Transparency in Supply Chains Act Disclosure Statement

The California Transparency in Supply Chains Act of 2010 (Cal. Civ. Code §1714.43), which took effect January 1, 2012, is designed to supplement existing laws aimed at eliminating slavery and human trafficking around the globe. The law requires large retailers and manufacturers with gross worldwide sales of over $100 million dollars which do business in the State of California to disclose the measures they have taken to eliminate slavery and human trafficking from their supply chains.

D&M Holdings (“D&M”) is committed to conducting our business in an ethical, legal, and socially responsible manner. As part of this commitment, D&M has taken and continues to take steps to enforce, review and improve upon our existing policies designed to ensure a supply chain that is free of forced or coerced labor and which complies with local laws and international standards.


1. Verification of Supply Chains
D& M is in the process of assuring that all of its Purchase Agreements with our suppliers require them to abide by D&M’s Supplier Code of Conduct, which mandates compliance with applicable labor laws and explicitly forbids the use of forced or coerced labor. D&M intends to roll out new and revised Purchase Agreements in 2013 that will require that our suppliers verify the absence of slavery or trafficking in their operations, and certify that their agreements with their own suppliers require the same. D&M is currently developing a plan to further evaluate and address the risk of slavery and human trafficking within our supply chains and exploring options for outside verification by a third party.

2. Audits of Suppliers
D&M conducts periodic, announced audits of our first-level suppliers for purposes of quality control. Additional procedures designed to be implemented in 2013 will expand the process to review compliance with D&M’s human rights policies. D&M also places employees at its major suppliers on a regular basis to audit such supplier’s activities. D&M will investigate the possibility of reinforcing this process through independent and unannounced audits of our suppliers.

3. Supplier Certification
Our suppliers are required to fill out a self-assessment questionnaire. The self-assessment reports a supplier’s legal compliance in a variety of areas including labor and human rights. During 2013 D&M will enhance these certifications in the self-assessment. The assessment will also require a supplier to report whether it obligates its own suppliers (D&M’s sub-suppliers) to observe D&M’s Code of Conduct through subcontracts and reasonable monitoring.

4. Internal accountability
D&M maintains a zero-tolerance policy for violations of our Code of Conduct. Violations of the prohibitions against slavery and human trafficking by a supplier will be regarded as grounds for termination of any supply agreement and D&M’s relationship with that supplier.

5. Training
D&M is developing a training program to further educate D&M’s supply chain management team on D&M’s policies regarding labor and human rights. The program will initially consist of materials focused on recognizing and mitigating the risks of human trafficking and slavery and will be designed for employees and managers with direct responsibility over supply chain management. Follow-up will be conducted as part of the self-assessment and audit processes.