529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 529900CLC3WDMGI9VH80 2021-12-31 529900CLC3WDMGI9VH80 2020-12-31 529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 ifrs-full:NoncontrollingInterestsMember 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 ifrs-full:NoncontrollingInterestsMember 529900CLC3WDMGI9VH80 2019-12-31 529900CLC3WDMGI9VH80 2019-12-31 ifrs-full:IssuedCapitalMember 529900CLC3WDMGI9VH80 2019-12-31 ifrs-full:SharePremiumMember 529900CLC3WDMGI9VH80 2019-12-31 ifrs-full:StatutoryReserveMember 529900CLC3WDMGI9VH80 2019-12-31 EDP:ReservesAndRetainedEarning 529900CLC3WDMGI9VH80 2019-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 529900CLC3WDMGI9VH80 2019-12-31 ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember 529900CLC3WDMGI9VH80 2019-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 529900CLC3WDMGI9VH80 2019-12-31 ifrs-full:TreasurySharesMember 529900CLC3WDMGI9VH80 2019-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 529900CLC3WDMGI9VH80 2019-12-31 ifrs-full:NoncontrollingInterestsMember 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 ifrs-full:IssuedCapitalMember 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 ifrs-full:SharePremiumMember 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 ifrs-full:StatutoryReserveMember 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 EDP:ReservesAndRetainedEarning 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 529900CLC3WDMGI9VH80 2020-01-01 2020-12-31 ifrs-full:TreasurySharesMember 529900CLC3WDMGI9VH80 2020-12-31 ifrs-full:IssuedCapitalMember 529900CLC3WDMGI9VH80 2020-12-31 ifrs-full:SharePremiumMember 529900CLC3WDMGI9VH80 2020-12-31 ifrs-full:StatutoryReserveMember 529900CLC3WDMGI9VH80 2020-12-31 EDP:ReservesAndRetainedEarning 529900CLC3WDMGI9VH80 2020-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 529900CLC3WDMGI9VH80 2020-12-31 ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember 529900CLC3WDMGI9VH80 2020-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 529900CLC3WDMGI9VH80 2020-12-31 ifrs-full:TreasurySharesMember 529900CLC3WDMGI9VH80 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 529900CLC3WDMGI9VH80 2020-12-31 ifrs-full:NoncontrollingInterestsMember 529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 ifrs-full:IssuedCapitalMember 529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 ifrs-full:SharePremiumMember 529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 ifrs-full:StatutoryReserveMember 529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 EDP:ReservesAndRetainedEarning 529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember 529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 529900CLC3WDMGI9VH80 2021-01-01 2021-12-31 ifrs-full:TreasurySharesMember 529900CLC3WDMGI9VH80 2021-12-31 ifrs-full:IssuedCapitalMember 529900CLC3WDMGI9VH80 2021-12-31 ifrs-full:SharePremiumMember 529900CLC3WDMGI9VH80 2021-12-31 ifrs-full:StatutoryReserveMember 529900CLC3WDMGI9VH80 2021-12-31 EDP:ReservesAndRetainedEarning 529900CLC3WDMGI9VH80 2021-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 529900CLC3WDMGI9VH80 2021-12-31 ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember 529900CLC3WDMGI9VH80 2021-12-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 529900CLC3WDMGI9VH80 2021-12-31 ifrs-full:TreasurySharesMember 529900CLC3WDMGI9VH80 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 529900CLC3WDMGI9VH80 2021-12-31 ifrs-full:NoncontrollingInterestsMember iso4217:EUR iso4217:EUR xbrli:shares CHANGING TOMORROW NOW ANNUAL REPORT 2021 The Annual report of EDP – Energias de Portugal, S.A. (“EDP”), which incorporates a chapter regarding Corporate Governance, is prepared in accordance with the provisions set out on Portuguese Companies Code and Securities Code and in compliance with the provisions set out on CMVM’s Regulations no. 4/2013 and no. 5/2008, concerning Corpo- rate Governance and Disclosure Requirements of the publicly traded companies and under the terms of the Corporate Governance Code of the Portuguese Corporate Governance Institute, revised in 2020. The financial statements presented in the report are prepared in accordance with the Internation- al Financial Reporting Standards (IFRS), adopted in the European Union. EDP Group has opted to anticipate the reporting of the annual financial report under the European Single Electronic Format (ESEF). Thus, under the combined terms of articles 29.ºG and 29.ºL of the portuguese Securities Code, the documents included in this Annual Report were prepared in the ESEF Format and in accordance with the specifications provided for by the Commission Delegated Regulation (EU) 2018/815 of 17 December 2018, and in accordance with the subsequent amendments, also taking into account the guidance provided by the European Securi- ties and Markets Authority (ESMA) through the updated version of the ESEF Reporting Manual. Pursuant article 508º-G of the Portuguese Companies Code, in the wording introduced by Decree-Law no. 89/2017, dated 28th July, EDP publishes autonomously the Sustainability Report, in which it will be included sufficient information for understanding the evolution, the performance, the position and the impact of the Group activities regarding the following questions: environ- mental, social, referent to employees, to gender equality, to non-discrimination, to human rights respect, to corruption combat and to bribery attempts. Additionally, EDP publishes a set of reports available at www.edp.com: • Annual Report of the General and Supervisory Board; • Sectoral reports, in particular: Ethics Ombudsman’s Report, Safety Summary and Stakeholders’ Report; • Annual and sustainability reports of the companies EDP España, EDP - Energias do Brasil and EDP Renováveis; • Sustainability Report, which endorses the issues set by GRI methodology and explains the relation between organizational processes and material issues for EDP’s activities. This Report CHANGING TOMORROW NOW We are creating a new energy on the planet. More inclusive. More shared. Greener. Promoting renewable energy on a worldwide scale. Using the power of wind, sun and water, to be all green by 2030. Accelerating decarbonization, to achieve carbon neutrality. Investing € 24 billion in the energy transition. Duplicating the capacity in solar and wind power. Being on new technologies, such as green hydrogen. Leading the way in sustainability indexes. It's in our hands. The only one who changes the world, is whoever can change himself, the one who finds the will, the knowledge and the action. Because this is our story: To always discover a new ambition. — INDEX 01 — EDP Message From the Chairman Our Year EDP Group Profile Changing Tomorrow Now 02 — STRATEGIC APPROACH Global Energy Trends Strategic Priorities Risk Management 03 — PERFORMANCE Group’s Financial Analysis Business Area Analysis Share Performance Markets and Regulation Risk Management in the Year 04 — CORPORATE GOVERNANCE 05 — REMUNERATIONS REPORT 06 — FINANCIAL STATEMENTS 07 — ANNEXES 14 14 18 24 32 40 40 44 48 60 60 65 73 77 91 98 236 264 456 10 11 Progressive and meaningfull change. SAFETY 12 13 01 — EDP MESSAGE FROM THE CHAIRMAN 14 OUR YEAR 18 Main Events 18 Key Metrics 20 EDP GROUP PROFILE 24 Who We Are 24 Where We Are 26 How We Are Organized 28 CHANGING TOMORROW NOW 32 Business Model 32 Vision, Values and Commitments 34 Stakeholder Management 35 14 — Miguel Stilwell d’Andrade CHAIRMAN OF THE EXECUTIVE BOARD OF DIRECTORS 15 Dear Shareholders and Stakeholders, In the future we may look back on 2021 as a turning point for the planet. The energy sector remains at the heart of a myriad of challenges, from the fight against climate change to supply chain disruption, volatile energy prices, rising inflation and an enduring pandemic – a warning for all to properly plan an orderly energy transition. COP26 turned up the volume on the climate conversation. Political support from both sides of the Atlantic added momentum, contributing decisively to the acceleration of decarbonization. It was good to see further commitments within the EU Fit for 55 packages as well as EU Next Gen funds, in addition to progress towards the implementation of the infrastructure bill in the US. Alongside these important steps forward on climate, the broader theme of stakeholder capitalism stood firmly at the top of the agenda. As the lines between life and work continue to blur, worldwide attention turned to think more flexibly about the way we work, support and develop our teams. The world faces unprecedented challenges and we need to collectively rethink how to live and preserve our planet. At EDP, we’ve answered this call to action by leading from the front on the global energy transition. Our strategic commitment The last twelve months have been transformational for EDP. In February 2021, we unveiled our strategic plan for 2021-2025, which is very clear in its ambition: an accelerated and sustainable growth strategy, enabled by an organization that is future- -proof, offering ESG excellence and superior value to our shareholders. Our bold and ambitious investment plan of €24 billion by 2025 will be mostly dedicated to Renewables, but also to Networks, Client Solutions and Energy Management. The plan implies an additional 4 GW deployed yearly in renewables, with zero weight of coal on revenues by 2025 and carbon neutral (scope 1 & 2 emissions) by 2030 - our all-Green landmark. Our focus in networks will be in continuing to build a strong asset base maximizing asset value through smarter grids, investing more than €3 billion until 2025. We will also be investing in Client Solutions to scale up our footprint in decentralized solar generation and electric mobility, and exploring new services with a clear focus on efficiency and end-to-end digital transformation. Within Energy Management, we will leverage our distinctive 20+ year track record and expertise to create value, monetize flexibility and reinforce the origination of PPAs. We will invest in new growth avenues, namely offshore wind, renewable hydrogen and storage, and commit to €2 billion in innovation and digital transformation. Our main business achievements in 2021 We’ve reached the end of 2021 stronger and more global than ever before, now present in 28 markets across Europe, North America, Latin America and Asia-Pacific, following the agreement of the acquisition of Sunseap in Singapore, the largest distributed solar player and top 4 solar player in South-East Asia. EDP is now growing in 4 continents, and we are proud to be the third greenest utility in Europe. 1.0 — Message from the Chairman 16 We’ve worked hard, and this has paid off. Our renewables portfolio is now at secured capacity of 8.4 GW, following the record installation of 2.6 GW additions in 2021. At EDP, over 75% of generated energy comes from renewable sources, showing real progress in decarbonizing the company portfolio, not forgetting the closure of our historic Sines coal power plant in Portugal. A key pillar of our strategy remains geographical and business diversification. In that respect, 2021 was a year of many firsts: we entered Hungary and Chile and consolidated our presence in Asia; we commissioned our first wind farm in Greece and we inaugurated our largest wind project and solar array by capacity in the US - where EDPR is now the third largest producer of renewable energy; we started the construction of a major renewables’ project in Colombia, and we inaugurated the largest ever photovoltaic project to be developed, built and operated in Brazil. In offshore, we achieved remarkable milestones through EDPR’s joint venture with Engie (Ocean Winds), entering Poland, awarding a 400 MW PPA in the US, and, in the UK, commissioning our 950 MW Moray East wind farm, the largest offshore project in Scotland, and being awarded a 1GW project at the Caledonian seabed. We have innovative projects in generation advanced at pace, including a floating solar project at the Alqueva hydro power plant and the development of a pipeline of hybrid projects (sun and wind). The networks business continues to deliver against our strategy with the successful completion of the Viesgo integration in Spain, the investment in transmission in Brazil including in the transmission company Celg-T with a portfolio of 756 km of networks and 14 substations, and the asset rotation transaction comprising the sale of 3 transmission lines in Brazil. In Portugal, we’ve successfully re-branded our networks’ business and delivered our grid modernization and operational excellence plan. Within client solutions, we are investing and growing in the solar distributed generation market – in 2021 we’ve contracted 417 MW in Europe, Brazil and US, and acquired a 194 MW portfolio in Asia. In electric mobility we are building close partner- ships and contributing to a broader public charging network. Green hydrogen is clearly emerging as an opportunity thus we launched our dedicated hydrogen business unit and enginee- ring competence center, aiming to invest in projects that will guarantee 1.5 GW of capacity by 2030. We’ve made the WBCSD (World Business Council for Sustainable Development) H2Zero commitment together with 27 major global companies to accelerate the technology development and production. This year, we’ve also furthered our efforts in storage and will soon start construction of our first co-located storage facility in the US, while evaluating storage projects supported by strong fundamentals across our markets. Across the group, we’ve revised our ambition and operating model of our global innovation platform to foster project’s incuba- tion through internal development, partnerships and ventures, as we increased our start-up Ventures target up to €100 million by 2025. Our efforts to accelerate the group’s digital and technological transformation are progressing through the active development of a new multi-cloud strategy, strengthening cybersecurity approach and deepening agile adoption. Our strong financials In 2021, we’ve further strengthened our financial base with €2.8 billion of proceeds secured in asset rotation transactions agreed and €2 billion in hybrid issuance. We’ve earned a long-term corporate credit rating upgrade to “BBB” by Standard & Poor's Global Ratings and Fitch Ratings as well as a Positive Outlook from Moody’s. EDP’s results showed resilience and the ability to maintain sustainable growth by achieving a recurring net profit of €826 million representing a 6% increase year-on-year in a critical context of record high power prices, supply chain disruption and inflation resurgence. A strong operational performance of our renewables and networks segments and a > €30 million nominal opex reduction enabled us to deliver a recurring EBITDA of €3,735 million representing a 7% increase year-on-year. Our commitment to ESG excellence It was a real moment to see EDP ranked in 2021 at the top as the world’s most sustainable electric utility by the Dow Jones Sustainability Index. Also, EDP Brazil ranked first in the corporate sustainability index of the Brazilian stock exchange. We’ve been fully committed to further advancing climate action within the group, with our partners and participating in global efforts, addressing external barriers on the pathway to net zero societies in international forums as the High-Level Dialogue on Energy and COP26, and joining relevant initiatives promoted by WBCSD, SEforALL and the UK COP26 Presidency. Furthermore, plans are advancing in the Just Transition and we are transforming our coal sites in Iberia (Sines, Barrios, Puente Nuevo, Abonõ and Soto) in green energy hubs, comprising hydrogen, renewables and batteries projects. 17 Our commitment to ESG goes far beyond EDP’s decarbonization credentials. In 2021, we revised our social impact strategy establishing fair energy transition as the overarching global community investment theme. We are supporting the launch of ‘solidarity solar communities’ pushing forward the sharing of energy between neighborhoods. Furthermore, we have celebrated the 10th anniversary of our Volunteering Program, which touched more than 1.7 million people, through the commitment of more than 40 thousand volunteers since its inception. At EDP, we maintain our strong commitment to the 10 principles of the United Nations Global Compact, to build a more sustainable world, aligned with the values of respect for human rights, employment, environmental protection and the fight against corruption. I truly believe that our success rests on our people – they are the cornerstone of our distinctive portfolio strategy and growth. We have put our full effort behind the attraction and retention of talent, continuously working on well-being programs to provide a meaningful experience for our teams. I am pleased to say that in EDP our people demonstrate high levels of commitment and pride towards the company, above the overall market. I’d also like to highlight our commitment to gender diversity and equality. EDP has been recognized, once again, by the Bloomberg Gender Equality Index for its efforts to support gender equality. We’re leading by example with a 40% female participation in EDP’s Executive Board of Directors as we continue to make progress towards our target of 30% female representation by 2025 across the group, both in overall representation and in leadership positions. Finally, we continuously ensure that we follow corporate governance best practices and always aim at delivering the best interests of our stakeholders. We promote a culture of best ethical and compliance principles and have launched a dedica- ted health and safety corporate area, specialized in security policies and the mitigation of human, environmental and economic losses. In 2021 we have improved our decision-making processes to promote as much as possible efficiency, agility, and increased delegation and trust in our teams, paramount to the company’s current growth path. In April, shareholders approved a new composition of the General and Supervisory Board, part of EDP’s dual corporate governan- ce model, with 16 members, of which 9 independent, a strong and varied professional track record, and diverse in gender and nationalities, providing valuable supervision and counsel in what was a demanding year for EDP. We are ready for 2022 EDP’s Executive Board of Directors completed its first year of leadership and I am proud of what we’ve achieved, with resolute focus on the delivery of our strategic plan, doing our best at all times to lead by example. Together with EDP’s General and Supervisory Board I know we are ready and fully committed to drive EDP throughout a promising path ahead leading the energy transition. Finally, I would like to emphasize, on behalf of the Board of Directors, how grateful we are to our global team of over 12,000 employees. EDP’s achievements would not have been attained were it not for their contribution and dedication – especially during another year of pandemic, struck by uncertainty. We also thank our external stakeholders around the world – sharehol- ders, customers, suppliers, regulators, partners and local communities –, for their trust on our mission and journey. Personally, I am looking at 2022 with great expectations. I remain committed to creating superior value for sharehol- ders and other stakeholders and I can assure you that EDP will continue to pursue the call to build a better future for the prosperity of mankind. 18 — Our year 1.1.1. Main Events EDP reached an agreement to acquire 85% of a distributed solar platform in the U.S.. 18 JANUARY Completion of the ABB and approval by EDPR BoD of a capital increase proposal of c.€1,5 Bn. 03 MARCH S&P Upgrades EDP to “BBB” with stable outlook. 16 MARCH EDP enters the UK onshore market with a 544MW Wind and Solar portfolio. 21 JULY Inclusion of EDP in the S&P Clean Energy Index. 06 APRIL EDP enters the Chilean market with a 628 MW wind and solar portfolio. 28 MAY EDP's most ambitious target was recognized by the Science Based Target initiative - reduce specific CO2 emissions by 98% by 2030 (vs 2015). 15 JULY EDPR enters Vietnameses market with 28 MWac solar PV project. 30 JUNE EDP enters Hungarian market with a 50 MW solar PV project. 12 FEBRUARY Launch of the external campaign Changing Tomorrow Now and also of the internal program to mobilize the organization to fulfill EDP’s strategic commitments. 10 FEBRUARY EDP distinguished as one of the most ethical companies in the world, by the Ethisphere Institute. 23 FEBRUARY EDP presents its strategic plan for 21-25 with two key environmental commitments: \- Coal-free by 2025 \- 100% green by 2030. 24 FEBRUARY 19 EDP Brasil acquires CELG Transmission Business. 14 OCTOBER EDP Brasil announces program for acquisition of treasury shares and hydro disposal process. 25 OCTOBER EDP establishes growth platform for APAC through the acquisition of Sunseap. 03 NOVEMBER EDP completes asset rotation deal of transmis- sion lines in Brazil. 28 DECEMBER EDP with relevant presence at COP26 with the announcement of a new commitment to invest 1.5 GW in renewable hydrogen until 2030. 09 NOVEMBER EDP is one of the 50 most influential utilities in 2021 - Top by the World Bench- marking Alliance (WBA). 02 DECEMBER EDP recognized as the world’s most sustainable electric utility in the world - highest classification ever in the Dow Jones World Sustainability Index 15 NOVEMBER EDP completes asset rotation deal of a 200 MWac solar project in the US. 30 DECEMBER 20 1.1.2. Key Metrics FINANCIAL DATA 1 – Net profit attributable to EDP equity shareholders. 2 – considers capex of EDP group, organic financial investment €414M (31 Dec 2020: €806M) and asset rotation -€1,356M (31 Dec 2020: -€1,678M). 3 – Non-recurring adjustments in 2020 -€446m including (i) EBITDA contribution of 6 hydro plants in Portugal and Castejon CCGT and B2C supply sold in Dec-20 (+€153m) (ii) net gains related to portfolio reshaping (+€277m), (iii) HR restructuring costs and other HR-related items (-€53m), (iv) costs related to Sines shutdown (-€18m) and (v) regulatory issues in Brazil and Portugal (+€87m); Non-recurring adjustments in 2021: €12m, including (i) the one-off gain on the sale of our 50% stake in the energy supplier CHC in Spain to our partner CIDE (-€21m), (ii) cost with Sonatrach agreement (€17m) and (iii) HR restructuring costs (€16m) 4 – Adjustments and non-recurring items impact at net profit level: In 2021 -€169m, including (i) impairments, mostly CCGTs in Iberia (-€164m), (ii) acquisition of debt in minority stake in Spain (+€36m); (iii) provision on competition authority penalty (-€33m), (iv) gain from CIDE disposal (+€21m), (v) debt buyback prepayment fees (-€19m), (vi) HR restructuring costs (-€10m); In 2020 -€21m including (i) the adjustment of net gain and net profit contribution from disposals (-€384m), (ii) impairments and provisions (€269m, mainly thermal in Iberia), (iii) liability management costs (-€55m), (iv) regulation related items and other (€18m) and (v) HR restructuring costs (€22m). Net profit per share (euros) NET PROFIT² Opex/gross profit (%) EBITDA Gross investments in renewables (B€) NET INVESTMENTS³ Adjusted net debt/EBITDA (x) NET DEBT 2020 2021 0,21 € 0,17€ 801 M€ 657 M€ 28% 31% 3,950 M€ 3,723 M€ 2020 2021 2,9 MM€ 2,9 MM€ 2,037 M€ 2,551 M€ 2020 2021 3,3x 3,5x 2020 2021 11,565 M€ 12,243 M€ 3,504 M€ 3,735 M€ Recurring3 Recurring4 780 M€ 826 M€ 21 OPERATIONAL DATA 24,651 MW Installed capacity +4% vs 2020 1,651 MW Installed capacity - equity +34% vs 2020 60,929 GWH Energy Net generation -5% vs 2020 1,824 MW Capacity under construction -11% vs 2020 GENERATION 59,687 GWH Electricity sales -14% vs 2020 8,654 (‘000) Electricity customers 0% vs 2020 14,321 GWH Gas supplied -16% vs 2020 687 (‘000) Gas customers -1% vs 2020 SUPPLY 84,885 GWH Electricity distributed +11% vs 2020 11,427 (‘000) Electricity supply points +1% vs 2020 DISTRIBUTION 162 KM Operating network (km) -49% vs 2020 1,252 KM Under construction network (km) +11% vs 2020 TRANSMISSION 21 ESG DATA ENVIRONMENT Renewables generation Recovered waste Specific CO2 emissions Assets certified by ISO 14001 Coal installed capacity Revenues aligned with EU taxonomy Investments in environmental matters % % t/GWh % GW % € M 75 78 164 90 2 63 88 74 86 146 94 2 58 67 +1 p.p. -8 p.p. +12% -4 p.p. 0% +5 p.p. +32% INDICATOR UNIT 2021 2020 ∆ Employee engagement (top tier company) Employees Female employees Total hours of training Employees with training Accidents at work with employees Accidents at work with suppliers 1 X 12,236 27 337,295 100 21 132 # % H % # # INDICATOR UNIT 2021 √ 12,180 26 273,873 100 17 115 0% +1 p.p. +23% 0 p.p. +24% +15% 2020 ∆ SOCIAL Female employees in management position Cybersecurity ESG & equity linked compensation for Top Management Top quartile in ESG rating performance % rating bitsight 26 790 √ √ 25 800 √ √ +1 p.p. -10 INDICATOR UNIT 2021 2020 ∆ GOVERNANCE 1.1.2. Key Metrics 1 – Workers who are not employees but whose work and/or workplace is controlled by the organization. 22 23 31 24 EDP is a multinational utility vertically integrated and present throughout the whole value chain of electricity and in the activity of gas supply. Over its more than 45 years of history, EDP has been cementing a relevant presence in the world energy panorama. Highlighting its renewable energy portfolio, it is well positioned for the challenges of the energy transition. Generation is the first activity in the value chain of the electricity sector. Power plants transform the various energy sources into electricity. These energy sources may be of renewable or non-renewable origin. In EDP Group, the energy produced from renewables sources represents 75% of a total of 61 TWh. GENERATION 25 GW 2 GW Installed capacity Capacity under construction 100% renewable 3% solar 1% others 8% coal 12% ccgt 29% hydric 47% eolic — EDP Group Profile 1.2 In the transmission the energy generated is delivered to the transport network, which is made of very high voltage lines and which then channels the energy to the distribution network. In EDP Group this is a growing business segment in Brazil. TRANSMISSION 1,252 KM Transmission network under construction 162 KM Operating network 1.2.1. Who We Are 25 In the supply activity the distributed energy arrives at the supply point and is sold by the supplier. Through- out the electricity and gas value chain, supply is the closest activity to the customer and responsible for the relationship with final consumers. EDP Group has been focusing on developing new solutions for customers responding to new challenges of the energy transition. SUPPLY In the distribution activity the transported energy is channeled to the distribution grid. The distribution network allows the flow of energy to the supply points. Electricity distribution networks are composed of high, medium and low voltage lines and cables. EDP Group has made major investments in the modernization of its network such as the increase in the number of smart meters installed. DISTRIBUTION 378,155 KM Network 83% Distribution overhead lines +8 p.p. vs 2020 50% Smart meters +132% vs 2020 43.500 Clients with electric mobility solutions +21% vs 2020 €1.285k Revenues from energy efficiency services 26 EDP is present in 20 markets and 4 continents counting with 12,236 employees. 1.2.2. Where We Are Portugal Spain Poland Romania Italy United Kingdom Belgium Hungary Greece 5,716 75 6 28 2,013 38 0 94 7 France 110 Canada 6 USA 887 27 Conventional generation Distribution Offices Employees Transport Supply Renewable generation Colombia 29 Chile Brazil 3,191 Peru 1 Mexico Vietnam South Korea Macau 16 7 9 3 28 BUSINESS AREAS EDP operates through 3 business areas that allow it to position itself as a leader in the energy transition. OF GROUP'S CAPEX OF GROUP'S EBITDA OF GROUP'S CAPEX OF GROUP'S EBITDA OF GROUP'S CAPEX OF GROUP'S EBITDA CLIENT SOLUTIONS & ENERGY MANAGEMENT Hedging portfolio and growth in new downstream RENEWABLES Key growth platform NETWORKS Portfolio stabilizer 1.2.3. How We Are Organized 36% 22% 3% 3% 61% 75% 29 30 GOVERNANCE EDP's governance structure is based on the dual model and consists of the General Meeting, Executive Board of Directors, General and Supervisory Board and the Statutory Auditor. The separation of management and supervision roles is embodied in an Executive Board of Directors, which is responsible for the management of the company's business, and a General and Supervisory Board, the highest supervisory body. The dual model of corporate governance in place in EDP has allowed effective separation of the company's supervision and management in pursuit of EDP's goals, interests and its shareholders, employees and other stakeholders, thereby contributing to achieving a degree of trust and transparency necessary for its adequate functioning and optimisation. Furthermore, this model has proved appropriate to the company's shareholder structure as it allows supervision by key shareholders on the General and Supervisory Board. SHAREHOLDER'S STRUCTURE 1.2.3. How We Are Organized 49.06% Remaining Shareholders 7.38% Blackrock, Inc 5.16% Canada Pension Plan Investment Board 2.63% Amundi 19.19% China Three Gorges 2.42% Norges Bank 2.02% Bank of America Corp. 0.48% EDP (Acções próprias) 2.19% Sonatrach 2.27% Qatar Investment Auth. 7.2% Oppidum 2 31 EDP CORPORATE BODIES Executive Board of Directors General and Supervisory Board Statutory Auditor — Pricewaterhouse Coopers & Associados - Sociedade de Revisores de Contas, Lda., João Rui Fernandes Ramos — Aurélio Adriano Rangel Amado Alternate Statutory Auditor Renewables Renewables Client Solutions & Energy Management Networks Rui Manuel Rodrigues Lopes Teixeira (CFO) Vera de Morais Pinto Pereira Carneiro Ana Paula Garrido de Pina Marques Miguel Stillwell d'Andrade (CEO) Miguel Nuno Simões Nunes Ferreira Setas — João Luís Ramalho de Carvalho Talone Chairman — Dingming Zhang China Three Gorges Corporation — Shengliang Wu China Three Gorges International Limited — Ignacio Herrero Ruiz China Three Gorges (Europe), S.A. — Li Li China Three Gorges Brasil Energia Ltda. — Miguel Espregueira Mendes Pereira Leite China Three Gorges (Portugal), Sociedade Unipessoal, Lda. — Felipe Fernández Fernández DRAURSA, S.A. — Fernando Maria Masaveu Herrero — João Carvalho das Neves — Maria del Carmen Fernández Rozado — Laurie Lee Fitch — Esmeralda da Silva Santos Dourado — Helena Sofia Silva Borges Salgado Fonseca Cerveira Pinto — Sandrine Dixson-Declève — Zili Shao — Luís Maria Viana Palha da Silva 32 — Changing Tomorrow Now 1.3 1.3.1. Business Model TRENDS MARKET FORCES STAKEHOLDERS EDP A global energy company, leading the energy transition to create superior value. GENERATION TRANSMISSION DISTRIBUTION SUPPLY RESOURCES NATURAL • Renewable resources: wind, hydro and solar • Non-renewable resources: gas, coal HUMAN • 12,236 employees • Suppliers FINANCIAL • €11,6 MM financial net debt • €3,2 MM cash • €14,0 MM equity PHYSICAL • €21,1 MM property, plant & equipment • 25 GW installed capacity (20 GW renewable) • Shop network INTELECTUAL • €103 M investment in innovation/R&D • Brand • Partnerships SOCIAL • €21 M donations • Suppliers • Business partners 33 OUTPUTS NATURAL • 176 tCO2/GWh emissions • 54 GWh energy consumption • Waste and water management SOCIAL • €23M volunteer investment • 11,307 hours of volunteering time • 994 beneficiary entities FINANCIAL • €657M net profit • -2,7% TSR • Debt management INTELECTUAL • Innovative products and services • Knowledge generated INFRASTRUCTURE • Quality and efficiency of energy supply • 61 TWh energy produced and 84,9 TWh distributed • Incidents with third parties HUMAN • 12,236 employees of which 27% women • 28 hours of training/employee • Employees 46 nationalities IMPACTS NATURAL • -51% of specific emissions reduction S1+S2 (vs 2015) • 5TWh saved energy by customers (since 2015) • Preservation of biodiversity SOCIAL • Reputation and recognition • Promotion of social investment • Promotion of customer satisfaction / customer experience • Promotion of an ethical culture • Supplier development FINANCIAL • Minimizing financial risks • Debt reduction INTELECTUAL • Promotion of innovation and research • Promotion of the adoption of sustainable consumption behaviours • Leveraging generated knowledge INFRASTRUCTURE • Ensuring the quality and efficiency of energy supply • Promotion of safety of facilities and equipment HUMAN • Promotion of diversity and equal opportunity • Promotion of employee skills development • Promotion of occupational health and safety • Promotion of employee satisfaction 34 1.3.2. Vision, Values and Commitments A global energy company, leading the energy transition to create superior value. COMMITMENTS We assume the social and environmental responsibilities that result from our performance thus contributing towards the development of the regions in which we operate. We avoid specific greenhouse gas emissions with the energy we produce. We ensure the participatory, competent and honest governance of our business. We join conduct and professional rigour to enthusiasm and initiative, emphasizing teamwork. We promote the development of skills and merit. We believe that the balance between private and professional life is fundamental in order to be successful. We place ourselves in our clients’ shoes whenever a decision has to be made. We listen to our clients and answer in a simple and clear manner. We surprise our clients by anticipating their needs. We fulfil the commitments that we embraced in the presence of our shareholders. We are leaders due to our capacity of anticipating and implementing. We demand excellence in everything that we do. SUSTAINABILITY PEOPLE CLIENTS RESULTS VISION VALUES With the aim of creating value in the many areas in which we operate. HUMANIZATION SUSTAINABILITY Aiming to improve the quality of life of current and future generations. Building genuine and trusting relationships with our employees, customers, partners and communities. INNOVATION 35 Stakeholder management has been a strategic priority for EDP for many years, anticipating the growing openness of compa- nies to society, to meet the increasingly demanding ethical and transparency standards. The engagement with several stakeholders has also gained increasing relevance in the business world as part of the ESG criteria (Environment; Social; Governance), and as these metrics become more important to the investor community and society in general. A clear proof of EDP's consistency and commitment to this strategy is its international recognition as ‘a top performer’, for the fifth consecutive year, in the Stakeholder Engagement and Policy Influence criteria of the Dow Jones Sustainability Index. EDP remains committed to preserving the excellence achieved in this area, constantly seeking to listen to its key stakeholders, adapting and improving its procedures, and incorporating different visions into its action plans. As a result, in 2021, and for the first time, the company carried out a global and integrated study among several stakeholder segments in the regions where it operates, with more than 5,000 respondents. This exercise allowed EDP to assess stake- holders' global perception towards the company and its role in leading the energy transition, as well as establish a baseline for future corporate reputation assessments, following its Strate- gic Update presented to the market in February 2021. The adoption of best practices in stakeholder management is an essential condition to ensure the delivery of consistent and sustainable results. This is also in line with EDP’s commitment to ESG excellence and attractive returns, as presented in the Strategic Update. 1.3.3. Stakeholder Management Understand > Include > Identifiy > Prioritise Trust > Transparency > Integrity > Respect > Ethics \- We believe promoting trust with our stakeholders is crucial to establish stable and long-term relations. \- Our relationship with stakeholders is based on such values as transparency, integrity, and mutual respect. Communicate > Inform > Listen > Understand \- We are committed to promoting a two-way dialogue with Stakeholders through information and advisory activities. Collaborate > Integrate > Share > Cooperate > Inform \- We aim to work with stakeholders to build strategic partnerships that collate and share knowledge, skills and tools, thereby promoting the creation of shared value in a differentiated way. \- We listen, inform, and respond consistently, clearly, accurately and transparently to stakeholders in order to build close, strong and lasting relationships. \- We have dynamically and systematically identified the Stakeholders who influence and are influenced by the Company. \- We analyze and seek to understand stakeholders’ expectations and interests in the decisions that impact them directly. EDP GROUP STAKEHOLDER ENGAGEMENT POLICY 36 37 Progressive and meaningful change. INNOVATION 38 39 02 — STRATEGIC APPROACH GLOBAL ENERGY TRENDS 40 STRATEGIC PRIORITIES 44 Business Plan 2021-25 44 Strategic Guidelines Compliance 2021-2025 46 RISK MANAGEMENT 48 40 Global energy trends Fighting climate change: an unprecedent challenge that requires efforts from everyone The World is facing an unprecedented challenge, which requires global coordination and efforts from all countries to reach the so-called “carbon neutrality” by 2050, which will be needed to limit the increase in global temperature by 1.5 o C com- pared with the pre-industrial levels (Figure 1). Reaching this goal implies the inversion of the trend of the last century of successive increase in greenhouse gas emissions (GHG), while at the same time world population is expected to increase by 2 billion people, the world GDP would more than double and access to energy should be given to the whole world population (as of today, 770 million people still lack access to electricity) 1 . In recent years there has been a strong increase in the global commitment to fight climate change, being estimated that, after the new pledges taken in the COP 26 Glasgow Summit in November 2021, almost 90% of the World’s GDP is produced in countries that have already established, or are in the process of establishing, a target to reach carbon neutrality. Some regions that have defined targets for carbon neutrality until 2050 include the European Union and the United States, while other coun- tries defined targets for after 2050, as it is the case of China and Brazil (2060) and India (2070). What does it take to reach carbon neutrality? Several studies have been conducted about how to reach carbon neutrality globally, at the most cost-effective way. The results show consistency in the main trends of the energy sector, that include: the decarbonization of the energy consump- tion, namely through energy efficiency, behavioral change and electrification; the decarbonization of energy production, by heavily investing in clean technologies, namely renewables for electricity generation and hydrogen production, bioenergy and the deployment of storage technologies. The comparison of some of the main indicators from these studies can be seen in Figure 2. 1 Data from the International Energy Agency 2.1. Source: International Energy Agency, World Energy Outlook 2021 FIGURE 1: GLOBAL CO2 EMISSIONS BY SCENARIO, 2000-2050 41 It is worth noting that several tools for decarbonization must be used in an integrated way, to reap all the synergies, at both environmental levels and regarding the management of the energy systems. For instance, the electrification of demand must be accompanied by the decarbonization of the power generation mix, to maximize environmental benefits and also to allow the increase in flexibility provided by the additional demand to manage renewables’ intermittency. To be able to secure the most benefits from these clean technologies, it is also necessary to invest in the enablers of the energy transition, which include the networks of energy and the digitalization of the value chain. It is important to ensure that the green transition occurs in parallel with the so-called “Just Transition”, which is set on the principle of not leaving anyone behind – the benefits of carbon neutrality should be shared by everyone. Therefore, the just transition includes access to energy to all citizens and the creation of mechanisms to protect the most vulnerable citizens to the economic and technological disruptions that are inherent to the climate transition. Decarbonize the energy demand Reducing energy consumption, through the use of more efficient appliances and/or change in consumer behavior, is one of the drivers with the highest potential to reduce emissions. Worth noting that electrification is one of the key instruments to decarbonize energy consumption, as it allows to simultaneously reduce energy demand and increase the penetration of renewables. Several studies point that, to reach climate neutrality, the share of electricity in global final energy demand should be raised from the current 20% to around 50% by 2050 (Figure 2). Today, there are already in the market highly efficient technologies, and economically competitive, to satisfy the energy demand needs of households and businesses. Some of these technologies are already sales leaders in their respective segments (ex: led lamps), while others are still in the early stages of the adoption curve (ex: electric vehicles, heat pumps). It is interesting to note that, already in the last decade, there was a significant improvement in the efficiency of energy uses, highlighted by the strong reduction in energy intensity indicator (calculated as the ratio of energy demand / GDP), which has improved by almost 20% in the last decade in the World, and which explains the decoupling between economic growth and energy demand that is already observable, namely in developed countries. Decarbonize the production of energy The energy transition requires that most of the energy demand that today is based on fossil fuels being replaced by clean sources, namely through renewables. To reach the 1.5 o C target, a complete transformation of the mix of energy demand will be needed: while today fossil fuels represent around 80% of the primary energy consumption, by 2050 this figure must be lower than 25% (and combined with Carbon Capture and Storage). On the other hand, by 2050 renewables must represent around two-thirds of the primary energy demand (Figure 3). FIGURE 2: CO2 EMISSIONS VS. % ELECTRIFICATION VS % RENEWABLES IN THE POWER SECTOR IN SEVERAL STUDIES FOR 2050 Source: IRENA, World Energy Transitions Outlook; International Energy Agency, World Energy Outlook 2021 42 The power sector should be the one with the highest contribution to the share of renewables, as in this sector there is a set of renewable technologies that are already competitive and with plenty of growth potential. According to data from BloombergNEF, during the last decade, the levelized cost of onshore wind decreased by around 60%, while the cost of solar photovoltaic fell by 90%. The same source points that currently these two technologies are the cheapest source for new electricity generation in countries thar represent more than two-thirds of the global population. The scenarios that are consistent with carbon neutrality (Figure 2) show that the share of renewables in the power sector must be at around 90% by 2050, compared with 29% by 2020. The increase in the share of intermittent renewable generation in the power sector requires the use of technologies that provide flexibility to the system, as generation and demand must match at any moment. In this package of flexible technol- ogies, some of them are already mature and make part of the current electricity system, such as pumping hydro and interconnections, while others are still in a growing stage, as it is the case of batteries and demand-side response. The green hydrogen has been gaining an important role in the energy transition, given its potential to decarbonize sectors where electrification is not technically feasible nor cost-effective, as it is the case for some industrial energy-uses (ex: steel, cement) and heavy-duty freight vehicles. Worth noting that there are several ways to produce hydrogen, with electrolysis (that uses electricity sourced from renewables) being the process that is more aligned with the decarbonization. The enablers For the power sector in particular, digitalization will allow a change in the paradigm to a more decentralized system, with consumers having a more active role. Digitalization will also enable the management of energy demand, by automatically adjusting the consumption from flexible equipment, such as electric vehicles and water heaters. Furthermore, the investment in the expansion, digitalization and resilience of electricity grids is key to enable the energy transition, as it will allow to accommodate the electrification of other energy uses, the integration of more renewables and distributed resources, in parallel with the improvement in the quality of service and reduction of operation and maintenance costs of the power grid. FIGURE 3: PRIMARY ENERGY DEMAND IN THE WORLD, IN THE NET ZERO SCENARIO Source: International Energy Agency, World Energy Outlook 2021 30% 26% 23% 16% 5% Oil Coal Natural Gas Renewables Nuclear 2020 8% 1% 3% 67% 11% 10% 2050 CCUS CHANGING TOMORROW NOW 44 Strategic Priorities 2.2.1. Business Plan 2021-25 The world is facing unprecedented challenges and the impacts of climate change on economies and nature are at the centre of the world's leaders’ concerns. Societies are coming together to prompt action from leaders to face this climate emergency. The world needs to be transformed and the energy sector Is critical to enable a decarbonized planet. At the same time that we are dealing with the energy transition, changes in society with growing digitalization and the cultural change pressed by millennials, introduce new challenges and uncertainty, implying a proactive management of risks and opportunities. EDP is stepping up to the challenge and in the beginning of 2021 presented its strategic plan up to 2025. In it, EDP conveyed its vision, the strategic pillars as well as the key initiatives and goals for the 2021-25 period. Vision EDP’s Vision is to assume the leadership of the energetic transition, ensuring the creation of superior value. EDP strategically positions itself with a low-risk and cross-diversified resilient profile, creating distinctive conditions for the execution of a strategy to create value in the face of the challenges of a context of low ecological footprint levered in sustainable growth. Strategic Pillars EDP's Vision remains as defined in the previous Plan and consists in taking the lead in the energy transition aligned with the creation of superior value, based on 3 strategic pillars: • Accelerated and Sustainable Growth: • Step-up green growth • Distinctive and resilient portfolio • Solid balance sheet • Future-proof Organization • Global, agile, and efficient • Talented and empowered people • Innovative and digitally driven • ESG excellence and Attractive returns • ESG Reference • Green leadership positioning • Strong return visibility In terms of accelerated and sustainable growth EDP will be stepping up in terms of the green growth to build a distinctive resilient portfolio which can rise up and meet the challenges of climate change keeping the focus in maintaining a solid balance sheet. This will allow EDP to accelerate investment and growth having a sustainable capital approach. We continue to believe that the asset rotation strategy is definitely a key pillar in terms of our growth because it allows us to crystallize value upfront and to recycle the capital back into the business. The bet on a future proof organization will boost the EDP of the future. This enforces EDP's commitment to build a DNA for the company that Is agile, global and efficient maintaining tight cost control. It Is key to have a talented and empowered 2.2. 45 people that keep the company going forward. EDP believes that focusing on the right incentives for its workforce triggers more innovation and it allows us to be a better company. We will strive to continue an ESG reference and keeping attractive returns. EDP will continually reinforce Its green leader- ship position targeting to be coal free by 2025 and carbon-neutral by 2030 and at the same time making sure that we are delivering value for our various stakeholders. For this, It Is key to make sure we have a strong return visibility and deliver good returns to the shareholders targeting EUR1.2 billion net income by 2025 and keeping the minimum €0.19 floor for this period with the potential for an increase. Sustainable Development EDP’s vision also reflects its commitment to sustainable development, fully assuming a structuring role in energy, supporting more balanced growth models from an economic, environmental and social point of view. This vision is mirrored in the Stra- tegic Plans that reflects the company's commitment to accelerate the energy transition, while meeting the needs of its stakeholders. Furthermore, the company is still maintaining its commitment in ensuring that its activity actively contributes to 9 of the 17 United Nations Sustainable Development Goals. • Distinctive renewables portfolio; • Stabilizer networks; • Clients in multiple geographies; • Solid rating investment grade; • Sustainable dividend policy. A GREEN UTILITY WITH: PEOPLE PLANET COMMUNITIES CLIENTS SHAREHOLDERS 46 2.2.3 Strategic guidelines compliance 2021 - 2025 STRATEGIC AXIS OBJECTIVES TARGET 2025 STATUS 2021 \- Step-up growth in renewables, accelerating ownership and asset rotation strategies; \- Focus investments on RES & Networks in EU and USA; \- Target a BBB rating in the short term (maintaining a sustainable leverage). ACCELERATED AND FOCUSED GROWTH \- CAPEX in energetic transition \- Gross aditions \- Asset rotations \- EBITDA¹ in 2025 \- FFO / NET DEBT² €24 Bn 20 GW €8 Bn €4,7 Bn > 20 % €3,2 Bn 2,6 GW € 1,4 Bn € 3,7 Bn 21 % √ \- Step-up a green leader- ship positioning and being a reference in ESG; \- Deliver a sustainable EPS growth and an attractive dividend policy. \- Coal-free³ by 2025 \- Carbon neutrality⁴ by 2050 \- Net Profit¹ in 2025 \- Minimum dividend per share 0 % 0 t/GWh5 € 1,2 Bn € 0,19 8 % 164 t/GWh € 0,8 Bn € 0,19 ESG EXCELLENCE AND ATTRACTIVE RETURNS √ \- Evolve organization to be more global, agile and efficient; \- Strengthen focus in innovation and promote a digitally enabled organi- zation. FUTURE-PROOF ORGANIZATION √ € 100 M € 2 Bn \- OPEX savings like-for-like \- TOTEX in digital and inovação 1- Recurring figures. 2- FFO/ND with a formula consistent with the methodology of rating agencies, considering EDP’s definition of recurring EBIDTA. 3- Coal installed caacity/total installed capacity. 4- Specific CO2 emissions. 5- Compensated residual emissions. € 32 M € 0,3 Bn 47 √ \- Renewables generation (%); \- Fleet electrification (%); \- EV charging points installed (#). 75 13,2 3,804 ENVIRONMENT √ 63 176 216 12 \- Revenues aligned with EU taxonomy (%); \- Scope 1 & 2 emissions (gCO2e/kWh); \- Total waste (kt); \- SDGs social investment (EUR Mn); \- Top quartile in ESG rating performance. SOCIAL √ \- Employee engagement (top tier company); \- Female overall (%); \- Accident Frequency Rate; \- Female on leadership (%); \- Top management ESG & equity linked compensation; \- Cybersecurity (rating bitsight). 26 0,92 25 Advanced (790) GOVERNANCE STRATEGIC AXIS OBJECTIVES STATUS 2021 ODS ≈ 85 >40 >40 000 ≈ 70 ≈ 100 118 50 30 1,55 30 Advanced TARGET 2025 √ √ √ √ X √ 7 7 7 7 7 12 11 \- 8 5 8 5 \- 11 48 Risk management Risk governance model EDP Group follows a risk governance model based on the concept of 3 lines of defence internal to the organization, which are complemented by an external fourth line of defence, external audit and regulation/ supervision. For every line of defence there are clearly defined responsible bodies and forums for debate and decision, formally estab- lished to materialize each line of defence at corporate and Business Units levels, avoiding duplication of efforts and/ or the existence of gaps and promoting the cooperation and collaboration between different areas. RISK GOVERNANCE MODEL OF 3 LINES OF DEFENCE 1 ST LINE: BUSINESS (RESPONSIBILITY FOR RISK) 2 ND LINE: RISK (SUPPORT THE ANALYSIS AND MONITORING OF RISKS) 3 RD LINE: AUDIT (INDEPENDENT SUPERVISION) MISSION Daily of running business, in- cluding proactive management of risks, aligned with estab- lished risk policies. Support in the identification, analysis, evaluation and monitoring of risk (to support business). Performance and coordination of auditing exercises, seeking the improvement of processes of risk management, control and corporate governance. AREAS INVOLVED 1 BUs. Corporate departments (with decision-making responsi- bility). Risk management (corporate and BUs). Planning and control. Compliance. Sustainability Internal audit (corporate and BUs). RATIONAL Who benefits the most from risk should be the responsible for taking it. Given the (natural) incentive for busi- ness to take risk, it is beneficial to have an independent function spe- cialized in risk. It is beneficial to have an in- dependent entity responsible for the verification and evalu- ation of processes of risk management and control. 1 Not exhaustive Risk management is represented by the Risk Management Department at corporate level, as well as by several risk units across the Business Units (lead by their respective risk-officer) that functionally report to the corporate Risk Management Department, guaranteeing a fluid articulation and communication concerning key risk sources and mitigation actions. In addition, Risk Committees are held at corporate level and in key Business Units, gathering top management and relevant specialists for analysis, debate and advice on key risk exposures for the Group, respective limits and other mitigation actions. A more detailed description about the intervening bodies in the risk governance model at EDP Group, as well as attributed responsibilities, is available in the Corporate Governance Chapter, part I, section 52. 2.3. 49 Key risks EDP Group seeks to have a comprehensive perspective over the key risks it is exposed to, at strategic, business, and opera- tional level, establishing processes to assure follow-ups and proactive management. The year of 2021 continued to be marked by the COVID-19 pandemic and by high volatility in energy markets, especially in the second half of the year. Risk management reinforced its importance, with an essential role in this disruptive context. ILLUSTRATION OF TOPICS (NOT EXHAUSTIVE) RECENT EVOLUTION/ EXPECTED IN SHORT – TERM STRATEGY Surrounding context • Geopolitical instability. • Social and economic crisis. • Technological disruption. • Change of competitive paradigm. • Climate change. • Macro-economic uncertainty due to rising inflation and uncertainty regarding its per- sistence and political, social, fiscal, and monetary response. • Instability in supply chains and, particularly in the energy sector and in Europe, in- creased exposure to geopolitical risks in fossil fuel supply. • Pandemic scenario expected in the short term, with risk of containment measures with relevant economic and social impact (namely lockdowns) due to the emergence of new variants. However, risk potentially mitigated due to comprehensive vaccina- tion plans. • Strengthening of the political and social commitment to renewable technologies, with a direct impact on the countries where EDP Group operates. STRATEGY RISK MANAGEMENT DEPARTMENT … CORPORATE FUNCTIONS BoD BoD BoD BoD BoD BoD BoD BoD BoD BoD RO RO RO RO RO RO RO RO RO RO RC RC RC RC RC RC RC RC RC RC EXECUTIVE BOARD OF DIRECTORS RISK COMMITTEE CORPORATE GOVERNANCE SUPPORT ECONOMIC-FINANCIAL MANAGEMENT RESOURCES BUSINESS UNITS (BUs) Hierarchical reporting Functional reporting 50 ILLUSTRATION OF TOPICS (NOT EXHAUSTIVE) RECENT EVOLUTION/ EXPECTED IN SHORT – TERM Internal strategy • Investment strategy. • Relationship with stakeholders. • Corporate planning. • Communication to investors of a new stra- tegic plan and strengthening of EDP Group's commitment to renewable technol- ogies. • Awarded the position of Global Leader, with the best score ever among integrated utilities in the Dow Jones Sustainability In- dex. • Closure of Sines coal-fired power plant, in Portugal, with 1.2GW. BUSINESS Energy markets • Fluctuations of pool price, commodities and CO2. • Volatility of the generation volume of renewable energies (i.e., hydro, wind and solar). • Volatility of energy consumption. • Changes in sales margins. • Volatility and record prices in energy mar- kets, with particular focus on Europe and electricity and natural gas markets. • Exposure to supply risk in the natural gas supply chain. • Rise of wind and solar renewable capacity. • Rise of hydro volumes risk in Brazil follow- ing a year of severe drought. Regulation • Changes in taxes and sectorial charges. • Changes in tariff regimes of regulated activities. • Legislative amendments. • Changes in regulations (e.g., environ- mental/ climatic). • Regulatory impacts in Portugal and Spain withmaterialization in the results of the Group. • Definition of a new regulatory period for the distribution business in Portugal. FINANCIAL Financial markets • Fluctuation of interest rate. • Fluctuation of exchange rate. • Inflation. • Fluctuation of the value of financial assets held by the Group. • Rise uncertainty regarding inflation and in- terest rates. • Key exposures to exchange rates of BRL and USD. • Stabilization of the EURBRL exchange rate during 2021, despite a potential increase in uncertainty in 2022 due to the electoral cy- cle. Credit and coun- terparties (energy and financial) • Default of financial counterparties. • Default of energy counterparties (contracts to buy/ sell energy). • Default of clients (B2B and B2C). • Rise of credit exposures due to increased prices in energy markets. FINANCIAL Liquidity • One-off insufficiencies of treasury. • Downgrade of financial rating (and consequent rise of financing costs and limitation of access to financing). • Rise of liquidity needs due to price hikes in energy markets accommodated by EDP Group’s conservative cash position. • EDP Group’s financial liquidity enough to cover refinancing need beyond 2022. • Update of one notch of EDP’s rating by two of the three main agencies and upgrade of the outlook by a third, strengthening the in- vestment grade status. Social liabilities • Capitalization of the Pension Fund of Defined Benefit. • Additional costs with current and an- ticipated retirements. • Costs with medical expenses. • Comfortable capitalisation position with lower risk of funding gap due to asset ap- preciation and rising interest rates. OPERATIONAL Development/ construction of physical assets • Delay in commissioning date of assets (COD) and inherent loss of profit. • Deviations in the cost of investment (CAPEX). • Increased instability and inflation in the supply chain. 51 ILLUSTRATION OF TOPICS (NOT EXHAUSTIVE) RECENT EVOLUTION/ EXPECTED IN SHORT – TERM Operation of physical assets • Damages in physical assets and third parties. • Malfunctions by component or installation defect. • Unavailability due to external events (e.g., atmospheric events). • Technical and non-technical losses of distribution grid. • Maintenance of the relevance of risk of ex- treme events impacting on electricity generation, transmission and distribution assets • Processes • Irregularities in the processes’ execu- tion (regarding commercial activities, suppliers’ selection and management, billing, etc.). \- Human resources • Work accidents. • Unethical conduct. • People management. • Relationship with unions and other stakeholders. • • Ongoing of the COVID-19 pandemic, namely with the emergence of new vari- ants, and the need to ensure the health and safety of EDP employees and partners. Systems • Unavailability of information and communication systems. • Integrity and security of information. • Maintenance of level of exposure (e.g., large-scale cyber-attacks, date protection directives) partially compensated by a con- tinuous reinforcement of mitigation measures (cyber range, SOC, cyber risk in- surance, training sessions). Legal, Compli- ance and Ethics • Losses arising from lawsuits related with tax, labour, administrative, civil, or others (penalties, compensation and agreements). \- A more detailed description of each risk is available in the Corporate Governance Chapter, part I, section 53. Besides closely monitoring key risks inherent to its activity, the Group maps key trends (at global and sectorial level) that may be translated into threats and opportunities, and proactively develops adequate mitigation strategies. A more detailed description of emerging risks is available in the EDP Group Sustainability Report. Risk Appetite The EDP Group is exposed to a number of risks due to its dimension and diversity of businesses and geographies in which it operates, hence it recognizes risks as an integral and unavoidable component of its activity, both as threats as opportunities. Acknowledging this fact, the Group establishes explicitly and implicitly its risk appetite for all internal and external stake- holders, both at corporate and Business Units level, as well as for the various categories of risks, through a set of mechanisms: • The periodical development and approval of the Group’s Business Plan by the Executive Board of Directors, which is communicated to all stakeholders, and where key strategic orientations are set for the upcoming 3 to 5 years; • The rigorous evaluation of risk related to investment and divestment opportunities proposed by the Business Units and approved by the Executive Board of Directors, including the estimation of returns adjusted to risks vs. established hurdles. This evaluation is supported by the opinion of the Investments Committee; • The development of a wide set of risk management policies, both at corporate and Business Unit level, which establish guidelines, methodologies of evaluation and exposure limits for key risks 2 ; • The periodical development of risk mapping exercises, based on objective, quantitative and comparable criteria, al- lowing an analysis of the exposure to key risks, as well as the adoption of preventive treatment actions for excessive exposure to risks (regarding the established tolerance of risk); 2 Including, among others, the Enterprise Risk Management Policy, the Risk Appetite Framework Policy, the Limits Structure of the Energy Management Busi- ness Unit, the Financial Management Policy, the Counterparty Policy, the Insurable Risk Management Policy, the Occupational Health and Safety Policy, the Information Security Policy, and the Principles, Structure, and Procedures for Crisis Management and Business Continuity. 52 • The establishment of a wide set of mechanisms for periodical reporting of key risks, at Group and Business Unit level, thus allowing a regular monitoring of the evolution of actual and emerging risks, and comparison of the exposure to different risk profiles within the established limits; • The adoption of a risk governance model based on 3 independent lines of defence (business, risk/ compliance and internal audit), which guarantees the implementation of the established strategies and alignment with risk appetite; • The definition of an internal framework for risk appetite, approved by Executive Board of Directors; • The periodic reporting to the EBD and GSB of risk indicators and limits aligned with the Group's strategy and perfor- mance metrics. The framework of risk appetite in EDP Group is structured around 4 pillars: • The governance model identifies the key actors in the process of risk appetite and their responsibilities; • The risk appetite statement defines statements of risk appetite with indicators and risk thresholds for each. In terms of positioning, the Group establishes a fundamental pillar in its strategy for the maintenance of a controlled risk profile, expressed transversally across 3 natures of risk; • The monitoring and follow-up define the key processes of monitoring, update and action plan; • And the technological platform, embodied in a risk appetite dashboard, allows the follow up of risk appetite in EDP Group. 53 Risk appetite statement of EDP Group 1ST LEVEL STATEMENT 2ND LEVEL STATEMENT KRI (OBJECTIVE) BALANCED BUSINESS Controlled risk utility, with a strong share of regulated/ LT contracted activities, di- versified both geographically and across the value chain, with a strong growth focus on re- newables GEOGRAPHICAL CONCENTRATION Geographical diversification and focus on geographies/ markets with reduced country risk. • EBITDA concentration (market/ emerging countries, sovereign rating) • Market share per market / country BUSINESS SEGMENTS Diversified portfolio across the value chain (generation, grids and retail) with a strong growth focus in medium to long-term viable renewable generation. • EBITDA per technology • Residual life of generation assets • CAPEX in low TRL (Technology Readiness Level) REGULATED/ LT CONTRACTED Activity focused mainly in regulated or long-term con- tracted operations. • EBITDA regulated / LT contracted • Gross Margin@Risk • Contracted residual life of generation assets ST ENERGY MARKET POSITIONING Controlled short-medium term energy market risk and limited proprietary trading exposure. • Value@Risk of portfolio • Net position per market REGULATORY MONITORING Foresight of possible high impacting regulatory/ political changes in current portfolio and potential new geogra- phies. • Regulatory rating • Expected loss from regulatory risk SOLID FINANCIALS Credible business plan with sound financials, aiming for a solid investment grade rating and sustainable divi- dend policy. RATING Alignment between business and financial profiles to target a solid Investment Grade. • LT rating, FFO / ND and ND / EBITDA • Business profile scoring • EBITDA concentration (business, country) DIVIDENDS Predictability and sustainability of dividend policy as a fundamental element of the shareholders’ value proposi- tion. • Payout ratio • Payout ratio P95% LIQUIDITY Maintenance of liquidity reserves enough to cover cash needs in short-medium term in times of stress. • Survival period • Debt redemption per year • Liquidity in cash FINANCIAL MARKETS RISK Proactive management of the exposure to financial mar- kets, namely FX and IR, controlling the impacts on the business activity. Investments are financed in local cur- rency if possible. • FX: Loss in net investment (P95%), EBT@Risk and equity in non-EUR not covered by NIH • IR: Floating ratio per currency, EBT@Risk and Debt NPV change vs. duration target CREDIT & COUNTERPARTY Controlled exposure to credit & counterparty risk, favour- ing higher rated counterparties. • Total EL of aggregate portfolio • Due debt as % of sales • Exposure (Top10 and non-Investment Grade counterparties) INVESTMENT PLAN EXECUTION Investment in projects with an attractive risk adjusted profitability, limited market exposure and short time to cash. • IRR / WACC and payback • Contracted NPV for generation • EBITDA in very high country risk scoring • CAPEX gap to target SOCIAL LIABILITIES Full coverage of funded social liabilities, through a diver- sified asset portfolio of limited duration gap, with new pension plans as defined contribution. • Funded Pensions coverage ratio • Value@Risk asset-liability position • Duration mismatch LEADER IN INNOVATION, SUSTAINABILITY & REPUTATION Leader in innovation, sus- tainability and trust for all stakeholders. ENVIRONMENTAL SUSTAINABILITY Reference in the energy transition, with performance recognized by independent international entities. • Reduction of CO2 emissions • Renewable installed capacity INVOVATION Follow-up on key technological developments in order to remain competitive and optimize value creation. • CAPEX digital REPUTATION & ETHICS Assurance of top reputation among peers and an exem- plar ethics track record. • Scoring in ESG indexes (DJSI, MSCI, CDP, Sus- tainalytics), and RepRisk • Ethisphere certification CLIENT SATISFACTION Assurance of distinctive levels of global client satisfac- tion. • Client satisfaction scoring • Number of complaints 54 1ST LEVEL STATEMENT 2ND LEVEL STATEMENT KRI (OBJECTIVE) EMPLOYEE SATISFACTION Maximization of employee engagement and healthy working environment, within a flexible organization. • Engagement and Enablement scoring of em- ployees OPERATIONAL EXCELLENCE Prudent operational man- agement, following best- practices and preventing business disruption. PHYSICAL ASSETS UNDER DEVELOPMENT/ CON- STRUCTION Excellence in project management, limiting risk of CAPEX deviation and COD delays, allowing the fulfil- ment of the investment plan. • CAPEX deviation • COD deviation • MW built gap to target AVAILABILITY AND INTEGRITY OF PHYSICAL ASSETS Prudent O&M and security of physical assets, comple- mented with insurance and contingency and recovery planning, guarantying limited operational losses, out- standing quality of service and assets availability. • Losses on physical assets after insurance • Unavailability of grid due to extreme events • QoS indicators (TIEPI, SAIDI) • Loss ratio TECHNICAL AND NON-TECHNICAL ENERGY LOSSES Control of technical and non-technical losses in the power grid through adequate technology, maintenance, operation and fraud anticipation processes. • Losses (total, technical and non-technical) PROCESSES Pursue of increasingly efficient and adequately con- trolled processes and, for business critical and intersecting processes, assurance of business continuity and recovery under abnormal/disruptive situations and minimization of procedural errors. • Global KPI Digitalization • Critical processes with Business Continuity strategies, by BU SUPPLY CHAIN Reinforcement of the effectiveness, sustainability, resili- ence and continuity of the supply chain, providing service excellence to customers and partners in a secure manner, while ensuring supplier compliance. • Purchase volume from critical suppliers (inc. with ESG assessment and performance evalu- ation) LEGAL/ COMPLIANCE Zero tolerance to illegal behaviour or deliberately and consciously non-compliance with norms and/or regula- tions, integrity standards and contractual obligations. • Passive contingencies and provisions • Implementation of Internal audit recommen- dations • Internal training on compliance matters • Counterparty integrity risk FRAUD Zero tolerance to fraudulent behaviours, performed by any employee of the company, as well as suppliers and other related third parties. • # of complaints and non-conformities associ- ated with the risk of fraud HEALTH AND SAFETY Zero tolerance for noncompliance with safety measures, preventing the occurrence of accidents with employees, external contractors or other third parties. • Frequency and severity rate of work accidents (inc. fatalities) with employees, external sup- pliers and third parties • Incidence of COVID-19 cases and % of em- ployees vaccinated against COVID-19 SECURITY, CONFIDENTIALITY, INTEGRITY AND AVAILABILITY OF SYSTEM Prudent management, targeted maintenance, security and availability of IT and OT systems and related ser- vices, ensuring resiliency capability under abnormal/disruptive situations. • Recovery time • System or services unavailability • # events/ incidents of data security • Rating BiTSightSecurity • Losses after insurance with cyber attack • Data privacy breaches CHANGING TOMORROW NOW 56 57 Where innovation and sustainability meet. RENEWABLE 58 59 03 — PERFORMANCE GROUP’S FINANCIAL ANALYSIS 60 BUSINESS AREA ANALYSIS 65 Renewables 65 Networks 68 Client Solutions and Energy Management 70 SHARE PERFORMANCE 73 MARKETS AND REGULATION 77 RISK MANAGEMENT IN THE YEAR 91 60 Group’s Financial Analysis Income Statement EURO MILLION 2021 2020 Δ % Δ ABS. Gross Profit 4,835 5,092 -5% -257 Operating Costs 1,555 1,524 2% 32 Other Revenues/(Costs) 335 379 -11% -43 Joint Ventures and Associates 108 3 \- 105 EBITDA 3,723 3,950 -6% -227 EBIT 1,931 2,206 -12% -275 Net Profit for the period 1,105 1,161 -5% -57 Net Profit attributable to EDP shareholders 657 801 -18% -144 Non-controlling interests 448 361 24% 87 • EBITDA amounted to 3,723 million euros in 2021, a 6% decline vs. 2020, including the impact from Hydro, CCGT and B2C supply activities disposed in Iberia in Dec-20 (-341 million euros) and adverse ForEx impact (-94 million euros) mainly due to an 8% depreciation of the Brazilian Real against the Euro. If disregarded these effects, EBITDA performance was impacted by a 46% increase of Electricity Networks’ EBITDA, supported by Viesgo’s acquisition in 2020 and by the regulated revenues annual indexation to inflation in Brazil, and by higher asset rotation gains, both in Renewables and on Transmission lines in Brazil. EBITDA was negatively impacted by the weak Energy management performance compared to the strong performance in 2020, exacerbated by the strong surge in energy prices. • In Renewables, 12% decline vs. 2020 to 2,294 million euros. Excluding the impact from the Excluding the sale of 6 hydro plants in Portugal closed in Dec-20 and the gain booked in 2020 with the GSF legal settlement in Brazil (66 million euros), EBITDA increased 4% vs. 2020 (+80 million euros), mainly driven by: (i) higher average MW capacity installed (+9% vs. 2020), (ii) higher asset rotation gains (+97 million euros), which were offset by (iii) the de-consolidation of wind assets sold in December 2020, (iv) negative ForEx impact (-49 million euros) e (v) weak hydro performance. • In Networks, 46% increase to 1,327 million euros, reflecting: (i) the first year of EBITDA contribution from Viesgo in Spain (182 million euros) and the “Lesividad” provision reversal (54 million euros), (ii) the 54 million euros increase in Portugal, due to OPEX savings on digitalization acceleration and (iii) 157 million euros increase in the Brazilian networks segment positively impacted by the asset rotation gains (46 million euros), stronger demand, regulated revenues indexation to inflation, smaller losses from over-contracting and update of the concessions’ assets’ residual value with inflation. 3.1. € EBITDA €3,723M -6% VS. 2020 61 • In Client Solutions and Energy Management, 74% decline vs. 2020 to 122 million euros following the tough YoY comparison vs. the very strong energy management results in 2020 aggravated by the adverse environment in 2021, penalized by the sharp increase in energy prices in the wholesale markets, especially in 2H21. This implied a significantly higher production and sourcing costs as well as a negative mark-to-market impact on hedging contracts in energy markets. This was just partially offset by the improvement of EBITDA in: (i) supply activities, supported by a recovery in B2B consumption and the increase of new services penetration rate (31% vs. 28% in 2020); (ii) Thermal generation, supported by the increase in energy prices and the ancillary services in Spain. • Opex costs increased slightly (2% vs. 2020) to 1,555 million euros, reflecting Viesgo integration. The tight cost control and succesful implementation of ongoing saving programs, mainly in Iberia, continue supporting the requirements needed to accelerate growth in renewables. • Other net operating revenues/(costs) changed by 43 million euros, to a net operating revenue of 335 million euros, mainly on the gains from the asset rotation. • EBIT decreased 12% vs. 2020, to 1,931 million euros, negatively impacted by the increase of amortizations mainly driven by the Viesgo acquisition, which was partly mitigated by a lower level of provisions in 2021. • Net Financial results amounted to -511 million euros in 2021. Note that financial costs in 2021 were impacted by a non-recurring item, including a €64m gain on the acquisition at a price below book value of the shareholder loans granted by our previous minority partner (25%) at Soto 4 CCGT in Spain. Additionally, excluding non-recurring items related with the repurchase of outstanding debt, -24 million euros (vs. -70 million euros in 2020), net financial interest increased by 6% vs. 2020, driven by the cost and relative weight increase of debt denominated in Brazilian Reais. Income taxes amounted to 262 million euros, representing an effective tax rate of 18% in 2021. • Non-controlling interests increased 24% YoY to 448 million euros in 2021, including: (i) 241 million euros related to EDPR, mainly explained by the increase EDPR’s net profit prompt by higher capital gains and dilution of EDP’s stake at EDPR following the capital increase in 2021; (ii) 176 million euros related to EDP Brasil on the back of the strong performance of EDP Brasil, despite the Brazilian Real depreciation; and (iii) 31 million euros following Viesgo acquisition in Dec-20. • Net profit attributable to EDP shareholders reached 657 million euros in 2021 (-18% vs. 2020). Adjusted for the disposal of operations in Iberia in 2020 (hydro in Portugal and Castejon CCGT and B2C supply in Spain) and by one-off impacts, recurring net profit increase 7% YoY, to 826 million euros in 2021, driven by strong performance of networks and renewables. EBIT €1,931M -12% VS. 2020 NET PROFIT Attributable to EDP Shareholders €657M -18% VS. 2020 € EBITDA €3,723M -6% VS. 2020 62 Investment Activity Expansion Investments (including Expansion Capex and Financial Investments), 3,337 million euros (+5% vs. 2020) • Expansion Investment represented 85% of total investment and mostly dedicated to new renewables capacity in North America and Europe and electricity networks in Brazil (~88%). • Expansion Investment in new wind & solar capacity amounted to 2.9 billion (+1% vs. 2020), of which 61% was applied in North America, 26% in Europe and 13% in Latin America and Other. • In Brazil, Expansion Capex in transmission increased 3% whereas de Expansion Capex in distribution increased 41% vs. 2020, mainly due to the construction of new transmission lines, expansion of the grids and improving the quality of service in both distribution concessions. Maintenance Capex, €570M (+12% vs. 2020) • Maintenance capex amounted to 570 million euros in 2021 and was mostlyabsorbed by networks in Iberia and Brazil (76% of total). The execution of our asset rotation strategy was strong during 2021: In 2021 we announced and closed several asset rotation deals, of which it’s worth highlighting: (i) 80% stake in a 405 MW wind onshore portfolio located in the Illinois, USA (543 Million euros), (ii) The transfer of a 302 MW wind onshore farm, Indiana Crossroads, under a Build & Transfer agreement signed in Oct-19 (198 Million euros), (iii) 80% stake in a 200 MWac solar farm, Riverstart Solar, located in Indiana, USA (225 Million euros), (iv) 100% stake in three transmission lines in Brazil (212 Million euros). ASSET ROTATION €1,356M GROSS INVESTMENT €3,907M +5% VS. 2020 63 Net Debt As of December 2021, net debt stood at 11.6 billion euros, 6% lower vs. December 2020, impacted by: (i) recurring organic cash flow (0.6 billion euros); (ii) proceeds from asset rotations in the period (1.4 billion euros); (iii) capital increase at EDPR level (1.5 billion euros); (iv) green bonds issuing (1.0 billion euros). This decrease was partly mitigated by our core expansion activity with the significant step up of our expansion investment (3.3 billion euros, including financial investments) and the annual dividend payment (750 million euros). Funding Policy • Centralized policy for financial debt at EDP – Energias de Portugal, S.A. and EDP Finance BV (approximately 78% of gross debt), while the remainder is divided between EDP Brasil (ring fenced vs. the rest of the Group), EDP España (after the Viesgo acquisition in Dec-20) and project finance at some EDP Renováveis’ subsidiaries. • In 2021, the average cost of debt stood at 3.5% (+20 basis points vs. 2020), mainly driven by the cost and relative weight increase of Brazilian Real in our gross debt. • Fixed interest rate debt represents 69% of overall gross financial debt. 1) After FX-derivatives 54% 33% 12% 1% GROSS DEBT BY CURRENCY IN DEC-21 (1) Euro Dollar Real Other 2021 NET DEBT €11,565M -6% VS. 2020 64 Bond Issues All EDP issuances in 2021 were subordinated green notes, detailed as follows: Rating Regarding EDP’s rating, throughout the first half of 2021, EDP received several rating upgrades, namely an improvement in S&P’s rating to BBB with stable outlook, an outlook upgrade from Moody’s from stable to positive and finally, a reassessment of Fitch’s rating to BBB, from BBB-, with a stable outlook. ISIN CODE CURRENCY AMOUNT COUPON MATURITY PTEDPLOM0029 EUR 750,000,000 1.875% 02/08/2081 PTEDPXOM0021 EUR 750,000,000 1.500% 14/03/2082 PTEDPYOM0020 EUR 500,000,000 1.875% 14/03/2082 LONG-TERM SHORT-TERM OUTLOOK S&P BBB A-2 Stable Moody's Baa3 P3 Positive Fitch BBB F2 Positive 65 Business area analysis 3.2.1. Renewables Financial Analysis Renewables EBITDA (wind, solar and Hydro) declined 12% vs. 2020 to 2,294 million euros, supported by: Extraordinary effects in 2020: gain with the sale of six hydro plants in Portugal (216 million euros) and contribution from the same plants in 2020 (117 million euros) and gain booked on GSF legal settlement in Brazil (66 million euros). On Hydro, excluding the above-mentioned impacts, o EBITDA decreased by 4% vs. 2020 to 534 million euros driven by hydro resources well below average, in Iberia, in the fourth quarter 2021 (57% below long-term average in Portugal in the fourth quarter 2021) combined with the strong surge in energy prices in wholesale market and pre-hedged electricity volumes. In Brazil, the management of the portfolio in an integrated way and the good performance of the allocation strategy more than compensated the adverse ForEx impact (-15 million euros). On Wind & Solar, EBITDA increased 6% to 1,760 million euros due to mixed effects from (i) higher average MW installed capacity (+9% vs. 2020), (ii) higher asset rotation gains (+97 million euros vs. 2020, 434 million euros), (ii) de-consolidation of assets sold last year (-103 million euros) e (iii) adverse ForEx impact (-34 million euros). Operational Analysis Hydro Generation 3.2. € EBITDA RENEWABLES €2,294M -12% VS. 2020 INSTALLED CAPACITY HYDRO (MW) NET ELECTRICITY GENERATION HYDRO (GWH) Total: 7,127 Total: 7,127 6% 71% 22% 6% 22% 71% 5,478 772 Total: 18,792 Total: 15,283 5,543 12,572 9,033 677 2020 2021 2020 2021 Portugal Europe Brazil Portugal Europe Brazil 66 Iberia • EDP's hydro production portfolio in the Iberian Peninsula includes a total of 5.5GW of installed capacity, of which 45% includes pumping. • Hydro generation in 2021 decreased 26% year on year (-3.4TWh), to 9.8TWh, reflecting the reduction of 1.7GW in installed capacity given the sale in Dec-20 of a portfolio of 6 hydroelectric plants (Miranda, Bemposta, Picote, Foz Tua, Baixo Sabor e Feiticeiro) in Portugal, that contributed with 3.4TWh generation in 2020. • Excluding this impact, hydro production in 2021 was in line with 2020, with weaker water resources (hydro generation coefficient of 0,93 in Portugal, compared with a coefficient of 0,97 in 2020), mainly given the weak hydraulicity during the 4Q21, being compensated by the resources available on the hydroelectric plants with reservoirs. Brazil • The Hydro generation portfolio in Brazil includes a total of 1.6 GW of installed capacity and 0.6 GW of equity installed capacity. • In 2021, the hydrological scenario remained below the historical average, directly impacting the Group's plants, which were exposed to an 77% GSF. In this context, EDP maintains a strategy to protect its portfolio by decontracting and / or purchasing energy to mitigate risks related to GSF and fluctuating PLD through “hedge”, in addition to the Company's seasonal allocation of greater energy allocation for the second semester. • In 2021, the volume of energy sales, considering the consolidated companies, was 5,478 GWh, a reduction of 1% year- on-year. Wind and Solar Generation The Group's wind and solar generation portfolio corresponds to a total of 13.6 GW of installed capacity, an increase of 1.4 GW (+12%) explained by the growth of the portfolio of EDP Renováveis (“EDPR”) net of deconsolidations resulting from the asset rotation strategy. • In 2021, EDPR added a total of 2,585 MW, including 5 MW following the acquisition of a solar portfolio in the United States, mainly still in development phase (544 MW). • Regarding the EBITDA portfolio, EDPR built: 1,766 MW of onshore wind technology, of which 678 MW in Europe (56 MW in Spain, 135 MW in Portugal, 56 MW in France, 272 MW in Poland, 114 MW in Italy and 45 MW in Greece), 933 MW in North America (871 MW in the United States and 62 MW in Canada) and 156 MW in Brazil; and, 503 MW of solar pv technology (272 MW in the United States, 204 MW in Brazil and 28 MW in Vietnam). INSTALLED CAPACITY WIND + SOLAR (MW) Total: 12,490 42% 6% 52% 1,888 11,357 NET ELECTRICITY GENERATION WIND + SOLAR (GWH) Total: 28,537 Total: 30,324 1,093 17,421 17,057 10,024 Total: 11,500 4% 0% 0% 41% 55% 2020 2021 North America Europe Asia Brazil 2020 2021 23 North America Europe Asia Brazil 67 • Following the asset rotation strategy, EDPR concluded the following sales: the sale of 80% in a 405 MW wind onshore portfolio in the United States; the sale of 80% in a 200 MW solar pv project in the United States under an asset rotation transaction partially closed in 2020; total participation in a wind onshore portfolio of 211 MW in Portugal; and 302 MW of a Build and Transfer wind project in the United States. • Regarding the equity portfolio, the variation was +0.4 GW (+63%) due to: the start of operation of a 311 MW wind offshore project in the United Kingdom, owned by the 50/50 joint-venture of EDPR and ENGIE (Ocean Wind Offshore); the asset rotation sales of 80% wind portfolio and 80% solar project, both in the United States, with 20% being consolidated using the equity method (81 MW out of 405 MW and 40 MW out of 200 MW, respectively); the sale of a 23% share in a Spanish wind farm, previously owned by Viesgo (11 MW). • Wind and solar generation increased by 6% in 2021, reflecting the higher average installed capacity (+ 1 GW), despite the lower wind index (7% below the expected average volume). • At the end of 2021, EDPR had 1.8 GW of capacity under construction, of which 1.6 GW related to onshore wind and 0,2 GW related to solar pv. Regarding onshore wind, 412 MW were under construction in Europe (133 MW in Spain, 21 MW in France, 100 MW in Poland and 159 MW in Italy), 96 MW in Mexico, 580 MW in Brazil and 504 MW in Colombia. Solar pv projects respect to 224 MW in the United States and 9 MW in Spain. Risk outlook • Demand risk (Portugal and Spain): risk in the evolution of demand due to uncertainty about economic recovery and government measures taken to control contagions. • Hydro volumes: uncertainty regarding hydro generation levels, mainly in Portugal due to high market prices and opportunity cost of energy, but also in Brazil due to the dry period in 2021 and consequent increase in energy acquisition costs. • Generation volumes: annual volatility in wind generation. • Spot electricity price: with special focus on market energy in Portugal and Spain due to the current high volatility, but also with transversal impact on Brazil's value chain (Generation, Distribution, Supply). • Generation merchant prices: uncertainty regarding wholesale prices, particularly due to the high volatility in energy markets in recent months. This risk is mostly mitigated with the hedged already contracted for 2022. • Physical commodities (in particular natural gas): risk in gas supply in Europe, as well as its impact on prices and volatility in energy markets. • Regulatory risk due to current market situation: uncertainty regarding medium and long-term regulatory frameworks (i.e. incentives, capacity, among others) and short-term. • Regulatory changes risk: potential changes in sectoral and fiscal regulation in Portugal and Spain due to record electricity and gas prices and the possible need for government measures to contain the resulting social and economic crises. • Macro risk in Brazil: macroeconomic (namely inflation, interest rate and EUR-BRL exchange rate), social and political uncertainty with the 2022 electoral cycle. • FX: evolution of key currencies (USD, BRL, CAD, RON, PLN, GBP, COP, HUF), mainly USD due to the uncertainty associated with monetary policy in the Euro Zone and the United States of America. In addition, the strong volatility in all currencies reflected into a general devaluation in the market. • Liquidity: possible increase in liquidity needs in particular associated with margin calls and physical operations in energy markets due to high prices. • Counterparty: possible default on contract obligations given the high market price volatility (i.e., financial hedging, physical supply of natural gas). • Counterparty: possible default on contract obligations (i.e., long-term contracts of power purchase, contracts to buy equipment, among others). • Delays in asset construction due to supply chain instability: uncertainty about meeting start-up deadlines and the cost of equipment due to the instability and inflation present in global supply chains. 68 • Operation and maintenance of assets: exposure to term and price risks for the supply of critical materials for interventions on generation assets, whether due to evolutions in the COVID-19 pandemic, geopolitical reasons or insufficient supply for market demand causing disruption to the normal functioning of supplies and/or inflation on raw materials such as metal alloys, electrical or electronic equipment. • Risk of coal supply in Brazil: impacting Pecém power plant and aggravated by the decrease in production of business partners, strikes and climatic events. 3.2.2. Networks Financial Analysis EBITDA from networks increased 46% vs. 2020 to 1,327 million euros, mainly explained by: In Brazil (distribution and transmission), 58% EBITDA growth vs. 2020 mainly related to demand recovery in 2021, the asset rotation gain in transmission and the regulated revenues annual indexation to inflation. In Portugal, the 13% increase vs. 2020 was supported by the operational costs savings and by the growth in regulated revenues. In Spain, the 122% increase vs. 2020 reflected mainly (i) EBITDA contribution from Viesgo (+€182m) and (ii) the “Lesividad” provision reversal (+€54m). Operacional Analysis Distribuition € EBITDA NETWORKS €1,327m +46% VS. 2020 94,986 52,493 NETWORK LENGTH (KM) Total: 375,777 Total: 378,155 94,118 229,168 52,492 230,676 26,016 14,117 ELECTRICITY DISTRIBUTED (GWH) Total: 76,360 Total: 84,885 24,658 44,143 44,752 7,559 2020 2021 2020 2021 Portugal Spain Brazil Portugal Spain Brazil 69 Iberia • The Distribution network in Iberia reached the length of 283,169 km in 2021 corresponding to a slight increase of 1% vs 2020. • At the end of 2021, EDP reached 5.4 million smart meters installed in the entire distribution network in the Iberian Peninsula. Smart meters are aligned with the efficiency, digitalization and innovation strategies and are considered a strong bet in the Group, especially in Portugal where there was an increase of 24% against 2020. • In 2021 there was an increase in the volume of electricity distributed in Iberia (+14% vs 2020), resulting in a variation of +7.2 TWh. This variation is mainly explained by the integration of Viesgo’s networks in the Group while also being supported by an economic recovery in a less severe pandemic context. • The Installed Capacity Equivalent Interruption Time (ICEIT) in Portugal registered a decrease vs 2020, reaching the value of 50 minutes and staying below the regulator’s benchmark. In Spain, the registered ICEIT value was of 20 minutes, an increase over the value of 15 minutes from the previous year. • Regarding energy losses in the network, Portugal registered a decrease in the indicator which reached 9.5% in 2021 (- 0.4pp vs 2020), remaining above the regulatory reference of 7.8%. In Spain, an increase to 4.7% was registered (+1pp vs 2020). This increase is due, in part, to the integration of Viesgo which presents in 2021 a higher value of energy losses when compared to the networks belonging to the Group in 2020. Brazil • The Distribution network in Brazil reached the length of 94,986 km in 2021, corresponding to an increase of 1% vs 2020\. • In 2021, the volume of energy distributed increased 5.5%, (5.2% at EDP SP and 6.0% at EDP ES). This increase reflects the progressive resumption of economic activity mainly at the industrial and commercial level. • The number of new customers increased 2.2% with free customers increasing by 27.6% (242 customers at EDP SP and 116 customers at EDP ES), due to the migration of captive customers to the free market. • In both distributors, service quality indicators improved in comparison to 2020. At EDP SP and EDP ES, the Equivalent Duration of Interruption (DEC) was at 381 and 454 minutes respectively. As for the Equivalent Frequency of Interruption (FEC), it reached the values of 4.1 at EDP SP and 3.9 at EDP ES. All these values are below the established regulatory benchmarks. Transmission Brazil • During 2021, two portfolio recomposition transactions were carried out: the agreement for the acquisition of CELG-T, concluded in February 2022, and the sale of three assets (lots 24, 7 and 11), completed in December 2021, these operations represent part of our asset rotation strategy in the Transmission segment. Two lots were also acquired, one in the secondary market, in May, located in the state of Maranhão, and the other in the Transmission Auction nº 1/2021, between the states of Acre and Rondônia. • With these operations, in December 2021, 2 of the 5 Transmission lots were partially in operation and 1,256 km were still under development. Risk Outlook • Low voltage network concessions (Portugal): uncertainty regarding the renewal of framework, possible fragmentation and increase in system costs. • Asset operation and availability: uncertainty regarding damage of assets and/ or loss of profit. • Business continuity: across-the-board and prolonged interruption of operations by extreme events (e.g., natural disasters) • Regulation in the Distribution segment in Brazil: tariff review in the distribution segment, uncertainty regarding business support mechanisms due to the exceptional pandemic situation and extreme prices in energy markets and possibility of regulatory pass-through of energy involuntarily over-contracted. 70 • Macro risk in Brazil: macroeconomic (namely in terms of the EUR-BRL exchange rate), social and political uncertainty with the 2022 electoral cycle. • Demand risk: uncertainty, due to the emergence of the Omicron variant, regarding the potential repetition of extended lockdown periods, that again will have a significant impact in reducing demand and therefore on the remuneration of the electricity distribution business in Brazil. • Operation, maintenance and expansion of the network: exposure to term and price risks for the supply of critical materials for interventions and investments in the distribution network, whether due to evolutions in the COVID-19 pandemic, geopolitical reasons or insufficient supply for market demand causing disruption to the normal functioning of supplies and/or inflation on raw materials such as metal alloys, electrical or electronic equipment 3.2.3. Client Solutions and Energy Management Financial Analysis EBITDA from Client solutions and Energy Management (thermal generation, supply and energy management), decreased 74% vs. 2020 to 122 million euros, impacted by: In Iberia, the tough YoY comparison vs. the very strong energy management results in 2020 aggravated by the adverse environment in 2021, penalized by the sharp increase in energy prices in the wholesale markets. This implied a significantly higher production and sourcing costs as well as a negative mark-to-market impact on gas hedging contracts. In Brazil, the segment performance was penalized by an 8% depreciation of the Brazilian Real against the Euro, the poor performance of the trading division and a negative impact from coal, with no pass-through of the acquisition costs. Operational Analysis Thermal Generation € EBITDA CLIENT SOLUTIONS AND ENERGY MANAGEMENT €122m -74% VS. 2020 14% 45% INSTALLED CAPACITY THERMAL (MW) Total: 5,054 Total: 5,034 41% 41% 3,417 7,944 NET ELECTRICITY GENERATION THERMAL (GWH) Total: 16,988 Total: 15,321 1,586 7,623 3,961 7,779 14% 45% 2020 2021 2020 2021 Portugal Spain Brazil Portugal Spain Brazil 71 Iberia • The Iberian thermal generation portfolio has an installed capacity of 4.3GW, with most of the capacity being CCGT (67% or 2.9GW) and coal production (29% or 1.3GW). The remaining thermal capacity is divided between nuclear (0.2GW), cogeneration and waste. • Thermal generation decreased 23% compared to 2020 (-3.5TWh), to 11.9TWh, reflecting the reduction of 0.8GW in installed capacity given the sale in Dec-20 of two CCGT plants (Castejón I & III) in Spain (that contributed with 1.6TWh generation in 2020), as well as the decrease in CCGT generation given the increase in gas and CO2 prices in 2021. Coal and nuclear generation remained stabler. Brazil • In Brazil, EDP has 720MW of installed thermal capacity corresponding to Pecém plant. • The average availability of the plant was 94% above the Reference Availability. Supply ELECTRICITY CUSTOMERS (’000) Total: 8,620 Total: 8,654 3,600 4,999 22 3,680 4,952 22 ELECTRICITY SUPPLIED (GWH) Total: 69,566 Total: 59,687 19,508 10,790 39,269 28,792 19,936 10,959 2020 2021 2020 2021 Portugal Spain Brazil Portugal Spain Brazil GAS CUSTOMERS (’000) GAS SUPPLIED (GWH) 686 6 Total: 686 682 4 Total: 17,070 4,294 12,776 Total: 14,321 9,920 4,401 2020 2021 2020 2021 Total: 692 Portugal Spain Portugal Spain 72 Iberia • Client relationship has been at the heart of EDP action plan, which is why a strong importance has been given to quality improvements in our products and services provided, focusing on being alongside the customer making sure a proper assistance in a challenging global pandemic context. At the same time, one of EDP’s vertical axes concerns the expansion of its value proposition through new services to keep on pace with the current and necessary energy transition. EDP has neem building a position of notoriety in the energy market, aiming to be an engaging and innovative company in which customers can relate. As a result of this commitment to customer relations, especially during the first full year of a global pandemic, EDP achieved an overall customer satisfaction level of 82% in 2021, above the 79% in 2020\. • In Iberia, EDP has increasingly reinforced its focus on the cross-offer of products and services integrating its energy products with service packages, in order to be able to offer greater value to its customers. In 2021, EDP continued its commercial footprint expansion with the acquisition of Enertel, an Italian provider of distributed solar. • At the end of 2021, EDP Comercial's electricity customer portfolio reached 4 million customers with a volume of 17.7TWh of commercialized energy, an increase of 3% compared to 2020. In what concerns the gas sector, despite the slight decrease of 2 thousand customers, it is worth noting the increase in the volume of gas sold, which allowed EDP Comercial to close 2021 with a total volume of gas sold of 4.2 TWh (120 MWh above 2020). • In Spain, excluding the B2C customer portfolio sold at the end of November 2020, electricity sales in the B2B segment increased by 30% to 11 TWh. In gas, sales increased to 10 TWh, a variation of 6% compared to 2020. • In the services sector, the focus remained on innovating and offering new quality services and reinforcing its presence in more traditional services, in order to offer customers a diverse portfolio with energy efficiency, micro-generation, electric mobility and technical assistance solutions. • Among the main traditional services, emphasis should be placed on “Funciona” portfolio, which grew by 16% to 535 thousand customers and “EDP Saúde”, which registered a total number of 191 thousand customers in Portugal, 41% more than in 2020. • Regarding the commitment to new services, more focused on efficiency and energy transition, emphasis is placed on Solar B2C, which in Portugal registered an increase of 7 thousand installations of solar panels compared to 2020, to a total of 21.7 thousand; and in Spain there was an increase of 1.4 thousand compared to 2020 for a total of 2.2 thousand installed panels. Concerning Electric Mobility, one of the areas of strong growth, emphasis should be placed on the increase in charging points in Portugal to 1.3 thousand, an increase of 37% compared to 2020. Brazil • The volume of energy sold in 2021 totaled 28.8 TWh, a reduction of 37% when compared to last year. This reduction reflected the maintenance of high energy prices, as a result of the unfavorable hydrological scenario, and consequently, the low level of water reservoirs. A scenario that ended up favoring low volatility in the market, resulting in a reduction in the volume of energy transacted, also fueled by the maintenance of the portfolio protection strategy. • The focus on distributed generation continues to mark the year in which EDP ended with 175 MWp in solar energy projects – 75 MWp already installed and 100 MWp contracted to be installed. Risk outlook • Retail margin/ share: uncertainty regarding the evolution of retail margin or loss of market share, supply of new products, and services. • Demand risk: uncertainty, due to the emergence of the Omicron variant, regarding the potential repetition of extended lockdown periods that again has a profound impact of reducing demand and changing the consumption profile. • Macro risk in Brazil: macroeconomic (namely in terms of the EUR-BRL exchange rate), social and political uncertainty with the 2022 electoral cycle. • Counterparty: possibility of counterparties and customers defaulting on their obligations under energy sales and service contracts. 73 Share performance Share EDP’s market price was 4.838€ per share at the end of 2021, 6.2% below the 5.156€ per share at the end of 2020. Based on the payment of dividends to shareholders held on April 26th, 2021 (0.19€ per share), which implied a dividend yield of 3.7% (considering 2020’s year-end closing price), in 2021 EDP generated a total shareholder return (TSR) of -2.7%, assuming automatic reinvestment of the dividends received into new shares. Market Performance In 2021, European Equities benchmark index, Eurostoxx 600, yielded a TSR of +23.5% significantly impacted by the recovery of the economic outlook following COVID-19 initial lockdowns, with a strong fundamental story unfolding from a macroeconomic perspective, on the back of improved labour markets and continued fiscal and monetary support programmes. This effect was offset by surging inflation amidst global supply chain disruptions, mainly during 2021’s second half. The Utilities Sector underperformed the Eurostoxx600 and exhibited total return of +7.9% return in 2021 as investors’ risk appetite recovered, shifting away from defensive stocks. Furthermore, several headwinds have limited the sectors’ returns throughout the year, with supply chain bottlenecks resulting in soaring energy, carbon, gas and raw materials’ prices, weak renewable resources and concerns on negative regulatory news flow. In 2021, the global benchmark for clean energy-related businesses, S&P Global Clean Energy Index, registered a TSR of -23.1%, mainly driven by global congestions in supply chains, matched with weak renewable resources throughout the years. These factors have contributed to looming concerns on the sustainability of renewables’ projects internal rates of return and speed of the energy transition, worsening the market sentiment towards this sector. EDP’s TSR of -2.7% in 2021 underperformed both European and Utilities benchmark Indexes and outperformed the S&P Global Clean Energy Index. Throughout the past two years, EDP has experienced a strong price performance, particularly in 2020’s back end, as it delivered on its strategic goals while witnessing global support towards the energy transition, outperforming the Eurostoxx 600 and Eurostoxx Utilities. During 2021, we saw a correction of the sector’s stellar performance, with the European energy crisis, weak renewable resources, supply chain concerns and negative regulatory news flow, raising uncertainties on the sector. However, despite the deteriorated market sentiment on renewables, EDP has moved forward on strategic targets execution through prudent investment criteria, reassuring sustainable returns and registering superior returns than the S&P Global Clean Energy. 3.3. 74 Factors influencing the change in EDP share price The performance of EDP’s share price in 2021 was impacted by several factors. On one hand, the improvement of the macro situation on the back of the end of Covid-19’s lockdowns led to a recovery of electricity demand as economies re-opened which caught supply chains unprepared. On the other hand, the execution and strong delivery of EDP’s Strategic Plan growth targets in the first year of this plan. INTERNAL FACTORS Accelerated Sustainable Growth Focused Growth • In renewables, the addition of 2.6 GW during 2021 and securing 8.4 GW of long-term contracts for new renewables capacity, representing 75% of our target for 2021-2023. • In renewables, the entry on 12 different markets, reassuring EDP’s status as a true global player, namely through EDPR’s expansion to Asia. • In networks in Spain, the advanced integration of Viesgo, adding a total RAB of €1.8 billion (post-Lesividad). • In networks in Brazil, the acquisition of Celg-T, contributing with 756 km of line extensions. Portfolio Optimization • €2.8 billion of secured proceeds, corresponding to 35% of the 2021-2025 targets. • Portfolio reshaping in Brazil: Acquisition of Celg-T and asset rotation of 3 transmission lots to Actis, whilst developing negotiations to dispose 0.5 GW of net hydro capacity. Investment Strategy & Criteria • Roughly 90% of secured capacity with fully contracted or higher Capex already embedded in Investment decision. • Strong investment performance with IRR/WACC of ~1.45x, with an implied IRR to WACC spread of 300 bps. Debt Management • Issuance of three €750 million green hybrid bond in Jan-21, Sep-21 and Sep-21 at 1.88%, 1.50% and 1.88% yield, respectively, and repurchase of €0.14 billion, €0.11 billion, €0.14 billion and €0.26 billion, of 2022, 2023, 2023 and 2024 bonds, respectively, totaling €650 million, enabling a reduction of average financing costs. • Debt ratings upgraded by all three major rating companies, with Moody’s improving EDP’s outlook to positive and Fitch and S&P updating EDP’s rating to “BBB” with stable outlooks. Future Proof Organization Efficiency • 2% OPEX recurring reduction on a like-for-like basis, excluding growth in 2021\. ESG Excellence • Reassured presence in S&P Global Clean Energy Index and leadership among electric utilities on the Dow Jones Sustainability Index after 2021’s review. • Strengthening of EDP’s share of renewable generation, reaching 75% of total output, and improved alignment with EU taxonomy. EXTERNAL FACTORS Covid-19 Pandemic • Economic re-opening post Covid-19 lockdowns led to a positive impact on electricity demand. Regulatory Environment European Union • Higher visibility on member states’ overall energy policy, focused on renewables on the back of the Green Deal. Approval of 2030 CO2 reduction target of -55%. • European Resilience and Recovery Funds of €0.75 trillion focused around the Green Deal and the energy transition USA • Important legislative measures under discussion, including 10-year extensions to tax credits for renewables projects Spain • Introduction and later retraction of the Spanish windfall profits clawback news flow, proposing to tax windfall profits associated with the surge of energy prices. Portugal • Smooth transition toward new Portuguese regulatory period and maintenance of end-user regulated electricity tariff, through a 52% decline of the grid access tariff. • Enhanced visibility on a 50% decline of the Portuguese Electricity System Debt, over the next year. Supply Chain • Bottlenecks throughout global supply chains have been responsible for strong inflationary pressures and delays. 75 Energy Markets CO2 • The increase in the price of CO2 in the European market has been supportive to electricity wholesale prices, penalizing institutions with open natural short positions on energy and favoring renewable players. Gas Prices • Sharp increase in gas prices contributed positively for the electricity wholesale prices in Europe, penalizing institutions with open natural short positions on energy. ESG Trends • The rise of sustainable investing has increased the focus in companies that comply with ESG factors (Environmental, Social and Governance), like EDP. Dividend In the Strategic Update held virtually on February 25th, 2021, EDP reiterated its dividend policy, comprising a dividend floor of 0.19€ per share on the dividend going forward, which we delivered in 2021. The announced dividend policy dictates that the dividend should continue to evolve in tandem to earnings per share, within a payout ratio interval of 75% to 85%. Accordingly, for the 2020 financial year the Executive Board of Directors of EDP submitted to the approval of the General Shareholders’ Meeting of April 14th, 2021, a proposal for the allocation of 2020 profits, including 753.5 million euros to be distributed to shareholders in the form of dividends. The proposal was approved at the General Meeting and a gross dividend of 0.19€ per share was paid on the April 26th, 2021. 1) 2018 Payout based on Net Profit excluding regulatory impacts (-€208m), impairments at coal plants in Iberia (-€21m), restructuring costs (-€21m), net gain on disposals (+€64m), debt prepayment fees and others (-€26m) and the extraordinary contribution for the energy sector (-€65m). 2) 2019 Payout based on Net Profit excluding impairments (-€224m), the provision for Fridão (-€59m), provision reversal at S. Manoel and the gain on the revaluation of Feedzai (+€28m), restructuring costs (-€8m), provision for the sharing of some gains with customers and gains following the change in medical plan of employees in Brazil (-€12m) and the extraordinary contribution for the energy sector (-€66m). 3) 2020 Payout based on Net Profit excluding the net gain from disposals and investments (+€325m), impairments (-€252m, mainly thermal in Iberia), liability management costs (-€55m), regulation related items and other (-€18m) and HR reestructuring costs (-€38m). Analysts’ Recommendations There are currently 24 Equity sell side analysts with active coverage of EDP. During 2021, the weight of Buy recommendations by equity sell side analysts improved significantly to 92%, representing a 25 p.p increase, given the first quarter’s unsupported sell-off, phase-out of negative Iberian regulatory news flow and smooth transition to the new Portuguese regulatory period. Hold recommendations decreased from 29% to 8%, whereas Sell recommendations decreased from 5% to 0%. The average Price Target as of December 31st, 2021, was €5.8 per share, according to Bloomberg, implying a 21% upside potential. Dividend yield Payout 5.0% 6.8% 7,7% 8,1% 6,9% 5,7% 5,6% 6,6% 6,6% 6,2% 4,9% 55% 58% 60% 67% 67% 65% 74% 72% 62% 87% 81% 3.7% 90% 76 1.0 0.7 1.2 1.4 1.6 1.6 3.8 3.7 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 0 5 10 15 20 25 30 35 40 2020 2021 AVERAGE DAILY TRADING VOLUME PER TYPE OF MARKET IN 2021 (MILLION SHARES) Euronext Other Exchanges OTC Fonte: Bloomberg Volumes EDP‘s ordinary shares are publicly traded not only in its main market (Euronext Lisbon), but also in other 27 stock exchanges (including Turquoise and Chi-X Europe) and 7 Over-the-Counter markets (including BATS Chi-X Europe and BOAT) Fonte: Bloomberg 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 ANALYSTS' RECOMMENDATIONS 67% 5% BUY HOLD SELL 92% 29% 8% -35% +15% +1% -4% 77 Markets and regulation Fuels in the World and in Europe The 2021 year was characterized by a strong escalation on commodities prices, mainly in the second half of the year, reflecting drivers such as economic recovery post-pandemic in a context of supply restrictions, and some climate phenomena at global level. The Brent price gradually raised throughout 2021, reaching 74 $/bbl in December, which compares with 55 $/bbl in January. This raise is explained by the increase in global demand for oil (namely in Asia and in the United States), due to the economic recovery and, in the second half of the year, also due to some oil switching from gas in Asia. Furthermore, the first part of the year was characterized by supply restrictions, with the OPEC+ group not easing supply cuts that were in place since April 2020\. Despite the fact that in the second half of 2021, these countries agreed to boost oil supply, it was still not enough to avoid the raise in prices. On average, the oil price in 2021 stood at 71 $/bbl, which represents a strong increase compared with 41 $/bbl as of 2020 average. The natural gas price in Europe (TTF index) reached record high levels in 2021, with 111 €/MWht as of December average. Several drivers on the supply side contributed to this increase, namely the lower supply of gas coming from Russia by pipeline, lower production from the UK and Netherlands and liquified natural gas (LNG) restrictions -ex: Trinidad and Tobago, Nigeria, Norway and Peru-, which led to LNG deviation to Asian markets, backed on strong demand rise pushed by quick economic recovery, and to South America due to weak hydro resources. The reduction in supply contributed to increasing concerns regarding the storage levels of gas in Europe, which by the end of 2021 were much lower than the historical average. On top of this uncertainty, it is the delay in the entry into operation of the Nord Stream 2 pipeline, due to certification problems in Germany and the European Commission. On average, the TTF price stood at 46 €/MWht in 2021, which represents an increase of almost 400% compared with 2020. In the United States, the Henry Hub price has almost doubled, to 11 €/MWht on the 2021 average. Still, it had a much more moderated evolution than TTF, due to limitations in the export of natural gas from this country, which means that this index is not such impacted by global dynamics in the natural gas markets. The average CO2 price also had a strong raise during 2021, from 33 €/ton in January to 80 €/ton in December average. This increase is mostly due to the reinforcement of European decarbonization policies for 2030, which necessarily imply a reduction in the future supply of CO2 allowances. Additionally, the strong increase in the gas price benefits the relative competitiveness of coal plants, which in turn imply an increase in demand for allowances, with consequent increasing pressure in CO2 prices. 3.4. Source Reuters FIGURE 1: ANNUAL AVERAGE PRICES OF FUELS AND CO2 41 9 6 50 25 71 46 11 120 53 Oil - Brent ($/bbl) Natural gas - TTF (€/MWht) Natural gas - Henry hub (€/MWht) Coal - API#2 ($/ton) CO2 (€/ton) 2020 2021 78 Energy and Environmental Policy in Europe In September 2020, as part of the Green Deal, the European Commission proposed the reduction of greenhouse gas emissions by at least 55% in 2030 vs. 1990 levels, which places the UE on the pathway of carbon neutrality by 2050. In July and in December 2021, the European Commission released the “Fit for 55” package, which comprises a set of legislative proposals (including revision of current legislation and proposal of new laws), setting the base to reach the decarbonization target for 2030. Some of the main legislative proposals include: SUMMARY OF THE PROPOSALS Emissions Trading System (ETS) • Objective to reduce emissions by 61% in ETS sectors in 2030 vs. 2005, which implies to raise the linear reduction factor to 4.2% in phase 4 • Inclusion of maritime transport in the ETS • Creation of a new ETS, for the road transport and buildings sectors • Creation of a “Social Climate Fund”, to support vulnerable consumers (families and SME’s) due to the increase in energy prices and the introduction of the new ETS in the road transport and buildings • 100% of the revenues from the Member States in the CO2 auctions must be devoted to projects or policies related to the climate Carbon Border Adjustment Mechanism (CBAM) • New mechanism that allows the taxing of CO2 emissions in imported goods from outside the European Union, related to goods from 5 sectors (electricity, cement, fertilizers, steel and iron and aluminum), to apply from 2026 onwards. Renewable Energy Directive (RED) • Target of 40% renewables in final energy by 2030 (binding for Member States) • Creation of sectoral targets for renewables share: 49% in buildings by 2030, annual increase of 1.1. percentage points in the heating and cooling and in the industry, 13% reduction of carbon intensity in transports by 2030 • Removal of barriers for renewables deployment, namely for the rollout of PPA contracts and access to guarantees of origin • Introduction of a credit trading mechanism in the transports sector, under which economic operators that supply renewable electricity to electric vehicles via public charging stations will receive credits they can sell to fuel suppliers • Promotion of renewable hydrogen, with the creation of specific targets for the share of RFNBO (Renewable Fuels of Non-Biological Origins) in the industry and transports Energy Efficiency Directive (EED) • Target of 36-39% energy efficiency by 2030 (binding for Member States) • Energy savings obligation of 1.5%/year in the 2024-30 period • Fight to energy poverty, with several measures to support vulnerable consumers through energy efficiency measures • Revision of the primary energy factor (PEF) to 2.1 Energy Tax Directive (ETD) • Energy taxation becomes based on the energy content and environmental performance of the several energy products • Enlargement of the taxable base, by including more energy products and by removing some of the current exemptions and tax reductions 79 Effort Sharing Regulation (ESR) • 40% target to reduce emissions in the non-ETS sectors in 2030 vs. 2005 in the European Union, with distinct targets by Member States according to the GDP per capita CO2 standards for vehicles and vans Regulation • All new light-duty vehicles should be zero emissions from 2035 onwards Alternative Fuels Infrastructure Regulation (AFIR) • Definition of targets for the expansion of public recharding stations for electric and hydrogen vehicles, both light-duty and heavy-duty vehicles • Definition of common requirements about means of payment and prices Legislative package for the gas and hydrogen markets • Establishes a market for hydrogen, creating an adequate environment for investment and allowing the development of dedicated infrastructures • Easy the access of renewable and low-carbon gases to the existing gas network Energy Performance of Buildings Directive (EPBD) • Determines that from 2030 onwards, all new buildings should be emissions zero, target which is anticipated for 2027 for public buildings • Enlarges the situations where it is needed to have energy performance certificates Iberian Peninsula Macroeconomic context 2021 was the year of vaccination and economic rebound, but also brought a strong acceleration on prices and a crisis in the logistics and maritime transport. In this year, the real GDP increased by 4.9% and by 5% year-on-year, in Portugal 1 and in Spain 2 respectively, pushed by private demand from families and by private investment. While in 2020, inflation was stagnant in the Euro Zone (+0.3%) and in negative territory in Portugal and in Spain, the 2021 year is marked by the strong acceleration on consumer prices, with the inflation rate 3 reaching 2.6% in the Euro Zone in the average of the year, but with an escalation by the end of 2021, standing at 5% in December. This is mainly driven by the prices of energy, which still were mitigated in many countries with extraordinary measures to contain the impact of the escalation of energy prices in the wholesale markets. On the average of the year, Portugal was the third country in the Euro Zone with the lowest inflation rate (+0.9%), while Spain was above the European average (+3%). Focusing on the prices at the end of 2021, Portugal had the second lowest inflation rate (2.8%), while Spain saw its prices accelerating 6.6% in December. Regarding the labor market, the indicators are quite surprising, as the unemployment rate in Portugal is even slightly below the levels before the pandemic (6.3% in November-21 vs. 6.7% in November-19), with employed population reaching historical maximum. The scarcity of workforce in some sectors has increased pressure on wages, with a raise of 2.6% year- on-year in the third quarter of 2021. In Spain, there was a clear recovery in the indicators of the labor market during 2021, with the unemployment rate at 13.3% in the fourth quarter of 2021, below the pre-pandemic levels (13.8% in the fourth quarter of 2019). Evolution of the power sector In 2021, the consumption of electricity in Portugal and in Spain increased year-on-year, reflecting the economic recovery from a particularly depressed 2020 year, but still fell short from 2019 levels. • Portugal: Electricity demand increased 1.4% (+1.7% correcting for temperature and labor days), but was 1.7% below 2019 levels; 1 “Instituto Nacional de Estatística” of Portugal 2 “Instituto Nacional de Estadística” of Spain 3 Eurostat 80 • Spain: Electricity demand grew 2.4% (the same figure if correcting for temperature and labor days), but was 2.8% short of 2019 levels. Regarding the electricity generation mix in 2021, the main changes from the previous year are related with the closure of coal plants in Portugal (with the end of operations of Sines plant in January and of Pego plant in November) and with the strong investment of photovoltaic solar in Spain, with capacity increasing by 26% in 2021. Globally, renewable generation supplied 59% of power energy in Portugal in 2021, with wind generation representing 26% of total and hydro with 23%. In Spain, renewables supplied almost 50% of electricity demand, a 10% increase in renewable generation year-on-year, pushed by the 3.8 GW increase in renewable capacity in the country. In Portugal, in spite of the increased demand (+1.4%), electricity generation was 5.4% lower, showing that imports had to rise. The wholesale power prices in several European markets had a strong increase throughout 2021, mostly reflecting the escalation in natural gas price, but also (in lower degree) the CO2 price. In Iberia, the average pool price was 111 €/MWh, aligned with the French market. It is worth noting that the average hides the huge volatility that occurred during the year, as the MIBEL average price fluctuated between the minimum of 28 €/MWh (February average) and reached historical high records in December (239 €/MWh average), having surpassed the 300 €/MWh threshold several times. Portugal Spain FIGURE 2: ELECTRICITY GENERATION IN PORTUGAL AND IN SPAIN (MAINLAND) Sourc es: REN, REE 12 11 14 13 12 13 1 2 8 7 2020 2021 5 5 38 38 56 54 33 32 54 59 15 20 38 38 2020 2021 49 47 239 247 TWH 81 Regulatory framework Portugal The most relevant legislative pieces released during 2021 are described below, being additional to the legal and regulatory framework already in place. The Resolution of the Council of Ministers n.º 8-A/2021, published on February 3 rd , approves the Long-Term Strategy of Buildings Renovation (ELPRE). The main roles of ELPRE include the improvement of the energy performance of the national building stock, aiming to reach by 2050 cumulative savings of energy primary of 34% and CO2 emissions reduction of 77%, compared with 2018 levels, contributing for Portugal to reach its targets on energy and climate. The Ministerial Order nº230-A/2021, published on October 29 th , revokes the interruptibility mechanism, while establishing a transitory regime to extend the current contracts up to the end of 2021, since the alternative mechanism required the authorization from the European Commission with regard to State Aid procedures. The interruptibility mechanism was replaced by the implementation of the Regulation Reserve Band, approved by the Directive nº16/2021 from ERSE, of November 18 th , producing effects from January 1 st 2022, onwards. On December 31 st , the Law nº 98/2021 was published, defining the Climate Basis Law, aiming to reach carbon neutrality up to 2050 and with the possibility to analyze being anticipated to 2045, the latest. It establishes targets for reduction of GHG emissions (at least 55%), 2040 (at least 65-75%) and 2050 (at least 90%), in line with NECP 2030 and the long-term strategy. It also establishes some guidelines related with green taxation and energy transition matters. On December 31 st , it was published the Law nº 99/2021, which extends the application of the Extraordinary Contribution over the Energy Sector (CESE) for 2022, in the same conditions that were in force in previous years. On January 14 th 2022, it was published the Decree-Law nº15/2022, which establishes a new organization and functioning of the National Electricity System (SEN), where (i) 14 legal normative diplomas are consolidated into a single diploma; (ii) it is transposed the Directive of the Internal Electricity Market; (iii) it is partially transposed the Renewables Energy Directive; (iv) it is developed several matters that were lacking regulatory framework or changes. This decree-law applies to activities of generation, storage, selfconsumption, transmission, distribution, aggregation and supply of electricity, as well as to the FIGURE 3: WHOLESALE POWER PRICES IN EUROPEAN MARKETS SOURCE: Reuters 38 39 34 32 30 11 131 125 111 109 97 62 UK Italy Iberia France Germany Nordpool 2020 2021 €/MWH 82 logistic operation to change supplier and aggregator, the organization of the respective markets, the activity of emission of guarantees of origin, the activity of guarantees of SEN, the procedures that are applicable to the access to those activities and the protection of consumers. It does not apply to the activities of generation electricity through cogeneration and electric mobility. Concerning the power generation activities, the Dispatch nº 866/2021, of January 21 st , created a Working Group aiming to analyze potential benefits at local level from the transmission of the Titles of Use of Hydro Resources (TRH) regarding the following hydro plants: Miranda, Bemposta, Picote, Baixo Sabor and Foz Tua. The final report was presented in May 10 th , 2021\. Within the scope of the competition balance mechanism (“clawback”) foreseen in Decree-Law nº 74/2013 of June 4 th , changed by the Decree-Law nº 104/2019 of August 9 th , the several legislative pieces were published: • Dispatch nº 6398-A/2021, of June 29 th , which suspends the application of clawback during the period between July 1 st and September 30 th 2021; • Dispatch nº 9974/2021, of October 14 th , which sets the final compensation to apply during 2020, considering ISP as the sole extra-market event – thus resulting in a value of 2.16 €/MWh for coal plants, 3.42 €/MWh for CCGT plants and 3.64 €/MWh for the remaining plants covered by the clawback regime; • Dispatch nº 9975/2021, of October 14 th , which suspends the application of clawback during the period between October 1 st and December 31 st 2021\. On November 27 th , the Ministerial Order nº 686-A/2020 was published, concerning the Just Transition Fund, setting measures and actions to support workers and territories affected by the end of electricity generation from coal power plants, such as Sines power plant. On December 23 rd , the Ministerial Order nº 315/2021 was published, which suspends the update of the CO2 added tax during January 1 st to March 31 st 2022\. Thus, it remains at the same level of 2021, at 23.921 €/ton. Regarding renewable energy, it is important to highlight the Resolution of the Council of Ministers nº 68/2021, of June 4 th , approving the National Strategy for the Sea 2021-2030, and the Resolution of the Council of Ministers nº 120/2021, of September 1 st , approving its respective Action Plan. The Dispatch nº11740-B/2021, of November 26 th , sets the opening of the procedure for the third solar auction (to attribute reserve of capacity to floating solar PV, that operate in hydro reservoirs). There will be a total of 263 MVA of capacity to be auctioned. Concerning activities of distribution of electricity, to highlight the Dispatch nº 3759/2021, of April 13 th , which extends the mandate of the Working Group to elaborate the procedure parts and the draft standard contract for the concession of the operation of the low voltage electricity distribution networks , created by the Dispatch nº 11814/2020, of November 30 th , for more 4 months (until the end of July 2021). By the time of the publication of this report, these guidelines are not known. On August 23 rd , the Regulation nº758/2021 from ERSE was published (amended by the rectification statement nº813/2021 of November 16 th ), which approves the change in the Tariff Regulation of the Electricity Sector, aiming (among others) the update of the methodologies of regulation and calculation of the allowed revenues of regulated companies to be applied in the new period of regulation, that begins in 2022 and ends by 2025, having its parameters of regulation being defined in the document “Tariffs and Prices of Electricity Energy and Other Services in 2022 and Parameters for the Period of Regulation 2022-25”, published by ERSE on December 15 th . Regarding the distribution of electricity, it is important to highlight the enlargement of the application of regulation by incentives to the revenue cap type to the total controllable costs of distribution in HV and MV, along with the introduction of a mechanism of sharing of gains and losses of efficiency between the DSO and consumers. It is maintained the mechanism of indexation of the remuneration rate to the evolution of the yield of 10-years treasury bills (OT) of the Portuguese Republic, establishing as the starting point a rate of 4.7%, which corresponds to an average OT of 0.302%. Furthermore, the formula to compute the allowed revenues of the Last Resort Supplier is changed, now including a component for the costs of capital, using the same rate of the activity of electricity distribution. Still regarding electricity supply activities, to highlight the Ministerial Order nº 6/2021, of January 6 th , which extends the deadline for the right of final clients to choose a tariff equivalent to the regulated or transitory tariffs, from a supplier in the liberalized market, up to December 31 st 2025\. 83 On May 5 th , the Regulation nº 373/2021 from ERSE was published, defining a new regime for self-consumption and for renewable energy communities, thus revoking Regulation nº 266/2020, from ERSE, of March 20 th . The Directive nº 11/202,1 from ERSE, of June 21 st , approves the update of the Electricity Tariff by 5 €/MWh, due to the increase in wholesale power prices, becoming effective from July 1 st 2021\. Furthermore, Directive nº 15/2021 from ERSE, of September 28 th , approves a new update of the Electricity tariff by 5 €/MWh, again explained by the increased wholesale prices, becoming effective from October 2021, onwards. The Dispatch nº 10376/2021, of June 22 nd , extends the deadline previously established in the nº1 of Dispatch nº 6453/2020, of June 19 th , about the conditions for the exemption of levies related to the costs of general economic interest (CIEG), for self-consumption and renewable energy communities, which use the public power grid and obtain the conditions for the exercise of its activity until the end of 2022. On June 30 th , the Ministerial Order nº138/2021 was published, defining the methodology to compute the remuneration rate of the special regime deferral, as well as a profit-sharing mechanism with electricity consumers is also enshrined. . Due to the increasing wholesale power prices, it was published the Regulation nº 951/2021, from ERSE, of November 2 nd , adopting new measures to ensure higher flexibility in supplier activities, avoiding additional costs and risks for the energy consumers and, in parallel, prevent any eventual problems with the exit of suppliers in the liberalized market. In the context of COVID-19 pandemic, a set of legislation was approved, aiming to adjust the activities of the energy sector to the new reality, defining measures to protect consumers and to establish procedures of continuity of activities, namely: • Decree-Law nº 6-E/2021, of January 15 th , establishing mechanisms of support in the context of the State of Emergency, such as the extraordinary support to consumers that benefits from the Social Tariff, due to the general lockdown, and to all residential consumers with contracted power equal or lower than 6.9 kVA, due to a period of very low temperatures. • Regulation nº 180/2021 from ERSE, of March 2 nd , which, given the continued pandemic context, sets exceptional measures to support consumers, such as rules for the payment of energy bills by tranches. • Decree-Law nº 56-B/2021, of July 7 th (afterwards, changed by Decree-Law nº70-A/2021, of August 6 th ), which establishes, among others, the prohibition to suspend the supply of essential services (such as electricity and natural gas) up to December 31 st 2021, with effects from July 1 st 2021, for consumers that suffered from unemployment, a decrease of at least 20% in their income or from COVID-19 infection. • Regulation nº 836/2021 from ERSE, of September 7 th , which extends the exceptional measures of supply of energy up to December 31 st 2021, thus extending the measures defined in Regulation nº 180/2021 from ERSE. • Decree-Law nº 119-B/2021, of December 23 rd , forbidding the suspension of the supply of essential services until March 31 st , 2022, again for consumers that suffered from unemployment, a decrease of at least 20% in their income or from COVID-19 infection. Regarding the electricity sector tariff debt, the tariffs foresee an ex-ante debt by the end of 2021 of €1,709 million, which corresponds to a reduction of €1,048 million compared to the debt amount at the end of 2021. An annual reduction of the tariff debt total amount has been observed since 2015, year which it reached its peak, according to the sector’s sustainability target. Spain Given the escalation in energy prices that occurred in the second half of 2021, some relevant measures have been adopted by Government in order to reduce the impact of energy costs on consumers, mainly: • the reduction of Value Added Tax for electricity bills of certain customers from 21% to 10% and the suspension of the 7% tax on the value of electricity production, both measures established through the Royal Decree-Law 12/2021 in June; 84 • the introduction in the wholesale and retail electricity and natural gas markets of certain exceptional measures through Royal Decree-Law 17/2021 and Royal Decree-Law 23/2021 in September and October, respectively: (i) reduction of the Special Tax on Electricity from 5.1% to 0.5%; (ii) introducing a mechanism to reduce the alleged over- remuneration of certain facilities due to the marginal cost price setting of the energy market; (iii) new type of long-term power purchase auction and (iv) measures to extend protection to vulnerable consumers like increases the discounts of the electricity social bond from 40% to 70% for severe vulnerable consumers and from 25% to 60% for the remaining vulnerable consumers and prohibition of cut off of the electricity supply. Regarding other regulatory developments published during 2021, at the beginning of the year was approved the Circular 1/2021 of CNMC, regarding the methodology and conditions of access and connection to the electricity transmission and distribution networks by electric power producers. Likewise, the Government completed the regulation of electricity charges (that are aimed to finance other costs of this sector, namely the ones from the energy policies) with Royal Decree 148/2021 and Ministerial Order TED/371/2021. Regarding gas charges, the Government also published the Ministerial Order TED/1023/2021. In May 2021, the Spanish Parliament approved a law on climate change and energy transition (Law 7/2021), which will bring the country into line with the EU’s goal to become carbon neutral by 2050. As an intermediate target, the law targets to cut emissions 23% by 2030, compared with 1990 levels. Regarding the renewables’ sector, the law foresees a reform of the electricity sector aimed at fostering: (i) the participation of consumers in the markets including aggregation and demand response and (ii) investment in variable and flexible renewables, distributed generation and energy storage among others. A fiscal reform is also foreseen focused on green taxation. In December, the Government released a proposal for the future law that will create the Fondo Nacional de Sostenibilidad para el Sistema Eléctrico (Power System Sustainability Fund), which aims to alleviate the electricity sector from the costs coming from the feed-in-tariffs of renewables, cogeneration and waste (RECORE). With this future law, which is expected to come into force throughout 2022, RECORE will be financed by consumers of electricity, natural gas and petroleum products. In addition, by the end of the year, CNMC has published the Informative Circular 8/2021 requesting information from electricity distribution companies for the supervision and calculation of the remuneration of the activity, that sets the regulatory framework of that activity and the properly implementation of the Circular 6/2019. Markets for EDP's renewable energy activities Evolution of renewables in the World Wind Global wind additions are expected to remain strong in 2021 4 , with analysts 5 forecasting around 81-93 GW of new capacity. If confirmed, total additions would probably slightly drop from the record-breaking installations seen in 2020 (93 GW), but considerably above the average of the last 5 five years. In 2021, the offshore wind sector continued on its astonishing growth trajectory. While analysts were forecasting around 11-14 GW of new installations worldwide, China reported that the country alone had commissioned 16.9 GW of new offshore capacity, which represents nearly half the world’s total installed capacity in 2020YE. Therefore, worldwide offshore wind installations could amount to more than 20 GW, meaning that around 15-20% of total wind additions could have been offshore (the largest share ever). China remains the largest offshore market, as 16.9 GW were installed in 2021, reaching a cumulative total offshore capacity of around 27 GW. Other large markets include Vietnam (~0.7 GW commissioned), Netherlands (~1.1 GW) and Denmark (~0.6 GW). In total, around 55 GW of offshore wind could be operating worldwide. 4 At the time of preparation of this report, final data from the Global Wind Energy Council (GWEC), the American Clean Power Association (ACP) or Wind Europe, had not been released 5 Experts consulted include: GWEC, IHS Markit, Bloomberg New Energy Finance, Wood MacKenzie, IEA, Wind Europe and American Clean Power Association, among others. 85 Overall, China has connected 48 GW of wind (and therefore, around 50% of worldwide wind additions), according to the National Energy Administration. It remains the largest onshore wind market and has also become the largest offshore wind market, overtaking the UK. In Europe, 2021 could prove to be a record year in wind installations. According to Wind Europe 6 , new wind facilities could account to 19.5 GW, mainly due to the high amount of projects that had suffered delays from the pandemic. 2021 could also prove to be a good year for offshore wind installations, with around 2-4 GW forecasted. Germany and Sweden are expected to remain the largest onshore markets, while Netherlands, Denmark and the UK could show positive offshore results. In Spain, wind became the leading energy source, overtaking nuclear and covering around 23% of total generation. In the US, renewables dominated new generating capacity additions in 2021. According to the American Clean Power Association, 7,248 MW of wind were installed in the first nine months of 2021. Latest data show that the cumulative wind power capacity amounts to 129 GW. In addition, the wind industry currently has around 40 GW of wind projects in the pipeline, of which 14 GW correspond to offshore wind projects, suggesting that the offshore sector is set to take off. Solar PV 2021 is on course to break a global record for solar PV growth. According to the International Energy Agency (IEA), nearly 160 GW of new solar facilities could have been connected 7 , despite skyrocketing commodity prices and supply chain disruptions. With those additions, nearly 900 GW of solar PV could be operating worldwide. The IEA stresses that Solar PV, the so-called “new king of the world’s electricity markets”, is becoming increasingly competitive. Other analysts consulted are forecasting 2021 additions ranging 145-183 GW and most of them believe that the 200 GW landmark could be surpassed as soon as in 2022. Utility-scale projects are expected to remain the engine of growth (in 2021, they represented around 60% of total solar PV additions). China remains the largest solar PV market worldwide, with around 53 GW 8 of solar PV installed in 2021, well above the previous year one (48.2 GW). The cumulative solar capacity reached 306 GW at the end of 2021, according to the latest data of the National Energy Administration (NEA). Other major markets in Asia include India (11.3 GW expected in 2021), Japan (6.1 GW) and Republic of Korea (4.1 GW). According to preliminary estimations provided by Solar Power Europe, the European Union could have added 25.9 GW of new solar PV capacity, becoming the best year in history. As in 2020, Germany was again Europe’s major solar market in 2021 with 5.3 GW of newly installed capacity, followed by Spain (3.8 GW), the Netherlands (3.3 GW), Poland (3.2 GW) and France (2.5 GW). In the US, 6.8 GW of solar PV capacity was installed in the first three quarters of the year, 18% more compared to the same period in 2020. With that, total solar installed capacity amounts to more than 54 GW. California is the leading solar State with more than 14 GW of installed capacity. Solar also accounts for the largest share of development activity, with nearly 60 GW of projects in the pipeline. In the American continent, other important markets are: Brazil (4.8 GW), Mexico (2.5 GW) and Chile (1.7 GW), according to IEA preliminary forecasts. 6 Wind Energy in Europe Statistics, 2020 7 “Renewables 2021”, published in December 2021 8 According to the National Energy Administration 86 Regulatory framework Spain: The first auction under the new auction framework (set by RD 960/2020) was held on 26 January 2021. In total 3,034 MW were awarded: 2,036 MW of solar PV projects (at an average price of 24.47 €/MWh) and 998 MW of onshore wind (at an average price of 25.31€/MWh). Winning bids were awarded 12-year power purchase agreements (PPAs). The second renewables auction of 2021 was held on October 19, awarding 2,258 MW capacity for onshore wind projects (at an average price of 36.68€/MW) and 866 MW solar PV (at an average of 31.65€/MWh) to the winners. Portugal: DL 35/2013 introduced the tariff extension regime for wind producers: in exchange of 5.8 k€/MW payment from 2013 to 2020, producers were entitled to enter a cap and floor regime of 74 and 90 €/MWh during seven years once the initial tariff is exhausted. Both payments and cap and floor values were subject to indexation: • From 2023 to June 2020 based on the Kn factor, which envisages an annual adjustment for the difference between CPI and 2% • After June 2021 with CPI, applied over the reference value So far, ERSE has applied literally the indexation formulas, that is, individually on each year, without cumulation. Dispatch n.º 6304/2021, published in June 2021, set that kn shall be applied on a cumulative basis, meaning that in 2020 the initial floor value of 74 €/MWh would change to 66 €/MWh. The Dispatch mandated ERSE to regularize payments and to apply the new methodology from July 2021 onwards. France: In April 2021, the Energy Regulator (CRE) released the new set of rules (“Cahier des Charges”) that will govern auctions from 2H 2021 until 2026. According to the document, there will seven types of tenders for a total of 34 GW of new renewable capacity, including: (i) ground-mounted solar PV, (ii) building-mounted solar PV, (iii) onshore wind, (iv) hydro, (v) innovative solar, (vi) self-consumption and (vii) technology neutral tenders. Winning projects will be supported by 20-year CfD MAP WITH WIND AND SOLAR CAPACITY ADDITIONS IN SOME REGIONS OF THE WORLD EUROPE Wind Onshore 20 GW Wind Offshore 3 GW Solar PV 26 GW CHINA Wind Onshore 31 GW Wind Offshore 17 GW Solar PV 53 GW INDIA Wind Onshore 2 GW Solar PV 11 GW USA¹ Wind Onshore 7 GW Solar PV 7 GW BRAZIL Wind Onshore 3 GW Solar PV 5 GW WORLD Wind Onshore 80 GW Wind Offshore 22 GW Solar PV 185 GW 1 — US data refers to the third quarter of 2021. 87 Italy: The Italian government released the so-called “Decreto Semplificazione” in May 2021 and was officially converted into law in July. The Decree seeks to simplify administrative procedures (in particular, regarding public procurement and concessions). It defines the regulatory framework aimed at simplifying and facilitating implementation of the goals and objectives established in its “National Recovery and Resilience Plan” and in its “National Energy and Climate Plan”. It also rationalizes the role of the Minister of Culture, whose opinion would not be binding in locations outside protected areas, and it provides a series of measures aimed at streamlining the obtention of the VIA (environmental authorization). The Italian energy agency (GSE) conducted in September 2021 the 7 th clean energy auction for projects with capacities above 1 MW, allocating 594 MW of renewable projects. The auction was undersubscribed as the government had initially planned to award 2 GW of new projects. In total, 298 MW of solar and 296 MW of wind were awarded. All developers offered a discount ranging from 2-2.6% from the auction ceiling price of 70€/MWh. UK: In September 2021, the Department for Business, Energy and Industrial Strategy (BEIS) formally announced the Fourth Allocation Round (“AR4”) of the CfD scheme, that opened in December 2021 with a target of 12 GW of capacity set to receive £285 million of support. Offshore wind will be supported by £200 million (in 2012 real terms), including £24 million ringfenced for floating offshore wind. Solar PV and onshore wind will be included in the scheme for the first time since 2015, supported by £10 million and with a cap of 3.5 GW per technology or 5 GW together. Poland: In February 2021, the Polish Government announced the approval of the “Poland’s energy policy until 2040”, which is based on 3 pillars: a just transition, a zero-emission energy system and a good air quality. According to the document, in 2040, zero-emission sources will constitute more than half of the installed capacity, with special focus on offshore wind and nuclear power plants. In the adopted assumptions, the use of coal for electricity production is expected to drop to 37% in 2030 (being the current level 70%) and 28% in 2040. After months of consultations, the offshore wind law was finally published in February 2021. The law set the regulatory framework for the development of offshore wind energy in the Baltic Sea. The regulation approved a new remuneration scheme for offshore wind, that will be introduced in two phases. In the first one, support will be granted by administrative decision (for a total of 5.9 GW). Then, in a second phase, support will be granted via competitive auctions, with the first auction taking place in 2025. A new renewable auction was held in June 2021, awarding CfDs to 1.2 GW of solar PV and 0.3 GW of onshore wind. In December 2021 another auction was held. It was awarded to 570 MW of PV and 460 MW of onshore wind at an average price of 228 PLN/MWh. Greece: The latest renewable auction was held in May 2021, for both wind and solar PV although all the available capacity was win by solar PV projects (350 MW). The European Commission approved in November 2021, under EU State aid rules, a €2.27 billion Greek scheme for the production of electricity from renewable sources and high efficiency combined heat and power (CHP). This approval came after Greece notified the Commission of its intention to approve a new scheme to support electricity for renewable sources. For both onshore wind and solar installations, support will be awarded through a joint competitive tendering procedure (although separate auctions are also envisaged in case targets are not met). Winning projects will be awarded two-way contract-for-difference contracts. The scheme is expected to start in March 2022 and will be opened until 2025. Romania: On 29 October 2021, the Romanian Parliament Endorsed Law 259/2021, which approved and put into action Government Emergency Ordinance 118/2021. The Ordinance immediately came into force on 1 November. It contains measures to alleviate the burden of the current rise in energy price such as direct financial support and a reduction of taxes paid by end- 88 consumers. Also, the Law includes a windfall tax for electricity producers: until 31 March 2022, the additional income obtained by electricity producers and resulting from the difference between the average monthly selling price of electricity and the price of RON 450/MWh will be taxed at 80%. However, this tax only applies to CO2-free generation facilities and will not apply to producers of electricity based on fossil fuels, including cogeneration. Brazil: On March 23 rd , 2021, ANEEL published the rules to compensate the lack of wind generation due to grid curtailments caused by systemic electrical limitations. The regulation for solar plants is expected for 2022. On December 6 th , 2021, ANEEL published the normative resolution for the implementation of hybrid power plants, allowing potential synergies in terms of grid costs and energy production. In the same month, MME announced the regulated auc- tions scheduled for the next three years by means of Portaria MME nº 32/2021. A A-4 new energy auction will take place in May 27 th ,2022 starting supply as of January 1 st 2026\. US: In 2021, Democrat Joe Biden was inaugurated as President and the 117 th Congress was inaugurated with Democratic majorities in both the House & Senate. Prior to the election, both President Biden and key members of Congress had indicated a willingness to pass meaningful climate legislation including, but not limited to, new tax credits for renewable energy and transmission, national targets for clean energy, funding for electric vehicles, and other various proposals. In November 2021, Congress passed the Infrastructure Investment and Jobs Act, which fulfilled some of these proposals - including funding for grid upgrades, certain demonstration projects of renewable energy and storage, clean hydrogen production hubs, and electric vehicle charging stations. Also in November 2021, the US House of Representatives passed a version of the "Build Back Better" bill which included, among other things, tax credit extensions for renewable energy and storage. However, negotiations around this legislation stalled in the Senate - leaving the future of this legislation unclear. Canada: In August 2021, Prime Minister Justin Trudeau called a snap Federal election for an election date of September 20 th , 2021. After a 36-day campaign, Justin Trudeau's Liberal party added two seats to its previous totals. In terms of energy policy, the election results effectively solidified the Liberal party's ability to continue increasing federal carbon prices towards a goal of $170 CAD/ton by 2030. As currently configured, the tax is set at $50/ton in 2022 and slated to increase by $15/ton each year until 2030. Mexico: In March 2021, a modification of the Ley de la Industria Eléctrica ("LIE") proposed by Mexican President Andres Manuel López Obrador passed through both houses of congress where his MORENA party holds majorities. The law prescribes dispatch not on an economic basis, but rather prioritizing capacity owned by Comisión Federal de Electricidad ("CFE"), the state-owned electric utility of Mexico. On March 19, 2021, a federal judge granted an indefinite suspension of the LIE modification, protecting all participants in the market from its implementation. On October 1 st 2021, President Andrés Manuel López Obrador introduced to the Chamber of Deputies a bill to overhaul the electricity sector through a constitutional reform. The electricity reform contemplates the policies including cancelling all generation permits granted to private electricity companies, establishing a minimum market share of 56% for CFE in generation and distribution, eliminating the Energy Regulatory Commission ("CRE") and the independent system operator National Center of Energy Control ("CENACE"), and transferring their faculties to CFE. Anticipating that the opposition will reject the initiative, the President stated that he would present it anyway because it is important that “the people know that if the CFE is to be strengthened it cannot struggle with unfair competition from private foreign companies”. It is broadly expected that this initiative will be rejected by the opposition. 89 Brazil Macroeconomic context In Brazil, as well as in other geographies previously described, the 2021 year was marked by the recovery from the global shock caused by COVID-19 pandemic in 2020. From January to September 2021, GDP 9 increased by 5.7% in the relation to the same period last year. In this period, industry (+6.5%) and services (+5.2%) had a positive growth, while agriculture fell by 0.1%. Despite the supply chain disruptions and lack of raw materials that has been observed during 2021, there was an expressive growth of the industrial 10 output. From January to November 2021, industrial output rose by 4.7% year-on-year, with positive results in all large economic categories, 18 out of 26 branches and 65% of the 805 products surveyed. The increase in social mobility, due to the easing of lockdown restrictions, fueled the growth of the services 11 sector, with a 10.9% rise in the first eleven months on 2021, compared with the same period of the previous year. The main contributions came from the transports, ancillary services to transports and post mail (15.1%) and information and communication (9.4%). The retail 12 services also benefited from increased social mobility, with a cumulative increase of 2.6% up to October 2021. Nevertheless, there was an escalation of inflation 13 (driven by the increased oil prices, dollar appreciation and hydro crisis in Brazil), which posted a 10.06% growth at the end of 2021, which is becoming an increasing concern that could limit economic recovery. Focusing on the labor market, the average real income fell on the quarter, standing at R$ 2,449 at October 2021, the lowest value of the whole historical series that began in 2012. Still, the unemployment rate (12.1%) 14 was reduced by 1.6 p.p., in the moving quarter from August to October 2021, when compared with the quarter from May to July 2021 (13.7%) and by 2.5 p.p. if compared with the same moving quarter of 2020 (14.6%). Regulatory framework The 2021 year was marked by the effects from the pandemic and from the hydro crisis, the worst one of the last 91 years. Additionally, there were some developments in key measures considered as structural by the sector. Worth noting that as of January 1 st 2021, the short-term price (PLD) comes into effect in an hourly basis, after two years of shadow operation, and thus replacing the previous weekly PLD. Although, since the previous year, the ONS has been operating based on the new dispatch model results, just in 2021 the hourly PLD became effective for the purpose of commercialization. The main regulatory topics of 2021 to highlight are: (i) Provisional Measure 1031/2021 – Eletrobras privatization On February 23 rd , the Federal Government released the Provisional Measure 1031/2021, which addresses the privatization of Eletrobras. In summary, the privatization will occur by an increase of capital, which could be accompanied by a secondary stock offer, if the operation does not reach the necessary level for the loss of control of the company. Furthermore, the Provisional Measures brings other highlights: • Application of 50% (instead of one-third) of the resources to be paid to CDE for the tariff; • 30-years extension of the hydro concession of Tucuruí; • Authorization for new concessions of generation plants in 30 years, removing plants that are under the quotas regime, and forbidding the mechanism of sharing of hydrological risk. 9 “Instituto Brasileiro de Geografia e Estatística” (IBGE). Quarterly national accounts. July/September 2021. 10 IBGE. Monthly Survey of Industry - Physical Production. November/2021 11 IBGE. Monthly Survey of Services. November/2021 12 IBGE. Monthly Survey of Retail. November/2021 13 IBGE. National System of Consumer price indexes IPCA and INPC – December/2021. 14 IBGE. Continuous National Household Sample Survey. November/2021 90 (ii) Provisional Measure 1055/2021 – Creates the “House of Excepcional Rules for Hydro management” (CREG) On June 28 th , the Federal Government published the Provisional Measure 1055/2021, which created the CREG. Its main responsibility is to adopt measures, from the definition of inter-ministerial group, to ensure the supply of electric energy in the country, due to the hydro crisis and consequent low storage levels in the reservoirs of hydro plants. The roles attributed to CREG are: • To define mandatory guidelines for, temporarily, establishing limits of use and management of hydro power plants and eventual mitigation measures associated to those limits; • To set deadlines for the guidelines referred in the previous item; • To request and define deadlines to the flows of data and technical issues; and • Decide about the approval of recommendations from the Power Sector Monitoring Committee (CMSE), related to the emergency measures, aiming to have a mandatory character in the compliance of these decisions. (iii) Result of the Public Hearing n° 35/20 – Impacts of the pandemic in the economic and financial equilibria of the distribution Companies In November 23 rd , ANEEL approved a methodology to compute the effects of the pandemic in the oversupply and financial equilibria of distribution companies, as well as the financial costs of COVID-Account. It was changed the understanding regarding some items of Parcel A (in particular, the difference between the amount received and the effective regulated assets, as well as part of the CVA of the previous tariff period). Previously these amounts were to be allocated to distribution companies, but now these costs should be allocated to consumers. Furthermore, to recognize the losses from bad debt from clients, the criteria should now include a more broad analysis. (iv) Provisional Measure 1078/2021 – Measures to mitigate the economic and financial effects of the hydro crisis On December 13 th , the Provisional Measure (PM) 1078/2021 was released, addressing measures to mitigate the economic and financial effects from the hydro scarcity in 2021, which is the worst one of the last 91 years (“Conta-Escassez Hídrica”). This law allows the use of CDE for collecting resources for the amortization of financial operations related to hydro scarcity context, as well as the deferrals from previous tariff processes. The aim of this PM if to allow distribution companies to consider their additional costs driven by the hydro crisis. These costs will be passed-through all consumers, including regulated consumers that move to the ACL. Furthermore, the PM allows the creation of an extraordinary tariff flag to cover all extraordinary costs caused by the hydro crisis. This flag will not be applied to low income consumers that benefit from the Social Tariff. The content of the PM awaits for discussion and approval in the National Congress. After the approval, the publication of a decree must set the conditions and terms for financing, after which it must follow to ANEEL. (v) Law 14300/2022 – Legal Framework for Distributed Generation On January 7 th 2022, the Law 14300/2022 was published, creating a regulatory framework for the development of Distributed Generation (DG) in the country. In summary, a transition period was established for the charge of levies over energy injected in the grid, offering improved legal security and regulatory stability to this type of investments, thus incentivizing clean energies. The main topics of this law are described below: • Existing installations (current model up to 2045): Mini and micro generators already established will only pay a component of the tariff over the difference, if positive, between total consumption and energy production injected in the distribution grid, up to 2045. The waiver will also apply to new investments, if the access to distributor is requested within two months after the publication of the law; • New installations (Tariff Transition): it is created a transition period, of six to eight years, for the payment of distribution charges, with a gradual percentual increase up to 2028. The difference will be borne by distribution companies through CDE. 91 Risk management in the year The risk management at EDP Group looks for acting in an integrated way across 5 fundamental pillars: RECURRENT ACTIVITIES DEVELOPMENTS IN 2021 PRIORITIES FOR 2022 IN-DEPTH KNOWLEDGE ABOUT KEY SOURCES OF RISK EXPOSURE Mapping of key risks (and representation in a structured taxonomy). Quantitative analysis of exposures (based on average and maximum loss). Identification of scenarios with disruptive potential and risks for Business Continuity. Presence in national and international forums on the resilience of critical assets. Development of a risk map with the key risks of 2022. Deepen TCFD recommendations, concretizing the scenario and quantification through the creation of a process of climate risk assessment. Review of taxonomy and quantification of operational risks. Update the annual exercise of risk map with the key risks of 2023. Update the annual exercise of climate risk assessment. In-depth analysis of supply chain risk management. DEFINITION OF MANAGEMENT STRATEGY Support the clarification and reflection around risk-return trade-offs (and risk appetite) in key management decisions. Periodical update of the risk appetite statement disclosed in the Annual Report. Support in defining specific strategies for Business Continuity. Consolidation of risk-return methodologies (marginal cost of risk). Alignment of EDP Group's Risk Appetite Statement with the new Business Plan for 2021-25. Establishment and monitoring of a plan to improve operational risk management practices. Establishment of the Operational Risk Appetite Statement and update of the framework. Strengthening the integrated management of energy markets and counterparty risks, namely by revising quantification methodologies, exposure limits and mitigation instruments. Assessment and self-reflection on the maturity of the enterprise risk management framework ACTIVE PARTICIPATION OF RISK IN KEY DECISIONS AND MANAGEMENT PROCESSES Risk advice/ support for the Business Plan and Budget exercises. Support for investment decisions (incl. participation in Investment Committee). Support the definition of coverage strategies for key exposures. Analysis and advice on topics with possible impact in the risk profile of the Group. Follow-up and control of key exposures (through periodical reports at Group level and for the most relevant BUs). Periodical Risk Committees (for debate of key sources of risk exposure and treatment measures). Monitoring and support of impact analysis and risk assessment, as part of Business Continuity Update and standardization of risk policies. Risk analysis and asset composition for the Group’s Pension Fund. Support the strengthening, standardization and formalization of practices for Crisis Management and Business Continuity. Analysis of the risk profile of EDP Group, considering different asset portfolios. Analysis of vertical integration of generation and retail as a mean to mitigate risk. Establishment of a Committee to monitor Business Continuity and Crisis Management activities. Risk analysis for the EDP Group Budget for 2023. Structural integration of the ESG into risk management processes. Monitoring the level of risk and implementation of mitigation measures in the energy markets. 3.5. 92 RECURRENT ACTIVITIES DEVELOPMENTS IN 2021 PRIORITIES FOR 2022 FORMALIZATION OF RISK GOVERNANCE MODEL Establishment of policy and principles for risk management at EDP Group. Monitoring the adoption of the model for Crisis Management and Business Continuity. Continuous disclosure of the risk governance model, and integration of the corporative structure with risk-officers of BUs giving visibility over key risk topics to top management. Establishment of structures and governance for Crisis Management for the EDP Group. Definition of policy and support practices for operational risk management. Support the dynamization of risk- officers network and consolidation of the risk management function (in BUs with more recent risk governance models). Review of the enterprise risk management policy, resulting from the recommendations of the assessment underway. Monitoring the adoption of the policy and support practices for operational risk management. PROMOTION OF A SOLID RISK CULTURE, TRANSVERSAL TO THE ORGANIZATION Development of a wide set of initiatives for awareness, customized for different audiences: • Sessions for top management. • Courses at EDP University for specialists, senior and intermediate managers.Specialized courses for all employees (e.g., ethics, health and safety, cyber security). Business Continuity meetings and newsletter. Development of multiple sessions dedicated to risk: • Top management (executive and non-executives): four Risk Committees dedicated to the analysis of the main risk topics with executive top management; participation in two sessions of the Financial Matters Committee, and also one session highlighting the main risk topics (incl. strategy, business, financial and operational risks) with the General and Supervisory Board. • Risk-officers meeting: development of a workshop with the risk-officers network of EDP Group, to share best practices. • Business Continuity meeting: holding a session with the Group's network of interlocutors to share best practices. • Establishment of an E- learning on resilience, operational risk and Business Continuity. • Transversal exercise of strategic crisis management, with the participation of the EBD and Board of Directors. Consolidation of the risk culture strengthening programs. Development of a risk-officers meeting to share best-practices. In 2022, it is planned the creation of a Safety, Security & Business Continuity corporate area that will include all matters related to crisis management and business continuity and will work in strict articulation with the risk management of EDP Group. CHANGING TOMORROW NOW 94 95 Giving energy transition the right color. GREEN 96 97 04 — CORPORATE GOVERNANCE PART I - INFORMATION ON OWNERSHIP STRUCTURE, ORGANIZATION AND CORPORATE GOVERNANCE A. OWNERSHIP STRUCTURE 98 I. Capital Strucuture 98 II. Shareholdings and bonds owned 100 B. CORPORATE BODIES AND COMMITTEES 109 I. General meeting 109 Composition of general meeting 109 Exercise of voting rights 110 II. Management and supervision 112 Composition 112 Operation 134 Committees of managing or supervisory body 135 III. Supervision 141 Composition 141 Operation 142 Powers and duties 142 IV. Statutory auditor 143 V. External auditor 144 C. INTERNAL ORGANIZATION 147 I. Articles of association 147 II. Whistleblowing 147 III. Internal control and risk management 148 IV. Investor relations 167 V. Website 168 D. REMUNERATION 169 I. Power to set remuneration 169 II. Remuneration committee 170 III. Remuneration structure 170 IV. Disclosure of remuneration 175 V. Agreements affecting remuneration 179 VI. Stock purchase option plans or stock options 179 E. TRANSACTIONS WITH RELATED PARTIES 180 I. Mechanisms and procedures of control 180 II. Business information 182 PART II -ASSESSEMENT OF CORPORATE GOVERNANCE 183 1\. Corporate governance code in effect 183 2\. Compliance assessement of the adopted corporate governance code 183 3\. Other information 213 Annex I. Corporate bodies’ biography 214 Annex II. Attendance list of the general supervisory board 226 Annex III. Attendance list of the executive board of directors 227 Annex IV. Positions held in other companies 229 Annex V. Attendance list of financial matters committee/audit committee 230 98 PART I Information on Ownership Structure, Organisation and Corporate Governance A. Ownership Structure I. Capital Structure 1\. Capital Structure The share capital of EDP – Energias de Portugal, S.A. (Company or EDP) is of EUR 3,965,681,012 and is fully paid up, according to Article 4 of EDP's Articles of Association, being represented by 3,965,681,012 ordinary shares, which have a face value of 1 euro each. The geographical and investor type breakdown of the EDP shareholder structure on 31 December 2021 was as follows: Source: Interbolsa 2\. Restrictions on Share Transferability In statutory terms the shares are not subject to any limitations in terms of transferability, given that, according to the Portuguese Securities Code, shares traded in the market are fully transferable. 3\. Treasury stock As at 31 December 2021, EDP owned 19,103,158 treasury stock shares, corresponding to 0.48% of the share capital. 99 At the General Shareholders’ Meeting held on 14 April 2021, shareholders resolved on the granting of authorization to the Executive Board of Directors for the acquisition and sale of own shares by EDP and subsidiaries of EDP for an eighteen- month period as from the proposal approved in the General Meeting. 4\. Change of company control EDP has not entered into any significant agreements that come into force, are amended or terminate in the event of a change in control of the Company following a takeover bid, except for normal market practice in terms of debt issuance. In fact, EDP is usually a party in financing agreements and issuer of bonds that include change of control clauses, which are typical set forth in such agreements and securities and are necessary for the completion of transactions, not considering that its existence is likely to harm the economic interest in the transfer of EDP shares, nor the free assessment by shareholders of the directors' performance. 5\. Defensive measures EDP has not taken any measures to prevent takeover bids that would put the interests of the Company and its shareholders at risk. The supplementary rules on this matter remain thus in force. In this regard, it is important to note that, pursuant to Article 14 (3) of EDP's current Articles of Association, votes cast by a shareholder on his own behalf or representing another will not be considered if they exceed 25% of all the votes corresponding to the share capital. Although EDP's Articles of Association impose this limitation on the exercise of voting rights, this limitation is not a measure to prevent successful takeover bids. In fact, the inability of the limitation on voting rights to prevent the success of a takeover bid is the result of EDP's current capital structure and of the compliance of the deliberative quorum of two-thirds of the votes cast, which is set out in EDP's Articles of Association for an amendment to the company agreement on this matter with Article 182 - A (2) of the Portuguese Securities Code. No defensive measures have been taken aimed at or resulting in serious erosion of EDP's assets in the event of transfer of control of the company or a change in the composition of the Executive Board of Directors, thereby prejudicing the free transferability of the shares and free appraisal by the shareholders of the performance of the members of the Executive Board of Directors. 6\. Shareholder agreements According to the Article 7 of EDP's Articles of Association, shareholder agreements regarding the Company must be communicated in full to the Executive Board of Directors and the General and Supervisory Board by the shareholders that have signed them in the 30 (thirty) days following their conclusion. According to information provided to the Company by the shareholders, the Executive Board of Directors is aware of the existence of a single shareholder agreement, which was entered into on 11 April 2007 by Parpública, Caixa Geral de Depósitos, S.A. ("CGD") and Société Nationale pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbures ("Sonatrach"). Although Parpública has sold its shareholdings in EDP's share capital and CGD does not own a qualifying shareholding in EDP's share capital, according to information at EDP's disposal this does not represent automatic cessation of the effects of the shareholder agreement. EDP has not been informed of any agreement to revoke or amend the said shareholder agreement. 100 EDP and Sonatrach agreed to terminate the partnership entered into in 2007, under which EDP assumed full control of the combined cycle natural gas plant, Soto 4, in Spain, with an installed capacity of 426MW, through the acquisition of 25% stake held by Sonatrach, and terminates the commercial relations with Sonatrach that were associated with this partnership. II. Shareholdings and Bonds Owned 7\. Qualifying holdings Pursuant to Article 8 (1) (b) of CMVM Regulation 5/2008, we are providing the following information on qualifying holdings owned by EDP shareholders as at 31 December 2021 and attributable voting rights in accordance with Article 20 (1) of the Portuguese Securities Code. SHAREHOLDER NR. OF SHARES % CAPITAL WITH VOTING RIGHTS CHINA THREE GORGES CORPORATION (*) Yangtze Three Gorges Investment Management Co.,Ltd China Three Gorges International Corporation China Three Gorges International Limited China Three Gorges (Europe), S.A. 760.872.884 19,19% Total 760.872.884 19,19% China Three Gorges (Europe), S.A. is fully owned by China Three Gorges International Limited, which is fully owned by China Three Gorges International Corporation. China Three Gorges Corporation holds 70% of the share capital of China Three Gorges International Corporation and fully owns Yangtze Three Gorges Investment Management Co. Ltd. Yangtze Three Gorges Investment Management Co. Ltd holds 30% equity of China Three Gorges International Corporation. (*) On 4 February 2022, pursuant to market disclosure, China Three Gorges (Europe) S.A. informed EDP that held a shareholding of 801,947,605 shares corresponding to 20.22% of the share capital of EDP. BLACKROCK, INC.(2) BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock International Holdings, Inc. BR Jersey International Holdings L.P. BlackRock (Singapore) Holdco Pte. Ltd. BlackRock HK Holdco Limited BlackRock Lux Finco S.a.r.l. BlackRock Japan Holdings GK BlackRock Japan Co., Ltd. BlackRock Holdco 2, Inc. BlackRock, Inc. Trident Merger, LLC BlackRock Investment Management, LLC BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock International Holdings, Inc. BR Jersey International Holdings L.P. BlackRock Holdco 3, LLC BlackRock Cayman 1 LP BlackRock Cayman West Bay Finco Limited 101 SHAREHOLDER NR. OF SHARES % CAPITAL WITH VOTING RIGHTS BlackRock Cayman West Bay IV Limited BlackRock Group Limited BlackRock Finance Europe Limited BlackRock Investment Management (UK) Limited 2.16% BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock International Holdings, Inc. BR Jersey International Holdings L.P. BlackRock Australia Holdco Pty. Ltd. BlackRock Investment Management (Australia) Limited BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock International Holdings, Inc. BR Jersey International Holdings L.P. BlackRock Holdco 3, LLC BlackRock Cayman 1 LP BlackRock Cayman West Bay Finco Limited BlackRock Cayman West Bay IV Limited BlackRock Group Limited BlackRock International Limited BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock Holdco 4, LLC BlackRock Holdco 6, LLC BlackRock Delaware Holdings Inc. BlackRock Institutional Trust Company, National Association BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock Holdco 4, LLC BlackRock Holdco 6, LLC BlackRock Delaware Holdings Inc. BlackRock Fund Advisors 2.0% BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock International Holdings, Inc. BR Jersey International Holdings L.P. 102 SHAREHOLDER NR. OF SHARES % CAPITAL WITH VOTING RIGHTS BlackRock (Singapore) Holdco Pte. Ltd. BlackRock HK Holdco Limited BlackRock Asset Management North Asia Limited BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock International Holdings, Inc. BR Jersey International Holdings L.P. BlackRock Holdco 3, LLC BlackRock Cayman 1 LP BlackRock Cayman West Bay Finco Limited BlackRock Cayman West Bay IV Limited BlackRock Group Limited BlackRock Finance Europe Limited BlackRock (Netherlands) B.V. BlackRock Asset Management Deutschland AG BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock International Holdings, Inc. BR Jersey International Holdings L.P. BlackRock Holdco 3, LLC BlackRock Canada Holdings LP BlackRock Canada Holdings ULC BlackRock Asset Management Canada Limited BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock Capital Holdings, Inc. BlackRock Advisors, LLC BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. BlackRock International Holdings, Inc. BR Jersey International Holdings L.P. BlackRock Holdco 3, LLC BlackRock Cayman 1 LP BlackRock Cayman West Bay Finco Limited BlackRock Cayman West Bay IV Limited BlackRock Group Limited BlackRock Finance Europe Limited BlackRock Advisors (UK) Limited BlackRock, Inc. BlackRock Holdco 2, Inc. BlackRock Financial Management, Inc. 103 SHAREHOLDER NR. OF SHARES % CAPITAL WITH VOTING RIGHTS BlackRock International Holdings, Inc. BR Jersey International Holdings L.P. BlackRock (Singapore) Holdco Pte. Ltd. BlackRock (Singapore) Limited BlackRock, Inc. Trident Merger, LLC BlackRock Investment Management, LLC Amethyst Intermediate, LLC Aperio Holdings, LLC Aperio Group, LLC Total 292,858,021 7.38% The qualified shareholding above mentioned refers to the communication from BlackRock, Inc. occurred on 19 August 2021. OPPIDUM CAPITAL, S.L. Oppidum Capital, S.L. 285,414,883 7.20% Total 285,414,883 7.20% According to paragraph 1(b) of article 20 of the Portuguese Securities Code, the voting rights inherent to the share capital held by Oppidum Capital, SL and Flicka Forestal, SL are imputable to Fernando Masaveu Herrero. Oppidum Capital, SL is 55.9% owned by Masaveu Internacional, S.L. and 44.1% owned by Unicaja Banco S.A. In turn, Masaveu Internacional, SL is 100% held by Corporación Masaveu, SA. Corporación Masaveu, SA is 41.38% held by Fundación María Cristina Masaveu Peterson, 10.73% by Flicka Forestal, SL and 0.03% by Fernando Masaveu Herrero. Fernando Masaveu Herrero controls Fundación María Cristina Masaveu Peterson, Flicka Forestal, SL and Peña Maria, S.L. Additionally, Fernando Masaveu Herrero’s spouse holds 18,467 shares of EDP’s share capital. Also, three dependents of Fernando Masaveu Herrero - Pedro Masaveu Compostizo, Jaime Masaveu Compostizo and Elias Masaveu Compostizo - hold each 542 shares of EDP's share capital. In this sense, in total, 7.20% of the voting rights of EDP, corresponding to 285,434,976 shares of EDP’s share capital, should be imputable to Fernando Masaveu Herrero. CANADA PENSION PLAN INVESTMENT BOARD CPPIB 204,634,446 5.16% Total 204,634,446 5.16% AMUNDI Amundi Asset Management 0.83% CPR AM 0.13% Amundi Hong-Kong Ltd 0.02% Etoile Gestion 0.01% Amundi SGR SpA 0.03% Amundi Taiwan Ltd 0.01% LYXOR Funds Solutions S.A 0.00% Lyxor International Asset Management S.A.S. 0.55% Lyxor Asset Management S.A.S. 1.06% Amundi Austria GmbH 0.00% Amundi Deutschland GmbH 0.00% Amundi Canada GmbH 0.00% Amundi Iberia SGIIC, SA 0.00% Amundi Japan Ltd 0.00% Total 104,421,359 2.63% The qualified shareholding above mentioned refers to the communication from Amundi Asset Management occurred on 10 January 2022. 104 SHAREHOLDER NR. OF SHARES % CAPITAL WITH VOTING RIGHTS NORGES BANK Norges Bank 95,783,685 2.42% Total 95,783,685 2.42% Norges Bank, the Central Bank of Norway, acts on behalf of the State of Norway. QATAR INVESTMENT AUTHORITY Qatar Holding LLC 89,915,722 2.27% Total 89,915,722 2.27% The company Qatar Holding LLC is wholly owned by Qatar Investment Authority. SONATRACH Sonatrach 87,007,433 2.19% Total 87,007,433 2.19% BANK OF AMERICA CORPORATION Bank of America Corporation NB Holdings Corporation BofAML Jersey Holdings Limited BofAML EMEA Holdings 2 Limited ML UK Capital Holdings Limited Merrill Lynch International Bank of America Corporation NB Holdings Corporation BAC North America Holding Company Bank of America, National Association Bank of America Corporation NB Holdings Corporation BofA Securities, Inc Bank of America Corporation NB Holdings Corporation BAC North America Holding Company Merrill Lynch, Pierce, Fenner & Smith Incorporated Managed Account Advisors LLC Bank of America Corporation NB Holdings Corporation BAC North America Holding Company Merrill Lynch, Pierce, Fenner & Smith Incorporated Bank of America Corporation NB Holdings Corporation BAC North America Holding Company Bank of America, National Association U.S Trust Company of Delaware 105 SHAREHOLDER NR. OF SHARES % CAPITAL WITH VOTING RIGHTS Bank of America Corporation NB Holdings Corporation BofA Securities, Inc. Merrill Lynch Professional Clearing Corp. Total 79,992,285 2.02% EDP (Treasury stock) 19,103,158 0.48% Remaining Shareholders 1,947,677,136 49.06% Total 3,965,681,012 100.00% 8\. Financial instruments owned by members of the management and supervisory bodies Financial instruments owned by members of the Executive Board of Directors The financial instruments held by the members of the Executive Board of Directors in office until 19 January 2021 were as follows: EDP – ENERGIAS DE PORTUGAL, S.A. EDP – ENERGIAS DO BRASIL, S.A. EXECUTIVE BOARD OF DIRECTORS (*) NO. SHARES 19-01-2021 NO. SHARES 31-12-2020 NO. SHARES 19-01-2021 NO. SHARES 31-12-2020 António Luís Guerra Nunes Mexia 101,093 101,093 1 1 João Manuel Manso Neto 1,375 1,375 \- \- António Fernando Melo Martins da Costa 58,915 58,915 \- \- João Manuel Veríssimo Marques da Cruz \- \- \- \- Miguel Stilwell de Andrade 151,904 151,904 \- \- Miguel Nuno Simões Nunes Ferreira Setas 8,104 8,104 6,000 6,000 Rui Manuel Rodrigues Lopes Teixeira 39,033 39,033 \- \- Maria Teresa Isabel Pereira 25,415 25,415 \- \- Vera de Morais Pinto Pereira Carneiro 7,000 7,000 \- \- (*) Between 31 December 2020 and 19 January 2021, the members of the Executive Board of Directors were not holders of EDP Renováveis, S.A.’s shares, and did not hold any bond of EDP – Energias de Portugal, S.A. In turn, the financial instruments held by the members of the Executive Board of Directors in office as of 19 January 2021 are as follows: EDP – ENERGIAS DE PORTUGAL, S.A. EDP RENOVÁVEIS, S.A. EDP – ENERGIAS DO BRASIL, S.A. EXECUTIVE BOARD OF DIRECTORS (1) No. SHARES 31-12-2021 No. SHARES 19-01-2021 No. SHARES 31-12-2021 No. SHARES 19-01-2021 No. SHARES 31-12-2021 No. SHARES 19-01-2021 Miguel Stilwell de Andrade 180,000 151,904 \- \- \- \- Miguel Nuno Simões Nunes Ferreira Setas 8,104 8,104 \- \- 6,000 6,000 Rui Manuel Rodrigues Lopes Teixeira (2) 39,433 39,033 100 \- \- \- Vera de Morais Pinto Pereira Carneiro 7,000 7,000 \- \- \- \- Ana Paula Garrido de Pina Marques \- \- \- \- \- \- (1) The Executive Board of Directors did not hold any bonds from EDP – Energias de Portugal, S.A. (2) Transactions carried out under the terms of article 19, no. 8 of Regulation (EU) no. 596/2014 of the European Parliament and of the Council, of 16 April 2014, worth less than 5,000.00 Euro (five thousand euros). 106 Financial instruments owned by members of the General and Supervisory Board The following chart presents the financial instruments held by or imputable to the General and Supervisory Board members, under the terms set forth in article 447 (5) of the Portuguese Companies Code. The financial instruments held or attributable to the members of the General and Supervisory Board in office until 14 April 2021 were as follows: EDP – ENERGIAS DE PORTUGAL, S.A. GENERAL AND SUPERVISORY BOARD (1) No. SHARES 14-04-2021 No. SHARES 31-12-2020 Luís Filipe Marques Amado \- \- China Three Gorges Corporation 754,736,441 854,736,441 Dingming Zhang (as representative of China Three Gorges Corporation) \- \- China Three Gorges International Corp. 754,736,441 854,736,441 Shengliang Wu (as representative of China Three Gorges International Corp.) \- \- China Three Gorges (Europe), S.A. 754,736,441 854,736,441 Ignacio Herrero Ruiz (as representative of China Three Gorges (Europe), S.A.) \- \- China Three Gorges Brasil Energia Ltda. \- \- Li Li (as representative of China Three Gorges Brasil Energia Ltda.) \- \- China Three Gorges (Portugal), Sociedade Unipessoal, Lda. \- \- Eduardo de Almeida Catroga (as representative of China Three Gorges (Portugal) Sociedade Unipessoal, Lda.) \- \- DRAURSA, S.A. \- \- Felipe Fernández Fernández (as representative of Draursa, S.A.) 1,350 1,350 Fernando Maria Masaveu Herrero 285,434,976 285,434,976 Senfora BV 54,095,476 54,095,476 Mohammed Issa Khalfan Alhuraimel Alshamsi (as representative of Senfora BV) \- \- Banco Comercial Português, S.A. 76,627,022 76,627,022 Nuno Manuel da Silva Amado (as representative of Banco Comercial Português, S.A.) \- \- Sonatrach 87,007,433 87,007,433 Karim Djebbour (as representative of Sonatrach) \- \- Maria Celeste Ferreira Lopes Cardona \- \- Ilídio da Costa Leite de Pinho \- \- Jorge Avelino Braga de Macedo \- \- Jorge Avelino Braga de Macedo \- \- Vasco Joaquim Rocha Vieira 3,515 3,515 Augusto Carlos Serra Ventura Mateus \- \- João Carvalho das Neves 8,060 8,060 María del Carmen Fernández Rozado \- \- Laurie Lee Fitch \- \- Clementina Maria Dâmaso de Jesus Silva Barroso \- \- Luís Maria Viana Palha da Silva 5,479 5,479 (1) Between 31 December 2020 and 14 April 2021, the members of the General and Supervisory Board did not hold any shares in EDP Renováveis SA and EDP – Energias do Brasil, SA, and did not hold any EDP – Energias de Portugal, S.A. bonds. 107 The financial instruments held or attributable to the members of the General and Supervisory Board in office as of 14 April 2021 are as follows: EDP – ENERGIAS DE PORTUGAL, S.A. GENERAL AND SUPERVISORY BOARD (*) No. SHARES 31-12-2021 No. SHARES 14-04-2021 João Luís Ramalho de Carvalho Talone \- \- China Three Gorges Corporation 760.872.884 754,736,441 Dingming Zhang (as representative of China Three Gorges Corporation) \- \- China Three Gorges International Limited 760.872.884 754,736,441 Shengliang Wu (as representative of China Three Gorges International Limited) \- \- China Three Gorges (Europe), S.A. 760.872.884 754,736,441 Ignacio Herrero Ruiz (as representative of China Three Gorges (Europe), S.A.) \- \- China Three Gorges Brasil Energia Ltda. \- \- Li Li (as representative of China Three Gorges Brasil Energia Ltda.) \- \- China Three Gorges (Portugal), Sociedade Unipessoal, Lda. \- \- Miguel Pereira Leite (as representative of China Three Gorges (Portugal) Sociedade Unipessoal, Lda.) \- \- DRAURSA, S.A. \- \- Felipe Fernández Fernández (as representative of Draursa, S.A.) 1,350 1,350 Fernando Maria Masaveu Herrero 285,434,976 285,434,976 João Carvalho das Neves 8,060 8,060 María del Carmen Fernández Rozado \- \- Laurie Lee Fitch \- \- Esmeralda da Silva Santos Dourado \- \- Helena Sofia Silva Borges Salgado Fonseca Cerveira Pinto \- \- Sandrine Dixson-Declève \- \- Zili Shao \- \- Luís Maria Viana Palha da Silva 5,479 5,479 (*) The members of the General and Supervisory Board do not hold any shares in EDP - Energias do Brasil, S.A. and EDP Renováveis S.A., nor do they hold any bonds in EDP - Energias de Portugal, S.A. 9\. Special powers of the managing body with regard to decisions to increase share capital The Executive Board of Directors has the powers enshrined in the law and Articles of Association to perform its duties, which are indicated in detail in item 21. In what concerns the approval of decisions on share capital increases, and according to Article 4 (3) of the Articles of Association, the Executive Board of Directors has the power to approve one or more share capital increases up to an aggregate limit of 10% of the current share capital via the issuance of shares to be subscribed by new entries in cash, in accordance with the issuance terms and conditions that it defines. The draft decision must be submitted to the General and Supervisory Board subject to a two-thirds voting majority of the respective members. The General Shareholders’ Meeting held on 14 April 2021 resolved to approve the renewal, for a period of five years, of the authorization granted to the Executive Board of Directors to increase the share capital of EDP, one or more times, up to a limit of 10% of share capital. 108 Additionally, the General Shareholders’ Meeting held on 14 April 2021 also resolved to amend the Company's Articles of Association under which authorization is granted to the Executive Board of Directors to increase the share capital, one or more occasions, until 14 April 2026, up to the maximum amount of 10% of the current share capital, through the issuance of shares, to be made by contributions in cash and subscribed by qualified investors following accelerated book-building offers, in accordance with the terms and conditions of the issuance to be defined by the Executive Board of Directors, provided that the issuance price is not lower than (i) 95% of the weighted average price of the shares in Euronext Lisbon on the date on which the issuance price is set, or (ii) 95% of the weighted average price of the shares in Euronext Lisbon in the maximum period of ten days ending on the date in which the issuance price is set, and provided that the proposed resolution is approved in advance by the General and Supervisory Board by a qualified majority of two thirds of votes cast. The authorizations granted to the Executive Board of Directors described in the two previous paragraphs are not cumulative, in the sense that any measures taken under one of these authorizations are written off to the maximum limit of the other. 10\. Significant business relationships between owners of qualifying holdings and the company In pursuit of its activity and regardless of its relevance, EDP conducts business with and enters into transactions under normal market conditions for similar operations with several entities, beyond which are included qualified shareholders of EDP or companies related to those. Thus, with reference to the 2021 exercise, it should be pointed out the performance of the following operations between companies of EDP Group and owners of qualifying holdings in EDP’s share capital: • EDP Group, through EDP Clientes, S.A. provided electricity and gas supply services as well as the installation of solar panels to the company Cementos Tutela Veguín in the amount of approximately 19.4 million Euros and the estimated total amount of which could be approximately of 33.7 million Euros (Cementos Tutela Veguín is a subsidiary of the Group Masaveu, which, in turn, holds 55.9% of the company Oppidum Capital, SL); • EDP Group provided payment management services to Liberbank in the amount of approximately 10,562 Euros. (Liberbank holds 44.1% of Oppidum Capital, SL). • EDP and Sonatrach agreed to terminate the partnership entered into in 2007, under which EDP assumed full control of the combined cycle natural gas plant, Soto 4, in Spain, with an installed capacity of 426MW, through the acquisition of 25% stake held by Sonatrach, and terminates the commercial relations with Sonatrach that were associated with this partnership. Additionally, and as disclosed to the market, (i) on 15 November 2021, EDP, through its subsidiary EDP Renováveis, S.A., signed a Sale and Purchase Agreement with China Three Gorges to sell a 100% equity stake in a 181 MW operating wind portfolio located in Spain for an estimated Enterprise Value of 307 million Euro (subject to customary closing adjustments), transaction that is subject to regulatory and other customary precedent conditions and (ii) on 10 December 2021, EDP and China Three Gorges agreed to update the partnership terms entered into in 2011 which considering the current context of the sector marked by the strong commitment to energy transition, aims to promote flexibility for the growth strategies of both companies, ensuring the application of the most rigorous corporate governance standards in the parties’ future relations and preserving the instruments of cooperation and sharing of best practices, in order to potentiate the maximization of value for both companies and their shareholders. As for the surrounding governance guidelines, on July 29, 2010, the General and Supervisory Board approved the first version of the “Regulation on Conflicts of Interest and Transactions with Related Parties”, which was subject to review during 2015, having been a new version approved on 29 October 2015. On 17 May 2010, the Executive Board of Directors approved the rules on identification, in-house reporting and procedure in the event of conflicts of interest applicable to all EDP Group employees who play a decisive role in transactions with related parties. Considering the amendments introduced by Law no. 50/2020, of 25 August, as well as the constant adoption of best practices by the Company, a review of the internal regulations that regulate conflicts of interest and business between related parties was promoted, having, in 2021, the Policy on Transactions with Related Parties came into force, and is available for consultation at EDP’s website, www.edp.com. 109 The General and Supervisory Board noted in relation to 2021, in view of the cases analysed and the information provided by the Executive Board of Directors, that no evidence was found that the potential conflicts of interest underlying the transactions made by EDP may have been settled contrary to the interests of the Company. The Financial Matters Committee / Audit Committee is responsible for supervising enforcement of the aforementioned policy and reports on its work to the General and Supervisory Board. B. Corporate Bodies and Committees I. General Meeting A) Composition of The General Meeting 11\. Name and position of officers of the General Meeting and their term of office Pursuant to Article 12 of EDP’s Articles of Association, the members of the Board of the General Meeting are composed by a Chairman, a Vice-Chairman, and the Company Secretary, who is appointed by the Executive Board of Directors. The members of the Board of the General Meeting in office until 14 April 2021 were as follows: BOARD OF THE GENERAL MEETING Chairman Luís Maria Viana Palha da Silva Vice Chairman Rui Pedro Costa Melo Medeiros Company Secretary Ana Rita Pontífice Ferreira de Almeida Côrte-Real(*) (*) Appointed by the Executive Board of Directors on 5 April 2018 for the position of Company Secretary, having also been appointed, on such date, Joana Gomes da Costa Monteiro Dinis, for the position of Alternate Company Secretary. The Company Secretary and the Alternate Company Secretary were reappointed by the Executive Board of Directors on 19 January 2021 following the Extraordinary General Shareholders’ Meeting held on such date. As of 14 April 2021, the composition of the Board of the General Meeting was as follows: BOARD OF THE GENERAL MEETING Chairman Luís Maria Viana Palha da Silva ( 1 ) Vice Chairman Clara Patrícia Costa Raposo ( 2 ) Company Secretary Ana Rita Pontífice Ferreira de Almeida Côrte-Real (1) The Chairman of the Board of the General Shareholders’ Meeting was re-elected at the General Shareholders’ Meeting held on 14 April 2021 for the 2021- 2023 three-year mandate. (2) The Vice-Chairman of the Board of the General Shareholders’ Meeting was elected at the General Shareholders’ Meeting held on 14 April 2021 for the 2021- 2023 three-year mandate. On 27 April 2021, Clara Patrícia Costa Raposo tendered her resignation from the office of Vice-Chairman of the Board of the General Shareholders’ Meeting of EDP. The Chairman of the General Meeting is automatically a member of the General and Supervisory Board, pursuant to Article 21 (2) of EDP’s Articles of Association. The Chairman of the General Meeting has the in-house human and logistic resources appropriate to his/her needs, including the support of the General Secretariat and Legal Department, the Investor Relations Office, the Communication Department, and the Brand Department plus external support from a specialised entity hired by EDP to collect, process, and count the votes. The logistic and administrative resources for the General Meeting are provided by the Company and the organisation is supervised by the Chairman of the Board of the General Meeting. 110 B) Exercise of Voting Rights 12\. Restrictions on Voting Rights Pursuant to Article 14 (2) of EDP's Articles of Association, each share corresponds to one vote. According to Article 14 (9) of EDP’s Articles of Association, the holders of rights representing shares under ADR (American Depositary Receipt) programs may instruct the respective depositary bank in order to see their voting rights exercised or, alternatively, grant proxy to a representative designated by EDP for such purpose, in compliance with applicable legal or statutory provisions; the depository contract should regulate terms and ways for exercising the voting rights, as well as for cases in which such instructions do not exist. According to Article 14 (10) of the Articles of Association, EDP's shareholders can only participate and vote at the General Meeting, personally or through a representative, if on the date of registration, 00:00 hours (GMT) of the fifth day of trading prior to that of the General Meeting, they own at least one share. Proof of ownership of the shares is provided by sending the Chairman of the General Meeting, by the fifth day of trading prior to that of the General Meeting, a statement issued, certified, and sent by the financial intermediary responsible for registering the shares, indicating the number of shares registered and the date of registration. It may be sent by email (Article 14 (13) of EDP's Articles of Association). Participation in the General Meeting also requires the shareholder to express this intention to the Chairman of the General Meeting and the financial intermediary at which the individual registration account has been opened, by the end of the sixth day of trading prior to that of the General Meeting. The communication may be sent by email (Article 14 (11) of EDP's Articles of Association). Shareholders who have expressed their intention to participate in a General Meeting pursuant to the Articles of Association and have transferred ownership of the shares between the fifth day of trading prior to that of the General Meeting and the end thereof, must inform the Chairman of the General Meeting and the CMVM immediately (Article 14 (11) of EDP's Articles of Association). EDP shareholders may exercise their right to vote by correspondence, postal or electronic, on each of the items on the agenda by means of a communication addressed to the Chairman of the Board of the General Meeting, as provided for in number 6 and number 11 of article 14 of the Articles of Association. Pursuant to Article 14 (7) of EDP's Articles of Association, voting rights may also be exercised electronically, in accordance with the requirements necessary to ensure their authenticity, which must be defined by the Chairman of the General Meeting in the invitation to the meeting. Shareholders can find the necessary forms for postal or electronic votes at EDP's website (www.edp.com). EDP has taken several measures to encourage shareholders to exercise their voting rights, such as elimination of financial obstacles that may affect their exercise. These measures include: • general circulation of the notice of meeting of the General Meeting with an express indication of the channels available for the exercise of voting rights and in publications on the CMVM website (www.cmvm.pt) and EDP’s website (www.edp.com), in the Justice Ministry and in the Interbolsa Platform (My Interbolsa) and on the NYSE Euronext Lisbon newsletter; • payment of the costs of issuing declarations of ownership of shares for all shareholders who participate in the General Meeting. As per EDP’s Articles of Association, votes cast by a shareholder in his own name or as a representative of another exceeding 25% (twenty-five percent) of all the votes representing the share capital are not considered. This limitation applies to all decisions of the General Meeting, including those for which the law or EDP's Articles of Association provide for a qualified majority of the Company's share capital. 111 Pursuant to Article 14 (4) of EDP’s Articles of Association, votes for which, under Article 20 (1) of the Securities Code or any legal rule that amends or replaces it, he is responsible will be considered cast by the same shareholder. Pursuant to Article 15 (2) and (3) of the Articles of Association, EDP's shareholders are obliged to provide the Executive Board of Directors, in writing and in a complete, objective, clear, truthful form, and in a manner acceptable to the board, all information that it requests from them on facts concerning them and related to Article 20 (1) of the Securities Code. Noncompliance with this obligation shall result in prevention of the exercise of voting rights pertaining to the shares owned by the shareholder in question. If the limitation on the counting of votes affects a number of shareholders, it will operate in proportion to the ordinary shares owned by each one (Article 14 (5) of the Articles of Association). Furthermore, pursuant to Article 20 (1) of the Portuguese Securities Code, or any legal rule that amends or replaces it, shareholders who become owners of a shareholding of 5% (five percent) or more of the voting rights or share capital, must inform the Executive Board of Directors thereof within five business days of the date on which ownership occurred. They cannot exercise their voting rights until they have made this communication (Article 15 (1) of EDP's Articles of Association). 13\. Maximum percentage of voting rights that can be exercised by a single shareholder or shareholders that are related in some of the relations of Article 20 (1) See item 12. 14\. Decisions of shareholders who, under the Articles of Association, can only be made by a qualified majority other than those provided for by law Decisions by the General Meeting are taken by a majority of votes cast, unless the law or the Articles of Association require a qualified majority (Article 11 (3) of the Articles of Association). Article 10 (1) of the Articles of Association defines the performance of functions in any corporate body is incompatible with: • the status of a legal person that is a competitor of EDP or a company in a control or group relation with EDP; • the status of a legal person or an individual related to a legal person that is a competitor of EDP; • the exercise of functions, of any nature or for any reason whatsoever, notably by appointment to a corporate office, by employment contract or by services provision agreement, at a legal person that is a competitor of EDP or at a legal person related to a legal person that is a competitor of EDP; • the appointment, even if only in fact, for a corporate body member by a competing legal person or a person, natural or legal, related to a legal person competing with EDP. Nevertheless, Article 10 (4) defines that the incompatibilities set forth in the foregoing paragraphs may also not apply to the performance of functions as a member of the general and supervisory board, to the extent permitted by law, subject to authorization given by prior resolution, with the favour of two thirds of the votes cast at the elective general shareholders’ meeting. The competition relation must be expressly referred to and precisely identified in the appointment proposal, and the authorization resolution may be subject to conditions, notably to a holding of no more than 10% of EDP’s share capital. It should also be highlighted that, according to Article 10 (10) of EDP’s Articles of Association, it should not be deemed to be a competitor of EDP the legal person shareholder that individually holds at least 20% of the share capital of EDP, and that, directly or through a legal person which is in a domain relationship with it, enters into and maintains a medium or long term strategic partnership of business cooperation in the activities of generation, distribution or supply of electricity or natural gas, approved in accordance with legal and statutory provisions, with prior favourable opinion of the General and Supervisory Board. In all other cases, the deliberative quorum set out in Article 383 (2) of the Portuguese Companies Code applies. 112 II. Management and Supervision A) Composition 15\. Corporate governance model EDP's governance structure is a dual model one and consists of the General Meeting, Executive Board of Directors, General and Supervisory Board and the Statutory Auditor. The separation of management and supervision roles is embodied in an Executive Board of Directors, which is responsible for the management of the Company’s business, and a General and Supervisory Board, the highest supervisory body. The division of competences, inherent to such model, between the Executive Board of Directors and the General and Supervisory Board, has been assuring an effective management of the Company, benefitted by a constant and attentive supervision. The dual model of corporate governance in place at EDP since July 2006 has allowed for an effective separation of the Company’s supervision and management in pursuit of the goals and interests of EDP and its shareholders, employees, and other stakeholders, thereby contributing to achieving the degree of trust and transparency necessary for its adequate functioning and optimization. It is also important to note that this governance model has proven to be adequate to the size and shareholder structure of the Company, allowing for constant supervision both by the reference shareholders and by the independent members, through the respective intervention in the General and Supervisory Board. Considering the transversal competences of the General and Supervisory Board and the specificities of the activities of the four Specialized Committees, the integration of members of the General and Supervisory Board and of the Executive Board of Directors of EDP should, according to the Selection Procedure of the members of the General and Supervisory Board and of the Executive Board of Directors, ensure diverse skills, professional experiences, diversity of knowledge, gender and cultures, taking into account the specificities of the Company's business. Along with the concern for the individual adequacy of each member, it is also sought that the composition of the governing bodies and corporate bodies demonstrate a collective adequacy, bringing together the professional and personal skills necessary for the proper performance of the functions of each body of EDP. Likewise, in determining the respective number of members, the size of the Company, the complexity of its activity and its geographical dispersion are considered, in addition to the costs and the desirable speed of operation of the administration. According to Article 11 (2) (b) of the Articles of Association, it is the responsibility of the General Meeting of EDP to elect and dismiss the members of the Executive Board of Directors and the General and Supervisory Board, as well as their Chairmen and Vice-Chairmen, if any, and the Statutory Auditors, based on a proposal by the General and Supervisory Board (or by delegation to the Financial Matters Committee / Audit Committee). The General Meeting also appoints the members of the Environment and Sustainability Board, on proposal of the Executive Board of Directors, and Remuneration Committee of the General Meeting. For a better understanding of EDP's corporate governance, EDP's website (www.edp.com) allows shareholders and the general public to view the up-to-date Articles of Association in Portuguese and English, the Internal Regulation of the Executive Board of Directors, General and Supervisory Board and its committees, documents that have been modified in order to accommodate best practices, notably the principles and recommendations set forth by the Corporate Governance Code issued by the Portuguese Institute for Corporate Governance. Worth noting also that EDP has since 2010 a Corporate Governance Manual, whose primary objective consists of registering and sharing the provisions of the Executive Board of Directors and of General and Supervisory Board regarding best practices recommendations applicable to EDP on corporate governance. The Manual has a dynamic nature. It should therefore continue to be revised periodically, considering the contributions of all interested parties in the continuous development of EDP’s governance model. The Manual for the Corporate Governance of EDP is available to shareholders and general public at its website (www.edp.com). In what concerns prevention and fighting against harassment at work, and complementing the commitments already taken on by EDP in its Code of Ethics, available at EDP’s website (www.edp.com), the Good Conduct Code for the Prevention and Fight Against Harassment at Work entered into force as of 21 November 2017 and it is applicable to all EDP Group’s 113 employees. According to this Code, other service providers and suppliers are explicitly required to uphold or adhere to the principles established, in accordance with their obligations under qualification procedures or current contracts. Additionally, the Integrity Policy approved by the Executive Board of Directors has implemented the mandatory execution to all EDP Group companies as well as to its employees, service providers acting on its behalf, in strict compliance with the legal framework applicable in geographies where the Group is present which aim to avoid unlawful conducts, in particular those associated with the practice of corruption acts, money laundering and terrorism financing. EDP Group is committed to promote an exempt, honest, integrated, professional, and fair action and requires that its employees and contracted third parties behave in accordance with such commitment, complying with the legislation and regulation in force. The EDP Group Companies has implemented and has disseminated prevention, detection, and control measures towards any form of corruption, prevarication, conduct on conflict of interest, influence peddling, money laundering, terrorism financing and other illegal acts. In this regard, the EDP Group Companies may adopt more demanding additional measures, according to local needs, always ensuring the compliance with the local applicable legislation. Additionally, the Compliance Department which independence is guaranteed through the reporting to the Executive Board of Directors and to the General and Supervisory Board / Financial Matters Committee / Audit Committee of EDP is responsible to biennially review this Policy or whenever any relevant legislative change occurs, submitting those amendments to the Executive Board of Directors for approval. The Integrity Policy of EDP Group are available at EDP’s website (www.edp.com). EDP intends to continue to assume a precursor and excellence role about the promotion of best government practices, in the hope that this initiative may also contribute to enrich the debate on these matters in the general context of the organization and functioning of public limited companies, particularly in Portugal. The EDP Group has been publicly distinguished with several recognitions regarding the behaviours observed in terms of promoting integrity, ethics, and sustainability. Among these recognitions, the following stand out: • The results of the ETHISPHERE ranking, which, for the past ten years, has considered EDP as one of the “World Most Ethical Companies”; • A prominent position in the “Codes of Conduct / Compliance / Corruption and Bribery” criterion of the Dow Jones Sustainability Indexes (DJSI), which have presented EDP as one of the most sustainable companies in the world since 2008, integrating the respective indexes (DJSI World and DJSI Europe); • The presence in the Ethibel Pioneer EXCELLENCE, ESI Europe and ESI Global of Investment Register of the Ethibel Forum, which presents a group of companies that have an above average performance in the respective sector of activity, with the assessment being carried out based on sustainability criteria; • EDP’s presence in the Solactive Global and Europe Corporate Social Responsibility Index based on information provided by Forum Ethibel; • Obtained ISO 37001 (Anti-bribery Management Systems) certification by EDP Energias do Brasil. • Obtained ISO 37001 (Anti-bribery management system) and certification UNE 19601 (Criminal Compliance Management Systema) by EDP Renováveis; • Obtained ISO 37001 certification (Anti-bribery management system) and ISO 37301 certification (Compliance Management System) by EDP. 16\. Articles of Association rules on procedural and material requirements for the appointment and replacement of members of the Executive Board of Directors and General and Supervisory Board It is the role of the General Meeting to elect and remove members of the Executive Board of Directors and the General and Supervisory Board, including their chairmen. 114 In the event of permanent or temporary absence of any of the members of the Executive Board of Directors, the General and Supervisory Board arranges for his/her replacement and the appointment must be ratified by the next General Meeting, under Article 22 (1) (g) of the Company’s Articles of Association. In the event of permanent absence of any of the members of the General and Supervisory Board, the substitutes on the list submitted to the General Meeting must be summoned by the Chairman of this Board to replace him/her, following the order on the list. Pursuant to Article 21 (5) of EDP's Articles of Association, the substitutes on the list must all be independent. If there are no substitutes, they will be elected by the General Shareholders’ Meeting. 17\. Composition of the Board of Directors, Executive Board of Directors and General and Supervisory Board The shareholders elected, at the Extraordinary General Shareholders’ Meeting held on 19 January 2021, the members of the Executive Board of Directors for the three-year mandate 2021-2023. At the Annual General Shareholders’ Meeting held on 14 April 2021, shareholders elected the members of General and Supervisory Board for the three-year mandate 2021-2023, as well as the Chairman of the Board of the General Meeting which is, automatically, an independent member of the General and Supervisory Board. General and Supervisory Board In the exercise of its duties – see Article 441 of the Companies Code and Article 22 of EDP’s Articles of Association - the main mission of the General and Supervisory Board is to constantly advise, monitor and supervise the management activities of EDP, cooperating with the Executive Board of Directors and the various other corporate bodies in pursuit of the Company’s interests, pursuant to the Companies Code and the company’s Articles of Association. It is elected by the shareholders at the General Meeting. Pursuant to Article 21 (1) of the Articles of Association, the General and Supervisory Board consists of no fewer than nine effective members, but always more than the number of members of the Executive Board of Directors. Most of the elected members of the General and Supervisory Board must be independent, pursuant to Article 21 (4) of the Articles of Association. Until 14 April 2021, the General and Supervisory Board was composed by the following members: GENERAL AND SUPERVISORY BOARD INDEPENDENT MEMBERS FIRST APPOINTMENT DATE Chairman Luís Filipe Marques Amado Independent 21/04/2015 Vice- Chairman China Three Gorges Corporation represented by Dingming Zhang 20/02/2012 China Three Gorges International Corp. represented by Shengliang Wu 05/04/2018 China Three Gorges (Europe), S.A. represented by Ignacio Herrero Ruiz 20/02/2012 China Three Gorges Brasil Energia Ltda. represented by Li Li 05/04/2018 China Three Gorges (Portugal), Sociedade Unipessoal, Lda. represented by Eduardo de Almeida Catroga 21/04/2015 DRAURSA, S.A. represented by Felipe Fernández Fernández 21/04/2015 Fernando Maria Masaveu Herrero 20/02/2012 Senfora BV represented by Mohammed Issa Khalfan Alhuraimel Alshamsi 21/04/2015 Banco Comercial Português, S.A. represented by Nuno Manuel da Silva Amado 21/04/2015 Société National pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbures (Sonatrach) represented by Karim Djebbour 12/04/2007 Maria Celeste Ferreira Lopes Cardona Independent 20/02/2012 Ilídio da Costa Leite de Pinho Independent 20/02/2012 115 GENERAL AND SUPERVISORY BOARD INDEPENDENT MEMBERS FIRST APPOINTMENT DATE Jorge Avelino Braga de Macedo Independent 20/02/2012 Vasco Joaquim Rocha Vieira Independent 20/02/2012 Augusto Carlos Serra Ventura Mateus Independent 06/05/2013 João Carvalho das Neves Independent 21/04/2015 María del Carmen Fernández Rozado Independent 21/04/2015 Laurie Lee Fitch Independent 05/04/2018 Clementina Maria Dâmaso de Jesus Silva Barroso Independent 05/04/2018 Luís Maria Viana Palha da Silva Independent 24/04/2019 As from 14 April 2021, the General and Supervisory Board is composed by the following members: GENERAL AND SUPERVISORY BOARD INDEPENDENT MEMBERS FIRST APPOINTMENT DATE Chairman João Luís Ramalho de Carvalho Talone Independent 14/04/2021 China Three Gorges Corporation represented by Dingming Zhang 20/02/2012 China Three Gorges International Limited represented by Shengliang Wu 14/04/2021 China Three Gorges (Europe), S.A. represented by Ignacio Herrero Ruiz 20/02/2012 China Three Gorges Brasil Energia Ltda. represented by Li Li 05/04/2018 China Three Gorges (Portugal), Sociedade Unipessoal, Lda. represented by Miguel Espregueira Mendes Pereira Leite 21/04/2015 DRAURSA, S.A. represented by Felipe Fernández Fernández 21/04/2015 Fernando Maria Masaveu Herrero 20/02/2012 João Carvalho das Neves Independent 21/04/2015 María del Carmen Fernández Rozado Independent 21/04/2015 Laurie Lee Fitch Independent 05/04/2018 Esmeralda da Silva Santos Dourado Independent 14/04/2021 Helena Sofia Silva Borges Salgado Fonseca Cerveira Pinto Independent 14/04/2021 Sandrine Dixson-Declève Independent 14/04/2021 Zili Shao Independent 14/04/2021 Luís Maria Viana Palha da Silva Independent 24/04/2019 The representatives of the companies China Three Gorges Corporation and China Three Gorges International Limited initiated their term of office on 11 May 2012, following the entry into force of the Strategic Partnership Agreement concluded on 30 December 2011. Executive Board of Directors The Executive Board of Directors is responsible for managing the Company's activities and representing the Company, pursuant to Article 431 of the Companies Code and Article 17 of the Articles of Association and was elected by the shareholders at a General Meeting. Pursuant to Article 16 (2) of the Articles of Association of EDP, the Executive Board of Directors must have a minimum of five and a maximum of nine members. 116 The members of the Executive Board of Directors may not exercise executive functions in more than two companies not integrating EDP Group, and the exercise of the referred functions shall be subject to prior appraisal by the Executive Board of Directors, according to Article 7 of the Internal Regulation of such body. At the Extraordinary General Shareholders’ Meeting held on 19 January 2021, the members of the Executive Board of Directors were elected for the 2021-2023 term of office. The term of office of the members of this Board ends on 31 December 2023, without prejudice to their maintenance in office until a new appointment. Until 19 January 2021, the Executive Board of Directors was composed as follows: EXECUTIVE BOARD OF DIRECTORS FIRST APPOINTMENT DATE Chairman ANTÓNIO LUÍS GUERRA NUNES MEXIA (1) 30/03/2006 João Manuel Manso Neto (2) 30/03/2006 António Fernando Melo Martins da Costa 30/03/2006 João Manuel Veríssimo Marques da Cruz 20/02/2012 Miguel Stilwell de Andrade (3) 20/02/2012 Miguel Nuno Simões Nunes Ferreira Setas 21/04/2015 Rui Manuel Rodrigues Lopes Teixeira 21/04/2015 Maria Teresa Isabel Pereira 05/04/2018 Vera de Morais Pinto Pereira Carneiro 05/04/2018 Members elected at the General Meeting of March 30, 2006 to hold office from June 30, 2006, date of entry into force of new Articles of Association of the Company and the two-tier corporate governance model (1) On 6 July 2020, in the context of the judicial procedure investigating the early termination of Power Purchase Agreements regime and transition to the Costs of Maintenance for Contractual Balance regime, and also of the extension of the hydro public domain right of use Mr. António Luís Guerra Nunes Mexia was suspended from his executive functions. The procedure continues in the inquiry phase. (2) On 6 July 2020, in the context of the judicial procedure investigating the early termination of Power Purchase Agreements regime and transition to the Costs of Maintenance for Contractual Balance regime, and also of the extension of the hydro public domain right of use Mr. João Manuel Manso Neto was suspended from his executive functions. The procedure continues in the inquiry phase. (3) Appointed Interim Chairman of the Executive Board of Directors, on 6 July 2020, following the suspension of Mr. António Mexia. As from 19 January 2021, the Executive Board of Directors is composed as follows: EXECUTIVE BOARD OF DIRECTORS FIRST APPOINTMENT DATE Chairman MIGUEL STILWELL DE ANDRADE 20/02/2012 Miguel Nuno Simões Nunes Ferreira Setas 21/04/2015 Rui Manuel Rodrigues Lopes Teixeira 21/04/2015 Vera de Morais Pinto Pereira Carneiro 05/04/2018 Ana Paula Garrido de Pina Marques 19/01/2021 18\. Independent members of the Executive Board of Directors and General and Supervisory Board EDP's Articles of Association (Article 9 (1), Article 10 (1), Article 11 (2) (d), Article 21 (4), Article 22 (1) (a), Article 23 and Article 27) and the Internal Regulation of the General and Supervisory Board (Article 8), both available on its website (www.edp.com), lay down the rules on independence and incompatibilities for members of any of the Company's corporate bodies. The criteria of independence set out in EDP's Articles of Association are in line with those laid down in 414 (5) of the Companies Code and determine that independence means an absence of direct or indirect relations with the Company or one of its bodies and an absence of any circumstances that might affect impartiality of analyses or decisions, e.g. because the people in question own or are acting on behalf of owners of a qualifying shareholding of 2% (two percent) or more of the share capital of EDP or have been re-elected for more than two terms of office continuously or intermittently. 117 Pursuant to Article 9 (1) of EDP's Articles of Association, independence is “absence of direct or indirect relations with the Company or one of its bodies and an absence of any circumstances that might affect impartiality of analyses or decisions, e.g., because the people in question own or are acting on behalf of owners of a qualifying shareholding of 2% (two percent) or more of the share capital of EDP or have been re-elected for more than two continuous or intermittent mandates". In view of the need to clarify the aforementioned Article 414 (5) of the Company Code, as there are diverging legal opinions, Associação de Emitentes de Valores Cotados em Mercado (“AEM”) requested an opinion from the CMVM , whose opinion was that the capacity as independent is only lost if, “on the basis of the criterion of number of terms of office, in a situation likely to affect his/her impartiality in analyses or decisions if the members of the supervisory bodies of public limited companies, having been elected for a first term of office and re-elected continuously or intermittently for a second and third term, are re-elected (for the third time, therefore) for a fourth term of office.” Pursuant to its Internal Regulation, the General and Supervisory Board has in place a specific procedure regarding compliance with a large number of rules on incompatibilities and independence applicable to positions on this board (Articles 7 and 8 of the General and Supervisory Board Internal Regulation). This procedure includes the following aspects: • acceptance of a position as member of the General and Supervisory Board is subject to a written statement setting out specifically (i) the inexistence of any incompatibility under the law or Articles of Association; (ii) compliance with the independence requirements set out in its Internal Regulation, if the person has been elected as an independent member; (iii) the members' obligation to report to the Chairman of the General and Supervisory Board or, for the Chairman, directly to the board any subsequent event that might generate incompatibility or loss of independence • every year, the members of the General and Supervisory Board must renew their statements as to the inexistence of incompatibility and, if applicable, the compliance with the independence requirements. Also, every year, the General and Supervisory Board conducts a general assessment of compliance with the rules of incompatibility and independence by its members. At the same time, the Internal Regulation of the General and Supervisory Board (article 8) has broadened the independence criteria applicable to its members, going beyond the provisions of Article 414 (5) of the Companies Code and Article 9 of EDP's Articles of Association, and so people who directly or through their spouse or relative or similar in a straight line and to the collateral third degree, inclusive, are in one of the following situations cannot have independent status: • being holder, director, having contractual ties or acting on behalf or on the account of owners of a qualifying shareholding of 2% (two percent) or more of the share capital or voting rights in EDP or the same percentage in a company of which it is a subsidiary; • being a holder, director, having contractual ties or acting on behalf or on the account of owners of a qualifying shareholding of 2% (two percent) or more of the share capital or voting rights in a company that is a competitor of EDP; • having been re-elected for more than two consecutive or non-consecutive terms of office; • having exercised for twelve years, on a consecutive or non-consecutive basis, functions in any corporate body of the Company exception made to, from the end of its functions in any body and its new appointment, at least a three-year period has elapsed; • having, in the last three years, provided services or had a significant commercial relation with the Company or one of its Subsidiaries; and, • being a remuneration beneficiary paid by the Company or one of its Subsidiaries other than the remuneration deriving from the execution of its functions as a member of the General and Supervisory Board. The rules of independence covering members of the General and Supervisory Board are particularly important regarding the following requirements: • the board must consist of a majority of independent members (Article 434 (4) and Article 414 (5) and (6) of the Companies Code and Article 21 (4) of EDP's Articles of Association); 118 • the Financial Matters Committee/Audit Committee is composed, at least by, three independent members of the General and Supervisory Board (Article 23 (2) of EDP Articles of Association and Article 3 (1) of the Financial Matters Committee/Audit Committee’s Internal Regulation); • the Remuneration Committee of the General and Supervisory Board must comprise a majority of independent members (Article 27 (1) of the Articles of Association and Article 28 (b) of the General and Supervisory Board's Internal Regulation); • the United States of America (USA) Business Affairs Monitoring Committee must be composed mainly of independent members (Article 3 (1) of the Internal Regulation of the Business Monitoring Committee in the United States of America). In compliance with the above procedure, at the start of their terms of office, the members of the General and Supervisory Board stated that they were not in any of the situations of incompatibility set out in the Companies Code (Article 414-A (1) (a) to (e), (g) and (h) (ex vi Article 434 (4)) and Article 437 (1)) or under Article 10 (1) of the Articles of Association and, where applicable, that they complied with the independence requirements of the Internal Regulation of the General and Supervisory Board and the Articles of Association of EDP (article 9 (1), article 11 (2) (d) and article 21 (4)) . Of the incompatibility situations for the exercise of the role of member of the General and Supervisory Board, pursuant to the Article 414-A of the Companies’ Code, it is considered the exercise of functions of administration or supervisory in five companies. Therefore, one may not be elected or designated a member of the General and Supervisory Board if holds office of administrator or supervisor in five companies. At the end of 2021, the members of the outgoing General and Supervisory Board renewed their statements on incompatibilities and independence. The above statements are available to the public at EDP's website, at www.edp.com. The independent members of the General and Supervisory Board are shown in the chart in Item 17 above. 19\. Qualifications of the members of the General and Supervisory Board and Executive Board of Directors See Annex I of this Report. 20\. Family, work-related and business relationships of the members of the General and Supervisory Board and Executive Board of Directors with shareholders owning a qualifying shareholding of over 2% of the voting rights As for the General and Supervisory Board, there are professional relationships between Board members and shareholders attributed a qualifying holding of more than 2% of voting rights, as described below: • Dingming Zhang, Shengliang Wu, Ignacio Herrero Ruiz, Li Li and Miguel Espregueira Mendes Pereira Leite were appointed representatives respectively of the members of the General and Supervisory Board, China Three Gorges Corporation, China Three Gorges International Limited, China Three Gorges (Europe), S.A., China Three Gorges Brasil Energia Ltda. e China Three Gorges (Portugal), Sociedade Unipessoal, Lda. China Three Gorges (Europe), S.A., held, on 31 December 2021, a 19.19% shareholding in EDP; • the member of the General and Supervisory Board Fernando María Masaveu Herrero is chairman of the management body of Masaveu International, S.L. which owns 55.9% of Oppidum, S.L., a company with a 7.20% shareholding in EDP, on 31 December 2021. Fernando María Masaveu Herrero is also chairman of the administration body of Oppidum, S.L; • the member of the General and Supervisory Board Felipe Fernández Fernández is a manager of Liberbank, S.A. which owns 44.1% of Oppidum, S.L., a company with a 7.20% shareholding in EDP, on 31 December 2021. 119 21\. Organisation chart, delegation, and division of powers Powers of the General and Supervisory Board Pursuant to Article 22 of the Articles of Association, the General and Supervisory Board is especially responsible for: • permanently monitor the management of EDP and its subsidiaries and provide management advice and assistance to the Executive Board of Directors, particularly regarding strategy, goals, and compliance with the law; • issue opinions on the annual report and accounts; • permanently oversee the work of the Statutory Auditor and External Auditor and, regarding the former, issue an opinion on their election or appointment, dismissal, independent status, and other relations with the Company; • oversee, on a permanent basis, and evaluate internal accounting and auditing procedures, the efficacy of the risk management system, internal control system and internal auditing system, including the way in which complaints and queries are received and processed, whether originating from employees or not; • propose to the General Meeting the removal from office of any member of the Executive Board of Directors; General Meeting Corporate Entities1 Corporate Bodies Other Statutory Bodies 1 Corporate Entities are also Corporate Bodies, pursuing the article 8(4) of EDP’s Articles of Association. Company Secretary Board of the General Meeting Remuneration Committee of the General Meeting Environmental and Sustainability Board Financial Matters Committee/Audit Committee Executive Board of Directors Statutory Auditor General and Supervisory Board Remuneration Committee Corporate Governance and Sustainability Committee United States of America Business Affairs Monitoring Committee 120 • monitor the definition of criteria and responsibilities required or appropriate for the structures and internal bodies of the Company or Group and their impact and draft follow-up plans; • provide for the replacement of members of the Executive Board of Directors in the event of permanent or temporary absence, as required by law; • issue an opinion on their annual vote of confidence in the directors set out in Article 455 of the Company Code, on its own initiative or when requested to do so by the CEO; • monitor and assess matters of corporate governance, sustainability, internal codes of ethics and conduct and compliance with these codes and systems for appraising and resolving conflicts of interest, including those associated with the Company's relations with its shareholders, and issue opinions on these matters; • obtain the financial or other resources that it reasonably deems necessary for its work and ask the Executive Board of Directors to take any measures or make any corrections that it considers pertinent, with the power to hire independent consultants, if necessary; • receive regular information from the Executive Board of Directors on significant business relations between the Company or its subsidiaries and shareholders with a qualifying holding and persons related to them; • appoint the Remuneration Committee and Financial Matters Committee/Audit Committee; • represent the Company in its relations with the directors; • supervise the work of the Executive Board of Directors; • oversee compliance with the law and Articles of Association; • select and replace the Company's External Auditor, giving the Executive Board of Directors instructions for engagement or dismissal; • monitoring the bookkeeping, accounts and supporting documents and the status of any assets or securities held by the Company, as and when it deems appropriate; • supervise the preparation and disclosure of financial information; • call the General Meeting when it deems appropriate; • approve its Internal Regulation, which includes rules on relations with the other corporate bodies; • exercise any other powers that may be granted by law, the Articles of Association or by the General Meeting. Under the corporate governance model in place at EDP, the General and Supervisory Board also has a power of particular importance. Although it does not have management powers, pursuant to Article 442 (1) of the Company Code, Article 17 (2) of the Articles of Association lays down that the approval of EDP's strategic plan and performance of the operations indicated below by EDP or its subsidiaries are subject to a prior favourable opinion from this board (see also Article 15 of the Internal Regulation of the General and Supervisory Board): • acquisitions and sales of assets, rights, or shareholdings of significant economic value; • financing operations of significant value; • opening and closure of establishments, or important parts thereof, and substantial extensions or limitations of Company activity; • other transactions or operations of significant economic or strategic value; • formation or termination of strategic partnerships or other forms of lasting cooperation; 121 • plans for splits, mergers, or conversions; • amendments to the Articles of Association, including changes of registered office and share capital increases when on the Executive Board of Directors' initiative. The Chairman of the General and Supervisory Board is granted particular powers, and pursuant to Article 5 of the General and Supervisory Board Internal Regulation, is responsible for: • convening and presiding over meetings of the General and Supervisory Board; • representing the General and Supervisory Board institutionally; • coordinating the work of the General and Supervisory Board and the correct operation of its committees, being entitled to attend any meeting, and being kept informed of their activities; • proposing to the plenary General and Supervisory Board the members, the Chairman and, when appropriate, the Vice- Chairman of each committee; • ensuring that the members of the General and Supervisory Board punctually receive the information they need for their duties; • requesting from the Executive Board of Directors relevant information for the General and Supervisory Board and its committees to perform their duties and ensuring that the members of the General and Supervisory Board receive it in good time; • taking the necessary measures to ensure that the General and Supervisory Board adequately monitors the activity of EDP and of subsidiaries; • monitoring implementation of the General and Supervisory Board’s budget and managing the material and human resources assigned to it; • ensuring correct implementation of General and Supervisory Board decisions. The Chairman of the General and Supervisory Board or, in his/her absence or incapacity, a member selected by the board for that purpose, may attend meetings of the Executive Board of Directors whenever s/he sees fit and take part in the discussion of matters to be submitted to the General and Supervisory Board, without having any voting rights pursuant to Article 21 (10) of EDP's Articles of Association. The members of the Financial Matters Committee/Audit Committee have a right to attend the meetings of the Executive Board of Directors when the accounts are appraised (see Article 10 of the Financial Matters Committee/Audit Committee Internal Regulation). Worth also noting that the General and Supervisory Board annually performs: • a self-assessment of its activity and performance and those of its committees, the conclusions of which are set out in its annual report (see Article 12 of the General and Supervisory Board Internal Regulation); • an independent assessment of the activity and performance of the Executive Board of Directors, the conclusions of which are submitted to the General Meeting and are presented in an annex to the annual report of the General and Supervisory Board. On the initiative of the General and Supervisory Board, EDP has voluntarily established a formal, impartial process to assess the activity of this board and of the Executive Board of Directors. Experience of recent years has allowed the General and Supervisory Board to make some changes in the process to make it more effective and efficient. During the 2021 financial year, the method used comprises the following stages: 122 • carry out the collective evaluation process of the General and Supervisory Board, its Specialized Committees, and the Executive Board of Directors to an external entity, in order to have interviews supported by individual questionnaires to the General and Supervisory Board members support in completing and validating the treatment of information to support the evaluation process; • in the beginning of 2022, each member of the General and Supervisory Board have answered an interview made by specialized consultants, answering to quantitative and qualitative matters, in particular on matters related to the composition, organization and functioning, activity performance of the General and Supervisory Board, relationship between the General and Supervisory Board and the Specialized Committees and other EDP corporate bodies as well as to proceed with the analysis of matters related with the composition, organization of the Executive Board of Directors, its activity performance and the relationship between the Executive Board of Directors and the General and Supervisory Board including to other interlocutors; • reports were produced on the General and Supervisory Board evaluation, on its Specialized Committees and on the Executive Board of Directors, which were available for assessment in the General and Supervisory Board meeting; • in its meeting, the General and Supervisory Board issues its assessment opinions and they are included in this board's annual report. At the General Meeting, the Chairman of the General and Supervisory Board presents the board's opinion in the item of the agenda for assessment of the Executive Board of Directors. Powers of the Executive Board of Directors The Executive Board of Directors is a collegial body. No director is allowed to represent more than one other director at each meeting. The powers of the Executive Board of Directors, in accordance with the Article 17 (1) of the Articles of Association, include: • setting the goals and management policies of EDP and the EDP Group; • drawing up the annual business and financial plans; • managing corporate business and undertaking all actions and operations associated with the corporate object that do not fall within the responsibilities of other company bodies; • representing the Company in and out of court, actively and passively, with the power to waive, transact and admit guilt in any legal proceedings and make arbitration agreements; • buying, selling or by any other means disposing or encumbering rights or immovable assets; • setting up companies and subscribing, purchasing, encumbering, and selling shareholdings; • deciding on the issue of bonds and other securities in accordance with the law and the Articles of Association, in compliance with the annual quantitative limits set by the General and Supervisory Board; • establishing the technical and administrative organisation of EDP and the Internal Regulation, particularly in relation to personnel and their remuneration; • appointing proxies with such powers as it sees fit, including the power to delegate; • appointing the Company Secretary and alternate; • hiring and dismissing the External Auditor on recommendation of the General and Supervisory Board; • exercising any other powers that may be granted to it by law or by the General Meeting; 123 • establishing its own Internal Regulation. As executed in 2021, proposals to amend EDP's Articles of Association regarding share capital increases submitted by the Executive Board of Directors require a favourable prior opinion from the General and Supervisory Board, pursuant to Article 17 (2) (g) of the Articles of Association. The Chairman of the Executive Board of Directors sends the Chairman of the General and Supervisory Board the notices of meetings, support documents and minutes of the meetings and, on request, provides appropriate, timely information, which is accessible to all the members of the General and Supervisory Board. When so requested by other members of the corporate bodies, the Executive Board of Directors also provides all the required information in a timely and appropriate fashion. There is an information sharing portal for the Executive Board of Directors and General and Supervisory Board, which is accessible to all their members, without prejudice to restrictions on access to information regarding members who are in a situation of conflict of interests. The Chairman of the Executive Board of Directors is granted particular powers by Article 18 of the Articles of Association. These powers are: • representing the Executive Board of Directors; • coordinating the work of the Executive Board of Directors and convening and presiding over its meetings; • ensuring proper execution of the decisions of the Executive Board of Directors. The Chairman of the Executive Board of Directors is entitled to attend the meetings of the General and Supervisory Board, whenever considered appropriate, except when these concern decisions on the supervision of the work of the Executive Board of Directors and, in general, any situations that may involve a conflict of interest, pursuant to Article 18 (2) of the Articles of Association. In the Executive Board of Directors there is a functional division of management areas to each of its members. The college of directors is responsible for making decisions on all matters within its remit. Delegated powers are not granted to directors individually, because of the board's particular nature. As previously explained, the activity and performance of the Executive Board of Directors are assessed continuously and independently by the General and Supervisory Board on an annual basis. 124 Until 19 January 2021, the assignment of Corporate Departments and Business Units to the members of the Executive Board of Directors was the following: MIGUEL STILWELL DE ANDRADE CORPORATE GOVERNANCE SUPPORT AREA • Office of the Chairman of the Executive Board of Directors • Internal Audit Department STRATEGY AREA • Business Analysis Department • Energy Planning Department • Studies and Competition Department FINANCIAL AREA • Consolidations, IFRS Reporting and Tax Global Coordination Department • Corporate Planning and Management Control Department • Financial Management Department • Investor Relations Department RESOURCES AREA • Transformation and Talent Unit • People Experience Unit • EDP University BRAND AND COMUNICATION AREA • Brand, Marketing and Communication Coordination Department BUSINESS • EDP Inovação • EDP Finance BV • Energia RE • EDP Sucursal en España Corporate Areas Management Areas RUI TEIXEIRA BUSINESS • EDP Renováveis (and respective subsidiaries) • UNGE - Energy Management Business Unit • EDP Gas.Com • Portsines • EDP España (and electricity sector subsidiaries) STRATEGY AREA • Energy Planning Department BRAND AND COMUNICATION AREA • Brand, Marketing and Communication Coordination Department BUSINESS • EDP Comercial • SU Eletricidade • EDP Gás Serviço Universal SHARED SERVICES • EDP Soluções Comerciais VERA PINTO PEREIRA MARIA TERESA PEREIRA CORPORATE GOVERNANCE SUPPORT AREA • General Secretarial • Legal Department • Compliance Department • Internal Audit Department STRATEGY AREA • Studies and Competition Department BUSINESS • EDP Estudos e Consultoria SHARED SERVICES • EDP Global Solutions • EDP Real Estate RESOURCES AREA • Transformation and Talent Unit • People Experience Unit • Universidade EDP BUSINESS • EDP Brasil (and respective subsidiaries) • EDP Produção ( (and respective subsidiaries) • EDP Produção Bioleléctrica SHARED SERVICES • Sãvida • SCS MIGUEL SETAS CORPORATE GOVERNANCE SUPPORT AREA • Ethics Ombudsman Office STRATEGY AREA • Markets and Regulation Department • Sustainability Department • Risk Management Department RESOURCES AREA • Digital Global Unit BRAND AND COMUNICATION AREA • lnstitutional Relations and Stakeholders Department ANTÓNIO MARTINS DA COSTA JOÃO MARQUES DA CRUZ BUSINESS • E-REDES • EDP Internacional (and respective subsidiaries) • EDP International Investment and Services SL • EDP Inovação • Labelec 125 Following the General Shareholders’ Meeting held on 19 January 2021 and the resulting changes in EDP's governing bodies, modifications were made to the allocation of Corporate Departments and Business Units to the members of the Executive Board of Directors, which on 31 December 2021 was as follows: MIGUEL STILWELL DE ANDRADE BUSINESS • EDP Renováveis (and respective subsidiaries) OTHERS • EDP Sucursal en España RISK MANAGEMENT AND SUSTAINABILITY AREA • Risk Management Department • Sustainability Department BUSINESS • E-Redes • IE2/EDP Redes España • Companhia de Electricidade de Macau (CEM) GEOGRAPHIES • EDP Brasil1 (and respective subsidiaries) SHARED SERVICES, INNOVATION AND SOCIAL AND CULTURAL ACTIVITY • EDP Global Solutions \- Shared Services • Sãvida • Energia Re • EDP - Estudos e Consultoria MIGUEL SETAS RUI TEIXEIRA STRATEGY AND FINANCIAL AREA • Business Analysis Department • Energy Planning Department • Consolidations, IFRS Reporting and Tax Global Coordination Department • Corporate Planning and Management Control Department • Financial Management Department • lnvestor Relations Department BUSINESS • UNGE – Unidade de Negócio de Gestão de Energia (including project EMIR) • EDP Gas.Com GEOGRAPHIES • EDP España (and respective subsidiaries in the electric sector, excluding IE2/EDP Redes España) OTHERS • EDP Finance BV COMUNICATION AND TRADEMARK • Trademark Department • Social Impact Coordination Office BUSINESS • EDP Comercial (and respective subsidiaries) • SU Eletricidade • EDP Gás Serviço Universal • EDP Clientes • EDP Solar • EDP Energia Polska • EDP Energía Italia SHARED SERVICES, INNOVATION AND SOCIAL AND CULTURAL ACTIVITY • Fundação EDP2 VERA PINTO PEREIRA ANA PAULA MARQUES DIGITAL • Digital Global Unit REGULATION AND INSTITUTIONAL RELATIONS AREA • Markets and Regulation Department • Studies and Competition Department • lnstitutional Relations and Stakeholders Department BUSINESS • EDP Produção (and respective subsidiaries) • EDP Internacional (and respective subsidiaries) • Hydro Global SHARED SERVICES, INNOVATION AND SOCIAL AND CULTURAL ACTIVITY • EDP Inovação (and respective subsidiaries) • Labelec (and respective subsidiaries) Corporate Areas Management Areas 1 The CEO of EDP Energias do Brasil has hierarchical reporting to the Chairman of the Executive Board of Directors. 2 Without prejudice of the competencies led by the General and Supervisory Board under the Articles of Association of Fundação EDP. CORPORATE GOVERNANCE SUPPORT • Office of the Chairman of the Executive Board of Directors • Internal Audit Department • Compliance Department • Office of the Ethics Ombudsman • General Secretarial and Legal Office Department STRATEGY AND FINANCIAL AREA • Business Analysis Department HUMAN RESOURCES • People & Organizational Development Global Unit COMUNICATION AND TRADEMARK • Communication Department 126 EDP's functional structure Group's organisational model The Executive Board of Directors is responsible for defining the EDP Group's organisational model and splitting competences among the different Business Units, the Shared Services companies, and the central structure. This structure consists of a Corporate Centre that provides assistance to the Executive Board of Directors in defining and monitoring the execution of strategies, policies, and goals. Apart from the Corporate Centre, EDP has Business Units, allowing for optimisation and greater efficiency of the organisational structure. The Executive Board of Directors is also assisted by specialised committees, which ensure more effective monitoring of matters and contribute to the decision-making process. On 31 December 2021, the corporate centre structure was as follows: CORPORATE CENTRE • BUSINESS UNITS DEPARTMENTS Corporate Governance Support Area General Secretariat and Legal Department Rita Ferreira de Almeida Office of the Chairman of the Executive Board of Directors Teresa Lobato (1) Internal Audit Department Azucena Viñuela Hernández Compliance Department Rita Sousa Office of the Ethics Ombudsman Maria Manuela Silva Strategy and Financial Area Energy Planning Department Jorge Casillas Business Analysis Department Pedro Vasconcelos (2) Financial Management Department João Pedro Summavielle Consolidation, IFRS Reporting Global Coordination Department Miguel Ribeiro Ferreira Management Planning and Control Department Rui Antunes Investor Relations Department Miguel Henriques Viana Social Impact Coordination Office Martim Salgado Risk and Sustainability Area Sustainability Department António Castro (3) Risk Management Department Rui Eustáquio Regulation and Institutional Relations Area Markets and Regulation Department Sandra Pinto Ferreira Studies and Competition Department Ricardo Ferreira Institutional Relations and Stakeholders Department Filipa Ricciardi (4) Resources Area Digital Global Unit João Nascimento People & Organizational Development Global Unit Paula Carneiro Communication and Brand Area Communication Department Rui Cabrita Brand Department Catarina Barradas Business Units Energy Management Business Unit Pedro Neves Ferreira Notes: (1) On 1 January 2022, Mónica Gameiro replaced Teresa Lobato as Chief of Staff of the Chairman of the Executive Board of Directors; (2) On 15 February 2022, André Fernandes replaced Pedro Vasconcelos as responsible for the Business Analysis Department; (3) On 7 January 2022, Miguel Henriques Viana replaced António Castro as responsible for the Sustainability Department; (4) On 16 February 2022, Maria Marta Geraldes replaced Filipa Ricciardi as responsible for the Institutional Relations and Stakeholders Department. 127 The General Secretariat and Legal Department provides administrative and logistical assistance to the Executive Board of Directors, provides advice to EDP and to EDP Group’s companies with their head offices in Portugal, in order to ensure the effective operation of the Corporate Centre, compliance with applicable legislation and ensures the harmonisation of the corporate governance policies within the Group. The Office of the Chairman of the Executive Board of Directors assists the CEO in all matters within his/her remit in order to help maximise the effectiveness of decisions and instructions. The mission of the Internal Audit Department is to increase and protect the value of the organization, providing assurance, advisory and insight, by assessing and issuing recommendations to improve the Company's governance processes and contributing to the improvement of the company's risk, control and governance management processes at EDP. The Compliance Department is responsible for promoting and coordinating the implementation of Compliance mechanism within the Group aiming to improve and protect the value and the operations of the Group and contribute to improve the risk management procedures, control, and governance of EDP Group and ensure the implementation of the Internal Financial Reporting Control System (SCIRF). The Ethics Ombudsman's Office is responsible for supporting the General and Supervisory Board and the Executive Board of Directors regarding the definition, communication, implementation and assessment of objectives, policies, and management instruments of corporate ethics. Additionally, it manages the processes of claims of ethical nature, regarding the commitments established concerning confidentiality and protect rights associated with these procedures. The mission of the Energy Planning Department is to draft studies and opinion to assist the Executive Board of Directors in decision-making process regarding strategy definition to the planning and development in several Business Units of the Group. The Business Analysis Department coordinates studies to assist with the Group's overall business strategy and performs development operations via investments, divestitures and/or partnerships in order to assist the Executive Board of Directors in optimising EDP's business portfolio and promoting and taking new business opportunities. The mission of the Risk Management Department is to promote an integrated view of corporate risk, ensure the alignment of risk policies and limits with the appetite defined for the Group and coordinate risk-return studies at Group level, aiming to support the Executive Board of Directors in monitoring and mitigating the main risks. The Regulation and Markets Department designs, orchestrates, and executes the Group's regulatory strategy, anticipating challenges, ensuring an integrated perspective, analysing economic and financial impacts, and supporting the Executive Board of Directors in planning, prioritization, and decision-making. The Studies and Competition Department coordinates strategic studies on the legal framework for the sector and competition, with the aim of supporting the Executive Board of Directors in developing a global vision on issues related to the legal framework and market design, coordinates actions regulatory/legal consultation at European level and promotes compliance on competition issues. The mission of the Sustainability Department is to support the Executive Board of Directors in the definition and implementation of the Group's sustainability policy and strategy, defining corporate objectives and targets, streamlining their operation and continuous improvement in the Business Units, executing the reporting of non- consolidated financial statement to interested parties within defined timeframes. The remit of the Financial Management Department is to propose and implement the Group's financial management policy and analyse and monitor management of its pension fund in order to optimise and guarantee financial sustainability and control financial liabilities in accordance with Group policy. The Global Coordination Department for Consolidation, IFRS Reporting, and Taxation guarantees the process of consolidation of accounts and ensures the rendering of IFRS accounts for the Group, with the objective of complying with the defined schedules and ensures the processes, criteria, and accounting rules necessary to guarantee the adequate and consistent accounting treatment and recording of operations in all Group companies. The Management Planning and Control Department is responsible for the Group's management planning and oversight, to ensure alignment with strategic goals and monitor implementation of the Business Plan. 128 The Investor Relations Department communicates with analysts and investors in Group companies to ensure the sustainability of EDP’s image and reputation and fulfil the information requirements of regulators and financial supervisors. The mission of the Digital Global Unit is to define a global technology strategy and vision for the Group, making EDP a truly digital organization, integrating digital technology into business domains and transforming the way of working and delivering value. The mission of the People and Organizational Development Global Unit is to define a global strategy for the development of people and organization, which provides an engaging and inclusive experience, enabling the EDP Group to face the challenges of the energy transition. The mission of the Brand Department is to define and develop EDP Group's brand strategy, as well as the EDP Group's Brand Activation and Sponsorship Policy, ensuring their alignment with the Group's values and vision. The mission of the Communication Department is to develop and implement the EDP Group's global communication strategy, in order to maximize the positive impact on brand perception and reinforce the involvement of employees with Society, as well as ensuring the monitoring of reputation, the relationship with the media and the management of digital platforms for internal and external communication. The Institutional Relations and Stakeholders Department ensures an integrated and consistent narrative with the Group's stakeholders, in line with the vision and strategy adopted, aiming to maximize the Group's communication potential vis-à- vis its stakeholders and contributing to information fluid and systematized information on the Group and its actions. The mission of the Social Impact Coordination Office (SICO) is to define the global social investment strategy, with a view to maximize EDP Group's social impact, ensuring the alignment of all the EDP Group's social investment vehicles. The Energy Management Business Unit (UNGE) is responsible for negotiating the physical and forward purchase of fuels and contracting their transport, in the name and on behalf of the relevant EDP Group companies. It is responsible for carrying out forward and spot transactions for the purchase and sale of electricity on the market, of a physical or financial nature, namely in energy-derived products and foreign exchange transactions. It is also responsible for deciding on the exploration and dispatch programs of the EDP Group's power generation centres whose energy management is under its responsibility, with a view to optimizing the portfolio and satisfying the energy supply to the customers of the EDP Group's suppliers. It also manages operations related to “CO2 emission permits” and “green certificates” of EDP Group In 2021, changes were made to the existing departments and their respective powers, in the following terms: • Merger of the General Secretariat and the Legal Department into a single department, General Secretariat and Legal Department. • Extinction of the Global Brand, Marketing and Communication Coordination Department and autonomization of the Communication Department and the Brand Department. • Merger of the People and Experience Unit, Transformation & Talent Unit and EDP University into a single Department, the People & Organizational Development Global Unit. • Incorporation of the Social Impact Coordination Office (SICO). • Incorporation of the Safety, Security & Business Continuity Unit, effective on 7 January 2022, under the responsibility of Miguel Amaro. Its mission is to support the Executive Board of Directors in defining the strategy and drawing up global Safety, Security policies and Business Continuity, in accordance with best practices, ensuring its operation and monitoring within the EDP Group. EDP Platforms As a result of EDP Group's Business Plan for the period 2021-2025 objectives, and the necessary introduction of changes to the Group's structure that respond to the challenges contained in such Business Plan, in 2021, EDP Group established a management model by platforms with the inherent coordination mechanisms, respecting the existing structures in the different geographies where the Group is present. 129 The established model is based on the balance between platforms and geographies, compliance with the legal and regulatory framework and considers the specificities existing in each of the geographies and business areas in which the Group operates, allowing, at the same time, to respond in a consistent, synergistic, and global manner, to the path that EDP Group advocated following the approval of its Business Plan Specific EDP committees (Functional Structures) The EDP organizational model provides for management committees that contribute in two ways to the Company's decision- making process: • they input information to assist the Executive Board of Directors in its decision-making reflecting opinions and information from the areas in the organisation most affected by the proposal in question • they are used by an organisational unit (belonging to the Corporate Centre, a Business Unit or shared service unit to assist in gathering information, alignment, decisions and implementation of policies and practices with an impact on a number of areas in the organization. Considering the principle of continuous improvement by which the EDP Group is governed and the importance of the Management Committees in the organizational model of the Group, the Executive Board of Directors approved, on 9 February 2021, changes in the structure and organizational characterization of the Management Committees, maintaining only the strategic and functional committees, which became Corporate Committees. In view of the changes that have taken place in the structure of the EDP Group, in 2021, Business Committees as well as the Compliance and Purchasing Committees were eliminated, and the Committees on Prices and Volumes, Energy Planning and Iberian Market and Commercial Committees were deformalized. On 31 December 2021, the Committees structure configuration was as follows: CORPORATE COMMITTEES Risk Committee Sustainability Committee Investments Committee Regulation Committee Innovation Commitee Financing Committee Stakeholders Committee Fund Plan and Pension Committee P&O Committee Digital and Information Technology Committee Prevention and Safety Committee Corporate Committees Risk Committee The main duties of the Risk Committee are: The main duties of the Risk Committee are: • share information on the EDP Group's key risks and risk profile • discuss the result of significant risk assessment projects undertaken in conjunction with the Business Units 130 • discuss and issue opinions or recommendations on policies, procedures, significant risks, risk limits and extraordinary risk situations • promote and monitor maintenance of the inventory of the most significant risks (risk portal) • approve the periodical reporting model to be submitted by the Business Units or the Risk Management Department and other mechanisms for reporting and monitoring EDP’s risks. The Risk Committee is presided by Director Ana Paula Marques and the person responsible for the Risk Management Department has secretarial duties. The Risk Committee held four meetings in 2021. Sustainability Committee The Sustainability Committee's responsibilities are as follows: • share information and discuss the implications of major legislative packages in the field of sustainability • share the Group's environmental performance indicators and benchmarks • discuss and give opinions on the annual Operational Environment and Sustainability Plans (POSA) and the annual consolidated budget • discuss and give opinions on the annual action plans and the EDP Group's goals and targets • monitor the progress of approved action plans and the activities of the EDP Group companies' sustainability management structures. The Sustainability Committee is presided by Director Miguel Setas and the person responsible for the Sustainability Department has secretarial duties. The Sustainability Committee held one meeting in 2021. Investments Committee The Investments Committee discusses and issues opinions on proposed investment and disinvestment projects and WACC proposals for the Business Units. The Investments Committee is presided by Director Rui Teixeira and a representative of the Business Analysis Department has secretarial duties. The Investments Committee held ninety-three meetings in 2021. Regulation Committee The mission of the Regulation Committee is as follows: • share regulatory practices in the Iberian Peninsula and the rest of Europe and those followed in Brazil; • analyse the European Commission's energy strategy and policies and the implementation of directives by the internal market and the competition and policies, legislation, regulations and organisation of the energy sectors in Portugal and Spain; • analyse prices evolutions and the implications of tariff policies and decisions on regulated activities; 131 • discuss and clarify the regulatory developments and modification, as well as the respective impacts. The Regulation Committee is presided by Director Ana Paula Marques and the person responsible for the Regulation and Markets Department has secretarial duties. The Regulation Committee held three meetings in 2021. Innovation Committee The Innovation Committee's main duties are: • discuss and propose strategic areas of innovation in the EDP Group • follow the governance model and EDP’s innovation results Discuss and propose changes • monitor the EDP Group's ongoing innovation initiatives and EDP Group projects in progress and propose corrective action. The Innovation Committee is presided by Director Ana Paula Marques and the Director of EDP Inovação has secretarial duties. Financing Committee The Financing Committee's main duties are: • develop an integrated view of corporate financial matters and processes together with the Business Units; • follow-up on initiatives of a financial nature across the Group, namely regarding efficiency; • promote internal and external benchmarking with a view to adopting best practices in the financial areas; • analyse and assess the information provided to the market, as well as the internal control and disclosure mechanisms. • The Financing Committee is presided by Director Rui Teixeira and, on a rotating basis, by the head of the Control and Management Department, the head of the Financial Department, the head of the Investor Relations Department and the head of the Global Coordination Department for Consolidation, IFRS Reporting and Taxation. The Financing Committee held one meeting in 2021. Stakeholders’ Committee The duties of the Stakeholders’ Committee are as follows: • evaluate the alignment and consistency of stakeholder relationship strategies in the different markets and geographical areas where the EDP Group operates; • discuss priorities and propose guidelines and a management model for the Group's relations with stakeholders; • assess compliance with the Group's stakeholder management policy. This Committee is presided by Director Ana Paula Marques and the person responsible for the Institutional Relations and Stakeholders Department has secretarial duties. 132 Pension Plan and Fund Committee The Pension Plan and Fund Committee's main responsibilities are: • share significant information with an impact on management of the pension fund; • analyse the performance of assets under management, fund profitability and management mandates and the performance of the different asset managers; • monitor the value of the fund's liabilities and level of financing; • issue an opinion on investment policy and/or management mandates, actuarial assumptions used in calculating the fund's liabilities and members' contributions to the fund. The Pension Plan and Fund Committee is presided by Director Rui Teixeira and the person responsible for the Financing Management Department has secretarial duties. The Pension Plan and Fund Committee held four meetings in 2021. P&O Committee The duties of the P&O Committee are as follows: • Present the P&O Division's annual action plan and its execution; • Align key policies that allow the promotion of best practices in the different areas; • Monitor KPIs and main initiatives in different areas. This Committee is presided by the Chairman of the Executive Board of Directors, Miguel Stilwell de Andrade, and the person responsible for the People & Organizational Development Global Unit has secretarial duties. The P&O Committee held one meeting in 2021. Digital and Information Technology Committee The Digital and Information Technology Committee's duties are as follows: • align the global strategy with Information technologies, including information safety; • define and consolidate the digital and information technology budget, including information safety; • monitor the main Digital and information technology projects. The Digital and Information Technology Committee is presided by Director Ana Paula Marques and the person responsible for Digital Global Unit has secretarial duties. The Digital and Information Technology Committee held two meetings in 2021. Prevention and Safety Committee The Prevention and Safety Committee's duties are as follows: 133 • issue an opinion on proposals for defining the EDP Group's objectives in terms of prevention and safety at work; • analyse the Annual Activity Report and give an opinion on EDP's Prevention and Safety Activities Plan; • assess the evolution of the main occupational safety indicators and propose improvement actions; • issue an opinion on the normative documents of the safety management system that have a general scope within the EDP Group or have a transversal impact on various sectors and activities The Prevention and Safety Committee is presided by Director Miguel Setas and the person responsible for Sustainability Department has secretarial duties. The Prevention and Safety Committee held two meetings in 2021. Ethics Commission The Ethics Committee, as initially formed, was set up following the approval of the EDP Group's Code of Ethics, being appointed by the General and Supervisory Board, on a proposal from the Executive Board of Directors, and after the opinion of the Corporate Governance and Sustainability Committee. In 2021, as a result of an exercise conducted internally regarding best practices in Corporate Ethics, EDP proceeded (i) to change the name from “Committee” to “Ethics Commission”, in order to move away from the concept of “Management Committee”, used at EDP for organizational figures of different nature and content (ii) to the adoption of an identical basic structure in different geographies, independent from the executive management, with a relatively small number of members, which includes two independent members of the General Supervisory Board, the respective Chairman being simultaneously Chairman of the Ethics Committee, and members with certain specific functions, namely, Ethics Ombudsman, Human Resources, Compliance and Legal. The main mission of this Committee is to independently ensure the monitoring and application of the EDP Code of Ethics, also proceeding with the assessment and deliberation, in accordance with the respective competences, of the matters submitted to it, as well as promoting and supporting the development and implementation of mechanisms for establishing the principles of business ethics in the Group. In 2021, the Ethics Commission held four meetings, two of which were still under the Ethics Committee format. Customer Ombudsman The Customer Ombudsman is an independent entity that was created in 2008 to reinforce the EDP Group's customer care policy. Its responsibilities, pursuant to Article 9 of the EDP Group Companies' Customer Ombudsman Regulation, are as follows: • receive and examine complaints filed by customers and directly related to actions or omissions by EDP Group companies • enter into dialogue with customers making a complaint • arbitrate disputes and conflicts between customers and EDP Group companies • issue opinions on matters relating to the activity of EDP Group companies, if requested to do so by any of their corporate bodies • propose measures to improve quality of service and customer satisfaction • contact third parties to obtain specialist information so that recommendations can be made to the EDP Group companies on measures to be taken to improve their customer relations. 134 Branch in Spain EDP – Energias de Portugal, Sociedad Anonima, Sucursal en España (EDP Spanish Branch) aims to manage and coordinates the energy interests of the EDP Group's dependent subsidiaries in Spain. Its management and supervisory bodies ensure optimisation of synergies and creation of value in operations and activities in Spain. It is also the organisational platform to lead the Iberian integration for support services. In this regard, EDP Spanish Branch owns all the corporate holdings in EDP España, S.A.U., EDP Servicios Financieros España S.A.U. and EDP International Investments & Services, S.L. as well as 74.98% of EDP Renováveis, S.A share capital. EDP Spanish Branch has offices in Madrid and Oviedo. It is represented in relations with third parties by permanent representatives, who have been appointed members of the EDP Executive Board of Directors for that purpose. The Branch's steering, coordination, management, and representation structure consists of an Executive Committee and Management Committee. The Executive Committee is composed of five permanent EDP representatives, one Corporate General Director (Group Controller for activities in Spain), and front-line managers in charge of the Business Units in Spain. This committee basically serves as the coordinator of the permanent representatives' activities. The Management Committee is chaired by the Group Controller and is a natural extension of the management departments at the EDP Corporate Centre, i.e. Environment, Sustainability and Innovation Department, Legal Department, Internal Audit Department, Financial, Management and Human Resources Department, a Procurement Department and Information Technology Department, Projects and Prevention Department, a Fundação EDP España Department and a Communication, Marketing, and Trademark Department, ensuring and regrouping homogeneously these position of subsidiaries of EDP Group in Spain. B) OPERATION 22\. Location where the operating regulations of the General and Supervisory Board and Executive Board of Directors can ser consulted The functioning of the General and Supervisory Board and Executive Board of Directors are governed by their Internal Regulation, available on EDP's website, at www.edp.com. 23\. Meetings and attendance rate of each member of the General and Supervisory Board and Executive Board of Directors Ordinary meetings of the General and Supervisory Board are held at least once every quarter and extraordinary meeting take place whenever convened by the Chairman, on his/her own initiative or at the request of any of its members, the Executive Board of Directors, or its Chairman, pursuant to Article 24 (1) of the Articles of Association and Article 20 (1) of the Internal Regulation of the General and Supervisory Board. The General and Supervisory Board met eleven times in 2021 and minutes were kept of all the meetings. Information on the attendance of each member of the board is provided in Annex II to this Report. Pursuant to the provisions of Article 20(1) of the Articles of Association and Article 7(1) of the Executive Board of Directors Internal Regulation, this body will have ordinarily met at least twice a month, as fortnightly meetings were compulsory. Nevertheless, the Executive Board of Directors meets weekly, as a rule. The Executive Board of Directors met seventy-one times in 2021 and minutes were kept of all the meetings. Information on the attendance of each member of the board is provided in Annex III of this Report. 24\. Company bodies with powers to evaluate performance of executive directors The Remuneration Committee of the General and Supervisory Board is responsible for, namely, the annual evaluation of the Executive Board of Directors, considering, among other factors, the fulfilment of the Company's strategy and the previously set goals, plans and budgets for the purpose of considering and determining the variable remuneration of the Chairman and 135 of the other members of the Executive Board of Directors. It also evaluates the individual performance of each member of the Executive Board of Directors, including this evaluation the contribution of each member to the mode of operation of this body and the relationship between the various corporate bodies of the Company. Additionally, the General and Supervisory Board evaluates the Executive Board of Directors accordingly with the abovementioned Item 21. 25\. Pre-determined criteria for performance evaluation of executive directors These criteria for evaluating the performance of the Members of the Executive Board of Directors are set out in points 69 and 71 of the Corporate Governance Report. 26\. Positions held at other Group or non-group companies by each member of the General and Supervisory Board and Executive Board of Directors The positions held by members of the General and Supervisory Board and Executive Board of Directors in other EDP Group or non-group companies are shown in Annex I and IV of this Report. C) Committees of the managing or supervisory body 27\. Committees set up in the General and Supervisory Board and Executive Board of Directors The Internal Regulation of the General and Supervisory Board as well as the provisions of the law and of the Articles of Association regarding the Financial Matters Committee/Audit Committee provide for the establishment of permanent committees and temporary committees, composed of some of its members, without prejudice to its responsibility for the exercise of its duties as a corporate body. These committees may be set up whenever it sees fit and appropriate and have specific duties delegated to them. It should be noted that, in the case of the Financial Matters Committee / Audit Committee, the respective existence derives from the law, considering the governance model in force at EDP. The main remit of the permanent and temporary committees is the specific and continuous monitoring of the matters entrusted to them, in order to ensure informed resolutions by the General and Supervisory Board or provide it with information on certain matters. The committees' activity is coordinated by the Chairman of the General and Supervisory Board, who ensures proper articulation of the committees with the plenary board through their chairmen, who keep him informed by sending notices and the minutes of meetings. The General and Supervisory Board believes that the committees are important to the regular functioning of the Company as they can perform certain delegated duties, especially monitoring the Company's financial information, reflecting on its governance system, assessing the performance of directors, and evaluating its own overall performance. Currently, the General and Supervisory Board holds four Specialized Committees: the Financial Matters Committee/Audit Committee, the Remuneration Committee, the Corporate Governance and Sustainability Committee, and the United States of America Business Affairs Monitoring Committee, as the Strategy and Performance Committee was extinct on 15 April 2021 following a decision of the General and Supervisory Board. 28\. Membership of the executive committee and/or name of managing director(s) Not applicable to EDP's governance model. 136 29\. Duties of each committee and summary of work performed while carrying them out A. The Committees of the General and Supervisory Board Financial Matters Committee/Audit Committee Currently, the Financial Matters Committee/Audit Committee is made up of three independent members with the appropriate qualifications and experience, including at least one member with a degree in the area of the committee’s duties and specific knowledge of auditing and accounting, as confirmed by the Curriculum Vitae of Chairman, which can be viewed in Annex I of the current Report. Until 14 April 2021, the Financial Matters Committee/Audit Committee was composed as follows: FINANCIAL MATTERS COMMITTEE / AUDIT COMMITTEE FIRST APPOINTMENT DATE Chairman Luís Filipe Marques Amado 06/04/2018 Vice-Chairman João Carlos Carvalho das Neves 22/04/2015 Clementina Maria Dâmaso de Jesus da Silva Barroso 06/04/2018 Maria Celeste Ferreira Lopes Cardona 18/04/2012 María del Carmen Ana Fernández Rozado 22/04/2015 Following the General Shareholders’ Meeting held on 14 April 2021, the new members of the Financial Matters Committee/Audit Committee were appointed on 15 April 2021, and the Committee is now composed of the following members: FINANCIAL MATTERS COMMITTEE / AUDIT COMMITTEE FIRST APPOINTMENT DATE Chairman João Carlos Carvalho Das Neves 22/04/2015 María del Carmen Ana Fernández Rozado 22/04/2015 Helena Sofia da Silva Borges Salgado Fonseca Cerveira Pinto 15/04/2021 In accordance with Articles of Association and the Internal Regulation of the Financial Matters Committee/Audit Committee and under the applicable law, are assigned to this Committee, by delegation from the General and Supervisory Board, the following powers: • financial matters and financial practices; • internal audit practices and procedures; • internal mechanisms and procedures of the Internal Control System for Financial reporting (ICSFR); • matters relating to risk management and control system; • activities and mechanisms of the compliance management system; • activity and independence of the Statutory Auditor (SA) / Society of Chartered Accountants (SROC) of the company; • systems for assessing and resolving conflicts of interest, particularly regarding the Company’s relations with shareholders. The composition, role and functioning of the Financial Matters Committee/Audit Committee are in line with the applicable legislation and regulation, including the European Commission Recommendation of 15 February 2005 (2005/162/EC), the European Commission Recommendation of 30 April 2009 (2009/385/EC) as well as the recommendations provided for by the Corporate Governance Code of the Portuguese Institute for Corporate Governance, having the respective Internal Regulation been updated in December 2021. 137 The Financial Matters Committee/Audit Committee held sixteen meetings in 2021, as envisaged in its Activity Plan. The main matters addressed in those meetings were: the supervision of financial and business information and the monitoring of the activity of Internal Audit, the Internal Control System for Financial Reporting (SCIRF), the Compliance Management System and the Risk Management System. In this context, it also monitored and supervised litigation procedures, transactions with related parties, ongoing investment procedures, the performance of the EDP Group Pension Fund, the received communications of irregularities, the relationship with Audit Committees of subsidiaries. the contractual relationship, and the assessment of the objective conditions for the activity and independence of the Statutory Auditor. Remuneration Committee of the General and Supervisory Board The Remuneration Committee appointed by the General and Supervisory Board, pursuant to Article 27 of EDP’s Articles of Association, submits a proposal for a remuneration policy to the members of the Executive Board of Directors to the approval of the General Shareholders’ Meeting, at least every four years and whenever there is a material change in the currently in force remuneration policy. The mission of this Specialized Committee is to: • prepare and submit the company policy and objectives regarding the Executive Board of Directors Chairman’ and Directors’ remuneration determination; • set the Executive Board of Directors Chairman’ and Directors’ remuneration; • monitor and assess the Executive Board of Directors Chairman’ and Directors’ performance for the purposes of determination of the variable remuneration; • monitor the dissemination of external information on remuneration and the Executive Board of Directors remuneration policy, in particular th§e Remuneration Report. Until 14 April 2021, the Remuneration Committee of the General and Supervisory Board was composed as follows: REMUNERATION COMMITTEE OF THE GENERAL AND SUPERVISORY BOARD FIRST APPOINTMENT DATE Chairman Shengliang Wu 13/12/2018 Fernando Maria Masaveu Herrero 22/04/2015 Ilídio da Costa Leite de Pinho 22/05/2012 João Carlos Carvalho das Neves 22/04/2015 Vasco Joaquim Rocha Vieira 22/04/2015 Following the General Shareholders’ Meeting held on 14 April 2021, the new members of the Remuneration Committee of the General and Supervisory Board were appointed on 15 April 2021, and the Committee is now composed of the following members: REMUNERATION COMMITTEE OF THE GENERAL AND SUPERVISORY BOARD FIRST APPOINTMENT DATE Chairman Miguel Espregueira Mendes Pereira Leite 15/04/2021 Esmeralda da Silva Santos Dourado 15/04/2021 Felipe Fernández Fernández 15/04/2021 João Carvalho das Neves 22/04/2015 Zili Shao 15/04/2021 138 In accordance with statutory amendment approved on 14 April 2021, and under the applicable law, the Remuneration Committee of the General and Supervisory Board must submit a remuneration proposal of the members of the Executive Board of Directors to the Annual General Shareholders’ Meeting for approval. Throughout 2021, and considering its competencies, the Remuneration Committee of the General and Supervisory Board held four meetings, two more than those provided for in its activity plan, due to the conclusion of the work to review the Remuneration policy for the Executive Board of Directors, having proceeded (i) to the determination of the annual variable remuneration for the year 2020, as well as the multiannual remuneration of the members of the Executive Board of Directors and (ii) to the approval of the proposed remuneration policy for the members of the Executive Board of Directors to be submitted for approval of the General Shareholders’ Meeting of 14 April 2021. Corporate Governance and Sustainability Committee The Corporate Governance and Sustainability Committee is a specialised committee of the General and Supervisory Board. Its purpose is to permanently monitor and supervise all matters related with the following: • corporate governance; • sustainability in all its dimensions; • Internal codes of ethics and conduct; • Systems for evaluating and resolving conflicts of interest in relations between the Company and its shareholders, through the analysis of the proposals for remedies regarding situations reported to this Committee by the Financial Matters Committee/Audit Committee (AUDC); • internal proceedings and relationship between the Company and Subsidiary or Group companies and their employees, clients, providers, and remaining stakeholders; • succession plans; • the evaluation process of the General and Supervisory Board and the different Specialized Committees. The Corporate Governance and Sustainability Committee is made up of members of the General and Supervisory Board, the majority of whom are independent, with the appropriate qualifications and experience for their duties. Until 14 April 2021, the composition of the Corporate Governance and Sustainability Committee was the following: CORPORATE GOVERNANCE AND SUSTAINABILITY COMMITTEE FIRST APPOINTMENT DATE Chairman Luís Filipe Marques Amado 22/04/2015 Augusto Carlos Serra Ventura Mateus 06/04/2018 Felipe Fernández Fernández 22/04/2015 Ignacio Herrero Ruiz 13/12/2018 Jorge Avelino Braga de Macedo 22/04/2015 Li Li 23/01/2020 Maria Celeste Ferreira Lopes Cardona 18/04/2012 139 Following the General Shareholders’ Meeting held on 14 April 2021, the new members of the Corporate Governance and Sustainability Committee were appointed on 15 April 2021, and the Committee is now composed of the following members: CORPORATE GOVERNANCE AND SUSTAINABILITY COMMITTEE FIRST APPOINTMENT DATE Chairman João Luís Ramalho de Carvalho Talone 15/04/2021 Ignacio Herrero Ruiz 13/12/2018 Fernando Maria Masaveu Herrero 15/04/2021 Laurie Lee Fitch 15/04/2021 Li Li 23/01/2020 María del Carmen Ana Fernández Rozado 15/04/2021 Sandrine Dixson-Declève 15/04/2021 Considering the competencies of the Corporate Governance and Sustainability Committee, the following topics addressed should be highlighted in the five meetings held in 2021: (i) Ethics at EDP - monitoring the implementation of the Ethics Program, analysis of the opinions issued by the Ethics Commission regarding reported ethical complaints, and monitoring of the Ethical Climate Study; (ii) our people – monitoring of the 2020 Climate Study; monitoring and approval of the Strategic Plan in the area of People and Organization management, the Succession Plan for top management and the EDP Group’s 2021-2022 Gender Equality Plan, and analysis of the study “organizations in a post-pandemic future, the case of EDP”; (iii) Environment, Sustainability and Governance – analysis and appreciation of the EDP Group's “ESG Excelence Roadmap 2030”, monitoring of EDP's action with regard to the European agenda for a Just Transition in the energy sector; (iv) thematic analysis of Sustainable Finance and the establishment of the EU Taxonomy and monitoring of EDP's ratings at ESG level, where the Dow Jones Sustainability Index stands out. United States of America Business Affairs Monitoring Committee The mission of the United States of America Business Affairs Monitoring Committee is the monitoring and passing of resolutions on matters related with the activity undertaken by companies wholly or majority held by and/or subsidiary of EDP Group in the United States of America, notably regarding: • strategic/business plans, assessing the different developing scenarios in which they rest and their implementation, including the resources necessary to its execution (human and financial); • annual budget; • investment, divestment, merger, acquisition and restructuring projects of significant value businesses; • financing transactions; • alliances /strategic partnerships entered into, the specific actions deriving therefrom and evolution of counterpart risks; • issuance of prior opinions including in cases of urgency following the requests presented by the Executive Board of Directors; • compliance of the assumed commitments regarding public safety; • performance, risk assessment, value at risk and the respective management. The Committee is further responsible for defining compliance procedures on the obligations assumed by EDP regarding the development of the business of companies wholly or majority held by and/or subsidiary of EDP Group in the United States of America with respect to the General and Supervisory Board activity. Until 14 April 2021, the United States of America Business Affairs Monitoring Committee was composed of the following members: 140 UNITED STATES OF AMERICA BUSINESS AFFAIRS MONITORING COMMITTEE FIRST APPOINTMENT DATE Chairman Luís Filipe Marques Amado 16/03/2020 Augusto Carlos Serra Ventura Mateus 16/03/2020 Clementina Maria Dâmaso de Jesus da Silva Barroso 16/03/2020 Felipe Fernández Fernández 16/03/2020 João Carvalho das Neves 16/03/2020 Jorge Avelino Braga de Macedo 16/03/2020 Vasco Joaquim Rocha Vieira 16/03/2020 Following the General Shareholders’ Meeting held on 14 April 2021, the new members of the United States of America Business Affairs Monitoring Committee were appointed on 15 April 2021, and the Committee is now composed of the following members: UNITED STATES OF AMERICA BUSINESS AFFAIRS MONITORING COMMITTEE FIRST APPOINTMENT DATE Chairman João Luís Ramalho de Carvalho Talone 15/04/2021 Esmeralda da Silva Santos Dourado 15/04/2021 Felipe Fernández Fernández 16/03/2020 Laurie Lee Fitch 15/04/2021 Helena Sofia Silva Borges Salgado Fonseca Cerveira Pinto 15/04/2021 In 2021, the United States of America Business Affairs Monitoring Committee held eight meetings, covering, among other matters, the monitoring of the 2021-2025 Business Plan and EDP Renováveis' action strategy in the United States of America; the ongoing investment and divestment projects at EDPR North America; monitoring of the EDP Group's financial information in the United States of America; monitoring the strategic partnership between EDP Renováveis and Engie in the offshore wind segment in the United States of America; the status of compliance mechanisms in the United States of America; monitoring EDPR North America's regulatory strategy and the evolution of renewables legislation in the United States of America; the company's sustainability strategy in the United States of America; business risk analysis in the United States of America; monitoring of EDPR North America's talent management; monitoring logistical bottlenecks in the United States of America supply chain and possible impact on EDPR North America operations; and monitoring of EDPR North America's 2022 Group Budget. B. Other company bodies Environment and Sustainability Board The Environment Board was set up as a company body in 1991. Its name was changed to Environment and Sustainability Board by decision of the Annual General Meeting of 30 March 2006. As a corporate body, the Environment and Sustainability Board has powers to advise the Executive Board of Directors on environment and sustainability matters. In particular, it provides advice and support in defining the Company’s environmental and sustainability strategy and drafting opinions and recommendations on the environmental impact of projects planned by the EDP Group (Article 28 (1) of EDP’s Articles of Association). The members of the Environment and Sustainability Board, pursuant to Article 28 (2) of EDP’s Articles of Association, have acknowledged competence in the field of environmental protection and sustainability. Until 14 April 2021, the composition of the Environment and Sustainability Board was as follows: 141 ENVIRONMENTAL AND SUSTAINABILITY BOARD Chairman José Manuel Caré Baptista Viegas António José Tomás Gomes de Pinho Joana Pinto Balsemão Joaquim Poças Martins Pedro Manuel Sousa Mendes Oliveira As from 14 April 2021, the composition of the Environment and Sustainability Board was as follows: ENVIRONMENTAL AND SUSTAINABILITY BOARD Chairman José Manuel Caré Baptista Viegas Joana Pinto Balsemão Joaquim Poças Martins Maria Mendiluce Pedro Manuel Sousa Mendes Oliveira The Environment and Sustainability Board held two meetings in 2021. Remuneration Committee of the General Meeting The Remuneration Committee elected by the General Meeting is responsible for setting the remuneration of the members of the governing bodies, with the exception of the members of the Executive Board of Directors, in accordance with the proposed remuneration policy to be submitted for approval by the General Shareholders’ Meeting (paragraph d) of number 2 of article 11 of EDP’s Articles of Association). Pursuant to this Article of the Articles of Association, the majority of the members of the Remuneration Committee of the General Meeting must be independent. The members of the Remuneration Committee of the General Shareholders’ Meeting were reappointed at the Annual General Shareholders’ Meeting held on 14 April 2021 for the 2021-2023 term-of-office, with the following composition: REMUNERATION COMMITTEE OF THE GENERAL MEETING CHAIRMAN LUÍS MIGUEL NOGUEIRA FREIRE CORTES MARTINS José Gonçalo Maury Jaime Amaral Anahory In 2021, the Remuneration Committee of the General Shareholders’ Meeting held two meetings. III. Supervision A) Composition 30\. The supervisory body EDP's two-tier model of corporate governance has made possible an effective separation between supervision and management of the Company. The General and Supervisory Board is the highest supervisory body. 142 31\. Membership Financial matters committee - effective members and term of office The duties of the Financial Matters Committee / Audit Committee are described in Item 29 of the Corporate Governance Report. The Financial Matters Committee / Audit Committee is composed by three independent members with the appropriate qualifications and experience, including at least one member with a degree in the area of the committee’s duties and specific knowledge of auditing and accounting, as confirmed by the Curriculum Vitae of the Chairman, which, as previously stated, can be consulted in Annex I of this Report. Under article 23 no. 3 of EDP’s Articles of Association, this Committee is presided by an independent member. The Financial Matters Committee / Audit Committee currently has the following composition: FINANCIAL MATTERS COMMITTEE / AUDIT COMMITTEE FIRST APPOINTMENT DATE Chairman João Carlos Carvalho Das Neves 22/04/2015 María del Carmen Ana Fernández Rozado 22/04/2015 Helena Sofia da Silva Borges Salgado Fonseca Cerveira Pinto 15/04/2021 32\. Independent members of the Financial Matters Committee See Item 31 of this Report. 33\. Qualifications of members of the Financial Matters Committee See Annex I of this Report. B) Operation 34\. Location at which the operating procedures of the Financial Matters Committee/Audit Committee can be viewed The Financial Matters Committee / Audit Committee's work is governed by Internal Regulation, available on EDP's website at www.edp.com. 35\. Meetings and attendance rate of each member of the Financial Matters Committee / Audit Committee During 2021, the Financial Matters Committee / Audit Committee held sixteen meetings, and minutes of the respective meetings were drawn up. Information regarding the attendance of members of the aforementioned Committee is described in Annex V of this Report as well as in the Annual Report of the General and Supervisory Board. 36\. Positions held in other companies within and outside the Group by each Financial Matters Committee / Audit Committee member See Annex I of this Report. C) Powers and Duties 37\. Procedures and criteria governing the supervisory body's involvement in hiring additional services from the external auditor 143 The proposal for hiring additional services of the Statutory Auditor is presented by the Executive Board of Directors to the Financial Matters Committee / Audit Committee and any contracting requires the prior authorisation of that Committee. Internal Regulation on the Provision of Services by the Statutory Auditor of EDP are in force, in this regard, and the implications on the hiring of additional services are described in Item 46. There are other internal regulations adopted by the Executive Board of Directors that ensure all EDP Group companies comply with the rules contained in the referred Internal Regulation. 38\. Other duties of the supervisory bodies and, if applicable, of the Financial Matters Committee/Audit Committee The duties of the Financial Matters Committee / Audit Committee pursuant to the Articles of Association and the Internal Regulation of the Financial Matters Committee / Audit Committee are described in Item 29 as well as in the Annual General and Supervisory Board Report. IV. Statutory Auditor 39\. The statutory auditor and the certified auditor representing it At the General Shareholders’ Meeting held on 14 April 2021, PriceWaterhouseCoopers & Associados - Sociedade de Revisores de Contas, Lda., Sociedade Revisor Oficial de Contas number 183, represented by João Rui Fernandes Ramos (ROC no. 1333), was re-elected as Statutory Auditor for the three-year period 2021-2023, and on the same date, Aurélio Adriano Rangel Amado (ROC no. 1074) was re-elected as Alternate of the Statutory Auditor, to perform duties during the aforementioned three-year period 40\. Number of years for which the statutory auditor has worked consecutively with the company and/or Group The statutory auditor PricewaterhouseCoopers & Associados - Sociedade de Revisores de Contas, Lda. has worked with the Company since 5 April 2018. 41\. Other services provided to the company by the statutory auditor The Statutory Auditor is the company body responsible for the examination of the accounting documents. It is elected by the General Meeting for a three-year term, pursuant to Article 25 of EDP’s Articles of Association and Article 446 of the Portuguese Company Code. According to the Companies Code and the Company’s Articles of Association, the Statutory Auditor is responsible for checking (see Article 446 (3) of the Company Code): • the regularity of the Company’s books, accounting records and their supporting documents • the cash and all assets or securities belonging to the company or received by it as guarantees, deposits or for any other purpose, whenever and however it sees fit • the accuracy of the accounting documents • whether the company's accounting policies and valuation criteria result in an accurate assessment of its assets and results. A description of the services provided by the Statutory Auditor can be found on Item 46. 144 V. External Auditor 42\. The external auditor and certified auditor partner representing it Since the General Shareholders’ Meeting held on 5 April 2018, date of its respective election, is PriceWaterhouseCoopers was appointed External Auditor, being João Rui Fernandes Ramos the partner in charge of overseeing and performing audits of the EDP Group's accounts, and was reappointed for the 2021-2023 period, at the General Shareholders’ Meeting held on 14 April 2021. PriceWaterhouseCoopers is registered before the Portuguese Securities Commission under number 20161485. The External Auditor performs the necessary audit work to ensure the reliability of the financial reporting and credibility of the accounting documents. The External Auditor's duties include checking compliance with remuneration policies and systems, the efficacy of internal control mechanisms and reporting of any significant deficiencies to the General and Supervisory Board. EDP takes measures specifically aimed at ensuring the independence of the External Auditor, in view of the scope of services provided by audit firms. 43\. Number of years for which the external auditor and certified auditor partner representing it have worked consecutively with the company and/or group. EDP's External Auditor is as from its election on 5 April 2018, PriceWaterhouseCoopers, having been appointed João Rui Fernandes Ramos as the partner in charge on such date and who was reelected on 14 April 2021. 44\. Policy on and frequency of rotation of external auditor and certified auditor partner representing it The rotation of the External Auditor and certified auditor partner representing it depends on the strict assessment by the Financial Matters Committee / Audit Committee of the independence and quality of the work done and consideration of the independence of the Statutory Auditor and External Auditor and the advantages and costs of replacing them. Considering the rules referring to the mandatory rotation of the External Auditor and of the Statutory Auditor, pursuant to Article 54 (3)(4) of the By-Laws of the Association of the Statutory Auditors, and the fact that the mandate of KPMG has terminated on 31 December 2017, such rotation was fulfilled for the service provision of Statutory Auditor and External Auditor for the triennium of 2018-2020. In this sense, and under a Financial Matters Committee / Audit Committee proposal, the General and Supervisory Board resolved to launch a consultation process in order to select the Statutory Auditor of EDP Group for the 2018-2020 mandate, as well as to create two specific Committees to develop the consultation process, specifically, (i) Monitoring and Analysis Committee, with the purpose of monitoring the tender process and analysing the proposals, as well as to prepare a summary of the respective conclusions, to report to the Assessment Committee and (ii) Assessment Committee , with the aim of assessing the results presented by the Monitoring and Analysis Committee and preparing a proposal to the Financial Matters Committee / Audit Committee. From the work performed and from the assessment conducted to the presented proposals, both accomplished with autonomy and without third parties influence, two proposals were selected in accordance with the selection criteria identified in the consultancy program which were presented to the Annual Shareholders General Meeting, which took place on 5 April 2018, having been elected PriceWaterhouseCoopers as statutory audit for the 2018-2020 triennium. To the extent that PricewaterhouseCoopers & Associados - Sociedade de Revisores de Contas, Lda. was elected for the mandate corresponding to the 2018-2020 term, in the second half of 2020, the General and Supervisory Board and the Financial Matters Committee / Audit Committee started preparing the process for the presentation, at the 2021 Annual General Shareholders’ Meeting, of a proposal for the re-election of the EDP statutory auditor for the 2021-2023 triennium. 145 Such work was carried out by the Financial Matters Committee / Audit Committee, under the delegation granted by the General and Supervisory Board. This work is concluded, and considering that, according to paragraphs 3 and 4 of article 54 of the Statute of the Order of Statutory Auditors, in publicly traded entities the maximum period of exercise of statutory audit functions by the statutory auditor accounts is for two or three terms, depending on whether they are, respectively, four or three years, the referred Committee submitted to the supervisory body the presentation, to the EDP 2021 Annual General Meeting, of a proposal for the renewal of PriceWaterHouseCoopers to the position of EDP's statutory auditor for the term corresponding to the 2021-2023 triennium. The General and Supervisory Board approved the proposal for the reappointment of PriceWaterhouseCoopers to the position of Statutory Auditor at EDP for the 2021-2023 period at the meeting held on 26 November 2020 which was submitted by the General and Supervisory Board and approved at the General Shareholders’ Meeting held on 14 April 2021. 45\. Body responsible for assessing the external auditor and frequency of assessment The Financial Matters Committee / Audit Committee presents annually to the General and Supervisory Board the report on the assessment of the activity and independence of the External Auditor and EDP’s Statutory Auditor. The result of the appreciation is published in the report of the General and Supervisory Board. 46\. Non-Audit Services done by the external auditor for the company and/or subsidiaries and internal procedures for approving hiring of these services and reasons for hiring them Proposals to hire non-audit services from the External Auditor and Statutory Auditor are presented by the Executive Board of Directors to the Financial Matters Committee / Audit Committee and their hiring requires prior authorisation from this Committee. The Regulation on Services Provided by EDP's Statutory Auditor and External Auditor determines, regarding the contracting of non-audit services, that the Financial Matters Committee / Audit Committee may deny authorisation of those services if one such service is prohibited and/or involves a possible threat to the independence of the Statutory Auditor. The above- mentioned regulations are available on the EDP’s website www.edp.com In 2021, the following services were performed by the External Auditor: AUDIT SERVICES AND STATUTORY AUDIT: • necessary services (including internal control procedures required as part of audits) for the issue of the External Auditor's annual on the accounts • services required for compliance with local legislation (including internal control procedures required as part of audits) for the issue of Legal Certifications of Accounts. OTHER ASSURANCE OF RELIABILITY SERVICES: Services with a specific or limited purpose or scope, namely: • necessary services for the issue of the interim reports and quarterly information on the accounts • audit services (pre-assurance) related to the accounting impacts of a subsidiary’s capital increase documented in a technical document prepared by EDP; • assurance of reliability on the Internal Control System on Financial Reporting • assurance of reliability on the Sustainability information • assurance of reliability on annual financial information of regulated activities • comfort letters issuance 146 • opinion over carve-out and mergers under the terms of Portuguese Companies Code. • assurance of reliability on the Billing report for the entities covered by the Framework Agreement of the Public Administration Shared Services Entity (“ESPAP”); • Audit reports related to increase, reductions of share capital under the Code of Commercial Companies. OTHER SERVICES: • Support on the file generation of the Country-by-Country reporting (CbCr) from 2020, in XML, according to the current legislation The reasons for hiring these services were essentially related with i) better understanding of the Group's business, ensuring appropriate knowledge of the relevant information, which promotes greater agility and efficiency in providing solutions and ii) it was considered that the hiring of such services was not considered a threat to the independence of the External Auditor and did not foster any situation of personal interest in relation to the guarantee of independence given by the External Auditor. The services that are not related with Audit and statutory audit of accounts requested by Group entities to the External Auditor and to other entities belonging to the same network, amounted to 1,497,340 Euro. 47\. Annual remuneration paid by the company and/or subsidiary or group companies to the auditor and other natural or legal persons belonging to the same network and breakdown of percentage for the following services: PriceWaterhouseCoopers is responsible for conducting an independent External Audit of all the EDP Group companies in Portugal, Spain, Brazil (only in EDP Renováveis) and USA, as well as in other countries in which the Group operates. In the subgroup of EDP Brasil independent external auditing is conducted by KPMG. In 2021, the recognised, specialised costs of the fees of PriceWaterhouseCoopers and KPMG for audit and statutory audit of accounts, other assurance of reliability services and other services than auditing for Portugal, Spain, Brazil, United States of America, and other countries were as follows: PRICEWATERHOUSE COOPERS EUROS PORTUGAL SPAIN BRAZIL USA OTHER COUNTRIES TOTAL Audit and statutory audit of accounts 2.497.251 1.313.630 188.719 1.290.216 1.084.298 6.374.114 Other assurance of reliability services (*) 928.094 316.214 6.000 \- 14.865 1.265.173 Total of audit and assurance of reliability services 3.425.345 1.629.844 194.719 1.290.216 1.099.163 7.639.287 98% Tax consultancy services \- \- \- \- \- \- Other services 18.800 1.542 168.483 \- \- 188.825 Total of other services 18.800 1.542 168.483 \- \- 188.825 2% Total 3.444.145 44% 1.631.386 21% 363.202 2% 1.290.216 16% 1.099.163 14% 7.828.112 100% (*) Includes assurance of reliability services of the exclusive competence and responsibility of the Statutory Auditor and External Auditor in accordance with the Regulations on Provision of Services by Statutory Auditor or Statutory Auditing Company approved by the General and Supervisory Board. 147 The audit and statutory audit of accounts in Portugal include 1,711,710 Euro related with statutory audit fees, on a company and in consolidated basis, of EDP - Energias de Portugal, S.A. KPMG EUROS BRAZIL TOTAL Audit and statutory audit of accounts 432,913 432,913 Other assurance of reliability services 43,342 43,342 Total of audit and assurance of reliability services 476,254 476,254 100% Tax consultancy services \- \- Other additional services \- \- Total of other services \- \- -% Total 476,254 100% 476,254 100% C. Internal Organisation I. Articles of Association 48\. Rules on amendments to the company’s Articles of Association EDP's Articles of Association do not set forth special rules on their amendment and the general rule set out in 3 Article 386 (3) of the Companies Code therefore applies, i.e., decisions to amend the Articles of Association must be approved at a General Meeting by two-thirds of the votes cast. EDP's Articles of Association may also be amended under the powers of the Executive Board of Directors to move EDP's registered office (Article 2 (1) of EDP's Articles of Association) and increase EDP's share capital (Article 4 (3) of EDP's Articles of Association) provided that a favourable prior opinion of the General and Supervisory Board is obtained (article 17 (2) paragraph g) of EDP's Articles of Association). Pursuant to the general rule set out in Article 410 (7) of the Company Code, by reference to Article 433 of this code, these decisions by the Executive Board of Directors must be passed by a majority of the votes of the directors present or represented. II. Whistleblowing 49\. Whistleblowing policy and channels The EDP Group has consistently implemented measures to ensure the good governance of its companies, including the prevention of incorrect practices, particularly in matters related to accounting, internal accounting controls, auditing, complaints, denouncements or other irregularities and fight against corruption, banking, and financial crime and, for this purpose, updated in April 2020, the Whistleblowing Procedures Regulation. EDP provides Group employees, shareholders, Statutory Auditor or to any other stakeholders with a channel that enables them to report irregularities on such matters directly and confidentially to the Financial Matters Committee / Audit Committee of the General and Supervisory Board. With the creation of this channel for reporting irregularities, EDP aims at: • ensuring that any stakeholder can freely communicate his/her concerns in these fields to the Financial Matters Committee / Audit Committee 148 • facilitating the early detection of irregular situations that, if they occurred, might cause serious damage to the EDP Group, its employees, customers, shareholders, and stakeholders. The contact with the Financial Matters Committee / Audit Committee is made through a platform that supports the operation of the channel, with security and encryption mechanisms for all information, allowing to establish an interaction with the respective author, maintaining anonymity. The communications of irregularities are treated as confidential information, namely by the General and Supervisory Board, the Financial Matters Committee / Audit Committee, and the persons in charge of the operational management of the mechanisms and procedures for receiving, retaining, and handling irregularity communications. Knowledge of its existence and the conclusions of the analysis will be limited to those who need this information to carry out their professional tasks. The Company may not dismiss, threaten, suspend, suppress, harass, withhold, or suspend payments of wages and / or benefits, demote, transfer, or otherwise take any disciplinary or retaliatory action related to the terms and conditions of a work contract of an employee, agent, or representative of the Company, insofar as that person legally reports an irregularity or provides some information or assistance in the scope of the analysis of the reported irregularities presented. The Financial Matters Committee / Audit Committee informed the General and Supervisory Board of the work carried out regarding the mechanism for reporting irregularities in the financial year of 2021, and mentioned that, during this period, the Financial Matters Committee / Audit Committee received and analysed by four reports of irregularities. These communications are covered within the “subjects covered” defined in the Whistleblowing Procedures Internal Regulation, and the aforementioned Specialized Committee is responsible for instructing, conducting, and supervising the inherent investigation processes. As a result of the analysis carried out by the Financial Matters Committee/Audit Committee on the four communications received, it was concluded that two of them were closed and did not confirm the reported irregularities, another was closed and was considered valid (the reported irregularity was confirmed, and was related to theft of energy, with a claim for compensation of the amount receivable) and another one was considered valid and is under analysis and investigation by the competent services of EDP. The authors of the referred communications were informed, in accordance with the provisions of the Whistleblowing Procedures Internal Regulation, about their status. EDP makes available, at its website, greater detail regarding the Whistle Blowing Procedures’ Regulation to adopt in what concerns to Communication of Erroneous Procedures www.edp.com/en/edp/irregularities-communication-channel. III. Internal Control and Risk Management 50\. People, bodies, or committees responsible for internal audits or implementation of internal control systems The EDP Group's Compliance Management System, aligned with the risk management model, is founded on an internal control system based on the “three lines of defence”, in order to properly identify and manage the risks arising from the activity, under the terms of the which: • The First line of defence (Business): it has, among others, the responsibility for the daily and proactive management of compliance risks, in line with the established regulations. The top management of each functional, business or support unit and all employees who are part of them are identified. • The Second line of defence (Compliance): it has, among others, the responsibility of ensuring business support in the identification, analysis, evaluation, mitigation, and monitoring of risk, as well as challenging and questioning the potential risks that may arise. The Compliance Department supported by the Compliance Departments of EDP España, EDP Energias do Brasil and EDP Renováveis, and the performance of a network of Compliance Partners, Compliance Business Partners and the Local SCIRF Managers (Reporting on Internal Control Systems). • The Third line of defence (Internal Audit): it has, among others, the responsibility for carrying out independent audits to the Compliance Management System. These audits may also be carried out by independent external entities with recognized capacity for that purpose. 149 As defined, this model allows the rationalization of resources and efforts, promotes coordination between functions and homogenization of language and links all Business Units / Departments through a common infrastructure, which shares the same information systems and processes. The Group's Compliance Management System, formalized by EDP’s compliance standard, updated in 2021, considers the particularities of the size and activity of each Business Unit and geography. In this sense, the compliance function is supported by a structure composed of the Compliance Department, the Local Compliance Departments (subgroups / geographies), Compliance Partners, Compliance Business Partners and Local SCIRF Managers, which complement the network dedicated to compliance management in the EDP Group, allowing for an optimization of resources and the effective diffusion / implementation of compliance mechanisms at the various levels of the organization. In addition, EDP Group has implemented a Compliance Management System approved by the Executive Board of Directors and the Financial Matters Committee / Audit Committee, in line with the best international practices, namely with the references of ISO 37301:2021 Compliance Management Systems - Guidelines and with the COSO (Committee of Sponsoring Organizations of the Treadway Commission) framework for risk management, internal control and fraud prevention. The aforementioned Compliance Management System reinforces the special importance that the Group attaches to compliance with legislation and regulations, good professional and industry practices, as well as respect for the principles and values contained in the Code of Ethics and the Integrity Policy which are fundamental instruments to achieve the objectives and proceed with the rigorous execution of the respective strategy. On the other hand, it shows the EDP Group's commitment to ensure (i) an adequate identification, assessment, and management of compliance risks, in order to minimize the risk of sanctions, namely financial and possible operational and reputational impacts, and (ii) the confidence of the stakeholders, reinforcing the competitiveness of the EDP Group. The Compliance Management System allows the harmonization of guidelines and methodologies for compliance management, across the organization and different regulatory spheres, ensuring alignment with other internal policies and procedures, namely with the Integrity Policy and the Code of Conduct EDP Group Ethics, seeking the continuous improvement of the actions developed. The compliance function's mission is to promote a culture of compliance and integrity, by identifying relevant compliance risks and by disseminating and coordinating the implementation of mechanisms that promote compliance, providing proactive and systematic advice to the entire organization. Through the work developed over the years, EDP Group's Compliance Management System currently has different mechanisms, such as specific policies and procedures, channels for communicating internal and external irregularities, periodic training / awareness initiatives and monitoring instruments that enable the identification of situations to analyse in a logic of continuous improvement, responding to internal and external challenges. The Compliance Department's activity is essentially based on four pillars, namely: • identification and analysis of compliance risks; • promotion and coordination of the implementation of policies, procedures, and other control mechanisms, in order to mitigate the identified compliance risks; • monitoring of procedures and other compliance mechanisms adopted, in order to assess the maintenance of their adequacy and efficiency; • periodic reporting to the Executive Board of Directors and the Financial Matters Committee / Audit Committee of the most relevant topics that may represent a significant risk for the Group. The Compliance Department also has as main responsibilities to contribute to the improvement of risk management processes associated, in an external plan, with legal and regulatory compliance and, in an internal plan, with compliance with the regulations and other internal regulations in force, also ensuring implementation of the Internal Control System for Financial Reporting (SCIRF). In the performance of its duties, the Compliance Department reports hierarchically to the Executive Board of Directors and functionally to the Financial Matters Committee / Audit Committee. 150 For its part, the Executive Board of Directors establishes a culture of tone at the top in Compliance matters, approving, disseminating, and ensuring the implementation of EDP's Compliance Management System in line with the Group's strategic objectives. The General and Supervisory Board, through the Financial Matters Committee / Audit Committee, monitors and supervises the implementation of the referred compliance culture and approves the business plan of the Compliance Department, also ensuring the follow-up of the respective execution. The Compliance Management System is based on a Global Compliance Program composed of different Specific Compliance Programs. The Global Compliance Program is developed at corporate level and covers all activities, businesses, and geographies, defining the organization and functioning model of the Compliance Function and identifying the most relevant specific regulatory spheres, for which the development of a Specific Compliance Program is foreseen. EDP Group adopted a model for structuring its Compliance Management System, applicable both to the Global Compliance Program and to Specific Compliance Programs, based essentially on nine components, which can be classified into three action levels. COMPLIANCE MANAGEMENT SYSTEM PREVENTION 1\. Implementation of a governance model 2\. Identification and management of compliance risks 3\. Development of Internal Compliance Standards, Policies and Procedures and other control mechanisms, including compliance mechanisms over third parties 4\. Promotion of Training and Awareness / Communication actions DETECTION 5\. Monitoring, follow-up, supervision and reporting mechanisms and corresponding definition of improvement action plans 6\. Management of communication channels / issues 7\. Audits and respective definition of action plans CONTINUOUS IMPROVEMENT 8\. Monitoring and reporting the implementation of improvement action plans 9\. Definition of investigation procedures / application of corrective measures Based on the defined governance model, the EDP Group's Compliance Management System develops from a risk assessment, which is reviewed periodically or whenever there are material changes in the legal and regulatory context or in the organizational context, and that allows the identification of the compliance obligation or most relevant normative scopes for the organization, resulting in the structuring and development of Specific Compliance Programs, through a process that goes through different sequential phases: (i) planning, (ii) conceptual structuring and design , (iii) support for implementation; (iv) monitoring of implementation and (v) ongoing maintenance and continuous improvement. The identification of these most relevant topics is carried out based on the identification and assessment of the legal and other compliance obligations applicable to the activities carried out by the Group, whose analysis is organized into normative blocks (corporate governance, energy sector, reporting, environment, health, and safety; information, among others), resulting in the development of Specific Compliance Programs. At the Specific Compliance Program level, and as a function of specific risks identification and assessment, policies, procedures, and other compliance mechanisms are developed, through which the fundamental principles in compliance management are formalized and detailed control rules and mechanisms implemented, reflecting on the activities developed internally or by third parties on behalf of EDP, and which are key elements for the dissemination of a culture of compliance across the Group. Another fundamental element for the development of Specific Compliance Programs is the training and awareness actions carried out both at the transversal level of the Group and specific to certain Business Units or regulatory areas. 151 The compliance function ensures the follow-up and monitoring of the development, operation, and implementation of Specific Compliance Programs. For its part, and in accordance with the respective annual activity plan, the Audit function conducts specific audit work, addressing compliance issues. In addition, the Compliance Management System and several Specific compliance programs are still subject to independent external works review. The results of the monitoring and any recommendations for internal and / or external auditing are considered for the purpose of improving compliance management, in a perspective of continuous improvement. The compliance function reports the activities carried out to the Executive Board of Directors and to the Financial Matters Committee / Audit Committee. Without prejudice to other mechanisms previously developed, since the definition of the methodological approach to compliance management in the EDP Group, it was possible to structure the different relevant compliance issues at the corporate and local level, reflecting this work in the evolution of the different Specific Programs of Compliance, with emphasis among others on the following areas: • Integrity / Corruption Prevention. The systematization of this Specific Compliance Program had as fundamental element the definition of an Integrity Policy in which the commitments, general principles of action and the duties of the entities of the Group, its employees and business partners were defined, with regard to prevention illicit acts, complementing the set of norms and compliance mechanisms that already exist both at the corporate level (namely the Code of Conduct for Suppliers, the Code of Conduct for Senior Management and Senior Financial Officers, Transaction with Related Parties Policy and the Social Investment Policy, in addition to the EDP Group's own Code of Ethics and the irregularity communication channels made available), as in the different companies of the group, namely the models of prevention and control of criminal liability in EDP Spain and EDP Renováveis and EDP's corruption prevention Compliance program Brazil (which in turn include a significant set of specific compliance policies and procedures). The EDP Group's Integrity Policy, periodically reviewed, is disclosed to all employees (in the case of a mandatory reading document, with record of the respective acknowledgment) and available at EDP’s website (www.edp.com), reinforces the tolerance policy zero regarding the adoption of practices that could be perceived as acts of corruption or bribery, clarifies the ban on facilitation payments and details the principles related to the prevention of conflicts of interest, donations and sponsorships, contributions to political parties and prevention of money laundering and combating the financing of terrorism, as well as guidelines regarding the conduct of third party integrity due diligences, the relationship with public officials and politically exposed people, the acceptance and assignment of offers and invitations to events and the monitoring international sanctions. Within the scope of the reporting of irregularities, the principle of non- retaliation remains, the different channels available internally and externally and the process of investigating potential situations of non-compliance and the identification and implementation of possible corrective actions is addressed are listed. These principles and guidelines were implemented in specific internal procedures developed within the scope of the Specific Integrity Compliance / Corruption Prevention Program. In 2021, the review of risks and control mechanisms implemented in terms of Integrity was carried out and training initiatives were launched across the different Business Units and geographies, addressing the main internal procedures undertaken. • Specific Compliance Program for Money Laundering and Fight the Financing of Terrorism. In 2021, the Integrity Policy as well as the other procedures and compliance mechanisms associated with this program were subject to internal training for employees and were also internally disclosed EDP's internal communication channels. As part of the structuring of the Specific Compliance Program for Money Laundering and Combating the Financing of Terrorism, specific internal regulations and a transversal procedure related to the reporting of suspicious transactions were implemented by the obliged entities. The corporate Whistleblowing Communication Channel, implemented since 2006 to report potential irregularities in financial matters, currently also discloses a specific communication channel for potential irregularities related to money laundering and fighting terrorism financing. The obliged companies, proceeded to designate a Responsible for Normative Compliance, according to the legal requirements, whose performance is articulated with the governance model defined in the scope of this program. Throughout 2021, compliance with the applicable legal requirements was ensured, with emphasis on compliance with identification and diligence duties of counterparties with business relationships and/or occasional transactions with EDP group entities subject to the legal regime for the prevention of money laundering. • Protection of Personal Data. This program aims to ensure the adequacy of the EDP Group entities to the applicable legal requirements in terms of Data Protection, under which Data Protection Officers were appointed in situations subject to this legal obligation and specific teams were identified, with the responsibility to promote the dissemination, knowledge, training, and implementation of the compliance program in the respective areas of activity, with the 152 coordination of the Compliance Department. In this context, EDP has implemented a Personal Data Protection Policy, available on the EDP website (www.edp.com), of generalized and transversal application to all the Group's Business Units, which reinforces the commitments and the position assumed by EDP in terms of privacy and protection of personal data and defines the principles of action to ensure compliance. This policy thus embodies the company's values and principles, which are reflected in its operation and in the various privacy policies that govern the processing of data carried out by the different Business Units. Additionally, there is also a set of cross-cutting methodologies and procedures that internally regulate the risk assessment process and conducting impact assessments of personal data processing operations, the development of Privacy by Design procedures, matters such as the response to the exercise of rights, the management of subcontractors, the handling of personal data breaches is complemented by specific procedures and control activities defined at the level of the business areas. Within the scope of the communication and training plans defined annually at the level of each geography, different specific initiatives were carried out and directed according to the exposure of employees to the risks associated with the processing of personal data. • Competition. The Specific Competition Compliance Program aims to reinforce the guarantee of compliance by the EDP Group companies, in Portugal, with the legal requirements in terms of competition, namely regarding contracts signed and the performance of its employees in accordance with the highest standards of the ethics, integrity and competitive Compliance, contributing to the sustainability and development of the markets in which EDP operates. A similar approach to preventing and mitigating practices that potentially restrict competition is being implemented for the rest of the geographies, without prejudice to the codes and manuals already applied. This Specific Competition Compliance Program is, like the others, subject to a continuous improvement scrutiny, having been monitored throughout 2021. In 2021, specific training and awareness initiatives on competition matters were also promoted, based on the review of the Competition Manual and other internal procedures implemented in this area. • Prevention of Criminal Legal Risks. The Criminal Legal Risk Prevention Program was implemented in a first phase in companies in Spain (also including a specific program at EDP Renováveis), following different reforms of criminal law in this country, which introduced and deepened the concept of criminal liability of individuals with respect to certain crimes, also defining the requirements to be considered when implementing compliance models. The Compliance programs implemented under this scope at EDP, meanwhile extended to other geographies with similar legal frameworks, provide the organization with a management system that includes supervision and control measures to prevent the occurrence of crimes or mitigate the risk of their occurrence, highlighting the issues of preventing corruption, bribery and other similar offenses (which allows the capture of synergies with other Compliance programs with a transversal scope at the level of the EDP Group, such as the Integrity Compliance / Corruption Prevention Program). These compliance programs have been evolving and adapting over time, both in terms of changes in the context of EDP companies and their businesses, and in terms of legal and regulatory changes with an impact on this matter. They also have their own government models, in line with the compliance management model in general and provide for the identification and assessment of risks applicable to the activity and their mitigation through policies, procedures, specific control activities for that purpose and other mechanisms of control. Complementary compliance (training, awareness, communication channels, among others). From the established governance model, and with the objective of identifying, assessing, monitoring, and controlling the risks to which the EDP Group is exposed, the role, in addition to the Compliance Department, the Risk Management Department and the Internal Audit Department. The Risk Management Department is primarily responsible for coordinating risk assessment studies for the Group, with the aim of supporting the Executive Board of Directors in their control and mitigation and providing integrated risk-return analyses, as presented the respective chapter, which activity is detailed in items 52 to 54 of this Annual Report. In turn, internal audit is an objective and independent activity, of guarantee and advisory, aimed at adding value and improving operations of EDP Group, assisting the organization in pursuing its objectives, through a systematic and disciplined approach in assessing and improving the effectiveness of risk management, control, and governance procedures. The internal audit function has the mission of increasing and protecting the value of EDP, providing assurance, advisory and insight, covering several fields of action. The EDP Group's internal audit is a corporate function performed by the Internal Audit Department (DAI), which has a double dependency, on the one hand administrative structure of the Executive Board of Directors and, on the other, functional of the General and Supervisory Board, to which reports the respective exercise. 153 The EDP Group's Internal Audit Departments are present in Portugal, Spain, the United States of America, and Brazil, depending functionally on DAI. In addition to conducting operational and regulatory audits to Business Units in Portugal and auditing information systems at the Iberian level, DAI's main duties are to propose audit policies and objectives, in accordance with the law and with the best international practices, ensuring the harmonization of internal audit methods, processes and manuals and with a view to implementing the respective support tools, establishing and managing the systematic planning of internal audits at the Group level. Regarding the areas that make up the DAI, although each area has (operational and regulatory audits and information systems audits) its specific duties, multidisciplinary and the growing interaction between the operational audit and information systems audit teams (with an Iberian scope) have allowed synergies in the analysis of information and data extracted from computer systems to support business processes and, therefore, a better quality of the conclusions obtained, a closer proximity to the business and an increasing monitoring of the degree of evolution of the projects most relevant. On the other hand, DAI's commitment to quality and the continuous improvement of the processes and activities it carries out led to the creation of the Quality and Continuous Improvement Office at DAI, which, in a fundamentally methodological aspect, ensures an internal service with a view to increasing value added in relation to the internal audit activity in the EDP Group. The Internal Audit Departments, as well as all professionals assigned to this function, govern their performance by the Fundamental Principles for the Practice of Internal Auditing, the Code of Ethics and the International Standards for the Professional Practice of Internal Auditing approved by The Institute of Internal Auditors (IIA). EDP Group has internal auditors experienced in several areas (e.g., finance, accounting, legal, information systems), with a deep knowledge of the Group, allowing a multipurpose and transversal analysis of the issues in question and of the activities carried out. In addition to specific training and experience in the area, the employees assigned to the information systems audit area know the systems implemented in the Group and follow market trends, allowing them to obtain a broad view of the systems and processes with the greatest technological risk. and of greater relevance for the different Business Units. The internal audit activities are developed based on plans aligned with the objectives and mission of the function, in which the audit works that comprise them have as main inputs the consultation with the government bodies and the alignment with the Group's Strategic Plan and with the sustainability objectives, the prioritization of processes based on the risk analysis carried out by DAI, the interactions with the external auditor throughout the year and the consideration of topics of interest that it has identified in the scope of the SCIRF audit and the financial audit, international trends and best practices in matters of internal audit, and the identification and assessment of the control environment existing in the various lines of defence that affect each process, in a perspective of Combined Assurance. DAI's lines of activity are the analysis of the effectiveness and efficiency of operations, reliability, and integrity of information, both financial and operational, compliance with internal procedures and standards, compliance with external standards, auditing of information systems and integrity of assets. The changing macroeconomic, social, and political context, as well as the growing technological transformations and the news and changes that have been affecting the energy sector in general and the EDP Group in particular have forced a constant adaptation of the internal audit activity in order to maintain an ability to respond adequately to the challenges ahead, aiming to maximize the added value that this activity can and should offer to its stakeholders. DAI has been monitoring the extent and development of the Group's activity in new markets, business lines and geographies, incorporating in its business plan, actions aimed at evaluating and reinforcing the existing internal control environment. The continuous auditing model has evolved consistently, consolidating the methodology, continuing existing audits, implementing new audits to evaluate different business areas, some with real-time analysis, with a set of new indicators and automation of communication exceptions to the audited entity at the time they are detected. It is a robust monitoring and evaluation model, very relevant for the automatic processing of a high volume of data, allowing to obtain efficiency gains in terms of internal control and in the prevention and detection of irregularities. Within the scope of information systems audits, actions have been carried out covering several areas of high criticality, considering, in particular, the digitization program underway at the EDP Group, which has been a lever for strengthening 154 and growing business processes, the increase in processes / activities analysed by continuous auditing and the expansion of routine automation in order to speed up the monitoring of the Group's information systems. In recent years, the existing competencies in the field of information systems and data analytics have been strengthened by recruiting employees who are specialists in these matters in an internal audit perspective, complementing the profiles already existing in the information systems and operational audit teams. The relationship with the various stakeholders is developed, mainly, through periodic meetings with the Financial Matters Committee / Audit Committee and the members of the Executive Board of Directors, interactions with the Business Units, both at the level of the Boards of Directors and with those in charge of the audited areas, interactions with other areas of the Group, such as risk, sustainability, legal advice, human resources, regulation, strategy, management control, compliance, information systems, in order to identify risk areas and to ensure the update on the various matters of the organization. DAI carries out, annually, a process of self-assessment of the Group's internal audit activity, which consists of a reflection and analysis on the structure, composition, skills, relationship, reports, methodologies, DAI procedures and work carried out throughout the year, among others, and includes a global conclusion expressed by the responsible person of DAI's activity in line with the best practices of the function. On the other hand, DAI's activity and performance is evaluated annually by the Financial Matters Committee / Audit Committee based, among others, on the analysis of the interaction that the Commission develops throughout the year with DAI and on the analysis of information and documentation made available by it regarding the process of its self-assessment. DAI's activity has been subject to external evaluations since 2010 by the IIA (every 5 years, as established in the International Standards for the Professional Practice of Internal Auditing) and, since that date, the opinion of the evaluation teams has been that the internal audit activity "Generally Complies" with the International Standards for the Professional Practice of Internal Auditing and the IIA Code of Ethics, this qualification being the highest granted by the IIA. The last external evaluation took place in 2020, in all locations where the internal audit function is developed, with the aim of obtaining joint independent certification, with the opinion issued in the external evaluation reports being that the internal audit activity “generally complies” with the Standards and Code of Ethics issued by the IIA in all locations (Portugal, Spain, United States and Brazil), in all its aspects (government, personnel, management and procedures). It is also worth mentioning, and in line with the information described above, the competence of the General and Supervisory Board, which, under legal terms, permanently monitors and evaluates the internal procedures related to accounting and auditing matters, as well as the effectiveness of the risk management system, the internal control and compliance, including the reception and handling of complaints and related doubts, whether or not from employees. This competence is attributed to the Financial Matters Committee / Audit Committee, which is responsible, among other tasks, for permanently monitoring and supervising: (i) financial matters and accounting practices; (ii) internal audit practices and procedures; (iii) the internal mechanisms and procedures of the Financial Reporting Internal Control System (SCIRF); (iv) matters relating to the risk management and control system; (v) the activities and mechanisms of the compliance management system and (vi) the activity and independence of the Statutory Auditor / Company of Statutory Auditors. 51\. Description of hierarchical and/or functional dependency on other company bodies or committees In the performance of their duties, the Internal Audit Department (DAI) administratively reports to the Executive Board of Directors and functionally reports to the General and Supervisory Board that supervises its activity through the Financial Matters Committee / Audit Committee. On the other hand, the Compliance Department (DCO) reports hierarchically to the Executive Board of Directors, and functionally to the Financial Matters Committee / Audit Committee of the General and Supervisory Board. The Risk Management Department reports hierarchically to the Executive Board of Directors, without prejudice to the permanent monitoring, by the Financial Matters Committee/Audit Committee, of risk-related matters, as described in item 52 below. 155 52\. Other company areas with risk control duties The risk management is an integral part of the common practices of business management, and it is the responsibility of all, from the Executive Board of Directors right down to the individual staff member. Each one is responsible for knowing the risks existing in their area of intervention and for managing them in accordance with their role, expertise, and delegated responsibilities. The EDP Group manages its meaningful risks in a portfolio approach, optimizing the risk/ return trade-off transversely across its business areas, aiming to create value and to stand out in the markets where it operates. The EDP Group also works towards a permanent progress of its risk management processes in order to reflect the evolution of its needs and to maintain its alignment with international risk management best practices. The integration of risk management in the most relevant business and decision-making processes is promoted as part of i) strategic development, ii) investment decisions, iii) business plan and iv) operations management, with the purpose of ensuring stability in results and optimize its response to changes in context and opportunities. The risk management process is structured around 3 lines of defence (business operation, risk management/ compliance and internal and external auditing), each led independently and ensuring an adequate level of segregation relative to one another. The functions of risk identification, analysis, evaluation, treatment, and monitoring are followed by a set of bodies with clearly established roles and responsibilities, typified by Group policies that are approved and ratified by the competent bodies of the Group: • The General and Supervisory Board, in particular the Financial Committee/ Audit Committee, is responsible for permanently monitoring and evaluating internal procedures relating to accounting and auditing matters, as well as for the effectiveness of the risk management system, namely in terms of identifying, evaluating, controlling and managing risks and assessing the degree of compliance of the Company's risk management system, continuously monitoring its performance and effectiveness, in conjunction with the Executive Board of Directors, namely risk control policies, identification of key risk indicators (KRI) and integrated assessment methodologies of risk, having to evaluate and pronounce on the strategic lines and the policy of the corporate risk management of the EDP Group prior to the respective final approval by the Executive Board of Directors. The General and Supervisory Board is additionally involved in the Group's Strategic Plan, ensuring, implicitly, an alignment between management and shareholders regarding risk appetite. The General and Supervisory Board also receives regular reports on key risk indicators that are aligned with performance metrics and allow monitoring the evolution of the company's risk profile. • The Executive Board of Directors is the highest body responsible for risk-related decision-making, supervision, and management control. It is responsible for the approval of the business plan, for setting the management objectives and policies of the EDP Group. It is responsible, among other duties, for defining the Group's risk exposure, in line with the best practices in risk management procedures and policies (namely, the respective exposition limits by risk category), as well as the allocation of resources, depending on the risk-return profile of the various options available. • The Risk Management Department, headed by the Chief Risk-Officer, establishes an integrated and holistic view of the Group's risk position (top-down perspective), supporting the prioritization and coordination of cross-cutting initiatives, offering a segregated and business-independent view regarding key risks. Its main responsibilities are: i) to maintain and update an inventory of the Group's most significant risks and fostering their implementation in the various Business Units and Corporate Departments; ii) to promote and monitor the implementation of the management and control actions regarding the Group's most significant risks; iii) to systematically measure specific risks and conduct risk-return analyses, noting and reporting adjustment needs when necessary; iv) to define main concepts, methods and risk measures and Key Risk Indicators (KRI), supplementary, but aligned with the Key Performance Indicators (KPI); and v) to develop and support projects and initiatives aimed at the effective improvement of the management process of significant risks. • The Management of Business Units and Corporate Departments is the first responsible for an integrated risk management in each of their business areas. Its main responsibilities are: i) to propose and approve (through the respective Board of Directors) the definition of key principles for risk management, aligned with the orientations defined by corporate policies; ii) to ensure that the risks within the scope of their activity are identified, analysed and evaluated broadly, rigorously and consistently throughout the Group, using established methodologies; iii) to 156 optimize the risk/ return trade-off of their activity, aligned with the orientations established by the Executive Board of Directors, regarding the definition and implementation of risk management strategies, implementation of effective initiatives in treatment costs of key risks, the clear and equilibrated allocation between parties in case of internal or external contract of products or services and the definition of mechanisms and levels of residual risk transference (insurance); iv) to monitor and report periodically their risk position, by the definition and regular monitoring of KRIs, risk reports and the evaluation of existing risk controls; and v) to highlight key aspects of risk management to their respective risk-officers, Risk Management Department and appropriate decision makers. • Local structures for risk management (risk-officers) assume a key role on operationalizing risk management. Typically, they report hierarchically to a member of the respective Board of Directors, and in coordination with EDP Group Chief Risk-Officer, acting independently from business operation. In large and/ or particularly complex Business Units local replicas of risk management corporate structure exist, articulated with the Risk Management Department. Their responsibilities include: i) to identify and characterize through quantification and qualification the materiality of key risks (both threats and opportunities), within the scope of their activity and in articulation with the business; ii) to perform studies on key strategic issues and associated risks, in close articulation with the business and the Risk Management Department; iii) to support the Board of Directors and Departments on decision making, in the perspective of risk; iv) to advise on mitigation and hedging strategies for key risks; v) to monitor and report key risks to decision makers and Risk Management Department, to implement policies and procedures, including the follow-up of expositions vs. established risk limits, the systematic register of incidents and quasi- incidents, including the characterization of events and its quantitative impact; vi) to develop and promote methodologies to analyse, evaluate and treat actual and emerging risks and support its implementation; vii) to coordinate initiatives regarding crisis management and business continuity; viii) to coordinate the existing Risk Committees (if applicable); and ix) to provide adequate risk related information to the Risk Management Department, decision makers, and remaining relevant stakeholders. Model for risk function report at EDP Group (and communication with the corporate centre) Furthermore, there are several regular forums for the discussion, analysis, and issue of opinions on risk-related topics: CORPORATE RISK MANAGEMENT (DGR) BoD BoD BoD BoD BoD BoD BoD BoD BoD BoD RO RO RO RO RO RO RO RO RO RO EXECUTIVE BOARD OF DIRECTORS RISK COMMITTEE BUSINESS UNITS (BUs) Hierarchical Functional Supervision GENERAL AND SUPERVISORY BOARD 157 • EDP Group Risk Committee has the main objective of supporting the decisions of the Executive Board of Directors in the identification, assessment, management and control of risk, in terms of: i) supporting the identification of significant risks and the characterization of the EDP Group's risk profile; ii) discussing relevant risk analysis and evaluation projects results developed with Business Units and Corporate Departments; iii) advising and/ or recommending risk management strategies (e.g., regarding policies, procedures and limits); and iv) monitoring and controlling the evolution of significant risks. This Committee is held at half-yearly intervals (at least). It is composed of the key decision makers and those responsible for the Group's risk management (the Executive Board of Directors, the Corporate Centre, and selected Business Units). • The Individual Risk Committees are set up and held at Business Unit levels when the degree of complexity of risk management justifies such, taking on a structure replicated from the Group's Risk Committee. These Committees are composed of the key decision makers and those responsible for risks of each Business Unit, typically coordinated by the respective risk officer. 53\. The main types of economic, financial, and legal risk to which the company is exposed in its business The taxonomy of risks for the EDP Group combines in an integrated approach and in common language the various mapped risks existing in relation to the Group's several Business Units, structured around four major families: strategic, business, financial and operational. In 2020, the pandemic situation caused by the COVID-19 virus had a transversal impact on business, financial and operational risks. In particular, the main impacts for EDP Group were at the business level, with the reduction in energy consumption caused by the confinement and deceleration of economic activity, and at the level of the financial markets, with the depreciation of exchange rates. Strategic risks The EDP Group closely monitors and reports on strategic risks, since it considers that these risks may have a significant impact if they occur. The strategic risks can be broken down into two different types: • Risks of the surrounding context, associated with external developments that may have a negative material impact on the Group, in particular but not limited to, severe macro-economic, social/ or political crisis in core geographies for the Group, technological disruptions of various kinds, profound changes resulting from climate change and disruptive changes in competitive paradigm. • Regarding the risk of a macro-economic, social and/ or political crisis in the geographies where the Group is present, the stability of public deficit and of the interest rate of public debt in Portugal and Spain, as well as the stability of political context, suggest a material reduction of the probability of actual occurrence of these risks. Strategic • Strategic (internal) • Surrounding context (external) Operational • Physical assets • Process execution • Human resources • Systems • Legal, Compliance and Ethics Business • Energy markets • Regulation Financial • Financial markets • Credit and couterparty • Liquidity and solvency • Social liabilities 158 However, some geographies where EDP operates, namely Brazil, are living challenging macroeconomic cycles, which may be materialized in increased volatility of financial markets with direct impact in EDP operations. • Regarding technological disruption, the EDP Group has sought to position itself at the forefront of technological development in the sector, looking at this issue not as a threat but as a central vehicle for promoting growth in the future. The EDP Group has accordingly actively and transversely invested in and investigated the promotion of new technologies in the various stages of the value chain (namely EDP Inovação activity level, and through the development of the digital acceleration program EDPX in 2018, resulting in the creation of a unit dedicated to digitalization – Digital Global Unit). • Regarding climate change, such changes may have a significant and across-the-board impact on the various stakeholders over the medium to long term (e.g., in terms of average temperatures, average sea levels, structural changes in water and/or wind volumes, or the incidence of extreme climatic events). In this regard, the Group has decisively invested over the recent years in strengthening its portfolio of renewable energy as well as in a concerted strategy of environmental sustainability, which has been internationally recognized, not only in order to reduce its ecological footprint, but also to ensure its resilience to the possible materialization of risks deriving from climate change. • Regarding disruptive changes to the competitive paradigm, the Group recognizes the risks associated with changes to the business model paradigm (e.g., in relation to distributed generation). The EDP Group addresses this risk through meticulous analyses and prospective investments, allowing to proactively anticipate and adapt the business model to possible market development trends. • Strategy risks, associated with investment decisions, relationships with key partners (shareholders and others), internal governance and corporate planning (in its various forms). • Regarding investment decisions, EDP's growth strategy implies the constant evaluation and decision-making in relation to investment options that allow it to implement the strategy established and approved by its shareholders. Accordingly, a meticulous and consistent process is defined across the Group, with pre-established criteria 1 for analysis, decision-making and monitoring of projects. This process is conducted at the corporate level by the Business Analysis Department, locally supported by the various Business Units. Additionally, Investment Committees regularly meet to discuss, monitor and advice on i) investment analysis and decisions; ii) compliance with investment implementation schedules; and iii) evaluation of impact of detected or potential deviations. These forums are performed both at the Business Unit level and at the corporate level, involving decision-makers and key experts of the Group in the relevant fields. • Regarding the relationship with partners (shareholders and others), the EDP Group has a solid and stable core of shareholders, which is aligned with and actively participates in the Group's strategy. On the other hand, the EDP Group is guided by strict criteria at all levels for the selection of its partners in the various countries and business areas in which it operates, the management of which is led by the Executive Board of Directors, Business Units and Institutional Relations and Stakeholders Department. • Regarding internal governance, the Group considers that the design and implementation of its various corporate bodies ensures compliance with the best international practices on this topic (see previous section for more information). • Regarding corporate planning (particularly in terms of brand and communication, investor relations, human resources, information systems, business strategy, and others) the Group believes that the current structures and processes allow it to adequately manage these risks. 1 Particularly related to the definition of minimum return levels, up to date and geography/ business line-specific discount rates as well as to the resilience to multiple adverse scenarios of delays, overruns, fluctuations in key business variables, political environment, and regulations. 159 Business risks The business risks encompass all risk factors intrinsically related with the remuneration of the core activities of the EDP Group in the generation, distribution, and sale of energy in the various countries and markets where it operates. The business risks can be broken down into two different types: • Energy market risks, related to electricity prices (pool) and other commodities, renewable energy generating volumes (hydro, wind, and solar power), energy consumption (associated with demand) and supply margins. • Regarding price of electricity, the impact is limited by the fact that a significant share of generation is contracted in the long term, especially in relation to EDP Renováveis and most of the installed capacity in Brazil. Currently, generation subject to market price fluctuations includes: i) all ordinary status generation in Portugal and Spain; ii) generation in Brazil in excess of or in deficit to the PPA; and iii) part of the wind energy farms of EDP Renováveis in Spain, US, Poland and other geographies. The Energy Management Business Unit (UNGE) is responsible for proactively acting in the MIBEL 2 and other forward markets (including OTC) in order to optimize the margin of market generation and limit the respective risk, according to the delegation of powers clearly established and ensuring periodic P@R - "Profit at Risk" reporting, based on a proprietary model. Energy Management Business Unit (UNGE)'s operations are adequately framed by a specific risk policy, including exposure limits. • Regarding the price of other commodities (mostly fuel and CO2), subject to fluctuation due to supply and demand dynamics or changes in international legislation and relevant only to power plants exposed to market risk, this risk is monitored and proactively managed by the Energy Management Business Unit (UNGE), which negotiates and manages coal and gas contracts and CO2 allowances. It is also responsible for mitigation of the fuel prices risk via hedging (including foreign exchange risk in USD, in coordination with the Financial Management Department). • Regarding renewable energy generation volumes, the EDP Group has a degree of material exposure to this risk, particularly in relation to water volume (Wind Energy Capability Index 3 tends to be less volatile than the Hydroelectric Capability Index 4 , on an annual basis), arising from its increasing focus on a generation portfolio with ever greater renewable energy, as well as its hydro portfolio in Portugal and Brazil. It should be noted that although this risk may introduce some volatility in annual results, it has a significantly lower impact on the long- term value of EDP’s generation assets portfolio, since it i) diversifies inter-annually; ii) diversifies through technologies, somehow compensating volume vs. price with the remaining technologies (lower hydro productivity is, in part, compensated by higher thermal production at typically higher prices) and iii) is uncorrelated with the market. On the other hand, exposure in Brazil is significantly mitigated by i) the fact that there is hydrological diversification throughout the country (through financial coupling mechanisms); as well as ii) the fact that a PPA on fixed energy generation is established; and iii) the fact that the Group joined, in the end of 2015, the hydro risk renegotiation mechanism, which combined with the cap on PLD price limits the exposure to the deficit of allocated energy relative to energy sold in PPA (for the Regulated Environment). • Regarding energy consumption (electricity and gas), the EDP Group is subject to fluctuations in the amounts of energy sold depending, among others, on factors such as economic activity and annual temperatures, as well as extraordinary events (such as the COVID-19 pandemic in 2020). Besides such economic cycle fluctuations and energy efficient solutions, consumption can also be affected by situations of rationing (as happened in Brazil in 2001). Given the difficulty to mitigate these risks, EDP chooses to manage them through diversification across multiple technologies, countries and business lines. • Regarding sales margins, the current customer migration to the free market enhances the competitiveness of offers from suppliers and can add additional volatility in terms of market shares and unit margins. Moreover, there is risk associated with deviations in actual consumption from the forecasting model adopted by the Group. These risks are managed by the Group's energy sales companies, with particular emphasis on initiatives to i) strengthening the core offer (e.g., through combined electricity and gas products); and ii) introducing innovative products and services (e.g., Funciona and Re:dy). In addition, a team dedicated to the prices and volumes matters evaluates and regularly makes recommendations for the dynamic management of this risk. 2 Iberian Electricity Market. 3 Ratio between the yearly wind energy output vs. reference year. 4 Ratio between the yearly hydro energy output vs. reference year. 160 • Regulatory risks, related to changes in legislation and regulations that the Group is required to comply with in the various countries and markets in which it operates (in particular, but not limited to, sectoral packages, regulatory frameworks, environmental legislation, and taxes, and other). This risk is managed proactively by the EDP Group, through monitoring and thorough preparation of the various dossiers and adopting a constructive and cooperative attitude in their discussion. This allows the materialization of options out of synch with reality in the different market contexts in which the Group operates to be anticipated and minimized. Financial risks The financial risks encompass the market risk factors linked to the (non-operational) energy business of the EDP Group in the various countries and markets where it operates. Financial risks can be divided into four different types: • Financial markets risks, associated with fluctuations in international markets in interest rates, exchange rates, inflation and valuation of financial assets held by the Group. • Regarding interest rates, the risk is mainly associated with the percentage of debt at floating rates, as well as any increases in costs associated with fixed rate debt refinancing needs in a context of rising current interest rates. This risk is managed and mitigated by the Group's Financial Management Department, which ensures compliance with the risk profile, using the procedures and tools provided by the Group's risk policies. Periodic reports on the evolution of these variables and sources of risk are prepared. • Regarding foreign currency exchange rates, the risk is associated with fluctuations in the cost of the purchase and sale of electricity and fuel and with the cost of investments denominated in foreign currencies, as well as fluctuations in the value of net assets, debt and income denominated in foreign currencies. The EDP Group acts proactively in order to ensure a broadly balanced net structural exposure (assets - liabilities) in USD, GBP and CAD. On the other hand, the geographical diversification (and exposure to multiple currencies) contributes for the reduction of annual result volatility. The remaining risks are managed and mitigated by the Group's Financial Management Department, in conjunction with the Energy Management Business Unit (UNGE), EDP Renováveis and EDP Energias do Brasil, in the same way as above. • Regarding inflation, the risk is mainly associated with the fluctuation of operating revenues and costs in the various countries where the EDP Group operates. In terms of mitigation, the revenue models of regulated activities as well as part of the PPAs include inflation pegging components in order to preserve adequate revenue for the business activity. A significant component of the Group's current business activities is also focused on markets with stable inflation rates. For the remaining risk, as well as active management of the various supply and services contracts, the EDP Group addresses this risk from an integrated perspective, mitigating it through an appropriate debt profile (fixed rate/floating rate) aligned with the revenues profile. • Regarding the valuation of financial assets, EDP adopts a conservative risk policy with reduced levels of exposure, based on a reduced weight of strategic financial assets and short-term cash investments mainly based on bank deposits (without market risk). This risk mainly results from the possibility of devaluation of the financial assets that EDP holds (traded on securities markets). It is managed according to the procedures and tools provided by the Group's risk policies. • Counterparty and credit risks, associated with unexpected changes in the compliance capacity with obligations by customers, financial counterparties (mainly associated with deposits in financial institutions and financial derivatives) and energy counterparties. • Regarding financial counterparties, this risk is managed through: i) a careful selection of counterparties; ii) an appropriate diversification of risk over multiple counterparties; iii) an exposure based on financial instruments of reduced complexity, high liquidity and of a non-speculative nature; and iv) regular monitoring of the positions held. • Regarding energy counterparties, this risk is reduced for operations in an organized market. For operations in over-the-market markets and fuel purchases, the Energy Management Business Unit (UNGE), which is responsible for monitoring and the interface with wholesale markets, monitors transactions by applying exposure and negotiation limits that have been established and approved in advance by a higher management according to the counterparty rating (external whenever possible, or internally rated if the former is unavailable), and using clearing 161 houses for clearing. The counterparty risk is also associated with the sale of long-term energy agreements (PPA), which is minimized by the fact that a significant proportion of counterparties in this context are sovereign entities (governments or state-owned electricity systems). Meticulous scrutiny and approval criteria are likewise applied for private counterparties. • Regarding customers, the Group is exposed to default risk in Portugal, Spain, and Brazil. The average level of risk in Spain is structurally mitigated in terms of expected loss due to a mix of customers with greater weight of the B2B segment (which has less relative weight of average default). The risk in Brazil is mitigated through financial collateral to mitigate the loss (for the Free Contracting Environment), and through the partial recovery of non- compliance by the regulated tariff (for the Regulated Contracting Environment). This is monitored by E-Redes and EDP Comercial (in Portugal) and EDP España, which are responsible for carrying out the meter reading cycles and cutting off the service/taking legal action and debt recovery. In addition, mitigation tools such as credit insurance and setting up bank collateral are used, whenever this is deemed necessary. • Liquidity/solvency risk, associated with specific cash shortfalls, difficulties in access/ cost of credit and rating reduction risk. • Regarding possible sporadic cash shortfalls, there is a risk of possible default of the EDP Group in meeting all its short-term liabilities in the committed time periods, or just being able to do so under unfavourable conditions. This risk is mitigated through careful liquidity management, by means of: i) centralization (cash pooling) of all the Group's liquidity at the holding company except for Brazil; ii) keeping adequate levels of liquidity (cash and firmly committed credit lines) based on detailed forecasting of cash requirements (reviewed in 2016 to cover two years of refinancing); iii) an appropriate strategy to diversify funding sources; and iv) the diversification of debt type and maturity profiles. • Regarding access to and the cost of credit, the EDP Group has achieved, despite the adverse economic context, all funding necessary for the usual roll over of debt and to finance the Group's business. EDP's Group has successfully continued with its strategic commitment to reduce leverage (expressed as Net Debt/EBITDA excluding Regulatory Assets) over forthcoming years. Additionally, the Group has acted towards increasing the average maturity of its debt and reducing its average cost. • Regarding the risk of a ratings decline, the EDP Group can be impacted in its access to and cost of financing by adverse changes in its rating profile (assigned by international agencies). EDP proactively manages this risk by maintaining a low risk profile and maintaining stable contractual standards, which assure that its liquidity position does not depend on mechanisms as financial covenants or rating triggers. • Social liabilities' risk, associated with obligations relating to the capitalization of the Defined Benefit Pension Fund of the Group for Portugal, Spain and Brazil (which has a risk associated with the market value of its assets), and additional costs associated with early retirement as well as medical expenses. The liabilities for employee social benefits are calculated annually by an Independent Actuary on the basis of IFRS-IAS assumptions (taking various factors into account, including interest rate, demographic aspects, economic variables and the applicable requirements). The Defined Benefit Pension Fund is regularly monitored by the Pension Fund Committee that meets at an established frequency, in terms of the value of its assets and the variations in terms of its liabilities (e.g., actuarially related). Operational risks The operational risks encompass the risk factors other than those linked to the energy and financial business of the EDP Group in the various countries and markets where it operates, associated with the planning, construction and operation of physical assets, implementation of processes, human resources, systems and legal litigation, compliance, and ethics. The operational risks can be broken down into five different types: • Physical assets risks, related to unforeseen occurrences in projects under development/construction, damage to physical assets in operation and (technical and non-technical) operating losses, associated with the operation of the assets (mainly in distribution). 162 • Regarding projects under development/ construction and assets in operation, the EDP Group is exposed to incidents derived from external causes (e.g., atmospheric phenomena, fire, damage to structures, burglary and theft, environmental pollution) or internal causes (e.g., damage caused by defects of origin and/or faulty installation), which can result in, among others, threats to the physical integrity of the Group's employees or third parties, repair or replacement costs of equipment, asset unavailability and consequential loss of profit or compensation to third parties. These risks are initially managed and mitigated by the various operational areas of the Group's Business Units, which propose and implement in an articulated manner the best practices in terms of the different policies, standards and operating procedures, inspection, and regular preventive maintenance as well as crisis management plans and business continuity for catastrophic events. To this regard, it should be noted the revision of crisis management and business continuity policies in 2015, in order to ensure the continuous alignment with international best practices. Secondly, a significant portion of the remaining risk is mitigated through a comprehensive range of insurance policies (particularly in terms of property damage, civil liability, and the environment), insured in an integrated manner through a special area for this field - the Insurable Risks' Unit. This approach ensures consistency in the risk management policies, guarantees the dissemination of best practices, and strengthens the negotiating position of the Group. The existing insurance policies contribute to significantly mitigate the impact of large-scale events (e.g., associated with extreme and comprehensive weather phenomena, non-availability of revenue generating assets or significant compensation to third parties) as well as much less frequent incidents with catastrophic impact (e.g., earthquakes). • Regarding operating losses, the EDP Group is, firstly, liable for regulatory penalties if it does not meet the objectives set for distribution efficiency (technical losses) and also, on the other hand, for the loss of revenue associated with increased consumption of non-invoiced energy (non-technical losses). The various energy distribution Business Units (E-Redes, EDP España, Espírito Santo and São Paulo) are responsible for this risk. Programs are continuously developed to monitor and mitigate this risk (including the launch of comprehensive programs to combat fraud). • Process execution risks, associated with irregularities in the implementation of various processes (particularly, but not limited to, commercial activities, supplier selection and management, billing and collection from customers, planning and budgeting of activities). This risk is monitored by the various Business Units. Its mitigation regarding financial reporting is controlled through the group-wide Financial Reporting Internal Control System (SCIRF), which systematically assess both quantitatively and qualitatively the existence and adequacy of the design and documentation of the various existing processes, as well as their internal control mechanisms, based on annual cycles. • Human Resources Risks, associated with incidents impacting on the physical integrity of employees, the impact of unethical conduct and labour and trade union relations. • Regarding incidents impacting on the physical integrity of employees, the Group directs its activity around a zero accidents culture, with awareness of employees concerning the risks involved in the various activities, as well as continuous identification and implementation of best practices for the prevention and meticulous analysis of incidents. • Systems risks, associated with both the non-availability of information systems, as well as failure in the integrity and security of their data, due to a growing sophistication and integration of the several informatic systems and technologies. These risks are managed by dedicated areas within each the Business Unit (centralized in the Digital Global Unit for Portugal and Spain). To mitigate IT risks, there were established in collaboration with Business Units (end-users) critical levels and maximum unavailability timings allowed for each key application. Disaster recovery redundant systems have also been sized and implemented to address the business specifications (particularly strict for critical systems related with, for example, the implementation of financial transactions, communication and grid operation and trading of energy). Business Units with operational information systems (i.e., EDP Produção and E-Redes) have specialized teams to guarantee the security and integrity of systems. Additionally, regarding cyber security there has been developed a number of mitigation measures, namely i) the creation of a Security Operations Centre (SOC) dedicated to the continuous monitoring of the security of IT/ OT infrastructures, ii) the creation of a cyber range to simulate and test the reaction of employees in case of cyber- attack, iii) insurance coverage of cyber risks, and iv) the development of training and other awareness initiatives about the key principles of information security. • Legal and compliance risks, associated with losses arising from non-compliance with existing tax, labour, administrative, or civil legislation, or any other, that has an economic (penalties, compensation and agreements) 163 and reputation impact. EDP Group analyses, monitors, and reports the aggregate exposure and material developments to all relevant bodies, whether at the level of the Board of Directors or the General and Supervisory Board. In addition to overall exposure and by country, all cases deemed to be of a material nature (contingency over EUR 2.5 million) are collected, analysed, and reported individually. All ongoing processes are evaluated and classified individually by legal advisors as probable, possible, or remote, according to their probability of resulting in a negative impact on the EDP Group. EDP and its subsidiaries' board of directors, based on the information provided by legal advisors and on the analysis of pending lawsuits, recognizes provisions to cover the losses estimated as probable, related with litigations in progress. This treatment includes not only ongoing disputes (litigation in courts and out-of-court), but also the main contingencies in dispute and not materialized (and which may also translate into a negative impact, through the materialization of a dispute). • Regarding potential unethical conduct by employees or other associated entities, the EDP Group provides regular training (for all employees) on ethical models of action and behaviour in case of transgressions in the ethical field. This risk is monitored by the EDP Group's Ethics Ombudsman Office, an internal structure responsible for collecting, analysing and assessing, in the Ethics Committee, all allegations of unethical behaviour, under strict conditions of confidentiality and protection of the respective sources. In addition, the EDP Group's Ethics Committee is responsible for defining lines of action to mitigate and sanction unethical behaviour, whenever necessary, according to the facts collected and reported by the Ombudsman. Risks associated with non-compliance with processes or corruption are also monitored by the Compliance Department. 54\. Identification, analysis, evaluation, treatment, and monitoring of risks Given the size of EDP Group and its geographical diversity, it is important to define a common process for all Business Units that recognizes and manages the heterogeneity of businesses and activities in which the Group operates. Accordingly, risk management in the EDP Group can be divided into five major integrated and structured phases (identification, analysis, evaluation, treatment, and monitoring), complemented by a previous phase of establishment of context, and adequate levels of communication between all stakeholders: 06 COMMUNICATION • Continuous, two-way communication between relevant stakeholders 03 EVALUATION • Exposure assessment in light of risk appetite • Definition of treatment strategies to be implemented 04 TREATMENT • Implementation and execution of the established treatment plan 02 ANALYSIS • Establishment of risk criteria • Analysis (qualitative and quantitative) of risk materiality 05 MONITORIZATION • Monitoring and reporting of the evolution of risk indicators, materialization of events and progress of treatment measures 01 IDENTIFICATION • Comprehensive mapping of key risks (and representation in structured taxonomy) 00 ESTABLISH THE CONTEXT • Assessment of external & internal environment • Definition of key principles for risk management Complementary Phases Fundamental Phases 164 • The identification of risks concerns the survey and update of the main risks associated with the Group's business, as well as their representation in a structured repository - the taxonomy of risks. Each of the Business Unit and Corporate Departments is primarily responsible for this exercise, within their scope. The Risk Management Department, in coordination with risk-officers, is responsible for the validating and integrating the different exercises and for obtaining and maintaining a global perspective (at the EDP Group level). The Group updated its top-down global risk map, based on interviews and in conjunction with the Group's main risk-owners. More recently, it also developed a reference taxonomy of risks, promoting a common language and facilitating the structure of different exercises for risk identification across all Business Units. • The analysis of risks concerns the establishment of criteria to assess its nature and order of relative magnitude, as well as the analysis of individual and aggregated exposition according to the defined criteria. Each Business Unit and Corporate Department is primarily responsible for this exercise, within their scope of activity, being supported by the Risk Management Department, in coordination with risk-officers, namely through the development of adequate methodologies. This standardization and systematization of analysis and assessment criteria helps make risks of a heterogeneous nature comparable, informs the various decision makers of the orders of magnitude of the various risks and guides the prioritization of management and mitigation initiatives and the definition of clear risk management policies at various levels (including the definition of limits). In addition to this perspective, risk-return analyses are performed systematically (based on EBITDA@Risk, CF@Risk or other methods) associated with the main strategic guidelines and decisions of the Group (e.g., regarding the Group's Strategic Plan, key investment decisions or other topics deemed to be relevant). • The evaluation of risks is related to the comparison between the risk profile and the risk appetite of the Group (stated both implicitly or explicitly), as well as on the definition of adequate strategies for treatment, when necessary. This exercise is responsibility of the Executive Board of Directors and Business Units, supported by the risk-officers, who act in coordination with the business operation (or risk-owners) and the Risk Management Department (leaded by the Chief Risk-Officer). It is important to highlight the recent formalization of EDP Group's risk appetite statement, with the external objective of structuring a holistic narrative around the strategic pillar of controlled risk, as well as the internal objective of promoting a reflection on the risk-return trade-off of strategic options. • The treatment of risks concerns the adequate implementation of the risk strategies previously established, including the definition of adequate mechanisms of control. This exercise is responsibility of each Business Unit and Corporate Department, within the scope of their activity. • The monitoring of risks ensures the effectiveness of action on identified risks, both in terms of control and periodic reporting of the Group's position as regards several risk factors, as well as the effective implementation of the policies, standards and procedures established for risk management. This role is ensured by the Boards of Directors of the various Group Business Units. The Risk Management Department and risk-officers are responsible for promoting and enhancing risk control and management measures, disseminating best practices and supporting the disclosure of concepts, methods, risk measures and key risk indicators (KRI). Additionally, the Risk Management Department, supported by the network of risk-officers, develops a set of bi-weekly or quarterly reports sent to the Executive Board of Directors and to the Board of Directors of each Business Unit. These reports allow the organisation to regularly follow KRIs that are aligned with performance metrics and, as such, reflect the risk profile at each moment. In addition, these indicators are subject to risk limits that are aligned with the objectives and strategy of the EDP Group, thus allowing this strategy to be implemented at the operational level. This information and the evolution of the company's risk profile are also reported to the General and Supervisory Board, namely through the Risk Appetite dashboard that is shared quarterly. 55\. Main features of the risk management and internal control systems in place in the company for the disclosure of financial information EDP Group has incorporated, into its management, the Internal Control System of Financial Reporting (SCIRF), based on criteria established by the regulatory framework of internal control issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013), in relation to business processes and entity level controls, and the Control Objectives for Information and Related Technologies (COBIT), in relation to the general controls of information technology. 165 According to the adopted methodology and approved responsibilities model, activities were carried out related to the implementation, maintenance, monitoring and assessment of the internal control system, within the competence of those responsible that participating in it at the corporate level, business unit level, and shared services unit companies. The monitoring and maintenance work were carried out through: (i) corporate (ii) business units and shared services companies. The activities at corporate level were as follows: • Planning and monitoring cycle, maintenance and review of reference models, conceptual and methodological support to business and shared services unit companies; • Defining SCIRF 2021 scope based in the consolidated financial information, supported on materiality and risk criteria on a "top down" (Compliance Department) and "bottom up" basis, from which the companies and Corporate Centre Departments and respective processes considered relevant were identified. Autonomously, they were covered by the scope, the most relevant companies in Portugal, Spain, and Brazil Geographies and in aggregate, the units that make up EDP Renewables, SA, EDP Renewables Europe, SL and EDP Renewables North America, LLC; • Support for business units and shared services unit companies in the documentation and review of new controls and redesigned of the existing, resulting from the inclusion of new topics, by materiality and/or risk and legal, structural, procedural and/or accounting changes; • Identification of relevant computer applications that support SCIRF and analysis of "service organizations", for monitoring the issuance of the ISAE 3402 International Standard on Assurance Engagements, reports corresponding to an independent assessment of the control environment used by EDP's information technology service providers; • Monitoring the cycle evaluation process, by the External Auditor, in terms of work planning, interaction with business and shared services unit companies; • Attendance and support provided to business and shared services unit companies, resolution of identified non- compliances and improvement opportunities and reporting to those internal responsible and supervisors; • Launch and monitoring of the self-certification process, through which those responsible for the internal control of the business and shared services unit companies, declare their explicit recognition about the (i) sufficiency or insufficiency of the controls documentation in terms of updating and adjustment, (ii) its execution and maintenance of evidence, (iii) actions approval and implementation related to the resolution of non-compliance and improvement opportunities and (iv) compliance with the Code of Ethics and the Integrity Policy of EDP Group; • Completion of the self-assessment process for SCIRF 2021 cycle, through which the Executive Board of Directors, represented by the Chairman and the member of the Executive Board of Directors responsible for the financial areas, emit a responsibility report on the safety and reliability degree of consolidated financial statements preparation and presentation. The activities at business units and shared services companies’ level of EDP Group were as follows: • Analysis of the results of the scope model application to the financial statements on an individual basis and inclusion of new topics and relevant applications, following the risk analysis bottom up; • Application on “stand alone” scope level for the EDP España, EDP Renewables and EDP Brasil subgroups, with the profile of materiality and risk appropriate to their size; • Identification, review, and appointment of SCIRF responsible, depending on the result of the scope model application and on the review and/or update due to organizational, structural, legislative and operational changes in the business and shared services unit companies; • Documentation of new controls and redesign of the controls documented in previous cycles, subject to revision due to changes at different levels of the business and shared services unit companies; 166 • Implementation of actions necessary for the resolution of non-compliances and improvement opportunities identified in the assessment tests made by the External Auditor; • Self-certification by which the SCIRF leaders assess, at all levels of the chain, the sufficiency and updating of documentation and maintenance of evidence in the execution of control activities; • Self-assessment by the President of the Board and by the board member in charge of the financial matters of EDP España, EDP Renewables and EDP Brasil subgroups, through the issue of responsibility reports on the degree of safety and reliability of the preparation and presentation of financial statements; • Evaluation of the SCIRF 2021 was made by the Group's External Auditor, PriceWaterhouseCoopers, according to the "ISAE 3000 - International Standard on Assurance Engagements" in all geographies covered by the scope model and with the support of KPMG, in the specific case of EDP Brasil. The External Auditor issued an independent report on the Group's Internal Control System of Financial Reporting related to the financial statements of December 31, 2021, without reservations nor qualifications, presented in the annex "Reporting Principles", concluding with a reasonable degree of assurance regarding the effectiveness of internal controls system on financial reporting of EDP Group. 167 IV. Investor Relations 56\. Composition, duties and information provided by these services and their contact information The essential role of the Investor Relations Department is to act as the interlocutor between EDP's Executive Board of Directors and investors and the financial markets in general. It is responsible for all the information provided by the EDP Group, in terms of disclosure of privileged information and other market communications and publication of periodic financial statements. In carrying out its duties, the department is in constant contact with investors and financial analysts, providing all the information that they request, while observing the applicable legal and regulatory provisions. EDP's Investor Relations Department comprises six people and is coordinated by Miguel Viana. It is located at the Company’s head office: Avenida 24 de Julho, n.º 12, 4.º Piso – Poente 1249-300 Lisboa Telefone: +351 21 001 2834 E-mail: ir@edp.com Site: www.edp.com The following chart shows the communication channels through which EDP provides its shareholders with information on each type of documentation. CHANNELS IN PERSON 1 WWW.EDP.COM E-MAIL IR PHONE NUMBER 2 WWW.CMVM.PT ELEMENTS REQUIRED BY LAW OR REGULATION 3 Notice of meeting √ √ √ √ √ Executive Board of Directors' proposals √ √ \- √ √ Amendment of the Articles of Association √ √ \- √ √ Other proposals √ √ \- √ \- Annual Report √ √ √ \- √ Management and supervisory positions held in other Group companies by company officers √ √ \- √ √ ADDITIONAL ELEMENTS Ballots for voting by proxy √ √ √ √ \- Ballots for voting by mail √ √ √ √ \- Ballots for voting by e-mail √ √ √ √ \- Clarification of any issues √ √ √ √ \- EDP Articles of Association and Regulations √ √ √ √ √ 1 At EDP's headquarters; 2 IR phone number +351 21 001 2834; 3 Art. 289 of Companies Code and Regulation of CMVM 5/2008. 57\. Representative for market relations The representative for market relations is director Rui Manuel Rodrigues Lopes Teixeira. 168 58\. Percentage of and response time to queries received in the year or pending from previous years EDP's goal is for communication with the market to consist of objective, transparent information that is understandable to all stakeholders. In order to achieve such intent and bearing in mind the importance of keeping a trustworthy and sustainable behaviour, EDP has adopted a financial reporting policy based on transparent and consistent information properly conveyed to investors and analysts. On 25 February 2021, EDP presented its “Strategic Update” in Lisbon, where it was announced the business plan for the period 2021-2025. Additionally, during 2021, EDP participated in numerous events with analysts and investors to inform the market of the Company's strategy and operational and financial performance. These included roadshows, presentations to analysts and investors, meetings, and conference calls. In 2021, 115 market communications were made. The Investor Relations Department received several requests for information during the year and the average response time to queries was less than 24 hours. The Company's efforts have been rewarded at several events. In 2021, EDP was nominated for the IR Magazine Europe Awards 2021, having been considered the second-best company in the Utilities sector, it was also considered the twelfth best company in Investor Relations in all sectors in Europe and reached the same position in the ranking of the best Investor Relations by the Management Team (CEO+CFO). In addition to being recognized by IR Magazine, EDP was also awarded by the Institutional Investor, in the All-Europe Executive Team award, with the CEO coming in second place in the Sell-side ranking, the CFO in third place in the Sell-Side ranking, and EDP in fifth place in the Utilities sector. V. Website 59\. Website Address EDP's website (www.edp.com) provides comprehensive legal or corporate governance information, updates on the Group's activity and complete financial and operational data in order to facilitate searches and access to information by shareholders, financial analysts and others. The information made available through this channel in Portuguese and English includes data on the Company, financial statements and accounts, privileged information, the Articles of Association and Internal Regulation of corporate bodies, the Group’s shareholder structure, preparatory documentation for General Meetings, historical performance of EDP share prices, a calendar of Company events, the names of members of the corporate bodies and the representative for market relations, contact information for the Investor Relations Department and other information of potential interest about the Group. EDP's website also allows visitors to consult accounting documents for any financial year since 1999. 60\. Location of information about the company, its status as a public limited company, head office and other details mentioned in Article 171 of the Company Code The information set out in Article 171 of the Companies Code is available on EDP's website on: www.edp.com/en/investors/corporate-governance/principles-govern-us#by-laws---regulations. 61\. Location of the Articles of Association and regulations of bodies or committees The Articles of Association and regulations of bodies and committees are available on EDP's website on: www.edp.com/en/investors/corporate-governance/principles-govern-us#by-laws---regulations. 169 62\. Location of information on the names of members of the corporate bodies, market relations representative, investor relations office or equivalent body, their duties and forms of access The names of members of the corporate bodies, market relations representative, investor relations office or equivalent body, their duties and forms of access are available on EDP's website on: www.edp.com/en/investors/corporate-governance/governing-bodies www.edp.com/en/investors/corporate-governance/principles-govern-us#by-laws---regulations 63\. Location of accounting documents, which must be available for at least five years and the six-monthly calendar of company events disclosed at the start of each half year, including General Meetings, disclosure of annual, six-monthly and, if applicable, quarterly accounts The accounting documents and calendar of company events are available on EDP's website on: www.edp.com/en/investors/investor-information/results-reports#reports-and-accounts www.edp.com/en/investors-0 64\. Location of notice of meeting for General Meetings and all their preparatory and subsequent information The notice of meeting for General Meetings and all their preparatory and subsequent information are available on EDP's website on: https://www.edp.com/en/investors/general-meetings. 65\. Location of history of decisions made at the company's General Meetings, the share capital represented and result of votes for the previous three 3 years The history of decisions made at the Company's General Meetings, the share capital represented, and result of votes are available on EDP's website on: https://www.edp.com/en/investors/general-meetings. D. Remuneration I. Power to set Remuneration 66\. Power to set the remuneration of corporate bodies and company directors As provided for in the EDP Articles of Association until the amendments resulting from the General Meeting held on 14 April 2021, the remuneration of the members of the governing bodies was fixed by a Remuneration Committee appointed by the General Meeting, with the exception of the remuneration of the members of the Board of Directors Executive Board, which were set by a Remuneration Committee appointed by the General and Supervisory Board. These Committees submitted annually to the General Meeting a declaration on the remuneration policy of the members of the governing bodies, pursuant to the provisions of paragraph 1 of article 2 of Law no. 28/2009, of 19 June. With the entry into force of Law no. 50/2020, of 25 August, and the and the resulting statutory amendment approved at the General Shareholders’ Meeting, it is up to the Remuneration Committee to submit to the Company's General Shareholders’ Meeting a proposal for a Remuneration Policy for the Members of the Governing Bodies, and both Committees have submitted to the shareholders’ approval the respective proposal to the General Shareholders’ Meeting held on 14 April 2021, under the terms of the statutory modification approved by the General Shareholders’ Meeting. The Remuneration Committee elected by the General Meeting takes into account, for the purposes of the proposed remuneration policy for the members of the General and Supervisory Board, the Board of the General Meeting and the 170 Statutory Auditor, namely, their fixed nature, as well as the mandatory rules on their determination, in particular the provisions of number 2 of article 440 of the Commercial Companies Code, which explains the criteria for determining the remuneration of the General and Supervisory Board, in article 374-A of the Commercial Companies Code, pursuant to Law no. 50/2020, of 25 August, on the remuneration of members of the Board of the General Meeting and in article 60 of Decree- Law no. 224/2008, of 20 November, on the remuneration of the Statutory Auditor. II. Remuneration Committee 67\. Membership of the Remuneration Committee, including names of the natural or legal persons hired to assist and declaration on independence of each member and consultant The membership of the Remuneration Committee of the General Meeting and of the Remuneration Committee appointed by the General and Supervisory Board is set out in Item 29. In 2021, the Remuneration Committee of the General and Supervisory Board hired an external consultant – Mercer (Portugal), Lda. – to support it in the validation and certification of the calculation of the annual and multi-annual variable remuneration of the Executive Board of Directors. In January 2022, the General and Supervisory Board also hired Mercer (Portugal), Lda. to provide services concerning the certification of the evaluation process of the abovementioned body, of its Specialized Committees and of the Executive Board of Directors. The referred certifications may be consulted at the 2021 Annual Report of the General and Supervisory Board. 68\. Knowledge and experience of remuneration policy of the members of the Remuneration Committee The Remuneration Committee of the General and Supervisory Board is composed of members of the General and Supervisory Board with qualifications and experience in remuneration policy, according to Annex I of the current Report. On the other hand, the Remuneration Committee appointed by the General Meeting is composed of a number of members not less than three, with adequate knowledge and experience in matters of remuneration policy, in accordance with article 2 of the respective Internal Regulation and in accordance with the curricular notes attached to the proposal for election at the General Meeting available at www.edp.com. III. Remuneration Structure 69\. Remuneration policy of management and supervisory bodies Executive Board of Directors The Executive Board of Directors' Remuneration Policy ensures a (fixed) base remuneration, the payment of which is not dependent on performance evaluation, which must be fair, competitive, and sufficiently relevant in relation to the total remuneration, in order to allow greater flexibility in the conformation of the variable component of the remuneration. The Remuneration Policy of the Executive Board of Directors comprises a variable remuneration, with an annual component, and a multi-annual component, with the nature of reward/incentive appropriate to the individual and collective performance of the members of the Executive Board of Directors and the promotion of good conduct, taking into account EDP's short- and long-term, financial, and non-financial objectives that are achieved, and the way in which they were achieved (pay for performance). The annual variable component is linked to financial and non-financial objectives established in accordance with EDP's Annual Budget, evaluated annually, with an impact on the year and subject to evaluation and consequent repercussion in the following years, being paid in cash. The annual variable remuneration must be determined after the approval of EDP's 171 accounts at the Annual General Meeting each year, by reference to the previous year/period of annual performance. The payment of multi-annual variable remuneration is partially deferred. The multi-annual variable component is linked to the quantitative and qualitative objectives of EDP's Business Plan, the fulfilment of which will be evaluated at the end of a period of three years, with the respective payment subject to partial deferral. The multi-annual variable remuneration is paid exclusively in shares representing the share capital of EDP. The determination of the variable annual and multi-annual remuneration of the members of the Executive Board of Directors in accordance with the Remuneration Policy is the responsibility of the Remuneration Committee of the General and Supervisory Board. The payment of the variable remuneration is subject to the permanence of the member of the Executive Board of Directors at EDP until the end of the annual or three-year period of relevant performance, without prejudice to the provisions of the remuneration policy. The remunerations policy approved at the General Shareholders’ Meeting held on 14 April 2021 determines therefore the following: • Fixed remuneration \- The base remuneration of the members of the Executive Board of Directors must be aligned with the base remuneration practiced by a group of companies comparable with EDP, of the national market (PSI 20 Index) and of the international electricity sector, in terms of size, market capitalization, risk profile, relevance and geographic implantation, also considering, at all times, the complexity of the functions performed, the remuneration conditions of EDP workers and the non-increase of the average remuneration gap of the market between workers and managers. Considering the reduction in the number of members of the Executive Board of Directors and the organizational / functional review of the same with the consequent increase in responsibilities resulting therefrom, in particular the lower remuneration level of the Executive Board of Directors, and without prejudice to the possibility that amendments to this Remuneration Policy may be proposed to the General Shareholders Meeting during the current term, as a result of a complete analysis of the functions of the members of the Executive Board of Directors as a result of the reorganization verified, it was considered adequate to eliminate a remuneration level in the Executive Board of Directors, reducing, in this phase, from three to two, the levels of remuneration of the members of the Executive Board of Directors, under the following terms: (i) annual base remuneration of the CEO: 800,000.00 Euro; and (ii) annual base remuneration of the other members of the Executive Board of Directors: 560,000.00 Euro. The base remuneration of the members of the Executive Board of Directors is paid in 14 monthly instalments. • Annual variable remuneration \- The maximum annual variable remuneration may not be higher than 80% of the base remuneration in force in the year to which the referred annual variable remuneration refers, being determined, and falling due, after the approval of accounts for the year to which it relates. The annual variable remuneration has the nature of an incentive / performance bonus linked to short-term financial and non-financial objectives (linked to the business plan and budget), analysed annually, with a reflection on the year under evaluation and possible repercussions in the following years, being paid in cash. The amount of the annual performance bonus will be determined within three months after the approval of EDP's accounts at the Annual General Shareholders Meeting each year, by reference to the previous annual performance period. Key annual performance indicators (and weightings) pursuant to the budget for the year at stake are as follows: • Regarding the quantitative component: (i) Growth – Earnings per share recurring (20%), (ii) shareholder remuneration – Total Shareholder return vs Eurostoxx utilities (20%), (iii) Balance sheet solidity – Funds from Operations/Net Debit (10%), (iv) Operational efficiency – Recurring Cash OPEX (10%); (v) ESG indicator(s)(20%) including Dow Jones Sustainability Index Results, performance in the employees’ yearly climate study and performance in the customer satisfaction index; and, • Regarding qualitative component: (i) implementation of the Business Plan in the year (25%), (ii) team management (25%), (iii) Teamwork (25%) and (iv) Stakeholder management (25%). This 20% weighting results from an individual qualitative assessment carried out by the Remuneration Committee of the General and Supervisory Board, based on the individual performance of each member of the Executive Board of Directors and, after consultation with the Executive Board of Directors. • Multiannual variable remuneration \- The multiannual variable remuneration will be calculated and will be due within 3 months after the approval of accounts for the last financial year of the three-year period to which it relates and will be 172 paid in EDP Shares. The number of EDP shares to be awarded to each member of the Executive Board of Directors will be the one resulting from the quotient between the value of the remuneration calculated as to be paid in EDP shares after performance evaluation, and the price attribution of EDP shares corresponding to the average price of EDP shares in the last month prior to the General Shareholders' Meeting on 14 April 2021: 4.95 Euros. The multi-annual variable remuneration will be measured according to the fulfilment of long-term financial and non-financial objectives in accordance with the Business Plan approved by EDP, including the Company's sustainability metrics within the scope of ESG (Environment, Social and Governance) policies and objectives. Key multi-annual performance indicators for the three-year term of office (and weightings) against the 2021-2025 Business Plan subject to a prior favourable opinion of the General and Supervisory Board of 24 February 2021, after approval by the Executive Board of Directors: • Regarding the quantitative component: (i) Shareholder remuneration - Total shareholder return vs Eurostoxx utilities (40%); (ii) Growth - Earnings per share recurring cumulative (20%) and (iii) ESG indicators (20%) including increase of share of renewable energy production, emissions reduction and Bloomberg Gender Diversity Index Performance. The 80% resulting from the weighted sum of these indicators reflects a performance that is common to all members of the Executive Board of Directors. • The remaining 20% result from an individualized qualitative assessment carried out by Remuneration Committee, based on the individual performance of each of the members of the Executive Board of Directors, and after consulting the Executive Board of Directors. Regarding qualitative component (i) strategy and execution (25%), (ii) employee development (25%), (iii) teamwork and new forms of working and (25%) stakeholders management (25%). For more detailed information please see Chapter 5 – Remuneration Report. General and Supervisory Board In compliance with the provisions of article 440 of the Commercial Companies Code, the remuneration of the members of the General and Supervisory Board is of a fixed nature, taking into account the duties performed. The remuneration of the Chairman of the General and Supervisory Board was fixed considering, namely, the necessary availability for the exercise of the respective functions as well as the significant institutional representation component required. The remuneration of the Chairman of the General and Supervisory Board also includes the costs associated with the use of the vehicle and its driver. The Remuneration Committee elected by the General Meeting defined the remuneration policy for the members of the General and Supervisory Board, having as a guiding principle that it should be simple, transparent, moderate, adapted to the working conditions performed and the Company's economic situation, but, also competitive and equitable, in order to guarantee the purpose of creating value for shareholders and other stakeholders. Based on these criteria and considering the challenges that the Company intends to pursue during the next term of office, the Remuneration Committee elected by the General Meeting decided that the following guidelines should apply (i) A distinction must be maintained between the remuneration attributed to the members of the General Supervisory Board and those fixed to the members of the Executive Board of Directors, with the former not being allocated a variable remuneration component or any other remuneration supplement. (ii) The performance with merit and the complexity of the functions performed by the members of each body must be considered, so that the cohesion, stability, and development of the Society are not jeopardized. (iii) Regarding the Chairman of the General Supervisory Board, it must be considered that the functions require great availability and include a strong component of institutional representation. He may also chair the Financial Matters Committee/Audit Committee, without additional remuneration. (iv) If the chairmanship of the Financial Matters Committee/Audit Committee is assigned to another member of the General Supervisory Board, other than its Chairman, he/she must have a compatible remuneration, depending on the responsibility of the position and the requirement of availability. 173 (v) In any case, the Chairman of the General Supervisory Board, or the Chairman of the Financial Matters Committee/Audit Committee, if they are separate persons, may not accumulate any other remuneration in relation to the basis assigned to them. (vi) It is also important to differentiate the performance of other specific functions, within the scope of the General Supervisory Board, namely the participation of members of the General Supervisory Board in other committees, as well as the functions performed in these committees. (vii) Finally, it should be considered that, historically, the remuneration of the Chairman of the Board of the General Meeting is similar to the remuneration attributed to the Chairman of a Committee. For this reason, the remuneration of the Chairman of the Board is aligned accordingly, and his inherent membership of the position of Member of the General Supervisory Board is also considered. For more detailed information please see Chapter 5 – Remuneration Report. 70\. How remuneration is structured to allow alignment of the interests of the members of the managing body with the company's long-term interests and how it is based on assessment of performance and discourages excessive risk-taking As set out in the Remuneration report, the Remuneration Policy of the Executive Board of Directors comprises a variable remuneration, with an annual component, and a multi-annual component, with the nature of reward/incentive appropriate to the individual and collective performance of the members of the Executive Board of Directors and the promotion of good conduct, taking into account EDP's short- and long-term, financial and non-financial objectives that are achieved, and the way in which they were achieved (pay for performance). Pursuant to the principles set out in the Remuneration Policy approved at the General Shareholders’ Meeting, the remuneration of the members of the Executive Board of Directors should be aligned with the interests of shareholders, be focused on the creation of long-term value and be compatible with adequate risk management and rigorous, thus contributing to the Company's strategy, to its values and long-term interests and to its sustainability. The right to variable remuneration and its effective payment is conditioned to the non-performance, by the members of the Executive Board of Directors, of any malicious illegal acts known after the evaluation has been carried out, and which cause damage to EDP or jeopardize the sustainability of performance of EDP and are the subject of a claim for compensation to EDP, by shareholders or third parties. EDP’s Executive Board of Directors Members do not enter into contracts, either with the Company or with third parties, the effect of which is to mitigate the risk associated with the variability of the remuneration determined for them by the Company. For more detailed information please see Chapter 5 – Remuneration Report. 71\. Reference to a variable remuneration component and any impact of performance evaluation on this component As described above, in item 69, the remuneration policy in force is composed of three components: (i) fixed remuneration, (ii) annual variable remuneration and (iii) multi-annual variable remuneration. For more detailed information please see Chapter 5 – Remuneration Report. 72\. Deferral of payment of variable component of remuneration and its length The payment of annual performance bonus is partially deferred in 30% of its value throughout a 2-year period, with the payment to be carried out in 50% each year, with EDP reserving through the Remuneration Committee of the General and 174 Supervisory Board the possibility of not applying such deferral when the annual amount of the bonus is not higher than 20% of the relevant base remuneration. The multi-annual variable component is linked to the quantitative and qualitative objectives of EDP's Business Plan, the fulfilment of which will be evaluated at the end of a period of three years, with the respective payment subject to partial deferral. The multi-annual variable remuneration is paid exclusively in shares representing the share capital of EDP. The payment of two thirds of the multi-annual variable remuneration payable in EDP shares will be deferred and must be paid in two equal and successive annual instalments, ensuring that the payment of the multi-annual variable remuneration is made in the third year after each year of performance of the plan. multiannual year in reference, the first one due, respectively, and the second two years after the annual General Meeting at which the EDP accounts corresponding to the last year of the term in question are approved. For more detailed information please see Chapter 5 – Remuneration Report. 73\. Criteria on allocation of variable remuneration in shares and executive directors' maintenance of these shares, any agreements concluded concerning these shares, such as hedging or risk transfer contracts, their limit, and their association with total annual remuneration The multiannual variable remuneration will be calculated and will be due within three months after the approval of accounts for the last financial year of the three-year period to which it relates and will be paid in EDP Shares. The number of EDP shares to be awarded to each member of the Executive Board of Directors will be the one resulting from the quotient between the value of the remuneration calculated as to be paid in EDP shares after performance evaluation, and the price attribution of EDP shares corresponding to the average price of EDP shares in the last month prior to the General Shareholders' Meeting on 14 April 2021: EUR. 4.95. The multi-annual variable remuneration will be measured according to the fulfilment of long-term financial and non-financial objectives in accordance with the Business Plan approved by EDP, including the Company's sustainability metrics within the scope of ESG (Environment, Social and Governance) policies and objectives. The payment of two thirds of the multi-annual variable remuneration payable in EDP shares will be deferred and must be paid in two equal and successive annual instalments, ensuring that the payment of the multi-annual variable remuneration is made in the third year after each year of performance of the plan. multiannual year in reference, the first one due, respectively, and the second two years after the annual General Meeting at which the EDP accounts corresponding to the last year of the term in question are approved. The payment of a significant part of the component of the multiannual variable remuneration in EDP shares reinforces the focus on the capital market and the alignment of interests of the members of the Executive Board of Directors with those of shareholders. 74\. Criteria on allocation of variable remuneration in options, period of deferral and price of exercise EDP has no variable remuneration option schemes. 75\. Main parameters and basis of any annual bonus system and any non-monetary benefits The members of the Executive Board of Directors also benefit from the following additional benefits: • Payment of an annual Life Insurance and Personal Accident Insurance premium (along with the other associated costs), under the terms that will take as reference the policies in force at EDP; 175 • Payment of an annual premium for / co-payment of / access to Health Insurance, extendable to spouse and children (along with other associated costs), under the terms that will take as reference the policies in force at EDP; • Use of a vehicle, in terms of the culture and practice consistently followed at EDP for service vehicles, which includes, for the members of the Executive Board of Directors, the assignment of a driver, payment of costs and expenses related to the vehicle and its use. The benefits and rights granted to the members of the Executive Board of Directors under the employment contracts they have entered into with EDP will be suspended during the exercise of their duties as members of the Executive Board of Directors, thus not adding to the benefits and rights above indicated. The benefits and rights attributed to the members of the Executive Board of Directors under the terms of the Remuneration Policy may, by decision of the Remuneration Committee of the General and Supervisory Board, with a favourable opinion from the Corporate Governance and Sustainability Committee, be adjusted according to the practices market and continued alignment with EDP's general Human Resources policy applicable at any given time, and must be justifiably reported in the first remuneration report that is presented after the aforementioned adjustment. Pursuant to Article 402 of the Portuguese Companies Code and Article 27(1) of EDP's Articles of Association, the Company may create old-age or disability retirement pension supplements in favour of the members of the Executive Board of Directors. EDP has not created a supplementary retirement pension fund or plan for directors, instead making annual contributions / or co-contributions with the director to a Retirement Savings Plan (PPR) in a net amount corresponding to 10% of the respective remuneration base. The PPR is subscribed by EDP with the insurance company of its choice, indicating the director as an insured person, with EDP's defined contribution paid in 12 monthly instalments. The PPR characteristics will correspond to the usual characteristics in the market for this type of product, being refundable before the end of the respective term, under the terms legally applicable to these financial products. The PPR currently available to the members of the Executive Board of Directors may, with a favourable opinion from the Remuneration Committee of the General and Supervisory Board, be replaced by unit linked capitalization insurance or equivalent vehicle, depending on the offer and market practices at any given time. 76\. Main characteristics of supplementary pension or early retirement schemes for directors and date of approval individually at a General Meeting As described above, in item 75, and under the terms of the Remuneration Policy approved by the General Shareholders’ Meeting held on 14 April 2021, EDP has not created a supplementary retirement pension fund or plan for directors, instead making annual contributions / or co-contributions with the director to a Retirement Savings Plan (PPR) in a net amount corresponding to 10% of the respective remuneration base. The PPR is subscribed by EDP with the insurance company of its choice, indicating the director as an insured person, with EDP's defined contribution paid in 12 monthly instalments. The PPR characteristics will correspond to the usual characteristics in the market for this type of product, being refundable before the end of the respective term, under the terms legally applicable to these financial products. The PPR currently available to the members of the Executive Board of Directors may, with a favourable opinion from the Remuneration Committee of the General and Supervisory Board, be replaced by unit linked capitalization insurance or equivalent vehicle, depending on the offer and market practices at any given time. IV. Disclosure of Remuneration 77\. Annual aggregate and individual remuneration paid to the members of the company's managing body by the company, including fixed and variable remuneration and its different components The gross global amount paid by EDP to the members of the Executive Board of Directors in 2021 was 10,691,416 Euros. The table below shows, in Euros, the gross remuneration amounts paid in 2021, individually, to the members of the Executive Board of Directors in office until 19 January 2021, regarding the 2018-2020 term of office: 176 GROSS REMUNERATION PAID BY EDP (1) FIXED ANNUAL COMPONENT (2020) MULTIANNUAL COMPONENT (2018) TOTAL António Luís Guerra Nunes Mexia 48,424 558,626 727,952 1,335,002 João Manuel Manso Neto 33,897 391,038 500,629 925,564 António Fernando Melo Martins Costa 24,902 329,251 383,146 737,299 João Manuel Veríssimo Marques da Cruz 14,518 211,361 250,876 487,262 (2) Miguel Stilwell de Andrade 32,932 402,942 500,629 936,503 Miguel Nuno Simões Nunes Ferreira Setas 110,184 (3) 224,388 289,559 864,131 (4) Rui Manuel Rodrigues Lopes Teixeira 27,366 340,771 413,789 781,926 Maria Teresa Isabel Pereira 25,485 329,251 413,789 768,525 Vera de Morais Pinto Pereira Carneiro 28,016 333,859 421,450 783,325 (1) The remuneration of the members of the Executive Board of Directors includes the amounts related to the Retirement Savings Plan. (2) The total amount includes EUR. 10,507 paid by companies of the EDP Group (according to the remuneration table paid by companies in a controlling relationship). (3) This amount includes an exchange/tax adjustment in the amount of Eur. 96,170 relative to the previous year. (4) The total amount includes 240,000 Euros paid by companies of the EDP Group (as per the table below of remuneration paid by companies in a controlling relationship). The table below shows, in Euros, the gross remuneration amounts paid in 2021, individually, to the members of the Executive Board of Directors in office since 19 January 2021, in relation to the 2021-2023 term of office, as well as the total earned by each of these members in 2021: GROSS REMUNERATION PAID BY EDP (*) FIXED FROM 19 JANUARY 2021 TO 14 APRIL 2021 FIXED FROM 14 APRIL 2021 TO 31 DECEMBER 2021 TOTAL (TERM 2021-2023) TOTAL 2021 (TERM 2018-2020 AND 2021-2023) Miguel Stilwell de Andrade 230,863 686,701 917,564 1,854,067 Miguel Nuno Simões Nunes Ferreira Setas 72,262 440,647 512,909 1,377,040 Rui Manuel Rodrigues Lopes Teixeira 160,789 481,442 642,231 1,424,157 Vera de Morais Pinto Pereira Carneiro 144,197 481,036 625,233 1,408,557 Ana Paula Garrido de Pina Marques 143,299 481,150 624,450 624,450 (*) The remuneration of the members of the Executive Board of Directors includes the amounts related to the Retirement Savings Plan. 78\. Amounts paid for any reason by other subsidiary or Group companies or companies under common control The amounts of variable remuneration were fixed based on the tax treatment applicable in the country in which the Director was tax resident. The amounts paid by companies’ majority owned by EDP refer exclusively to the period of residence abroad. The table below shows the gross remuneration paid to members of the Executive Board of Directors by other companies in a controlling or group relationship or that are subject to a common control. EUROS GROSS REMUNERATION PAID BY EDP FIXED ANNUAL COMPONENT (2020) COMPANIES IN CONTROLLING RELATIONSHIP João Manuel Veríssimo Marques da Cruz 10,507 0 EDP - Asia Soluções Energéticas, Lda. Miguel Nuno Simões Nunes Ferreira Setas 240,000 0 EDP - Energias do Brasil, S.A. 79\. Remuneration in the form of profit-sharing and/or payment of bonuses and reasons for these bonuses or profit sharing EDP has no schemes in place for payment of remuneration in the form of profit-sharing and/or payment of bonuses. 80\. Compensation paid or owed to former executive directors for termination in the financial year For information regarding Item 80, please see Chapter 5 – Remuneration Report 81\. Annual aggregate and individual remuneration paid to the members of the company's supervisory bodies 177 1\. General and Supervisory Board The gross global amount paid by EDP to the members of the General and Supervisory Board in 2021 was 2,053,113.70 Euros. The following table shows the amounts of remuneration paid during the 2021 financial year to members of the General and Supervisory Board in office, during the 2018-2020 term, until 14 April 2021: MEMBERS OF THE GENERAL AND SUPERVISORY BOARD FIXED EUROS Luís Filipe Marques Amado 148,778 China Three Gorges (Portugal), Sociedade Unipessoal, Lda. (1) 55,828 China Three Gorges Corporation 27,181 China Three Gorges International Corp. 16,778 China Three Gorges (Europe), S.A. 19,640 China Three Gorges Brasil Energia Ltda 16,984 Banco Comercial Português, S.A. 16,467 DRAURSA, S. A. ( 2 ) 26,716 SONATRACH 16,467 Senfora BV 16,467 Fernando Maria Masaveu Herrero 19,169 Maria Celeste Ferreira Lopes Cardona 23,111 Ilídio Costa Leite Pinho 16,467 Jorge Avelino Braga Macedo 19,356 Vasco Joaquim Rocha Vieira 19,356 Augusto Carlos Serra Ventura Mateus 19,356 João Carvalho das Neves 32,903 María del Carmen Fernández Rozado 20,028 Laurie Lee Fitch 16,308 Clementina Maria Dâmaso de Jesus Silva Barroso 31,041 Luís Maria Viana Palha da Silva 20,028 (1) Remuneration paid to the representative Eduardo de Almeida Catroga (2) Of the total amount, EUR. 7,500 are due to adjustments in relation to the 2020 financial year The following table shows the amounts of remuneration paid during the 2021 financial year to the members of the General and Supervisory Board in office, for the 2021-2023 term, as of April 14, 2021: MEMBERS OF THE GENERAL AND SUPERVISORY BOARD FIXED EUROS João Luís Ramalho de Carvalho Talone 397,653 China Three Gorges Corporation 49,972 China Three Gorges International Limited 49,503 China Three Gorges (Europe), S.A. 63,779 China Three Gorges Brasil Energia Ltda. 63,575 China Three Gorges (Portugal), Sociedade Unipessoal, Lda. (1) 67,819 DRAURSA, S. A. 78,481 Fernando Maria Masaveu Herrero 64,250 João Carvalho das Neves 102,086 178 MEMBERS OF THE GENERAL AND SUPERVISORY BOARD FIXED EUROS María del Carmen Fernández Rozado 82,097 Laurie Lee Fitch 78,528 Esmeralda da Silva Santos Dourado 78,528 Helena Sofia da Silva Borges Salgado Fonseca 82,097 Zili Stephen Shao 64,250 Sandrine Dixson-Declève 64,250 Luís Maria Viana Palha da Silva 67,819 (1) Remuneration paid to the representative Miguel Espregueira Mendes Pereira Leite 2\. Other company bodies Environment and Sustainability Board Under the terms of the current remuneration policy, approved by the General Shareholders’ Meeting on 14 April 2021, the members of the Environment and Sustainability Board are entitled to receive an attendance fee per meeting in the amount of 1,750 Euros. In the 2021 financial year, the members of the Environment and Sustainability Board earned the remuneration indicated in the following table: ENVIRONMENT AND SUSTAINABILITY BOARD ( 1 ) FIXED EUROS José Manuel Caré Baptista Viegas 8,750 ( 2 ) Joana Pinto Balsemão ( 3 ) \- Joaquim Manuel Veloso Poças Martins 7,000 ( 4 ) Maria Mendiluce 0 Pedro Manuel Sousa Mendes Oliveira 7,000 ( 5 ) (1) António José Tomás Gomes de Pinho, member of the Environment and Sustainability Board during the 2018-2020 term, earned EUR. 5,250 related to previous years. (2) Of the total amount, EUR. 5,250 are due to adjustments related to previous years. (3) Waived the respective remuneration. (4) Of the total amount, EUR. 1,750 are due to adjustments related to previous years. (5) Of the total amount, EUR. 1,750 are due to adjustments related to previous years. 179 Remuneration Committee of the General Meeting The members of the Remuneration Committee of the General Meeting received, in 2021, the following remunerations: REMUNERATION COMMITTEE OF THE GENERAL SHAREHOLDER’S MEETING (*) FIXED EUROS Luís Miguel Nogueira Freire Cortes Martins 29,278 José Gonçalo Ferreira Maury 20,708 Jaime Amaral Anahory 20,708 (*) Due to a processing error, a payment of EUR 15,000 was advanced to the Chairman and of EUR 10,000 to the two other members of the Remuneration Committee of the General Shareholders’ Meeting, amounts that will be settled during the 2022 financial year. 82\. Remuneration of the Chairman of the General Meeting The Chairman and Secretary of the General Meeting do not earn any remuneration in that capacity, given that they are remunerated as a member of the General and Supervisory Board and Company Secretary, respectively. In 2021, the Vice-Chairman of the General Meeting during the 2018-2020 term-of-office, received the amount of EUR 3,000. V. Agreements Affecting Remuneration 83\. Contractual limitations for compensation payable to directors for dismissal without due cause and their association with the variable component of remuneration. In addition to the situations reported in the Remuneration Report, there are no contracts in force at EDP that provide for payments in the event of dismissal or termination by agreement of the director's duties. 84\. Description and amounts of agreements between the company and members of the managing body and directors, as set out in Article 248-B (3) of the Securities Code, providing for compensation in the event of dismissal without due cause or termination of employment following a change of company control Under the European Union legislation regarding market abuse, EDP has no directors other than the members of the General and Supervisory Board and of the Executive Board of Directors. In fact, apart from the members of those bodies, there is no person who has regular access to inside information and participates in management and business strategy decision of the Company. On the other hand, it is reiterated that, in addition to the situations reported in the Remuneration Report, there are no agreements in force at EDP that provide for payments in the event of dismissal or termination by agreement of director's duties. VI. Stock Purchase Option Plans or Stock Options 85\. Plan and its beneficiaries There are no option rights granted for the acquisition of shares (stock options) from which the Company's employees and employees are beneficiaries. 180 86\. Description of the plan (conditions for award, clauses on non-saleability of shares, shares price criteria, price of options in financial year, period in which options can be exercised, characteristics of shares or options, incentives for purchase of shares or exercise of options) There are no option rights granted for the acquisition of shares (stock options) from which the Company's employees and employees are beneficiaries. 87\. Stock options of company employees There are no option rights granted for the acquisition of shares (stock options) from which the Company's employees and employees are beneficiaries. 88\. Control mechanisms set out in any employee share scheme so that they do not exercise their voting rights directly The Company has no such control mechanisms. E. Transactions with Related Parties I. Mechanisms and Procedures of Control 89\. Company mechanisms for monitoring transactions with related parties The General and Supervisory Board approved in 2009 objective, transparent rules on the identification, prevention, and resolution of relevant corporative conflicts of interest called Framework on Handling of Conflicts of Interest. Following a resolution made by the General and Supervisory Board, on 17 May 2010 the Executive Board of Directors approved the rules on identification, in-house reporting, and procedure in the event of conflicts of interest applicable to all EDP Group employees who play a decisive role in transactions with related parties. As part of its improvement of governance practices, on 29 July 2010, the General and Supervisory Board approved EDP's Regulation on Conflict of Interest and Transactions between Related Parties, which was reviewed in 2015 and a new version was approved on 29 October 2015. Considering the changes introduced by Law no. 50/2020, of 25 August, as well as the constant adoption of best practices by the Company, a review of the internal regulations that regulate conflicts of interest and business between related parties was promoted, and, in 2021, the Policy on Transactions with Related Parties came into force, available for consultation on the EDP website, www.edp.com. The Financial Matters Committee / Audit Committee is responsible for issuing a reasoned opinion on matters subject to a prior opinion by the General and Supervisory Board, which concern transactions between related parties, supported, whenever applicable, by reasoned opinions from the Risk and Compliance Departments, which must be made known to the General and Supervisory Board. 90\. Transactions that underwent controls in the year Attentive to the current reporting obligations, the Executive Board of Directors, during 2021, submitted to the General and Supervisory Board the information concerning the transactions between related parties. Such information concerned the transactions listed below: • EDP Group, through EDP Clientes, S.A. provided electricity and gas supply services as well as the installation of solar panels to the company Cementos Tutela Veguín in the amount of approximately 19.4 million Euros and the estimated total amount of which could be approximately of 33.7 million Euros (Cementos Tutela Veguín is a subsidiary of the Group Masaveu, which, in turn, holds 55.9% of the company Oppidum Capital, SL); 181 • EDP Group provided payment management services to Liberbank in the amount of approximately 10,562 Euros. (Liberbank holds 44.1% of Oppidum Capital, SL). • EDP and Sonatrach agreed to terminate the partnership entered into in 2007, under which EDP assumes full control of the combined cycle natural gas plant, Soto 4, in Spain, with an installed capacity of 426MW, through the acquisition of 25% stake held by Sonatrach, and terminates the commercial relations with Sonatrach that were associated with this partnership. Additionally, and as disclosed to the market, (i) on 15 November 2021, EDP, through its subsidiary EDP Renováveis, S.A., signed a Sale and Purchase Agreement with China Three Gorges to sell a 100% equity stake in a 181 MW operating wind portfolio located in Spain for an estimated Enterprise Value of 307 million Euro (subject to customary closing adjustments), transaction that is subject to regulatory and other customary precedent conditions and (ii) on 10 December 2021, EDP and China Three Gorges agreed to update the partnership terms which considering the current context of the sector marked by the strong commitment to energy transition, aims to promote flexibility for the growth strategies of both companies, ensuring the application of the most rigorous corporate governance standards in the parties’ future relations and preserving the instruments of cooperation and sharing of best practices, in order to potentiate the maximization of value for both companies and their shareholders. It should be noted that the General and Supervisory Board issued a favourable prior opinion on the two aforementioned operations with China Three Gorges. The General and Supervisory Board noted that, with basis on the cases analysed and information provided by the Executive Board of Directors for 2021, there was no evidence that the potential conflict of interests in EDP operations were resolved contrarily to the company’s interests. At the same time, it is important to highlight Article 17(2) of EDP Articles of Association, that defines a number of matters subject to prior opinion from the General and Supervisory Board. This corporate body has competences to set the parameters for measuring the economic or strategic value of the operations that must be submitted for its opinion, and these were updated by the referred Board on the 13 May 2021. In this context, and in addition to the 2021 financial year, 8 investment/divestment operations were submitted to the General and Supervisory Board for a prior opinion, with an average amount above 300 million Euros, as well as three financing operations, with the approximate average amount of 1.5 billion Euros, namely the two aforementioned operations with China Three Gorges. Regarding the waiver of a prior opinion and the use of the expedited mechanism for issuing a prior opinion, five operations were submitted to the General and Supervisory Board, two related to participation in auctions (in Spain and in Brazil), one for the acquisition of EDP bonds (Bond Buy Back) and two for amendment of articles of association (of EDP Renováveis and of EDP Energias do Brasil). Also in this context, during the 2021 financial year, five operations were submitted to the United States of America Business Affairs Monitoring Committee for a prior opinion, with an average value of 300 million dollars, with the maximum value of which was 345 million dollars. dollars. Regarding the waiver of prior opinion and the issuance of a prior opinion by an expedited mechanism, three operations were submitted to the United States of America Business Affairs Monitoring Committee, with an average value of 258 million dollars, with the operation with the maximum value being 307 million dollars. Regarding transactions analysed by the United States of America Business Affairs Monitoring Committee, none of them had a related party transaction underlying them. 91\. Procedures and criteria applicable to the supervisory body's prior assessment of transactions between the company and holders of qualifying shareholdings or entities related to them in any way The rules in force applicable to the issuance of a prior opinion and to the expedited mechanisms of opinion in urgent cases of the General and Supervisory Board were updated on 13 May 2021, as well as the procedures for communication and provision of clarifications between that corporate body and the Executive Board of Directors. The Articles of Association of EDP also establish that the General and Supervisory Board should set the parameters for measuring the economic or strategic value of the operations that must be submitted to it for an opinion, as well as establish 182 expedited mechanisms for issuing an opinion in urgent cases or when the nature of the matter justifies it and the situations in which exemption from issuing such an opinion is permitted (Article 21 (7)). In fact, the expedited mechanism for issuing an opinion by the General and Supervisory Board can only occur in situations of exceptional urgency or when the nature of the matter justifies it, as set out in the EDP’s Articles of Association and the Internal Regulations of the General and Supervision (Article 15(5)). With reference to prior opinion mechanism, General and Supervisory Board of EDP established a set of demanding rules regarding the conclusion of business between related parties, aimed at preventing situations of conflict of interests. In this context, it is important to highlight the provisions of the Transaction with Related Parties Policy – reviewed in 2021 - regarding the procedures and criteria applicable to the intervention of the supervisory body for prior assessment of the business purposes to be carried out between the Company and holders of qualifying holdings or entities that are in any relationship with them. In particular, in legal transactions or de facto situations between related parties that are likely to give rise to a conflict of interest between the parties involved, relevant to the pursuit of EDP's interest, together with the request for a prior opinion from the General and Supervisory Board or its waiver, the Executive Board of Directors must provide the following information: • Summary description of the operations and the responsibilities taken up by the parties; • Outline of the procedures used to select the counterparty, i.e., whether the operation was based on a call for tenders/market consultation procedure or direct contract award; • In the event of direct contract award, the reasons for this decision; • In cases of calls for tenders/market consultation procedures, the type of contact established with the potential interested parties and the identity of those parties; • In case of competitive tenders, the details of the different tenders and the criteria used for selection; • The parameter used to check whether the transaction was performed under “normal market conditions for similar operations”; • Measures adopted to prevent, mitigate risks, or solve potential conflicts of interests, namely the issuing of fairness opinions by independent entities prior to taking a decision regarding the performance of a Transaction with a Related Party; • Indication, if applicable, of the multi-annual nature of the operation, in which case the initial date of the award/contract must be reported, as well as the date on which the supplies and/or services are provided. With respect to legal business or cases that exist between related parties that are likely to give rise to a conflict of interests between those involved, which could impact the interests of EDP, these should be subject to a preliminary opinion from the General and Supervisory Board: • if the Financial Matters Committee/Audit Committee can meet before the General and Supervisory Board meeting, an opinion from this Committee should be requested, which should be presented to the General and Supervisory Board for decision-making purposes; • if it is not possible for the Financial Matters Committee/Audit Committee to meet, the assessment of the potential conflict of interests must be made directly by the General and Supervisory Board within its decision-making authority. II. Business Information 92\. Location of accounting documents providing information on transactions with related parties, pursuant to IAS 24, or reproduction of the information Information on transactions with related parties, pursuant to IAS 24, is set out in Note 43 of the consolidated and individual financial statements. 183 PART II Assessment of Corporate Governance 1\. Corporate Governance Code in Effect EDP – Energias de Portugal, S.A. (EDP) is a listed company whose securities are admitted to trading on the NYSE Euronext Lisbon stock market. Following the entry into force of the Protocol between the CMVM and the Portuguese Institute for Corporate Governance (Instituto Português de Corporate Governance \- IPCG), on 13 October 2017, the Corporate Governance Code issued by CMVM was revoked, and changes were made to the Corporate Governance Code issued by the IPCG, available at www.cgov.pt The choice of EDP to adopt the Corporate Governance Code issued by the IPCG, from the moment it entered into force, and under the current version, reflects the concern of always ensuring the implementation of best corporate governance practices. According to the CMVM Circular, dated 11 January 2019, this Report is structured in accordance with Article 1(4) of CMVM Regulation 4/2013, and therefore abides by the model in its Annex I, not including the sections not applicable to EDP’s governance model. 2\. Compliance assessment of the adopted Corporate Governance Code The following table sets out IPCG’s corporate governance principles and recommendations as included in the Corporate Governance Code, along with the identification, for each case, of EDP’s compliance or non-compliance with said principles or recommendations or, as the case may be, that the provisions to not apply to the Company. Complimentary information has been included where the description of the Company’s shareholder structure and governance model does not exhaust the scope of the underlying explanation of the respective principles or recommendations. COMPLIANCE DECLARATION PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION CHAPTER I · GENERAL PROVISIONS General Principle: Corporate Governance should promote and enhance the performance of companies, as well as of the capital markets, and strengthen the trust of investors, employees and the general public in the quality and transparency of management and supervision, as well as in the sustained development of the companies. I.1. Company’s relationship with investors and disclosure Principle: Companies, in particular its directors, should treat shareholders and other investors equitably, namely by ensuring mechanisms and procedures are in place for the suitable management and Regarding the disclosure of information, it is important to refer the existence of, on one hand, information flow mechanisms and, on the other hand, of corporate bodies and specialized committees purposefully favouring information sharing. On that regard, EDP relies on an information sharing platform between the Executive Board of Directors and the General and Supervisory Board as well as between the Specialized Committees, accessible to all members of such bodies and committees, without prejudice to restrictions on access to information regarding members who are in a situation of conflict Item 15 | Item 21 | Item 22 | Item 27 | Item 29 | Item 52 | Items 55 to 65 184 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION disclosure of information of interests. Such information tool allows all members to have knowledge of the most important documents, namely minutes and supporting documents to resolutions. The Executive Board of Directors provides to all other corporate body members all the requested information in a timely and appropriate manner. Furthermore, the Investor Relations Department aims to ensure the communication with analysts and investors of the Group companies in order to guarantee the sustainability of the Company’s image and EDP’s notoriety, as well as to answer all information requests of regulatory entities and financial supervisory authorities. Moreover, the Stakeholders and Institutional Relations Department ensures the institutional communication of the Company through an integrated and consistent narrative before the Group’s stakeholders, in line with the adopted vision and strategy in order to maximize the communication potential of the Group towards its stakeholders and to contribute to a fluid and systematized information flow about the Group and its activities. Finally, EDP has established a Corporate Centre that assumes a supporting role to the Executive Board of Directors in the definition and control of the execution of the defined strategies, policies and objectives. The Corporate Centre is organized by Corporate Departments and Business Units, allowing a better optimization and efficiency of the organizational structure. Recommendation I.1.1. The Company should establish mechanisms to ensure, in a suitable and rigorous form, the timely disclosure of information to its governing bodies, shareholders, investors and other stakeholders, financial analysts, and to the markets in general. ADOPTED Item 15 | Item 21 | Item 22| Item 27 | Item 29 | Item 52 | Items 55 to 65 I.2. Diversity in the composition and functioning of the company’s governing bodies Principle I.2.A Companies ensure diversity in the composition of its governing bodies, and the adoption of requirements based on individual merit, in the appointment procedures that are exclusively within the powers of the shareholders. The respect for diversity within the governing bodies and in the appointment, procedures constitute one of the structuring elements of EDP’s corporate purpose. The Internal Regulations of the corporate bodies, corporate entities and Specialized Committees which form part of EDP’s structure set forth several provisions related to reputation, independence, and incompatibilities applicable to the members of those bodies. Regarding the General and Supervisory Board and the Executive Board of Directors, EDP has a specific policy entitled “Policy on Selection of the Members of the General and Supervisory Board and Executive Board of Directors” according to which the integration of several skills, professional experiences, and knowledge, as well as genre and cultural diversity should always be assured, considering the specificities of the Company’s business. Such policy establishes that the election proposal of any candidate to be submitted to the Shareholders’ General Meeting should be duly substantiated in what concerns the candidate’s profile and function to be performed, so as to enable the shareholders to verify the adequacy of the candidate’s profile, knowledge, and curriculum to the functions to be performed. Under the abovementioned policy, some of the general selection criteria are: (i) promotion of equality of rights and opportunities in a context of diversity; (ii) enhancement of diversity, notably regarding age, gender, geographical origin, skills, competences, qualifications, and experience; (iii) promotion of the increase in the number of members of the under- represented gender; and (iv) prevention of potential conflicts of interest. Said selection policy also foresees the competences that the members of the Executive Board of Directors and of the General and Supervisory Board should possess, among which we highlight the following: (i) technical-professional competences suitable for the function; (ii) integrity, ethics and professional and personal values; (iii) sufficient knowledge of the legal, regulatory and statutory rules applicable to its functions and to the Company; (iv) sufficient availability to comply with the respective legal and statutory functions; (v) fulfilment of the independence requirements established by law and in the Articles of Association; (vi) commitment with the provisions set forth in policies, codes and Internal Regulations of the Company; (vii) commitment towards compliance with the best corporate governance practices; (viii) competences and experience in company management, risk management and supervision Items 11 | Items 15 to 17 and 30 to 33 | Annex I Principle I.2.B Companies should be provided with clear and transparent decision structures and ensure a maximum effectiveness of the functioning of their governing bodies and commissions. Item 21 | Items 27 to 31 Principle I.2.C Companies ensure that the functioning of their bodies and committees is duly recorded, namely in minutes, to allow an understanding not only of the meaning of the decisions taken, but also of their grounds and opinions expressed by their members. Item 23 | Item 27 | Item 35 Recommendation I.2.1. Companies should establish standards ADOPTED Items 11 | Items 15 to 17 | Items 30 to 33 | Annex I 185 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION and requirements regarding the profile of new members of their governing bodies, which are suitable according to the roles to be carried out. Besides individual attributes (such as competence, independence, integrity, availability, and experience), these profiles should take into consideration general diversity requirements, with particular attention to gender diversity, which may contribute to a better performance of the governing body and to the balance of its composition. suitable for the function and (ix) industry knowledge and experience in the sector. In particular, regarding gender diversity, it is convened by compliance with Law 62/2017, of 1 August, related to the balanced representation between men and women in governing and supervisory bodies in public sector entities and listed companies. Furthermore, EDP has a diversity policy according to which it undertakes to (i) promote mutual respect and equal opportunity, (ii) acknowledge the differences as a source of strengthening human potential and valuing diversity in organizing, managing and in the strategy, and (iii) adopt positive discrimination and awareness measures, not only internally but also towards the community in order to have an effective and efficient implementation of the diversity policy. Under the terms of Law no. 62/2017, of 1 August, and in full compliance with applicable law, EDP shareholders have resolved on 5 April 2018 to appoint new members of the management and supervisory bodies of the Company for the 2018-2020 triennium, in a way that safeguards a 20% representation of persons of each sex in the Executive Board of Directors and the General and Supervisory Board. The members of the Executive Board of Directors for the 2021-2023 triennium were appointed at the Extraordinary General Shareholders Meeting held on 19 January 2021, with representation at that body now standing at 40%, above legal requirements. At the General Shareholders’ Meeting held on 14 April 2021, the members of the General and Supervisory Board were elected and therefore the representativeness of this body is also higher than that provided for in the applicable legislation. As set out in EDP’s Gender Equality Policy, updated for the 2021-2022 period, available at www.edp.com and at www.cmvm.pt, gender equality is of civilizational importance, as a corollary of the equality of rights, freedoms, guarantees, opportunities and recognition between genders. It also enables the enhancement of skills and knowledge through the inclusion of all, promoting a better and more motivating work environment and, consequently, greater levels of productivity and retention of talent. Recommendation I.2.2. The company’s managing [I.2.2.(1)] and supervisory boards [I.2.2.(2)], as well as their committees [I.2.2.(3)], should have internal regulations — namely regulating the performance of their duties, their Chairmanship, periodicity of meetings, their functioning, and the duties of their members — disclosed in full on the company’s website. Minutes [I.2.2.(4)] / [I.2.2.(5)] / [I.2.2.(6)] of the meetings of each of these bodies should be drawn out. ADOPTED The General and Supervisory Board, the Executive Board of Directors, the Financial Matters Committee / Audit Committee (FMC/AC), the Corporate Governance and Sustainability Committee (CGSC), the Remuneration Committee (RC) and the United States of America Business Affairs Monitoring Committee (BAMC) have specific Internal Regulations that establish its functioning (in particular the exercise of the respective duties, chairmanship, periodicity of meetings, functioning, duties of their members and duty to draft detailed minutes of the respective meetings). In relation to the applicable specific articles, please see the chart below: Internal Regulation EBD [I.2.2 (1)] Duties 4.º Chairmanship 5.º Periodicity of meetings 8.º Functioning 8.º Duties of their members 2.º, 4.º and 7.º Duty to draft Minutes 10.º [I.2.2 (4)] Internal Regulation GSB [I.2.2 (2)] Duties 2.º Chairmanship 5.º Periodicity of meetings 4.º Functioning 4.º Items 22 and 23 | Items 27 to 29 | Item 34 | Item 61 186 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION Duties of their members 11.º Duty to draft Minutes 26.º [I.2.2 (5)] Internal Regulation FMC/AC [I.2.2 (3)] Duties 2.º Chairmanship 5.º Periodicity of meetings 4.º Functioning 4.º Duties of their members 10.º Duty to draft Minutes 4.º [I.2.2 (6)] Internal Regulation RC [I.2.2 (3)] Duties 2.º Chairmanship 5.º Periodicity of meetings 4.º Functioning 4.º Duties of their members 10.º Duty to draft Minutes 4.º [I.2.2 (6)] Internal Regulation CGSC [I.2.2 (3)] Duties 2.º Chairmanship 5.º Periodicity of meetings 4.º Functioning 4.º Duties of their members 10.º Duty to draft Minutes 4.º [I.2.2 (6)] Internal Regulation BAMC [I.2.2 (3)] Duties 2.º Chairmanship 5.º Periodicity of meetings 4.º Functioning 4.º Duties of their members 9.º Duty to draft Minutes 4.º [I.2.2 (6)] Recommendation I.2.3. The composition [I.2.3.(1)] and the number of annual meetings [I.2.3.(2)] of the managing and supervisory bodies, as well as of their committees, should be disclosed on the company’s website. ADOPTED [I.2.3.(1)] www.edp.com/en/investors/corporate-governance/governing- bodies-0 [I.2.3.(2)] This information is made available at EDP’s website, is disclosed at EDP’s Annual Report as well as on the General and Supervisory Board Annual Report. Item 59 Recommendation I.2.4. A policy for the communication of irregularities (whistleblowing) should be adopted that guarantees the suitable means of communication and treatment of those ADOPTED The Whistleblowing Procedures Regulation is in force and has been reviewed in 2020. Such Regulation sets forth reception mechanisms and procedures, irregularities communication retention and processing on several matters received by the Company. Under the terms of this Regulation, the communication of irregularities is handled as confidential information, namely by the General and Supervisory Board, by the Financial Matters Committee / Audit Committee and by the supporting employees that are responsible for the operational Item 15 | Item 49 | Items 50 to 55 187 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION irregularities, with the safeguarding of the confidentiality of the information transmitted and the identity of its provider, whenever such confidentiality is requested. management of reception, retention and handling mechanisms and procedures of the irregularity’s communication. Further information is available at https://www.edp.com/en/edp/irregularities-communication- channel, and the Whistleblowing Procedures Regulation is available at https://www.edp.com/sites/default/files/2020- 04/Regulations%20Whistleblowing%20Procedures.pdf. Without prejudice to other mechanisms used in different geographies, EDP has an additional channel, the Ethics Ombudsperson channel, which allows all employees, clients, suppliers, or other interested parties to report ethics violations and ask ethical questions, where the addressee is the Ethics Ombudsperson. For further information: https://www.edp.com/en/contact-ethics-ombudsperson. In 2021, the Integrity Policy as well as the remaining procedures and compliance mechanisms associated to this program where the object of training directed at the employees and have been internally disclosed for review in EDP’s internal communication channels. Within the scope of the Anti-Money Laundering and Terrorist Financing Compliance Program, obliged entities have implemented specific internal regulations and a horizontal procedure for the communication of suspicious operations- The Irregularities Communication Channel, which was initially set up in 2006 to enable the reporting of potential financial irregularities, has been restructured in 2020 to include the possibility of reporting potential violations related to money laundering and terrorist financing. https://edp.whispli.com/pt-pt/comunicacaodeirregularidadespt I.3. Relationships between the company bodies Principle: Members of the company’s boards, especially directors, should create, considering the duties of each of the boards, the appropriate conditions to ensure balanced and efficient measures to allow for the different governing bodies of the company to act in a harmonious and coordinated way, in possession of the suitable amount of information to carry out their respective duties. EDP’s Article of Association expressly set forth that all corporate bodies of the Company should, to the extent of their competences, create the necessary conditions for a harmonious, articulated and informed performance of their duties, with reporting and information sharing mechanisms implemented in accordance with recommendation I.1.1. In addition, the Internal Regulations of the General and Supervisory Board, the Executive Board of Directors and of the specialized committees contain several provisions that set forth the need to report, namely to supervisory bodies, information regarding annual activity plans, resolutions and minutes. Items 21 to 45 188 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION Recommendation I.3.1. The bylaws, or other equivalent means adopted by the company, should establish mechanisms that, within the limits of applicable laws, permanently ensure the members of the managing and supervisory boards are provided with access to all the information and company’s collaborators, in order to appraise the performance, current situation and perspectives for further developments of the company, namely including minutes, documents supporting decisions that have been taken, calls for meetings, and the archive of the meetings of the managing board, without impairing the access to any other documents or people that may be requested for information. ADOPTED This recommendation is also complied with considering article 5 of the Internal Regulation of the Executive Board of Directors. Currently, EDP also has an internal instrument that systematizes the operating principles and rules to be observed in the interaction of the Executive Board of Directors with the General and Supervisory Board, developing the legal framework, the Articles of Association and the Internal applicable to such matters. Items 21 to 45 Recommendation I.3.2. Each of the company’s boards and committees should ensure the timely and suitable flow of information, especially regarding the respective calls for meetings and minutes, necessary for the exercise of the competences, determined by law and the bylaws, of each of the remaining boards and committees. ADOPTED All Internal Regulations set forth reporting and information sharing mechanisms. In particular, it should be highlighted the relevance of the information sharing platform between the General and Supervisory Board and the Executive Board of Directors. Regarding the applicable provisions, one should highlight: \- Articles of Association: Article 22 (1) (L); \- Internal Regulation of the Executive Board of Directors: Articles 5 (1) (e) and 10 (4); \- Internal Regulation of the General and Supervisory Board: Article 5 (c) and (e), and Article 11 (1) (a); Article 14 and Article 17; \- Internal Regulation of the Financial Matters / Audit Committee: Article 5 (1) (f), Article 10 (1) (a) and Article 13; \- Internal Regulation of the Remuneration Committee: Article 5 (1) (d); Article 10 (1) (a) and (2); \- Internal Regulation of the Corporate Governance and Sustainability Committee: Article 5 (e); Article 10 (1) (a), (2), and (3) (c); Articles 12 and 13; \- Internal Regulation of the United States of America (USA) Business Affairs Monitoring Committee: Article 5 (d); article 9 (1) (a). Items 21 to 45 I.4. Conflict of interests Principle: The existence of current or potential conflicts of interest, between members of the company’s boards or committees and the Since 17 May 2010, EDP has implemented rules on identification, internal reporting and actions to be carried out should a case of conflict of interests occur. This Regulation is applicable to all EDP Group employees that have a decision-making role on the completion of a transaction with related parties. Item 10 | Item 18 | Item 20 | Item 21 | Item 91 189 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION company, should be prevented. The non- interference of the conflicted member in the decision process should be guaranteed. In 2021, and with the review of internal regulations, the Transaction with Related Parties Policy came into force, aiming to establish general principles of action and reporting in order to identify, prevent, detect and settle situations of conflicts of interest in Related Party Transactions. In addition, it aims to contribute to the promotion of ethics and integrity in the development of the business of EDP and other companies and/or entities forming part of the EDP Group, ensuring compliance with legislation and the principles and rules laid down. The Internal Regulations of EDP’s bodies and committees set forth provisions by which the members of such bodies and committees should inform the respective body or committee on facts that could constitute or give cause to a conflict between his/hers interests and the corporate interest, the communication of a conflict of interest occurs whenever there are facts that may constitute or give rise to it, and not limited to the deliberative context. All corporate bodies and Specialized Committees’ Internal Regulations set forth a specific provision on the conduct to be adopted by the respective body or committee member in case of an effective or apparent conflict of interests, as well as a duty to provide information or clarifications. The respective articles that specifically set forth this recommendation are the following: \- Internal Regulation GSB: Article 10 \- Internal Regulation EBD: Article 6 \- Internal Regulation FMC/AC: Article 9 \- Internal Regulation RC: Article 9 \- Internal Regulation CGSC: Article 9 \- Internal Regulation BAMC: Article 8 Recommendation I.4.1. The members of the managing and supervisory boards and the internal committees are bound, by internal regulation or equivalent, to inform the respective board or committee whenever there are facts that may constitute or give rise to a conflict between their interests and the company’s interest. ADOPTED Item 10 | Item 18 | Item 20 | Item 21 | Item 91 Recommendation I.4.2. Procedures should be adopted to guarantee that the member in conflict does not interfere in the decision-making process, without prejudice to the duty to provide information and other clarifications that the board, the committee or their respective members may request. ADOPTED Item 10 | Item 18 | Item 20 | Item 21 | Item 91 I.5. Related party transactions Principle: Due to the potential risks that they may hold, transactions with related parties should be justified by the interest of the company and carried out under market conditions, subject to principles of transparency and adequate supervision. Regarding this matter, in addition to the legal and statutory provisions, there is an internal regulation on conflicts of interest and transactions with related parties, reviewed in 2021 - Transactions with Related Parties Policy – which is available for consultation at EDP’s website www.edp.com. Under the terms of EDP’s Articles of Association and the applicable law, the Executive Board of Directors is responsible for the management of the Company and for transaction with related parties purposes, are deemed decision-makers: (i) the members of EDP's corporate bodies; (ii) the members of the management bodies of the companies controlled by EDP, which the EBD qualifies as such, because the persons concerned, by virtue of the fact that the persons in question, because of their roles in these entities, have direct or indirect authority and responsibility for planning, directing and controlling the activities of the EDP Group; (iii) front-line managers reporting directly to the board of directors; (iv) employees of the EDP Group, among the permanent staff, with an individual employment contract of fixed or undefined term, even if their employment relationship is temporarily suspended, who, in accordance with the limits of their delegated powers, may perform acts at an individual cost equal to or greater than EUR 25,000; (v) other employees working for the EDP Group, even if under a contract of assignment or requisition, on a permanent or occasional basis and regardless of the nature of the contractual tie, on a commission basis or under a service provision contract, as well as carrying out activities under internship or vocational training programmes, who, in accordance with the limits arising from the respective legal Item 10 | Items 89 to 92 Recommendation I.5.1. The managing body should disclose in the corporate governance report or by other means publicly available the internal procedure for verifying transactions with related parties. ADOPTED Item 10 | Items 89 to 92 190 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION relationships established, may perform acts at an individual cost equal to or greater than EUR 25,000; (vi) employees who perform roles in the EDP Group within other categories and regardless of the monetary limits of those competences, that the EBD qualifies as such by virtue of having direct or indirect authority and responsibility for planning, directing and controlling the EDP Group's activities. All decision-making persons should therefore report any information deemed relevant over transactions performed or to be performed with related parties, namely with controlled companies or with the own decision-makers. There are also identified in Transaction with Related Parties Policy, transactions of significant relevance, specifying the type and scope of the transactions subject to prior opinion. Furthermore, article 17 (2) of EDP’s Articles of Association sets forth a range of matters subject to favourable prior opinion of the General and Supervisory Board, with the Board retaining power to set the parameters, in terms of economic or strategic value of the transactions, that should be subject to opinion, namely regarding acquisitions and disposals of goods, rights or shareholdings of a significant amount, under the terms of article 21 (7) of EDP’s Articles of Association and article 15 of the General and Supervisory Board Internal Regulation. The General and Supervisory Board is responsible for, under the scope of the annual and interim management EDP report assessment and taking into consideration the activity performed by the Financial Matters Committee/Audit Committee, analyse, and issue an opinion regarding transactions with related parties. In effect, the General and Supervisory Board contains a Specialized Committee, the Financial Matters Committee/Audit Committee, whose attributions include reviewing related party transactions. Its Internal Regulation clarifies that the final decision is up to the General and Supervisory Board, in accordance with article 12 (1) (i). Furthermore, the Corporate Governance and Sustainability Committee is responsible for monitoring and supervising the systems for evaluating and resolving conflicts of interest, namely regarding the Company's relations with shareholders, by analysing the proposed remedies for situations that reported to it by the Committee by the Financial Matters Committee/Audit Committee. EDP also displays a set of rules on the issuance of prior opinion by the General and Supervisory Board, as well as the communication procedures between the General and Supervisory Board and the Executive Board of Directors. In addition, the Executive Board of Directors should, within 20 days of the end of each quarter, inform the General and Supervisory Board of all “significant transactions”, being set forth in the respective policy the elements that should be submitted on such communication (see Article 22 (1) (l) of the Articles of Association and article 14 (1) (k) of the General and Supervisory Board Internal Regulation). The General and Supervisory Board intervention in the assessment made to such transaction is always preceded of the analysis and scrutiny of the Executive Board of Directors. Also under the terms of the Internal Regulation in force regarding this matter, the General and Supervisory Board and, more specifically, the Financial Matters Committee/Audit Committee analyses all transactions between EDP and subsidiaries in the amount equal or superior to: (i) EUR 75M, for subordinated and standard loans; (ii) EUR 75M for purchase, sale, marketing or supply of electricity and natural gas (and connected products and services) and (iii) EUR 5M for all other transactions. Recommendation I.5.2. The managing body should report to the supervisory body the results of the internal procedure for verifying transactions with related parties, including the ADOPTED For Transaction with Related Parties Policy purposes, the Executive Board of Directors should inform the General and Supervisory Board, within 20 days after the end of each quarter, of all transactions that constitute relevant situations. Item 10 | Items 89 to 92 191 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION transactions under analysis, at least every six months. CHAPTER II – SHAREHOLDERS AND GENERAL MEETINGS Principle II.A As an instrument for the efficient functioning of the company and the fulfilment of the corporate purpose of the company, the suitable involvement of the shareholders in matters of corporate governance is a positive factor for the company’s governance. Item 5 | Item 6 | Item 7 | Item 10 | Items 12 to 16 | Item 56 Principle II.B The company should stimulate the personal participation of shareholders in general meetings, which is a space for communication by the shareholders with the company’s boards and committees and also of reflection about the company itself. Item 5 | Item 6 | Item 7 | Item 10 | Items 12 to 16 | Item 56 Principle II.C The company should implement adequate means for the participation and remote voting by shareholders in meetings. Item 5 | Item 6 | Item 7 | Item 10 | Items 12 to 16 | Item 56 Recommendation II.1. The company should not set an excessively high number of shares to confer voting rights [II.1.(1)], and it should make its choice clear in the corporate governance report every time its choice entails a diversion from the general rule: that each share has a corresponding vote [II.1.(2)]. ADOPTED [II.1.(1)] EDP establishes in Article 14 (1) and (2) of its Articles of Association that to each share corresponds one vote and that all shareholders with voting rights may participate in the Shareholders’ General Meeting provided that they have such capacity on registration date. [II.1.(2)] - Not applicable. Item 5 | Item 6 | Item 7 | Item 10 | Items 12 to 16 | Item 56 Recommendation II.2. The company should not adopt mechanisms that make decision making by its shareholders (resolutions) more difficult, specifically, by setting a quorum ADOPTED Article 11 (3) of EDP’s Articles of Association establishes that Shareholders’ General Meeting resolutions are adopted by a majority of voting cast, unless a legal or statutory provision requires a qualified majority. Item 5 | Item 6 | Item 7 | Item 10 | Items 12 to 16 | Item 56 192 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION higher than that established by law. Recommendation II.3. The company should implement adequate means for the participation and remote voting by shareholders in meetings. ADOPTED While EDP has always favoured maximizing shareholder participation in general meetings, which entails direct interaction with the holders of its share capital, which constitutes a positive factor for the proximity with its shareholding structure, for the efficient functioning of the Company and for the pursuit of its corporate purpose, the COVID-19 pandemic context has inevitably altered that understanding. EDP has held three General Shareholder Meetings in a state of emergency, in 16 April 2020, in 19 January 2021 and in 14 April 2021, and this has required the implementation of procedures to allow the meetings to take place remotely, as per the convening notices available at https://www.edp.com/en/investors/general- meetings. The quorum in the aforementioned Annual and Extraordinary General Shareholders’ Meetings were respectively of 67,3% in April 2020, of 73,9068% in January 2021 and of 74.415 in April 2021\. Due to these exceptional circumstances, all voting rights were exercised remotely, either by post or by electronic means, as provided in Article 384(8) and (9) of the Portuguese Companies Code, Article 22 of the Portuguese Securities Code, and in Article 14(6) and (8) of EDP’s Articles of Association. Holding the General Shareholders’ Meeting remotely has allowed all duly registered Shareholders to access the live audio and video feed of the meeting. To that effect, a hyperlink to a digital platform was sent the day prior to the meeting to the registered e-mail address of each shareholder who had communicated its intent to attend. Besides being able to ask questions in writing, through the platform, about the topics included in the Agenda which warranted clarification during the meeting, shareholders were allowed to submit questions in advance, up to two days prior to the respective General Shareholder Meeting dates. In the Extraordinary General Shareholders’ Meeting held on 19 January 2021 and the Annual General Shareholders’ Meeting held on 14 April 2021, and in order to allow for the complete clarification of the shareholder’s questions before they exercised their voting rights – without prejudice to the timely disclosure of documents supplementing the Agenda and the abovementioned alternative, shareholders were allowed to submit questions within the scope of information rights as foreseen in Article 290 of the Portuguese Companies Code, up to eight days before the meeting, so that shareholders have all the questions they had before the exercise of voting rights were fully clarified. Recommendation II.4. The company should also implement adequate means for the exercise of remote voting, including by correspondence and electronic means. ADOPTED EDP’s Articles of Association enable the exercise of voting rights by post (Article 14 (6)), they also, on the other hand, determine the procedure for the exercise of postal vote, including by electronic means, in accordance with requirements that ensure its authenticity (Article 14 (6) to (8). At EDP’s website (www.edp.com) shareholders may find the necessary drafts for postal and e-mail voting. Due to the abovementioned exceptional circumstances, all voting rights in the General Shareholder Meetings held in April 2020 and January and April 2021 were exercised remotely, either by post or by electronic means, as provided in Article 384(8) and (9) of the Portuguese Companies Code, Article 22 of the Portuguese Securities Code, and in Article 14(6) and (8) of EDP’s Articles of Association. Holding the General Shareholder Meeting remotely has allowed all duly registered Shareholders to access the live audio and video feed of the meeting. EDP has been actively seeking technological solutions that are safe and ensure audio quality, transparency and voting secrecy, which are compatible with the Portuguese legal framework, in order to implement real-time electronic voting. Item 5 | Item 6 | Item 7 | Item 10 | Items 12 to 16 | Item 56 193 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION Recommendation II.5. The bylaws, which specify the limitation of the number of votes that can be held or exercised by a sole shareholder, individually or in coordination with other shareholders, should equally provide that, at least every 5 years, the amendment or maintenance of this rule will be subject to a shareholder resolution — without increased quorum in comparison to the legally established — and in that resolution, all votes cast will be counted without observation of the imposed limits. NOT ADOPTED Considering the current shareholder structure of the Company, this recommendation does not have any practical applicability. However, over the past few years, the subject of statutory limitation on voting rights has already been discussed by the General Shareholders Meeting of EDP on three occasions, the last of which on 24 April 2019. The shareholders have thus been called on to decide on limiting the number of votes. The continued existence of the limitation has prevailed, and the reflection on the adjustment of the relevant ceiling for counting voting rights has been precisely to progressively increase this level. The shareholding dynamics of the Company has thus proven to be perfectly in tune with the sense advocated in this recommendation, and to be sufficiently apt for pursuing its goals, avoiding rigid formulas for this review set down in the Articles of Association, which has also fostered a particularly intense scrutiny of this clause by shareholders, and does not constitute an impediment to adequate functioning of the market for corporate control. These circumstances confirm that the voting cap does not prevent the relevant shareholders’ involvement in EDP’s corporate governance, again bearing in mind that three resolutions of the General Shareholders’ Meeting have been adopted, from 2011 to 2019, regarding this statutory limitation. In effect, the voting limitation set forth in article 14 of the Articles of Association reflects the express wish of EDP’s shareholders through the General Meeting resolutions, in the defence of the Company’s specific interests: (i) the increase of the limit from 5% to 20% was approved by the shareholders at the General Meeting of 25 August 2011, involving the participation of 72.25% of the share capital and the approval of a majority of 94.16% of the votes cast; (ii) a subsequent increase to the current 25% cap was approved at the General Meeting of 20 February 2012, involving the participation of 71.51% of the share capital and the approval by a majority of 89.65% of votes cast and (iii) the removal of the voting cap set out in the Articles of Association was rejected by a majority of 56.61% of votes cast, with the participation of 64.29% of the share capital. Recommendation II.6. The company should not adopt mechanisms that imply payments or assumption of fees in the case of the transfer of control or the change in the composition of the managing body, and which are likely to harm the free transferability of shares and a shareholder assessment of the performance of the members of the managing body. ADOPTED As provided for in EDP’s Corporate Governance Manual, there are no known measures in place that prevent free transmission of shares and free performance assessment of the members of the Executive Board of Directors. Identically, EDP has not entered into any significant agreements that come into force, are amended or terminate in the event of a change in control of the Company following a takeover bid, except for normal market practice in terms of debt issuance. In fact, EDP is usually a party in financing agreements and issuer of bonds that include change of control clauses, which are typical set forth in such agreements and securities and are necessary for the completion of transactions, not considering that its existence is likely to harm the economic interest in the transfer of EDP shares, nor the free assessment by shareholders of the directors' performance. Items 4 and 5 CHAPTER III – NON-EXECUTIVE MANAGEMENT, MONITORING AND SUPERVISION Principle III.A The members of governing bodies who possess non-executive management duties or monitoring and supervisory duties should, in an effective and judicious manner, Items 15 to 19 | Item 21 | Item 29 194 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION carry out monitoring duties and incentivize executive management for the full accomplishment of the corporate purpose, and such performance should be complemented by committees for areas that are central to corporate governance. Principle III.B The composition of the supervisory body and the non-executive directors should provide the company with a balanced and suitable diversity of skills, knowledge, and professional experience. The election proposal of any candidate of the General and Supervisory Board and of the Executive Board of Directors to be submitted to the General Shareholder Meeting should be duly substantiated, considering the candidate’s profile and function to be performed so as to enable the verification of the adequacy of the candidate’s profile, knowledge and curriculum. Among the established criteria are (i) the promotion of equality of rights and opportunities in a context of diversity; (ii) the enhancement of diversity, notably in matters of age, gender, geographical origin, skills, competences, qualifications and experience; (iii) the promotion of the increase in the number of members of the under-represented gender; (iv) prevention of potential conflicts of interest. As provided in recommendation I.2.1, a selection policy is in force which sets forth specifically the skills that the members of such bodies should possess. Item 21 | Item 29 | Item 31 | Item 68 Principle III.C The supervisory body should carry out a permanent oversight of the company’s managing body, also in a preventive perspective, following the company’s activity and, in particular, the decisions of fundamental importance. Items 15 to 19 | Item 21 | Item 29 Recommendation III.1. Without prejudice to the legal powers of the chair of the managing body, if he or she is not independent, the independent directors should appoint a coordinator, from amongst them, namely, to: (i) act, when necessary, as an interlocutor near the chair of the board of directors and other directors, (ii) make sure there are the necessary conditions and means to carry out their functions; and (iii) coordinate the independent directors in the assessment of the performance of the managing body, as established in NOT APPLICABLE This recommendation is not applicable considering the Company’s governance model in force. 195 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION recommendation V.1.1. Recommendation III.2. The number of non- executive members in the managing body [III.2.(1)], as well as the number of members of the supervisory body [III.2.(2)] and the number of the members of the committee for financial matters [III.2.(3)] should be suitable for the size of the company and the complexity of the risks intrinsic to its activity, but sufficient to ensure, with efficiency, the duties which they have been attributed. The formation of such suitability judgment should be included in the corporate governance report. ADOPTED [III.2(1)] This sub-recommendation is not applicable in light of the governance model in force at the Company. [III.2.(2)] The General and Supervisory Board is composed of a minimum of nine members, but always higher than the number of directors, under Article 21 (1) of the Articles of Association. [III.2.(3)] The Financial Matters Committee / Audit Committee should be composed by at least three independent members according to Article 3 of the Financial Matters Committee / Audit Committee Internal Regulation, which is entirely proportional to the Company’s features. Item 15 | 17 | Item 21 | Item 29 | Recommendation III.3. In any case, the number of non- executive directors should be higher than the number of executive directors. NOT APPLICABLE This recommendation is not applicable considering the Company’s governance model in force. Recommendation III.4. Each company should include several non- executive directors that corresponds to no less than one third, but always plural, who satisfy the legal requirements of independence. For the purposes of this recommendation, an independent person is one who is not associated with any specific group of interest of the company, nor under any circumstance likely to affect his/her impartiality of analysis or decision, namely due to: i. having carried out functions in any of the company’s bodies for more than twelve years, either on a consecutive or non- consecutive basis; NOT APPLICABLE This recommendation is not applicable considering the Company’s governance model in force. 196 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION ii. having been a prior staff member of the company or of a company which is considered to be in a controlling or group relationship with the company in the last three years; iii. having, in the last three years, provided services or established a significant business relationship with the company or a company which is considered to be in a controlling or group relationship, either directly or as a shareholder, director, manager or officer of the legal person; iv. having been a beneficiary of remuneration paid by the company or by a company which is considered to be in a controlling or group relationship other than the remuneration resulting from the exercise of a director’s duties; v. having lived in a non-marital partnership or having been the spouse, relative or any first degree next of kin up to and including the third degree of collateral affinity of company directors or of natural persons who are direct or indirect holders of qualifying holdings, or vi. having been a qualified holder or representative of a shareholder of qualifying holding. Recommendation III.5. The provisions of (i) of recommendation III.4 does not inhibit the qualification of a new director as independent if, between the termination of his/her functions in any of the company’s bodies and the new appointment, a period of 3 years has NOT APPLICABLE This recommendation is not applicable considering the Company’s governance model in force. 197 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION elapsed (cooling-off period). Recommendation III.6. The supervisory body, in observance of the powers conferred to it by law, should assess and give its opinion on the strategic lines [III.6.(1)] and the risk policy prior to its final approval by the management body [III.6.(2)]. ADOPTED EDP’s current governance model foresees the attribution to the General and Supervisory Board of a significant function in this respect. While it does not have managerial attributes, as provided in Article 422(1) of the Portuguese Companies Code, Article 17(2) of EPD’s Articles of Association provides (as does Article 15 of the Internal Regulation of the General and Supervisory Board) that the Company’s strategic plan as well as the performance, by EDP or any of its subsidiaries, of the following transactions are subject to prior favourable opinion of this body: (i) acquisition and sale of assets, rights or shareholdings of significant economic value, (ii) contracting financing operations of significant value, (iii) the opening and closure of establishments, or important parts thereof, and important increases or reductions in activity, (iv) other transactions or operations of significant economic or strategic value, (v) the commencement or termination of strategic partnerships or other forms of lasting cooperation, (vi) plans for divisions, mergers or transformations, and (vii) changes to the EDP’s Articles of Association, including moving the head office and increasing the share capital proposed by the Executive Board of Directors. Also relevant are the specific attributions of the Financial Matters Committee / Audit Committee regarding financial and accounting matters, internal auditing practices and procedures, the functioning of the Internal Control System of Financial Reporting (SCIRF), matters relating to risk management procedures and compliance mechanisms, as well as the work and independence of the Company’s statutory auditors. The Financial Matters Committee/Audit Committee is responsible for monitoring, on a permanent basis, the assessment of internal procedures regarding the effectiveness of the risk management system, internal control and internal audit systems, including the reception and handling of complaints and related doubts, whether or not arising from employees, and must evaluate and comment on the strategic lines and policy of the EDP Group's corporate risk management prior to the respective final approval by the Executive Board of Directors, under the terms of article 12 (2) (i) of the Internal Regulation of the FMC/AUDC. The General and Supervisory Board is also involved in the EDP Group's Business Plan, implicitly ensuring an alignment between management and shareholders with regard to the Group's risk appetite. Key risk indicators are also regularly reported to the General and Supervisory Board, in line with performance metrics and which allow this body to monitor the evolution of the Company's risk profile. Item 21 | Item 24 | Item 29 | Items 49 to 55 Recommendation III.7. Companies should have specialized committees, separately or cumulatively, on matters related to corporate governance [III.7.(1)], appointments [III.7.(2)], and performance assessment [III.7.(3)]. In the event that the remuneration committee provided for in article 399 of the Commercial Companies Code has been created and should this not be prohibited by law, this ADOPTED [III.7(3)] The Remuneration Committee elected by the General Meeting (CVEN AG) is responsible for submitting a proposal for a remuneration policy for the members of the General and Supervisory Board, the members of the Board of the General Meeting, the ROC and the members of the Environment and Sustainability Board. One of the guiding principles of CVEN AG's activity is based on the definition of a simple, clear, transparent policy in line with EDP's culture, so that the remuneration practice can be based on uniform, consistent, fair, and balanced criteria. In this context, the remuneration policy proposed by CVEN AG aims to ensure levels of homogeneity and stability compatible not only with the necessary cohesion of the governing bodies and bodies, but also and above all with their non-executive nature, not being considered desirable to attribute variable remuneration mandatorily conditional on the performance of the respective members. In this context, it is considered appropriate to defend the - growing - differentiation between the remuneration treatment of directors with executive functions, on the one hand, and that of the remaining members of the other governing bodies, namely supervisory and supervisory bodies, on the other hand. Thus, and in line with the Item 21 | Item 29 | Remuneration Report 198 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION recommendation may be fulfilled by conferring competence on such committee in the aforementioned matters provisions of the applicable legislation, the fixed remuneration safeguards the distance between the exercise of supervisory and/or supervisory functions and the risk inherent to business activity, as well as the fundamental independence within the scope of supervision and/or unbiased and effective supervision. The aforementioned differentiating treatment is even reflected in the IPCG Code itself, namely under the terms of the Chapter V Principle, according to which “Society shall promote the evaluation of the performance of the executive body and its individual members and also of the overall performance of the body”. of administration and of the specialized committees constituted within it.”. In this instance, the preliminary exclusion from the performance evaluation of members of corporate bodies other than the members of the executive bodies and the specialized committees constituted within them does not seem to us to be unreasonable, but also reveals an intrinsic relationship between variable remuneration and the evaluation of performance of the member of the executive body, and for the other bodies, namely supervision and/or inspection, solid mechanisms of checks and balances and internal control are sufficient. In this sense, in addition to the shareholder prerogative at the General Shareholders’ Meeting, there are internal mechanisms, of an instrumental nature, to evaluate, at first hand and with in-depth knowledge, the performance of the members of the governing bodies and bodies, there are no benefits to establish a mechanism additional measure to assess the individual performance of each of the members of EDP's corporate members and bodies. In this sense, the evaluation mechanisms are duly safeguarded, namely through the evaluation and self-evaluation process of the General and Supervisory Board, certified by a specialized external entity, including the Chairman of the Board of the General Meeting, of the evaluation process of the Statutory Auditor by the FMC/AUDC, with the Environment and Sustainability Board being a social body with consultative functions. Considering that the Remuneration Policy proposed by CVEN AG only proposes to provide for the remuneration - always with a fixed nature - of the aforementioned governing bodies and bodies and the Company having established effective and resilient internal mechanisms of evaluation and control to assess the individual performance of each one of the members, including their contribution to the functioning of the body and the relationship between the various bodies of the Company, this sub- recommendation [III.7(3)] should be considered as equivalent to adoption. CHAPTER IV – EXECUTIVE MANAGEMENT Principle IV.A As a way of increasing the efficiency and the quality of the managing body’s performance and the suitable flow of information in the board, the daily management of the company should be carried out by directors with qualifications, powers and experience suitable for the role. The executive board is responsible for the management of the company, pursuing the company’s objectives Item 17 | Item 18 | Item 19 | Item 21 199 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION and aiming to contribute towards the company’s sustainable development. Principle IV.B In determining the number of executive directors, it should be taken into account, besides the costs and the desirable agility in the functioning of the executive board, the size of the company, the complexity of its activity, and its geographical spread. Item 17 | Item 18 | Item 19 | Item 21 Recommendation IV.1. The managing body should approve, by internal regulation or equivalent, the rules regarding the action of the executive directors applicable to their performance of executive functions in entities outside of the group. ADOPTED The Internal Regulation of the Executive Board of Directors expressly addresses this issue. In particular, Article 6 provides that board members cannot hold executive functions in more than two companies outside of the EDP Group, and the performance of such functions must be subject to prior appraisal by the Executive Board of Directors. Item 17 | Item 18 | Item 19 | Item 21 Recommendation IV.2. The managing body should ensure that the company acts consistently with its objects and does not delegate powers, namely, in what regards: i) the definition of the strategy and main policies of the company [IV.2.(1)]; ii) the organization and coordination of the business structure [IV.2.(2)]; iii) matters that should be considered strategic in virtue of the amounts involved, the risk, or special characteristics [IV.2.(3)]. NOT APPLICABLE This recommendation is not applicable in light of the Company’s governance model in force. In fact, in accordance with the dual governance model, the Executive Board of Directors does not delegate any powers provided for in this recommendation. Item 17 | Item 18 | Item 19 | Item 21 Recommendation IV.3. In the annual report, the managing body explains in what terms the strategy and the main policies defined seek to ensure the long-term success of the company and which are the main contributions resulting therein for the community at large. ADOPTED Item 21 | Items 50 to 55 | Sustainability Report CHAPTER V – EVALUATION OF PERFORMANCE, REMUNERATION AND APPOINTMENTS 200 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION V.1 Annual evaluation of performance Principle The company should promote the assessment of performance of the executive board and of its members individually, and also the assessment of the overall performance of the managing body and its specialized committees. Item 21 | Item 24 and 25 | Item 27 | Item 29 | Item 52 | Item 54 | Remuneration Report | Annual Report of the General and Supervisory Board Recommendation V.1.1. The managing body should annually evaluate its performance [V.1.1(1)] as well as the performance of its committees [V.1.1(2)] and executive directors [V.1.1(3)], taking into account the accomplishment of the company’s strategic plans and budget plans, the risk management, the internal functioning and the contribution of each member of the body to these objectives, as well as the relationship with the company’s other bodies and committees. ADOPTED [V.1.1.(1)] Under the terms of Article 5(4) of the Internal Regulation of the Executive Board of Directors, the Chairman of the board should ensure the adoption of adequate mechanisms for the annual evaluation of the functioning of the Executive Board of Directors and the performance of each of its members. In addition, EDP has voluntarily implemented a formal and objective evaluation procedure of the Executive Board of Directors’ activity that allows it to evaluate the compliance level of the adopted measures. This is a distinctive practice adopted by the General and Supervisory Board which is aligned with the evaluation criteria of the Dow Jones Sustainability Index and matches the recognition of the continuous excellence efforts of corporate governance practices that the General and Supervisory Board and the Executive Board of Directors have been undertaking. It should be noted that this evaluation process, its content, questionnaire format, and respective conclusions was analysed and certified by an external consultant. At the beginning of each year, the General and Supervisory Board members are invited, during an interview, to answer a questionnaire that allows to assess each personal perception regarding the performance of the Executive Board of Directors. In this questionnaire several topics are analysed: (i) composition and organization; (ii) performance of the Executive Board of Directors’ activity; (iii) the relationship between the Executive Board of Directors and the General and Supervisory Board; (iv) the relationship between the Executive Board of Directors and other parties. The purpose of the questionnaire is to be an objective reflection support that may be used by the General and Supervisory Board to prepare an evaluation opinion on the performance of the Executive Board of Directors that will then be presented to EDP shareholders to be voted. Such evaluation is available at the Annual Report of the General and Supervisory Board – Statement of the Evaluation Process of the Executive Board of Directors of EDP. Item 21 | Item 24 and 25 | Item 27 | Item 29 | Item 52 | Item 54 V.2 Remuneration Principle V.2.A The remuneration policy of the members of the managing and supervisory boards should allow the company to attract qualified professionals at an economically justifiable cost in relation to its financial situation, induce the alignment of the member’s interests with those of the company’s shareholders — taking Items 66 to 88 | Remuneration Report 201 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION into account the wealth effectively created by the company, its financial situation and the market’s — and constitute a factor of development of a culture of professionalization, sustainability, promotion of merit, and transparency within the company. Principle V.2.B Directors should receive compensation: i) that suitably remunerates the responsibility taken, the availability and the expertise placed at the disposal of the company; ii) that guarantees a performance aligned with the long-term interests of the shareholders and promotes the sustainable performance of the company; and iii) that rewards performance. Items 69 and 70 | Remuneration Report Recommendation V.2.1. The company should create a remuneration committee, the composition of which should ensure its independence from the management, which may be the remuneration committee appointed under the terms of article 399 of the Portuguese Companies Code. ADOPTED The Remuneration Committee appointed by the General and Supervisory Board is independent from the management and aims to submit a proposal for the remuneration policy of the members of the Executive Board of Directors for approval by the General Shareholders’ Meeting, at least every four years and whenever a relevant change in the current remuneration policy, as provided for in article 27 of the Articles of Association and article 28(b) of the Internal Regulations of the General and Supervisory Board. On the other hand, the Remuneration Committee of the General Meeting is responsible for setting the remuneration of the governing bodies, with the exception of the members of the Executive Board of Directors, under the terms of the proposed remuneration policy to be submitted for approval by the General Shareholders’ Meeting, as set out in the provided for in article 11 of the Articles of Association. Item 29 | Remuneration Report Recommendation V.2.2. The remuneration should be set by the remuneration committee or the general meeting, on a proposal from that committee. ADOPTED Item 29 | Remuneration Report Recommendation V.2.3. For each term of office, the remuneration committee, or the general meeting, on a ADOPTED As started in Article 12 of it’s a Internal Regulation, the Remuneration Committee of the General and Supervisory Board is responsible for (i) preparing and submitting, at least every four years and whenever a relevant change to the policy in force takes place, the remuneration policy for the Executive Board of Item 29 | Items 66 to 88 | Remuneration Report 202 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION proposal from that committee, should also approve the maximum amount of all compensations payable to any member of a board or committee of the company due to the respective termination of office. The said situation as well as the amounts should be disclosed in the corporate governance report or in the remuneration report. Directors Chairman and Members in line with the corporate governance best practices, namely by foreseeing criteria for the remuneration’s variable component, pursuant to applicable law and current best practices; (ii) proposing the several components of base and variable remuneration, particularly the pension plans for retirement or incapacity; (iii) proposing remunerations according to the proposed policy, allowing the Company to attract, within a reasonable economic cost, qualified professionals, induce the alignment of shareholders’ interests and constitute a development factor of a professionalization culture, promotion of merit and transparency within the Company; (iv) proposing the significant part of the multi-year variable remuneration to be deferred in time, at least for a period of three years. The payment of which is conditional on not undertaking intentional unlawful acts known after completion of the assessment and which jeopardise the sustainability of the company's performance; (v) annually evaluating the executive management body considering, among other factors, compliance with the company’s strategy and previously defined objectives, plans and budgets, in order to ponder and determine the variable remuneration of the EBD Chairman and Directors; (vi) assessing the individual performance of each member of the EBD, including in this assessment the contribution of each member to the operating efficiency of the body and relations with the different bodies of the company; (vii) monitoring the contractual changes of the mandates of the Chairman of the EBD and the executive directors, that reflect on their remuneration, particularly in the event of suspension or termination of those mandates; (viii) proposing the maximum amount of compensation payable to the Chairman of the EBD and the executive directors in the event of termination of office; (ix) evaluating the consequences, in the scope of the adopted remuneration policy, of the possible remuneration to EBD Chairman or Directors for holding an office in participated or Subsidiary Companies; (x) submitting to the approval of the General Shareholders Meeting a proposal for the remuneration policy for EBD Chairman and Directors, prepared in accordance with applicable law; (xi) establishing the necessary mechanisms to coordinate its activity with the Remuneration Committee elected by the General Shareholders Meeting in order to submit the remuneration determination proposal for the remaining corporate bodies; (xii) monitoring the definition of the remuneration policies of the Directors of Subsidiaries; (xiii) accompanying the publication of the remuneration policy approved by the General Shareholders Meeting in the Company’s website, pursuant to applicable law and (xiv) contributing to the preparation of the Remuneration Report in accordance with applicable law, verifying its conformity and clarity. The Remuneration Report identifies two extraordinary situations that resulted in the attribution of remuneration instalments to be paid between 2021 and 2023, resulting from termination agreements and non-compete agreements entered into with directors of EDP Group officers with the approval of the Remuneration Committee of the General and Supervisory Board, pursuant to article 429 of the Commercial Companies Code, article 27 of EDP's Articles of Association and article 12 (h) of the Internal Regulations of the Remuneration Committee of the General and Supervisory Board at a meeting held on 13 November 2020, and the General and Supervisory Board, at the meeting held on 17 November 2020, expressed its agreement to the respective execution and granted powers to two members of the Remuneration Committee of the General and Supervisory Board to represent the Company in the signing of such agreements. Recommendation V.2.4. In order to provide ADOPTED Article 5 (2) of the Remuneration Committee Internal Regulation expressly sets forth that in order to provide information or clarification to shareholders, the Chairman, or in his absence, Item 29 | Remuneration Report 203 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION information or clarifications to shareholders, the chair or, in case of his/her impediment, another member of the remuneration committee should be present at the annual general meeting, as well as at any other, whenever the respective agenda includes a matter linked with the remuneration of the members of the company’s boards and committees or, if such presence has been requested by the shareholders. other Remuneration Committee member, shall ensure the presence in the Annual Shareholders’ General Meeting or in any other General Shareholders Meeting if the agenda covers any matter related to the remuneration of the members of the Company’s bodies or committees, or if such presence is required by shareholders. Recommendation V.2.5. Within the company’s budgetary limitations, the remuneration committee should be able to decide, freely, on the hiring, by the company, of necessary or convenient consulting services to carry out the committee’s duties. ADOPTED Both the Remuneration Committee of the General and Supervisory Board and the Remuneration Committee elected by the General Shareholders Meeting freely decide on the hiring by the Company of the necessary or convenient consultancy services for the exercise of the respective functions, as provided, namely, in Article 4 (6) of the Remuneration Committee of the General and Supervisory Board Internal Regulation and in article 4, no. 4 and no. 5 of the Internal Regulations of the Remuneration Committee appointed by the General Meeting. In particular, the members of the Remuneration Committee appointed by the General Meeting may propose to the respective Chairman, according to the budgeted amount, the hiring of technical and specialist services that they deem necessary for the performance of their duties, pursuant to article 10 (1) (b). Item 29 | Item 67 | Remuneration Report Recommendation V.2.6 The remuneration committee should ensure that those services are provided independently and that the respective providers do not provide other services to the company, or to others in controlling or group relationship, without the express authorization of the committee. ADOPTED In accordance with Article 4 (5) of its Internal Regulation, the Remuneration Committee of the General and Supervisory Board ensures that the consultancy services on remuneration matters are provided with independence and that the respective service providers are not hired for the provision of any other services to the Company or any other controlled by the Company or subsidiary of the Company without express consent of the Committee. In accordance with Article 4(5) of its Internal Regulations, the Remuneration Committee appointed by the General Meeting ensures that consultancy services on remuneration matters are provided independently and that the respective providers will not be contracted to provide any other services to the Company itself or to others that are in a domain or group relationship with it without the express authorization of the Commission. Item 29 | Item 67 | Remuneration Report Recommendation V.2.7 Considering the alignment of interests between the company and the executive directors, a part of their remuneration should be of a variable nature, reflecting the sustained performance of the company, and not stimulating the assumption of excessive risks. ADOPTED The adoption of this recommendation results in particular of item 69 of this chapter and the Remuneration Report (Chapter V). Items 69 and 70 | Remuneration Report 204 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION Recommendation V.2.8 A significant part of the variable component should be partially deferred in time, for a period of no less than three years, being necessarily connected to the confirmation of the sustainability of the performance, in the terms defined by a company’s internal regulation. ADOPTED The adoption of this recommendation results in particular of items 69 and 70 of this chapter and the Remuneration Report (Chapter V). Item 69 | Items 70 and 72 | Remuneration Report Recommendation V.2.9 When variable remuneration includes the allocation of options or other instruments directly or indirectly dependent on the value of shares, the start of the exercise period should be deferred in time for a period of no less than three years. NOT APPLICABLE There are no stock option plans or other direct or indirect instruments dependent on the value of shares. Items 85 to 88 | Remuneration Report Recommendation V.2.10 The remuneration of non-executive directors should not include components dependent on the performance of the company or on its value. NOT APPLICABLE This recommendation is not applicable considering the Company’s governance model in force. V.3. Appointments Principle. Regardless of the manner of appointment, the profile, the knowledge, and the curriculum of the members of the company’s governing bodies, and of the executive staff, should be suited to the functions carried out. Items 17 to 19 Recommendation V.3.1. The company should, in terms that it considers suitable, but in a demonstrable form, promote that proposals for the appointment of the members of the company’s governing bodies are accompanied by a justification regarding ADOPTED The Selection Policy in force for the members of the General and Supervisory Board was implemented in accordance with the best practices and is aimed at implementing transparent and objective selection procedures. The appointment of the members of the General and Supervisory Board and of the Executive Board of Directors Members results from a transparent and objective selection procedure that evaluates the adequacy of the candidates, both individually and collectively, taking into consideration the legal and statutory competences of such corporate bodies, despite the fact that it is an attribution of the General Shareholders Meeting. In the scope of the selection process, the integration of a range of skills, professional experiences, diversity of knowledges, gender and culture must be ensured, bearing in mind the specificities of the companies’ Items 17 to 19 205 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION the suitability of the profile, the skills and the curriculum vitae to the duties to be carried out. businesses. The election proposal of any candidate of the General and Supervisory Board and of the Executive Board of Directors to be submitted to the General Shareholder Meeting should be duly substantiated, so that shareholders may assess the candidates’ profile, knowledge, and curriculum considering the functions to be carried out. Noe also the specific competences set forth in the Corporate Governance and Sustainability Committee Internal Regulation, in particular the powers to monitor, together with the Executive Board of Directors, the selection criteria, the provision of necessary competences to the internal bodies and structures of the Company, its subsidiaries and other entities in which the Company has the right to appoint members corporate bodies, and their repercussions in the respective composition, all in articulation with EDP’s Selection Policy and the criteria set out therein of merit, adequacy to function and diversity. In this regard, EDP effectively promotes that the presentation of resolution proposals by shareholders is made in accordance with the Selection Policy in force, by which said proposals are required to be duly grounded. Recommendation V.3.2. The overview and support to the appointment of members of senior management should be attributed to a nomination committee unless this is not justified by the company’s size. NOT APPLICABLE This recommendation is not applicable considering the Company’s governance model in force. Recommendation V.3.3. This nomination committee includes a majority of nonexecutive, independent members. NOT APPLICABLE This recommendation is not applicable considering the Company’s governance model in force. 206 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION Recommendation V.3.4. The nomination committee should make its terms of reference available, and should foster, to the extent of its powers, transparent selection processes that include effective mechanisms of identification of potential candidates, and that those chosen for proposal are those who present a higher degree of merit, who are best suited to the demands of the functions to be carried out, and who will best promote, within the organisation, a suitable diversity, including gender diversity. NOT APPLICABLE The Corporate Governance and Sustainability Committee, in coordination with the Executive Board of Directors, shall oversee the preparation of the succession plans regarding the internal structures and bodies of the Company and its subsidiaries, as well as of other entities in which the Company has the right to appoint members of their corporate bodies. In this respect, a stated objective is to identify in advance potential additional human resources needs, in order to ensure the continuity of the Company's operations. Under the selection procedure of the candidates, it is considered advisable to resort to external independent consultants with specific expertise on these matters, which should comply with the criteria and skills sets forth in the Selection Policy in force when selecting candidates. The Corporate Governance and Sustainability Committee should carry out a periodic review on the execution and compliance of the Selection Policy and should propose any changes deemed necessary, reporting its conclusions on the adoption of the policy to the General and Supervisory Board. The members to be appointed for the General and Supervisory Board and the Executive Board of Directors shall be individuals of recognized national and/or international prestige, with professional knowledge and experience which are adequate to the exercise of the respective functions. The curricula of candidates to the corporate bodies should be made available on the institutional website of the Company. Along with the concern for each member's individual adequacy, it is also intended that the composition of the corporate bodies demonstrates a collective adequacy, by gathering as a whole the professional and personal qualities required for the proper performance of the functions of each of EDP’s corporate bodies. Likewise, in order to determine the number of members of the Executive Board of Directors, the costs and the desirable operational agility of the management, the size of the Company, the complexity of its activity and the geographical dispersion shall be pondered. Items 17 to 19 CHAPTER VI – INTERNAL CONTROL Principle. Based on its mid and long-term strategies, the company should establish a system of risk management and control, and of internal audit, which allow for the anticipation and minimization of risks inherent to the company’s activity. Items 50 to 55 Recommendation VI.1. The managing body should debate and approve the company’s strategic plan [VI.1.(1)] and risk policy, which should include the establishment of limits on risk-taking [VI.1.(2)]. ADOPTED [VI.1.(1)] The Executive Board of Directors is the highest responsible for the risk management decision-making, supervision, and control, and is in charge to set objectives and management policies within the EDP Group. Among other attributions, the Executive Board of Directors is responsible for the Business Plan, definition of risk policies, namely the respective exposure limits by risk category and by resources allocation, according to the risk profile. On the other hand, the General and Supervisory Board permanently monitors and assesses the efficiency of the risk management system. As set forth in Article 17(2) of the Company’s Articles of Association, the approval of the Company’s strategic plan and the execution of relevant transactions by the Company its subsidiaries are subject to favourable prior opinion of the General and Supervisory Board. [VI.1.(2)] As stated in Article 4 (2) (n) of its Internal Regulation, the Executive Board of Directors should “ensure that the Company risks are identified, assessed, controlled and managed, define risk objectives, set risk profiles of the Company and coordinate the decisions related to material Items 50 to 55 207 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION risks management.”. In this regard, the definition of EDP’s strategic objectives on risk assumption matters should be subject to the appraisal of the General and Supervisory Board and the Financial Matters Committee/Audit Committee, following a proposal of the Executive Board of Directors, namely within the scope of the appraisal of the Company’s business plan. Furthermore, the Executive Board of Directors should develop a continuous effort to improve the internal control and risk management systems, assessing its efficiency and implementing measure deemed adequate to reinforce the assured quality levels. It should also be noted that, periodically, the Executive Board of Directors reports to the General and Supervisory Board and to the Financial Matters Committee/Audit Committee on the identification and evolution of the main risks related to EDP’s activity, quantifying its impact and the probability of occurrence of the risks deemed relevant. Recommendation VI.2. The supervisory board should be internally organised, implementing mechanisms and procedures of periodic control that seek to guarantee that risks which are effectively incurred by the company are consistent with the company’s objectives, as set by the managing body. ADOPTED In accordance with Article 12(2)(i) of its Internal Regulation, the Financial Matters Committee/Audit Committee shall, in carrying out its functions, pay special attention to the identification, evaluation, risk management and control and evaluations of the internal level of compliance as well as the continuous monitoring of performance and risk management system efficiency of the Company, jointly with the Executive Board of Directors, following namely the risk control policies, the key risk indicators (KRI) identification and the integrated risk evaluation methodologies, having the possibility to request to the Risk Management Department and to the Corporate Risk Department the information deemed convenient, and should implement necessary mechanisms and procedures adequate to that effect. The monitoring of risks ensures the effectiveness of action on identified risks, both in terms of control and periodic reporting of the Group's position as regards several risk factors, as well as the effective implementation of the policies, standards and procedures established for risk management. This role is ensured by the Boards of Directors of the various Group Business Units. The Risk Management Department and risk-officers are responsible for promoting and enhancing risk control and management measures, disseminating best practices, and supporting the disclosure of concepts, methods, risk measures and key risk indicators (KRI). Additionally, the Risk Management Department, supported by the network of risk-officers, develops a set of bi-weekly or quarterly reports sent to the Executive Board of Directors and to the Board of Directors of each Business Unit. These reports allow the organisation to regularly follow KRIs that are aligned with performance metrics and, as such, reflect the risk profile at each moment. In addition, these indicators are subject to risk limits that are aligned with the objectives and strategy of the EDP Group, thus allowing this strategy to be implemented at the operational level. This information and the evolution of the company's risk profile are also reported to the General and Supervisory Board, namely through the Risk Appetite dashboard that is shared quarterly. Pursuant to Article 12(3) of its Internal Regulation, the Financial Matters Committee/Audit Committee is additionally authorized to (i) propose to the General and Supervisory Board the contracting of specialist services and independent consultants in accordance with the appropriate budgets, (ii) carry out other inquires in departments of the Company and its subsidiaries or group companies, when necessary in order to enable it to fulfil its duties, (iii) obtain all the information it requires in order to carry out its duties, either directly or indirectly through the Chairman of the General and Supervisory Board, (iv) Attend meetings of the Executive Board of Directors, where attendance at meetings at which the annual accounts are to be considered is mandatory, (v) assess, annually, the activity and performance of the Internal Audit Department as well as the work conditions adequacy namely the human resources and technical means levels, (vi) assess, annually, the activity and performance of the Compliance Items 50 to 55 | Annual Report of the General and Supervisory Board Recommendation VI.3. The internal control systems, comprising the functions of risk management, compliance, and internal audit should be structured in terms adequate to the size of the company and the complexity of the inherent risks of the company’s activity. The supervisory body should evaluate them and, within its competence to supervise the effectiveness of this system, propose adjustments where they are deemed to be necessary. ADOPTED Item 50 | Items 53 and 54 | Annual Report of the General and Supervisory Board 208 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION Department as well as the work conditions adequacy namely the human resources and technical means levels, (vii) review, annually, in coordination with the Executive Board of Directors, the Internal Audit Basic Standard, (viii) review, annually, in coordination with the Executive Board of Directors, the Compliance System Regulation, and (ix) monitor on a permanent basis the communication of the Company to the Statutory Auditors Association the conclusion of contracts, on behalf of the Company, the nature and duration of the service to be provided. Recommendation VI.4. The supervisory body should provide its view on the work plans and resources allocated to the services of the internal control system, including the risk management, compliance, and internal audit functions, and may propose the adjustments deemed to be necessary. ADOPTED Item 50 | Items 53 and 54 | Annual Report of the General and Supervisory Board Recommendation VI.5. The supervisory body should be the recipient of the reports prepared by the internal control services, including the risk management functions, compliance and internal audit, at least regarding matters related to the approval of accounts, the identification and resolution of conflicts of interest, and the detection of potential irregularities. ADOPTED In accordance with Article 12(1)(p) of its Internal Regulation, the Financial Matters Committee/Audit Committee shall supervise and monitor the accounts review and the individual and consolidated accounting documents namely taking into consideration eventual remarks of the Portuguese Securities Market Commission (CMVM) and assess the content of the certification of accounts and audit annual reports with the Statutory Auditor, being the Financial Matters/Audit Committee the first recipient of such documents, namely regarding eventual reservations for recommendation presentation purposes to the General and Supervisory Board and the Executive Board of Directors. It shall also receive the reports prepared by the internal control services, including risk management, compliance, and internal auditing, at least whenever they relate to the preparation of accounts, the identification or solution of conflicts of interest, and the detection of potential irregularities. In also ensures the activity and independence of the Statutory Auditor, as foreseen in Annex II of its Internal Regulation and in applicable laws and regulations, in order to assess its independence and compliance with applicable laws, regulations and agreements, as well as principles and best practices applicable to auditing companies and their representatives with the audited entities. Item 50 | Items 53 and 54 | Annual Report of the General and Supervisory Board Recommendation VI.6. Based on its risk policy, the company should establish a risk management function, identifying (i) the main risks it is subject to in carrying out its activity [VI.6.(1)]; (ii) the probability of occurrence of those risks and their respective impact [VI.6.(2)]; (iii) the devices and measures to adopt towards their mitigation [VI.6.(3)]; and (iv) the monitoring procedures, aiming at their accompaniment [VI.6.(4)]. ADOPTED EDP has set several internal rules that set forth provisions on risk management strategies and policies. On the Group Business Risk Management Manual of EDP it should be highlighted the specific chapters on business risk management structures, on risks management procedures, on business risk management tools and on periodic updating. Regarding EDP’s Risk Appetite Execution document, the objective is to formalize and to disclose EDP’s risk approach, as a relevant element of alignment and transparency towards shareholders and other stakeholders, as well as further explain the controlled risk pillar. For further information please see: https://www.edp.com/en/investors/corporategovernance/risk- management https://www.edp.com/en/edp/suppliers/sustainable- procurement/risk-management-supply-chain#risk-analysis [VI.6.(1)] Items 53 and 54 of this Report set forth the main risks that EDP is subject to in the performance of its activity. [VI.6.(2)] Under item 53 of this Report, EDP identifies the probability of occurrence of each risk associated with its activity and the respective impact. Item 50 | Items 53 and 54 209 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION [VI.6.(3)] Regarding the instruments and measures adopted in order to mitigate risk, EDP adopts such sub-recommendation as set out in items 53 and 54 of this Report. [VI.6.(4)] The adoption of this sub-recommendation regarding the monitoring procedures is set forth in item 54 of this Report being the respective risk management structured in six main phases, being the “monitorization” phase the penultimate one. Recommendation VI.7. The company should establish procedures for the supervision, periodic evaluation, and adjustment of the internal control system, including an annual evaluation of the level of internal compliance and the performance of that system, as well as the perspectives for amendments of the risk structure previously defined. ADOPTED As referred in the comments to recommendation VI.I, the Executive Board of Directors of EDP should develop a continuous effort on improving the internal risk control and management systems, assessing their efficiency, and implementing the adequate measures to reinforce the quality assurance levels. It should also be noted that, periodically, the Executive Board of Directors reports to the General and Supervisory Board and to the Financial Matters Committee / Audit Committee on the identification and evolution of the main risks associated with EDP’s activity, quantifying the impact and the occurrence probability of the deemed relevant risks. The Financial Matters Committee/Audit Committee should according to Article 12 (2) (i) of its Internal Regulation, monitor with special attention the risk identification, evaluation, control and management and to assess the internal compliance standards, as well as to continuously monitor the risk management system performance and efficiency with the Executive Board of Directors, accompanying namely the risk control policies, the key risk indicators (KRI) identification and the integrated risk assessment methodologies, having the possibility to request to the Risk Management Department and to the Risk Committee the information deemed relevant, and should, whenever necessary, implement the appropriate mechanisms and procedures for this purpose, and should assess and pronounce on the strategic lines and policy of the EDP Group's corporate risk management prior to the respective final approval by the Executive Board of Directors. In addition to Article 12 (1) (e) of the respective Internal Regulation provision which specifically sets forth the Financial Matters Committee/Audit Committee competence to supervise the risk management, the internal control and internal audit systems efficiency, it should be noted that the Financial Matters Committee/Audit Committee is authorized to propose to the General and Supervisory Board and to the Executive Board of Directors the measures aimed to guarantee the integrity of financial information and improve the operation of financial information internal control systems, risk and compliance management systems, in accordance with Article 12 (3) (a). It is also important to point out that, according to Article 12 (3) (f) of the respective Internal Regulation, the Financial Matters Committee/Audit Committee should annually evaluate the activity and performance of the Internal Audit Department, as well as the working conditions namely on human resources and technical means adequacy. Items 50 to 55 CHAPTER VII – FINANCIAL INFORMATION VII.1 Financial Information Principle VII.A The supervisory body should, with independence and in a diligent manner, ensure that the managing body complies with its duties when choosing appropriate accounting policies and standards for the company, and when establishing suitable The General and Supervisory Board is responsible for the monitoring and permanent assessment of internal proceedings related to accounting and auditing matters as well the monitoring of the risk profile of the Company, the risk management system efficiency, the internal control system and the internal auditing system including the reception and processing of claims and complaints whether or not arising from employees under Article 14 (1) (e) of the General and Supervisory Board Internal Regulation. In particular, the Financial Matters Committee/Audit Committee has the authority to (i) verify if the accounting policies and metrical criteria adopted by the Company are consistent with the general accounting principles accepted and adequate to the correct presentation of its assets, liabilities and results (under Article 12 Item 15 | Item 17 | Item 21 | Item 29 | Items 30 to 41 210 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION systems of financial reporting, risk management, internal control, and internal audit. (1) (a)) of the Financial Matters Committee/Audit Committee Internal Regulation and (ii) supervise the internal audit, financial reporting control (SCIRF), risk, and compliance management systems, under Article 12 (1) (e) of such Committee Internal Regulation. Principle VII.B The supervisory body should promote an adequate coordination between the internal audit and the statutory audit of accounts. The General and Supervisory Board is responsible for the monitoring and permanent assessment of internal proceedings related to accounting and auditing matters as well the monitoring of the risk profile of the Company, the risk management system efficiency, the internal control system and the internal auditing system including the reception and processing of claims and complaints whether or not arising from employees under Article 14 (1) (e) of its Internal Regulation. In particular, the Financial Matters Committee/Audit Committee has the authority to (i) verify if the accounting policies and metrical criteria adopted by the Company are consistent with the general accounting principles accepted and adequate to the correct presentation of its assets, liabilities, and results (under Article 12 (1) (b)) and (ii) supervise the internal audit, financial reporting control (SCIRF), risk, and compliance management systems, under Article 12 (1) (e). The Internal Regulation of the Financial Matters Committee/Audit Committee specifically sets forth the competence to monitor, with special care, the activity and contractual relations with the Statutory Auditor, without interfering with its performance, being allowed to formulate recommendations or request clarifications within the context of the relationship between the General and Supervisory Board, the Executive Board of Directors and the Statutory Auditor regarding financial information, as well to monitor and evaluate, pursuant to applicable law, the objectivity and independence of the Statutory Auditor, namely regarding the provision of non-audit services, under Article 12 (2) (j). Item 15 | Item 17 | Item 21 | Item 29 | Items 30 a 41 Recommendation VII.1.1. The supervisory body’s internal regulation should impose the obligation to supervise the suitability of the preparation process and the disclosure of financial information by the managing body, including suitable accounting policies, estimates, judgments, relevant disclosure, and its consistent application between financial years, in a duly documented and communicated form. ADOPTED The Internal Regulation of the Financial Matters Committee/Audit Committee sets forth in Article 12 (2) (g) the competence to supervise the adequacy of the preparation and financial disclosure of information process as well as to prepare a report addressed to the General and Supervisory Board which includes the analysis of the Financial Matters Committee/Audit Committee of such process, namely on the adequacy of accounting policies, estimates, judgements and relevant disclosure procedures and its consistent implementation between financial years. Item 21 | Item 27 | Item 29 | Item 46 | Item 50 | Item 55 VII.2 Statutory audit of accounts and supervision Principle. The supervisory body should establish and monitor clear and transparent formal procedures on the relationship of the company with the statutory auditor and on the supervision of compliance, by the auditor, with rules Article 14 (1) (d) of the General and Supervisory Board Internal Regulation sets forth that this body should permanently monitor the activity of the Statutory Auditor and give its opinion on the respective election or appointment, its exoneration, its independency, and its other relationships with the Company. Particularly, the Financial Matters Committee/Audit Committee is responsible for the (i) proposal to the General and Supervisory Board of the hiring and the dismissal of the Statutory Auditor as well as its remuneration under Article 12 (1) (o), (ii) issuance of a reasoned opinion, in accordance with applicable law, on the renewal and extension of the Statutory Auditor’s mandate to be submitted to the General and Supervisory Board under Article 12 Item 29 | Item 42 | Items 44 to 46 | Item 50 211 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION regarding independence imposed by law and professional regulations. (1) (n), (iii) monitoring, with special care, the activity and contractual relations with the Statutory Auditor, without interfering with its performance, being allowed to formulate recommendations or request clarifications within the context of the relationship between the General and Supervisory Board, the Executive Board of Directors and the Statutory Auditor regarding financial information, as well to monitor and evaluate, pursuant to applicable law, the objectivity and independence of the Statutory Auditor, namely regarding the provision of non-audit services, under Article 12 (2) (j) and (iv) supervise the activity and the independence of the Statutory Auditor and compliance with applicable laws, regulations and agreements, as well as principles and best practices applicable to auditing companies and their representatives with the audited entities under Article 12 (1) (p). Recommendation VII.2.1. By internal regulations, the supervisory body should define, according to the applicable legal regime, the monitoring procedures aimed at ensuring the independence of the statutory audit. ADOPTED The duties of the Financial Matters Committee / Audit Committee are set forth in Article 12 of its Internal Regulation, and they include supervising the activity and the independence of the Statutory Auditor in accordance with applicable laws and regulations, in order to assess its independence and compliance with applicable laws, regulations and agreements, as well as principles and best practices applicable to auditing companies and their representatives with the audited entities. It should also approve the provision of audit and non-auditing services by the Statutory Auditor to the Company or its subsidiaries, ensuring an adequate prior review of any threats to the independence of the Statutory Auditor that the provision of such services may entail, as well as any safeguards to be applied in order to mitigate them. Within the scope of its attributions, the Financial Matters Committee / Audit Committee must monitor, with special care, the activity and contractual relations with the Statutory Auditor, without interfering with its performance, being allowed to formulate recommendations or request clarifications within the context of the relationship between the General and Supervisory Board, the Executive Board of Directors and the Statutory Auditor regarding financial information, as well to monitor and evaluate, pursuant to applicable law, the objectivity and independence of the Statutory Auditor, namely regarding the provision of non-audit services. Consider also that Article 12 (1) (g) sets out the competence to supervise the adequacy of the preparation and financial disclosure of information process, as well as to prepare a report addressed to the General and Supervisory Board which includes the analysis of the Financial Matters Committee/Audit Committee of such process, namely on the adequacy of accounting policies, estimates, judgements and relevant disclosure procedures and its consistent implementation between financial years. Furthermore, EDP has an Internal Regulation on Services Provided by the Statutory Auditor which defines and promotes criteria and methodologies to ensure the independence of the Statutory Auditor when providing audit and non-audit services to EDP or to its subsidiaries. This Regulation is available at EDP’s website: https://www.edp.com/en/corporate-governance/governing- bodies/statutory-auditor The supervisory procedures aiming to ensure the independence of the Statutory Auditor are set forth in the aforementioned Regulation, as well as in Annex II of the Internal Regulation of the Financial Matters Committee / Audit Committee, which specifically sets forth the annual evaluation process of the Statutory Auditor of the Company. Items 39 to 41 Recommendation VII.2.2. The supervisory body should be the main interlocutor of the statutory auditor in the company and the first ADOPTED [VII.2.2 (1)] The Financial Matters Committee/Audit Committee is responsible for assessing the contents of the annual accounts’ certification reports (Article 12 (1) (p) of its Internal Regulation), and [VII.2.2 (2)] for monitoring, with special care, the activity and contractual relations with the Statutory Auditor, without interfering with its performance, being allowed to formulate recommendations or request clarifications within the context of Item 21 | Item 29 212 PRINCIPLES AND RECOMMENDATIONS ADOPTED NOT ADOPTED NOT APPLICABLE COMMENTS REPORT DESCRIPTION recipient of the respective reports [VII.2.2 (1)], having the powers, namely, to propose the respective remuneration [VII.2.2 (2)] and to ensure that adequate conditions for the provision of services are ensured within the company. the relationship between the General and Supervisory Board, the Executive Board of Directors and the Statutory Auditor regarding financial information, as well to monitor and evaluate, pursuant to applicable law, the objectivity and independence of the Statutory Auditor, namely regarding the provision of non-audit services, under Article 12 (2) (j). Furthermore, this Internal Regulation sets forth the specific competences of the Financial Matters Committee/Audit Committee to propose, to the General and Supervisory Board, the hiring and dismissal of the Statutory Auditor. Recommendation VII.2.3. The supervisory body should annually assess the services provided by the statutory auditor, their independence, and their suitability in carrying out their functions and propose their dismissal or the termination of their service contract by the competent body when this is justified for due cause. ADOPTED The Internal Regulation of the Financial Matters Committee/Audit Committee establishes specific prerogatives and competences to annually assess the activity pursued by the Statutory Auditor namely on (i) submitting to the General and Supervisory Board proposals on the hiring and dismissal of the Statutory Auditor, as well as its remuneration under Article 12 (1) o), (ii) issuing a reasoned opinion in accordance with the applicable law on the renewal or extension of the Statutory Auditor’s mandate, to be presented to the General and Supervisory Board under Article 12 (1) (n), (iii) monitoring, with special care, the activity and contractual relations with the Statutory Auditor, without interfering with its performance, being allowed to formulate recommendations or request clarifications within the context of the relationship between the General and Supervisory Board, the Executive Board of Directors and the Statutory Auditor regarding financial information, as well to monitor and evaluate, pursuant to applicable law, the objectivity and independence of the Statutory Auditor, namely regarding the provision of non-audit services, under Article 12 (2) j) and (iv) supervise the activity and the independence of the Statutory Auditor and compliance with applicable laws, regulations and agreements, as well as principles and best practices applicable to auditing companies and their representatives with the audited entities under Article 12 (1) p). During this exercise, the annual evaluation of the Statutory Auditor of EDP has been carried out under the terms set forth in Annex II of the Internal Regulation of the Financial Matters Committee /Audit Committee. Item 21 | Item 29 | Item 45 213 3\. Other information The following documents are attached to this Report, forming an integral part thereof: Annex I – Brief curricula of the members of the General and Supervisory Board and the Executive Board of Directors Annex II \- Attendance list of the meetings of the General and Supervisory Board Annex III \- Attendance list of the meetings of the Executive Board of Directors Annex IV \- Positions held in other companies Annex V – Attendance lists for: (i) The Financial Matters Committee/Audit Committee (ii) The Remuneration Committee of the General and Supervisory Board (iii) The Corporate Governance and Sustainability Committee (iv) The United States of America Business Affairs Monitoring Committee (v) The Strategy and Performance Committee 214 ACADEMIC QUALIFICATIONS • Assistant Professor of “Operational Research” and “Statistics” – IST (1972-1975); • Invited Auxiliar Professor of “International Finance” – Nova SBE (1985-1987); • Degree in Advanced Management Program - Harvard Business School (2002); • Master of Science degree in Civil Engineering - Technical University of Lisbon (1974); • Certificate in Corporate Governance - INSEAD (2018); • Executive Program - Singularity University in Silicon Valley (2020). SKILLS AND EXPERIENCE • Executive Board Member – BCP (1987-2001); • Chairman - Foreign & Colonial in London; • Special Commissioner for the Portuguese Government - IPE (2002-2003); • CEO – EDP – Energias de Portugal, S.A. (2003-2006); • Vice-Chairman – HidroCantábrico (2005); • Co-founder – Hyperion (2006); • Chairman – IBERWIND (2008-2015); • Member - Corporate Finance Standing Committee – ESMA (2010-2013); • Advisory Board member - Banco de Portugal (2018-2020); • MBA - Nova SBE/Wharton (1982); • Non-executive Board Member – ITA CARE (2016 – 2021); • Non-executive Board Member – Lexer (2019 – 2021); • Board Member of Alfred Santos Foundation – Financial Sponsor of Nova SBE (2021). COMPANY BACKGROUND • General and Supervisory Board Chairman (since April 2021). CURRENT EXTERNAL APPOINTMENTS • Co-founder - Magnum Capital (2006); • Non-executive Board Member – Miranza (2019); • Non-executive Board Member – ROQ (2018); • Member - Engineers Academy (2012). João Luis Ramalho Carvalho Talone STATUS Independent POSITION Chairman of the General and Supervisory Board COMMITTEES Corporate Governance and Sustainability Committee Chairman USA Business Affairs Monito- ring Committee Chairman ACADEMIC QUALIFICATIONS • Bachelor’s degree in Power System and Automation - Huazhong University of Science and Technology (1984); • Master’s degree in Management - Huazhong University of Science and Technology (2001); SKILLS AND EXPERIENCE • Deputy Director of Power Production Department - China Three Gorges Corporation (2002); • Executive Vice President - China Yangtze Power Company (2002-2011); • Director - Guangzhou Development Industry. COMPANY BACKGROUND • General and Supervisory Board Vice Chairman, in representation of China Three Gorges Corporation (February 2012 – April 2015); • General and Supervisory Board Member, in representation of CWEI (Europe), S.A. (April 2015 - April 2018); • General and Supervisory Board Member, in representation of China Three Gorges International Corporation (March 2018 - December 2018); • General and Supervisory Board Vice Chairman, in representation of China Three Gorges Corporation (December 2018 - April 2021). CURRENT EXTERNAL APPOINTMENTS • President - Beijing Yangtze Power Capital (since 2015); • Vice-President - China Three Gorges Corporation (December 2018-to date). Dingming Zhang STATUS Non-Independent POSITION General and Supervisory Board Member General and Supervisory Board ANNEX I 215 ACADEMIC QUALIFICATIONS • Bachelor’s degree in Engineering –Wuhan University (1992); • Master’s degree in Technical Economics and Management – Chongqing University (2000); SKILLS AND EXPERIENCE • Secretary of Corporate Affairs Department - Gezhouba Hydropower Plant (1998-2000); • Deputy Director of the Board - China Yangtze Power Company (2002-2003); • Director of Capital Operating Department - China Yangtze Power Company (2004-2006); • Executive Vice-President - Beijing Yangtze Power Capital (2006-2011); • Executive Vice President of Beijing Yangtze Power Capital Co. Ltd (2008-2011); • Deputy Director of Strategic Planning Department – China Three Gorges Corporation (2011-2015); • Executive Vice-President - China Three Gorges International Corporation (2015-2020); • Chairman - China Three Gorges (Europe), S.A. (2015-2020); • Chairman – China Three Gorges International Limited (2020- ). COMPANY BACKGROUND • General and Supervisory Board Member, in representation of China Three Gorges International (Europe), S.A. (February 2012 – April de 2015); • General and Supervisory Board Member, in representation of China Three Gorges (Portugal), Sociedade Unipessoal, Lda. (April 2015 - April 2018); • General and Supervisory Board Member, in representation of China Three Gorges (Europe), S.A (April 2018 - December 2018); • General and Supervisory Board Member, in representation of China Three Gorges International Corporation, (December 2018 - April 2021); • General and Supervisory Board Member, in representation of China Gorges International Limited, ( April 2021- ). CURRENT EXTERNAL APPOINTMENTS • Chairman – China Three Gorges International Limited (since 2020); Shengliang Wu STATUS Non-Independent POSITION General and Supervisory Board Member ACADEMIC QUALIFICATIONS • Degree in Economics - Carlos III University (Madrid) (1997); SKILLS AND EXPERIENCE • Credit Risk Management Department - Citigroup (1997-1998); • Mergers and Acquisitions Department - Deutsche Bank (1998- 2007); • Mergers and Acquisitions Department - Credit Suisse (2007-2016). COMPANY BACKGROUND • General and Supervisory Board Member, in representation of China Three Gorges (Europe), S.A., since December 2018. CURRENT EXTERNAL APPOINTMENTS • Holds senior positions in China Three Gorges Corporation (Europe), S.A. (since 2016)1 Ignacio Herrero Ruiz STATUS Non-Independent POSITION General and Supervisory Board Member COMMITTEES Corporate Governance and Sustainability Committee Member 1-Ignacio Herrero Ruiz is not a member of the Board of Directors of China Three Gorges (Europe), S.A. 216 ACADEMIC QUALIFICATIONS • Degree in Law - Portuguese Catholic University (1987); • Management Course – Executive Program - PBS – Porto Business School (1996); SKILLS AND EXPERIENCE • Founder - Atlantic SGOIC, S.A. (2005); • Chairman and CEO - Morgan Stanley Portugal SGFIM SA (2001-2003); • Head of Morgan Stanley´s local operation in Portugal (1999-2003); • Manager - Morgan Stanley – Portugal (Holding) (2001-2003); • Management Committee - Morgan Stanley SV SA (Spain) (2000-2003); • Executive Director - Morgan Stanley International (2001-2003); • Board Member - Banco Chemical Finance (1998-1999); • Member of the Executive Committee - Banco Chemical Finance (1998-1999); • Managing Director - private banking division of Banco Pinto & Sotto Mayor (1996 -1999); • Managing Director - private banking division of Banco Totta & Açores (nowadays Bank Santander Portugal) (1998-1999); • Chairman of the Board - M.C. Geste - Asset Management Company (latter on called Santander Gest SGP) (1997-1999); • Private banking director - Millennium BCP (1987-1996). COMPANY BACKGROUND • General and Supervisory Board Member, in representation of China Three Gorges (Portugal), Sociedade Unipessoal, Lda., since April 2021. CURRENT EXTERNAL APPOINTMENTS • Chairman and CEO - Atlantic SGOIC, S.A. (since 2005); • Board Member - Liminorke S.A. (since 2009); • Member – Oporto Municipal Assembly (since 2009) – Chairman from 2014 to 2021. Miguel Espregueira Mendes Pereira Leite STATUS Non-Independent POSITION General and Supervisory Board Member COMMITTEES Remuneration Committee Chairman ACADEMIC QUALIFICATIONS • Bachelor’s degree in International Business with a major in Hydropower Engineering; SKILLS AND EXPERIENCE • First-class Constructor in China | Assistant Engineer at Planning Department – CWE (1984-85); • Assistant Engineer/Engineer – CWE Tunisian Branch (1985-89); • Engineer at Hydropower Department – CWE (1989-93); • Engineer – CWE Romanian Branch (1994-95); • Senior Engineer at Hydropower Department – CWE (1995-99); • Project Manager (the Odaw Drainage Channel) – CWE (1999-00); • Deputy General Manager - CWE (2000-01); • Project Manager (the Water Mains)– CWE (2001-03); • Deputy/General Manager at International Business Department – CWE (2003-11); • Vice-Chairman – CWE (2011-15); • Chairman – CWE (2015-17); • Executive Director – CWE (2017-19). COMPANY BACKGROUND • General and Supervisory Board Member, in representation of China Three Gorges Brasil Energia Ltda., since December 2019 (re-elected in April 2021). CURRENT EXTERNAL APPOINTMENTS • Deputy Chief Economist – China Three Gorges (since 2019); • General and Supervisory Board Member –IHA (September 2021–September 2023). Li Li STATUS Non-Independent POSITION General and Supervisory Board Member COMMITTEES Corporate Governance and Sustainability Committee Member 217 ACADEMIC QUALIFICATIONS • Degree in Administrative and Economic Sciences – Bilbao University (1975); SKILLS AND EXPERIENCE • Professor of Business and Economic Faculty – Oviedo University (1984-1990); • Director of Economics and Regional Planning - Principality of Asturias (1984-1990); • Counsellor of Organization of the Territory and Housing – Principality of Asturias (1990-1991); • Counsellor of countryside and fishing - Principality of Asturias (1991-1993); • Manager on several companies on numerous fields. COMPANY BACKGROUND • General and Supervisory Board Member in representation of Cajastur Inversiones S.A., (February 2012 - April 2015); • General and Supervisory Board Member, in representation of DRAURSA, S.A., since April 2018 (re-elected in April 2021). CURRENT EXTERNAL APPOINTMENTS • Board of Directors Member – Unicaja Banco (since 2011); • Chairman of Board of Directors - Lico Leasing (since 2017); • Executive Commission Member - Lico Leasing (since 2018); • Board of Director Member - Tudela Veguín (since 2011); • Masaveu Inmobiliaria (2014); • Cimento Verde do Brasil (since 2014); • Board of Directors Member – Molecular Oncology Medicine Institute of Asturias (since 2014). Felipe Fernández Fernández STATUS Non-Independent POSITION General and Supervisory Board Member COMMITTEES Remuneration Committee Member USA Business Affairs Monitoring Committee Member ACADEMIC QUALIFICATIONS • Law Degree – Navarra University (1992); SKILLS AND EXPERIENCE • Chairman on several companies of Masaveu Group in numerous fields such as energy, finance, industrial, cement and real state, among others. COMPANY BACKGROUND • General and Supervisory Board Member, since February 2012 (re-elected in April 2015, April 2018, and April 2021). CURRENT EXTERNAL APPOINTMENTS • Chairman - Masaveu Corporation; • Chairman - Cementos Tudela Veguín; • Chairman of the Board – Oppidum Capital; • Chairman of the American companies - Masaveu Real Estate US Delaware LLC, Oppidum Renewables USA Inc. and Oppidum Green Energy USA LLC; • Board Member – American Cement Advisors Inc.; • Board Member – EGEO Internacional and EGEO, SGPS; • Board Member – EDP España; • Joint Manager – Flicka Forestal; • Board Member – Bankinter; • Executive Committee Member – Bankinter; • Remuneration Committee Member – Bankinter; • Board Member – Línea Directa Aseguradora; • Chairman - Maria Cristina Masaveu Peterson Foundation; • Chairman - San Ignacio de Loyola Foundation; • Trustee – Princess of Asturias Foundation; • Delegate Committee Member - Princess of Asturias Foundation; • Assets Committee Member - Princess of Asturias Foundation; • Member of the International Council – MET, New York; • International Trustee – Friends of the Prado Museum Association. Fernando Maria Masaveu Herrero STATUS Non-Independent POSITION General and Supervisory Board Member COMMITTEES Corporate Governance and Sustainability Committee Member 218 ACADEMIC QUALIFICATIONS • Ph. D. in Business Administration - Manchester Business School Manchester University (1992); • Master’s in management/MBA – ISEG – Institute of Economics and Management (1985); • Bachelor’s in business administration – ISEG Institute of Economics and Management - Lisbon University (1981). • Executive training: Finance and Control - IMD (1986); • Management Control - HEC Paris (1987); • International Finance - INSEAD (1987); • Leadership - Kennedy Harvard Government School (2009); • Leadership Development Program - Creative Leadership Center (2010); • Coaching for Performance - London Business School (2010); • Diploma in Advanced Mindfulness and Emotional Intelligence Teachers Training (2017) - Search Inside Yourself – Leadership Institute (SIYLI) in San Francisco. SKILLS AND EXPERIENCE • Certified accountant (1981); • Statutory Auditor (1995. Asked for voluntary suspension in 2022.); • FRICS - Fellow of Royal Institution of Chartered Surveyors (2008); • Recognized European Valuer (REV) (2018) and Recognized Business Valuer (REV-BV) (2021) by TEGoVA; • Certified Teacher of MBSR by the University of California San Diego Center for Mindfulness Professional Training Institute (MBPTI) (2016); • Member of the Board (as CFO) of Montepio Geral – Associação Mutualista (2022 - ..); • Vice-President of ISEG School Council (2021-2022); • Head of Scientific Area of Finance of ISEG (2020-2022); • Independent non-executive board member - Montepio - Valor SGOIC (2017-2022); • Member of the Board - ERES European Real Estate Society (2019-2021); • President of Central Administration of the Portuguese Health System (2011-2014); • Chairman of the Management Department – ISEG (2010-2011); • Board Member - BPN (2008); • CEO and CFO - SLN (2008-2009); • Chairman of the Management Department - ISEG (2007-2008); • Partner and Statutory Auditor - Neves, Azevedo Rodrigues e Batalha, SROC (1995-2008); • Judicial Manager of Torralta (1993-1998); Casino Hotel de Tróia (1994-1995); TVI (1997-1998); • Associate Consultant - Coopers & Lybrand (1992-1993); • General Manager and Trainer in Finance and Control - CIFAG/IPE (1987-1992); • Trainer for executives in Finance and Control - CIFAG/IPE (1985-1987); • Executive Deputy Controller - Cometna SA (1981-1985); COMPANY BACKGROUND • General and Supervisory Board Independent Member since April 2015 (re-elected in April 2018 and April 2021). CURRENT EXTERNAL APPOINTMENTS • Board Member (CFO) of Montepio Geral – Associação Mutualista (since 2022); • Member of Valuation Professional Group - RICS Portugal (since 2020); • Member of the European Business Valuation Standards Board - TEGoVA (since 2020); • Mentor of Mindfulness Center of the University of California at San Diego (since 2021). João Carvalho das Neves STATUS Independent POSITION General and Supervisory Board Member COMMITTEES Remuneration Committee Member Financial Matters Committee / Audit Committee Chairman 219 ACADEMIC QUALIFICATIONS • Degree in Economics and Business Administration and Political Sciences and Sociology - Complutense University of Madrid (1978); • PhD in Public Finance - Complutense University of Madrid (1998); • PADE Management Program MBA - IESE Business School (2004-05); SKILLS AND EXPERIENCE • State Tax Inspector (1984); • Account Auditor (1988); • Chief-Inspector in Spanish Ministry of Economy and Finance (1985-86); • Deputy Head of the State Tax Inspection Office (1987- 96); • Head of the State Tax Inspection Office (1996-99); • President of the Task Force for Renewable Energies, Sustainability and Carbon Markets - ARIAE (1999-2011); • Member of the Advisory Board - Ernst & Young (2012-13). COMPANY BACKGROUND • General and Supervisory Board Independent Member since April 2015 (re-elected in April 2018 and April 2021). CURRENT EXTERNAL APPOINTMENTS • Member of the executive committee – ACS group (since 2020) • Member of Audit Committee – ACS Group (since 2017) • Member of The Appointments and Remuneration Committee – ACS group • Member of the Board – ACS group (since 2017) • Member of the Advisory Board - Beragua Capital (since 2015) • Member of the board – Primafrio SL. (since 2021) • Chairman of Audit committee – Primafrio SL (sice 2021) • Member of the The Appointments and Remuneration Committee- Primafrio SL (since 2021) Maria Del Carmen Fernández Rozado STATUS Independent POSITION General and Supervisory Board Member COMMITTEES Financial Matters\ Committee/Audit Committee Member Corporate Governance and Sustainability Committee Member ACADEMIC QUALIFICATIONS • B.A. in Arabic - American University in Washington DC. (1991); • M.A. - Georgetown University’s School of Foreign Service (1994); SKILLS AND EXPERIENCE • Assistant Vice-President – Middle East and Africa Division of The Bank of New York (1994-1999); • Equity analysis - Schroders (1999-2000); • Equity analysis - UBS Warburg (2000-2002); • Manager investing in the global utilities, infrastructures, and industrials sectors for TIAA and Artisan Partners (2002-2006); • Analyst and Portfolio Manager - Artisan Partners (2006-2011); • Co-Head of Morgan Stanley’s Global Industrials Group (2012-2016); • Partner at the investment banking firm PJT Partners (since 2016); • Chairman of the Remuneration Committee and member of the safety and risk Committee - Enquest PLC (2018-2021). COMPANY BACKGROUND • General and Supervisory Board Independent Member since April 2018 (re-elected in April 2021). CURRENT EXTERNAL APPOINTMENTS • Member of both Audit and Finance & Operations Audit sub-committees - Tate Board of Trustees in London (since 2015); • Trustee of The American University in Cairo (since 2019); • Partner at the investment banking firm PJT Partners (since 2016) where she advises utilities and industrials chief executives and their boards on long term value creation in the energy transition; • Board Chair of Georgetown University’s Center for Contemporary Arab Studies; Laurie Lee Fitch STATUS Independent POSITION General and Supervisory Board Member COMMITTEES Corporate Governance and Sustainability Committee Member USA Business Affairs Monitoring Committee Member 220 ACADEMIC QUALIFICATIONS • Degree in Chemical lndustry Engineering – Instituto Superior Técnico (1975); • Advanced Corporate Finance - Harvard University (1985); SKILLS AND EXPERIENCE • Responsible for Industrial area and New Business Development (1978); • Vice-President and Chief Corporate Banking Head - Citibank (1985 – 1990); • Board Member Banco Fonsecas & Burnay; • Board Member - União de Bancos Portugueses; • Board Member - lnterbanco (currently Banco Santander Consumer Portugal); • CEO - SAG SGPS SA Portugal (2000-2009); • Chairwoman - SAG SGPS SA Brazil (2000-2009); • Chairwoman PARTAC SGPS SA (2018-2021); • Non-Executive Board Member and Member of the investment Committee - BCP Capital SA (2013-2020); • Chairwoman - PNCB - Bank Credit Restructuring Platform, A.C.E. (2018-2020); • CEO - FAE - Forum de Administradores e Gestores de Empresas (2007-2013); • Member of Executive Committee - EMCE - Mission Structure for Company Capitalization (2015-2017); • President of Supervisory Board - Fundação Luso-Brasileira (2005-); • Member of General Council - IPCG - Instituto Português de Corporate Governance (2010-); • CEO - AMC - Associação Missão Crescimento (2013-2015); • Member of the General Council - Universidade de Coimbra (2017-2020); • Non-Executive Board Member and Audit Committee Chairwoman – TAP SGPS SA (2017-2021). COMPANY BACKGROUND • General and Supervisory Board Independent Member. CURRENT EXTERNAL APPOINTMENTS • Supervisory Member Board - Mystic lnvest Holding SA (2018- ); • Chairwoman Advisory Board ACTIVE CAP – Capital Partners, S.A. (2021- ). Esmeralda da Silva Santos Dourado STATUS Independent POSITION General and Supervisory Board Member COMMITTEES Remuneration Committee Member USA Business Affairs Monitoring Committee Member ACADEMIC QUALIFICATIONS • PhD in Business Studies - Warwick University (UK); • MSc and BSc in Management - Universidade Católica Portuguesa; • High Potentials Leadership Program Certificate - Harvard (2012); • International Directors Program – INSEAD (2019); SKILLS AND EXPERIENCE • Dean - Católica Porto Business School (2013 – 2020); • Professor - Católica Porto Business School (since 1997); • Hospitality and Entertainment Industry; • Author of a book, book chapters, articles, and opinion articles. COMPANY BACKGROUND • General and Supervisory Board Member since April 2021. CURRENT EXTERNAL APPOINTMENTS • Independent Board Member - Mota-Engil SGPS (Since April 2018); • President of the Fiscal Board - Media Capital, SA (since November 2020); • Member of the EQUIS Board - EFMD (Brussels) (since 2019); • Member of the International Advisory Board of 2 international Business Schools in • UK (since 2019) and France (since 2020); • Member - Porto Coordination Group of ACEGE (Association of Christian Managers) (since 2013); • Member - Diocesan Commission for the Interreligious Dialogue (since 2020). Helena Salgado Fonseca Cerveira Pinto STATUS Independent POSITION General and Supervisory Board Member COMMITTEES Financial Matters Committee/ Audit Committee Member USA Business Affairs Monitoring Committee Member 221 SKILLS AND EXPERIENCE • Co-founder - Women Enablers Change Agent Network (WECAN) (since 2017); • Chief Partnership Officer - UN Agency Sustainable Energy for All 2016-2017; • Director - Prince of Wales’s Corporate Leaders Group (2009 - 2016); • EU office - Cambridge Institute for Sustainability Leadership (2009-2016); • Executive Director - Green Growth Platform (2013-2016); • Advising - HRH The Prince of Wales (2009-2016) • Advising - Members of the European Parliament, European Commission Presidents, Commissioners and officials, Governments in Asia, Africa and the Middle East, international organizations OPEC, ADB, OECD, UNEP, USAID, UNFCCC, IEA) and business leaders of large international, European, and African companies (1990-Ongoing) • Vice Chair - European Biofuels Technology Platform (2008-2016); • Board member - We Mean Business (2014-2016); • Member – The Guardian’s Sustainable Business Advisory Board (2014-2016); • Member of Sustainability Advisory Board - Oil and Gas major Sasol (2007-2010); • Published articles, book chapters and given presentations on green growth and competitiveness, innovation, low carbon energy solutions, climate change, sustainable development, transport, conventional and alternative fuel quality legislation as well as on trade & environment (1990-Ongoing); • Recognised by GreenBiz GreenBiz as one of the 30 most influential women across the globe driving change in the low carbon economy and promoting green business. Bring together business leaders, policy makers, academia and NGO’s. COMPANY BACKGROUND • General and Supervisory Board Independent Member (since April 2021). CURRENT EXTERNAL APPOINTMENTS • Co-President – The Club of Rome (2018-Ongoing); • Chair and Expert Group on Economic and Societal Impact of Research & Innovation (ESIR) - European Commission (2020-Ongoing); • Assembly Member - Climate Mitigation & Adaptation Mission (DGR&I) (2019-2020) • TEG Sustainable Finance Taxonomy and Sustainable Finance Platform (DGFISMA) (2018-2021); • Food Summit Action Track 5 Resilience - United Nations (2020-2021); • Senior Associate and faculty Member - Cambridge Institute for Sustainability Leadership (CISL) (2016-Ongoing); • Senior Associate - E3G (2017-Ongoing); • Ambassador - Energy Transition Commission (ETC) 2018-Ongoing and WEALL (2020-Ongoing). Advisory Boards: ClimateKIC 2018-Ongoing), BMW (2020-Ongoing), UCB (2020-Ongoing), UCL Bartlett School (2020-Ongoing), IEEP (2020-Ongoing). Sandrine Dixson-Declève STATUS Independent POSITION General and Supervisory Board Member COMMITTEES Corporate Governance and Sustainability Committee Member 222 ACADEMIC QUALIFICATIONS • Bachelor of Laws - China University of Political Science and Law (1980–1984); • LLM - University of Melbourne (1988–1991); SKILLS AND EXPERIENCE • Citic Group, Beijing (1984-1986); • Solicitor - Mallesons Stephen Jaques, Melbourne (1990–1994); • Partner - Allens Arthur Robinson, Sydney (1995-1998); • Partner - Linklaters LLP; Managing Partner of Asia Pacific; Member of Global Management Committee (1998 –2009); • Chairman & CEO - J.P. Morgan China (2010–2014); • Vice Chairman - J.P. Morgan Asia Pacific (2014–2015); • Co-Chairman and partner - King & Wood Mallesons, China (2015–2017); • Qualified lawyer - PRC, UK, HK and Australia. COMPANY BACKGROUND • General and Supervisory Board Independent Member since April 2021. CURRENT EXTERNAL APPOINTMENTS • Independent Director - Bank of Montreal (China) Limited, subsidiary bank of BMO Financial Group (since December 2016); • Independent Director - Yum China Holdings, Inc., listed in New York and Hong Kong Stock Exchanges (since October 2016); • Founder and Chairman - MountVue Capital Management Co. Ltd (since 2017); • Senior Advisor - Fangda Partners, a leading PRC law firm (since June 2017); • Advisory Board Member - Ares SSG Capital Management (since April 2019. Zili Shao STATUS Independent POSITION General and Supervisory Board Member COMMITTEES Remuneration Committee Member ACADEMIC QUALIFICATIONS • Degree in Economics - Higher Institute of Economics (1978); • Degree in Management – Portuguese Catholic University (1981); SKILLS AND EXPERIENCE • CFO – Covina – Companhia Vidreira Nacional, S.A.R.L (1987-91); • Member of the Board of Directors - IPE – Investimentos e Participações Empresariais, SGPS, S.A. (1991); • Secretary of State for Trade (1991-95); • CFO – CIMPOR – Cimentos de Portugal, SGPS, S.A. (1997-2001); • CFO and CEO – Jerónimo Martins (2001-11), Advanced Management Program – University of Pennsylvania (2005); • Vice-Chairman of the Board of Directors - Galp Energia, SGPS, S.A. (2012-15); • Member of the Board of Directors - Oi, S.A. (2015-18); • Chairman of the Board - AEM – Associação dos Emitentes Portuguese (2013-14); • Non-executive Member of the Board of Directors - NYSE Euronext (2011-16); • Member of the Audit Committee - NYSE Euronext (2013-14); • Chairman - APETRO – Associação Portuguesa de Empresas Petrolíferas (2012-15). COMPANY BACKGROUND • General and Supervisory Board Member since April 2019 (re-elected in April 2021); • Chairman of the Board of the General Shareholders’ Meeting of EDP since April 2019 (re-elected in April 2021). CURRENT EXTERNAL APPOINTMENTS • Pharol, SGPS, S.A. (Chairman of the Board of Directors and CEO) (since 2015) 2015-…); • Bratel B.V. (2015-…) and Bratel S.à.r.l. (Director) (2018-…); • Nutrinveste, SGPS, S.A. (Non-executive Board Member) (2018-…); • Member of the Board of Directors of Oi, S.A. (2015-2018; 2021-…); • Chairman of the Audit Committee of Fórum para a Competitividade (2015-…). Luís Maria Viana Palha da Silva STATUS Independent POSITION General and Supervisory Board Member 223 ACADEMIC QUALIFICATIONS • MEng with Distinction – University of Strathclyde (98); • MBA – Massachusetts Institute of Technology - Sloan School of Management (03). SKILLS AND EXPERIENCE • Mergers and Acquisitions – UBS Investment Bank (UK) (98-00); • Strategy & Corporate Development/M&A – EDP (00-01 & 03-05); • Head of Strategy & Corporate Development/M&A – EDP (05-09); • Non-executive Member of the Board of Directors – EDP Inovação (07-12); • Member of the Board of Directors – E-Redes (09-12); • Non-executive Member of the Board of Directors – EDP Gás Distribuição (09-12); • Chairman – InovGrid ACE (09-11); • CEO – EDP Comercial and EDP España (12-18); • Member of the Executive Board of Directors – EDP (12-18); • CFO – EDP (18-21); • Interim Chairman of the Executive Board of Directors – EDP (20-21); • CFO e Vice- Chairman of the Board of Directors - EDP Renováveis (21); • Chairman of the Executive Board of Directors – EDP (21). CURRENT EXTERNAL APPOINTMENTS • General Board Member – AEM – Associação de Empresas Emitentes de Valores Cotados em Mercado (21). Miguel Stilwell d’Andrade POSITION Chairman of the Executive Board of Directors, elected in January 2021 ACADEMIC QUALIFICATIONS • Physics Engineering Degree - Instituto Superior Técnico (93); • Electrical and Computing Engineering Masters - Instituto Superior Técnico (95); • MBA - Nova University, Lisbon (96); • Executive Training – Harvard, Wharton, IESE (Barcelona) and CEIBS (Shanghai) (19). SKILLS AND EXPERIENCE • Consultant - Mckinsey & Co (95-97); • Corporate Director - GDP - Gás de Portugal (98); • Member of the Board of Directors - Setgás (99-01); • Member of the Executive Board of Directors - Lisboagás (00-01); • Strategic Marketing Director - Galp Energia (01-04); • Member of the Board of Directors - Comboios de Portugal (04-06); • Chief of Staff of the Chairman of the Executive Board of Directors - EDP (06-07); • Member of the Board of Directors – EDP Comercial (07-08); • Member of the Board of Directors – EDP Inovação (07-08 & 12-14); • Vice-Chairman of the Board of Directors - EDP Energias do Brasil (08-13); • CEO – EDP Brasil (14-21); • Chairman of the Board of Directors – EDP Produção (20-21); • Member of the Board of Directors - EDP España (21); • Chairman of the Board of Directors - EDP Energias do Brasil (21); • Member of the Board of Directors - EDP Renováveis (21); • Chairman of the Board of Directors - E-Redes España (21). CURRENT EXTERNAL APPOINTMENTS • Board Vice-Chairman - BCSD Portugal (21). Miguel Nuno Simões Nunes Ferreira Setas STATUS Independent POSITION Member of the Executive Board of Directors, elected in 2015 (reappointed in 2018 and 2021) Executive Board of Directors 224 ACADEMIC QUALIFICATIONS • Naval Architecture and Marine Engineering Graduate- Instituto Superior Técnico (95); • MBA - Nova University Lisbon (01); • Advanced Management Program - Harvard Business School (13). SKILLS AND EXPERIENCE • Naval Commercial Department Assistant Director - Gellweiler (96-97); • Project Manager and Ship Surveyor - Det Norske Veritas (97-01); • Consultant- McKinsey & Company (01-04); • Head of Corporate Planning and Control - EDP (04-07); • Member of the Board of Directors - EDP Renováveis (08-15); • Chairman of the Board of Directors - EDP Produção (15-20); • Member of the Board of Directors (CEO) - EDP España (18); • Member of the Board of Directors (CFO) - EDP Renováveis (19); • CFO – EDP (21); • Member of the Board of Directors (CFO) - EDP Energias do Brasil (21). CURRENT EXTERNAL APPOINTMENTS • Board Member – OMIP SGPS, S.A. and OMEL (21); • Strategic Board Member – ISEG MBA (21). Rui Manuel Rodrigues Lopes Teixeira STATUS Independent POSITION Member of the Executive Board of Directors, elected in 2015 (reappointed in 2018 and 2021) ACADEMIC QUALIFICATIONS • Economics Degree - Nova University Lisbon (96); • Economics Post-Graduate Degree - Nova University Lisbon(98); • MBA - INSEAD, Fontainebleau (00); • Executive Education Program - Harvard Business School (21). SKILLS AND EXPERIENCE • Associate - Mercer (96-99); • Founder - Innovagency Consulting (01-03); • Head of TV Business Unit - TV Cabo - PT Multimédia (03-07); • Head of TV Business Unit - MEO (07-14); • Board of Directors Member – Pulsa Media (14-18); • Executive Vice-President and General Director PT & ESP Member of Executive Leadership Team Europe & Africa - Fox Networks Group (14-18); • Board of Directors Chairperson - EDP Comercial (18); • Member of the Board of Directors - EDP España (18); • Member of the Board of Directors - EDP Renováveis (19); • Board of Directors Chairperson – Fundação EDP (21); • Member of the Board of Directors - EDP Energias do Brasil (21). CURRENT EXTERNAL APPOINTMENTS • Governing Board Chairman – Portuguese-Chinese Chamber of Commerce and Industry; • General Board Member – Charge Up Europe; • General Board Member – Fundação Alfredo de Sousa; • Board Member – IPCG. Vera de Morais Pinto Pereira Carneiro STATUS Independent POSITION Member of the Executive Board of Directors, elected in 2018 (reappointed in 2021) 225 ACADEMIC QUALIFICATIONS • Economics Degree - Faculdade de Economia do Porto (96); • MBA - INSEAD, France and Singapore (02); • Executive Education Program - IMD in Lausanne and Harvard Business School (09). SKILLS AND EXPERIENCE • Marketing - Procter & Gamble (96-98); • SMEs Business Unit - Optimus (98-03); • Head of Marketing, Brand and Communication - Optimus (03-07); • Head of Marketing & Sales of the Mobile Residential Business Unit - Optimus (08-09); • Member of the Executive Board of Directors - Optimus (10-13); • President - APRITEL, Portuguese Association of Telecom Operators (11-14); • Member of the Executive Board of Directors - NOS, SGPS, S.A. (13–20); • Non-Executive Member of the Board of Directors - SportTV (16-20); • Vice-Chairperson of the Executive Board of Directors - NOS, SGPS, S.A. (19-20); • Member of the Board of Directors - EDP Renováveis, EDP España and EDP Energias do Brasil (21); • CEO - EDP Produção and Labelec (21). CURRENT EXTERNAL APPOINTMENTS • Governing Board Chairman – ELECPOR; • General Board Member – COTEC Portugal; • General Board Member - IPCG; • General Board Member – Porto Business School; • Guest Professor - FEP & Porto Business School. Ana Paula Garrido de Pina Marques STATUS Independent POSITION Member of the Executive Board of Directors, elected in 2021 226 ANNEX II Meetings of the General and Supervisory Board and each member's attendance: Mandate 2018-2020: NAME 28-JAN 24-FEB 25- MAR % Luís Filipe Marques Amado P P P 100 Augusto Mateus P P P 100 Clementina Barroso P P P 100 Eduardo de Almeida Catroga P P A 67 Ilídio Pinho A R P 67 Jorge Braga de Macedo A P P 67 Karim Djebbour P P P 100 Maria Celeste Cardona P P P 100 Mohammed Al-Shamsi A A A 0 Nuno Amado A P P 67 Vasco Rocha Vieira P P P 100 Dingming Zhang R R R 100 Shengliang Wu R R R 100 Li Li P P P 100 Ignacio Herrero Ruiz P P P 100 Luís Maria Viana Palha da Silva P P P 100 Fernando Masaveu Herrero P P P 100 Felipe Fernández Fernández P P P 100 João Carvalho das Neves P P P 100 Laurie Lee Fitch P P P 100 María del Carmen Rozado P P P 100 P = Present; A = Absent; R = Represented Average participation: 89%: (includes present and represented) Mandate 2021-2023: NAME 15-APR 28-APR 13-MAI 23-JUN 29-JUL 23-SEP 4-NOV 16-DEC % João Luís Ramalho de Carvalho Talone P P P P P P P P 100 Dingming Zhang R R R R R R R R 100 Shengliang Wu P R P R P P R P 100 Li Li P P R P P P P P 100 Zili Shao P P P P P P P P 100 Ignacio Herrero Ruiz P P P P P P P P 100 Luís Maria Viana Palha da Silva P P P P P P P P 100 Miguel Espregueira Mendes Pereira Leite P P P P P P P P 100 Fernando Maria Masaveu Herrero P R P R P R P P 100 Felipe Fernández Fernández P P P P P P P P 100 João Carvalho das Neves P P P P P P P P 100 Laurie Lee Fitch P P P P P P P P 100 María del Carmen Rozado P P P P P P P P 100 Esmeralda da Silva Santos Dourado P P P P P P P P 100 227 Helena Sofia Silva Borges Salgado Fonseca Cerveira Pinto P P P P P P P P 100 Sandrine Dixson-Declève P P P A P P P P 88 P = Present; A = Absent; R = Represented Average participation: 99%: (includes present and represented) ANNEX III Meetings of the Executive Board of Directors and each member's attendance: Mandate 2018-2020: NAME 5-JAN 15-JAN António Luís Guerra Nunes Mexia \- \- João Manuel Manso Neto \- \- António Fernando Melo Martins da Costa P P João Manuel Veríssimo Marques da Cruz P P Miguel Stilwell de Andrade P P Miguel Nuno Simões Nunes Ferreira Setas P P Rui Manuel Rodrigues Lopes Teixeira P P Maria Teresa Isabel Pereira P P Vera Morais Pinto Pereira Carneiro P P Mandate 2021-2023: NAME 19-JAN 26-JAN 02-FEB 09-FEB 15-FEB 17-FEB 23-FEB 24-FEB 25-FEB 28-FEB 02-MAR 03-MAR 03-MAR 09-MAR Miguel Stilwell de Andrade P P P P P P P P P P P P P P Miguel Nuno Simões Nunes Ferreira Setas P P P P P P P P P P P P P P Rui Manuel Rodrigues Lopes Teixeira P P P P P P P P P P P P P P Vera Pinto Pereira Carneiro P P P P P P P P P P P P P P Ana Paula Garrido de Pina Marques P P P P P P P P P P P P P P NAME 16-MAR 18-MAR 23-MAR 30-MAR 06-APR 11-APR 13-APR 14-APR 20-APR 27-APR 04-MAI 06-MAI 06-MAI 11-MAI Miguel Stilwell de Andrade P P P P P P P P P P P P P P Miguel Nuno Simões Nunes Ferreira Setas P P P P P P P P P P P P P P Rui Manuel Rodrigues Lopes Teixeira P P P P P P P P P P P P P P Vera Pinto Pereira Carneiro P P P P P P P P P P P P P P Ana Paula Garrido de Pina Marques P P P P P P P P P P P P P P 228 NAME 13-MAI 18-MAI 20-MAI 25-MAI 01-JUN 04-JUN 08-JUN 15-JUN 17-JUN 22-JUN 29-JUN 6/7-JUL 13-JUL 20-JUL Miguel Stilwell de Andrade P P P P P P P P P P P P P P Miguel Nuno Simões Nunes Ferreira Setas P P P P P P P P P P P P P P Rui Manuel Rodrigues Lopes Teixeira P P P P P P P P P P P P P P Vera Pinto Pereira Carneiro P P P P P P P P P P P P P P Ana Paula Garrido de Pina Marques P P P P P P P P P P P P P P NAME 22-JUL 27-JUL 29-JUL 01-AUG 24-AUG 31-AUG 07-SEP 09-SEP 14-SEP 21-SEP 27-SEP 30-SEP 04-OCT 12-OCT Miguel Stilwell de Andrade P P P P P P P P P P P P P P Miguel Nuno Simões Nunes Ferreira Setas A P P P P P P P P P P P A P Rui Manuel Rodrigues Lopes Teixeira P P P P P P P P P P P P P P Vera Pinto Pereira Carneiro P P P P A P P P P P P P P P Ana Paula Garrido de Pina Marques P P P P P P P A P P P P P P NAME 20-OCT 26-OCT 28-OCT 02-NOV 04-NOV 09-NOV 16-NOV 23-NOV 30-NOV 07-DEC 10-DEC 15-DEC 21-DEC % Miguel Stilwell de Andrade P P P P P P P P P P P P P 100% Miguel Nuno Simões Nunes Ferreira Setas P P P P A P P P P P P P P 95,8% Rui Manuel Rodrigues Lopes Teixeira P P P P P P P P P P P P P 100% Vera Pinto Pereira Carneiro A P P P P P P P A P P P P 95,8% Ana Paula Garrido de Pina Marques P P P P P P P P P P P P P 98,6% P = Presence; A = Absent Total meetings held in 2021: 71 Average participation: 98.1% 229 ANNEX IV Positions held by the members of the Executive Board of Directors in other companies belonging or not to the EDP Group: MIGUEL STILWELL ANDRADE MIGUEL SETAS RUI TEIXEIRA VERA PINTO PEREIRA ANA PAULA MARQUES Comercializadora Energética Sostenible, S.A.U. \- \- R \- \- EDP - Energias de Portugal Sociedade Anónima, Sucursal en España PR PR PR PR PR EDP - Energias do Brasil, S.A. \- CBD D D D EDP - Gestão da Produção de Energia, S.A. \- \- \- \- CBD EDP Comercial - Comercialização de Energia, S.A. \- \- \- CBD \- EDP España, S.A.U. \- D VP/MD D D EDP Finance BV R R R R R EDP Gás.Com - Comércio de Gás Natural, S.A. \- \- CBD D \- EDP Iberia, S.L.U. \- \- CBD \- \- EDP IS - Investimentos e Serviços, Sociedade Unipessoal, Lda. \- \- M \- \- EDP Redes España, S.L.U. \- CBD \- \- \- EDP Renewables Europe S.L.U. CBD \- VP \- \- EDP Renováveis Brasil, S.A. CBD \- D \- \- EDP Renováveis Servicios Financieros S.A. \- \- CBD \- \- EDP Renováveis, S.A. VP/CD D D D D EDP Solar España, S.A.U. \- \- \- R \- EDP Ventures Brasil S.A. \- \- \- \- CBD EDP Ventures España, S.A. \- \- \- \- CBD Empresa Hidroeléctrica do Guadiana, S.A. \- \- \- \- CBD Fresco Redes Internacional, S.L. \- CBD \- \- \- Fresco Redes Investments, S.L.U. \- CBD \- \- \- Generaciones Eléctricas Andalucía, S.L.U. \- \- CBD \- \- Hydro Global Investment Limited \- \- \- \- CBD Labelec - Estudos, Desenvolvimento e Actividades Laboratoriais, S.A. \- \- \- \- CBD OW Offshore S.L.U. \- \- VP \- \- SCNET – Sino-Portuguese Centre for Energy Technologies (Shangai) co., Ltd. \- \- \- \- D Transporte GNL, S.A.U. \- \- R \- \- OMIP – Operador do Mercado Ibérico (Portugal), SGPS, S.A. \- \- D \- \- Operador del Mercado Ibérico de Energía, Polo Español, S.A. (OMEL) \- \- D \- \- Viesgo Infraestructuras Energéticas, S.L.U. \- CBD \- \- \- D – Director M – Manager CBD – Chairman of the Board of Directors R – Representative PR –Permanent Representative VP – Vice-President VP/MD – Vice-President and Managing Director 230 ANNEX V Attendance list of the Financial Matters Committee/Audit Committee Mandate 2018-2020: P = Present; A = Absent; R = Represented Average participation: 100% Mandate 2021-2023: P = Present; A = Absent; R = Represented Average participation: 100% NAME 11-JAN 26-JAN 17-FEB 24-FEB 17-MAR % Luís Filipe Marques Amado P P P P P 100 João Carvalho das Neves P P P P P 100 Clementina Dâmaso Barroso P P P P P 100 Maria Celeste Ferreira Lopes Cardona P P P P P 100 Maria del Carmen Fernandez Rozado P P P P P 100 NAME 21-APR 06-MAI 13-MAI 16-JUN 22-JUL 29-JUL 22-SEP 28-OCT 04-NOV 17-NOV 15-DEC % João Carvalho das Neves P P P P P P P P P P P 100 Maria del Carmen Fernandez Rozado P P P P P P P P P P P 100 Helena Sofia Salgado Cerveira Pinto P P P P P P P P P P P 100 231 Attendance list of the Remuneration Committee Mandate 2018-2020: P = Present; A = Absent; R = Represented Average participation: 73% Mandate 2021-2023: P = Present; A = Absent; R = Represented Average participation: 100% NAME 5-MAR 11-MAR 9-APR % Shengliang Wu P P P 100 Fernando Maria Masaveu Herrero A P P 67 Ilídio Pinho A A A 0 João Carvalho das Neves P P P 100 Vasco Rocha Vieira P P P 100 NAME 30-SEP % Miguel Espregueira Mendes Pereira Leite P 100 Esmeralda da Silva Santos Dourado P 100 Felipe Fernández Fernández P 100 João Carvalho das Neves P 100 Zili Shao P 100 232 Attendance list of the Corporate Governance and Sustainability Committee Mandate 2018-2020: P = Present; A = Absent; R = Represented Average participation: 71,4% Mandate 2021-2023: P = Present; A = Absent; R = Represented Average participation: 79% (includes present and represented) NAME 23-FEB % Luís Filipe Marques Amado P 100 Augusto Mateus P 100 Felipe Fernández Fernández P 100 Jorge Braga de Macedo P 100 Maria Celeste Cardona P 100 Ignacio Herrero Ruiz A 0 Li Li A 0 NAME 12-MAI 28-JUL 03-NOV 14-DEC % João Luís Ramalho de Carvalho Talone P P P P 100 Ignacio Herrero Ruiz P P P A 75 Fernando Maria Masaveu Herrero A P P A 50 Laurie Lee Fitch P P P P 100 Li Li A R P A 50 María del Carmen Fernandez Rozado P P P P 100 Sandrine Dixson-Declève P P A P 75 233 Attendance list of the United States of America (USA) Business Affairs Monitoring Committee Mandate 2018-2020: P = Present; A = Absent; R = Represented Average participation: 90% Mandate 2021-2023: P = Present; A = Absent; R = Represented Average participation: 100% Attendance list of the Strategy and Performance Committee (extinct in April 2021) Mandate 2018-2020: P = Present; A = Absent; R = Represented Average participation: 76% (includes present and represented) NAME 26-JAN 18-FEB 17-MAR % Luís Filipe Marques Amado P P P 100 Augusto Mateus P P P 100 Clementina Barroso P P P 100 Felipe Férnandez Férnandez A P P 67 João Carvalho das Neves P P P 100 Jorge Braga de Macedo A P P 67 Vasco Rocha Vieira P P P 100 NAME 12-MAI 28-JUL 23-SEP 03-NOV 14-DEC % João Luís Ramalho de Carvalho Talone P P P P P 100 Esmeralda da Silva Santos Dourado P P P P P 100 Felipe Fernández Fernández P P P P P 100 Laurie Lee Fitch P P P P P 100 Helena Sofia Silva Borges Salgado Fonseca Cerveira Pinto P P P P P 100 NAME 27-JAN 18-FEB 23-FEB % Eduardo de Almeida Catroga P P P 100 Augusto Carlos Serra Ventura Mateus P P P 100 Fernando Maria Masaveu Herrero P P P 100 Ignacio Herrero Ruiz A P A 33 Jorge Avelino Braga de Macedo A P P 67 Karim Djebbour P P P 100 Laurie Fitch P A A 33 Mohammed Alshamsi A A A 0 Nuno Amado P P P 100 Shengliang Wu R R P 100 Vasco Rocha Vieira P P P 100 234 235 A. REMUNERATION POLICY APPLICABLE TO MEMBERS OF THE EXECUTIVE BOARD OF DIRECTORS APPROVED BY THE REMUNERATION COMMITTEEE APPOINTED BY THE GENERAL AND SUPERVISORY BOARD B. REMUNERATION POLICY APPLICABLE TO MEMBERS OF THE GOVERNING BODIES APPROVED BY THE REMUNERATION COMMITTEEE ELECTED BY THE GENERAL MEETING C. SPECIFICS APPLICABLE TO THE REMUNERATION OF THE MEMBERS OF THE GENERAL AND SUPERVISORY BOARD D. SPECIFICS APPLICABLE TO THE REMUNERATION OF THE STATUTORY AUDITOR E. PARTICULARS APPLICABLE TO THE REMUNERATION OF THE ENVIRONMENT AND SUSTAINABILITY BOARD F. PARTICULARS APPLICABLE TO THE REMUNERATION OF THE REMUNERATION COMMITTEE OF THE GENERAL MEETING G. PARTICULARS APPLICABLE TO THE REMUNERATION OF THE CHIRMAN OF THE GENERAL MEETING H. EVOLUTION OF THE REMUNERATION AND PERFORMANCE 236 251 254 256 257 258 258 258 05 — REMUNERATIONS REPORT 236 Under the terms of the Securities Code, this Remuneration Report aims to provide a comprehensive and integrated description of the remuneration earned by the members of the governing bodies and bodies of EDP – Energias de Portugal, SA (“EDP” or “Company”), including all benefits , regardless of the respective form, attributed or due during the 2021 financial year. As provided for in the EDP Articles of Association until the amendments resulting from the General Meeting held on 14 April 2021, the remuneration of the members of the governing bodies was fixed by a Remuneration Committee appointed by the General Meeting, with the exception of the remuneration of the members of the Board of Directors Executive Board, which were set by a Remuneration Committee appointed by the General and Supervisory Board. These Committees submitted annually to the General Shareholders’ Meeting a declaration on the remuneration policy of the members of the governing bodies, pursuant to the provisions of paragraph 1 of article 2 of Law no. 28/2009, of 19 June. With the entry into force of Law no. 50/2020, of 25 August, which transposes Directive (EU) no. 2017/828 of the European Parliament and of the Council of 17 May 2017, is the Remuneration Committee’s responsibility to submit to the Company's General Shareholders’ Meeting a proposal for a Remuneration Policy for the Members of the Governing Bodies. Following the General Meeting held on 14 April 2021, the proposal for the conformation of EDP's Articles of Association was approved, as were the proposal for the remuneration policy of the members of the governing bodies submitted by the Remuneration Committee appointed by the General Meeting, as well as the proposed policy remuneration of the members of the Executive Board of Directors, which was submitted by the Remuneration Committee appointed by the General and Supervisory Board. A. Remuneration policy applicable to members of the Executive Board of Directors approved by the Remuneration Committee appointed by the General and Supervisory Board Procedures for adopting the policy Until the General Shareholders’ Meeting held on 14 April 2021, the definition of the remuneration policy for the members of the management body was defined by the Remuneration Committee appointed by the General and Supervisory Board, which established a fixed component and a variable component. Regarding the variable component, this Committee established the remuneration to be awarded to the directors, seeking to ensure that it reflected the performance of each of the members of the Executive Board of Directors in each year of the mandate (annual variable remuneration), as well as their performance for the entire term of office, by setting a variable component consistent with maximizing EDP's long-term performance (multi- annual variable remuneration). The remuneration policy was revised annually 1 and, with the same periodicity, was subject to the General Shareholders’ Meeting appreciation. The General Shareholders’ Meeting held on 14 April 2021 approved the proposed remuneration 2 policy for the members of the Executive Board of Directors, submitted by the Remuneration Committee appointed by the General and Supervisory Board. As stated in the remuneration policy for the members of the Executive Board of Directors prepared by the Remuneration Committee appointed by the General and Supervisory Board, under the terms of Law no. 50/2020, 25 August, which transposes Directive (EU) no. 2017/828, of the European Parliament and of the Council of 17 May 2017, and considering the Corporate Governance Code of the Portuguese Institute of Corporate Governance (IPCG) adopted by EDP, the beginning of a mandate with a new Executive Board of Directors, and also the approval of a new business plan and the feedback received from analysts and investors on the remuneration system of the Executive Board of Directors, understood the Remuneration Committee of the General and Supervisory Board it was opportune to review the Remuneration Policy of the Executive Board of Directors, submitting the proposal for the Remuneration Policy of the Executive Board of Directors of EDP resulting from the aforementioned revision to the EDP General Shareholders’ Meeting for approval. The policy review work that gave rise to the proposal presented to the General Shareholders’ Meeting was also based on the conclusions of a study requested by the Remuneration Committee of the General and Supervisory Board and carried out 1 For more information, see: Remuneration Report EDP 2020 e Remuneration policy submitted to the General Shareholders Meeting from April 16 th 2020 2 For more information, see: Remuneration Policy approved at the General Shareholders Meeting of April 14 th 2021 237 by an independent consultant, as well as on the advice obtained by the aforementioned Committee in relation to corporate governance matters, good international practices and, in general, the matter of remuneration policy as an instrument to promote the business strategy and the long-term and sustainability interests of EDP, provided by a law firm, based on a benchmark analysis of the remuneration model, both qualitative and quantitative, of companies in the PSI 20 Index and comparable companies in the international electricity sector. In the proposed Executive Board of Directors' Remuneration Policy, the evolution of the remuneration system for directors and other EDP employees, the reduction in the number of members of the Executive Board of Directors, with the functional reorganization of that Board and consequent increase in responsibilities resulting therefrom, in particular for the lower remuneration level of the Executive Board of Directors, also taking into account the reasonable expectations of its members, elected in January 2021, regarding the remuneration model and its adequacy and competitiveness. The consideration of current employment conditions and the remuneration model for EDP's workers and the current economic and financial situation in the country and worldwide also contributed to this end. In fact, the consideration of these elements advised that, on this occasion, and without prejudice to the reduction in the number of levels of fixed remuneration of the members of the Executive Board of Directors, as mentioned below, no further review of the fixed component of the remuneration should be carried out. of the members of the Executive Board of Directors, with the impact that such an option has on the other components of the remuneration, although from the point of view of analysing the functions of the current five members of the Executive Board of Directors and the sector benchmark, such a review could prove to be appropriate. EDP, as the apex of a responsible multinational business group (“Group”) has a solid governing culture that ensures the management, monitoring, control, and supervision of the risks that the Group, its shareholders, employees, customers and, in general, all its stakeholders face, including those arising from the remuneration systems it adopts. EDP adopts remuneration practices transversal to the Group, consistent and based on common principles, which comply with the regulations applicable in the jurisdictions where it carries out its activity. EDP's remuneration systems, including those of the Executive Board of Directors, are defined to promote a culture of merit and high performance that ensures that people and teams are recognized, encouraged and rewarded according to their responsibility, availability, loyalty and competence placed at the service of EDP, guaranteeing action in line with the long- term interests of shareholders and its stakeholders and the promotion of sustainable performance by EDP aligned with ESG (Environment, Social and Governance) objectives. The proposal for the Remuneration Policy for the members of the Executive Board of Directors was also aimed at simplification, transparency, and clarity, favouring a complete understanding of the framework of principles and rules that constitute it, and which will be applied by the Remuneration Committee of the General Board and Supervision. Definition, review, and renewal of the Policy The definition of the remuneration policy of the Executive Board of Directors is submitted for approval by the General Meeting of EDP, at the proposal of the Remuneration Committee of the General and Supervisory Board. Recent changes to the Internal Regulations of the Remuneration Committee of the General and Supervisory Board include the process of reviewing and applying the Remuneration Policy of the Executive Board of Directors, in accordance with the following principles: • The Remuneration Committee of the General and Supervisory Board meets at least once a semester in order to monitor the situation of EDP in relevant matters for the purposes of determining and fixing the variable remuneration of the Chairman of the Executive Board of Directors and the other Directors and for the analysis of relevant information that may justify the consideration of adjustments to the application of the Remuneration Policy, proceeding as necessary and convenient to the hearing of the Financial Matters Committee/Audit Committee and the Corporate Governance and 238 Sustainability Committee of the General and Supervisory Board, of the Executive Board of Directors or any of EDP’s corporate body in terms of compliance, risk management and Human Resources; • The definition and possible proposals for reviewing the Remuneration Policy are based on the articulation of EDP's long- term objectives, measured according to its strategic plan at any given moment, on the conclusions of comparative remuneration studies with national listed companies and with peers’ foreign sectors and in an articulation of principles with the remuneration plan of other workers and employees of EDP; • On an annual basis, the Remuneration Committee of the General and Supervisory Board will assess the opinions expressed by shareholders and analysts on EDP's Remuneration Policy; • The Remuneration Committee of the General and Supervisory Board may hire the consultants and external support necessary to carry out studies on comparative remuneration and best corporate governance practices within the scope of remuneration policies for directors, assessing their independence conditions to the provision of services that may be requested. Without prejudice to (extraordinary) revision proposals, the Remuneration Committee of the General and Supervisory Board should, at least at the end of each term of office, when assessing compliance with the objectives set for the term in question, specifically analyse and decide on a reasoned basis, on the opportunity to propose the revision/update (ordinary) of the Remuneration Policy in any of its components, in order to ensure, at all times and with adequate agility, the fulfilment of the objective of the remuneration policy of retention and attraction of talent. The review of the base remuneration must also imply the weighting, according to benchmark criteria, of the total remuneration model practiced by comparable companies, in order to always ensure that the remuneration model of the members of the Executive Board of Directors of EDP remains balanced, fair, and competitive. Whenever a remuneration policy is proposed for reviewed, all relevant changes introduced will be described and how these changes reflect the votes and opinions expressed by shareholders on the remuneration policy, as well as the remuneration reports issued based on the aforementioned policy. Principles and General Characteristics The Remuneration Policy of the Executive Board of Directors of EDP aims to comply with the applicable legislation, also in terms of its content, under the terms of Article 26-C of the Securities Code (as amended by Law No. 50/2020, of 25 August), the IPCG Corporate Governance Code adopted by EDP and good international practices, being coherent and consistent with the remuneration policy and remuneration practices applied to Group employees. Regardless of the functions performed in companies of the Group, namely at EDP Renováveis, in accordance with the Remuneration policy of the members of the Executive Board of Directors, the members of this Board do not receive any remuneration or benefit from any other company of the Group, being exclusively remunerated through EDP. The remuneration of the members of the Executive Board of Directors must be aligned with the interests of shareholders, be focused on the creation of long-term value and be compatible with adequate and rigorous risk management, thus contributing to the Company's strategy, to its long-term values and interests and for its sustainability. Total remuneration and the remuneration model, in general, must be competitive, aligned with the practices of the international electricity sector and the market, facilitating the attraction and retention of talent, and the commitment to the company's challenges and ambitions. The competitiveness of the remuneration model/system of the Executive Board of Directors must be regularly and periodically assessed, namely through the analysis of the functions performed and benchmark exercises to be carried out with the support of independent entities, which is assumed to be done with a minimum triennial frequency, corresponding to the duration of the term-of-office of the Executive Board of Directors. 239 The Executive Board of Directors' Remuneration Policy ensures a (fixed) base remuneration, the payment of which is not dependent on performance evaluation, which must be fair, competitive, and sufficiently relevant in relation to the total remuneration, in order to allow greater flexibility in the conformation of the variable component of the remuneration. The Remuneration Policy of the Executive Board of Directors comprises a variable remuneration, with an annual component, and a multi-annual component, with the nature of reward/incentive appropriate to the individual and collective performance of the members of the Executive Board of Directors and the promotion of good conduct, considering EDP's short- and long- term, financial, and non-financial objectives that are achieved, and the way in which they were achieved (pay for performance). The annual variable component is linked to financial and non-financial objectives established in accordance with EDP's Annual Budget, evaluated annually, with an impact on the year and subject to evaluation and consequent repercussion in the following years, being paid in cash. The annual variable remuneration must be determined after the approval of EDP's accounts at the Annual General Meeting each year, by reference to the previous year/period of annual performance. The payment of the annual variable remuneration is partially deferred. The multi-annual variable component is linked to the quantitative and qualitative objectives of EDP's Business Plan, the fulfilment of which will be evaluated at the end of a period of three years, with the respective payment subject to partial deferral. The multi-annual variable remuneration is paid exclusively in shares representing the share capital of EDP (“EDP Shares”). The determination of the variable annual and multi-annual remuneration of the members of the Executive Board of Directors in accordance with the Remuneration Policy is the responsibility of the Remuneration Committee of the General and Supervisory Board. The payment of the variable remuneration is subject to the permanence of the member of the Executive Board of Directors at EDP until the end of the annual or three-year period of relevant performance, without prejudice to the provisions of the remuneration policy. In the event that EDP or members of the Executive Board of Directors are responsible, by shareholders or third parties, for intentional unlawful acts of management, the annual and multiannual variable remuneration of the directors in question may, by decision of the Remuneration Committee of the General and Supervisory Board, be suspended or not awarded, until such claims are determined and, in case they are considered valid, the variable remuneration paid during the period of practice of the facts, overdue, or to be awarded, will be reimbursed, retained or not awarded for compensation for damages caused up to the full amount thereof (malus and clawback clauses). In assessing the annual and multi-annual performance of the members of the Executive Board of Directors and determining the amount of the variable remuneration due to them, the Remuneration Committee of the General and Supervisory Board may take into account exceptional circumstances with which EDP does not comply, caused by decisions of a political or administrative nature beyond the control of the members of the Executive Board of Directors, which have an impact on EDP's performance and level of achievement of objectives, neutralizing their impacts on annual and multi-annual performance metrics, provided that it ensures that, in case of reversal of the decisions of a political or administrative nature in question, by means of an arbitration, judicial or arbitration procedure, the members of the Executive Board of Directors will also not benefit from the effects of such reversal decision. Likewise, the Remuneration Committee of the General and Supervisory Board may consider other exceptional conjunctural and exogenous circumstances that EDP is faced with, which have an impact on the Company's performance and the level of achievement of objectives set for its members. of the Executive Board of Directors, adjusting or justifiably adopting appropriate solutions to neutralize, for the benefit of EDP or the members of the Executive Board of Directors, as the case may be, in whole or in part, the impact of said consequences on annual and multi- annual performance metrics. 240 In addition to some of the benefits provided to EDP employees, which the members of the Executive Board of Directors also benefit from, the members of this Board must also benefit, by virtue of the duties performed and in accordance with market practices and EDP's culture from a set of additional benefits, of a non-financial nature. As with EDP employees and in accordance with the legislation and Article 27(1) of EDP's Articles of Association, the Company must provide directors with a supplementary retirement pension due to old age or disability or, in its place, and in accordance with the practice consistently followed by the company, a retirement savings plan or equivalent instrument, namely a unit linked capitalization insurance. The Financial Matters Committee / Audit Committee and the Corporate Governance and Sustainability Committee of the General and Supervisory Board shall, together with the Remuneration Committee of the General and Supervisory Board and at its request, monitor the adequacy and application of the Policy of Remuneration of the Executive Board of Directors and other documents, namely of a regulatory nature that develop it, with a view to ensuring its compliance with the legislation and internal policies and risk culture of EDP, as well as evaluating its effects on the appetite for risk and how such effects are managed. The Remuneration Committee of the General and Supervisory Board ensures certification, by an independent entity, of the application of performance metrics in accordance with the approved Remuneration Policy. Without prejudice to a proposal for an extraordinary review during the term of office according to benchmark criteria, the Remuneration Policy will be valid for a period of three years (2021-2023) and must be the subject of a proposal for renewal or revision to be submitted to the General Meeting of EDP to be held in 2024. EDP’s Executive Board of Directors Members do not enter into contracts, either with the Company or with third parties, the effect of which is to mitigate the risk associated with the variability of the remuneration determined for them by the Company. Apart from the situations described in this Remuneration Report, there are no contracts in force at EDP that foreseeing payments in the event of dismissal or termination by agreement of the directors' duties. Components of the remuneration of the members of the Executive Board of Directors Fixed Component – Base Remuneration The base remuneration of the members of the Executive Board of Directors must be aligned with the base remuneration practiced by a group of companies comparable with Executive Board of Directors, of the national market (PSI 20 Index) and of the international electricity sector, in terms of size, market capitalization, risk profile, relevance and geographic implantation, also considering, at all times, the complexity of the functions performed, the remuneration conditions of EDP workers and the non-increase of the average remuneration gap of the market between workers and managers. Considering the reduction in the number of members of the Executive Board of Directors and the organizational / functional review of this structure with the consequent increase in responsibilities resulting therefrom, in particular the lower remuneration level of the Executive Board of Directors, and without prejudice to the possibility that amendments to this Remuneration Policy may be proposed to the General Shareholders Meeting during the current term, as a result of a complete analysis of the functions of the members of the Executive Board of Directors as a result of the reorganization verified and of the provision in point 2.1.2 below, it was considered adequate to eliminate a remuneration level in the EBD, reducing, in this phase, from three to two, the levels of remuneration of the members of this Board, under the following terms: a) Annual base remuneration of the CEO: € 800,000.00; and b) Annual base remuneration of the other members of the Executive Board of Directors: € 560,000.00. 241 The base remuneration of the members of the Executive Board of Directors is paid in 14 monthly instalments. Variable remuneration The variable remuneration of the members of the Executive Board of Directors is based on the success of the short and long- term performance of EDP, pursuant to the budget and business plan in effect, considering the performance of that Board and the individual performance of each member of the Executive Board of Directors, determined based on parameters of a financial and non-financial nature, individual and collective, absolute, and relative, in the terms indicated below. Annual Component The maximum annual variable remuneration may not be higher than 80% of the base remuneration in force in the year to which the referred annual variable remuneration refers, being determined, and falling due, after the approval of accounts for the year to which it relates. The annual variable remuneration has the nature of an incentive / performance bonus linked to short-term financial and non- financial objectives (linked to the business plan and budget), analysed annually, with a reflection on the year under evaluation and possible repercussions in the following years, being paid in cash. The amount of the annual performance bonus will be determined within three months after the approval of EDP's accounts at the Annual General Shareholders Meeting each year, by reference to the previous annual performance period / period. The annual variable component is limited to 80% of the base remuneration in force in the year to which the referred annual variable remuneration refers, being attributed according to the following parameters, calculated linearly: • If the performance reaches less than 85% of the defined objectives, there is no place for the attribution of an annual variable component; • If the performance achieved is between 85% and 95% of the defined objectives, an amount within the range of 10% and 25% of the fixed reference remuneration of each EBD member is due; • If the performance achieved is between 95% and 100% of the defined objectives, an amount within the range of 25% and 52.5% of the fixed reference remuneration of each EBD member is due; • If the performance achieved is between 100% and 110% of the defined objectives, an amount within the range of 52.5% and 80% of the fixed reference remuneration of each EBD member is due; • If the performance achieved reaches more than 110% of the objectives set, the amount corresponding to 80% of the reference fixed remuneration of each EBD member is due. Graphically: 242 The payment of annual performance bonus is partially deferred in 30% of its value throughout a 2-year period, with the payment to be carried out in 50% each year, with EDP reserving through the REMC the possibility of not applying such deferral when the annual amount of the bonus is not higher than 20% of the relevant base remuneration. Key annual performance indicators (and weights) against the year of reference. • Quantitative component: • Growth – Earnings per share recurring (20%) • Shareholder remuneration – Total Shareholder return vs Eurostoxx utilities (20%) • Balance sheet solidity – Funds from Operations/Net Debit (10%) • Operational efficiency – Recurring Cash OPEX (10%) • ESG indicator(s) (20%) § Dow Jones Sustainability Index Results § Performance in the employees’ yearly climate study § Performance in the customer satisfaction index The 80% resulting from the weighted sum of these indicators reflects a performance that is common to all members of the EBD. The performance level of a given quantitative objective must be greater than or equal to 85% for that same objective to be considered in the calculation of the total performance, and each quantitative objective will have a maximum performance limit of 120%. The remaining 20% result from an individualized qualitative assessment carried out by REMC, based on the individual performance of each of the members of the Executive Board of Directors, and after consulting the EBD, based on the following indicators: • Qualitative component: • Implementation of the Business Plan in the year (25%) • Team management (25%) • Teamwork (25%) • Stakeholder management (25%) 243 The payment of annual variable remuneration is subject to the permanence of the members of the Executive Board of Directors in office until the end of the relevant annual period of performance, without prejudice to the provisions of the Remuneration Policy. KPI WEIGHT COMPARATIVE DESCRIPTION QUANTITATIVE COMPONENT (80%) Growth – Earnings per share recurring 20% Budget 2021 Comparison of the net earnings per share for the year under review with the objective previously defined in the annual budget object of prior favourable opinion by the General and Supervisory Board. Shareholder remuneration – Total Shareholder return vs Eurostoxx utilities 20% SX6E Comparison of profitability for EDP shareholders on the market (TSR) with the TSR of a benchmark index, the Eurostoxx utilities (SX6E, which includes the main companies in the utilities sector in the Euro zone). Balance sheet solidity – Funds from Operations/Net Debit 10% Budget 2021 Comparison of the ratio between Funds from operations and net debt with the objective previously defined in the annual budget approved by the General and Supervisory Board. Operational efficiency – Recurring Cash OPEX 10% Budget 2021 Comparison between the OPEX cash achieved in the year under evaluation with the same indicator considered in the annual budget approved by the General and Supervisory Board. ESG indicators 20% Annual evolution of indices and studies Results of the Dow Jones Sustainability Index, Performance in the annual study of employee climate and performance in the customer satisfaction index. QUALITATIVE COMPONENT (20%) Individual Performance Assessment 20% \- Individual qualitative assessment carried out by the Remuneration Committee of the General and Supervisory Board, based on the individual performance of each of the members of the Executive Board of Directors, and after consulting this body, based on the following indicators: • Implementation of the Business Plan in the year (25%) • Team management (25%); • Teamwork (25%); • Stakeholders’ management (25%) Total 100% 20% 20% 10% 10% 20% 20% ANNUAL PERFORMANCE INDICATORS (%) Individual Performance EPS FFO/NET DEBT Cash OPEX ESG Indicators TSR VS. SX6E 25% 25% 25% 25% QUALITATIVE COMPONET (%) Implementation of the Business Plan in the year Team management Teamwork Stakeholder management 244 0% 20% 40% 60% 80% 100% 120% 140% 160% 80% 90% 100% 110% 120% Variable Multiannual remuneration in % of base annual remuneration Annual performance review Multiannual Component The multiannual variable remuneration will be calculated and will be due within 3 months after the approval of accounts for the last financial year of the three-year period to which it relates, and will be paid in EDP Shares. The number of EDP shares to be awarded to each member of the Executive Board of Directors will be the one resulting from the quotient between the value of the remuneration calculated as to be paid in EDP shares after performance evaluation, and the price attribution of EDP shares corresponding to the average price of EDP shares in the last month prior to the General Shareholders' Meeting on 14 April 2021: EUR. 4.95. The multi-annual variable remuneration will be measured according to the fulfilment of long-term financial and non-financial objectives in accordance with the Business Plan approved by EDP, including the Company's sustainability metrics within the scope of ESG (Environment, Social and Governance) policies and objectives. The payment of two thirds of the multi-annual variable remuneration payable in EDP shares will be deferred and must be paid in two equal and successive annual instalments, ensuring that the payment of the multi-annual variable remuneration is made in the third year after each year of performance of the plan. multiannual year in reference, the first one due, respectively, and the second two years after the annual General Meeting at which the EDP accounts corresponding to the last year of the term in question are approved. The payment of a significant part of the component of the multiannual variable remuneration in EDP shares reinforces the focus on the capital market and the alignment of interests of the members of the Executive Board of Directors with those of shareholders. The maximum multiannual variable remuneration cannot be higher than 145% of the base remuneration earned during the three-year benchmark period, being attributed according to the following parameters, calculated on a linear basis: • If the performance achieved is less than 85% of the defined objectives, there will be no multiannual variable remuneration attribution; • If the performance achieved is between 85% and 95% of the defined objectives, it is due an amount within the range of 15% and 40% of the base total remuneration of each EBD member; • If the performance achieved is between 95% and 100% of the defined objectives, it is due an amount within the range of 40% and 97.5% of the base total remuneration of each EBD member; • If the performance achieved is between 100% and 110% of the defined objectives, it is due an amount within the range of 97.5% and 145% of the base total remuneration of each EBD member; • If the performance achieved meets the defined objectives in more than 110%, it is due an amount equal to 145% of the fixed remuneration of each EBD member. Graphically: 15% 40% 97.5% 145% 245 Key multi-annual performance indicators for the three-year term of office (and weightings) against the 2021-2025 Business Plan subject to a prior favourable opinion of the General and Supervisory Board of 24 February 2021, after approval by the Executive Board of Directors • Quantitative component: • Shareholder remuneration - Total shareholder return vs Eurostoxx utilities (40%) • Growth - Earnings per share recurring cumulative (20%) • ESG indicators (20%) § Increase of share of renewable energy production § Emissions reduction § Bloomberg Gender Diversity Index Performance The 80% resulting from the weighted sum of these indicators reflects a performance that is common to all members of the EBD. The performance level of a given quantitative objective must be greater than or equal to 85% for that same objective to be considered in the calculation of the total performance and each quantitative objective will have a maximum performance limit of 120%. The remaining 20% result from an individualized qualitative assessment carried out by the REMC, based on the individual performance of each of the members of the EBD, and after consulting the EBD, based on the following indicators: • Qualitative component: • Strategy and execution (25%) • Employee development (25%) • Teamwork and new forms of working (25%) • Stakeholders Management (25%) The multiannual variable remuneration will only be due if, at the end of the mandate and considering the entire term of the mandate, an average of 85% of the objectives set has been reached. The payment of the multi-annual variable remuneration is subject to the permanence of the members of the Executive Board of Directors in office until the end of the three-year period of relevant performance, without prejudice to the provisions of the Remuneration Policy. 246 The members of the Executive Board of Directors are prohibited from entering into contracts, either with EDP or with third parties, which have the effect of mitigating the risk inherent to the variability of the remuneration set for them by EDP. KPI WEIGHT COMPARATIVE DESCRIPTION QUANTITATIVE COMPONENT (80%) Total shareholder return (TSR) vs Eurostoxx utilities 40% SX6E Comparison of the return generated for EDP shareholders on the market (TSR) with that of the Eurostoxx utilities benchmark index (SX6E, which includes the main companies in the utilities sector in the Euro zone). This comparison is made between quotations at the end of the three-year period and considers the reinvestment of dividends received in the period. Earnings per Share recurring cumulative 20% Business plan Comparison of net earnings per share with the target previously defined for that year in the multi-annual Business Plan object of prior favourable opinion by the General and Supervisory Board. ESG indicators 20% Multi-annual evolution of renewables penetration, emission reduction and index This indicator assesses the increase in penetration of renewables, reduction of emissions, Bloomberg Gender Diversity Index. QUALITATIVE COMPONENT (20%) Individual Performance Assessment 20% \- Individual assessment of the performance in the period considered of each of the members of the Executive Board of Directors carried out by the Remuneration Committee of the General and Supervisory Board, and after consulting the Executive Board of Directors, based on the following indicators: v Strategy and execution (25%) v Employees’ development (25%) v Teamwork and new forms of working (25%) v Stakeholders’ management (25%) Total 100% Below is a summary table of the remuneration framework applicable to members of the Executive Board of Directors: MULTIANNUAL PERFORMANCE INDICATORS (%) TSR VS. SX6E EPS ESG Indicators Individual Performance 20% 20% 20% 40% 25% 25% 25% 25% QUALITATIVE COMPONENT (%) Strategy and execution Employee development Teamwork and new forms of working Stakeholder Management 247 ELEMENT Approved at GSM 2021 2021 2022 2023 2024 2025 2026 FIXED COMPONENT Fixed Remuneration Defined by REMC Retirement Savings Plan Net amount corresponding to 10% of the base remuneration Other benefits Insurance, use of car VARIABLE REMUNERATION – ANNUAL COMPONENT Variable Remuneration Maximum of 80% of fixed remuneration 70% - award 2021 15% - award 2021 15% - award 2021 70% - award 2022 15% - award 2022 15% - award 2022 70% - award 2023 15% - award 2023 15% - award 2023 VARIABLE REMUNERATION – MULTIANNUAL COMPONENT Variable Remuneration Maximum of 145% of fixed remuneration Performance period 1/3 of award 2021-23 1/3 of award 2021-23 1/3 of award 2021-23 OTHER CORPORATE GOVERNANCE TOPICS Clawback and Malus rules Remuneration paid during the period in which the facts were committed, overdue, or to be awarded, will be refunded, retained, or not awarded Clawback and Malus: the right to variable remuneration and its effective payment is conditioned to the non-performance, by the members of the Executive Board of Directors, of any wilful unlawful acts known after the evaluation has been carried out and that cause damage to EDP or jeopardize the sustainability of performance of EDP and are the subject of a claim for damages against EDP, presented by shareholders or third parties. Performance evaluation to be carried out by the Remuneration Committee of the General and Supervisory Board Under the terms of the remuneration policy in force, the remuneration of directors comprises a qualitative component, namely in relation to the annual variable remuneration (weighted by the individual performance evaluation of each of the members of the Executive Board of Directors, representing 20% and taking into account performance during one year) and in relation to the multi-annual variable remuneration (weighted by the individual performance evaluation of each of the members of the Executive Board of Directors, representing 20%, and taking into account the performance during the three-year period). For this purpose, the General and Supervisory Board carries out a self-assessment of its activity and performance, as well as of the respective Committees, whose conclusions are presented in the annual activity report of the General and Supervisory Board (Article 12 of the Internal Regulations of the General and Supervisory Board). This corporate body also carries out an independent assessment of the activity and performance of the Executive Board of Directors, conclusions of which are presented to the General Shareholders’ Meeting and annexed to above referred report. EDP, on the initiative of the General and Supervisory Board, voluntarily instituted a formal and objective process to assess both the activity of this body and the activity of the Executive Board of Directors. The experience of recent years has allowed the General and Supervisory Board to introduce some changes to the process with a view to making it more effective and efficient. During 2021, the methodology adopted comprised the following steps: 248 • Conduction of the process of collective evaluation of the General and Supervisory Board, its Specialized Committees, and the Executive Board of Directors by an external entity, with a view to carrying out interviews based on individual questionnaires to the members of the supervisory body and to support in completing and validation of the treatment of information supporting the evaluation process; • At the beginning of 2022, each member of the General and Supervisory Board responded to an interview conducted by specialized consultants, answering questions of a quantitative and qualitative nature; namely, issues related to the composition, organization and functioning, performance of the General and Supervisory Board's activity and the relationship of this Board with its Specialized Committees and with other EDP governing bodies were analysed; Likewise, issues related to the composition and organization of the Executive Board of Directors, performance of the respective activity and the relationship between the Executive Board of Directors and the General and Supervisory Board were analysed, including with other interlocutors; • Assessment reports were produced by the General and Supervisory Board, its Specialized Committees, and the Executive Board of Directors, which are made available for consideration at a meeting of the General and Supervisory Board; • At a meeting, the General and Supervisory Board issued the respective assessment opinions, which are included in this body's annual activity report; • At the General Meeting, in the point concerning the assessment of the Executive Board of Directors, the Chairman of the General and Supervisory Board presents the respective opinion. In 2021, the Remuneration Committee of the General and Supervisory Board hired an external consultant, Mercer (Portugal), Lda., to provide support in the validation and certification of the calculation of the annual and multi-annual variable remuneration of the members. of the Executive Board of Directors. In January 2022, the General and Supervisory Board also contracted Mercer (Portugal), Lda. to provide services within the scope of certification of the evaluation process of the aforementioned body, its Specialized Committees, and the Executive Board of Directors. These certifications can be consulted in the 2021 Annual Report of the General and Supervisory Board. Maximum potential amount in case of full compliance with the defined objectives By reference to each year of term-of-office, the maximum potential amount to be attributed to the members of the Executive Board of Directors per mandate, in the event of full compliance with the defined objectives, which implies the payment of the maximum amounts fixed for the annual and multi-annual variable remuneration, under the terms described above, is the following: • Chairman of the Executive Board of Directors: 2,600,000 Euros • Remaining members of the Executive Board of Directors: 7,280,000 Euros • Total amount: 9,880,000 Euros Itemized Remuneration The gross global amount paid by EDP to the members of the Executive Board of Directors in 2021 was 10,691,416 Euros, of which 6,249,774 Euros refer to the 2021-2023 term of office starting on 19 th January 2021. The following chart illustrates the breakdown between the amounts paid, in millions of Euros, during 2021 for each of the mandates: 249 Remuneration of the Executive Board of Directors (millions of EUR.) The table below shows, in Euros, the gross remuneration amounts paid in 2021, individually, to the members of the Executive Board of Directors in office until 19 January 2021, regarding the 2018-2020 term of office: GROSS REMUNERATION PAID BY EDP (1) FIXED ANNUAL COMPONENT (2020) MULTIANNUAL COMPONENT (2018) TOTAL António Luís Guerra Nunes Mexia 48,424 558,626 727,952 1,335,002 João Manuel Manso Neto 33,897 391,038 500,629 925,564 António Fernando Melo Martins Costa 24,902 329,251 383,146 737,299 João Manuel Veríssimo Marques da Cruz 14,518 211,361 250,876 487,262 (2) Miguel Stilwell de Andrade 32,932 402,942 500,629 936,503 Miguel Nuno Simões Nunes Ferreira Setas 110,184 (3) 224,388 289,559 864,131 (4) Rui Manuel Rodrigues Lopes Teixeira 27,366 340,771 413,789 781,926 Maria Teresa Isabel Pereira 25,485 329,251 413,789 768,525 Vera de Morais Pinto Pereira Carneiro 28,016 333,859 421,450 783,325 (1) The remuneration of the members of the Executive Board of Directors includes the amounts related to the Retirement Savings Plan. (2) The total amount includes EUR. 10,507 paid by companies of the EDP Group (according to the remuneration table paid by companies in a controlling relationship). (3) This amount includes an exchange/tax adjustment in the amount of Eur. 96,170 relative to the previous year. (4) The total amount includes 240,000 Euros paid by companies of the EDP Group (as per the table below of remuneration paid by companies in a controlling relationship). The table below shows, in Euros, the gross remuneration amounts paid in 2021, individually, to the members of the Executive Board of Directors in office since 19 January 2021, in relation to the 2021-2023 term of office, as well as the total earned by each of these members in 2021: GROSS REMUNERATION PAID BY EDP (*) FIXED FROM 19 JANUARY 2021 TO 14 APRIL 2021 FIXED FROM 14 APRIL 2021 TO 31 DECEMBER 2021 TOTAL (TERM 2021-2023) TOTAL 2021 (TERM 2018-2020 AND 2021-2023) Miguel Stilwell de Andrade 230,863 686,701 917,564 1,854,067 Miguel Nuno Simões Nunes Ferreira Setas 72,262 440,647 512,909 1,377,040 Rui Manuel Rodrigues Lopes Teixeira 160,789 481,442 642,231 1,424,157 Vera de Morais Pinto Pereira Carneiro 144,197 481,036 625,233 1,408,557 Ana Paula Garrido de Pina Marques 143,299 481,150 624,450 624,450 (*) The remuneration of the members of the Executive Board of Directors includes the amounts related to the Retirement Savings Plan. The amounts of variable remuneration were fixed based on the tax treatment applicable in the country in which the Director was tax resident. The amounts paid by companies’ majority owned by EDP refer exclusively to the period of residence abroad. The table below shows the gross remuneration paid to members of the Executive Board of Directors by other companies in a controlling or group relationship or that are subject to a common control. 250 EUROS GROSS REMUNERATION PAID BY EDP FIX ANNUAL COMPONENT (2020) COMPANIES IN DOMAIN RELATIONSHIP João Manuel Veríssimo Marques da Cruz 10,507 0 EDP - Asia Soluções Energéticas, Lda. Miguel Nuno Simões Nunes Ferreira Setas 240,000 0 EDP - Energias do Brasil, S.A. Additional benefits The members of the Executive Board of Directors also benefit from the following additional benefits: • Payment of an annual Life Insurance and Personal Accident Insurance premium (along with the other associated costs), under the terms that will take as reference the policies in force at EDP; • Payment of an annual premium for / co-payment of / access to Health Insurance, extendable to spouse and children (along with other associated costs), under the terms that will take as reference the policies in force at EDP; • Use of a vehicle, in terms of the culture and practice consistently followed at EDP for service vehicles, which includes, for the members of the Executive Board of Directors, the assignment of a driver, payment of costs and expenses related to the vehicle and its use. The benefits and rights granted to the members of the Executive Board of Directors under the employment contracts they have entered into with EDP will be suspended during the exercise of their duties as members of the Executive Board of Directors, thus not adding to the benefits and rights above indicated. The benefits and rights attributed to the members of the Executive Board of Directors under the terms of the Remuneration Policy may, by decision of the Remuneration Committee of the General and Supervisory Board, with a favourable opinion from the Corporate Governance and Sustainability Committee, be adjusted according to the practices market and continued alignment with EDP's general Human Resources policy applicable at any given time, and must be justifiably reported in the first remuneration report that is presented after the aforementioned adjustment. Pursuant to Article 402 of the Portuguese Companies Code and Article 27(1) of EDP's Articles of Association, the Company may create old-age or disability retirement pension supplements in favour of the members of the Executive Board of Directors. EDP has not created a supplementary retirement pension fund or plan for directors, instead making annual contributions / or co-contributions with the director to a Retirement Savings Plan (PPR) in a net amount corresponding to 10% of the respective remuneration base. The PPR is subscribed by EDP with the insurance company of its choice, indicating the director as an insured person, with EDP's defined contribution paid in 12 monthly instalments. The PPR characteristics will correspond to the usual characteristics in the market for this type of product, being refundable before the end of the respective term, under the terms legally applicable to these financial products. The PPR currently available to the members of the Executive Board of Directors may, with a favourable opinion from the Remuneration Committee of the General and Supervisory Board, be replaced by unit linked capitalization insurance or equivalent vehicle, depending on the offer and market practices at any given time. Malus and clawback rules The right to variable remuneration and its effective payment is conditioned to the non-performance, by the members of the Executive Board of Directors, of any malicious illegal acts known after the evaluation has been carried out, and which cause damage to EDP or jeopardize the sustainability of performance of EDP and are the subject of a claim for compensation to EDP, by shareholders or third parties. If the provisions of the previous paragraph are verified, the variable remuneration paid during the period of practice of the facts, overdue, or to be awarded, will be reimbursed, withheld, or not awarded to compensate for the damages caused up to the competition of the full amount thereof. 251 Exceptional payments arising from termination of service and non- compete agreements Following the suspension of duties, during 2020, of Dr. António Luís Guerra Nunes Mexia, Chairman of the Executive Board of Directors for the three-year period 2018-2020, and of Dr. João Manuel Manso Neto, Director of the Company in the same term, by court order issued within the scope of the process concerning the termination of Energy Acquisition Contracts and transition to the Contractual Balance Maintenance Costs regime and the extension of the use of the Public Hydric Domain, and the conclusion with EDP, on 20 November 2020, of termination of office and non-compete agreements, it was agreed that EDP would maintain the obligation to pay the aforementioned Directors the monetary amounts due as remuneration in relation to the mandate elapsed between 2018 and 2020, including the respective fixed and variable, annual and pluriannual, whose evaluation is the responsibility of the Remuneration Committee of the General and Supervisory Board, under the terms in force in the respective the remuneration policy statement approved by this Committee and submitted to the appreciation of the General Meeting. Given that the aforementioned Directors had access, as a result and inherent in the performance of their duties, for a period of fourteen years, to knowledge and extensive privileged and particularly sensitive information in terms of competition in relation to the strategy and business of the EDP Group , non-compete pacts were also signed with reference to the period after termination of duties. According to the analysis that preceded the conclusion of the termination of functions and non- compete agreements, the interests of the signatory parties were duly safeguarded, with the respective final terms being based on the best market practices. As consideration for the non-compete obligation, EDP undertook to pay to Dr. António Luís Guerra Nunes Mexia, for a period of three years, the amount of 800,000 Euros and the maintenance, during the same period, of the payment of insurance premiums and life insurance, as well as the PPR Life Insurance whose net amount represents 10% of the fixed annual remuneration, and to Dr. João Manuel Manso Neto, for a period of three years, the amount of 560,000 Euros and the maintenance , during the same period, of the payment of a PPR Life Insurance premium, the net amount of which represents 10% of the fixed annual remuneration. The termination and non-compete agreements entered into were subject to approval by the Remuneration Committee of the General and Supervisory Board, under the terms of article 429 of the Commercial Companies Code, article 27 of the EDP Statutes and the article 12, point h) of the Internal Regulations of the Remuneration Committee of the General and Supervisory Board at a meeting held on 13 November 2020, and the General and Supervisory Board, at the meeting held on 17 November 2020, expressed its agreement to the respective conclusion and conferred powers to two members of the Remuneration Committee of the General and Supervisory Board to represent the Company in the signature of the referred agreements. In this context, in 2021, 400,000 Euros were paid to Dr. António Mexia as consideration for the non-compete obligation, in January and July, totalling 800,000 Euros, as well as the aggregate amount of 65,069.17 Euros relating to insurance premiums health and life insurance and PPR Life Insurance. In January 2021, the gross amount of 280,000 Euros was paid to Dr. João Manuel Manso Neto, and in March 2021, Dr. João Manso Neto refunded the net amount of 233,800.00 Euros, as a result of the unilateral termination, regarding the non- compete obligations, relating to the Termination of functions and Non-Compete Agreement. In May 2021, the amount of 5,548.39 Euros, which had been credited in the PPR of Dr. João Manso Neto, was also refunded to EDP. B. Remuneration policy applicable to members of the Governing Bodies approved by the Remuneration Committee elected by the General Meeting The Remuneration Committee elected by the General Meeting takes into account, for the purposes of the proposed remuneration policy for the members of the General and Supervisory Board, the Board of the General Meeting and the Statutory Auditor, namely, their fixed nature, as well as the mandatory rules on their determination, in particular the provisions of number 2 of article 440 of the Commercial Companies Code, which explains the criteria for determining the remuneration of the General and Supervisory Board, in article 374-A of the Commercial Companies Code, pursuant to Law no. 50/2020, of 25 August, on the remuneration of members of the Board of the General Meeting and in article 60 of Decree- Law no. 224/2008, of 20 November, on the remuneration of the Statutory Auditor. 252 It is therefore incumbent upon the Remuneration Committee elected at the General Meeting to set the remuneration of the members of the following governing bodies: Board of the General Meeting, Chairman and members of the General and Supervisory Board, Statutory Auditor and the Environment and Sustainability Board. The Financial Matters Committee/Audit Committee is treated together with the other Specialized Committees of the General and Supervisory Board. Considering the competence of the Remuneration Committee elected at the General Meeting, its attributions aim to define fixed remuneration, so the legal determinations and others relating to variable remuneration, with their various dimensions, are not applicable here, without prejudice to the necessary alignment, underlying the principles that shape remuneration policies, anchored, namely in the EDP Business Plan for the period 2021-2025. Procedures for adopting the policy In the definition of the Remuneration Policy, proposals are made to ensure that remuneration is adequate, contribute to the business strategy and sustainability of EDP and reflect the risk profile and the long-term objectives and interests of EDP, showing still complying with legal norms, principles, and relevant national and international recommendations. The Remuneration Committee elected by the General Shareholders’ Meeting is also attentive to market references, following benchmark studies carried out in due course. Also in defining this policy, the Remuneration Committee elected by the General Meeting maintains interactions both with members of the relevant governing bodies and with the Company's stakeholders. As is the case of the Executive Board of Directors, the General and Supervisory Board and its Specialized Committees, the Remuneration Committee elected by the General Shareholders’ Meeting develops mechanisms for the prevention and management of conflicts of interest, under the terms set out in article 10 of the EDP Statutes, observing the following essential rules: (i) When a member of the Remuneration Committee is in a situation of actual or apparent conflict of interest in a decision to be taken by this body, he must previously inform the Committee of the facts that may constitute or give rise to a conflict between his interests and the Social. (ii) In the situation referred to in the previous number, the member of the Remuneration Committee must abstain from participating and voting at the meeting in which the topic is discussed and voted on, without prejudice to the duty to provide information and clarifications that the Committee or the respective members ask you. It should also be noted that, under the statutory terms, the Remuneration Committee elected by the General Meeting is composed of a majority of independent members. General Definition and Characterization When defining the remuneration policy presented by the Remuneration Committee and approved at the General Meeting, held on 14 April 2021, the following factors were considered: (i) There is a renewal of the governing bodies with some depth, with the decrease in the number of members of the General Supervisory Board being highlighted; (ii) Experience has shown that the functions are increasingly demanding and complex, which requires greater availability of this body, and it should be noted that, in 2020, instead of the eleven annual meetings that were usually held, there were nineteen; (iii) The remuneration of the governing bodies, with the exception of the remuneration of the Chairman of the General Supervisory Board, has not changed since 2009, and in that year there was a reduction in relation to the 2006/2008 term of office; (iv) Remuneration must also consider market comparables and be sufficiently attractive and adjusted to the responsibilities of the functions; 253 (v) The current remuneration of the members of the General Supervisory Board is, for the reasons mentioned above, well below market comparables, namely in the sector in which EDP operates. The proposed Remuneration Policy for the Members of the Governing Bodies aims to comply with the provisions of Law no. 50/2020, 25 August, and incorporate the corporate governance guidelines set out in the IPCG Corporate Governance Code and adopted by the Company, framing within the guidelines that have been defined by the Company's reference shareholders, which are formulated in accordance with the aforementioned applicable rules and recommendations and with the best practices existing in the sector. It should be noted, as already mentioned, that the proposal for the Remuneration Policy for the Members of the Governing Bodies has a necessarily limited and reduced scope, since the definition of the remuneration policy for the members of the Executive Board of Directors is in charge of the Remuneration of the General and Supervisory Board. Therefore, the scope of the proposed Remuneration Policy does not include any variable remuneration to directors, remuneration based on shares or any other remuneration complement, a matter that is the responsibility of the Remuneration Committee of the General and Supervisory Board. For this reason, several legal provisions deriving from Law no. 50/2020, 25 August, concerning the referred matters, notably, those set forth in Article 26-C (3) (4). Principles underlying the remuneration policy of the members of the Governing Bodies (excluding that of the Executive Board of Directors) The Remuneration Committee elected by the General Shareholder’s Meeting defined the remuneration policy for the members of the General and Supervisory Board, having as a guiding principle that it should be simple, transparent, moderate, adapted to the working conditions performed and the Company's economic situation, but, also competitive and equitable, in order to guarantee the purpose of creating value for shareholders and other stakeholders. The Remuneration Committee elected by the General Shareholders’ Meeting based its decisions on remuneration policy on the following main guiding principles: (i) Definition of a simple, clear, understandable, transparent policy in line with EDP's culture, so that the remuneration practice can be based on uniform, consistent, fair, and balanced criteria. (ii) Definition of a policy consistent with effective risk management and control, to avoid excessive exposure to risk and conflicts of interest and seeking consistency with the Company's long-term objectives and values. (iii) Evaluation and encouragement of a judicious action in which merit must be duly rewarded, ensuring levels of homogeneity compatible with the necessary cohesion of the General Supervisory Board, while also considering the economic and financial situation of the company and the country, even though EDP operates on a global scale. (iv) Alignment of the remuneration of the various members of the governing bodies by companies with the highest market capitalization and European counterparts, naturally adapted to the Portuguese market. (v) The most recent recommendations issued by the European Union and the Securities Market Commission. (vi) Alignment of remuneration with the specific responsibilities inherent to the position in question. (vii) Alignment of remuneration with the time required to spend in each position. (viii) Simplification of the remuneration policy. Structure of the remuneration policy for the members of the Governing Bodies (excluding that of the Executive Board of Directors) Based on these criteria and considering the challenges that the Company intends to pursue during the next term of office, the Remuneration Committee elected by the General Meeting decided that the following guidelines should apply 254 (i) A distinction must be maintained between the remuneration attributed to the members of the General Supervisory Board and those fixed to the members of the Executive Board of Directors, with the former not being allocated a variable remuneration component or any other remuneration supplement. (ii) The performance with merit and the complexity of the functions performed by the members of each body must be considered, so that the cohesion, stability, and development of the Society are not jeopardized. (iii) Regarding the Chairman of the General Supervisory Board, it must be considered that the functions require great availability and include a strong component of institutional representation. He may also chair the Financial Matters Committee/Audit Committee, without additional remuneration. (iv) If the chairmanship of the Financial Matters Committee/Audit Committee is assigned to another member of the General Supervisory Board, other than its Chairman, he/she must have a compatible remuneration, depending on the responsibility of the position and the requirement of availability. (v) In any case, the Chairman of the General Supervisory Board, or the Chairman of the Financial Matters Committee/Audit Committee, if they are separate persons, may not accumulate any other remuneration in relation to the basis assigned to them. (vi) It is also important to differentiate the performance of other specific functions, within the scope of the General Supervisory Board, namely the participation of members of the General Supervisory Board in other committees, as well as the functions performed in these committees. (vii) Finally, it should be considered that, historically, the remuneration of the Chairman of the Board of the General Meeting is similar to the remuneration attributed to the Chairman of a Committee. For this reason, the remuneration of the Chairman of the Board is aligned accordingly, and his inherent membership of the position of Member of the General Supervisory Board is also considered. C. Specifics applicable to the remuneration of the members of the General and Supervisory Board In compliance with the provisions of article 440 of the Commercial Companies Code, the remuneration of the members of the General and Supervisory Board is of a fixed nature, considering the duties performed. The remuneration policy currently in force was approved at the General Shareholders’ Meeting held on 14 April 2021. The remuneration of the Chairman of the General and Supervisory Board was set considering, namely, the necessary availability for the performance of his duties as well as the important component of institutional representation required. The remuneration of the Chairman of the General and Supervisory Board also includes the costs associated with the use of the vehicle and its driver. Remuneration limits Accordingly, and considering the aforementioned, the Remuneration Committee elected by the General Shareholders’ Meeting submitted to the shareholders the proposal for the gross remuneration of the members of the governing bodies identified below, for the financial year that began on 14 April 2021 and until the term of office, under the terms that follow: GENERAL AND SUPERVISORY BOARD ANNUAL REMUNERATION Chairman of the General and Supervisory Board: EUR. 515,000.00 Member of the General and Supervisory Board: EUR. 70,000.00 FINANCIAL MATTERS COMMISSION / AUDIT COMMITTEE: the following values add to the base remuneration ANNUAL REMUNERATION 255 President: \+ EUR. 73,000.00 ( 3 ) (total de EUR. 143,000.00) Member: \+ EUR. 25,000.00 OTHER COMMITTEES: MEMBER OF THE GENERAL AND SUPERVISORY COUNCIL WHO ACCUMULATES FUNCTIONS IN ONE OR MORE COMMITTEES: ANNUAL REMUNERATION For each Commission in which he participates as President: \+ EUR. 25,000.00 For each Committee in which you participate as a Member: \+ EUR. 20,000.00 Regarding the establishment of the remunerations listed above, the following rules are also added: • The Chairman of the General and Supervisory Board and the Chairman of the Financial Matters Committee/Audit Committee (if not the Chairman of the General Supervisory Board), even if they form part of other committees, will not have any additional remuneration. • No other Member of the General and Supervisory Board may, in addition to the basic remuneration, accumulate remuneration in more than two committees, in accordance with the rules referred to above, even if they participate in a greater number. Amounts earned broken down The gross global amount paid by EDP to the members of the General and Supervisory Board in 2021 was 2,053,113.70 Euros. The following table shows the amounts of remuneration paid during the 2021 financial year to members of the General and Supervisory Board in office, during the 2018-2020 term, until 14 April 2021: MEMBERS OF THE GENERAL AND SUPERVISORY BOARD FIX EUROS Luís Filipe Marques Amado 148,778 China Three Gorges (Portugal), Sociedade Unipessoal, Lda.( 1 ) 55,828 China Three Gorges Corporation 27,181 China Three Gorges International Corp. 16,778 China Three Gorges (Europe), S.A. 19,640 China Three Gorges Brasil Energia Ltda 16,984 Banco Comercial Português, S.A. 16,467 DRAURSA, S. A. ( 2 ) 26,716 SONATRACH 16,467 Senfora BV 16,467 Fernando Maria Masaveu Herrero 19,169 Maria Celeste Ferreira Lopes Cardona 23,111 Ilídio Costa Leite Pinho 16,467 Jorge Avelino Braga Macedo 19,356 Vasco Joaquim Rocha Vieira 19,356 Augusto Carlos Serra Ventura Mateus 19,356 João Carvalho das Neves 32,903 María del Carmen Fernández Rozado 20,028 Laurie Lee Fitch 16,308 Clementina Maria Dâmaso de Jesus Silva Barroso 31,041 Luís Maria Viana Palha da Silva 20,028 3 Applicable in this term of office, since the function is not performed by the Chairman of the General Supervisory Board. 256 (1) Remuneration paid to the representative Eduardo de Almeida Catroga (2) Of the total amount, EUR. 7,500 are due to adjustments in relation to the 2020 financial year The following table shows the amounts of remuneration paid during the 2021 financial year to the members of the General and Supervisory Board in office, for the 2021-2023 term, as of April 14, 2021: MEMBERS OF THE GENERAL AND SUPERVISORY BOARD FIX EUROS João Luís Ramalho de Carvalho Talone 397,653 China Three Gorges Corporation 49,972 China Three Gorges International Limited 49,503 China Three Gorges (Europe), S.A. 63,779 China Three Gorges Brasil Energia Ltda. 63,575 China Three Gorges (Portugal), Sociedade Unipessoal, Lda.( 1 ) 67,819 DRAURSA, S. A. 78,481 Fernando Maria Masaveu Herrero 64,250 João Carvalho das Neves 102,086 María del Carmen Fernández Rozado 82,097 Laurie Lee Fitch 78,528 Esmeralda da Silva Santos Dourado 78,528 Helena Sofia da Silva Borges Salgado Fonseca 82,097 Zili Stephen Shao 64,250 Sandrine Dixson-Declève 64,250 Luís Maria Viana Palha da Silva 67,819 (1) Remuneration paid to the representative Dr. Miguel Espregueira Mendes Pereira Leite D. Specifics applicable to the remuneration of the Statutory Auditor Contractual nature At the General Shareholders’ Meeting held on 14 April 2021, PriceWaterhouseCoopers & Associados - Sociedade de Revisores de Contas, Lda., Sociedade Revisor Oficial de Contas number 183, represented by João Rui Fernandes Ramos (ROC n.º 1333), was re-elected to Statutory Auditor for the three-year period 2021-2023, having, on the same date, been re- elected Aurélio Adriano Rangel Amado (ROC n.º 1074), as Substitute of the Statutory Auditor, to perform duties during the aforementioned three-year period. The Remuneration Committee elected by the General Shareholders’ Meeting decided that the remuneration of the Statutory Auditor will correspond to the amounts contained in the “Agreement for the Provision of Legal Audit Services” entered into between EDP and PricewaterhouseCoopers & Associados - Sociedade de Revisores de Contas, Lda. Scope of activity and services provided PriceWaterhouseCoopers is responsible for carrying out the independent external audit of all the companies that make up the EDP Group, namely in Portugal, Spain, Brazil (only EDP Renováveis companies) and the United States of America, as well as in other countries where the Group is located. gift. In the EDP Energias do Brasil sub-group, the independent external audit is performed by KPMG. All services provided by the Statutory Auditor during the 2021 financial year are detailed in chapter 4, point 46, of this Annual Report. Fees earned 257 PRICEWATERHOUSECOOPERS EUROS PORTUGAL SPAIN BRAZIL USA OTHER COUNTRIES TOTAL Audit and statutory audit of accounts 2,497,251 1,313,630 188,719 1,290,216 1,084,298 6,374,114 Other assurance of reliability services (*) 928,094 316,214 6,000 \- 14,865 1,265,173 Total of audit and assurance of reliability services 3,425,345 1,629,844 194,719 1,290,216 1,099,163 7,639,287 98% Tax consultancy services \- \- \- \- \- \- Other services 18,800 1,542 168,483 \- \- 188,825 Total of other services 18,800 1,542 168,483 \- \- 188,825 2% Total 3,444,145 44% 1,631,386 21% 363,202 2% 1,290,216 16% 1,099,163 14% 7,828,112 100% (*) Includes assurance of reliability services of the exclusive competence and responsibility of the Statutory Auditor and External Auditor in accordance with the Regulations on Provision of Services by Statutory Auditor or Statutory Auditing Company approved by the General and Supervisory Board. The amount of fees for “Audit and statutory auditing” in Portugal includes 1,711,710 Euros corresponding to the fees for statutory audit of the annual, individual and consolidated accounts of EDP - Energias de Portugal, S.A. KPMG EUROS BRAZIL TOTAL Audit and statutory audit of accounts 432,913 432,913 Other assurance of reliability services 43,342 43,342 Total of audit and assurance of reliability services 476,254 476,254 100% Tax consultancy services \- \- Other additional services \- \- Total of other services \- \- -% Total 476,254 100% 476,254 100% Services other than Audit and Legal Review of Accounts requested by Group companies from the External Auditor and other entities belonging to the same network, amounted to 1,497,340 Euros. E. Particulars applicable to the remuneration of the Environment and Sustainability Board Under the terms of the current remuneration policy, approved by the General Shareholders’ Meeting on 14 April 2021, the members of the Environment and Sustainability Board are entitled to receive an attendance fee per meeting in the amount of 1,750 Euros. In the 2021 financial year, the members of the Environment and Sustainability Board earned the remuneration indicated in the following table: 258 ENVIRONMENT AND SUSTAINABILITY BOARD ( 1 ) FIXED EUROS José Manuel Caré Baptista Viegas 8,750 ( 2 ) Joana Pinto Balsemão ( 3 ) \- Joaquim Manuel Veloso Poças Martins 7,000 ( 4 ) Maria Mendiluce 0 Pedro Manuel Sousa Mendes Oliveira 7,000 ( 5 ) (1) António José Tomás Gomes de Pinho, member of the Environment and Sustainability Board during the 2018-2020 term, earned EUR. 5,250 related to previous years. (2) Of the total amount, EUR. 5,250 are due to adjustments related to previous years. (3) Waived the respective remuneration. (4) Of the total amount, EUR. 1,750 are due to adjustments related to previous years. (5) Of the total amount, EUR. 1,750 are due to adjustments related to previous years. F. Particulars applicable to the remuneration of the Remuneration Committee of the General Meeting Together with the re-election of the members of the Remuneration Committee of the General Meeting, the Meeting approved the respective remuneration, for the 2021-2023 term, in the following terms: The members of the Remuneration Committee of the General Meeting received, in 2021, the following remunerations: REMUNERATION COMMITTEE OF THE GENERAL SHAREHOLDER’S MEETING (*) FIXED EUROS Luís Miguel Nogueira Freire Cortes Martins 29,278 José Gonçalo Ferreira Maury 20,708 Jaime Amaral Anahory 20,708 (*) Due to a processing error, a payment of EUR 15,000 was advanced to the Chairman and of EUR 10,000 to the two other members of the Remuneration Committee of the General Shareholders’ Meeting, amounts that will be settled during the 2022 financial year G. Particulars applicable to the remuneration of the Chairman of the General Meeting The remuneration policy submitted by the Remuneration Committee elected by the General Meeting, approved at the General Meeting held on April 14, 2021, provides, as regards the members of the Board of the General Meeting, as follows: (1) Gross amounts The Chairman and Secretary of the Board of the General Shareholders’ Meeting do not receive remuneration in this capacity, given that they are remunerated as a member of the General and Supervisory Board and as Company Secretary, respectively. In 2021, the Vice-Chairman of the General Meeting, during the 2018-2020 term, earned a remuneration of 3,000 Euros. REMUNERATION COMITTEE: ANNUAL REMUNERATION President: EUR. 20,000.00 Members: EUR.15,000.00 BOARD OF THE GENERAL MEETING: ANNUAL REMUNERATION 1 President: EUR. 70,000.00, plus EUR. 25,000.00 Vice-President: EUR. 5,000.00 259 H. Evolution of the remuneration and performance 1,90 1,83 1,84 1,86 2,05 2017 2018 2019 2020 2021 Remuneration of the General and Supervisory Board (€ million) 5,0% 11,6% 34,4% 43,2% -3% 2017 2018 2019 2020 2021 Total Shareholder Return (%) 11,87 11,30 11,54 12,84 10,69 2017 2018 2019 2020 2021 Remuneration of the Executive Board of Directors (€ million) 5 * N. Members EBD Multiannual variable remuneration Annual variable remuneration Fixed remuneration * As a result of the Extraordinary General Meeting of 19 January 2021, the Executive Board of Directors elected for the 2021- 2023 term is composed of 5 members. The amount of EUR 10.69 million refers to the amounts of remuneration paid in 2021, relating to the terms of office of 2018-2020 (9 members) and 2021-2023 (5 members). 3 132 3 295 3 364 3 676 3 930 2017 2018 2019 2020 2021 Average Employees' Remuneration (€) 694,74 694,74 694,74 694,74 753,48 2016 2017 2018 2019 2020 Dividends (€ million) 9 9 9 8 Note: Exchange rate at constant values (average from 2015 to 2017) 3.72 EUR/BRL, applied to the period from 2016 to 2021. 260 261 Creating a carbon neutral planet. GLOBAL 262 263 FINANCIAL STATEMENTS 264 06 — FINANCIAL STATEMENTS 264 Financial Statements 31 December 2021 265 (Page left intentionally blank) 266 Thousand Euros Notes 2021 2020 7 14,982,909 12,448,205 Cost of energy sales and other 7 -10,148,018 -7,356,487 4,834,891 5,091,718 Other income 8 1,023,988 1,077,689 Supplies and services 9 -888,954 -856,519 Personnel costs and employee benefits 10 -666,459 -667,313 Other expenses 11 -655,694 -635,180 26 -32,828 -63,690 -1,219,947 -1,145,013 Joint ventures and associates 21 108,106 3,257 3,723,050 3,949,962 Provisions 36 -60,510 -112,093 Amortisation and impairment 12 -1,731,755 -1,631,831 1,930,785 2,206,038 Financial income 13 364,883 226,702 Financial expenses 13 -875,816 -897,326 Profit before income tax and CESE 1,419,852 1,535,414 Income tax expense 14 -261,892 -309,112 Extraordinary contribution to the energy sector (CESE) 15 -53,314 -65,109 -315,206 -374,221 Net profit for the period 1,104,646 1,161,193 Attributable to: Equity holders of EDP 656,717 800,692 Non-controlling Interests 33 447,929 360,501 Net profit for the period 1,104,646 1,161,193 30 0.17 0.21 LISBON, 17 FEBRUARY 2022 THE CERTIFIED ACCOUNTANT THE MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS N.º 17,713 EDP - Energias de Portugal Consolidated Income Statements for the periods ended at 31 December 2021 and 2020 Revenues from energy sales and services and other Impairment losses on trade receivables and debtors Earnings per share (Basic and Diluted) - Euros The following notes form an integral part of these financial statements 267 Equity holders Non-controlling Equity holders Non-controlling Thousand Euros of EDP Interests of EDP Interests 656,717 447,929 800,692 360,501 Actuarial gains/(losses) (iii) 51,153 1,889 -78,961 4,226 Tax effect from the actuarial gains/(losses) -15,725 -758 25,671 -1,436 Fair value reserve with no recycling (financial assets) (ii) 8,050 -5,203 \- Tax effect from the fair value reserve with no recycling (financial assets) (ii) -1,624 \- 927 \- 41,854 1,131 -57,566 2,790 Items that may be reclassified to profit or loss (i) Currency translation reserve 40,453 97,975 -508,945 -472,807 Fair value reserve (cash flow hedge) (ii) -1,053,285 -147,287 -61,451 -6,196 Tax effect from the fair value reserve (cash flow hedge) (ii) 280,203 37,395 17,898 -197 Fair value reserve of assets measured at fair value throught other comprehensive income with recycling (ii) -1,053 797 1,404 -755 value throught other comprehensive income with recycling (ii) 353 \- -442 \- Share of other comprehensive income of joint ventures and associates, net of taxes 795 685 -8,312 -6,644 -732,534 -10,435 -559,848 -486,599 -690,680 -9,304 -617,414 -483,809 -33,963 438,625 183,278 -123,308 (i) See Consolidated Statement of Changes in Equity (ii) See Note 32 (iii) See Note 35 LISBON, 17 FEBRUARY 2022 THE CERTIFIED ACCOUNTANT THE MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS N.º 17,713 Net profit for the period Other comprehensive income for the period (net of income tax) Total comprehensive income for the period EDP - Energias de Portugal Consolidated Statements of Comprehensive Income for the periods ended at 31 December 2021 and 2020 2021 2020 Tax effect of Fair value reserve of assets measured at Items that will never be reclassified to profit or loss (i) The following notes form an integral part of these financial statements 268 Thousand Euros Notes 2021 2020* Assets Property, plant and equipment 16 21,099,241 20,390,294 Right-of-use assets 17 1,007,029 1,030,193 Intangible assets 18 4,915,025 4,998,235 Goodwill 19 2,379,386 2,335,964 Investments in joint ventures and associates 21 1,350,445 940,362 Equity instruments at fair value 22 189,942 184,748 Investment property 23 20,668 21,378 Deferred tax assets 24 1,509,092 1,206,603 Debtors and other assets from commercial activities 26 2,668,506 2,747,012 Other debtors and other assets 27 1,841,147 1,020,788 Non-Current tax assets 28 173,846 251,770 Collateral deposits associated to financial debt 34 23,397 22,848 Total Non-Current Assets 37,177,724 35,150,195 Inventories 25 575,849 323,945 Debtors and other assets from commercial activities 26 5,928,004 3,545,611 Other debtors and other assets 27 2,810,855 851,594 Current tax assets 28 551,842 414,302 Collateral deposits associated to financial debt 34 26,678 9,221 Cash and cash equivalents 29 3,222,409 2,954,302 Non-Current Assets held for sale 41 700,791 22,248 Total Current Assets 13,816,428 8,121,223 Total Assets 50,994,152 43,271,418 Equity Share capital 30 3,965,681 3,965,681 Treasury stock 31 -52,660 -54,025 Share premium 30 1,196,522 1,196,522 Reserves and retained earnings 32 3,556,549 3,673,785 656,717 800,692 9,322,809 9,582,655 Non-controlling Interests 33 4,654,756 3,488,321 Total Equity 13,977,565 13,070,976 Liabilities Financial debt 34 15,299,588 14,023,940 Employee benefits 35 940,266 1,138,237 Provisions 36 976,588 994,105 Deferred tax liabilities 24 989,078 871,242 Institutional partnerships in North America 37 2,259,741 1,933,542 Trade payables and other liabilities from commercial activities 38 1,806,925 1,702,005 Other liabilities and other payables 39 3,039,975 1,739,448 Non-current tax liabilities 40 124,362 122,743 Total Non-Current Liabilities 25,436,523 22,525,262 Financial debt 34 1,518,348 2,262,823 Employee benefits 35 179,534 204,067 Provisions 36 110,319 260,154 Trade payables and other liabilities from commercial activities 38 6,320,011 3,952,213 Other liabilities and other payables 39 2,781,101 597,178 Current tax liabilities 40 582,686 398,634 Non-Current Liabilities held for sale 41 88,065 111 Total Current Liabilities 11,580,064 7,675,180 Total Liabilities 37,016,587 30,200,442 Total Equity and Liabilities 50,994,152 43,271,418 * LISBON, 17 FEBRUARY 2022 THE CERTIFIED ACCOUNTANT THE MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS N.º 17,713 Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) EDP - Energias de Portugal Consolidated Statements of Financial Position as at 31 December 2021 and 31 December 2020 Consolidated net profit attributable to equity holders of EDP Total Equity attributable to equity holders of EDP The following notes form an integral part of these financial statements 269 Equity Other Fair value Fair value attributable reserves reserve reserve Currency to equity Non- Total Share Share Legal and retained (cash flow (financial translation Treasury holders of controlling Thousand Euros Equity capital (i) premium (i) reserve earnings hedge) assets) reserve stock (iv) EDP Interests (iii) Balance as at 31 December 2019 12,632,013 3,656,538 503,923 739,024 4,518,226 40,541 15,202 -554,047 -61,220 8,858,187 3,773,826 Comprehensive income: Net profit for the period 1,161,193 \- \- \- 800,692 \- \- \- \- 800,692 360,501 Changes in the fair value reserve (cash flow hedge) net of taxes -49,946 \- \- \- \- -43,553 \- \- \- -43,553 -6,393 Changes in the fair value reserve of assets measured at fair value through other comprehensive -4,069 \- \- \- \- \- -3,314 \- \- -3,314 -755 income, net of taxes Share of other comprehensive income of joint ventures and associates net of taxes -14,956 \- \- \- -16,453 -1,356 \- 9,497 \- -8,312 -6,644 Actuarial gains/(losses) net of taxes -50,500 \- \- \- -53,290 \- \- \- \- -53,290 2,790 -981,752 \- \- \- \- \- \- -508,945 \- -508,945 -472,807 \- Total comprehensive income for the period 59,970 \- \- \- 730,949 -44,909 -3,314 -499,448 \- 183,278 -123,308 \- Dividends paid -690,739 \- \- \- -690,739 \- \- \- \- -690,739 \- Dividends attributable to non-controlling interests -132,436 \- \- \- \- \- \- \- \- \- -132,436 Share Capital increase 1,001,742 309,143 692,599 \- \- \- \- \- \- 1,001,742 \- Share-based payments 7,354 \- \- \- 159 \- \- \- 7,195 7,354 \- Changes resulting from acquisitions/sales, equity increases/decreases and other 193,072 \- \- \- 222,833 \- \- \- \- 222,833 -29,761 Balance as at 31 December 2020 * 13,070,976 3,965,681 1,196,522 739,024 4,781,428 -4,368 11,888 -1,053,495 -54,025 9,582,655 3,488,321 Comprehensive income: Net profit for the period 1,104,646 \- \- \- 656,717 \- \- \- \- 656,717 447,929 Changes in the fair value reserve (cash flow hedge) net of taxes -882,974 \- \- \- \- -773,082 \- \- \- -773,082 -109,892 Changes in the fair value reserve of assets measured at fair value through other comprehensive income, net of taxes 6,523 \- \- \- \- \- 5,726 \- \- 5,726 797 Share of other comprehensive income of joint ventures and associates net of taxes 1,480 \- \- \- 4,940 -4,030 \- -115 \- 795 685 Actuarial gains/(losses) net of taxes 36,559 \- \- \- 35,428 \- \- \- \- 35,428 1,131 138,428 \- \- \- \- \- \- 40,453 \- 40,453 97,975 \- \- Total comprehensive income for the period 404,662 \- \- \- 697,085 -777,112 5,726 40,338 \- -33,963 438,625 Transfer to legal reserve \- \- \- 43,908 -43,908 \- \- \- \- \- \- Dividends paid -749,763 \- \- \- -749,763 \- \- \- \- -749,763 \- Dividends attributable to non-controlling interests -151,090 \- \- \- \- \- \- \- \- \- -151,090 Purchase and sale of treasury stock -479 \- \- \- \- \- \- \- -479 -479 \- Share-based payments 2,684 \- \- \- 840 \- \- \- 1,844 2,684 \- Dilution in the financial interest by capital increase EDP Renováveis S.A. 1,470,481 \- \- \- 564,281 620 -252 -16,320 \- 548,329 922,152 Aquisition of partnership in Central Térmica de Ciclo Combinado Grupo 4 -5,000 \- \- \- -69,684 \- \- \- \- -69,684 64,684 Changes resulting from acquisitions/sales, equity increases/decreases and other -64,906 \- \- \- 43,030 \- \- \- \- 43,030 -107,936 Balance as at 31 December 2021 13,977,565 3,965,681 1,196,522 782,932 5,223,309 -780,860 17,362 -1,029,477 -52,660 9,322,809 4,654,756 (i) See note 30 (ii) See note 32 (iii) See note 33 (iv) See note 31 * Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) LISBON, 17 FEBRUARY 2022 THE CERTIFIED ACCOUNTANT THE MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS N.º 17,713 Exchange differences arising on consolidation EDP - Energias de Portugal Consolidated Statements of Changes in Equity for the periods ended at 31 December 2021 and 2020 Exchange differences arising on consolidation Reserves and retained earnings (ii) The following notes form an integral part of these financial statements 270 Thousand Euros 2021 2020 2021 2020 Operating activities Profit before income tax and CESE 1,419,852 1,535,414 765,586 817,731 Adjustments for: Amortisation and impairment 12 1,731,755 1,631,831 31,649 40,726 Provisions 36 60,510 112,093 1,899 301 Joint ventures and associates 21 -108,106 -3,257 \- \- Financial (income)/expenses 13 510,933 670,624 -984,777 -791,838 (Gains) / Losses on disposal and scope effects except Asset Rotations \- -234,818 \- -699 Changes in working capital: Trade and other receivables -1,267,111 5,928 -1,161,229 -139,245 Trade and other payables 785,560 16,411 1,302,765 -54,349 Personnel -170,055 -101,616 1,250 6,018 Regulatory assets 906,892 -47,293 \- \- Other changes in assets/liabilities related with operating activities -523,418 -324,307 -135,624 Income tax and CESE -89,845 -172,788 71,161 71,184 Net cash flows from operations 2,595,519 2,889,111 -296,003 -185,795 Net (gains) / losses with Asset Rotations -575,610 -433,900 \- \- Net cash flows from operating activities 2,019,909 2,455,211 -296,003 -185,795 Investing activities Cash receipts relating to: Sale of assets/subsidiaries with loss of control i) 763,279 3,835,863 \- \- Other financial assets and investments ii) 110,545 130,227 5,860 1,613,045 Other financial assets at amortised cost \- \- 52,711 527,282 5,847 85,579 \- \- Property, plant and equipment and intangible assets 98,322 12,484 251 6,123 Other receipts relating to tangible fixed assets 12,234 6,683 \- \- Interest and similar income 22,996 26,940 35,796 55,349 Dividends 53,468 48,478 774,979 883,690 Loans to related parties 628,556 326,071 98,603 600,260 1,695,247 4,472,325 968,200 3,685,749 Cash payments relating to: Acquisition of assets/subsidiaries iii) -98,381 -1,097,339 \- \- Other financial assets and investments iv) -507,926 -431,182 -178,919 -7,919 Other financial assets at amortised cost \- \- -676,890 -122,442 -26,865 -38,825 \- \- Property, plant and equipment and intangible assets -3,351,506 -2,409,812 -50,318 -45,272 Loans to related parties -488,519 -780,652 -10,969 -46,160 -4,473,197 -4,757,810 -917,096 -221,793 Net cash flows from investing activities -2,777,950 -285,485 51,104 3,463,956 Financing activities Receipts relating to financial debt (include Collateral Deposits) 3,080,716 5,927,683 2,452,048 1,942,863 (Payments) relating to financial debt (include Collateral Deposits) -2,649,517 -6,463,566 -2,068,048 -4,365,029 Interest and similar costs of financial debt including hedge derivatives -481,329 -570,155 -235,199 -349,697 Receipts/(payments) relating to loans from non-controlling interests -53,679 216,858 \- \- Interest and similar costs relating to loans from non-controlling interests -18,244 -9,831 \- \- Receipts/(payments) relating to loans from related parties \- \- 1,156,028 406,597 \- \- \- -3,145 Governmental grants received \- 37 \- \- Share capital increases/(decreases) (includes subscribed by non-control. interests) v) 1,415,106 920,598 \- 996,392 Receipts/(payments) relating to derivative financial instruments 10,317 12,776 20,585 -68,248 Dividends paid to equity holders of EDP vi) -749,763 -690,739 -749,763 -691,026 Dividends paid to non-controlling interests -135,058 -112,001 \- \- Treasury stock sold/(purchased) 1,365 7,195 -479 \- \- -1,007 \- \- Lease (payments) vii) -98,772 -80,364 -12,502 -11,853 Receipts/(payments) from institutional partnerships in North America viii) 692,164 248,728 \- \- Net cash flows from financing activities 1,013,306 -593,788 562,670 -2,143,146 Changes in cash and cash equivalents 255,265 1,575,938 317,771 1,135,015 Effect of exchange rate fluctuations on cash held 28,023 -170,198 51 223 Cash and cash equivalents reclassified as held for sale -15,181 5,840 \- \- Cash and cash equivalents at the beginning of the period 2,954,302 1,542,722 2,172,631 1,037,393 Cash and cash equivalents at the end of the period ix) 3,222,409 2,954,302 2,490,453 2,172,631 i) ii) Porsines and partial disposal of shares of Feedzai, as well as companies located at North America (see note 6); iii) iv) v) vi) vii) viii) ix) LISBON, 17 FEBRUARY 2022 THE CERTIFIED ACCOUNTANT THE MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS N.º 17,713 EDP - Energias de Portugal Consolidated and Company Statements of Cash Flows for the periods ended at 31 December 2021 and 2020 Notes Group Company Changes in cash resulting from consolidation perimeter variations Changes in cash resulting from consolidation perimeter variations Receipts/(payments) related with transactions with non-controlling interest without change of control Relates essentially to the receivement related to the sale of a group of companies located in North America and Brazil (see note 6); Interest and similar costs of loans from related parties including hedge derivatives Relates essentially to the receivement of notes (see note 27) and the receivements related to the sales of CIDE HC Energia, S.A. and Relates, mainly, to the impact with the acquisition of Enertrel Group S.r.l., Evoikos Voreas A.E., Sofrano, AES Tietê Inova Soluções de Energia LTDA, Trina Solar Investment First Pte. Ltd and Vento Ludens Ltd. as well a solar portfolio located in North America (see note 6); Includes capital and interest; On a consolidated basis, refers to the receipts and payments net of transaction costs (transactions included in note 37); See details of Cash and cash equivalents in note 29 and the Consolidated and Company Reconciliation of Changes in the responsibilities of Financing activities in note 52 of the Financial Statements. Relates essentially to payments made for the capital increases in OW Offshore S.L., Hydro Global Investment, Ltda. and other companies located in Europe and North America, as well the acquisition of treasury stock of EDP Energias do Brasil; Relates, mainly, to the capital increase of EDP Renováveis, S.A; See note 32; The following notes form an integral part of these financial statements -1,184,866 271 Thousand Euros Notes 2021 2020 Revenues from energy sales and services and other 7 5,201,964 2,863,316 Cost of energy sales and other 7 -5,139,933 -2,555,001 62,031 308,315 Other income 14,310 16,646 Supplies and services 9 -169,556 -159,748 Personnel costs and employee benefits 10 -80,652 -79,382 Other expenses -11,757 -18,917 Impairment losses on trade receivables and debtors -19 6 -247,674 -241,395 -185,643 66,920 Provisions -1,899 -301 Amortisation and impairment 12 -31,649 -40,726 -219,191 25,893 Financial income 13 1,459,316 1,486,782 Financial expenses 13 -474,539 -694,944 Profit before income tax 765,586 817,731 Income tax expense 14 58,484 60,420 Net profit for the period 824,070 878,151 LISBON, 17 FEBRUARY 2022 THE CERTIFIED ACCOUNTANT THE MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS N.º 17,713 EDP - Energias de Portugal, S.A. Company Income Statements for the periods ended at 31 December 2021 and 2020 The following notes form an integral part of these financial statements 272 Thousand Euros 2021 2020 824,070 878,151 Items that will never be reclassified to profit or loss (i) Actuarial gains/(losses) 649 628 Tax effect from the actuarial gains/(losses) -143 -159 506 469 Items that may be reclassified to profit or loss (i) Fair value reserve (cash flow hedge) (ii) 468,352 176,802 Tax effect from the fair value reserve (cash flow hedge) (ii) -105,379 -39,780 362,973 137,022 363,479 137,491 1,187,549 1,015,642 (i) See Company Statement of Changes in Equity (ii) See note 32 LISBON, 17 FEBRUARY 2022 THE CERTIFIED ACCOUNTANT THE MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS N.º 17,713 EDP - Energias de Portugal, S.A. Company Statements of Comprehensive Income for the periods ended at 31 December 2021 and 2020 Other comprehensive income for the period (net of income tax) Total comprehensive income for the period Net profit for the period The following notes form an integral part of these financial statements 273 Thousand Euros Notes 2021 2020 Assets 16 37,056 27,958 Right-of-use assets 17 101,630 106,911 Intangible assets 18 132,660 115,223 Investments in subsidiaries 20 15,065,364 14,396,105 Investments in joint ventures and associates 2 2 Equity instruments at fair value 1,227 1,252 Investment property 23 101,700 87,289 Deferred tax assets 24 37,218 123,626 867 730 Other debtors and other assets 27 3,745,567 3,203,422 Total Non-Current Assets 19,223,291 18,062,518 Inventories 25 79,960 \- Debtors and other assets from commercial activities 26 2,047,936 733,926 Other debtors and other assets 27 5,816,675 853,407 Current tax assets 28 94,426 51,314 Cash and cash equivalents 29 2,490,453 2,172,631 Total Current Assets 10,529,450 3,811,278 Total Assets 29,752,741 21,873,796 Equity Share capital 30 3,965,681 3,965,681 Treasury stock 31 -52,660 -54,025 Share premium 30 1,196,522 1,196,522 Reserves and retained earnings 32 3,279,491 2,786,784 Net profit for the period 824,070 878,151 Total Equity 9,213,104 8,773,113 Liabilities Financial debt 34 9,081,678 8,134,429 Employee benefits 8,097 8,366 Provisions 4,000 2,051 7 363 Other liabilities and other payables 39 1,823,998 497,290 Total Non-Current Liabilities 10,917,780 8,642,499 Financial debt 34 3,952,621 3,349,143 Employee benefits 969 1,075 Provisions 798 848 38 2,192,662 662,559 Other liabilities and other payables 39 3,430,452 423,337 Current tax liabilities 40 44,355 21,222 Total Current Liabilities 9,621,857 4,458,184 Total Liabilities 20,539,637 13,100,683 Total Equity and Liabilities 29,752,741 21,873,796 LISBON, 17 FEBRUARY 2022 THE CERTIFIED ACCOUNTANT THE MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS N.º 17,713 Debtors and other assets from commercial activities EDP - Energias de Portugal, S.A. Company Statements of Financial Position as at 31 December 2021 and 31 December 2020 Property, plant and equipment Trade payables and other liabilities from commercial activities Trade payables and other liabilities from commercial activities The following notes form an integral part of these financial statements 274 EDP - Energias de Portugal, S.A. Company Statements of Changes in Equity for the periods ended at 31 December 2021 and 2020 Other Fair value Reserves reserve Total Share Share Legal and retained (cash flow Treasury Thousand Euros Equity capital (i) premium (i) reserve earnings hedge) stock (iii) Balance as at 31 December 2019 7,445,497 3,656,538 503,923 739,024 2,672,405 -71,269 -55,124 Comprehensive income: Net profit for the period 878,151 \- \- \- 878,151 \- \- Changes in the fair value reserve (cash flow hedge) net of taxes 137,022 \- \- \- \- 137,022 \- Actuarial gains / (losses) net of taxes 469 \- \- \- 469 \- \- Total comprehensive income for the period 1,015,642 \- \- \- 878,620 137,022 \- 1,001,742 309,143 692,599 \- \- \- \- -691,026 \- \- \- -691,026 \- \- Share-based payments 1,258 \- \- \- 159 \- 1,099 Balance as at 31 December 2020 8,773,113 3,965,681 1,196,522 739,024 2,860,158 65,753 -54,025 Comprehensive income: Net profit for the period 824,070 \- \- \- 824,070 \- \- Changes in the fair value reserve (cash flow hedge) net of taxes 362,973 \- \- \- \- 362,973 \- Actuarial gains / (losses) net of taxes 506 \- \- \- 506 \- \- Total comprehensive income for the period 1,187,549 \- \- \- 824,576 362,973 \- Transfer to legal reserve \- \- \- 43,908 -43,908 \- \- Dividends paid -749,763 \- \- \- -749,763 \- \- Purchase and sale of treasury stock -479 \- \- \- \- \- -479 Share-based payments 2,684 \- \- \- 840 \- 1,844 Balance as at 31 December 2021 9,213,104 3,965,681 1,196,522 782,932 2,891,903 428,726 -52,660 (i) See note 30 (ii) See note 32 (iii) See note 31 LISBON, 17 FEBRUARY 2022 THE CERTIFIED ACCOUNTANT THE MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS N.º 17,713 Reserves and retained earnings (ii) Dividends paid Share Capital increase The following notes form an integral part of these financial statements 275 Notes to the Consolidated and Company Financial Statements COVID 19 - Macroeconomic, Regulatory, Operational, Accounting Impact and Stakeholders 276 1\. Economic activity of EDP Group 277 2\. Accounting policies 277 3\. Recent accounting standards and interpretations issued 299 4\. Critical accounting estimates and judgements in preparing the financial statements 302 5\. Financial risk management policies 316 6\. Consolidation perimeter 324 7\. Revenues and cost of Energy Sales and Services and Other 327 8\. Other income 330 9\. Supplies and services 330 10\. Personnel costs and employee benefits 331 11\. Other expenses 331 12\. Amortisation and impairment 332 13\. Financial income and expenses 333 14\. Income tax 335 15\. Extraordinary contribution to the energy sector (CESE) 338 16\. Property, plant and equipment 339 17\. Right-of-use assets 341 18\. Intangible assets 342 19\. Goodwill 343 20\. Investments in subsidiaries (Company basis) 346 21\. Investments in joint ventures and associates 347 22\. Equity instruments at fair value 352 23\. Investment property 353 24\. Deferred tax assets and liabilities 354 25\. Inventories 358 26\. Debtors and other assets from commercial activities 359 27\. Other debtors and other assets 362 28\. Tax assets 364 29\. Cash and cash equivalents 364 30\. Share capital and share premium 365 31\. Treasury stock 366 32\. Reserves and retained earnings 367 33\. Non-controlling interests 369 34\. Financial debt 370 35\. Employee benefits 375 36\. Provisions 382 37\. Institutional partnerships in North America 388 38\. Trade payables and other liabilities from commercial activities 389 39\. Other liabilities and other payables 392 40\. Tax liabilities 394 41\. Non-Current assets and liabilities held for sale 394 42\. Derivative financial instruments 395 43\. Commitments 404 44\. Related parties 407 45\. Fair value of financial assets and liabilities 414 46\. Relevant or subsequent events 417 47\. EDP Branch in Spain 418 48\. Environmental matters 419 49\. Business combinations 420 50\. Investigation process about CMEC and DPH 425 51\. Operating segments 427 52\. Consolidated and Company Reconciliation of Changes in the responsibilities of Financing activities 434 53\. Explanation added for translation 435 Annex I. Companies in the Consolidation Perimeter 436 276 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 In global macroeconomic terms, COVID-19 has impacted the EDP Group's activity in its various geographies and across the value chain. However, a prudent strategy to hedge energy and financial market risks, the maintenance of robust liquidity levels as well as an active management of suppliers and critical supplies, have allowed to significantly mitigate the impacts of this crisis. COVID 19 - Macroeconomic, Regulatory, Operational, Accounting Impact and Stakeholders ix) Subsequent events (see note 46). v) Fair value of financial instruments (see note 22); vi) Derivatives – “Own use” and hedging relationships (see note 42); vii) Provisions for risks and charges (see note 36); viii) Recoverability of deferred tax assets (see note 24); and i) Impairment losses of trade receivables (expected credit losses) (see note 2); ii) Provision for employee benefit liabilities (see note 35); iii) Impairment losses on non-financial assets (see notes 12 and 19); iv) Investment in joint ventures and associates (see note 21); EDP Group has not applied any different classifications from those normally used in its income statement, as a result of COVID- 19\. To assess possible accounting impacts arising from COVID-19, the Group reassessed the estimates it considers relevant and which may have been impacted by this fact. Thus, on 31 December 2021, the Group carried out a series of analyses of the relevant estimates and has not determined any materially relevant impacts compared to 31 December 2020. In late 2019, in the Chinese city of Wuhan, a virus, SARS-COV-2, that can cause a serious respiratory infection like pneumonia was first identified in humans. During the year 2020, the disease caused by the virus, the COVID-19, was classified by the World Health Organization (WHO) as a pandemic. COVID-19 has forced the world to change its habits and is having several social, economic, regulatory, operational, accounting and public health impacts. The current global crisis with the COVID-19 pandemic incorporates significant risks to the economy and society, remaining an uncertainty regarding the duration of the epidemic crisis and its long term economic impacts. 277 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 1\. Economic activity of EDP Group 2\. Accounting policies a) Basis of presentation EDP - Energias de Portugal, S.A. (hereinafter referred to as EDP), currently with head office in Lisbon, Avenida 24 de Julho 12 and with its shares listed on the Euronext Lisbon stock exchange, results from the transformation of Electricidade de Portugal, E.P., incorporated in 1976 following the nationalization and consequent merger of the main companies in the electricity sector in Portugal. During 1994, as established by Decree-laws 7/91 and 131/94, the EDP Group (EDP Group or Group) was set up following the split of EDP, which led to a number of directly or indirectly wholly owned subsidiaries of EDP. The Group’s businesses are currently focused on the generation, transmission, distribution and supply of electricity and supply of gas. Additionally, the Group also operates in related areas such as engineering, laboratory tests, professional training, energy services and property management. EDP Group operates essentially in the European (Portugal, Spain, France, Poland, Romania, Italy, Belgium, United Kingdom and Greece) and American (Brazil and North America) energy sectors. The accompanying consolidated and company financial statements of EDP - Energias de Portugal, S.A. reflect the results of the company's operations and its subsidiaries (EDP Group or Group) and the Group's interest in its joint ventures and associated companies, for the periods ended on 31 December 2021 and 2020 and EDP S.A.'s Executive Board of Directors approved them on 17 February 2022, after that they are subject to General Meeting approval. The financial statements are presented in thousand Euros, rounded to the nearest thousand. In accordance with Regulation (EC) 1606/2002 of the European Council and Parliament, of 19 July 2002, as transposed into Portuguese legislation through Decree-law 35/2005 of 17 February 2005, with changes updated by the Decree-law 158/2009 of 13 July and Decree-law 98/2015 of 2 June, the company's financial statements and the Group's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS), as endorsed by the European Union (E.U). IFRS comprise accounting standards issued by the International Accounting Standards Board (IASB) as well as interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and their predecessor bodies. The EDP Group's consolidated and company financial statements for the years ended 31 December 2021 and 2020 were prepared in accordance with IFRS as adopted by the E.U. and effective since 1 January 2021. The financial statements have been prepared on a going concern basis and under the historical cost convention, modified by the application of the fair value accounting to derivative financial instruments, financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. Assets and liabilities that are hedged under hedge accounting are stated at fair value in respect of the hedged risk. Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less costs to sell. Liabilities for defined benefit plans are recognised at the present value of the obligation net of plan assets fair value. The accounting policies used by the Group in preparing the consolidated financial statements described in this note were adopted in accordance. The new standards and interpretations recently issued but not yet effective and that the Group has not yet applied on its consolidated financial statements, are detailed in note 3. 278 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2020 Adjustment Dec 2020 Restated Assets Property, plant and equipment 1,165,228 227,073 1,392,301 Right-of-use assets 2,438 \- 2,438 Intangible assets 1,043,291 \- 1,043,291 Deferred tax assets 293,185 67,060 360,245 Other debtors and other assets 679,111 \- 679,111 Cash and cash equivalents 52,672 \- 52,672 Total Assets 3,235,925 294,133 3,530,058 Liabilities Financial Debt 1,283,988 \- 1,283,988 Employee benefits 144,409 \- 144,409 Provisions 162,805 1,240 164,045 Deferred tax liabilities 411,656 56,768 468,424 Other liabilities and other payables 207,933 266,999 474,932 Total liabilities 2,210,791 325,007 2,535,798 Net Assets 1,025,134 -30,874 994,260 758,731 -23,441 735,289 Acquisition cost 1,102,696 6,220 1,108,916 Goodwill 343,965 29,661 373,627 In accordance with IFRS 3 - Business Combinations, if the initial purchase price allocation of assets, liabilities and contingent liabilities acquired is identified as provisional, in the subsequent 12 months after the business combination transaction, the legal acquirer should make the final allocation of the purchase price related to the fair value of the assets, liabilities and contingent liabilities acquired. These adjustments with impact on the amount of goodwill determined and booked in previous periods, originate a restatement of the comparative information, which is reflected on the statement of financial position, with effect from the date of the business combination transaction. Net assets acquired at fair value (75.1% of Distribution business + 100% Generation business) In the last quarter of 2021, the Group, based on a more detailed assessment carried out by an independent external entity, proceeded to the definitive update of the fair value of the assets acquired and the liabilities assumed, restating the comparative data. Thus, the effect on the statement of financial position with reference to the date of the acquisition of Viesgo is detailed as follows: Updating the fair value of identifiable assets and liabilities - Acquisition of Viesgo On 16 December 2020, EDP Iberia S.L. completed the acquisition of Viesgo, framed within the scope of IFRS 3. With reference to the acquisition date, the EDP Group, based on an assessment carried out by an independent external entity, proceeded to a provisional determination of the fair value of the acquired assets and the assumed liabilities. 279 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 b) Basis of consolidation Accounting policies have been applied consistently by all Group companies and in all periods presented in the consolidated and company financial statements. The preparation of financial statements in conformity with IFRS requires the Executive Board of Directors to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and related assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments regarding the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The issues involving a higher degree of judgment or complexity, or where assumptions and estimates are considered to be significant, are presented in note 4 - Critical accounting estimates and judgments in preparing the financial statements. The main changes are: i) Adjustment to acquisition cost as a result of some price adjustments, mostly related to the use of negative tax bases, generated in 2020, of the electricity generating companies included in the acquisition perimeter of Grupo Viesgo; and On a step acquisition process resulting in the acquisition of control the revaluation of any interest previously held is booked against the income statement when goodwill is calculated. On a partial disposal resulting in loss of control over a subsidiary, any participation retained is revalued at market value on the sale date and the gain or loss resulting from this revaluation is booked against the income statement, as well as any gain or loss resulting from the disposal. Jointly controlled entities EDP Group classifies an arrangement as a joint arrangement when the jointly control is contractually established. Joint control exists only when decisions about the relevant activities require the unanimous consent of the parties that collectively control the arrangement. After determining the existence of joint control, the Group classifies joint arrangements into two types - joint operation or joint venture. The accompanying consolidated financial statements reflect the assets, liabilities and results of EDP, S.A. and its subsidiaries (Group or EDP Group) and the equity and results attributable to the Group, through the investments in associates and jointly controlled entities. Controlled entities Investments in subsidiaries where the EDP Group has control are fully consolidated from the date the Group assumes control over their financial and operating activities and/or over their assets and liabilities until the moment that control ceases to exist. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee, independently of the percentage of voting rights held. Accumulated losses are attributed to non-controlling interests in the corresponding proportions held, implying that the Group can recognise negative non-controlling interests. ii) Transfers of assets from customers concession arrangement and out of the scope of IFRIC 12, in accordance with IFRS 15, are related to payments of performance obligations fulfilled over the useful life of the underlying asset. Accordingly, the assets are recognised by the estimated construction cost and are depreciated over their useful lives, and the liabilities are recognised as revenue based on the corresponding useful life of the underlying asset. Thus, at the acquisition date, EDP recognised a liability related to the contractual obligations that Viesgo had to fulfill after the acquisition date and an asset based on the construction costs to be incurred to fulfill those obligations. The performance obligation is measured at fair value on the acquisition date in accordance with the general measurement principle and assets are recognised at fair value. 280 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 \- Interchange of managerial personnel; and \- Provision of essential technical information. The consolidated financial statements include the Group's attributable share of total reserves and profits or losses of associates, included under the equity method. When the Group’s share of losses exceeds its interest in an associate, it's carrying amount is reduced to zero and recognition of further losses is discontinued, except to the extent that the Group has a legal or constructive obligation to cover such losses on behalf of the associate. Investments in subsidiaries, joint ventures and associates not classified as held for sale or not included in a disposal group which is classified as held for sale are accounted for at cost in the company's financial statements, and are subject to periodic impairment tests, whenever indication exists that certain financial investment may be impaired. Entities over which the Group has significant influence Investments in associates are included in the consolidated financial statements under the equity method from the date the Group acquires significant influence to the date it ceases. Associates are entities over which the Group has significant influence, but not control, over its financial and operating policies. The existence of significant influence by the Group is usually evidenced by one or more of the following: \- Representation on the Executive Board of Directors or equivalent governing body of the investee; \- Participation in policy-making processes, including participation in decisions about dividends or other distributions; \- Existence of material transactions between the Group and the investee; Accounting for investments in subsidiaries, joint ventures and associates in the company's financial statements A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets and obligations for the liabilities relating to the arrangement, so the assets and liabilities (and related revenues and expenses) in relation to its interest in the arrangement are recognised and measured in accordance with relevant IFRS applicable. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint ventures) have rights to the net assets of the arrangement, so these investments are included in the consolidated financial statements under the equity method. The consolidated financial statements include the Group's attributable share of total reserves and profits or losses of joint ventures, included under the equity method. When the Group’s share of losses exceeds its interest in a joint venture, it's carrying amount is reduced to zero and recognition of further losses is discontinued, except to the extent that the Group has a legal or contractual obligation to cover such losses on behalf of that entity. Goodwill Following the transition to International Financial Reporting Standards (IFRS) on 1 January 2004 and as permitted under IFRS 1 - First-time Adoption of International Financial Reporting Standards, the EDP Group decided to maintain the goodwill resulting from business combinations that occurred prior to the transition date, calculated in accordance with the Group's previous accounting policies. Costs directly attributable to the acquisition of a subsidiary are booked directly in the income statement. As from the transition date to IFRS, total positive goodwill arising from acquisitions is recognised as an asset carried at acquisition cost and is not subject to amortisation. Goodwill arising on the acquisition of subsidiaries, joint ventures and associates is defined as the difference between the cost of acquisition and the corresponding share of the fair value of the net assets acquired. 281 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Investments in foreign operations The financial statements of the foreign subsidiaries, joint ventures and associates of the Group are prepared using their functional currency, defined as the currency of the primary economic environment in which they operate. In the consolidation process, the assets and liabilities of foreign subsidiaries are translated into Euros at the official exchange rate at the balance sheet date. Regarding the investments in foreign operations that are consolidated using the full consolidation method and equity method, the exchange differences between the amount of equity expressed in Euros at the beginning of the period and the amount translated at the official exchange rates at the end of the period, on a consolidated basis, are booked against reserves. Foreign currency goodwill arising on the acquisition of these investments is remeasured at the official exchange rate at the balance sheet date directly against reserves. The income and expenses of foreign subsidiaries are translated into Euros at the approximate exchange rates at the dates of the transactions. Exchange differences from the translation into Euros of the net profit for the period, arising from the differences between the rates used in the income statement and those prevailing at the balance sheet date are recognised in reserves. On disposal of a foreign subsidiary, the related exchange differences previously recognised in reserves, are accounted for in the income statement. The recoverable amount of the goodwill is assessed annually, regardless of the existence of any impairment triggers. Impairment losses are recognised in the income statement. The recoverable amount is determined based on the value in use of the assets, calculated using valuation methodologies supported by discounted cash flow techniques, considering market conditions, the time value of money and the business risks. Goodwill is not adjustable due to changes in the initial estimate of the contingent purchase price and the difference is booked in the income statement. Purchases of non-controlling interests and dilution In acquisitions (dilutions not resulting in a loss of control of non-controlling interests), the difference between the fair value of the non-controlling interests acquired and the consideration paid, is accounted against reserves. The acquisitions of non- controlling interests through written put options related with investments in subsidiaries held by non-controlling interests, are recorded as a liability for the fair value of the amount payable, against non-controlling interests. The fair value of the liability is determined based on the contractual price which may be fixed or variable. In case of a variable price, the changes in the liability are recognised against the income statement as well as the effect of the financial discount of the liability (unwinding). The EDP Group has the possibility to book non-controlling interests at fair value or at cost, implying that the full amount of goodwill can be booked in the financial statements, including the portion attributable to the non-controlling interests, against non-controlling interests, if the first option is chosen. Goodwill arising on the acquisition of subsidiaries, joint ventures and associates is defined as the difference between the cost of acquisition and the total or corresponding share of the fair value of the net assets acquired, depending on the option taken. Negative goodwill arising on an acquisition is recognised directly inthe income statement inthe period when the business combination occurs. Balances and transactions eliminated on consolidation Inter-company balances and transactions, including any unrealised gains and losses on transactions between Group companies, are eliminated in preparing the consolidated financial statements. Unrealised gains and losses arising on transactions with associates and jointly controlled entities are eliminated to the extent of the Group's interest in those entities. 282 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 c) Foreign currency transactions d) Derivative financial instruments and hedge accounting Foreign currency non-monetary assets and liabilities accounted for at historical cost are translated using the exchange rates at the dates of the transactions. Foreign currency non-monetary assets and liabilities stated at fair value are translated into Euros at the exchange rates at the dates the fair value was determined. Derivative financial instruments are recognised on the trade date at fair value. Subsequently, the fair value of derivative financial instruments is remeasured on a regular basis, being the gains or losses on re-measurement recognised directly in the income statement, except for derivatives designated as cash flow hedging instruments. Recognition, in the income statement, of the resulting gains and losses on re-measurement of hedging derivatives depends on the hedge model used. The fair value of derivative financial instruments corresponds to their market value, if available, or to quotes indicated by external entities through the use of valuation techniques accepted by the market, which are compared in each date of report to fair values available in common financial information platforms, namely Bloomberg and Reuters. Hedge accounting The Group uses financial instruments to hedge interest rate risk, exchange rate risk and price risk resulting from its operational and financing activities. Derivatives not qualified for hedge accounting under IFRS 9 are accounted for as trading instruments. Business combinations achieved in stages In a business combination achieved in stages, on the date of obtaining control, the excess of the aggregate of (i) the consideration transferred; (ii) the amount of any non-controlling interest recognised in the acquiree; and (iii) the fair value of the previously held equity interest in the acquired business; over the net of amounts of the identifiable assets acquired and liabilities assumed, is recognised as goodwill. If applicable, the negative difference, after evaluating the consideration transferred, of the amount of any non-controlling interest recognised in the acquiree and the fair value of the previously held equity interest in the acquired business; over the net value of the identifiable assets acquired and liabilities assumed, is recognised in the income statement. The Group recognises the difference between the fair value of the previously held equity interest in the acquired business and the carrying value in consolidated results in Other income. Additionally, the Group reclassifies the deferred amounts in other comprehensive income relating to the previously held equity interest to the income statement or consolidated reserves, according to their nature. Foreign currency transactions are translated at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currency are translated into Euros at the exchange rates at the balance sheet date. These exchange differences arising on translation are recognised in the income statement as financial results. 283 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 (i) The hedging relationship consists only of hedging instruments and hedged items that are eligible as per determined in IFRS 9; (ii) At the inception of the hedge there is formal documentation of the hedging relationship and the Group's risk management objective and strategy for the hedge; (iii) There is an economic relationship between the hedged item and the hedging instrument; Hedging derivatives are recorded at fair value, being the gains and losses recognised in accordance with the hedge accounting model applied by the Group. Hedge relationship exists when: The accumulated foreign exchange gains and losses regarding the net investment and the related hedging instrument recognised in equity are transferred to the income statement when the foreign currency subsidiary is sold, as part of the gain or loss resulting from the disposal. Cash flow hedge Changes in the fair value of derivatives qualified as cash flow hedges are recognised in reserves. The cumulative gains or losses recognised in reserves are reclassified to the income statement when the hedged item affects the income statement. When a hedging relation of a future transaction is discontinued, the changes in the fair value of derivative recognised in reserves remain recognised in reserves until the future hedged transaction occurs. When the future transaction is no longer expected to occur, the cumulative gains or losses recognised in reserves are recorded immediately in the income statement. Net investment hedge The net investment hedge model is applied on a consolidated basis to investments in subsidiaries in foreign currencies. This model allows that the exchange differences recognised in the currency translation reserve to be offset by the foreign exchange differences in foreign currency loans or currency derivatives contracted, recognised in Currency translation reserve - Net investment hedge. For cross currency interest rate swaps, the cross currency basis spread and forward points are not designated into the hedge relationship, but deferred as a hedging cost in other comprehensive income, in Currency translation reserve - Net investment hedge - Cost of hedging, and recognized in profit or loss over the period of the hedge. The ineffective portion of the hedging relationship is recognised in the income statement. (iv) The effect of credit risk does not dominate the value changes that result from that economic relationship; and (v) The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item. Fair value hedge Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged assets and liabilities or group of hedged assets and liabilities that are attributable to the hedged risk. For cross currency interest rate swaps, the currency basis spread is excluded from the hedge designation, but considered as a hedging cost in other comprehensive income, in cost of hedging reserve. When the hedging relationship ceases to comply with the requirements for hedge accounting, the accumulated gains or losses concerning the fair value of the risk being hedged are amortised over the residual period to maturity of the hedged item. 284 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 e) Debtors and Other assets Effectiveness For a hedge relationship to be classified as such, in accordance with IFRS 9, its effectiveness must be demonstrated. Therefore, the Group performs prospective tests at the inception date and at each balance sheet date, in order to demonstrate its effectiveness, showing that any adjustments to the fair value of the hedged item attributable to the risk being hedged are offset by adjustments to the fair value of the hedging instrument. Any ineffectiveness is recognised in the income statement when it occurs. The financial assets are classified based on the business model for managing the financial assets ("business model test") and their contractual cash flow characteristics ("SPPI test"). EDP Group classifies its financial assets, at the initial recognition, in accordance with the aforementioned requirements introduced by IFRS 9, on the following categories: Financial assets at amortised cost A financial asset is measured at amortised cost if: (i) it is held within a business model whose objective is to hold assets in order to collect its contractual cash flows; and (ii) the contractual cash flows represent solely payments of principal and interest. Financial assets included within this category are initially recognised at fair value and subsequently measured at amortised cost. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss. Changes in the business model assessment over time Financial assets are not reclassified subsequent to their initial recognition. However, if the Company changes its business model for managing financial assets, it will classify newly originated or newly purchased financial assets under the new business model, but will keep the classification of existing assets under the previous business model. Recognition and derecognition of financial assets Purchases and sales of financial assets are recognised on the trade date, which isthe date on which the Group commits to purchase or sell these financial assets. Loans and trade receivables are generally held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest, thus they meet the criteria for amortised cost measurement under IFRS 9\. Financial assets measured at fair value through other comprehensive income (FVOCI) A financial asset is measured at fair value through other comprehensive income if (i) the objective of the business model is achieved by both collecting contractual cash flows and selling financial assets; and (ii) the asset’s contractual cash flows represent solely payments of principal and interest. Financial assets included within this category are initially recognised and subsequently measured at fair value, with the changes in the carrying amount booked in other comprehensive income, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses, which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss. Financial assets measured at fair value through profit or loss (FVTPL) Financial assets that do not meet the criteria to be classified under the previously referred categories, are classified at fair value through profit or loss, deemed to be a residual category under IFRS 9. Regardless of the business model assessment, EDP Group can elect to classify a financial asset at fair value through profit or loss if doing so reduces or eliminates a measurement or recognition inconsistency (“accounting mismatch”). 285 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 EDP Group recognises an impairment loss based on the Expected Credit Loss (ECL) model, before the objective evidence of a loss event from past actions. This model is the basis for the recognition of impairment losses on held financial assets that are measured at amortised cost or at fair value through other comprehensive income (which includes cash and cash equivalents, trade receivables, loans and debt securities). The impairment methodology applied depends on whether there has been a significant increase in credit risk since initial recognition. If the credit risk on a financial asset does not increase significantly since its initial recognition, EDP Group measures the loss allowance for that financial asset at an amount equal to 12-month expected credit losses. If the credit risk increases significantly since its initial recognition, EDP Group measures the loss allowance for that financial asset at an amount equal to lifetime expected credit losses. Regardless of the above, a significant increase in credit risk is presumed if there is an objective evidence that the financial asset is impaired, including if there is observable data that comes to the attention of the holder of the asset about the following loss events, among others: significant financial difficulty of the issuer or obligor; restructuring of an amount due to the Group in terms that it would not consider otherwise; a breach of contract, such as a default or delinquency in interest or principal payments; or it becoming probable that the borrower will enter bankruptcy or other financial reorganisation. Financial assets are derecognised when: (i) the Group contractual rights to receive their future cash flows have expired, (ii) the Group has transferred substantially the risks and rewards of ownership, or (iii) although retaining some, but not substantially all the risks and rewards of ownership, the Group has transferred control over the assets. Impairment As soon as the loss event occurs in terms of IFRS 9, the impairment allowance would be allocated directly to financial asset affected, that is, the asset’s carrying amount is reduced and the amount of the loss is recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases, the previously recognised impairment loss is reversed in profit or loss, if the decrease can be related objectively to an event occurring after the impairment loss was recognised. Trade receivables, including contract assets EDP Group applies the simplified approach and records lifetime expected losses on all trade receivables and contract assets, including those with a significant financing component. The estimated ECL are calculated based on actual credit loss experience over a period that, per business and type of customers, is considered statistically relevant and representative of the specific characteristics of the underlying credit risk. When applicable, EDP Group estimated the ECL rates separately for corporates and individuals. Considering the particularities of each business, exposures are segmented based on common credit risk characteristics such as credit risk grade, geographic region and/or industry - for corporates; and type of product purchased - for individuals, as applicable. Actual credit loss experience is adjusted by scalar factors to reflect differences between economic conditions during the period over which historical data was collect, current conditions and EDP Group's view of economic conditions over the expected lives of the receivables. 286 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 f) Trade payables and other liabilities Remeasurement of the lease liabilities EDP Group remeasures the lease liabilities, and adjusts the corresponding right-of-use assets, by discounting the revised lease payments, using an unchanged discount rate, if either: i) there is a change in future lease payments resulting from a change in an index or a rate used to determine those payments; or ii) there is a change in the amounts expected to be payable under a residual value guarantee. If there is a lease modification that do not qualifies to be accounted as a separate lease, EDP Group remeasures the lease liabilities and adjusts the corresponding right-of-use assets, by discounting the revised lease payments, using a revised discount rate at the effective date of the modification. The variable lease payments that do not depend in an index or a rate are not included in the measurement of the lease liabilities, nor the right-of-use asset. Those payments are recognised as cost in the period in which the event or condition that gives rise to the payments occurs. An instrument is classified as a financial liability when there is a contractual obligation for the issuer to liquidate capital and/or interests, through delivering cash or other financial asset, regardless of its legal form. Financial liabilities are recognised at the issuance date (trade date): (i) initially at fair value less transaction costs; and (ii) subsequently at amortised cost, using the effective interest method. All financial liabilities are booked at amortised cost, with the exception of the financial liabilities hedged at fair value hedge, which are stated at fair value on risk component that is being hedged. Initial measurement of the lease liabilities As provided by IFRS 16, the lease liabilities on the commencement date are measured by the Group based on the present value of the future payments of that lease contracts, discounted using EDP Group's incremental borrowing rate for each portfolio of leases identified. EDP Group determines the lease term as the non‐cancellable period of a lease, together with both: (i) periods covered by an option to extend the lease, if the lessee is reasonably certain to exercise that option; and (ii) periods covered by an option to terminate the lease, if the lessee is reasonably certain not to exercise that option. EDP Group applies the recognition exemption provided by IFRS 16 for the leases which lease term is 12 months or less, or that are for a low-value asset. After the commencement date, the lease liabilities are increased to reflect interest on the liability and reduced to reflect the lease payments made. Other receivables and financial assets For receivable assets related to regulatory assets, loans, financial entities and State carried at amortised cost and FVOCI, EDP Group performes an analysis based on the general approach. On making its assessment, the company has to make assumptions about risk of default and expected loss rates, which requires judgement. The inputs used for risk assessment and for calculation of the loss allowances for financial assets includes: (i) credit ratings (as far as available) from external credit rating companies such as Standard and Poors, Moody’s and Fitch; (ii) significant changes in the expected performance and behaviour of the borrower, including changes in the payment status of borrowers in the Group and changes in the operating results of the borrower; (iii) public market data, namely on probabilities of default and loss given default expectations; and (iv) macroeconomic information (such as market interest rates or growth rates). 287 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 g)Equity instruments h) Property, plant and equipment Derecognition of financial liabilities EDP Group derecognises a financial liability (or a part of a financial liability) from its statement of financial position when, and only when, the obligation specified in the contract is discharged, cancelled or expired. An exchange between an existing borrower and lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability, or a part of it, is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. EDP Group classifies the equity instruments that are held for trading at fair value to profit or loss. For all other equity instruments, management has the ability to make an irrevocable election on initial recognition, on an instrument-by-instrument basis, to present changes in fair value in other comprehensive income. If this election is made, all fair value changes, excluding dividends that are a return on investment, will be included in other comprehensive income. There is no recycling of amounts from other comprehensive income to profit and loss (for example, on sale of an equity investment) being, at that time, transferred to retained earnings. Property, plant and equipment is stated at acquisition cost less accumulated depreciation and impairment losses. On transition to IFRS, on 1 January 2004, the Group decided to consider as deemed cost the revalued amount of Property, plant and equipment in accordance with the Group's previous accounting policy, which was comparable in general terms to the depreciated cost determined in accordance with IFRS. Subsequent costs are recognised as Property, plant and equipment only when it is probable that future economic benefits associated with the item will flow to the Group. Repair and maintenance costs are charged in the income statement as incurred, according to the accrual principle. The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. A financial instrument is classified as an equity instrument when there is no contractual obligation at settlement to deliver cash or other financial asset to another entity, regardless of its legal form, and there is a residual interest in the assets of an entity after deducting all its liabilities. Costs directly attributable to the issuance of equity instruments are recognised in equity, as a deduction to the amount issued. Amounts paid or received relating to sales or acquisitions of equity instruments are recognised in equity, net of transaction costs. Distributions related to equity instruments are deducted from equity, as dividends, when declared. Preference shares issued by the Group are considered as an equity instrument when there is no contractual obligation to redeem the shares and dividends are paid at the discretion of the Group. Preference shares issued by subsidiaries, classified as equity instruments and held by third parties, are recognised as non-controlling interests. Equity instruments at fair value 288 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Number of years Buildings and other constructions 8 to 50 Plant and machinery: \- Hydroelectric generation 30 to 75 \- Thermoelectric generation 25 to 45 \- Renewable generation 30 to 35 \- Electricity distribution 10 to 40 \- Other plant and machinery 4 to 25 Transport equipment 4 to 25 Office equipment and tools 2 to 16 Other property, plant and equipment 3 to 50 Land is not depreciated. Depreciation of tangible assets is calculated on a straight-line basis over their estimated useful lives, as follows: According to IFRS, the estimate of the useful life of assets should be reviewed whenever a change in the expected economic benefits flowing from the assets occurs as well as when the technical use planned for the assets differs from previous estimates. Changes occurring in the depreciation charge for the year are accounted prospectively. Capitalisation of borrowing costs and other directly attributable costs Borrowing costs that are directly attributable to the acquisition or construction of assets are capitalised as part of the cost of these assets. A qualifying asset is an asset that needs a substantial period of time to be ready for its intended use or sale. The amount of interest costs eligible for capitalisation is determined by applying a capitalisation rate to the expenditures on those assets. The capitalisation rate corresponds to the weighted average of the borrowing costs applicable to the outstanding borrowings during the period. The capitalisation of borrowing costs begins when expenditure for the assets is being incurred, borrowing costs have been incurred and activities necessary to prepare all or part of the assets for their intended use or sale are in progress. Capitalisation ceases when substantially all the activities necessary to prepare the qualifying assets for their intended use or sale are completed. Other expenses directly attributable to the acquisition and construction of the assets, such as cost of consumed materials and personnel costs, are also capitalised as part of the cost of the assets. Investment government grants The Group carries out impairment tests whenever events or circumstances may indicate that the book value of an asset exceeds its recoverable amount, being any impairment recognised in the income statement. The recoverable amount isthe higher of fair value less costs to sell and value in use, the latter being calculated bythe present value of the estimated future cash flows obtained from continued use of the asset and its sale at the end of its useful life. Investment government grants are initially booked as Trade payables and other liabilities from commercial activities - Non Current only when there is reasonable certainty that the grant will be received and that the Group will fulfil the grant term conditions. Grants that compensate the Group for expenses incurred are booked in the income statement on a linear basis, on the same period in which the expenses are incurred. Grants that compensate the Group for the acquisition of assets are recognised in the income statement over the related assets useful life. Transfers of assets from customers Transfers of assets from customers concession arrangement and out of the scope of IFRIC 12, in accordance with IFRS 15, are related to payments of performance obligations fulfilled over the useful life of the underlying asset. Accordingly, when they are received from the customers, they are booked as liabilities instead of revenue. The assets are recognised by the estimated construction cost and are depreciated over their useful lives. The liabilities are recognised as revenue based on the corresponding useful life of the underlying asset. 289 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 i) Intangible assets j) Right-of-use assets EDP Group presents the information related to lease contracts in the caption Right-of-use assets, in a separate line in the Statement of Financial Position. These assets are accounted for at cost less accumulated depreciation and impairment losses. The cost of these assets comprises the initial costs and the initial measurement of the lease liabilities, deducted from the prepaid amounts and any incentives received. Portuguese concession rights to use the public hydric domain are booked as intangible assets and depreciated on a straight- line basis over the concession period, which does not exceed 74 years. EDP Group records as concession rights the financial compensations for the use of public domain assets, whenever these compensations are paid and for all the Group subsidiaries. The accounting policy related to intangible assets assigned to concessions inthe scope of IFRIC 12 is described inz), Group concession activities. Industrial property and other rights Industrial property and other rights are amortised on a straight-line basis over the estimated useful life of the assets, not exceeding 6 years. The costs of purchasing software and the costs incurred bythe Group to implement it are capitalised and amortised on a straight-line basis over the expected useful life of the asset. Costs incurred by the Group directly related to the development of software, that are expected to generate economic benefits beyond one year, are recognised as intangible assets. Such costs include employee costs directly associated to the project and are amortised on a straight-line basis over its estimated useful life. Software maintenance costs are charged to the income statement when incurred. Concession rights on distribution of electricity The concession rights on distribution of electricity in Brazil are recorded as intangible assets and amortised on a straight-line basis over the concessions period, not exceeding 30 years. Concession rights to use the public hydric domain Concession rights on generation of electricity The concession rights on generation of electricity in Brazil are recorded as intangible assets and amortised on a straight-line basis over the concession period. The Group's intangible assets are booked at acquisition cost less accumulated amortisation and impairment losses. The Group performs impairment tests whenever events or circumstances may indicate that the book value of the asset exceeds its recoverable amount, being any impairment recognised in the income statement. The recoverable amount is the higher of fair value less costs to sell and value in use, the latter being calculated by the present value of the estimated future cash flows obtained from continued use of the asset and its sale at the end of its useful life. Acquisition and development of software Depreciation of right-of-use assets is calculated on a straight-line basis over their estimated useful lives, considering the lease contract terms. 290 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 k) Investment property l) Inventories m) Employee benefits Some EDP Group companies grant post-employment benefits to employees under defined benefit and defined contribution plans, namely pension plans that grant complementary retirement benefits for age and early retirement pensions. Defined benefit plans In Portugal, the defined benefit plan is assured by (i) a closed pension fund managed by an external entity, covering responsibilities with benefits that are complementary to those provided under the Social Security System (namely retirement and early retirement pensions); and (ii) by a complementary specific provision, recognised in the statement of financial position. Benefits are generally determined and assigned through the combination of one or more factors, such as age, years of service and the relevant base retribution (pensionable salary). The responsibilities for early retirement are not covered by the fund’s assets, being adequately provisioned through a specific provision. In Brazil, EDP São Paulo and EDP Espírito Santo have defined benefit plans managed by a closed complementary welfare entity, external to EDP Group, covering responsibilities associated with retirement and early retirement pensions, according to factors such as age, years of service and the relevant base retribution. In Spain, the defined benefit plan is partially covered by insurance policies, and complemented by a specific provision, recognised at the balance sheet. Benefits are generally determined and assigned through the combination of one or more factors, such as age, years of service and the relevant base retribution (pensionable salary). Investment property is amortised on a straight-line basis over the estimated useful life of the assets (between 8 and 50 years). Inventories are measured at the lower of acquisition cost and net realisable value. The cost of inventories includes purchases, conversion and other costs incurred in bringing the inventories to their present location and condition. The net realisable value is the estimated selling price in the ordinary course of business less the estimated selling costs. The cost of inventories is determined by using the weighted average cost method. CO2 Licenses held by the Group for trade purposes are booked as inventories and measured at fair value, at each balance sheet date, against the income statement. Pensions In the pension plans in Portugal, and according with the Pension Funds regulation, the surplus amount of the assets fund, under certain conditions, can be reimbursed to the company. Remeasurement of right-of-use assets If EDP Group remeasures the lease liability (see f)), the corresponding right-of-use assets shall be adjusted accordingly. The Group classifies as investment property, property held for capital appreciation and/or for rental purposes. Investment property is recognised initially at acquisition or production cost, including directly attributable transaction costs, and is subsequently measured at cost less accumulated depreciation and any impairment losses. Subsequent expenditures on investment property are only added to the cost of the asset when it is probable that additional future economic benefits will arise when compared to initial recognition. 291 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 The Group’s pension liability for each plan is calculated by independent experts annually, for each plan, at the balance sheet date, using the projected unit credit method. The discount rate used in the calculation is determined based on market interest rates of high quality corporate bonds denominated in the currency in which the benefits will be paid and that have similar maturity to the related pension liability. Actuarial gains and losses presented in consolidated statement of comprehensive income comprise: (i) the actuarial gains and losses resulting from increases or decreases in the present value of the defined benefit obligation because of changes in actuarial assumptions and experience adjustments; (ii) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and (iii) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset). In the pension plans in Brazil, the surplus amount of the assets fund generally can not be reimbursed to the company, since there are very strict rules on the amount that can be recovered, therefore the asset amount to be recognised is greatl y reduced. The increase in past service costs arising from early retirements (retirements before the normal retirement age) or plan amendments is recognised in the income statement when incurred. The Group recognises as operational results, in the income statement, current and past service costs. Net interest on the net defined benefit liability (asset) is recognised in financial results. The assets of the plan comply with the recognition criteria established by IFRIC 14 - IAS 19 and the minimum funding requirements established by law or by contract. Defined contribution plans Some Group companies in Portugal, Spain and Brazil have defined contribution social benefit plans that complement those granted by the Social Security System, under which they pay an annual contribution to the plans, calculated in accordance with the rules established in each plan. These contributions represent a percentage of the fixed and variable remuneration of the employees included in this plan and are accounted for as cost for the period in which they are due. Other benefits granted - Defined Benefit Type In Spain, the medical care and death subsidy benefits plan is partially covered by insurance policies, and complemented by a specific provision, booked in EDP Group company’s statement of financial position. Medical benefits Some EDP Group companies provide medical benefits under which employees and immediate eligible family members have favourable conditions in medical assistance and health care services, namely: \- Concerning EDP Group companies in Portugal, through the provision of medical assistance that is complementary to the one provided under the National Health System, provided using infrastructures owned and managed internally; \- Concerning EDP Group companies in Spain and Brazil, through the share of costs in eligible medical and health expenses, in an external agreed network. In Portugal, the medical benefit and death benefits plan is assured by (i) a closed fund managed by an external entity, created in December 2016, and (ii) a complementary specific provision, recognised in EDP Group company’s statement of financial position. In Brazil, the liability is being covered by provisions booked in EDP Group company’s statement of financial position. Measurement and recognition of the medical benefits liabilities are similar to the defined benefit pension plans liabilities, explained above. 292 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 n) Provisions o) Recognition of revenue from contracts with customers The Group accounts for provisions for dismantling and decommissioning of assets at the end of the assets’ useful lifewhen there is a legal, contractual or constructive obligation. Therefore, such provisions have been booked for the electric power plants to cover the cost of restoring the location and land to their original condition. The provisions are calculated at the present amount of the expected future liability and are accounted for as part of the cost of the related property, plant and equipment being depreciated on a straight-line basis over the useful life of those assets. Decommissioning and dismantling provisions are remeasured on an annual basis based on the best estimate of the settlement amount. The unwinding of the discount at each balance sheet date is charged to the income statement. Other benefits In addition, EDP Group grants other benefits, supporting charges arising from responsibilities for disability benefit’s complements, survival benefits, life insurance, antiquity and retirement benefits, power tariff discounts, among others. These responsibilities are fully covered by a provision. Benefits included in each Plan for Portugal and Brazil are detailed in EDP’s Collective Labor Agreement, published in the Labor Bulletin of 8 October 2014 and in the website of the Plan management entity Enerprev (www.enerprev.com.br), respectively. Provisions are recognised when: (i) the Group has a present legal, contractual or constructive obligation; (ii) it is probable that settlement will be required in the future; and (iii) a reliable estimate of the obligation can be made. Regarding the electricity generation, the transfer of control occurs when the energy is generated and injected into the transport/distribution grids. The electricity generated is sold under free market conditions or through the establishment of medium/long term power purchase agreements. The energy distribution is a regulated activity, which is remunerated through tariffs set by each country Regulatory Body (Entidade Reguladora dos Serviços Energéticos (ERSE) in Portugal, Comisión Nacional de Energía (CNE) in Spain and Agência Nacional de Energia Elétrica (ANEEL) in Brazil). In Portugal and Spain, revenue arises mainly from the sale of access tariffs, as well as from the recovery, from the commercialisation entities, of the costs related to the global management activity of the system. In Brazil, revenue results from the electricity sales to final consumers, in the regulated market, based on the tariffs determined by ANEEL, which are included the use of the distribution and transport system tariff, among other components. In Portugal and Brazil, these activities are subject to public service concession arrangements (see z)). Provisions for dismantling and decommissioning in electric power plants EDP Group recognises revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services, as provided in the 5 steps methodology introduced by IFRS 15, namely: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to performance obligations; and (v) recognise revenue when (or as) the entity satisfies a performance obligation. Revenue in EDP Group arises essentially from electricity generation and distribution and energy (electricity and gas) supply activities. Revenue related to the sale of energy and access tariffs to energy distribution network is measured at fair value of the consideration received or receivable, net of value added tax, rebates and discounts and after elimination of intra-group sales. 293 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 EDP Group recognises the revenue related with services rendered over time in accordance with IFRS 15, given that the customer simultaneously receives and consumes the benefits provided by the Group. EDP Group also sells products and services as a part of an integrated commercial offer ("bundled"). In a bundled sale arrangement, the Group accounts the sale of each product and/or service separately if they are distinct, that is, if the product or service is separately identifiable in the context of the integrated offer and the customer benefits from it. The consideration paid is allocated between the goods or services separately identifiable based on their relative stand-alone selling prices. The stand-alone selling price is determined based on EDP Group price lists on goods or services sold separately or, if they are not listed, based on the market valuation approach. Inwhat concerns variable transaction prices, EDP Group only recognises revenue when it is highly probablethat there will not be any significant reversal of the recognised revenue, when it becomes certain. EDP Group considers the facts and circumstances when analysing the terms of each contract with customers, applying the requirements that determine the recognition and measurement of revenue in a harmonized manner, when considering contracts with the same characteristics and in similar circumstances. Contract liabilities Additionally, it should be noted that, in energy distribution and supply activities, there is a tariff adjustment mechanism through which gains or losses of a certain year are recognised in the period to which they relate and recovered in the future years tariffs – Tariff Adjustments (see w)). For pluriannual contracts with customers for energy sales including a termination clause determined based on the estimated consumption and contractual set prices, revenue is recognised based on the "Input Method". Under this method, revenue is recognised according to the percentage of the contract execution and the corresponding contractual margin. The margin is reviewed annually, on a contract-by-contract basis, based on the updating of estimated energy supply volumes until the end of the contract Following the Directive 13/2018, of 15 December, on tariffs to be in force in 2019, and the premisses of IFRS 15, E-Redes – Distribuição de Eletricidade, S.A. acts as an agent in the purchase and sale of access to the transmission network (CVART) and therefore, as from this date onwards the associated amounts of costs and revenues are recorded at net value in the caption Revenues and cost of Energy Sales and Services and Other. The energy supply is carried out in regulated and non-regulated markets. In non-regulated market, revenue is recognised based on commercial agreements. In regulated market, revenue is recognised according to the tariffs determined by each country Regulatory Body. For contracts with customers in which the sale of energy and access tariffs are generally expected to be the only performance obligation, EDP Group recognises the revenue at a point in time when control of the asset is transferred to the customer, generally on delivery of the goods. Revenue recognition includes two components: (i) energy sales already invoiced, based on actual consumption readings and/or in estimated consumption based on the historical data of each consumer; and (ii) estimates of energy supplied and not yet invoiced (energy into energy meter). Differences between estimated and actual amounts are recorded in subsequent periods. As provided by IFRS 15, EDP Group presents a contract liability if the Group has an obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. 294 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 p) Financial results q) Income tax Financial results include interest costs on borrowings, interest income on funds invested, dividend income, foreign exchange gains and losses, realised gains and losses, changes in fair value of derivative financial instruments related to financing activity classified by the Group, within IFRS 9, as held for trading and consequently measured at fair value through profit or loss, and changes in the fair value of hedged risks, when applicable. Interest is recognised inthe income statement on an accrual basis. Dividend income is recognised on the date theright to receive is established. Considering the accounting model provided by IFRS 16,the financial results includes the interest expenses (unwinding) calculated on the lease liabilities. Income tax recognised in the income statement includes current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is also recognised in equity. Incremental costs of obtaining a contract EDP Group establishes certain contracts with third parties for the promotion (sale) of energy and related services. These third parties act as sales agents and are paid through sales commissions. The Group recognises incremental costs of obtaining contracts with customers as an asset if the entity expects to recover these costs over the respective contracts. The costs incurred by an entity to obtain a contract with a customer are considered as incremental costs whenever it is clear that the entity would not incur these costs if the contract had not been obtained (for example, a sales commission). Therefore, EDP Group understands that the incremental costs to obtain a contract are eligible for capitalisation, accounting for a contract asset under the caption Debtors and other assets of commercial activities - Non-current. This asset shall be recognised in the income statement as amortisation, on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. Considering the analysis carried out on the set of goods and services provided by the EDP Group to which these commissions relate, the useful life allocated to them varies between 6 and 8 years. Deferred taxes arising from the revaluation of assets (debt instruments) measured at fair value through other comprehensive income and cash flow hedge derivatives recognised in equity are recognised in the income statement in the period the results that originated the deferred taxes are recognised. Current tax is the tax expected to be paid on the taxable income for the period, using tax rates enacted at the balance sheet date and any adjustment to tax payable in respect of previous years. Deferred taxes are calculated in accordance with the balance sheet liability method, considering temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax basis, using the tax rates enacted or substantively enacted at the balance sheet date for each jurisdiction and that are expected to be applied when the temporary differences are reversed. Contract assets As provided by IFRS 15, EDP Group presents a contract asset if the Group has a right to consideration that is conditional on something other than the passage of time. This is common when the Group has transferred goods or services to a customer usually before invoicing and the payment is due, excluding any amounts presented as a Trade receivables (unconditional rights to consideration). 295 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 r) Earnings per share s) Share based payments The Group offsets, as established in IAS 12, the deferred tax assets and liabilities if, and only if: (i) the entity has a legally enforceable right to offset current tax assets against current tax liabilities; and (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in future periods in which deferred tax liabilities or assets are expected to be settled or recovered. When accounting for interest and penalties related to income taxes, EDP Group considers whether a particular amount payable or receivable is, in its nature, a taxable income and, if so, applies IAS 12 to this amount. Otherwise, IAS 37 is applied. The compensation between deferred tax assets and liabilities is performed at each subsidiary, and therefore the consolidated financial statements reflect in its assets the total of the deferred tax of subsidiaries that have deferred tax assets and in its liabilities the total of the deferred tax of subsidiaries that have deferred tax liabilities. Basic earnings per share are calculated by dividing the consolidated and the company net profit attributable to the equity holders of EDP, S.A. by the weighted average number of ordinary shares outstanding during the period, excluding the average number of shares held by the Group and by EDP, S.A., respectively. For the diluted earnings per share calculation, the weighted average number of ordinary shares outstanding is adjusted to consider conversion of all dilutive potential ordinary shares, such as convertible debt and stock options granted to employees. The dilution effect corresponds to a decrease in earnings per share resulting from the assumption that the convertible instruments are converted or the options granted are exercised. The stock options remuneration program enables the Group's employees to acquire parent company shares. The exercise price of the options is calculated based on the listed price of the shares at the grant date. The fair value of the options granted, determined at the grant date, is recognised in the income statement against equity during the vesting period, based on their market value calculated at the grant date. In case the option is exercised, the Group acquires shares in the market to grant them to employees. Deferred tax liabilities are recognised for all taxable temporary differences except for goodwill not deductible for tax purposes, differences arising on initial recognition of assets and liabilities that affect neither accounting nor taxable profit and differences relating to investments in subsidiaries, to the extent that these will probably not be reversed in the future. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available to absorb deductible temporary differences for taxation purposes. Shareholders of EDP Brasil structured and implemented a Share based Compensation Policy, which began in June 2016. The referred policy comprises two types of programs to be granted to certain employees (incentive and retention programs), being the eligible beneficiaries and assignment requirements subject to the conditions established. Regarding the IFRIC 23 regarding IAS 12 – Income tax, when there is uncertainty over income tax treatments, EDP Group measures its current or deferred tax asset or liability applying the requirements in IAS 12. Additionally, the Group analises all the pending litigations or disputes with tax authorities regarding income tax and records contingency and litigation provisions whenever necessary. 296 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 t) Non-current assets held for sale and discontinued operations u) Cash and cash equivalents v)Operating segments The Group presents the operating segments based on internal management information. w) Tariff adjustments Cash and cash equivalents include balances with maturity of less than three months from the contract date, including cash and deposits in banks. This caption also includes other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and specific demand deposits in relation to institutional partnerships that are funds required to be held in escrow sufficient to pay the remaining construction related costs of projects in institutional equity partnerships. In accordance with IFRS 8, an operating segment is a Group component: (i) that engages in business activities from which it may earn revenues and incur expenses; On a company basis, EDP S.A. classifies as Cash and cash equivalents the current account balances with Group companies formalized through Cash Pooling Agreements (Group's financial system). The Group also classifies as non-current assets held for sale, non-current assets or groups of assets acquired exclusively for its subsequent resale, that are available for immediate sale and its sale is highly probable. (ii) whose operating results are reviewed regularly by the entity's chief operating decision maker in order to make decisions about resources to be allocated to the segment and assess its performance; and Prior to their classification as held for sale, the measurement of all non-current assets and all assets and liabilities included in a disposal group, is adjusted in accordance with the applicable IFRS standards. Subsequently, these assets or disposal groups are measured at the lowest between their carrying amount and fair value less costs to sell. On the other hand, deviations or deficits that can be recovered, either through electricity rates (receipt of capital and interest) or through sales with recourse to third parties (bilateral contracts or securitization operations) are recognised at fair value through comprehensive income. This classification results from the existing history of sales to third parties and from the management's perspective regarding the existing assets. Non-current assets or groups of non-current assets held for sale (groups of assets and related liabilities that include at least one non-current asset) are classified as held for sale when their carrying amounts will be recovered mainly through sale, the assets or groups of assets are available for immediate sale and its sale is highly probable. Classification and measurement of regulatory assets, which qualify as financial assets in EDP Group’s financial statements, is analysed based on the business model used in the management of the assets and the characteristics of the contractual cash flows (see e)). In this sense, deviations and tariff deficits exclusively recovered or returned through electricity and gas tariffs, applicable to customers in subsequent periods, are recognised at amortised cost. (iii) for which discrete financial information is available. 297 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 x) CO2 Licenses and greenhouse gas emissions y) Statement of Cash Flow z) Group concession activities in the scope of IFRIC 12 Decree-Law 165/2008 of 21 August recognised the unconditional right of the regulated operators of the electric sector to recover the tariff adjustments under a regime identical to the one used for the tariff deficits. Consequently, EDP Group booked under the income statement caption Revenues from energy sales and services and other - Energy and access, the effects resulting from the recognition of tariff adjustments, against Debtors and other assets from commercial activities. According to the referred Decree-Law, the tariff adjustments determined annually, will be recovered by the regulated operators even in case of insolvency or cease of operations. ERSE is the entity responsible to establish the method to ensure that the entity entitled to these rights continues to recover the tariff adjustments until its complete payment. The Decree-Law also allows the transfer of the right to receive the tariff adjustment to third parties, in whole or in part, through future electricity tariffs. The Group classifies cash flows related to interest and dividends paid as financing activities and interest and dividends received as investing activities. EDP Group applies IFRIC 12 to the public-private concession contracts in which the public entity controls or regulates the services rendered through the utilisation of certain infrastructure as well as the price for such services and also controls any significant residual interest in the infrastructure. The infrastructures allocated to concessions are not recognised by the operator as property, plant and equipment or as financial leases, as the operator does not control the assets. These infrastructures are recognised according to one of the following accounting models, depending on the type of remuneration commitment of the operator assumed by the grantor within the terms of the contract: In regulated activities, the regulator establishes, through the tariff adjustment mechanism, the criteria to recognise gains or losses of one period in future periods. The tariff adjustments accounted for in the EDP Group financial statements represent the difference between the amounts invoiced by Portuguese regulated companies (based on the applicable tariffs published by ERSE in December of the previous year) and the regulated revenue calculated based on actual costs. The assets or liabilities resulting from the tariff adjustments are recovered or returned through the electricity and gas tariffs charged to customers in subsequent periods. The Statement of Cash Flow is presented under the indirect method, by which gross cash flows from operating, financing and investing activities are disclosed. Decree-Law 87/2011 of 18 July establishes the unconditional right of regulated operators in the natural gas sector to recover tariff adjustments and related interest expenses, notwithstanding the form of the future payment or situations of insolvency and cessation of operations, and allows the transfer to third parties of the right to receive tariff adjustments. The EDP Group recorded in the income statement, under the caption Revenues from energy sales and services and other - Gas, the effects of the recognition of tariff adjustments of Natural Gas, against Debtors and other assets from commercial activities and Trade payables and other liabilities from commercial activities. The Group holds CO2 Licenses in order to deal with gas emissions resulting from its operational activity and Licenses for trading. The CO2 and gas emissions Licenses held for its own use are booked as intangible assets at the acquisition cost. CO2 licenses consumption is recorded in accordance with the weighted average price of the CO2 and gas emissions Licenses held for consumption in that year. The Licenses held by the Group for trading purposes are booked under Inventories (see l)). 298 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 aa) Institutional partnerships in North America Grants received from customers related to assets within concessions are delivered to the Group on a definitive basis, and, therefore, are not reimbursable. These grants are deducted from the value of the assets allocated to each concession. Financial Asset Model The institutional investors purchase their minority partnership interests for an upfront cash payment with an agreed targeted internal rate of return over the period that the tax credits are generated. This anticipated return is computed based on the total anticipated benefit that the institutional investors will receive and includes the value of PTC’s / ITC's, allocated taxable income or loss and cash distributions received. The financial instruments held by the institutional investors issued by the partnerships represent compound financial instruments as they contain characteristics of both financial liabilities and equity. The Group has determined that at the funding dates, the fair values of the original proceeds is equal to the fair values of the liabilities at that time and no value was assigned to the equity component. Subsequently, these liabilities are measured at amortized cost. The Group carries out impairment tests to the intangible assets within concessions whenever events or circumstances may indicate that the book value of an asset exceeds its recoverable amount, being any impairment recognised in the income statement. The Group has entered in several partnerships with institutional investors in North America, through operating agreements with limited liability companies that apportion the cash flows generated by the wind farms between the investors and the Company and allocates the tax benefits, which include Production Tax Credits (PTCs), Investment Tax Credits (ITC) and accelerated depreciation, largely to the investor. This model is applicable when the operator has an unconditional right to receive certain monetary amounts regardless of the level of use of the infrastructure within the concession and results in a financial asset recognition, booked at amortised cost. This model is applicablewhen the concession includes simultaneously guaranteed remuneration and remuneration based on the level of use of the infrastructure within the concession. Intangible assets within concessions are amortised over their respective useful lives during the concession period. Intangible Asset Model This model is applicable when the operator, within the concession, is remunerated on the basis of the level of use of the infrastructure (demand risk) and results in an intangible asset recognition. Mixed Model The control and management of these wind farms are a responsibility of EDP Group and they are fully consolidated inthese financial statements. The concession contracts that currently exist in EDP Group are mainly based in the Intangible Asset Model, namely in the electricity special regime production concessions (PRE) in Portugal and in the Mixed Model, namely in the electricity distribution concessions in Portugal and in Brazil. 299 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 ab) Disposal of assets under Asset Rotation strategy 3\. Recent accounting standards and interpretations issued ● ● ● Inter-bank offered rates (IBOR) are benchmark interest rates used in various financial instruments, including loans, deposits or derivative financial instruments. EURIBOR and LIBOR are examples of this type of interest rates. After the flip date, the institutional investor retains a non-significant interest for the duration of the structure. This non- controlling interest is entitled to distributions ranging from 2.5% to 10% and taxable income allocations ranging from 5% to 10%. EDPR NA has an option to purchase the institutional investor’s residual interest at fair market value during a defined period following the flip date. Post flip non-controlling interests is the portion of equity that is ascribed to the institutional investor in the institutional equity partnership at flip date. This amount is reclassified from the total equity attributable to the Parent to non-controlling interests caption in the period in which the flip date takes place. IFRS 4 (Amended) - Deferral of effective dates to apply two optional solutions (temporary exemption from IFRS 9 and overlay approach); IFRS 16 (Amended) - Covid-19 Related Rents Concessions beyond 30 June 2021. Due to these recommendations, the transition from IBOR to risk-free rates ("RFR") has begun. In this regard, several IBOR are being reformed: (i) LIBOR GBP – due to end on 31 December 2021; (ii) EONIA - scheduled for 31 December 2021; and (iii) LIBOR USD - scheduled for 30 June 2023. Regarding EURIBOR, after the change in 2019, it is expected to continue and there are no indications that it will end in the near future. Following the financial crisis, global regulators identified the need to replace the IBORs, due to the fact that they are based less on market-observable transactions and more on the opinion of experts, recommending that they be replaced by risk-free rates. The changes in the IFRS from the interest rate benchmark reform were issued by the International Accounting Standards Board (IASB) in two phases, Phase 1, which deals with pre-substitution issues - issues prior to the replacement of a benchmark interest rate -, and Phase 2, which deals with issues of replacing a benchmark rate. Amendments to IFRS 9, IFRS 7, IFRS 4 and IFRS 16 due to the Interest Rate Benchmark Reform (IBOR Reform): This liability is reduced by the value of tax benefits provided and cash distributions made to the institutional investors during the contracted period. The value of the tax benefits delivered, primarily accelerated depreciation and ITC are recognised as Income from institutional partnerships on a pro-rata basis over the useful life of the underlying projects and, from 1 January 2021 onwards, over the 5-year recapture period, respectively (see note 8). The value of the PTC's delivered are recorded as generated. This liability is increased by an interest accrual that is based on the outstanding liability balance and the targeted internal rate of return agreed. Standards, amendments and interpretations issued effective for the Group The amendments that have been issued and that are already effective and that the Group has applied on its financial statements, with no significant impacts, are the following: The Asset rotation strategy allows EDP Group to crystallize the value of a project by selling with loss of control, and reinvesting the proceeds in another projects, targeting greater growth. Typically, the developer retain the role of O&M supplier. The gains on disposals under this strategy are recognised in the caption Other income. The amendments to IFRS 16 - Leases: Covid-19 - Related Rent Concessions beyond 30 June 2021 have been issued by the International Accounting Standards Board (IASB) on March 2021 and endorsed by EU on 30 August 2021. The Group has adopted these amendments early on after 1 January 2021.; and 300 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Regarding Phase 1, the amendments entered into force from 1 January 2020, with retrospective application. These amendments clarify that entities continue to apply certain hedging accounting requirements, assuming that the benchmark interest rate on which the hedged cash flows and cash flows of the hedging instrument are based will not be changed as a result of this reform; and include a set of exemptions that apply to all interest rate risk hedging relationships that are affected by the interest rate benchmark reform, which cease to apply when: (i) there is no longer uncertainty as to the timing and amount of the underlying cash flows; or (ii) the hedging relationship ends. Regarding Phase 2, the amendments entered into force from 1 January 2021, with retrospective application. These amendments essentially clarify: (i) the impacts on hedge accounting when Phase 1 exemptions no longer apply; (ii) the time at which the basis for determining the contractual cash flows required for financial instruments measured at fair value should be updated; and (iii) the impacts on the measurement of lease liabilities when there is a change in the basis for determining the respective contractual cash flows resulting from this reform. The EDP Group retroactively adopted the changes planned for Phase 2 on 1 January 2021. Within the implementation of this phase and as for hedging accounting, the Group only updated the documentation of existing hedging relationships when one of these situations occurred: (i) designation of an alternative benchmark rate (specified contractually or not) as a hedged risk; (ii) change in the description of the hedged item, including a description of the designated part of cash flows or fair value to be hedged; or (iii) change in the description of the hedging instrument. Given the significant number of financial instruments held by the EDP Group indexed to a benchmark interest rate, the EDP Group set up a working group to analyse the impacts of IBOR Reform in its different phases, involving the Financial Departments and the Risk Department of the EDP Group. When the existing hedge relationships are updated, the accumulated value in the cash flow hedge reserve is considered based on the new benchmark rate. In the event of discontinuation of hedge relationship when the benchmark interest rate on which the hedged future cash flows were based is changed as required by the reform, the accumulated value in the cash flow hedge reserve is also considered based on the alternative benchmark rate for the purpose of assessing whether the future hedged cash flows are still expected to occur. During 2021, no changes were made to hedge relationships or documentations, resulting from changes to benchmark interest rates. For financial instruments measured at amortised cost, the impact is reflected by the adjustment of the respective effective interest rate and there is no recognition of any gain or loss. For lease liabilities, there were no contracts identified for which the basis for determining contractual cash flows has been amended as a result of this reform. The EDP Group retrospectively adopted the changes planned for Phase 1 on 1 January 2020. As at 31 December 2020, as alternative rates had not been defined yet, EDP Group did not recognize any impact on its consolidated financial statements. To summarize, according to the analysis made, the following categories of assets and liabilities were identified as potentially subject to the application of a benchmark interest rate: Cash and cash equivalents, Trade receivables, Tariff adjustments, Amount receivable under IFRIC 12, Lease liabilities, Financial debt, Amounts payable under institutional partnerships in North America and Derivative financial instruments. From the analysis carried out, it is concluded that only the following categories would be impacted by this reform: Cash and cash equivalents, financial debt and derivative financial instruments. It should be noted that a significant part of the EDP Group's financial debt is being remunerated at fixed interest rates and therefore without exposure to the change in the benchmark interest rates. 301 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros LIBOR USD CAD CDOR EURIBOR Other Total Cash and cash equivalents 46 697 \- \- 3,175,712 3,222,409 Collateral deposits associated to financial debt \- \- 1,866 48,209 50,075 Financial debt 203 309 155,411 116,760 16,342,456 16,817,936 Derivative financial instruments (notional): Interest rate swaps Cash flow hedge 86 437 123,812 64,920 13,763 288,932 Fair value hedge \- \- 1,457,859 \- 1,457,859 Trading \- \- 313,197 190,171 503,368 Currency interest rate swaps Fair value hedge 80 891 \- 410,314 \- 491,205 Net investment hedge \- 91,378 \- 1,609,918 1,701,296 Trading \- \- \- 297,617 297,617 ● ● ● ● ● ● ● ● ● IFRS 17 - Insurance Contracts (and amendments related to initial application and comparative information); IAS 1 (Amended) - Classification of Liabilities as Current or Non-current; IAS 8 (Amended) - Disclosure of Accounting Estimates; and IAS 12 (Amended) - Deferred tax related to assets and liabilities arising from a Single Transaction. IAS 16 (Amended) - Proceeds before Intended Use; IAS 37 (Amended) - Onerous Contracts – Cost of Fulfilling a Contract; Annual Improvement Project (2018-2020); IAS 1 (Amended) - Disclosure of Accounting Policies; IFRS 3 (Amended) - Reference to the Conceptual Framework; Standards, amendments and interpretations issued but not yet effective for the Group The standards, amendments and interpretations issued but not yet effective for the Group (whose effective application date has not yet occurred or, despite their effective dates of application, they have not yet been endorsed by the EU) for which no significant impact is expected, are the following: Given the announced end of the LIBOR GBP and EONIA rates for 31 December 2021, the Group began its analysis by the contractual relations which had these rates as a benchmark and throughout the year gradually replaced these rates in its contracts with risk-free rates, such as the SONIA and the €STER rates. For LIBOR USD (announced end date 30 June 2023) and EURIBOR (replacement is not expected in the near future), the Group has not made as of 31 December 2021 any change in its contracts and is monitoring the contractual relationships that will potentially be affected by this reform in order to minimise uncertainty regarding the applicable interest rate and the timing of the flows associated with the benchmark interest rate. Thus, with reference to 31 December 2021, the EDP Group's exposure to IBOR benchmark rates is as follows (derivative financial instruments are presented at notional value while the remaining instruments are presented at their net book value): Interest rates subject to the reform Other includes amounts subject to other variable rates that are not included in the reform or fixed rate amounts. 302 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 4\. Critical accounting estimates and judgements in preparing the financial statements The new DL 15/22 provides that the coordination of the operation of the distribution networks will continue to be ensured under the current concessions until the integrated manager of the distribution networks takes over. IFRS requires the use of judgement and the making of estimates in the decision process regarding certain accounting treatments, with impact in total assets, liabilities, equity, costs and income. The actual effects may differ from these estimates and judgements, namely in relation to the effect of actual costs and income. In May 2017 Law 31/2017 was approved, which lays down the principles and general rules concerning the organisation of public tendering procedures for the awarding, by contract, of the municipal LT concessions’ operation in the Portuguese mainland. This Law foresees the simultaneous launch, in 2019, of public tender procedures for all municipalities that do not opt for direct management of the electricity distribution activity, as well as to all municipalities whose current concession contracts reach their end before 2019, and do not opt for direct management. In these cases, both parts shall enter into a written agreement extending the term of their respective concessions until the new concession contracts enter into force. The awarding decisions will be taken by municipalities or by the territorial area’s intermunicipal entity attached to the referred proceedings. The RND’s operation, which is part of the HT and MT, is carried out through a public service concessions’ attribution, by the Portuguese State. On the other hand, the right to distribute low voltage electricity is attributed to the Portuguese mainland municipalities. The legislation that establishes the basis of each concession sets up that the ownership or possession of the goods assigned to these concessions revert to the concessionaires at the end of their respective concessions. They also establish that in return for the assets returned to grantors, whether State or municipalities, compensation corresponding to the assets’ book value assigned to the concession, net of amortisations, financial contributions and non-refundable subsidies will be paid. Therefore, the assets’ estimated residual value at the end of each concession constitutes a financial asset, and the remaining fair value component of the concession assets is an intangible asset to be amortised over its useful life. Hence, the end date of each concession is one of the main assumptions to determine the amount of the financial and intangible assets. The caption “Amounts receivable from concessions - IFRIC 12”, refers to the financial assets receivable by EDP Group companies that operate infrastructures under concession contracts, and arises from the unconditional right to receive this amount regardless of the utilisation level of the infrastructures covered by the concession. In these companies is included E- Redes – Distribuição de Eletricidade, S.A. as the National Distribution Network’s (RND) concessionaire, which comprises the medium and high voltage network (MT and HT), and low voltage distribution networks (LT), being these concessions exercised exclusively through public service concession contracts. The main accounting estimates and judgements used in applying the accounting policies are discussed in this note in order to improve the understanding of how its application affects the Group’s reported results and disclosures. A broader description of the accounting policies employed by the Group is disclosed in note 2 - Accounting policies. Considering that in many cases there are alternatives to the accounting treatment adopted by EDP Group, the reported results could differ if a different treatment was chosen. The Executive Board of Directors believes that the choices made are appropriate and that the financial statements present fairly the Group operations in all material respects. Financial asset related with infrastructure concession contracts in Portugal 303 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Classification of the fair value of financial instruments In 2012, the Provisional Measure 579/12 was published in Brazil, meanwhile converted into Law 12.783/13, which determines that the amount of the indemnisation payable to the distribution companies regarding the assets not amortised or depreciated at the end of each concession, should be determined based in the methodology of the Value of Replacement as New (VNR). The indemnisation amount variation is booked against Revenues from energy sales and services and other. This amount corresponds to the difference between the residual value determined based on the value of replacement as new and the residual value determined based on the historical cost. ANEEL reviews the VNR, through the valuation report of the Regulatory Remuneration Base, every three years for EDP Espírito Santo and every four years for EDP São Paulo, as established in the concession contracts. Within these periods the distribution companies use their best estimate for the VNR. The use of different assumptions could result in different values of financial assets, with the consequent impact in the Statement of Financial Position (see note 26). Thus, it is expected that this legislation and the concessions renewal proceedings will have a significant impact on the amount of the financial and intangible assets determined E-Redes – Distribuição de Eletricidade, S.A., namely through the concessions’ termination anticipation, that currently extend beyond 2019. However, at this date it is not possible to predict the end date of the concession contracts currently in force, as the process is still in an initial phase, by doing studies and legislation. With reference to 31 December 2021, financial assets and intangible assets were determined based on the end dates of each of the contracts currently in force, and do not consider any changes arising from the already mentioned legislation. The use of different assumptions could result in different amounts of financial and intangible assets, with the consequential impact in the Statement of Financial Position (see note 26). Measurement criteria of the concession financial receivables under IFRIC 12 in Brazil Considering the uncertainties regarding the recoverable amount of property, plant and equipment, intangible assets and goodwill as they are based on the best information available, changes in the assumptions could result in changes on the determination of the amount of impairment and, consequently, in results (see notes 12 and 19). Measurement of the fair value of financial instruments Fair values are based on listed market prices, if available. Otherwise, fair value is determined either by the price of similar recent transactions under market conditions, or determined by external entities, or based on valuation methodologies, supported by discounting future cash flows techniques, considering market conditions, time value, yield curves and volatility factors. These methodologies may require the use of assumptions or judgements in determining fair values. Consequently, the use of different methodologies and different assumptions or judgements in applying a particular model, could generate different financial results from those reported. Financial instruments’ classification as debt or equity requires judgement in the interpretation of contractual clauses and in the evaluation of the existence of a contractual obligation to deliver cash or other financial assets. Impairment tests are performed whenever there is a trigger that the recoverable amount of property, plant and equipment and intangible assets is less than the corresponding net book value of the assets. Impairment of long term assets and Goodwill On an annual basis, the Group reviews the assumptions used to assess the existence of impairment in goodwill resulting from acquisitions of shares in subsidiaries. The assumptions used are sensitive to changes in macroeconomic indicators and business assumptions used by management. The investments in subsidiaries, on a company basis, and in associates are reviewed when circumstances indicate the existence of impairment. 304 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Useful lives of generation assets - Hydro independent generator in Brazil Tariff adjustments The Group reviews annually the reasonableness of the assets' useful lives that are used to determine the depreciation rates of assets assigned to the activity. When applicable, the Group changes the depreciation charge of the year, prospectively, based on such review. Brazil On 25 November 2014, ANEEL made addendums to the concession contracts with brazilian electric distribution companies to reduce significant uncertainties regarding to the recognition and realization of regulatory assets/liabilities that existed since 2010, when the IFRS were adopted in Brazil. As a consequence, the CPC ("Comitê de Pronunciamentos Contábeis") issued on 28 November 2014, the OCPC 08 (Recognition of Certain Assets and Liabilities in Accounting and Financial Reports of Electric Distribution) which determines how to treat these regulatory assets/liabilities in the financial statements. Decree-Law 237-B/2006 of 19 December, and Decree-Law 165/2008 of 21 August, recognised an unconditional right of the operators of the electricity sector to recover the tariff adjustments and related interest expenses, notwithstanding the form of the future payment or situations of insolvency and cessation of operations. Additionally, the legislation allows the transfer to third parties of the right to receive tariff adjustments. Therefore, under this legislation, regulated companies may provide to third parties, in whole or in part, the right to receive the tariff adjustments through the electricity tariffs. In accordance with the accounting policy in force, the EDP Group books under the caption Revenues from energy sales and services and other - Electricity and network access, the effects of the recognition of tariff adjustments in the electricity sector, against Debtors and other assets from commercial activities and Trade payables and other liabilities from commercial activities. Review of the useful life of the assets Portugal Tariff adjustments in Portugal represent the difference between costs and income of the National Electricity, estimated at the beginning of each period for purposes of calculating the tariff, and the actual costs and income of the System established at the end of each period. The tariff adjustments assets or liabilities are recovered or returned through electricity and gas tariffs to customers in subsequent periods. Lease Liabilities The Group recognises right-of-use assets and lease liabilities, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: i) the contract involves the use of an identified asset; ii) it has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and iii) it has the right to direct the use of the asset. EDP Group uses judgement on its assessment, namely concerning the termination and extension contract options and the determination of the incremental borrowing rate to be applied for each portfolio of leases identified (see notes 17 and 39). The hydro generation assets in Brazil for independent generators are amortised during their estimated useful lives, considering the existing facts and circumstances at the date of preparation of the financial statements. This includes, among other issues, EDP's best expectations of the useful lives of such assets, which are consistent with the useful lives defined by ANEEL, the respective contractual residual indemnification values at the end of each concession period, as well as related technical and legal opinions. The remaining period of amortisation and the indemnification values at the end of the concessions may be influenced by changes in the regulatory legal framework in Brazil (see note 16). 305 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 The use of different assumptions and judgement from those referred could lead to different financial results than those considered (see note 36). Pensions and other employee benefits Determining pension and other employee benefits liabilities requires the use of assumptions, including actuarial projections, estimated rates of return on investments, discount rates and pension and salary growth and other factors that can impact the cost and liability of pension plans, medical plans and other benefits. Changes in the assumptions could materially affect the amounts determined (see note 35). Therefore, on 10 December 2014, EDP Brasil signed the Fourth and Fifth Addendum to the Concession Agreement, where it was established that, in the case of concession termination, the outstanding balances of any failure of payment or reimbursement by the tariff (assets and liabilities), will be considered on the indemnity calculation, based on the regulator pre- established regulations. EDP Group considers, based on the issued legislation (Portugal and Brazil), that the requirements for the recognition of tariff deficits as receivables and payables against the income statement of the period have been satisfied (see notes 7, 26 and 38). Revenue recognition Energy sales revenue is recognised when the monthly energy invoices are issued, based on actual meter readings or estimated consumption based on the historical data of each consumer. Revenue relating to energy to be invoiced, regarding consumption up to the balance sheet date but not measured, is booked based on estimates that take into consideration factors such as consumption in prior periods and analysis relating to the energy balance of the operations. Provisions for dismantling and decommissioning of power generation units EDP considers to exist legal, contractual or constructive obligations to dismantle and decommission property, plant and equipment assets allocated to electricity generation operations. The Group records provisions in accordance with existing obligations to cover the present value of the estimated cost to restore the locations and land where the electricity generation units are located. EDP Group provisions include the calculation of the present value of the expected future liabilities. The use of different estimates and assumptions could affect the Group’s revenue and, consequently, its reported results (see note 7). Income taxes The Group is subject to income taxes in several jurisdictions. Certain interpretations and assumptions are required in determining the global amount of income tax. There are several transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. It is the Group's understanding that, in general, the tax treatment follows the accounting treatment, and therefore, no significant tax adjustments have been made to the accounting records arising from the implementation of the new standards. Different interpretations and assumptions could result in a different level of income taxes, current and deferred, recognised in the period (see note 14). 306 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Other assumptions and judgements could lead to a different consolidation perimeter of the Group, with direct impact on the consolidated financial statements (see note 6). Business combination Under IFRS 3 (Business Combination) in a business combination, the acquirer shall recognise and measure in the consolidated financial statements the assets acquired and liabilities assumed at fair value at the acquisition date. The difference between the purchase price and the fair value of the assets and liabilities acquired leads to the recognition of goodwill or a gain from a purchase at a low price (bargain purchase). The fair value determination of the assets acquired and liabilities assumed is carried out internally or by independent external evaluators, using the discounted cash flows method, using the replacement cost or other fair value determination techniques, which rely on the use of assumptions including macroeconomic indicators such as inflation rates, interest rates, exchange rates, discount rates, sale and purchase prices of energy, cost of raw materials, production estimates and business projections. Consequently, the determination of the fair value and goodwill or gain from a purchase at a low price is subject to numerous assumptions and judgments and therefore changes could result in different impacts on results (see note 49). Fair value measurement of contingent consideration Acquisition of assets out of the scope of IFRS 3 In order to assess whether an acquisition of an asset or a group of assets is a business, the Group identifies the elements in the acquired entity (inputs, processes and outputs), assesses the capability to create outputs (it should have at a minimum, an input and a substantive process to be assessed as a business) and, finally, assesses the capability of market participants to continuing to create outputs (conducting the activities as a business). In the case of an integrated set of activities that is in an early-stage of development and has not started to generate outputs, the Group considers other factors to determine whether it constitutes a business, such as if: (i) planned principal activities have begun; (ii) employees, intellectual property, and other inputs and processes are present; (iii) a plan to produce outputs is being pursued; and/or (iv) access to customers who will purchase the outputs can be obtained. Generally, an early-stage entity that has employees capable of developing an output will be considered a business. Contingent consideration from a business combination or a sale of a financial investment is measured at fair value at the acquisition date as part of the business combination or at the date of the sale in the event of a sale of a financial investment. This contingent consideration is subsequently remeasured at fair value at each report date. Fair value is based on discounted cash flows. The main assumptions consider the probability of achieving each objective and the discount factor, corresponding to the best estimates of management at each report date. Changes in assumptions could have significant impact on the values of contingent assets and liabilities recognised in the financial statements (see notes 27 and 39). In order to determine which entities must be included in the consolidation perimeter, EDP Group evaluates whether it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee ("de facto" control). This evaluation requires the use of judgement and assumptions in order to conclude whether the Group is in fact exposed to the variability of returns and has the ability to affect those returns through its control over the investee. Entities included in the consolidation perimeter 307 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 a) b) The approval in 2004 of the Decree-Law 240/2004,of 27 December, determined the early Power Purchase Agreements (PPA) extinction, and the adoption of a contractual stability compensation (CMEC), which EDP Produção entered into after signing the Contractual stability on 27 January 2005, approved by the competent Government member (Order 4672/2005, of 4 March). This mechanism includes three types of compensation: initial compensation, annual adjustment (or revisibility) and final adjustment. Revisibility amounts for the years 2007 to 2014 were determined and approved by the Member of the Government responsible for the energy sector, and were contested by EDP Produção: As regards the approval of the 2011 and 2012 revisibilities, the fact that it did not consider the costs incurred with the social tariff in the calculation of the revisibilities; and As regards the approval of the 2014 revisibility, the fact that it did not take into account in the calculation of the revisibility the costs incurred with the social tariff and CESE. The annual revisibility of 2015 was approved by the Government member responsible for the energy sector in 20 October 2020 in the amount of 62.7 million Euros, after deducting an amount of 72.9 million Euros related to the alleged overcompensation of CMEC, due to their participation in the ancillary services market, in the period between 2009 and the first quarter of 2014 (see section Ancillary Services). EDP Produção challenged the order for ratifying the annual revisibility for the year 2015 on 19 January 2021, as it did not agreed with the assumption of overcompensation within the scope of its performance in the system services market, between 2009 and 2014 and, consequently, do not agree with the deduction of the underlying value (72.9 million Euros) in that revisibility. It should also be noted that EDP Produção has already contested the imposition of a fine by the Competition Authority on matters of the same scope. The challenge also covered the non- consideration of the Social Tariff and CESE amounts paid by the centrals operating under the CMEC regime and also the non- approval of the annual revisibilities from 2016 to 2017, which still await the respective approval by the Government member responsible for the area of energy. ii) Contractual stability compensation – Final Adjustment Therefore, in application of the above, the Group concludes that IFRS 3 is not applicable when there are no outputs at the acquisition date due to an early-stage of development, and the acquired process(es) cannot be considered substantive. Thus, the acquisition of an asset or a group of assets that does not fulfill the conditions to be considered a business is classified as an acquisition of a company out of scope of IFRS 3. Contractual stability compensation - CMEC i) Contractual stability compensation – Annual revisibility mechanism The CMEC’s Final Adjustment is calculated in accordance with number 7 of article 3rd and Annex IV of Decree-Law 240/2004, of 27 December. The State budget for 2017 (Law 42/2016 of 28 December) determined, in its article 170, that the final adjustment amount is determined and based on a study prepared and presented by ERSE. This entity had the technical support of EDP Produção and REN (Work Team), legally enforced. During period I (2007/2017) of the contractual stability compensation mechanism, there was a correction on an annual basis, resulting from positive or negative deviations between the estimates made for the initial stability compensation calculation and actual amounts arising from an efficient performance, using the "Valorágua" model, as established in the Decree-Law 240/2004. Later, Order 4694/2014 was published to define the guidelines of the annual revisibility calculation with respect to the revenues from the ancillary services market, regarding power plants under CMEC. 308 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 In the Financial statements as at 31 December 2017, EDP Group has included its best estimate of the CMEC final adjustment, by recognising an asset in the amount of 256.5 million Euros against deferred income, based on the methodology established for this purpose in Decrew-Law 240/2004, of 27 December, and in the legal opinions obtained in the meantime on this understanding. On 3 May 2018, EDP was notified (through a DGEG’s letter from 25 April 2018) that the CMEC final adjustment had been officially approved, according to ERSE’s proposal, in the amount of 154 million Euros. EDP reflected this reality in its financial statements as of 31 December 2018, recognising a provision by the difference in the final adjustment amounts already recognised in the Group's revenues. On 31 December 2021 EDP maintains the provision in its accounts (see note 36). Considering that the administrative act contained in the Dispatch of approval of the SSE of 25 April 2018 lacks technical, economic and legal basis, and that, in particular, it does not apply the calculation methodology contained in Decree-Law 240/2004, of 27 December, and which would lead to the determination of an amount close to the one determined by the technical group, on 3 September 2018, EDP Produção has legally contested it. "Clawback" - Regulatory mechanism to ensure the competitive balance in the wholesale electricity market in Portugal The amount payable should consider, on one hand, an estimate of the impact that the off-market events in the European Union (such as the above-mentioned tax changes in Spain) would have in pool prices, and on the other hand, the existence of extra-market events - national markets that affect the competitiveness of electricity generators operating in Portuguese territory. Consequently, a net competition advantage would allegedly arise to generators operating in Portugal. Under this mechanism regulation – commonly known as clawback – Social tariff and CESE were approved by Dispatch 11566- A/2015, of 3 October, as off-market events that should be considered as competitive disadvantages of generators operating in Portugal. Dispatch 7557-A/2017, of 25 August, superseded Dispatch 11566-A/2015 (which defined the variables for the computation formula of the amount to be paid by each of the power-generating plants under Decree-Law 74/2013, of 4 June, for each injected MWh) in its entirety. It states that ERSE, after consulting DGEG, shall present proposals for a new definition of the variables, as well as reference terms for the new study. Pursuant to relate diploma and its regulations, in order to restore such balance, the power plants operating on a market regime situated in Portugal, which were not covered by the PPA or CMEC regime, should pay to the System an amount per MWh produced. Following some tax changes occurred in Spain, which affected electricity generators operating in this country, Decree-Law 74/2013, of 4 June, was approved in Portugal, which aimed to rebalance the competition between electricity generators operating in Portugal and other players operating in Europe. At the end of September 2017, ERSE has also presented to the Government its report on the calculation of the CMEC final adjustment, reaching an amount of 154 million Euros, which was provisionally considered in the document of tariffs and prices for 2018. Accordingly, the technical group EDP/REN has presented to ERSE its report on the CMEC final adjustment calculation, which was achieved by strictly following the calculation methodology described in Decree-Law 240/2004, of 27 December. This calculation, performed by the technical group EDP/REN was presented to ERSE and comes to a range of amounts between 256.5 and 271 million Euros. 309 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 In the Financial statements as at 31 December 2018, EDP Group has included the clawback amount as calculated by EDP Produção, regarding the legislation in place in each period, namely Decree-Law 74/2013, of 4 of June, Order 225/2015, Ordinance 9371/2017 and Dispatch 9955/2017. It is important to notice that this mechanism is not applicable to power plants in 2018 still operating under CMEC regime. However, this situation was subsequently changed and disputed by EDP Produção. Following the temporary suspension of the tax on electricity production in Spain: Subsequently, the Dispatch 9371/2017, of 24 October, partially nulled the Dispatch 11566-A/2015, from the SSE, in relation to the decisions presented under its numbers 11 and 12 (the deduction of social tariff and CESE costs in the unit price). ERSE was asked to consider in 2018 UGS tariff, the recovery, in benefit of the consumers, of the amounts allegedly unproperly included in previous years’ tariffs (2016 and 2017). Dispatch 9955/2017, of 17 November, defines a new amount for the estimate of the off-market events’ impact in EU, which is -4.75 €/MWh, with retroactive effects as at August 24. Following these Dispatches, the document of prices and tariffs for 2018 has included a clawback amount of around 90 million Euros to be returned to tariffs, which includes power plants operating under CMEC and estimated generation. Based on its interpretation of the Law, as well as on legal opinions obtained in the meantime, EDP Produção considers that the Decree-Law 74/2013, of 4 of June, aims to reestablish a situation of competition balance between generators operating in Portugal and their peers operating in other European countries, which means to consider as off-market events all the taxes and contributions that fall only over generators located outside of Portugal (particularly in Spain), as well as all the taxes and contributions that fall only over generators located in Portugal. Consequently, in the EDP Produção’s understanding, Dispatch 9371/2017 and 9955/2017 have completely distorted the clawback mechanism, having filed its legal action in January 2018. \- Order 895/2019 of 23 January, establishing the suspension of the "Clawback" was approved for a period of 6 months as from 1 October 2018; \- The Tariff and Price Document for 2019, published on 17 December 2018, estimates a Clawback value of € 4.18/MWh, to be applied after the end of the suspension period (more specifically from 6 April 2019); \- The State Budget Law for 2019 provided that "the Government shall, until the end of the first quarter of 2019, review the regulatory mechanism designed to ensure the balance of competition in the wholesale electricity market in Portugal, provided for under DL 74/2013, of 4 June, adapting it to the new rules of the Iberian Electricity Market, with the aim of creating harmonized regulatory mechanisms that reinforce competition and protect consumers". On 1 April 2019, the suspension of the tax on the production of electric energy in Spain was terminated, and it became effective again. From that moment, the "clawback" invoiced to EDP Produção was resumed, based on a value of 4.75€/MWh. On 9 August 2019, Decree-Law 104/2019 was published, which makes the first amendment to Decree-Law 74/2013, of 4 June, by changing the scope of the clawback mechanism. Previously, “electricity producers under the ordinary regime and other producers not covered by the guaranteed remuneration regime" were subject to clawback. With the publication of this diploma, the CMEC centrals are now included in the scope of the clawback. Considering that this scope contradicts the Decree Law 240/2004, of 27 of December, EDP Produção proceeded to its challenge. \- ERSE informed EDP Produção that any clawback invoicing relating to the referred suspension period should be deleted or cancelled; On 5 October 2018, the Spanish legislature, by the sixth and seventh additional lines on Article 21 of Royal Decree-Law 15/2018, suspended the 7% tax on electricity generation approved in 2012 for a period of six months, from the beginning of October 2018 to the end of March 2019. This tax suspension corresponds to the suspension of the off-market event verified within the European Union, which is considered in the clawback calculation. 310 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 On 30 June 2020, Dispatch 6740/2020 was published by the Secretary State of Energy (SEE) which establishes the CIT (corporate income tax) – advanced payment to be applied in 2020 to electric power producers covered by the "Clawback" mechanism. The value of CIT (corporate income tax) – advanced payment for the year 2020 is set at € 2.24/MWh for plants that are not subject to extra market internal events, that is, only to some renewable energy producers in the market with the exception of the power generation centers included in the scope of internal extra-market events identified. On 22 October 2020, Dispatch 10177/2020, issued by the SEE Office, was published, which determines the final compensation of the “Clawback” for the year 2019, considering the ISP regime as the only internal off-market event within the National Electrical System (SEN), thus determining a value of € 2.24 / MWh for hydro, gas and PRE on the market and 0.68€/MWh for coal power plants. This determination is not consistent with that contained in Dispatch 12424-A/2019, of 27 December, which identifies ISP, CESE and Social Tariff as internal off-market events for 2019. EDP Produção challenged Order 10177/2020 on 22 January 2021. On 25 June 2021, the Spanish legislator, within the scope for the adoption of urgent measures regarding energy taxation due to the high prices verified in the MIBEL in recent months, published the Royal Decree-Law 12/2021, which, among others, proceeds the suspension of the 7% tax on the production of electricity, approved in 2012, for a period between 1 July and 30 September 2021 (3 months), and with effects on the determination of the “Clawback”. More recently, and following Royal Decree-Law 17/2021, the Spanish legislator has once again suspended the 7% tax on electricity production for another 3 months, between 1 October and 31 December of 2021. Following the temporary suspension of the tax on the production of electricity in Spain, Dispatch 6398-A/2021, of 29 June, was published, which established the suspension of the “Clawback” in the period between 1 July 2021 and 30 September 2021, and Order 9975/2021, of 14 October, which determines the suspension of this mechanism between 1 October and 31 December 2021. The same Decree-Law introduced the possibility to define CIT (corporate income tax) – advanced payment, and on 26 September 2019 was published the Order 8521/2019, which set the amounts of advanced payment related to the clawback mechanism at 2.71€/MWh for coal-fired power plants and 4.18€/MWh for other power plants. In the Tariff and Price Document for 2020, published on 16 December 2019, ERSE considered the unit values defined in Dispatch 8521/2019, correcting only the value applicable to coal to 1.23 € / MWh, due to the increase in the ISP tax percentage and CO2 addition planned for 2020. EDP Produção presented on 10 March of 2020 an action seeking a declaration of nullity or annulment of that administrative act by ERSE. On 27 December 2019, Dispatch 12424-A / 2019 was published, which identifies as national extra-market events to be considered in the Study to be prepared by ERSE until April 2020 (with reference to 2019) under the Clawback mechanism, the taxation of petroleum and energy products used in the production of electricity (ISP), CESE and the Social Electricity Tariff. On 20 March 2020 ERSE Directive 4/2020 was published, which approves the operational rules of the commercial relationship between the Transmission System Operator (ORT) and the producers covered by the application of Decree-Law 74/2013, of 4 June, with the amendment given by Decree-Law 104/2019, of 9 August, revoking Directive 15/2016, of 14 September 2016, regarding the “Clawback” regime. The main change of this Directive is: i) the breakdown of the amount of power plants with CMEC and, ii) the monthly aggregation by balance sheet area, instead of by power generation center. 311 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 The verification request aims to obtain confirmation on the inadequacy of the current national social tariff financing mechanism and to prompt the review of national legislation on this financing mechanism. The European Commission is expected to complete its review by the end of 2021 during the first quarter of 2022. i) Secondary regulation band service According to AdC, EDP Produção would have manipulated its offer of tele-regulation service or secondary regulation band, limiting the capacity offer of its CMEC power plants to offer it through its market power plants, benefiting in two ways: \- Highest compensation paid to CMEC plants (annual revisability), as their lower participation in the provision of secondary regulation band service would be below what would be expected (according to competitive market criteria); and \- The increase of the market price of the secondary bandwidth service, as a result of the limited supply by CMEC plants, favouring market-based power plants. On 15 October 2021, Order 9974/2021, of the SEAE Office, was published, which determines the final compensation of the "Clawback" for the year 2020, considering as the only extra-market event within the National Electric System the regime of ISP (noting that it is consistent with the Dispatch that approved the final value for the year 2019), resulting in the following “Clawback” values: 3.64€/MWh for hydro plants and Special Regime Production (PRE) in the PRE market in Marketplace; 3.42€/MWh for CCGTs; and 2.16€/MWh for coal plants. This determination is not coherent with the goals and rationale underlying the “Clawback” mechanism, as it does not admit the Social Tariff and CESE as internal extramarket events. EDP Produção challenged Order 9974/2021 at 14 January 2022. Following the periodic litigation assessment, EDP Group filed a request to the European Commission to assess the compliance of the Social Tariff funding mechanism, fully supported by ordinary regime generators, with the rules and principles of European Union law. On this, since 2011, EDP has already been charged more than 460 million Euros (including ERSE’s estimate for 2021). EDP does not question the existence of the Social Tariff, and agrees with its purpose, but cannot, in light of the current regime, conform with the terms in which the legislator enshrined its method of financing. On 3 September 2018 the Autoridade da Concorrência (AdC) adopted a Note of Illegality, under which it intended to attribute to EDP Produção a behaviour of abuse of a dominant position in the secondary regulation band service. AdC claimed that EDP Produção restricted the offer of a segment of the Electricity System (the secondary regulation band or teleregulation service) between January 2009 and December 2013, limiting the capacity offer of its plants under CMEC regime to benefit market power plants, in order to benefit twice, to the detriment of consumers. On 28 November 2018, EDP Produção exercised its right to be heard and to defend itself in relation to the wrongful act was imputed and the sanctions it could incur, that is, it responded to the Note of Illegality. Social Tariff Scheme Ancillary Services On 18 September 2019, AdC informed EDP Produção of its decision to condemn, imposing a fine of 48 million Euros, for alleged abuse of dominant position in the secondary regulation band market in mainland Portugal between January 2009 and December 2013. 312 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Without having received any response to the gracious complain filed on 1 February 2019, EDP Produçãochallenged in court the Orders of 29 August and 4 October and the Tariff and Price Document for 2019. Subsequently, EDP Produção received a letter from ERSE dated 12 November 2018 and became aware of the Order of the SEE of 4 October, which, following the Order of 29 August, declared the annulment of the annual adjustments in the part in which they considered the alleged "innovative features" concerning the procedures for calculating the coefficient of availability. In the Tariff and Price Document for 2019, ERSE considered the refund of an amount of 90 million Euros for a portion of the 285 million Euros referred to, expecting that the remaining portion will be paid for a number of years that allow the CMEC to have zero tariff impact by including the 86.5 million Euros in the tariffs of 2020, 86.5 million Euros in tariffs of 2021 and 21.9 million Euros in 2022. ii) CMEC's revisibility overcompensation On 30 October 2019, EDP Produção filed an appeal against this decision before the Competition, Regulation and Supervision Court (TCRS), awaiting the AdC's counter-allegations. On 20 May 2020, EDP Produção was notified of an order from TCRS, which, among other things, admitted its Appeal of Judicial Contestation, establishing a purely return effect and determining the payment of the fine imposed within 20 days. In this context, EDP Produção submitted requests, invoking supervening facts to demonstrate the considerable damage associated with a putative payment of the fine, and arguing defects in the decision that determined the attribution of a merely devolutive effect to the Judicial Challenge Appeal. However, despite EDP Produção's well-founded convictions about the possibility of providing a bank guarantee or bond, instead of paying the fine, the TCRS ended up determining the payment of the fine, which occurred on 20 October 2021 (see note 36). The trial started in September 2021 and the witness hearing period has already started. On 9 July 2018, EDP has been notified,withinthe scope of a stakeholder hearing promoted bythe DGEG, to present its opinion on the possibility of DGEG proposing to the Secretary of State for Energy an amount associated with the alleged "innovative features" introduced in CMEC regime regarding PPA, to a maximum amount of 357.9 million Euros. According to DGEG, this amount shall be associated with the lack of legal scope for tests on the availability of the CMEC plants (285 million Euros) and the ancillary services, mentioned above (72.9 million Euros). On 26 September 2018, EDP Produção was notified of the Order of the SEE of 29 August, which considers as an "innovative features" the topic "procedures for calculating the verified availability coefficient", quantified at 285 million Euros. This Order refers to the alleged lack of legal forecast of availability tests of CMEC plants. Considering that the Order in question lacks technical, economic and legal basis, on 8 October 2018 EDP Produção has submitted an administrative appeal. Innovative Features On 29 September 2021, EDP Produção was cited in a class action filed by Associação IUS Omnibus based on the alleged abuse of dominant position in the secondary regulation band market between the beginning of 2009 and the end of 2013, requesting, in representation of consumers, a compensation in the amount of 94.8 million euros, as estimated by AdC in the scope of process PRC/2016/05. Given the date of service, the process is at a very early stage, and the company is currently analyzing its possible implications. On 20 October 2020, EDP Produção became aware, by letter sent by DGEG, of the dispatch of the SEE regarding the approval of the revisibility for the year 2015, which is deducted in the amount of 72.9 million Euros, relating to the alleged overcompensation. In this respect, the EDP Group has registered a provision in the amount of 72.9 million Euros (see note 36), and carried out a judicial appeal against the order of SEAE at the Administrative Court of the Lisbon Circle. The EDP Group considers that EDP Produção did not abuse any dominant position, having acted strictly in accordance with the legal framework in force. 313 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Simultaneously, the Minister of the Environment and Energy Transition (MATE) announced at the National Assembly, in a hearing at the Environment, Land-use Planning, Decentralization, Local Power and Housing Committee, that the State's decision was not to build the AHF and that "the State will always comply with the contract but believes there are no reasons for any repayment of the amount that was given to the State ten years ago". It acknowledged, however, that there was no agreement with EDP on this matter. In the Electricity Tariffs and Prices Document for 2020, approved by ERSE on 16 December 2019, that entity charged again 86.5 million Euros, as it had foreseen the previous year. Although the EDP Group considers that there were no innovative features weighted in CMEC adjustments, this aspect was reflected in these financial statements as of 31 December 2018, by recognising a provision of 285 million Euros. In 2019 EDP made the payment of 92,458 thousand Euros, during 2020 made the payment of 110,963 thousand Euros and during 2021 made the payment of 69,374 thousand Euros(see note 36), using this provision, so that at 31 December 2021 this provision amounts 12,105 thousand Euros. Hydro power plants of Fridão and Alvito On 17 December 2008, EDP Produção and the Portuguese State signed the Contract for the Implementation of the National Program for High Hydroelectric Potential Power Plants (PNBEPH) regarding the Hydro Power Plants of Fridão (AHF) and Alvito (AHA), with the payment, by EDP Produção of 231.700 thousand Euros. Of this amount, 217,798 thousand Euros relates to the right to implement and exploit the AHF. EDP Produção followed up on the procedures for the implementation of these projects, having, in the case of the AHF, obtained a Favourable Environmental Impact Declaration and an Environmental Compliance Report of the Execution Project (RECAPE). On 22 October 2013, EDP Produção requested to the Minister of the Environment, Land Management and Energy, based on a change of circumstances, to postpone the signing of the concession contract for the AHF. This request was formally rejected on 2 May 2014, and the terms of the concession contract, were subsequently negotiated between EDP Produção and the Portuguese Environmental Agency (APA) and a specific date for the respective signature for 30 September 2015, which was revoked by the Government without rescheduling a new date. In 2016, following the beginning of the XXI Constitutional Government, the Government Program provided the reassessment of the PNBEPH. In this context, it was suspended, for three years, the execution of the Contract for the implementation of the AHF, as well as the annulment of the implementation Contract regarding AHA, through a Memorandum of Understanding signed on 5 December 2016, concluded by an agreement between the Portuguese State and EDP Produção on 11 April 2017. This deferral decision was taken based on public interest reasons, considering the evolution of installed power and energy demand since 2008 (conclusion date of the Implementation Contract) until 2016. It is not clear that the AHF would be an energy surplus that would offset the environmental impacts resulting from its implementation. On 16 April 2019 EDP Produção received, by email, an official letter from the Ministry of the Environment and Energy Transition, dated 11 April 2019, informing the State's conclusion that there is no need for implementation of AHF to meet national targets for energy production from renewable sources and for reducing the emission of Greenhouse Gases, as well as "that the State does not find any reason to inhibit the construction of the Fridão Hydro Power Plant". 314 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Subsequent to the publication of the Tariffs for 2020, in 17 December 2019, the Government approved an Order that stipulates that the total value of the gains generated by the sale of real estate by E-Redes – Distribuição de Eletricidade, S.A. between 2009 and 2018, and which were subject to remuneration for the tariffs, “reverts entirely to the grantor ”, and should be “fully reflected in the electricity tariffs”. In the regulated accounts sent to ERSE in April 2018, E-Redes – Distribuição de Eletricidade, S.A. identified the amount to be returned into tariffs related to the depreciation of the properties that were sold in the period 2012-2017. ERSE did not consider this amount in the 2019 rates and submitted the topic for further analysis. Inthe Tariffs for 2020, ERSE recognized the principleof profitsharing with the system and assumed the return into the tariffs of approximately 16.6 million Euros referring to half of the net gains obtained from the sale of real estate by E-Redes – Distribuição de Eletricidade, S.A. between 2009 and 2018, having mentioned that the position to be taken by the respective grantors of the Concession Contract for the National Distribution Network (RND) and the electricity distribution network concessions in BT may determine the revision of this amount. E-Redes did not question the return to the tariff of half of the capital gains generated with the sale of real estate not allocated to any of the activities included in the RND concession and in the concessions of the municipal low voltage electricity distribution networks, having the respective representative on the ERSE Tariff Board voted in favor of this solution. EDP Produção notified the Portuguese State to clarify that at no time did EDP express its intention to not proceed with the construction of power plants and to return all the investment already made, including the consideration paid on the provisional award, and, as well, to compensate it for other losses and damages resulting from the non-compliance, to be settled in a timely manner. The Group reclassified these Assets under construction to Other debtors and other assets and valued in accordance with the principles defined in IFRS 9 (see note 27). Currently, the arbitral proceedings, initiated by EDP Produção on 24 January 2020, are in progress, and the Portuguese State presented a Reply on 20 November 2020. A preliminary hearing took place in the first quarter of 2021, and arbitration hearings during the month of April 2021. In July 2021 the closing arguments were presented and the decision being expected until the end of the first quarter of 2022. Sale of real estate by E-Redes – Distribuição de Eletricidade, S.A. In the 2009-2018 period, E-Redes – Distribuição de Eletricidade, S.A. disposed a set of real estate that were unused for the activities of the various electricity distribution concessions, in the amount of approximately 52 million Euros, obtaining a total net value of gains of 33.9 million Euros (35.7 million Euros of gains and 1.7 million Euros of losses). 315 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 On 17 March 2020, E-Redes – Distribuição de Eletricidade, S.A. initiated an arbitration process at the Commercial Arbitration Center, in which claims, moreover, (i) the principle of sharing benefits in this case, may not result in the granting ownership of all the gains generated from the sale of real estate; (ii) that the maintenance of the alienated properties would entail costs for the system, so that their alienation proves to be correct; (iii) that, in relation to all E-Redes real estate where no specific technical installations for each voltage level are installed, as is the case, it is not possible to make any distinction between the respective allocation to the RND concession, or to the municipal concessions for low voltage electricity distribution networks. The State, represented by the Ministry for the Environment and Climate Action (MAAC), submitted its response on 3 July 2020. In January 2021, the first preliminary hearing was held, followed by the pleadings phase, in which E-Redes presented its initial petition and the State reiterated in its response the arguments already listed, noting that it does not call into question the management carried out, the value of the transactions and that there was never any intention to prevent E-Redes from proceeding with the sale of the assets in question, maintaining, however, that all real estate sold are included in the concession of the RND and that the respective concession contract determines that the proceeds from the sale of properties must revert to the concession. Between July and September 2021, the written testimonies of the witnesses appointed by the parties were presented and in October 2021 these witnesses provided additional clarifications to the Arbitration Court, which agreed to notify E-Redes to attach to the process additional documentation relating to the properties referred to in process. Thus, after the fulfilment of this notification took place in the first half of November, the parties presented new witnesses who gave their testimony in mid-December 2021 and a session was held on 28 January 2022 for the presentation of closing arguments. A decision is awaited from this moment on, for which the Arbitral Tribunal has a period of 60 days, subject to extension. E-Redes acted in a transparent manner and within the framework of regulatory efficiency standards dictated by ERSE itself, as is evident from the values that have always been evidenced in the published Reports and Accounts and in the Regulated Accounts presented. On 15 December 2020, the Regulator published the tariffs for 2021 and it was considered the return to the system of the remaining amount of 16.6 million Euros referring the net gains obtained from the sale of properties in the period between 2009 and 2018, in accordance with the Dispatch sent by MAAC, despite the ongoing arbitration process. The project for the sale of the portfolio of Hydroelectric Projects located in the Douro basin falls within the scope of EDP's strategic plan for 2019-2022, as presented to the market in March 2019 and reinforced with EDP's Strategic Plan for 2021- 2025 presented in February 2021, in particular within the scope of the strategy of portfolio balancing and capital reallocation, as a way to finance new investments, particularly in renewable energy, including in Portugal. The transaction was concluded on 16 December 2020, through the sale of the entire share capital of the company Camirengia Hidroelétricos S.A. (“Camirengia”), by its sole shareholder, EDP - Energias de Portugal, S.A. ("EDP"), to the company Movhera - Hidroeléctricas do Norte, S.A. (previously known as Águas profundas, S.A., company incorporated in Portugal and therefore resident for tax purposes in Portugal, owned by the consortium formed by GDF International SAS, from ENGIE Group, by 40%, Mirova S.A. by 35% and Predica Prevoyance Dialogue du Credit Agricole, S.A. in 25%). The company Camirengia was incorporated under the simple demerger of EDP - Gestão da Produção de Energia, S.A. ("EDP Produção"), under which a complex set of items was carved-out from this company, comprising not only the titles of use of the hydric resources related to the portfolio mentioned above, but also by a multiplicity of assets, liabilities, resources and contractual positions associated and necessary for the development of the exploration activity. Sale of the portfolio of Hydroelectric Projects 316 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 5\. Financial risk management policies The Group monitors regularly the financial risks to which it has exposure to. During 2021, considering the COVID-19 pandemic and the impacts on the markets, namely on interest and foreign exchange rates to which the Group has exposure to, there was a revaluation of the risks involved, having concluded that the current Financial Risk Management Policies already incorporate worst case scenarios sufficiently conservative and therefore adequate to the Group profile, not being necessary its revision. However, given that the pandemic duration and global impacts are still unknown, the EDP Group continues to monitor the risks, seeking to anticipate and manage possible impacts not currently contemplated. EDP scrupulously fulfils all of its obligations, including tax obligations, adopting very strict practices in the technical framework of all issues, having made this transaction under the tax framework applicable, assessing the tax rules in force on the date of the transaction, a framework that was also subject to validation by Opinions requested from reputable tax experts. From a strictly operational, regulatory, technical and legal point of view, the demerger was the only viable and feasible option to proceed with the detachment of the portfolio, considering its size and complexity. In this sense, EDP followed the only model, the demerger and the subsequent sale of shares, that guaranteed the continuity of operations and the maintenance of all the commitments (including environmental nature and towards the municipalities) necessary for the portfolio normal operation and also to respond to the need of the buyer of acquiring a functional and autonomous company that would ensure the operation of all activity, without disruption, immediately after the sale - which was also required by the regulator. On the other hand, the contractual model used in the implementation of the transaction is fully in line with market standards. After its conclusion, the transaction was subject to media attention, based on the assumption that it constitutes a transfer of concessions and that, therefore, would be subject to Stamp Duty (under paragraph 27.2 of the Stamp Duty General Table). In EDP's view, that assumption is not at all applicable, and Stamp Duty is not due, as the transaction did not entail a transfer of concessions, but rather a demerger followed by the sale of the entire share capital of a company (Camirengia) holding the patrimonial assets assigned to the portfolio, operations that are not subject to Stamp Duty. Inthis context, on 16 March 2021,the President of the EDP Executive Board of Directors was requested to attend the Environment, Energy and Spatial Planning Commission of the Portuguese Parliament, in order to address the abovementioned transaction, where EDP had the opportunity to clarify all questions addressed by the Members present. In addition, on 1 April 2021, that Commission sent EDP a request for information and questions about the transaction. On 15 April, EDP, committed to contribute to the swift, full and definitive clarification of the questions that were presented, sent to the Portuguese Parliament answers to all the questions raised, and made available all the requested documentation, despite its private and confidential nature, as a testament to the collaborative, transparent and good faith attitude with which EDP has been guiding its relationship with the State and its institutions. In this spirit of collaboration, transparency and good faith in its relationship with the State and its institutions, EDP proactively contacted the Tax Authority, making itself available to clarify the tax aspects of the operation. On 6 July 2021, EDP became aware that DCIAP is investigating the sale of the Douro portfolio, with searches carried out at the premises of EDP and EDP Produção. During the diligence, and basing its action on a cooperative posture, all cooperation and assistance was provided to the authorities. 317 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros +10% -10% +10% -10% USD -14,282 17,456 -64,579 78,930 Exchange-rate and interest rate risk management Equity As for the subsidiaries of EDP Energias do Brasil, the management of the financial risks inherent to the variation of interest rates, exchange rates and commodities is carried out locally, according to the rules set by EDP Energias do Brasil's Management and aligned with the principles/policies set by EDP Group for this geographical area. Exchange-rate risk management Sensitivity analysis - exchange rate Regarding the financial instruments that result in an exchange rate risk exposure, a fluctuation of 10% in the EUR/USD exchange rate, as at 31 December 2021 and 2020, would lead to an increase/(decrease) in the EDP Group results and/or equity as follows: Profit or loss EDP Group operates in different geographies, therefore becoming exposed to exchange rate risk in US Dollar (USD), Brazilian Real (BRL), Polish Zloty (PLN), Romanian Leu (RON), Canadian Dollar (CAD), Pound Sterling (GBP), Hungarian Forint (HUF) and Colombian Pesos (COP). Currently, these exposures result essentially from investments of EDP Group in wind parks (and solar) in the USA, Poland, Romania, Canada, United Kingdom, Hungary and Colombia. The exposure to Brazilian Real results essentially from investments of EDP Group in EDP Energias do Brasil and EDP Renováveis Brasil. The majority of these investments were financed with debt contracted in the respective local currency which allows to mitigate the exchange rate risk related to these assets, and such financing is complemented in certain cases with derivatives to hedge exchange-rate risk on net investment. The policy implemented by the EDP Group consists of undertaking derivative financial instruments to hedge exchange rate risk with similar terms to those of the hedged asset or liability. The operations are revalued and monitored throughout their useful lives and, periodically, their effectiveness in controlling and hedging the risk that gave rise to them is assessed. Investments in the Brazilian subsidiaries of EDP Energias do Brasil, whose net assets expressed in Brazilian Real expose EDP Group to the exchange rate risk from its conversion to Euros, are monitored through analysis of the evolution of the BRL/EUR exchange rate. In the hedge relationships, the main source of ineffectiveness is the effect of the counterparties’ and the Group’s own credit risk on the fair value of the forward foreign exchange contracts and cross currency interest rate swaps, which is not reflected in the change in the fair value of the hedged cash flows attributable to the change in exchange rates. Financial risk management The EDP Group’s business is exposed to a variety of financial risks, including the effect of changes in market prices, foreign exchange and interest rates. The Group’s exposure to financial risks arises essentially from its debt portfolio, its investments and from the volatility of commodity prices, resulting in interest and exchange rate exposures as well as commodity market price exposure. The status and evolution of the financial markets are analysed on an on-going basis in accordance with the Group’s risk management policy. The management of financial risks of EDP, S.A. and other EDP Group entities is undertaken centrally by EDP, S.A., in accordance with policies approved by the Executive Board of Directors. The Financial Department, the Energy Management Business Unit and the Risk Management Department identify, evaluate and submit to the Board, for approval, hedging mechanisms appropriate to each exposure. The Executive Board of Directors is responsible for the definition of general risk management principles and the establishment of exposure limits. Dec 2021 318 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros +10% -10% +10% -10% USD -22,673 27,712 -68,188 83,341 50 bp 50 bp 50 bp 50 bp Thousand Euros increase decrease increase decrease Cash flow effect: Hedged debt -9,341 9,341 \- \- Unhedged debt -1 1 \- \- Fair value effect: Cash flow hedging derivatives \- \- 8,917 -8,917 Trading derivatives (accounting perspective) 2,773 -2,773 \- \- -6,569 6,569 8,917 -8,917 Equity Based on the Group's debt portfolio, except for Brazil, and the related derivative financial instruments used to hedge the related interest rate risk, a 50 basis points change in the reference interest rates at 31 December 2021 and 2020 would lead to an increase/(decrease) in the EDP Group results and/or equity as follows: Dec 2021 Profit or loss Profit or loss Equity Sensitivity analysis - Interest rates (excluding the Brazilian operations) This analysis assumes that all other variables, namely interest rates, remain unchanged. Interest rate risk management The aim of the interest rate risk management policies is to manage the impact on financial charges, from contracted debt, related to the exposure to interest rate risk from market fluctuations. Dec 2020 In the floating rate financing context, the EDP Group enters, when considered appropriate, into interest rate derivative financial instruments to hedge the cash flows associated with future interest payments, which have the effect of converting floating interest rate loans into fixed interest rate loans. Long-term debt engaged at fixed rates is, when appropriate, converted into floating rate debt through interest rate derivative financial instruments designed to level them to current and expected market conditions. All the operations are undertaken on liabilities in the EDP Group’s debt portfolio and mainly involve perfect hedges, resulting in a high level of correlation between changes in fair value of the hedging instrument and changes in fair value of the interest rate risk or future cash flows. In the hedge relationships, the main source of ineffectiveness is the effect of the counterparty’s and the Group’s own credit risk on the fair value of the interest rate swaps, which is not reflected in the change in the fair value of the hedged cash flows attributable to the change in interest rates. The EDP Group has a portfolio of interest rate derivatives with maturities up to 18 years. The Group’s Financial Departments undertake sensitivity analyses of the fair value of financial instruments to interest rate fluctuations. As at 31 December 2021, after the hedging effect of the derivatives 69% of the Group's liabilities are at fixed rate. 319 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 50 bp 50 bp 50 bp 50 bp Thousand Euros increase decrease increase decrease Cash flow effect: Hedged debt -10,052 10,052 \- \- Unhedged debt -1,362 1,362 \- \- Fair value effect: Cash flow hedging derivatives \- \- 6,392 -6,392 Trading derivatives (accounting perspective) 5,159 -5,159 \- \- -6,255 6,255 6,392 -6,392 Thousand Euros \+ 25% \- 25% \+ 25% \- 25% Financial instruments - assets 11,328 -10,913 2,676 -2,437 Financial instruments - liabilities -110,495 109,851 -75,183 70,936 Derivative financial instruments -7,580 8,137 -306 306 -106,747 107,075 -72,813 68,805 Brazil - Exchange and interest rate risk management Stress tests and sensitivity analysis are carried out for purposes of risk management inthe Brazilian subsidiaries. Through these two tools, the financial impact in different market scenarios is monitored. For sensitivity analysis, the exposure of portfolio of operations is evaluated through 25% and 50% changes in the main risk factors, currency and interest rates, and the scenario with the highest probability of occurrence is presented (25%). The stress test is performed on the fair value of the operations and uses as premise the interest rate curve projections of the Brazilian basic macroeconomic scenario. Brazil - Sensitivity analysis - exchange rate Dec 2020 Profit or loss This analysis assumes that all other variables, namely exchange rates, remain unchanged. Dec 2020 Counterparty credit risk management EDP Group’s policy in terms of counterparty risk on financial transactions (see note 2 e)) is managed through an analysis of the technical capacity, competitiveness, credit rating and exposure to each counterparty, avoiding significant concentrations of credit risk. Counterparties in derivative financial instruments are institutions with high credit rating so the risk of counterparty default is not considered to be significant. Therefore, guarantees and other collaterals are not typically required for these transactions. EDP Group has documented its financial operations in accordance with international standards. Derivative financial instruments are mainly contracted under ISDA Master Agreements. Dec 2021 Two Brazilian subsidiaries are mainly exposed to the USD/BRL exchange rate, arising from USD debt for which the exposure is completely offset by cross currency interest rate swaps. Equity Brazil - Sensitivity analysis - Interest rates Based on the portfolio of operations, a 25% change in the interest rates, to which the Brazilian subsidiaries are exposed to, would have an impact to EDP Energias do Brasil Group, at 31 December 2021 and 2020, in the amount of: 320 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Dec 2020 Corporate and private sector: Supply companies 81,366 74,119 B2B 443,937 415,342 B2C 354,586 326,927 Other 652,790 196,966 1,532,679 1,013,354 Public sector: Debt with payment agreement 4,059 1,238 Debt without payment agreement 202,896 114,639 206,955 115,877 1,739,634 1,129,231 Thousand Euros Portugal Spain Brazil USA Other Group Corporate and private sector 860,518 281,042 350,076 22,287 18,756 1,532,679 Public sector 38,780 149,831 18,034 \- 310 206,955 899,298 430,873 368,110 22,287 19,066 1,739,634 Thousand Euros Portugal Spain Brazil USA Other Group Corporate and private sector 498,733 96,125 393,449 17,162 7,885 1,013,354 Public sector 25,450 66,466 23,914 \- 47 115,877 524,183 162,591 417,363 17,162 7,932 1,129,231 Trade receivables by geographical market for the Group EDP, is as follows: Dec 2021 Dec 2020 The amounts receivable from supply companies are concentrated mainly in Portugal, Brazil and EDP Renováveis Group, as follows: \- In Portugal, these counterparties present a significantly reduced days sales outstanding, about 20 days, and these entities are subject to the sector regulation that establishes collaterals to reduce credit risk. The collateral provided is updated based on the average of the last quarter monthly sales, which reinforces a low risk profile; The amount receivable from customers is mainly generated by operations in Portugal, Spain and Brazil, with a diversified customer base, both geographically and in terms of segments (business clients, private and public sector) and size (Supply companies, Business to Business (B2B) and Business to Consumer (B2C)). EDP is present in 20 countries and 4 continents, with more than 8.7 million customers in the electricity sector and 0.7 million customers in the gas sector, and usually the contractual relationship with the counterparty tends to be long-lasting. The maximum exposure to customer credit risk by counterparty type is detailed as follows: \- In Brazil, it refers mainly to: (i) the amounts from sale of electricity to wholesale dealers and supply companies, (ii) accounts receivable relating to energy traded in the Electric Energy Trading Chamber - CCEE; and (iii) charges for the electricity network access; \- In EDPR EU, main customers are utilities and regulated entities in the different countries. Credit risk is not significant due to the limited average collection period for customer balances and the quality of its debtors. Additional counter-party risk comes from the countries with renewables incentives, which it is usually treated as regulatory risk; and \- In EDPR NA, main customers are regulated utility companies and regional market agents inthe US. As it occurs in Europe, credit risk is not significant due to the limited average collection period for customer balances and the quality of the debtors. However, the exposure due to the mark-to-market of long term contracts may be significant. This exposure is managed by a detailed assessment of the counter-party before signing any long term agreement and by a requirement of collaterals when financial soundness of the counterparty deteriorates. 321 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Dec 2020 Contract assets related to energy sales: Contract assets receivable from energy sales contracts 1,727,613 1,032,629 1,727,613 1,032,629 Amounts receivable from the electric sector: Amounts receivable from tariff adjustments - Electricity (see note 26) 860,661 563,580 Amounts receivable relating to CMEC (see note 26) 657,734 697,171 Amounts receivable from concessions - IFRIC 12 (see note 26) 1,208,888 1,115,215 2,727,283 2,375,966 4,454,896 3,408,595 The EDP Group undertakes management of liquidity risk through the engagement and maintenance of credit lines and financing facilities, with a firm underwriting commitment with international reliable financial institutions, as well as term deposits, allowing immediate access to funds. These credit lines are used to complement and backup national and international commercial paper programmes, allowing the EDP Group’s short-term financing sources to be diversified (see note 34). Considering the COVID-19 pandemic, the Group assessed the potential impacts on additional liquidity needs, having concluded that the current Liquidity Risk Management Policy remains adequate. As at 31 December 2021, in accordance with the methodology for determining impairment losses on amounts receivable from the electric sector, no impairment loss has been booked. The risk levels for amounts receivable from the electric sector have been considered to be the same as the country risk levels for Brazil, Portugal and Spain, which have high credit ratings. The maximum exposure to creditrisk of Contract assets related to energy sales and Amounts receivable from theelectric sector is as follows: Liquidity risk management In accordance with accounting policies - note 2 e), impairment losses are determined using thesimplified approach precluded in IFRS 9, based on life time expected losses. Regarding third-party receivables generated by the Group’s day-to-day business, the credit risk arises essentially from customers default, whose exposure is limited to the Low Tension Eletricity supplied with usual delays in payments. The very criterious credit risk analysis made for new costumers, as well as the large number of customers and their diversity in terms of sectors of activity are some of the main factors that mitigate the concentration of counterparty credit risk. EDP Group believes that the amount that best represents the Group's exposure to credit risk corresponds to the carrying amount of customers and of Contract assets related to energy sales net of the impairment losses recognised. The Group believes that the credit quality of these receivables is adequate and that no significant impaired credits exist that have not been recognised as such and provided for. Regarding the remaining receivables from companies and individual customers, resulting from the current activity of EDP Group, the credit risk is essentially the result of customers defaults, whose exposure is limited to the supply made until the possible date of supply disruption. A very criterious credit risk analysis made for new costumers, as well as the large number of customers and their diversity in terms of sectors of activity are some of the main factors that mitigate the concentration of counterparty credit risk. Amounts receivable from public sector customers include amounts receivable from renegotiated debt with payment agreements, which, as the counterparty is a public entity and has already recognised the debt through payment protocols, present a lower risk. These amounts also include debt without payment agreements arising from the normal power supply activity similar to that described for the corporate and individual sector. 322 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Following Thousand Euros Dec 2022 Dec 2023 Dec 2024 Dec 2025 Dec 2026 years Total Bank loans 238,385 212,429 116,702 85,009 51,145 578,049 1,281,719 Bond loans 1,227,879 1,777,840 2,221,977 1,774,009 2,040,793 2,262,749 11,305,247 Hybrid Bond 48,081 \- \- \- \- 3,750,000 3,798,081 Commercial paper 2,769 154,796 47,543 320,060 \- \- 525,168 Other loans 2,504 1,202 1,011 1,031 1,052 21,836 28,636 Interest Payments (i) 404,148 559,603 472,657 292,542 192,802 545,187 2,466,939 1,923,766 2,705,870 2,859,890 2,472,651 2,285,792 7,157,821 19,405,790 The table below shows the contractual undiscounted cash flows and the estimated interests due, computed using the rates available at 31 December 2021: (i) The coupons of the hybrid bonds were included taking into consideration the earliest possible call date. Energy market risk management In the sphere of its operations in the Iberian market for both electricity and gas, EDP Group purchases fossil fuels to generate electric energy which is sold in organized markets (OMIE and OMIP) as well as to third parties or, in the gas business, sells natural gas to clients either through EDP Group’s trading companies or directly to third parties. As a result, the Group is fully exposed to energy market risks. As a result of its energy management operations, EDP Group has a portfolio of operations related to electricity and gas businesses. The portfolio is managed through the engagement of operations with financial and physical settlement on the forward energy markets. The objective of the operations is to reduce volatility of the financial impact resulting from the managed positions and to benefit from arbitration or positioning within the trading limits approved by the Executive Board of Directors. The financial instruments traded include swaps (electricity, coal and gas) and futures to fix prices. Energy market risk management (excluding the Brazilian operations) In the hedge relationships, the main source of ineffectiveness is the effect of the counterparty’s and the Group’s own credit risk on the fair value of the derivative financial derivatives, which is not reflected in the change in the fair value of the hedged cash flows attributable to the change in market prices. Energy management activity is subject to a series of variables which are identified and classified based on their common uncertainty characteristics (or risk). Such risks include market price evolution risk (electricity and fuel) with impact in the expected energy volume generated, as well as credit risk of the counterparties. Monitoring the price, volume and credit risks includes their quantification in terms of positions at risk which can be adjusted through market operations. This quantification is made by using specific models that value positions to determine the maximum loss that can be incurred, with a given probability and a determined time frame. Risks are managed in accordance with the strategies defined by the Executive Board of Directors, which are subject to a periodic review based on the evolution of the operations, to change the profile of the positions and adjust them to the established management objectives. Risks are monitored by means of a series of actions involving daily monitoring of the different risk indicators, of the operations grouped in the systems and the prudence limits defined by management area and risk component, as well as regular backtesting and supplementary validation of the models and assumptions used. This monitoring not only ensures the effectiveness of the strategies implemented, but also provides elements to enable initiatives to be taken to correct them, if necessary. 323 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Dec 2020 Business Portfolio Electricity Trading 2,391 5,000 Electricity Trading \+ Hedging 369,883 80,412 Gas Hedging 77,363 38,725 Diversification effect -17,505 -26,668 432,131 97,469 Dec 2021 Dec 2020 Credit risk rating (S&P) AAA to AA- 0.00% 4.44% A+ to A- 47.53% 26.08% BBB+ to BBB- 34.70% 60.95% No rating assigned 17.77% 8.53% 100.00% 100.00% Thousand Euros \+ 25% \- 25% Differences Settlement Price - PLD -1,795 1,795 Dec 2021 Brazil - Energy market risk management Arising from the energy trading activity in Brazil, EDP Trading Comercialização e Serviços de Energia, S.A. and EDP Smart Energia Lda. are exposed to market price risk associated with future commitments, resulting from bilateral contracts for the purchase and sale of energy. At reporting date, the result of future commitment contracts is determined as the differential, for each maturity term, between the prices of the bilateral contracts for the purchase and sale of energy and their mark-to-market valuation using forward price curves. The result of future commitment contracts presents volatility associated with energy price fluctuation, generating market price risk. The management of market price risk is carried out through the determination and daily monitoring of the risk respecting the limits approved by the Management of EDP Brazil, and framed within the Risk Management Policy of the EDP Group, for the purchase and sale of energy using a methodology established in the Energy Risk Policy. The methodology adopted is a VaR (Value at Risk) with 95% confidence that considers a forward curve of market prices, the exposure of the portfolio (difference between purchase and sell) and the volatility and liquidity observed in the free market for each period. For sensitivity analysis, the exposure of portfolio of operations is evaluated through 25% and 50% changes in the forward curve of market energy prices. Below shows the scenario with the highest probability of occurrence (25%). P@R Distribution by business segment Regarding credit risk, the quantification of exposure considers the amount and type of transaction (e.g. swap or forward), the rating of the counterparty risk that depends on the probability of default and the expected value of credit to recover, which varies depending on the guarantees received or the existence of netting agreements. The EDP Group's exposure to credit risk rating is as follows: The main price and volume risk indicator used is the margin at risk (P@R), which estimates the impact of the variation of the different risk factors (price of electricity and hydrological) on the next 24 month’s margin, P@R corresponding to the difference between an expected margin and a margin of a pessimistic scenario with a probability to occur of 5% (confidence interval of 95%) considering a time frame of 2 years. Both the volumes which are certain and those, which although uncertain, are expected, namely production of the plants and the corresponding consumption of fuel, are considered. The P@R distribution by business segment is as follows: 324 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 6\. Consolidation perimeter ● ● ● ● ● ● ● ● The Group’s goal in managing capital is to safeguard the Group’s capacity to continue operating as a going concern, grow steadily to meet established objectives and maintain an optimum capital structure to reduce equity cost. In conformity with other groups operating in this sector, the Group controls its financing structure based on several control mechanisms and ratios. During the year of 2021, the following changes occurred in the EDP Group consolidation perimeter: Companies acquired: EDP Renováveis, S.A. and EDP Renewables Europe, S.L.U. acquired 100% of the company Aioliki Oitis Energiaki Single- Member LLC; The following acquisitions were classified as asset purchases, out of scope of IFRS 3 – Business Combinations, due to the substance of these transactions, the type of assets acquired and the very early stage of the projects: EDP is not an entity subject to regulation in terms of capital or solvency ratios. Therefore, capital management is carried out within the financial risk management process of the entity. Additionally, management describes this aspect of its strategic objectives, policies and processes to manage risks, including the financial risks, in the chapters of the Annual Report of 2021: 02 Strategic Approach 2.2.2 Strategic Guidelines Compliance - Continue Financial Deleveraging; and 2.3 Risk Management: Key Risks - Financial; Risk Appetite - Financial. 04 Corporate Governance 53 The main types of economic, financial and legal risk - Financial risks. Capital management EDP Renewables Europe, S.L.U. acquired 100% of the companies Kadmeios Anemos Energiaki, A.E., Voiotikos Anemos Anonimi Energiaki Etaireia e Energopark, S.R.L., International Solar Energy, S.R.L., Solar Phoenix, S.R.L., Beta Wind, S.R.L. and Nyírség Watt, Kft. and 51% of the companies Evoikos Voreas A.E. and Sofrano; EDP Energias do Brasil, S.A. acquired 100% of the company Mata Grande Transmissora de Energia LTDA; EDP Renewables Italia Holding, S.R.L. acquired 100% of the company C & C Tre Energy S.r.l.; EDP Renewables Polska, Sp. z o.o. acquired 100% of the companies Elektrownia Kamienica, Sp. z o.o., Neo Solar Chotków, Sp. z o.o., Neo Solar Przykona II, Sp. z o.o., Farma Fotowoltaiczna Koden, Sp. z o.o. and WF Energy III, Sp. z o.o.; EDP Renováveis, S.A. acquired 100% of the companies Los Llanos Solar, SpA, Parque Eólico San Andrés, SpA, Parque Eólico Victoria, SpA and Parque Eólico Punta de Talca, SpA. and 60% of the company OMA Haedori Co., Ltd.; EDP Renováveis Brasil, S.A. acquired 100% of the companies Central Geradora Fotovoltaica Monte Verde Solar II S.A., Central Geradora Fotovoltaica Monte Verde Solar III S.A., Central Geradora Fotovoltaica Monte Verde Solar IV S.A., Central Geradora Fotovoltaica Monte Verde Solar VI S.A., Central Geradora Fotovoltaica Monte Verde Solar VII S.A., Central Eólica Amanhecer I, S.A., Central Eólica Amanhecer II, S.A., Central Eólica Amanhecer III, S.A., Central Eólica Amanhecer IV, S.A., Central Eólica Amanhecer V, S.A., Central Eólica Amanhecer VI, S.A., Central Eólica Amanhecer VII, S.A., Central Solar Novo Oriente I, S.A., Central Solar Novo Oriente II, S.A., Central Solar Novo Oriente III, S.A., Central Solar Novo Oriente IV, S.A., Central Solar Novo Oriente V, S.A. and Central Solar Novo Oriente VI, S.A.; and Adittionally, were acquired 100% of three companies in North America. 325 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 ● ● ● ● ● ● ● ● ● ● ● ● ● EDP Energia Itália S.R.L. acquired 100% of the company Enertel Group S.r.l.; EDP Ventures Brasil S.A. acquired 40% of the company Blue Sol Participações S.A.; EDP Renewables North America LLC acquired, in the first quarter of 2021, an 85% stake in a distributed solar generation portfolio (C2) (see note 49); and Companies sold: The companies CIDE HC Energía, S.A. and Comercializador de Referencia Energético, S.L.U. , in which EDP Iberia, S.L. held, directly or indirectly, the 50% financial interest, were sold. This transaction generated a gain in the amount of 20,705 thousand Euros (see note 21); Additionally, the following companies were acquired in the scope of IFRS 3 – Business Combinations: Sale of companies with loss of control: EDP Energias do Brasil, SA acquired 100% of the company AES Tietê Inova Soluções de Energia LTDA., which holds 100% of the companies Nova Geração Solar LTDA. and AES Tietê Inova Soluções de Energia II LTDA.; EDP Renewables Italia Holding, S.R.L. acquired 100% of the company Aria del Vento (see note 49); EDP Renováveis, SA acquired 100% of Trina Solar Investment First Pte. Ltd., which holds 100% of LYS Energy Investment Pte. Ltd. which owns 100% of Trung Son Energy Development JSC. (see note 49); EDP Renewables Europe, S.L.U. acquired 100% of the company Vento Ludens Ltd., which owns 79% of Muirake Wind Farm Ltd. and 100% of Lurg Hill Wind Farm Ltd. On 1 April 2021, EDP Real Estate Global Solutions - Imobiliária e Gestão Participações SA ("EDP RE") agreed to sell the entire stake it held in Portsines - Terminal Multipurpose de Sines, SA ("Portsines") to the other shareholder of the Company, Empresa de Tráfego e Estiva, S.A. for the amount of 7,100 thousand Euros. In this agreement, it was established that EDP RE received all the dividends, referring to the year 2020, paid by Portsines. This agreement resulted in a global gain for EDP RE of 6,237 thousand Euros (see note 21); The companies Aliseo, S.r.l. and Elecdey Carcelén, S.A., of which EDP Renewables Europe, S.L.U. held a financial interest of 100% and 23%, respectively, were sold; The company ESC ERŐMŰ, Kft., of which EDP Renewables Europe, S.L.U. held a financial interest of 85%, was sold; In the second quarter of 2021, EDP Renewables North America LLC sold to Greencoat Fuji LLC for 232,713 thousand Euros, the equivalent of 280,500 thousand US Dollars, 68% of its interest in the company 2019 Vento XX LLC with a subsequent loss of share interest in the following companies: \- Lexington Chenoa Wind Farm LLC; and \- Broadlands Wind Farm LLC. In accordance with the Shareholders Agreement and other relevant contracts, it has been established a shared control of the Company which led to a loss of control over the company and its consolidation by the equity method. This disposal with loss of control generated a gain on a consolidated basis of 100,809 thousand Euros, recorded in the income statement (see note 8). Within this transaction, on the third quarter, EDP Renewables North America LLC sold an additional 12% of its financial interest, for an amount of 41,380 thousand Euros, the equivalent of 49,500 thousand US Dollars, generating a gain of 801 thousand Euros (see note 21). Additionally to the above sale price, it should be considered a contingent consideration, according to the relevant agreements signed, which fair value as of 31 December 2021 is a negative amount of 20 million Euros; and In the fourth quarter of 2021, EDP Renewables North America LLC., sold to CC&L Java Solar USA LLC, by 131,051 thousand Euros the equivalent of 154,999 thousand US Dollars, 80% of its interest in the project Riverstart. In accordance with the Shareholders Agreement and other relevant contracts, it has been established a shared control of the Company which led to a loss of control over the company and its consolidation by the equity method. This disposal with loss of control generated a gain on a consolidated basis of 34,825 thousand Euros (see note 8). 326 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● 2 companies in North America were liquidated. The company Dunkerque Éoliennes en Mer, S.A.S., in which EDP Renewables Europe, S.L.U., directly or indirectly held a 32% stake, was liquidated; The company Quatro Limited Partnership, in which the companies EDP Renewables Canada Ltd. and Nation Rise Wind Farm GP II Inc., held, directly or indirectly, a 100% stake was liquidated; Companies liquidated: The company SGORME - Sociedade Gestora de Operações da Rede de Mobilidade Eléctrica, S.A., in which E-Redes - Energia S.A. held, directly or indirectly, a 91% financial interest, was liquidated; Companies merged: The merger of Nation Rise Wind Farm GP II Inc. into EDP Renewables Canada Ltd.; EDP Energias do Brasil, S.A. Sold the entire stake in the companies EDP Transmissão, S.A., EDP Transmissão MA I, S.A. e EDP Transmissão MA II, S.A. for the amount of 139,315 thousand Euros, the equivalent to 879,090 thousand of Brazilian Reals. This transaction generated a gain of 45,584 thousand Euros (see note 8); EDP Renewables North America LLC sold to Northern Indiana Public Service Company LLC its entire stake in the wind project Indiana for 466,878 thousand Euros the equivalent of 538,667 thousand US Dollars, that includes an amount to be received of 269,799 thousand Euros (see note 27). This transaction resulted in a gain of 62,995 thousand Euros (see note 8); EDP Renewables, SGPS S.A., sold to Onex Renewables, S.A.R.L. the entire stake in the companies Eólica do Sincelo, S.A. and Eólica da Linha, S.A. Total shares proceeds for the transaction amount to 325,103 thousand Euros. This transaction has generated a gain of 307,699 thousand Euros (see note 8); The entire stake of a company in North America was sold. The company IE2 Innovación, S.L., in which Viesgo Infraestructuras Energéticas, S.L. held a 100% stake was liquidated; The company Aprofitament D'Energies Renovables de la Terra Alta, S.A., in which the company EDP Renovables España, S.L.U., held directly or indirectly, a 36,40% financial interest, was liquidated; and The merger of Le Chemin de Saint Druon, S.A.S. into Le Chemin de la Corvée, S.A.S.; The merger of Vaudrimesnil Energie, S.A.R.L., Parc Éolien de la Côte du Cerisat, S.A.S., La Plaine de Nouaille, S.A.S., Parc Éolien des 7 Domaines, S.A.S., Parc Éolien de Paudy, S.A.S., Parc Éolien de Flavin, S.A.S., Parc Éolien de Prouville, S.A.S., Parc Éolien de Marchéville, S.A.S., Parc Eolien Louvières, S.A.R.L., Parc Éolien des Longs Champs, S.A.R.L., Parc Éolien de Mancheville, S.A.R.L., Parc Éolien de La Hetroye, S.A.S., Parc Éolien de la Champagne Berrichonne, S.A.R.L., Bourbriac II, S.A.S. and Parc Éolien de Boqueho-Plouagat, S.A.S. into EDPR France Holding, S.A.S.; The merger of Cernavoda Power, S.A., Pestera Wind Farm, S.A., VS Wind Farm, S.A. e Sibioara Wind Farm, S.R.L. into EDPR România, S.R.L.; and The merger of EDP Real Estate Global Solutions - Imobiliária e Gestão de Participações, S.A. into EDP Global Solutions - Gestão Integrada de Serviços S.A. 327 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Companies incorporated: ● EDP Renewables Chile, SpA; ● EDPR México, S.L.U.; ● IAM Caecius, S.L.; ● Site Sunwind Energy, S.L.; ● EDPR Centro Italia PV, S.r.l.; ● EDP Transmissão Norte S.A.; ● Desarrollos Renovables de Teruel, S.L.; ● Biomasa Puente Nuevo S.L.U.; ● PCH Santa Leopoldina S.A.; ● EDPR Investment Hungary, Kft.; and ● 20 companies incorporated in North America. Other changes: ● ● ● ● ● 7\. Revenues and cost of Energy Sales and Services and Other Revenues from energy sales and services and other, by sector, are as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Energy and access 13,774,589 11,564,720 4,277,707 2,223,156 Revenue from assets assigned to concessions 709,052 622,826 \- \- Other 499,268 260,659 924,257 640,160 14,982,909 12,448,205 5,201,964 2,863,316 On April 16, 2021, EDP Renováveis S.A. concluded a capital increase of 1,500,250,000 Euros through the issue of 88,250,000 new shares at a subscription price of 17.00 Euros per share. Following the capital increase, EDP holds the same 720,191,372 shares of EDP Renováveis that it previously held, and its stake was diluted from 82.56% to 74.98% in EDPR and its subsidiaries. This dilution of EDP's holding resulted in a global gain of 548,329 thousand Euros. As it is an operation with an impact on minority interests and, therefore, without loss of control, this gain was recorded in equity. As a current operation with non-controlling interests and therefore with no loss of control, this gain was recorded in equity (see Condensed Consolidated Statements of Changes in Equity, note 32 and 33); The companies included in the consolidation perimeter of EDP Group as at 31 December 2021 are disclosed in Annex I. EDP España, S.A.U. acquired 38.24% of the company Ceprastur, A.I.E., which was already 56.76% owned by EDP Renovables España, S.L.U., whereby the Group now holds control over it; Group Company In May of 2021, EDP - Soluções Comerciais, S.A. was divided and incorporated in EDP Comercial - Comercialização de Energia, S.A., E-Redes – Distribuição de Eletricidade, S.A., SU Eletricidade, S.A. and EDP Global Solutions - Gestão Integrada de Serviços S.A.; and During the second quarter of 2021, EDPR sold 50.01% of its stake in Nation Rise to Grupo Algonquins of Pikwakanagan First Nation (AOPFN). At the same time, EDPR granted a loan to this Group to acquire this participation. From a consolidated accounting perspective, this sale, as well as the loan granted, is not considered effective. Thus, EDPR continues to consolidate this company at 100% without recognizing any non-controlling interests; In September of 2021, EDP España, S.A.U. acquired the remaining 25% of Central Térmica Ciclo Combinado Grupo 4, S.L. 328 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Revenues from energy sales and services and other, by geographical market, for the Group, are as follows: Thousand Euros Portugal Spain Brazil USA Other Group Energy and access 6,406,904 3,869,408 2,436,152 563,951 498,173 13,774,589 Revenue from assets assigned \- to concessions 252,406 \- 456,647 \- \- 709,052 Other 271,222 99,180 106,989 16,364 5,514 499,268 6,930,532 3,968,588 2,999,788 580,315 503,687 14,982,909 Thousand Euros Portugal Spain Brazil USA Other Group Energy and access 5,990,422 2,622,963 2,046,186 623,547 281,602 11,564,720 Revenue from assets assigned to concessions 230,796 \- 392,030 \- \- 622,826 Other 113,724 55,894 73,841 9,932 7,268 260,659 6,334,942 2,678,857 2,512,057 633,479 288,870 12,448,205 Thousand Euros Renewables Networks Client Solutions & Energy Managt. Total Group Energy and access 1,286,677 1,343,149 11,144,770 13,774,596 -7 13,774,589 Revenue from assets assigned to concessions \- 709,029 24 709,053 -1 709,052 Other 65,089 122,865 294,181 482,135 17,133 499,268 1,351,766 2,175,043 11,438,975 14,965,784 17,125 14,982,909 Other Segments Dec 2021 Reported Operating Segments Dec 2021 Dec 2020 The caption Energy and network access in Portugal, on a consolidated basis, includes a revenue of 232,552 thousand Euros (revenue in 31 December 2020: 1,462,407 thousand Euros) regarding tariff adjustments of the period (see notes 26 and 38). This caption also includes, in Brazil, a net revenue of 91,111 thousand Euros (31 December 2020: net revenue of 61,596 thousand Euros) related to recognition of tariff adjustments for the period in Brazil (see note 38). Additionally, the caption Energy and network access includes, on a consolidated basis, a positive amount of 51,529 thousand Euros (31 December 2020: positive amount of 61,777 thousand Euros) related to the contractual stability compensation (CMEC) as a result of the power purchase agreements (PPA) termination, including an income of 19,282 thousand Euros related to the CMEC final adjustment (31 December 2020: positive amount of 21,629 thousand Euros), net from the recognised provision due to the final adjustment official approval. The caption Energy and network access, on a company basis, includes 1,140,333 thousand Euros (31 December 2020: 1,097,464 thousand Euros) related with energy sales under the purchase and sale agreement of evolutive energy between EDP, S.A. and EDP Comercial S.A. The breakdown of Revenues from energy sales and services and other by segment, are as follows (see note 51 - Operating Segments): The caption Other includes, on an individual basis, 749,759 thousand Euros (31 December 2020: 473,678 thousand Euros) related to the sale of CO2 licenses. The caption Others includes, on a consolidated basis, 241,605 thousand Euros (31 December 2020: 95,053 thousand Euros) related to the sale of CO2 licenses. 329 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Renewables Networks Client Solutions & Energy Managt. Total Group Energy and access 1,308,733 502,673 9,753,359 11,564,765 -45 11,564,720 Revenue from assets assigned to concessions \- 622,823 3 622,826 \- 622,826 Other 49,685 48,417 157,653 255,755 4,904 260,659 1,358,418 1,173,913 9,911,015 12,443,346 4,859 12,448,205 Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Cost of energy 7,544,255 5,978,560 3,299,117 1,953,992 Expenditure with assets assigned to concessions 589,634 531,861 \- \- Changes in inventories and cost of raw materials and Consumables used Fuel, steam and ashes 401,558 177,253 \- \- Gas 638,799 248,850 906,212 169,310 CO2 Licenses 460,639 261,784 741,768 458,007 Other 513,133 158,179 192,836 -26,308 2,014,129 846,066 1,840,816 601,009 10,148,018 7,356,487 5,139,933 2,555,001 Thousand Euros Dec 2021 Dec 2020 Revenue from assets assigned to concessions 709,052 622,826 Expenditure with assets assigned to concessions Subcontracts and other materials -456,112 -417,609 Personnel costs capitalised (see note 10) -75,706 -70,709 Capitalised borrowing costs (see note 13) -57,816 -43,543 -589,634 -531,861 The segment "Client Solutions & Energy Management" includes sales of renewable energy, hydro and wind, carried out by EDP SA's energy management business unit, as part of its intermediation activity. Revenues from energy sales and services and other by segment are considered globally as "overtime" and not as "at a point in time". Cost of energy sales and other are as follows: Group Company Dec 2020 Reported Operating Segments Other Segments Cost of electricity includes, on a company basis, includes the cost of 1,167,199 thousand Euros (31 December 2020: 1,047,943 thousand Euros) with the purchase of energy under the agreement for management, purchase and resale of energy signed between EDP, S.A. and EDP Gestão da Produção de Energia, S.A. Under the terms of concession contracts of EDP Group to which IFRIC 12 is applicable, the construction activities are outsourced to external specialised entities. The revenue and the expenditure with the acquisition of these assets are as follows: Group Revenue from assets assigned to concessions include 424,454 thousand Euros relative to electricity distribution concessions in Portugal and in Brazil resulting from the application of the mixed model. Additionally, it also includes the revenue related to the asset to be received by EDP Group under the transmission concessions in Brazil (see note 26). 330 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 8\. Other income Other income, for the Group, are as follows: Thousand Euros Dec 2021 Dec 2020 Income arising from institutional partnerships (see note 37) 177,205 201,783 Gains on disposals - electricity business assets - Asset Rotation 586,988 444,338 Gains on disposals - electricity business assets \- 245,738 Gains from contractual indemnities and insurance companies 39,956 25,373 Other 219,839 160,457 1,023,988 1,077,689 9\. Supplies and services Supplies and services are as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Consumables and communications 29,114 27,300 6,262 6,681 Rents and leases 37,302 31,619 5,425 6,183 Maintenance and repairs 342,835 353,442 19,192 16,878 Specialised works: \- Commercial activity 142,433 142,404 217 656 \- IT services, legal and advisory fees 163,980 140,076 79,435 77,442 \- Other services 61,439 52,584 28,282 23,988 Provided personnel \- \- 8,052 9,156 Other supplies and services 111,851 109,094 22,691 18,764 888,954 856,519 169,556 159,748 Group Company Income arising from institutional partnerships relates to income arising from production and investment tax credits (PTC/ITC), mostly from accelerated tax depreciation, regarding wind farms and solar plants in North America (see note 37). The caption Gains on disposals \- electricity business assets - Asset Rotation corresponds to gains from asset rotation strategy. This strategy aimed at crystallizing the value of a project by selling with loss of control, and reinvesting the proceeds in another projects, targeting greater growth. Typically, the developer may retain the role of O&M supplier. The caption includes: i) the gain in the amount of 198,629 thousand Euros resulting from the loss of control over the sale of three portfolios of companies in North America (see note 6); ii) a gain of 307,699 thousand Euros, resulting from the sale of two companies fully owned by EDP Renewables SGPS, S.A. (see note 6); iii) a gain of 45,584 thousand Euros resulting from the sale of three companies 100% owned by EDP Energias do Brasil, S.A. (see note 6) and; iv) the amount of 29,950 thousand Euros which refers to changes in the fair value of contingent considerations, related to the sale in 2020 to OW Offshore S.L. of Mayflower Wind Energy LLC (see note 27). The caption Other includes gains on: i) reinsurance activity; ii) gains on the sale of property, plant and equipment; iii) changes in fair value of contingent prices of sales transactions; and iv) a gain of 44 million euros resulting from a favorable decision of the Regional Economic-Administrative Court of the Principality of Asturias in favor of EDP España regarding the fee for using the public hydraulic domain known as “Canon Hidráulico”. The main variations on the captions Revenues and cost of Energy Sales and Services and Other are described in the Chapter 3 \- Performance mainly in 3.1 - Group's financial analysis and 3.4 - Business area analysis. Group 331 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 10\. Personnel costs and employee benefits Personnel costs and employee benefits are as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Personnel costs Board of Directors remuneration 16,424 16,997 5,758 7,050 Employees' remuneration 488,711 466,762 45,948 42,501 Social charges on remuneration 119,546 112,117 11,457 10,918 Performance, assiduity and seniority bonus 97,710 84,138 18,713 16,753 Other costs 21,350 22,972 1,503 294 Own work capitalised: \- Assigned to concessions (see note 7) -75,706 -70,709 \- \- \- Other (see note 16) -93,494 -77,367 -9,360 -6,660 574,541 554,910 74,019 70,856 Employee benefits Pension plans costs 20,636 18,673 1,486 4,967 Medical plans costs and other benefits (see note 35) 6,867 14,843 208 348 6,844 36,848 \- \- Other benefits plans past service cost (Curtailment/Plan amendments) (see note 35) 8,469 1,068 \- \- Other 49,102 40,971 4,939 3,211 91,918 112,403 6,633 8,526 666,459 667,313 80,652 79,382 Dec 2021 Dec 2020 Dec 2021 Dec 2020 Executive Board of Directors 5 9 5 9 Senior management 962 861 113 102 Managers 865 777 18 28 Specialists 5,276 4,717 463 441 Support, Operational and Administrative Technicians 5,128 5,246 70 72 12,236 11,610 669 652 11\. Other expenses Other Expenses are as follows: Thousand Euros Dec 2021 Dec 2020 Concession rents paid to local authorities and others 281,209 283,486 Direct and indirect taxes 228,055 207,487 Donations 21,219 24,822 Write-off of tangible assets 31,195 33,755 Other 94,016 85,630 655,694 635,180 As at 31 December 2020, Pension plans past service cost (Curtailment/Plan amendments) were essentially related to the increase in liabilities due to the closure of Sines power plant (see note 35). Group Company Pension plans costs include 5,221 thousand Euros (31 December 2020: 5,202 thousand Euros) related to defined benefit plans (see note 35) and 15,415 thousand Euros (31 December 2020: 13,471 thousand Euros) related with defined contribution plans. (see note 35) Pension plans past service cost (Curtailment/Plan amendments) During 2021, EDP Group distributed treasury stocks to employees (554,583 shares) totalling 2,684 thousand Euros. The breakdown by management positions and category of professional staff is as follows: Group Company Group 332 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 12\. Amortisation and impairment Amortisation and impairment are as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Depreciation/impairment of Property, plant and equipment (see note 16) 1,214,239 1,112,667 5,519 6,045 Depreciation/impairment of Right of use asset (see note 17) 77,640 62,282 5,661 5,519 Amortisation/impairment of Intangible assets (see note 18) 449,362 455,783 16,673 17,858 1,741,241 1,630,732 27,853 29,422 Amortisation/impairment of Investment property (see note 23) 297 8,042 3,796 11,304 1,741,538 1,638,774 31,649 40,726 Compensation of depreciation -22,517 -22,176 \- \- Amortisation of Incremental costs of obtaining contracts 7,747 12,841 \- \- Impairment of Goodwill (see note 19) 4,987 2,392 \- \- 1,731,755 1,631,831 31,649 40,726 Company The caption Others includes losses in the reinsurance activity, losses in fixed tangible assets and an indemnity of 21.5 million Euros related to the cancellation of the gas acquisition contracts that existed with Sonatrach, as part of an agreement to terminate commercial relations between the companies. During 2021, due to the revision of market assumptions (in mainly, commodity prices and energy sales prices), as well as the entry of renewable energy capacity, the Group carried out a review of its future estimates of value by carrying out impairment tests for some of the production assets. with customers Group Partially-funded property, plant and equipment (see note 38) The increase in the caption Direct and indirect taxes essentially results from the new taxes on generation in Spain, as a result of the new legislation issued in September 2021 to reduce the impact of the high price of gas on the sale price of generation and the adjustments of 2020 Clawback made in 2021 after the publication of the final figures on 14 October 2021. This impact was partially offset by the suspension, as of 1 July 2021, of the 7% tax on electricity generation in Spain and corresponding suspension of Clawback in Portugal (see note 4). In 2021, the EDP Group proceeded to the write-off of tangible assets, which mainly relate to losses in materials, equipment and discontinuation of projects in EDP Brasil and Portugal in the amount of 18,839 thousand Euros (31 December 2020: 31,747 thousand Euros). The caption Concession rents paid to local authorities and others includes essentially the rents paid to the local authorities under the terms of the low tension electricity distribution concession contracts and rents paid to city councils where the power plants are located. The above impairment tests carried out led to the recording of the following impairments on assets in Portugal: 82,626 thousand Euros at the combined cycle thermoelectric plant in Lares and 53,213 thousand Euros at the combined cycle thermoelectric plant in Ribatejo (see note 16). Impairments were also recorded in Spain at the combined cycle thermoelectric plants in Soto 4 and Soto 5 (27,188 thousand Euros and 51,356 thousand Euros, respectively) and in Los Barrios and Puente Nuevo coal powerplants (3,898 thousand Euros and 6,089 thousand Euros, respectively) (see note 16). In the scope of impairment tests on these assets, sensitivity analyzes were performed on key variables, namely discount rates. A sensitivity analysis of +0.5% in discount rate would determine an additional impairment loss of around: 12,922 thousand Euros in Lares power station, 14,333 thousand Euros in Ribatejo power station, 5,651 thousand Euros in Soto 4 and 10,673 thousand Euros in Soto 5. 333 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 13\. Financial income and expenses Financial income and expenses, for the Group, are as follows: Thousand Euros Dec 2021 Dec 2020 Financial income Interest income from bank deposits and other investments 15,097 20,294 Interest from derivative financial instruments 16,558 24,161 Interest income on tariff deficit: \- Portugal - Electricity (see note 26) 2,733 1,147 \- Brazil - Electricity (see note 38) 6,057 2,205 Other interest income 53,476 47,604 Derivative financial instruments 53,936 -9,076 Foreign exchange gains 100,746 59,315 CMEC: \- Interest on the initial CMEC 27,336 30,570 \- Financial effect considered in the calculation 7,198 7,792 Gains on the sale of the electricity tariff deficit - Portugal (see note 26) 230 992 Other financial income 81,516 41,698 364,883 226,702 Financial expenses Interest expense on financial debt 523,928 513,692 Bonds buyback 24,248 70,436 Capitalised borrowing costs: \- Assigned to concessions (see note 7) -57,816 -43,543 \- Other (see note 16) -33,086 -26,989 Interest from derivative financial instruments 33,411 24,387 Interest expense on tariff deficit: \- Portugal - Electricity (see note 38) 53 42 \- Brazil - Electricity (see note 38) 3,989 7,191 Other interest expense 22,435 19,559 Derivative financial instruments 106 8,759 Foreign exchange losses 126,165 65,228 CMEC 7,681 10,655 Unwinding of discounted liabilities 123,248 142,421 Unwinding of lease liabilities (see note 39) 39,511 39,743 Net interest on the net pensions plan liability (see note 35) 3,300 2,197 Net interest on the medical liabilities and other benefits (see note 35) 13,290 13,372 Losses on the sale of the electricity tariff deficit - Portugal \- 1,037 Other financial expenses 45,353 49,139 875,816 897,326 Financial income/(expenses) -510,933 -670,624 Capitalised borrowing costs includes the interest capitalised in assets under construction according to Group accounting policy (see note 2 h)). Regarding the rate applicable to borrowing costs related with tangible/intangible assets under construction that is used in the determination of the amount of borrowing costs eligible for capitalisation (see notes 16 and 18), it varies depending on business unit, the country and currency, since EDP Group incorporates in its scope of consolidation a significant number of subsidiaries in several geographies with different currencies. Therefore, for the most representative geographies, the weighted average funding rates, in use in 2021, ranged from 0.6% to 3.26% in Portugal, from 1.8% to 4.42% in Spain and from 0.43% to 7.75% in North America, depending on related assets under construction and related financing. Group 334 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Financial income and expenses, for the Company, are as follows: Thousand Euros Dec 2021 Dec 2020 Financial income Interest income from loans to subsidiaries and related parties (see note 44) 37,906 53,123 Interest from derivative financial instruments 81,127 124,800 Derivative financial instruments 164,763 151,540 Income from equity investments (see note 44) 1,164,310 908,690 Gains on the sale of financial investments \- 215,650 Other financial income 11,210 32,979 1,459,316 1,486,782 Financial expenses Interest expense on financial debt 195,422 209,513 Bonds Buyback 16,525 120,042 Interest from derivative financial instruments 102,457 136,141 Derivative financial instruments 136,176 207,352 Unwinding of lease liabilities 4,949 7,062 Other financial expenses 19,010 14,834 474,539 694,944 Financial income/(expenses) 984,777 791,838 The Derivative financial instruments caption includes income and expenses related with financial assets and liabilities measured and fair value through profit and loss, while the remaining captions of financial income and expenses are registered at amortised cost, based on the effective interest rate method. The costs related to the Unwinding liabilities at discounted value refer essentially to: (i) the financial update of the provision for dismantling and decommissioning of production assets in the amount of 3,753 thousand Euros (31 December 2020: 6,432 thousand Euros) (see note 36); (ii) the implied financial return in institutional partnerships of 79,023 thousand Euros (31 December 2020: 94,718 thousand Euros) (see note 37); and (iii) the financial expenses related to the discount of the liability associated to the concessions of Alqueva/Pedrógão, Investco and Enerpeixe of 26,256 thousand Euros (31 December 2020: 26,721 thousand Euros). In the third quarter of 2021, EDP S.A. has bought an amount of 647,040 thousand Euros issued by Finance B.V., booking a cost related to the transactions of 24,248 thousand Euros (see notes 27 and 34). Company On December 2020, EDP S.A. sold its stake in the company that owns the portfolio of 6 Hydroelectric Power Plants (Miranda, Bemposta, Picote, Foz Tua, Baixo Sabor e Feiticeiro), by a total amount of 2,173,000 thousand Euros, generating a gain of 215,609 thousand Euros in the Caption Gains on the sale of financial investments. Under the agreement entered into with Sonatrach with a view to ending commercial relations between the companies, it was agreed a debt cancellation that EDP had with Sonatrach companies in the amount of 79 million of Euros for a payment of 15 million Euros (see note 39). The impact of this operation is included in the caption Other Financial Income. The fluctuation of Financial Costs and Profit on an individual basis is mainly explained by the increase in income from equity investments and by the reduction of the cost of debt, both by a reduction of the average cost of debt and by the debt buybacks occurred in 2020, with an impact of 120,042 thousand Euros. The fluctuation of Financial Costs and Profit in EDP Group is mainly explained by the above mentioned fact on an individual basis and by the income accounted under the agreement entered into with Sonatrach. On December 2021, EDP S.A. has ought an amount of 150 million Euros from the issue "EUR1.000.000.000 Fixed Rate Notes due 2025", booking a cost related to the transaction of 16,525 thousand Euros. 335 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 14\. Income tax Dec 2021 Dec 2020 Europe: Portugal 21% - 31,5% 21% - 31.5% Spain 24% - 25% 24% - 25% Netherlands 25% 25% Belgium 25% 25% 26,5% - France 27.5% 28% Italy 24% - 28,8% 24% - 28.8% Poland 19% 19% Romania 16% 16% United Kingdom 19% 19% America: Brazil 34% 34% United States of America 24.91% 24.91% Canada 26.5% 26.5% Mexico 30% 30% The statutory corporate income tax rates applicable in the main countries in which EDP Group operates are as follows: EDP Group companies are taxed, whenever possible, on a Group consolidated basis as allowed by the tax legislation of the respective countries. As the EDP Group prepares and discloses its financial statements in accordance with IFRS, an alignment between the accounting of income tax expense or income and the corresponding cash flow is not mandatory. Accordingly, this analysis does not represent the income tax paid or received by the EDP Group for the correspondent reporting period. The overall tax contribution borne by the EDP Group (which includes comments on the contributions paid to the respective states where the Group operates), as well as other relevant information (such as EDP Group's tax footprint, specific taxation over energy sector and procedures to control and manage adverse tax exposures), are disclosed on the annual Sustainability Report, available on EDP website (www.edp.com). The general principles concerning EDP Group's mission and tax policy are also addressed in the same report. This document also describes the key principles with respect to transfer pricing policy applicable to the EDP Group, under which the Group's policy is to abide within the international rules, guidelines and best practices applicable in the various geographies where it operates. It should be noted that, as a multinational group, the EDP Group fully complies with the annual obligation of communication and report, which results from the transposition to the Portuguese domestic Law of the disposals of Action 13 of the Base Erosion and Profit Shifting (named Country-by-Country Reporting), as a part of a set of measures adopted by OECED and G20 countries to enhance transparency for tax administrations. Furthermore, this obligation is fulfilled in Portugal by the parent company, within the deadlines foreseen by law. Main features of the tax systems of the countries in which EDP Group operates The following note includes an analysis on the reconciliation between the theoretical and the effective income tax rate applicable at an individual level and at the level of the EDP Group, on a consolidated basis. In general terms, this analysis aims to quantify the impact of the income tax, recognised in the income statement, which includes both current and deferred tax. 336 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Income tax expense is as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Current tax -191,433 -139,751 38,028 25,411 Deferred tax -70,459 -169,361 20,456 35,009 -261,892 -309,112 58,484 60,420 As per the applicable legislation, in general terms, tax periods may be subject to review and reassessment by the various tax authorities during a limited number of years. Statutes of limitation differ from country to country, as follows: Portugal 4 years or, if tax losses or credits have been used, the number of years that such tax losses or credits may be carried forward; Spain 4 years; USA and The Netherlands 3 years; and Brazil 5 years. In remaining main jurisdictions, the deadline for review and reassessment by the various tax authorities ranges between 3 and 10 years. Tax losses generated in each year are also subject to tax authorities' review and reassessment and may be used to offset yearly taxable income assessed in the subsequent periods, in the main jurisdictions in which EDP is present, as follows: in Portugal 5 years (for tax losses of 2017 to 2019, not being considered the years 2020 and 2021 for the purposes of this period); and 12 years (for tax losses of 2014 to 2016, being also applicable the suspension of two years previously referred; 2020 and 2021); in the Netherlands 6 years (for tax losses incurred from 2019 onwards); 9 years (for tax losses incurred before 2019), and without term in the USA, Brazil and Spain. Moreover, in the Netherlands the tax losses of a given year may be used to recover current tax of the previous year. However, the deduction of tax losses in the USA, Portugal, Spain and Brazil may be limited to a percentage of the taxable income of each period. EDP Group companies may, in accordance with the law, benefit from certain tax benefits or incentives in specific conditions, namely the Production Tax Credit in North America (see note 1), which are the dominant form of wind remuneration in this country, and represent an extra source of revenue per unit of electricity, over the first 10 years of the asset’s life. Wind facilities that qualify for the application of the Production Tax Credits prior to 1 January 2017, benefit from 100% of the credit ($25/MWh in 2020 and in 2021, being adjusted to inflation in subsequent years). The credit amount is reduced by 20% for wind facilities qualifying in 2017, 40% in 2018 and 60% in 2019. Additional legislation in 2020 and 2021 extended the aforementioned regime to wind facilities, with start of construction in 2020 or 2021, attributing 60% of the tax credit amount. Additionally, EDP Group companies benefit from the Investment Tax Credit which avails solar projects to a credit based upon its capital expenditures. This credit amount equates to 26% for projects that start construction before 2022 and 22% for projects starting construction in 2023 as long as these projects go into service by 2025. Relevant events for EDP Group with impact in 2021 EDP is monitoring, in the countries where it is present, tax measures designed to help mitigate the economic effects of the COVID-19 outbreak. To date, these measures have not constitute material impacts in the geographies where the EDP Group is present. The Spanish state budget for 2021 introduced amendments to the participation exemption regime, under which the exemption for dividends and capital gains from domestic and foreign subsidiaries would be limited to 95% of the income. Given the standard Corporate Income Tax (CIT) rate in Spain, the effective tax rate on dividends and capital gains derived by Spanish companies would be 1.25%, not susceptible of elimination under Spanish CIT group taxation. Corporate income tax provision Group Company 337 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 The effective income tax rate is as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Profit before tax and CESE 1,419,852 1,535,414 765,586 817,731 Income tax expense -261,892 -309,112 58,484 60,420 Effective income tax rate 18.4% 20.1% -7.6% -7.4% Thousand Euros Dec 2021 Dec 2020 Profit before income tax and CESE 1,419,852 1,535,414 Theoretical income tax rate * 29.5% 29.5% Theoretical income tax expense 418,856 452,947 Different tax rates (includes state surcharge) and CIT rate changes -74,081 36,624 Tax losses and tax credits 14,579 -33,846 Dividends -15,327 1,867 Tax benefits -21,686 -19,530 Differences between accounting and fiscal provisions/depreciations 11,062 20,661 Accounting/fiscal differences on the recognition/derecognition of assets -69,764 -130,804 Taxable differences attributable to non-controlling interests -16,576 -15,776 Other adjustments and changes in estimates 14,829 -3,031 Effective income tax expense as per the Consolidated Income Statement 261,892 309,112 * Average tax rate considering the different tax rates applicable to EDP Group companies in Portugal. Thousand Euros Dec 2021 Dec 2020 Profit before income tax 765,586 817,731 Nominal income tax rate (*) 22.5% 22.5% Theoretical income tax expense 172,257 183,989 Tax losses and tax credits 26,461 -1,258 Dividends -261,970 -204,455 Accounting/fiscal temporary differences on the recognition / derecognition of assets \- -48,762 Other adjustments and changes in estimates 4,768 10,066 Effective income tax expense as per the Company Income Statement -58,484 -60,420 * Statutory Corporate Income Tax rate applicable in Portugal (21%) and municipal surcharge (1.5%), The caption Accounting/fiscal differences on the recognition/derecognition of assets mainly includes the impacts inherent to transactions of production and energy supply business assets, in the several geographies in which the Group operates as a result of its business activity (see note 6). The caption Different tax rates (includes state surcharge) and CIT rate changes mainly refer to the difference between the tax rates applicable in the countries in which the EDP Group operates as compared to the tax rate used as reference for the theoretical income tax expense calculation. The caption Taxable differences attributable to non-controlling interests (North America) include the effect inherent in the attribution of taxable income to non-controllable interests in EDPR Group in the USA, as determined by the tax legislation of that geography. The reconciliation between the theoretical and the effective income tax expense for the Company, in 2021 and 2020, is as follows: Reconciliation between the theoretical and the effective income tax expense Group Company The difference between the theoretical and the effective income tax expense results from the application of the law provisions, in the various countries where EDP operates, in the determination of the taxable base, as demonstrated below. The reconciliation between the theoretical and the effective income tax expense for the Group, in December 2021 and 2020, is as follows: 338 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 15\. Extraordinary contribution to the energy sector (CESE) EDP has paid 506,671 thousand Euros relating to CESE so far. Since January 2016, EDP Groups contests the legal basis and constitutionality of this contribution. Furthermore, EDP undertakes periodic assessments of the company’s ongoing legal proceedings. From this analysis and taking into account the current public health and economic crisis, caused by the COVID-19 pandemic, the litigation related to CESE has been considered for a possible withdrawal and the relevant legal procedures have been initiated in 2020 and 2021. CESE is calculated based on the companies’ net assets as at 1 January, which comply, cumulatively, to: (i) property, plant and equipment; (ii) intangible assets, except industrial property elements; and (iii) financial assets assigned to concessions or licensed activities. In the case of regulated activities, CESE focuses on the value of regulated assets if it is higher than the value of those assets. The general rate is 0.85%. However, in case of natural gas combined cycle power plants with an annual utilization equivalent of installed capacity equal or higher to 1,500 hours and lower than 3,000 hours, is expected a reduced rate of 0.565%. Nevertheless, this rate could be 0.285% in case the annual utilization of installed capacity is lower than 1,500 hours. The CESE system has been successively extended and is now valid for 2021 through Law nº 75-B/2020 of 31 December. Law 83-C/2013, of the State Budget 2014 ("Lei do Orçamento de Estado 2014"), approved by the Portuguese Government on 31 December 2013, introduced CESE, with the objective of financing mechanisms that promote the energy sector systemic sustainability, through the establishment of a fund which aims to contribute for the reduction of tariff debt and to finance social and environmental policies in the energy sector. This contribution focuses generally on the economic operators that develop the following activities: (i) generation, transportation or distribution of electricity; (ii) transportation, distribution, storage or wholesale supply of natural gas; and (iii) refining, treatment, storage, transportation, distribution and wholesale supply of crude oil and oil products. 339 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 16\. Property, plant and equipment Land and Buildings Plant Other Assets natural and other and tangible under Thousand Euros resources construct. machinery assets construct. Gross Amount 74,057 364,648 35,685,856 553,586 2,800,419 39,478,566 Accumulated depreciation and impairment losses \- 163,937 18,426,670 416,164 81,501 19,088,272 74,057 200,711 17,259,186 137,422 2,718,918 20,390,294 Gross Amount 76,453 378,107 36,861,822 595,029 2,678,691 40,590,102 Accumulated depreciation and impairment losses \- 171,331 18,796,511 449,112 73,907 19,490,861 76,453 206,776 18,065,311 145,917 2,604,784 21,099,241 Balance as at 1 January 2020 82,310 214,417 17,653,425 91,281 1,634,789 19,676,222 Additions 770 8,319 577,859 16,557 2,179,260 2,782,765 Depreciation and impairment (see note 12) \- -8,303 -1,072,363 -31,378 -623 -1,112,667 Disposals/Write-offs -1,425 -1,048 -18,885 -846 -2,418 -24,622 Transfers \- 4,317 1,009,091 23,874 -992,291 44,991 Exchange Difference -13,465 -44,991 -1,095,810 -1,548 -199,023 -1,354,837 Perimeter Variations and Other 5,867 28,000 205,869 39,482 99,224 378,442 Balance as at 31 December 2020 * 74,057 200,711 17,259,186 137,422 2,718,918 20,390,294 Additions 2,371 770 336,875 22,113 2,492,713 2,854,842 Depreciation and impairment (see note 12) \- -8,614 -1,161,118 -43,739 -768 -1,214,239 Disposals/Write-offs -57 -148 -19,174 -1,551 -19,627 -40,557 Transfers -133 12,741 1,964,656 29,709 -2,412,161 -405,188 Exchange Difference 1,354 1,234 603,249 681 115,499 722,017 Perimeter Variations and Other -1,139 82 -918,363 1,282 -289,790 -1,207,928 Balance as at 31 December 2021 76,453 206,776 18,065,311 145,917 2,604,784 21,099,241 Land and Buildings Plant Other Assets natural and other and tangible under Thousand Euros resources construct. machinery assets construct. Gross Amount 4,581 28,575 468 82,297 11,486 127,407 Accumulated depreciation and impairment losses \- 26,661 323 63,945 8,520 99,449 4,581 1,914 145 18,352 2,966 27,958 Gross Amount 4,581 28,586 724 88,197 9,900 131,988 Accumulated depreciation and impairment losses \- 26,728 341 67,863 \- 94,932 4,581 1,858 383 20,334 9,900 37,056 Balance as at 1 January 2020 4,581 1,945 159 20,296 1,944 28,925 Additions \- \- \- 2,587 2,595 5,182 Depreciation and impairment (see note 12) \- -78 -14 -5,953 \- -6,045 Disposals/Write-offs \- -52 \- -48 \- -100 Transfers \- 103 \- 1,470 -1,573 \- Other \- -4 \- \- \- -4 Balance as at 31 December 2020 4,581 1,914 145 18,352 2,966 27,958 Additions \- 7 243 5,785 8,944 14,979 Depreciation and impairment (see note 12) \- -68 -18 -5,440 7 -5,519 Disposals/Write-offs \- \- \- -362 \- -362 Transfers \- 5 13 1,999 -2,017 \- Balance as at 31 December 2021 4,581 1,858 383 20,334 9,900 37,056 This caption is as follows, for the Company: Carrying Amount at 31 December 2021 Total Total Carrying Amount at 31 December 2020 Carrying Amount at 31 December 2020 * Carrying Amount at 31 December 2021 This caption is as follows, for the Group: * Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) 340 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Gross amount of Assets under construction are as follows: Thousand Euros Dec 2021 Dec 2020 Wind and solar farms in North America 1,079,633 1,485,274 Wind and solar farms in Europe 824,808 711,455 Wind and solar farms in South America 509,951 373,541 Hydric Portugal 43,123 32,680 Other assets under construction 221,176 197,468 2,678,691 2,800,419 The capitalised costs for Property, plant and equipment for the period, except Land and natural resources, are as follows: Thousand Euros Dec 2021 Dec 2020 Subcontracts and other materials 2,625,744 2,356,170 Purchase price allocation 70,622 256,054 Dismantling and decommissioning costs (see note 36) 29,525 65,415 Personnel costs (see note 10) 93,494 77,367 Borrowing costs (see note 13) 33,086 26,989 2,852,471 2,781,995 Transfers refers to the transfer of Europe onshore wind and Hydro Brazil to non-current assets held for sale, by the net amount of 405,188 thousand Euros (cost in the amount of 563,204 thousand Euros and accumulated depreciation and impairment losses in the amount of 158,016 thousand Euros) (see note 41). Perimeter Variations and Other mainly include: (i) the impact of a solar distributed generation portfolio acquisition in the amount of 134,949 thousand Euros (see notes 6 and 49); and (ii) the impact of the sale of North America and Portugal onshore wind portfolios in the amount of 1,398,893 thousand Euros (see note 6). Additionally, additions include the effect of the price allocation exercise of Europe onshore wind portfolio assets in the amount of 27,193 thousand Euros. Additions include the investment in wind and solar farms by North America, Europe and Brazil. In Portugal, the Group is carrying out hydroelectric investments in several power plants (Ribeiradio-Ermida and Alqueva I) and improvements and repairs in thermoelectric power plants (Lares and Ribatejo). Charge/Impairment losses include impairment in combined cycle thermoelectric plants in Portugal in the amount of 135,839 thousand Euros as well as impairments in Spain in the amount of 88,531 thousand Euros (see note 12). The movement in Exchange differences in the period results mainly from the appreciation of US Dollar, Canadian Dollar and Brazilian Real, against the Euro. 341 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 17\. Right-of-use assets Land and Buildings Plant Other natural and other and tangible Thousand Euros resources construct. machinery assets Gross amount 723,690 250,301 153,316 11 744 1,139,051 Accumulated depreciation and impairment losses 49,350 45,303 7,282 6,923 108,858 674,340 204,998 146,034 4,821 1,030,193 Gross amount 746,422 261,627 167,316 10 117 1,185,482 Accumulated depreciation and impairment losses 77,730 64,317 30,552 5,854 178,453 668,692 197,310 136,764 4,263 1,007,029 Balance as at 1 January 2020 623,389 196,233 3,639 5 242 828,503 Additions (see note 39) 138,008 38,120 149,754 1,879 327,761 Depreciation and impairment (see note 12) -28,135 -24,308 -6,473 -3,366 -62,282 Disposals/Write-offs -7 -680 \- -5 -692 Transfers \- 47 \- 127 174 Exchange Difference -45,573 -4,492 -886 -657 -51,608 Perimeter Variations -13,342 78 \- 1,601 -11,663 Balance as at 31 December 2020 674,340 204,998 146,034 4 821 1,030,193 Additions 136,730 15,787 1,079 2,609 156,205 Depreciation and impairment (see note 12) -28,877 -24,042 -22,004 -2,717 -77,640 Disposals/Write-offs -210 -480 -1 -446 -1,137 Transfers -12,328 -32 -13 - -12,373 Exchange Difference 40,446 1,055 10,894 5 52,400 Perimeter Variations -141,409 24 775 -9 -140,619 Balance as at 31 December 2021 668,692 197,310 136,764 4 263 1,007,029 Buildings Other and other tangible Thousand Euros construct. assets Gross amount 117,135 709 117,844 Accumulated depreciation and impairment losses 10,532 401 10,933 106,603 308 106,911 Gross amount 117,334 676 118,010 Accumulated depreciation and impairment losses 15,993 387 16,380 101,341 289 101,630 Balance as at 1 January 2020 110,534 413 110,947 Additions 1,391 92 1,483 Depreciation and impairment -5,322 -197 -5,519 Balance as at 31 December 2020 106,603 308 106,911 Additions 199 181 380 Depreciation and impairment -5,461 -200 -5,661 Balance as at 31 December 2021 101,341 289 101,630 This caption is as follows, for the Group: This caption is as follows, for the Company: Carrying Amount at 31 December 2020 Total Carrying Amount at 31 December 2020 Carrying Amount at 31 December 2021 Carrying Amount at 31 December 2021 Total Additions include, essentially, new lease contracts registered, under IFRS16, in North America. Transfers include, mainly, the reclassification to held for sale of certain European onshore wind portfolios (see note 41). Perimeter Variations mainly include the sale of North America and Portugal onshore wind portfolios (see note 6). 342 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 18\. Intangible assets Concession CO2 Other Intangible rights Licenses intangibles assets Thousand Euros in progress Total Gross amount 12,355,618 198,555 2,227,892 169 842 14,951,907 Accumulated depreciation and impairment losses 9,291,434 \- 662,238 \- 9,953,672 3,064,184 198,555 1,565,654 169,842 4,998,235 Gross amount 12,375,147 213,938 2,319,353 203 996 15,112,434 Accumulated depreciation and impairment losses 9,444,968 \- 752,441 \- 10,197,409 2,930,179 213,938 1,566,912 203,996 4,915,025 Balance as at 1 January 2020 3,337,501 224,992 442,326 219 004 4,223,823 Additions 31,209 237,892 595,549 145,967 1,010,617 Depreciation and impairment (see note 12) -381,476 \- -74,307 \- -455,783 Disposals/Write-offs -5,183 -269,172 -9,681 -64 -284,100 Transfers 147,435 \- 183,230 -195,754 134,911 Exchange Difference -151,560 \- -12,372 -4,043 -167,975 Perimeter Variations 86,258 4,843 440,909 4,732 536,742 Balance as at 31 December 2020 3,064,184 198,555 1,565,654 169 842 4,998,235 Additions 972 417,398 17,189 121,711 557,270 Depreciation and impairment (see note 12) -362,813 \- -86,549 \- -449,362 Disposals/Write-offs -4,828 -402,015 -1,282 -519 -408,644 Transfers 205,084 \- 71,648 -79,476 197,256 Exchange Difference 4,195 \- 2,775 340 7,310 Perimeter Variations and Other 23,385 \- -2,523 -7,902 12,960 Balance as at 31 December 2021 2,930,179 213,938 1,566,912 203 996 4,915,025 Other Intangible intangibles assets Thousand Euros in progress Total Gross amount 183,691 54 412 238,103 Accumulated depreciation and impairment losses 122,880 \- 122,880 Carrying Amount at 31 December 2020 60,811 54,412 115,223 Gross amount 203,204 69 009 272,213 Accumulated depreciation and impairment losses 139,553 \- 139,553 Carrying Amount at 31 December 2021 63,651 69,009 132,660 Balance as at 1 January 2020 48,720 44 633 93,353 Additions 9,647 30,081 39,728 Depreciation and impairment -17,858 \- -17,858 Transfers 20,302 -20,302 \- Balance as at 31 December 2020 60,811 54 412 115,223 Additions 112 33,998 34,110 Depreciation and impairment -16,673 \- -16,673 Transfers 19,401 -19,401 \- Balance as at 31 December 2021 63,651 69 009 132,660 This caption is as follows, for the Group: Additions of CO2 Licenses includes 76,355 thousand Euros refering to CO2 Licenses granted free of charge to EDP Group power plants operating in Portugal and Spain and 341,043 thousand Euros of licences purchased in the market for own consumption. Additions of Intangible assets in progress essentially include the implementation and development of information systems projects. This caption is as follows, for the Company: Carrying Amount at 31 December 2021 Carrying Amount at 31 December 2020 343 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 19\. Goodwill Client Solutions & Energy Thousand Euros Manag. Balance as at 1 January 2020 1,627,099 300,207 192,556 2,119,862 Increases 143,700 373,627 \- 517,327 Decreases -57,310 \- -180,434 -237,744 Impairment -2,759 \- 367 -2,392 Exchange differences -59,148 \- -1,941 -61,089 Balance as at 31 December 2020 * 1,651,582 673,834 10,548 2,335,964 Increases 4,462 \- 6,688 11,150 Decreases -15,160 \- \- -15,160 Impairment \- \- -4,987 -4,987 Exchange differences 52,412 \- 7 52,419 Balance as at 31 December 2021 1,693,296 673,834 12,256 2,379,386 Renewables Disposals/Write-offs in CO2 Licenses essentially includes the delivery in April 2021 of the 2020 consumption licenses. Networks Renewab. Total Transfers essentially refer to the intangible assets assigned to concessions that became operational, in the amount of 222,641 thousand Euros (see note 26). The capitalised costs of the period related to construction of intangible assets are included in own work capitalised in notes 7, 10 and 13. In the first quarter of 2021, EDP Renováveis, S.A. acquired, through a North American subsidiary, an 85% stake in a distributed solar generation (DG) business, for an amount of 46,530 thousand Euros. This transaction has been framed within the scope of IFRS 3 – Business combinations and that has implied the recognition of goodwill in the consolidated financial statements in the amount of 1,575 thousand Euros (see notes 6 and 49). In the second quarter of 2021, EDP Renováveis, S.A. acquired 100% of the companies Trung Son Energy Development LLC, Trina Solar Investment First Pte. Ltd. and LYS Energy Investment Pte. Ltd., for an amount of 13.187 thousand Euros. This business combination has resulted in the recognition of goodwill in the amount of 2.343 thousand Euros, in accordance with IFRS 3 requirements (see notes 6 and 49). A goodwill amounting to 544 thousand Euros, related to the business combination for the acquisition of the companies Vento Ludens Ltd and Muirake Wind Farm Ltd, has also been recognized (see note 6). During 2021, the closing of the sale transactions of the onshore windfarms in North America resulted in a decrease in goodwill in the amount of 11,506 thousand Euros (see note 6). Goodwill for the Group, resulting from the difference between the acquisition price and the fair value of the net assets acquired, at the acquisition date, is organized by segment, and is as follows: Additionally, the decreases in this caption include the amount of 3,654 thousand Euros referring to the reclassification of goodwill related to the company Energest S.A. to non-current assets held for sale (see note 41). * Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) 344 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Client Solutions & Energy Management Goodwill impairment test analysis – EDP Group In the first quarter of 2021, EDP Energia Italia S.r.l. acquired 100% of Enertel Group S.r.l. for the amount of 5,980 thousand Euros and generated goodwill in the amount of 5,724 thousand Euros (see note 6). For the purposes of these tests, the EDP Group has defined a set of assumptions to determine the recoverable amount of the main investments by each cash generating unit, being presented by aggregation in each business units after the impairment tests carried out at each subgroup/cash generating unit. Goodwill impairment test analysis – Renewables Segment The future cash flows are based on the useful life of wind farms, solar and hydro assets. This projection also considers long- term energy sales contracts and long-term energy price estimates, for assets with market exposure. The main assumptions on which impairment tests are based are as follows: The recoverable amount of the goodwill in subsidiaries is assessed annually, as at 30 September, independently of the existence of any indicators of impairment. The recoverable amount is determined based on the value in use of the assets, calculated using valuation methodologies supported by discounted cash flow techniques, considering market conditions, the time value of money and the business risks. Any impairment losses are recognised in the income statement for the period. EDP Group segments based on which the Group monitors its activity are as follows (see note 51): • Renewables - corresponds to the activity of producing electricity through renewable energy sources, with emphasis on hydro, wind and solar; • Grids - corresponds to the electricity distribution and transmission activity, including regulated energy retailers; • Client Solutions and Energy Management - includes the following activities: production of electricity using non-renewable energy sources, with emphasis on coal and gas; commercialization of electricity and gas and energy solutions services to customers; and the intermediation business responsible for managing the purchase and sale of energy in the Iberian and Brazilian markets, as well as for the respective hedging operations; \- Regarding the production of wind and solar energy, the “net capacity factors” used for each cash-generating unit consider: (i) the installed capacity and the forecast resulting from the studies on the occurrence of wind in the long term; and (ii) that regulatory mechanisms in almost all geographies determine the production and priority of energy dispatch whenever weather conditions permit; \- Regarding hydro production, the “net capacity factors” used for each cash-generating unit consider: (i) the installed capacity and the forecast for hydraulic production; and (ii) that the regulatory mechanisms in each geography; \- Energy remuneration: the approved or contracted remunerations were considered in the event of long-term energy sales contracts for the total or partial useful life of the assets or remunerations determined by the regulatory framework in force in each geography. In the remaining cases, the long-term market price curves projected by the Group were used based on past experience and internal models built on the basis of external information sources; In the second quarter of 2021, EDP Smart Serviços, S.A. (ex EDP Grid S.A.) acquired 100% of AES Tietê Inova Soluções de Energia Ltda. for the amount of 15,581 thousand Euros and generated goodwill in the amount of 964 thousand Euros (see note 6). 345 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 2021 2020 Europe (EUR) 2.9% - 4.0% 3.5% - 5.3% North America (USD) 4.8% - 6.7% 4.8% - 6.5% Brazil (BRL) 7.6% - 9.3% 8.5% - 10.2% The impairment tests carried out on Goodwill did not lead to any impairment registration. Goodwill impairment test analysis – Grids Segment The cash flow projection assumes the extent of the concessions related to the electricity distribution business in Brazil. In the case of the concession in Spain, it is perpetual. These cash flows are estimated considering the volume of production and expected consumption, installed capacity, the evolution forecast of the tariff and the energy purchase / sale agreements. \- Operating costs: the land and maintenance contracts in force were used. The other operating costs were projected consistently based on the experience acquired, on the Budget approved for the next year and taking into account internal analysis models; \- Terminal value: considered as a 15% of the initial investment in each wind farm, considering inflation; and \- Discount rate: the discount rates used are post-tax, reflect EDP Group’s best estimate of the risks specific to each CGU and range as follows: \- The terminal value of the distribution assets corresponds to the present value of the net assets at the end of the concession ("Net Regulatory Asset Base”). Sensitivity analyzes were carried out on the results of the impairment tests carried out, namely at discount rates. The results of the sensitivity analyzes carried out conclude that an increase of 50 basis points in the different discount rates, does not determine the existence of signs of impairment in "goodwill" or concession rights. The discount rates after taxes used in the grids segment for the purposes of impairment tests ranged between 3.2% (Spain) and 7.4% (Brazil in BRL) (2020: between 3.6% and 7.8% respectively). The main assumptions used to project cash flows are as follows: \- Investment costs: the best available estimates of the investments to be made were used to ensure regular use of current assets, as well as those resulting from legislative changes; \- Regarding operating costs, the projections made considered the current operating costs projected based on the historical experience acquired, in the Budget approved for the next year and taking into account internal models of analysis; \- The most recent remuneration rates proposed by ANEEL and CNMC ("Comisión Nacional de los Mercados y la Competencia") were considered, applying the updating mechanisms as provided for in the regulation; \- The projections for the electricity distribution businesses are based on long-term estimates of the various assumptions considered in the analysis; Impairment tests were performed taking into account the regulatory changes in each country. 346 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 20\. Investments in subsidiaries (Company basis) This caption is as follows: Company Thousand Euros Dec 2021 Dec 2020 Acquisition cost 16,076,429 15,414,830 Effect of equity method (transition to IFRS) -785,593 -785,593 Equity investments in subsidiaries 15,290,836 14,629,237 Impairment losses on equity investments in subsidiaries -225,472 -233,132 15,065,364 14,396,105 Investments in subsidiaries are as follows: Company Dec 2021 Dec 2020 Thousand Euros Net amount Net amount Equity investments in subsidiaries: EDP Renováveis, S.A. 4,154,431 4,154,431 EDP Gestão de Produção de Energia, S.A. 4,470,776 4,470,776 EDP España, S.A.U. 2,105,002 2,105,002 E-Redes – Distribuição de Eletricidade, S.A. de Energia, S.A. 1,691,145 1,686,158 EDP International Investments and Services, S.L. 1,488,181 988,849 EDP Servicios Financieros España, S.A.U. 482,695 482,695 EDP Comercial - Comercialização de Energia, S.A. 344,444 299,091 SU Eletricidade, S.A., S.A. 243,407 145,104 Other 85,283 63,999 15,065,364 14,396,105 In order for entities to focus on their core business, a corporate restructuring was carried out, which resulted from the transfer of the stake held by EDP Servicios Financieros in EDP International Investments and Services to EDP Sucursal. With this transaction, EDP Servicios Financieros now has as its mission only the management of the EDP Group's debt in Spain. The transaction was carried out on 5 November 2021, through the distribution of dividends in kind in the amount of 499,332 thousand Euros, consisting of the delivery of 3,006 shares of EDP International Investments and Services held by EDP Servicios Financieros España, which constitute 32.97% of the capital of that company. The remaining variation inthe caption Investments in subsidiaries results from capital increases carried out in some subsidiaries. \- For the activities subject to regulation, the remunerations currently in force and/or approved were considered, applying the updating mechanisms as provided for in the regulation, and incorporates the expectation of renewal of the concessions currently in force and the best estimate of CAPEX and the future regulatory framework; In the context of impairment tests carried out at EDP Group, the financial investments held by EDP, S.A. in subsidiaries are reviewed, based on the higher of the value in use and the fair value less costs related to the sale. The main assumptions considered in the valuation models of the main financial holdings in Portugal of EDP, S.A. are as follows: \- The discount rates used reflect the best estimate regarding the specific risks associated to each subsidiary activity within a range between 3.2% and 5.1% (2020: between 3.6% and 4.8%); On the date of transition to IFRS, EDP, S.A. ceased to apply the equity method of accounting to its investments in its separate financial statements, having considered this method in the determination of the deemed cost at transition date. 347 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 21\. Investments in joint ventures and associates This caption is as follows: Thousand Euros Dec 2021 Dec 2020 Investments in joint ventures 1,140,454 753,056 Investments in associates 209,991 187,306 1,350,445 940,362 Thousand Euros Dec 2021 Dec 2020 Balance at the beginning of the period 940,362 1,098,512 Acquisitions/Entries 36,753 71,495 Increases/Decreases of share capital 456,186 126,647 Disposals -10,224 -79,833 Share of profit in joint ventures and associates 80,086 6,938 Dividends -50,077 -52,739 Exchange differences 46,675 -187,621 Cash flow hedging reserve -5,376 -1,642 Transfer to Assets held for sale (see note 41) -149,182 -10,103 Other 5,242 -31,292 Balance at the end of the period 1,350,445 940,362 \- Fuel prices (brent, gas, coal and CO2 licenses) and electricity prices forecast were defined considering market expectations for future prices and the application of internal models for building price curves, taking into account the regulatory framework in force and the best expectation regarding its future evolution. Regarding fuel prices, the prices and clauses established in long-term supply contracts, including gas purchase contracts, were also considered. Production assets were valued from a portfolio management perspective, without prejudice to an individual analysis as to recoverability, based on the estimate of the evolution of the market share; \- The production estimates were based on an average hydrological year over the projection period for the hydroelectric plants, the estimated evolution of demand, market share projections and current installed and under construction capacity, as well as the best estimate of the plants to be decommission in the projection period; The impairment tests did not lead to the recording of impairment in these financial investments, in addition to the already recognized. The movement in Investments in joint ventures and associates, for the Group, is as follows: Group The assumptions used in the valuation models of EDP S.A.'s financial holdings in other geographies, as well as the respective sensitivity analyses are described in note 19. Group As at 31 December 2021, for the Group, this caption includes goodwill in investments in joint ventures of 8,047 thousand Euros (31 December 2020: 8,047 thousand Euros) and goodwill in investments in associates of 27,647 thousand Euros (31 December 2020: 24,599 thousand Euros). \- Additionally, other system costs are considered, such as: ISP and CO2 addition fee, CESE, social tariff, and other income; \- The operating costs considered were based on extrapolations from current operating costs based on the knowledge acquired in each activity. To the assets that were subject to impairment tests, the sensitivity analyzes carried out at the discount rate considering an increase of 50 basis points did not determine a relevant additional impairment in the financial investments of EDP, S.A. 348 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Energia Flat Rock Hydro Goldfinger Goldfinger São Windpower Flat Rock Global Thousand Euros Vento Vento II Manoel II Windpower Investment Non-Current Assets 209,580 313,792 570,694 81,368 198,882 266,899 Current Assets 554 1,685 34,461 1,893 5,205 89,958 Cash and cash equivalents -47 870 14,864 1,704 4,282 75,491 Total Equity 141,812 194,044 287,008 80,735 197,721 101,327 Long term Financial debt \- \- 282,747 \- \- 229,312 Non-Current Liabilities 65,228 112,157 294,927 1,554 4,080 233,356 Short term Financial debt 98 101 13,747 \- \- \- Current Liabilities 3,094 9,276 23,220 972 2,287 22,175 Revenues 11,063 10,657 58,805 3,723 9,711 \- -9,212 -7,372 -20,449 -5,117 -13,097 -181 Other financial expenses -1,708 -3,202 -31,130 -24 -53 -11,308 Income tax expense \- \- 6,426 \- \- 574 Net profit for the period 9,187 12,931 -12,514 -6,184 -14,667 -11,889 Net assets 63,217 84,775 95,671 40,367 102,608 40,336 Goodwill \- \- \- \- \- \- Dividends paid 3,270 4,539 \- \- 9,809 \- Companies' financial information of joint ventures Property plant and equipment and Amounts proportionally attributed to EDP Group intangibles amortization/impairment The caption Joint ventures and associates in the Consolidated Income Statement includes a positive amount of 80,086 thousand Euros from result of these investments, a gain of 20,705 thousand Euros from the sale of CIDE HC Energía, S.A., a gain of 6,237 thousand Euros from the sale of the entire stake on Portsines - Terminal Multipurpose de Sines, S.A. ("Portsines") and a gain of 801 thousand Euros from the sale of 12% stake of 2019 Vento XX LLC (see note 6). The caption Increases/Decreases of share capital essentially refers to a capital increase of 331,519 thousand Euros of EDP Renováveis S.A. in OW Offshores, S.L. and to the revaluation of a 20% stake in a portfolio of North American companies, in the amount of 98.052 thousand Euros, as a result of the sale of 80% of the same and consequent loss of control (see note 6). The movement in Exchange differences in the period results mainly from the appreciation of US Dollar and Brazilian Real, against the Euro. The following table resumes the companies' financial information of joint ventures whose investment is included under the equity method in the Group consolidated accounts, as at 31 December 2021: 349 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Portfolio EDP Asia OW Portfolio Portfolio Thousand Euros Vento XX Group Offshore, S.L. Vento XVII Vento XIX Others joint ventures Non-Current Assets 644,158 132,238 1,187,928 525,211 477,624 350,117 Current Assets 16,121 \- 266,754 5,453 13,913 34,392 Cash and cash equivalents 9,429 \- 82,639 -159 -86 14,281 Total Equity 215,942 132,238 713,524 177,215 133,497 118,385 Long term Financial debt \- \- 50,037 \- \- \- Non-Current Liabilities 415,353 \- 650,372 344,720 351,971 148,605 Short term Financial debt 456 \- 3,720 \- \- 3,864 Current Liabilities 28,983 \- 90,786 8,729 6,068 117,519 Revenues 30,600 \- 10,040 34,952 22,019 41,133 -15,714 \- -4,532 -19,352 -16,498 -3,109 Other financial expenses -26,102 \- -69,164 -14,259 -17,347 -83 Income tax expense \- \- 1,080 \- \- -548 Net profit for the period 534,542 21,561 34,813 20,545 13,463 39,725 Net assets 67,457 87,723 358,986 57,919 47,447 93,948 Goodwill \- \- 5,352 \- \- 2,695 Dividends paid \- 6,758 \- 3,885 3,118 4,278 Companhia Energia Energia Flat Rock Hydro Energética Cachoeira São Windpower Flat Rock Global Thousand Euros do Jari Caldeirão Manoel II Windpower Investment Non-Current Assets 246,874 204,661 584,212 80,247 196,644 221,071 Current Assets 25,393 18,184 30,361 2,334 3,022 70,163 Cash and cash equivalents 12,093 11,873 13,875 1,085 1,927 61,241 Total Equity 143,409 90,781 296,676 79,905 192,900 90,166 Long term Financial debt 77,237 109,317 273,868 \- \- 163,107 Non-Current Liabilities 100,115 113,752 283,510 1,411 3,714 178,743 Short term Financial debt 8,477 14,396 24,184 \- \- 1,381 Current Liabilities 28,743 18,312 34,387 1,265 3,052 22,325 Revenues 46,749 24,204 61,243 2,726 7,106 \- -9,005 -7,885 -22,952 -5,351 -13,703 -366 Other financial expenses -10,329 -12,453 -30,815 -25 -55 -19,228 Income tax expense 267 2,360 7,032 \- \- 3,887 Net profit for the period 15,314 -4,603 -13,665 -7,996 -19,919 -16,650 Net assets 97,019 45,620 98,894 39,953 103,315 34,736 Goodwill \- \- \- \- \- \- Dividends paid 11,414 \- \- \- 10,149 \- Amounts proportionally attributed to EDP Group intangibles amortization/impairment Companies' financial information of intangibles amortization/impairment Amounts proportionally attributed to EDP Group Property plant and equipment and The following table resumes the companies' financial information of joint ventures whose investment is included under the equity method in the Group consolidated accounts, as at 31 December 2020: Property plant and equipment and Companies' financial information of joint ventures 350 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 EDP Asia OW Portfolio Portfolio Thousand Euros Group Offshore, S.L. Vento XVII Vento XIX Others Non-Current Assets 115,001 873,253 506,707 449,711 543,060 Current Assets 1 133,403 4,590 11,435 23,458 Cash and cash equivalents 1 38,740 -126 4,569 7,819 Total Equity 115,002 8,790 166,781 120,578 315,402 Long term Financial debt \- \- \- \- 3,679 Non-Current Liabilities \- 166,013 338,441 336,584 226,206 Short term Financial debt \- 10,612 \- \- 8,431 Current Liabilities \- 831,853 6,075 3,984 24,910 Revenues \- 1,108 39,505 25,448 56,136 \- -777 -13,179 -16,177 -24,232 Other financial expenses \- -29,415 -29,782 -18,485 -7,702 Income tax expense \- 305 \- \- -766 Net profit for the period 20,023 -18,096 -1,694 20,055 1,492 Net assets 83,409 9,027 53,917 44,943 142,223 Goodwill \- 5,352 \- \- 2,695 Dividends paid 7,087 \- \- 5,477 10,674 Parque Parque Principle Eólico Eólico Power Thousand Euros Belmonte Madero Inc. Others Non-Current Assets 382,241 17,817 44,111 17,311 49,127 Current Assets 18,870 5,054 24,124 15,510 60,128 Total Equity 389,778 9,512 41,178 23,723 34,795 Non-Current Liabilities 861 9,302 8,066 5,375 41,363 Current Liabilities 10,471 4,057 18,991 3,722 33,098 Revenues 12,544 3,914 16,656 6,910 71,851 74,460 1,278 7,766 -7,891 18,725 Net assets 110,668 4,568 17,290 8,425 69,040 Goodwill \- 1,726 \- 5,083 20,838 Dividends paid 8,924 \- \- \- 5,496 Celesc Companies' financial information of The following table resumes the companies' financial information of associates whose investment is included in the Group consolidated accounts under the equity method, as at 31 December 2021: Companies' financial information of joint ventures intangibles amortization/impairment Amounts proportionally attributed to EDP Group Property plant and equipment and associates Net profit for the period Amounts proportionally attributed to EDP Group 351 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Parque Parque Principle Eólico Eólico Power Thousand Euros Belmonte Madero Inc. Others Non-Current Assets 256,026 18,589 45,647 15,544 66,781 Current Assets 21,121 2,033 14,281 20,395 64,986 Total Equity 253,354 8,234 33,412 28,840 80,901 Non-Current Liabilities 714 4,790 3,974 4,527 31,074 Current Liabilities 23,080 7,599 22,542 2,573 19,792 Revenues \- 4,575 9,895 8,201 65,024 48,475 1,187 2,547 -5,653 -65 Net assets 75,744 4,188 14,033 9,893 83,448 Goodwill \- 1,726 \- 5,008 17,865 Dividends paid 5,578 \- 1,470 \- 890 % Fair Value Net Thousand Euros Equity EM Adjustments Assets Empresa de Energia São Manoel S.A. 287,008 33.33% \- \- \- 95,671 Flat Rock Windpower II LLC 80,735 50.00% \- \- \- 40,367 Flat Rock Windpower LLC 197,721 50.00% \- \- 3,748 102,608 Hydro Global Investment, Ltda 101,327 50.00% \- \- -10,327 40,336 EDP ASIA - Investimento e Consultadoria, Lda 132,238 50.00% 21,604 \- \- 87,723 OW Offshore, S.L. 713,524 50.00% \- 5,352 -3,128 358,986 Portfolio Vento XVII 177,215 20.00% 22,476 \- \- 57,919 Portfolio Vento XIX 133,497 20.00% 20,748 \- \- 47,447 Portfolio Vento XX 215,942 20.00% 24,269 \- \- 67,457 Goldfinger Vento 141,812 50.00% -7,689 \- \- 63,217 Goldfinger Vento II 194,044 50.00% -12,247 \- \- 84,775 Centrais eléctricas de Santa Catarina, S.A. - Celesc 389,778 29.90% \- \- -5,862 110,668 Parque Eólico de Belmonte, S.A. 9,512 29.90% \- 1,726 \- 4,568 Parque Eólico Sierra del Madero S.A. 41,178 42.00% \- \- \- 17,290 Principle Power, Inc. 23,723 25.93% \- 5,083 -2,810 8,425 The column "Others" include companies with financial statements as of 31 December 2020, with the exception of companies that have no activity or are in liquidation process, and Portsines whose financial statements are for the period ended 30 November 2020, once the accounts as at 31 December 2020 were not yet available. Additionally, Celesc is based on the Financial Statements disclosed to the market with reference to 30 September 2020. associates Companies' financial information of Other Goodwill The following table resumes the companies' financial information of associates whose investment is included in the Group consolidated accounts under the equity method, as at 31 December 2020: Other include companies with Financial Statements as of 31 December 2021, with the exception of companies that have no activity or are in liquidation process. Additionally, Celesc is based on the Financial Statements disclosed to the market with reference to 30 September 2021. Net profit for the period Amounts proportionally attributed to EDP Group Celesc As at 31 December 2021, the significant companies' financial information of joint ventures and associates presents the following reconciliation of net assets proportionally attributed to EDP Group: 352 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 % Fair Value Net Thousand Euros Equity EM Adjustments Assets Companhia Energética do Jari 143,409 50.00% 25,314 \- \- 97,019 Empresa de Energia Cachoeira Caldeirão S.A. 90,781 50.00% 229 \- \- 45,620 Empresa de Energia São Manoel S.A. 296,676 33.33% \- \- \- 98,894 Flat Rock Windpower II LLC 79,905 50.00% \- \- \- 39,953 Flat Rock Windpower LLC 192,900 50.00% \- \- 6,865 103,315 Hydro Global Investment, Ltda 90,166 50.00% \- \- -10,347 34,736 EDP ASIA - Investimento e Consultadoria, Lda 115,002 50.00% 25,908 \- 83,409 OW Offshore, S.L. 8,790 50.00% \- 5,352 -720 9,027 Portfolio Vento XVII 166,781 20.00% 20,561 \- \- 53,917 Portfolio Vento XIX 120,578 20.00% 20,558 \- 269 44,943 Centrais eléctricas de Santa Catarina, S.A. - Celesc 253,354 29.90% \- \- \- 75,744 Parque Eólico de Belmonte, S.A. 8,234 29.90% \- 1,726 \- 4,188 Parque Eólico Sierra del Madero S.A. 33,412 42.00% \- \- \- 14,033 Principle Power, Inc. 28,840 25.93% \- 5,008 -2,593 9,893 Thousand Euros Dec 2021 Dec 2020 Less than 1 year 250,656 314,547 From 1 to 3 years 7,560 7,427 From 3 to 5 years 2,376 2,351 More than 5 years 50,376 18,547 310,968 342,872 22\. Equity instruments at fair value Thousand Euros Dec 2021 Dec 2020 Equity Instruments at Fair Value through Other Comprehensive Income (OCI) 126,827 117,111 Equity Instruments at Fair Value through Results (PL) 63,115 67,637 189,942 184,748 Capital outstanding by maturity Group Commitments and contingent liabilities in respect of joint ventures and associates include EDPR commitments to provide funding to Offshore projects and to the construction of solar farms facilities in USA, and to commitments assumed by EDP Brasil related to its joint ventures operating obligations. Goodwill Other As at 31 December 2021, the movements in Equity Instruments measured at Fair Value are as follows: As at 31 December 2020, the significant companies' financial information of joint ventures and associates presents the following reconciliation of net assets proportionally attributed to EDP Group: As at 31 December 2021 and 2020, commitments and contingent liabilities assumed by the Group in respect of its joint ventures and associates, including its share of commitments assumed jointly with other investors, are disclosed by maturity as follows: 353 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Mercer Zephyr and EDA Feedzai - Fund Dunas Electricid. Consult. (Energ. RE (Energ. RE dos Açores, e Inov. Thousand Euros portfolio) portfolio) S.A. Tecn., S.A. Balance as at 1 January 2020 80,079 \- 22,735 14,416 46,814 6,762 170,806 Acquisitions \- 94,915 4,071 \- \- 1,371 100,357 Disposals -79,054 -8,595 -2,394 \- \- -2,750 -92,793 Change in fair value -1,025 3,501 3,130 870 \- -469 6,007 Other variations \- \- -252 \- \- 623 371 Balance as at 31 December 2020 \- 89,821 27,290 15,286 46,814 5,537 184,748 Acquisitions \- \- 1,137 \- \- 3,438 4,575 Disposals \- \- -436 \- -8,207 -8,643 Change in fair value (see note 32) \- 5,990 2,851 769 \- -526 9,084 Other variations \- \- 174 \- \- 4 178 Balance as at 31 December 2021 \- 95,811 31,016 16,055 38,607 8,453 189,942 Thousand Euros Dec 2021 Dec 2020 Mercer Funds 8,897 2,907 Defined Crowd Corporation 6,339 6,339 Other 5,817 4,008 21,053 13,254 23\. Investment property Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Cost 55,125 55,733 130,851 112,644 Accumulated amortisation and impairment losses -34,457 -34,355 -29,151 -25,355 Carrying amount 20,668 21,378 101,700 87,289 Results Other Other Total Other Comprehensive Income During 2021, EDP Ventures S.G.P.S., S.A., with the aim of optimizing its portfolio, sold in two tranches 157,387 shares of Feedzai - Consultadoria e Inovação Tecnológica, S.A. As at 31 December 2021, the fair value reserve of equity instruments measured at fair value through other comprehensive income attributable to the Group is as follows: In equity instruments measured at fair value through profit stands out: i) Feedzai - Consultadoria e Inovação Tecnológica, S.A., the fair value of 38,607 thousand Euros was determined according to the last transaction on the market; 2) EDA - Electricidade dos Açores, S.A., the fair value of 16,055 thousand Euros was determined according to the Dividend Discounted model. The sensitivity analysis, considering a reduction or increase of 50bp in the discounted rate, determines a fair value of 18.4 million Euros and 14.3 million Euros, respectively. The caption is detailed as follows: As at 31 December 2021, this caption is analysed as follows: Under IFRS 13 (see note 45), equity instruments at fair value are classified into three levels of fair value: level 1 includes essentially financial investments that are indexed to quoted market prices; level 2 includes the fund of stocks and bonds held by Energia RE; and level 3 covers all other equity instruments at fair value. As at 31 December 2021, there are no equity instruments at fair value within level 1. Group Company During 2021 an increase in the fair value of the Equity Instruments through Profit and Losses, in the amount of 243 thousand Euros, was booked against Profit or Loss (see notes 13 and 45). 354 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 24\. Deferred tax assets and liabilities Perimeter variations, exchange differences and Thousand Euros others Tax losses and tax credits 1,023,712 138,686 \- 43,565 1,205,963 Provisions for social benefits, bad debts and other risks 722,690 -47,751 -17,360 -23,381 634,198 Financial instruments 95,417 -40,724 780,528 6,466 841,687 Property plant and equipment and intangible assets 412,651 -59,693 \- 706 353,664 Financial and equity instruments at fair value 2,868 800 -1,889 174 1,953 Tariff adjustments and tariff deficit 37,988 -24,576 \- 958 14,370 Allocation of fair value to assets and liabilities acquired 159,529 52,666 \- -179,750 32,445 Fiscal revaluations 304,712 -39,034 \- \- 265,678 Use of public property (Brazil) 23,658 3,376 \- 274 27,308 Other temporary differences 87,541 -13,806 -661 967 74,041 -1,664,163 -24,228 4,468 -258,292 -1,942,215 1,206,603 -54,284 765,086 -408,313 1,509,092 Net Deferred Tax Assets Balance at 1 January On a consolidated basis, Accumulated amortisation and impairment losses in 2021 includes 297 thousand Euros related to charges of the period (see note 12). EDP Group records the tax effect resulting from temporary differences between the assets and liabilities determined on an accounting basis and on a tax basis. As at a 31 December 2021, on a consolidated basis, the movement by nature of Net Deferred Tax Assets and Liabilities are as follows: The investment properties are mainly lands and buildings held to obtain rents or for capital appreciation and are not materially relevant. Balance at 31 December The impairment tests carried out of Investment Properties are based on assessments using current market practices: the comparative method, in cases where there is an active and comparable market, the income method, through discounted cash flows depending on the property income and the cost method, which considers the market value of the land and the construction costs. Assets/liabilities compensation of deferred taxes Mov. Reserves Mov. Results On an individual basis, Accumulated amortisation and impairment losses in 2021 includes 3,796 thousand Euros related to charges of the period (see note 12). The variation in the caption Cost relates with the transfer of property, plant and equipment and right-of-use assets to investment property of 18,207 thousand Euros (see notes 16 and 17). 355 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Perimeter variations, exchange differences and Thousand Euros others Provisions for social benefits, bad debts and other risks 14,413 3,699 1,494 -8 19,598 Financial instruments 100,911 48,260 456,924 3,751 609,846 Property plant and equipment and intangible assets 366,868 -7,126 \- 14,367 374,109 Reinvested gains 3,735 -30 \- \- 3,705 Financial and equity instruments at fair value 8,959 -1,711 \- \- 7,248 Tariff adjustments and tariff deficit 149,690 -134,161 -353 902 16,078 Allocation of fair value to assets and liabilities acquired 1,184,420 96,140 2,406 -170,497 1,112,469 Fiscal revaluations 54,737 -2,148 \- \- 52,589 Deferred income relating to CMEC 187,558 -2,893 \- \- 184,665 Gains from institutional partnerships in wind farms 344,092 10,580 55 29,183 383,910 Use of public property (Brazil) 7,737 -887 \- 69 6,919 Fair value of financial assets (Brazil) 47,643 20,889 \- 703 69,235 Other temporary differences 64,642 9,791 \- 16,489 90,922 -1,664,163 -24,228 4,468 -258,292 -1,942,215 871,242 16,175 464,994 -363,333 989,078 Perimeter variations, exchange differences and Thousand Euros others Tax losses and tax credits 1,067,738 -2,498 \- -41,528 1,023,712 666,766 -14,940 24,130 46,734 722,690 84,851 1,810 30,030 -21,274 95,417 Property plant and equipment and intangible assets 278,901 62,006 \- 71,744 412,651 Financial and equity instruments at fair value 248 83 2,600 -63 2,868 Tariff adjustments and tariff deficit 14,448 23,540 \- \- 37,988 Allocation of fair value to assets and liabilities acquired 13,248 -8,382 \- 154,663 159,529 Fiscal revaluations 392,872 -92,494 \- 4,334 304,712 Use of public property (Brazil) 24,437 6,867 \- -7,646 23,658 Other temporary differences 86,815 8,933 1,947 -10,154 87,541 -1,546,278 -55,514 -623 -61,748 -1,664,163 1,084,046 -70,589 58,084 135,062 1,206,603 Mov. Results Balance at 1 January Mov. Results Mov. Reserves Balance at 31 December * As at a 31 December 2020, on a consolidated basis, the movement by nature of Net Deferred Tax Assets and Liabilities are as follows: Balance at 1 January Provisions for social benefits, bad debts and other risks Financial instruments Net Deferred Tax Liabilities Assets/liabilities compensation of deferred taxes Net Deferred Tax Assets Assets/liabilities compensation of deferred taxes Mov. Reserves Balance at 31 December 356 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Perimeter variations, exchange differences and Thousand Euros others Provisions for social benefits, bad debts and other risks 16,375 732 -2,267 -427 14,413 Financial instruments 122,266 -7,667 11,080 -24,768 100,911 Property plant and equipment and intangible assets 404,458 -2,614 \- -34,976 366,868 Reinvested gains 3,192 \- \- 543 3,735 Financial and equity instruments at fair value 10,551 29 -1,621 \- 8,959 Tariff adjustments and tariff deficit 109,158 40,090 442 \- 149,690 Allocation of fair value to assets and liabilities acquired 663,855 74,060 \- 446,505 1,184,420 Fiscal revaluations 61,552 -4,931 \- -1,884 54,737 Deferred income relating to CMEC 177,611 9,947 \- \- 187,558 Gains from institutional partnerships in wind farms 349,644 25,711 57 -31,320 344,092 Use of public property (Brazil) 6,958 3,038 \- -2,259 7,737 Fair value of financial assets (Brazil) 56,977 7,872 \- -17,206 47,643 Other temporary differences 67,427 8,019 \- -10,804 64,642 -1,546,278 -55,514 -623 -61,748 -1,664,163 503,746 98,772 7,068 261,656 871,242 Balance at Thousand Euros 1 January Tax losses and tax credits 139,397 19,879 \- 3,802 163,078 Provisions for social benefits, bad debts and other risks 7,817 471 -143 -20 8,125 Financial instruments 28,596 \- 196,949 \- 225,545 Property plant and equipment 3,965 -1,940 \- \- 2,025 Other temporary differences 3,273 -3,069 \- 42 246 -59,422 -302,379 \- \- -361,801 123,626 -287,038 196,806 3,824 37,218 Balance at Thousand Euros 1 January Financial instruments 47,681 \- 302,328 \- 350,009 Allocation of fair value to assets and liabilities acquired 3,546 \- \- \- 3,546 Fiscal revaluations 185 -6 \- \- 179 Other temporary differences 8,010 -5,109 \- 5,166 8,067 -59,422 -302,379 \- \- -361,801 \- -307,494 302,328 5,166 \- Mov. Reserves Others Balance at 31 December Net Deferred Tax Liabilities Balance at 1 January Mov. Reserves Balance at 31 December Mov. Results Mov. Reserves Balance at 31 December * Net Deferred Tax Assets Assets/liabilities compensation of deferred taxes Mov. Results Others Assets/liabilities compensation of deferred taxes On a Company basis, EDP, S.A. records the tax effect arising from temporary differences between the assets and liabilities determined on an accounting basis and on a tax basis. As at a 31 December 2021, on a Company basis, the movement by nature of Net Deferred Tax Assets and Liabilities are as follows: Net Deferred Tax Liabilities Assets/liabilities compensation of deferred taxes Mov. Results * Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) 357 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Balance at Thousand Euros 1 January Tax losses and tax credits 116,483 37,356 \- -14,442 139,397 Provisions for social benefits, bad debts and other risks 6,065 2,006 -159 -95 7,817 Financial instruments 48,337 \- -19,741 \- 28,596 Property plant and equipment 4,330 -365 \- \- 3,965 Other temporary differences 3,086 \- \- 187 3,273 -35,394 -24,028 \- \- -59,422 142,907 14,969 -19,900 -14,350 123,626 Balance at Thousand Euros 1 January Financial instruments 27,642 \- 20,039 \- 47,681 Allocation of fair value to assets and liabilities acquired 3,546 \- \- \- 3,546 Fiscal revaluations 192 -7 \- \- 185 Other temporary differences 4,014 3,995 \- 1 8,010 -35,394 -24,028 \- \- -59,422 \- -20,040 20,039 1 \- Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Financial instruments and fair value 317,598 17,701 -105,379 -39,780 Actuarial gains and losses -16,483 24,235 -143 -159 Financial instruments and equity instruments at fair value OCI -1,271 485 \- \- Transactions with non-controlling interests and Others 248 8,595 \- \- 300,092 51,016 -105,522 -39,939 The Group tax losses carried forward are analysed as follows: Thousand Euros Dec 2021 Dec 2020 Expiry date: 2021 \- 41,583 2022 1,344 12,558 2023 10,430 22,875 2024 23,704 34,604 2025 8,155 16,858 2026 531,520 524,703 2027 a 2040 2,429,290 2,340,878 Without expiry date 1,923,698 1,673,849 4,928,141 4,667,908 As at a 31 December 2020, on a Company basis, the movement by nature of Net Deferred Tax Assets and Liabilities are as follows: Of the total of EDP Group’s tax losses available to carry forward as at 31 December 2021, the amount of 821.765 thousand Euros does not have deferred tax asset, in accordance with the applicable accounting standards since, at the present date, there is still not sufficient visibility about the future period in which such tax losses will be used. Taxes recorded against reserves are as follows: Group Net Deferred Tax Assets Mov. Results Assets/liabilities compensation of deferred taxes Net Deferred Tax Liabilities Mov. Results Mov. Reserves Others Balance at 31 December Assets/liabilities compensation of deferred taxes Group Company Mov. Reserves Others Balance at 31 December 358 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 25\. Inventories This caption is as follows: Thousand Euros Dec 2021 Dec 2020 Merchandise 188,665 54,159 Finished, intermediate products and sub-products 42,890 27,801 Raw and subsidiary materials and consumables (coal and other fuels) 109,246 43,275 Nuclear fuel 14,764 14,576 CO2 licenses 79,960 57,661 Other 140,324 126,473 575,849 323,945 CO2 (Ton) Dec 2021 Dec 2020 CO2 Licenses held for trading on 1 January 1,772,000 \- Licenses negotiated in the market 4,521,185 8,697,000 Emission Licenses transferred from trading portfolio to intangibles -3,521,185 -6,925,000 CO2 Licenses sold -1,772,000 \- CO2 Licenses held for trading on 31 December 1,000,000 1,772,000 CO2 Licenses for trading on 31 December (in thousand Euros) 79,960 57,661 Group Fair value corresponds to the spot price (closing price) at the end of December in each period. On an individual basis, the value in Inventories refers to a gas boat acquired by EDP S.A. within the scope of the energy business management carried out by Unge and which will be sold to the subsidiaries that consume this raw material. The change in the Inventoriescaption is essentially explained by the rise in raw material prices, namely gas and CO2. The movements in the portfolio of CO2 Licenses held for trading and classified as inventories are as follows: Group 359 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 26\. Debtors and other assets from commercial activities At Group level, Debtors and other assets from commercial activities are as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Assets measured at amortised cost: Amounts receivable from tariff adjustments - Electricity \- Portugal 7,328 53,634 62,755 1,036 124,604 49,986 101,928 35,600 Debtors for other goods and services \- \- 39,134 29,480 Amounts receivable relating to CMEC 432,293 507,419 225,441 189,752 Amounts receivable from concessions - IFRIC 12 275,782 359,650 933,106 755,565 Other assets measured at amortised cost 118,955 65,125 404,138 175,170 Impairment losses on other assets measured at amortised cost -71 -2,894 -2,370 -1,406 958,891 1,032,920 1,764,132 1,185,197 Trade receivables at amortised cost: Trade receivables 32,856 24,896 1,939,214 1,363,760 Impairment losses on trade receivables -3,225 -8,771 -232,100 -253,067 29,631 16,125 1,707,114 1,110,693 Assets measured at fair value through other comprehensive income: Amounts receivable from tariff adjustments - Electricity \- Portugal 483 267,054 563,563 156,270 Assets measured at fair value through profit or loss: Amounts receivable from concessions - IFRIC 12 693,785 547,103 \- \- Contract assets: Contract assets receivable from energy sales contracts 617 600 1,729,885 1,034,442 Contract assets receivable from concessions - IFRIC 12 921,412 805,382 \- \- 922,029 805,982 1,729,885 1,034,442 Other assets: Incremental costs of obtaining contracts with customers 34,130 33,600 \- \- Other assets from commercial activities 29,557 44,228 163,310 59,009 63,687 77,828 163,310 59,009 2,668,506 2,747,012 5,928,004 3,545,611 At Company level, Debtors and other assets from commercial activities are as follows: Thousand Euros Dec 2021 Dec 2020 Assets measured at amortised cost: Debtors for other goods and services 38,753 40,223 Other assets measured at amortised cost 252,319 246,349 Impairment losses on other assets measured at amortised cost -2 -1 291,070 286,571 Trade receivables at amortised cost: Trade receivables 897,757 214,153 Impairment losses on trade receivables -226 -209 897,531 213,944 Contract assets: Contract assets receivable from energy sales contracts 850,819 226,040 Other assets: Other assets from commercial activities 8,516 7,371 2,047,936 733,926 (see note 38) Amounts receivable from tariff adjustments - Electricity - Brazil Current Non-Current Current 360 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Balance as at 31 December 2020 320,688 157,306 Receipts through the electricity tariff \- -6,919 Securitization of tariff deficit \- -500,000 Tariff adjustment of the period (see note 7) 1,443,740 5,711 Tariff adjustment of 2021 \- -3,410 Fair value of the tariff deficit measured at fair value through other comprehensive income (see note 32) -1,481 428 Adjustment due to tariff deficit (2019 and 2020) \- -685,735 Financial expenses (see note 13) \- 2,733 Transfer to/from tariff adjustment payable (see note 38) -36,899 -62,033 Transfer from Non-Current to Current -1,718,237 1,718,237 Balance as at 31 December 2021 7,811 626,318 Thousand Euros Deficit Tariff adj. Sales Total Year: 2,515 \- \- 2,515 870 \- \- 870 68 57,044 \- 57,112 1,060,592 13,040 -500,000 573,632 1,064,045 70,084 -500,000 634,129 The caption Amounts receivable relating to CMEC is detailed as follows: Thousand Euros Initial CMEC 294,653 43,197 Final adjustment 137,640 78,518 Revisibility 2014 - 2017 * \- 103,726 432,293 225,441 Current Non-Current 2018 * The revisibility calculation for 2016 to 2017 is still waiting the official approval. As at 31 December 2021,the caption Assets measured at fair value through other comprehensive income includes the amount of the tariff deficit classified and measured at fair value through other comprehensive income. According to IFRS 13, the tariff deficit fair value is classified as level 2 (see note 45). The following table provides details for the caption Amounts receivable from tariff adjustments - Electricity - Portugal, by nature and year of establishment, as well as presents the amounts of tariff deficit that have been sold during the period ended 31 December 2021: 2019 Non-Current Current The movement for the period in Amounts receivable from tariff adjustments - Electricity - Portugal (Non-current and Current) is as follows: 2020 2021 During the third quarter of 2021, SU Eletricidade, S.A., sold the 2021 tariff deficit in the amount of 500,000 thousand Euros. This tariff deficit results from the 5-year deferral of the recovery of the 2021 overcost related with the acquisition of energy from special regime generators (including adjustments for 2019 and 2020). In this sale transaction of assets, SU Eletricidade, S.A., gave in fully and without recourse, the right to receive such amounts and interest. The sale price amounted to 502,560 thousand Euros and generated a gain net of transaction costs of 230 thousand Euros (see note 13). 361 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Non- Non- Thousand Euros current current Balance as at 1 January 2020 16,285 302,687 2,895 2,694 Charge of the period 65 100,447 \- 32 Reversal of impairment losses -1,169 -35,264 \- -421 Charge-off -4,696 -40,539 \- -702 Exchange differences -1,714 -30,115 \- -66 Perimeter variations/Other regularisations \- -44,149 -1 -131 Balance as at 31 December 2020 8,771 253,067 2,894 1,406 Charge of the period 42 100,955 \- 1,317 Reversal of impairment losses -615 -65,424 -1,688 -1,759 Charge-off -5,005 -40,432 -1,206 -2 Exchange differences 32 938 \- 1 Perimeter variations/Other regularisations \- -17,004 71 1,407 Balance as at 31 December 2021 3,225 232,100 71 2,370 The caption Contract assets receivable from concessions - IFRIC 12 refers to the investment in assets under construction assigned to concessions with the biggest increase, during 2021, in Brazil. The variation of the period includes (i) the effect of the appreciation of Brazilian Real against Euro in the amount of 8,776 thousand Euros; (ii) the investment of the period in the amount of 588,620 thousand Euros and (iii) the transfer of assets assigned to concessions which began operation to intangible assets, in the amount of 222,641 thousand Euros (see note 18), and to Amounts receivable from concessions - IFRIC 12, in the amount of 317,161 thousand Euros. The caption Amounts receivable from concessions - IFRIC 12 in the amount of 1,902,673 thousand Euros (31 December 2020: 1,662,318 thousand Euros) relates to the financial asset to be received by the EDP Group regarding the electricity distribution concessions in Portugal and Brazil, resulting from the application of the mixed model, and the asset related to electricity transmission concessions in Brazil. The variation of the period includes: (i) the effect of the depreciation of Brazilian Real against Euro in the amount of 9,363 thousand Euros and (ii) transfers from Contract assets receivable from concessions in the amount of 317,161 thousand Euros. The movements in Impairment losses on trade receivables and other assets measured at amortised cost are as follows: Trade receivables Current Other assets The geographical market Trade receivables' breakdown and the credit risk analysis are disclosed in note 5, under the Counterparty credit risk management. As at 31 December 2021 and 2020, on a company basis, trade receivables are from Portugal geographical market. Contract assets receivable from energy sales contracts - Current include contract assets relating to energy delivered and not yet invoiced, amounts receivable from REN regarding the CMEC Revisibility of 2016 and 2017 which are awaiting approval, and accruals from UNGE's energy management business. The impairment losses on Trade receivables includes impairment losses related to Contract assets receivable from energy sales contracts. Current 362 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 27\. Other debtors and other assets Other debtors and other assets are as follows: Thousand Euros Dec 2021 Dec 2020 * Dec 2021 Dec 2020 Debtors and other assets - Non-Current Assets measured at amortised cost: Loans to subsidiaries \- \- 1,703,778 2,739,230 Loans to related parties 173,267 7,630 90 90 Guarantees rendered to third parties 102,766 96,311 \- \- Other financial assets at amortised cost (i) 8,002 23,864 512,042 113,609 Assets measured at fair value through profit or loss: Derivative financial instruments (see note 42) 712,710 333,600 1,439,961 350,400 Contingent price 155,216 113,880 \- \- Other assets: Excess of the pension fund financing (see note 35) 13,268 29,610 42 93 Other debtors and sundry operations 675,918 415,893 89,654 \- 1,841,147 1,020,788 3,745,567 3,203,422 Debtors and other assets - Current Assets measured at amortised cost: Loans to subsidiaries \- \- 968,218 18,186 Dividends attributed by subsidiaries \- \- \- 110,000 Loans to related parties 100,261 415,120 \- \- Receivables from the State and concessors \- 5,402 \- \- Guarantees rendered to third parties 640,380 72,150 466,453 47,102 Subsidiary companies \- \- 249,800 103,602 Other financial assets at amortised cost (i) 16,171 22,818 280,060 56,038 Assets measured at fair value through profit or loss: Derivative financial instruments (see note 42) 1,640,616 271,828 3,852,144 421,666 Other financial investments measured at fair value 1,858 24,157 \- \- Contingent price 4,004 13,000 \- 7,159 Other assets: Other debtors and sundry operations 407,565 27,119 \- 89,654 2,810,855 851,594 5,816,675 853,407 4,652,002 1,872,382 9,562,242 4,056,829 Group For the Loans to subsidiaries, EDP S.A. performs an analysis to evaluate impairment based on the general approach. The company uses several inputs on making its assessment of the credit risk related to these assets, such as the analysis of the historical possible delays and/or impairment losses indications, companies rating (when applicable) and market and macroeconomic data that may change the probability of default and the expectation of delays in the receivable amounts. According to the analysis performed, as per 31 December 2021 there are no expected credit losses accounted for related to loans with subsidiaries. Company * Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) Loans to subsidiaries - Non-Current and Current, for the Company, mainly includes 809,836 thousand Euros (31 December 2020: 807,346 thousand Euros) of loans granted to EDP - Gestão da Produção de Energia, S.A. and 1,503,659 thousand Euros (31 December 2020: 1,503,685 thousand Euros) of loans granted to E-Redes – Distribuição de Eletricidade, S.A. (see note 44). 363 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 (i) Issue Class R Liquidity Senior Thousand Euros date Notes Notes Notes Overcost from special regime production 2017 Dec 2017 366 46 1,258 1,670 Overcost from special regime production 2018 Jun 2018 285 423 9,612 10,320 Overcost from special regime production 2019 Jun 2019 443 340 11,352 12,135 1,094 809 22,222 24,125 Nominal value Acquired Fair in Currency in Currency Value Issuer '000 '000 '000 EDP Finance B.V. EUR 2.63% 857,859 142,141 142,326 EDP Finance B.V. EUR Fixed rate (i) 93,357 53,357 54,910 EDP Finance B.V. EUR 2.38% 488,832 111,168 114,793 EDP Finance B.V. EUR 1.88% 462,465 137,535 142,488 EDP Finance B.V. EUR 1.13% 743,804 256,196 262,831 (i) This issue corresponds to private placements. On a company basis, this caption includes the bonds issued by EDP Finance B.V. reacquired on market by EDP S.A. 23 Dec 2022 The variation of the caption Loans to related parties - Non Current, on a consolidated basis, is mainly due to new loans granted to OW FS Offshore, S.A. in the amount of 172,095 thousand Euros. The variation of the caption Loans to related parties - Current, on a consolidated basis, is mainly due to the receipt of loans granted to OW Offshore, S.L. in the amount of 398,348 thousand Euros. Interest rate On 1 July 2021, EDP S.A. has bought an amount of 647,040 thousand Euros of nominal debt, related with four bonds issued by EDP Finance B.V. in a market operation, in the total amount of 675,544 thousand Euros. This amount includes a premium and transaction costs amounting to 24,248 thousand Euros and accrued interest as at the acquisition date (see notes 13 and 34). Maturity date 29 Sep 2023 12 Feb 2024 18 Jan 2022 In the first quarter of 2021 EDP Finance B.V. repaid, at maturity, 600 million Euros of securities issued, of which EDP S.A. had already reacquired 46,783 thousand Euros. The detail of these bonds is as follows: The variation of the caption Contingent prices - Non Current mainly results from the: i) update of the fair value of the contingent consideration in connection with the sale in 2018 and 2020 of a stake in the companies Éoliennes en Mer Dieppe - Le Tréport, S.A.S and Éoliennes en Mer Îles d'Yeu et de Noirmoutier, SAS to Sumitomo Corporation and to OW Offshore S.L., respectively; and ii) sale in 2020 of a stake in the company Mayflower Wind Energy LLC to OW Offshore S.L., in accordance with the relevant agreements signed (see note 8). 23 Mar 2023 On November 2020, EDP S.A. has bought an amount of 53,357 thousand Euros of a private bond placement, issued by EDP Finance B.V. Currency Other financial assets at amortised cost The caption Other debtors and sundry operations - Non Current includes the financial consideration paid in advance in 2009 for the exploitation of the hydro power plants of Fridão and other amounts invested in such hydro power plant (see note 4). The variation of the caption results mainly from the recognition of receivable amounts related with the sale transaction in 2021 of the eolic project Indiana Crossroads in the amount of 269,799 thousand Euros (see note 6). On a consolidated basis, this caption mainly includes securities issued by Tagus - Sociedade de Titularização de Créditos, SA, in the context of the transmission of the right to receive tariff adjustments (deviations and deficits) from the National Electric System for credit securitisation companies, acquired by SU Eletricidade, S.A. The detail of the balances arising from these operations is as follows: Total 364 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 28\. Tax assets Current tax assets are as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Non-Current: Special taxes Brazil 173,846 251,770 \- \- Current: Income tax 132,109 125,503 48,893 44,241 Value added tax (VAT) 295,789 191,587 44,659 6,196 Special taxes Brazil 93,624 90,783 \- \- Other taxes 30,320 6,429 874 877 551,842 414,302 94,426 51,314 725,688 666,072 94,426 51,314 29\. Cash and cash equivalents Cash and cash equivalents are as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Cash 288 254 29 39 Bank deposits Current deposits 2,572,979 1,461,444 1,177,071 1,030,863 Term deposits 458,386 1,451,681 \- 150,000 Specific demand deposits in relation to institutional partnerships 314 34,313 \- \- 3,031,679 2,947,438 1,177,071 1,180,863 Operations pending cash settlement Current deposits \- \- 140,000 118,000 Other operations Other short term investments 205,623 770 200,178 \- Group Financial System (see note 44) \- \- 973,175 873,729 3,237,590 2,948,462 2,490,453 2,172,631 Held for sale operations: Cash and cash equivalents reclassified as held for sale (see note 41) -15,181 5,840 \- \- 3,222,409 2,954,302 2,490,453 2,172,631 Group The Special taxes Brazil caption relates to the following taxes: CSLL (Social Contribution on net profits), PIS (Social integration programme) and COFINS (Social Security Financing Contribution). The caption Other taxes includes,mainly, the amount of 18,539 thousand Euros related to the undue payment in the period from 2013 to 2017 of the fee for the use of the public hydraulic domain known as “Hydraulic Canon” by EDP España (see note 8). Group Company The caption Guarantees rendered to third parties - Current includes margin deposits made in energy trading exchanges, such as the OMIP and EEX exchanges. The variation in relation to the previous year is essentially explained by the increase in energy prices that occurred during this year. The variation of the caption Other debtors and sundry operations - Current is mainly due to the recognition of the receivable amount for the sale of the companies Eólica do Sincelo, S.A. and Eólica da Linha, S.A., corresponding to 355,996 thousand Euros (see note 6). Company 365 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 30\. Share capital and share premium % Capital % Voting China Three Gorges Corporation 19.19% 19.19% BlackRock, Inc. 7.38% 7.38% Oppidum Capital, S.L. 7.20% 7.20% Canada Pension Plan Investment Board 5.16% 5.16% Amundi Asset Management 2.63% 2.63% Norges Bank 2.42% 2.42% Qatar Investment Authority 2.27% 2.27% Sonatrach 2.19% 2.19% Bank of America Corporation 2.02% 2.02% EDP (Treasury Stock) 0.48% Remaining Shareholders 49.06% 100.00% On August 11, 2020, EDP made a capital increase by issuing 309,143,297 ordinary, book-entry and nominative shares, with a unit face value of 1 Euro, with a unit subscription price of 3.30 Euros, offered to subscription of its shareholders, in the exercise of the respective preemptive rights, offered to the shareholders of EDP for subscription through the exercise of their pre- emption subscription rights pursuant to applicable law (the “Rights Offering”). The new ordinary shares will be fungible with existing ordinary shares and will entitle their holders to the same rights as those of pre-existing shares. As such, the current share capital of EDP is now of 3,965,681,012 Euros, represented by 3,965,681,012 ordinary, registered, book-entry shares with nominal value 1,00 Euro each. EDP - Energias de Portugal S.A. shareholder structure as at 31 December 2021 is as follows: 87,007,433 79,992,285 19,103,158 760,872,884 As at 31 December 2021, on a company basis, the caption Operations pending cash settlement represents commercial paper issued by EDP S.A. in the amount of 140,000 thousand Euros (31 December 2020: 118,000 thousand Euros) on 31 December 2021, acquired by EDP Finance B.V., which settlement date occurred on 4 January 2022. On 21 February 2013, Parpública – Participações Públicas (SGPS) S.A. (Parpública) notified EDP that, on 19 February 2013, it sold 151,517,000 shares, which correspond to 4.14% of EDP's share capital. As a result of these last two transactions, Parpública no longer has a qualified shareholding position in EDP share capital. EDP, S.A. was incorporated as a State-owned company and started its privatisation process in 1997. The second and third phases of the privatisation process were carried out in 1998, the fourth phase in 2000, the fifth phase consisting of a capital increase in 2004 and a sixth phase in 2005. In December 2007, the State issued bonds convertible into shares of EDP, S.A. under the seventh phase of the privatisation process. On 11 May 2012, regarding EDP's eighth privatisation phase, the Portuguese State sold to China Three Gorges (Europe), S.A. (former - CWEI (Europe), S.A.), the ownership of 780,633,782 shares representing 21.35% of the share capital and the voting rights of EDP, S.A. No. of Shares 1,945,677,136 3,965,681,012 On 29 September 2017, China Three Gorges (Europe), S.A. acquired 70,143,242 shares representing around 1.92% of EDP's share capital and voting rights. After this acquisition, an off-market transaction, CTG Europe became the holder of 850,777,024 shares. Specific demand deposits in relation to institutional partnerships corresponds to funds required to be held in escrow sufficient to pay the remaining construction related costs of projects in institutional equity partnerships (see note 37), under the Group accounting policy. 292,858,021 285,414,883 204,634,446 104,421,359 95,783,685 89,915,722 366 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Share Share Thousand Euros capital premium Balance as at 1 January 3,965,681 1,196,522 Movements during the period \- \- Balance as at 31 December 3,965,681 1,196,522 The earnings per share (EPS) attributable to the equity holders of EDP are as follows: Dec 2021 Dec 2020 Dec 2021 Dec 2020 Net profit attributable to the equity holders of EDP (in Euros) 656,716,781 800,691,979 824,069,863 878,151,389 Net profit from continuing operations attributable to the equity holders of EDP (in Euros) 656,716,781 800,691,979 824,069,863 878,151,389 Weighted average number of ordinary shares outstanding 3,946,530,875 3,764,319,113 3,946,530,875 3,765,706,030 Weighted average number of diluted ordinary shares outstanding 3,946,530,875 3,764,319,113 3,946,530,875 3,765,706,030 Basic earnings per share attributable to equity holders of EDP (in Euros) of EDP (in Euros) 0.17 0.21 \- \- Diluted earnings per share attributable to equity holders of EDP (in Euros) 0.17 0.21 \- \- Basic earnings per share from continuing operations (in Euros) 0.17 0.21 \- \- Diluted earnings per share from continuing operations (in Euros) 0.17 0.21 \- \- The average number of shares is determined as follows: Dec 2021 Dec 2020 Dec 2021 Dec 2020 Ordinary shares issued at the beginning of the period 3,965,681,012 3,656,537,715 3,965,681,012 3,656,537,715 Effect of shares issued during the period \- 128,809,707 \- 128,809,707 Average number of realised shares 3,965,681,012 3,785,347,422 3,965,681,012 3,785,347,422 Effect of treasury stock -19,150,137 -21,028,309 -19,150,137 -19,641,393 Average number and diluted average number of shares during the period 3,946,530,875 3,764,319,113 3,946,530,875 3,765,706,030 31\. Treasury stock This caption is as follows: Dec 2021 Dec 2020 Dec 2021 Dec 2020 Book value of EDP, S.A.'s treasury stock (thousand Euros) 52,660 54,025 52,660 54,025 Number of shares 19,103,158 19,557,741 19,103,158 19,557,741 Market value per share (in Euros) 4.832 5.156 4.832 5.156 Market value of EDP, S.A.'s treasury stock (thousand Euros) 92,306 100,840 92,306 100,840 Share capital and Share premium are as follows: EDP Group calculates basic and diluted earnings per share attributable to equity holders of EDP using the weighted average number of ordinary shares outstanding during the period, net of changes in treasury stock during the period. Basic earnings per share and diluted earnings per share are equal because there are no dilution factors. Company Group Company Group Group Group and Company Company 367 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Shares' transactions occurred between 1 January and 31 December 2021: EDP, S.A. Volume acquired (number of shares) 100,000 Average purchase price (in Euros) 4.789 Total purchases (thousand Euros) 479 Volume sold (number of shares) i) -554,583 Average selling price (in Euros) 4.840 Total sales (thousand Euros) i) 2,684 Final position (number of shares) 19,103,158 Highest market price (in Euros) 4.840 Lowest market price (in Euros) 4.780 Average market price (in Euros) 4.832 32\. Reserves and retained earnings This caption is as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Legal reserve 782,932 739,024 782,932 739,024 Fair value reserve (cash flow hedge) -1,063,338 -6,066 553,245 84,893 Tax effect of fair value reserve (cash flow hedge) 282,478 1,698 -124,519 -19,140 21,405 14,659 \- \- Tax effect of the fair value reserve of assets measured at fair value -4,043 -2,771 \- \- -391,219 -699,299 \- \- -595,305 -291,829 \- \- -42,953 -62,367 \- \- Treasury stock reserve (EDP, S.A.) 52,660 54,025 52,660 54,025 Other reserves and retained earnings 4,513,932 3,926,711 2,015,173 1,927,982 3,556,549 3,673,785 3,279,491 2,786,784 Currency translation reserve - Net investment hedge - Cost of hedging Group Company This reserve includes theeffective portion of the cumulative net change inthe fair value of the cash flow hedging financial derivative instruments. The treasury stock held by EDP, S.A. is within the limits established by the Company's articles of association and by the "Código das Sociedades Comerciais" (Portuguese Commercial Companies Code). Treasury stock is recognised at acquisition cost. Currency translation reserve - Net investment hedge The variation in the caption Fair value reserve (cash flow hedge) reflects, essentially, the impact of the price increase of the indexes associated with electricity and gas, which reflect the current evolution on the market. other comprehensive income The movement in Other reserves and retained earnings reflects, essentially, the dilution effect resulting from EDPR's capital increase, in April 2021 by issuing new shares, not accompanied by EDP (see Condensed Consolidated Statements of Changes in Equity and note 6). through other comprehensive income Fair value reserve of assets measured at fair value through i) Includes the distribution of treasury stocks to employees (see note 10). Legal reserve In accordance with article no. 295 of "Código das Sociedades Comerciais" (Portuguese Commercial Companies Code) and EDP, S.A.'s articles of association, the legal reserve must be increased by a minimum of 5% of the annual profit until it reaches 20% of the company’s share capital. This reserve can only be used to cover losses or to increase share capital. Fair value reserve (cash flow hedge) Currency translation reserve - Exchange differences arising on 368 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Balance Perimeter Balance Milhares de Euros Dec 2020 variations Dec 2021 6,339 \- \- \- 6,339 Mercer and Dunas Funds (Energia RE portfolio) (see note 22) 2,907 5,990 \- \- 8,897 SU Eletricidade, S.A. tariff deficit (see note 26) 1,405 428 -1,481 \- 352 Other (see note 22) 4,008 2,054 \- -245 5,817 14,659 8,472 -1,481 -245 21,405 Currency Close Average Close Average US Dollar USD 1.133 1.183 1.227 1.142 Brazilian Real BRL 6.310 6.378 6.374 5.889 Macao Pataca MOP 9.098 9.469 9.800 9.124 Canadian Dollar CAD 1.439 1.483 1.563 1.530 Polish Zloty PLN 4.599 4.567 4.615 4.444 Romanian Leu RON 4.948 4.921 4.869 4.837 Pound Sterling GBP 0.840 0.860 0.899 0.890 Mexican Peso MXN 23.275 23.985 24.359 24.514 Colombian peso COP 4,527.375 4,425.924 4,191.065 4,214.657 Chinese Yuan CNY 7.195 7.628 8.023 7.874 Corean Won WON 1,346.380 1,354.057 1,336.000 1,345.385 Japanese Yen JPY 130.380 129.877 126.490 121.846 Net investment Thousand Euros hedge Balance as at 31 December 2020 -291,829 -62,367 Changes in fair value -287,725 19,414 Transfer to income statement resulting from the sale of a foreign currency subsidiary -15,751 \- Balance as at 31 December 2021 -595,305 -42,953 Cost of Hedging Exchange rates Dec 2021 Defined Crowd Corporation (see note 22) Currency translation reserve - Net investment hedge and Cost of hedging Fair value reserve (financial assets at fair value through other comprehensive income) The changes in this consolidated caption for the period are as follows: Currency translation reserve - Exchange differences arising on consolidation Exchange differences arising on consolidation corresponds to the amounts resulting from changes in the value of net assets of subsidiaries, joint ventures and associated companies resulting from changes in exchange rates. The exchange rates used in the preparation of the financial statements are as follows: Fair Value Reserve Increases Decreases Dez 2020 The caption Net investment hedge corresponds to the amounts resulting from the application of hedge accounting to investments in subsidiaries in foreign currencies, mainly in the subsidiary EDPR North America, through financial derivative instruments (see note 42) and debt in foreign currency. The caption Cost of hedging corresponds to the amounts determined in accordance with accounting policies (see note 2 d)). The movement for the period in Exchange differences arising on consolidation is mainly due to the effect of the depreciation of the Brazilian Real against the Euro. The changes in these captions, net of income tax, for the period are as follows: 369 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 33\. Non-controlling interests This caption is as follows: Thousand Euros Dec 2021 Dec 2020 * Non-controlling interests in income statement 447,929 360,501 Non-controlling interests in equity and reserves 4,206,827 3,127,820 4,654,756 3,488,321 The movement by subgroup of the non-controlling interests item is analysed as follows: EDP EDP Renováveis Brasil Thousand Euros Group Group Balance as at 31 December 2020 2,518,461 943,167 26,693 3,488,321 Results 240,720 176,241 30,968 447,929 Dividends -57,770 -93,320 \- -151,090 Currency Exchange differences 80,188 17,176 -73 97,291 Capital Increases/Decreases -63,487 -69,602 \- -133,089 Changes in the fair value reserve (cash flow hedge) -110,502 88 522 -109,892 Perimeter variations and Others 945,700 5,584 64,002 1,015,286 Balance as at 31 December 2021 3,553,310 979,334 122,112 4,654,756 The summarised financial information for subsidiaries with material non-controlling interests, namely EDP Brasil and EDP Renováveis, as at 31 December 2021, are disclosed in the Annex I. Other Total The movement in Perimeter variations and Others reflects, essentially, the dilution effect resulting from EDPR's capital increase, in April 2021 by issuing new shares, not accompanied by EDP, in the amount of 922,152 thousand Euros (see Condensed Consolidated Statements of Changes in Equity and note 6). Dividends On 14 April 2021, the Shareholders General Meeting of EDP, S.A. approved the dividends distribution to shareholders of the net profit for the year 2020 in the amount of 753,479 thousand Euros, corresponding to a dividend of 0.19 Euros per share (including the treasury stock dividend). This distribution occurred on 26 April 2021. Group Treasury stock reserve (EDP, S.A.) In accordance with the article 324º of "Código das Sociedades Comerciais" (Portuguese Commercial Companies Code), EDP, S.A. has created an unavailable reserve with an amount equal to the book value amount of treasury stock held in the company statements. * Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) 370 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 34\. Financial debt This caption is as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Debt and borrowings - Non-current Bank loans: \- EDP Finance B.V. ** -6,796 -8,935 \- \- \- EDP Brasil Group 210,050 200,782 \- \- \- EDP España Group \- 15,067 \- \- \- EDP Renováveis Group 813,616 572,457 \- \- \- Others 1,305 \- \- \- 1,018,175 779,371 \- \- Non-convertible bond loans: \- EDP S.A. 743,874 742,779 5,143,874 6,192,779 \- EDP Finance B.V. 7,047,836 8,475,687 \- \- \- EDP Brasil Group 1,115,680 613,880 \- \- \- EDP España Group 1,051,954 1,052,210 \- \- 9,959,344 10,884,556 5,143,874 6,192,779 Hybrid bonds: \- EDP S.A. 3,717,072 1,737,918 3,717,072 1,737,918 3,717,072 1,737,918 3,717,072 1,737,918 Commercial paper: \- EDP S.A. 220,732 203,732 220,732 203,732 \- EDP Finance B.V. 198,658 183,359 \- \- \- EDP Brasil Group 103,009 62,760 \- \- 522,399 449,851 220,732 203,732 Other loans 26,132 26,741 \- \- 15,243,122 13,878,437 9,081,678 8,134,429 Accrued interest 5,511 13,026 \- \- Other liabilities: \- Fair value of the issued debt hedged risk 50,955 132,477 \- \- Total Debt and Borrowings 15,299,588 14,023,940 9,081,678 8,134,429 Collateral Deposits - Non-current * -23,397 -22,848 \- \- 15,276,191 14,001,092 9,081,678 8,134,429 ** Deferred discount of origination fees on celebrated RCF, which are currently not used. Group Company * Deposits constituted as collateral for financial guarantee. 371 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Debt and borrowings - Current Bank loans: \- EDP Brasil Group 120,154 188,032 \- \- \- EDP Renováveis Group 103,093 77,173 \- \- \- Other \- 3,305 \- \- 223,247 268,510 \- \- Non-convertible bond loans: \- EDP S.A. \- \- 900,000 1,500,000 \- EDP Finance B.V. 942,554 1,164,278 \- \- \- EDP Brasil Group 82,792 181,219 \- \- 1,025,346 1,345,497 900,000 1,500,000 Commercial paper: \- EDP S.A \- \- 620,000 586,000 \- EDP Finance B.V. \- 155,000 \- \- \- EDP Brasil Group \- 123,951 \- \- \- EDP España Group \- 100,000 \- \- \- 378,951 620,000 586,000 Other loans Group Financial System (see note 44) \- \- 2,348,605 1,188,704 \- Other 1,395 1,797 \- \- 1,395 1,797 2,348,605 1,188,704 Accrued interest 242,653 243,214 84,016 74,439 Other liabilities: \- Fair value of the issued debt hedged risk 25,707 24,854 \- \- Total Debt and Borrowings 1,518,348 2,262,823 3,952,621 3,349,143 Collateral Deposits - Current * -26,678 -9,221 \- \- 1,491,670 2,253,602 3,952,621 3,349,143 On 1 July 2021, EDP S.A., acquired 647,040 thousand Euros of nominal value debt referring to four bond issues, issued by EDP Finance B.V., in the total amount of 675,544 thousand Euros (see notes 13 and 27). Non-current Commercial Paper refers to three Commercial Paper programs with firm underwriting commitment for a period of over one year, in the total amount of 475,000 thousand American Dollars and 650,000 thousand Brazilian Real. On 25 January 2021, EDP issued a subordinated hybrid green bond of 750 million Euros, which is non-callable up to 5.25 years and final maturity in August 2081. Group Company On 6 September 2021, EDP issued two subordinated hybrid green bonds of 750 and 500 million Euros, which are non-callable up to 5.25 and 7.75 years respectively, and final maturity in March 2082. * Deposits constituted as collateral for financial guarantee. Main events of the period: 372 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Nominal Value in Million Currency Group Company Hybrids by EDP S.A. EDP S.A. (iv) Jan-19 Fixed rate EUR 4.496% (v) n.a. Apr-79 1,000 EUR 1,000,000 1,000,000 EDP S.A. (vi) Jan-20 Fixed rate EUR 1.7% (vii) n.a. Jul-80 750 EUR 750,000 750,000 EDP S.A. (viii) Jan-21 Fixed Rate EUR 1.875% (v) n.a. Aug-81 750 EUR 750,000 750,000 EDP S.A. (ix) Sep-21 Fixed Rate EUR 1.5% (v) n.a. Mar-82 750 EUR 750,000 750,000 EDP S.A. (x) Sep-21 Fixed Rate EUR 1.875% (xi) n.a. Mar-82 500 EUR 500,000 500,000 3,750,000 3,750,000 Issued under the Euro Medium Term Notes program (EMTN) EDP Finance B.V.(ii) Dez-02 Taxa fixa EUR (iii) n.a. Dec-22 40 EUR 40,000 \- EDP Finance B.V.(i) Nov-08 Fixed rate GBP 8.625% Fair Value Jan-24 325 GBP 410,314 \- EDP Finance B.V. Nov-08 Zero coupon EUR (iii) n.a. Nov-23 160 EUR 160,000 \- EDP Finance B.V.(i)(ii) Sep-14 Fixed rate EUR 2.625% Fair Value Jan-22 858 EUR 857,859 \- EDP Finance B.V.(i) Apr-15 Fixed rate EUR 2% Fair Value Apr-25 750 EUR 750,000 \- EDP Finance B.V.(ii) Mar-16 Fixed rate EUR 2.375% n.a. Mar-23 489 EUR 488,832 \- EDP Finance B.V.(i)(ii) Aug-16 Fixed rate EUR 1.125% Net Invest. Feb-24 744 EUR 743,804 \- EDP Finance B.V.(ii) Jan-17 Fixed rate EUR 1.875% n.a. Sep-23 462 EUR 462,465 \- EDP Finance B.V. Jun-17 Fixed rate USD 3.625% Net Invest. Jul-24 1000 USD 882,924 \- EDP Finance B.V. Nov-17 Fixed rate EUR 1.5% n.a. Nov-27 500 EUR 500,000 \- EDP Finance B.V. Jun-18 Fixed rate EUR 1.625% n.a. Jan-26 750 EUR 750,000 \- EDP Finance B.V. Oct-18 Fixed rate EUR 1.875% n.a. Oct-25 600 EUR 600,000 \- EDP Finance B.V. Sep-19 Fixed rate EUR 0.375% n.a. Sep-26 600 EUR 600,000 \- EDP S.A. Apr-20 Fixed rate EUR 1.625% n.a. Apr-27 750 EUR 750,000 750,000 EDP Finance B.V. Sep-20 Fixed rate USD 1.71% Net Invest. Jan-28 850 USD 750,486 \- 8,746,684 750,000 (i) These issues by EDP Finance B.V. are associated with interest rate swaps and/or currency swaps; (ii) Consolidated nominal value after the repurchase of securities by EDP - Energias de Portugal, S.A.; (iii) These issues correspond to private placements; (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) Fixed rate in the first 7.75 years, subsequently updated every 5 years. There is a call option exercisable at par by EDP at April 2025 and July 2025 and subsequently, on each interest payment date; Fixed rate in the first 5,5 years, subsequently updated every 5 years; Fixed rate in the first 5,25 years, subsequently updated every 5 years; There is a call option exercisable at par by EDP at January 2024 and subsequently, on each interest payment date; The nominal value of outstanding Bond loans placed with external counterparties, as at 31 December 2021, is as follows: Issuer Issue date Interest rate Type of hedge Conditions/ Redemp. There is a call option exercisable at par by EDP from May 2026 until August 2026 and subsequently, on each interest payment date; There is a call option exercisable at par by EDP from December 2026 until March 2027 and subsequently, on each interest payment date; There is a call option exercisable at par by EDP from June 2029 until September 2029 and subsequently, on each interest payment date; Thousand Euros 373 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Nominal Value in Million Currency Group Company Issued by the EDP Energias do Brasil Group in the Brazilian domestic market Energias do Brasil Sep-15 n.a. Sep-24 66 BRL 10,519 \- Energias do Brasil Apr-16 n.a. Apr-22 164 BRL 25,951 \- EDP São Paulo Apr-17 n.a. Apr-22 30 BRL 4,754 \- EDP Espírito Santo Apr-17 n.a. Apr-22 38 BRL 6,022 \- Enerpeixe Nov-17 n.a. Dec-22 107 BRL 16,918 \- Lajeado Energia Dec-17 n.a. Dec-22 100 BRL 15,848 \- EDP Espírito Santo Aug-18 n.a. Jul-25 227 BRL 36,026 \- EDP São Paulo Aug-18 n.a. Aug-25 301 BRL 47,748 \- EDP Transmissão Oct-18 n.a. Oct-28 1.435 BRL 227,391 \- Lajeado Energia Nov-18 n.a. Oct-22 50 BRL 7,924 \- Enerpeixe Dec-18 n.a. Nov-23 255 BRL 40,411 \- EDP Espírito Santo Apr-19 n.a. Mar-24 300 BRL 47,543 \- EDP São Paulo Apr-19 n.a. Mar-24 200 BRL 31,695 \- EDP Transmissão Aug-19 n.a. Jul-39 930 BRL 147,406 \- EDP São Paulo Feb-21 n.a. Jan-26 763 BRL 120,922 \- Enerpeixe Mar-21 n.a. Mar-26 275 BRL 43,581 \- EDP Espírito Santo Feb-21 n.a. Jul-25 545 BRL 86,373 \- Lajeado Energia Jun-21 n.a. Dec-22 150 BRL 23,771 \- EDP São Paulo Aug-21 n.a. Jul-26 350 BRL 55,467 \- EDP Espírito Santo Aug-21 n.a. Jul-25 400 BRL 63,390 \- EDP Transmissão Nov-21 n.a. Nov-23 525 BRL 83,200 EDP São Paulo Dec-21 n.a. Dec-26 450 BRL 71,314 1,214,174 \- 13,710,858 4,500,000 107.5% CDI EDP Group has several credit facilities it uses for liquidity management. EDP Group has short-term credit facilities of 255 million Euros, indexed to Euribor for the agreed period of use with spread conditions agreed in advance, all with a firm underwriting commitment, which as at 31 December 2021 were totally available. Regarding medium-term credit facilities with a firm underwriting commitment, EDP Group has two Revolving Credit Facilities, namely (i) 3,300 million Euros, of which 3,295 million Euros mature in 2024 while the remaining amount matures in 2023; and (ii) 2,240 million Euros, of which 2,095 million Euros mature in 2025 while the remaining amount matures in 2023, both of them totally available as at 31 December 2021. CDI + 1.05% IPCA + 4.45% 108.75 % CDI 108.75 % CDI IPCA + 3.91% CDI + 1.75% IPCA + 3.26% Some of the loans contracted by the EDP Group, mainly debt issued under the EMTN, include some usual clauses in this type of operations, namely, "change-of-control", "negative pledge", "pari-passu" and "cross-default" clauses, each one only applicable under a restricted set of circumstances. The Group has project finance loans with the usual guarantees for such loans, namely pledges or promissory pledges over shares, bank accounts and assets relating to the projects. As at 31 December 2021, these loans amounted to 843,778 thousand Euros (31 December 2020: 643,984 thousand Euros). At 31 December 2021, the Group confirms the fulfillment of all the covenants of the Project Finance Portfolio under the Facilities Agreements. Additionally, there are 17,329 thousand Euros of other loans that are guaranteed by EDPR (31 December 2020: 18,034 thousand Euros). 112.48% CDI 106.9% CDI 113.70% CDI CDI + 1.25% CDI + 1.25% CDI + 1,10% IPCA + 8.7608% 116% CDI IPCA + 8.3479% IPCA + 5.91% IPCA + 5.91% IPCA + 6.72% 109.25% CDI Issuer Issue date Interest rate Type of hedge Conditions/ Redemp. Thousand Euros CDI + 1,38% 374 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Following Thousand Euros Dec 2022 Dec 2023 Dec 2024 Dec 2025 Dec 2026 years Total Bank loans: Euro 31,420 31,096 25,224 12,292 324 445 100,801 Brazilian Real 115,418 146,825 51,194 42,088 24,321 203,512 583,358 US Dollar 65,853 18,037 20,274 20,614 21,479 233,449 379,706 Other 25,694 16,471 20,010 10,015 5,021 140,643 217,854 238,385 212,429 116,702 85,009 51,145 578,049 1,281,719 Bond loans: Euro 1,086,538 1,611,297 1,147,583 1,364,841 1,900,000 1,304,443 8,414,702 Brazilian Real 120,986 166,543 191,470 409,168 140,793 207,820 1,236,780 US Dollar 20,355 \- 882,924 \- \- 750,486 1,653,765 1,227,879 1,777,840 2,221,977 1,774,009 2,040,793 2,262,749 11,305,247 Hybrid Bonds: Euro 48,081 \- \- \- \- 3,750,000 3,798,081 48,081 \- \- \- \- 3,750,000 3,798,081 Commercial paper: Brazilian Real \- 55,467 47,543 \- \- \- 103,010 US Dollar 2,769 99,329 \- 320,060 \- \- 422,158 2,769 154,796 47,543 320,060 \- \- 525,168 Other loans: Euro 2,095 1,202 1,011 1,031 1,052 12,037 18,428 Brazilian Real 409 \- \- \- \- 9,799 10,208 2,504 1,202 1,011 1,031 1,052 21,836 28,636 Origination Fees: -1,270 -23,491 -10,250 -8,164 -5,982 -71,758 -120,915 1,518,348 2,122,776 2,376,983 2,171,945 2,087,008 6,540,876 16,817,936 Following Thousand Euros Dec 2021 Dec 2022 Dec 2023 Dec 2024 Dec 2025 years Total Bank loans: Euro 49,272 46,444 37,605 30,677 16,208 56,194 236,400 Brazilian Real 159,025 54,700 48,859 38,730 31,174 165,805 498,293 US Dollar 59,593 11,304 11,546 12,135 13,109 148,042 255,729 Other 22,796 12,964 16,389 19,905 9,858 18,064 99,976 290,686 125,412 114,399 101,447 70,349 388,105 1,090,398 Bond loans: Euro 714,271 1,095,210 1,843,550 1,421,152 1,379,512 3,227,930 9,681,625 Brazilian Real 196,059 79,483 80,744 122,108 122,380 234,352 835,126 US Dollar 642,896 \- \- 814,930 \- 692,690 2,150,516 1,553,226 1,174,693 1,924,294 2,358,190 1,501,892 4,154,972 12,667,267 Hybrid Bond: Euro 36,066 \- \- \- \- 1,750,000 1,786,066 36,066 \- \- \- \- 1,750,000 1,786,066 Commercial paper: Euro 255,000 \- \- \- \- \- 255,000 Brazilian Real 123,951 15,690 \- 47,070 \- \- 186,711 US Dollar 2,517 \- 91,680 \- 295,412 \- 389,609 381,468 15,690 91,680 47,070 295,412 \- 831,320 Other loans: Euro 2,210 994 1,202 1,011 1,031 13,125 19,573 Brazilian Real 782 \- \- \- \- 9,378 10,160 2,992 994 1,202 1,011 1,031 22,503 29,733 Origination Fees: -1,615 -6,788 -38,785 -8,922 -6,620 -55,291 -118,021 2,262,823 1,310,001 2,092,790 2,498,796 1,862,064 6,260,289 16,286,763 As at 31 December 2021, future debt and interest payments and origination fees, by type of loan and currency, are as follows: As at 31 December 2020, future debt and interest payments and origination fees, by type of loan and currency, are as follows: 375 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 35\. Employee benefits Employee benefits are as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Provisions for pension liabilities 379,689 507,883 107,212 121,725 560,577 630,354 72,322 82,342 940,266 1,138,237 179,534 204,067 Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Balance at the beginning of the period 629,608 630,790 712,696 680,879 Charge for the period 8,521 7,399 20,157 28,215 Past service cost (Curtailment/Plan amendments) 6,844 36,848 8,469 1,068 Actuarial (gains)/losses 460 97,403 -53,502 -22,668 Charge-off -122,565 -129,588 -65,621 -26,504 Fund contributions (see note 44) \- \- -11,520 -23,040 Surplus/(Deficit) pension funding (see note 27) -16,342 -25,896 \- \- Transfers, reclassifications and exchange differences -19,625 -11,293 22,220 -45,718 Perimeter variations \- 23,945 \- 120,464 Balance at the end of the period 486,901 629,608 632,899 712,696 Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Actuarial gains and losses arising from: \- changes in demographic assumptions 15,778 \- 8,705 \- \- changes in financial assumptions -23,233 3,369 -18,539 -9,838 \- experience adjustments 76,553 95,671 -5,019 -8,107 Actuarial gains and losses arising from return on plan assets -69,872 6,892 -38,649 -4,723 Actuarial gains and losses of asset ceiling 1,234 -8,529 \- \- 460 97,403 -53,502 -22,668 Thousand Euros Portugal Spain Brazil Group Current service cost (see note 10) 5,569 \- -348 5,221 Past service cost (Curtailment/Plan amendments) (see note 10) 6,844 \- \- 6,844 Operational component 12,413 \- -348 12,065 Net interest on the net pensions plan liability (see note 13) 563 1 2,736 3,300 Financial component 563 1 2,736 3,300 12,976 1 2,388 15,365 The breakdown of actuarial gains and losses is as follows: The components of the consolidated net cost of the pension plans recognised during the period are as follows: The movement in Provisions for employee benefits liabilities for EDP Group is as follows: Provisions for medical liabilities and other benefits Pensions and Other Dec 2021 Non-Current Current Pensions Medical Pensions Medical Pensions and Other In accordance with the Group's accounting policies, the financial liabilities whose risks are being hedged by derivative financial instruments and that comply with hedge accounting requirements of IFRS 9, are accounted at fair value. The financial liabilities are booked at amortised cost. 376 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Portugal Spain Brazil Group Current service cost (see note 10) 6,304 \- -1,102 5,202 Past service cost (Curtailment/Plan amendments) (see note 10) 36,848 \- \- 36,848 Operational component 43,152 \- -1,102 42,050 Net interest on the net pensions plan liability (see note 13) 206 \- 1,991 2,197 Financial component 206 \- 1,991 2,197 43,358 \- 889 44,247 Thousand Euros Portugal Spain Brazil Group Current service cost (see note 10) 4,482 1,995 390 6,867 Past service cost (Curtailment/Plan amendments) (see note 10) 200 8,269 \- 8,469 Operational component 4,682 10,264 390 15,336 2,298 3,429 7,563 13,290 Financial component 2,298 3,429 7,563 13,290 6,980 13,693 7,953 28,626 Thousand Euros Portugal Spain Brazil Group Current service cost (see note 10) 4,832 9,324 687 14,843 Past service cost (Curtailment/Plan amendments) (see note 10) 1,068 \- \- 1,068 Operational component 5,900 9,324 687 15,911 2,640 1,038 9,694 13,372 Financial component 2,640 1,038 9,694 13,372 8,540 10,362 10,381 29,283 The components of the consolidated net cost of the medical and other benefits plans recognised during the period are as follows: other benefits (see note 13) During 2020, under the employees' reduction program in Portugal and the closure of Sines power plant, EDP Group entered into early retirement and anticipation of retirement agreements, and as a result an increase in liabilities with employee benefits has been recognised in the income statement in the amount of 37,916 thousand Euros (see note 10). Dec 2020 Dec 2020 Dec 2021 Net interest on the net medical liabilities and The weighted average duration of the defined benefit liabilities in Portugal is 10 years. Net interest on the net medical liabilities and In accordance with accounting policies - note 2 m), the EDP Group opted, upon transition to IFRS, to charge to reserves, the total amount of the deferred actuarial losses existing at that date, for the several employee benefits plans. The impact in reserves at 31 December 2004 amounted to 1,162,000 thousand Euros. In the following periods, actuarial gains and losses were recognised directly in reserves. As at 31 December 2021 gains of 53,042 thousand Euros (31 December 2020: losses of 74,735 thousand Euros). other benefits (see note 13) 377 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Portugal Spain Brazil Portugal Spain Brazil Assumptions 0,70% - 7,57% - 0.70% - 6.78% - 0.90% 8.77% 0.80% 7.67% not not applicable applicable not not applicable applicable not not not not applicable applicable applicable applicable Inflation rate 1.70% 0.57% 3.25% 1.50% 1.50% 3.31% Annual increase rate of medical not service costs applicable Estimated administrative expenses per 282 €/year not not 289 €/year not beneficiary per year (Euros) (e) applicable applicable (g) 2.00% applicable Nasc.< 1950.00% TV99/01 \-- TV99/01 (all (+1) // population) Nasc.>= 1950 -- TV99/01 Muller / Muller / TASA TASA applicable 1927 applicable 1927 Expected % of eligible employees not not not not accepting early retirement (a) applicable applicable applicable applicable (b) 2.30% for 2022 and 1.95% for the remaining years. (c) 1.00% for 2022 and 1.70% for the remaining years. (d) 9.45% in the first year, decreasing linearly to 5.32% in 2030. (e) Increase of 0.34% for 2023 and increase according to inflation after that date. (f) 9.51% in the first year, decreasing to 5.38% in 2029. (g) Decrease of 2.4% for 2022, decrease of 0.4% for 2023 and an increase after that date. Portugal Spain Brazil Total Portugal Spain Brazil Total 166,074 589 15,377 182,040 35,451 21,153 6,224 62,828 142,646 470 15,828 158,944 34,280 17,979 6,522 58,781 119,912 483 16,267 136,662 34,529 7,273 6,834 48,636 99,448 418 16,727 116,593 34,686 17,278 7,184 59,148 2026 and 375,555 1,777 109,259 486,591 206,074 165,520 49,849 421,443 2024 Social Security salary appreciation 61 years of age or 40 years of service at any age. Thousand Euros 2025 following Medical and Other Benefits Salary increase rate Pension increase rate 1.50% 3.31% 50%EKV 80 not not 1.50% 1.50% 3.25% 1.70% 4.05% 1.00% (c) 1.70% AT-2000 / RP-2000 Geracional (a) Employees entitled to early retirement, as stated in the Collective Labour Agreement: 37 years of service with at least The discount rates used for the EDP Group pension plan were selected based on an analysis of the rates of return available on the date for the high quality corporate bonds. Bonds with maturities and ratings considered appropriate were selected considering the amount and the periods that the benefits are expected to be paid. As at 31 December 2021 the amount of future benefits expected to be paid, related to the activity in Portugal, Spain and Brazil, is as follows: Assumptions used to determine EDP Group liabilities related to employee benefits The following financial and actuarial assumptions used in the calculation of the liability for employees defined benefit plans, were updated considering the evolutions occurred in the financial markets during 2021 and 2020: Dec 2021 Dec 2020 Disability table 50%EKV 80 Mortality table 35% 1.56% PERM/F- 2000P 0.82% 2.30% (b) 9.45% (d) 0.90% 9.51% (f) Discount rate Pensions Years 2022 2023 45% PERM/F- 2000P AT-2000 / RP-2000 Geracional 1.75% 4.18% 378 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Increase Decrease Increase Decrease Increase Decrease Discount rate (0.5% movement) -46,220 49,997 -284 335 -9,936 10,846 Thousand Euros Increase Decrease Increase Decrease Increase Decrease Discount rate (0.5% movement) -52,686 58,749 -12,998 13,551 -4,659 5,089 Health care cost trend (0.5% movement) 12,691 -11,674 \- \- \- \- Thousand Euros Liquidity Bonds Shares Property Other Total 31 December 2021 15,571 481,123 542,016 198,724 71,473 1,308,907 31 December 2020 -14,639 519,874 454,436 197,314 94,216 1,251,201 Mortality (increase of 1 year in expected lifetime of plan participants) The level of solvency of the fund for the financing of post-employment medical care liabilities in Portugal may vary not only from the risks described above, but also from the performance of the different classes of assets that comprise it. Considering the nature of the defined benefit of the plan and despite the fund's low risk profile (mostly composed of fixed income assets), the joint materialization of adverse risks (including those above referred) may lead to changes in the financing plan approved by ASF. The assets of the pension funds, medical care and death subsidy in Portugal are as follows: Mortality (increase of 1 year in expected lifetime of plan participants) 19,417 \- 3,573 46,151 Portugal In 2021, the pensions paid by the funds in Portugal amounted 77,590 thousand Euros (31 December 2020: 81,001 thousand Euros) and in Brazil amounted to 13,850 thousand Euros (31 December 2020: 13,195 thousand Euros). The contributions made to the Pension funds in Brazil amounted to 1,640 thousand Euros (31 December 2020: 697 thousand Euros), which were fully paid in cash. Portugal The solvency level of the fund for the financing of pension plan liabilities in Portugal may vary not only from the risks described above, but also from the performance of the different classes of assets that comprise it. Considering the nature of the defined benefit of the plan and despite the fund's low risk profile (mostly composed of fixed income assets), the joint materialization of adverse risks (including those above referred) may lead to the need for additional contributions to the fund. The medical care and other benefits Plans in Portugal, Spain and Brazil are subject to several risks, in which are included the risk of changes in market rates (which impacts the discount rate and the fixed rate of return rate on assets), the risk of changes in the health care costs and the risk of changes on the expected lifetime of plan participants, to which are made the following sensitivity analysis for the liabilities at the end of the period: Spain Brazil The decision and implementation of the autonomisation of the Medical Plan and Death Subsidy Plan in Portugal, EDP Group has made contributions of 11,520 thousand Euros in 2021 (31 December 2020: 23,040 thousand Euros). In the following years, until the end of 2027, the Group estimates to make additional contributions in the approximate total amount of 138 million Euros, of which approximate 35 million Euros in 2022, in line with the financing plan approved by Insurance and Pension Funds Supervisory Authority (ASF) (see note 44). The Pension Plans in Portugal, Spain and Brazil are subject to several risks, in which are included the risk of changes in market rates (which impacts the discount rate and the fixed rate of return rate on assets), the risk of changes on the expected lifetime of plan participants, the risk of changes on the pension increase rate and the risk of changes on the social security pension increase, to which are made the following sensitivity analysis for the liabilities at the end of the period: Fund assets by nature Composition of the assets portfolio funds \- 3,645 Brazil Spain 379 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 % Liquidity Bonds Shares Property Other Total 31 December 2021 1.19% 36.76% 41.41% 15.18% 5.46% 100.00% 31 December 2020 -1.17% 41.55% 36.32% 15.77% 7.53% 100.00% The portfolio of shares and bonds have a quoted market price in an active market. Thousand Euros Liquidity Bonds Shares Property Other Total 31 December 2021 \- 180,448 10,277 672 5,956 197,353 31 December 2020 \- 197,959 2,505 1,624 \- 202,088 % Liquidity Bonds Shares Property Other Total 31 December 2021 \- 91.43% 5.21% 0.34% 3.02% 100.00% 31 December 2020 \- 97.96% 1.24% 0.80% \- 100.00% The portfolio of shares and bonds have a quoted market price in an active market. Portugal Spain Brazil Portugal Spain Brazil Retirees and pensioners 18,022 809 1,484 17,949 822 1,483 Active workers 2,260 75 432 2,575 159 592 20,282 884 1,916 20,524 981 2,075 Thousand Euros Portugal Spain Brazil Group Liability at the end of the period 1,266,282 3,814 207,893 1,477,989 Plan assets at the end of the period -838,755 \- -197,353 -1,036,108 Surplus/(Deficit) pension funding (see note 27) 13,267 \- \- 13,267 Asset ceiling \- \- 31,753 31,753 Provision at the end of the period 440,794 3,814 42,293 486,901 Thousand Euros Portugal Spain Brazil Group Liability at the end of the period 1,353,388 23,945 210,725 1,588,058 Plan assets at the end of the period -814,128 \- -202,088 -1,016,216 Surplus/(Deficit) pension funding (see note 27) 29,610 \- \- 29,610 Asset ceiling \- \- 28,156 28,156 Provision at the end of the period 568,870 23,945 36,793 629,608 Thousand Euros 2021 2020 2019 2018 2017 Liability at the end of the period 1,477,989 1,588,058 1,719,435 1,784,521 1,882,891 Plan assets at the end of the period -1,036,108 -1,016,216 -1,195,046 -1,136,581 -1,236,791 Surplus / (Deficit) pension funding 13,267 29,610 55,506 59,840 58,952 Asset ceiling 31,753 28,156 50,895 51,596 58,197 Provision at the end of the period 486,901 629,608 630,790 759,376 763,249 The real return rate on assets of the pension Fund in 2021 was positive in 9.40% (2020: positive in 2.12%). The assets of the pension fund in Brazil are as follows: Fund assets by nature The liability for retirement pensions and related coverage for the Group is as follows: 2021 2020 The evolution of the present value of the plan liability and fair value of the plan assets of the related Funds is as follows: The number of participants covered by the pension plans and similar obligations is as follows: Fund assets by nature Fund assets by nature Properties included in the fund, that are being used by the Group amount to 180,950 thousand Euros as at 31 December 2021 (31 December 2020: 183,242 thousand Euros). Bonds includes 4,919 thousand Euros (31 December 2020: 5,138 thousand Euros) relating to bonds issued by EDP Finance B.V. and EDP, S.A. Dec 2021 Dec 2020 380 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros 2021 2020 2019 2018 2017 Portugal Experience adjustments for the Plan liabilities 55,794 61,193 -46,993 -91,575 -55,281 Experience adjustments for the Plan assets -79,211 -6,662 60,914 -37,567 64,044 Brazil Experience adjustments for the Plan liabilities 20,759 34,478 -4,974 -6,090 15,354 Experience adjustments for the Plan assets 9,339 13,554 41,036 8,182 6,278 The past service liability of the pension plans for the Group is as follows: Thousand Euros Portugal Spain Brazil Group Liability at the beginning of the period 1,353,388 23,945 210,725 1,588,058 Current service cost 5,569 \- -348 5,221 Net interest on the pensions plan liability 3,729 1 17,381 21,111 Benefits paid -178,260 -71 -15,834 -194,165 Past service cost (Curtailment/Plan amendments) (see note 10) 6,844 \- \- 6,844 Actuarial (gains)/losses 75,137 -12 -6,027 69,098 Exchange differences \- \- 1,996 1,996 Perimeter variations and other -125 -20,049 \- -20,174 Liability at the end of the period 1,266,282 3,814 207,893 1,477,989 Thousand Euros Portugal Spain Brazil Group Liability at the beginning of the period 1,404,188 \- 315,247 1,719,435 Current service cost 6,304 \- -1,102 5,202 Net interest on the pensions plan liability 3,796 \- 20,735 24,531 Benefits paid -188,691 \- -14,566 -203,257 Past service cost (Curtailment/Plan amendments) 36,848 \- \- 36,848 Actuarial (gains)/losses 90,943 \- 8,097 99,040 Exchange differences \- \- -90,825 -90,825 Other \- 23,945 -26,861 -2,916 Liability at the end of the period 1,353,388 23,945 210,725 1,588,058 Thousand Euros Portugal Brazil Group Assets value at the beginning of the period 814,128 202,088 1,016,216 Group contribution \- 1,640 1,640 Plan participants contributions \- 211 211 Benefits paid -57,750 -13,850 -71,600 Interest on the pensions plan assets 3,166 14,645 17,811 Actuarial gains/(losses) 79,211 -9,339 69,872 Exchange differences \- 1,958 1,958 Assets value at the end of the period 838,755 197,353 1,036,108 Thousand Euros Portugal Brazil Group Assets value at the beginning of the period 864,350 330,696 1,195,046 Group contribution \- 697 697 Plan participants contributions \- 504 504 Benefits paid -60,474 -13,195 -73,669 Interest on the pensions plan assets 3,590 18,744 22,334 Actuarial gains/(losses) 6,662 -13,554 -6,892 Exchange differences \- -93,742 -93,742 Other variations \- -28,062 -28,062 Assets value at the end of the period 814,128 202,088 1,016,216 Dec 2020 Dec 2021 Dec 2020 The experience adjustments (effects of the differences between the previous actuarial assumptions and what has really occurred) for the Pension Funds in Portugal and Brazil are as follows: Dec 2021 The evolution of the consolidated assets of the Pension Funds is as follows: 381 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Dec 2020 Asset ceiling at the beginning of the period 28,156 50,895 Effect of changes in restricted net assets of benefits to the asset ceiling 1,234 -8,529 Exchange differences 2,363 -14,210 Asset ceiling at the end of the period 31,753 28,156 Portugal Spain Brazil Portugal Spain Brazil Retirees and pensioners 17,563 3,015 2,819 17,949 2,876 2,884 Active workers 5,663 466 937 5,672 639 203 23,226 3,481 3,756 23,621 3,515 3,087 Thousand Euros Portugal Spain Brazil Group Liability at the end of the period 806,641 203,978 92,432 1,103,051 Plan assets at the end of the period -470,152 \- \- -470,152 Provision at the end of the period 336,489 203,978 92,432 632,899 Thousand Euros Portugal Spain Brazil Group Liability at the end of the period 833,506 212,451 103,812 1,149,769 Plan assets at the end of the period -437,073 \- \- -437,073 Provision at the end of the period 396,433 212,451 103,812 712,696 Thousand Euros 2021 2020 2019 2018 2017 Liability at the end of the period 1,103,051 1,149,769 1,107,444 923,880 994,273 Plan assets at the end of the period -470,152 -437,073 -426,565 -275,954 -235,269 Provision at the end of the period 632,899 712,696 680,879 647,926 759,004 Thousand Euros 2021 2020 2019 2018 2017 Portugal Experience adjustments for the Plan liabilities \- 5 051 11 979 3 214 \- 1 265 \- 452 Experience adjustments for the Plan assets -38,649 -4,723 22,187 -11,869 8,368 Brazil Experience adjustments for the Medical Plan liabilities 32 -20,086 -1,937 37,773 -2,565 The caption Asset ceiling refers to the unrecognised assets in the respective accounting periods. The reconciliation between the opening balance and the closing balance is as follows: Group To determine the amount of provisions for pension funds, it has been deducted from the assets funds the value of the asset ceiling of 31,753 thousand Euros (200,365 thousand Reais). As at 31 December 2020, the asset ceiling amounted to 28,156 thousand Euros (179,452 thousand Reais). The actuarial gains/losses in Brazil include the positive amount of 1,234 thousand Euros (7,870 thousand Reais) related to actuarial gains and losses of the asset ceiling not recognised in reserves (31 December 2020: negative in 8,529 thousand Euros). Dec 2021 Dec 2020 The evolution of the present value of the liability for Medical care and other benefits for the Group is as follows: The experience adjustments (effects of the differences between the previous actuarial assumptions and what really occurred) for the medical and other benefits Liabilities in Portugal and Brazil and for the Plan Assets in Portugal are as follows: The number of participants covered by the medical and other benefits plans is as follows: 2021 2020 The provision for medical liabilities and other benefits and related coverage for the Group is as follows: 382 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 The past service liability of medical and other benefits plans for the Group is as follows: Thousand Euros Portugal Spain Brazil Group Liability at the beginning of the period 833,506 212,451 103,812 1,149,769 Current service cost 4,482 1,995 390 6,867 5,047 3,429 7,563 16,039 Benefits paid -32,989 -45,974 -6,497 -85,460 Past service cost (Curtailment/Plan amendments) (see note 10) 200 8,269 \- 8,469 Actuarial (gains)/losses -3,605 606 -11,854 -14,853 Exchange differences \- \- -982 -982 Perimeter variations and other \- 23,202 \- 23,202 Liability at the end of the period 806,641 203,978 92,432 1,103,051 Thousand Euros Portugal Spain Brazil Group Liability at the beginning of the period 835,882 104,364 167,198 1,107,444 Current service cost 4,832 9,324 687 14,843 5,910 1,038 9,694 16,642 Benefits paid -32,597 -7,940 -6,494 -47,031 Past service cost (Curtailment/Plan amendments) (see note 10) 1,068 \- \- 1,068 Actuarial (gains)/losses 18,403 -14,162 -22,186 -17,945 Exchange differences \- \- -48,318 -48,318 Other 8 119,827 3,231 123,066 Liability at the end of the period 833,506 212,451 103,812 1,149,769 Thousand Euros Dec 2021 Dec 2020 Assets value at the beginning of the period 437,073 426,565 Group contribution 11,520 23,040 Benefits paid -19,839 -20,525 Interest on the pensions plan assets 2,749 3,270 Actuarial gains/(losses) 38,649 4,723 Assets value at the end of the period 470,152 437,073 36\. Provisions Provisions are as follows: Thousand Euros Dec 2021 Dec 2020 * Dec 2021 Dec 2020 * Provision for legal and labour matters and other contingencies 98,351 97,320 3,067 2,996 Provision for customer guarantees under current operation \- 2,417 57,233 19,274 Provision for dismantling and decommissioning 560,007 549,378 8,615 16,792 Provision for other liabilities and charges 318,230 344,990 41,404 221,092 976,588 994,105 110,319 260,154 Net interest on the net medical liabilities and other benefits Net interest on the net medical liabilities and other benefits Portugal Non-Current Current Dec 2021 Dec 2020 The evolution of the consolidated assets of the Medical care and Other subsidies is as follows: * Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) 383 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Guarantees customers Legal, in the Dismantl- labour and context of ing and other current Decommi- Thousand Euros matters activity ssioning Balance as at 31 December 2019 110,034 1,029 485,990 455,464 1,052,517 Perimeter variations 723 \- 43,871 100,755 145,349 Charge for the period 20,300 \- \- 33,753 54,053 Reversals -9,871 \- \- -4,989 -14,860 Charge-off for the period -9,072 \- -17,154 -4,064 -30,290 Unwinding 12,013 \- 6,432 2,497 20,942 Increase of the responsibility \- \- 65,415 \- 65,415 Onerous contracts \- 20,662 \- \- 20,662 Innovative Features Charge-off \- \- \- -110,963 -110,963 Overcompensation revisability CMEC \- \- \- 72,900 72,900 CMEC \- \- \- 15,824 15,824 "Lesividad" \- \- \- 12,020 12,020 Exchange differences and other -24,789 \- -18,384 -7,478 -50,651 Reclassification to Liabilities Held for Sale 978 \- \- 363 1,341 Balance as at 31 December 2020 100,316 21,691 566,170 566,082 1,254,259 Perimeter variations (see note 6) -1,647 \- -18,748 -651 -21,046 Charge for the period 14,758 \- \- 58,871 73,629 Reversals -9,430 \- \- -3,689 -13,119 Charge-off for the period -14,293 \- -20,023 -46,464 -80,780 Unwinding (see note 13) 13,749 \- 3,753 1,771 19,273 Increase of the responsibility (see note 16) \- \- 29,525 \- 29,525 Onerous contracts \- 35,542 \- \- 35,542 Innovative Features Charge-off (see note 4) \- \- \- -69,374 -69,374 Overcompensation revisability CMEC (see note 4) \- \- \- -72,900 -72,900 CMEC \- \- \- 15,014 15,014 "Lesividad" \- \- \- -47,233 -47,233 Ancillary services charge-off (see note 4) \- \- \- -48,000 -48,000 Exchange differences and other -1,061 \- 14,921 6,262 20,122 Reclassification to Liabilities Held for Sale (see note 41) -974 \- -6,976 -55 -8,005 Balance as at 31 December 2021 101,418 57,233 568,622 359,634 1,086,907 Provision for legal and labour matters and other contingencies includes provisions for litigation in progress and other labour contingencies, which are related essentially with: i) Requests for the refund of tariff increases paid by industrial consumers of the brazilian subsidiaries EDP São Paulo and EDP Espírito Santo in the amount of 12,324 thousand Euros (31 December 2020: 10,575 thousand Euros). These requests result from the application of Administrative Orders DNAEE no. 38 of 27 February 1986 and no. 45 of 4 March 1986 - Plano Cruzado, effective from March to November 1986; With reference to 31 December 2021, the movement by nature of the Provisions item at the EDP Group level is presented as follows: EDP and its subsidiaries' Board of Directors, based on the information provided by its legal advisors and on the analysis of pending law suits, have recognised provisions to cover the losses estimated as probable, related with litigations in progress. Other risks and charges Total ii) The remaining legal litigations correspond mainly to indemnities for damages allegelly suffered in consequence of interruption of electricity supply, power accidents and fires. Provisions for customer guarantees under current operations include essentially provisions for commercial losses. 384 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 North America Discount Rate [0.00% - 5.40%] [0.26% - 1.92%] [11.23% - 11.83%] Inflation Rate [0.00% - 3.95%] [2.00% - 2.50%] [3.33% - 17.18%] Provisions for dismantling and decommissioning includes : (i) 45,003 thousand Euros of the dismantling Trillo nuclear power plant; (ii) EUR 313,594 thousand Euros of the dismantling of wind and solar farms (replacement of sites and land in its original state), mainly, in Europe (146,014 thousand Euros), North America (163,100 thousand Euros) and Brazil (3,370 thousand Euros); and (iii) EUR 208,334 thousand Euros of the dismantling and environmental requalification of thermal electro- producing centers in Spain (EUR 127,896 thousand Euros) and Portugal (80,438 thousand Euros). These provisions were calculated based on the present value of future liabilities and recorded against an increase in the respective tangible fixed assets, which are amortized over the average useful life of these assets. The calculation of these provisions was based on the following discount and inflation rates: On 26 September 2018, DGEG notified EDP about a dispatch issued by the Secretary of State for Energy (SSE) on 29 August 2018, which quantifies at 285 million Euros the alleged overcompensation of EDP related to the calculation of the real availability factor of the plants under the CMEC regime. EDP reflected this in the financial statements as at 31 December 2018, through a provision of the same amount. During 2021, EDP made payments of 69,374 thousand Euros, using this provision. As at 31 December 2021, the value of this provision is 12,205 thousand Euros (see note 4). The BOE 223/2017 published during the third quarter of 2017 opened the hearing process of the Order of the Minister of Energy, Tourism and Digital Agenda of 13 September, introducing "lesividad" declaration procedure for the public interest Order IET/980/2016, of 10 June, which established the remuneration of electricity distribution companies until 2016. Thus, the remuneration that has been determined has allegedly been higher than that due for the year 2016. Until the "lesividad" procedure is finitely resolved, the remuneration of the distribution activity for the years 2016, 2017, 2018 and 2019 is considered provisional. With reference to 31 December 2020, EDP España recorded an accumulated provision of 93,105 thousand Euros corresponding to the potential effect of "lesividad" for the financial years 2016, 2017, 2018, 2019 and 2020. Since 2016, EDP España, like other companies in the sector, have been in place with legal proceedings to resolve the “lesividad” procedure. At the same time, companies initiated processes to determine the real value of assets subject to remuneration and proceeded with the reformulation and deposit of their annual accounts from 2014 to 2020, ending this process during 2021. Although no new liquidation or a new regulation has been issued, the companies consider that, in accordance with the order 481/2020 of the Supreme Court, the reformulated and deposited annual accounts must be considered for the calculation of the remuneration. Thus, with reference to 31 December 2021, EDP España updated the provision for the “lesividad” procedure for the years 2016 to 2020, reversing it by approximately 47 million Euros. On 3 May 2018, it has come to EDP’s knowledge (through a DGEG’s letter) that the CMEC final adjustment had been officially approved, according to ERSE’s proposal, in the amount of 154 million Euros. EDP reflected this reality in its financial statements as of 31 December 2018, recognising a provision by the difference in the final adjustment amounts already recognised in the Group's revenues. On 31 December 2021 EDP maintains the provision in its accounts (see note 4). Europe Brazil On 20 October 2020, EDP Produção became aware, by letter sent by DGEG, of the dispatch of the SEE regarding the approval of the revisibility for the year 2015, which is deducted in the amount of 72.9 million Euros the predicted amount of 135.6 million Euros. In this respect, the EDP Group has registered a provision in the amount of 72.9 million Euros, and carried out an administrative appeal against the order of SEE on 19 January 2021. However, notwithstanding EDP Produção's well-founded beliefs on the possibility of providing a bank guarantee or security, instead of the payment of the fine, the TCRS determined the payment of EDP Produção, which occurred on 20 October 2021 (see note 4). Provision for other liabilities and charges 385 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Milhares de Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Administrative and Civil 255,406 222,541 330 \- Fiscal 656,768 559,652 9,541 11,969 Others 114,305 133,969 2,811 2,691 1,026,479 916,162 12,682 14,660 In their ordinary course of business, EDP Group subsidiaries are involved in several litigations and contingencies (of possible risk) of administrative, civil, tax, labour and other natures. These legal, arbitration or other actions, involve customers, suppliers, employees and administrative authorities. In EDP Group and its legal advisors' opinion, the risk of a loss in these actions is not probable, and the outcome will not affect on a material way its consolidated financial position. The processes whose losses were considered as possible, do not require the recognition of provisions and are periodically reassessed. The detail of possible contingencies is analised as follows: ii) On 29 July 2016, the Portuguese Competition Authority (AdC) has notified EDP S.A. and EDP Comercial, S.A. with a notice for alleged violation of competition laws, regarding the process of the commercial campaign done in partnership with Modelo Continente, designated as "Plano EDP Continente". This was an occasional campaign, limited to two years, which was one of several campaigns usually performed by several other market agents. On 5 May 2017, EDP S.A. and EDP Comercial, S.A. received AdC final decision which applied a fee of 2,900 thousand Euros to EDP S.A. and 25,800 thousand Euros to EDP Comercial. EDP Group is convinced that this campaign has brought real benefits to consumers and competition in markets and that no transgression has been committed. The companies filed their appeal on 19 June 2017 to TCRS. By this court was determined a court hearing that EDP and EDP Comercial would provide security in the amount of 50% of the fine imposed on them by the AdC, and on 19 June 2020, EDP and EDP Comercial provided surety bond and surety in the amounts of 1,450 thousand Euros and 12,900 thousand Euros, respectively. On 30 September 2020, a judgment was issued by the TCRS, which maintained the conviction of the two companies of the EDP Group, as well as Sonae Group's Companies, having also reduced fines by 10%. Fines were determined at 2,610 thousand Euros and 23,220 thousand Euros for EDP and EDP Comercial, respectively. On 30 October 2020, EDP and EDP Comercial appealed the condemnatory sentence handed down by the TCRS, to the Lisbon Court of Appeal. On 6 April 2021, the parties were notified of the judgment handed down by the Court of Appeal of Lisbon, through which it decreed the suspension of the proceedings and the preliminary referral of the case to the Court of Justice of the European Union, under the foreseen mechanism Article 267(b) of the Treaty on the Functioning of the European Union. The case was filed at the Registry of the Court of Justice on 26 May 2021, and the deadline for the parties to submit written observations on the questions raised by the Lisbon Court of Appeal is ongoing. It is expected that the Judgment of the Court of Justice will not be delivered before the end of 2022; The events and possible contingencies more relevants in Portugal, are as follows: i) Within E-Redes – Distribuição de Eletricidade, S.A. (E-Redes) there was a contingency emerging from a lawsuit established by Gás Natural Comercializador, S.A. (GNC), for the undue payment of tariffs for access to networks charged by E-Redes and surplus consumption by Repsol Polimeros, S.A. The situation is related to the attribution of a proper consumption producer status to Repsol Polimeros, S.A. in June 2014, being this energy invoiced only from October 2015 onwards. Taking into account the evolution of the process, the probable contingency amount of 2,308 thousand Euros was updated to 5,579 thousand Euros. In May 2021, the parties entered into an agreement that ended this litigation under which E-Redes undertook to pay GNC the amount of 3,455 thousand Euros, which was fully settled in June 2021. Company Group 386 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 However, on 12 October 2020, EDP Produção was notified of the appeal filed by the Public Prosecutor's Office, at the Lisbon Court of Appeal, against the TCRS order of 16 July 2020, and considered the existence of considerable damage in the early payment of the fine and suspended the payment order. On 18 November 2020, EDP Produção was notified of a decision by the Lisbon Court of Appeal, granting the appeal presented by the Public Prosecutor and, consequently, revoking the order of TCRS of 16 July 2020. EDP Produção appealed this judgment to the Constitutional Court on 30 November 2020. On 22 February 2021, EDP Produção was notified of the decision of the Constitutional Court in the sense of not knowing the object of the appeal. The case was returned to the TCRS to establish the effect of the appeal filed, to determine whether EDP Produção must pay a fine or provide a guarantee. By order of the same day, the TCRS has scheduled the trial hearing for 27 September, 7, 11 and 25 October, 4, 8, 18, 22 November and 2 and 6 December 2021. On 16 September 2021, the TCRS issued an order that demanded the payment of the fine. Despite having lodged an appeal against this order, on 20 October 2021 EDP Produção paid the amount under appeal, and is waiting for a decision on the appeals submitted. The Trial is currently ongoing. iv) On 9 September 2020, Portsines - Terminal Multipurpose de Sines, S.A. (Portsines) filed an arbitration lawsuit against EDP Produção, to obtain its condemnation in the payment of the amounts relating to port fees, allegedly provided for in the Contract for Provision of Services celebrated between both. In summary, Portsines intends to obtain the condemnation of EDP Produção to the payment of the so-called fixed rate provided for in the Contract, even concerning periods in which there is no unloading of coal destined for the Sines Thermoelectric Power Station, claiming in particular that the referred fee remunerates the investment made by you in said infrastructure and makes its actual use by EDP Produção irrelevant. The amount of the contingency currently amounts to 5,896 thousand Euros, having the risk been classified as possible. In April 2021 the parties entered into an agreement that provides for the termination of the contract between both parties and that ended the pending cases, that is to say, the Appeal filed by EDP Produção at the Lisbon Court of Appeal, as well as the executions brought by Portsines against the company. iii) On 3 September 2018, the Portuguese Competition Authority (AdC) notified EDP Produção with a Statement of Objections, under which EDP Produção is accused of abuse of a dominant position in the secondary regulation band market (a part of the ancillary services market). AdC claims that EDP Produção has deliberately limited the participation of CMEC plants in the secondary regulation market between 2009 and 2014, benefitting its non-CMEC power plants. The alleged benefit, to the detriment of consumers, would be twofold: receiving higher compensation under CMEC annual adjustment regime; profiting from higher market prices in said market. AdC has estimated that the alleged practice of EDP Produção has generated damages to the national electricity system and to consumers of around 140 million Euros. AdC pointed out that the adoption of a Statement of Objections did not determine the result of the investigation, which began in September 2016 and is still in course. On 28 November 2018, EDP Produção presented to AdC its facts about the accusation. On 18 September 2019, AdC has notified EDP Produção of an alleged infraction to competition rules. This contingency was estimated with a value of 48 million Euros and its graduation was assessed as possible (se note 4). On 30 October 2019, EDP Produção presented an appeal against this decision to the TCRS. On 20 May 2020, EDP Produção was notified of a decision by the TCRS, which, among other things, admitted its Judicial Challenge Appeal, establishing a purely return effect and determining the payment of the fine imposed within 20 days. In this regard, EDP Produção submitted requests, invoking supervening facts for the demonstration of considerable damage, and arguing defects in the decision that determined the attribution of a mere devolution effect to the Judicial Challenge Appeal. On 16 July 2020, EDP was notified of an order which implied the existence of substantial losses if the fine was paid in advance. Thus, the payment order was therefore suspended. 387 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 v) On 19 July 2021, Celulose Beira Industrial, SA (CELBI), submitted to SU Eletricidade, SA a constitutional request of an Arbitral Tribunal, regarding a conviction of a payment of the energy produced by it under special production in cogeneration, and its interest, since April 2020 (date on which, in accordance with the law and the understanding of DGEG and followed by SU Eletricidade, CELBI has moved to the transitional remuneration scheme provided for in DL No. 23/2010 and Ordinance No. 140/2012), and throughout the term of operation of its Cogeneration Center (which it estimates to be at least 25 years), i.e. at least until 24 March 2035 (supporting this understanding in the fact that the 2002 Remuneration Scheme does not establish any period); or, in the alternative, until 24 March 2030 (claiming that you are entitled to be remunerated under the 2002 Remuneration Scheme for a further 120 months (10 years) from March 2020); or, in the alternative, until November 2020 (claiming that the transition to the 2012 Remuneration Scheme should only take place six months after the effective knowledge of the communication sent by the SRB); or, in the alternative, until August 2020 (in the alternative claiming that the transition from CELBI's remuneration scheme would operate from the beginning of the month following the date of the audit report certifying primary energy savings, which means the transition would operate from August 2020 because the audit report is from July 2020). The overall value of the application amounts to 6,839 thousand Euros and has been classified as possible risk. In October 2021, SU Eletricidade filed a challenge, and the process was in the pleading phase. i) Investco is involved in a legal action of a civil nature mostly related with indemnity claims resulting from the filling of the hydroelectric reservoir, in the amount of 17,297 thousand Euros (31 December 2020: 21,033 thousand Euros); ii) There is a public civil action filed against EDP São Paulo and EDP Espírito Santo by ADIC – Associação de Defesa dos Interesses Colectivos, claiming a compensation arising from a tariff readjustment on part A from 43 concessionaires. The estimated value attributable to EDP São Paulo and EDP Espirito Santo amounts to 55,031 thousand Euros (31 December 2020: 44,502 thousand Euros); The possible contingencies more relevant in Brazil, are as follows: iii) EDP São Paulo is a party to a lawsuit related to the COFINS (Contribution for social security financing) from 1993 to 1995 in joinder with AES Eletropaulo, where is discussed the application of the tax amnesty introduced by the Provisional Measures paragraphs 1858-6 and 1858-8, granted to taxpayers who did not collect COFINS, considering it improper. In the trial of 2nd Instance, was partially confirmed the right to amnesty, and applied the Decree-Law 1,025/69, which established the payment of procedural costs in favour of the National Treasury. From this decision, an appeal was presented, which holds trial. The updated amount as at 31 December 2021 is 12,267 thousand Euros (31 December 2020: 12,050 thousand Euros); iv) EDP São Paulo and EDP Espírito Santo have administrative and judicial actions regarding tax compensations not ratified by the Brazilian Federal Revenue Bureau, which: (i) are protected by judicially recognised credits (IRPJ - Corporate tax income and CSLL - Social Contribution on net profits) and (ii) that result from tax contributions in 2001 of IRPJ, CSLL, PIS (Social integration programme) and COFINS considered to be excessive as a consequence of the application of "Parecer COSIT 26/2002" (Extraordinary Tariff Adjustment - RTE) published by the Brazilian Tax Authorities. According to this opinion, the amounts resulting from tariffs updated under RTE should be recognised and taxed only as of 2002. The reduction in the amount is due to the success obtained in one of the administrative proceedings, canceling the debt collection. As at 31 December 2021, the updated values amount to 17,007 thousand Euros (31 December 2020: 30,917 thousand Euros); v) Lajeado has a judicial tax action initiated by the Brazilian Tax Authorities in 2014 aimed at collecting tax contributions (IRPJ and CSLL) resulting from the disallowance of expenses regarding goodwill arising from a business combination (acquisition). As at 31 December 2021, this contingency amounts to 23,030 thousand Euros (31 December 2020: 22,332 thousand Euros); 388 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 37\. Institutional partnerships in North America Thousand Euros Dec 2021 Dec 2020 Deferred income related to benefits provided 731,573 799,094 Liabilities arising from institutional partnerships 1,528,168 1,134,448 2,259,741 1,933,542 vii) Following a period of drought in the State of Ceará, the local government, through Decree 32,044 of 16 September 2016, introduced an extraordinary rate called the Emergency Water Charge (EHE) over the actual water consumption of thermoelectric power plants, and in particular the Porto do Pecém. On 13 October 2016, the Porto do Pecém submitted an administrative request to ANEEL for the purpose of transferring this additional cost to the Unit Variable Cost (CVU), in order to restore the economic-financial balance of the contract (CCEAR). ANEEL, through Order 3,293 of 16 December 2016, denied the request of the Porto do Pecém, which initiated proceedings against ANEEL. As at 31 December 2021, the lawsuit is estimated in an amount of 23,087 thousand Euros (31 December 2020: 19,721 thousand euros). The variation occured during this period is related with the revision of assumptions used to calculate the contingency which previously was considering the estimative of the value of EHE to be paid following the historical average. The new calculation is based on the claim effective risk considering the transference of CVU. The caption Institutional partnerships in North America is as follows: Group i) On 27 October 2009 and 5 January 2010, the EDP Group received two tax settlements regarding 2005 and 2006 taxable income for the EDP tax Group, which included an adjustment of 591 million Euros regarding its subsidiary, EDP Internacional SGPS, related to the tax treatment considered by the EDP Group in relation to a capital loss generated with the liquidation of a subsidiary, whose main assets consisted of investments in operating subsidiaries in Brazil, namely EDP Espírito Santo and Enersul. As at 31 December 2021, the amount of this tax contingency amounts to 307 million Euros (31 December 2020: 299 million Euros). Considering the analysis made, the technical advice received and a favourable binding opinion obtained from the tax authorities in relation to the nature of the transaction occurred in the year of the assessment, the EDP Group considers as remote the risk associated with this matter. Under this analysis, the capital loss is tax deductible for income tax purposes as established in article 75 no. 2 of the Corporate Income Tax Code ("Código do IRC") based on the wording of the law in force at that date (existing article 81). Given the above, and considering that the EDP Group’s tax procedures comply with applicable Portuguese tax legislation at the date of the events, the Group is currently using all available legal means to contest these additional settlements. Thus, following the implied rejection of the hierarchical appeal, EDP presented a judicial claim, on 6 June 2012. In November 2018, EDP Group was notified with a decision in favour. The Treasuary filed an appeal on that decision. Subsidiaries in North America recognises under this caption the receipts of institutional investors associated with wind and solar projects. This liability is reduced by the amount of tax benefits provided and payments made to the institutional investors during the period. The amount of tax benefits provided is booked as a non-current deferred income, and recognised over the useful life of the related projects (see note 8). Additionally, this liability is increased by the estimated interest based on the liability outstanding and the expected rate of return of the institutional investors (see note 13). vi) Porto do Pecém was the subject of tax execution procedure in the amount of 19,995 thousand Euros, resulting from alleged non-taxation under IRPJ and CSLL of financial income and exchange variations related to previous periods amounting to 31 December 2021 to 14,850 thousand Euros (31 December 2020: 14,407 thousand Euros); and Finally, even if EDP Group classifies its risk as remote, it is important to identify the following litigation: 389 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Dec 2020 Balance at the beginning of the period 1,933,542 2,289,784 Proceeds received from institutional investors 779,825 307,860 Cash paid for deferred transaction costs -4,131 -3,310 Cash paid to institutional investors -83,530 -55,822 Other Income (see note 8) -177,205 -201,783 Unwinding (see note 13) 79,023 94,718 Loss of control of companies with Institutional Partnerships -420,522 -320,944 Exchange differences 168,318 -181,398 Perimeter Variations and Other -15,579 4,437 Balance at the end of the period 2,259,741 1,933,542 38\. Trade payables and other liabilities from commercial activities At Group level, Trade payables and other liabilities from commercial activities are as follows: Thousand Euros Dec 2021 Dec 2020 * Dec 2021 Dec 2020 Contract liabilities: Energy sales contracts - North America 4,959 6,286 \- \- Deferred income - CMEC 80,566 142,482 61,915 66,053 Amounts received from the Fund for systemic sustainability \- \- 125,777 12,405 85,525 148,768 187,692 78,458 Other liabilities: Investment government grants 321,870 313,235 \- \- Customer contract obligations 457,414 469,173 \- \- Amounts payable for tariff adjustments - Electricity \- Portugal 115,941 75,093 1,071,548 41,479 Amounts payable for tariff adjustments - Electricity \- Brazil 237,135 277,807 99,365 98,345 Amounts payable - securitisations \- \- 121,050 139,192 Amounts payable - CMEC \- \- 215,973 222,245 Amounts payable for concessions 201,820 195,471 \- \- Property, plant and equipment suppliers 1,992 2,874 1,384,231 1,202,896 Suppliers \- \- 1,006,643 799,158 Accrued costs related with commercial activities \- \- 1,386,103 731,954 Holiday pay, bonus and other charges with employees \- \- 173,039 168,272 CO2 emission Licenses \- \- 300,541 166,692 Other creditors and sundry operations 385,228 219,584 373,826 303,522 1,721,400 1,553,237 6,132,319 3,873,755 1,806,925 1,702,005 6,320,011 3,952,213 Non-Current Current The movements in Institutional partnerships in North America are as follows: of the energy sector During 2021, EDPR NA, has secured and received proceeds amounting to 768,534 thousand Euros (908,976 thousand dollars) related to institutional equity financing from Bank of America and JP Morgan, in exchange for an interest in onshore wind projects. In the second quarter of 2021, EDPR NA has lost control over the Vento XX portfolio upon the completion of the sale of 68% of equity shareholding and over Riverstart portfolio (see note 6), implying a decrease in the amount of 420,522 thousand Euros in the Institutional partnerships liabilities related to these portfolios. Under these partnerships, EDP Group provides operating guarantees to institutional investors in wind and solar projects, which are typical of this type of structure. As at 31 December 2021, the liabilities associated with these guarantees are not expected to exceed the amounts already recognized under the caption Liabilities arising from institutional partnerships. Group * Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) 390 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 At Company level, Trade payables and other liabilities from commercial activities are as follows: Thousand Euros Dec 2021 Dec 2020 Other liabilities: Suppliers 1,161,903 390,819 Accrued costs related with commercial activities 990,091 234,644 Property, plant and equipment suppliers 506 1,379 Holiday pay, bonus and other charges with employees 34,145 33,133 Other creditors and sundry operations 6,017 2,584 2,192,662 662,559 The caption Deferred income - CMEC is detailed as follows: Non- Thousand Euros current Initial CMEC 4,532 33,021 Final adjustment 76,034 28,894 80,566 61,915 Balance at the beginning of the period Payment through the electricity tariff 75,093 41,479 Payment through the electricity tariff \- -47,103 Tariff adjustment of the period (see note 7) 1,216,899 \- Interest expense (see note 13) \- 53 Transfer to/from tariff adjustment payable (see note 26) -36,899 -62,033 Transfer from Non-Current to Current -1,139,152 1,139,152 Balance at the end of the period 115,941 1,071,548 Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Amounts payable for tariff adjustments - Electricity \- Brazil 237,135 277,807 99,365 98,345 Amounts receivable from tariff adjustments - Electricity \- Brazil -124,604 -49,986 -101,928 -35,600 112,531 227,821 -2,563 62,745 Non- Current Current Current At the moment of EDPR NA acquisition, the contracts signed between this subsidiary and its customers, determined under the terms of the Purchase Price Allocation, were valued through discounted cash flow models and market assumptions at 190,400 thousand US Dollars, being booked as a non-current liability under Energy sales contract - EDPR NA, and amortised over the useful life of the contracts in Other operating income - Other. The captions Amounts payable and Amounts Receivable for tariff adjustments - Electricity - Brazil, refer to tariff adjustments recognised in EDP São Paulo - Distribuição de Energia S.A. and EDP Espírito Santo - Distribuição de Energia S.A. Non-current Current (see note 26) Investment government grants are amortised through the recognition of a revenue in the income statement over the useful life of the related assets, which amounts to 22,517 thousand Euros as at 31 December 2021 (see note 12). The Amounts received from the Fund for Systemic Sustainability of the Energy Sector refer to amounts transferred to SU Eletricidade, S.A. related with the electricity tariffs for 2021, which represented CESE amounts intended to reduce the National Electric System's tariff debt and that will be settled through the tariff. The movement for the period in Amounts payable for tariff adjustments - Electricity - Portugal (Non-current and Current) is as follows: Current 391 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Balance at the beginning of the period 290,566 Tariff adjustment of the period (see note 7) -91,111 Payment/Receipt through the electricity tariff -88,386 Interest expense/income (see note 13) -2,068 Effect of exchange differences of the Brazilian Real against the Euro 967 Balance at the end of the period 109,968 The movement includes the recognition of 50,770 thousand Euros (320,366 thousand Brazilian Real) of the refund and the 2,529 thousand Euros (15,959 thousand Brazilian Real) of unwinding over the amount resulting from the non-inclusion, in 2019, of the amounts of VAT borne in the basis of calculation of PIS and COFINS (1,756,597 thousand Brazilian Real as at 31 December 2019, of which 385,580 thousand Brazilian Reais were returned in 2020 and 2021 through the electricity tariff and unwinding in 2020 and 2021 of 54,623 thousand Brazilian Real). The caption Other creditors and sundry operations - Non-current includes the amount of 37,300 thousand Euros related with the reinsurance activity (31 December 2020: 55,155 thousand Euros). The caption Other creditors and sundry operations - Current includes the amount of 14,317 thousand Euros related to tariff adjustment payable (31 December 2020: 14,317 thousand Euros). The movement for the period in Amounts payable and Amounts Receivable for tariff adjustments - Electricity - Portugal (Non- current and Current) is as follows: The caption Property, plant and equipment suppliers - Current refers mainly to the amounts due related with the construction of windfarms and solar parks in North America in the amount of 967,740 thousand Euros (31 December 2020: 789,771 thousand Euros) and in Europe in the amount of 219,780 thousand Euros (31 December 2020: 218,810 thousand Euros). The caption CO2 emission licenses includes the CO2 consumptions during 2021 in Portugal and Spain, in the amount of 54,722 thousand Euros and 245,819 thousand Euros, respectively (31 December 2020: 103,469 thousand Euros and 63,223 thousand Euros). The variation that occurred includes the consumption for the year and the return of the licenses related to consumptions in 2020, which will be delivered to the regulatory authorities until April of the following year. In the energy distribution activity, the subsidiaries of EDP Group in Portugal and Spain recover the deficits and tariff adjustment assets through the tariffs charged to their customers. The caption Amounts payable - securitizations includes the amounts payable to entities that have acquired the right to receive these assets in securitisation or direct sales operations in Portugal. The caption Amounts payable - CMEC refers to amounts received by E-Redes – Distribuição de Eletricidade, S.A., through the tariff, regarding the CMEC Revisibility of 2016 and 2017, which delivery to REN is awaiting approval. The caption Amounts payable for concessions includes the concession rights for the operation of the hydric domain of Alqueva and Pedrógão transferred by EDIA in the amount of 128,467 thousand Euros (31 December 2020: 131,577 thousand Euros) and the financial compensation for the use of the public domain related to concession agreements of Investco, S.A. and Enerpeixe, S.A. in Brazil in the amount of 73,353 thousand Euros (31 December 2020: 63,894 thousand Euros). 392 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 39\. Other liabilities and other payables Other liabilities and other payables are as follows: Thousand Euros Dec 2021 Dec 2020 * Dec 2021 Dec 2020 Other liabilities and other payables - Non-Current Liabilities measured at amortised cost: Loans from non-controlling interests 430,001 409,978 \- \- Lease Liabilities 951,751 955,036 143,737 149,588 Liabilities measured at fair value through profit or loss: Derivative financial instruments (see note 42) 1,523,949 227,228 1,618,247 263,309 Amounts payable and contingent prices for acquisitions/sales 126,484 143,567 62,014 84,393 Other Liabilities: Other creditors and sundry operations 7,790 3,639 \- \- 3,039,975 1,739,448 1,823,998 497,290 Other liabilities and other payables - Current Liabilities measured at amortised cost: Loans from non-controlling interests 42,754 180,446 \- \- Dividends attributed to related companies 68,124 55,561 \- \- Group companies \- \- 3,630 3,873 Lease Liabilities 97,697 100,642 12,617 12,384 Liabilities measured at fair value through profit or loss: Derivative financial instruments (see note 42) 2,417,295 169,654 3,168,309 346,612 Amounts payable and contingent prices for acquisitions/sales 139,396 74,100 51,335 25,349 Other Liabilities: Other creditors and sundry operations 15,835 16,775 194,561 35,119 2,781,101 597,178 3,430,452 423,337 5,821,076 2,336,626 5,254,450 920,627 Group Company * Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) 393 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Dec 2020 ACE Portugal (CTG Group) 25,760 29,282 ACE Poland (CTG Group) 74,086 88,950 ACE Italy (CTG Group) 43,868 50,284 CITIC CWEI Renewables (CTG Group) 13,590 26,462 Sonatrach \- 76,394 Macquarie Super Core Infrastructure Fund SD Holdings S.À.R.L. 302,622 306,368 459,926 577,740 Thousand Euros Dec 2021 Balance at the beginning of the period 1,055,678 Charge for the period 157,786 Unwinding of lease liabilities (see note 13) 39,511 Lease payments (principal and interests) -92,938 Exchange differences 54,624 Perimeter variations and other regularisations -165,213 Balance at the end of the period 1,049,448 Less From From More than 5 5 to 10 10 to 15 than 15 Thousand Euros Total year years years years Lease Liabities 1,605,318 474,700 335,210 307,975 487,433 Capital outstanding by maturity Fixed rate of a range between 0.40% / 2.73% The perimeter variations and other regularisations include the decrease of 150,166 thousand Euros regarding lease liabilities of windfarms in North America and Portugal which were sold in 2021 (see note 6) and the reclassification of 12,533 thousand Euros regarding lease liabilities of windfarms in Europe classified as non current assets held for sale (see note 41). The caption Lease Liabilities, on a Company basis, includes lease contracts with EDP Pension and Medical and Death Subsidy Funds regarding the building units of Porto headquarters acquired by EDP Pension Fund in December 2015 and the Lisbon headquarters building given as an in-kind contribution to EDP Medical and Death Subsidy Fund in September 2017. These contracts were celebrated for a period of 25 years (see note 44). Fixed rate of a range between 2.95% / 7.23% Fixed rate of 3.75% Fixed rate of 4.5% The variation of the caption Amounts payable and contingent prices for acquisitions/sales is mainly due to the recognition of contingent consideration in the amount of 74 million Euros as a result of the sale of windfarms in North America (see note 6), the recognition of the costs actually incurred in the construction of the windfarm projects as foreseen in the context of the sale of North America projects in 2020 (decrease of 18 million Euros) and the review of the fair value of contingent prices recognised as at 31 December 2020. Fixed rate of 5.6% Dec 2021 The variation of the caption Loans from non-controlling interests is mainly due to the agreement with Sonatrach, with the intent to end the commercial relations between the companies (see note 13). The movements in Lease Liabilities - Non Current and Current are as follows: Fixed rate of 5.5% The caption Loans from non-controlling interests Non-Current and Current mainly includes: The nominal value of Lease Liabilities, by maturity, is as follows: 394 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 40\. Tax liabilities Tax liabilities are as follows: Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Non Current Special tax Brazil 124,362 122,743 \- \- Current Income tax 100,533 47,859 38,971 15,044 Withholding tax 48,203 35,730 1,486 1,256 Value Added Tax (VAT) 244,938 141,399 2,666 3,777 Special taxes Brazil 83,148 71,911 \- \- Other taxes 105,864 101,735 1,232 1,145 582,686 398,634 44,355 21,222 707,048 521,377 44,355 21,222 41\. Non-Current assets and liabilities held for sale This caption is as follows: Thousand Euros Dec 2021 Dec 2020 Assets held for sale Electricity generation assets - Offshore wind 25,111 12,306 Electricity supply (B2C) assets - Spain \- 9,942 Electricity generation assets - Onshore wind 455,813 \- Electricity generation assets - Hydro Brazil 219,867 \- 700,791 22,248 Liabilities held for sale Electricity generation liabilities - Offshore wind \- 111 Electricity generation assets - Onshore wind 62,345 \- Electricity generation assets - Hydro Brazil 25,720 \- 88,065 111 612,726 22,137 The assets and liabilities associated with Moray West Holdings Limited remain classified as non-current assets and liabilities held for sale under the sale plan that the EDPR Group has entered into in the past. The criteria for classifying assets and liabilities as held for sale, as well as their presentation in EDP Group’s consolidated financial statements, are described in the Group's accounting policies. Group Company In the second quarter of 2020, the EDP Group agreed to sell a portfolio of two CCGTs power plants (Castejón I & III), with 843 MW of installed capacity located in Navarra, North of Spain and the B2C energy supply business in Spain, which includes 1.2 million clients in free market, and the 50% stake in our joint venture with CIDE for electricity supply in this segment (CHC Energia). This transaction was partially completed in December 2020. Furthermore, following CIDE’s exercise of its preferential right for the acquisition of EDP’s 50% shareholding in CHC Energia, EDP and CIDE have reached an agreement for the acquisition by CIDE which was completed in the first quarter of 2021 (see note 6). Group The Special taxes Brazil caption relates to the following taxes: CSLL (Social Contribution on net profits), PIS (Social integration programme) and COFINS (Social Security Financing Contribution). 395 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Hydro Onshore Offshore Thousand Euros Brazil wind wind Assets Property, plant and equipment (see note 16) -31,310 -373,878 \- -405,188 Right‐of‐use assets (see note 17) -23 -12,350 \- -12,373 Investments in joint ventures and associates (see note 21) -149,198 \- 16 -149,182 Other assets -33,712 -60,028 -12,821 -106,561 Cash and cash equivalents (see note 29) -5,624 -9,557 \- -15,181 Assets Held for Sale 219,867 455,813 12,805 688,485 \- \- \- \- Liabilities Financial debt -17,462 \- \- -17,462 Provisions (see note 36) -1,040 -6,965 \- -8,005 Other liabilities -7,218 -55,380 111 -62,487 Liabilities Held for Sale 25,720 62,345 -111 87,954 \- \- \- \- 42\. Derivative financial instruments In accordance with IFRS 9, the Group classifies derivative financial instruments as fair value hedge of a recognised asset or liability (Fair value hedge), as cash flow hedge of recognised liabilities and highly probable future transactions (Cash flow hedge), as net investment hedge in foreign operations (Net investment hedge), or as held for trading, if or when they are not eligible for hedge accounting. These reclassifications were made only for financial statement presentation purposes, without impact on the measurement of these assets and liabilities, as it is expected that the fair value less costs to sell is higher than its book value, in accordance with IFRS 5. During the third quarter of 2021, the EDP Brasil Group started the asset rotation process of three transmission lines with a total length of 439 kilometers: EDP Transmissão SA (Lot 24), EDP Maranhão I SA (Lot 7) and EDP Maranhão II SA (Lot 11), and classified the assets and liabilities associated with this portfolio as held for sale. During the last quarter of 2021, Grupo Brasil announced the conclusion of this sale to Actis Assessoria Investimentos Ltda (see note 6). Renewables During the last quarter of 2021, the EDP Brasil Group started a structured process for the sale of three hydro assets: Companhia Energética do Jari – CEJA, Empresa de Energia Cachoeira Caldeirão S.A. and Energest S.A. Assets and liabilities associated with this portfolio was presented in non-current assets and liabilities held for sale. Total As at 31 December 2021 the following reclassifications were made to held for sale: During the Year of 2021, EDPR Group, as part of its asset rotation program, started the process of selling onshore wind portfolios in Europe (Portugal, Spain an Poland). Assets and liabilities associated with these portfolios were presented in non- current assets and liabilities held for sale. In January 2022, the EDPR Group concluded the sale of the Portugal wind portfolio, and the conditions precedent of the transaction were verified on 31 December 2021 and such its assets and liabilities were derecognized on that date (see notes 6 and 46). 396 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Assets Liabilities Assets Liabilities Net Investment hedge Cross-currency interest rate swaps 13,917 -64,452 83,532 -23,822 Currency forwards 2,898 -30,313 5,544 -38 Fair value hedge Interest rate swaps 39,022 \- 70,515 \- Cross-currency interest rate swaps 48,263 -7,829 27,320 -3,974 Cash flow hedge Interest rate swaps 748 -9,142 2,287 -24,852 Swaps related to gas commodity 858,421 -1,904,607 153,253 -156,716 Electricity swaps 171,230 -645,611 24,219 -34,235 Currency forwards (includes commodities forwards) 84,135 -1,578 54,046 -22,770 Trading Interest rate swaps 515 -6,875 \- -6,054 Cross-currency interest rate swaps 8,959 -2,094 1,089 -432 Commodity swaps and forwards 1,061,750 -1,189,754 146,877 -97,339 Currency forwards 12,596 -8,616 3,006 -4,528 CO2 forwards 9,605 -32,981 \- -3,843 Currency forwards associated to commodities 41,267 -8,474 29,592 -18,279 Commodity options \- -28,918 4,148 \- 2,353,326 -3,941,244 605,428 -396,882 Thousand Euros Assets Liabilities Assets Liabilities Cash flow hedge Swaps related to gas commodity 107,577 -934,872 27,101 -80,913 Electricity swaps 593,502 -82,172 57,387 -2,434 Currency forwards (includes commodities forwards) 61,439 -219 39,768 -7,766 Trading Interest rate swaps 38,271 -43,221 69,493 -73,850 Cross-currency interest rate swaps 107,185 -87,542 96,906 -88,240 Commodity swaps 4,215,967 -3,465,075 417,217 -305,455 Currency forwards 36,494 -31,827 6,847 -6,700 Commodity forwards 59,877 -73,180 3,341 -7,535 Currency forwards associated to commodities 42,875 -10,591 46,111 -32,960 Commodity options 28,918 -57,857 7,895 -4,068 5,292,105 -4,786,556 772,066 -609,921 The fair value of the derivative financial instruments at Company level is as follows: Dec 2021 Dec 2020 The fair value of derivative financial instruments is booked in Other debtors and other assets (see note 27) and Other liabilities and other payables (see note 39), according to its nature. As at 31 December 2021, EDP Group holds contracts for the purchase and sale of commodities traded on futures exchange market, namely Chicago Mercantile Exchange, Intercontinental Exchange, European Energy Exchange and OMIP, whose fair value of the contracted operations is settled on a daily basis, and therefore it is not included in the Statement of Financial Position. The notional amount of these futures contracts amount to 2,971,782 thousand Euros with maturities ranged between 2022 and 2031 (31 December 2020: 2,619,544 thousand Euros, with maturity in 2020 and 2024), and the fair value held in EDP Group results and cash flow hedge reserves related to these operations are a negative amount of 129,223 thousand Euros and a positive amount of 295,538 thousand Euros, respectively (31 December 2020: negative amount of 11,313 thousand Euros and negative amount of 16,664 thousand Euros). The management of financial risk of EDP, S.A. and other EDP Group companies, is carried out centrally by EDP, S.A. (note 5). On this basis, EDP, S.A. negotiates derivative financial instruments with external entities to hedge its own individual business risks, as well as for other companies of the Group, performing for these entities’ as an intermediate in their contracting. Dec 2021 The fair value of the derivative financial instruments in EDP Group is as follows: Dec 2020 397 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Following Thousand Units Unit 2022 2023 2024 2025 years Total Net Investment hedge Euros 84,861 52,687 877,009 \- 686,740 1,701,297 Currency forwards Euros 1,627,944 \- \- \- \- 1,627,944 Fair value hedge Interest rate swaps Euros 857,859 \- \- 600,000 \- 1,457,859 Euros \- \- 410,314 \- 80,891 491,205 Cash flow hedge Interest rate swaps Euros 49,412 27,929 26,694 9,795 175,102 288,932 MWh 62,576 38,639 26,869 12,792 \- 140,876 Electricity swaps MWh 7,352 5,759 4,637 2,868 13,451 34,067 Euros 775,620 451,303 105,768 82,878 \- 1,415,570 Trading Interest rate swaps Euros 675 700 726 379,611 121,657 503,369 Euros 131,707 165,909 \- \- \- 297,616 Swaps related to gas commodity MWh 38,422 25,354 9,963 \- \- 73,739 Electricity swaps and forwards MWh 28,499 19,215 12,631 8,449 3,602 72,396 Euros 1,986,790 16,613 \- \- \- 2,003,403 MT 1,861 467 \- \- \- 2,328 Currency forwards for commodities Euros 269,801 236,508 149,580 \- \- 655,889 MWh 1,533 \- \- \- \- 1,533 commodities forwards) Currency forwards CO2 forwards interest rate swaps In 2021, the notional amounts per measurement unit of the derivative financial instruments in EDP Group, are as follows: Fair value of derivative financial instruments is based on listed market prices, whenever available, or on valuations determined through valuation models that use variables observable on the market. Therefore, according to IFRS 13 requirements, the fair value of the derivative financial instruments is classified as of level 2 (see note 45) and no changes of level were made during this period. These valuation models are based on generally accepted discounted cash flow techniques and option valuation models, using market data obtained through financial information platforms. gas commodity Cross-currency Swaps related to Cross-currency interest rate swaps Cross-currency interest rate swaps Derivative financial instruments classified as trading are financial hedging instruments contracted for economic hedging at EDP Group level (see note 5), however such instruments are not eligible for hedge accounting under IFRS. Options purchased and sold Currency forwards (includes 398 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Following Thousand Units Unit 2021 2022 2023 2024 years Total Net Investment hedge Euros 94,906 102,959 138,512 877,009 686,740 1,900,126 Currency forwards Euros 1,001,739 \- \- \- \- 1,001,739 Fair value hedge \- Interest rate swaps Euros \- 1,000,000 \- \- 600,000 1,600,000 Euros \- \- \- 410,314 \- 410,314 Cash flow hedge Interest rate swaps Euros 98,526 131,973 59,216 56,798 101,719 448,232 MWh 64,366 40,584 34,849 23,401 12,792 175,992 Electricity swaps MWh 11,313 7,521 5,829 4,270 9,076 38,009 Euros 581,611 178,358 108,358 105,768 82,878 1,056,974 Trading Interest rate swaps Euros 639 645 645 645 311,276 313,850 Euros 95,403 \- \- \- \- 95,403 Swaps related to gas commodity MWh 26,654 27,782 15,308 8,694 \- 78,438 Electricity swaps and forwards MWh 8,590 3,420 3,709 1,895 2,542 20,156 Currency forwards Euros 201,447 58,957 \- \- \- 260,404 MT 655 155 \- \- \- 810 for commodities Euros 166,530 240,776 185,549 108,352 \- 701,207 Options purchased and sold MWh 1,752 438 \- \- \- 2,190 Following Thousand Units Unit 2022 2023 2024 2025 years Total Cash flow hedge MWh 23,658 20,801 16,253 12,792 \- 73,504 Electricity swaps MWh 3,346 4,017 3,654 3,359 11,869 26,245 Euros 126,282 93,236 105,768 82,878 \- 408,164 Trading Interest rate swaps Euros 1,857,859 \- \- 1,500,000 \- 3,357,859 Euros 1,238,569 378,555 1,587,769 \- 686,740 3,891,633 Swaps related to gas commodity MWh 117,153 64,232 33,682 \- \- 215,067 Coal swaps MT 690 \- \- \- \- 690 Electricity swaps MWh 14,611 6,298 4,554 4,016 15,808 45,287 Currency forwards Euros 5,766,759 614,890 \- \- \- 6,381,649 MT 7,018 1,308 250 \- \- 8,576 for commodities Euros 475,807 266,753 149,580 \- \- 892,141 Options purchased and sold MWh 4,577 \- \- \- \- 4,577 In 2020, the notional amounts per measurement unit of the derivative financial instruments in EDP Group, were as follows: Currency forwards CO2 forwards interest rate swaps Currency forwards CO2 forwards gas commodity for commodities Cross-currency interest rate swaps Currency forwards Currency forwards (includes Swaps related to gas commodity commodities forwards) Cross-currency interest rate swaps Swaps related to Cross-currency interest rate swaps Cross-currency In 2021, the notional amounts per measurement unit of the derivative financial instruments at Company level, are as follows: 399 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Following Thousand Units Unit 2021 2022 2023 2024 years Total Cash flow hedge MWh 21,012 21,658 20,801 16,253 12,792 92,516 Electricity swaps MWh 8,015 542 796 315 1,148 10,816 Euros 148,473 127,379 93,236 105,768 82,878 557,734 Euros \- 2,000,000 \- \- 1,500,000 3,500,000 Cross-currency interest rate swaps Euros 965,829 1,011,349 277,024 901,418 686,740 3,842,360 Swaps related to gas commodity MWh 115,663 65,685 46,609 24,643 \- 252,600 Coal swaps MT 528 \- \- \- \- 528 MWh 12,576 4,260 1,344 1,346 6,696 26,222 Euros 974,985 54,328 \- \- \- 1,029,313 CO2 forwards MT 1,923 155 \- \- \- 2,078 Currency forwards for commodities Euros 464,053 303,912 215,795 108,352 \- 1,092,112 MWh 5,256 1,314 \- \- \- 6,570 Following Thousand Euros 2022 2023 2024 2025 years Total Net Investment hedge Cross-currency interest rate swaps -33,806 -33,222 -14,954 -14,863 -39,498 -136,343 Currency forwards -27,946 \- \- \- \- -27,946 -61,752 -33,222 -14,954 -14,863 -39,498 -164,289 Fair value hedge Interest rate swaps 26,135 7,453 7,460 5,793 \- 46,841 Cross-currency interest rate swaps 18,700 18,730 6,134 \- 9,331 52,895 44,835 26,183 13,594 5,793 9,331 99,736 Cash flow hedge Interest rate swaps -6,141 -4,856 -4,117 -3,404 -20,202 -38,720 Swaps related to gas commodity -488,014 -384,245 -133,743 -36,541 \- -1,042,543 Electricity swaps -238,650 -101,847 -78,103 -57,666 1,590 -474,676 39,311 24,597 19,539 345 \- 83,792 -693,494 -466,351 -196,424 -97,266 -18,612 -1,472,147 Trading Interest rate swaps -1,009 -1,029 -1,032 -1,099 515 -3,654 Cross-currency interest rate swaps -3,552 2,687 \- \- \- -865 Commodity swaps and forwards -56,611 -68,809 -4,980 13,049 -9,821 -127,172 CO2 forwards -13,574 -9,672 \- \- \- -23,246 3,278 -3 \- \- \- 3,275 10,135 11,084 11,574 \- \- 32,793 Options purchased and sold -28,918 \- \- \- \- -28,918 -90,251 -65,742 5,562 11,950 -9,306 -147,787 -800,662 -539,132 -192,222 -94,386 -58,085 -1,684,487 Swaps related to gas commodity Options purchased and sold for commodities Trading In 2021, the future undiscounted cash flows of the derivative financial instruments in EDP Group, are as follows: forwards) Currency forwards Interest rate swaps Electricity swaps Currency forwards Currency forwards (includes commodities In 2020, the notional amounts per measurement unit of the derivative financial instruments at Company level, were as follows: Currency forwards for commodities Currency forwards 400 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Following Thousand Euros 2021 2022 2023 2024 years Total Net Investment hedge Cross-currency interest rate swaps -34,223 -26,730 -24,583 34,322 -17,442 -68,656 Currency forwards 5,578 \- \- \- \- 5,578 -28,645 -26,730 -24,583 34,322 -17,442 -63,078 Fair value hedge Interest rate swaps 20,754 29,271 7,332 7,338 5,732 70,427 Cross-currency interest rate swaps 15,959 15,953 15,953 -26,728 \- 21,137 36,713 45,224 23,285 -19,390 5,732 91,564 Cash flow hedge Interest rate swaps -5,143 -3,535 -2,332 -1,728 -16,786 -29,524 Swaps related to gas commodity 23,534 -17,495 -5,626 -6,570 2,662 -3,495 Electricity swaps -1,551 -4,208 -3,194 -2,411 -4,942 -16,306 11,106 9,624 5,918 10,124 -9,290 27,482 27,946 -15,614 -5,234 -585 -28,356 -21,843 Trading Interest rate swaps -2,123 -977 -969 -971 -995 -6,035 Cross-currency interest rate swaps 591 \- \- \- \- 591 Commodity swaps and forwards 7,115 284 9,764 13,131 18,149 48,443 CO2 forwards -2,581 -1,235 \- \- \- -3,816 Currency forwards -1,943 787 \- \- \- -1,156 6,817 2,193 -1,160 3,463 \- 11,313 Options purchased and sold 5,015 1,533 \- \- \- 6,548 12,891 2,585 7,635 15,623 17,154 55,888 48,905 5,465 1,103 29,970 -22,912 62,531 Following Thousand Euros 2022 2023 2024 2025 Years Total Cash flow hedge Swaps related to gas commodity -482,194 -226,577 -80,941 -36,535 \- -826,247 Electricity swaps 309,822 179,373 66,580 13,192 -60,364 508,603 24,849 16,492 19,535 345 \- 61,221 -147,523 -30,712 5,174 -22,998 -60,364 -256,423 Trading Interest rate swaps -4,260 -1,029 -1,032 -515 \- -6,836 Cross-currency interest rate swaps 54,684 -25,601 -11,202 -14,863 -39,498 -36,480 Commodity swaps 782,678 7,393 -21,008 -17,060 4,692 756,695 Commodity forwards -6,028 -8,276 1,078 \- \- -13,226 10,592 10,781 12,105 \- 610 34,088 Commodity options purchased and sold -28,939 \- \- \- \- -28,939 808,727 -16,732 -20,059 -32,438 -34,196 705,302 661,204 -47,444 -14,885 -55,436 -94,560 448,879 for commodities Currency forwards for commodities In 2021, the future undiscounted cash flows of the derivative financial instruments at Company level, are as follows: Currency forwards In 2020, the future undiscounted cash flows of the derivative financial instruments in EDP Group, are as follows: Currency forwards (includes commodities forwards) Currency forwards for commodities 401 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Following Thousand Euros 2021 2022 2023 2024 Years Total Cash flow hedge Swaps related to gas commodity -26,037 -18,740 -7,696 -4,519 2,662 -54,330 Electricity swaps 51,464 1,725 2,359 -163 -561 54,824 7,751 12,158 7,684 10,124 -5,936 31,781 33,178 -4,857 2,347 5,442 -3,835 32,275 Trading Interest rate swaps -929 -977 -969 -971 -484 -4,330 Cross-currency interest rate swaps -54,323 1,642 -30,504 33,648 -17,442 -66,979 Commodity swaps 82,362 10,801 9,454 985 8,806 112,408 Currency forwards \- \- \- \- \- \- Commodity forwards -2,931 -1,235 \- \- \- -4,166 8,129 2,193 -1,160 3,463 \- 12,625 Commodity options purchased and sold 4,906 1,511 \- \- \- 6,417 37,214 13,935 -23,179 37,125 -9,120 55,975 70,392 9,078 -20,832 42,567 -12,955 88,250 Thousand Euros Hedged risk Instrument Risk Instrument Risk -110,245 133,729 104,452 -159,741 Net investment Currency forwards Subsidiaries in USD -32,921 32,921 480 -480 -31,493 31,493 -14,247 14,866 17,088 -10,223 -26,867 26,577 Cash flow Interest rate swap Interest rate 14,171 -14,171 -7,304 7,304 Cash flow Currency forwards Exchange rate 51,281 -51,281 -58,918 58,918 -1,507,088 1,476,050 8,137 -21,500 -1,599,207 1,598,518 5,733 -74,056 (i) (ii) and COP Currency forwards The changes in the fair value, including accrued interest, of hedging instruments and risks being hedged are as follows: Fair value Fair value Interest rate Exchange and interest rate for commodities 2021 BRL, GBP, USD, CAD Hedging instrument Commodity swaps Considering that hedging derivative financial instruments are contracted with a high correlation of critical terms, namely in the same currency and at the same indexes, the hedge ratio between the hedging instruments and the hedged instruments is 1:1. Net investment (i) 2020 Subsidiaries in PLN, Cross-curr. int. rate swaps Interest rate swap Cross-curr. int. rate swaps Cash flow (ii) Commodity prices Fair value variation of the hedging instrument on Cross currency interest rate swaps for Net investment includes a positive amount of 24,574 thousand Euros related to the cost of hedging (19,414 thousand Euros net of tax effect), recorded in reserves (see note 32), and ineffectiveness of a negative amount of 1,090 thousand Euros. Relating to December 2021, fair value variation of the hedging instrument on Commodity swaps for Cash flow includes a negative amount of 31,038 thousand Euros related to ineffectiveness. Changes in fair value Changes in fair value Currency forwards for commodities In 2020, the future undiscounted cash flows of the derivative financial instruments at Company level, are as follows: 402 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Instrument Fair value indexed to the following market inputs Interest rate swaps Currency forwards for Thousand Euros commod. Balance as at 1 Januray 2020 -44,502 8,522 94,696 58,716 -18,175 40,541 Fair value changes 39,063 -87,407 -77,761 -126,105 47,233 -78,872 -36 63,095 \- 63,059 -28,885 34,174 Comprehensive Income changes -1,735 \- \- -1,735 1,524 -211 Balance as at 31 December 2020 -7,210 -15,790 16,935 -6,065 1,697 -4,368 Fair value changes -16,240 -1,110,047 31,179 -1,095,108 283,263 -811,845 Transfer to results from hedging -923 24,579 13,841 37,497 -3,339 34,158 Comprehensive Income changes in associates 339 \- \- 339 856 1,195 Balance as at 31 December 2021 -24,034 -1,101,258 61,955 -1,063,337 282,477 -780,860 Currency forwards for Thousand Euros commod. Balance as at 1 Januray 2020 -178,289 86,379 -91,910 20,641 -71,269 Fair value changes -96,537 -54,378 -150,915 33,956 -116,959 Transfer to results from hedging 327,717 \- 327,717 -73,736 253,981 Balance as at 31 December 2020 52,891 32,001 84,892 -19,139 65,753 Fair value changes 1,545,107 43,737 1,588,844 -357,490 1,231,354 Transfer to results from hedging -1,105,974 -14,518 -1,120,492 252,111 -868,381 Balance as at 31 December 2021 492,024 61,220 553,244 -124,518 428,726 Thechanges inthe fair value reserve related to cash flow hedges in 2021 and 2020 by nature of derivative financial instruments in EDP Group, were as follows: Transfer to results from hedging Interest rate swaps Commodity swaps Gross Amount Gross Amount As at 31 December 2021 and 2020, the following market inputs were considered for the fair value calculation: EUR/BRL, EUR/PLN, EUR/CAD, EUR/RON, EUR/COP, USD/BRL e EUR/USD. Deferred Tax Total CO2 and JKM. BRL/USD, BRL/CNY, COP/USD, CAD/USD, EUR/CAD, EUR/COP, EUR/SGD, USD/PLN e MXN/USD. Deferred Tax Market quotes of commodities: Brent, NBP Natural Gas, Electricity, Henry Hub, TTF, Coal, Changes in fair value for the period, on consolidated and individual basis, in the fair value reserve include: (i) future contracts for the purchase and sale of commodities traded on futures exchange market whose fair values are settled on a daily basis, and therefor are not in the statement of financial position; and (ii) fair value variation of derivative financial instruments contracted and settled within the same period. in associates Commodity swaps Interest rates: Euribor 3M, Euribor 6M, Wibor 6M, US Libor 3M e CAD CDOR 3M. Total Interest rates: Euribor 3M, Euribor 6M, Libor 3M, Libor 6M, Daily CDI, Wibor 3M, Wibor 6M, CAD CDOR 3M, Robor 3M and Colombia Overnight Interbank; and exchange rates: EUR/GBP, Exchange rates: EUR/USD, EUR/PLN, EUR/BRL, EUR/GBP, EUR/HUF, USD/HUF, EUR/RON, Cross-curr. int. rate swaps Currency forwards Commodity swaps The changes in the fair value reserve related to cash flow hedges in 2021 and 2020 by nature of derivative financial instruments at Company level, were as follows: 403 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Commodity derivatives held for trading -330,148 50,432 -192,825 26,395 Debt derivatives held for trading 35,940 -16,065 28,587 -55,812 Net investment hedge - ineffectiveness -1,090 -3,171 \- \- Fair value hedges: -Derivatives -24,012 -36,498 \- \- -Hedged liabilities 43,915 37,935 \- \- Cash flow hedges: -Transfer to results from hedging of financial liabilities -923 -36 \- \- -Transfer to results from hedging of commodity prices 38,420 40,939 1,120,492 -327,717 -237,898 73,536 956,254 -357,134 Notional Euro'000 Interest rate contracts: Interest rate swaps 1,835,976 EUR Interest rate swaps 13,763 PLN Interest rate swaps 86,437 USD Interest rate swaps 190,171 BRL Interest rate swaps 123,812 CAD Currency and interest rate contracts: CIRS (currency interest rate swaps) 451,378 EUR/GBP CIRS (currency interest rate swaps) 32,812 EUR/RON CIRS (currency interest rate swaps) 227,234 EUR/PLN CIRS (currency interest rate swaps) 29,345 EUR/BRL CIRS (currency interest rate swaps) 8,422 EUR/COP CIRS (currency interest rate swaps) 91,378 EUR/CAD CIRS (currency interest rate swaps) 110,209 USD/BRL CIRS (currency interest rate swaps) 1,539,340 USD/EUR Notional Euro'000 Interest rate contracts: Interest rate swaps 2,158,662 EUR Interest rate swaps 34,763 PLN Interest rate swaps 40,804 USD Interest rate swaps 14,090 CAD Currency and interest rate contracts: CIRS (currency interest rate swaps) 458,647 EUR/GBP CIRS (currency interest rate swaps) 225,348 EUR/PLN CIRS (currency interest rate swaps) 29,345 EUR/BRL CIRS (currency interest rate swaps) 8,455 EUR/COP CIRS (currency interest rate swaps) 97,638 EUR/CAD CIRS (currency interest rate swaps) 72,441 USD/BRL CIRS (currency interest rate swaps) 1,539,340 USD/EUR [ 4.14% \- 1.08% ] [ -0.09% \- -3.50% ] [ 3.82% \- 2.30% ] [ 1.50% \- 0.38% ] [ 1.13% \- 0.62% ] [ 3.82% \- 2.30% ] [ 1.50% \- 0.38% ] [ 11.12% \- 3.87% ] The amount transferred to the Income Statement related to the hedging of commodity derivatives is included in the caption of Revenues and cost of Energy Sales and Services and Other. [ 2.78% \- 2.48% ] [ 3.59% \- 0.12% ] [ 0.86% \- 0.22% ] [ -0.51% \- -0.57% ] [ 3.15% \- 0.32% ] [ 1.84% \- -0.54% ] Currency [ 3.83% ] [ 1.86% ] [ 3.11% ] Company The effective interest rates of the derivative financial instruments relating to financing operations in EDP Group at 31 December 2021 are as follows: [ -0.58% ] [ 0.75% \- 0.27% ] [ -0.55% \- -0.59% ] [ 3.67% \- -0.53% ] [ 3.67% \- -0.50% ] [ 2.63% \- -0.50% ] [ 5.95% \- 0.03% ] [ 2.59% ] [ 1.70% ] [ -0.54% ] [ 3.55% \- 1.25% ] [ 0.95% \- 0.84% ] [ 8.63% \- -0.54% ] [ -0.44% \- -0.58% ] [ 2.63% \- -0.53% ] EDP Pays EDP Receives Currency [ 8.63% ] [ 2.78% \- 2.48% ] [ 3.21% \- 0.17% ] [ 5.95% \- 0.69% ] [ 1.96% \- -0.58% ] EDP Pays EDP Receives [ 15.07% \- 14.35% ] [ 2.75% \- 2.10% ] [ 5.96% \- 5.59% ] [ -0.28% ] Theeffective interest rates of the derivative financial instruments relating to financing operations in EDP Group at 31 December 2020 were as follows: The gains and losses on the financial instruments portfolio, excluding accrued interest, booked in the Income Statement in 2021 and 2020 are as follows: Group [ -0.22% ] [ -0.44% \- -0.54% ] [ -0.25% ] [ -0.45% \- -0.51% ] [ -0.57% ] [ 5.69% \- -0.57% ] [ -0.51% ] 404 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Following Unit 2022 2023 2024 2025 Years Euros/ [33.20 - [30.50 - [30.50 - [30.50 - [30.50 - MWh 104.75] 55.50] 54.50] 54.50] 54.50] Euros/ [6.89 - [7.56 - [8.49 - [7.52 - MWh 174.30] 94.20] 94.20] 37.60] n.a. [24.97 - [43.19 - 80.19] 81.86] n.a. n.a. n.a. Following Unit 2021 2022 2023 2024 Years Euros/ [40.35 - [41.75 - [41.75 - [41.75 - [37.00 - MWh 53.00] 45.60] 45.25] 45.25] 44.00] Euros/ [6.20 - [6.36 - [6.99 - [7.84 - [6.94 - MWh 23.64] 19.87] 17.23] 17.05] 16.67] [26.58 - [24.97 - 29.10] 24.97] 43\. Commitments Thousand Euros Dec 2021 Dec 2020 Dec 2021 Dec 2020 Operating guarantees EDP S.A. 637,968 440,724 637,968 440,724 EDP España Group 64,360 87,851 \- \- EDP Brasil Group 144,133 159,325 \- \- EDP Renováveis Group 2,287,997 1,444,576 \- \- 3,134,458 2,132,476 637,968 440,724 n.a. The contracted prices of the derivative financial instruments relating to commodities at 31 December 2021 were as follows: The contracted prices of the derivative financial instruments relating to commodities at 31 December 2020 were as follows: Additionally there are guarantees of an operational nature in the amount of 29,611 thousand euros and 466 thousand euros, associated with the portfolio of EDP Renewables and EDP Brasil of companies that were classified as held for sale on 31 December 2021. In addition to the guarantees identified above, EDP Group provides financial and operating guarantees related to liabilities assumed by joint ventures and associates in the amount of 481,082 thousand Euros and 293,253 thousand Euros, respectively (31 December 2020: 492,364 thousand Euros and 309,806 thousand Euros). The remaining financial and operating guarantees granted by EDP Group have underlying liabilities that are already reflected in its consolidated statement of financial position and/or disclosed in the Notes. Electricity swaps Euros/MT Company n.a. n.a. Group Operating guarantees granted by EDP Group, not included in the consolidated statement of financial position nor in the Notes, are as follows: Swaps related to gas commodity CO2 forwards Electricity swaps Swaps related to gas commodity The operating guarantees which are not included in the consolidated statement of financial position or in the Notes, as at 31 December 2021 and 2020, mainly refer to Power Purchase Agreements (PPA), interconnection, permits and market participation guarantees. CO2 forwards Euros/MT 405 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Less From From More than 1 1 to 3 3 to 5 than 5 Thousand Euros Total year years years years 34,846 6,252 9,128 3,018 16,448 Purchase obligations 25,727,477 5,922,012 4,542,844 2,572,937 12,689,684 25,762,323 5,928,264 4,551,972 2,575,955 12,706,132 Less From From More than 1 1 to 3 3 to 5 than 5 Thousand Euros Total year years years years 64,408 7,379 11,535 6,436 39,058 Purchase obligations 21,992,063 4,502,177 3,774,031 2,392,018 11,323,837 22,056,471 4,509,556 3,785,567 2,398,454 11,362,895 Thousand Euros Dec 2021 Dec 2020 Purchase obligation - Present value 8,984,056 8,560,278 Purchase obligation - Nominal amount 12,893,660 12,149,109 Thousand Euros Dec 2021 Dec 2020 Fuel acquisition 6,908,075 5,473,666 Electricity acquisition 12,232,819 11,533,487 O&M contracts 838,575 719,288 Fixed assets, equipment and miscellaneous materials acquisition 2,337,649 1,888,135 Supply and assembly contract 2,301,643 1,404,619 Other supplies and services 1,108,716 972,868 25,727,477 21,992,063 Capital outstanding by maturity Dec 2020 The commitments related to the joint ventures are disclosed in note 21. Purchase obligations of 8,984,056 thousand Euros essentially related with very long-term contracts for energy acquisition in the brazilian market (by regulatory imposition) which are updated with the respective projected rates and discounted at present value by a rate that represents the weighted average cost of capital (WACC) of the EDP Brasil Group, as follows: The Group’s contractual commitments shown above relate essentially to agreements and commitments required for current business activities. Specifically, the majority of the commitments are established to guarantee adequate supply of energy to the customers in Europe, North America and Brazil and to comply with medium and long term investment objectives of the Group. As at 31 December 2021,there are commitments from future cash outflows not reflected inthe measurement of the lease liabilities which refer to future rents of lease contracts already signed but not yet commenced. The nature of purchase obligations breaks down as follows: Dec 2021 Future cash outflows not reflected in the measurement of the lease liabilities Future cash outflows not reflected in the measurement of the lease liabilities Purchase obligations also include obligations of long term contracts relating to the supply of products and services under the Group’s ordinary course of business. Prices defined under forward contracts are used in estimating the amount of contractual commitments. In the Group, the commitments relating to future cash outflows not reflected in the measurement of the lease liabilities and purchase obligations are disclosed, by maturity, as follows: Capital outstanding by maturity 406 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Less From From More than 1 1 to 3 3 to 5 than 5 Thousand Euros Total year years years years Fuel acquisition 6,908,075 902,897 862,739 649,346 4,493,093 Electricity acquisition 12,232,819 977,059 1,888,041 1,702,631 7,665,088 19,140,894 1,879,956 2,750,780 2,351,977 12,158,181 Less From From More than 1 1 to 3 3 to 5 than 5 Thousand Euros Total year years years years Fuel acquisition 5,473,666 557,396 760,122 488,274 3,667,873 Electricity acquisition 11,533,487 837,075 1,789,979 1,752,465 7,153,968 17,007,153 1,394,471 2,550,101 2,240,739 10,821,841 Less From From More than 1 1 to 3 3 to 5 than 5 Thousand Euros Total year years years years of the lease liabilities 62 45 17 \- \- Purchase obligations 6,235,282 384,121 702,960 653,440 4,494,761 6,235,344 384,166 702,977 653,440 4,494,761 Less From From More than 1 1 to 3 3 to 5 than 5 Thousand Euros Total year years years years of the lease liabilities 450 450 \- \- \- Purchase obligations 4,960,512 297,368 514,212 488,623 3,660,309 4,960,962 297,818 514,212 488,623 3,660,309 Future cash outflows not reflected in the measurement Capital outstanding by maturity Dec 2020 Capital outstanding by maturity The commitments for fuel and electricity acquisition are disclosed, by maturity, as follows: Capital outstanding by maturity Dec 2021 Future cash outflows not reflected in the measurement Some of the transactions related to the disposal of non-controlling interests while retaining control, carried out in previous years, incorporate contingent assets and liabilities according to the terms of the corresponding agreements. Additionally, some of the assets acquisition transactions foresee contingent liabilities which depend on certain milestones and, although EDP Group has recognized the fair value of these liabilities in the consolidated financial statements, changes in the assumptions could change these liabilities. At Company level, the commitments relating to future cash outflows not reflected in the measurement of the lease liabilities and purchase obligations are disclosed, by maturity, as follows: Dec 2021 Dec 2020 Capital outstanding by maturity The caption Purchase obligations relates mainly to gas purchase contracts. 407 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 44\. Related parties Shares held by company officers 2021 2020 Nr. of shares Nr. of shares General and Supervisory Board China Three Gorges Corporation (represented by Dingming Zhang) 760,872,884 854,736,441 China Three Gorges International Corp. (represented by Shengliang Wu) 760,872,884 854,736,441 China Three Gorges (Europe), S.A. (represented by Ignacio Herrero Ruiz) 760,872,884 854,736,441 Draursa, S.A. (represented by Felipe Fernández Fernández) 1,350 1,350 Fernando Maria Masaveu Herrero 285,434,976 285,434,976 Sonatrach (representada por Karim Djebbour) 87,007,433 87,007,433 João Carvalho das Neves 8,060 8,060 Luís Maria Viana Palha da Silva 5,479 5,479 Executive Board of Directors Miguel Stilwell de Andrade 180,000 151,904 Miguel Nuno Simões Nunes Ferreira Setas 8,104 8,104 Rui Manuel Rodrigues Lopes Teixeira 39,433 39,033 Vera de Morais Pinto Pereira Carneiro 7,000 7,000 Remuneration of company officers Thousand Euros EBD GSB President 1,525 547 Members 4,279 1,505 5,804 2,052 During 2021, the remuneration costs of the members of the Remunerations Committee of the General Assembly and the Sustainability Committee mounted to 70,694 Euros and 22,750 Euros respectively. The remuneration costs accounted with the EBD includes the amount of 1,702 thousand Euros related to the annual variable remuneration. This amount was calculated considering the best estimation of the variable remuneration for the year of 2021, in accordance with Remunerations Committee policy of the GSB, deducted from the correction of the accrual from the previous year compared with the amount paid. Additionally, the Remunerations Committee policy of the GSB foresees, in certain circumstances, a variable multi-annual remuneration to the EBD members, corresponding to the current mandate (2019-2021). On this basis, an estimated amount of 13,848 thousand Euros was accrued (31 December 2020: 12,383 thousand Euros). In accordance with the Company's by-laws, the remuneration of company officers is set by a Remunerations Committee appointed by the Shareholders’ General Meeting, except for the remuneration of the members of the Executive Board of Directors (EBD), which is set by a Remunerations Committee appointed by the General and Supervisory Board (GSB). Short-term employee benefits The number of shares of EDP S.A. held or attributable to company officers as at 31 December 2021 and 2020 are as follows: EDP S.A bonds and the number of shares of other EDP group companies held or attributable to company officers are disclosed in part I section A - Ownership structure of chapter 4 - Corporate governance. During 2021,the annual fixed and variable remuneration cost accounted for the members of the EBD and the fixed remuneration of the GSB, was as follows: 408 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Also under this partnership, on 6 December 2013, EDP Brasil signed a Memorandum of Understanding with CWE Investment Corporation (CWEI), currently designated as China Three Gorges Corporation, a wholly owned subsidiary of CTG, setting out the main guidelines for a future partnership in joint investments between EDP Brasil and CWEI and that governs parties' participation in joint projects in Brazil. These investments by CWEI Brasil were considered for purposes of fulfilment of the Strategic Partnership Agreement in relation to the total investment of 2 billion Euros made by CTG up to 2015 (including co- funding of operating investments) in ready-to-build and operational renewable energy generation projects. Under the Strategic Partnership Agreement with China Three Gorges Corporation, on 28 June 2013, EDP Renováveis, S.A. sold for a total final price of 368 million Euros to a CTG Group company (CITIC CWEI Renewables S.C.A.) a 49% shareholding in EDP Renováveis Portugal and 25% of the shareholder loans capital and supplementary capital contributions under the applicable rules for additional contributions granted to this company. In the course of its activity and regardless of their relevance, EDP concludes businesses and operations under normal market conditions for similar transactions with different entities, namely financial institutions, including holders of qualified shareholdings in EDP's share capital and those related parties. Post-employment benefits EDP has not created a supplementary pension fund or pension plan for directors by making, instead, contributions/or co- contributions with the administrator to a Savings Plan (PPR) in a net amount at 10% (ten percent) of their remuneration base. The PPR is subscribed by EDP to the insurer of your choice, indicating the administrator as a insured person, and the defined contribution of EDP is paid in twelve monthly installments. As the characteristics of the PPR correponds to the usual characteristics on the market for this type of product, be reimbursable before the expiry of the term, in the terms legally applicable to these financial products. The PPR currently coma the members of the Executive Board of Directors may, upon the assent of the Remuneration Committee of the General and Supervisory Board, be replaced by capitalizing insurance linked unit or equivalent vehicle, depending on the offer and market practices each time. Audit and non audit fees On 11 May 2012, after the Strategic Partnership Agreement concluded with China Three Gorges Corporation (CTG) came into effect in December 2011, this company (and three other group companies) became part of EDP's General and Supervisory Board. On 19 May 2015, EDP Renováveis, S.A. completed the sale to CTG, of a 49% equity shareholding in selected wind farms in Brazil. This transaction was recognised as a sale without loss of control, having the Group recognised non-controlling interests of 50,943 thousand Euros and an impact in reserves attributable to the Group of 10,337 thousand Euros in 2015. In 2021, PwC fees relating to external audit and statutory audit of all subsidiaries of EDP Group, except EDP Brasil Group, amounted to 6,374,114 Euros. Additionally, the total fees charged by PwC for other assurance services, which include quarterly reviews, and other non audit services amounted to 1,265,173 Euros and 20,342 Euros, respectively. In 2021, PwC Portugal fees relating to external audit and statutory audit of all subsidiaries of EDP Group in Portugal, amounted to 2,497,251 Euros. The total fees charged by PwC Portugal for other assurance of reliability services, which include quarterly reviews and other non audit services to subsidiaries of EDP Group in Portugal amounted to 928,094 Euros and 18,800 Euros, respectively. Business operations between the Company and the members of the Executive Board of Directors and General and Supervisory Board with qualifying holdings and companies in the group or control relationship with EDP 409 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Balances and transactions with companies of China Three Gorges Group Balances with EDP Pension and Medical and Death Subsidy Funds On November 15, 2021, EDP Renováveis S.A. signed a sales agreement with CTG of a 100% stake in an operational wind portfolio in Spain for a total amount of 307 million Euros (subject to adjustments in completion). On 10 December 2021, following the acquisition of Sunseap by EDP Renováveis S.A. and consequent entry into the Asian Market, EDP and CTG updated the Strategic Partnership Agreement (concluded in December 2011). This update aims to make the growth strategies of both companies more flexible, ensuring the application of the most demanding corporate governance standards in their future relationships. In September 2017, EDP, S.A. signed a lease contract related with the building of the Lisbon headquarters (given as an in-kind contribution to the EDP Medical and Death Subsidy Funds) for a period of 25 years. As at 31 December 2021, the present value of the lease liability, as a result of the adoption of IFRS 16, amounts to 85,656 thousand Euros (31 December 2020: 88,261 thousand Euros) (see note 39). During 2021, EDPR Portugal distributed dividends to CTG in the amount of 14,700 thousand Euros. On 30 June 2017, EDP Renewables, SGPS, S.A. completed the sale to ACE Portugal S.A.R.L. (CTG Group), of a 49% equity shareholding in EDPR PT-PE. This transaction was recognised as a sale without loss of control, having the Group recognised non-controlling interests of 135,679 thousand Euros and an impact in reserves attributable to the Group of 74,419 thousand Euros in 2017. On 28 December 2018, EDP Renováveis, S.A. completed the sale to CTG, of a 10% equity stake and respective shareholder loans on Moray Offshore Windfarm (East) Limited, for the total amount of 37.6 million Pounds. Following the decision and implementation of the autonomisation of the Medical Plan and Death Subsidy Plan in Portugal, EDP Group expects to make additional contributions in the coming years, totaling around 138 million Euros by the end of 2027, and about 35 million in 2022 in line with the financing plan approved by the Supervisory Authority of Insurance and Pension Funds (ASF). In the year of 2021, a contribution of around 11,520 thousand Euros was made (see note 35). In December 2015, EDP, S.A. signed a lease contract related with the building units of the Porto headquarters (sold to the EDP Pension Fund in December 2015) for a period of 25 years. As at 31 December 2021, the present value of the lease liability, as a result of the adoption of IFRS 16, amounts to 45,344 thousand Euros (31 December 2020: 46,941 thousand Euros) (see note 39). In accordance with the EDP/CTG strategic partnership, EDPR Group completed the sale of 49% of EDPR Portugal, EDPR Brasil, EDPR PT-PE, EDPR Italia and EDPR Polska to CTG Group. Following these transactions, CTG Group granted shareholders loans to the EDPR Group in the amount of 157,304 thousand Euros including accrued interests (31 December 2020: 194,978 thousand Euros) (see note 39). On 27 October 2016, the transaction relating with the sale of the minority interest in the wind generation assets of EDP Renováveis, S.A. in Italy and Poland to CTG, which purchase and sale agreement was signed on 28 December 2015 was concluded. CTG, through ACE Poland S.A.R.L. and ACE Italy S.A.R.L., both owned in 100% by ACE Investment Fund LP, an entity owned by China Three Gorges Hong Kong Ltd, subsidiary of CTG, formalised the payment of approximately 363 million Euros corresponding to the final price agreed between the parties. 410 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Balances and transactions with subsidiaries, joint ventures and associates Credits held Intra-Group Loans and Financial Interests Other Thousand Euros Mov. receivable Credits EDP Comercial, S.A. \- 5,622 389,273 394,895 E-Redes – Distribuição de Eletricidade, S.A 214,547 1,503,659 36,275 1,754,481 EDP Finance B.V. \- 768,936 5,255 774,191 EDP Produção, S.A. \- 809,836 1,633,848 2,443,684 Hidrocantábrico Distribucion Eléctrica, S.A.U. \- \- 24,921 24,921 EDP Renováveis, S.A. \- \- 105,909 105,909 EDP Servicios Financieros España, S.A.U. 624,006 \- 14,709 638,715 SU Eletricidade, S.A. \- 300,399 120,850 421,249 EDP Renewables Europe, S.L.U. \- \- 587,366 587,366 EDP Clientes, S.A. \- \- 1,058,380 1,058,380 Other 134,622 52,570 480,332 667,524 973,175 3,441,022 4,457,118 8,871,315 Intra-Group Loans and Financial Interests Other Thousand Euros Mov. receivable Credits EDP Comercial, S.A. \- 42,037 259,053 301,090 E-Redes – Distribuição de Eletricidade, S.A. 19,381 1,503,685 28,567 1,551,633 EDP España, S.A.U. \- \- 143,878 143,878 EDP Finance, B.V. \- 156,705 300 157,005 EDP Produção, S.A. \- 807,346 402,019 1,209,365 Hidrocantábrico Distribucion Eléctrica, S.A.U. \- \- 30,500 30,500 EDP Renováveis, S.A. \- \- 19,278 19,278 EDP Servicios Financieros España, S.A.U. 853,955 \- 6,453 860,408 SU Eletricidade, S.A., S.A. \- 300,387 14,728 315,115 EDP Renewables Europe, S.L.U. \- \- 22,520 22,520 EDP GÁS.COM - Comércio de Gás Natural, S.A. \- 10,038 13,988 24,026 EDP Clientes, S.A. \- \- 121,228 121,228 Other 393 94,013 35,841 130,247 873,729 2,914,211 1,098,353 4,886,293 In their ordinary course of business, EDP Group companies establish commercial transactions and operations with other Group companies, whose terms reflect current market conditions. The credits and debits over subsidiaries, joint ventures and associates, at Company level, are as follows: 31 December 2021 Total 31 December 2020 Total The amount of 768,936 thousand Euros refers to one private placement by EDP S.A. of a bond issued by EDP Finance B.V. 411 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Debits held Intra-Group Loans and Financial Interests Other Thousand Euros Mov. payable Debits E-Redes – Distribuição de Eletricidade, S.A \- \- 794 794 EDP Finance B.V. \- 5,948,182 45,396 5,993,578 EDP Renováveis Servicios Financieros, S.A. \- \- 57,730 57,730 EDP Produção, S.A. 902,040 \- 1,537,113 2,439,153 EDP Renováveis, S.A. \- \- 23,811 23,811 SU Eletricidade, S.A. 1,297,239 \- 1,466 1,298,705 EDP España, S.A.U. \- \- 648,624 648,624 EDP Clientes, S.A. \- \- 302,778 302,778 EDP GÁS.COM - Comércio de Gás Natural, S.A. \- \- 135,375 135,375 Other 149,326 \- 238,241 387,567 2,348,605 5,948,182 2,991,328 11,288,115 Intra-Group Loans and Financial Interests Other Thousand Euros Mov. payable Debits E-Redes – Distribuição de Eletricidade, S.A. \- \- 13,257 13,257 EDP Comercial, S.A. 41,506 \- 1,281 42,787 EDP Finance, B.V. \- 7,567,069 69,579 7,636,648 EDP Renováveis Servicios Financieros, S.A. \- \- 17,237 17,237 EDP Produção, S.A. 864,756 \- 364,155 1,228,911 EDP Renováveis, S.A. \- \- 56,058 56,058 SU Eletricidade, S.A., S.A. 203,304 \- 9 203,313 EDP España, S.A.U. \- \- 28,775 28,775 EDP Clientes, S.A. \- \- 54,580 54,580 Other 79,137 \- 70,448 149,585 1,188,703 7,567,069 675,379 9,431,151 Expenses Interest on Intra-Group Financial Thousand Euros Mov. EDP Finance B.V. \- 94,998 50,165 145,163 EDP Produção, S.A. \- \- 1,693,345 1,693,345 EDP España, S.A.U. \- \- 878,112 878,112 EDP Clientes, S.A. \- \- 13,925 13,925 EDP Servicios Financieros España, S.A.U. 3,765 \- \- 3,765 Other 7 \- 208,954 208,961 3,772 94,998 2,844,501 2,943,271 Other Losses 31 December 2021 At 31 December 2021, the amount of 5,948,182 thousand Euros includes four intragroup bonds issued by EDP Finance BV and acquired by EDP S.A., in the total amount of 5,324,551 thousand Euros, with fixed and variable rate and a term to maturity up to 10 years. Total 31 December 2020 Total Interest on Loans Obtained Total Expenses and income related to Subsidiaries, Joint Ventures and Associates, at Company level, are as follows: 31 December 2021 412 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Interest on Intra-Group Financial Thousand Euros Mov. EDP Finance, B.V. \- 136,276 145,147 281,423 EDP Produção, S.A. \- \- 2,031,542 2,031,542 EDP España, S.A.U. \- \- 140,240 140,240 Other 30 \- 406,976 407,006 30 136,276 2,723,905 2,860,211 Income Interest on Intra-Group Financial Thousand Euros Mov. EDP Comercial, S.A. 4 470 1,171,973 1,172,447 E-Redes – Distribuição de Eletricidade, S.A. 14 17,689 289,181 306,884 EDP Produção, S.A. \- 13,354 979,790 993,144 EDP Finance B.V. \- 12,299 45,870 58,169 EDP Renewables Europe, S.L.U. \- \- 471,065 471,065 EDP Renováveis, S.A. \- \- 221,613 221,613 EDP España, S.A.U. \- \- 774,161 774,161 EDP GÁS.COM - Comércio de Gás Natural, S.A. 31 220 411,908 412,159 EDP Clientes, S.A. \- \- 1,234,460 1,234,460 SU Eletricidade, S.A. 63 4,417 9,804 14,284 Other \- 1,644 624,740 626,384 112 50,093 6,234,565 6,284,770 Interest on Intra-Group Financial Thousand Euros Mov. EDP Comercial, S.A. 119 1,537 1,145,769 1,147,425 E-Redes – Distribuição de Eletricidade, S.A. 11 23,209 137,345 160,565 EDP España, S.A.U. \- \- 909,485 909,485 EDP Produção, S.A. \- 21,802 941,198 963,000 EDP Soluções Comerciais, S.A. 2 219 10,221 10,442 EDP Finance, B.V. \- 14,053 97,630 111,683 Hidrocantábrico Distribución Eléctrica S.A.U. \- \- 23,632 23,632 EDP Renováveis, S.A. \- \- 86,794 86,794 EDP Renewables Europe, S.L.U. \- \- 22,276 22,276 Other 46 6,178 400,069 406,293 178 66,998 3,774,419 3,841,595 31 December 2021 Interest on Loans Granted Other Gains Total 31 December 2020 Interest on Loans Obtained Other Losses Total Interest on Loans Granted Other Gains Total Other gains include income from equity investments of 1,164,310 thousand Euros (see note 13). 31 December 2020 413 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Assets and Liabilities Thousand Euros Joint Ventures Companhia Energética do JARI - CEJA 2,940 342 2,598 Empresa de Energia São Manoel, S.A. 8,031 494 7,537 OW FS Offshore, S.A. 180,544 \- 180,544 Other 6,515 6,034 481 198,030 6,870 191,160 Associates Parque Eólico Sierra del Madero, S.A. 5,621 \- 5,621 Eos Pax IIa, S.L. 5,257 \- 5,257 Centrais Elétricas de Santa Catarina, S.A. - Celesc 4,972 2,715 2,257 Solar Works! B.V. 2,594 \- 2,594 Eólica de São Julião, Lda. 16,572 1,638 14,934 Other 2,139 74 2,065 37,155 4,427 32,728 235,185 11,297 223,888 Thousand Euros Joint Ventures OW Offshore, S.L. 474,939 130 474,809 Cide HC Energía, S.A. 6,860 1,276 5,584 Flat Rock Windpower II LLC 17 961 -944 Outras 9,898 3,496 6,402 491,714 5,863 485,851 Associates Parque Eólico Sierra del Madero, S.A. 8,149 \- 8,149 Parque Eólico Belmonte, S.A. 1,119 \- 1,119 Centrais Elétricas de Santa Catarina, S.A. - Celesc 3,083 \- 3,083 Solar Works! B.V. 965 \- 965 Other 2,078 36 2,042 15,394 36 15,358 507,108 5,899 501,209 Net Value Net Value 31 December 2021 31 December 2020 Assets Liabilities Assets, liabilities and transactions with related companies, for the Group, are as follows: Assets Liabilities 414 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Transactions Operating Financial Operating Financial Thousand Euros Income Income Expenses Expenses Joint Ventures Companhia Energética do JARI - CEJA 214 \- 2,376 \- Empresa de Energia São Manoel, S.A. 3,535 \- 6,416 \- Empresa de Energia Cachoeira Caldeirão, S.A. 159 \- 2,520 \- OW FS Offshore, S.A. 881 5,953 \- Other 12,503 16 9,148 \- 17,292 5,969 20,460 \- Associates Eos Pax IIa, S.L. 5,739 \- \- \- Eólica de São Julião, Lda 20,750 \- 4,046 \- Parque Eólico Belmonte, S.A. 428 31 \- \- Parque Eólico Sierra del Madero, S.A. 8 213 \- \- Other 823 182 63 \- 27,748 426 4,109 \- 45,040 6,395 24,569 \- Operating Financial Operating Financial Thousand Euros Income Income Expenses Expenses Joint Ventures Cide HC Energía, S.A. 67,144 5 110 \- Companhia Energética do JARI - CEJA 218 \- 2,462 \- Empresa de Energia São Manoel, S.A. 4,998 \- 6,629 \- OW Offshore, S.L. 6,932 3,934 \- 3,102 Porto do Pecém Transportadora de Minérios S.A. 172 \- 2,568 \- Other 9,098 114 3,829 \- 88,562 4,053 15,598 3,102 Associates Desarrollos Eólicos de Canarias, S.A. 453 \- 55 \- Parque Eólico Sierra del Madero 8 284 \- \- Parque Eólico Belmonte, S.A. 644 33 \- \- Other \- 113 \- \- 1,105 430 55 \- 89,667 4,483 15,653 3,102 45\. Fair value of financial assets and liabilities Additionally, management describes other transactions with related parties in the part I section A - Ownership structure of chapter 4 - Corporate governance. The aforementioned chapter includes transactions with holders of qualified shareholding positions as required by the Securities Code which are out of scope of IAS 24. Fair value of financial instruments is based, whenever available, on listed market prices. Otherwise, fair value is determined through quotations supplied by third parties or through the use of generally accepted valuation models, which are based on cash flow discounting techniques and option valuation models. These models use market data which impacts the financial instruments, namely yield curves, exchange rates and volatility indicators, including credit risk. 31 December 2021 Market data is available on stock exchanges and/or financial information platforms such as Bloomberg and Reuters. 31 December 2020 During 2021, EDP Group contributed with 12,700 thousand Euros of donations to Fundação EDP (see note 11). 415 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 The fair value of financial assets and liabilities is as follows: Carrying Carrying Thousand Euros amount Assets Equity instruments at fair value 189,942 189,942 \- 184,748 184,748 \- Investment property 20,668 20,668 \- 21,378 21,378 \- Debtors/other assets from commercial activities 8,596,510 8,596,510 \- 6,292,623 6,292,623 \- Other debtors and other assets 2,298,676 2,298,676 \- 1,266,954 1,266,954 \- Derivative financial instruments 2,353,326 2,353,326 \- 605,428 605,428 \- Collateral deposits/financial debt 50,075 50,075 \- 32,069 32,069 \- Cash and cash equivalents 3,222,409 3,222,409 \- 2,954,302 2,954,302 \- 16,731,606 16,731,606 \- 11,357,502 11,357,502 \- Liabilities Financial debt 16,817,936 17,293,095 475,159 16,286,763 17,100,948 814,185 Suppliers and accruals 2,390,874 2,390,874 \- 2,002,054 2,002,054 \- Institutional partnerships 2,259,741 2,259,741 \- 1,933,542 1,933,542 \- Trade payables and other liabilities from commercial activities 4,956,778 4,956,778 \- 3,136,755 3,136,755 \- Other liabilities and other payables 1,879,832 1,879,832 \- 1,939,744 1,939,744 \- Derivative financial instruments 3,941,244 3,941,244 \- 396,882 396,882 \- 32,246,405 32,721,564 475,159 25,695,740 26,509,925 814,185 Given that EDP Group’s financial assets and liabilities, recognised at amortised cost, are predominantly short-term and level 2, changes in fair value were not considered. Fair value of EDP Group’s financial debt was determined considering current market, namely listed price (level 1). The market value of financial debt, when no listed market prices are available, is calculated based on the discounted cash flows at market interest rates at the balance sheet date, increased by the best estimate, at the same date, of market conditions applicable to Group's debt. Dec 2021 Dec 2020 amount Fair value Difference Fair value Difference 416 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Financial assets Equity instruments at fair value through Other comprehensive income (see note 22) \- 95,811 31,016 \- 89,821 27,290 Profit or loss (see note 22) \- \- 63,115 \- \- 67,637 Tariff deficit at fair value through other comprehensive income (see note 26) \- 564,046 \- \- 423,324 \- Amounts receivable from concessions-IFRIC 12 at fair value through profit or loss (see note 26) \- 693,785 \- \- 547,103 \- Investment property \- 20,668 \- \- 21,378 \- Derivative financial instruments (see note 42) \- 2,353,326 \- \- 605,428 \- \- 3,727,636 94,131 \- 1,687,054 94,927 Financial liabilities Derivative financial instruments (see note 42) \- 3,941,244 \- \- 396,882 \- \- 3,941,244 \- \- 396,882 \- According to IFRS 13 requirements, EDP Group established the way it obtains the fair value of its financial assets and liabilities. The levels used are defined as follows: Dec 2021 The market value of the amounts of tariff deficit at fair value through other comprehensive income is calculated based on the cash flows associated with these assets, discounted at rates which, at the balance sheet date, better reflect the assets risk considering the average term of the assets. The amounts receivable from concessions - IFRIC 12 at fair value through profit or loss are valued based in the methodology of the Value of Replacement as New (VNR). This method requires that each asset is valued, at current prices, for all the expenses needed for its replacement by equivalent asset that performs the same services and has the same capacity as the existing asset. The valuation for each asset is based on (i) Data Bank of Referential Prices - which is defined in the Tariff Adjustment Procedures - PRORET; or (ii) Data Bank of Prices from the Distribution company - which is formed based on the company's own information; or (iii) Referential Budget – that corresponds to the calculation by comparison of market data, relating to other assets with similar characteristics. ANEEL reviews the VNR, through the valuation report of the Regulatory Remuneration Base, every three years for EDP Espírito Santo and every four years for EDP São Paulo, as established in the concession contracts. The market value of investment properties is based on assessments using current market practices: the comparative method, in cases where there is an active and comparable market, the income method, through discounted cash flows and the cost method, which considers the market value of the land and the construction costs. ● Level 2 – Fair value based in market inputs not included in level 1, but observable in the market for the asset or liability, either directly or indirectly; ● Level 1 – Fair value based on the available listed price (not adjusted) in the identified active markets for assets and liabilities; ● Level 3 – Fair value of the assets and liabilities calculated with inputs that are not based on observable market information. Dec 2020 417 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 other comprehen- Thousand Euros sive income Balance at beginning of period 27,290 67,637 Change in fair value (see note 22) 2,851 243 Acquisitions 1,137 3,438 Disposals -436 -8,207 Other changes 174 4 Balance at the end of the period 31,016 63,115 46\. Relevant or subsequent events EDP establishes a growth platform for APAC through the acquisition of Sunseap Ocean Winds is awarded with exclusive rights to develop wind project offshore Sale of 562 million Euros of portuguese tariff deficit Asset rotation deal of a 221 MW wind portfolio in Portugal Substitution of the issuer and amendments to Terms and conditions of Notes Issued by Viesgo Group China Three Gorges with qualified shareholding in EDP of 20.22% On 3 November 2021, EDP Renováveis, S.A. reached an agreement to acquire an 87.4% stake in Sunseap Group Pte. Ltd., the largest distributed solar player and top four solar player in South East Asia. The transaction is subject to customary conditions precedent, namely regulatory approvals, and as of 31 December 2021 the transaction was not yet completed. The assumptions used inthe determination of Equity Instruments at Fair Value are described in note 22, as required by IFRS 13\. The movement in financial assets and liabilities included in Level 3 is as follows: On January 17, 2022, EDP announced, through its subsidiary EDP Renováveis, that Ocean Winds won NE4 block in the ScotWind offshore auction, obtaining exclusive rights to develop a bottom-fixed offshore project with 1 GW of installed capacity. On 25 January 2022, EDP Serviço Universal, S.A., the last resort supplier of the Portuguese electricity system, agreed the non- recourse sale of the 2021 tariff deficit, related with special regime generation, for a total amount of 562 million Euros. On 28 January 2022, EDP announced, through its subsidiary EDP Renováveis, the completion of the sale and Purchase Agreement with Onex Renewbles, for a 100% equity stake in a wind portfolio with 221 MW of installed capacity, the transaction scope includes five wind farms in Portugal, for an Enterprise Value of 534 million Euros. On 3 February 2022, EDP iniciated a consent solicitation process with the purpose of approving , by extraordinary resolution, proposals to amend the terms and conditions of the Notes. If the holders of the Notes approve the changes requested by the issuer IE2 Holdco, S.A.U. (i) EDP -Energias de Portugal, S.A. will replace IE2 Holdco, S.A.U. as issuer of the Notes, (ii) Viesgo Holdco, S.A.U.’ guarantee will be cancelled and (iii) other terms and conditions of the Notes will be amended. On 4 February 2022, China Three Gorges (Europe), S.A. notified EDP that, in accordance with article 16º of the Portuguese Securities Code, it had reached a qualifying shareholding correspondent to 20.22% of EDP’s share capital and of the respective voting rights, having crossed the threshold of 20% on 1 February of the respective year. At fair value through profit or loss 418 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 EDP Energias do Brasil concludes investment in CELG-T 47\. EDP Branch in Spain The Spanish branch of EDP has offices in Madrid and Oviedo. From a formal and legal point of view, the representation of the Spanish branch of EDP before third parties is ensured through the permanent representatives, which are members of the Executive Board of Directors of EDP, mandated for that purpose. The structure of direction, coordination, management and representation of the Spanish branch of EDP is composed by an Executive Committee, a Management Committee and by direct representation on iberian scope EDP Management Committees. The Executive Committee is composed essentially by five permanent representatives, a Corporate General Director (Group Controller for the activities in Spain) and by first line directors of the business units in Spain, which constitute the main direction and coordination body of the Branch, being responsible for the coordination of the activities of the permanent representatives and of the Management Committee. The Management Committee is chaired by the Corporate General Director and is composed by the natural extension of the Departments of the Corporate Centre of EDP in Spain, namely the Department of M&A ("Direcção de Projectos e Novos Negócios"), Department of Legal Affairs ("Direcção de Assessoria Jurídica"), Department of Internal Audit ("Direcção de Auditoria Interna"), Department of Administration and Finance ("Direcção de Administração e Finanças"), Department of Human Resources ("Direcção de Recursos Humanos"), Department of EDP Spain Foundation ("Direcção da Fundação EDP Espanha"), Department of Regulation ("Direcção de Regulação"), IT Department ("Direcção de Tecnologias de Informação") and Department of Environment, Sustainability, Innovation and Climate Change ("Direcção de Ambiente, Sustentabilidade, Inovação e Alteração Climática") ensuring in a homogeneous way the functions of these departments transversally to the Spanish territory, being provided with 213 human resources as at 31 December 2021, including 142 in its own payroll. The aim of EDP - Energias de Portugal - Sociedade Anónima, Sucursal en España is to manage and coordinate the energy interests of subsidiaries depending from EDP Group in Spain, organised through managing and monitoring structures, in order to ensure the maximum synergy and value creation in the operations and activities in Spain, also assuming itself as an organizational platform to lead the Iberian integration of shared and support services (back and middle offices). On this basis, interests in EDP Servicios Financieros (España), S.A.U., EDP International Investments and Services, S.L. and EDP España, S.A.U. are directly allocated to the assets of EDP Sucursal, as well as the majority interest in EDP Renováveis, S.A. On 14 October 2021, EDP announced that its owned subsidiary, EDP Energias do Brasil S.A, won the public auction for 100% of the equity shares of Celg Transmissão S.A,. Following this announcement, on 7 February 2022, EDP - Energias do Brasil S.A. concluded the investment of 99.99% of Celg Transmissão S.A. equity shares, for an amount of 2,115 million brazilian Reais (347 million Euros). 419 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Dec 2020 Investments in subsidiaries: \- EDP Renováveis, S.A. 4,154,431 4,154,431 \- EDP España, S.A.U. 2,105,002 2,105,002 \- EDP Servicios Financieros (España), S.A.U. 482,695 482,695 \- EDP International Investments and Services, S.L. 1,488,181 988,849 Deferred tax assets 50,844 53,020 Other debtors and others assets 8,544 9,358 Total Non-Current Assets 8,289,697 7,793,355 Other debtors and others assets 122,196 176,365 Tax receivable 45,648 39,515 Cash and cash equivalents 624,241 854,129 Total Current Assets 792,085 1,070,009 Total Assets 9,081,782 8,863,364 Equity 8,903,961 8,809,855 Employee benefits 1,823 1,592 Other liabilities and other payables 116 685 Total Non-Current Liabilities 1,939 2,277 Financial debt 42 \- Employee benefits 719 891 Other liabilities and other payables 171,759 46,251 Tax payable 3,362 4,090 Total Current Liabilities 175,882 51,232 Total Liabilities 177,821 53,509 Total Equity and Liabilities 9,081,782 8,863,364 48\. Environmental matters Thousand Euros Dec 2021 Dec 2020 Air and climate protection 4,025 6,200 Water management 283 346 Waste management 258 159 Soil, subterranean and surface water protection 15,253 3,334 Noise and vibration reduction 540 470 Biodiversity protection 24,145 17,638 Landscape protection 12,081 9,094 Energetic efficiency 19,584 16,752 Other environmental management and protection activities 12,055 12,995 88,224 66,988 Group Investments of an environmental nature booked as Property, plant and equipment and intangible assets during 2021 and 2020, in the Group, are as follows: The Statement of Financial Position of the Branch is as follows: EDP Branch Expenses of an environmental nature are those identified and incurred to avoid, reduce or repair damage of an environmental nature resulting from the company's normal activity. Expenses of an environmental nature are booked as expenses for the period, except if they qualify to be recognised as an asset according with IAS 16. 420 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Dec 2021 Dec 2020 Air and climate protection 295,064 194,624 Water management 5,228 6,989 Waste management 14,443 18,317 Soil, subterranean and surface water protection 896 836 Noise and vibration reduction 285 277 Biodiversity protection 7,390 5,079 Landscape protection 26 40 Energetic efficiency 3,877 5,450 Radiations management 32 118 Research and development in the environmental area 309 455 Other environmental management and protection activities 6,664 9,885 334,214 242,070 49\. Business combinations Distributed Solar Generation - C2 Omega LLC Under current and future socioeconomic trends and practices followed by the EDP Group regarding to environmental sustainability, the group accounts for provisions to cover the costs of dismantling, decommissioning, restoring and decontaminating land where electric power plants are located, of 80,438 thousand Euros and 127,896 thousand Euros for thermoelectric power plants located in Portugal and Spain, respectively. Regarding the liability to dismantle and restore the land where solar and wind farms are located to its original condition, as at 31 December 2021, the provisions amount to 313,594 thousand Euros. Additionally, the provision to dismantle the Trillo nuclear power plant amounts to 45,003 thousand Euros (see notes 2 n) and 36). Within this transaction, EDPR has gained control over the company C2, with the then unrelated former owners having retained 15% of the ownership. The former sole owners are currently employees of EDPR. EDPR has an option to purchase the remaining 15% after February 2025 at an amount that is the present value of cash flows determined in a pre-defined model. If this call option is not executed, then the former owners may put the 15% to EDPR after February 2026 using the present value of cash flows from the same pre-defined model, but with a discount rate 100 basis points higher than what was used in the value of call option one year prior. EDP Renováveis S.A. (EDPR), through its wholly owned US subsidiary, EDP Renewables North America LLC, entered into an agreement in January 2021 to acquire 85% of C2 Omega LLC (C2). C2 is a US based Distributive Solar Generation Company with 89 MWs of operating and near completion capacity with a near-term pipeline of approximately 120 MWs through 16 states. At that moment, the completion of this transaction was subject to customary precedent conditions. With the aforementioned customary conditions precedent fulfilled on March 1, 2021, EDPR acquired the aforementioned 85% interest in C2 for 46,530 thousand euros. This transaction is considered under the scope of IFRS 3 - Business combinations. The Group used the financial statements as at 28 February 2021 of the companies acquired, to determine pre-acquisition results and, consequently, the companies have been consolidated from that date. The profit and loss and statement of cash flows reflect the activity of C2 and its subsidiaries from March 1, 2021 through December 31, 2021. During 2021 and 2020, the Group recognised expenses that are as follows: Environmental income recognised in 2021 relates to the sale of environmental waste of 2,495 thousand Euros (31 December 2020: 2,716 thousand Euros) and the sale of by-products of 116 thousand Euros (31 December 2020: 71 thousand Euros). Group 421 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Assets Property, plant and equipment 134 949 447 135,396 Right-of-use assets 4 858 \- 4,858 Other debtors and other assets 16 684 -2,308 14,376 Cash and cash equivalents 1 767 \- 1,767 Total Assets 158,258 -1,861 156,397 Liabilities Financial Debt 79 684 -3,294 76,390 Provisions 2 930 \- 2,930 Institutional partnerships in US 7 216 4,259 11,475 Other liabilities and other payables 16 621 \- 16,621 Total liabilities 106,451 965 107,416 Net Assets 51,807 -2,826 48,981 Non-controlling interests -4,026 Net assets acquired at fair value 44,955 Acquisition cost 46,530 Goodwill 1,575 Such valuation has determined a fair value of the net assets acquired in the amount of 44,880 thousands of Euros . Fair value of identifiable assets and liabilities at the acquisition date is presented as follows: The noncontrolling interest value of 4,026 thousand Euros was determined in two pieces: 1) four years of cash flows attributable to the former owners up until EDPR's call option date and 2) the value of the option to purchase the former owner's residual 15% interest. The fair values of financial debt and Partnerships in US wind farms was derived by taking the forecasted payment streams under those instruments using the market interest rates and returns for those instruments at the acquisition date. The purchase price allocation exercise carried out in accordance with IFRS 3 resulted in goodwill recognition in the amount of 1,575 thousand Euros, as per the difference between the net assets acquired at fair value and the consideration transferred for the acquisition of the shares. If this acquisition had occurred at the beginning of 2021, it would have contributed to the consolidated financial statements with Revenues, mainly from energy sales, in the approximate amount of 13,000 thousand Euros and with a Net loss for the period in the approximate amount of 2,400 thousand Euros, referring to the twelve-month period ended at 31 December 2021. Book value at acquisition date The aforementioned C2's valuation has determined a fair value for Property, plant and equipment in the amount of 135,396 thousand Euros, generating a fair value adjustment of 447 thousand Euros (see note 16). 106,190 thousand Euros of this amount is attributable to operating assets and 29,206 thousand Euros is attributable to assets in the development pipeline. At the acquisition date, EDPR Group has determined the fair value of the assets acquired and liabilities assumed, based on a valuation performed by a third party. The valuation methodology utilized was a discounted cashflow approach, where cash flows for each project were forecasted for the remaining life of the assets. The main components of cashflow, namely production, long term power prices and operational costs were estimated using EDPR’s own methodology using historical data of the assets provided by the seller. The after tax cash flows were then discounted at the weighted average cost of capital of 7% reflecting the risk of the debt and equity financing components adjusted for the contracted profile of each project. Lastly to the aggregate value of the portfolio, adjustments were made for one-off items, other balance sheet assets or liabilities and synergies, to reach the final equity valuation. Fair value at Fair value adjustment acquisition date 422 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 The aforementioned goodwill resulting from the purchase price allocation is mainly attributable to EDPR using C2 as an entry to the distributive generation market. Aria del Vento EDPR entered in December 2018 into an agreement with Siemens Gamesa Renewable Energy Italy, S.p.A. for the acquisition of the project Aria del Vento. At that moment, the completion of this transaction was subject to customary conditions precedent.The agreement entailed as one of these conditions precedent to closing the contribution of the project by Siemens Gamesa Renewable Energy Italy, S.p.A. into a newly created SPV after the wind farm starts operating. At the acquisition date, EDPR Group has determined the fair value of the assets acquired and liabilities assumed, with the assistance of a specialized and independent firm. The valuation methodology utilized has been the Multi-Excess Earning Method (MEEM) and the discounted cashflow approach. This valuation methodology assumes that the kind of assets to be valued normally generates cash flows in combination with other tangible and intangible assets and therefore consists in deducting the estimated cost of the use of other assets, such as PP&E or working capital, from the estimated cash flows associated to the asset to be valued. The main components of cashflow, namely production, long term power prices and operational costs were estimated using EDPR’s own methodology using historical data and experience assessing investments of similar wind farms in EDPR’s portfolio. These internal assumptions used in the preparation of the cashflows of the wind farm have been challenged by the specialized firm. The after tax cash flows were then discounted at the weighted average cost of capital, that has been calculated by the firm, reflecting the risk of the country and adjusted for the profile of the project. With this transaction, completed in June 2021 once the aforementioned customary conditions precedent were fulfilled, EDPR has acquired 100% of the shareholding of the company Parco Eolico Aria del Vento, S.r.l. (see note 6) which owns a wind farm project with a installed capacity of 16 MW. As the wind farm project was tranferred to the company acquired at closing of the transaction, there is no further profit and loss results previously. For simplification purposes, and considering this does not have a material effect, the Group used the financial statements as at 30 June 2021 of the company acquired, to determine pre-acquisition balance sheet and results, and, consequently, the companies have been consolidated from that date following the full consolidation method. Thus this acquisition has contributed to the consolidated financial statements with Revenues, mainly from energy sales, in the approximate amount of 3,319 thousand Euros and with a Net profit in the approximate amount of 2,822 thousand Euros, referring to the six-month period ended at 31 December 2021. 423 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Assets Property, plant and equipment 21,651 13,993 35,644 Right-of-use assets 836 \- 836 Goodwill 5,216 -5,216 \- Other debtors and other assets 1,907 \- 1,907 Cash and cash equivalents 586 \- 586 Total Assets 30,196 8,777 38,973 Liabilities Provisions 419 \- 419 Other liabilities and other payables 1,364 \- 1,364 Deferred Tax liabilities \- 3,358 3,358 Total liabilities 1,783 3,358 5,141 Net Assets 28,413 5,419 33,832 Non-controlling interests \- Net assets acquired at fair value 33,832 Acquisition cost 26,001 Gain on acquisition -7,831 The purchase price allocation exercise carried out in accordance with IFRS 3 resulted on a gain recognition (badwill) in the amount of 7,831 thousand Euros, as per the difference of the net assets acquired at fair value and the consideration transferred for the acquisition of the shares. The gain resulting from the purchase price allocation has been registered in the Other income caption of the consolidated financial statements (see note 8). The aforementioned gain recognition is mainly attributable to the 20 year awarded tariff which is the result of a regulatory policy designed to support the development of renewable energy sources by providing a guaranteed price for producers and from the valuation carried out by the independent expert this amount corresponds to a net amount of 5,419 thousand Euros. Trung Son EDPR entered in April 2021 into an agreement with Trina Solar Investment Pte, Ltd. for the acquisition of 100% of the shares of the holding company called Trina Solar Investment First Pte. Ltd. owning the 100% of the company LYS Energy Investment Pte. Ltd. which in turn owns the 100% of the company holding the 28 MWac (35 MWdc) solar PV project called Trung Son Energy Development Joint Stock Company (see note 6). At that moment, the completion of this transaction was subject to customary conditions precedent. With this transaction, completed in 29 June 2021 once the aforementioned customary conditions precedent were fulfilled, EDPR has acquired 100% of a 28 MWac (35 MWdc) solar PV project in Vietnam for a total consideration of 29,568 thousand Euros (35,179 thousand US dollars) of which an amount of 16,381 thousand Euros (19,174 thousand US dollars) refers to shareholders loans. This transaction is considered under the scope of IFRS 3 - Business combinations. Such valuation has determined a fair value of the net assets acquired in the amount of 33,832 thousands Euros . Fair value of identifiable assets and liabilities at the acquisition date is presented as follows: adjustment acquisition date The aforementioned Aria del Vento's valuation has determined a fair value for Property, plant and equipment in the amount of 35,644 thousand Euros, generating a fair value adjustment of 13,933 thousand Euros and a corresponding deferred tax liability in the amount of 3,358 thousand Euros (see note 16 and 24). Book value at Fair value Fair value at acquisition date 424 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 Thousand Euros Assets Property, plant and equipment 19,724 5,631 25,355 Right-of-use assets 2,073 \- 2,073 Other debtors and other assets 15,381 \- 15,381 Cash and cash equivalents 1,459 \- 1,459 Total Assets 38,637 5,631 44,268 Liabilities Financial Debt Provisions 1,014 \- 1,014 Other liabilities and other payables 31,284 \- 31,284 Deferred Tax liabilities \- 1,126 1,126 Total liabilities 32,298 1,126 33,424 Net Assets 6,339 4,505 10,844 Non-controlling interests Net assets acquired at fair value 10,844 Acquisition cost 13,187 Goodwill 2,343 For simplification purposes, and considering this does not have a material effect, the Group used the financial statements as at 30 June 2021 of the company acquired, to determine pre-acquisition balance sheet and results, and, consequently, the companies have been consolidated from that date following the full consolidation method. Thus this acquisition has contributed to the consolidated financial statements with Revenues, mainly from energy sales, in the approximate amount of 1,246 thousand Euros and with a Net loss in the approximate amount of 283 thousand Euros, referring to the six-month period ended at 31 December 2021. If this acquisition had occurred in the beginning of the exercise, it would have contributed to the consolidated financial statements with revenues, mainly from energy sales, in the approximate amount of 3,047 thousand Euros and with a Net profit for the period in the approximate amount of 555 thousand Euros, referring to the twelve-month period ended at 31 December 2021. At the acquisition date, EDPR Group has determined the fair value of the assets acquired and liabilities assumed, with the assistance of a specialized and independent firm. The valuation methodology utilized has been the Multi-Excess Earning Method (MEEM) and the discounted cashflow approach. This valuation methodology assumes that the kind of assets to be valued normally generates cash flows in combination with other tangible and intangible assets and therefore consists in deducting the estimated cost of the use of other assets, such as PP&E or working capital, from the estimated cash flows associated to the asset to be valued. The main components of cashflow, namely production, long term power prices and operational costs were estimated using EDPR’s own methodology using historical data and experience assessing investments of similar solar PV projects in EDPR’s portfolio. These internal assumptions used in the preparation of the cashflows of the solar PV project have been challenged by the specialized firm. The after tax cash flows were then discounted at the weighted average cost of capital, that has been calculated by the firm, reflecting the risk of the country and adjusted for the profile of the project. Such valuation has determined a fair value of the net assets acquired in the amount of 10,844 thousands Euros . Fair value of identifiable assets and liabilities at the acquisition date is presented as follows: Book value at Fair value Fair value at acquisition date adjustment acquisition date The aforementioned Trung Son's project valuation has determined a fair value for Property, plant and equipment in the amount of 25,355 thousand Euros, generating a fair value adjustment of 5,631 thousand Euros and a corresponding deferred tax liability in the amount of 1,126 thousand Euros (see note 16 and 24). 425 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 50\. Investigation process about CMEC and DPH The purchase price allocation exercise carried out in accordance with IFRS 3 resulted on Goodwill recognition in the amount of 2,343 thousand Euros, as per the difference of the net assets acquired at fair value and the consideration transferred for the acquisition of the shares. The aforementioned goodwill recognition resulting from the purchase price allocation, which is identified as provisional according to what is indicated in note 2.A, is mainly attributable to EDPR using Trung Song’s portfolio to establish its presence in Singapore and Vietnam and represents a rst step towards the establishment of EDPR’s presence in the Asia Paci c region. Accordingly, Decree-Law no. 240/2004, of 27 December, was enacted in the context of the liberalization of the Portuguese energy sector, establishing the early termination of the CAEs entered into in 1996 and, at the same time, approving the methodology to be used in accomplishing said termination, as well as the compensation due to energy producers in that respect. In that context, and according to the approved methodology, EDP and REN - Rede Eléctrica Nacional, S.A. (REN) signed the CAE early termination agreements in 2005, their entry into force having taken place on 1 July 2007, after being amended earlier that same year. Both termination agreements were ratified by the member of the Portuguese Government responsible for the energy sector. Pursuant to the provisions of the 2005 CAE termination agreements, on 8 March 2008 the Portuguese Government, REN and EDP Produção entered into a number of concession agreements formalizing EDP’s right of use over the Public Hydro Domain (“Domínio Público Hídrico” – DPH) until the end of the operational life of the hydroelectric plants subject to the so-called Costs for the Maintenance of the Contractual Balance mechanism (“Custos de Manutenção do Equilíbrio Contratual“ – CMEC). Decree-Law 226-A/2007, of 31 May, introduced a new obligation to EDP, unforeseen in the 2004 legislation or in the 2005 termination agreements, which consisted in the payment by EDP of an amount concerning the “economic and financial balance” of each power plant. Pursuant to this legal framework, and following assessments carried out by two independent financial institutions appointed by the Government, EDP Produção was ordered to pay EUR 759 million, as consideration for the extension of its right of use over the DPH. This included approximately EUR 55 million due for the Hydro Resources Tax. In 2012, the EC and Portuguese authorities (the Central Department of Criminal Investigation and Prosecution, a part of the Public Prosecutor’s Office – “Departamento Central de Investigação e Ação Penal”, DCIAP) received complaints regarding (i) the methodology adopted for the early termination of the CAEs and the implementation of the CMEC mechanism and; (ii) EDP’s right of use over the DPH. Following the enactment of an EU legislation package regarding the construction of the Internal Energy Market, aimed at, among others, promoting the liberalization of the electricity sector, the existence of long-term Power Purchase Agreements (“Contratos de Produção de Energia” – CAE), and the Portuguese legal framework involving a “single buyer”, ceased to be compatible with EU law. So far as the complaint received by the EC is concerned, this institution addressed a clarification request to the Portuguese Government over the early termination of the CAEs, and its replacement by the CMEC framework. This methodology was subjected to the European Commission’s (EC) prior approval, expressed in the Decision concerning State aid N161/2004, which deemed it effective and strictly necessary. Additionally, the enactment of the aforementioned Decree-Law by the Portuguese Government was object of a legislative authorization, granted by the Portuguese Parliament. 426 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 On 19 January 2021, an Extraordinary General Shareholders’ Meeting was held, and a new management team was appointed to the Executive Board of Directors, for the 2021-2023 triennium. These in-depth investigation proceedings over EDP’s right of use over the DPH were formally concluded in May 2017, with the EC having decided that the consideration paid by EDP was in line with market conditions. It further concluded that the financial methodology followed to determine the price to be paid by EDP for the right of use over the DPH was appropriate and resulted in a fair market price, expressly adding that the accusations that such price (759 million euros) had been underappreciated were baseless, and resulted from an inaccurate financial calculation methodology. On 13 July 2020, and as in due course disclosed to the market (https://www.edp.com/sites/default/files/2020- 07/20200713_Notifica%C3%A7%C3%A3o%20do%20DCIAP_EN_0.pdf ), EDP was notified by the Portuguese Authorities to appoint a legal representative to appear at the DCIAP for questioning and constitution of EDP as defendant, for the facts related to the hiring by EDP Group of the father of the then Secretary of State Artur Trindade. Such diligence has already occurred and EDP was named as a defendant in the context of such judicial procedure and is now waiting for further developments of the procedure. EDP reaffirms that no irregularities exist regarding the matters at hand and believes the amounts due by the early termination of the CAEs and the proceedings regarding the DPH, in particular the amounts paid, were fair and according to market conditions. In 2 June 2017, EDP was made aware of the investigation being carried out by the DCIAP since 2012 regarding the amounts due to EDP for the early termination of the CAEs and the right of use over the DPH. On that date, the authorities carried out a search in EDP’s offices, as well as REN’s (as network operator) and a consultant. At that time, DCIAP informed, by way of a public press release, that investigations were ongoing, and the alleged facts could amount to active and passive corruption, and economic participation in business deals. The DCIAP further informed, in said press release, that some members of EDP’s Executive Board of Directors, as well as former directors who executed the relevant agreements, were suspects in that investigation. The EC decided, in September 2013, that the compensation attributed to EDP Produção in the context of the early termination of the CAEs did not exceed the amount required to reimburse the investment costs meant to be recovered throughout the operational life of the assets in question. Furthermore, it certified that the execution of the CMEC framework respected the terms that were notified to the EC, and approved, in 2004. Accordingly, the EC has at this stage concluded its investigation regarding the early termination of the CAEs. Having found no evidence of non-compliance with the framework in force in Portugal (approved by the EC itself in 2004) or at the EU level, it decided not to pursue an in-depth investigation on the matter. Simultaneously, in September 2013,the EC decided to undertake an in-depth investigation exclusively in respect of therightof use over the DPH matter. On 6 July 2020, a measure of constraint to suspend the exercise of functions in EDP’s Executive Board of Directors was proposed by the Public Prosecutor’s Office, and applied by the court, to António Mexia and João Manso Neto (then Chairman and member of the board, respectively), while the investigation remained in the inquiry stage. On the same day, the General and Supervisory Board and the Executive Board of Directors resolved to appoint then Chief Financial Officer Miguel Stilwell de Andrade as interim Chairman, for the duration of the impediment of the current Chairman of the Executive Board of Directors, in addition to his functions at the time. On 30 November 2020, and as communicated to the market on that same date, EDP received formal notices of both suspended members of the Executive Board of Directors, informing of their unavailability to be re-appointed to serve in EDP’s corporate bodies for the 2021-2023 term of office. 427 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 51\. Operating segments • Enerpeixe, S.A.; • EDP - Gestão da Produção de Energia, S.A. (hydro activity); The new Board of Directors, elected in January, considered that the last resort suppliers should be monitored in the Client Solutions & Management segment along with the other suppliers. Therefore the comparative data for this segment and the Networks segment (where it was allocated in 2020) have been amended accordingly. The Executive Board of Directors regularly reviews segmental reports, using Operating Profit to assess and release each business operating performance, as well as to allocate resources. • EDP España, S.A.U. (hydro activity); • EDP Renováveis, S.A. and all subsidiaries of the EDPR Group; The Group develops a set of regulated and liberalised activities in the energy sector, with special emphasis in generation, distribution and supply of electricity. EDP remains determined in the pursuit of its corporate purpose and in the fulfilment of its clients, shareholders, employees, and remaining stakeholders’ highest expectations. EDP is committed to the accomplishment of its strategic goals, and no impact to its consolidated financial statements is expected to arise as a consequence of the above. Regarding the judicial procedure, it is still under investigation and till the present date there are no relevant developments regarding the reason that uphold EDP as a defendant. In accordance with IFRS 8, an operating segment is a Group component: (i) that engages in business activities from which it may earn revenues and incur expenses; (iii) for which discrete financial information is available. (ii) whose operating results are reviewed regularly by the Group's chief operating decision maker to make decisions about The management of financial activities of all EDP Group entities (except Brazil) is undertaken centrally by the Financial Department at holding level, in accordance with policies approved by the Executive Board of Directors. As a result of this management, all financial operations and financial results are disclosed only at Group level. • Investco, S.A.; • Lajeado Energia, S.A. The Renewables segment corresponds to the activity of generation of electricity from renewable sources, mainly hydro, wind and solar. This segment includes, but not limited to, the following companies: 428 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 • Viesgo Distribución Eléctrica, S.L.; • Barras Eléctricas Galaico-Asturianas, S.A.; • EDP São Paulo Distribuição de Energia S.A.; • EDP Transmissão, S.A.; Under IFRS 8, the EDP Group discloses as Operating investment, additions in non-current assets, except for financial instruments, deferred tax assets and post-employment benefit assets. Therefore, in each business segment, the Operating Investment caption includes increases in Property, Plant and Equipment; Intangible Assets; and Amounts receivable from concessions - IFRIC 12 under the financial asset model, excluding CO2 licenses and Green certificates, net of increases in Government grants, customers contributions for investment and sales of properties in the period. Goodwill is disclosed in note 19\. The amounts reported in each operating segment result from the aggregation of the subsidiaries and business units defined in each segment perimeter and the elimination of transactions between companies of the same segment. The statement of financial position captions of each subsidiary and business unit, as well as income statement captions for each operating segment, are determined based on the amounts booked directly in the companies that compose the segment, including the elimination of balances between companies of the same segment, and excluding the allocation in the segments of the adjustments between segments. In each business segment, Assets include the Property, Plant and Equipment, Right-of-use assets, Intangible Assets and Goodwill. The remaining assets are presented in the "Reconciliation of information between Operating Segments and Financial Statements". • EDP España, S.A.U. (thermal and intermediation activities); • UNGE - Unidade de Negócio de Gestão de Energia Ibérica (EDP, S.A.); • Porto do Pecém Geração de Energia, S.A.; • EDP Comercial - Comercialização de Energia, S.A.; • EDP Trading Comercialização e Serviços de Energia, S.A.; Segment Definition • EDP Gás Serviço Universal, S.A. • Electra de Llobregat Energía, S.L.; • SU Eletricidade, S.A.; • EDP Transmissão Aliança SC, S.A.; • EDP Transmissão SP-MG, S.A. The Client Solutions & Energy Management segment includes the following activities: generation of electricity from non- renewable sources, mainly coal and gas; electricity and gas supply, including last resort suppliers and related energy solutions services to clients; and energy management businesses responsible for management of purchases and sales of energy in iberian and brazilian markets, and also for the related hedging transactions. This segment includes, but not limited to, the following companies: • EDP - Gestão da Produção de Energia, S.A. (thermal activity); The Networks segment corresponds to the activities of electricity distribution and transmission. This segment includes, but not limited to, the following companies: • E-Redes – Distribuição de Eletricidade, S.A.; • Hidrocantábrico Distribucion Eléctrica, S.A.U.; • EDP Espírito Santo Distribuição de Energia S.A.; 429 EDP Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements as at and for the periods ended 31 December 2021 and 2020 In consolidated financial statements, Joint Ventures and associated companies are accounted under the equity method, in accordance with the Group accounting policy disclose in note 2. These equity accounted investees are disclosed by business segment under IFRS 8 and presented in the business segment correspondent to its operating activity. 430 EDP Group Operating Segments Information as at 31 December 2021 Client Solutions Renewables Networks & Energy Total Thousand Euros Management Segments Revenues from energy sales and services and other 2,845,315 3,947,159 11,294,666 18,087,140 Revenues inter-segments 1,493,549 1,772,116 -144,309 3,121,356 Revenues from third parties 1,351,766 2,175,043 11,438,975 14,965,784 Gross Profit 2,194,992 2,070,887 572,962 4,838,841 Other income 856,810 109,693 38,504 1,005,007 Supplies and services -379,295 -324,133 -249,578 -953,006 Personnel costs and employee benefits -217,149 -202,214 -127,249 -546,612 Other costs -208,224 -308,113 -120,533 -636,870 Impairment losses on trade receivables and debtors 380 -19,258 -13,926 -32,804 Joint ventures and associates 46,292 256 22,103 68,651 Gross Operating Profit 2,293,807 1,327,118 122,283 3,743,208 Provisions -49,843 -7,145 -1,506 -58,494 Amortisation and impairment -787,402 -483,824 -424,230 -1,695,456 Operating Profit 1,456,561 836,148 -303,453 1,989,256 Assets 21,811,462 6,162,596 2,131,237 30,105,295 Financial assets - Investments in joint ventures and associates 1,084,193 190 15,677 1,100,060 Operating Investment 2,559,932 749,314 100,291 3,409,537 EDP ‐ Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended at 31 December 2021 and 2020 431 Thousand Euros 18,087,140 Revenues from energy sales and services and others from Other Segments 236,881 Adjustments and Inter-segments eliminations* -3,341,112 14,982,909 4,838,841 Gross Profit from Other Segments 235,344 Adjustments and Inter-segments eliminations* -239,294 Total Gross Profit of EDP Group 4,834,891 3,743,208 Gross Operating Profit from Other Segments 993 Adjustments and Inter-segments eliminations* -21,151 Total Gross Operating Profit of EDP Group 3,723,050 Total Operating Profit of Reported Segments 1,989,256 Operating Profit from Other Segments -47,629 Adjustments and Inter-segments eliminations* -10,842 Total Operating Profit of EDP Group 1,930,785 Total Assets of Reported Segments 30,105,295 Assets Not Allocated 20,243,025 Financial Assets 4,163,217 Trade Receivables and Other Debtors 8,596,510 Inventories 575,849 Tax Assets 2,234,780 Other Assets 4,672,669 Assets from Other Segments 703,191 Inter-segments assets eliminations* -57,359 Total Assets of EDP Group 50,994,152 1,100,060 250,385 1,350,445 Total Operating Investment of Reported Segments 3,409,537 Operating Investment from Other Segments 83,342 Total Operating Investment of EDP Group 3,492,879 Dismantling/discomission of PP&E 29,525 CO2 Emission Licenses and Green Certificates 428,026 Concession Rights - IFRIC 12 ** -588,620 Investment Grants -132 Other Investments 50,434 Total Fixed Assets additions of EDP Group (Notes 14 and 16) 3,412,112 Total of Reported Segments Other Segments Adjustments and Inter- segments Total of EDP Group Other income 1,005,007 40,654 -21,673 1,023,988 Supplies and services -953,006 -164,092 228,144 -888,954 Personnel costs and employee benefits -546,612 -123,350 3,503 -666,459 Other costs -636,870 -26,993 8,169 -655,694 Impairment losses on trade receivables and debtors -32,804 -25 1 -32,828 Equity method in joint ventures and associates 68,651 39,455 \- 108,106 \- Provisions -58,494 -2,016 \- -60,510 Amortisation and impairment -1,695,456 -46,606 10,307 -1,731,755 * Mainly related with intragroup balances and transactions eliminations. ** See Note 26 - Debtors and Other Assets from Commercial Activities Total Revenues from energy sales and services and other of Reported Segments Total Revenues from energy sales and services and other of EDP Group Total Equity accounted Investments in joint ventures and associates of Reported Segments Equity accounted Investments in joint ventures and associates from Other Segments Total Equity accounted Investments in joint ventures and associates of EDP Group Total Gross Profit of Reported Segments Total Gross Operating Profit of Reported Segments Reconciliation of information between Operating Segments and Financial Statements for 31 December 2021 EDP ‐ Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended at 31 December 2021 and 2020 432 EDP Group Operating Segments Information as at 31 December 2020 * Client Solutions Renewables Networks & Energy Total Thousand Euros Management Segments Revenues from energy sales and services and other 2,600,353 3,313,444 9,955,146 15,868,943 Revenues inter-segments 1,241,935 2,139,530 44,131 3,425,596 Revenues from third parties 1,358,418 1,173,913 9,911,015 12,443,346 Gross Profit 2,416,124 1,668,557 1,026,381 5,111,062 Other income 920,102 75,781 55,025 1,050,908 Supplies and services -355,222 -300,382 -294,678 -950,282 Personnel costs and employee benefits -190,367 -197,799 -169,731 -557,897 Other costs -176,234 -313,120 -109,192 -598,546 Impairment losses on trade receivables and debtors -110 -27,917 -35,670 -63,697 Joint ventures and associates -1,369 2,382 3,933 4,946 Gross Operating Profit 2,612,924 907,502 476,068 3,996,494 Provisions -73,265 -10,416 -27,980 -111,661 Amortisation and impairment -827,782 -371,525 -390,400 -1,589,707 Operating Profit 1,711,877 525,561 57,688 2,295,126 Assets 20,501,380 6,233,972 2,384,400 29,119,752 Financial assets - Investments in joint ventures and associates Assets 716,417 91 10,871 727,379 Operating Investment 2,134,995 619,219 110,647 2,864,861 EDP ‐ Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended at 31 December 2021 and 2020 * Includes reexpression caused by the change in monitoring of last resort suppliers and includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) 433 Thousand Euros 15,868,943 Revenues from energy sales and services and others from Other Segments 225,485 Adjustments and Inter-segments eliminations* -3,646,223 12,448,205 Total Gross Profit of Reported Segments 5,111,062 Gross Profit from Other Segments 225,201 Adjustments and Inter-segments eliminations* -244,545 Total Gross Profit of EDP Group 5,091,718 3,996,494 Gross Operating Profit from Other Segments * -43,640 Adjustments and Inter-segments eliminations* -2,892 Total Gross Operating Profit of EDP Group 3,949,962 Total Operating Profit of Reported Segments 2,295,126 Operating Profit from Other Segments -96,603 Adjustments and Inter-segments eliminations* 7,515 Total Operating Profit of EDP Group 2,206,038 Total Assets of Reported Segments 29,119,752 Assets Not Allocated 13,576,371 Financial Assets 3,193,367 Trade Receivables and Other Debtors 6,292,623 Inventories 323,945 Tax Assets 1,872,675 Other Assets 1,893,761 Assets from Other Segments 630,695 Inter-segments assets eliminations* -55,400 Total Assets of EDP Group 43,271,418 727,379 212,983 940,362 Total Operating Investment of Reported Segments 2,864,861 Operating Investment from Other Segments 44,330 Total Operating Investment of EDP Group 2,909,191 Discomission of Property, plant and equipment 65,050 CO2 Licenses and Green Certificates 237,321 Concession Rights - IFRIC 12 -502,126 Other Investments 1,083,946 Total Fixed Assets additions of EDP Group 3,793,382 Total of Reported Segments Other Segments Adjustments and Inter- segments eliminations* Total of EDP Group Other income 1,050,908 49,291 -22,510 1,077,689 Supplies and services -950,282 -166,347 260,110 -856,519 Personnel costs and employee benefits -557,897 -112,925 3,509 -667,313 Other costs -598,546 -37,178 544 -635,180 Impairment losses on trade receivables and debtors -63,697 7 \- -63,690 Joint ventures and associates 4,946 -1,688 \- 3,257 Provisions -111,661 -432 \- -112,093 Amortisation and impairment -1,589,707 -52,531 10,407 -1,631,831 * Mainly related with intragroup balances and transactions eliminations ** Includes the restatement arising from the change of the fair value of the identifiable assets and liabilities in the acquisition of Viesgo as described in note 2a) Total Revenues from energy sales and services and others of Reported Segments Total Revenues from energy sales and services and others of EDP Group Total Equity accounted Investments in joint ventures and associates of Reported Segments Equity accounted Investments in joint ventures and associates from Other Segments Total Equity accounted Investments in joint ventures and associates of EDP Group Total Gross Operating Profit of Reported Segments Reconciliation of information between Operating Segments and Financial Statements for 31 December 2020 ** EDP ‐ Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended at 31 December 2021 and 2020 434 52\. Reconciliation of Changes in the responsibilities of Financing activities at 31 December 2021 Institutional Loans Derivative partnerships from Loans Collateral financial in North Lease non- obtained Deposits instrument America Liabilities interests Thousand Euros (Note 34) (Note 34) (Note 42)* (Note 37) (Note 39) (Note 39) Balance as at 31 de December 2019 16,571,469 -61,476 -86,007 2,289,784 837,729 332,350 Cash flows: Receipts relating to financial debt (including Collateral Deposits) 5,907,155 20,528 \- \- \- \- (Payments) relating to financial debt (including Collateral Deposits) -6,459,862 -3,704 \- \- \- \- Interest and similar costs of financial debt including hedge derivatives -582,350 \- 12,195 \- \- \- Receipts/(payments) relating to loans from non-controlling interests \- \- \- \- \- 216,858 Interest and similar costs relating to loans from non-controlling interests \- \- \- \- \- -9,831 Receipts/(payments) relating to derivative financial instruments \- \- 12,776 \- \- \- Receipts/(payments) from institutional partnerships - USA \- \- \- 248,728 \- \- Lease (payments) \- \- \- \- -80,364 \- Perimeter variations 1,209,285 4 42,375 -320,944 -12,801 44,372 Exchange differences -855,183 12,579 -1,141 -181,398 -54,766 -8,091 Fair value changes -16,381 \- -110,016 \- \- \- Interests and accrued and deferred costs 512,630 \- 225 4,437 \- 14,766 Unwinding \- \- \- 94,718 39,735 \- ITC/PTC recognition \- \- \- -201,783 \- \- New lease contracts/Increments in rent values \- \- \- \- 324,827 \- Reclassification to Liabilities held for sale \- \- \- \- 1,318 \- Balance as at 31 de December 2020 16,286,763 -32,069 -129,593 1,933,542 1,055,678 590,424 Cash flows: Receipts relating to financial debt (including Collateral Deposits) 3,080,716 \- \- \- \- \- (Payments) relating to financial debt (including Collateral Deposits) -2,630,334 -19,183 \- \- \- \- Interest and similar costs of financial debt including hedge derivatives -471,489 \- -9,840 \- \- \- Receipts/(payments) relating to loans from non-controlling interests \- \- \- \- \- -53,679 Interest and similar costs relating to loans from non-controlling interests \- \- \- \- \- -18,244 Receipts/(payments) relating to derivative financial instruments \- \- 10,317 \- \- \- Receipts/(payments) from institutional partnerships \- \- \- 692,164 \- \- Lease (payments) \- \- \- \- -98,772 \- Perimeter variations -167,448 1,551 1,426 -413,306 -144,155 -65,017 Exchange differences 348,143 -374 1,050 168,318 51,456 1,955 Fair value changes -67,036 \- 112,293 \- \- Interests and accrued and deferred costs 455,897 \- 16,853 9,369 \- 17,318 Unwinding \- \- \- 79,023 39,510 \- ITC/PTC recognition \- \- \- -177,205 \- \- Change in Benefits Recognition \- \- \- -32,164 \- \- New lease contracts/Increments in rent values \- \- \- \- 158,285 \- Reclassification to Liabilities held for sale -17,276 \- -103 \- -12,554 -2 Balance as at 31 December 2021 16,817,936 -50,075 2,403 2,259,741 1,049,448 472,755 * The Group considers as financing activities all derivative financial instruments excluding derivatives related with commodities. Derivative Loans financial Lease Group obtained instrument Liabilities companies Thousand Euros (Note 34) (Note 42)* (Note 39) (Note 39) Balance as at 31 de December 2019 13,474,129 2,138 145,768 70,288 Cash flows: Receipts relating to financial debt (including Collateral Deposits) 1,942,863 \- \- \- (Payments) relating to financial debt (including Collateral Deposits) -4,365,029 \- \- \- Interest and similar costs of financial debt including hedge derivatives -347,023 -2,674 \- \- Receipts/(payments) relating to loans from related parties 476,868 \- \- -70,271 \- \- \- -3,145 Receipts/(payments) relating to derivative financial instruments \- -68,248 \- \- Lease (payments) \- \- -11,853 \- \- Exchange differences -20,102 \- \- \- Fair value changes \- 52,986 \- \- Unwinding \- \- 7,062 \- Interests and accrued and deferred costs 321,866 11,342 \- 7,001 New lease contracts/Increments in rent values \- \- 20,995 \- Balance as at 31 December 2020 11,483,572 -4,456 161,972 3,873 Cash flows: Receipts relating to financial debt (including Collateral Deposits) 2,452,048 \- \- \- (Payments) relating to financial debt (including Collateral Deposits) -2,068,048 \- \- \- Interest and similar costs of financial debt including hedge derivatives -218,264 -16,935 \- \- Receipts/(payments) relating to loans from related parties 1,159,901 \- \- -3,873 Receipts/(payments) relating to derivative financial instruments \- 20,585 \- \- Lease (payments) \- \- -12,502 \- Exchange differences 17,001 \- \- \- Fair value changes \- -39,886 \- \- Unwinding \- \- 4,948 \- Interests and accrued and deferred costs 208,089 21,332 \- 3,630 New lease contracts/Increments in rent values \- \- 1,936 \- Balance as at 31 December 2021 13,034,299 -19,360 156,354 3,630 * The Group considers as financing activities all derivative financial instruments excluding derivatives related with commodities. Interest and similar costs of loans from related parties including hedge derivatives EDP ‐ Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended at 31 December 2021 and 2020 Group instruments (including Collateral Deposits) Company Derivative financial instruments Financial debt and Derivative financial Financial debt and 435 53\. Explanation Added for Translation These financial statements are a free translation of the financial statements originally issued in Portuguese in accordance with International Financial Reporting Standards as adopted by the European Union. In the event of discrepancies, the Portuguese language version prevails. EDP ‐ Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended at 31 December 2021 and 2020 436 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 Annex I. Companies in the Consolidation Perimeter The subsidiary companies where the Group exercises control as at 31 December 2021 are as follows: Group's parent holding company and Related Activities: Portugal: EDP - Energias de Portugal, S.A. (Empresa-Matriz do Grupo EDP) Lisbon 3,965,681,012 EUR 29,752,741 20,539,636 9,213,105 5,201,964 824,070 CEO - Companhia de Energia Oceânica, S.A. Póvoa do Varzim 65,435 EUR 1,167 709 458 \- -249 52.07% CNET - Centre for New Energy Technologies, S.A. Sacavém 300,000 EUR 3,172 2,906 266 167 -200 60.00% EDP Estudos e Consultoria, S.A Lisbon 50,000 EUR 3,206 47 3,159 147 -143 100.00% 100.00% EDP Inovação, S.A. Lisbon 50,000 EUR 59,773 56,938 2,835 5,683 -953 100.00% 100.00% EDP Internacional, S.A. Lisbon 12,500,000 EUR 26,465 1,919 24,546 1,000 -365 100.00% 100.00% EDP IS – Investimentos e Serviços, Sociedade Unipessoal, Lda (ex-Balw Lisbon 140,309,500 EUR 464,354 188,541 275,814 \- 24,127 100.00% EDP Ventures, S.G.P.S., S.A. Lisbon 50,000 EUR 78,994 38,387 40,606 15 -2,645 100.00% EDP Ventures - Sociedade de capital de risco, S.A. Lisbon 125,000 EUR 1,022 59 963 124 39 100.00% ENAGÁS - S.G.P.S., S.A. Oporto 299,400 EUR 2,054 62 1,992 \- -22 60.00% Fundo EDP CleanTech FCR Lisbon 19,895,723 EUR 18,976 137 18,838 \- 151 60.00% LABELEC - Estudos, Desenvolvimento e Actividades Laboratoriais, S.ASacavém 2,200,000 EUR 20,264 9,909 10,356 17,177 1,933 100.00% 100.00% Sãvida - Medicina Apoiada, S.A Lisbon 450,000 EUR 20,585 12,429 8,156 23,614 1,729 100.00% 100.00% Other Countries: EDP - Ásia Soluções Energéticas Limitada Macao 1,500,000 MOP 1,980 22 1,959 \- -507 100.00% 5.00% EDP Finance BV Amesterdam 2,000,000 EUR 9,390,916 9,260,917 129,999 \- 10,473 100.00% 100.00% EDP International Investments and Services, S.L. Oviedo 9,116 EUR 1,307,017 156,427 1,150,589 \- 35,832 100.00% 100.00% EDP Servicios Financieros España, S.A.U. Oviedo 10,300,058 EUR 2,614,885 2,078,986 535,899 \- 518,212 100.00% 100.00% Energia RE - Sociedade Cativa de Resseguro Luxembourg 3,000,000 EUR 161,819 88,157 73,662 4 10,831 100.00% 100.00% Electricity and Gas Activity - Portugal: Electricity Generation: EDP Gestão Produção Energia, S.A. Lisbon 2,805,760,025 EUR 7,634,720 4,167,322 3,467,398 1,076,607 -67,378 100.00% 100.00% Empresa Hidroeléctrica do Guadiana, S.A. Lisbon 79,432,475 EUR 372,287 271,304 100,983 77,491 -16,835 100.00% FISIGEN - Empresa de Cogeração, S.A. Lisbon 50,000 EUR 29,818 30,945 -1,126 29,482 1,764 51.00% Greenvouga - Sociedade Gestora do Aproveitamento Hidroeléctrico deLisbon 1,000,000 EUR 229,188 178,672 50,516 10,361 254 100.00% TERGEN - Operação e Manutenção de Centrais Termoeléctricas, S.A. Carregado 250,000 EUR 4,209 3,000 1,209 6,409 -143 100.00% Electricity Distribution: E-Redes – Distribuição de Eletricidade, S.A. Lisbon 300,000,000 EUR 4,095,141 3,071,347 1,023,794 1,316,375 144,927 100.00% 100.00% Electricity Supply: EDP Comercial - Comercialização de Energia, S.A. Lisbon 64,500,005 EUR 995,434 726,474 268,961 3,265,547 65,258 100.00% 100.00% EDP Mediadora, S.A. Lisbon 50,000 EUR 8,571 1,154 7,418 3,269 1,951 100.00% Effizency, S.A. Lisbon 74,561 EUR 1,545 941 604 1,140 -248 94.61% SU Eletricidade, S.A. Lisbon 10,110,110 EUR 2,291,622 2,137,926 153,696 2,056,628 -16,423 100.00% 100.00% Gas Distribution: EDP Gás Serviço Universal, S.A. Oporto 1,050,996 EUR 11,254 2,503 8,750 8,934 -215 100.00% 100.00% Gas Supply: EDP GÁS.COM - Comércio de Gás Natural, S.A. Lisbon 50,000 EUR 506,185 417,129 89,056 732,362 -3,271 100.00% 100.00% Shared Services: EDP Global Solutions - Gestão Integrada de Serviços S.A. (ex-EDP-VA Lisbon 14,550,825 EUR 95,795 66,491 29,305 48,135 1,990 100.00% 100.00% Electricity and Gas Activity - Spain: Electricity Generation: EDP España, S.A.U. (Empresa-Matriz do Subgrupo HC Energia) Oviedo 421,739,790 EUR 3,470,573 1,001,658 2,468,915 2,549,146 -93,475 100.00% 100.00% Central Termica Ciclo Combinado Grupo 4, S.L. Oviedo 2,117,000 EUR 188,386 140,300 48,086 252,216 -30,050 100.00% Ceprastur, A.I.E. Oviedo \- EUR \- \- \- \- -44 95.00% Cogeneración Siderúrgica Asturiana, S.A.U. Oviedo 1,000,000 EUR 1,335 265 1,071 3,517 -206 100.00% IBERENERGIA, SAU Oviedo 60,200 EUR 246,908 204,436 42,473 91,674 27,934 100.00% Transporte GNL, S.A. Bilbau 1,000,000 EUR 136,739 132,664 4,075 37,871 5,648 100.00% Viesgo Producción, S.L. Santander 25,000,000 EUR 148,429 159,662 -11,233 145 -8,035 100.00% Electricity Distribution: Barras Eléctricas Galaico-Asturianas, S.A. Lugo 15,689,797 EUR 349,972 242,038 107,935 57,237 18,864 75.05% Electra Llobregat Energía, S.L. Barcelona 90,000 EUR 4,504 2,647 1,857 338 5 56.33% Hidrocantábrico Distribucion Eléctrica, S.A.U. Oviedo 44,002,000 EUR 985,906 769,081 216,825 250,177 100,606 75.10% Viesgo Distribución Eléctrica, S.L. Santander 77,792,000 EUR 1,117,349 898,821 218,528 183,508 63,289 75.10% Electricity Supply: Biomasa Puente Nuevo S.L.U. Oviedo 3,000 EUR 3 \- 3 \- \- 100.00% Comercializadora Energética Sostenible, S.A. Bilbau 60,000 EUR 109 28 81 127 8 100.00% EDP Clientes, S.A. Oviedo 1,000,000 EUR 1,345,653 1,807,708 -462,055 1,505,524 -50,524 100.00% EDP Energia Ibérica, S.A. Oviedo 60,200 EUR 55 12,980 -12,924 \- 2 100.00% EDP Solar España, S.A. Oviedo 1,000,000 EUR 25,677 20,161 5,516 14,245 -6,251 100.00% Subsidiaries Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group % Company HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 437 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 Other activities: EDP Ventures España, S.A. Oviedo 60,000 EUR 257 201 57 \- -2 100.00% EDP Iberia, S.L. Bilbau 130,260,000 EUR 1,376,439 87,208 1,289,231 \- 4,613 100.00% Fresco Redes International, S.L. Oviedo 145,000 EUR 196,927 178,934 17,992 \- -820 75.10% Fresco Redes Investments, S.L.U. Oviedo 130,000 EUR 237,263 91,069 146,194 61 -866 75.10% EDP Redes España, S.L.U. Oviedo 10,000,000 EUR 1,408,129 1,035,992 372,137 1,400 -14,823 75.10% Viesgo Infraestructuras Energéticas, S.L. Santander 147,195,418 EUR 1,470,425 1,254,489 215,937 54,269 -19,455 75.10% Viesgo Holdco, S.A. Santander 15,000 EUR 1,851,473 1,165,821 685,652 \- 2,497 75.10% IE2 HoldCo, S.A. Santander 60,000 EUR 1,069,104 1,064,639 4,465 \- 2,162 75.10% Electricity and Gas Activity - Other Countries: Electricity Supply: EDP Energia Italia S.R.L. Milan 3,610,000 EUR 20,982 16,851 4,131 13,570 -2,562 100.00% EDP Energia Polska Warsaw 8,505,000 PLN 12,040 9,162 2,878 3,452 -2,922 100.00% EDP Energie France Paris 10,000 EUR 161 147 15 \- -58 100.00% Enertel Group S.r.l. Verona 200,000 EUR 10,131 8,955 1,176 17,808 920 100.00% Electricity Activity - Brazil: Parent company and Related Activities: EDP Energias do Brasil, S.A. (Empresa-Matriz do Subgrupo EDP Brasil) São Paulo 5,502,715,947 BRL 1,988,750 216,976 1,771,773 467 337,752 55.97% Electricity Generation: Energest, S.A. São Paulo 3,204,770 BRL 75,685 32,461 43,224 48,349 21,336 55.97% Enerpeixe, S.A. São Paulo 219,735,966 BRL 295,871 190,362 105,509 66,070 -442 33.58% Investco, S.A. Tocantins 804,458,843 BRL 183,563 38,926 144,637 19,884 4,324 22.82% Lajeado Energia, S.A. São Paulo 6,867,541 BRL 208,435 104,249 104,186 112,300 60,025 31.27% Porto do Pecém Geração de Energia, S.A. Ceará 2,368,998,621 BRL 625,084 191,683 433,401 366,406 38,662 55.97% Resende Engenharia e Assessoria, Ltda. São Paulo 21,573,318 BRL 3,362 5 3,357 \- -3 55.97% Electricity Distribution: EDP Espírito Santo Distribuição de Energia S.A. Espírito Santo 650,572,403 BRL 1,045,564 825,019 220,545 822,511 69,298 55.97% EDP São Paulo Distribuição de Energia S.A. São Paulo 596,669,107 BRL 1,146,513 939,402 207,111 1,012,939 69,662 55.97% Electricity Supply: EDP Smart Energia, Ltda São Paulo 4,531,000 BRL 19,374 16,160 3,214 24,271 2,103 55.97% EDP Smart Serviços, S.A. Espírito Santo 195,886,011 BRL 81,854 62,189 19,666 3,653 -9,979 55.97% EDP Smart Soluções, S.A. Rio Grande do Sul 122,972,773 BRL 25,020 7,888 17,132 7,555 -1,245 55.97% EDP Trading Comercialização e Serviços de Energia, S.A. São Paulo 221,679,595 BRL 344,299 289,020 55,279 442,573 9,403 55.97% UFV SP V Equipamentos Fotovoltaicos Ltda. São Paulo 13,541,069 BRL 2,354 25 2,329 488 193 55.97% Transmission of Electricity: AES Tietê Inova Soluções de Energia LTDA. São Paulo 87,351,253 BRL 25,224 12,226 12,998 582 -150 55.97% AES Tietê Inova Soluções de Energia II LTDA. São Paulo 1,183,819 BRL 333 299 34 \- -14 55.97% EDP Transmissão Aliança SC, S.A. Espírito Santo 164,500,999 BRL 367,140 312,755 54,385 95,651 14,075 50.37% EDP Transmissão Litoral Sul S.A. São Paulo 127,755,430 BRL 48,698 32,298 16,400 26,357 -648 55.97% EDP Transmissão Norte S.A. Espírito Santo 1,000 BRL 2,287 2,305 -19 1,272 -19 55.97% EDP Transmissão SP-MG, S.A. São Paulo 33,000,999 BRL 394,333 348,185 46,149 97,473 21,072 55.97% Mata Grande Transmissora de Energia LTDA. Paraná 17,529,870 BRL 19,396 17,365 2,031 9,768 -335 55.97% Nova Geração Solar LTDA. São Paulo 2,518,124 BRL 455 403 52 \- -18 55.97% PCH Santa Leopoldina S.A. Espírito Santo 10,000 BRL 398 567 -169 \- -167 55.97% Other Activities: EDP Ventures Brasil S.A. São Paulo 22,200,999 BRL 6,127 3,072 3,055 \- -210 55.97% Renewable Energy Activity: Parent company and Related Activities: EDP Renováveis, S.A. (EDP Renováveis Subgroup Parent Company) Oviedo 4,802,790,810 EUR 10,980,808 2,987,345 7,993,463 63,066 -95,360 74.98% 74.98% EDP Renováveis Servicios Financieros, S.A. Oviedo 84,691,368 EUR 6,095,262 5,640,931 454,331 32,486 37,204 74.98% Europe Geography / Platform: Spain: EDP Renewables Europe, S.L.U. (EDPR EU Subgroup Parent Company)Oviedo 249,498,800 EUR 3,723,711 2,027,721 1,695,989 81,610 -805,912 74.98% Acampo Arias, S.L. Zaragoza 3,314,300 EUR 50,957 35,948 15,008 15,058 8,550 71.23% Aplicaciones Industriales de Energías Limpias, S.L. Zaragoza 131,288 EUR 1,375 \- 1,375 \- 1,299 46.11% Canerde, S.L.U. Madrid 4,000 EUR 75 73 3 \- -1 59.98% Compañía Eólica Aragonesa, S.A. Zaragoza 6,701,165 EUR 139,714 27,584 112,130 38,306 19,077 74.98% Desarrollos Eólicos de Teruel, S.L. Zaragoza 18,890,100 EUR 53,958 35,068 18,890 \- \- 38.24% Desarrollos Renovables de Teruel, S.L. Teruel 3,000 EUR 3 1 3 \- \- 74.98% EDP Renovables España, S.L.U. Oviedo 46,128,100 EUR 1,462,579 656,314 806,265 256,320 60,335 74.98% EDPR México, S.L.U. Oviedo 3,000 EUR 3 2 1 \- \- 74.98% EDPR Terral S.L.U. Madrid 3,000 EUR 410 409 1 \- -1 74.98% EDPR Yield, S.A.U. Oviedo 99,405,403 EUR 229,552 14,431 215,121 \- 26,703 74.98% Eólica Arlanzón, S.A. Madrid 4,508,980 EUR 20,113 5,112 15,001 6,913 3,578 63.73% Eólica Campollano, S.A. Madrid 6,559,994 EUR 68,414 27,514 40,900 26,390 12,580 56.23% Eólica Fontesilva, S.L.U. La Coruña 6,860,000 EUR 43,712 22,840 20,872 10,397 4,318 74.98% Eólica La Brújula, S.A.U. Madrid 3,294,000 EUR 51,250 29,009 22,241 6,516 515 74.98% Eólica La Janda, S.L.U. Madrid 4,525,000 EUR 196,677 152,837 43,840 40,103 18,246 74.98% Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group % Company 438 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 IAM Caecius, S.L. Madrid 3,000 EUR 3 1 2 \- \- 74.98% Iberia Aprovechamientos Eólicos, S.A. Zaragoza 1,918,728 EUR 19,348 11,622 7,726 6,073 2,695 70.48% Northeolic Monte Buño, S.L. Cantabria 4,000 EUR 43 14 28 \- 179 56.23% Parc Eòlic Serra Voltorera, S.L.U. Barcelona 3,458,010 EUR 23,594 11,220 12,374 4,012 1,280 74.98% Parque Eólico Altos del Voltoya, S.A. Madrid 6,434,349 EUR 32,102 15,914 16,189 13,159 -2,613 69.35% Parque Eólico de Abrazadilla, S.L.U. Madrid 3,000 EUR 1 \- 1 \- \- 74.98% Parque Eólico La Sotonera, S.L. Zaragoza 2,000,000 EUR 14,329 3,926 10,403 5,882 3,153 52.36% Parque Eólico Los Cantales, S.L.U. Zaragoza 1,963,050 EUR 22,129 15,738 6,392 4,940 2,141 74.98% Parque Eólico Santa Quiteria, S.L. Zaragoza 63,006 EUR 18,281 4,413 13,868 7,437 3,760 62.95% Renovables Castilla La Mancha, S.A. Madrid 60,102 EUR 28,423 19,785 8,639 6,717 2,688 67.48% Site Sunwind Energy, S.L. Madrid 3,000 EUR 3 1 2 \- \- 74.98% Tébar Eólica, S.A.U. Madrid 4,720,400 EUR 21,342 5,123 16,220 11,211 6,436 74.98% Viesgo Europa, S.L.U. Cantabria 1,000,000 EUR 31,433 23,129 8,304 7,881 4,851 74.98% Viesgo Mantenimiento, S.L.U. Cantabria 3,050 EUR 1,875 421 1,454 2,210 528 74.98% Viesgo Renovables, S.L.U. Cantabria 12,769,690 EUR 334,667 96,550 238,117 23,863 29,409 74.98% Portugal: EDP Renováveis Portugal, S.A. Oporto 7,500,000 EUR 452,569 285,114 167,455 128,946 46,532 38.24% EDP Renewables SGPS, S.A. Oporto 50,000 EUR 472,581 28,005 444,575 \- 328,748 74.98% EDPR PT - Parques Eólicos, S.A. Oporto 50,000 EUR 101,002 54,729 46,274 8 8,298 38.24% EDPR PT - Promoção e Operação, S.A. Oporto 57,500 EUR 23,695 23,554 141 14,304 -5,429 74.98% Eólica da Coutada, S.A. Vila Pouca de Aguiar 50,000 EUR 146,718 86,085 60,633 26,751 9,067 38.24% Eólica da Serra das Alturas, S.A. Boticas 50,000 EUR 11,607 3,301 8,306 3,114 1,401 19.16% Eólica da Terra do Mato, S.A. Oporto 50,000 EUR 42,063 29,154 12,909 7,282 1,984 38.24% Eólica das Serras das Beiras, S.A. Arganil 50,000 EUR 93,186 49,344 43,842 19,189 8,094 38.24% Eólica de Alagoa, S.A. Arcos de Valdevez 50,000 EUR 7,148 2,704 4,445 2,292 806 22.94% Eólica de Montenegrelo, S.A. Vila Pouca de Aguiar 50,000 EUR 18,706 5,686 13,020 5,697 2,572 19.16% Eólica do Alto da Lagoa, S.A. Oporto 50,000 EUR 21,268 8,396 12,872 4,608 1,348 38.24% Eólica do Alto da Teixosa, S.A. Alhões 50,000 EUR 25,141 13,762 11,379 4,748 1,444 38.24% Eólica do Alto do Mourisco, S.A. Boticas 50,000 EUR 22,276 12,321 9,955 4,469 1,694 38.24% Eólica do Espigão, S.A. Miranda do Corvo 50,000 EUR 26,260 10,768 15,492 5,750 1,837 38.24% Eólica dos Altos de Salgueiros-Guilhado, S.A. Vila Pouca de Aguiar 50,000 EUR 10,875 6,250 4,625 2,181 780 38.24% Eoliser - Serviços de Gestão para Parques Eólicos, Lda. Lisbon 264,085 EUR 3,684 2,864 820 2,870 27 74.98% Fotovoltaica Lote A, S.A. Oporto 50,000 EUR 14,631 14,697 -66 \- -54 74.98% IE2 Portugal, SGPS, S.A. Lisbon 331,187 EUR 3,935 2,213 1,721 677 148 74.98% Malhadizes - Energia Eólica, S.A. Oporto 50,000 EUR 17,226 6,333 10,893 5,452 2,431 38.24% Parque Eólico do Barlavento, S.A. Lisbon 60,000 EUR 42,681 10,621 32,059 14,334 4,706 67.46% S.E.E. - Sul Energía Eólica, S.A. Lisbon 150,000 EUR 8,599 1,742 6,857 3,008 1,193 74.98% France: EDPR France Holding, S.A.S. Paris 79,900,000 EUR 365,149 248,778 116,372 25,393 5,431 74.98% Le Chemin de la Corvée, S.A.S. Paris 215,000 EUR 4,499 4,477 22 \- -51 74.98% Monts de la Madeleine Energie, S.A.S. Paris 88,000 EUR 1,387 1,344 43 \- -13 74.98% Monts du Forez Energie, S.A.S. Paris 200,000 EUR 1,175 1,064 111 \- -12 74.98% Parc Éolien d’Entrains-sur-Nohain, S.A.S. Paris 266,000 EUR 646 6 640 \- -9 67.48% Parc Eolien de Dionay, S.A.S. Paris 215,000 EUR 1,763 1,651 112 \- -20 74.98% Transition Euroise Roman II, S.A.S. Paris 603,000 EUR 10,484 9,894 589 \- -9 63.73% Vanosc Energie, S.A.S. Paris 1,000 EUR 804 806 -2 \- -2 74.98% Poland: Budzyn, Sp. z o.o. Warsaw 5,000 PLN \- 20 -20 \- -18 38.24% EDP Renewables Polska HoldCo, S.A. Warsaw 100,100 PLN 226,590 51,976 174,614 \- 11,110 38.24% EDP Renewables Polska Solar, Sp. Zo.o. Warsaw 5,000 PLN 1,926 1,818 108 \- -168 74.98% EDP Renewables Polska, Sp. z o.o. Warsaw 435,045,000 PLN 555,197 373,974 181,222 11,140 218 74.98% Elektrownia Kamienica, Sp. z o.o. Warsaw 5,000 PLN 594 610 -16 \- -8 74.98% Elektrownia Wiatrowa Kresy I, Sp. z o.o. Warsaw 70,210 PLN 104,586 23,335 81,251 23,785 12,190 38.24% EW Dobrzyca, Sp. z o.o. Warsaw 674,000 PLN 79,949 73,147 6,802 \- 110 74.98% EWP European Wind Power Krasin, Sp. z o.o. Warsaw 7,190,000 PLN 48,392 45,609 2,783 2,198 1,521 74.98% Farma Fotowoltaiczna Koden, Sp. z o.o. Warsaw 5,000 PLN 654 660 -6 \- -7 74.98% Farma Wiatrowa Bogoria, Sp. z o.o. Warsaw 2,395,000 PLN 39,048 36,674 2,375 \- -326 74.98% Farma Wiatrowa Starozreby, Sp. z o.o. Warsaw 466,000 PLN 286 2 285 \- -16 74.98% FW Warta, Sp. z o.o. Warsaw 10,000 PLN 16,716 16,651 65 \- 5 74.98% Gudziki Wind Farm, Sp. z o.o. Warsaw 5,000 PLN 1 46 -44 \- -23 38.24% Korsze Wind Farm, Sp. z o.o. Warsaw 38,855,000 PLN 131,061 91,350 39,711 30,455 14,906 38.24% Kowalewo Wind, Sp. z o.o. Warsaw 89,900 PLN 39,015 37,414 1,601 1,966 1,225 74.98% Lichnowy Windfarm, Sp. z o.o. Warsaw 865,500 PLN 31,253 29,945 1,308 3,330 943 74.98% Masovia Wind Farm I, Sp. z o.o. Warsaw 1,258,000 PLN 121 146 -24 \- -32 74.98% Miramit Investments, Sp. z o.o. Warsaw 55,000 PLN 475 318 156 \- -12 74.98% Molen Wind II, Sp. z o.o. Warsaw 14,600 PLN 63,559 46,486 17,072 13,127 4,960 38.24% Neo Solar Chotków, Sp. z o.o. Warsaw 5,000 PLN 3,726 3,746 -20 \- -3 74.98% Neo Solar Farm, Sp. z o.o. Warsaw 5,000 PLN 4,642 3,052 1,590 \- 408 74.98% Neo Solar Przykona II, Sp. z o.o. Warsaw 5,000 PLN 972 1,015 -42 \- -5 74.98% Nowa Energia 1, Sp. z o.o. Warsaw 6,983,300 PLN 73,824 72,938 885 \- -421 74.98% R.Wind, Sp. z o.o. Warsaw 6,000 PLN 751 779 -28 \- -13 74.98% % Company Liabilities 31-Dec-21 Euro'000 Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group 439 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 Radziejów Wind Farm, Sp. z o.o. Warsaw 27,605,000 PLN 28,746 24,986 3,760 4,909 1,665 38.24% Rampton, Sp. z o.o. Warsaw 11,005,000 PLN 2,470 139 2,331 304 -24 74.98% Relax Wind Park I, Sp. z o.o. Warsaw 46,540,000 PLN 115,291 82,506 32,785 26,756 10,665 38.24% Relax Wind Park III, Sp. z o.o. Warsaw 59,603,000 PLN 193,813 171,748 22,065 17,839 5,889 38.24% Rowy-Karpacka Mala Energetyka, Sp. z o.o. Warsaw 50,000 PLN 81 530 -450 \- -35 74.98% Ujazd, Sp. z o.o. Warsaw 4,648,016 PLN 37,217 37,402 -185 \- -397 74.98% WF Energy III, Sp. z o.o. Warsaw 5,000 PLN 6 \- 6 \- \- 74.98% Wind Field Wielkopolska, Sp. z o.o. Warsaw 505,000 PLN 68,528 68,878 -350 \- 265 74.98% Winfan, Sp. z o.o. Warsaw 20,000 PLN 11,533 11,447 85 \- -17 74.98% Romania: Beta Wind, S.R.L. Bucharest 207,470 RON 5,380 147 5,233 \- \- 74.98% EDPR România, S.R.L. Bucharest 1,491,259,750 RON 649,692 146,119 503,572 86,056 43,841 74.98% Energopark, S.R.L. Bucharest 133,720 RON 1,630 1,447 183 \- -557 74.98% International Solar Energy, S.R.L. Bucharest 200 RON 41 43 -1 \- -1 74.98% Solar Phoenix, S.R.L. Bucharest 79,300 RON 89 94 -5 \- -1 74.98% Great Britain: Altnabreac Wind Farm Limited Edinburgh 100 GBP 980 1,280 -300 \- -293 74.98% Ben Sca Wind Farm Limited Edinburgh 100 GBP 2,244 2,559 -315 \- -303 74.98% Drummarnock Wind Farm Limited Edinburgh 100 GBP 640 937 -297 \- -290 74.98% Lurg Hill Wind Farm Ltd Edinburgh 100 GBP \- 412 -412 \- -403 74.98% Moorshield Wind Farm Limited Edinburgh 100 GBP 975 1,277 -302 \- -293 74.98% Muirake Wind Farm Ltd Edinburgh 100 GBP 4,704 5,299 -595 444 -216 59.23% Vento Ludens Ltd Edinburgh 8,000 GBP 7,489 6,439 1,050 1,005 38 74.98% Wind 2 Project 1 Limited Edinburgh 100 GBP 694 990 -297 \- -290 74.98% Italy: Aria del Vento Milan 11,000 EUR 33,344 3,106 30,239 4,541 1,892 74.98% AW 2, S.r.l. Milan 100,000 EUR 24,500 18,915 5,585 5,418 2,374 56.23% Breva Wind, S.r.l. Milan 7,100,000 EUR 68,636 63,396 5,240 16 -705 74.98% C & C Tre Energy S.r.l. Milan 100,000 EUR 7,270 6,282 988 \- -42 74.98% Conza Energia, S.R.L. Milan 456,000 EUR 41,395 31,714 9,681 9,523 4,693 74.98% Custolito, S.R.L. Milan 10,000 EUR 135 110 24 \- -10 74.98% EDP Renewables Italia Holding, S.R.L. Milan 347,000 EUR 212,580 156,179 56,401 6,067 6,769 74.98% EDP Renewables Italia, S.R.L. Milan 34,439,343 EUR 184,454 118,867 65,587 21,732 14,546 38.24% EDPR Centro Italia PV, S.r.l. Milan 10,000 EUR 10 \- 10 \- \- 74.98% EDPR Sicilia PV, S.R.L. Milan 10,000 EUR 2,142 2,120 22 \- -27 74.98% EDPR Sicilia Wind, S.r.l. Milan 10,000 EUR 952 938 14 \- -41 74.98% EDPR Villa Galla, S.R.L. Milan 9,000,000 EUR 103,600 27,383 76,216 30,692 15,665 38.24% Energia Emissioni Zero 4, S.r.l. Naples 10,000 EUR 25,264 25,008 256 \- -72 44.99% Giglio, S.r.l. Milan 20,000 EUR 3,748 2,600 1,149 \- -75 44.99% Lucus Power, S.r.l. Milan 10,000 EUR 27,148 19,474 7,674 5,463 2,541 74.98% Re Plus, S.R.L. Milan 100,000 EUR 796 710 86 \- -14 74.98% San Mauro, S.R.L. Milan 70,000 EUR 20,268 15,950 4,318 4,041 1,827 56.23% Sarve, S.r.l. Milan 10,000 EUR 49,100 49,222 -122 \- -243 74.98% T Power, S.p.A. Milan 1,000,000 EUR 1,476 138 1,338 \- -880 74.98% TACA Wind, S.R.L. Milan 1,160,000 EUR 29,543 19,640 9,904 5,991 2,712 74.98% Tivano, S.R.L. Milan 100,000 EUR 21,419 17,414 4,006 4,165 1,760 56.23% VRG Wind 153, S.r.l. Rovereto 10,000 EUR 12,942 12,579 363 \- -117 74.98% WinCap, S.R.L. Milan 2,550,000 EUR 31,529 19,764 11,765 5,812 3,354 74.98% Wind Energy San Giorgio, S.r.l. Milan 20,000 EUR 5,783 5,140 643 \- -90 44.99% Greece: Aioliki Oitis Energiaki Single-Member LLC Athens 4,500 EUR 793 1,858 -1,065 \- -981 74.98% Aioliko Parko Fthiotidos Erimia E.P.E. Agia Paraskevi 154,500 EUR 6,129 5,416 712 \- -476 74.98% EDPR Hellas 1 M.A.E. Attica 1,255,000 EUR 6,921 5,471 1,450 \- -489 74.98% EDPR Hellas 2 M.A.E. Attica 470,000 EUR 3,418 1,510 1,908 \- -358 74.98% Energiaki Arvanikou E.P.E. Athens 1,312,380 EUR 60,534 44,875 15,659 631 -1,601 74.98% Kadmeios Anemos Energiaki, A.E. Athens 25,000 EUR 520 1,448 -928 \- -933 74.98% Voiotikos Anemos Energy, A.E. Athens 25,000 EUR 177 311 -135 \- -81 74.98% Wind Park Aerorrachi M.A.E. Athens 496,020 EUR 4,163 2,817 1,346 \- -489 74.98% Wind Shape, Ltd. Attica 18,000 EUR 1,059 1,220 -162 \- -127 74.98% Other Countries: EDP Renewables Belgium, S.A. Brussels 286,500 EUR 18,582 17,349 1,233 2,178 642 74.98% EDP Renewables Hungary Hungry 180,000,000 HUF 225 1,512 -1,287 80 -1,574 74.98% EDPR International Investments, B.V. Amesterdam 20,000 EUR 12,737 2,120 10,617 \- 7,324 74.98% EDPR Investment Hungary, Kft. Hungry 6,000,000 HUF 16 45 -29 \- -46 74.98% Nyírség Watt, Kft. Hungry 338,700,000 HUF 1,437 600 837 \- 312 74.98% Sunlight Solar, Kft. Hungry 196,000,000 HUF 1,545 1,491 54 \- -700 63.73% Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group % Company 440 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 North America Geography / Platform: United States of America: EDP Renewables North America LLC (EUA Subgroup Parent CompanyDelaware 5,184,917,755 USD 4,832,396 854,682 3,977,715 42,196 80,948 74.98% 10 Point Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% 17th Star Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% 2007 Vento I LLC Delaware 529,176,487 USD 522,158 6,045 516,114 7,264 721 74.98% 2007 Vento II LLC Delaware 278,820,333 USD 241,591 416 241,175 \- -125 38.24% 2008 Vento III LLC Delaware 398,671,607 USD 347,849 1,989 345,860 \- -9 38.24% 2009 Vento V LLC Delaware 14,976,549 USD 12,085 36 12,049 \- -5 38.24% 2011 Vento IX LLC Delaware 65,888,637 USD 57,437 414 57,023 \- -104 38.24% 2011 Vento X LLC Delaware 83,783,464 USD 72,970 93 72,878 \- -102 74.98% 2014 Sol I LLC Delaware 62,233,969 USD 54,408 33 54,375 \- -67 37.49% 2014 Vento XI LLC Delaware 217,796,519 USD 192,311 110 192,201 \- -4 38.24% 2014 Vento XII LLC Delaware 111,494,540 USD 98,446 117 98,329 \- -6 38.24% 2015 Vento XIII LLC Delaware 272,149,377 USD 239,583 153 239,430 \- -99 38.24% 2015 Vento XIV LLC Delaware 238,816,034 USD 210,248 25 210,223 \- -97 38.24% 2016 Vento XV LLC Delaware 430,273,511 USD 386,994 7,687 379,307 \- -100 74.98% 2016 Vento XVI LLC Delaware 167,475,870 USD 147,469 155 147,313 \- -96 74.98% 2017 Sol II LLC Delaware 109,377,411 USD 96,482 63 96,419 \- -18 74.98% 2018 Vento XVIII LLC Delaware 450,352,377 USD 397,670 466 397,203 \- -88 74.98% 2019 Vento XXI LLC Delaware 246,406,995 USD 218,497 1,067 217,430 \- -76 74.98% 2020 Vento XXII LLC Delaware 805,855,420 USD 713,277 1,713 711,564 \- 52 74.98% 2021 DG Agora Holdings LLC Delaware \- USD \- 5,258 -5,258 \- \- 63.73% 2021 DG Agora Sol I LLC Delaware \- USD \- \- \- \- \- 63.73% 2021 DG Agora Ventures I LLC Delaware 5,743,317 USD 7,082 2,049 5,033 \- -36 63.73% 2021 DG Apollo Sol II LLC Delaware \- USD \- 1 \- \- 68 63.73% 2021 DG Apollo Ventures II LLC Delaware \- USD 1 1 \- \- \- 63.73% 2021 DG CA Agora Holdings LLC Delaware 56,417 USD 52 2 50 \- \- 63.73% 2021 DG CA Agora Sol I LLC Delaware \- USD \- \- \- \- \- 63.73% 2021 DG CA Agora Ventures I LLC Delaware 320,743 USD 290 7 283 \- \- 63.73% 2021 DG CA Apollo Sol II LLC Delaware \- USD \- \- \- \- \- 63.73% 2021 DG CA Apollo Ventures II LLC Delaware \- USD \- \- \- \- \- 63.73% 2021 Vento XXIII LLC Delaware 161,243,163 USD 142,365 \- 142,365 \- \- 74.98% Alabama Ledge Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Alabama Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Amsterdam 3 Solar LLC Delaware \- USD \- \- \- \- \- 63.73% Antelope Ridge Wind Power Project LLC Delaware 12,828,809 USD \- \- \- \- \- 74.98% Arbuckle Mountain Wind Farm LLC Delaware 145,050,648 USD 130,338 10,532 119,806 7,443 -1,556 38.24% Arkwright Summit Wind Farm LLC Delaware 182,579,749 USD 183,997 17,877 166,120 11,161 1,408 74.98% Arlington Wind Power Project LLC Delaware 59,575,189 USD 96,045 7,992 88,052 14,655 5,206 38.24% Aroostook Wind Energy LLC Delaware 46,845,757 USD 36,731 174 36,556 \- -4 74.98% Ashford Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Athena-Weston Wind Power Project II LLC Delaware \- USD \- \- \- \- \- 74.98% Athena-Weston Wind Power Project LLC Delaware \- USD \- \- \- \- \- 74.98% Avondale Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% AZ Nohave Solar LLC Delaware 725,625 USD 666 25 641 \- \- 63.73% AZ Solar LLC Delaware \- USD \- \- \- \- \- 74.98% Azalea Springs Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Bayou Bend Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% BC2 Maple Ridge Holdings LLC Delaware \- USD \- \- \- \- \- 74.98% BC2 Maple Ridge Wind LLC Delaware 268,810,612 USD 108,202 4,815 103,387 \- -7,334 74.98% Big River Wind Power Project LLC Delaware \- USD \- \- \- \- \- 74.98% Black Prairie Solar Park II LLC Delaware \- USD \- \- \- \- \- 74.98% Black Prairie Solar Park LLC Delaware 1,009,233 USD 926 35 891 \- \- 74.98% Black Prairie Storage II LLC Delaware \- USD \- \- \- \- \- 74.98% Black Prairie Storage LLC Delaware \- USD \- \- \- \- \- 74.98% Black Prairie Wind Farm II LLC Delaware \- USD \- \- \- \- \- 74.98% Black Prairie Wind Farm III LLC Delaware \- USD \- \- \- \- \- 74.98% Black Prairie Wind Farm LLC Delaware 1,181,149 USD 1,042 2 1,040 \- \- 74.98% Blackford County Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Blackford County Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Blackstone Wind Farm II LLC Delaware 193,151,150 USD 269,924 95,140 174,784 18,800 3,039 74.98% Blackstone Wind Farm III LLC Delaware 6,275,439 USD \- \- \- \- \- 74.98% Blackstone Wind Farm IV LLC Delaware \- USD \- \- \- \- \- 74.98% Blackstone Wind Farm LLC Delaware 87,477,977 USD 122,043 43,225 78,818 10,185 2,060 74.98% Blackstone Wind Farm V LLC Delaware \- USD \- \- \- \- \- 74.98% Blissville Road LLC Delaware 2,391,391 USD 2,212 101 2,111 112 10 63.73% Blue Canyon Windpower II LLC Texas 145,146,676 USD 203,428 112,052 91,375 4,167 -6,309 74.98% Blue Canyon Windpower III LLC Texas \- USD \- \- \- \- \- 74.98% Blue Canyon Windpower IV LLC Texas \- USD \- \- \- \- \- 74.98% Blue Canyon Windpower V LLC Texas 13,687,120 USD 107,797 7,760 100,037 17,914 7,525 38.24% Blue Canyon Windpower VI LLC Delaware 82,645,726 USD 98,642 8,871 89,772 6,884 -1,742 74.98% % Company Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group 441 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 Blue Canyon Windpower VII LLC Delaware \- USD \- \- \- \- \- 74.98% Blue Harvest Solar Park LLC Delaware 3,021,557 USD 3,315 666 2,648 \- -19 74.98% Blue Marmot I LLC Delaware \- USD \- \- \- \- \- 74.98% Blue Marmot II LLC Delaware \- USD \- \- \- \- \- 74.98% Blue Marmot IV LLC Delaware \- USD \- \- \- \- \- 74.98% Blue Marmot IX LLC Delaware \- USD \- \- \- \- \- 74.98% Blue Marmot Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Blue Marmot V LLC Delaware \- USD \- \- \- \- \- 74.98% Blue Marmot VI LLC Delaware \- USD \- \- \- \- \- 74.98% Blue Marmot VII LLC Delaware \- USD \- \- \- \- \- 74.98% Blue Marmot VIII LLC Delaware \- USD \- \- \- \- \- 74.98% Blue Marmot XI LLC Delaware \- USD \- \- \- \- \- 74.98% Bluebird Prairie Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Bright Stalk Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Broadlands Wind Farm II LLC Delaware \- USD \- \- \- \- \- 74.98% Broadlands Wind Farm III LLC Delaware \- USD \- \- \- \- \- 74.98% Buffalo Bluff Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% C2 Alpha Holdings LLC Delaware 100 USD \- \- \- \- \- 63.73% C2 Bristol I LLC Delaware 438,049 USD 580 203 378 \- -9 63.73% C2 Bristol II LLC Delaware 375,061 USD 376 45 331 \- \- 63.73% C2 CA 2016 Holdings LLC Delaware 1,414,212 USD 1,406 16 1,390 \- -11 63.73% C2 CA WMS Redlands #1693 LLC Delaware \- USD \- \- \- \- \- 63.73% C2 CB 2017 Holdings LLC Delaware 19,226,268 USD 17,697 326 17,370 \- -576 63.73% C2 Centrica MT LLC Delaware 833,634 USD 15,228 676 14,552 \- -13 63.73% C2 CI Holdings 2 LLC Delaware 120 USD \- \- \- \- \- 63.73% C2 CI Sponsor 2 LLC Delaware 120 USD \- \- \- \- \- 63.73% C2 CT Fund 1 Holding LLC Delaware 37,840,306 USD 46,775 1,813 44,962 \- -312 63.73% C2 CT Fund 1 MM LLC Delaware 19,015,893 USD 33,384 16,462 16,922 \- -477 63.73% C2 Energy Development LLC Delaware 47,664,643 USD 41,787 52 41,735 \- -251 63.73% C2 Energy Holdings Inc. Delaware \- USD \- 20 -20 \- -20 63.73% C2 Franklin LLC Delaware 3,541,757 USD 3,128 5 3,122 \- \- 63.73% C2 Gamma Holdings LLC Delaware 3,541,757 USD 3,068 13 3,056 \- -67 63.73% C2 IL WMS Bloomington #3459 LLC Delaware 18,743 USD 18 2 16 \- \- 63.73% C2 IL WMS Skokie #1998 LLC Delaware 16,751 USD 16 1 15 \- \- 63.73% C2 Lessee Holdings LLC Delaware 2,198,947 USD 1,942 \- 1,942 \- \- 63.73% C2 MA 2016 Holdings LLC Delaware 1,863,845 USD 1,722 2 1,720 \- 12 63.73% C2 MA Adams I Holdings LLC Delaware 11,556,280 USD 10,564 172 10,392 \- -196 63.73% C2 MA Adams I LLC Delaware 11,504,067 USD 9,687 153 9,534 343 -418 63.73% C2 MA Adams II LLC Delaware 1,986,733 USD 3,970 2,237 1,734 298 -64 63.73% C2 MA DEPCOM 2017 LLC Delaware 4,117,007 USD 5,042 82 4,960 \- 37 63.73% C2 MA DEPCOM Sponsor LLC Delaware 4,117,006 USD 3,636 1 3,635 \- \- 63.73% C2 MA Dudley II LLC Delaware 1,757,742 USD 3,333 1,942 1,391 \- -126 63.73% C2 MA FKW Holdings LLC Delaware 3,059,017 USD 2,934 331 2,604 \- -64 63.73% C2 MA Kelly Way Solar LLC Delaware 1,278,508 USD 1,221 128 1,093 109 -3 63.73% C2 MA Lakeville Holdings LLC Delaware 8,616,468 USD 8,323 190 8,134 \- -26 63.73% C2 MA Lakeville LLC Delaware 9,186,573 USD 8,227 288 7,939 645 -25 63.73% C2 MA Lakeville Sponsor LLC Delaware 8,616,468 USD 7,612 4 7,608 \- \- 63.73% C2 MA Managing Member II LLC Delaware 3,058,061 USD 2,701 \- 2,701 \- 1 63.73% C2 MA Managing Member LLC Delaware 20,695,503 USD 18,273 \- 18,273 \- \- 63.73% C2 MA New Salem LLC Delaware 1,501,887 USD 2,906 1,550 1,356 226 -2 63.73% C2 MA Owner LLC Delaware 20,695,503 USD 18,761 \- 18,761 \- 1 63.73% C2 MA Swansea Holdings LLC Delaware 6,744,295 USD 7,153 1,097 6,056 \- -152 63.73% C2 MA Swansea LLC Delaware 7,251,532 USD 6,495 112 6,383 710 190 63.73% C2 MN Hopkins LLC Delaware 3,526,974 USD 3,301 190 3,111 \- -3 63.73% C2 Morin LLC Delaware 1,796,554 USD 1,525 39 1,486 39 -79 63.73% C2 NC Kitty Hawk LLC Delaware 31,854 USD \- \- \- \- -27 63.73% C2 NJ Andover I LLC Delaware -0 USD 2,308 1,310 998 218 86 63.73% C2 NY Brookhaven LLC Delaware 2,198,972 USD 6,640 4,731 1,909 \- -31 63.73% C2 NY Sentinel Heights Solar LLC Delaware 1,050,874 USD 923 12 911 \- -16 63.73% C2 O&M Services LLC Delaware -100 USD \- \- \- \- \- 63.73% C2 OH New Lebanon LLC Delaware \- USD \- \- \- \- \- 63.73% C2 OH Otsego I LLC Delaware \- USD \- \- \- \- \- 63.73% C2 OH Otsego II LLC Delaware 44,388 USD 2,779 1,395 1,384 162 -185 63.73% C2 Omega Holding Company LLC Delaware \- USD -56 -48 -8 \- -7 63.73% C2 Rho LLC Delaware 39,581,502 USD 72,289 35,186 37,104 2,057 855 63.73% C2 RI Hopkinton LLC Delaware 3,255,570 USD 3,372 500 2,872 162 -16 63.73% C2 Scripps 1 LLC Delaware 1,546,512 USD 2,319 1,044 1,275 82 -62 63.73% C2 Scripps 3 LLC Delaware 1,034,332 USD 1,427 561 866 47 -34 63.73% C2 Scripps 4 LLC Delaware 1,423,536 USD 2,126 917 1,209 75 -36 63.73% C2 SH 2019 LLC Delaware 2,394,952 USD 2,114 \- 2,114 \- \- 63.73% C2 Starratt Solar LLC Delaware 14,943,617 USD 13,214 328 12,886 540 -206 63.73% C2 Starratt Sponsor LLC Delaware 19,226,368 USD 16,978 3 16,975 \- \- 63.73% C2 WM 2020 Holdings LLC Delaware \- USD \- \- \- \- \- 63.73% Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group % Company 442 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 C2 WM 2020 Parent LLC Delaware \- USD \- \- \- \- \- 63.73% C2 WM Arizona 1 LLC Delaware 1,096,002 USD 976 21 956 39 -9 63.73% C2 WM Arizona 10 LLC Delaware 820,675 USD 743 26 717 31 -8 63.73% C2 WM Arizona 1512 LLC Delaware 769,539 USD 681 1 680 \- \- 63.73% C2 WM Arizona 1549 LLC Delaware 1,406,006 USD 1,336 46 1,290 103 40 63.73% C2 WM Arizona 2 LLC Delaware 1,743,556 USD 1,561 37 1,524 63 -19 63.73% C2 WM Arizona 2112 LLC Delaware 968,455 USD 913 29 883 67 25 63.73% C2 WM Arizona 3 LLC Delaware 2,550,101 USD 2,265 36 2,229 91 -18 63.73% C2 WM Arizona 3360 LLC Delaware 998,541 USD 940 34 906 69 22 63.73% C2 WM Arizona 3465 LLC Delaware 970,934 USD 996 88 909 28 27 63.73% C2 WM Arizona 3799 LLC Delaware 1,113,072 USD 1,378 352 1,026 92 30 63.73% C2 WM Arizona 3833 LLC Delaware 1,121,174 USD 1,381 352 1,029 94 27 63.73% C2 WM Arizona 3861 LLC Delaware 1,434,110 USD 1,353 46 1,307 92 29 63.73% C2 WM Arizona 4 LLC Delaware 2,013,147 USD 1,809 57 1,753 73 -21 63.73% C2 WM Arizona 4451 LLC Delaware 1,153,274 USD 1,129 85 1,045 30 25 63.73% C2 WM Arizona 5 LLC Delaware 1,705,713 USD 1,516 31 1,486 57 -16 63.73% C2 WM Arizona 5768 LLC Delaware 330,916 USD 293 \- 293 \- 1 63.73% C2 WM Arizona 6 LLC Delaware 2,165,201 USD 1,923 32 1,891 78 -28 63.73% C2 WM Arizona 7 LLC Delaware 2,494,043 USD 2,237 58 2,179 92 -20 63.73% C2 WM Arizona 8 LLC Delaware 2,385,210 USD 2,126 42 2,084 85 -21 63.73% C2 WM Arizona 9 LLC Delaware 2,254,146 USD 2,011 46 1,965 80 -20 63.73% C2 WM Arizona Holdings LLC Delaware 0 USD \- \- \- \- \- 63.73% C2 WM California 1789 LLC Delaware 788,164 USD 775 40 735 66 31 63.73% C2 WM California 1988 LLC Delaware 548,795 USD 527 20 506 45 20 63.73% C2 WM California 2039 LLC Delaware 69,620 USD \- \- \- \- -59 63.73% C2 WM California 4202 LLC Delaware 381,113 USD 349 11 338 25 2 63.73% C2 WM California 4317 LLC Delaware 707,497 USD 585 -40 625 \- \- 63.73% C2 WM California 5884 LLC Delaware 20,936 USD \- \- \- \- -18 63.73% C2 WM California 5890 LLC Delaware 730,752 USD 672 17 655 37 7 63.73% C2 WM California Holdings LLC Delaware -0 USD \- \- \- \- \- 63.73% C2 WM Chester Leasing LLC Delaware 268,360 USD 253 34 219 13 -17 63.73% C2 WM DSA Holdings LLC Delaware 13,678,166 USD 21,674 15,268 6,406 499 429 63.73% C2 WM DSA Sponsor LLC Delaware 0 USD 10,960 13,119 -2,159 \- -398 63.73% C2 WM Greenwood Leasing LLC Delaware 408,247 USD 418 53 365 38 4 63.73% C2 WM Holdings LLC Delaware 33,486 USD 30 \- 30 \- \- 63.73% C2 WM Illinois 1404 LLC Delaware 1,029,591 USD 1,078 39 1,039 194 124 63.73% C2 WM Illinois 1489 LLC Delaware 796,036 USD 818 28 790 129 86 63.73% C2 WM Illinois 1548 LLC Delaware 796,124 USD 708 27 681 36 -16 63.73% C2 WM Illinois 1553 LLC Delaware 781,750 USD 835 34 801 157 112 63.73% C2 WM Illinois 1761 LLC Delaware 927,882 USD 942 43 899 130 83 63.73% C2 WM Illinois 1848 LLC Delaware 714,413 USD 796 34 762 176 134 63.73% C2 WM Illinois 1933 LLC Delaware 794,976 USD 862 41 820 166 122 63.73% C2 WM Illinois 2215 LLC Delaware 891,056 USD 942 37 906 184 135 63.73% C2 WM Illinois 2491 LLC Delaware 1,184,821 USD 1,367 147 1,219 242 177 63.73% C2 WM Illinois 253 LLC Delaware 1,323,490 USD 1,381 50 1,331 226 165 63.73% C2 WM Illinois 5442 LLC Delaware 652,394 USD 691 38 653 114 80 63.73% C2 WM Illinois 612 LLC Delaware 862,755 USD 795 34 761 47 5 63.73% C2 WM Illinois 891 LLC Delaware 1,009,841 USD 1,086 41 1,045 214 158 63.73% C2 WM Illinois Holdings LLC Delaware 32,418 USD 31 \- 31 \- 2 63.73% C2 WM Indian Land Leasing LLC Delaware 562,805 USD 560 99 462 31 -31 63.73% C2 WM Lake Wylie Leasing LLC Delaware 574,809 USD 565 90 475 31 -29 63.73% C2 WM Laurens Leasing LLC Delaware 2,330,702 USD 2,104 107 1,997 62 -76 63.73% C2 WM Leasing LLC Delaware 1,659,446 USD 1,465 \- 1,465 \- \- 63.73% C2 WM Louisiana 309 LLC Delaware 247,077 USD 220 3 217 \- -1 63.73% C2 WM Louisiana 539 LLC Delaware 248,384 USD 221 3 218 \- -1 63.73% C2 WM Louisiana 87 LLC Delaware 598,597 USD 562 26 536 36 3 63.73% C2 WM Louisiana Holdings LLC Delaware -1,750 USD \- \- \- \- \- 63.73% C2 WM Maryland 1715 LLC Delaware 306,301 USD 1,034 759 274 5 4 63.73% C2 WM Maryland 2436 LLC Delaware 72,582 USD 1,389 1,318 72 9 9 63.73% C2 WM Maryland Holdings LLC Delaware -0 USD \- \- \- \- \- 63.73% C2 WM New Jersey 1 LLC Delaware 5,899,739 USD 5,353 71 5,282 372 92 63.73% C2 WM New Jersey 1807 LLC Delaware 714,488 USD 632 1 631 \- \- 63.73% C2 WM New Jersey 1844 LLC Delaware 709,118 USD 628 2 626 \- \- 63.73% C2 WM New Jersey 1869 LLC Delaware 726,894 USD 653 12 642 \- \- 63.73% C2 WM New Jersey 1977 LLC Delaware 721,107 USD 648 12 637 \- \- 63.73% C2 WM New Jersey 2195 LLC Delaware 1,241,791 USD 1,104 3 1,101 \- 4 63.73% C2 WM New Jersey 3795 LLC Delaware 1,399,016 USD 1,241 6 1,235 \- \- 63.73% C2 WM New Jersey Holdings LLC Delaware -0 USD \- \- \- \- \- 63.73% C2 WM Phase 3 Holdings LLC Delaware \- USD \- \- \- \- \- 63.73% C2 WM Phase 3 Sponsor LLC Delaware \- USD \- \- \- \- \- 63.73% C2 WM Phase I Holdings LLC Delaware 1,606,214 USD 1,466 17 1,448 \- -2 63.73% C2 WM Pickens Leasing LLC Delaware 220,811 USD 241 34 207 13 12 63.73% % Company Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group 443 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 C2 WM Powdersville Leasing LLC Delaware 637,304 USD 576 29 547 26 -14 63.73% C2 WM Regent Dev Holdings 2020 LLC Delaware -234 USD \- \- \- \- -14 63.73% C2 WM Simpsonville Leasing LLC Delaware 812,448 USD 772 57 715 55 -3 63.73% C2 Woodbury Solar LLC Delaware 10,600,158 USD 9,356 16 9,340 \- -18 63.73% C2-REA Solar LLC Delaware 10,432,082 USD 8,475 2 8,473 \- -1 63.73% CA Gettysburg Solar Farm LLC Delaware 1,863,955 USD 1,889 243 1,646 \- \- 63.73% CA Marinwood Solar LLC Delaware 56,838 USD 52 2 50 \- \- 63.73% CA Olde Thompson Solar LLC Delaware 0 USD 1,003 1,265 -262 21 -37 63.73% CA Syracuse Solar LLC Delaware 48,484 USD 44 2 43 \- \- 63.73% CA Tours Solar LLC Delaware \- USD 44 46 -1 \- -1 63.73% Camden PV PSEG Solar LLC Delaware 115,262 USD \- -43 43 \- -46 63.73% Camden PV Solar LLC Delaware 8,210,023 USD 6,588 135 6,453 517 -283 63.73% Cameron Solar LLC Delaware 35,427,886 USD 34,702 3,126 31,577 1,786 23 74.98% Casa Grande Carmel Solar LLC Delaware \- USD \- \- \- \- \- 74.98% Castle Valley Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Cattlemen Solar Park II LLC Delaware \- USD \- \- \- \- \- 74.98% Cattlemen Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Chateaugay River Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Cielo Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Clinton County Wind Farm LLC Delaware 195,664,711 USD 172,750 \- 172,750 \- \- 74.98% Cloud County Wind Farm LLC Delaware 138,746,576 USD 179,790 13,732 166,058 19,756 4,638 38.24% Clover Creek Solar Project LLC Delaware \- USD \- \- \- \- \- 74.98% Coldwater Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Coos Curry Wind Power Project LLC Delaware \- USD \- \- \- \- \- 74.98% Cortland-Virgil Road Solar LLC Delaware 7,263,234 USD 6,316 323 5,993 \- -403 63.73% Creed Road Solar 1 LLC Delaware 3,950 USD 3 \- 3 \- \- 63.73% Crescent Bar Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Crooked Lake Solar LLC Delaware \- USD \- \- \- \- \- 74.98% Cropsey Ridge Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Crossing Trails Wind Power Project II LLC Delaware \- USD \- \- \- \- \- 74.98% Crossing Trails Wind Power Project LLC Delaware 57,425,925 USD 143,406 93,927 49,479 3,206 -1,155 74.98% Dairy Hills Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% DC Green Solar LLC Delaware \- USD \- \- \- \- \- 63.73% DC- JD Portfolio - 818 Michigan Delaware 1,966 USD 5 6 -1 \- -3 63.73% DC- JD Portfolio - Barrel Roof Delaware 1,475 USD 2 1 1 \- \- 63.73% DC- JD Portfolio - Flat Roof Delaware 1,625 USD 2 1 1 \- \- 63.73% DC- JD Portfolio - Green Roof Delaware 1,819 USD 2 \- 2 \- \- 63.73% DC- JD Portfolio - Parking Deck Delaware 1,819 USD 2 \- 2 \- \- 63.73% DC Michigan Solar LLC Delaware \- USD \- \- \- \- \- 63.73% DC PD Solar LLC Delaware \- USD \- \- \- \- \- 63.73% Diamond Power Partners LLC Delaware \- USD \- \- \- \- \- 74.98% Drake Peak Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Dry Creek Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Duff Solar Park II LLC Delaware \- USD \- \- \- \- \- 74.98% Duff Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% East Klickitat Wind Power Project LLC Delaware \- USD \- \- \- \- \- 74.98% East River Solar LLC Delaware 1,918,703 USD 1,886 257 1,629 \- -63 63.73% Eastmill Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% EDPR CA Solar Park II LLC Delaware 28,296 USD 5 41 -36 \- -59 74.98% EDPR CA Solar Park III LLC Delaware \- USD \- 8 -8 \- -7 74.98% EDPR CA Solar Park IV LLC Delaware \- USD \- \- \- \- \- 74.98% EDPR CA Solar Park LLC Delaware 255,856 USD 231 24 207 \- -12 74.98% EDPR CA Solar Park V LLC Delaware \- USD \- \- \- \- \- 74.98% EDPR CA Solar Park VI LLC Delaware 203,119 USD \- 36 -36 \- -137 74.98% EDPR NA DG Holding LLC Delaware 64,314,877 USD 56,785 1 56,784 \- -1 74.98% EDPR NA DG MN SLP LLC Delaware \- USD \- \- \- \- \- 63.73% EDPR NA DG MN YMCA LLC Delaware \- USD \- \- \- \- \- 63.73% EDPR NA Distributed Generation LLC Delaware 29,894,810 USD 130,648 55,832 74,815 380 -4,143 63.73% EDPR NA Greenfield Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% EDPR NA Shelby Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% EDPR Northeast Allen Solar Park II LLC Delaware \- USD \- \- \- \- \- 74.98% EDPR Northeast Allen Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% EDPR RS LLC Delaware \- USD \- \- \- \- \- 74.98% EDPR Solar Ventures I LLC Delaware 35,044,683 USD 54,948 3,853 51,095 \- 124 37.49% EDPR Solar Ventures II LLC Delaware 53,108,705 USD 96,572 25,287 71,285 \- 6,002 74.98% EDPR Solar Ventures III LLC Delaware 78,315,618 USD 77,867 172 77,695 \- 4,431 74.98% EDPR Solar Ventures IV LLC Delaware 93,011,976 USD 97,731 283 97,448 \- 6,256 74.98% EDPR Solar Ventures V LLC Delaware 0 USD 26,046 \- 26,046 \- 80,370 74.98% EDPR South Table LLC Nebraska \- USD \- \- \- \- \- 74.98% EDPR Vento I Holding LLC Delaware 260,468,682 USD 229,974 \- 229,974 \- \- 74.98% EDPR Vento IV Holding LLC Delaware 134,291,179 USD 173,248 37,979 135,269 \- 317 74.98% EDPR WF LLC Delaware 49,317,020 USD 43,543 \- 43,543 \- \- 74.98% EDPR Wind Ventures X LLC Delaware 0 USD 75,528 11,330 64,198 \- 7,607 74.98% Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group % Company 444 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 EDPR Wind Ventures XI LLC Delaware 28,665,730 USD 192,298 113,844 78,454 \- 7,077 38.24% EDPR Wind Ventures XII LLC Delaware 21,158,908 USD 98,441 71,430 27,011 \- 2,266 38.24% EDPR Wind Ventures XIII LLC Delaware 69,996,945 USD 240,287 143,334 96,953 \- 6,896 38.24% EDPR Wind Ventures XIV LLC Delaware 27,297,324 USD 210,856 150,303 60,553 \- 7,817 38.24% EDPR Wind Ventures XIX LLC Delaware \- USD 26,699 2,950 23,749 \- -1,678 74.98% EDPR Wind Ventures XV LLC Delaware 92,010,243 USD 379,899 238,844 141,055 \- 9,388 74.98% EDPR Wind Ventures XVI LLC Delaware 57,071,334 USD 147,869 88,572 59,297 \- 2,106 74.98% EDPR Wind Ventures XVII LLC Delaware \- USD 35,443 2,930 32,513 \- 314 74.98% EDPR Wind Ventures XVIII LLC Delaware 185,537,578 USD 397,627 207,898 189,729 \- 8,428 74.98% EDPR Wind Ventures XX LLC Delaware 0 USD 43,247 22,447 20,800 56 104,998 74.98% EDPR Wind Ventures XXI LLC Delaware 108,549,602 USD 217,559 115,649 101,910 \- 3,562 74.98% EDPR Wind Ventures XXII LLC Delaware 152,223,674 USD 711,509 569,460 142,049 \- 7,323 74.98% EDPR Wind Ventures XXIII LLC Delaware 19,268,420 USD 142,365 125,353 17,013 \- \- 74.98% EDPRNA DG WM Illinois 1998 LLC Delaware \- USD \- \- \- \- \- 63.73% EDPRNA DG WM Illinois 3459 LLC Delaware \- USD \- \- \- \- \- 63.73% Edwardsport Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Esker Solar Park II LLC Delaware \- USD \- \- \- \- \- 74.98% Esker Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Estill Solar I LLC Delaware 38,619,782 USD 36,070 1,957 34,114 1,615 -55 74.98% Five-Spot LLC Delaware \- USD \- \- \- \- \- 74.98% Ford Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Franklin Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% German Community Solar LLC Delaware 5,179,344 USD 4,628 138 4,491 \- -79 63.73% Gilpatrick Solar LLC Delaware 636,786 USD 563 1 562 \- \- 63.73% Goldfinger Ventures III LLC Delaware \- USD \- \- \- \- \- 74.98% Green Country Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Green Power Offsets LLC Delaware 10,515 USD \- \- \- \- \- 74.98% Greenbow Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Gulf Coast Windpower Management Company LLC Delaware \- USD \- \- \- \- \- 56.23% Hampton Solar II LLC Delaware 35,227,996 USD 34,253 1,734 32,519 1,702 79 74.98% Headwaters Wind Farm II LLC Delaware 119,703,209 USD 243,807 139,605 104,202 7,056 -614 74.98% Headwaters Wind Farm III LLC Delaware \- USD \- \- \- \- \- 74.98% Headwaters Wind Farm IV LLC Delaware \- USD \- \- \- \- \- 74.98% Headwaters Wind Farm LLC Delaware 217,811,725 USD 285,237 27,788 257,449 21,651 14,173 38.24% Helena Harbor Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Hidalgo Wind Farm II LLC Delaware 40,276,008 USD 71,141 26,970 44,171 10,682 7,377 74.98% Hidalgo Wind Farm LLC Delaware 311,346,329 USD 316,706 20,266 296,439 42,303 21,032 74.98% High Prairie Wind Farm II LLC Delaware 52,937,170 USD 91,429 15,227 76,202 10,959 1,710 38.24% High Trail Wind Farm LLC Delaware 141,391,609 USD 209,169 19,125 190,044 20,031 -678 74.98% Holly Hill Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Chocolate Bayou I LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Midwest IX LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Northwest I LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Northwest IV LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Northwest VII LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Northwest X LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Northwest XI LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Panhandle I LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Southwest I LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Southwest II LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Southwest III LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Southwest IV LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Energy Valley I LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind Freeport Windpower I LLC Delaware \- USD \- \- \- \- \- 74.98% Horizon Wind MREC Iowa Partners LLC Delaware \- USD \- \- \- \- \- 56.23% Horizon Wind Ventures I LLC Delaware 225,515,009 USD 1,176,230 363,809 812,421 \- 1,876 74.98% Horizon Wind Ventures III LLC Delaware \- USD 13,223 3,660 9,563 \- -162 38.24% Horizon Wind Ventures IX LLC Delaware 27,119,991 USD 58,174 35,698 22,476 \- 1,507 38.24% Horizon Wyoming Transmission LLC Delaware \- USD \- \- \- \- \- 74.98% Horse Mountain Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Indiana Crossroads Solar Park II LLC Delaware \- USD \- \- \- \- \- 74.98% Indiana Crossroads Wind Farm II LLC Delaware 26,224 USD 128 139 -12 \- -34 74.98% Indiana Crossroads Wind Ventures LLC Delaware \- USD \- \- \- \- \- 74.98% Jericho Rise Wind Farm LLC Delaware 126,963,501 USD 130,337 8,715 121,622 8,953 240 74.98% Juniper Wind Power Partners LLC Delaware \- USD \- \- \- \- \- 74.98% Leprechaun Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Lexington Chenoa Wind Farm II LLC Delaware 1,993,645 USD 1,260 31 1,229 \- \- 74.98% Lexington Chenoa Wind Farm III LLC Delaware \- USD \- \- \- \- \- 74.98% Lime Hollow Solar LLC Delaware 7,416,181 USD 6,397 347 6,050 \- -408 63.73% Little Brook Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% % Company Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group 445 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 Loblolly Hill Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Loki Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Loma de la Gloria Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Lone Valley Solar Park I LLC Delaware 22,962,297 USD 23,770 1,824 21,946 1,635 271 37.49% Lone Valley Solar Park II LLC Delaware 38,660,092 USD 44,273 3,616 40,657 3,467 1,140 37.49% Long Hollow Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Lost Lakes Wind Farm LLC Delaware 115,082,737 USD 113,977 14,136 99,841 8,123 -4,808 74.98% Lowland Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Loyal Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Machias Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Madison Windpower LLC Delaware 18,467,844 USD 3,468 624 2,844 484 -1,337 74.98% Marathon Wind Farm LLC Delaware \- USD \- 2 -2 \- -2 74.98% Marble River LLC Delaware 195,677,957 USD 303,844 99,311 204,532 15,297 3,569 74.98% Martinsdale Wind Farm LLC Delaware 5,939,964 USD 5,164 44 5,120 \- -65 74.98% McLean Solar 1 LLC Delaware -0 USD \- 1,300 -1,300 \- \- 63.73% McLean Solar 2 LLC Delaware 7,062,552 USD 6,095 265 5,830 \- -371 63.73% ME Dover Foxcroft Solar LLC Delaware 460,235 USD 413 8 405 \- -1 63.73% ME Ellsworth Solar LLC Delaware 691,796 USD 616 6 610 \- -1 63.73% ME New Vineyard Solar LLC Delaware 123,383 USD 118 9 109 \- \- 63.73% ME Punky Meadows Solar LLC Delaware \- USD \- \- \- \- \- 63.73% ME Rocky Hill Solar LLC Delaware 138,893 USD 126 4 123 \- \- 63.73% ME Sandy Hill Solar LLC Delaware 166,014 USD 153 6 147 \- \- 63.73% Meadow Lake Solar Park LLC Delaware 13,606,612 USD 22,209 10,626 11,583 \- -413 74.98% Meadow Lake Wind Farm II LLC Delaware 142,057,689 USD 119,538 13,141 106,397 7,863 -3,630 74.98% Meadow Lake Wind Farm III LLC Delaware 89,286,028 USD 129,610 45,597 84,014 8,265 -245 74.98% Meadow Lake Wind Farm IV LLC Delaware 85,653,988 USD 104,059 36,762 67,297 5,639 -1,828 74.98% Meadow Lake Wind Farm LLC Delaware 180,758,904 USD 221,048 79,106 141,942 14,204 1,309 74.98% Meadow Lake Wind Farm VIII LLC Delaware \- USD \- \- \- \- \- 74.98% Mesquite Wind LLC Delaware 102,962,847 USD 165,954 9,893 156,060 19,111 435 74.98% MidCoast C2 Solar LLC Delaware 7,534 USD 7 \- 7 \- \- 63.73% Mineral Springs Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Misenheimer Solar LLC Delaware 9,363,759 USD 8,367 99 8,267 \- \- 74.98% MN CSG 2 LLC Delaware 10,542,149 USD 9,727 533 9,194 424 -44 63.73% Moonshine Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Morgan Road Solar East LLC Delaware 2,671,714 USD 2,357 20 2,337 \- -21 63.73% Morgan Road Solar West LLC Delaware 2,426,391 USD 2,140 21 2,119 \- -22 63.73% MT Plentywood Solar I LLC Delaware \- USD \- \- \- \- \- 63.73% MT Plentywood Solar II LLC Delaware \- USD \- \- \- \- \- 63.73% NC Loy Farm Solar LLC Delaware -25,000 USD -19 28 -48 \- -24 63.73% ND Crystal Solar I LLC Delaware \- USD \- \- \- \- \- 63.73% New Scotland 5 Solar LLC Delaware \- USD \- \- \- \- \- 63.73% New Trail Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% NH Hinsdale Solar LLC Delaware \- USD \- \- \- \- \- 63.73% Nine Kings Transco LLC Delaware \- USD \- \- \- \- \- 74.98% NJ GSEB Fal Solar LLC Delaware 1,800 USD \- 3 -3 \- -4 63.73% North Coast Highway Solar 1 LLC Delaware 14,872 USD 26 12 13 \- \- 63.73% North Coast Highway Solar 2 LLC Delaware 38,016 USD 35 1 34 \- \- 63.73% North Slope Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Norton Solar I LLC Delaware 1,734,345 USD 1,754 11 1,743 183 150 63.73% Norton Solar II LLC Delaware 1,880,287 USD 1,723 11 1,712 185 32 63.73% Number Nine Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% NV Solar Sparks LLC Delaware 630 USD 10 9 1 \- \- 63.73% NY Broadway SAS LLC Delaware \- USD \- \- \- \- \- 63.73% NY CSG 2 Holdings LLC Delaware 2,155,217 USD 27,035 19,926 7,109 \- -96 63.73% NY CSG 2 Sponsor LLC Delaware 2,137,093 USD 1,882 \- 1,882 \- \- 63.73% NY Gomer SAS LLC Delaware \- USD \- \- \- \- \- 63.73% NY Hemlock Hills Solar LLC Delaware 7,150 USD 5 5 \- \- -6 63.73% NY Highland SAS LLC Delaware \- USD \- \- \- \- \- 63.73% NY Mines Press Solar LLC Delaware -0 USD 4,115 7,965 -3,850 \- \- 63.73% NY Morgan Solar LLC Delaware -8,776 USD -5 1 -6 \- 1 63.73% NY OG 1 Solar LLC Delaware 6,297,165 USD 5,560 \- 5,560 \- \- 63.73% NY- Potsdam I Delaware 3,118,133 USD 2,761 27 2,734 \- -18 63.73% Old Trail Wind Farm LLC Delaware 113,264,738 USD 217,579 18,355 199,224 32,142 9,635 38.24% Omega CSG 1 LLC Delaware 1,694,817 USD 24,337 20,834 3,504 \- -510 63.73% OPQ Property LLC Delaware \- USD \- \- \- \- \- 74.98% Pacific Southwest Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Parkman Solar DG LLC Delaware \- USD \- \- \- \- \- 63.73% Paulding Wind Farm II LLC Delaware 65,052,895 USD 134,194 20,909 113,285 17,131 4,954 38.24% Paulding Wind Farm III LLC Delaware 166,772,933 USD 180,683 18,696 161,987 9,668 3,475 74.98% Paulding Wind Farm IV LLC Delaware 197,692,179 USD 209,465 39,396 170,069 7,563 -3,770 74.98% Paulding Wind Farm LLC Delaware 35,360 USD \- 1 \- \- \- 74.98% Paulding Wind Farm V LLC Delaware \- USD \- \- \- \- \- 74.98% Paulding Wind Farm VI LLC Delaware \- USD \- \- \- \- \- 74.98% Pearl River Solar Park LLC Delaware 3,279,083 USD 2,996 101 2,895 \- \- 74.98% Penn Yan Solar I LLC Delaware 8,413,811 USD 7,401 241 7,160 \- -257 63.73% Peterson Power Partners LLC Delaware \- USD \- \- \- \- \- 74.98% % Company Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group 446 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 Pioneer Prairie Wind Farm I LLC Delaware 195,651,518 USD 332,160 34,237 297,923 39,858 4,951 38.24% Piscataquis Valley Solar LLC Delaware 400,926 USD 354 \- 354 \- \- 63.73% Pleasantville Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Plum Nellie Wind Farm LLC Delaware \- USD \- 6 -6 \- -6 74.98% Poplar Camp Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Post Oak Wind LLC Delaware 110,834,205 USD 181,532 8,218 173,314 21,090 2,250 38.24% Prospector Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Quilt Block Wind Farm II LLC Delaware \- USD \- \- \- \- \- 74.98% Rail Splitter Wind Farm II LLC Delaware \- USD \- \- \- \- \- 74.98% Rail Splitter Wind Farm LLC Delaware 196,283,871 USD 131,156 15,450 115,707 9,006 -2,006 74.98% Randolph Solar Park LLC Delaware 23,990,795 USD 21,303 153 21,150 \- -31 74.98% RE Scarlet LLC Delaware 552,697 USD 868 380 488 \- \- 74.98% REA-C2 2016 Lessee LLC Delaware 8,000,751 USD 7,338 36 7,302 \- 3 63.73% Reloj del Sol Wind Farm LLC Delaware 301,559,271 USD 256,543 13,531 243,012 4,063 -22,246 74.98% Renville County Wind Farm LLC Delaware 1,923,473 USD 1,699 \- 1,698 \- \- 74.98% RevEnergy C2 Franklin LLC Delaware 1,928,055 USD 1,860 190 1,670 138 -59 63.73% RI Abrava Solar LLC Delaware 428,345 USD 1,352 1,050 301 \- -73 63.73% RI- Comolli Delaware \- USD \- \- \- \- \- 63.73% RI- Moo Cow Delaware 1,511,194 USD 1,265 -73 1,338 \- 3 63.73% RI Quarry Solar LLC Delaware \- USD \- \- \- \- \- 63.73% RI Sposato Solar LLC Delaware 74,820 USD 79 13 66 \- \- 63.73% RI Stainless LLC Delaware \- USD \- \- \- \- \- 63.73% Rio Blanco Wind Farm LLC Delaware 3,076,391 USD 2,715 \- 2,715 \- \- 74.98% Rising Tree Wind Farm II LLC Delaware 23,143,047 USD 28,852 2,328 26,524 3,041 1,035 38.24% Rising Tree Wind Farm III LLC Delaware 126,301,270 USD 157,573 3,593 153,980 20,605 12,061 38.24% Rising Tree Wind Farm LLC Delaware 88,356,730 USD 124,690 3,615 121,074 18,624 9,569 38.24% Riverstart Solar Park II LLC Delaware \- USD \- \- \- \- \- 74.98% Riverstart Solar Park III LLC Delaware 1,223,699 USD 1,201 159 1,043 \- -36 74.98% Riverstart Solar Park IV LLC Delaware \- USD \- \- \- \- \- 74.98% Riverstart Solar Park V LLC Delaware \- USD \- \- \- \- \- 74.98% Riverstart Solar Park VI LLC Delaware \- USD \- \- \- \- \- 74.98% Rock Dane Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Rolling Upland Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Rosewater Ventures LLC Delaware \- USD \- \- \- \- \- 74.98% Route 13 Solar LLC Delaware 7,578,811 USD 6,561 283 6,278 \- -323 63.73% Route 149 LLC Delaware 2,752,358 USD 2,583 176 2,407 118 -11 63.73% RS Holyoke 3 LLC Delaware 1,881,415 USD 1,720 153 1,566 131 -42 63.73% RSBF E470 I LLC Delaware 1,171,087 USD 1,156 39 1,117 143 84 63.73% RSBF Jeffco II LLC Delaware 419,761 USD 2,107 1,739 368 \- -2 63.73% RTSW Solar Park II LLC Delaware \- USD \- \- \- \- \- 74.98% RTSW Solar Park III LLC Delaware \- USD \- \- \- \- \- 74.98% RTSW Solar Park IV LLC Delaware \- USD \- \- \- \- \- 74.98% RTSW Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% RTSW Solar Park V LLC Delaware \- USD \- \- \- \- \- 74.98% RTSW Solar Park VI LLC Delaware \- USD \- \- \- \- \- 74.98% Rush County Wind Farm LLC Delaware 2,856,408 USD 2,538 16 2,522 \- \- 74.98% Rye Patch Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Saddleback Wind Power Project LLC Delaware 1,354,487 USD 4 \- 4 \- \- 74.98% Sagebrush Power Partners LLC Delaware 121,645,156 USD 109,163 9,409 99,755 14,743 4,583 74.98% Sailor Springs Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% San Clemente Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Sardinia Windpower LLC Delaware \- USD \- \- \- \- \- 74.98% Sawmill Junction Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% SC Beaufort Jasper Solar LLC Delaware 5,419 USD 10 7 3 \- -1 63.73% SC Heathwood Hall Solar LLC Delaware 1,112 USD 4 3 1 \- \- 63.73% SC Southern Wesleyan Solar LLC Delaware 620 USD 1 \- 1 \- \- 63.73% Sedge Meadow Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Shields Drive LLC Delaware 2,644,959 USD 2,395 96 2,299 108 -22 63.73% Shullsburg Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Signal Hill Wind Power Project LLC Delaware 4,502 USD \- \- \- \- \- 74.98% Simpson Ridge Wind Farm II LLC Delaware \- USD \- \- \- \- \- 74.98% Simpson Ridge Wind Farm III LLC Delaware \- USD \- \- \- \- \- 74.98% Simpson Ridge Wind Farm IV LLC Delaware \- USD \- \- \- \- \- 74.98% Simpson Ridge Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Simpson Ridge Wind Farm V LLC Delaware \- USD \- \- \- \- \- 74.98% SLX Project 1080 LLC Delaware 1,670,550 USD 1,710 163 1,547 155 41 63.73% Smart Sunscribe LLC Delaware \- USD \- \- \- \- \- 63.73% Solar Ventures Purchasing LLC Delaware 369,211 USD 1,533 2,282 -749 \- -2 74.98% Soteria Solar Services LLC Delaware 3,807,154 USD 3,289 161 3,128 \- -118 63.73% Spruce Ridge Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Stinson Mills Wind Farm LLC Delaware 4,640,820 USD 4,025 16 4,010 \- \- 74.98% Strawberry Solar Farm LLC Delaware 2,612,616 USD 2,270 22 2,249 \- -56 63.73% Sustaining Power Solutions LLC Delaware 126,651,741 USD 26,864 20,354 6,510 22,146 -27,716 74.98% Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group % Company 447 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 Sweet Stream Wind Farm LLC Delaware \- USD \- \- \- \- \- 74.98% Telocaset Wind Power Partners LLC Delaware -0 USD 92,821 8,426 84,396 19,865 9,932 38.24% Tillma Storage LLC Delaware \- USD \- \- \- \- \- 74.98% Tillman Solar Park II LLC Delaware \- USD \- \- \- \- \- 74.98% Tillman Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Timber Road II Storage LLC Delaware \- USD \- \- \- \- \- 74.98% Timber Road III Storage LLC Delaware \- USD \- \- \- \- \- 74.98% Timber Road Solar Park II LLC Delaware \- USD \- \- \- \- \- 74.98% Timber Road Solar Park III LLC Delaware \- USD \- \- \- \- \- 74.98% Timber Road Solar Park LLC Delaware 2,972,920 USD 3,153 551 2,601 \- -23 74.98% Top Crop I Storage LLC Delaware \- USD \- \- \- \- \- 74.98% Top Crop II Storage LLC Delaware \- USD \- \- \- \- \- 74.98% Tug Hill Windpower LLC Delaware \- USD \- \- \- \- \- 74.98% Tumbleweed Wind Power Project LLC Delaware 4,003 USD \- \- \- \- \- 74.98% Turtle Creek Wind Farm LLC Delaware 267,820,905 USD 274,193 24,037 250,156 14,937 2,198 74.98% Twin Groves I Storage LLC Delaware \- USD \- \- \- \- \- 74.98% Twin Groves II Storage LLC Delaware \- USD \- \- \- \- \- 74.98% Upper Road LLC Delaware 2,509,510 USD 2,423 218 2,205 121 -3 63.73% VA- Green Acres Delaware 9,247 USD 8 \- 8 \- \- 63.73% VT Stone Valley LLC Delaware -0 USD \- \- \- \- \- 63.73% Waterville Solar LLC Delaware \- USD \- \- \- \- \- 63.73% Waverly Wind Farm II LLC Delaware \- USD \- \- \- \- \- 74.98% Waverly Wind Farm LLC Delaware 238,126,730 USD 254,017 15,382 238,635 21,470 5,898 38.24% Western Trail Wind Project I LLC Delaware \- USD \- \- \- \- \- 74.98% Wheat field Holding LLC Delaware \- USD \- 20,320 -20,320 \- -4 38.24% Wheat field Wind Power Project LLC Delaware \- USD 85,522 26,589 58,933 14,916 7,908 38.24% Whiskey Ridge Power Partners LLC Delaware \- USD \- \- \- \- \- 74.98% Whistling Wind WI Energy Center LLC Delaware \- USD \- \- \- \- \- 74.98% White Stone Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% Whitestone Wind Purchasing LLC Delaware -0 USD 62,336 161,183 -98,846 \- 31,884 74.98% Wildcat Creek Wind Farm LLC Delaware 251,399,604 USD 250,917 28,768 222,149 5,695 227 74.98% Wilson Creek Power Project LLC Delaware \- USD \- \- \- \- \- 74.98% Wind Turbine Prometheus LP Delaware 5,990 USD \- \- \- \- \- 74.98% Wolf Run Solar LLC Delaware \- USD \- \- \- \- \- 74.98% Wrangler Solar Park LLC Delaware \- USD \- \- \- \- \- 74.98% WTP Management Company LLC Delaware \- USD \- \- \- \- \- 74.98% Canada: EDP Renewables Canada, Ltd. (Empresa-Matriz de Subgrupo Canadá)British Columbia 144,145,495 CAD 110,212 12,830 97,383 2 -2,585 74.98% Blue Bridge Solar Park GP Ltd British Columbia \- CAD \- \- \- \- \- 74.98% Blue Bridge Solar Park LP British Columbia \- CAD 125 340 -215 \- 2 74.98% Bromhead Solar Park GP Ltd British Columbia \- CAD \- \- \- \- \- 74.98% Bromhead Solar Park LP Saskatchewan \- CAD 125 340 -215 \- 2 74.98% EDP Renewables Canada Management Services Ltd British Columbia \- CAD 6,067 8,711 -2,644 442 \- 74.98% EDP Renewables Sask SE GP Ltd British Columbia \- CAD \- \- \- \- \- 74.98% EDP Renewables Sask SE Limited Partnership Ontário \- CAD 84 799 -716 \- -149 74.98% EDP Renewables SH II Project GP Ltd British Columbia \- CAD \- \- \- \- \- 74.98% EDP Renewables SH II Project LP Alberta \- CAD \- \- \- \- \- 74.98% EDP Renewables Sharp Hills Project GP Ltd. British Columbia \- CAD \- \- \- \- \- 74.98% EDP Renewables Sharp Hills Project LP Alberta 18,527,471 CAD 58,484 45,598 12,886 \- -837 74.98% Halbrite Solar Park GP Ltd British Columbia \- CAD \- \- \- \- \- 74.98% Halbrite Solar Park LP Saskatchewan \- CAD 125 340 -215 \- 2 74.98% Kennedy Wind Farm GP Ltd British Columbia \- CAD \- \- \- \- \- 74.98% Kennedy Wind Farm LP Saskatchewan \- CAD 125 340 -215 \- 2 74.98% Nation Rise Wind Farm GP Inc. British Columbia 1,690 CAD 8 25 -17 \- -6 74.98% Nation Rise Wind Farm LP Ontário 72,345,683 CAD 217,249 169,479 47,770 7,692 1,059 37.48% SBWF GP Inc. British Columbia 42 CAD 1 \- 1 \- \- 38.24% South Branch Wind Farm II GP Inc. British Columbia \- CAD \- \- \- \- \- 74.98% South Branch Wind Farm II LP Ontário 387,548 CAD 1,621 1,790 -169 \- 7 74.98% South Dundas Wind Farm LP Ontário 4,847,541 CAD 48,060 20,528 27,532 6,941 3,494 38.24% Mexico: EDPR Servicios de México, S. de R.L. de C.V. Cidade do México 160,535,656 MXN 6,409 1,494 4,915 2,457 213 74.98% Eólica de Coahuila, S.A. de C.V. Cidade do México 7,792,042 USD 261,651 217,263 44,387 41,367 11,548 38.24% Vientos de Coahuila, S.A. de C.V. Cidade do México 2,502,421 USD 102,439 102,151 288 \- -1,274 74.98% Parque Solar Los Cuervos, S. de R.L. de C.V. Cidade do México 5,244,480 USD 203,077 198,646 4,431 12,097 416 74.98% South America Geography / Platform: Brazil: EDP Renovaveis Brasil, SA (EDPR BR Subgroup Parent Company) São Paulo 2,129,472,300 BRL 531,695 134,454 397,241 1,146 12,218 74.98% Aventura Holding, S.A. São Paulo 127,733,996 BRL 36,164 8,282 27,882 \- 10,115 74.98% Central Eólica Amanhecer I, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Eólica Amanhecer II, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 HeadOfce Share capital / Currency Net Profit/(Loss) 31-Dec-21 Euro'000 % Group % Company Subsidiaries 448 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 Central Eólica Amanhecer III, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Eólica Amanhecer IV, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Eólica Amanhecer V, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Eólica Amanhecer VI, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Eólica Amanhecer VII, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Eólica Aventura I, S.A. São Paulo 81,678,829 BRL 23,754 9,450 14,304 3,626 796 38.24% Central Eólica Aventura II, S.A. São Paulo 31,220,564 BRL 16,381 9,770 6,611 3,709 2,224 74.98% Central Eólica Aventura III, S.A. São Paulo 39,746,401 BRL 20,765 12,384 8,381 4,385 2,741 74.98% Central Eólica Aventura IV, S.A. São Paulo 49,231,221 BRL 22,362 12,393 9,968 5,047 2,861 74.98% Central Eólica Aventura V, S.A. São Paulo 43,768,851 BRL 21,879 13,191 8,688 4,546 2,313 74.98% Central Eólica Baixa do Feijão I, S.A. São Paulo 39,216,713 BRL 20,429 12,096 8,333 2,903 261 38.24% Central Eólica Baixa do Feijão II, S.A. São Paulo 40,551,200 BRL 19,952 11,218 8,734 2,961 415 38.24% Central Eólica Baixa do Feijão III, S.A. São Paulo 67,416,713 BRL 23,328 12,358 10,970 2,721 -72 38.24% Central Eólica Baixa do Feijão IV, S.A. São Paulo 44,433,110 BRL 19,635 11,265 8,370 2,636 143 38.24% Central Eólica Boqueirão I, S.A. São Paulo 100,213,500 BRL 18,891 3,027 15,864 \- -11 74.98% Central Eólica Boqueirão II, S.A. São Paulo 70,245,500 BRL 13,572 2,453 11,120 \- -8 74.98% Central Eólica Catanduba I, S.A. São Paulo 500 BRL 4,628 4,810 -182 \- -175 74.98% Central Eólica Catanduba II, S.A. São Paulo 500 BRL 4,217 4,228 -11 \- -6 74.98% Central Eólica JAU, S.A. São Paulo 174,051,904 BRL 67,412 30,641 36,771 9,786 1,904 38.24% Central Eólica Jerusalém I, S.A. São Paulo 9,894,250 BRL 10,953 9,414 1,539 \- -16 74.98% Central Eólica Jerusalém II, S.A. São Paulo 9,015,250 BRL 10,621 9,215 1,406 \- -12 74.98% Central Eólica Jerusalém III, S.A. São Paulo 9,709,250 BRL 18,910 17,398 1,512 \- -16 74.98% Central Eólica Jerusalém IV, S.A. São Paulo 8,959,150 BRL 10,635 9,239 1,397 \- -12 74.98% Central Eólica Jerusalém V, S.A. São Paulo 8,973,250 BRL 10,554 9,155 1,399 \- -12 74.98% Central Eólica Jerusalém VI, S.A. São Paulo 10,516,250 BRL 12,029 10,386 1,643 \- -13 74.98% Central Eólica Monte Verde I, S.A. Lagoa Nova 20,593,200 BRL 39,746 36,514 3,233 \- -20 74.98% Central Eólica Monte Verde II, S.A. Lagoa Nova 20,307,200 BRL 34,886 31,694 3,193 \- -18 74.98% Central Eólica Monte Verde III, S.A. Lagoa Nova 18,473,200 BRL 28,617 25,718 2,899 \- -19 74.98% Central Eólica Monte Verde IV, S.A. Lagoa Nova 14,528,200 BRL 26,315 24,037 2,277 \- -16 74.98% Central Eólica Monte Verde V, S.A. Lagoa Nova 10,517,200 BRL 17,763 16,114 1,649 \- -15 74.98% Central Eólica Monte Verde VI, S.A. Lagoa Nova 12,211,000 BRL 22,589 20,683 1,906 \- -19 74.98% Central Eólica SRMN I, S.A. São Paulo 54,114,765 BRL 28,516 20,142 8,374 \- -162 74.98% Central Eólica SRMN II, S.A. São Paulo 83,393,676 BRL 34,492 20,421 14,070 1,640 1,138 74.98% Central Eólica SRMN III, S.A. São Paulo 54,211,265 BRL 28,536 20,133 8,402 \- -156 74.98% Central Eólica SRMN IV, S.A. São Paulo 55,642,262 BRL 29,810 21,172 8,638 \- -148 74.98% Central Eólica SRMN V, S.A. São Paulo 41,343,289 BRL 23,248 16,422 6,826 780 382 74.98% Central Geradora Fotovoltaica Monte Verde Solar II, S.A. São Paulo 500 BRL 217 68 149 \- \- 74.98% Central Geradora Fotovoltaica Monte Verde Solar III, S.A. São Paulo 500 BRL 216 67 149 \- \- 74.98% Central Geradora Fotovoltaica Monte Verde Solar IV, S.A. São Paulo 500 BRL 217 68 149 \- \- 74.98% Central Geradora Fotovoltaica Monte Verde Solar VI, S.A. São Paulo 500 BRL 217 68 149 \- \- 74.98% Central Geradora Fotovoltaica Monte Verde Solar VII, S.A. São Paulo 500 BRL 215 66 149 \- \- 74.98% Central Nacional de Energia Eólica, S.A. São Paulo 12,396,000 BRL 4,378 1,087 3,292 2,168 1,262 38.24% Central Solar Lagoa I, S.A. São Paulo 510,000 BRL 194 115 80 \- -1 74.98% Central Solar Lagoa II, S.A. São Paulo 510,000 BRL 172 92 80 \- -1 74.98% Central Solar Novo Oriente I, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Solar Novo Oriente II, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Solar Novo Oriente III, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Solar Novo Oriente IV, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Solar Novo Oriente V, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Solar Novo Oriente VI, S.A. São Paulo 50 BRL \- \- \- \- \- 74.98% Central Solar Pereira Barreto I, S.A. Pereira Barreto 39,317,000 BRL 28,884 21,390 7,494 2,233 1,743 74.98% Central Solar Pereira Barreto II, S.A. Pereira Barreto 102,597,000 BRL 27,997 10,583 17,414 2,133 1,716 74.98% Central Solar Pereira Barreto III, S.A. Pereira Barreto 34,747,000 BRL 35,620 29,179 6,441 1,707 1,287 74.98% Central Solar Pereira Barreto IV, S.A. Pereira Barreto 54,747,000 BRL 28,114 18,813 9,300 1,528 1,055 74.98% Central Solar Pereira Barreto V, S.A. Pereira Barreto 14,035,000 BRL 25,488 23,369 2,119 575 -20 74.98% Elebrás Projetos, S.A. São Paulo 103,779,268 BRL 40,093 14,429 25,664 19,334 8,784 38.24% Jerusalém Holding, S.A. São Paulo 57,212,700 BRL 66,235 57,341 8,893 \- -97 74.98% Monte Verde Holding, S.A. São Paulo 96,816,300 BRL 59,104 43,952 15,152 \- -126 74.98% SRMN Holding, S.A. São Paulo 271,075,000 BRL 52,329 8,706 43,623 \- 1,028 74.98% Colombia: Elipse Energía, S.A.S. E.S.P. Bogotá 253,201,999 COP 440 732 -292 \- -448 74.98% Eolos Energías, S.A.S. E.S.P. Bogotá 16,236,568,604 COP 79,351 44,644 34,707 \- -4,439 74.98% Kappa Energía, S.A.S. E.S.P. Bogotá 251,632,000 COP 517 807 -291 \- -446 74.98% Omega Energía, S.A.S. E.S.P. Bogotá 251,569,001 COP 440 730 -291 \- -446 74.98% Solar Power Solutions, S.A.S. E.S.P. Bogotá 1,031,027,958 COP 2,173 726 1,447 \- -450 74.98% Vientos del Norte, S.A.S. E.S.P. Bogotá 13,604,192,802 COP 45,820 16,149 29,670 927 -3,716 74.98% Chile EDP Renewables Chile, SpA Santiago 3,961,123 USD 6,298 3,116 3,182 1,585 -302 74.98% Los Llanos Solar, SpA Santiago 592 USD 676 1,125 -449 \- -431 74.98% Parque Eólico Punta de Talca, SpA Santiago 358,552 USD 328 987 -659 \- -674 74.98% Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group % Company 449 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 Parque Eólico San Andrés, SpA Santiago 438,894 USD 3,925 4,239 -313 \- -319 74.98% Parque Eólico Victoria, SpA Santiago 1,311,374 USD 90 337 -247 \- -285 74.98% Other Geographies: EDP Renewables Vietnam Company Limited Ho Chi Minh 7,200,000,003 VND 344 1,059 -715 \- -948 74.98% Trung Son Energy Development JSC Khanh Hoa Province 197,000,000,009 VND 26,802 18,629 8,174 1,246 -334 74.98% OMA Haedori Co., Ltd. Coreia do Sul 497,624,000 KRW 593 663 -70 \- -428 44.99% Trung Song SG Pte. Ltd. Singapura 10,674,707 USD 62,670 53,380 9,290 \- -64 74.98% LYS Energy Investment Pte. Ltd. Singapura 10,674,707 USD 9,384 1,557 7,827 \- 114 74.98% Electricity Generation: Bioastur, A.I.E. Serín 60,101 EUR 50.00% Companhia Energética do JARI - CEJA São Paulo 850,823,746 BRL 27.98% Empresa de Energia Cachoeira Caldeirão, S.A. Amapá 728,600,000 BRL 27.98% Empresa de Energia São Manoel S.A. Rio de Janeiro 2,409,974,104 BRL 18.66% Kosorkuntza, A.I.E. Bilbau \- EUR 25.00% Pecém Operação e Manutenção de Unidades de Geração Eletrica S.A. Ceará 7,053,368 BRL 27.98% Porto do Pecém Transportadora de Minérios S.A. Ceará 6,604,018 BRL 27.98% Renewable Energy Activity: Desarrollos Energéticos Canarios, S.A. Las Palmas 15,025 EUR 37.41% Desarrollos Energéticos del Val, S.L. Soria 137,070 EUR 18.74% Evolución 2000, S.L. Albacete 117,996 EUR 36.85% Flat Rock Windpower II LLC Delaware 215,826,269 USD 37.49% Flat Rock Windpower LLC Delaware 548,339,611 USD 37.49% Goldfinger Ventures LLC Delaware 140,518,424 USD 37.49% Goldfinger Ventures II LLC Delaware 184,194,100 USD 37.49% OW Offshore, S.L. Madrid 57,519,614 EUR 37.49% Moray West Holdings Limited Londres 1,000 GBP 25.04% Nine Kings Wind Farm LLC Delaware \- USD 37.49% Sistemas Eólicos Tres Cruces, S.L. Soria 50,000 EUR 18.74% Solar Ventures Acquisition LLC Delaware -0 USD 37.49% Evoikos Voreas A.E. Athens 66,000 EUR 38.24% Sofrano Athens 700,000 EUR 38.24% Riverstart Development LLC Delaware 0 USD 15.00% Riverstart Ventures LLC Delaware 147,500,396 USD 15.00% 2019 Vento XX LLC Delaware 234,070,472 USD 15.00% 2018 Vento XIX LLC Delaware 85,678,362 USD 15.00% 2017 Vento XVII LLC Delaware 176,413,762 USD 15.00% Other Activities: ARQUILED - Proj. Iluminação, S.A. Mora 231,004 EUR 49.91% Energia Ásia Consultoria, Limitada Macau 200,000 MOP 50.00% 49.00% Hydro Global Investment, Ltda.- Subconsoliado Hong Kong 166,066,000 USD 50.00% MABE Construção e Administração de Projectos, Ltda. Ceará 566,151,832 BRL 27.98% Electricity Generation: Carriço Cogeração - Sociedade de Geração de Electricidade e Calor, S. Lisbon 50,000 EUR 35.00% HC Tudela Cogeneración, S.L. Aboño - Carreño 306,030 EUR 50.10% Solar Siglo XXI, S.A. Ciudad Real 80,000 EUR 18.74% Electricity Supply: Blue Sol Participações S.A. São Paulo 20,005,268 BRL 22.39% Electricity Distribution: AMBERTREE - Tecnologia para Redes de Energia Electrica, Lda Lisbon 5,000 EUR 26.00% Associated companies * HeadOfce Share capital / Currency % Group % Company Subsidiaries HeadOfce Share capital / Currency Assets 31-Dec-21 Euro'000 Liabilities 31-Dec-21 Euro'000 Equity 31-Dec-21 Euro'000 Revenues 31-Dec-21 Euro'000 Net Profit/(Loss) 31-Dec-21 Euro'000 % Group % Company Joint Ventures entities * HeadOfce Share capital / Currency % Group % Company 450 EDP - Energias de Portugal, S.A. Notes to the Consolidated and Company Financial Statements for the periods ended 31 December 2021 and 2020 Renewable Energy Activity: Biomasas del Pirineo, S.A. Huesca 454,896 EUR 22.49% Blue Canyon Windpower LLC Texas 63,851,000 USD 18.74% Desarrollos Eólicos de Canarias, S.A. Gran Canaria 1,817,167 EUR 33.55% Eólica de São Julião, Lda. Lisbon 500,000 EUR 33.74% Eos Pax IIa, S.L. La Coruña 6,010 EUR 36.36% Geólica Magallón, S.L. Zaragoza 2,040,000 EUR 27.17% Parque Eólico Belmonte, S.A. Madrid 120,401 EUR 22.42% Parque Eólico Sierra del Madero, S.A. Madrid 7,193,970 EUR 31.49% San Juan de Bargas Eólica, S.L. Zaragoza 5,000,000 EUR 35.25% Solar Works! B.V. Roterdão 6,769,245 USD 15.13% Unión de Generadores de Energía, S.L. Zaragoza 23,044 EUR 37.49% Other Activities: Centrais Elétricas de Santa Catarina, S.A. - Celesc Santa Catarina 2,480,048,423 BRL 16.73% Zypho, S.A. Oporto 221,795 EUR 33.50% Endeco Technologies Limited Dublin 15,756,985 EUR 16.90% Principle Power, Inc Seattle 33,150 USD 23.84% SCNET - Sino-Portuguese Centre Shanghai 21,600,000 CNY 40.00% Vertequip, Equipamentos e Trabalhos Verticais, Lda Chamusca 347,139 EUR 23.66% WPVT, S.A. Oporto 75,001 EUR 20.00% Associated companies * HeadOfce Share capital / Currency % Group % Company CHANGING TOMORROW NOW 452 453 Diverse and inclusive, for generations to come. HUMAN 454 455 07 — ANNEXES FINAL REFERENCES 456 PROPOSAL FOR THE 457 APPROPRIATION OF PROFITS HISTORY OF OPERATIONAL INDICATORS 458 CONCEPTS & DEFINTIONS 463 EXTERNAL CHECKS 456 Final References The Executive Board of Directors expresses its gratitude to all those who have supported and followed, directly or indirectly, the activity of EDP Group over the year of 2021. First, we would like to thank the shareholders for the trust and support given to the Executive Board of Directors and to each of its members in the exercise of its activity. To all the members of the Corporate Bodies, responsible for the auditing and supervision of the Group, a special thanks is also due, for the support given over the year. A special word to the General and Supervisory Board for the guidance provided to the activity of the Executive Board of Directors. Considering the Group's results, as well as the demands placed on management, we consider that it is once again demonstrated that EDP's current governance model is fully consolidated. The Executive Board of Directors also extends its gratitude to all Stakeholders with which EDP Group interacted during 2021, notably, clients, suppliers, regulators, partners and local communities. Lastly, a special thanks to all EDP employees. Their knowledge, determination, and commitment were crucial for the company to achieve its results. Miguel Stilwell de Andrade (Chairman) Vera de Morais Pinto Pereira Carneiro Miguel Nuno Simões Nunes Ferreira Setas Ana Paula Garrido de Pina Marques Rui Manuel Rodrigues Lopes Teixeira 457 Proposal for the Appropriation of Profits In accordance with Article 30 (1) of EDP’s Articles of Association, the Executive Board of Directors hereby proposes for approval by the Shareholders that: 1\. The 2021 financial year results, in the total amount of € 824,069,862.75, have the following allocation: • Legal Reserve € 10,204,297.56 • Endowment to EDP Foundation* € 6,200,000.00 • Retained Earnings € 807,665,565.19 2\. Dividends to be paid in the amount of € 0.190 per share, in the total amount of € 753,479,392.28. * The proposed endowment amount remains unchanged from 2019. The total amount of € 753,479,392.28 in dividends to be paid from distributable assets, corresponding to € 0.190 per share, considers the total number of shares representing EDP’s share capital; nevertheless, under applicable law, no payment of dividends shall take place regarding own shares held by EDP as of the date that dividends are made available for payment, and such amount is added to the amount of retained earnings. 458 History of Operational Indicators RENEWABLES UN 2021 2020 2019 2018 WIND AND SOLAR INSTALLED CAPACITY Installed Capacity MW 12,490 11,500 10,812 11,301 Portugal MW 1,142 1,228 1,164 1,309 Spain MW 2,194 2,137 1,974 2,312 Rest of Europe MW 1,894 1,403 1,263 1,652 North America MW 6,438 6,296 5,944 5,562 Brazil MW 795 436 467 467 Asia MW 28 0 0 0 Capacity under Construction MW 1,824 2,051 664 344 Portugal MW 0 135 6 47 Spain MW 141 85 18 29 Rest of Europe MW 280 502 130 69 North America MW 320 970 509 199 Brazil MW 1,084 359 0 0 Equity Installed Capacity 1 MW 1,090 668 550 371 Portugal MW 31 30 0 0 Spain MW 156 167 152 152 Rest of Europe MW 311 0 0 0 North America MW 592 471 398 219 Brazil MW 0 0 0 0 Capacity under Construction MEP 1 MW 0 311 330 330 Portugal MW 0 0 14 14 Rest of Europe MW 0 311 316 316 WIND AND SOLAR NET ELECTRICITY GENERATION GWh 30,324 28,537 30,041 28,359 Portugal GWh 3,049 2,624 3,160 2,995 Spain GWh 4,979 4,346 5,298 5,164 Rest of Europe GWh 3,329 3,054 3,333 3,321 North America GWh 17,057 17,421 16,492 15,644 Brazil GWh 1,888 1,093 1,757 1,235 Asia GWh 23 0 0 0 WIND AND SOLAR TECHNICAL AVAILABILITY 97 97 97 97 Portugal % 98 98 98 98 Spain % 96 95 97 97 Rest of Europe % 98 98 97 97 North America % 96 96 96 97 Brazil % 98 98 98 98 Asia % n.d. 0 0 0 1 Share of the MW installed in plants owned by companies equity consolidated 459 RENEWABLES UN 2021 2020 2019 2018 HYDRO INSTALLED CAPACITY MW 7,127 7,127 8,785 8,785 Portugal MW 5,076 5,076 6,759 6,759 Spain MW 451 451 426 426 Brazil MW 1,599 1,599 1,599 1,599 EQUITY HYDRO INSTALLED CAPACITY 1 Installed Capacity MW 551 551 551 539 Brazil MW 551 551 551 539 Capacity under Construction MW 78 78 78 78 Brazil MW \- \- \- \- Peru MW 78 78 78 78 HYDRO NET ELECTRICITY GENERATION GWh 15,283 18,792 14,110 19,296 Portugal GWh 9,033 12,572 9,101 12,648 Spain GWh 772 677 880 1,054 Brazil GWh 5,478 5,543 4,129 5,594 HYDRO TECHNICAL AVAILABILITY Portugal % 91 93 91 91 Spain % 100 100 100 100 Brazil % 98 91 98 94 1 Share of the MW installed in plants owned by companies equity consolidated 460 NETWORKS UN 2021 2020 2019 2018 DISTRIBUTION Electricity distributed GWh 84,885 76,360 79,519 80,426 Portugal GWh 44,752 44,143 45,666 46,059 Spain GWh 14,117 7,559 8,262 9,360 Brazil GWh 26,016 24,658 25,591 25,007 Electricity supply points '000 11,427 11,274 10,470 10,343 Portugal '000 6,370 6,302 6,277 6,226 Spain '000 1,376 1,371 668 666 Brazil '000 3,680 3,601 3,524 3,451 Grid extension Km 378,155 375,777 340,744 339,177 Portugal Km 230,676 229,168 226,823 226,308 Overhead lines Km 180,951 179,867 177,841 177,491 Underground lines Km 49,725 49,301 48,981 48,817 Spain Km 52,493 52,492 20,766 20,709 Overhead lines Km 39,553 39,670 15,729 15,723 Underground lines Km 12,940 12,822 5,037 4,986 Brazil Km 94,986 94,118 93,155 92,160 Overhead lines Km 94,708 93,850 92,899 91,906 Underground lines Km 277 268 256 254 GRID LOSSES Portugal 1 % 9 10 10 10 Spain % 5 4 4 3 Brazil % 10 11 10 10 SERVICE QUALITY Portugal Installed Capacity Equivalent Interruption Time 2 Min 50 60 56 61 Spain Installed Capacity Equivalent Interruption Time 2 Min 20 15 26 17 Brazil Average Interruption Duration per Consumer EDP São Paulo Hours 6 7 7 8 EDP Espírito Santo Hours 8 8 8 8 Frequency of Interruptions per Consumer EDP São Paulo # 4 5 5 5 EDP Espírito Santo # 4 5 5 5 TRANSMISSION Grid extension Km 1,414 1,441 1,441 1,299 Grid extension in Operation Km 162 316 113 113 Grid extension Under Construction Km 1,252 1,125 1,328 1,186 2 ICEIT in MV grid, excluding extraordinary events 1 In 2021, the loss indicator was changed to consider the energy input in the grid, and not the output (as until 2020), according to the expectation that the regulator will incorporate this change in the next regulatory period, to align with common practice in other countries (namely Spain and Brazil). 461 CLIENT SOLUTIONS & ENERGY MANAGEMENT UN 2021 2020 2019 2018 THERMAL INSTALLED CAPACITY Installed Capacity MW 5,034 5,054 7,084 7,058 Portugal MW 2,049 2,049 3,236 3,236 CCGT MW 2,031 2,031 2,031 2,031 Coal MW 0 0 1,180 1,180 Cogeneration MW 17 17 24 24 Spain MW 2,265 2,285 3,128 3,102 CCGT MW 854 854 1,698 1,698 Coal MW 1,250 1,250 1,250 1,224 Nuclear MW 156 156 156 156 Cogeneration and Waste MW 5 25 25 25 Brazil MW 720 720 720 720 Coal MW 720 720 720 720 Equity Installed Capacity 1 MW 10 10 10 10 Portugal MW 0 0 0 0 Spain MW 10 10 10 10 THERMAL NET ELECTRICITY GENERATION GWh 15,321 16,988 22,539 24,308 Portugal GWh 3,961 7,623 10,027 12,341 CCGT GWh 3,836 5,653 5,838 4,091 Coal GWh 0 1,832 4,025 8,067 Cogeneration GWh 125 138 163 182 Spain GWh 7,944 7,779 8,805 8,512 CCGT GWh 2,599 4,107 4,346 1,242 Coal GWh 4,152 2,403 3,129 5,948 Nuclear GWh 1,145 1,196 1,223 1,196 Cogeneration and Waste GWh 48 73 107 126 Brazil GWh 3,417 1,586 3,707 3,455 Coal GWh 3,417 1,586 3,707 3,455 THERMAL TECHNICAL AVAILABILITY Portugal % 81 94 90 89 CCGT % 81 94 90 86 Coal % 0 96 90 94 Cogeneration % 91 94 94 97 Espanha % 79 95 95 96 CCGT % 89 98 95 99 Coal % 72 91 97 93 Nuclear % 86 91 92 90 Cogeneration % 99 97 100 100 Waste % n.d. 85 81 92 Brazil % 94 92 95 80 Coal % 94 92 95 80 1 Share of the MW installed in plants owned by companies equity consolidated 462 CLIENT SOLUTIONS & ENERGY MANAGEMENT UN 2021 2020 2019 2018 ELECTRICITY CUSTOMERS '000 8,654 8,620 9,828 9,848 Portugal '000 4,952 4,999 5,138 5,244 Last Resort '000 930 965 1,034 1,125 Liberalised Market '000 4,022 4,033 4,104 4,119 Market Share EDP - Liberalised Market % n.a. 76 78 81 Spain '000 22 22 1,166 1,154 Last Resort '000 0 0 229 221 Liberalised Market '000 22 22 937 933 Brazil '000 3,680 3,600 3,523 3,450 Last Resort '000 3,679 3,600 3,523 3,450 Liberalised Market '000 0.7 0.4 0.4 0.3 Social Tariff '000 914 833 818 862 Portugal '000 553 588 615 661 Spain '000 0 51 39 57 Brazil '000 360 194 164 144 Special Needs '000 1 1 1 2 Portugal '000 0 0 0 2 Brazil '000 0 1 1 0 Green Tariff '000 563 230 1,131 1,026 Portugal '000 563 230 73 3 Spain '000 0 0 1,058 1,023 Brazil '000 n.a. n.a. n.a. n.a. ELECTRICITY SUPPLIED GWh 59,687 69,566 71,254 65,556 Portugal GWh 19,936 19,508 20,653 21,136 Last Resort GWh 2,280 2,413 2,658 3,016 Liberalised Market GWh 17,656 17,095 17,995 18,119 Market Share EDP - Liberalised Market % n.a. 41 42 42 Spain GWh 10,959 10,790 12,362 12,549 Last Resort GWh 0 438 461 444 Liberalised Market GWh 10,959 10,352 11,901 12,106 Market Share EDP - Liberalised Market % 4 6 6 7 Brazil GWh 28,792 39,269 38,239 31,871 Last Resort GWh 13,587 13,429 14,202 13,769 Liberalized Market GWh 15,205 25,840 24,036 18,102 Social Tariff GWh 511 729 631 523 Portugal GWh 150 159 173 199 Spain GWh 0 110 111 117 Brazil GWh 360 461 348 208 Green Tariff GWh 2,067 5,760 5,456 5,546 Portugal GWh 1,547 746 174 10 Spain GWh 520 5,014 5,282 5,536 Brazil GWh n.a. n.a. n.a. n.a. GAS CUSTOMERS '000 687 692 1,599 1,595 Portugal '000 682 686 696 700 Last Resort '000 32 34 37 41 Liberalised Market '000 650 652 659 659 Spain '000 4 6 903 895 Last Resort '000 0 0 52 51 Liberalised Market '000 4 6 851 844 GAS SUPPLIED GWh 14,321 17,070 19,389 18,997 Portugal GWh 4,401 4,294 3,995 3,854 Last Resort GWh 155 167 202 249 Liberalised Market GWh 4,247 4,127 3,793 3,605 Market Share EDP - Liberalised Market % n.a. 11 11 10 Spain GWh 9,920 12,776 15,394 15,143 Last Resort GWh 0 195 247 261 Liberalised Market GWh 9,920 12,581 15,147 14,882 Market Share EDP - Liberalised Market % 6 3 4 3 463 Concepts and Definitions A ADJUSTED NET DEBT Net Debt adjusted by Regulatory Receivables. ADJUSTED NET DEBT/EBITDA Number of times/years needed to pay the Adjusted Net Debt with the EBITDA generated by the Company. ASSET ROTATION Strategy aimed at crystallizing the value of a project by selling a stake in an asset and reinvesting the proceeds in another asset, targeting greater growth. Typically the developer retain the role as an O&M supplier. AVERAGE COST OF DEBT Considers (Interest expense on financial debt +/- Income and Expenses with Interest from derivative financial instruments) / Average Financial Gross Debt in the period (Total debt and borrowings - Accrued Interest - Fair value of the issued debt hedged risk). Includes 50% of the interest expense and of the nominal amount of hybrid debt. C CAGR (COMPOUND ANNUAL GROWTH RATE) Annual growth rate over a specified period of time longer than one year CAPEX (CAPITAL EXPENDITURE) Capex includes increases in Property, Plant and Equipment and in Intangible Assets, excluding CO2 licenses and Green certificates, net of increases in Government grants, Customers contributions for investment and Sales of properties in the period. CDI (INTERBANK DEPOSIT CERTIFICATE RATE) Brazilian reference interest rate constructed from the daily average overnight interbank loans. The CDI rate is commonly used as the reference in short-term securities. CDS (CLEAN DARK SPREAD) Theoretical gross margin of a coal-fired power plant per unit of electricity after deducting variable production costs (fuel, emission allowances, transport charges, variable O&M, per-unit taxes, etc.). CESE (EXTRAORDINARY CONTRIBUTION TO THE ENERGY SECTOR) Extraordinary contribution created in 2014, in Portugal, with the objective of financing mechanisms that promote the energy sector systemic sustainability. This contribution focuses generally on the economic operators that develop the following activities: (i) generation, transportation or distribution of electricity; (ii) transportation, distribution, storage or wholesale supply of natural gas; and (iii) refining, treatment, storage, transportation, distribution and wholesale supply of crude oil and oil products. CLAWBACK Mechanism of financial compensation established by the Portuguese government on electricity generators operating in Portugal. This mechanism has as its objective the restitution to the electricity system of part of the income derived from the tax differences in electricity generation between Portugal and Spain. COD (COMMERCIAL OPERATION DATE) Date upon which the project starts operating officially, after the testing and commissioning period. CONTRACTING LEVEL Ratio that returns the percentage of market commitment of Brazilian electricity distribution companies that is properly covered by energy purchase contracts registered in CCEE. Non-compliance generates penalties provided for in the rules and procedures of commercialization. The penalties apply when the ratio is above 105% or below 95%. CSS (CLEAN SPARK SPREAD) 464 Theoretical gross margin of a gas-fired power plant per unit of electricity after deducting variable production costs (fuel, emission allowances, transport charges, variable O&M, per-unit taxes, etc.). D D/E (DEBT-TO-EQUITY RATIO) Debt-to-equity (D/E) ratio is calculated by dividing a company’s total liabilities by its shareholder equity. The ratio is used to evaluate a company's financial leverage being an important metric used in corporate finance. It is a measure of the degree to which a company is financing its operations through debt versus wholly-owned funds. DEC Equivalent interruption time of energy per consumed unit. Refers only to medium voltage. DIVIDEND PAY-OUT RATIO Measures the percentage of a company’s net income that is given to shareholders in the form of dividends (Total Dividends per Share of period “n”/ Earnings per Share of period “n-1”). DIVIDEND YIELD Considers the ratio between gross dividend per share and its share price. DPS (DIVIDEND PER SHARE) Dividend per share (DPS) is the sum of declared dividends issued by a company for every ordinary outstanding share. DPS is calculated by dividing the total dividends paid out by a business, including interim dividends, over a period of time by the number of outstanding ordinary shares issued. E EBIT Earnings before Interest and Tax: EBITDA deducted from provisions, amortisations and impairments. EBITDA Earnings before Interest, Tax, Depreciations and Amortizations: Gross Profit - Supplies and services - Personnel costs and employee benefits +/- Other income/expenses. EBITDA@risk Estimated loss of EBITDA, in a given period of time and for a given confidence interval. Usually a 12-month is used along with a 95% level of confidence. EOLICITY Indicator that allows to quantify the deviation of the total value of energy produced by wind in a given period, in relation to an average wind regime. ENERGY BOX Energy Box is a household energy manager that does much more than metering energy, being endowed with technology that supports the supply of electricity services, namely, in remote communications. EPS (EARNINGS PER SHARE) The portion of a company's net profit allocated to each outstanding share of common stock. F FEC Equivalent interruption frequency of energy per consumed unit. Refers only to medium voltage. FEED IN TARIFFS Remuneration framework that guarantees that a company will receive a set price, applied to all of the electricity they generate and provide to the grid. FFO 465 Funds from Operations: EBITDA – Interest on debt and on TEI liabilities – Current taxes +/- Income from equity investments +/- other residual adjustments resulting from accruals/deferrals. FFO/NET DEBT Funds from Operations (FFO) over Net Debt. For this purpose, Net Debt includes Nominal Debt of the company + Pension and Medical care liabilities post tax + Tax Equity financial liabilities + Present value of leasing and other financial commitments. FOREX Foreign Exchange (forex or FX) is the trading of one currency for another. For example, one can swap the U.S. dollar for the euro. Foreign exchange transactions can take place on the foreign exchange market, also known as the Forex Market. G GC (GREEN CERTIFICATE) Tradable commodity resulting from electricity generated using renewable energy sources. GHG (GREENHOUSE GASES) Gases that trap the heat of the sun in the Earth's atmosphere, producing the greenhouse effect. The two major greenhouse gases are water vapor and carbon dioxide. Lesser greenhouse gases include methane, ozone, chlorofluorocarbons, and nitrogen oxides. GROSS PROFIT Includes Revenues from energy sales and services and other minus Cost of energy sales and other. GSF (GENERATION SCALING FACTOR) Ratio of the deficit of hydroelectric companies' actual generation volumes to their assured energy delivery. GW (GIGAWATT) Unit of electric power equal to 1,000 MW. GWh Equal to 1,000 MW used continuously for one hour. H HEDGING Risk management strategy used in limiting or offsetting probability of loss from fluctuations in the prices of commodities, currencies, indexes or securities. HYDRO COEFFICIENT Indicator that allows to quantify the deviation of the total value of hydroelectric energy produced in a given period, in relation to an average hydro regime. Values above "1" translate a period with inflows and energy generated above the average ("wet" period) and bellow "1" the reverse ("dry" period). I ICEIT (INSTALLED CAPACITY EQUIVALENT INTERRUPTION TIME) Indicator that represents the equivalent interruption time of installed power per geographical area of the operator of the distribution network in a given period, excluding extraordinary events (the extraordinary weather events that exceed the conditions for which was dimensioned). IGP-M (GENERAL MARKET PRICE INDEX) Index used to comprehensively measure the fluctuation of prices of goods and services practiced in the Brazilian market. Calculated by FGV (Getúlio Vargas Foundation), this index is used to update the prices of some goods and services, namely electricity. INSTALLED CAPACITY Installed Capacity is the sum of capacity (MW) installed in power plants owned by companies fully consolidated. 466 INSTALLED CAPACITY EQUITY Installed Capacity Equity also includes the respective share of the MW installed in power plants owned by company’s equity consolidated. IPCA (EXTENDED NATIONAL CONSUMER PRICE INDEX) Is the name given to the Consumer Price Index in Brazil being a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. ITC (INVESTMENT TAX CREDIT) Tax incentive in the US in the form of an one-shot tax credit that covers a percentage of the investment. K KRI (KEY RISK INDICATOR) Risk indicator that follows a variable risk factor, allowing the early warning of changes in risk exposure and the identification of potential risks or opportunities. L LIQUIDITY Total amount of Cash and Equivalents, Credit Lines available and Financial assets at fair value through profit or loss. LOSSES The total losses of electric energy are calculated by the differential between the energy entered in the electrical network and the distributed energy (% Global losses = (Energy Input - Distributed Energy) / Distributed Energy). They consist of technical losses related to the magnetization of the power transformers, the Joule effect, the consumption of meters, etc. and non-technical losses related to theft, fraud, anomalies in counting equipment or in systems M MW (MEGAWATT) Unit of electric power equal to 10 6 watts. MWh Equal to 10 6 watts of electricity used continuously for one hour. N NCF (NET CAPACITY FACTOR) The ratio of a plant’s actual output over a period of time to its potential output if it were possible for it to operate at full nameplate capacity continuously, over the same period of time. Also known as Load Factor. NET DEBT A metric that shows a company’s overall debt situation calculated using company’s total debt less cash on hand. From 2017 onwards it includes Financial Debt, Cash and Equivalents, Short-term financial assets at fair-value and fair value hedge and collateral deposits associated to financial debt and 50% of the amount related with the issuance of a subordinated debt instrument (hybrid). Until 31 December 2016, it included the fair value of derivatives designated for Net Investments hedge. NET INVESTMENTS Considers Capex + organic Financial Investments - Asset Rotations + granted and/or sold shareholder loans. O OPEX (OPERATING EXPENDITURE) Includes Supplies and Services and Personnel costs and Employee Benefits. OPEX/GROSS PROFIT Efficiency ratio that compares the cost to operate with the income generated computed by OPEX (excluding Restructuring costs) over Gross Profit (including income from institutional partnerships in EDPR-NA). 467 ORGANIC CASH-FLOW Cash generated from organic activities. Includes cash flows from operating activities (excluding changes in Regulatory Receivables), net of maintenance CAPEX, interest payments associated with debt, payments to institutional partnerships in the US and payments to minorities (such as dividends, capital distributions and payments of capital/interests on shareholder loans), not excluding gains arised from Sell-Down . P PLD (SETTLEMENT PRICE FOR THE DIFFERENCES) Price used to value the energy exchanged in the spot market. This price is calculated weekly for each submarket and load periods, based on the marginal cost of generation. It is limited by a minimum and maximum value. PPA (POWER PURCHASE AGREEMENT) A legal contract between an electricity generator (provider) and a power purchaser (host). The power purchaser buys energy, and sometimes also capacity and/or ancillary services, from the electricity generator. PTC (PRODUCTION TAX CREDIT) The result of the Energy Policy Act of 1992, a commercial tax credit in the US that applies to wholesale electrical generators of wind energy facilities based upon the amount of energy generated in a year. PUMPING Pumping activity is the act of pushing back to the dam reservoir the water that had already been turbinated before. This action intends to increase the hydro output and thus generate higher operational results as water is pushed back when electricity market prices are low and turbinated again when those prices reach higher levels. R RAB (REGULATORY ASSET BASE) Corresponds to the net book value of the distribution companies’ regulated fixed assets (gross value less accumulated depreciation, net of reimbursements). RECURRING Which occurs periodically or repeatedly. It aims to normalize indicators into more predictable ones and which can be counted on in the future with a high degree of certainty. Indicators such as EBITDA, Net Profit, FFO, Organic Cash-Flow are referred to as recurring when adjusted by one-off events. One-off events include non-recurrent amounts materially relevant resulting from, for instance, impairments and capital gains/losses on assets, retroactive regulatory changes, HR and debt restructuring costs and CESE. REGULATORY RECEIVABLES Amounts pending to be received from the electricity system and related with tariff adjustments and tariff deficits from regulated activities in Iberia and Brazil (Generation in Portugal and Spain, Distribution and Last Resort Supply of electricity in Portugal and Distribution in Brazil). RENEWABLE ENERGY Energy that is derived from resources that are regenerative or that cannot be depleted including wind energy, solar, biomass, geothermal, and moving water. REC (RENEWABLE ENERGY CREDIT) Represents the property rights to the environmental, social, and other non-power qualities of renewable electricity generation. A REC can be sold separately from the electricity associated with a renewable energy generation source. RESERVOIR LEVEL Volume of water stored in a dam reservoir measured in total amount of electrical power it can produce if turbinated (GWh). RESIDUAL INCOME Is the amount of net income generated in excess of the minimum rate of return. Residual income concepts have been used in a number of contexts, including as a measurement of internal corporate performance whereby a company's management team evaluates the return generated relative to the company's minimum required return. ROE (RETURN ON EQUITY) 468 Earnings before non-controlling interests over average total equity of the period. ROIC (RETURN ON INVESTED CAPITAL) ROIC gives a sense of how a company uses its money to generate returns. ROIC = EBIT Adjusted over annual average Invested Capital. EBIT Adjusted is EBIT + share of net profit in joint ventures and associates + impairments + provisions +/- capital losses/gains (except related to sell downs) + HR restructuring costs – Price Purchase Allocation amortizations – other one-off events. Invested Capital includes net fixed assets – assets under construction + working capital. ROIC CASH (CASH RETURN ON INVESTED CAPITAL) Similar to ROIC but focuses on cash return rather than profit. EBIT adjusted is EBIT – (nominal tax rate x EBIT) + share of net profit in joint ventures and associates. Invested Capital as in ROIC. ROIC LEVELIZED Similar to ROIC but focuses on the average life of Invested Capital rather than in accounted Invested Capital. EBIT Adjusted as in ROIC. Invested Capital assumes 50% amortization of assets for all businesses except networks. ROR (RATE OF RETURN) Corresponds to the rate to be applied to the distribution companies’ RAB accepted for capital remuneration purposes, with the respective formula defined by the Regulator at the beginning of each regulatory period. RPS (RENEWABLE PORTFOLIO STANDARD) Regulation in the US that places an obligation in certain states on electricity supply companies to source a specific percentage of their energy from renewable sources. S SAIDI (SYSTEM AVERAGE INTERRUPTION DURATION INDEX) Is the average outage duration for each served customer. SELL-DOWN Strategy aimed at developing and selling a majority stake in an asset, crystallizing the value of a project, and reinvesting the proceeds in another asset, targeting greater growth. Typically, the developer may retain the role of O&M supplier. SOLAR PV (PHOTOVOLTAIC) Generation of electricity by means of solar power through photovoltaics, consisting on an arrangement of several components, including solar panels to absorb and convert sunlight into electricity, a solar inverter, cables and other electrical accessories. SUPPLY POINTS Points of the grid where the delivering or reception of electricity is made to the custumer, producer or other grid installation. SUSTAINABILITY INDEX The Sustainability Index (SI) is a measurement system of sustainability performance, composed by 33 indicators organized in 3 dimensions: Economic, Environmental and Social. The weights assigned to each dimension of the sustainable development reflect the importance given by RobecoSAM (investment specialist focused exclusively on Sustainability Investing). T TEI (TAX EQUITY INVESTORS) Tax Equity Investors are the agents that are willing to trade on PTC. TSR (TOTAL SHAREHOLDER RETURN) Measures the return that the stock provides to the shareholder, including dividends paid and the stock price appreciation. V VALUE@RISK Estimated loss of the asset value, in a given period of time and for a given confidence interval. Usually a 12-month is used along with a 95% level of confidence. 469 W WATT (W) The rate of energy transfer equivalent to one ampere under an electrical pressure of one volt. One watt equals 1/746 horsepower, or one joule per second. It is the product of voltage and current (amperage). Watts are the standard measure for power. PricewaterhouseCoopers & Associados – Sociedade de Revisores Oficiais de Contas, Lda. Sede: Palácio Sottomayor, Rua Sousa Martins, 1 - 3º, 1069-316 Lisboa, Portugal Receção: Palácio Sottomayor, Avenida Fontes Pereira de Melo, nº16, 1050-121 Lisboa, Portugal Tel: +351 213 599 000, Fax: +351 213 599 999, www.pwc.pt Matriculada na CRC sob o NIPC 506 628 752, Capital Social Euros 314.000 Inscrita na lista das Sociedades de Revisores Oficiais de Contas sob o nº 183 e na CMVM sob o nº 20161485 PricewaterhouseCoopers & Associados – Sociedade de Revisores Oficiais de Contas, Lda. pertence à rede de entidades que são membros da PricewaterhouseCoopers International Limited, cada uma das quais é uma entidade legal autónoma e independente. Statutory Audit Report and Auditors’ Report (Free translation from the original in Portuguese. In the event of discrepancies, the Portuguese language version prevails) Report on the audit of the consolidated financial statements Opinion We have audited the accompanying consolidated financial statements of EDP – Energias de Portugal, S.A. (the Group), which comprise the consolidated statements of financial position as at December 31, 2021 (which shows total assets of Euro 50,994,152 thousand and total equity of Euro 13,977,565 thousand including a consolidated net profit attributable to equity holders of EDP of Euro 656,717 thousand), the consolidated income statements, the consolidated statements of comprehensive income, the consolidated statements of changes in equity and the consolidated statements of cash flows for the year then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly in all material respects, the consolidated financial position of EDP – Energias de Portugal, S.A. as at December 31, 2021, and their consolidated financial performance and their consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and other technical and ethical standards and recommendations issued by the Institute of Statutory Auditors. Our responsibilities under those standards are described in the “Auditor’s responsibilities for the audit of the consolidated financial statements” section below. In accordance with the law we are independent of the entities that are included in the Group and we have fulfilled our other ethical responsibilities in accordance with the ethics code of the Institute of Statutory Auditors. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current year. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 2 of 11 Key Audit Matter Summary of the Audit Approach Estimated energy sales Disclosures related to sales of energy (electricity and gas) presented in notes 2, 4, 7 and 26 of the consolidated financial statements. Revenue recognition of energy sales occurs at the time of delivery and incorporates three distinct aspects: (i) sales of energy billed based on actual consumption; (ii) sales of energy billed based on estimated consumption based on each customer's history; and (iii) estimate of energy supplied and not billed. The Group calculates the estimated volumes using an algorithm in line with the criteria defined by the regulatory entity. The algorithm is based on the average daily consumption of each customer, weighted by historical consumption profiles and adjusted for climatic factors and estimated energy losses. The Group also tests the algorithm using a telecounted sample of consumptions, also validating the estimate by comparison to the energy balance sheet that is based on the energy vloumes that are reported as being input to the network by the operator of the transmission network. A "rollback" analysis of real consumption is also carried out retrospectively. Valuation of the estimated quantities is carried out based on the historical average prices according to the tariff, type of customer, contracted power, among other factors. Given the high complexity of the methodology used by the Group to estimate the energy consumed by its customers and the degree of judgment involved, in particular in relation to volumes consumed and associated average prices, this issue was considered to be a relevant matter for the purposes of our audit. Our audit procedures included, among others, identifying and testing the design and operational effectiveness of key controls related to the recognition of revenue associated with energy sales, and in particular those related to estimated sales at the end of each period. The algorithm including the estimated volumes was obtained having been verified, on a sample basis for each type of customer and tariff, that the criteria defined by the regulator were being met and that the adjustments made were reasonable. Regarding the average prices used to value the estimated volumes for each type of costumer, a sample of historical data was also verified. The energy balance sheet was also obtained and the differences between the energy inputs to the network and the energy billed and estimated by the Group were evaluated. In order to complement the procedures described above, we also tested the reasonableness of the estimation of unbilled consumed energy on previous years’ considering the billing records of the year. We also reviewed the adequacy of the disclosures presented in the financial statements, based on the applicable accounting standards and in what we considered relevant. Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 3 of 11 Key Audit Matter Summary of the Audit Approach Transactions of equity stakes Disclosures related to transactions of equity stakes presented in notes 2, 4, 6, 8, 13, 21, 27, 33 and 39 of the consolidated financial statements. As a result of its activity and as part of its strategy, the Group proceeds to the disposal of equity stakes in controlled entities with the main objective of reinvesting the funds obtained in new projects. It also acquires equity stakes and other rights in entities considered relevant to its business portfolio and of value creation to the shareholders. Disposals may or may not result in a loss of control and acquisitions may or may not result in a gain in control, depending on the percentage of capital sold or acquired, shareholder agreements in place and effective control exercised. Given the amounts involved and the level of judgment involved in assessing the loss or gain of control, measuring contingent clauses resulting from the transactions, determining the acquisition value and allocating the acquisition price to identified assets / liabilities, this issue was considered to be a relevant matter for the purposes of our audit. Our audit procedures included, among others, holding meetings with the management of the geographies where the transactions took place, in order to obtain an adequate understanding of each of the relevant transactions, as well as the respective supporting documentation. Purchase and sale agreements, shareholder agreements and other associated documentation were analyzed in detail. The accounting treatment given to each of the operations was assessed based on the applicable accounting standards and the mathematical accuracy of the calculations that originate the records was tested. Key controls related to acquisitions and disposals of equity stakes were also identified and tested. Regarding disposals of equity stakes, the ownership of control and the valuation of contingent clauses, where applicable, were specifically analyzed and evaluated. In relation to the acquisition of equity stakes, control ownership was also evaluated, as well as the allocation of the purchase price to the fair value of identifiable assets and liabilities. We also reviewed the accounting treatment each of transactions analysed and the adequacy of the related disclosures, based on the applicable accounting standards and in what we considered relevant. Recoverability of non current assets Disclosures related to the non current assets in question presented in notes 2, 4, 12, 16, 18, 19, and 21 of the consolidated financial statements. As of 31 December 2021, goodwill, tangible fixed assets, intangible assets and investments in joint ventures and associates presented in EDP’s consolidated financial statements amounted to Euro 2,379,386 thousand, Euro Our audit procedures included, among others, identifying and testing the design and operational effectiveness of key controls related to impairment of non current assets, evaluating the adequacy of the impairment models used by the Group and testing the mathematical accuracy of the calculations. Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 4 of 11 Key Audit Matter Summary of the Audit Approach 21,099,241 thousand, Euro 4,915,025 thousand and Euro 1,350,445 thousand, respectively. In accordance with International Accounting Standard (IAS) 36, and as disclosed in the notes to the consolidated financial statements, the Group performs impairment tests on tangible and intangible assets whenever there are facts or circumstances that may indicate that the net book value may not be recoverable, except when allocated to cash generating units with allocated goodwill, in which case they are tested for impairment together with the associated goodwill on an annual basis or whenever there is evidence of impairment. Given the dispersion of the Group’s operating activity across the world, these impairment tests are carried out for the cash-generating units identified in each of the geographies where EDP Group operates. The recoverable amount of each of the non- current assets tested for impairment, namely tangible fixed assets used in the production and distribution of electricity, intangible assets related to concession rights and goodwill and financial investments in joint ventures and associates, is determined based on discounted cash flow models, which imply a high level of judgment given the uncertatinty of the underlying data, namely the economic and market projections and assumptions used relating to discount rates, exchange rates, growth rates and inflation rates, country risk, commodity prices, among others. Given the amounts involved, the complexity of the valuation models and the associated high level of judgment, this issue was considered to be a relevant matter for the purposes of our audit. We reconciled the future cash flows with the business plans approved by the management of each company and in all the geographies where the Group has assets subject to impairment tests. The reasonableness of the definition of cash-generating units subject to impairment tests was also evaluated. We also challenged the management regarding the appropriateness of the assumptions with the greatest sensitivity in determining the value in use, namely electricity price pools, prices of other commodities, regulatory frameworks and the respective impact on the cash flows of each geography and the discount rate. The analysis of the discount rate was carried out for each of the geographies, using peer information and other information available in the market. Sensitivity analysis were also carried out on the main assumptions in order to determine the level of variations that, individually or together, could lead to impairment losses on assets tested for impairment. The procedures described above, aimed at evaluating the assumptions and the methodology associated with the impairment models used by the Group, were carried out with the support of our team of specialists. The adequacy of the associated disclosures was also reviewed, based on the applicable accounting standards and in what we considered relevant. Derivative financial instruments Disclosures related to derivative financial instruments presented in notes 2, 4, 7, 13, 27, Our audit procedures included identifying and testing the design and operational effectiveness of the controls related to contracting, monitoring Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 5 of 11 Key Audit Matter Summary of the Audit Approach 32, 39, 42 and 45 of the consolidated financial statements. As mentioned in the consolidated financial statements, the exposure of EDP Group to financial risks lies essentially in its debt portfolio and in the commodity price volatility, resulting in interest rate, exchange rate and market price risks. Risk management of EDP Group is carried out centrally at EDP S.A., which uses a set of derivative financial instruments to cover these risks. As of 31 December 2021, the statement of financial position included assets and liabilities related to derivative financial instruments, amounting to Euro 2,353,326 thousand and Euro 3,941,244 thousand, respectively. The valuation of financial instruments classified as level 2, particularly derivative financial instruments, is carried using observable market data and valuation models based on discounted cash flow techniques, which usually involve a high degree of judgment by the Management in defining the assumptions to be used. Therefore, changes in these assumptions may give rise to material impacts in the the fair value of the mentioned financial instruments. Additionally, in accordance with IFRS 9, the Group prepares effectiveness tests on its hedging derivative financial instruments portfolio on an annual basis, in order to assess the accounting effectiveness of the hedges, which also involves the assumption of significant judgments and estimates. Given the relevance of the derivative financial instruments in the context of the Group's consolidated financial statements, together with the degree of judgment associated with its valuation and the complexity associated with its accounting treatment, this issue was considered to be a relevant matter for the purposes of our audit. and settling derivative financial instruments, to their classification, and to the preparation of supporting documentation and effectiveness tests, when applicable. In this context, controls tested included access policies, system management, approvals, confirmations with financial institutions and reconciliations with counterparties. Regarding the computation of the fair value of derivative financial instruments, in particular the models developed by the Group for this purpose, we evaluated their suitability and the suitability of the assumptions and data used by comparing observable data with information collected from external and independent sources, and analyzed the contractual information. External confirmations of counterparties were also performed in order to validate open positions as of the date of the statement of financial position. The documentation prepared by the Group regarding the hedge accounting was evaluated and compliance with the requirements of IFRS 9 was verified. The adequacy of the accounting entries for each of the analyzed situations as well as the adequacy of the own use exemption provided in IFRS 9 for the use of commodities in the operational activity and related impacts on the consumption calculation were also verified. The adequacy of the disclosures associated with financial derivative instruments was also reviewed, based on the applicable accounting standards and in what we considered relevant. Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 6 of 11 Key Audit Matter Summary of the Audit Approach Regulatory and legal framework Disclosures related to the regulatory and legal framework presented in notes 1, 2, 4, 7, 11, 15, 26, 36, 38, 43 and 50 of the consolidated financial statements. Given its geographic dispersion, the activity of the Group is subject to several regulatory and legal frameworks, which vary in accordance to the country and the activity performed. In this context, and particularly in Portugal, there has been an increase in the regulatory complexity associated with the activities in which the Group operates, which has given rise to several disputes and potential contingencies, namely related to the CMEC final adjustment, innovative aspects, costs with clawback, social tariff and CESE and other dispatches and published orders related to regulatory matters. These situations require the management to assess its potential impacts and to exercise, with the support of its legal counsels, a high degree of judgment as to its outcome, which may lead to additional provisions and to disclose additional information to the market, following the requirements of IAS 37 - Provisions, Contingent Liabilities and Contingent Assets. Given the increasing complexity of the regulatory and legal frameworks and the degree of judgment involved in assessing the outcome of the identified contingencies, this issue was considered to be a relevant matter for the purposes of our audit. Our audit procedures included identifying and testing the design and operational effectiveness of controls related to identifying and monitoring litigation and other regulatory and legal contingencies and to the categorization of risk. Several meetings were held with those in charge of the Regulatory and Legal Departments in order to obtain their understanding of the most relevant disagreements, litigations and contingencies and to inspect the relevant documentation. The assumptions used by the management to categorize the risks and measure the related contingencies. External confirmations from legal advisors and attorneys that are advising on regulatory and legal processes were also obtained, and the consistency of the information received with the risk assessment performed by the management was verified. The adequacy of the associated disclosures, namely the ones concerning the legal and regulatory framework of the Group’s activity, was also reviewed based on the applicable accounting standards and in what we considered relevant. Pensions and post employment benefits Disclosures related to pensions and post employment benefits presented in notes 2, 4, 10, 27, 32 and 35 of the consolidated financial statements. As of 31 December 2021, net liabilities with pensions and post-employment benefits presented in the consolidated financial statements of EDP Group amounted to Euro Our audit procedures included identifying and testing the design and operational efficiency of the controls implemented by the Group in order to determine liabilities with pension and post employment benefits, in particular the ones related to the assumptions used and to data sent to the actuary. Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 7 of 11 Key Audit Matter Summary of the Audit Approach 1,119,800 thousand, mainly comprising benefits with retirement and early retirement pensions, and healthcare services. These liabilities are estimated for each plan based on actuarial valuations performed annually by an independent expert in accordance with the Projected Credit Unit Method. These valuations incorporate a set of financial and actuarial assumptions, namely the discount rate, the inflation rate, the mortality and disability tables, the growth rates of pensions and salaries, amongst others, defined by the Executive Board of Directors considering the characteristics of the benefits attributed, the employees covered and the current and expected behaviour of these variables In the specific case of the discount rate used in the actuarial studies, it is determined on the basis of the market rates for high-quality corporate bonds in terms of credit risk, denominated in the currency in which the benefits will be paid and with a maturity similar to the termination date of the payment of the benefits of the plan. In this context, future changes in the financial and actuarial assumptions used may give rise to material impacts on the net liabilities and on the assets associated with these benefits, and for that reason this issue was considered to be a relevant matter for the purposes of our audit. Meetings were held with the management to identify the methodologies and options considered in defining the main financial and actuarial assumptions, for which a reasonableness analysis was performed by comparing them with the data that we were able to independently obtain. We also reviewed the adequacy of (i) the employee information, used for the calculation of liabilities; and (ii) the recognition of costs related to past services and actuarial deviations resulting from changes in assumptions and gains in experience. The fair value of the assets of the fund was independently validated by our internal experts. We have also read the actuarial report prepared with reference to 31 December 2021 and evaluated the main assumptions used, namely discount rate, inflation rate, growth rates of pensions and salaries and mortality and disability tables, using information developed internally and market benchmarks. We evaluated the technical skills of the actuary and verified its registration with ASF (Autoridade de Supervisão de Seguros e Fundos de Pensões), having also confirmed the actuary’s independence regarding the report as of 31 December 2021. The adequacy of the disclosures associated with post employment benefits, was also reviewed based on the applicable accounting standards and in what we considered relevant. Responsibilities of management and supervisory board for the consolidated financial statements Management is responsible for: a) the preparation of the consolidated financial statements, which present fairly the consolidated financial position, the consolidated financial performance and cash flows of the Group in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union; b) the preparation of the consolidated Directors’ report, the corporate governance report, the non-financial statement and the remunerations report in accordance with the applicable law and regulations; Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 8 of 11 c) the creation and maintenance of an appropriate system of internal control to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; d) the adoption of appropriate accounting policies and criteria; and e) the assessment of the Group’s ability to continue as a going concern, disclosing, as applicable, events or conditions that may cast significant doubt on the Group’s ability to continue its activities. The supervisory board is responsible for overseeing the process of preparation and disclosure of the Group’s financial information. Auditor’s responsibilities for the audit of the consolidated financial statements Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: a) identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; b) obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control; c) evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management; d) conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern; Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 9 of 11 e) evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation; f) obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion; g) communicate with those charged with governance, including the supervisory board, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit; h) of the matters we have communicated to those charged with governance, including the supervisory board, we determine which one’s were the most important in the audit of the consolidated financial statements of the current year, these being the key audit matters. We describe these matters in our report, except when the law or regulation prohibits their public disclosure; and i) confirm to the supervisory board that we comply with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, actions taken to eliminate threats or safeguards applied. Our responsibility also includes verifying that the information included in the consolidated Directors’ report is consistent with the consolidated financial statements and the verification set forth in paragraphs 4 and 5 of article No. 451 of the Portuguese Company Law on corporate governance matters, and verifying that the consolidated non-financial statement and the remunerations report were presented. Report on other legal and regulatory requirements Consolidated Directors’ report In compliance with paragraph 3 e) of article No. 451 of the Portuguese Company Law, it is our opinion that the consolidated Directors’ report has been prepared in accordance with applicable requirements of the law and regulation, that the information included in the consolidated Directors’ report is consistent with the audited consolidated financial statements and, taking into account the knowledge and assessment about the Group, no material misstatements were identified. Corporate governance report In compliance with paragraph 4 of article No. 451 of the Portuguese Company Law, it is our understanding that the corporate governance report includes the information required under article No. 29-H of the Portuguese Securities Market Code, that no material misstatements were identified in the information disclosed in this report and that it complies with paragraphs 1 c), d), f), h), i) and l) of that article. Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 10 of 11 European Single Electronic Format (ESEF) The Entity's consolidated financial statements for the year ended on December 31, 2021 must comply with the applicable requirements established in Commission Delegated Regulation (EU) 2019/815, of December 17, 2018 (ESEF Regulation). The management is responsible for the preparation and disclosure of the annual report in accordance with the ESEF Regulation. Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements included in the annual report are presented in accordance with the requirements of the ESEF Regulation. Our procedures took into account the OROC Technical Application Guide on ESEF reporting and included, among others: a) obtaining an understanding of the financial reporting process, including the annual report presentation in valid XHTML format; and b) the identification and assessment of the risks of material misstatement associated with the tagging of information in the consolidated financial statements, in XBRL format using iXBRL technology. This assessment was based on an understanding of the process implemented by the entity to tag the information. In our opinion, the consolidated financial statements included in the annual report are presented, in all material respects, in accordance with the requirements of the ESEF Regulation. Consolidated non-financial statement In compliance with paragraph 6 of article No. 451 of the Portuguese Company Law, we hereby inform that the Group prepared a separate report of the consolidated Directors’ report that includes the consolidated non-financial statement set forth in article No. 508-G of the Portuguese Company Law, which was disclosed together with the consolidated Directors’ report. Remunerations report In compliance with paragraph 6 of article No. 26-G of the Portuguese Securities Market Code, we hereby inform that the Entity included in a separate section, in its consolidated director’s report, the information set forth in paragraph 2 of that article. Additional information required in article No. 10 of the Regulation (EU) 537/2014 In accordance with article No. 10 of Regulation (EU) 537/2014 of the European Parliament and of the Council, of April 16, 2014, and in addition to the key audit matters referred to above, we also provide the following information: a) We were first appointed auditors of EDP – Energias de Portugal, S.A. in the Shareholders’ General Meeting of April 5, 2018 for the period from 2018 to 2020, having remained in functions until Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 11 of 11 the current period. Our last appointment was in the Shareholders’ General Meeting of April 14, 2021 for the period from 2021 to 2023. b) The management has confirmed to us it has no knowledge of any allegation of fraud or suspicions of fraud with material effect in the financial statements. We have maintained professional scepticism throughout the audit and determined overall responses to address the risk of material misstatement due to fraud in the consolidated financial statements. Based on the work performed, we have not identified any material misstatement in the consolidated financial statements due to fraud. c) We confirm that our audit opinion is consistent with the additional report that was prepared by us and issued to the Group’s supervisory board as of February 17, 2022. d) We declare that we did not provide any prohibited non-audit services referred to in paragraph 1 of article No. 5 of Regulation (EU) 537/2014 of the European Parliament and of the Council, of April 16, 2014 and that we remain independent of the Group in conducting our audit. February 17, 2022 PricewaterhouseCoopers & Associados \- Sociedade de Revisores Oficiais de Contas, Lda. represented by: Signed on the original João Rui Fernandes Ramos, ROC no. 1333 Registered with the Portuguese Securities Market Commission under no. 20160943 PricewaterhouseCoopers & Associados – Sociedade de Revisores Oficiais de Contas, Lda. Sede: Palácio Sottomayor, Rua Sousa Martins, 1 - 3º, 1069-316 Lisboa, Portugal Receção: Palácio Sottomayor, Avenida Fontes Pereira de Melo, nº16, 1050-121 Lisboa, Portugal Tel: +351 213 599 000, Fax: +351 213 599 999, www.pwc.pt Matriculada na CRC sob o NIPC 506 628 752, Capital Social Euros 314.000 Inscrita na lista das Sociedades de Revisores Oficiais de Contas sob o nº 183 e na CMVM sob o nº 20161485 PricewaterhouseCoopers & Associados – Sociedade de Revisores Oficiais de Contas, Lda. pertence à rede de entidades que são membros da PricewaterhouseCoopers International Limited, cada uma das quais é uma entidade legal autónoma e independente. Statutory Audit Report and Auditors’ Report (Free translation from the original in Portuguese. In the event of discrepancies, the Portuguese language version prevails) Report on the audit of the financial statements Opinion We have audited the accompanying financial statements of EDP – Energias de Portugal, S.A. (the Entity), which comprise the company statements of financial position as at December 31, 2021 (which shows total assets of Euros 29,752,741 thousand and total shareholders' equity of Euros 9,213,104 thousand including a net profit of Euros 824,070), the company income statements, the company statements of comprehensive income, the company statements of changes in equity and the company statements of cash flows for the year then ended, and the notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly in all material respects, the financial position of EDP – Energias de Portugal, S.A. as at December 31, 2021, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and other technical and ethical standards and recommendations issued by the Institute of Statutory Auditors. Our responsibilities under those standards are described in the “Auditor’s responsibilities for the audit of the financial statements” section below. In accordance with the law we are independent of the Entity and we have fulfilled our other ethical responsibilities in accordance with the ethics code of the Institute of Statutory Auditors. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 2 of 7 Key Audit Matter Summary of the Audit Approach Recoverability of investments in subsidiaries Disclosures related to investments in subsidiaries presented in notes 2, 4, 13, 20 and 44 of the financial statements. As of 31 December 2021, investments in subsidiaries presented in EDP’s financial statements amounted to Euro 15,065,364 thousand. As disclosed in the notes to the financial statements, in the context of the impairment tests carried out at EDP Group level, financial investments held by EDP, S.A. in subsidiaries are reviewed for impairment based on the higher of the value in use and the fair value less costs to sell. The value in use of each of the investments tested for impairment is determined based on discounted cash flow models, which imply a high level of judgment given the uncertatinty of the underlying data, namely the economic and market projections and assumptions used relating to discount rates, exchange rates, growth rates and inflation rates, country risk, commodity prices, among others. These assumptions are disclosed in the financial statements. Given the amounts involved, the complexity of the valuation models and the associated high level of judgment, this issue was considered to be a relevant matter for the purposes of our audit. Our audit procedures included, among others, identifying and testing the design and operational effectiveness of key controls related to impairment of investments in subsidiaries, evaluating the adequacy of the impairment models used by the Group and testing the mathematical accuracy of the calculations. We reconciled the future cash flows with the business plans approved by the management of each subsidiary subject to impairment tests. We challenged the management regarding the appropriateness of the assumptions with the greatest sensitivity in determining the value in use, namely electricity price pools, prices of other commodities, regulatory frameworks and the respective impact on the cash flows of each geography and the discount rate. An analysis of the discount rate was carried out in each of the geographies, using peer information and other information available in the market. Sensitivity analysis were also carried out on the main assumptions in order to determine the level of variations that, individually or together, could lead to impairment losses on investments in subsidiaries tested for impairment. The procedures described above, aimed at evaluating the assumptions and the methodology associated with the impairment models used by the Group, were carried out with the support of our team of specialists. The adequacy of the associated disclosures was also reviewed, based on the applicable accounting standards and in what we considered relevant. Derivative financial instruments Disclosures related to derivative financial instruments presented in notes 2, 4, 7, 13, 27, 32, 39, 42 and 45 of the consolidated financial statements. Our audit procedures included the identification and testing of the design and operational efficiency of the controls related to contracting, Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 3 of 7 Key Audit Matter Summary of the Audit Approach As mentioned in the financial statements, the exposure of EDP Group to financial risks lies essentially in its debt portfolio and in the commodity price volatility, resulting in interest rate, exchange rate and market price risks. Risk management of EDP Group is carried out centrally at EDP S.A., which uses a set of derivative financial instruments to cover these risks. As of 31 December 2021, the statement of financial position included assets and liabilities related to derivative financial instruments, amounting to Euro 5,292,105 thousand and Euro 4,786,556 thousand, respectively. The valuation of financial instruments classified as level 2, particularly derivative financial instruments, is carried using observable market data and valuation models based on discounted cash flow techniques, which usually involve a high degree of judgment by the Management in defining the assumptions to be used. Therefore, changes in these assumptions may give rise to material impacts in the the fair value of the mentioned financial instruments. Additionally, in accordance with IFRS 9, the Group prepares effectiveness tests on its hedging derivative financial instruments portfolio on an annual basis, in order to assess the accounting effectiveness of the hedges, which also involves the assumption of significant judgments and estimates. Given the relevance of the derivative financial instruments in the context of EDP’s financial statements, together with the degree of judgment associated with its valuation and the complexity associated with its accounting treatment, this issue was considered to be a relevant matter for the purposes of our audit. monitoring and settling derivative financial instruments, to their classification, and to the preparation of supporting documentation and effectiveness tests, when applicable. In this context, controls tested included access policies, system management, approvals, confirmations with financial institutions and reconciliations with counterparties. Regarding the computation of the fair value of derivative financial instruments, in particular the models developed by the Company for this purpose, we evaluated their suitability and the suitability of the assumptions and data used by comparing observable data with information collected from external and independent sources, and we analyzed the contractual information. External confirmations of counterparties were also performed in order to validate open positions as of the date of the statement of financial position. The documentation prepared by the Company regarding the hedge accounting was evaluated and compliance with the requirements of IFRS 9 was verified. The adequacy of the accounting entries for each of the analyzed situations as well as the adequacy of the own use exemption provided in IFRS 9 for the use of commodities in the operational activity and related impacts on the consumption calculation were also verified. The adequacy of the acounting entries as well of the disclosures associated with financial derivative instruments was also reviewed, based on the applicable accounting standards and in what we considered relevant. Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 4 of 7 Responsibilities of management and supervisory board for the financial statements Management is responsible for: a) the preparation of the financial statements, which present fairly the financial position, the financial performance and the cash flows of the Entity in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union; b) the preparation of the Directors’ report, the corporate governance report, the non-financial statement and the remunerations report in accordance with the applicable law and regulations; c) the creation and maintenance of an appropriate system of internal control to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; d) the adoption of appropriate accounting policies and criteria; and e) the assessment of the Entity’s ability to continue as a going concern, disclosing, as applicable, events or conditions that may cast significant doubt on the Entity’s ability to continue its activities. The supervisory board is responsible for overseeing the process of preparation and disclosure of the Entity’s financial information. Auditor’s responsibilities for the audit of the financial statements Our responsibility is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: a) identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; b) obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control; Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 5 of 7 c) evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management; d) conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern; e) evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation; f) communicate with those charged with governance, including the supervisory board, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit; g) of the matters we have communicated to those charged with governance, including the supervisory board, we determine which one’s were the most important in the audit of the financial statements of the current year, these being the key audit matters. We describe these matters in our report, except when the law or regulation prohibits their public disclosure; and h) confirm to the supervisory board that we comply with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, actions taken to eliminate threats or safeguards applied. Our responsibility also includes verifying that the information included in the Directors’ report is consistent with the financial statements and the verification set forth in paragraphs 4 and 5 of article No. 451 of the Portuguese Company Law on corporate governance matters and verifying that the non- financial statement and the remunerations report were presented. Report on other legal and regulatory requirements Directors’ report In compliance with paragraph 3 e) of article No. 451 of the Portuguese Company Law, it is our opinion that the Directors’ report has been prepared in accordance with applicable requirements of the law and regulation, that the information included in the Directors’ report is consistent with the audited financial statements and, taking into account the knowledge and assessment about the Entity, no material misstatements were identified. Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 6 of 7 Corporate governance report In compliance with paragraph 4 of article No. 451 of the Portuguese Company Law, it is our understanding that the corporate governance report includes the information required under article No. 29-H of the Portuguese Securities Market Code, that no material misstatements were identified in the information disclosed in this report and that it complies with paragraphs 1 c), d), f), h), i) and l) of that article. European Single Electronic Format (ESEF) The Entity's financial statements for the year ended on December 31, 2021 must comply with the applicable requirements established in Commission Delegated Regulation (EU) 2019/815, of December 17, 2018 (ESEF Regulation). The management is responsible for the preparation and disclosure of the annual report in accordance with the ESEF Regulation. Our responsibility is to obtain reasonable assurance about whether the financial statements included in the annual report are presented in accordance with the requirements of the ESEF Regulation. Our procedures took into account the OROC Technical Application Guide on ESEF reporting and included, among others to obtaining an understanding of the financial reporting process, including the annual report presentation in valid XHTML format. In our opinion, the financial statements included in the annual report are presented, in all material respects, in accordance with the requirements of the ESEF Regulation. Non-financial statement In compliance with paragraph 6 of article No. 451 of the Portuguese Company Law, we hereby inform that the Entity prepared a separate report of the Directors’ report that includes the non-financial statement set forth in article No. 66-B of the Portuguese Company Law, which was disclosed together with the Directors’ report. Remunerations report In compliance with paragraph 6 of article No. 26-G of the Portuguese Securities Market Code, we hereby inform that the Entity included in a separate section, in its Directors’ report, the information set forth in paragraph 2 of that article. Additional information required in article No. 10 of the Regulation (EU) 537/2014 In accordance with article No. 10 of Regulation (EU) 537/2014 of the European Parliament and of the Council, of April 16, 2014, and in addition to the key audit matters referred to above, we also provide the following information: Statutory Audit Report and Auditors’ Report EDP – Energias de Portugal, S.A. December 31, 2021 PwC 7 of 7 a) We were first appointed auditors of the Entity in the Shareholders’ General Meeting of April 5, 2018 for the period from 2018 to 2020, having remained in functions until the current period. Our last appointment was in the Shareholders’ General Meeting of April 14, 2021 for the period from 2021 to 2023\. b) The management has confirmed to us it has no knowledge of any allegation of fraud or suspicions of fraud with material effect in the financial statements. We have maintained professional scepticism throughout the audit and determined overall responses to address the risk of material misstatement due to fraud in the financial statements. Based on the work performed, we have not identified any material misstatement in the financial statements due to fraud. c) We confirm that our audit opinion is consistent with the additional report that was prepared by us and issued to the Entity’s supervisory board as of February 17, 2022. d) We declare that we did not provide any prohibited non-audit services referred to in paragraph 1 of article No. 5 of Regulation (EU) 537/2014 of the European Parliament and of the Council, of April 16, 2014 and that we remain independent of the Entity in conducting our audit. February 17, 2022 PricewaterhouseCoopers & Associados \- Sociedade de Revisores Oficiais de Contas, Lda. represented by: Signed on the original João Rui Fernandes Ramos, ROC no 1333 Registered with the Portuguese Securities Market Commission under no 20161485 PricewaterhouseCoopers & Associados – Sociedade de Revisores Oficiais de Contas, Lda. Sede: Palácio Sottomayor, Rua Sousa Martins, 1 - 3º, 1069-316 Lisboa, Portugal Receção: Palácio Sottomayor, Avenida Fontes Pereira de Melo, nº16, 1050-121 Lisboa, Portugal Tel: +351 213 599 000, Fax: +351 213 599 999, www.pwc.pt Matriculada na CRC sob o NIPC 506 628 752, Capital Social Euros 314.000 Inscrita na lista das Sociedades de Revisores Oficiais de Contas sob o nº 183 e na CMVM sob o nº 20161485 PricewaterhouseCoopers & Associados – Sociedade de Revisores Oficiais de Contas, Lda. pertence à rede de entidades que são membros da PricewaterhouseCoopers International Limited, cada uma das quais é uma entidade legal autónoma e independente. Independent Reasonable Assurance Report on the Internal Control System related to the Financial Reporting of EDP Group (Free translation from the original in Portuguese. In the event of discrepancies, the Portuguese language version prevails) To the Executive Board of Directors of EDP – Energias de Portugal, S.A. Introduction We were engaged by the Executive Board of Directors of EDP – Energias de Portugal, S.A. (“EDP” or “the Company”) to perform a reasonable assurance engagement on the internal control system over the consolidated financial reporting (“SCIRF”) of the Company and its subsidiaries, for the financial year that ended 31 December 2021, implemented based on the criteria established in the internal control framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO 2013”) in relation to business processes and global controls, and by the Control Objectives for Information and related Technologies (“COBIT”) in relation to information technology general controls. Executive Board of Directors’ Responsibilities It is the responsibility of the Executive Board of Directors, the implementation and maintenance of an appropriate internal control system that enables the preparation of consolidated financial statements free of material misstatement due to fraud or error. Auditor’s Responsibilities Our responsibility consists in issuing a reasonable assurance report, professional and independent, based on the procedures performed and stated in the paragraphs below, on the effectiveness of the internal control system over EDP Group's consolidated financial reporting. Our procedures were conducted, with reference to the financial year that ended on the 31 December 2021, in order to obtain a reasonable degree of assurance over the effectiveness of the internal control system implemented by the Company's Executive Board of Directors, to ensure that the consolidated financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS) and present fairly and appropriately the financial position of the EDP Group, its financial performance and its consolidated cash flows, as well as the use of appropriate accounting policies and criteria. The internal control system also includes policies and procedures established by the Company's Executive Board of Directors that guarantee, with reasonable assurance: i) an adequate maintenance of records which reliably reflect, and in reasonable detail, the acquisitions and disposals of assets of EDP Group; Independent Reasonable Assurance Report EDP - Energias de Portugal, S.A. 31 December 2021 PwC 2 of 3 ii) that transactions are recorded in order to allow the preparation of consolidated financial statements in accordance with the applicable accounting standards; iii) that receipts are fully recorded and that payments made by EDP Group are made only with the authorization of the members of the Executive Board of Directors and Directors of EDP, or Directors and Management of EDP subsidiaries; and iv) the prevention or timely detection of unauthorized acquisitions or disposals or the inappropriate use of assets of EDP Group which may have a material effect on the consolidated financial statements. The work performed was conducted in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (reviewed) “Reliability Assurance Engagements that Are Not Audits or Reviews of Historical Financial Information”, issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants and with the additional standards and technical guidance issued by the Institute of Statutory Auditors (“Ordem dos Revisores Oficiais de Contas – OROC”). These Standards require that we plan and perform the assurance engagement to obtain reasonable assurance on whether the internal control system, implemented based on “COSO 2013” and “COBIT”, allows the consolidated financial reporting (“SCIRF”) to be prepared free from material misstatement. For this purpose, the above mentioned work consisted of: i) obtaining an understanding of the internal control system over EDP Group’s consolidated financial reporting; ii) assessing the risk of existence of material deficiencies in the internal control system over the consolidated financial reporting, based on the criteria of “COSO 2013” and “COBIT”; iii) carrying out tests related to the design, effectiveness and operation of controls based on the risk assessment performed; and iv) carrying out other procedures which we considered necessary under the circumstances. We believe that the procedures performed provide a reasonable basis for our conclusion. Quality control and independence We apply the International Standard Quality Control 1 (ISQC1) and, accordingly, maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements. We have complied with the independence and ethical requirements of the International Ethics Standards Board for Accountants (IESBA Code) and of the ethics code of the Institute of Statutory Auditors. Conclusion Based on the work performed, it is our opinion that EDP Group maintained, in all relevant material aspects, an internal control system adequate and effective related to its consolidated financial Independent Reasonable Assurance Report EDP - Energias de Portugal, S.A. 31 December 2021 PwC 3 of 3 reporting (“SCIRF”), for the financial year ended 31 December 2021, and in accordance with the criteria established in the internal control framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO 2013”) in relation to business processes and global controls, and by the Control Objectives for Information and related Technologies (“COBIT”) in relation to information technology general controls. Other matters i) On 17 February 2022 we issued the audit report on the consolidated financial statements of EDP Group with reference to the financial year ended 31 December 2021, in which we expressed an unqualified opinion; ii) Due to the inherent limitations to any internal control system, there is a possibility that the internal control system over the consolidated financial reporting does not prevent or detect errors or irregularities that may arise, either due to collusion, errors in judgment, human error, fraud, or malpractice. Additionally, projections over the evaluation of the effectiveness of the internal control system related to the consolidated financial reporting, applicable to future periods, are subject to the risk that controls may become inadequate due to changes in conditions of business or operation of EDP Group, or that the degree of compliance with the policies and procedures may deteriorate. Restriction on distribution and use This report is solely issued under the agreed terms described in the first paragraph above and should not be used for any other purposes without our explicit consent. 17 February 2022 PricewaterhouseCoopers & Associados \- Sociedade de Revisores Oficiais de Contas, Lda. represented by: Signed on the original João Rui Fernandes Ramos, ROC no. 1333 Registered with the Portuguese Securities Market Commission under no. 20160943 CHANGING TOMORROW NOW — CONTACTS HEAD OFFICE EDP — Energias de Portugal Av. 24 de Julho, 12 249-300 Lisboa Portugal Tel: +351 21 001 25 00 Website: www.edp.com INVESTORS DRI – Investor Relations Department Av. 24 de Julho, 12 1249-300 Lisboa Portugal Tel: +351 21 001 28 34 E-mail: ir@edp.com CLIENTS EDP Lines Customer services SU Eletricidade (regulated market): 808 505 505 Customer services EDP Comercial (liberalised market): 808 53 53 53 E-redes: 808 100 100 SUPPLIERS Tel: 800 100 113 E-mail: srm@edp.pt HUMAN RESOURCES P&OD – People and Organizational Development Av. 24 de Julho, 12 1249-300 Lisboa Portugal Tel: +351 21 001 25 89 Website: http://www.linkedin.com/company/edp MEDIA CCU – Corporate Communication Unit Av. 24 de Julho, 12 1249-300 Lisboa Portugal Tel: + 351 21 001 26 80 E-mail: pressedp@edp.com SUSTAINABILITY E-mail: sustentabilidade@edp.pt FUNDAÇÃO EDP Av. de Brasília, Central Tejo 1300-598 Lisboa Portugal Tel: +351 21 002 81 30 Website: www.fundacaoedp.pt E-mail: fundacaoedp@edp.pt STAKEHOLDERS DRIS – Institutional Relationship and Stakeholders Department Av. 24 de Julho, 12 1249-300 Lisboa Portugal E-mail: stakeholders@edp.pt Printed on FSC certified paper from well-managed forests that offer environmental, social and economic benefits. ISO 9001 certified paper and ISO 14001 environmental management. Publication EDP - Energias de Portugal, S.A. BGU - Brand Global Unit Av. 24 de Julho, 12 1249-300 Lisboa Portugal Concept TTouch ttouch.pt Pagination EDP - Energias de Portugal, S.A. Printing Getside Print Run 75 Legal Deposit 000 000/00 Abril 2022