Jerónimo Martins SGPS S A : Jerónimo Martins, SGPS, S.A., informs on 2021 Corporate Governance Report to be presented to the Annual General Meeting of April 21, 2022

Jerónimo Martins | Annual Report 2021

Corporate Governance

Corporate Governance

Part I-Information on Shareholder Structure, Organization and Corporate Governance .................................................. 3

Section A-Shareholder Structure ........................................................................................................................................................ 3

Subsection I - Capital Structure ........................................................................................................................................................ 3

Subsection II - Shareholdings and Bonds Held .......................................................................................................................... 5

Section B - Corporate Bodies and Committees ............................................................................................................................... 7

Subsection I - General Meeting ......................................................................................................................................................... 7

A. Composition of the Presiding Board of the General Meeting ..................................................................................... 7

B. Exercising the Right to Vote .................................................................................................................................................... 7

Subsection II - Management and Supervision (Board of Directors) ................................................................................... 9

A. Composition ................................................................................................................................................................................... 9

B. Functioning .................................................................................................................................................................................. 24

C. Committees within the Board of Directors and Board Delegate ........................................................................... 27

Subsection III - Supervision - (Audit Committee) .................................................................................................................... 29

A. Composition ................................................................................................................................................................................ 29

B. Functioning .................................................................................................................................................................................. 31

C. Powers and Duties ................................................................................................................................................................... 32

Subsection IV - Statutory Auditor ................................................................................................................................................. 32

Subsection V - External Auditor .................................................................................................................................................... 32

Section C - Internal Organisation ...................................................................................................................................................... 35

Subsection I - Articles of Association .......................................................................................................................................... 35

Subsection II - Reporting of Irregularities .................................................................................................................................. 35

Subsection III - Internal Control and Risk Management ...................................................................................................... 35

Subsection IV - Investor Assistance ............................................................................................................................................ 41

Subsection V - Website .................................................................................................................................................................... 43

Section D - Remuneration ..................................................................................................................................................................... 45

Subsection I - Power to Establish ................................................................................................................................................. 45

Subsection II - Remuneration Committee .................................................................................................................................. 45

Subsection III - Remuneration Structure .................................................................................................................................... 46

Subsection IV - Remuneration Disclosure ................................................................................................................................. 51

Subsection V - Agreements with Remuneration Implications ........................................................................................... 55

Subsection VI - Share Allocation and/or Stock Option Plan .............................................................................................. 56

Section E - Related Party Transactions ........................................................................................................................................... 57

Subsection I - Control Mechanisms and Procedures ............................................................................................................. 57

Subsection II - Data on Business Deals ...................................................................................................................................... 59

Part II - Corporate Governance Assessment ................................................................................................................................. 60

1. Details of the Corporate Governance Code Implemented ............................................................................................. 60

2. Analysis of Compliance with the Corporate Governance Code Implemented ....................................................... 60

3. Other Information ........................................................................................................................................................................... 68

Index

Part I - Information on Shareholder Structure, Organization and Corporate Governance

Section A - Shareholder Structure Subsection I - Capital Structure

1. The Capital Structure (Share Capital, Number of Shares, Distribution of Capital by Shareholders, etc.), Including an Indication of Shares That Are Not Admitted to Trading, Different Classes of Shares, Rights and Duties of Same and the Capital Percentage That Each Class Represents (Art. 29.º-H/1/a of the Portuguese Securities Code - PSC)

The Company's share capital is 629,293,220 euros. It is fully subscribed and paid up, and divided into six hundred and twenty-nine million, two hundred and ninety-three thousand, two hundred and twenty shares with a nominal value of one euro each.

All issued shares are ordinary, there are no other categories of shares, and all shares have been admitted to trading on the Euronext Lisbon stock exchange.

The Company's shareholder structure is the following, with reference to 31 December 2021*:

* According to the last communications made by the shareholders with qualifying holdings to Jerónimo Martins, SGPS, S.A. up to the said date, being assumed that the number of shares owned is equivalent to the number of voting rights, unless otherwise disclosed to the issuer. See, point 7.

2. Restrictions on the Transfer of Shares, Such as Clauses on Consent for Disposal, or Limits on the Ownership of Shares (Art. 29.º-H/1/b PSC)

Jerónimo Martins' shares are freely transferable and there are no restrictions concerning their tradability.

3. Number of Own Shares, the Percentage of Share Capital that it Represents and Corresponding Percentage of Voting Rights that Corresponded to Own Shares (Art. 29.º-H/1/a PSC)

The Company holds 859 thousand shares in its own portfolio, which were acquired in 1999 at an average price of 7.06 euros per share (price adjusted by the restatement of capital). These shares represent 0.14% of the Company's share capital, which would correspond to equal percentage of voting rights.

4. Important Agreements to which the Company is a Party and that Come Into Effect, Amend or are Terminated in Cases Such As a Change in the Control of the Company After a Takeover Bid, and the Respective Effects, Except Where Due to their Nature, the Disclosure Thereof Would be Seriously Detrimental to the Company; This Exception Does Not Apply Where the Company is Specifically Required to Disclose Said Information Pursuant to Other Legal Requirements (Art. 29.º-H/1/j PSC)

There are no significant agreements (including financing agreements) to which the Company is a party and that come into effect, are amended or terminated in case of a change in the control of the Company after a takeover bid.

5. A System That is Subject to the Renewal or Withdrawal of Countermeasures, Particularly Those That Provide for a Restriction on the Number of Votes Capable of Being Held or Exercised by Only One Shareholder Individually or Together With Other Shareholders

No defensive measures were adopted that require payments or the assumption of costs by the Company in the event of a change of control or a change in the composition of the Board of Directors and that are likely to impair the free transfer of shares and the free assessment by the shareholders of the performance of the Board members, or that provide for a restriction on the number of votes capable of being held or exercised by only one shareholder individually or together with other shareholders.

6. Shareholders' Agreements that the Company is aware of and That May Result in Restrictions on the Transfer of Securities or Voting Rights (Art. 29.º-H/1/g PSC)

Pursuant to the communication regarding the qualifying holding received by the Company on 2nd January, 2012, the same was informed of a shareholders' agreement concerning the exercise of voting rights, on the following terms:

"It is further informed that, in accordance with the terms of number 2 of article 21, paragraphs b) and c), of the Portuguese Securities Code, Sociedade Francisco Manuel dos Santos, SGPS, S.A.[*] controls Sociedade Francisco Manuel dos Santos B.V., since it may exercise the corresponding voting rights under a Shareholders Agreement.

In accordance with the terms of article 20 of the Portuguese Securities Code, especially paragraph b) of its number 1, under the above mentioned Shareholders Agreement, the corresponding voting rights of the Jerónimo Martins, SGPS, S.A. shares, object of the purchase and sale above mentioned, remain attributed to Sociedade Francisco Manuel dos Santos, SGPS S.A.[*]".

The Company, however, does not know of any restrictions concerning the transfer of securities or voting rights.

* The company name was changed on 2015 to "Sociedade Francisco Manuel dos Santos, SGPS, S.E.".

Subsection II - Shareholdings and Bonds Held

7. Details of The Natural or Legal Persons Who, Directly or Indirectly, are Holders of Qualifying Holdings (Art. 29.º-H/1/c & /d PSC) and Art. 16.º PSC) With Details of the Percentage of Capital and Votes Attributed and the Source and Causes of the Attribution

The holders of qualifying holdings, calculated in accordance with the terms of paragraph 1 of Art. 20 PSC, as it stood on 31 December 2021, based on the total number of shares under the terms of section b), paragraph 3 of Art. 16 PSC, as at 31st December 2021 are identified in the table below.

List of Qualifying Holdings as at 31st December 2021*

(Pursuant to sub-paragraph b) of paragraph 1 of Art. 8 of the Portuguese Securities Regulations no. 5/2008)

Shareholder	No. of Shares Held	% Capital	No. of Voting Rights	% of Voting Rights
Sociedade Francisco Manuel dos Santos, SGPS, S.E. Through Sociedade Francisco Manuel dos Santos, B.V.	353,260,814	56.14%	353,260,814	56.14%
Comgest Global Investors, S.A.S.	12,983,594	2.06%	12,983,594	2.06%
BlackRock, Inc	12,947,912	2.06%	12,947,912	2.06%
T. Rowe Price Group, Inc. Through T. Rowe Price International Ltd	12,821,174	2.04%	12,694,305	2.02%

* Source: Last communications made by the shareholders with qualifying holdings to Jerónimo Martins, SGPS, S.A. up to the said date.