I. Control mechanisms and procedures

I.89. Mechanisms implemented by the Company for purposes of controlling
transactions with related parties (please see the concept resulting from IAS 24)

So as to facilitate control by the Audit Committee of transactions concluded
or to be concluded by REN or its subsidiaries with related parties and the
methodology to be adopted in the event of potential conflict of interests, the
REN Audit Committee proposed internal regulations to the Board of Directors
for the Analysis and Control of Transactions with Related Parties and Prevention
of Conflict of Interest, which were approved by the Board of Directors on 8
November 2012.

In accordance with the internal regulations on Analysis and Control of
Transactions with Related Parties and Prevention of Conflict of Interest, which
are in line with IAS 24 and CMVM recommendation V.2, transactions conducted
between a related part75 and REN or its subsidiaries, which are covered by the
following situations, shall be submitted by the management body for prior
opinion by the Audit Committee76:

  • The purchase and/or sale of goods, provision of services or contract work
    valued at over €1 000 000;
  • The acquisition or disposal of shareholdings;
  • New loans, financing and subscription of financial investments resulting in an
    overall annual indebtedness exceeding €100 000 000, except when dealing
    with a simple renewal of existing circumstances or operations undertaken
    within the framework of pre-existing contractual conditions.
  • Any transaction which, though not covered by the above criteria, has a value
    that exceeds €1 000 000 or must be considered relevant for this purpose by
    the Board of Directors, by virtue of its nature or its particular susceptibility
    to giving rise to a conflict of interests.

In turn, any business between a Related Party and REN or one of its Affiliates,
which does not fall into any of the above circumstances, must be submitted by
the management body to the Audit Committee for its consideration77.

If the Audit Committee issues an unfavourable prior expert opinion, approval of
the transaction by the Board of Directors must be particularly well-grounded
so as to demonstrate that the completion of the transaction is in line with
pursuing the corporate interest of REN or of its Affiliates and that the resulting
advantages for them outweigh in a positive manner the disadvantages
identified by the Audit Committee78.

Finally, the Audit Committee also submits recommendations to the Board of
Directors with regard sto measures to prevent and identify conflicts of interest.

Moreover, in accordance with the Board of Directors internal regulations,
transactions with related parties for sums exceeding €500 000 or, regardless
of the sum, any transaction which may be considered as not being executed
under market conditions are matters which may not be delegated to the
Executive Committee.

75 That is, a) a member of a REN management or supervisory body or of any other company in a controlling
or group relationship with REN, pursuant to Article 21 of the Portuguese Securities Code (‘Affiliates’)
or b) any individual who, due to the post he or she holds in REN or in the Affiliates, serves in a senior or
managerial capacity, or who has regular or occasional access to privileged information (‘Official’) or c)
a shareholder who holds a qualified shareholding of at least 2% of REN’s share capital or of that of the
Affiliates, calculated in accordance with Article 20 of the Portuguese Securities Code, or d) a third-party
body, related to an Official or a Relevant Shareholder by means of any relevant commercial or personal
interest.
76 Cf. Point II.I(a) of the abovementioned internal regulations.
77 Cf. Point III(b) of the abovementioned internal regulations.
78 Cf. Points 4 and 5 of the abovementioned internal regulations.
79 Cf. Point IX(I)(a) of the abovementioned internal regulations.

I.90. Indication of the transactions which were subject to control in the
reference year

In accordance with internal regulations on the appreciation and control of
transactions with related parties and the prevention of conflicts of interest, the
Audit Commission intervened in the following transaction, carried out between
the Company and the holder of qualified shareholding or entitie with which him is
in a relationship pursuant to Article 20 of the Portuguese Securities Code having
issued a prior favourable opinion to the carrying out of the aforementioned:

Supply contract for low, medium and high voltage for REN’s installations, as
follows:

a) Objective: Acquisition of medium and high voltage electricity supply for REN’s
installations

b) Date of approval: 15 May 2013, by REN the Board of Directors

c) Material criteria pursuant to appreciation: Business conducted with a related
party, EDP Comercial – Comercialização de Energia, S.A. (EDP Comercial),
and the following REN Group companies: REN Serviços, S.A., REN – Rede
Eléctrica Nacional, S.A., REN Gasodutos, SA, REN Armazenagem, S.A. and
REN Atlântico – Terminal de GNL, S.A.

d) Selection criteria: Lowest price, after technical validation

e) Type of procedure: Direct award with invitations to several entities

f) Stages of consultation: Launch of consultation, reception of proposals,
negotiation, preliminary report, prior hearing and final report

g) Suppliers consulted: EDP Comercial; EGL Energia Iberia SL; Endesa – Energia
Sucursal Portugal; Iberdrola Generación – Energia e Serviços Portugal,
Unipessoal, Lda.; Union Fenosa Comercial, SL., Galp Power, S.A. and Nexus
Energia, S.A.

h) Amount: Total estimated value of 5 426 467 euros, plus regulated access tariffs
to networks plus VAT

I.91. Description of the procedures and criteria applicable to the intervention of
the supervisory bodies for the purposes assessing business between the Company
and the holders of qualified shareholdings or entities with which they are in any
relationship pursuant to Article 20 of the Portuguese Securities Code

See I.89. The procedures and criteria outlined herein are applicable to
transactions with the holders of qualified shareholdings or entities with which
they are in any relationship pursuant to Article 20 of the Portuguese Securities
Code, given that these are by definition considered to be related parties
in accordance with the internal regulations for the ‘Analysis and Control of
Transactions with Related Parties and Prevention of Conflict of Interest’.

II. Information relating to business

II.92. Indication of the location of accounting documents providing information
regarding business with Related Parties, in accordance with IAS 24 or,
alternatively, reproductions of this information

Point 34 of the Appendix to the financial statements of the 2013 Management
Report, in accordance with IAS 24, includes a description of the principal
elements of business with Related Parties, including business and operations
carried out between the Company and holders of qualified shareholdings or
associated entities.

Business between the Company and the holders of qualified shareholdings or
entities with which they are in any relationship pursuant to Article 20 of the
Portuguese Securities Code was conducted under normal market conditions,
during normal REN business, and was largely a result of regulatory obligations,
and as such, CMVM recommendation V.1. was adopted.