREA
DAERYOUNG E&C    SOUTH KOREA
DaeryungENC    SOUTH KOREA
Dayu Wailiang Tungsten Co., Ltd    CHINA
Do Sung Corporation    SOUTH KOREA
Dongguanshi Sutande Dianzi Cailiao Youxiangongsi    CHINA
Dosung metal    SOUTH KOREA
Echememi Enterprise Corp (Futures Exchange)    CHINA
Eco-System Recycling Co. Ltd    JAPAN
EM Vinto    BOLIVIA
Ethiopian Minerals Development Share Company    ETHIOPIA
Feinhütte Halsbrücke GmbH    GERMANY
Fenix Metals    POLAND
FSE Novosibirsk Refinery    RUSSIA
Fujian Jinxin Tungsten Co. Ltd    CHINA
Fujian Nanping    CHINA
Gannon & Scott    UNITED STATES
Ganzhou Grand Sea W & Mo Group Co Ltd    CHINA
Ganzhou Hongfei W&Mo Materials Co. Ltd.    CHINA
Ganzhou sinda W&Mo Co., Ltd    CHINA
Gebrueder Kemper GMBH    GERMANY
Gejiu Gold Smelter Minerals Co. Ltd.    CHINA
Gejiu Yunxin Colored Electrolytic Co. Ltd.    CHINA
Gejiu Zi-Li    CHINA
Gold Bell Group    CHINA
Gomat-e-K.    GERMANY
Grillo Handel    GERMANY
Guangdong Jinding Advanced Materials Co.,Ltd(Formerly:Guangdong Gaoyao Hetai Gold Mine)    CHINA
Guangxi China Tin Group Co., Ltd.    CHINA
H.C. Starck GmbH    JAPAN, RUSSIA, UNITED STATES
Harima Smelter    JAPAN
Heraeus (zhaoyuan)Precious Metal Materials Co., Ltd.    CHINA

 

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Heraeus Precious Metals GmbH & Co. KG    GERMANY
Heraeus Technology Center    HONG KONG
Heraeus Zhaoyuan Precious Metal Materials Co., Ltd.    China
Hisikari Mine    JAPAN
Huaxi Guangxi Group    CHINA
Huichang Jinshunda Tin Co. Ltd    CHINA
Hunan Chenzhou Mining Group Co    CHINA
Hunan Chun-chang Non-ferrous Smelting & Concentrating Co., Ltd.    CHINA
Hwasung CJ Co., Ltd    SOUTH KOREA
IBF IND Brasileira de Ferrolligas Ltda    BRAZIL
IES Technical Sales    UNITED STATES
Iljin Diamond Co. Ltd    SOUTH KOREA
Indonesian State Tin Corporation Mentok Smelter    INDONESIA
Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited    CHINA
Jada Electronic limited (JX Nippon Mining & Metal Co., Ltd)    JAPAN
Japan Mint    JAPAN
Japan New Metals Co Ltd    JAPAN
Jean Goldschmidt International    BELGIUM
Jiangxi Copper Company Limited    CHINA
Jiangxi Nanshan    CHINA
Jiangxi Rare Earth & Rare Metals Tungsten Group Corp    CHINA
Jiangxi Tungsten Industry Group Co Ltd    CHINA
Jiangxi Yichun    CHINA
Jinlong Copper Co., Ltd.    CHINA
JSC Ekaterinburg Non-Ferrous Metal Processing Plant    RUSSIA
JSC Uralectromed    RUSSIA
Kai Unita Trade Limited Liability Company    CHINA
Kaimeng(Gejiu) Industry and Trade Co., Ltd.    CHINA
Kanto Denka Kogyo Co., Ltd.    JAPAN
Kazzinc Ltd    KAZAKHSTAN
KEMET Blue Metals    MEXICO
Kennametal Inc.    UNITED STATES
Kennecott Utah Copper    UNITED STATES
Kennemetal Inc    UNITED STATES
Ketabang    INDONESIA
KOBA    INDONESIA
Kojima Chemicals Co. Ltd.    JAPAN

 

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Korea Metal    SOUTH KOREA
Kovohute Pribram NastupnickaA.S.    CZECH REPUBLIC
Kupol    RUSSIA
Kyoritsu Gokin Co. Ltd.    JAPAN
Kyrgyzaltyn JSC    KYRGYZSTAN
La Caridad    MEXICO
Laibin China Tin Smelting Co., Ltd.    CHINA
Linwu Xianggui Smelter Co. Ltd    CHINA
Liuzhou China Tin    CHINA
LMBA    GERMANY
London Bullion Market Association    UNITED KINGDOM
Malaysia Smelting Corporation Berhad    MALAYSIA
Metahub Industries Sdn. Bhd.    MALAYSIA
Metal Do    JAPAN
Metallic Resources Inc    UNITED STATES
Metallo Chimique    BELGIUM
Metalor Technologies Singapore Pte Ltd    SINGAPORE
Met-Mex Peñoles, S.A.    MEXICO
Midwest Tungsten Wire Co.    UNITED STATES
Minmetals Ganzhou Tin Co. Ltd.    CHINA
Mitsubishi Electric Metecs Co., Ltd.    JAPAN
Mitsui & Co. Precious Metals Inc. Hong Kong Branch    HONG KONG
Mitsui Mining & Smelting Co., Ltd    JAPAN
Moscow Special Alloys Processing Plant    RUSSIA
N.E.Chemcat Corporation    JAPAN
Nanchang Cemented Carbide Limited Liability Company    CHINA
Nathan Trotter & Co    UNITED STATES
Navoi Mining and Metallurgical Combinat    UZBEKISTAN
Nihon Material Corporation    JAPAN
Niihama Nickel Refinery    JAPAN
Ningbo Kangqiang    CHINA
NingHua XingLuoKeng TungSten Mining CO., LID    CHINA
Nippon Filler Metals Ltd    JAPAN
Nippon Mining    JAPAN
North American Tungsten    COLOMBIA
North American Tungsten Corporation Ltd.    CANADA
Novosibirsk Integrated Tin Works    RUSSIA
NTET, Thailand    THAILAND
OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastvetmet)    RUSSIA

 

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OJSC Kolyma Refinery    RUSSIA
Operaciones Metalurgica S.A.    BOLIVIA
Orelec    FRANCE
Pan Pacific Copper Co. LTD    JAPAN
Plansee    AUSTRIA
Precious Metal Sales Corp.    UNITED STATES
Prioksky Plant of Non-Ferrous Metals    RUSSIA
PT Alam Lestari Kencana    INDONESIA
PT Aneka Tambang (Persero) Tbk    INDONESIA
PT Artha Cipta Langgeng    INDONESIA
PT Babel Inti Perkasa    INDONESIA
PT Babel Surya Alam Lestari    INDONESIA
PT Bangka Kudai Tin    INDONESIA
PT Bangka Putra Karya    INDONESIA
PT Bangka Timah Utama Sejahtera    INDONESIA
PT Bangka Tin Industry    INDONESIA
PT Belitung Industri Sejahtera    INDONESIA
PT BilliTin Makmur Lestari    INDONESIA
PT DS Jaya Abadi    INDONESIA
PT Eunindo Usaha Mandiri    INDONESIA
PT Fang Di MulTindo    INDONESIA
PT HP Metals Indonesia    INDONESIA
PT Indra Eramulti Logam Industri    INDONESIA
PT Koba    INDONESIA
PT Koba Tin    INDONESIA
PT Mitra Stania Prima    INDONESIA
PT Putra Karya    INDONESIA
PT Refined Banka Tin    INDONESIA
PT Sariwiguna Binasentosa    INDONESIA
PT Stanindo Inti Perkasa    INDONESIA
PT Sumber Jaya Indah    INDONESIA
PT Tambang Timah    INDONESIA
PT Timah    INDONESIA
PT Timah Nusantara    INDONESIA
PT Tinindo Inter Nusa    INDONESIA
PT Yinchendo Mining Industry    INDONESIA
PT Citralogam Alphasejahtera    INDONESIA
Pure Technology    RUSSIA
PX Precinox SA    SWITZERLAND
Richard Stenzhorn GmbH    GERMANY
Rui Da Hung    CHINA

 

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Rui Da Hung    TAIWAN
Sabin Metal Corp.    UNITED STATES
Samhwa non-ferrorus Metal ind.co.ltd    SOUTH KOREA
Samwon Metal    SOUTH KOREA
Samwon Metals Corp.    SOUTH KOREA
Sandvik Material Technology    SWEDEN
Schone Edelmetaal    NETHERLANDS
Senju Metal Industry Co. Ltd.    JAPAN
Shan Dong Huangjin    CHINA
Shandong Zhaojin Gold & Silver Refinery Co. Ltd    CHINA
shandong zhaojin gold refining co., ltd    CHINA
Shandong Zhaojin Group Co.    CHINA
Shanghai Gold Exchange    CHINA
ShangHai YueQiang Metal Products Co., LTD    CHINA
Shenzhen Chemicals & light industry co., ltd    CHINA
Sincemat Co, Ltd    CHINA
Singapore LME Tin    SINGAPORE
So Accurate Refining Services    UNITED STATES
SOE Shyolkovsky Factory of Secondary Precious Metals    RUSSIA
Sumitomo    CANADA, CHINA
Sumitomo Electric Industries    JAPAN
Sumitomo Electric, USA (A.L.M.T.)    UNITED STATES
Sumitomo Metal Mining Co., Ltd.    JAPAN
Sundwigger Messingwerk    GERMANY
Suzhou Xingrui Noble    CHINA
Sylham    UNITED STATES
Taicang City Nancang Metal Meterial Co., Ltd    CHINA
Tamura    JAPAN
TE Electronics    UNITED KINGDOM, UNITED STATES
Thailand Smelting & Refining Co., Ltd.    THAILAND
The Great Wall Gold and Silver Refinery of China    CHINA
The Hutti Gold Mines Co. Ltd    INDIA
The Miller Company    UNITED STATES
The Refinery of Shandong Gold Mining Co. Ltd    CHINA
Tian Cheng chemical industry    CHINA
Tong Ding Metal Company. Ltd.    CHINA
Tongling Nonferrous Metals Group Holdings Co., Ltd    CHINA
Torecom    SOUTH KOREA
Traxys    FRANCE
Triumph Northwest    UNITED STATES
Unit Metalurgi PT Timah (Persero ) Tbk    INDONESIA

 

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Unit Timah Kundur PT Tambang    INDONESIA
Westfalenzinn    GERMANY
White Solder Metalurgia    BRAZIL
Wolfram Bergbau und Hütten AG    AUSTRIA
Wolfram Company CJSC    RUSSIA
Wort Wayne Wire Die    UNITED STATES
Xiamen Golden Egret Special Alloy Co. Ltd.    CHINA
Xiamen Honglu Tungsten Molybdenum Industry Co., Ltd    CHINA
Xiamen Tungsten Co Ltd    CHINA
Yantai Zhaojin Kanfort Precious Metals Co., Ltd.    CHINA
Yokohama Metal Co Ltd    JAPAN
Yunan Tin Group    CHINA
Yunnan Chengfeng    CHINA
Yunnan Chengo Electric Smelting Plant    CHINA
Zhejiang Huangyan Xinqian Electrical Parts Factory    CHINA
Zhongyuan Gold Smelter of Zhongjin Gold Corporation    CHINA
Zhuzhou Cemented Carbide Group Co Ltd    CHINA
Zijin Mining Group Co. Ltd    CHINA

 

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V. Steps to Improve Due Diligence

We will continue to communicate our expectations and information requirements to our direct suppliers. We will also continue to monitor changes in circumstances that may impact the facts or our determination. Over time, we anticipate that the amount of information globally on the traceability and sourcing of conflict minerals will likely increase and improve our knowledge. We will continue to make inquiries to our direct suppliers and undertake additional fact and risk assessments where potentially relevant changes in facts or circumstances are identified. If we become aware of a supplier whose due diligence needs improvement, we intend to continue the trade relationship while that supplier improves its performance. We expect our suppliers to take similar measures with their suppliers to ensure alignment throughout the supply chain.

 

VI. Independent Private Sector Audit

Not required for calendar year 2013.

 

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