OHIO | 1-2299 | 34-0117420 |
(State or Other Jurisdiction of | (Commission File | (I.R.S. Employer |
Incorporation or Organization) | Number) | Identification No.) |
1. | Certain conflict minerals necessary to the functionality or production of products manufactured by us, or contracted to be manufactured for us, in 2013 may have originated in the Democratic Republic of the Congo or an adjoining country, and |
2. | The necessary conflict minerals may not be solely from recycled or scrap sources. |
APPLIED INDUSTRIAL TECHNOLOGIES, INC. | |
(Registrant) | |
By: /s/ Fred D. Bauer | |
Fred D. Bauer, Vice President | |
Date: May 30, 2014 |
a. | Establish company management systems |
• | We formed a multidisciplinary team of associates to lead our conflict minerals compliance efforts, including members with legal, regulatory, supply chain, finance, and communications backgrounds. |
• | The team attended training sessions offered by legal, audit, and consultant professionals on conflict minerals compliance. |
• | Through interviews with our business unit leaders, we identified component suppliers and contacts. |
• | We obtained quarterly certifications from business unit leaders to identify changes in component suppliers during the year. |
• | We determined that the most reasonable effort we could make to determine the existence and origin of necessary conflict minerals in our products was to seek information from our direct suppliers. |
• | We prepared a survey/questionnaire form to ask suppliers about the existence, country of origin, source, and chain of custody of conflict minerals in the products they supplied to us. |
• | Our manufacturing operations provided records of their component suppliers and contacts. |
• | Because we had hundreds of component suppliers, often representing very small purchase volumes, we surveyed direct suppliers of metal-containing components we estimated would constitute about three-quarters of the dollar volume of fiscal 2013 purchases by the manufacturing operations. |
• | We recorded all requests sent and responses received. |
• | We made repeat requests to suppliers that did not submit complete responses. |
• | Additional follow-up was conducted with suppliers after considering factors relevant to the reasonableness of our inquiry efforts, including the following: the value of our purchases from the supplier; and our subjective beliefs about the supplier’s business reputation, the nature of our company’s relationship with the supplier, and the likelihood of the existence of conflict minerals in the product. |
• | We followed up with suppliers who did not respond to the survey to educate them about the conflict minerals rule and to urge them to submit a completed survey. |
• | We reviewed the completed surveys and inquired about discrepancies in the answers provided. |
• | Many suppliers did not provide complete responses to our survey. |
• | Often, the responses were provided on a company-wide basis, rather than by product. |
• | Suppliers of certain components confirmed that one or more of their products contained one or more conflict minerals. In many cases, though, suppliers did not complete their due diligence on the origin of the conflict minerals because they were still making inquiries of their own suppliers. Accordingly, most suppliers did not identify the smelters or refiners for their necessary conflict minerals. |
• | We collected information from suppliers about some but not all of the smelters and refiners that process our necessary conflict minerals. A small number of component suppliers could not rule out that the conflict minerals originated in the Democratic Republic of the Congo or an adjoining country. |
• | After exercising the required due diligence, we did not obtain sufficient information from our suppliers to be able to identify the facilities used to process the necessary conflict minerals in those products or their country of origin. |
• | We added provisions to our purchase order terms and conditions requiring suppliers to make good faith inquiries and provide responses regarding the origin of necessary conflict minerals in their products. |
• | We added our conflict minerals survey form to supplier questionnaire packages. |