Pay Transparency And Remuneration Criteria Report issued by the Ministry of Labor and Employment – Base date of 2022

KENNAMETAL DO BRASIL LTDA. ("KENNAMETAL"), enrolled at the Corporate Taxpayer Registry (CNPJ/MF) under number 02.696.800/0001-14, hereby publishes its Pay Transparency and Remuneration Criteria Report, to comply with the new regulation on this subject matter (Law n. 14.611/2023, Decree n. 11.785/2023 and Ordinance n. 3.714/2023, from the Ministry of Labor and Employment).

For a better understanding of the Report, KENNAMETAL highlights the following:

• The purpose of the Ministry of Labor and Employment, through the Report, is to collect statistical data from Brazilian companies to assist in measures and public policies to foster pay equity between men and women;
• The Report is a document entirely prepared by the Ministry of Labor and Employment and Employment and is being only replicated by the company, and, therefore, does not reflect  the reality experienced by the company;
• The report is based on data from 2022 and does not reflect the company's current reality;
• The report uses data from the eSocial and a declaration on practices and policies filled by companies on the government website called "Portal Emprega Brasil";
• The methodology adopted by the Ministry of Labor and Employment disregards relevant particularities of the company structure with regard to job and remuneration structures, such as: positions with different levels, seniority and length of contract, remuneration linked to performance, additional length of service, salary increases provided in under the terms of the collective bargaining agreements, etc;
• The simplistic methodology used to compile the report makes it impossible to accurately analyze any salary differences between specific and equivalent positions and, therefore, it is not useful to demonstrate any discrimination or equal pay;
• Contrary to the information initially provided by the Ministry of Labor and Employment's that the methodology for preparing the report would be based on the families/categories of CBOs (Brazilian Classification of Occupations), in practice, the division used does not seem to follow this model and there has been no clarification from them on the subject so far, making it difficult to understand the comparisons made;
• The data related to employees in operational positions was disregarded by the report, despite being duly registered on the eSocial and there has been no clarification from the Ministry of Labor and Employment related to this inconsistency in the company's survey, impacting on the final figures.