ForTheYearEndedDecember31,2013 This report for the year ended December 31, 2013 is presented to comply with Section 13(p) of the Securities Exchange Act of 1934 and Rule 13p-1 (the Rule) and Form SD thereunder. 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 and tungsten (together with gold 3TG) for the purposes of this assessment. These requirements apply to registrants whatever the geographic origin of the conflict minerals and whether or not they fund armed conflict. In accordance with the instructions to Form SD, this Conflict Minerals Report has not been audited by an independent private sector auditor.
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 and submit a Conflict Minerals Report to the SEC that includes a description of those due diligence measures.
This report has been prepared by management of Hill-Rom Holdings, Inc. (herein referred to as “Hill-Rom” 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. It does not include the activities of variable interest entities that are not required to be consolidated.
We are a leading worldwide manufacturer and provider of medical technologies and related services for the health care industry, including patient care systems, safe mobility and handling solutions, non-invasive therapeutic products for a variety of acute and chronic medical conditions, medical equipment rentals, surgical products and information technology solutions. Our comprehensive product and service offerings are used by health care providers across the health care continuum and around the world in hospitals, extended care facilities and home care settings, to enhance the safety and quality of patient care.
For more information about our company and company detail description please refer to our website at http://www.hill-rom.com.
Products and Raw Materials Overview
Products Hill-Rom’s product lines are classified in the following categories:
Patient Care Systems. Our innovative patient care systems include a variety of bed systems, along with integrated and non-integrated therapeutic bed surfaces, that are rented and sold, as well as mobility solutions (such as lifts and other devices used to safely move patients).
Non-Invasive Therapeutic Products. We rent and sell non-invasive therapeutic products and surfaces designed for the prevention and treatment of a variety of acute and chronic medical conditions, including pulmonary, wound and bariatric conditions.
Medical Equipment Management. We provide rentals and health care provider asset management services for a wide variety of moveable medical equipment, also known as MME, such as ventilators, defibrillators, intravenous pumps and patient monitoring equipment.
Patient Environment Solutions. These products include architectural products (such as headwalls and power columns) and health care furniture.
Health Information Technology Solutions. We also develop and market a variety of communications technologies and software solutions.
Surgical Products. We offer a range of positioning devices for use in shoulder, hip, spinal and lithotomy surgeries as well as platform-neutral positioning accessories for nearly every model of operating room table. In addition, we offer operating room disposable products such as scalpel and blade and handle systems, disposable scalpels, skin markers and other disposable products.
In order to manage the scope of this task, Hill-Rom relies upon our suppliers to provide information on the origin of the 3TG contained in components and materials supplied to us, including sources of 3TG that are supplied to them from sub-tier suppliers.
We have conducted supplier training sessions designed to educate our supplier and supply chain partners regarding the relevant, emerging SEC requirements and Hill-Rom’s due diligence expectations. As part of this education, we communicated the expectation to our suppliers that they are to provide the 3TG sourcing information to us per our conflict minerals policy. Following our supplier training session, we sent our suppliers email communication requesting self-declaration and identification of the origin of any minerals included in the product(s) provided to Hill-Rom.
In addition, Hill-Rom has actively engaged in performing a comprehensive analysis of our product components, and the role that suppliers play throughout our manufacturing and product delivery processes. We defined our supply chain conflict minerals due diligence scope of work by including active suppliers that provide components and manufacturing activities that are likely to contain 3TG. We adopted CFSI’s standard Conflict Minerals reporting templates, and launched our conflict minerals due diligence communication survey to all 526 suppliers of these defined components and manufacturing supplies from 2013.
Reasonable Country of Origin Inquiry (RCOI) and RCOI conclusion:
We conducted an analysis of our products and found that tin, tantalum, tungsten, and gold (3TG), can be found in Hill-Rom’s product categories. Therefore, the products that we manufacture are subject to the reporting obligations of Rule 13p-1.
Despite having conducted a good faith reasonable country of origin inquiry, Hill-Rom has been unable to determine the origin of all of the 3TG within our instruments and array of products.
Due to the vast array of Hill-Rom’s products and the size and complexity of our supply chain, it will take time for many suppliers to verify the origin of any conflict minerals. Using our supply chain due diligence processes, driving accountability within the supply chain by leveraging the industry standard CFSI/CFS program, and continuing our outreach efforts, we hope to further develop transparency into our supply chain.
Hill-Rom’s Conflict Minerals DueDiligenceProgram
As part of this due diligence program, Hill-Rom implemented a conflict minerals policy to ensure that we conduct all of our operations and activities in compliance with the conflict minerals legislation. The purpose of this policy is to outline the actions that need to be taken by Hill-Rom to ensure continued compliance with this policy.
This policy is applicable to all suppliers of components that are used in the manufacturing of all Hill-Rom products.
Due Diligence Program Details:
The following actions were implemented in accordance with Hill-Rom’s conflict minerals policy:
A list of all suppliers who provide components that are used in the manufacturing of all Hill-Rom products was compiled by Hill-Rom’s Sourcing Department.
The supplier list was stratified by the commodity type provided by each given supplier.
Commodity types for which there is no risk of the use of conflict minerals were excluded from the supplier list.
Hill-Rom actively surveyed the remaining suppliers to obtain self-declarations identifying the origin of any minerals, where applicable, included in the product(s) provided to Hill-Rom.
This active survey was implemented in one of two ways: Hill-Rom either contracted with a third party to conduct this data collection on behalf of Hill-Rom, or otherwise Hill-Rom conducted this data collection on its own.
Any third party contractor that conducted this data collection utilized processes and systems agreed upon with Hill-Rom.
All data collected by the third party contractor was accessible to Hill-Rom.
Hill-Rom used all reasonable means to contact and obtain self-declarations from all applicable suppliers. Emphasis was placed on suppliers with whom Hill-Rom has the highest spend.
Design of Our DueDiligence Program
Our due diligence processes, as described above, have been developed in conjunction with the 2nd edition of The Organization for Economic Cooperation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance) and the related Supplements for gold and for tin, tantalum and tungsten. Hill-Rom designed our due diligence program, management and measures to conform in all material respects with the framework OECD Guidance. Hill-Rom has also had an independent review of this process conducted, which has verified its applicability and quality for accomplishing a RCOI.
Our conflict minerals due diligence process includes: the development of a Conflict Minerals Policy, management and governance structures with cross functional team members and executives, communication and supplier engagement, due diligence compliance process and measurement, record keeping, and escalation procedures.
As described above, Hill-Rom has adopted a company policy which is posted on our intranet as part of our Corporate Policies and Procedures.
We conducted a survey of our active suppliers using the template developed jointly by the companies of Electronic Industry Citizenship Coalition® (EICC®) and The Global e-Sustainability Initiative (GeSI), known as the CFSI Reporting Template (the Template). The Template was developed to facilitate disclosure and communication of information regarding smelters that provide material to a company’s supply chain. It includes questions regarding a company’s conflict-free policy, engagement with its direct suppliers, and a listing of the smelters the company and its suppliers use. In addition, the template contains questions about the origin of conflict minerals included in their products, as well as supplier due diligence. Written instructions and recorded training illustrating the use of the tool is available on CFSI’s website (http://www.conflictfreesourcing.org/). The Template is being widely adopted by many companies in their due diligence processes related to conflict minerals.
Hill-Rom has established a management system for conflict minerals. Our management system includes the development of a Conflict Minerals Task Force sponsored by the Chief Financial Officer of the Company, as well as executive-level representatives and a team of subject matter experts from relevant functions such as Finance, Legal, Sourcing and Supplier Quality. The team of subject matter experts is responsible for implementing our conflict minerals compliance strategy, as described above, and is led by a director of global supplier quality who acts as the executive conflict minerals program manager. Senior management is briefed about the results of our due diligence efforts on a regular basis.
With respect to the OECD requirement to strengthen engagement with suppliers, we engaged a third party data collection and software vendor, Foresite Compliance Cloud, Inc., to conduct outreach, train, and in some cases, archive the received supplier responses associated with our RCOI. Feedback from this engagement has allowed us to render the conclusions and statement annotated in this report.
As part of our conflict minerals program, Hill-Rom has established our due diligence compliance process and set forth a documentation and record maintenance mechanism to ensure the retaining of relevant documentation in a structured electronic database.
Because of our size, the complexity of our products, and the depth, breadth, and constant evolution of our supply chain, it is difficult to identify sub-tier suppliers downstream from our direct suppliers.
We have identified 526 direct suppliers for our product lines who have been confirmed to be in scope of the RCOI. Of these 526 suppliers we have received 142 responses to our request for information. We have relied on these supplier’s responses to provide us with information about the source of conflict minerals contained in the components supplied to us. Our direct suppliers are similarly reliant upon information provided by their suppliers.
At the outset of our 2013/2014 RCOI, Hill-Rom elected to survey our known component and outsourced manufacturing supply chain, most likely to provide components and products to Hill-Rom with 3TG. This consisted of 526 total suppliers.
Hill-Rom has created and maintained a database of this information. A copy of the declared sources of material has been included as part of this filing. The declared sources represent a summary of all available information, which has been declared by our supplier base during the course of our RCOI.