EX-1.02 2 d734435dex102.htm EX-1.02 EX-1.02

Exhibit 1.02

LOGITECH INTERNATIONAL S.A.

CONFLICT MINERALS REPORT

FOR THE REPORTING PERIOD FROM JANUARY 1 TO DECEMBER 31, 2013

SECTION ONE: INTRODUCTION

This report for the year ended December 31, 2013 is presented to comply with Rule 13p-1 under the Securities Exchange Act of 1934 (the Rule). The Rule was adopted by the Securities and Exchange Commission (SEC) to implement reporting and disclosure requirements related to conflict minerals as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The Rule imposes certain reporting obligations on SEC registrants whose manufactured products contain conflict minerals which are necessary to the functionality or production of their products. Conflict Minerals are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum, tungsten, and gold (3TG). These requirements apply to registrants whatever the geographic origin of the conflict minerals and whether or not they fund armed conflict. If a registrant can establish that the conflict minerals originated from sources other than the Democratic Republic of the Congo or an adjoining country (the Covered Countries),or from recycled and scrap sources, they must submit a Form SD which describes the Reasonable Country of Origin Inquiry completed.

If a registrant has reason to believe that any of the conflict minerals in their supply chain may have originated in the Covered Countries, or if they are unable to determine the country of origin of those conflict minerals, then the issuer must exercise due diligence on the conflict minerals’ source and chain of custody. The registrant must annually submit a report, Conflict Minerals Report (CMR), to the SEC that includes a description of those due diligence measures.

The report presented herein is not audited as the Rule provides that if a registrant’s products are “DRC conflict undeterminable” in 2013 or 2014, the CMR is not subject to an independent private sector audit.

1. Company Overview

This report has been prepared by management of Logitech (herein referred to as “Logitech,” the “Company,” “we,” “us,” or “our”). The information includes the activities of all majority-owned subsidiaries and variable interest entities that are required to be consolidated.

Logitech International S.A., together with its consolidated subsidiaries, (“Logitech” or the “Company”) is a world leader in products that connect people to the digital experiences they care about. Spanning multiple computing, communication and entertainment platforms, we develop and market innovative hardware and software products that enable or enhance digital navigation, music and video entertainment, gaming, social networking, and audio and video communication over the Internet.

Logitech was founded in Switzerland in 1981, and Logitech International S.A. has been the parent holding company of Logitech since 1988. Logitech International S.A. is a Swiss holding company with its registered office in Apples, Switzerland, which conducts its business through subsidiaries in Americas (including North and South America), EMEA (Europe, Middle East, Africa) and Asia Pacific (including, among other countries, China, Taiwan, Japan and Australia). Shares of Logitech International S.A. are listed on both the Nasdaq Global Select Market, under the trading symbol LOGI, and the SIX Swiss Exchange, under the trading symbol LOGN.

 

2

The Company has two operating segments, peripherals and video conferencing. Logitech’s peripherals segment encompasses the design, manufacturing and marketing of peripherals for personal computers (“PCs”), tablets and other digital platforms. The Company’s video conferencing segment offers scalable high-definition (“HD”) video communications endpoints, HD video conferencing systems with integrated monitors, video bridges and other infrastructure software and hardware to support large-scale video deployments, and services to support these products.

SECTION TWO: LOGITECH PRODUCTS

The Table 1 below lists the product categories developed and marketed by Logitech for the reporting period from January 1 to December 31, 2013. These products are more fully described in our Annual Report, which can be accessed on our Web site or on the Securities and Exchange Commission’s Web site at http://www.sec.gov, and the reports we file that are published by the SIX Swiss Exchange may be accessed at: http://www.six-exchange-regulation.com/obligations/management_transactions_en.html.

The vast majority of the Logitech products are electronic devices which include electronic and electrical components and semi-conductors. Because of their specific properties, the 3TG are widely used in semiconductors and in electronic components generally and, by way of consequence, in the consumers electronics industries. This why Logitech has considered that almost all of its product categories may potentially include one or several Conflict Mineral(s). Accordingly, Logitech has included in the scope of its Conflict Minerals plan all products qualifying as electronic devices. The only product categories that have been excluded from the scope of the Conflict Minerals plan are those related to so-called “passive devices”, namely devices which do not include electronic or electric components, nor any semi-conductors, nor any other metallic component made of any of the 3TG. These excluded categories are included in Table 1, below and consist of: (i) folio protective cases for tablets; (ii) protective cases for smartphones and other non electronic, non electric accessories for smartphones (such as tilt panels, car mounts); (iii) mouse pads.

 

3

Table 1:

 

Product Category    Products    Potentially 
include 
“Conflict 
Minerals” 
(Yes / No) 		    DRC Conflict
Status

 

PC Gaming

   

 

Gaming mice, keyboards, headsets and other controllers (e.g. steering wheel, joystick, gamepad)

   

 

Y

   

 

DRC Conflict undeterminable

  

 

Mouse pad (hard pad, cloth pad)

 

   

 

N

 

   

 

N/A

 

 

Tablet & Other Accessories

   

 

Tablet keyboard and other accessories

 

   

 

Y

 

   

 

DRC Conflict undeterminable

 

  

 

Folio protective cases (without keyboard)

 

   

 

N

 

   

 

N/A

 

  

 

Smartphone battery packs

 

   

 

Y

 

   

 

DRC Conflict undeterminable

 

  

 

Smartphone cases, tilt panel, drive mount

 

   

 

N

 

   

 

N/A

 

 

Mobile Speakers

   

 

Includes portable wireless Bluetooth speakers.

   

 

Y

   

 

DRC Conflict undeterminable

 

 

Pointing Devices

   

 

PC related mice, trackpads, touchpads, and presenters

    Y
   

 

DRC Conflict undeterminable

 

 

PC Keyboards & Desktops

   

 

Includes PC keyboards, keyboards used in living rooms and keyboard/mice combo products.

   

 

Y

   

 

DRC Conflict undeterminable

 

 

4

       
Audio-PC & Wearables    PC speakers, PC headsets, and in-ear headphones    Y     

DRC Conflict undeterminable

 

       
Video    Retail webcam products as well as Unified Communications webcams.    Y     

DRC Conflict undeterminable

 

       
Remotes    Harmony remote controls    Y     

DRC Conflict undeterminable

 

       

Other (products we currently intend to transition out of have already transitioned out)

 

   

This category comprises a variety of products out of which we currently intend to transition, or have transitioned, because they are no longer strategic to our business. Products currently included in this category include TV camera, Digital Video Security (DVS), other gaming and music products, including over-ear headphones, TV and home speakers, Google TV products, and PC Keyboards & Desktops accessories.

 

    Y      DRC Conflict undeterminable
       

Video conferencing

(sold under the brand 

“LifeSize”)

 

    HD video communication endpoints, HD video conferencing systems with integrated monitors, video bridges and other infrastructure    Y      DRC Conflict undeterminable

Logitech is currently transitioning out certain products in its peripherals operating segment. These are identified in Table 1 above under “Other”. Logitech has included in the scope of its Conflict Minerals plan any product under this category that has been manufactured or marketed during the reporting period from January 1 to December 31, 2013.

Logitech may modify in the future the above categorization of its products in line with the requirement to adapt the category classification to business needs.

 

5

SECTION THREE: CONFLICT MINERALS DETERMINATION

For the reporting period from January 1 to December 31, 2013, Logitech conducted due diligence on the source and chain of custody of the conflict minerals that are necessary to the functionality or production of the products (“necessary conflict minerals”) that we manufactured or contracted to manufacture, after January 31, 2013, for which the results of our reasonable country of origin inquiry and the diligence measures conducted on these conflict minerals were as follows:

 

  •   We were not able to obtain adequate information from our supply chain to be able to make any determination as to the source of these conflict minerals.

These conflict minerals we define collectively as the “CMR conflict minerals” (the “CMR Conflict Minerals”).

Therefore, these products that we manufacture that are subject to the reporting obligations of Rule 13p-1 are “DRC conflict undeterminable”, because we have been unable to determine the origin of the 3TG they contain or to determine whether they came from recycled or scrap sources; the facilities used to process them; their country of origin; or their mine or location of origin. (Please also refer to Table 1 within this report for additional details).

The company continues to implement and pursue processes to ensure in the future that it is able to obtain the information necessary to make a determination.

 

6

SECTION FOUR: DUE DILIGENCE MEASURES

We conducted due diligence on the source and chain of custody of our CMR Conflict Minerals to ascertain whether these conflict minerals originated in the Democratic Republic of the Congo or any of its adjoining countries and financed or benefitted non-state armed groups in any of these countries.

Design of Our Due Diligence Measures

Our conflict minerals due diligence measures have been designed to conform with the Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, Second Edition (the “OECD Guidance”), as applicable for tin, tantalum, tungsten, gold and downstream companies (as the term is defined in the OECD Guidance), in all material respects. We designed our due diligence measures to:

 

  1. establish strong Company management systems for conflict minerals supply chain due diligence;

 

  2. identify and assess conflict minerals risks in our supply chain;

 

  3. design and implement strategies to respond to conflict minerals risks identified;

 

  4. contribute to independent third-party audits of the due diligence practices of conflict minerals smelters and refiners by participating in industry organizations

 

  5. report on our conflict minerals supply chain due diligence activities.

Due Diligence Measures Performed

Logitech’s due diligence measures were based on multi-industry initiatives with the smelters and refiners of conflict minerals who provide those conflict minerals to Logitech’s suppliers. As a purchaser, Logitech is many steps removed from the mining of the conflict minerals; Logitech does not purchase raw ore or unrefined conflict minerals, and does no purchasing in the Covered Countries. The smelters and refiners are consolidating points for raw ore and are in the best position in the total supply chain to know the origin of the ores. For end users like Logitech, it is not possible to determine the origin of conflict minerals without information and clarification from suppliers and smelters.

As a member in the Conflict Free Sourcing Initiative (the “CFSI”), we leveraged the due diligence conducted on smelters and refiners by the CFSI’s Conflict-Free Smelter Program (the “CFSP”). The CFSP uses independent private sector auditors to audit the source, including mines of origin, and chain of custody of the conflict minerals used by smelters and refiners that agree to participate in the CFSP. The smelters and refiners that are found to be CFSP compliant are those for which the independent auditor has verified that the smelter’s or refiner’s conflict minerals originated from conflict free mines in the Democratic Republic of the Congo or any of its adjoining countries.

Our due diligence measures included the following activities:

 

  1)

We established an internal team to implement the Logitech’s Conflict Minerals Program. The core team members are comprised from the following business units: Sustainability; Lifesize Compliance; Global Sourcing; Supplier Development Team; Legal; Investor Relations and Finance;

 

7

  2) We established a Conflict Mineral Policy and made it publically available in 2014 at: http://www.logitech.com/assets/51186/logitech-policy-on-conflict-minerals-jan-2014-signed.pdf;

 

  3) We established requirements and incorporated these requirements into our standard supplier contracts to define Logitech expectations of suppliers regarding sourcing of conflict minerals and reporting of information to Logitech. These requirements have been provided in our contracts as we entered into new supplier contracts or renewed existing ones. We have amended a certain number of supplier contracts that have been in place for several years. It will take a number of years to ensure that all our supplier contracts contain appropriate flow-down clauses. In the meantime we are working with the relevant suppliers to insure they provide the conflict minerals (in the form of gold and the derivatives tin, tantalum, and tungsten, or collectively, “3TG”) sourcing information until the contracts can be amended;

 

  4) We chose to engage with all our direct suppliers based on the widespread use of 3TG. Given our position in the supply chain, we relied heavily on our first-tier suppliers to provide information about the sources of the 3TG used in our products and to identify whether those sources may be from the DRC or an adjoining country;

 

  5) We conducted a survey of our 3TG Direct Suppliers using the CFSI Conflict Minerals Reporting Template (the “Template”), which included questions about the location or mine of origin, and obligated those suppliers to make similar efforts to survey their supply chain using the Template and report the facilities and location or mine of origin for necessary conflict minerals. We elected to use this Template as it is the most commonly used tool in numerous industries, thus easing the potential confusion and burden for our suppliers;

 

  6) We received responses from 84.99% of the direct suppliers. We reviewed the responses against the criteria designed to evaluate the adequacy of responses. These criteria include, but are not limited to, untimely or incomplete responses as well as inconsistencies within the data reported in the Template;

 

  7) We compared the facilities identified by relevant 3TG Direct Suppliers via the supply chain survey against the list of facilities that have received a “conflict-free” designation for tantalum, tin, tungsten and gold, such as the Conflict-Free Smelter List (“CFS List”) published by the Conflict Free Sourcing Initiative (“CFSI”);

 

  8)

Based on the data collected to-date, the main risks we have identified are related to the lack of data and the quality of the data. The vast majority of the responses received from suppliers provided data at a company level or were unable to specify the smelter or refiners used in their

 

8

  supply chain. We are therefore unable to determine whether any of the conflict minerals reported by the suppliers were contained in products supplied to us or to validate that any of the smelters of refiners provided by our suppliers are actually in our supply chain;

 

  9) We analyzed all the information and have reached the following conclusion: After conducting due diligence on the source and chain of custody of the Conflict Minerals in our products, we found our products to be “DRC conflict undeterminable”; and

 

  10) We supported the CFSI Conflict-Free Smelter Program, and required relevant 3TG Direct Suppliers in Logitech supply chain to encourage the facilities in their supply chain to participate in the CFSI Conflict-Free Smelter Program.

 

9

SECTION FIVE: DUE DILIGENCE DETERMINATION

After conducting due diligence on the source and chain of custody of the CMR Conflict Minerals in Logitech products, we found the products to be “DRC conflict undeterminable”, as indicated below. DRC conflict undeterminable products are those for which we were unable to determine whether their necessary conflict minerals finance or otherwise benefit armed groups in the Democratic Republic of the Congo or any of its adjoining countries.

Survey Responses

We received responses from 84.99 % of the suppliers surveyed. We reviewed the responses against criteria developed to determine which responses required further engagement with our suppliers. These criteria included, though are not limited to, untimely or incomplete responses as well as inconsistencies within the data reported in the Template. We have worked directly with these suppliers to provide revised responses, where applicable.

Responses included the names of over 364 entities listed by our suppliers as smelters or refiners. 15.66% (57) of these entities were identified as certified Conflict-Free using the CFSI Reporting Template Revision 2.03a. We compared these facilities to the CFSI list of smelters and where a supplier indicated that the facility was certified as Conflict-Free, we ensured that the name was listed by CFSI. The remaining 307 processing facilities responses could not be validated and their status is deemed unknown.

Logitech supports the refinement and expansion of the list of participating smelters through our membership in the CFSI program.

A small minority of suppliers provided information at a product level or product category level. However all of these suppliers were unable to identify specifically the smelters whose 3TG went into parts supplied to Logitech.

The large majority of the responses received provided data at a company or divisional level or, as described above, were unable to specify the smelters or refiners used for components supplied to Logitech. Thus, our suppliers were unable to represent to us that 3TG from the entities they listed had actually been included in components they supplied to Logitech. In addition, 307 processing facilities were not validated as in fact being smelters or refiners.

We have therefore elected not to present the smelter and refiner names in this report, with the exception of the conflict-free smelters sourcing from Covered Countries. Please see table 2 below for further information on these facilities and their country of origin.

 

10

Logitech Products

Product Description: The Company has two operating segments, peripherals and video conferencing. Logitech’s peripherals segment encompasses the design, manufacturing and marketing of peripherals for personal computers (“PCs”), tablets and other digital platforms. The Company’s video conferencing segment offers scalable high-definition (“HD”) video communications endpoints, HD video conferencing systems with integrated monitors, video bridges and other infrastructure software and hardware to support large-scale video deployments, and services to support these products. These products are more fully described in our Annual Report, which can be accessed on our Web site or on the Securities and Exchange Commission’s Web site at http://www.sec.gov, and the reports we file that are published by the SIX Swiss Exchange may be accessed at: http://www.six-exchange-regulation.com/obligations/management_transactions_en.html.

Please refer to Table 2 which provides a list of all the Conflict Free Smelters for Logitech products.

Table 2: List of Conflict Free Smelters Determination for Logitech Products

 

Metal

   

SOR/Facility Name:

  

Country of Origin

   

Smelter ID

   

Conflcit Mineral
Free (CMF) Status

Gold    Allgemeine Gold- & Silberscheideanstalt   GERMANY    1DEU001    CMF
Gold    Argor-Heraeus   SWITZERLAND    1CHE004    CMF
Gold    Asahi Pretec Corp.   JAPAN    1JPN005    CMF
Gold    Dowa Metals & Mining Co., Ltd   JAPAN    1JPN015    CMF
Gold    Heraeus Limited Hongkong   HONG KONG    1HKG019    CMF
Gold    Heraeus Precious Metals GmbH & Co. KG   GERMANY    1DEU018    CMF
Gold    Johnson Matthey (Salt Lake City)   UNITED STATES    1USA025    CMF
Gold    Johnson Matthey Limited   CANADA    1CAN024    CMF
Gold    JX Nippon Mining & Metals Co.. Ltd   JAPAN    1JPN028    CMF
Gold    Kojima Chemicals Co. Ltd   JAPAN    1JPN074    CMF
Gold    LS-Nikko Copper Inc   KOREA, REPUBLIC OF    1KOR032    CMF
Gold    Materion Advanced Materials, Technologies and Services, Inc.   UNITED STATES    1USA033    CMF
Gold    Matsuda Sangyo co., Ltd   JAPAN    1JPN034    CMF
Gold    Metalor Technologies (Hong Kong) Ltd   HONG KONG    1HKG036    CMF
Gold    Metalor Technologies SA   SWITZERLAND    1CHE035    CMF
Gold    Metalor USA Refining Corporation   UNITED STATES    1USA037    CMF
Gold    Mitsubishi Materials Corporation   JAPAN    1JPN039    CMF
Gold    Mitsui Mining and Smelting Co., Ltd   JAPAN    1JPN040    CMF
Gold    Nihon Material Co. LTD   JAPAN    1JPN071    CMF

 

11

Gold    Ohio Precious Metals    UNITED STATES    1USA043    CMF
Gold    Rand Refinery (Pty) Ltd    SOUTH AFRICA    1ZAF049    CMF
Gold    Royal Canadian Mint    CANADA    1CAN050    CMF
Gold    Solar Applied Materials Technology Corporation    TAIWAN    1TWN056    CMF
Gold    Sumitomo Metal Mining Co.. Ltd.    JAPAN    1JPN057    CMF
Gold    Tanaka Kikinzoku Kogyo K.K    JAPAN    1JPN058    CMF
Gold    Tokuriki Honten Co. Ltd    JAPAN    1JPN060    CMF
Gold    Umicore SA Business Unit Precious Metals Refining    BELGIUM    1BEL062    CMF
Gold    United Precious Metal Refining, Inc.    UNITED STATES    1USA076    CMF
Gold    Valcambi SA    SWITZERLAND    1CHE063    CMF
Gold    Western Australian Mint trading as the Perth Mint    AUSTRALIA    1AUS046    CMF
Gold    Xstrata Canada Corporation    CANADA    1CAN064    CMF
Tantalum    Exotech    UNITED STATES    3USA002    CMF
Tantalum    F&X    CHINA    3CHN003    CMF
Tantalum    Global Advanced Metals    UNITED STATES    3USA005    CMF
Tantalum    HC Starck    GERMANY    3DEU006    CMF
Tantalum    Hi-Temp    UNITED STATES    3USA016    CMF
Tantalum    Mitsui Mining & Smelting    JAPAN    3JPN008    CMF
Tantalum    Ningxia    CHINA    3CHN009    CMF
Tantalum    Plansee    AUSTRALIA    3AUT011    CMF
Tantalum    Taki Chemicals    JAPAN    3JPN023    CMF
Tantalum    Ulba    KAZAKHSTAN    3KAZ014    CMF
Tantalum    Zhuzhou Cement Carbide    CHINA    3CHN015    CMF
Tin    Cookson    UNITED STATES    2USA001    CMF
Tin    Gejiu Non-Ferrous Metal Processing Co. Ltd.    CHINA    2CHN012    CMF
Tin    Malaysia Smelting Corp. BERHAD    MALAYSIA    2MYS016    CMF
Tin    Mineração Taboca S.A.    BRAZIL    2BRA018    CMF
Tin    Minsur Mines    PERU    2PER019    CMF
Tin    OMSA    BOLIVIA    2BOL022    CMF
Tin    PT Bukit Timah    INDONESIA    2IDN032    CMF
Tin    Thaisarco    THAILAND    2THA046    CMF
Tin    Yunan Tin Company LTD    CHINA    2CHN048    CMF
Tungsten    Fujian Jinxin Tungsten Co., Ltd.    CHINA    4CHN022    CMF
Tungsten    Global Tungsten & Powders Corp    UNITED STATES    4USA007    CMF
Tungsten    HC Starck GmbH    GERMANY    4DEU008    CMF
Tungsten    Jiangxi Tungsten Co Ltd    CHINA    4CHN010    CMF
Tungsten    Wolfram JSC    RUSSIAN FEDERATION    4RUS013    CMF
Tungsten    Xiamen Tungsten Co Ltd    CHINA    4CHN014    CMF

 

12

Efforts to Determine the Conflict Minerals’ Mine or Location of Origin –

Through our participation in CFSI, the OECD implementation programs, and requesting our suppliers to complete The Template, we have determined that seeking information about 3TG smelters and refiners in our supply chain represents the most reasonable effort we can make to determine the mines or locations of origin of the 3TG in our supply chain, as outlined in Section Four “Due Diligence Measures” above.

 

13

SECTION SIX: INDEPENDENT PRIVATE SECTOR AUDIT

The report presented herein is not audited as the Rule provides that if a registrant’s products are “DRC conflict undeterminable” in 2013 or 2014, the CMR is not subject to an independent private sector audit.

 

14

SECTION SEVEN: NEXT STEPS

Logitech will undertake the following steps during the next compliance periods to improve the due diligence conducted to further mitigate the risk that its necessary conflict minerals benefit armed groups, including:

 

  •   Attempting to increase the response rate of suppliers’ and improve the content of the responses.

 

  •   Requesting relevant suppliers to request smelters to participate in obtaining a conflict free designation from an industry program such as the EICC/GeSI Conflict Free Smelter program.

 

  •   Attempting to validate supplier responses using information collected via independent conflict free smelter validation programs such as the Electronic Industry Citizenship Coalition Global e-Sustainability Initiative (EICC/GeSI) Conflict Free Smelter program to which we provide financial support.

 

  •   Increasing the number of relevant supplier contracts that include our requirements defining Logitech expectations of suppliers regarding sourcing of conflict minerals and reporting information to Logitech.

 

  •   Future Non-Conformance: Discontinue doing business with any Logitech Suppliers whom are unable to meet our Conflict Minerals Policy.

 

15