UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Specialized Disclosure Report
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ALTRA INDUSTRIAL MOTION CORP. (Exact name of registrant as specified in its charter)
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Delaware | | 001-33209 | | 61-1478870 |
(State or other Jurisdiction of Incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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300 Granite Street, Suite 201 Braintree, Massachusetts | | 02184 |
(Address of Principal Executive Offices) | | (Zip Code) |
Glenn Deegan (781) 917-5517
(Name and telephone number, including area code, of the person to contact in connection with this report).
Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:
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x | Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2014. |
Section 1 – Conflict Minerals Disclosure.
Item 1.01. Conflict Minerals Disclosure and Report.
Overview
References in this report to “Altra,” “we,” “our,” or “us” mean Altra Industrial Motion Corp., together with its subsidiaries, except where the context otherwise requires.
Our Conflict Minerals Policy
Altra is committed to (i) conducting its business in full compliance with Rule 13p-1 under the Securities Exchange Act of 1934, as amended (the "Conflict Minerals Rule"), (ii) responsible sourcing of Conflict Minerals (as defined below), (iii) identifying the potential Conflict Minerals which are necessary to the functionality or production of a product manufactured by Altra or for Altra by a contract manufacturer, and (iv) determining the country of origin of any such Conflict Mineral.
In furtherance of the foregoing, we have adopted and communicated to our suppliers and the public a Policy Statement on Conflict Minerals (the "Conflict Minerals Policy"). As used herein and in the Conflict Minerals Policy, "Conflict Minerals" are columbite-tantalite (coltan), cassiterite, gold, wolframite and the derivatives tantalum, tin and tungsten, without regard to the location of origin.
Our Conflict Minerals Policy indicates that Altra will work with its suppliers to ensure compliance with the Conflict Minerals Rule in furtherance of Altra’s ultimate goal that only “conflict free” materials and components are utilized in Altra’s products.
Applicability of the Conflict Minerals Rule to Our Company
Altra is a leading global designer, producer and marketer of a wide range of mechanical power transmission products serving customers in a diverse group of industries, including energy, general industrial, material handling, mining, transportation, and turf and garden. Altra’s product portfolio includes industrial clutches and brakes, enclosed gear drives, open gearing, belted drives, couplings, engineered bearing assemblies, linear components, gear motors, electronic drives, and other related products. We conducted a review of the products manufactured or contracted to be manufactured by Altra during the reporting period from January 1, 2014 to December 31, 2014 (the “Reporting Period”) , and determined that Conflict Minerals could feasibly be found within or as part of certain of Altra’s product lines.
Our global supply chain is complex and, in most cases, we are many levels removed from, and have no direct relationships with, the mines, smelters, refiners and other vendors in our supply chain that may have direct knowledge of the source and use of Conflict Minerals that are included in our products. However, through the efforts described in this Form SD and the Conflict Minerals Report included as an exhibit hereto, we seek to ensure that our sourcing practices are consistent with our Conflict Minerals Policy and to encourage conflict free sourcing in our supply chain.
Reasonable Country of Origin Information (RCOI)
As required by the Conflict Minerals Rule, we conducted a good faith reasonable country of origin inquiry (“RCOI”) regarding the Conflict Minerals included in, and necessary to the functionality or production of, products that we manufactured, or contracted to manufacture, during the Reporting Period, in order to determine whether any such Conflict Minerals originated in the Conflict Region (as defined in the Conflict Minerals Rule) and/or whether any such Conflict Minerals were from recycled or scrap sources. Where applicable, we conducted additional due diligence regarding the source and chain of custody of the Conflict Minerals included in, and necessary to the functionality or production of, our products. We designed our due diligence measures to conform in all material respects with the Organization for Economic Co-operation and Development's (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-affected and High-risk Areas, an internationally recognized due diligence framework.
As a result of Altra's good faith RCOI and ongoing due diligence, Altra does not yet have sufficient information from its suppliers or other sources to (1) determine the country of origin of the Conflict Minerals included in, and necessary to the functionality of, some of our products or (2) identify the facilities used to process those Conflict Minerals.
Website Disclosure
As required by the Conflict Minerals Rule, the foregoing information and our Conflict Minerals Policy is publicly available in the “Corporate Governance” section of Altra’s website located at: http://ir.altramotion.com/governance.cfm. The information contained on our website is not incorporated by reference into this Form SD or our Conflict Minerals Report and should not be considered part of this Form SD or our Conflict Minerals Report.
Conflict Minerals Report
As required by the Conflict Minerals Rule, a Conflict Minerals Report is provided as an exhibit to this Form SD and is publicly available in the “Corporate Governance” section of Altra’s website located at: http://ir.altramotion.com/governance.cfm.
Section 2 – Exhibits.
Item 2.01. Exhibits.
The following exhibit is filed as part of this report:
Exhibit 1.01 – Conflict Minerals Report for the reporting period from January 1, 2014 to December 31, 2014, as required by Item 1.01 of this Form.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ALTRA INDUSTRIAL MOTION CORP. |
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/s/ Glenn Deegan |
Name: | | Glenn Deegan |
Title: | | Vice President, Legal and Human Resources, General Counsel and Secretary |
Date: June 1, 2015
EXHIBIT 1.01
Altra Industrial Motion Corp.
Conflict Minerals Report
For The Year Ended December 31, 2014
This is the Conflict Minerals Report of Altra Industrial Motion Corp. for calendar year 2014, in accordance with Rule 13p-1 under the Securities Exchange Act of 1934 (“1934 Act”). Please refer to Rule 13p-1, Form SD and the 1934 Act Release No. 34-67716 for definitions to the terms used in this Conflict Minerals Report (this “Report”), unless otherwise defined herein.
Overview
This Report has been prepared by Altra Industrial Motion Corp. (herein referred to as “Altra”, “we”, “us” or “our”). The information in this Report includes the activities of all subsidiaries owned or controlled by Altra that are required to be consolidated for purposes of this Report. This report covers products manufactured or contracted to be manufactured by Altra during the reporting period from January 1, 2014 to December 31, 2014 (the “Reporting Period”).
Our Products
Altra is a leading global designer, producer and marketer of a wide range of mechanical power transmission products serving customers in a diverse group of industries, including energy, general industrial, material handling, mining, transportation, and turf and garden. Altra’s product portfolio includes industrial clutches and brakes, enclosed gear drives, open gearing, belted drives, couplings, engineered bearing assemblies, linear components, gear motors, electronic drives, and other related products.
Compliance with the Conflict Minerals Rule
Altra is fully committed to complying with Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act"), which aims to prevent the use of certain "conflict minerals" that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo ("DRC") or adjoining countries (including Angola, Burundi, The Central African Republic, The Republic of Congo, Uganda, Rwanda, South Sudan, Tanzania, and Zambia) (the "Covered Countries"). For purposes of Rule 13-1 (the “Conflict Minerals Rule”), “Conflict Minerals” include: columbite-tantalite ("tantalum"), cassiterite ("tin"), wolframite ("tungsten"), and gold.
In accordance with the Conflict Minerals Rule, Altra undertook measures reasonably designed to (i) identify whether there are any Conflict Minerals necessary to the functionality or production of products manufactured by Altra or contracted by Altra to be manufactured during the Reporting Period, and if so, (ii) determine whether any of those Conflict Minerals originated in the DRC or
an adjoining country, or are from recycled or scrap sources. Altra’s processes are described in detail below.
While Altra takes compliance with the Conflict Minerals Rule very seriously, as a company engaged in the manufacture of mechanical power transmission products, Altra’s global supply chain is complex, and Altra is several levels removed from the actual mining of any potential Conflict Minerals that may be contained in its final products. Furthermore, Altra does not purchase raw ore or unrefined Conflict Minerals, or make purchases from the Covered Countries. Thus, it is difficult for Altra to determine the origin of any potential Conflict Minerals that may be in its final products with any certainty once the raw ores are smelted, refined and converted to ingots, bullion or other Conflict Mineral-containing derivatives. The smelters and refiners in Altra's supply chain -- who Altra typically does not know due to being so far removed from them in the supply chain -- are in the best position to know the origin of the ores.
Reasonable Country of Origin Inquiry
In order to comply with the Conflict Minerals Rule during the Reporting Period, Altra continued to utilize its management-level Conflict Minerals compliance team, led by Altra’s General Counsel. Each of Altra’s business units continued to utilize a site-level compliance team. Each site-level compliance team is responsible for (i) conducting a comprehensive analysis of its products, and generating and maintaining a list of those of its products for which Conflict Minerals are necessary to their functionality or production (the “Conflict Minerals Product List”) and (ii) generating and maintaining a list of suppliers that have the potential to supply components, parts or materials that contain Conflict Minerals and are incorporated into products listed on its Conflict Minerals Product List (the “Conflict Minerals Supplier List”).
Each site-level compliance team, with support and guidance from the management-level compliance team, conducted a good faith reasonable country of origin inquiry (“RCOI”) on the products included on its Conflict Minerals Product List for 2014 (the “Subject Products”). In accordance with the Conflict Minerals Rule and related guidance provided by the SEC, this good faith RCOI was reasonably designed to determine whether any of the Conflict Minerals included in the Subject Products originated in the Conflict Region and/or whether any of those Conflict Minerals may be from recycled or scrap sources. Altra’s RCOI process involved sending to each supplier on the Conflict Minerals Supplier List a compliance package that included (a) Altra’s Policy Statement on Conflict Minerals, (b) a letter to the supplier educating the supplier on compliance with the Conflict Minerals Rule and (c) a survey regarding the presence and origin of any Conflict Minerals contained within the components, parts and materials supplied to Altra during the Reporting Period (the “Supplier Compliance Package”). Each site-level compliance team made every reasonable effort to follow up with suppliers who did not return the survey or who did not provide a meaningful response.
Due Diligence Framework
In addition to its good faith RCOI, Altra undertook additional due diligence regarding the sources of the Conflict Minerals in the Subject Products. Altra designed its due diligence process to conform in all material respects with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, an internationally recognized due diligence framework (the “OECD Framework”). In accordance with the OECD Framework, during the Reporting Period Altra has maintained a Conflict Minerals compliance and due diligence program that includes (i) the establishment of strong company management systems, (ii) procedures for identifying and assessing risk in Altra’s supply chain, (iii) a strategy to respond to identified risks, and (iv) public reporting on supply chain due diligence. The following is a summary of Altra’s efforts to comply with the OECD’s Five-Step Framework for Risk-Based Due Diligence in the Mineral Supply Chain.
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1. | Company Management Systems |
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a. | Altra has structured internal management to support supply chain due diligence. |
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i. | Altra has adopted and implemented a Policy Statement on Conflict Minerals which is publicly available in the “Corporate Governance” section of Altra’s website located at: http://ir.altramotion.com/governance.cfm. |
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ii. | Altra has maintained a management-level Conflict Minerals compliance team, led by Altra’s General Counsel, as well as business site-level compliance teams. The site-level compliance teams are comprised of subject matter experts from relevant functions such as purchasing, quality assurance and engineering. |
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iii. | Each site-level compliance team reports to the General Counsel, who briefs senior management on the compliance and due diligence efforts as necessary. |
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b. | Altra continues to strengthen its engagement with suppliers by communicating with and educating its suppliers as necessary with respect to the Conflict Minerals Rule and the materials contained within Altra’s Supplier Compliance Package. |
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c. | Altra continues to require its suppliers to support its Conflict Minerals compliance efforts through contractual methods. For example, Altra has incorporated terms and conditions in its procurement documents which require the supplier to certify that its product is "conflict free." |
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d. | Altra’s Code of Business Conduct includes a mechanism for employees to escalate issues and concerns regarding any compliance matter, including issues regarding compliance with the Conflict Minerals Rule. In addition, Altra’s Conflict Minerals site-level compliance teams routinely follow up with the management-level compliance team, including the General Counsel, to identify and escalate any identified issues associated with non-responsive or problematic responses to Altra’s |
RCOI survey. Altra believes that this system is conducive to identifying and addressing risks as early as possible.
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2. | Identify and Assess Risks in the Supply Chain. Altra has continued its efforts to increase its supply chain transparency and to identify and assess risks in its supply chain. As noted above, Altra conducted a comprehensive analysis of its products in order to determine which of its products contain Conflict Minerals that are necessary to their functionality or production. Suppliers who have the potential to supply parts, components and materials that contain Conflict Minerals and are incorporated into such of Altra’s products were included in the scope of Altra’s RCOI described above. Altra has relied on the responses of these suppliers to provide information about the source of Conflict Minerals contained within the parts, components and materials supplied to Altra. |
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3. | Design and Implement a Strategy to Respond to Risks. Altra has continued to develop and execute measures to respond to identified risks. Altra's strategy includes the following: |
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a. | Findings of supply chain risk assessment are reported by Altra’s site-level compliance teams to Altra’s management-level compliance team, including the General Counsel, who briefs senior management as necessary. |
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b. | Utilizing a comprehensive supplier questionnaire and certification designed to definitively determine whether or not any Conflict Minerals in its products originated in the Conflict Region and, if so, whether the funds or proceeds from the mining operations within the Conflict Region that were the source of such Conflict Minerals have been used to finance or benefit rebel or militia groups that engage in armed conflict, extreme violence and/or systemic human rights abuses in the Conflict Region. |
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c. | Communicating with and educating suppliers on compliance with the Conflict Minerals Rule. |
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d. | Requiring suppliers to complete their RCOI and due diligence processes and certify as to the source and chain of custody of Conflict Minerals within their products. |
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e. | Communicating to its suppliers that they will be evaluated and reviewed on an ongoing basis for compliance with the Conflict Minerals Rule and that Altra reserves the right at any time to take appropriate actions with respect to non-compliant suppliers, up to and including discontinuing purchases from the supplier. |
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4. | Independent Third Party Audit of Supply Chain Due Diligence. It is important to note that the OECD Guidance was written for both upstream and downstream companies in the supply chain. With respect to Step 4 of the OECD Guidance, as noted above, Altra is a downstream consumer of Conflict Minerals and is many steps removed from smelters and refiners who provide minerals and ore. Altra does not purchase raw or unrefined Conflict Minerals and |
does not, to the best of its knowledge, directly purchase these minerals from any of the Covered Countries. Therefore, Altra does not perform or direct audits of smelters and refiners within its supply chain. Altra relies on industry resources, such as the Conflict Free Smelters Initiative and other certifying bodies, to provide certifications and to influence smelters and refiners to participate in audits and achieve conflict-free certifications.
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5. | Public Report on Supply Chain Due Diligence. Altra complies with Step 5 of the OECD Guidance by making this Report and its Policy Statement on Conflict Minerals publicly available in the “Corporate Governance” section of Altra’s website located at: http://ir.altramotion.com/governance.cfm. |
Results of Our RCOI and Due Diligence Processes
Based on the information obtained pursuant to the RCOI and due diligence processes described above, for the Reporting Period, Altra does not yet have sufficient information from its suppliers or other sources to (1) determine the country of origin of the Conflict Minerals used in certain of its products within the scope of its RCOI or (2) identify the facilities used to process those Conflict Minerals.
Altra’s efforts to collect information from suppliers included within the scope of Altra’s good faith RCOI for the Reporting Period continued into the current calendar year. Despite Altra’s diligent efforts in repeatedly contacting non-responsive suppliers, as of the date of this filing, Altra has yet to receive responses to its RCOI survey from a number of its suppliers. In addition, suppliers who have responded to Altra’s RCOI survey have showed varying degrees of cooperation. Some of the challenges Altra has faced with respect to obtaining and analyzing supplier responses include the following: (i) Altra is dependent on information received from its direct suppliers, who are dependent upon information received from their lower level suppliers, to determine (x) the country of origin of Conflict Minerals contained in the components and materials supplied to Altra and (y) which specific smelters are providing the source metals that eventually become incorporated into Altra’s products; (ii) Altra has a varied supplier base with differing levels of resources and sophistication, many of whom are not themselves subject to Rule 13p-1 of the Exchange Act; (iii) some of Altra’s suppliers provided incomplete or unclear responses that required significant follow-up; and (iv) some of Altra’s suppliers were unable or unwilling to specify the country of origin of, or the smelters or refiners used for, materials and components supplied to Altra.
Consistent with the OECD Guidance for downstream companies such as Altra, our efforts to determine the mine or location of origin of necessary Conflict Minerals with the greatest possible specificity encompassed our RCOI and due diligence measures described above, which were not conclusive. Altra’s ability to deliver products that are conflict free are dependent upon smelters adopting policies, controls and procedures that will provide reasonable confidence that their products
are conflict-free. Due to the limited information provided to us by our suppliers, we are not yet able to identify the mine, smelting facility and/or country of origin of the necessary Conflict Minerals contained within some of our products.
Risk Mitigation Efforts
The RCOI and due diligence processes outlined above have mitigated the risk that components necessary to the functionality or production of Altra's products contain Conflict Minerals. In the next compliance period, Altra intends to implement steps that will improve upon its RCOI and due diligence processes in attempts to increase the information gathered during such processes, in order to further mitigate any risk that Altra's products contain any necessary Conflict Minerals from Covered Countries that could benefit armed groups. These steps include:
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• | Participate with industry groups seeking to identify best practices for RCOI and due diligence processes; |
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• | Provide continuing education to members of our management and site-level Conflict Minerals compliance teams as well as other employees who are involved with Conflict Minerals on both the supplier and customer sides of Altra’s business; |
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• | If necessary, consider and evaluate new systems and processes for the collection and management of Conflict Minerals reporting data; |
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• | Continue to enhance supplier communication, education and training in attempts to increase the response rate of suppliers to Altra’s RCOI and due diligence surveys and to ensure the accuracy of those responses; |
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• | Continue to move towards purchasing only from suppliers who are sourcing from certified, conflict-free smelters; |
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• | Continue to compare the list of smelters identified as a result of Altra’s RCOI and due diligence processes to the evolving list of smelters who have been designated as “conflict free” through independent “conflict free” smelter validation programs; and |
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• | Where possible, encourage any smelters identified as a result of Altra’s RCOI and due diligence processes to obtain a conflict-free designation from the EICC-GeSI Conflict-Free Smelter Program or a similarly certified program. |
In order to achieve Altra’s ultimate goal of ensuring that only conflict free materials and components are used in its products, Altra will routinely (i) monitor these risk mitigation efforts, (ii) report to senior management on the effectiveness of these efforts and (iii) make any adjustments to this strategy as may be necessary from time to time.
Independent Audit
After conducting a good faith RCOI and performing appropriate due diligence as described above, Altra is unable to determine whether the Conflict Minerals necessary to the functionality or production of certain of its products originated in the Conflict Region or whether such
necessary Conflict Minerals directly or indirectly financed or benefited armed groups in the Conflict Region. Therefore, for the temporary period specified in Instruction 2 to Item 1.01, Altra is not required to obtain an independent private sector audit of this Report.
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