Disclosure Pursuant to the California Transparency in Supply Chains Act
Effective: January 1, 2012

“The California Transparency in Supply Chains Act, signed into law by Governor Schwarzenegger in September 2010 and effective on January 1, 2012, requires retailers and manufacturers doing business in California to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains for goods offered for sale. The disclosure must be posted on the retailer or manufacturer’s website with a conspicuous and easily understood link from the homepage”. The following is Magnussen Home Furnishings Inc.’s disclosure under the Act:

Magnussen Home Furnishings Inc. (“Magnussen”) follows, and requires its suppliers to follow industry guidelines for the loading and sealing of shipping containers with the aim of ensuring the condition, contents, and security of container carrying our goods into the US and that the containers are not used to conduct illegal transport of people.

Magnussen seeks to use only suppliers which Magnussen believes act in a responsible manner, including no involvement with slavery, human trafficking, forced labour or child labour in violation of international standards. Although price is an important criteria in selecting suppliers, Magnussen evaluates our suppliers on many other criteria’s, such as business history, financial stability, quality, timeliness of delivery, working conditions, and compliance with laws.

Magnussen informs our suppliers that Magnussen prohibits suppliers from using child labour or involuntary labour and that suppliers must conduct their operations in accordance with all laws applicable to their business and require the same standards of their suppliers in turn. Magnussen requires that non-US suppliers annually certify compliance with applicable laws, including labour laws, and acknowledge compliance is a requirement of doing business with Magnussen. In addition, those suppliers must certify on their invoices that they do not and will not knowingly engage in any forced labour, slavery or human trafficking.

Key leaders and managers from Magnussen’s quality, engineering, supply and compliance teams all work closely and train with the suppliers who manufacture components and goods for Magnussen’s business. Visits are conducted at all factories by key leaders allowing them to inspect the suppliers facilities, observe conditions and influence the people and practices that improve Magnussen’s products as well as protect the supply chain integrity. Staff from Magnussen visit the suppliers’ facilities and communicate with the management there regarding not only the production of Magnussen’s product but also working conditions in their facility. Magnussen work diligently to negotiate this level of access into every business relationship in our system, ensuring that partners in Magnussen’s supply chain receive reviews and visits throughout the year. In addition, Magnussen’s major customers perform independent audits of the facilities supplying those customers with products.

Magnussen provides periodic training to its employees involved directly with our suppliers to familiarize them with identifying and to the extent possible, mitigating, slavery and human trafficking issues. Staff who ignore and signs of child or forced labour are subject to disciplinary action up to and including termination of employment. No system of auditing and inspection is truly effective without designed consequences. For this reason, if suppliers are unable or unwilling to address concerns we identify, we may sever our business relationships with supply chain partners. We will continue to use this effective market-driven remedy as resolution when we cannot ensure that the principles and conditions of our organization are met.