1. Identification of the model of corporate governance adopted

The Corporate Governance Code to which the company is subject or has
decided voluntarily to abide by should be identified, under the terms and
pursuant to Article 2 of these regulations.

The place where the texts of the Corporate Governance Code to which the
Company is subject are made available to the public should also be indicated
((Article 245(1)).

In 2013, the regulatory and advisory framework for matters of corporate
governance was subject to a major overhaul.

Under the terms of this overhaul, and as a Company issuing shares that were
admitted for trading on the Euronext Lisbon regulated market, REN finds
itself subject to, in matters of disclosure of information relating to corporate
governance, to the regime established by the Portuguese Securities Code, in Law
28/2009, of 19 June, and the Securities Market Commission regulations 4/2013
(the latter was approved in 2013 and is applicable to governance reports referred
to in this exercise).

Amongst the many amendments to the Securities Market Commission
regulations 4/2013, it is worth noting the possibility for issuing companies
to opt for the adoption of the CMVM governance code or an alternative code
issued by a dedicated entity.

Also in this respect, and in an advisory sense, the Securities Market Commission
and the Portuguese Institute for Corporate Governance (IPCG) approved,
respectively, in 2013 and 2014, new corporate governance codes, the outcome of
a long process of discussion and consultation with various players in the market.

Considering this lengthy period for reflection in 2013 and given the fact that 2014
sees the end of the current mandate of the Company’s corporate bodies, during
2013 REN referred to the Securities Market Commission’s Corporate Governance
Code, in light of which the current governing bodies have come to put their
operating principles.

Therefore, in 2014 REN will consider the eventual adoption of an alternative code,
in that this may result in a strengthening of the corporate governance model,
especially considering the IPCG initiative. In any case, the Company understands
that the current model and principles of corporate governance are already in
line with a significant number of the recommendations included in the IPCG’s
Governance Code.

In summary, for the purposes of this report, REN took the decision to adopt the
recommendations laid out in the Corporate Governance Code of the Securities
Market Commission, approved in 2013, which can be viewed at www.cmvm.pt.

2. Analysis of compliance with the model of corporate governance adopted

Pursuant to Article 245-A(1)(a) a statement should be included on the
acceptance of the Corporate Governance Code to which the issuer is subject,
stating any divergence from said code and the reasons for said divergence.

The information submitted should include, for each recommendation:

a) Information that enables the verification of compliance with the
recommendation or referring to the part of the report where the issue is
discussed in detail (chapter, title, paragraph, page);
b) grounds for the non-compliance or partial compliance thereof;
c) In the event of non-compliance or partial compliance, the details of
any alternative mechanism adopted by the company for the purpose of
pursuing the same objective of the recommendation.

As discussed above, REN took the decision to adopt all recommendations laid
out in the Corporate Governance Code of the Securities Market Commission,
approved in 2013.

Therefore, REN hereby declares that it fully adopts all the abovementioned
CMVM recommendations on corporate governance laid down in said Code,
except for Recommendations I.1. (partially), I.2., II.1.4. and II.3.3. (partially), which
are not complied with for the reasons given below.

The chart below identifies CMVM recommendations and individually mentions
those that have been fully adopted by REN and those that have not. Also
indicated are the chapters in this report where a more detailed description of
measures taken for their adoption may be found with the aim of complying with
the said CMVM recommendations.

Recommendation /Chapter (80) Indication on the adoption of the Recommendation Chapter of the Report
I. Voting and Company control    
I.1. Companies shall encourage shareholders to attend and
vote at general meetings and shall not set an excessively large
number of shares required for the entitlement of one vote, and
implement the means necessary to exercise the right to vote
by mail and electronically.
Partially adopted
(Electronic voting is not possible at present
as REN considers that the participation
of shareholders at General Meetings
is fully provided for through vote by
correspondence and representation
mechanisms - as described above in the
respective chapter.
Furthermore, bearing in mind particularly
its shareholder structure, the reduced
dispersion of capital and the fact no
correspondence votes have been received
at recent General Meetings, REN considers
that electronic voting would not provide any
benefits for shareholders.
In summary, the Company considers that
correspondence vote and the possibility of
representation are sufficient mechanisms to
comply with the aim of this recommendation
to promote active shareholder participation
at General Meetings.)
Part 1, chapter B.I.12.
I.2. Companies shall not set a resolution-fixing quorum that
outnumbers that which is prescribed by law.
Not adopted
(The quorum required to constitute at first
call, is 51% of capital. Moreover, the quorum
for adopting resolutions on changes to the
Articles of Association, merger, demerger,
transformation or dissolution is two thirds of
votes issued, whether at first or second call.
The aim of the mechanisms set out in
Art.11(1) and (2 ) of the Articles of Association
is to ensure adequate representation
of shareholders in light of the nature of the
activities carried out by the Company and its
voting rights. In accordance with No 3 of the
same Article, resolutions for changes relating
to Articles 7(A), 12(3) and 11 of the Articles
of Association require the approval of three
quarters of the votes issued.
In summary, the rules in the Articles of Association
in question are best suited to the specificities
of the Company, bearing in mind the
underlying aim of this recommendation and
that this is related to a matter which is strictly
within the realm of shareholder decision.)
Part 1, chapters
B.I.14. and C.I.48.
I.3. Companies shall not establish mechanisms intended to cause
mismatching between the right to receive dividends or the
subscription of new securities and the voting right of each
common share, unless duly justified in terms of long-term
interests of shareholders.
Adopted Part 1, chapter B.I.12.
I.4. Os estatutos das sociedades que prevejam a limitação do
número de votos que podem ser detidos ou exercidos por um
único acionista, de forma individual ou em concertação com outros
acionistas, devem prever igualmente que, pelo menos de cinco
em cinco anos, será sujeita a deliberação pela assembleia geral a
alteração ou a manutenção dessa disposição estatutária – sem requisitos
de quórum agravado relativamente ao legal – e que, nessa
deliberação, se contam todos os votos emitidos sem que aquela
limitação funcione.
Adopted Part 1, chapter A.I.5.

80 Chapter’ refers to CMVM’s Corporate Governance Code.

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Recommendation /Chapter(80) Indication on the adoption of the Recommendation Chapter of the Report

I.4. The company’s articles of association that provide for the
restriction of the number of votes that may be held or exercised
by a sole shareholder, either individually or in concert with other
shareholders, shall also foresee for a resolution by the General
Assembly (5 year intervals), on whether that statutory provision is
to be amended or prevails – without super quorum requirements
as to the one legally in force – and that in said resolution, all votes
issued be counted, without applying said restriction

Adopted Part 1, chapter A.I.5.

I.5. Measures that require payment or assumption of fees by
the company in the event of change of control or change in the
composition of the Board and that which appear likely to impair
the free transfer of shares and free assessment by shareholders
of the performance of Board members, shall not be adopted.

Adopted Part 1, chapter A.I.4.
II. Supervision, management and oversight    
II. 1. Supervision and management    

II.1.1. Within the limits established by law, and except for the
small size of the company, the board of directors shall delegate
the daily management of the company and said delegated
powers shall be identified in the Annual Report on Corporate
Governance.

Adopted Part 1, chapter B.II.21.

II.1.2. The Board of Directors shall ensure that the company
acts in accordance with its objectives and shall not delegate its
responsibilities as regards the following: i) the definition
of the Company’s strategy and general policies , ii) the
definition of the business structure of the group iii) decisions
considered strategic due to the amount, risk and particular
characteristics involved:

Adopted Part 1, chapter
B.II.21.
II.1.3. The General and Supervisory Board, in addition to its
supervisory duties supervision, shall take full responsibility at
corporate governance level, whereby through the statutory
provision or by equivalent means, shall set out the requirement
for this body to decide on the strategy and major policies of
the company, the definition of the corporate structure of the
group and the decisions that shall be considered strategic due
to the amount or risk involved. This body shall also assess
compliance with the strategic plan and the implementation of
key policies of the Company
Not applicable
(This recommendation is not applicable
given the corporate governance model
adopted by REN)
Part 1, chapter B.II.15.

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Recommendation /Chapter (80) Indication on the adoption of the Recommendation Chapter of the Report

II.1.4. Except for small-sized companies, the Board of
Directors and the General and Supervisory Board, depending
on the model adopted, shall create the necessary committees
in order to:
a) Ensure a competent and independent assessment of the
performance of the executive directors and its own overall
performance, as well as of other committees;
b) Reflect on the system structure and governance practices
adopted, verify its efficiency and propose to the competent
bodies, measures to be implemented with a view to their
improvement.

Not adopted
(Considering the composition of the
management body, the governance model
and the company’s shareholder structure,
the Board of Directors does not understand it
to be suitable to its specificities, nor is the
‘formal setting up’ necessary of specialized
committees with such competences.
The processes for performance assessment,
identification of profile and selection, as
well as those for analysis of the governance
system, have been undertaken in a manner
suitable to the company’s interests, by the
non-executive directors of REN as a group
and, more particularly, by the members of
the Audit Committee (consisting exclusively
of independent directors). Moreover, within
its responsibilities, the Remunerations
Committee has also actively participated in
the performance assessment of directors.
Therefore, although it is not a ‘formal
committee’ of the Board of Directors,
substantially, these matters have been duly
dealt with by REN, as fully described in this
report.)
Aware of the above, REN has effective
mechanisms for ensuring the performance
of a supervisory duty within the management
body, particularly with regard to matters
of corporate governance, assessment
and remuneration– the underlying aim of
this recommendation. Such mechanisms
are those which best suit the specificities
of the Company and the structure of the
respective management body.)
Part 1, chapter B.II.27.

II.1.5. The Board of Directors or the General and Supervisory
Board, depending on the applicable model, should set goals
in terms of risk-taking and create systems for its control to
ensure that the risks effectively incurred are consistent with
those goals

Adopted Part 1, chapters
C.III.50 to 55.
II.1.6. The Board of Directors shall include a number of
non-executive members ensuring effective monitoring,
supervision and assessment of the activity of the remaining
members of the board.
Adopted

Part 1, chapter B.II.18.

II.1.7. Non-executive members shall include an appropriate number
of independent members, taking into account the adopted
governance model, the size of the company, its shareholder
structure and the relevant free float.
The independence of the members of the General and Supervisory
Board and members of the Audit Committee shall be
assessed as per the law in force. The other members of the
Board of Directors are considered independent if the member
is not associated with any specific group of interests in the
Company nor is under any circumstance likely to affect an
exempt analysis or decision, particularly due to:
a) Having been an employee at the Company or at a company
holding a controlling or group relationship within the last three
years;
b) Having, in the past three years, provided services or established
commercial relationship with the company or company with
which it is in a control or group relationship, either directly or as a
partner, board member, manager or director of a legal person;
c) Being paid by the company or by a company with which it
is in a control or group relationship besides the remuneration
arising from exercising the duties of a board member
d) Living with a partner or a spouse, relative or any first degree
next of kin and up to and including the third degree of collateral
affinity of board members or natural persons that are direct
and indirectly holders of qualifying holdings;
e) Being a qualifying shareholder or representative of
a qualifying shareholder.

Adopted

Part 1, chapter B.II.18.

II.1.8. Directors performing executive duties, when so requested
by other corporate body members, shall provide any information
requested by them in a timely and appropriate manner.

Adopted

Part 1, chapters
B.II.18. and 23.

II.1.9. The Chair of the Executive Board or of the Executive
Committee shall submit, as applicable, to the Chair of the Board
of Directors, the Chair of the Supervisory Board, the Chair of
the Audit Committee, the Chair of the General and Supervisory
Board and the Chairman of the Financial Matters Board, the
convening notices and minutes of the relevant meetings.
Adopted

Part 1,
chapter B.II. 23.

II.1.10. If the chair of the board of directors carries out executive
duties, said body shall appoint, from among its members, an
independent member to ensure the coordination of the work of
other non-executive members and the conditions so that said
can make independent and informed decisions or to ensure the
existence of an equivalent mechanism for such coordination.

Adopted

Parte 1, capítulo B.II. 18.

II. 2. Supervision    

II.2.1. Depending on the applicable model, the Chairman of the
Supervisory Board, the Audit Committee and the Financial Matters
Committee shall be independent in accordance with legal
criteria and be appropriately qualified to carry out his
or her duties.

Adopted

Part 1, chapters B.II.
18; B.III.30; and 38.

II.2.2. The supervisory body shall be the main representative
of the external auditor and the first recipient of the relevant
reports, and is responsible, inter alia, for proposing the relevant
remuneration and ensuring that the proper conditions for the
provision of services are provided within the company.

Adopted

Part 1, chapters
B.III.38. and B.V.45.

II.2.3. The supervisory board shall assess the external auditor
and propose to the competent body its dismissal or termination
of the contract as to the provision of their services when there
is a valid basis for said dismissal

Adopted

Part 1, chapter B.V.
45.

I.2.4. The supervisory board shall assess the functioning of the
internal control systems and risk management and propose
adjustments as may be deemed necessary.

Adopted

Part 1, chapters
B.III.38. and C.III.50.

III.2.5. The Audit Committee, the General and Supervisory
Board and the Supervisory Board decide on the work plans and
resources concerning the internal audit services and services
that ensure compliance with the rules applicable to the
Company (compliance services), and should be recipients
of reports made by these services at least when it concerns
matters related to accountability, identification or resolution
of conflicts of interest and detection of potential improprieties.

Adopted

Part 1, chapter
C.III.51.

II. 3. Setting of remuneration

II.3.1. All members of the Remunerations Committee, or equivalent,
shall be independent in regard to the management bodies
and such committee shall include, at least, one member with
know-how and experience in remuneration policy matters.
Adopted Part 1, chapters
D.II.67. and 68.
II.3.2. Any natural or legal person that provides or has provided
services in the past three years, to any structure under the
board of directors, the board of directors of the company
itself or who has a current relationship with the company
or consultant of the company, shall not be hired to assist
the Remuneration Committee in the performance of their
duties. This recommendation also applies to any natural
or legal person that is related by employment contract
or provision of services with the above
Adopted Part 1, chapter
D.II.67.

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Recommendation /Chapter (80) Indication on the adoption of the Recommendation Chapter of the Report

II.3.3. A statement on the remuneration policy of the
management and supervisory bodies referred to in Article 2
of Law No. 28/2009 of 19 June, shall also contain the following:
a) Identification and details of the criteria for determining the
remuneration to be paid to the members of the governing bodies;
b) Information on the maximum potential, in individual terms,
and the maximum potential, in aggregate form, to be paid to
members of corporate bodies, and identify the circumstances
whereby these maximum amounts may be payable;
d) Information on the enforceability or unenforceability
of payments for the dismissal or termination of appointment
of board members.

Partially adopted
(The declaration on remuneration policy
for the REN management and supervisory
bodies submitted at the last Annual General
Meeting does not expressly state the potential
sums required by subparagraph b) of
the recommendation.
Therefore, bearing in mind the date of
approval (30 April 2013) for this declaration
submitted at the last Annual General
Meeting, the said bodies did not have
any knowledge nor could have had any
knowledge of the CMVM Governance Code
published in its current version in July 201.
For this reason, this information was not
applicable to the above mentioned
declaration.
Furthermore, and even if it is not understood
as such, REN considers that the sums in
question, despite not being expressly
declared, could already have been specified
on the date of the abovementioned General
Meeting by the shareholders (main addressees
of the declaration subject to approval)
and the market in general, considering the
content of the 2012 Annual Governance
Report, which discloses remuneration paid
in 2012 and the remuneration policy for the
2012-2014 term of office. These documents
were put to the approval of the shareholders
and stated the values of fixed remuneration
and the criteria, limits and rules for determining
STVR and MTVR, in both cases, on
an individual and joint basis.
As such, the aims of this recommendation
were fully complied with in the financial
year of 2013.

Part 1, chapter
D.III.69.

II.3.4. Approval of plans for the allotment of shares and/or
options to acquire shares or based on share price variation to
board members shall be submitted to the General Meeting. The
proposal shall contain all the necessary information in order to
correctly assess said plan.

Not applicable

Part 1, chapter
D.VI.85.

II.3.5. Approval of any retirement benefit scheme established
for members of corporate members shall be submitted to the
General Meeting. The proposal shall contain all the necessary
information in order to correctly assess said system.

Not applicable

Part 1, chapter
D.III.76.

III. Remuneration    

III.1. The remuneration of the executive members of the board
shall be based on actual performance and shall discourage
taking on excessive risk.

Adopted Part 1, chapters
D.III.69 and 70.

III.2. The remuneration of non-executive board members and
the remuneration of the members of the supervisory board
shall not include any component whose value depends on the
performance of the Company or of its value.

Adopted

Part 1, chapters
D.III.69., 70. and 77.

III.3. The variable component of remuneration shall be reasonable
overall in relation to the fixed component of the remuneration
and maximum limits should be set for all components.
Adopted

Part 1, chapters
D.III.69., 70. and 71.

III.4. A significant part of the variable remuneration should be
deferred for a period not less than three years, and the right
of way payment shall depend on the continued positive
performance of the company during that period.
Adopted Part 1, chapter
D.III.72.
III.5. Members of the Board of Directors shall not enter into
contracts with the Company or with third parties which intend
to mitigate the risk inherent to remuneration variability set by
the company.
Adopted

Part 1, chapter
D.III.73.

III.6. Executive board members shall maintain the company’s
shares that were allotted by virtue of variable remuneration
schemes, up to twice the value of the total annual remuneration,
except for those that need to be sold for paying taxes on the
gains of said shares, until the end of their term of office.
Not applicable

Part 1, chapter
D.III.73.

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Recommendation /Chapter (80) Indication on the adoption of the Recommendation Chapter of the Report

III.7. When the variable remuneration includes the allocation of
options, the beginning of the exercise period shall be deferred
for a period not less than three years

Not applicable

Part 1, chapters
D.III.69 and 74.

III.8. When the removal of board member is not due to serious
breach of their duties nor to their unfitness for the normal
exercise of their functions but is yet due on inadequate performance,
the company shall be endowed with the adequate and
necessary legal instruments so that any damages or compensation,
beyond that which is legally due, is unenforceable
Adopted

Part 1, chapter
D.V.83.

IV. Auditing    

IV.1. The external auditor shall, within the scope of its duties,
verify the implementation of remuneration policies and systems
of the corporate bodies as well as the efficiency and effectiveness
of the internal control mechanisms and report any shortcomings
to the supervisory body of the Company.

Adopted

Part 1, chapters
B.III.38. and C.III.50.

IV.2. The company or any entity with which it maintains a control
relationship shall not engage the external auditor or any entity
with which it finds itself in a group relationship or that incorporates
the same network, for services other than audit services. If there
are reasons for hiring such services - which must be approved by
Corporate Governance - said services should not exceed more
than 30% of the total value of services rendered to the company.

Adopted

Part 1, chapter
B.V.46.

IV.3. Companies shall support auditor rotation after two or
three terms whether four or three years, respectively. Its
continuance beyond this period shall be based on a specific
opinion of the supervisory board that explicitly considers the
conditions of auditor’s independence and the benefits and
costs of its replacement.

Adopted

Part 1, chapter B.V.44.

V. Conflicts of interests and transactions with related parties

V.1. The Company’s business with holders of qualifying holdings
or entities with which they are in any type of relationship pursuant
to Article 20 of the Portuguese Securities Code, shall be
conducted under normal market conditions.

Adopted

Part 1, chapter E.II.92.

V.2. The supervisory or oversight board shall establish procedures
and criteria that are required to define the relevant level of significance
of business with holders of qualifying holdings - or entities
with which they are in any of the relationships described in Article
20(1) of the Portuguese Securities Code – thus significant relevant
business is dependent upon prior opinion of that body.

Adopted

Part 1, chapters B.II.II
and E.I.89.

VI. Information

VI.1. Companies shall provide, via their websites in both Portuguese
and English, access to information on their progress as
regards the economic, financial and governance state of play.

Adopted

Part 1, chapter C.V.59.
to 65.

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3. Other information

The Company shall provide any additional information which, not covered by
the previous points, is relevant for understanding the governance model and
practices implemented.

REN is not in the possession of any additional information which is relevant for
understanding the governance model and practices implemented.

80 Chapter’ refers to CMVM’s Corporate Governance Code.