Irani Papel e Embalagem S A : Integrated Report 2020

INTEGRATED REPORT

2020

MESSAGE FROM THE CEO

(102-14)

Life, first. This, our fundamental corporate value, made even more sense and guided our actions throughout 2020. As a nimble response to the year's challenges, we set up a crisis committee to provide the necessary guidelines to combat Covid-19. Among the many initiatives, we monitored all suspected and confirmed cases of the disease among our employees, instituted health and safety measures in all business units, and supported external initiatives through investments totaling approximately R$ 1 million.

We are part of an essential chain, as is a large part of our customer portfolio in the packaging paper and corrugated cartonboard packaging business. Added

to the growing demand for packaging for delivery, e-commerce and export sectors, our operations remained fully ramped up and strong. In a year of uncertainties, our teams amassed significant achievements. We recorded 75 productivity records throughout the year, our Net Revenue reached a mark of over R$ 1 billion, representing growth of almost 15% compared to 2019, and net income vaulted to over 250% compared to 2019, reaching the mark of R$ 92,761 thousand.

We conducted a successful public offering of common shares, raising R$ 405 million. This operation was fundamental for the launch of the Gaia Platform, our robust expansion plan estimated at R$ 1.2 billion,

which aims to boost production capacity and introduce improvements into the business units. Of the total investment, R$ 714 million will be made in the plants in Santa Catarina and the remainder will be earmarked for the Company's Minas Gerais businesses.

This move also kicked off the Company's migration to the B3's Novo Mercado listing segment. We progressed the structuring of new practices for and the establishment of advisory committees to the Board of Directors, becoming the first company in the paper and packaging industry to join the select group of corporations on the Brazilian stock exchange with the highest level of corporate governance.

Emphasizing this virtuous cycle, we also refined our brand logo, imbuing it with more modern design elements, linked to the current moment in the evolution of both the company as well as society in general.

With the involvement of almost 70% of the staff, we began working internally to strengthen our organizational culture. Mapping the habits, beliefs, values and behaviors that we share

in Irani, we scored an average of

77% on the general culture rating. This index considers eight dimensions identified as our cultural pillars, segmented per our strengths or opportunities for improvement. Among the strengths, we can highlight topics such as Development and Training, Communication, Culture and Climate,

Quality of Life, Leadership, Processes and Governance. Our opportunities for improvement, on the other hand, cover topics such as Strategy and Objectives, Career and Succession, Recruitment and Selection, and Recognition.

The appreciation of diversity and the enhancement of inclusion practices also represent important strategies to advance our organizational culture. Guided by the Diversity Committee's guidelines, we organized a series of roundtable discussions and awareness- raising sessions. Top management is making a special effort to increase the number of women in our workforce. This action even has become a management indicator. The Sustainability Committee's actions also continued over the period, as did the analysis of our practices

in relation to the UN Sustainable

Development Goals (SDGs), aligned with the guidelines of the Global and Business Pact for Integrity and Against Corruption, of which we are signatories.

We are driven by the challenge to innovate daily. Not only in products and services, but also in the way we relate, produce and impact society and the environment. In 2020, we progressed our open innovation strategy, launching an initiative to connect with startups through the Irani Labs, which had five strategic fronts in the first edition: waste management, collection and management of paper scraps, forestry technologies, new products and services and new business models. In total, there were 87 registered startups, 10 selected and three finalists for the Proof-of- Concept development with Irani.

As of the creation of the IT Governance and Digital Optimization area, our digital transformation journey continues to progress. We also welcomed two new digital "workers": IaraBot and Sofia. IaraBot was introduced in 2020, aiming to speed up five processes involving financial and tax routines. Its performance has proven

to be four times faster and more efficient than executing the same tasks manually. Sofia is a virtual assistant that operates in the omnichannel concept to serve our in-house public, supplying IT and Legal services.

When we contribute to the prosperity of our stakeholders, we are fulfilling our mission to Build Value Relationships. In 2020, we added R$ 585 million to society, of which R$ 80 million was reinvested in our business, R$ 200 million to society distributed in the form of municipal, state and federal taxes and contributions,

R$ 180 million to employees in the form of compensation, benefits and incentives, R$ 25

million distributed in the form of dividends or interest on equity and R$100 million to other groups, such as suppliers and service providers.

In the year in which we celebrate our 80th anniversary, we look back with pride at all we have done so far, and we remain even stronger and more committed to the plans we are drawing up for the future, which have materialized

in the revision of the Strategic Plan for the

2021-2030 cycle. Through this publication, we celebrate Environment Day - and the launch of this, our first Integrated Report. Adopting the basic principles and content elements of the International Integrated Reporting Council (IIRC) framework, we are giving our stakeholders a window into how we generate value over time and how the business responds to topics such as governance, economic performance and social and environmental initiatives.

Enjoy your reading!

Sérgio Luiz Cotrim Ribas

Chief Executive Officer

TABLE OF CONTENTS

1

2

3

4

OUR

BUSINESS MODEL

SOCIAL AND RELATIONSHIP

CAPITAL

FINANCIAL

CAPITAL

HUMAN

CAPITAL

5

6

7

8

INTELLECTUAL

CAPITAL

MANUFACTURING

CAPITAL

NATURAL

CAPITAL

ABOUT THIS

REPORT

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