EX-1.01 2 d935642dex101.htm EX-1.01 EX-1.01

Exhibit 1.01

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, 2014 to December 31, 2014.

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 2014 as the “covered products.” The covered products are hardware products we sell that generally include: embedded modules, gateways, adapter cards and device and terminal servers. Neither the software or services our company sold to customers during calendar year 2014 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

We have conducted a good faith reasonable country of origin inquiry (“RCOI”) regarding the conflict minerals. This inquiry was reasonably designed and conducted in good faith 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.

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 covered 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 during the applicable fiscal year. As a result, we received statements or responses from approximately 97% of our supply chain spend for fiscal 2014. We reviewed the statements and responses we received for completeness and consistency of answers and, as appropriate, certain suppliers were asked to provide corrections and clarifications.

 

III. Design and Performance of Due Diligence Measures

Our due diligence measures have been designed to conform in all material respects to the five-step 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”).

To address the first-step of the OECD Guidance, we have established strong company management systems by adopting 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 have advanced the second step of the OECD Guidance related to identifying risks in our supply chain by analyzing the responses from our suppliers. Certain responses from our direct suppliers pursuant to the RCOI process described above contained names of smelters who processed conflict minerals contained in our products. We reviewed the locations of these smelters in light of the covered countries and compared them 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 to enable us to design a strategy to respond to risks in our supply chain.

This Report is also publicly available on our website at the address identified above to meet the final step of the OECD Guidance to report annually on our supply chain due diligence.

 

IV. 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.

 

V. Product Description

Our suppliers also provided us with the names of approximately 300 smelters/refiners, along with the smelter/refiner facility location, that our direct suppliers have identified as processing the necessary conflict minerals in our hardware products. These smelters/refiners are listed on Schedule A. Of these smelters/refiners, approximately 135 are defined as compliant and approximately 25 are defined as active in the process of becoming defined compliant by the EICC’s Conflict-Free Mineral Program as of May 18, 2015. The remaining smelters/refiners were not defined as either compliant or active by the EICC as of May 18, 2015. The sourcing status for each of these smelters is unknown.

 

VI. 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

 

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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.

 

VII. Independent Private Sector Audit

Not required for calendar year 2014.

 

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Schedule A

to Conflict Minerals Report

 

Standard Smelter Name

 

Smelter Facility Location: Country

5N Plus   GERMANY
A.L.M.T. Corp.   JAPAN
Advanced Chemical Company   UNITED STATES
Aida Chemical Industries Co. Ltd.   JAPAN
Alldyne Powder Technologies   UNITED STATES
Allgemeine Gold-und Silberscheideanstalt A.G.   GERMANY
Almalyk Mining and Metallurgical Complex (AMMC)   UZBEKISTAN
ALMT   CHINA
Alpha   UNITED STATES
Amalgamated Metal Corporation   UNITED KINGDOM
AngloGold Ashanti Córrego do Sítio Minerção   BRAZIL
Argor-Heraeus SA   SWITZERLAND
Asahi Pretec Corp   JAPAN
Asaka Riken Co Ltd   JAPAN
Atasay Kuyumculuk Sanayi Ve Ticaret A.S.   TURKEY
Aurubis AG   GERMANY
Bangko Sentral ng Pilipinas (Central Bank of the Philippines)   PHILIPPINES
Bauer Walser AG   GERMANY
Boliden AB   SWEDEN
C. Hafner GmbH + Co. KG   GERMANY
Caridad   MEXICO
CB-Ceratizit CN   CHINA
CCR Refinery – Glencore Canada Corporation   CANADA
Cendres + Métaux SA   SWITZERLAND
Ceratizit S.A   LUXEMBOURG
Changsha South Tantalum Niobium Co., Ltd.   CHINA
Chenzhou Diamond Tungsten Products Co., Ltd.   CHINA
Chia Tai Metal Craft Products Co., Ltd.   CHINA
Chimet S.p.A.   ITALY
China Gold International Resources Corp. Ltd.   CHINA
China National Gold Group Corporation   CHINA
China Rare Metal Materials Company   CHINA
China Tin Group Co., Ltd.   CHINA
CHIN-LEEP ENTERPRISE CO., LTD.   TAIWAN
Chongyi Zhangyuan Tungsten Co., Ltd.   CHINA
Chugai Mining   JAPAN
Chunbao Carbide Science & Technology Co., Ltd   TAIWAN
CNMC (Guangxi) PGMA Co. Ltd.   CHINA
Colt Refining   UNITED STATES
Conghua Tantalum and Niobium Smeltry   CHINA
Cooper Santa   BRAZIL
CV Gita Pesona   INDONESIA
CV JusTindo   INDONESIA
CV Makmur Jaya   INDONESIA
CV Nurjanah   INDONESIA
CV Serumpun Sebalai   INDONESIA
CV United Smelting   INDONESIA
Daejin Indus Co. Ltd   KOREA, REPUBLIC OF
DaeryongENC   KOREA, REPUBLIC OF
Daye Non-Ferrous Metals Mining Ltd.   CHINA
Dayu Weiliang Tungsten Co., Ltd.   CHINA
Do Sung Corporation   KOREA, REPUBLIC OF
Doduco   GERMANY
Dowa   JAPAN
Duoluoshan   CHINA
E-CHEM Enterprise Corp   CHINA
Eco-System Recycling Co., Ltd.   JAPAN
EM Vinto   BOLIVIA
Estanho de Rondônia S.A.   BRAZIL
Exotech Inc.   UNITED STATES
F&X Electro-Materials Ltd.   CHINA
FAGGI ENRICO SPA   ITALY
Feinhütte Halsbrücke GmbH   GERMANY
Fenix Metals   POLAND
FSE Novosibirsk Refinery   RUSSIAN FEDERATION
Fujian Jinxin Tungsten Co., Ltd.   CHINA
Gansu Seemine Material Hi-Tech Co Ltd   CHINA
Ganzhou Grand Sea W & Mo Group Co Ltd   CHINA
Ganzhou Huaxing Tungsten Products Co., Ltd.   CHINA

 

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Standard Smelter Name

 

Smelter Facility Location: Country

Ganzhou Jiangwu Ferrotungsten Co., Ltd.   CHINA
Ganzhou Non-ferrous Metals Smelting Co., Ltd.   CHINA
Ganzhou Seadragon W & Mo Co., Ltd.   CHINA
Gejiu Kai Meng Industry and Trade LLC   CHINA
Gejiu Non-Ferrous Metal Processing Co. Ltd.   CHINA
Gejiu Zi-Li   CHINA
Gejiu zili mining&smel ting co.,ltd   CHINA
Global Advanced Metals   UNITED STATES
Global Advanced Metals Aizu   JAPAN
Global Advanced Metals Boyertown   UNITED STATES
Global Tungsten & Powders Corp.   UNITED STATES
Guangdong Jinding Gold Limited   CHINA
Guangdong Xianglu Tungsten Co., Ltd.   CHINA
Guangdong Zhiyuan New Material Co., Ltd.   CHINA
Guangxi Huaxi Group Limited   CHINA
Guizhou Zhenhua Xinyun Technology Ltd., Kaili branch   CHINA
H.C. Starck Co., Ltd.   THAILAND
H.C. Starck GmbH   GERMANY
H.C. Starck GmbH Goslar   GERMANY
H.C. Starck GmbH Laufenburg   GERMANY
H.C. Starck Group   GERMANY
H.C. Starck Hermsdorf GmbH   GERMANY
H.C. Starck Inc.   UNITED STATES
H.C. Starck Ltd.   JAPAN
H.C. Starck Smelting GmbH & Co.KG   GERMANY
Hangzhou Fuchunjiang Smelting Co., Ltd.   CHINA
HC Starck GmbH   GERMANY
Heesung Catalysts Corp.   KOREA, REPUBLIC OF
Heimerle + Meule GmbH   GERMANY
Henan Zhongyuan Gold Smelter of Zhongjin Gold Co. Ltd.   CHINA
Hengyang King Xing Lifeng New Materials Co., Ltd.   CHINA
Heraeus Ltd. Hong Kong   HONG KONG
Heraeus Precious Metals GmbH & Co. KG   GERMANY
Hi-Temp   UNITED STATES
Huichang Jinshunda Tin Co. Ltd   CHINA
Hunan Chenzhou Mining Group Co., Ltd.   CHINA
Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd.   CHINA
Hwasung CJ Co. Ltd   KOREA, REPUBLIC OF
ILJIN DIAMOND CO., LTD   KOREA, REPUBLIC OF
Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited   CHINA
Ishifuku Metal Industry Co., Ltd.   JAPAN
Istanbul Gold Refinery   TURKEY
JalanPantai/Malaysia   MALAYSIA
Japan Mint   JAPAN
Japan New Metals Co., Ltd.   JAPAN
Jean Goldschmidt International   BELGIUM
Jiangwu H.C. Starck Tungsten Products Co., Ltd.   CHINA
Jiangxi Copper Company Limited   CHINA
Jiangxi Gan Bei Tungsten Co., Ltd.   CHINA
Jiangxi Minmetals Gao’an Non-ferrous Metals Co., Ltd.   CHINA
Jiangxi Nanshan   CHINA
Jiangxi Richsea New Materials Co., Ltd.   CHINA
Jiangxi Tonggu Non-ferrous Metallurgical & Chemical Co., Ltd.   CHINA
Jiangxi Xinsheng Tungsten Industry Co., Ltd.   CHINA
Jiangxi Yaosheng Tungsten Co., Ltd.   CHINA
Jin Jinyin refining company limited   CHINA
JiuJiang JinXin Nonferrous Metals Co., Ltd.   CHINA
Jiujiang Tanbre Co., Ltd.   CHINA
Johnson Matthey Inc   UNITED STATES
Johnson Matthey Ltd   CANADA
JSC Ekaterinburg Non-Ferrous Metal Processing Plant   RUSSIAN FEDERATION
JSC Uralelectromed   RUSSIAN FEDERATION
JX Nippon Mining & Metals Co., Ltd.   JAPAN
Kaimeng(Gejiu) Industry and Trade Co., Ltd.   CHINA
Kanfort Industrial (Yantai)   CHINA
Kazzinc Ltd   KAZAKHSTAN
KEMET Blue Metals   MEXICO

 

A-2


Standard Smelter Name

 

Smelter Facility Location: Country

KEMET Blue Powder   UNITED STATES
Kennametal Fallon   UNITED STATES
Kennametal Huntsville   UNITED STATES
Kennecott Utah Copper LLC   UNITED STATES
King-Tan Tantalum Industry Ltd   CHINA
Kojima Chemicals Co., Ltd   JAPAN
Korea Metal Co. Ltd   KOREA, REPUBLIC OF
Kupol   RUSSIAN FEDERATION
Kyrgyzaltyn JSC   KYRGYZSTAN
L’ azurde Company For Jewelry   SAUDI ARABIA
Lingbao Gold Company Limited   CHINA
Lingbao Jinyuan Tonghui Refinery Co. Ltd.   CHINA
Linwu Xianggui Smelter Co   CHINA
London Bullion Market Association   UNITED KINGDOM
LSM Brasil S.A.   BRAZIL
LS-NIKKO Copper Inc.   KOREA, REPUBLIC OF
Luoyang Zijin Yinhui Metal Smelt Co Ltd   CHINA
Macderlun   CHINA
Magnu’s Minerais Metais e Ligas LTDA   BRAZIL
Malaysia Smelting Corporation (MSC)   MALAYSIA
Malipo Haiyu Tungsten Co., Ltd.   CHINA
Materion   UNITED STATES
Matsuda Sangyo Co., Ltd.   JAPAN
Melt Metais e Ligas S/A   BRAZIL
Metallo Chimique   BELGIUM
Metallurgical Products India (Pvt.) Ltd.   INDIA
Metalor Technologies (Hong Kong) Ltd   HONG KONG
Metalor Technologies (Singapore) Pte. Ltd.   SINGAPORE
Metalor Technologies SA   SWITZERLAND
Metalor USA Refining Corporation   UNITED STATES
Met-Mex Peñoles, S.A.   MEXICO
Mineração Taboca S.A.   BRAZIL
Minmetals Ganzhou Tin Co. Ltd.   CHINA
Minsur   PERU
Mistubishi Materials Corporation   JAPAN
Mitsubishi Materials Corporation   JAPAN
Mitsui Mining & Smelting   JAPAN
Mitsui Mining and Smelting Co., Ltd.   JAPAN
MK electron   KOREA, REPUBLIC OF
Molycorp Silmet A.S.   ESTONIA
Morigin Company   JAPAN
Morris and watson   NEW ZEALAND
Moscow Special Alloys Processing Plant   RUSSIAN FEDERATION
Nadir Metal Rafineri San. Ve Tic. A.Ş.   TURKEY
Navoi Mining and Metallurgical Combinat   UZBEKISTAN
Nihon Material Co. LTD   JAPAN
Ningbo Kangqiang   CHINA
Ningxia Orient Tantalum Industry Co., Ltd.   CHINA
Novosibirsk Integrated Tin Works   RUSSIAN FEDERATION
Nui Phao H.C. Starck Tungsten Chemicals Manufacturing LLC   VIET NAM
O.M. Manufacturing (Thailand) Co., Ltd.   THAILAND
O.M. Manufacturing Philippines, Inc.   PHILIPPINES
Ohio Precious Metals, LLC   UNITED STATES
Ohura Precious Metal Industry Co., Ltd   JAPAN
OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastvetmet)   RUSSIAN FEDERATION
OJSC Kolyma Refinery   RUSSIAN FEDERATION
OMSA   BOLIVIA
PAMP SA   SWITZERLAND
Penglai Penggang Gold Industry Co Ltd   CHINA
Plansee   AUSTRIA
Plansee SE Liezen   AUSTRIA
Plansee SE Reutte   AUSTRIA
Prioksky Plant of Non-Ferrous Metals   RUSSIAN FEDERATION
PT Alam Lestari Kencana   INDONESIA
PT Aneka Tambang (Persero) Tbk   INDONESIA
PT Artha Cipta Langgeng   INDONESIA
PT ATD Makmur Mandiri Jaya   INDONESIA
PT Babel Inti Perkasa   INDONESIA

 

A-3


Standard Smelter Name

 

Smelter Facility Location: Country

PT Babel Surya Alam Lestari   INDONESIA
PT Bangka Putra Karya   INDONESIA
PT Bangka Tin Industry   INDONESIA
PT Belitung Industri Sejahtera   INDONESIA
PT BilliTin Makmur Lestari   INDONESIA
PT Bukit Timah   INDONESIA
PT DS Jaya Abadi   INDONESIA
PT Eunindo Usaha Mandiri   INDONESIA
PT Fang Di MulTindo   INDONESIA
PT HANJAYA PERKASA METALS   INDONESIA
PT HP Metals Indonesia   INDONESIA
PT Indra Eramulti Logam Industri   INDONESIA
PT Inti Stania Prima   INDONESIA
PT Karimun Mining   INDONESIA
PT Koba Tin   INDONESIA
PT Mitra Stania Prima   INDONESIA
PT Panca Mega Persada   INDONESIA
PT Prima Timah Utama   INDONESIA
PT REFINED BANGKA TIN   INDONESIA
PT Sariwiguna Binasentosa   INDONESIA
PT Seirama Tin investment   INDONESIA
PT Stanindo Inti Perkasa   INDONESIA
PT Sumber Jaya Indah   INDONESIA
PT Supra Sukses Trinusa   INDONESIA
PT Tambang Timah   INDONESIA
PT Timah   INDONESIA
PT Tinindo Inter Nusa   INDONESIA
PT Tommy Utama   INDONESIA
PT Yinchendo Mining Industry   INDONESIA
PX Précinox SA   SWITZERLAND
QuantumClean   UNITED STATES
Rand Refinery (Pty) Ltd   SOUTH AFRICA
Realized the enterprise co.,ltd.   CHINA
RFH Tantalum Smeltry Co., Ltd   CHINA
Royal Canadian Mint   CANADA
Rui Da Hung   TAIWAN
Sabin Metal Corp.   UNITED STATES
Samduck Precious Metals   KOREA, REPUBLIC OF
SAMWON METALS Corp.   KOREA, REPUBLIC OF
Sandvik Material Technology   SWEDEN
Schone Edelmetaal   NETHERLANDS
SEMPSA Joyería Platería SA   SPAIN
Shandong Tiancheng Biological Gold Industrial Co. Ltd.   CHINA
Shandong Zhaojin Gold & Silver Refinery Co. Ltd   CHINA
Shanghai Jiangxi Metals Co. Ltd   CHINA
So Accurate Group, Inc.   UNITED STATES
SOE Shyolkovsky Factory of Secondary Precious Metals   RUSSIAN FEDERATION
Soft Metais, Ltda.   BRAZIL
Solar Applied Materials Technology Corp.   TAIWAN
SOLDER COAT Co.,LTD   JAPAN
Solikamsk Metal Works   RUSSIAN FEDERATION
Standard Sp z o.o.   POLAND
Sumitomo Electric Industries   JAPAN
Sumitomo Metal Mining Co., Ltd.   JAPAN
Suzhou Xingrui Noble   CHINA
Taki Chemicals   JAPAN
Tanaka Kikinzoku Kogyo K.K.   JAPAN
Tantalite Resources   SOUTH AFRICA
Tejing (Vietnam) Tungsten Co., Ltd.   VIET NAM
Telex   UNITED STATES
Thaisarco   THAILAND
The Great Wall Gold and Silver Refinery of China   CHINA
THE HUTTI GOLD MINES CO.LTD   INDIA
The Refinery of Shandong Gold Mining Co. Ltd   CHINA
Tian Cheng Chemical Industry   CHINA
Tokuriki Honten Co., Ltd   JAPAN
Tongling nonferrous Metals Group Co.,Ltd   CHINA
Torecom   KOREA, REPUBLIC OF
Ulba   KAZAKHSTAN

 

A-4


Standard Smelter Name

 

Smelter Facility Location: Country

Umicore Brasil Ltda   BRAZIL
Umicore Precious Metals Thailand   THAILAND
Umicore SA Business Unit Precious Metals Refining   BELGIUM
United Precious Metal Refining, Inc.   UNITED STATES
Valcambi SA   SWITZERLAND
Vietnam Youngsun Tungsten Industry Co., Ltd   VIET NAM
Western Australian Mint trading as The Perth Mint   AUSTRALIA
White Solder Metalurgia e Mineração Ltda.   BRAZIL
Wolfram Bergbau und Hütten AG   AUSTRIA
Wolfram Company CJSC   RUSSIAN FEDERATION
Xiamen Tungsten (H.C.) Co., Ltd.   CHINA
Xiamen Tungsten Co., Ltd   CHINA
Xinhai Rendan Shaoguan Tungsten Co., Ltd.   CHINA
YAMAMOTO PRECIOUS METAL CO., LTD.   JAPAN
Yichun Jin Yang Rare Metal Co., Ltd   CHINA
Yokohama Metal Co Ltd   JAPAN
Yukenkougiyou   JAPAN
Yunnan Chengfeng Non-ferrous Metals Co.,Ltd.   CHINA
Yunnan Chengo Electric Smelting Plant   CHINA
Yunnan Copper Industry Co Ltd   CHINA
YunNan GeJiu Jin Ye Mineral Co.,Ltd   CHINA
YunNan Gejiu Yunxin Electrolyze Limited   CHINA
Yunnan Tin Company, Ltd.   CHINA
YUNSIN   CHINA
ZHEJIANG HUANGYAN XINQIAN ELECTRICAL EQUIPMENT FITTINGS FACTORY   CHINA
Zhejiang Suijin   CHINA
Zhen bo shi ye Co., LTD   CHINA
Zhongyuan Gold Smelter of Zhongjin Gold Corporation   CHINA
Zhuzhou Cement Carbide   CHINA
Zhuzhou Cemented Carbide Group Co Ltd   CHINA
Zijin Mining Group Co. Ltd   CHINA

 

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