UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
SPECIALIZED DISCLOSURE REPORT
China Yuchai International Limited
(Exact name of the registrant as specified in its charter)
Bermuda | 1-13522 | Not Applicable | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
16 Raffles Quay
#39-01A Hong Leong Building
Singapore 048581
(Address of principle executive offices) | (Zip code) |
Loo Choon Sen
Chief Financial Officer
16 Raffles Quay
#39-01A Hong Leong Building
Singapore 048581
Tel: +65 6220 8411
Fax: +65 6221 1172
(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:
☒ | Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2023. |
Under the final rule, a company that uses any of the designated minerals is required to conduct a reasonable country of origin inquiry that must be performed in good faith and be reasonably designed to determine whether any of its minerals originated in the covered countries or are from scrap or recycled sources.
Section 1 - Conflict Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report
A copy of China Yuchai International Limiteds Conflict Minerals Report is filed as Exhibit 1.01 hereto and is publicly available at www.cyilimited.com under Investor Relations.
Item 1.02 Exhibits
Section 2 - Exhibits
Item 2.01 Exhibits
The following exhibit is filed as part of this report:
Exhibit 1.01 - Conflict Minerals Report as required by Items 1.01 and 1.02 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 duly authorized undersigned.
CHINA YUCHAI INTERNATIONAL LIMITED | ||||||
By: | /s/ Weng Ming Hoh |
Date: May 30, 2024 | ||||
Name: | Weng Ming Hoh | |||||
Title: | President/Director |
Exhibit 1.01
Conflict Minerals Report of China Yuchai International Limited
For the Year Ended December 31, 2023
This is the Conflict Minerals Report (Report) of China Yuchai International Limited (CYI) for the year ended December 31, 2023 in accordance with Rule 13p-1 under the Securities Exchange Act of 1934 (the Rule), as amended. The Rule was adopted by the United States Securities and Exchange Commission (SEC) pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, to implement reporting and disclosure requirements on all SEC registrants (including foreign issuers) about the use of specified conflict minerals emanating from the Democratic Republic of Congo and nine adjoining countries (collectively, the Covered Countries), in their products.
The term Conflict Minerals as defined by SEC rules, is a broad term which means cassiterite, columbite-tantalite (coltan), gold, wolframite and their derivatives which are limited to tantalum, tin, or tungsten (collectively, 3TGs) originating from a Covered Country. The terms used in this Report are as defined in Rule 13p-1, Form Statutory Declaration (Form SD) and the 1934 Act Release No. 34-67716 unless otherwise defined herein.
This Report prepared by the management of CYI includes the activities of its 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. CYI engaged the services of an independent third party (Advisor) to advise on the process of conducting conflict minerals due diligence and compliance. This Report has not been subject to an independent private sector audit (IPSA).
A. Company and Product Overview
CYI, through its main operating subsidiary, Guangxi Yuchai Machinery Company Limited (Yuchai), engages in manufacture, assembly and sale of a wide variety of light-, medium- and heavy-duty engines for trucks, buses, passenger vehicles, construction and agriculture equipment, and marine and power generation applications in China. The engines produced by Yuchai range from diesel to natural gas and hybrid systems. A list of the engine models produced in financial year 2023 is at Schedule 1 of this Report.
Yuchai manufactures engine blocks, cylinder heads, crankshaft, camshaft and certain other key parts. Third party suppliers provide the remaining engine parts and components. The production process involves the complete assembly and testing of the finished products. Yuchai purchases raw materials, principally scrap steel and scrap iron, from domestic suppliers and certain engine components are imported or originated from foreign suppliers. In addition, different alloys and additives such as tin, zinc, magnesium, and manganese are utilized during the manufacturing process.
B. Reasonable Country of Origin Inquiry (RCOI)
Further to the conduct of an analysis of our engine products manufactured in financial year 2023, we concluded in good faith that certain minerals such as 3TGs, which are necessary to the functionality or production of our engines, are used in the manufacturing process.
For financial year 2023, a total of 159 suppliers were identified as in-scope for conflict mineral regulatory purposes and contacted as part of the RCOI process. We then used the Conflict Minerals Reporting Template (CMRT), a standardized reporting template developed by the Responsible Minerals Initiative (RMI), to obtain information from all relevant suppliers regarding the facilities used to process the necessary 3TGs and the country of origin of such minerals. We excluded, as not relevant, those suppliers that: (a) did not provide us products or components during the reporting period; or (b) provided products or components that did not contain 3TGs during the reporting period. In the survey, we asked those suppliers: (a) whether the products they supply to us or in their production process contained 3TGs; and (b) if they did, to provide information regarding the source of 3TGs contained in those products and production process. We requested our suppliers to obtain information through their supply chain regarding the country of origin of 3TGs used, and smelters and refiners used in the supply of materials to Yuchais group of companies. In order to make this inquiry as complete as possible, our suppliers were requested to send the same CMRT to their suppliers (directly and indirectly) and, based on the responses received, complete their CMRT.
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We distributed the CMRT in version 6.31 and received 100% response as of April 16, 2024. 90% of the suppliers confirmed that the products they supplied to us in financial year 2023 do not contain 3TGs originated from the Covered Countries.
We have conducted a RCOI and performed reasonable due diligence on the source and chain of custody of 3TGs contained in the components and material supplied to us. We rely, to a large extent, on our direct suppliers in the RCOI who are similarly reliant upon information provided by their own suppliers. As a result, certain information provided may have been inaccurate or incomplete and hence subject to further verification.
C. Due Diligence Program
CYI designed its due diligence measures to conform to the 3rd Edition of the Organization of Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance).
A summary of the due diligence measures that we undertook in order to comply with the Rule were:
1. | Establish appropriate company management systems |
(a) | Established an internal interdisciplinary team of personnel from various departments, namely purchasing, procurement, research & development, technical, operations and legal providing updates to our management and Board of Directors; |
(b) | Instituted regular communications commencing in March 2024 with our Advisor in relation to the continued implementation of the Rule including advising on a system for the conduct of the RCOI, the requisite elements of a risk management framework and processes to be instituted and disclosure requirements of the Report covering financial year 2023; |
(c) | Documented and maintained records of the due diligence measures undertaken and communications with our Advisor; |
(d) | We reviewed our existing Conflict Minerals Policy Statement setting out our position on the Rule, which is publicly available at the following link on our website (http://investor.cyilimited.com/corporate-governance/conflict-minerals-policy) in both English and Chinese, as well as in Chinese on the website of our main operating subsidiary (which can be located at https://www.yuchaidiesel.com/news/ggnews-detail-689095.htm) and did not deem it necessary to amend the Policy Statement; and |
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(e) | In continuation of the process to adopt a Conflict Minerals Investigation and Management Regulation documenting the entire process flow of the RCOI and due diligence program within our main operating subsidiary, we standardized, embedded and operationalized the process flow which includes the scope of work to be performed, specific areas of responsibilities and stated timelines. |
2. | Identify and assess risks in the supply chain |
(a) | Identified direct suppliers that supply 3TGs or products that may contain 3TGs; |
(b) | Conducted a supply chain inquiry using version 6.31 of the CMRT requesting our suppliers to identify their sub-suppliers, smelters and the country of origin of the 3TGs that are used in our engine products and complete the CMRT within a specified timeframe; |
(c) | A cover letter accompanying the CMRT explaining the Rule, how to complete the CMRT together with an example of how the CMRT should be completed, and a number to call in the event of any inquiries, was sent to our suppliers; and |
(d) | Followed up with suppliers who provided inconsistent, incomplete or inaccurate responses and sent reminders to suppliers who failed to respond to our CMRT request within the given timeline. CYI may continue to follow up with suppliers to clarify responses where applicable. |
3. | Design and implement a strategy to respond to identified risks |
We identified and considered the risks arising from our due diligence measures and communicated our findings and steps taken to mitigate the risks to our management and Board of Directors.
4. | Carry out independent third-party audit of smelter/ refiners due diligence practices |
We do not have direct relationships with any mines, smelters or refiners of 3TGs which may be present in our supply chain and do not perform direct audits of such entities. However, as mentioned above, we rely, to a large extent, on our suppliers in the RCOI who are similarly reliant upon information provided by their own suppliers.
5. | Report on supply chain due diligence |
Should an IPSA be required to be conducted, the findings of any such IPSA will be posted as part of our SEC filings and on our website.
D. Future steps towards compliance with the Rule
In the next compliance period covering the year 2024, we will continue to engage with our suppliers to obtain current, accurate, and complete information about their smelters and refiners through their supply chain.
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Schedule 1
The schedule below lists the engine models by application produced by us in financial year 2023.
Truck
YCY24, YCY30, YCS04, YCS04N, YCS06, YCK05, YCK08, YCK08N, YCK09, YCK11, YCK11N, YCK13, YCK13N, YCA07N, YCK15N
Bus
YCY24, YCY30, YCS04, YCS06, YCK05, YCK08, YCK08N, YCK09, YCK11, YCS04N
Construction
YCF24, YCF30, YCF36, YCA05, YCA07, YCA08, YCK09, YCK11, YCK13, YCK16, YCTD20
Agriculture
YCF30, YCF36, YCA05, YCA07, YCA08, YCK09, YCK11, YCK13, YCK16, YCTD20
Marine
YC4FA, YC6T, YC6TD, YC6C, YC6CL, YC6CD, YC8CL, YC12VC
Generator-Drive
YC4R, YC4FA, YC6A, YC6LN, YC6T, YC6C, YC6CL, YC12VC, YC12VTD, YC16VTD, YC16VC, YC6KN
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