Exhibit 1.01
Conflict Minerals Report
This Conflict Minerals Report (“Report”) of Allied Healthcare Products, Inc., a Delaware corporation (“Allied”, the “Company”, “we”, or “us”) for the year ended December 31, 2014 is presented to comply with Rule 13p-1 under the Securities Exchange Act of 1934 (“Rule”). Certain terms in this Report are defined in the Rule and our Specialized Disclosure Report on Form SD and the reader is referred to those sources for such definitions.
Product Overview
We manufacture a variety of respiratory products used in the health care industry in a wide range of hospital and alternate site settings, including sub-acute care facilities, home health care and emergency medical care. The Company’s product lines include respiratory care products, medical gas equipment and emergency medical products.
Our product lines include:
Respiratory Care Products
· | respiratory care/anesthesia products |
· | home respiratory care products |
Medical Gas Equipment
· | medical gas system construction products |
· | medical gas system regulation devices |
· | disposable oxygen and specialty gas cylinders |
· | portable suction equipment |
Emergency Medical Products
· | respiratory/resuscitation products |
· | trauma and patient handling products |
The Company internally reviews the composition of all components supplied to the Company and, based on its knowledge of these components, determines which components do not contain conflict minerals. Based on this review, the Company determined that less than 1.5% of the components it purchased during the reporting year contained conflict minerals.
Report Overview
The Company has concluded that during 2014 (i) it manufactured products as to which “conflict minerals” (as defined in Section 1, Item 1.01 (d)(3) of Form SD) are necessary to the functionality or production of such products and (ii) based on a reasonable country of origin inquiry (“RCOI”) the Company has not been able to determine the origin of its necessary conflict minerals. Pursuant to SEC staff guidance, no company, including Allied, is required to describe its products as “DRC conflict free,” having “not been found to be ‘DRC conflict free,’” or “DRC conflict undeterminable.”
Due Diligence Process and Results
The Company performed due diligence on the source and chain of custody of the conflict minerals that are necessary to the functionality or production of its products. The due diligence measures conformed to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (Second Edition), an internationally recognized due diligence framework.
The Company has employed a combination of measures to exercise such due diligence. For example, the Company adopted a formal Conflict Minerals Policy which can be found on the Company’s website at www.alliedhpi.com.In addition, theVice-President of Operations and Quality Department has implemented and maintains the supply chain due diligence process. This Department is competent to oversee the supply chain due diligence process because of their previous experience with the maintenance of the quality system for FDA compliance and its familiarity with the Company’s production processes. The Vice-President of Operations and Quality Department reports to our Chief Executive Officer.
The Company’s primary means of due diligence was through a supply-chain survey with direct suppliers using a questionnaire based on the EICC/GeSI Conflict Minerals Reporting Template. The Company submitted such a survey to all of its vendors who supply the Company with components which, based on the Company’s internal review, likely contain conflict minerals. In this reporting year, we received responses from 100% of the 160vendors to whom we submitted such surveys.
A majority of the surveys returned to the Company were on a supplier wide basis and did not inform the Company whether particular products supplied to the Company contain conflict minerals. A majority of survey responses indicated that our necessary conflict minerals originated outside the Democratic Republic of the Congo or an adjoining country (collectively, the “Covered Countries”) or were from recycled material or scrap sources. The remainder of vendors responding to surveys indicated that the source of necessary conflict minerals was uncertain or unknown. No vendors indicated that necessary conflict minerals originated in a Covered Country.
While no supplier has indicated that any necessary conflict minerals originated in any of the Covered Countries, the limited information provided by the suppliers in response to the survey in most cases did not identify the facilities used to process or the country of origin of the necessary conflict minerals in its products. The Company’s efforts to determine the mine or location of origin of the necessary conflict minerals included submitting the survey described above and additional follow-up contacts with several suppliers.
As a downstream purchaser of inputs, the Company’s due diligence measures can provide only reasonable, not absolute, assurance regarding the source and chain of custody of the necessary conflict minerals. We generally do not have direct relationships with smelters and refiners with respect to conflict minerals and do not perform or direct audits of these entities within our supply chain. The Company’s due diligence processes are based on the necessity of seeking data from our direct suppliers and those suppliers seeking similar information within their supply chains to identify the original sources of the necessary conflict minerals.
Risk Management
The Company has implemented several procedures to manage the risk that our necessary conflict minerals might originate from Covered Countries. For example, the Company’s standard vendor agreement requires vendors to notify the Company if any products supplied to the Company contain conflict minerals and to notify the Company of the country of origin of any such conflict minerals. As smelters are identified, the Company will engage those smelters where possible (or rely on independent industry certifications) to determine if they are “conflict free.” The Company has also added standards relating to the sourcing of Conflict Minerals to its vendor qualification process and procedures. The status of those vendor qualifications are a consideration in purchasing decisions.
Pursuant to Section 1, Item 1.01 (c)(1)(iv) of Form SD, the Company is not required to obtain an independent private sector audit of this Conflict Minerals Report.