Skullcandy supports ending the violence and human rights violations taking place in Central Africa. The conflict and violence is believed to be funded from the mining of certain minerals in the region, namely tin, tantalum, tungsten and gold ("Conflict Minerals"). Section 1502 of the Dodd-Frank Act of 2010 addresses this conflict in the Democratic Republic of Congo and adjoining countries (the "Conflict Region") and requires that US publicly traded companies report annually to the Securities and Exchange Commission whether their products contain Conflict Minerals from the Conflict Region.
Skullcandy has evaluated its product lines and has determined that certain products the Company contracts to manufacture (the "Covered Products") contain tin, tungsten, tantalum or gold. Skullcandy is committed to ensuring that the minerals in its products are conflict free. To this end, Skullcandy created and implemented a Conflict Minerals Policy in 2013 that requires its suppliers to undertake reasonable due diligence within their supply chains to ensure the Conflict Minerals do not originate from the Covered Countries, to comply with Skullcandy's Code of Conduct regarding Conflict Minerals and responsible sourcing and report annually to the Company regarding Conflict Minerals in the products manufactured for Skullcandy. Skullcandy notified suppliers of the Conflict Minerals Policy, and has conducted a reasonable country of origin inquiry ("RCOI") to ascertain if any Conflict Minerals in its Covered Products originated in the Democratic Republic of the Congo or an adjoining country (each, a "Covered Country" and collectively, the "Covered Countries"), or are from recycled or scrap resources. The RCOI included the preparation and electronic distribution of a questionnaire (the "Questionnaire") to all suppliers with whom Skullcandy contracted to manufacture products containing Conflict Minerals during the reporting period. The Questionnaire was based on the Electronic Industry Citizenship Coalition and Global eSustainability Initiative (EICC) conflict minerals questionnaire template. Skullcandy reviewed and validated all supplier responses and followed-up with suppliers regarding the responses as necessary and appropriate.
Skullcandy continues to update and notify its suppliers as necessary regarding its Conflict Minerals Policy and requires suppliers to respond annually to its Questionnaire.