1.Introduction and Scope of the Code

Introduction: This Code of Ethics and Conduct was approved by the Board of Directors of KAPAZI Indústria e Comércio de Capachos Ltda. on March 18, 2024, and is a document summarizing the main policies and guidelines that define the rules governing the conduct and organizational practices of Kapazi employees across the various units, factories, and stores in which it operates, regardless of their region, and reflects its commitment to ethical conduct in its relationships with its various stakeholders and reaffirms one of its most important objectives: maintaining and consolidating its reputation in society.

The vision, mission, and values (described in specific materials) define the organizational identity and guide the company’s business operations. The Code provides clear, non-negotiable guidance regarding conduct and ethical commitments, is mandatory, and may be updated over time. Employees who fail to comply with the rules set out in this document will be subject to disciplinary action, including possible termination of employment.

2. The purpose of the Code is to:

2.1 formalize and institutionalize standards of professional conduct, establishing a standard for the company and its employees’ internal and external relationships with their various stakeholders;

2.2 guide professionals’ actions and decision-making and reduce the risks of subjective personal interpretations regarding moral and ethical aspects; 2.3 promote ethical behavior in the business environment.

3. Scope: The Code applies to all members of management and employees, including interns and apprentices of Kapazi.

4. Conduct in Relationships with Various Stakeholders

4.1 Relationships with Customers and Consumers: Kapazi seeks to identify the needs and meet the expectations of customers and consumers in accordance with its Quality Policy. To this end, it regularly conducts technical studies and research. Based on these studies and research, employees are expected to provide a welcoming service through their communication channels and seek to effectively resolve individual requests and concerns raised by customers and consumers. They must also act strictly in accordance with consumer protection legislation and observe competitive practices, not condoning coercive or unfair commercial practices or practices that abuse their power in specific circumstances. In relationships with customers and consumers, employees may not use inappropriate means that lead them to obtain undue advantages.

4.2 Relationship with the Community: Kapazi respects the customs and cultures of the local communities where it operates and adopts a responsible approach to engagement through its Human Resources team or through groups or committees established for this purpose. Kapazi adopts transparent processes to identify, select, and support social projects, encouraging employees to volunteer and develop projects and initiatives aimed at contributing to a fairer and more supportive society.

4.3 Relationships with Employees: Relationships in the workplace must be guided by respect and impartiality; no form of discrimination or retaliation is permitted. All employees must receive fair treatment and evaluation. Favoritism or prejudice will not be tolerated under any circumstances. All employees have the right to freedom of union association, religious choice, and political and gender identity.

4.3.1 Conflict of Interest: To prevent potential conflicts of interest, employees are required to notify the DHO in writing if any of their relatives, at any degree of kinship, or close friends work or come to work for companies in the same industry. Failure to provide such notification may result in appropriate disciplinary measures (Article 3, item I, and Article 4 of Law 8,213/13).

a) A conflict of interest exists when an employee acts to pursue personal interests that conflict with the interests of Kapazi or could cause any harm to the company.

b) Employees and their immediate family members must not have ownership interests in suppliers, customers, or competitors if their position gives them access to privileged information or the power to influence company transactions.

c) Any position held by employees at any other entities or companies must be reported to their supervisor for assessment of potential conflicts of interest.

d) Unless expressly authorized, employees may not sell products or services on company premises or during their working hours.

e) All employees have a duty to inform the Board of Directors or Management of any situation that could be characterized as a conflict of interest.

4.3.2 Use of Kapazi Property Resources and Confidential Information:

a) Employees must protect and properly use company assets.

b) Employees are not permitted to use company assets and resources for their own benefit unless duly authorized (in writing) by their hierarchical superiors.

c) The Information Security Policy is communicated to all employees during their onboarding process.

d) Employees must follow the rules regarding the use of computer equipment and virtual information. Confidential company information, such as commercial strategies or expansion plans, as well as other confidential data, may not be used or disclosed by employees for their own benefit or that of third parties.

e) Employee data may not be disclosed inside or outside the company, except when required by law or court order as provided by law.

f) Employees responsible for maintaining and storing information must observe the form and deadlines established by applicable regulations and the appropriate procedures, in order to preserve the integrity of documents and data.

4.3.3 Relationships (Family and Romantic) Between Company Professionals:

a) Kapazi accepts the hiring of employees' relatives, but without privileges regarding positions, salaries, or benefits, and all must have competed on equal terms with other candidates.

b) Married employees or those in romantic relationships must conduct themselves in the professional environment with the utmost respect and ethics, not making their private lives public, thereby respecting all other employees.

4.3.4 Respect for the Individual (prejudice, discrimination, and harassment): The policies and practices of Kapazi do not permit prejudice or discrimination of any kind, whether in selection, evaluation, promotion, or dismissal processes. Opportunities are offered to people regardless of gender, race, age, origin, sexual orientation, political or religious beliefs, or physical disability. Positions must be filled by people who meet the technical requirements of the role. Kapazi does not tolerate:

a) abusive or harassing conduct, harassment of any kind, and arbitrary actions such as intimidation, coercion, or threats in relationships between employees, regardless of their hierarchical level;

b) child labor and does not condone any situations that may involve the unlawful employment of adolescents under 16 (except when they are apprentices, from the age of 14);

c) consumption of alcoholic beverages and illicit drugs, as well as being under their influence during working hours or while providing services to the company.

d) in line with the previous item, the consumption of tobacco and all its derivatives on company premises will not be tolerated.

e) retaliation against any employee who reports potentially inappropriate behavior or who feels embarrassed or intimidated by abusive conduct. Kapazi is committed to the rights of children and adolescents. It opposes any form of neglect, discrimination, cruelty, violence, sexual exploitation of children or adolescents, or pornography in the company’s activities, in the use of its products and services, and throughout its value chain. Kapazi opposes slave, forced, or compulsory labor and situations that could potentially involve coercion, punishment under any pretext, degrading disciplinary measures, or punishment for exercising any fundamental right.

4.3.5 Rehiring Employees: Former employees may be rehired by the company provided that the analyses or policies of the Human Resources department and senior management are observed.

5. Relationship with Suppliers, Service Providers, and Third Parties in General

5.1 Evaluation of Suppliers and Service Providers: Kapazi evaluates its suppliers using clear criteria established technically and economically by the appropriate departments, and no form of discrimination or favoritism of any kind is permitted. Accordingly, all employees must act impartially, always observing the technical and economic criteria and prioritizing the company’s interests. The evaluation of contracts with former employees’ companies must comply with the criteria established by the Procurement department, along with special care to avoid exposing the company to labor-related risks.

5.2 Receipt of Gifts:

a) Gifts and presents offered by suppliers and service providers may be accepted only with authorization from management. Presents given to employees or their family members must be returned with thank-you letters;

b) No employee of Kapazi or member of their family may accept cash from suppliers, customers, banks, or Kapazi service providers.

c) Employees must inform suppliers and service providers about the company’s policy regarding the offering of gifts.

d) Kapazi employees may offer gifts and presents to suppliers and service providers only with the approval of their immediate supervisor and provided that this is in accordance with company practices.

e) Representatives of areas such as Sales or Marketing may offer gifts to customers and suppliers, with the aim of maintaining good business relationships, always in accordance with the policy and practices currently in force for this purpose.

5.3 Corruption: Kapazi does not tolerate any form of corruption, nor does it accept the offer of undue advantages, whether for the benefit of the employee or the company.

6. Relationship with the Public Sector

6.1 Use of the Kapazi name:

a) Kapazi values integrity and honesty in its dealings with public agencies. When defending the company’s interests, employees must always observe ethical principles and respect applicable rules and laws.

b) Employees are prohibited from addressing or discussing issues related to party or government politics on behalf of Kapazi and its suppliers or service providers.

c) Employees must not involve the company’s name in handling personal matters of any nature in their dealings with public agencies.

d) All contact with public agencies, except contact related to participation in public tenders, must be reported to Management.

6.1.1 Requests for Information: All information sent to public agencies must be submitted in writing, containing complete, truthful, and accurate information, within the appropriate timeframe, always observing the confidentiality policy for information and applicable laws. All information provided to a public agency must be officially filed.

6.1.2 Gifts and Presents: Kapazi employees may not offer courtesies, presents, or gifts to public-sector employees. Furthermore, Kapazi does not permit improper payments intended to obtain advantages or expedite administrative actions. Representatives of the commercial area may offer gifts to customers, with the aim of maintaining good business relationships, always in accordance with the policy and practices currently in force for this purpose.

6.1.3 Contributions to Political Parties: Kapazi encourages its employees to exercise citizenship through voting, seeking rights, and other means; however, employees may not use company resources for political activities.

7. Media Relations

7.1 The department responsible for media relations is Institutional Marketing: 

a) Contacts with the press may only be made by authorized employees. No employee may disclose any information about the company, customers, suppliers, or service providers without authorization from the Institutional Marketing department, which is responsible for reviewing and, if necessary, mediating relations between employees and the media in general.

b) If incorrect or negative information about Kapazi and its products is found to be circulating, the employee must report it to their immediate supervisor or the Institutional Marketing department.

8. Intellectual Property and Privileged Information

8.1 All employees have a duty to safeguard the intellectual property and confidential information of the company where they work, acknowledging the following obligations and standards:

a) Protecting the company's intellectual property, including technology, know-how, trademarks, patents, industrial processes, etc., is the duty of all Kapazi employees.

b) Any intellectual property developed by company employees arising from the nature of the employment contract, the use of company resources and equipment, or work on company premises shall be assigned to Kapazi and shall be its property.

c) The use of Kapazi's confidential or privileged information for personal gain or the benefit of third parties is prohibited. No company member who has relevant information not disclosed to the public is authorized to disclose such information to third parties.

d) The confidentiality of privileged information and intellectual property must be maintained even after the employment contract ends.

e) Disclosure of personal records is not permitted unless authorized or required by law, regulation, or court order. Intercepting emails and telephone conversations conducted by employees with other employees or company officers constitutes a serious ethical violation that may result in criminal prosecution.

9. Use of Communication Devices

9.1 a) Kapazi may assign employees computers and email addresses, as well as any other communication device for the performance of their work. Such devices must be used exclusively for the purpose for which they were intended, unless expressly authorized by their immediate supervisor.

b) All information contained on communication devices assigned to employees is the property of Kapazi and may, subject to the company’s guidelines, be accessed at any time.

10. Accounting and Financial and Contract Records

10.1 Contract Registration: All contracts in which Kapazi participates must be drafted precisely and appropriately, without allowing for double interpretations. The Administrative/Legal department designated by the company must review and authorize all contracts issued, safeguarding the rights and obligations set out in the document.

11. Health, Safety and the Environment

11.1 Responsibility for Compliance with Rules and Policies:

a) Kapazi periodically provides training related to health, safety and the environment so that everyone understands the work routines and can act responsibly and safely.

b) All employees must be aware of and strictly comply with health, safety and environmental rules and policies, and must immediately notify their supervisor whenever they observe any event that could threaten the physical or moral integrity of employees.

11.2 Sustainability and the Environment: Sustainability has always been part of Kapazi’s operations, whether through conducting business transparently, ethically and responsibly, valuing its employees, or innovating to develop solutions.

a) Kapazi does not tolerate practices that could potentially cause environmental violations or that are not aligned with the company’s commitment to sustainable development.

11.3 Safety: The health and physical well-being of employees are priorities for Kapazi.

a) The company operates all its businesses in accordance with applicable occupational health and safety laws, seeking to provide an increasingly safe work environment.

b) Potential emergencies and their severity are identified and assessed, and procedures are adopted to reduce or eliminate potential risks.

c) Kapazi analyzes and investigates incidents and accidents, documents the results and the procedures adopted to protect health and safety.

d) The entry and presence of children under 14 years of age on Kapazi premises is not permitted.

11.4 Health and Quality of Life: Kapazi believes that a healthy work environment begins with the health and quality of life of its employees. To this end, it acts transparently, providing:

a) healthy eating: with its own cafeteria, where meals are balanced under the supervision of a nutritionist;

b) use of personal protective equipment (PPE): the company provides PPE to all employees in the industrial area, and its use is mandatory in manufacturing facilities to promote a better quality of life in the workplace.

12. Fair and Ethical Competition

12.1 a) To surpass the competition through innovative, high-quality products and services, Kapazi constantly invests in new technologies;

b) The company respects its competitors and does not accept any type of statement that could harm their image in the market.

13. Responsibilities

All company employees must comply with the Code of Ethics and Conduct while performing their duties, taking responsibility for their actions and maintaining conduct that is ethical, honest, and consistent with the values and ethical principles of Kapazi. Any employee who commits an act contrary to the provisions of the Code or withholds information during an investigation may be subject to the applicable disciplinary measures.

14. Violation of the Code of Ethics and Conduct

Violations of this Code will be subject to disciplinary measures or penalties based on applicable legislation. Each employee is responsible for formally notifying their immediate supervisor whenever they become aware of a possible violation of the terms of this Code. 

Repeated noncompliance with the provisions of this Code may result in the progressive application of penalties, taking into account the seriousness of the violation and applicable legislation, in the following order:

1) Conduct Adjustment Agreement (TAC) with a documented verbal warning;

2) written warning;

3) second written warning;

4) suspension; and

5) termination for just cause.

15. When in doubt, what should you do?

If an employee is unsure about whether to engage in a certain type of conduct, they should ask themselves:

a) Is this consistent with the Company's Code of Ethics and Conduct?

b) Is this ethical?

c) Is this act legal?

d) Is this conduct impartial and honest?

e) Would I like to read about this in the newspaper?

f) Would I advise my children to act this way? Employees should not refrain from taking action when faced with these situations of doubt. If the answer to any of the questions is “No,” the conduct should not be adopted.

Almirante Tamandaré, October 29, 2025

KAPAZI Matting Industry and Commerce Ltd.

Download the Code of Ethics and Conduct in PDF.