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	ENAGAS, S.A.
	BALANCE SHEET AT DECEMBER 31, 2021	1
INCOME STATEMENT AT DECEMBER 31, 2021
	STATEMENT OF RECOGNISED INCOME AND EXPENSES
	AT DECEMBER 31, 2021	V
	STATEMENT OF TOTAL CHANGES IN EQUITY
	AT DECEMBER 31, 2021	5
	CASH FLOW STATEMENT AT DECEMBER 31, 2021	6
	Company activities and presentation bases	7
1.1	Company activity	8
1.2	Basis of presentation	9
1.3	Aspects relating to COVID-19	11
1.4	Estimates and accounting judgements used	11
1.5	Investments in group and multigroup companies	12
1.6	Dividends distributed and proposed	19
1.7	Commitments and guarantees	19
2.	Operational performance of the company	22
2.1	Operating profit	22
2.2	Trade and other receivables	24
2.3	Trade and other payables	25
2.4	Property, plant, and equipment	25
2.5	Intangible assets	28
2.6	Impairment of non-financial assets	29
2.7	Leases	30
2.8	Provisions and contingent liabilities	301
3.	Capıtal structure, financing and financial result	32
3.1	Equity	32
3.2	Financial debts	34
3.3	Net financial gain /(loss)	36
3.4	Derivative financial instruments	36
3.5	Financial and capital risk management	37
3.6	Cash flows	ਤਰੇਰੇ
人 -	Other information	41
4.1	Information on other items on the balance sheet	41
4.2	Tax situation	42
4.3	Related party transactions and balances	46
4.4	Remuneration to the members of the Board of Directors and Senior Management	48
4.5	Other information concerning the Board of Directors	51
4.6	Other information	52
4.7	Subsequent events	52
	5. Explanation added for translation to English	53
	MANAGEMENT REPORT OF ENAGAS, S.A.	54

ASSETS	Notes	12.31.2021	12.31.2020
NON-CURRENT ASSETS		5,822,118	6,115,722
Intangible assets	2.5	18,763	14,571
Research and development		74	65
IT applications		18,689	14,506
Property, plant, and equipment	2.4	27,002	21,218
Land and buildings		14,964	15,831
Technical facilities and other PP&E		4,280	4,324
Prepayments and work in progress		7,758	1,063
Property investments	4.1.a	18,660	19,020
Land		18,660	19,020
Long-term investments in group and multigroup companies	1.5	5,314,790	5,659,307
Equity instruments		5,314,790	5,259,016
Loans to companies		-	400,291
Long-term financial investments		431,936	390,983
Loans to third parties		12	27
Other financial assets	1.5.c	431,924	390,956
Deferred tax assets	4.2.g	10,967	10,623
CURRENT ASSETS		823,525	450,948
Inventories		1	1
Raw materials and other procurements		1	1
Trade and other receivables	2.2	23,862	35,413
Customers, Group companies and associates		11,295	11,921
Other receivables		194	43
Personnel		98	123
Current tax assets		12,272	23,323
Other credits with the Public Administrations		3	3
Short-term investments in group and multigroup companies	1.5	653,078	162,287
Loans to companies		523,246	135,187
Other financial assets		129,832	27,100
Short-term accruals		2,086	864
Cash and cash equivalents	3.6.a	144,498	252,383
Treasury		144,498	252,383
TOTAL		6,645,643	6,566,670

The accompanying Notes 1 to 4.7 constitute an integral part of the Balance Sheet at December 31, 2021

LIABILITIES	Notes	12.31.2021	12.31.2020
EQUITY		2,691,201	2,673,229
EQUITY		2,690,592	2,672,598
Capital	3.1.a	392,985	392,985
Subscribed capital		392,985	392,985
Issue premium	3.1.b	465,116	465,116
Issue premium		465,116	465,116
Reserves	3.1.d	1,558,979	1,557,649
Legal and statutory		78,597	78,597
Other reserves		1,480,382	1,479,052
Treasury shares	3.1.c	(12,464)	(12,464)
Profit /(loss) for the year		457,259	440,630
Interim dividend	1.6.a	(177,812)	(175,720)
Other equity instruments		6,529	4,402
ADJUSTMENTS FOR CHANGES IN VALUE	3.1.e	(22)	-
Hedging transactions		(22)	-
GRANTS, DONATIONS AND BEQUESTS RECEIVED	3.1.f	631	631
Grants, donations and bequests received		631	631
NON-CURRENT LIABILITIES		2,973,807	3,651,829
Long-term provisions	2.8.a	663	2,761
Obligations for long-term employee benefits		663	2,295
Other provisions		-	466
Long-term debts	3.2.a	197,734	183,249
Debts with credit institutions		197,694	183,155
Other financial liabilities		40	94
Long-term debts with group companies and associates	3.2.c	2,771,377	3,461,394
Deferred tax liabilities	4.2.g	3,226	3,629
Long-term accruals		807	796
CURRENT LIABILITIES		980,635	241,612
Current financial liabilities	3.2.b	8,284	4,425
Debts with credit institutions		94	54
Derivatives		36	-
Other financial liabilities		8,154	4,371
Short-term debts with group companies and associates	3.2.c	917,716	178,800
Trade and other payables	2.3	54,251	58,351
Suppliers		11,045	10,312
Payables to group companies and associates		733	6,895
Other payables		618	2,854
Personnel		9,352	6,365
Current tax liabilities		630	-
Other debts with the Public Administrations		31,873	31,925
Short-term accruals		384	36
TOTAL		6,645,643	6,566,670

The accompanying Notes 1 to 4.7 constitute an integral part of the Balance Sheet at December 31, 2021

	Notes	12.31.2021	12.31.2020
CONTINUING OPERATIONS		501,831	480,605
Revenue	2.1.a	591,596	583,588
Rendering of services		75,222	80,146
Dividend income from group and multigroup companies		516,374	503,442
Work done by the company for its assets	2.4	364	249
Procurements		-	3
Other operating income		1,113	911
Accessory income and other current management income		1,113	911
Personnel expenses	2.1.b	(49,773)	(47,482)
Wages, salaries and similar		(37,760)	(35,655)
Social contributions		(12,013)	(11,827)
Other operating expenses	2.1.c	(37,464)	(43,071)
External services		(36,843)	(42,171)
Taxes		(267)	(376)
Other management expenses		(354)	(524)
Amortisation of fixed assets	2.4 and 2.5	(5,755)	(6,766)
Impairment and gains /(losses) on disposal of assets	4.1.a	(360)	(607)
Impairment and gains /(losses) on disposals of financial instruments	2.1.d	2,110	(6,220)

OPERATING PROFIT		501,831	480,605
Financial income	3.3	12,831	12,975
From marketable securities and other financial instruments		12,831	12,975
- For debts with third parties		12,831	12,975
Financial expenses	3.3	(70,119)	(74,020)
For debts with group companies and associates		(65,467)	(68,046)
For debts with third parties		(4,652)	(5,974)
Exchange differences 3.3 and 4.1.b		862	1,455

FINANCIAL RESULT		(56,426)	(59,590)
PROFIT /(LOSS) BEFORE TAX		445,405	421,015
Income tax	4.2.e	11,854	19,615
PROFIT /(LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS		457,259	440,630
DISCONTINUED OPERATIONS		-	-
PROFIT /(LOSS) FOR THE YEAR		457,259	440,630

The accompanying Notes 1 to 4.7 constitute an integral part of the Income Statement at December 31, 2021

	Notes	12.31.2021	12.31.2020
RESULTS TO THE INCOME STATEMENT		457,259	440,630
INCOME AND EXPENSES RECOGNISED DIRECTLY IN EQUITY		(27)	631
From cash flow hedges		(36)	-
For grants, donations and bequests received	3.1.e	-	841
Tax effect		9	(210)
AMOUNTS TRANSFERRED TO THE INCOME STATEMENT		5	-
From cash flow hedges		7	-
For grants, donations and bequests received	3.1.e	-	-
Tax effect		(2)	-
TOTAL RECOGNISED INCOME AND EXPENSES		457,237	441,261

The accompanying Notes 1 to 4.7 constitute an integral part of the Statement of Recognised Income and Expenses at December 31, 2021

	Notes	12.31.2021	12.31.2020
CASH FLOWS FROM OPERATING ACTIVITIES (I)		377,931	498,699
Profit /(loss) for the year before taxes		445,405	421,015
Adjustments to profit		(465,540)	(439,719)
- Amortisation of fixed assets	2.4 and 2.5	5,755	6,766
- Variation of provisions		426	1,159
- Attribution of grants		(15)	(30)
- Gains/losses due to decreases and disposals of assets		360	17
- Financial income and dividends		(539,213)	(526,891)
- Financial expenses	3.3	70,119	73,905
- Impairment		(2,110)	6,810
- Exchange differences		(862)	(1,455)
Changes in working capital		(7,658)	15,093
- Inventories		-	5
- Trade and other receivables		500	2,212
- Other current assets		(1,222)	1,014
- Trade and other payables		(7,390)	11,548
- Other current liabilities		454	307
- Other non-current assets and liabilities		-	7
Other cash flows from operating activities		405,724	502,310
- Interest paid		(59,426)	(66,944)
- Dividends received		413,642	548,342
- Interest received		10,019	10,458
- Income tax paid (received)		40,398	10,453
- Other proceeds		1,089	1
CASH FLOWS FROM INVESTING ACTIVITIES (II)		(63,548)	(582,062)
Payments for investments		(64,939)	(1,055,944)
- Group companies and associates		(54,548)	(1,045,719)
- Intangible assets and property, plant and equipment	2.4 and 2.5	(10,399)	(10,254)
- Other financial assets		8	29
Proceeds from disposals		1,391	473,882
- Group companies and associates		1,391	473,882

CASH FLOWS FROM FINANCING ACTIVITIES (III)		(423,130)	(356,779)
Proceeds from and payments on equity instruments - Grants, donations and bequests received		359	1,673
		359	1,673
Proceeds from and payments on financial liabilities		17,903	68,297
- Issue of debts with credit entities		406,861	2,483,959
- Issue of debts with group companies and associates		150,000	430,979
- Repayment and amortisation of debts with credit entities		(407,216)	(2,487,388)
- Repayment and amortisation of debts with group companies and associates		(131,742)	(359,253)
Dividends paid and remuneration on other equity instruments		(441,392)	(426,749)
- Dividends	1.6	(441,392)	(426,749)
EFFECT OF EXCHANGE RATE FLUCTUATIONS (IV)		862	934
NET INCREASE/DECREASE IN CASH AND EQUIVALENTS (I + II + III + IV)		(107,885)	(439,208)
Cash and cash equivalents at beginning of the year		252,383	691,591
Cash and cash equivalents at year-end		144,498	252,383

The accompanying Notes 1 to 4.7 constitute an integral part of the Cash Flow Statement at December 31, 2021

Net profit attributed to the Company increased by 3.8% with respect to 2020, amounting to 457.3 million euros.
Net profit per share amounted to 1.75 euros per share as compared to 1.685 euros per share in 2020.
The proposed dividend payment per share for 2021 amounts to 1.70 euros per share (1.68 euros per share in 2020) (Note 1.6).
The Board of Directors proposed the following distribution of net profit corresponding to 2021 for the Parent Company, Enagás, S.A. (Note 1.6):

At December 31, 2021 the Balance Sheet shows a negative working capital of 157 million euros as a result of the reclassification to short-term of the debt with Enagás Financiaciones, as reported. However, the Company has been granted undrawn financial availability as detailed in Note 3.5 and it therefore does not represent a liquidity risk.

In 2021, both Enagás and its Group companies have operated normally, ensuring continuity of natural gas supply both in Spain and in the countries where these companies operate. regulatory framework.
As in 2020, in 2021 there were no significant equity effects as a result of the Covid-19 situation (Note 1.3).

At December 31, 2021, Enagás S.A. held financial instruments through which it develops some of its activities, both in current and non-current assets on the attached Balance Sheet, in the total amount of 6,400 million euros. The breakdown of these investments is as follows:

Equity instruments in the amount of 5,315 million euros (Note 1.5.a).
Loans to companies in the amount of 523 million euros (Note 1.5).
Other financial assets in the amount of 562 million euros (Note 1.5).
In relation to the situation of the investment in GSP, as a result of the termination of the concession contract on January 24, 2017, the dispute between the Peruvian State and Enagás regarding the application of the investment recovery mechanism established in the GSP Concession contract continues. In this regard, an international arbitration was initiated in 2018 under the Agreement for the Promotion and Reciprocal Protection of Investments (hereinafter, APPRI) Spain-Peru, as detailed in Note 1.5.c submitted to the International Centre for Settlement of Investment Disputes (hereinafter ICSID). This procedure continues on a regular basis. The reply to the Peruvian was in turn answered by the Peruvian State on October 20, 2021. On January 17, 2022, Enagás filed its rejoinder on preliminary objections. Preparations are currently underway for the hearings scheduled for September 2022.
In order to enforce the applicatio Agreements against the prohibitions on the transfer abroad of the dividends collected on said investment, after initiating direct treatment on February 24, 2021 with the Peruvian State, on December 23, 2021 the request for arbitration proceedings was submitted to the ICSID under the Spain-Peru APPRI (Reciprocal Promotion and Protection Agreement) (see Note 1.5.c).
At December 31, 2021, the total amount to be recovered by GSP amounted to 431,227 thousands of euros (390,266 thousands of euros at December 31, 2020) relating to both the recovery of the financial investment in this company and the credit rights associated with the recovery of the guarantees executed against the Enagás Group as a result of the termination of the concession contract in GSP (Note 1.5.c).

At December 31, 2021, Enagás S.A. had granted guarantees amounting to 5,885 million euros (Note 1.7).

Enagás, S.A, a company incorporated in Spain on July 13, 1972 in accordance with the Corporate Enterprises Act, is the parent company of a group of entities including interests in subsidiaries, associated companies, joint operations and joint ventures, which are engaged in various activities and, together with Enagás, S.A., the Enagás Group (hereinafter the Group), with corporate purpose of the transmission, storage and regasification of natural gas, as well as all related functions with the technical management of the gas system.

a.

a. Regasification, basic and secondary transmission as well as storage of natural gas, via the corresponding gas infrastructure or facilities, of its own or of third parties, and also the performance of auxiliary activities or others related to the aforementioned activities.
b. Design, construction, start up, exploitation, operation, and maintenance of all types of complementary gas infrastructure and facilities, including telecommunications networks, remote control and control of any nature, and electricity networks,
whether its own or of third parties. c. Development of all functions relating to technical management of the gas system.
d. Transmission and storage activities for carbon dioxide, hydrogen, biogas, and other energy-related fluids, via the corresponding facilities, of its own or of third parties, as well as the design, construction, start up, exploitation, operation, and maintenance of all types of complementary infrastructure and installations necessary for said activities. e. Activities for making use of heat, cold, and energies
associated with its main activities or arising from them.
f. Rendering of services of a diverse nature, among them, engineering, construction, advisory, and consultancy services in connection with the activities relating to its corporate purpose as well as participation in natural gas markets management activities to the extent they are compatible with the activities permitted for the Company by law

The above activities can be carried out by Enagás, S.A. itself or through companies with an identical or analogous corporate purpose in which it holds interest, provided they remain within the scope and limitations established by legislation applicable to the hydrocarbons sector. In accordance with said legislation, the activities related to transmission and technical management of the system which are of a regulated nature must be carried out by two subsidiaries entirely owned by Enagás, S.A. (Enagás Transporte, S.A.U. and Enagás GTS, S.A.U., respectively). Consequently, the corporate purpose includes:

g. Management of the corporate group comprised of the interest held in share capital of companies belonging to the group.
h. Rendering of assistance or support services to affiliates, including the provision of appropriate guarantees and reinforcement for them.

b.

Its registered address is located at Paseo de los Olmos, 19, 28005, Madrid. The Articles of Association and other public information about the Company and its Group may be consulted on its web page, www.enagas.es, and at its registered office.

In addition to the operations carried out directly, Enagás, S.A., as the parent company of the Enagás Group and in accordance with current legislation, is obliged to separately prepare consolidated accounts of the Group, which also include interests in subsidiaries, associates, joint operations and joint ventures.

The main figures of the consolidated Annual Accounts of the Enagás Group for 2021 and 2020 are the following:

		12.31.2021 12.31.2020
Total assets	9,873,818	9,008,923
Equity	3,101,650	3,006,984
Revenue	975,686	1,053,604
Net profit /(loss)	403,826	444,002

These Annual Accounts have been prepared by the Directors in accordance with the financial information regulatory framework applicable to the Company, which is established in:

i. Commercial Code and remaining mercantile legislation.
ii. National Chart of Accounts approved by Royal Decree 1514/2007 of November 16, 2007, which was amended in 2016 by Royal Decree 602/2016 of December 2, 2016, as well as Royal Decree 1/2021 of January 12, 2021 approving the National Chart of Accounts adapting it to the international accounting standards adopted by the European Union as regards accounting for financial instruments and revenue recognition.

The effects of the application of this last Royal Decree 1/2021 are shown below, and are applicable for years beginning on or after January 1, 2021.

iii. Compulsory regulations approved by the Accounting and Audit Institute, in development of the National Charts of Accounts and its complementary standards.
iv. The other Spanish accounting regulations to be applied.

In addition, no non-compulsory accounting principles have been applied.

Also, the Directors authorised these Annual Accounts for issue in due consideration of all compulsory accounting principles and standards with a significant effect on the Annual Accounts.

The Annual Accounts of Enagás, S.A. and its Consolidated Group for financial year 2021 were prepared by its Directors at the Board of Directors meeting held on February 14, 2022. The 2020 Annual Accounts of Enagás S.A. and its consolidated Group were approved ting held on May 27, 2021 and duly filed at the Madrid Mercantile Registry.

These Annual Accounts are presented in thousands of euros (unless otherwise stated).

On January 30, 2021, Royal Decree 1/2021 of January 12 was published in the Official State Journal (BOE), amending the National Chart of Accounts in several aspects. The main changes relate to revenue recognition, and recording and valuation of financial instruments standards.

The main objective of this amendment is to incorporate into national accounting regulations the changes necessary to adapt the 9th recording and valuat the European international regulations contained in IFRS 15 and IFRS 9, respectively. a. Recognition of income

The main novelty of the amendment is the adoption of the fivestep model already existing in the European international standard IFRS 15 for revenue recognition, consisting of

1. Contract identification
1. Identification of compliance obligations
1. Determination of the transaction price
1. Distribution of the price among the different obligations
1. Revenue recognition over time or at a point in time.

This new revenue recognition scheme is based on the concept of control, as opposed to the previous approach that focused on analysis of risks and rewards. Accordingly, the transfer of control indicators and the requirements that must be met for an entity to be able to record its income in accordance with the fulfilment of obligations over time are detailed.

The new revenue model is applicable to all contracts with customers, except those within the scope of other applicable standards, such as interest and dividend revenue recognition.

Regarding the measurement of income, the valuation of the variable components should take into account the valuation of the variable components using the best estimate of the variable consideration to be received and that a significant reversal of that amount is not highly likely.

Certain aspects of this amendment have been dealt with in greater depth in the ICAC Resolution of February 13, 2021.

The Royal Decree determines that these amendments must be applied retrospectively, although certain practical solutions are included, such as applying only to contracts that are not completed, or deciding to continue applying the old criteria to contracts that are not completed on the date of first application.

The Company has adopted this standard using the modified retrospective method as of January 1, 2021 and has chosen to apply the standard to all contracts existing as of January 1, 2021.

With respect to the specific risks relating to revenue for the Company, an analysis was performed to determine the impacts

which may arise from implementation of said Standard: a. In relation to service contracts provided to group companies, the Company has performed an analysis of potential impacts for each of the contracts by applying the 5-step model described above, without having detected any type of adjustment derived from its implementation compared to the previous recording criteria.
- b. The Enagás Group does not have any significant incremental costs in obtaining contracts with customers that have to be registered as an increase in the value of the asset, and thus amortised over the life of the contracts with customers in the Income Statement.

Implicit financing components have also not been

identified in the service contracts. c. As regards dividend and interest income presented as revenue, since it is a holding company, there is no change resulting from application of these new regulations, since the same criteria previously applied in relation to financial assets and the accrual of this income is maintained.

Based on the foregoing, as of January 1, 2021, there is no effect from the new regulations that should be recorded in Reserves for the first time, as well as in the Income Statement or the Balance Sheet.

The measurement criteria for application of this regulation are detailed in Note 2.1 Operating income

b. Financial instruments

As of January 1, 2021, the new classification and valuation criteria for financial instruments provided for in Royal Decree 1/2021, which are included in Note 1.5, are applicable to and represent a modification with respect to those applied in previous years.

The main novelty of the amendment consists of the application of new measurement categories for financial assets. Accordingly, the previous five categories of financial assets (loans and receivables, held-to-maturity investments, financial assets held for trading, other financial assets at fair value through profit or loss and investments in group, multi-group and associated companies) are replaced by the four new categories: a. Amortised cost

b. Fair value with changes in profit and loss c. Fair value with changes in equity
d. Cost

The category is determined for each financial asset based on the composition of cash flows associated with the asset and the expected business model.

With regard to financial liabilities, three categories (debits and payables, financial liabilities held for trading and other financial liabilities at fair value through profit or loss) have been replaced by two new categories: a. Amortised cost

b. Fair value with changes in the income statement
financial asset for the purpose of collecting contractual cash flows, which are exclusively payments of the capital plus interest on that capital, the financial asset will be valued at amortised cost.
b. contractually agreed upon cash flows and income from their sale, the financial assets will be measured at fair value through profit or loss (equity). Investments in equity instruments (shares and units in collective investment schemes) may also be included in this category if this treatment is initially chosen .

Other than these scenarios, the remaining assets will be measured at fair value with changes in the Income Statement.

In contrast, at the initial recognition of a financial asset, an entity may opt to measure it at fair value through profit or loss if this allows the entity to eliminate or reduce an accounting asymmetry.

All other financial assets are measured at fair value, recording the profits and losses resulting from the subsequent valuation in the Income Statement.

Following the rules set out in paragraph 6 of the second transitional provision, the Company has decided to apply the new criteria prospectively, considering for the purpose of classifying financial assets the facts and circumstances existing at January 1, 2021, the date of initial application.

The following table shows a reconciliation as of January 1, 2021 for each class of financial assets and liabilities between the initial measurement category with the corresponding carrying amount determined in accordance with the previous standards and the new valuation category with its carrying amount determined in accordance with the new criteria:

Financial assets:

Type of instrument	Classification at 12.31.2020	Classification at 01.01.2021	Amount under previous regulations	Amount under RD 1/2021 regulations
Equity instruments (Note 1.5)	Investments in group companies, multigroup and	Cost	5,259,016	5,259,016
Credits to affiliates (Note 1.5)	associates Loans and receivables	Amortised cost	535,478	535,478
Loans to third parties (Note 1.5)	Loans and receivables	Amortised cost	27	27
Other financial assets (Note 1.5)	Loans and receivables	Amortised cost	418,056	418,056
Commercial debtors and other receivables (Note 2.2)	Loans and receivables	Amortised cost	35,413	35,413

Financial liabilities:

b.	Fair value with changes in the income statement Classification and measurement of financial instruments:		Classification at 12.31.2020	Classification at 01.01.2021	Amount under previous regulations	Amount under RD 1/2021 regulations
flows.	The classification depends on the business model of the entity and the existence or not of certain contractually agreed upon cash a. If the objective of the business model is to maintain a financial asset for the purpose of collecting contractual cash flows, which are exclusively payments of the capital plus interest on that capital, the financial asset will be valued at amortised cost.	Financial debts with credit institutions (Note 3.2)	Debits and payables	Amortised cost	183,209	183,209
		Debts with group and associated companies (Note 3.2)	Debits and payables	Amortised cost	3,640,194	3,640,194
b.	contractually agreed upon cash flows and income from their sale, the financial assets will be measured at fair value through profit or loss (equity). Investments in	Other financial liabilities (Note 3.2)	Debits and payables	Amortised cost	4,465	4,465
	equity instruments (shares and units in collective investment schemes) may also be included in this category if this treatment is initially chosen .	Trade and other payables (Note 2.3)	Debits and payables	Amortised cost	58,351	58,351

The measurement criteria for application of this regulation are detailed in Note 1.5 Investments in group and multigroup companies and Note 3.4 Derivative financial instruments.

b)

The Annual Accounts of the Company have been prepared on a going concern basis.

At December 31, 2021, the Company has negative working capital in the amount of 157 million euros (at December 31, 2020 it had positive working capital amounting to 209 million euros). However, the Company has been granted undrawn financial availability as detailed in (Note 3.5) and it therefore does not represent a liquidity risk.

c)

The accompanying Annual Accounts do not include the information or disclosures which, not requiring detail due to their qualitative importance, the Group did not consider of material significance or important relative to the concept of materiality as defined in the conceptual framework of the National Charts of Accounts, taking into account the Annual Accounts as a whole.

c)

The accompanying Annual Accounts, which were obtained from the the regulatory financial reporting framework applicable to the Company and, in particular, with the accounting principles and criteria set out therein and, accordingly, provide a true and fair operations, the statement of changes in equity and cash flows during the year.

These Annual Accounts have been prepared by the Directors of the Company and will be submitted for approval by the General without modification.

d)

The information contained in these notes to the 2020 consolidated financial statements is presented solely for comparative purposes with the information for 2021. In this context, Note 1.2 above explains in more detail the impact of the application of the new classification categories for financial assets and liabilities to be considered at year-end 2020.

e)

Certain items on the Balance Sheet, the Income Statement, the Statement of Changes in Equity and the Cash Flow Statement are grouped together to make them easier to understand, although when individual data is significant, specific information has been included in the respective Notes to these Annual Accounts.

f)

In 2021 there were no significant changes in accounting policies with respect to those applied in 2020.

g)

Following the recommendations of supervisory bodies in relation to the economic situation arising due to the Covid-19 pandemic and healthcare crisis, this situation has not led to any change in the accounting policies of Enagás S.A. with respect to those applied in previous years.

In order to comply with these recommendations, (Note 1.3) summarises below the main aspects of this situation considered by the Company in relation to the financial statements of December 31, 2021.

1.3

During the overall adverse economic situation caused by the Covid-19 pandemic, both Enagás, S.A. and its affiliates implemented contingency plans to ensure normal operation and continuity of natural gas supply both in Spain and in all the countries where these companies operate. Thus, the going concern principle has continued to be fully applied in the formulation of the annual accounts.

With regard to the main activity of the Enagás Group, of which Enagás S.A. is the parent company, relating to the operation and maintenance of the Spanish gas system, it should be noted that this takes place within a stable regulatory framework and in 2021, as in the previous year, no effects or changes have been identified as a result of the situation caused by Covid-19 that could lead to capital losses for the Group. Neither the behaviour of gas demand nor the Oil & Gas market indices have had a significant effect on the revenues recorded by the Enagás Group. With regard to liquidity, as indicated in Note 3.5, Enagás, S.A. still has a solid liquidity and availability amounting to 1,844,876 thousands of euros at December 31, 2021 (1,753,836 thousands of euros at December 31, 2020), thus maintaining the liquidity strategy and the credit and exchange rate risk policies (Note 3.6).

During the 2021 financial year, as in the 2020 financial year, there have been no impairment of financial or non-financial assets, as well as no significant extraordinary expenses corresponding to this situation or provisions or contingent liabilities that have been included in the consolidated financial statements of Enagás, S.A. as of December 31, 2021.

Covid-19 situation that needed to be recorded at December 31, 2021.

1.4

The results and determination of assets and liabilities disclosed in the Annual Accounts are sensitive to the accounting principles and policies, measurement bases and estimates used by the

In the 2021 Annual Accounts, have occasionally used estimates, subsequently ratified by the Directors, in order to quantify certain assets, liabilities, income, expenses and commitments recognised therein. These estimates

basically relate to the following: a. The useful life of intangible assets and PP&E (Notes 2.4 and
2.5). b. The measurement of assets to determine the possible
existence of impairment losses (Notes 1.5.a, 2.6 and 4.1.a). c. Provisions of invoices pending formalisation (Notes 2.2 and
2.3). d. The calculation of provisions and contingencies (Note 2.8).
e. The calculation of income tax and deferred tax assets (Note 4.2).

- f. Impairment loss on financial assets measured at amortised

cost (Note 1.5.c). g. The fair value of equity instruments granted under the Long- (Note 4.4). Although these estimates were made on the basis of the best information available at December 31, 2021 regarding the facts analysed, it is possible that future events may require these to be modified (upwards or downwards) in the years ahead. This would be carried out prospectively, recognising the effects of the changes to accounting estimates in the Annual Accounts.

During the twelve-month period ended December 31, 2021, there were no significant changes to the estimates made at 2020 yearend, and thus future periods are also not expected to be affected.

Following the entry into force of Royal Decree 1/2021 of January 12 amending the Spanish National Chart of Accounts, approved by Royal Decree 1514/2007 of November 16 (Note 1.2), the Company includes the following in this category:

Investments in the equity of group and multigroup companies are classified as financial assets at cost.
Any other financial asset that initially should be classified in the fair value portfolio with changes in the income statement when it is not possible to obtain a reliable estimate of its fair value.

Investments included in this category are initially recognised at cost, being the fair value of the consideration given plus directly attributable transaction costs.

In the case of investments in group entities, if an investment existed before the entity was classified as a group entity, jointly controlled entity or associate, the cost of that investment is measured at the carrying amount that the investment should have had immediately before the entity is classified as such.

Subsequent measurement is also at cost, less any the cumulative amount of the impairment valuation adjustments.

Derecognition of balance of financial assets

The Company derecognises a financial asset from the balance sheet when:

The contractual rights to the cash flows from the asset expire. A financial asset is derecognised when it expires and the Company has received the related amount.
The contractual rights to the cash flows from the financial asset have been transferred. In this case, the financial asset is derecognised when the risks and rewards of ownership have been substantially transferred.

The Company classifies a financial asset in this category if the following conditions are met:

The Company holds the investment under a management model whose objective is to collect the cash flows from the performance of the contract.
The contractual features of the financial asset give rise to cash flows at specified times that consist solely of the collection of principal and interest on the principal outstanding.

Generally, loans and advances to customers and other debtors are included in this category.

Financial assets classified in this category are initially measured at fair value, which, until proven otherwise, is assumed to be the transaction price, which is the fair value of the consideration given plus capitalised transaction costs.

Trade receivables maturing in no more than one year and not bearing a contractual interest rate, as well as advances and loans to employees, dividends receivable and disbursements on equity instruments, the amount of which is expected to be received in the short-term, may be measured at their face value when the effect of not discounting the cash flows is not significant.

The amortised cost method is used for subsequent measurement. Accrued interest is recognised in the income statement (financial income) using the effective interest rate method.

Receivables with a maturity of less than one year, which are initially measured at face value as described above, continue to be measured at nominal value unless they are impaired.

If the contractual cash flows of a financial asset measured at amortised cost change due to financial difficulties of the issuer, the Company generally assesses whether an impairment loss should be recognised.

Impairment of financial assets at cost

At the closure of each financial year, or when there are indications of loss of value, the Company analyses the recoverability of the equity investments in group and multigroup companies, in order to verify that the recoverable amount of these investments is greater than the value ounting records.
In order to calculate the recoverable amount of the Group companies, an analysis of the updated cash flows is prepared, based on detailed future projections for these investments.
The recognition of impairment losses and reversal of impairment losses, if any, are recognised as income or expense in the income statement. The reversal is limited to the carrying amount of the investment that would have been recognised at the reversal date if no impairment loss had been recognised.
With regard to the impairment test relating to group and multigroup companies, the discount rate applied to Spanish companies in 2021 and 2020 was between 5% and 9% according to the business that it is allocated to. Investments in international companies range from 5.5% to 8.5%, depending on the business and the country in which they operate (6% to 9% in 2020). The sensitivity analysis of the discount rate of 0.5% and -0.5% carried out at 2021 year-end indicates that the Company shows no sign of significant risks associated with Management considers that, within the specified ranges, there

Impairment of financial assets at amortised cost

The Directors consider that the carrying amounts of the assets do not exceed the recoverable amounts which result from calculating discounted future cash flows generated by said assets based on foreseen remuneration under current regulations.
If such evidence exists, the impairment loss is calculated as the difference between the carrying amount and the present value of future cash flows. This includes, if applicable, those arising from the enforcement of collateral and personal guarantees, which are estimated to be generated, discounted at the effective interest rate calculated at the time of initial recognition. For financial assets at variable interest rates, the effective interest rate corresponding to the closing date of the Financial Statements is used in accordance with the contractual conditions.
Impairment losses, as well as their reversal when the amount of such loss decreases due to causes related to a subsequent event, are recognized as an expense or income, respectively, in the income statement. The reversal is limited to the carrying amount of the asset that would have been recognised at the reversal date if no impairment loss had been recognised.

As a substitute for the present value of future cash flows, the Company uses the market value of the instrument, provided that

both shortand long-term at year-end 2021 and 2020 is as follows:

	2021	2020
Long-term investments in group and multigroup companies	5,314,790	5,659,307
Equity instruments (Note 1.5.a)	5,314,790	5,259,016
Loans to companies (Note 1.5.b)	-	400,291
Long-term financial investments	431,936	390,983
Loans to third parties	12	27
Other financial assets (Note 1.5.c)	431,924	390,956
Short-term investments in group and multigroup companies	653,078	162,287
Credits and receivables (Note 1.5.b)	407,557	7,266
Credits to group companies for tax effect (1)	115,689	127,921
Dividends receivable (2)	129,832	27,100

(1) As mentioned in Note 4.2.b, Enagás S.A. is the parent company of Tax Consolidation Group 493/12 for corporate income tax, and this amount matches the le income.

(2) This amount relates to the dividends receivable at December 31, 2021 which were distributed by Enagás Transporte. S.A.U in 2021 (Note 2.1.a)

a)

		% Stake	Thousands of euros
Name / Address / Activity				Result					Carrying amount
	Direct	Indirect	Capital	Operating	Net	Remaining	Total Equity	Dividends	Cost	Accumulated	Total
				income		Equity		Received		impairment
2021									5,318,979		(4,189) 5,314,790
Enagás Transporte, S.A.U.	100		- 532,089		438,271 379,174	2,927,681	3,838,944	455,152	3,425,908	-	3,425,908
Enagás GTS, S.A.U.	100	-	5,914	2,513	1,800	5,330	13,044	-	34,231	-	34,231
Enagás Financiaciones, S.A.U.	100	-	890	72,926	10,420	110	11,420	10,424	8,271	-	8,271
Enagás Internacional, S.L.U.	100		- 153,258	50,154	34,322	1,956,004	2,143,584	50,798	1,761,585	-	1,761,585
Estación de Compresión Soto La Marina, S.A.P.I. de C.V.	48	2	9,114	5,291	1,908	3,898	14,920	-	5,147	-	5,147
Enagás Perú SAC	-	100	4,170	(346)	(593)	(2,506)	1,071	-	1	(1)	-
Enagás México SA de C.V.	1	99	2,890	(342)	(342)	(3,323)	225	-	121	(120)	1
Enagás Emprende, S.L.U.	100	-	17,204	(2,974)	(8,186)	32,126	41,144	-	57,347	(1,460)	55,887
Enagás Services Solutions, S.L.U.	100	-	5,882	2,807	-	11,182	17,064	-	19,682	(2,608)	17,074
Mibgas Derivatives, S.A.	19	9	500	120	120	(393)	227	-	97	-	97
Enagás Renovable, S.L.	100	-	2,004	(3,197)	(2,394)	3,602	3,212	-	6,589		6,589
2020									5,265,315		(6,299) 5,259,016
Enagás Transporte, S.A.U.	100		- 532,089		483,867 407,120	2,985,864	3,925,073	431,580	3,425,723	-	3,425,723
Enagás GTS, S.A.U.	100	-	5,914	3,645	3,126	2,056	11,096	-	34,083	-	34,083
Enagás Financiaciones, S.A.U.	100	-	890	72,383	10,012	501	11,403	34,362	8,249	-	8,249
Enagás Internacional, S.L.U.	100		- 149,369	59,048	60,284	1,936,478	2,146,131	37,500	1,722,472	-	1,722,472
Estación de Compresión Soto La Marina, S.A.P.I. de C.V.	49	1	8,161	4,661	1,424	3,456	13,041	-	6,538	-	6,538
Enagás Perú SAC	-	100	3,894	(1,048)	(421)	(2,579)	894	-	1	(1)	-
Enagás México SA de C.V.	1	99	2,890	(364)	(298)	(2,365)	378	-	98	(79)	19
Enagás Emprende, S.L.U.	100	-	13,835	(2,426)	(5,359)	29,802	38,278	-	46,118	(1,460)	44,658
Enagás Services Solutions, S.L.U.	100	-	5,294	(4,085)	(3,076)	10,787	13,005	-	17,706	(4,759)	12,947
Mibgas Derivatives, S.A.	19	9	500	(77)	(77)	(196)	227	-	97	-	97
Enagás Renovable, S.L.	100	-	1,296	(876)	(983)	2,934	3,247	-	4,230	-	4,230

These Group companies are not listed on the Securities Markets.

instruments:

As a result of the approval of a second cycle of the Long-Term regularisation of the previous Plan (Note 4.4), in accordance with BOICAC No. 75/2008, query No. 7, the Company increased the value of the equity instruments of each of the subsidiaries with beneficiaries assigned to the Plan, i.e. Enagás Transporte, S.A.U., Enagás GTS, S.A.U., Enagás Financiaciones, S.A.U., Enagás Internacional, S.L.U., Enagás México, S.A. de C.V. and Enagás Services Solutions, S.L.U., by a total of 506 thousands of euros in 2021 (503 thousands of euros in 2020 relating to the aforementioned Long-Term Incentive Plan). The counterparty of this contribution is included under th net equity of the balance sheet at December 31, 2021, as a result of the cost assumed by the Company in each of the aforementioned subsidiaries.
On July 2, 2021, the Company carried out a capital increase in Enagás Internacional, S.L.U. amounting to 3,900 thousands of

euros with an issue premium of 35,100 thousands of euros through the offsetting of receivables. This capital increase represented the issue of 3,900,000 shares.

On November 25, 2021, Enagás Services Solutions carried out a capital increase by issuing a total of 588,000 new shares, with a nominal value of one euro each, and a total issue premium of 1,372 thousands of euros, through a fully paid-up monetary contribution.
On May 20, 2021, Enagás Emprende, S.L.U. carried out a capital increase by issuing 1,374,000 new shares with a nominal value of one euro each, with a total issue premium of 3,206 thousands of euros, through a fully disbursed monetary contribution.
On June 10, 2021, Enagás Emprende, S.L.U. carried out a capital increase by issuing 690,000 new shares with a nominal value of one euro each, with a total issue premium of 1,610 thousands of euros, through a fully disbursed monetary contribution.

On November 18, 2021, Enagás Emprende, S.L.U. carried out a capital increase by issuing a total of 1,050,000 new shares, with a nominal value of one euro each, and a total issue premium of 2,450 thousands of euros, through a fully paid-up monetary contribution in each of the extensions.
On June 21, 2021, Enagás Renovable, S.L.U. increased its share capital by 1,000 thousands of euros through the creation of 300,000 fully paid-up shares with a nominal value of one euro each, with a total issue premium of 700 thousands of euros.
On December 20, 2021, Enagás Renovable, S.L.U. increased its share capital by 1,359 thousands of euros through the creation of 407,775 fully paid-up shares with a face value of one euro each, with a total issue premium of 951 thousands of euros.
On September 28, 2021, Estación de Compresión Soto La Marina, S.A.P.I de C.V. carried out a capital reduction by returning contributions to the partners. Consequently, the Company reduced its ownership interest in Estación de Compresión Soto la Marina S.A.P.I de C.V. by 1,391 thousands of euros.
Also, at December 31, 2021, the Company has made a reversal of impairment losses recorded in prior years on the value of its investment in Enagás Services Solutions, S.L.U. amounting to 2,151 thousands of euros, as well as an impairment adjustment to the value of its investment in Enagás México S.A. de C.V. amounting to 41 thousands of euros, respectively, in accordance with the criteria detailed in Note 2.1.d

	Long-term balances		Short-term balances
	2021	2020	2021	2020
Enagás Internacional, S.L.U.		400,291	407,557	7,266
Total		400,291	407,557	7,266

The balances at December 31, 2021 relate in full to a loan granted to Enagás Internacional, S.L.U. amounting to 400,291 thousands of euros and the interest associated with this loan, which was accrued but not paid, amounting to 7,266 thousands of euros (7,266 thousands of euros at December 31, 2020). This loan has been reclassified to short-term, as it matures in the next 12 months.

2020	2021	2022	2023	2024	2025 and later years	Total
Loans and receivables	7,266	400,291	-	-	-	407,557

Total	7,266	400,291	-	-	-	407,557

Loans to group companies are subject to the market interest rate, with the average rate for 2021 and 2020 being 2.4%. The breakdown per maturity of these loans at year-end 2021 and

2020 is as follows:

2021	2022	2023	2024	2025	2026 and later years	Total
Loans and receivables	407,557					407,557
Total	407,557					407,557

In relation to the investment in Gasoducto Sur Peruano, S.A. reement owing Security of the Country and the Development of the Gasoducto because the financial close had not been evidenced within the period established in the agreement (January 23, 2017), and proceeded to the immediate enforcement of the totality of the guarantee for full compliance given by GSP (262.5 million dollars), to ensure fulfilment of the obligations relating to the concession, which in the case of Enagás generated a payment of 65.6 million dollars. Also in January 2017, they paid GSP bank financing sureties to Enagás amounting to 162 million dollars, including both principal and interest pending payment. In December 2017, the process for delivering the Concession Assets held by GSP was substantially completed with the Peruvian State assuming control over them.

As a result of the termination of the concession contract, in accordance with the opinion of external and internal legal advisors, the Peruvian State had the obligation to apply Clause 20 of the Concession Contract, calculating the Net Carrying Amount (hereinafter NCA) of the Concession Assets, calling up to a maximum of three auctions to award the Concession, with the auction result being to pay GSP the NCA. With the amount that GSP would have received for the NCA of the Concession Assets, it would have proceeded to settle its obligations to third parties and, if appropriate, reimburse the capital contributions made by its shareholders, as explained in the Consolidated Annual Accounts of the Enagás Group since 2016.

As a result of inaction by the State of Peru in relation to the aforementioned procedure, on December 19, 2017, Enagás notified the Peruvian State about the existence of a dispute relating to the investment in GSP with a view to reaching an amicable agreement on the terms of Article 9.1 of the Agreement for the Reciprocal Promotion and Protection of APPRI in Spanish signed by the Republic of Peru and the Kingdom of Spain. This notification represented the beginning of the six-month period for direct contact prior to initiating international arbitration in which the APPRI acts as the mechanism for recovering the investment in GSP. Once the required six months of direct contact between Enagás and the Peruvian State had elapsed without it being possible to reach an amicable settlement of this dispute, on July 2, 2018, Enagás filed an application for the initiation of arbitration against the Peruvian State regarding its investment in GSP with the ICSID.

Through this arbitration procedure, it is expected that the Peruvian State will reimburse Enagás for its investment in GSP, this being the mechanism by which the financial assets recorded in the balance sheet would be recovered. Thus, it is expected that the Arbitration Court hearing the arbitration procedure in the ICSID will uphold the arguments of Enagás, issuing an award recognising that under the APPRI and, therefore, it must compensate it by paying it the value of that investment.

With respect to this ICSID arbitration procedure, the Arbitration Court was constituted on July 18, 2019, and Legal Resolution No. 1 was issued on September 24, 2019, establishing the procedural rules that govern the arbitration procedure until the award is handed down.

greement, In accordance with this Resolution, Enagás filed its claim on January 20, 2020, and the Peruvian State replied on July 17, 2020. Subsequently, the documentary exhibition phase took place in which the parties requested each other to provide documents that each of them considered relevant. This was followed by the presentation of the reply by Enagás on May 31, 2021 and the rejoinder by the Peruvian State on October 20, 2021, with Enagás finally presenting its rejoinder on preliminary objections on January 17, 2022. Preparations are currently underway for the hearings scheduled for September 2022.

Also with regard to the ICSID, on January 21, 2020, Odebrecht filed a request to initiate arbitration against the Republic of Peru to recover its investment in GSP.

maintained by Enagás is that, if the Peruvian State had complied with its obligation under the Concession Contract, it would have calculated the NCA and organised the three auctions, which it was obliged to do, to award the Concession, and the proceeds of the auction would have been delivered to GSP, which would have applied the amount delivered to pay its creditors and return the the Peruvian State must pay 100% of the NCA to GSP, since on January 24, 2018, one year has passed since the end of the concession contract and in that time there have been no calls for auctions. The absence of an auction means that the legal advisors of Enagás believe that it should be considered that GSP would have received 100% of the NCA because it was deprived of the possibility of receiving it when not even the first auction was convened. Therefore, starting from the NCA considered, a certain payments waterfall would have been applied.

Enagás considers that, taking into account the NCA of the Concession Assets determined by an independent expert, and also taking into account the payment waterfall as per the terms of the insolvency legislation, as well as the contracts between Enagás and the members and creditors of GSP relating to subordination and credit agreements, if the State had satisfied its obligations, and thus paid GSP the amount obtained in the auction, Enagás would have recovered its investment.

With respect to the amount of the NCA, there have been no variations other than the evolution of the exchange rate for certain items in Peruvian soles, maintaining at December 31, 2021 the valuation performed by a firm of independent appraisers hired by Enagás for a total updated value of the NCA of 1,943 million dollars (1,954 million dollars at December 31, 2020).

Taking into account this updated NCA, if the payment waterfall were to be applied to it as per the terms of the insolvency laws, the subordination and the assignment of credit agreements entered into by Enagás and its partners in GSP, Enagás would recover the total value of its investment claim with the ICSID in the amount of 511 million dollars.

In relation to the aforementioned contracts for the subordination of rights and assignment of credits, their effectiveness and form of partners in GSP through different arbitration proceedings, with the Peruvian legal advisors considering these agreements to be fully valid and enforceable.

Likewise, the INDECOPI authority has recognised the full bankruptcy process. In relation to the arbitration proceeding still in process filed by Negocios de Gas, subsidiary from Aenza (formerly Graña y Montero) questioning the legitimacy of Enagás to claim its credits against GSP, on July 13, 2021, Negocios de Gas communicated to the Court its withdrawal of the claim, thus requesting the end of the arbitration proceeding without the issuance of an award.

As regards the arbitration proceedings against the State of Peru, internal legal advisors, the recoverability of the totality of the Enagás investment in GSP, consisting of receivables in relation to the aforementioned enforced guarantees to the total of 226.8 million dollars, interests of 1.8 million dollars, various invoices for professional services rendered to the amount of 7.6 million dollars and the share capital contributed to GSP for the amount of 275.3 million dollars, is considered likely.

With regard to the recovery periods, assessing the time taken to resolve a dispute of this complexity in an international arbitration as well as the periods considered in the aforementioned ICSID Resolution No. 1, and the review of the planned actions, June 30, 2023 has been set as the estimated date for obtaining an award

(in 2020 it was estimated at December 31, 2022).

Based on this, the amounts outlined in the preceding paragraph are recorded at their updated value in the Consolidated Balance Sheet dated December 31, 2021 for a total amount of 431,277 thousands of euros (392,417 thousands of euros at December 31, 2020).

immediate payment to the Peruvian State to repair civil damage Supreme Decree 096-2018-EF was published, enacting the regulations of the aforementioned law.

In accordance with Article 9 of Law No. 30737, legal persons and legal entities in the form of partnerships, consortiums and joint ventures who may have benefited from the awarding of contracts, or subsequent to it, jointly with persons who have been convicted or who may have acknowledged having committed crimes against the public administration, asset laundering or related crimes, or their equivalents against the State of Peru, in Peru or abroad are classified as Category 2, and therefore fall within its scope of application.

In June 2019, the Peruvian Judiciary approved the Effective Partnership Agreement reached between the Odebrecht Group and not included as one of the projects affected by corruption-related

events. Subsequently, on October 15, 2019, Enagás Internacional informing it of the existence of an extension of this effective partnership agreement with Odebrecht, in which it would be acknowledging that it had made illegal payments - according to - with respect to the GSP project, although there are still no facts known or consistent or proven links between GSP and corruption in the awarding of the project.

With regard to other processes of effective collaboration with other third parties, as of December 31, 2021, there has been no judicial approval of any of them, nor are there any consistent or proven facts that link GSP to corruption in the awarding of the project.

and rejoinder also failed to provide new evidence that links GSP with corruption in a proven and irrefutable manner.

Notwithstanding the above comments on the extension of the initial Effective Collaboration Agreement signed by Odebrecht and the Public Prosecutor of Peru, there have been no significant developments regarding the actions of the Public Prosecutor of other investigations carried out by the Special Team of the somehow be related to the awarding of the project. In this regard, two investigations are known to be in progress:

The first one signed with Folder 321-2014, related to aggravated collusion between a former Odebrecht employee and a public official, whose control and clean-up phase has been resumed on June 28, 2019, after the Supreme Court Peru to At this stage it is expected that a decision on the opening of the oral proceedings will be taken. Based on the opinions of Enagás external legal advisors for the Peruvian criminal code, considered to be remote. In this same case, the preparatory investigative court has declared the incorporation of GSP as a liable third party as wrongful.
In relation to the second investigation opened, sealed with Folder 12-2017, those under investigation including two employees of Enagás and Enagás Internacional, S.L.U., on February 27, 2020, a decision was made to move to the preliminary investigation stage. Based on the opinion of our external legal advisors in Peruvian criminal law, it is maintained that to date there is no indication that the investigations could be detrimental to Enagás.

In connection with this second file, on December 30, 2020, the quested its incorporation as a civil plaintiff in the criminal proceeding in order to request the payment of an eventual reparation in the aforementioned proceeding once a final judgement is issued, as well as in order to request possible precautionary measures to ensure the eventual reparation. The initial request was rejected on formal grounds on submitted a new request for 1,107 million dollars for the GSP project, which was formally admitted on January 26, 2022.

The inclusion of Enagás Internacional as one of the civilly liable third parties, if applicable, is therefore pending. The amount will

be determined in detail by the criminal judge in charge once the final sentence has been handed down. According to both external and internal lawyers, the amount requested has not been duly supported nor does it comply with the possible civil liability that could be claimed on the basis of the offences referred to in the indictment. An objective reference for the calculation is the one established by Law No. 30737, which assures payment of civil compensation to the Peruvian State. Considering the very preliminary stage of the criminal process, taking into account the elements of knowledge available to date and based on the conclusions of the specialist local lawyers, it is considered that the probability of the imposition of this compensation in any case does not exceed 50% (possible), and therefore it is not appropriate to register any provision, as it is considered a contingent liability. Likewise, in the event that it could eventually be declared wellfounded, and the amount of the compensation could not be reliably estimated, the reference amount to be considered would be between 0 and 242 million dollars.

Moreover, with regard to civil compensation, even without evidence of a criminal conviction or a confession of the commission of crimes, as required under Article 9 of Law No. 30737, on June 28, 2018, the State of Peru classified Enagás Internacional on indicating the legal person or legal entity included under Section II to GSP. The application of the mentioned standard involves different measures to contribute to the payment of potential civil compensation, such as setting up an escrow account, reporting information, limiting transfers to other countries or preparing a compliance programme.

The total amount of the escrow account that would correspond to Enagás, estimated at 50% of the total average net equity, corresponding to its stake in GSP, confirmed with the Ministry of Justice, amounts to 65.5 million dollars. It is currently being

determined, if applicable, how this amount would be provided, potentially through the granting of a bank bond letter.

In addition, the Peruvian State has affirmed that the measure prohibiting companies included in Category 2 from making transfers outside of Peru, pursuant to Law No. 30737, is applicable. Bas internal legal advisors, it is maintained that this measure would be applicable to the investment in GSP and should not restrict the dividends received from TGP (amounting to 250 million dollars), also considering that this investment is protected by the Legal Stability Agreements in force in Peru, a regulation whose prevalence and application has been formally requested to the Peruvian state.

In this regard, in order to make effective the application of these Legal Stability Agreements, on February 24, 2021, the direct treatment to the Peruvian State was initiated, which was followed by the filing of a request for international arbitration under the Spain-Peru APPRI by Enagás on December 23, 2021. In addition, Enagás Internacional has pledged its TGP shares in favour of Enagás Financiaciones, S.A.U. and Enagás, S.A. to guarantee the payment of its present or future obligations and debts.

In view of the above, it is still maintained that these regulations do not have a negative effect on the recovery of accounts receivable through the international arbitration process indicated above recorded on the balance sheet at December 31, 2021.

Based on all of the above, the directors of Enagás, in line with the opinion of their external and internal legal advisors, and of an independent expert and independent expert accountant, consider these facts to have no bearing on the estimation for recovery of the investment in the stake in GSP and the previously mentioned receivables to the amount of 431,277 thousands of euros (390,266 thousands of euros at December 31, 2020).

a)

The appropriation of 2021 profit corresponding to the Company proposed by the Board of Directors and which will be submitted for approval by

TOTAL	457,259	Forecast cash balance for the period from
Voluntary reserves	12,217
Dividend	445,042
	12.31.2021

At a meeting held on November 22, 2021, the Board of Directors of Enagás, S.A. agreed to distribute an interim dividend charged against 2021 profit, based on the necessary liquidity statement, expressed in thousands of euros, amounting to 177,812 thousands of euros (0.68 euros gross per share), in accordance with Article 277 of the Spanish Corporate Enterprises Act.

The provisional accounting records prepared by the Company, in accordance with legal requirements and which presented balances sufficient for the distribution of the interim dividend in 2021, were as follows:

	Provisional accounting statement at October 31, 2021
	Net accounting result	40,115
	10% legal reserve	0
12.31.2021	Interim dividend received from Group companies	432,600
	distribution	472,715
	Forecast payment on account	(177,812)
	Forecast cash balance for the period from
	October 31 to December 31:
	Cash balance	38,521
	Projected collection for the period considered	313,972
	Credit lines and loans available from financial institutions	1,500,000
	Payments projected for the period under consideration (including the payment on account)	(249,944)
	Estimated available financing after dividend distribution	1,602,549

The aforementioned interim dividend was paid on December 21, 2021.

The gross complementary dividend proposed (1.02 euros per share) is subject to approval by the ordinary General Annual Accounts. Thus, this gross complementary dividend will total up to a maximum amount of 267,230 thousands of euros.

b)

In addition to the aforementioned interim dividend for 2021, during 2021 Enagás, S.A. distributed the gross complementary dividend for 2020.

This dividend amounted to 263,580 thousands of euros (1.008 euros per share) and was paid on July 8, 2021.

1.7

A financial guarantee contract is a contract which requires that the issuer makes specific payments to repay the holder for losses incurred when a specific debtor does not fulfil payment obligations at maturity, in accordance with the original or modified conditions of a debt instrument. The rights and obligations associated with a financial guarantee will be considered as financial assets and financial liabilities. For subsequent valuation, a contract will be recognised as the greater amount of a) the amount resulting from standards relating to provisions or b) accumulated
- An investment commitment corresponds to that obligation contracted with a related party which can give rise to outflows of funds or other resources in the future. The following is included among these: commitments not recognised in connection with contributing funds or resources as a consequence of incorporation agreements, capital intensive projects carried out by a business combination, commitments not recognised in connection with providing loans or other financial support to the joint venture, or commitments not recognised in connection with

Commitments and guarantees	Group Personnel, Companies or Entities (Note 4.3)	Other related parties (Note 4.3)	Third parties	Total
2021
Guarantees for related parties debt	5,688,752	-	-	5,688,752
Guarantees and sureties granted - Other	112,267	-	84,352	196,619
Total	5,801,019	-		84,352 5,885,371
2020
Guarantees for related parties debt	5,288,568	-	-	5,288,568
Guarantees and sureties granted - Other	66,358	14,699	45,593	126,650
Total	5,354,926	14,699		45,593 5,415,218

a)

	Thousands of euros
	2021	2020
E. Financiaciones debt guarantee	4,068,788	4,200,530
Guarantee on the Enagás Internacional debt	627,402	88,494
Guarantee on the TAP debt	609,205	622,920
Guarantee on the Enagás Holding USA/Enagás USA debt	383,164	376,432
Enagás Services debt guarantee	193	192
Total	5,688,752	5,288,568

The guarantees outlined above mainly correspond to:

The guarantees provided by Enagás, S.A. for all the debt of Enagás Financiaciones for both the bond issues and the loans granted by the European Investment Bank and the Instituto de Crédito Oficial, amounting to 4,068,788 thousands of euros (4,200,530 thousands of euros at December 31, 2020).
The guarantees provided by the Company for Enagás
- Debt with BBVA and CAIXA amounting to 624,176 thousands of euros, loans contracted in December 2021.
- Credit lines maintained with Banco Santander and La Caixa, amounting to 3,226 thousands of euros (88,494 thousands of euros with Banco Santander at December 31, 2020).
The guarantees provided by Enagás, S.A. for the debt that Enagás Holding USA, S.L.U. has with la Caixa and UBI for the financing of the purchase of Tallgrass by Enagás USA S.L.U. (amount received via an intercompany loan from Enagás Holding USA, S.L.U.), which at December 31, 2021 amounts to

383,164 thousands of euros (December 31, 2020: 376,432 thousands of euros).

Also, Enagás, S.A. guarantees the amount drawn down by Enagás Financiaciones, S.A.U. in the Euro Commercial Paper Programme (ECP) (Note 3.2.b). At December 31, 2021, Enagás Financiaciones, S.A.U. had not drawn down any amounts.
The corporate guarantee granted by Enagás, S.A. on behalf of the financial entities of Trans Adriatic Pipeline, AG (TAP), in accordance with the Financing Agreement signed by this company on November 30, 2018. This guarantee basically covers the following items:
- Principal and interests of the Financing Contract drawn by TAP;
- Market value of the hedging instrument over the interest rate.

2021, a milestone that allowed the partners to replace the construction phase of the infrastructure with a mechanism for shareholder support for the repayment of the TAP loan (Debt Payment Undertaking), which will be in effect until its maturity, and which would be activated in the event of certain extraordinary events.

This support mechanism has been granted jointly by each of hypothetical case, for the amount corresponding to it in

This support mechanism during the operating period is contractually limited by a cap in force throughout the life of the financing arrangement, so that the amounts claimed from Enagás may never exceed a total amount of 903,322 thousands of euros, regardless of the market value of the derivative or any other contingency.

At December 31, 2021 the amount guaranteed by Enagás, S.A. to the creditors of TAP amounted to 609,205 thousands of euros (622,920 thousands of euros at December 31, 2020).

Additionally, on May 28, 2021, Enagás Financiaciones, S.A.U. renewed the Euro Medium Term Note (EMTN) programme for a maximum amount of 4,000 million euros, registered in the Luxembourg Stock Exchange in 2012, with Enagás, S.A. as guarantor.

Finally, on May 28, 2021, Enagás Financiaciones, S.A.U. renewed the Euro Commercial Paper (ECP) programme for a maximum amount of 1,000 million euros, registered in the Irish Stock Exchange on May 4, 2017, with Enagás, S.A. as guarantor.

b)

This heading includes the following guarantees and sureties granted to group companies at December 31, 2021:

The technical sureties granted to third parties by Enagás Transporte, S.A.U. amounting to 3,712 thousands of euros (3,712 thousands of euros at December 31, 2020), by Gas to Move Transport Solutions, S.L., amounting to 359 thousands of euros (630 thousands of euros at December 31, 2020) and Enagás Renovable S.L.U., amounting to 9,600 thousands of euros (18,000 thousands of euros at December 31, 2020), all of which are counter-guaranteed by Enagás, S.A.
The Company counter-guarantees Enagás Internacional, S.L.U. the bid bond for the port concession in Colombia for the Buenaventura project in the amount of 1,319 thousands of euros (1,259 thousands of euros at December 31, 2020.
Enagás, S.A. also guarantees the hedging operations contracted by Enagás Internacional, S.L.U., which had a fair value at December 31, 2021 of 88,317 thousands of euros (42,757 thousands of euros at December 31, 2020 for the hedging operations contracted by Enagás n 2020).

criteria previously established by Order EHA/3050/2004, Banco Santander ceased to be a related party in 2021.

The net carrying amount of the tangible fixed assets at December 31,

2.

Operating profit increased by 4.4% with respect to 2020, amounting to 501,831 thousands of euros (Note 2.1).
The main income that makes up the Revenue is the income for dividends received from Group Companies that has increased with respect to the income received in 2020 under the same item at 2.5%, amounting to 516,374 thousands of euros (Note 2.1).

includes accounts receivable from the different Group companies to which the Company provides holding services. (Note 2.2).

The Company follows a process for the accounting recording of revenues derived from contracts with customers, which consists of the following stages:

1. Identify the contract with the customer, understood as an agreement between two or more parties that creates enforceable rights and obligations for them.
1. Identify the obligation or obligations to be fulfilled in the contract, representative of the commitments to transfer goods or provide services to a customer.
1. Determine the transaction price, or contract consideration to which the company expects to be entitled in exchange for the transfer of goods or provision of services committed to the customer.
1. Assign the transaction price to the obligations to be fulfilled, which must be based on the individual sales prices of each different goods or service committed to in the contract, or, if applicable, following an estimate of the sales price when this is not independently observable.
1. To recognise revenue from ordinary activities when the company fulfils a committed obligation through the transfer of a good or the rendering of a service; fulfilment that takes place when the customer obtains control of that good or service, so that the amount of revenue recognised will be the amount assigned to the fulfilled contractual obligation.

Recognition

The Company recognises revenue from a contract when control over the committed goods or services is transferred to the customer. For each identified performance obligation, the company determines at contract inception whether the obligation incurred will be settled over time or at a point in time.

Revenue from obligations that will be settled over time is recognised by reference to the stage of completion, or progress towards completion, of the contractual obligations, provided the company has reliable information to measure the stage of completion.

To determine the point at which the customer obtains control of the asset, the company considers the following indicators:

a. The customer assumes the significant risks and rewards of ownership of the asset.
b. The company transfers physical possession of the asset.
c. The customer receives the asset in accordance with the contractual specifications.

Valuation

Revenue from the sale of goods and the rendering of services is measured at the monetary amount or, where applicable, the fair value of the consideration received or expected to be received. The consideration is the agreed price for the assets to be transferred to the customer, less: the amount of any discounts, rebates or similar items that the company may grant; and interest included in the nominal amount of the receivables.

2021, is as follows (Note 2.4):

Under the accrual basis of accounting, revenue is recognised when control is transferred and expenses are recognised when incurred, regardless of the timing of collection or payment.

The Company recognises other income that does not relate to contracts with customers:

Dividend income from investments: is recognised when the rights of the shareholders to receive payment have been established. In applying the criteria of the Spanish Accounting and Audit Institute through BOICAC 79, on the classification for accounting purposes in separate financial statements of the income and expenses of holding companies that apply the Spanish National Chart of Accounts, approved by Royal Decree 1514/2007, and on the on loans received from its affiliates are included as an integral
Interest income: is accrued based on a temporary financial criterion, based on the outstanding principal and the applicable effective rate, which is the rate of the estimated future cash flows over the expected life of the asset that is equal to its carrying amount.
Expenses are recognised in the income statement when there is a decrease in the future economic benefit related to a reduction in an asset or an increase in a liability that can be measured reliably. This means that an expense is recognised simultaneously with the recognition of the increase in the liability or the reduction of the asset.
An expense is recognised immediately when a payment does not generate future economic benefits or when the prerequisites for capitalisation as an asset are not met.

The breakdown of revenue by activity is the following:

The breakdown of revenue in 2021 and 2020 by geographical markets is provided below:

	12.31.2021	12.31.2020
Spain	590,949	582,930
Latin America	647	658
Total	591,596	583,588

Dividend income

In relation to the dividend income of Enagás, S.A. as shareholder. The amount of dividends received in financial year 2021 amounting to 516,374 thousands of euros corresponds to the following distribution of dividends in the year 2021:

Enagás Transporte, S.A.U. distributed a total of 455,152 thousands of euros in 2021:
- A final dividend amounting to 30,000 thousands of euros.
- An interim dividend of 295,320 thousands of euros charged to 2021 results
- An extraordinary dividend charged to reserves in the amount of 129,832 thousands of euros.
Enagás Internacional, S.L.U. has distributed in 2021 the dividend corresponding to the profit for 2020 in the amount of 50,798 thousands of euros.
In 2021 Enagás Financiaciones, S.L.U. distributed an extraordinary dividend charged to reserves in the amount of 2,976 thousands of euros, as well as an interim dividend of 7,448 thousands of euros against 2021 results.

In 2020, the dividend income corresponded mainly to dividends from Enagás Transporte, S.A.U.

Income from loans to group and multigroup companies

The income of 10,007 thousands of euros in 2021 (10,473 thousands of euros in 2020) relates to the loan granted to Enagás International described in Note 1.5.

Income for services rendered to group and multigroup companies

The detail of income from services rendered is as follows:

12.31.2021 12.31.2020

Services rendered to group and multigroup companies

Total	65,215	69,673
Other	-	-
From customer contracts	65,215	69,673

Income from the rendering of services corresponds to services provided by Enagás, S.A. to its group of investees for the rendering of corporate services.

	12.31.2021	12.31.2020
Wages and salaries	37,056	34,533
Termination benefits	704	1,122
Social Security	5,605	5,300
Other personnel expenses	5,516	5,677
Contributions to external pension funds (defined contribution plan)	892	850
Total	49,773	47,482

In 2021, a staff restructuring plan was implemented culminating in the voluntary terminations of 3 employees that will leave in 2022 and in January 2023, the necessary requirements for them to be recorded as expenses for the year having been fulfilled (in 2020, a termination agreement was reached with 4 employees).

	12.31.2021	12.31.2020
Social contributions:
- Social Security	5,605	5,300
- Contributions to pension schemes	892	850
- Contributions	1,572	1,384
- Other social contributions	3,944	4,293
Total	12,013	11,827

Company contributions to the pension plan amounted to 892 thousands of euros in financial year 2021 (850 thousands of euros attached Income Statement. Furthermore, it includes the Senior the amount of 1,572 thousands of euros (1,384 thousands of euros in 2020).

The Company makes contributions, in accordance with the approved pension plan adapted to the provisions of the Spanish Pension Plans and Funds Act, to a defined contribution plan called Previsión y Pensiones, S.A. and its custodian Banco Bilbao Vizcaya respect to serving employees. The aforesaid plan recognises certain vested rights for past service and undertakes to make monthly contributions averaging 3.96% of eligible salary (4.00% in 2020). It is a mixed plan covering retirement benefits, disability and death. The total number of people adhered to the plan at December 31, 2021 totalled 319 participants (322 participants at December 31, 2020).

The contributions made by the Company each year in this Income Statement. At year-end 2021 and 2020, there were no contributions payable in this connection. In addition, the Company has outsourced its pension commitments with its senior managers by means of a mixed group insurance policy for pension

commitments, including benefits in the event of survival, death and employment disability.

The average number of employees at Enagás S.A. by professional category is as follows:

employees (361 employees in 2020).

The distribution of the professional categories by gender is as follows:

	2021		2020
Categories	Men	Women	Men	Women
Management	54	31	52	30
Technicians	114	133	110	131
Administrative staff	4	32	4	34
Total	172	196	166	195

comprising ten persons (eight men and two women) (Note 4.4). During 2021 and 2020, the average number of staff with disabilities greater than or equal to 33% employed by the Company, broken down by categories, is as follows: to 41 thousands of euros (Note 1.5.a). a) Unconditional right to receive the consideration

When the Company has an unconditional right to the consideration, irrespective of the transfer of control of the assets, a receivable is current assets, depending on its maturity based on the normal operating cycle.

	2021	2020
Technicians	1	2
Administrative staff	2	2
Total	3	4

c)

	12.31.2021	12.31.2020
External services	36,843	42,171
Taxes	267	376
Other	354	524
Total	37,464	43,071

necessary for the provision of services amounting to 10,122 thousands of euros at December 31, 2021 (13,308 thousands of euros at December 31, 2020) as well as for the services of independent professionals for the amount of 9,395 thousands of euros at December 31, 2021 (9,420 thousands of euros at December 31, 2020).

d)

The balance for 2021 comprises the reversal of the impairment loss recognised on the investment in Enagás Services Solutions, S.L.U. amounting to 2,151 thousands of euros and the impairment loss on the investment in Enagás México S.A. de C.V. amounting

b) Entitlement to consideration for transfer of control

When control of a contractual asset is transferred without an unconditional right to revenue, the Company recognises a right to consideration for the transfer of control. This entitlement to consideration for the transfer of control is derecognised when an unconditional right to receive the consideration arises.

These balances, like unconditional rights, are reported under trade receivables. They are classified as current or non-current depending on their maturity.

At least at each reporting date the Company performs an impairment test on financial assets not measured at fair value (Note 1.5).

own (Note 4.3):

	12.31.2021	12.31.2020
Enagás Internacional, S.L.U.	357	388
Gasoducto Morelos S.A.P.I. de CV	42	-
Enagás GTS, S.A.U.	1,961	1,533
Enagás Transporte, S.A.U.	6,634	9,036
Enagás Services Solutions, S.L.U.	193	374
Enagás Emprende, S.L.U.	496	148
Other	1,612	442
Total	11,295	11,921

These balances relate mainly to the corporate services rendered by Enagás, S.A., which mature after December 31, 2021.

Generally, Financial liabilities at amortised cost generally include trade -trade
These payables are initially recognised at the fair value of the consideration received, adjusted by directly attributable transaction costs. These liabilities are subsequently measured at their amortised cost.
In accordance with the ICAC Resolution of January 29, 2016, the calculation of the average payment period to suppliers takes into consideration the commercial transactions corresponding to the delivery of goods or rendering of services accrued since the date of the entry into force of Law 31/2014, of December 3.

Trade and other payables	12.31.2021	12.31.2020
Suppliers	11,045	10,312
Suppliers, group companies and associates	733	457
Sundry creditors, group companies	-	6,438
Other payables	618	2,854
Personnel	9,352	6,365
Current tax	630	-
Other debts with the Public Administrations (Note 4.2)	31,873	31,925
Total	54,251	58,351

materials and services provided to Enagás, S.A. whose captions of the income statement and the balance sheet, respectively.

remuneration corresponding to the current year, which is paid during the first quarter of 2022.

Suppliers, for the exclusive purposes of providing the information set forth in this Resolution, are considered to be trade payables owed to suppliers of goods and services included balance sheet.
time that passes between the delivery of the goods or rendering of the services by the supplier and the material payment for the transaction.
The maximum payment term applicable to the Company in 2021 under Law 3/2004, of December 29, establishing measures to combat late payments in commercial transactions, is 60 days. In order to obtain the foregoing information, payment obligations that have been the object of withholdings as a result of embargoes, enforcement orders, administrative

Other payables accounts payable to companies in which Enagás has direct or indirect holdings, as well as other third-party agents, in respect of advances on grants collected centrally by Enagás S.A. in connection with new energy projects to be carried out by these companies.

The disclosures required in the second additional provision of Law 31/2014, of December 3, prepared in accordance with the ICAC Resolution of January 29, 2016, are as follows:

Days	2021	2020
Average payment period to suppliers	44
Ratio of paid operations	45	42
Ratio of operations pending payment	33	51
Amount	2021	2020
Total payments made	45,115	47,037
Total pending payments	3,527	1,398

The cost model is applied, that is, the corresponding assets are measured at acquisition or production cost less the corresponding accumulated amortisation and any impairment losses.
Acquisition or production cost includes:

Amortisation entered on a linear basis once the assets are ready for use, in accordance with the following useful lives:

impairment losses.		Annual rate	Useful life (years)
Acquisition or production cost includes:
Finance expenses relating to the financing of infrastructure projects accrued only during the	Buildings	3%-2%	33.33-50
construction period, when the building work lasts for more than one year.	Other technical facilities and machinery	12%-5%	8.33-20
Personnel expenses directly related to work in progress, lowering personnel expenses (Note 2.1).	Equipment and tools	30%	3.33
The costs of renovation, extension or improvement are incorporated into the asset as the greatest value of the	Furniture and fixtures	10%	10
asset exclusively when they imply an increase in its capacity, productivity or prolongation of its useful life, with deduction of the net carrying amount of the substituted	Information technology equipment	25%	4
goods, if any. Conversely, the periodic expenses of maintenance, conservation and repair are charged to income for the year in which they are incurred.	Transport equipment	16%	6.25

The amortisation of assets recorded as property, plant and equipment follows the straight-line method, applying annual amortisation percentages calculated based on the years of estimated useful life of the respective goods.
- The Directors consider that the carrying amounts of the assets do not exceed the recoverable amounts which result from calculating discounted future cash flows generated by said assets based on foreseen remuneration under current regulations.

2021	Opening balance	Inputs or provisions	Increases or decreases due to transfers	Decreases, disposals or reductions	Balance at year-end
Land and buildings	35,196	90	-	-	35,286
Technical facilities and machinery	4,754	41	-	-	4,795
Other facilities, tools, and furniture	33,681	1,445	-	-	35,126
Prepayments and work in progress	1,063	6,695	-	-	7,758
Total cost	74,694	8,271	-	-	82,965
Land and buildings	(19,365)	(957)	-	-	(20,322)
Technical facilities and machinery	(4,683)	(36)	-	-	(4,719)
Other facilities, tools, and furniture	(29,428)	(1,494)	-	-	(30,922)
Prepayments and work in progress	-	-	-	-	0
Total amortisation	(53,476)	(2,487)	-	-	(55,963)
Land and buildings	15,831	(867)	-	-	14,964
Technical facilities and machinery	71	5	-	-	76
Other facilities, tools, and furniture	4,253	(49)	-	-	4,204
Prepayments and work in progress	1,063	6,695	-	-	7,758
Net Carrying Amount of Property, plant, and equipment	21,218	5,784	-	-	27,002

2020	Opening balance	Inputs or provisions	Increases or decreases due to transfers	Decreases, disposals or reductions	Balance at year end
Land and buildings	34,627	688	-	(119)	35,196
Technical facilities and machinery	4,746	8	-	-	4,754
Other facilities, tools, and furniture	32,112	1,569	-	-	33,681
Prepayments and work in progress	158	905	-	-	1,063
Total cost	71,643	3,170	-	(119)	74,694
Land and buildings	(18,466)	(1,001)	-	102	(19,365)
Technical facilities and machinery	(4,637)	(46)	-	-	(4,683)
Other facilities, tools, and furniture	(27,935)	(1,493)	-	-	(29,428)
Prepayments and work in progress	-	-	-	-	-
Total amortisation	(51,038)	(2,540)	-	102	(53,476)
Land and buildings	16,161	(313)	-	(17)	15,831
Technical facilities and machinery	109	(38)	-	-	71
Other facilities, tools, and furniture	4,177	76	-	-	4,253
Prepayments and work in progress	158	905	-	-	1,063
Net Carrying Amount of Property, plant, and equipment	20,605	630	-	(17)	21,218

computer equipment required to carry out certain corporate projects, for a total amount of 1,445 thousands of euros, while the additions are for additions to the Power to Green Mallorca project for the construction of a hydrogen generation plant for an amount of 6,408 thousands of euros.

involved an increase in the investment of 364 thousands of euros in financial year 2021 (249 thousands of euros in financial year 2020).

There are no mortgages or encumbrances of any type on assets recorded as property, plant, and equipment.

It is the Company policy to insure its assets to ensure that there is no significant loss of equity, based on best market practices, given the nature and characteristics of the items of Property, Plant and Equipment.

In addition, the Company has contracted the corresponding insurance policies to cover third party civil liabilities.

Fully depreciated PP&E items recognised by Enagás and still in use at 2021 and 2020 year-end are broken down as follows:

As a general rule, intangible assets are initially measured at acquisition or production cost. They are subsequently measured at cost less accumulated amortisation and impairment losses, if any.

Research costs are activated, with 95% of the cost amortised in the first year and the rest in the following year, provided that they are specifically identified by project, their amount can be clearly established and there are well-founded reasons for trusting in the technical success and in economic-commercial profitability of the project.
Development costs are capitalised by amortising on a straight-line basis over the corresponding useful life, provided they are specifically related to projects, their amounts can be clearly established, and technical success and economic feasibility of the project are reasonably assured.
Acquisition and development costs incurred with respect to basic IT systems used for management are recognised with a charge to systems are recognised in the income statement for the year in which they are incurred. They are measured at the amount disbursed for ownership or right-of-use of the IT programmes, as well as their production cost if they are developed by the Company. They are amortised over a period of four years.
Intangible fixed assets amortised based on their defined service life, if any, which is equivalent to the following amortisation percentages:

	Annual rate	Useful life
Development costs	5%-50%	20-2
Other intangible assets	20%	5
IT applications	25%	4

2021	Opening balance	Inputs or provisions	Increases or decreases due to transfers	Decreases, disposals or reductions	Balance at year-end
Research and Development	11,411	165	-	-	11,576
IT applications	124,749	7,295	-	-	132,044
Other intangible assets	6,724	-	-	-	6,724
Total cost	142,884	7,460	-	-	150,344
Research and Development	(11,345)	(156)	-	-	(11,501)
IT applications	(110,244)	(3,112)	-	-	(113,356)
Other intangible assets	(6,724)	-	-	-	(6,724)
Total amortisation	(128,313)	(3,268)	-	-	(131,581)
Research and Development	65	9	-	-	74
IT applications	14,506	4,183	-	-	18,689
Other intangible assets	-	-	-	-	-
Net Carrying Amount Intangible Assets	14,571	4,192	-	-	18,763

2020	Opening balance	Inputs or provisions	Increases or decreases due to transfers	Decreases, disposals or reductions	Balance at year-end
Research and Development	11,181	230	-	-	11,411
IT applications	118,119	6,630	-	-	124,749
Other intangible assets	6,724	-	-	-	6,724
Total cost	136,024	6,860	-	-	142,884
Research and Development	(11,088)	(257)	-	-	(11,345)
IT applications	(106,275)	(3,969)	-	-	(110,244)
Other intangible assets	(6,724)	-	-	-	(6,724)
Total amortisation	(124,087)	(4,226)	-	-	(128,313)
Research and Development	93	(28)	-	-	65
IT applications	11,844	2,662	-	-	14,506
Other intangible assets	-	-	-	-	-
Net Carrying Amount Intangible Assets	11,937	2,634	-	-	14,571

following projects:

Implementation of the SAP 4 HANA system migration project in the amount of 1,778 thousands of euros.
Implementation of the Scada Monarch system to monitor and 1,385 thousands of euros.
Unified Communications Software, evolution of IT Infrastructure, evolution of backup systems, integrated analytical reports, internet browser migration, corporate reengineering, among others, for a total amount of 2,764 thousands of euros.

At December 31, 2021 and 2020, the Company had recorded fully amortised intangible assets that remained in use, based on the following detail:

At each year-end, or when there are indications of impairment, the Group analyses the recoverable amounts to determine the possibility of impairment. This recoverable amount is the greater of the market value minus the cost necessary for its sale and the value in use, understood as the current value of the estimated future cash flows. For the calculation of the recovery value of property, plant, and equipment, the value in use is the criterion used by the
In the event that the recoverable amount is lower than the net carrying amount of the asset, the corresponding impairment provision is recorded by the difference, charged the attached income statement.

Determination of impairment losses on non-current assets other than financial assets is based on fulfilment of a series of hypotheses which are described below in this note and are revised annually.
To estimate value in use, the Company estimates projections regarding future cash flows before taxes based on the most recent budget forecasts approved by the Directors. These budgets use the best available income and costs estimates for each element, using sector forecasts,

These forecasts cover flows for future years, applying reasonable growth rates that, in any case, from the last year are increasing.

To calculate the current value, these flows are discounted at a rate, before taxes, which includes the cost of business capital. For its calculation, the current value of money is taken into consideration together with the risk premiums generally used by analysts of the business in question.

past experience and future expectations. During the twelve months of the financial year 2021, there were no movements with respect to the provisions for impairment losses of assets held by the Company in addition to those mentioned in each note of these Annual Accounts.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases.

At December 31, 2021 and 2020 the Company had no finance leases.

At year-end 2021 and 2020, the Company was committed with its lessors to the following minimum lease payments, pursuant to ongoing contracts, with no consideration taken of the effects of shared service charges, future CPI increases or future adjustments of contractually agreed rents:

The amount of operating lease payments recognised as an expense in 2021 was 3,440 miles thousands of euros (3,372 thousands of euros in 2020).

In its position as lessee, the most significant operating leases held by the Company at the end of 2021 and 2020 are the leases on the office buildings held by the Company in Madrid, which expire head office, for an annual amount of 1,976 thousands of euros, and the rest in 2022 for a total annual amount

In operating leases in which the Company acts as the lessee, expenses resulting therefrom are charged to income statement for the year in which they are incurred.

Any proceeds or payments in connection with an operating lease are treated as advance proceeds or payments and recognised in the income statement over the term of the lease as the benefits of the leased asset are received or conceded.

of 945 thousands of euros. In relation to contingent rents, these contracts are referenced to annual increases based on CPI.

Operating leases		Face value
Minimum fees to pay	2021	2020
Less than a year	3,459	3,504
Between one and five years	6,467	9,622
More than five years	-	26
Total	9,926	13,152

made a distinction between the following:
- a. Provisions: credit balances covering present obligations arising from past events, the settlement of which is likely to cause an outflow of resources, but which are uncertain as to their amount and/or time of cancellation.
- b. Contingent liabilities: possible obligations that arise from past events, the future emergence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events even if all are beyond the control of the Company.
The Annual Accounts include all provisions for which it is considered more likely than not that the corresponding obligation will have to be settled. Contingent liabilities are not recognised in the Annual Accounts, but are disclosed in the Notes to the Annual Accounts, unless they are considered to be remote.
Provisions are measured at the present value of the best possible estimate of the amount required to settle or transfer the obligation, taking into account the information available on the event and its consequences and any adjustments arising from the restatement of these provisions are recognised as
The compensation to be received from a third party when an obligation is settled is recognised as an asset, provided it is certain that reimbursement will be received, unless there is a legal relationship whereby a portion of risk has been externalised as a result of which the Company is not liable, in which case, reimbursement will be taken into consideration in estimating the amount of any provisions. The policy followed with respect to the recognition of provisions for risks and expenses is to recognise the estimated amount required to settle probable or certain liabilities arising from litigation underway, pending indemnities or liabilities, sureties and similar guarantees. They are recognised upon emergence of the liability or obligation determining the indemnity or payment.
At the end of 2021, in addition to the appeal filed by the Company in relation to the assessments signed in disagreement of the Corporate Income Tax for 2012 to 2015 (Note 4.2), various legal proceedings and claims filed against the Company arising from the normal course of its activities were in progress. Both the legal advisors of the Company and its Directors judge that the conclusion of these procedures and claims will not have a significant effect on the Annual Accounts of the financial years in which they are finalised that have not been recorded or indicated

At December 31, 2021, there are no significant contingencies that need to

Non-current provisions	Opening balance	Provisions	Reversals	Short-term reclassifications	Balance at year-end
2021
Personnel remuneration	2,295	-	-	1,632	663
Other responsibilities	466	-	466	-	-
Total non-current provisions	2,761	- 466		1,632	663
2020
Personnel remuneration	1,135	1,160	-	-	2,295
Other responsibilities	466	-	-	-	466
Total non-current provisions	1,601	1,160	-	-	2,761

the Long-Term Incentive Plan to be settled (Note 4.4), as well as the three-year bonus plan for contribution to results aimed at the remaining personnel of the Company, which will be paid in 2022 and 2023.

The Directors of the Company consider that the provisions recognised in the accompanying Balance Sheet for litigation and arbitration risk as well as other risks described in this note are adequate and, in this respect, they do not expect any additional

liabilities to arise other than those already recorded. Given the nature of the risks covered by these provisions, it is not possible to determine a reasonably reliable schedule of payment dates, if any.

b)

At December 31, 2021, there are no significant contingencies that to those indicated in Note 1.5.c in relation to the GSP project in Peru and in Note 4.2.f.

On December 29, 2021, the credit rating agency Fitch Ratings with a stable outlook. (Note 3.5).

At December 31, 2021, net equity has increased by 17.9 million euros compared to the previous year-end, to a total of 2,691 million euros.

should be mentioned:

The price of the Enagás, S.A. shares amounted to 20.4 euros per share at December 31, 2021.
A maximum value of 20.95 euros per share for 2021 was reached on December 16.
No individual or legal entity can invest directly or indirectly in a proportion in excess of 5% of the share capital of Enagás, S.A., nor exercise political rights in this company above 3% (1% for those subjects who, directly or indirectly, perform activities in the gas sector). These restrictions are not applicable to direct or indirect holdings corresponding to the public business sector (Note 3.1).

At 2021 and 2020 year-end, the share capital of Enagás S.A. amounted to 392,985 thousands of euros, represented by 261,990,074 shares with a nominal value of 1.5 euros each, fully subscribed, and paid in.

All shares of the parent company Enagás, S.A. are listed on the four official Spanish Stock Exchanges and are traded on the continuous market.

It is worth noting that, subsequent to publication of Additional Provision 31 of Hydrocarbon Sector Law 34/1998, in force since enactment of Law 12/2011, of May 27,"no natural or legal person can participate directly or indirectly in the shareholder structure of Enagás, S.A with a stake exceeding 5% of share capital, nor exercise political rights in said parent company exceeding 3%. natural persons or legal entities that directly or indirectly own equity holdings in the former of more than 5%, may not exercise or indirect interests held by public-sector enterprises.

The closing price on December 30, 2021 was 20.4 euros, reaching the highest closing price of the year on December 16 with a price of 20.95 euros per share. At December 31, 2021 and 2020 the most significant shareholdings in the share capital of Enagás, S.A. are as follows (according to information published with the

The average annual interest rate during 2021 for the credit institutions and Group companies) amounted to 1.7% (1.8% in 2020).

The main operations for the year were:

On December 28, 2021, Enagás, S.A. renewed the loan of 225 million dollars contracted in January 2021 until January 2023 and contracted a new hedging instrument associated with this loan for the same amount and maturity of one year.
Extension of the maturity of the multi-currency financing facility in the amount of 1,500 million euros until December 2026 for 81% of the amount, the rest remaining in force until 2025(Note 3.2.a).

The Company has available funds in the amount of 1,845 million euros (1,753 million euros in 2020) (Note 3.6).

Spanish National Securities Market Commission (CNMV)) (1) at December 31, 2021):

	Investment in share capital (%)
Company	12.31.2021	12.31.2020
Sociedad Estatal de Participaciones Industriales	5.000	5.000
Partler 2006 S.L.	5.000	5.000
Bank of America Corporation	3.614	3.614
BlackRock Inc.	3.383	3.383
State Street Corporation	3.008	3.008
Mubadala Investment Company PJSC	3.103	3.103
Credit Agricole, S.A. (2)	-	3.042

(1) The information obtained from the CNMV was based on the last notification that each entity thus obliged must send to said body, in connection with the stipulations of Royal Decree 1362/2007, of October 19 and Circular 2/2007, of December 19.

(2) At December 31, 2021 Credit Agricole, S.A does not hold a significant interest in the share capital of Enagás, S.A.

b)

amounted to 465,116 thousands of euros.

The Consolidated Text of the Corporate Enterprises Act expressly permits the use of the issue premium account balance to increase capital and does not establish any specific restrictions as to its use.

c)

During financial years 2020 and 2021, there were no variations in this heading.

On June 26, 2019, Enagás, S.A. finalised the process for acquiring treasury shares, which amounted to 501,946 shares, representing December 31, 2020), for a total of 9,876 thousands of euros (including associated expenses of 10 thousands of euros). This Treasury Shares Buymeet the obligations of delivering shares to the Executive Directors and members of the Enagás Group management team under the current remuneration scheme according to the terms and conditions of the 2019-2021 Long-Term Incentive Plan (ILP) Meeting on March 29, 2019. The shares were purchased in compliance with the conditions set out in Article 5 of Regulation EC/2273/2003 and subject to the terms authorised at the General the Temporary Treasury Share Buy-Back Scheme was entrusted to Banco Bilbao Vizcaya Argentaria (BBVA), which carried out the transaction on behalf of Enagás, S.A. independently and without

year must be transferred to the legal reserve until it represents at least 20% of share capital. During 2021 no legal reserve has been recorded as it has been fully constituted as of December 31, 2021 for a total amount of 78,597 thousands of euros (Note 1.6).

The legal reserve can be used to increase capital by the amount exceeding 10% of the new capital after the increase. Except for this purpose, until the legal reserve exceeds the limit of 20% of capital, it can only be used to compensate losses provided there are no other reserves available.

As of December 31, 2021, the Company has recorded a cash flow derivative on its balance sheet (Note 3.4). This derivative was contracted in December 2021 and therefore there have been no movements in relation to these hedges.

The movement in the heading in 2021 corresponds to two derivatives entered into which mature in 2021 (Note 3.4) (the Company had not entered into any derivatives in 2020).

In 2020, the European Union awarded the Company a grant under construction of a hydrogen generation plant. The amount of this grant associated with the investment in the plant, net of the tax effect, amounts to 631 thousands of euros (841 thousands of euros (gross for tax purposes)).

No amount relating to this capital grant was recognised in profit or loss in 2021 as the asset is in progress. The breakdown by timing criteria of the gross balance pending application at December 31, 2021 is:

Banco Bilbao Vizcaya Argentaria (BBVA), which carried out the	Body		Years
transaction on behalf of Enagás, S.A. independently and without		<1	2 to 5	>5
exercising influence on the process (Note 4.4).	European Union	-	126	715
	Total	-	126	715
The Corporate Enterprises Act stipulates that 10% of profit for the

The contractual features of the financial liability give rise to cash flows at specified times that consist solely of the payment of principal and interest on the principal outstanding.

Financial liabilities classified in this category are initially measured at fair value, which, until proven otherwise, is assumed to be the transaction price, which is the fair value of the consideration received plus transaction costs.

The amortised cost method is used for subsequent measurement. Accrued interest is recognised in the income statement (financial expenses) using the effective interest rate method.

Derecognition of financial liabilities

The Company derecognises a previously recognised financial liability when any of the following circumstances arise:

The obligation has been extinguished because payment has been made to the creditor to cancel the debt, or because the

The it is the intention to repositioning them in the future.
There is an exchange of debt instruments between a lender and a borrower, provided that they have substantially different terms, and the new financial liability that arises is recognised; similarly, a substantial modification of the current terms of a financial liability is recorded, as indicated for debt restructuring.

The accounting for the derecognition of a financial liability is as follows: the difference between the carrying amount of the financial liability (or part thereof that has been derecognised) and the consideration paid, including attributable transaction costs, and which also includes any asset transferred other than cash or liability assumed, is recognised in the income statement for the year in which it occurs.

Categories	Fair value with changes in equity		Amortised cost		Total
Class	2021	2020	2021	2020	2021	2020
Financial debts with credit institutions	-		- 200,618	186,763	200,618	186,763
Debt arrangement expenses with credit institutions	-	-	(2,924)	(3,608)	(2,924)	(3,608)
Other financial liabilities		- -	40	94	40	94
Total long-term debts	-	-	197,734	183,249	197,734	183,249
Debt arrangement expenses and accrued interest payable	-	-	94	54	94	54
Derivatives	36	-	-	-	36	-
Creditors and other financial liabilities	-	-	8,154	4,371	8,154	4,371
Total short-term debts	36		- 8,248	4,425	8,284	4,425
Total debts	36	-	205,981	187,674	206,017	187,674

The detail by maturity of the debits and payables under non-

2021	2023	2024	2025	2026 and later years	Total
Debts with credit institutions	198,798	1,820	-	-	200,618
Other	35	2	3	-	40
Total	198,833	1,822	3	-	200,658

2020	2022	2023	2024	2025 and later years	Total
Debts with credit institutions	-	-	186,763	-	186,763
Other	26	20	20	28	94
Total	26	20	186,783	28	186,857

a)

At December 31, 2021, the Company had credit lines granted up to a limit of 1,702,198 thousands of euros, partially arranged in the amount of 1,820 thousands of euros (in 2020 there were credit lines granted up to a limit of 1,688,216 thousands of euros, partially provided in the amount of 186,763 thousands of euros) (Note 3.6). Along these lines, a sustainable syndicated credit line 1,500,000 thousands of euros is included, the price of which is linked to the reduction of CO2 emissions. This credit line is held by 11 national and international financial institutions.

In the opinion of the Directors, this situation allows for sufficient funding to meet possible liquidity requirements in the short-term considering its current obligations.

The average rate of gross debt (considering debt with credit institutions and group companies) in 2021 was 1.7% (1.8% in 2020).

The Directors of the Company estimate that the fair value of the bank debts contracted at December 31, 2021 and December 31, 2020 does not differ significantly from their carrying amounts.

The most significant events of the 2021 financial year include:

On December 28, 2021, Enagás S.A. renewed the loan of 225 million dollars contracted in January 2021 until January 2023 and contracted a new hedging instrument associated with this loan for the same amount and maturity of one year.
Extension of the maturity of the multi-currency financing facility in the amount of 1,500 million euros until December 2026 for 81% of the amount, the rest remaining in force until 2025.

b)

relates mainly to the increase in accounts payable to suppliers of fixed assets in the amount of 3,404 thousands of euros.

c)

	Long-term		Short-term
	2021	2020	2021	2020
Enagás Financiaciones,	2,538,052	3,250,232	907,037	172,089
S.A.U. Enagás Internacional, S.L.U.	233,325	211,162	8,020	5,216
Enagás Emprende, S.L.U.	-	-	1,109	623
Enagás Services Solutions, S.L.U.	-	-	165	119
Scale Gas Solutions, S.L.	-	-	389	35
Other	-	-	996	718
Total	2,771,377	3,461,394	917,716	178,800

The average rate for 2021 for loans with group companies was 1.7% (1.8% for 2020).

The main changes in Debts with Group Companies included the following:

Credit granted by Enagás Financiaciones, S.A.U. during financial year 2021, amounting to 150,000 thousands of euros.
Repayment of a credit granted by Enagás Financiaciones, S.A.U. amounting to 131,742 thousands of euros
With respect to the account payable to Enagás Internacional for the recovery of the value of the share capital invested by it in GSP, since Enagás, S.A. is the holder of the loans assigned by the Odebrecht Group that will enable the recovery of the investment in the share capital of GSP, it represents a liability of 233,325 thousands of euros (211,162 thousands of euros at December 31, 2020) in the balance sheet at December 31, 2021, considering the effect of the financial restatement corresponding to a recovery period estimated at June, 30, 2023. (Note 1.5.c).
The -term debts from group companies and multi- -end 2021 and 2020 mainly includes:
- The balance of interest and short-term loans granted by Enagás Financiaciones, S.A.U. to Enagás, S.A. for a total of 886,777 thousands of euros.
- As the parent company of Tax Consolidation Group 493/12 for corporate income tax, Enagás S.A. has amounts pending payment to some group companies amounting to 30,889 thousands of euros (25,460 thousands of euros in 2020), mainly related to the amounts pending payment to Enagás Financiaciones, S.A.U., Enagás Internacional, S.L.U. and Enagás Emprende, S.L.U. in the amounts of 20,261, 8,020 and 1,109 thousands of euros, respectively (18,750, 5,216 and 623 thousands of euros, respectively, at December 31, 2020). Once the definitive declaration of the 2020 Corporate Tax has been presented in 2021, Enagás, S.A. paid the Corporate Tax account payable to the corresponding group companies belonging to the Tax Consolidation Group, in the amount of 25,617 thousands of euros (29,860 thousands of euros in 2020 for the 2019 Corporate Tax) (Note 4.2.a).

The breakdown by maturity is as follows:

2021	2022	2023	2024	2025	2026 and later years	Valuation adjustments and/or other transaction costs	Total
Loans and payables	917,716	1,859,077	99,742	390,019	426,819	(4,280)	3,689,093
Total	917,716	1,859,077	99,742	390,019	426,819	(4,280)	3,689,093

2020	2021	2022	2023	2024	2025 and later years	Valuation adjustments and/or other transaction costs	Total
Loans and payables	178,800	1,076,425	1,625,752	99,742	666,837	(7,362)	3,640,194
Total	178,800	1,076,425	1,625,752	99,742	666,837	(7,362)	3,640,194

	2021	2020
Financial income	12,831	12,975
Financial income	12,831	12,975
Financial expenses and similar	(151)	(294)
Loan interest	(69,968)	(73,726)
Financial expenses	(70,119)	(74,020)
Exchange differences	862	1,455
Net financial gain (loss)	(56,426)	(59,590)

It should be noted that expenses for interest on loans were calculated by using the effective interest rate method.

compared to the previous year mainly relates to:

Decrease in interest on debts with group companies amounting to 1,789 thousands of euros due to the improvement in interest rates on loans.
Decrease in bank interest amounting to 1,302 thousands of euros due to the improvement in interest rate, and the financing strategy followed by the company.

Likewise, the financial income includes the financial update of the loan for the two-year recovery of the guarantees provided by the Company for GSP and the investment itself and the account payable to Enagás Internacional, S.L.U., the net effect being an income amounting to 5,275 thousands of euros (5,952 thousands of euros in 2020). The breakdown of this effect is as follows:

The financial update of the loan for the execution of the guarantees provided and the update of the investment involved a total income of 11,741 thousands of euros (12,969 thousands of euros in 2020).
The financial update of the account payable to Enagás Internacional, S.L.U. for the assignment of the accounts receivable with GSP involved an expense in the amount of 6,353 thousands of euros (7,017 thousands of euros in 2020).

From January 1, 2021, the new criteria introduced by the amendment to the Spanish National Chart of Accounts made by Royal Decree 1/2021 of January 12, 2021 will be taken into account, as indicated in Note 2.1. The company has hedging derivatives that are also recognised at fair value. Depending on the hedge accounting model, the counterparty to the change in value of the derivative may change or an adjustment may be made to the accounting for the hedged item.

In accordance with the amendment to the Spanish National Chart of Accounts made by Royal Decree 1/2021 of January 12, 2021, different hierarchies continue to be established for estimating fair value.
The Company has determined that most of the inputs employed to determine the fair value of the derivative financial instruments are in Level 2 of the hierarchy, but that the adjustments for credit risk use Level 3 inputs such as credit estimates based on a credit rating or comparable companies to evaluate the likelihood of the bankruptcy of the company or of

The Group evaluated the relevancy of the inputs and recognised the corresponding adjustments to credit risk in the total valuation of derivative financial instruments, which were not significant.

Thus, the entire portfolio of derivative financial instruments is classified under Level 2 of the hierarchy.

In December 2021, the Company contracted an interest rate swap (IRS) designated as a cash flow hedge, in order to fix the cash flows associated with the financing granted by financial institutions, for a total amount of 198,658 thousands of euros (225,000 thousands of dollars) over the period of one year.

Category	Type	Contract	Maturity	Notional contracted (thousands of dollars)	Fair value 12.31.2021 Assets/(Liabilities)
Cash flow hedges
Interest rate swap	Floating to fixed	Dec-21	Dec-22	225,000	(36)
Interest rate swap	Floating to fixed	Jan-21	Dec-21	75,000
Interest rate swap	Floating to fixed	Jan-21	Dec-21	150,000

On January 19, 2021, Enagás, S.A. signed a loan agreement maturing on December 28, 2021 for an amount of 225 million dollars. Additionally, a hedging instrument was contracted to hedge the interest rate risk for the amount and term of this loan.

Subsequently, on December 28, this loan was renewed until January 2023, contracting a new hedging instrument associated with said loan for the same amount and with a maturity of one year.

The Company Enagás S.A. is exposed to certain risks which it manages with a risk control and management model, established at group level, which is directed towards guaranteeing with a medium-low risk profile.

This model allows it to adapt to the complexity of its business activity in a globalised competitive environment, in a complex economic context, where the materialisation of a risk is more rapid and with an evident contagion effect.

The model is based on the following:

The consideration of some standard types of risk to which the Company is exposed.
The separation and independence of risk control and management functions articulated by the Company in three
Governing bodies with responsibilities regarding supervision of
Establishing a risk appetite framework which defines the risk levels considered acceptable and that is in line with established business objectives and the market environment in which the
The transparency of information supplied to third parties, to guarantee its reliability and accuracy.

The integral analysis of all risks allows the appropriate control and management thereof, an understanding of the relationships between them and facilitates their joint assessment. The Company applied and identify the responsibilities of the different departments of the Company.

The risk control and management function is articulated around three lines of defence, each presenting different responsibilities:

First line of defence: made up from the organisational units which assume the risks in the ordinary course of their activities. They are the owners of the risks and are responsible for identifying and measuring their respective risk exposure.
Second line of defence: the Risk Department, in charge mainly of ensuring that the risk control and management system works correctly, defining the regulatory framework and approach, and performing periodic monitoring and overall
Third line of defence: the Internal Audit Department, in charge of supervising the efficiency of the risk controls in place.

The Governing Bodies responsible for risk control and management are the following:

Board of Directors: responsible for approving the risk control and management policy. Other responsibilities with respect to risks are delegated in the Audit and Compliance Committee.
Audit and Compliance Committee: the main function is to supervise the efficacy of the risk control and management

risk exposure (identification, measurement, and establishment of management measures).

Risk Committee: the main functions include establishment of global risk strategies, establishing the global risk limits, revising the level of risk exposure, and acting to correct any instances of non-compliance.

The main risks of a financial and tax nature to which the Company is exposed are as follows.

Credit risk relates to the possible losses arising from the nonpayment of monetary or quantifiable obligations of a counterparty to which the Company has granted net credit which is pending settlement or collection.

The credit risk associated with receivables from its business activity is historically very limited since the Company operates mainly with Group companies (Note 3.2.c).

The Company is also exposed to the risk of its counterparties not complying with obligations in connection with placement of surplus cash balances. To mitigate this risk, these operations are carried out in a diversified way over highly solvent entities.

Interest rate fluctuations affect the fair value of those assets and liabilities that accrue interest at fixed rates and the future cash flows from assets and liabilities that accrue interest at floating rates.

be The objective of interest rate risk management is to create a balanced debt structure that minimises finance costs over a multiyear period while also reducing volatility in the income statement.

Based on the Enagás S.A. estimates and debt structure targets, hedges are put in place using derivatives that reduce these risks.

Changes in exchange rates may affect credit positions denominated in foreign currency. The Company manages exchange rate risk through natural hedges, which consist of contracting financial instruments in the same currency in which the investment is made. (Note 4.1.b).

Liquidity risk arises as a consequence of differences in the amounts or payment and collection dates relating to the different assets and liabilities of the Company.

The liquidity policy followed by the Company is oriented towards ensuring that all short-term payment commitments acquired are fully met without having to secure funds under burdensome terms. For this purpose, different management measures are taken such as maintenance of credit facilities ensuring flexibility, sufficient amounts and sufficient maturities, diversified sourcing for financing needs via access to different markets and geographical areas, as well as the diversification of maturities in debt issued.

The Company is exposed to possible modifications in tax regulatory frameworks and uncertainty relating to different possible interpretations of prevailing tax legislation, potentially leading to negative effects on results.

The Company has a Board-approved tax strategy, which includes the action policies governing compliance with its tax obligations, attempting to avoid risks and tax inefficiencies.

Given the dynamic nature of the business and its risks, and despite having a risk control and management system that responds to the best international recommendations and practices, it is not possible to guarantee that some risk is not identified in the risk inventory of the Company.

	12.31.2021	12.31.2020
Percentage of financial debt tracking protected rates	49%	46%

Taking into account these percentages of net financial debt at fixed rates, and after performing a sensitivity analysis using a range of +0.25/-0.10% percentage points changes in market interest rates, the Company considers that, according to its estimates, the impact on results of such variations on finance costs relating to variable rate debt could change as follows:

			Interest rate change
	2021		2020
	25 bps	-10 bps	25 bps	-10 bps
Change in finance costs	4,880	(1,952)	5,220	(2,088)

The Company carries out capital management at corporate level and its objectives are to ensure financial stability and obtain sufficient financing for investments, optimising the cost of capital in order to maximise the value created for the shareholder while maintaining its commitment to solvency.

Liquid financial assets, deposits and liquid financial investments that may be transformed into a determinable amount of cash within less than three months, and whose risk of changes in value is immaterial, are considered cash equivalents.

The Company uses the level of consolidated leverage as an indicator for monitoring its financial position and managing capital, which is defined as the quotient resulting from dividing net consolidated assets (understood to be the sum of net financial debt and consolidated equity) by net consolidated financial debt.

Financial net debt and leverage of the Enagás Group at December 31, 2021 and 2020 was as follows (consolidated figures):

	2021	2020
Debts with credit institutions	1,777,900	1,338,246
Debentures and other marketable securities	3,481,812	3,473,931
Loans from the General Secretariat of Industry, General Secretariat of Energy and Oman Oil	1,745	2,859
Finance leases (IFRS 16)	459,550	336,442
Gross financial debt	5,721,007	5,151,478
Cash and cash equivalents	(1,444,151)	(863,655)
Net financial debt	4,276,856	4,287,823

	2021 2020
Net financial debt	4,276,856 4,287,823
	3,158,421 3,192,745
Financial leverage	57.5 % 57.3 %

In this way, Enagás, S.A. has shown its financial robustness as confirmed by different rating agencies.

On December 29, 2021, the credit rating agency Fitch Ratings reaffirming with a stable outlook.

a)

	2021	2020
Treasury	144,498	252,383
Total	144,498	252,383

Generally, the banked cash accrues interest at rates similar to daily market rates. The deposits maturing in the short-term are easily convertible into cash, and accrue interest at the going market rates. There are no significant restrictions on the availability of cash.

b)

In order to guarantee liquidity, Enagás has arranged loans and credit lines which it has not drawn down. Thus, liquidity available to the Company is broken down as follows:

	2021	2020
Cash and cash equivalents	144,498	252,383
Other available funds (Note 3.2)	1,700,378	1,501,453
Total	1,844,876	1,753,836

In the opinion of the Directors of the Company, this situation allows for sufficient funding to meet possible liquidity requirements in the short-term considering its current obligations.

Enagás, S.A. has a plot of land located at km. 18 of the A-6 motorway in Las Rozas (Madrid) classified as investment property since it is maintained to obtain a surplus value in its sale.
The market valuation of this land at December 31, 2021 was 19 million euros. This valuation was made by an independent expert in accordance with the Regulations of the Royal Institution of Chartered Surveyors (Note 4.1.a).
Remuneration for the Board of Directors, without taking into account insurance premiums, amounted to 5,026 thousands of euros (Note 4.4).
Remuneration for Senior Management, without taking into account the pension plans and insurance premiums, amounted to 3,511 thousands of euros.(Note 4.4).

The cost model is applied for measuring investment property, that is, the corresponding assets are measured at acquisition cost less the corresponding accumulated depreciation and any impairment losses. However, as one plot of land is not currently in use, it was measured at its recoverable amount, calculated as the fair value less the necessary costs for its sale.

Consequently, transactions in currencies other than the euro are considered to be foreign currency transactions and are recognised by applying the prevailing exchange rates at the dates of the operations.
At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated to euros at the prevailing rates. Any gains or losses arising are taken directly to the income statement for the year in

which they arise.

The market appraisal was performed by the independent expert in accordance with the Governing Rules of the Royal Institution of Chartered Surveyors (RICS), set out in the so- - RICS Valuation - Professional Standards, January 2014. Said market valuations defined by

RICS are internationally recognised by advisors and accountants providing services for investors and corporations that own investment properties, as well as by The European Group of Valuers (TEGoVA) and The International Valuation Standards Committee (IVSC).

	Balance at December 31, 2019	Impairment allowances 2020	Balance at December 31, 2020	Impairment allowances 2021	Balance at December 31, 2021
Cost	47,211	-	47,211	-	47,211
Impairment	(27,601)	(590)	(28,191)	(360)	(28,551)
Carrying amount	19,610	(590)	19,020	(360)	18,660

Corresponds entirely to a plot of land located at km 18 of the A-6 motorway in Las Rozas (Madrid), held to obtain a surplus value in its sale as a result of future increases in the market price. At December 31, 2021, Jones Lang LaSalle España, S.A. issued a valuation report, which concluded that the recoverable amount of the plot at that date amounted to 18,660 thousands of euros (19,020 thousands of euros at December 31, 2020).
- include any scope limitations with respect to the conclusions reached.
There are no mortgages or encumbrances of any type on real estate investments.
It is Company policy to insure its assets to ensure that there is no significant loss of equity, based on best market practices, given the nature and characteristics of the investment properties. In addition, the Company has contracted the corresponding insurance policies to cover third party Civil Liabilities.

b)

The detail of the most significant foreign currency balances valued at the year-end exchange rate is as follows:

	2021	2020
Long-term credits (Note 1.5.c)	431,227	390,266
Debts with Group Companies (Note 3.2.c)	233,325	211,162
Debts with credit institutions (Note 3.2.a)	199,303	186,451
Other short-term financial liabilities	4,163	3,767

The amount of exchange gains (losses) recognised in profit /(loss) for the year by financial instrument classes is as follows:

	For Transactions Settled in the Year		For Balances Pending Settlement		Total
	2021	2020	2021	2020	2021	2020
Debts with group companies	-	-	(15,810)	16,769	(15,810)	16,769
Debts with credit institutions	-	(1,704)	(13,424)	19,874	(13,424)	18,170
Other exchange gains (losses)	1,159	230	28,938	(33,713)	30,097	(33,483)
Total	1,159	(1,474)	(296)	2,930	863	1,456

As indicated in Note 3.5, the Company has liabilities and assets items in dollars whose variations are netted by a natural hedge, which do not cause a significant difference in the income statement.

The income tax payable or receivable comprises the current tax payable or receivable and the deferred tax income or expense.
Current tax is the amount paid by the Company in settlement of income tax during a particular year. Tax credits and other tax benefits applied to the taxable profit, excluding withholdings, prepayments and tax loss carryforwards effectively offset during the year, are deducted from the current tax.
Deferred tax expense or income relates to the recognition and derecognition of deferred tax assets and liabilities. These include the temporary differences measured as the amount expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities and their tax value, as well carry-forward tax losses pending payment and credits for tax deductions not applied fiscally. These amounts are measured by applying the tax rate to the corresponding temporary differences or tax credits at which they are expected to be recovered or settled.
Deferred tax liabilities are recognised for all taxable temporary differences, with the exception of those arising from initial recognition of goodwill or from other assets and liabilities in a transaction that does not affect taxable profit or accounting profit and is not a business combination.
Deferred tax assets are only recognised to the extent that it is considered likely the Company will have sufficient taxable profit in the future against which the deferred tax assets can be offset.
Deferred tax assets and liabilities arising from items directly charged or credited to equity accounts are also recognised with a charge or credit, respectively, to equity.
- The deferred tax assets recognised are reassessed at the end of each reporting period and the appropriate adjustments are made where there are doubts as to their future recoverability. Deferred tax assets not recognised on the balance sheet are also reassessed at the end of each reporting period and are recognised where it has become highly probable that they will be recovered through future taxable profits.

In accordance with prevailing legislation in Spain, tax returns cannot be considered final until they have been inspected by the tax authorities or until the four-year inspection period has elapsed.
The Directors consider that the tax returns for the aforementioned taxes have been filed correctly and, therefore, even in the event of discrepancies in the interpretation of prevailing tax legislation with respect to the treatment applied, the resulting potential tax liabilities, if any, would not have a material impact on the accompanying Annual Accounts.

a)

	2021	2020
Debit balances
Deferred tax assets	10,967	10,623
Current balances with the Public Administrations	12,275	23,326
Tax Authorities debtor for tax refund	12,272	23,323
Accounts payable by the Tax Authorities for VAT	3	3
Credit balances
Current tax liabilities	630	-
Deferred tax liabilities	3,226	3,629
Current balances with the Public Administrations	31,873	31,925
Accounts payable to the Tax Authorities for withholdings	31,067	30,720
Accounts payable to the Tax Authorities for VAT	414	834
Social Security agencies creditors	392	371

During 2021, Enagás, S.A. paid 72,979 thousands of euros for settling 2021 corporate income tax (96,248 thousands of euros in 2020), corresponding to the Tax Group of which Enagás, S.A acts as the Parent Company.

At December 31, 2021, the balance of the heading Current tax assets corresponds to the account receivable relating to the Corporate Income Tax Group for the financial year 2020 in the amount of 12,272 (at December 31, 2020, the balance of the heading Current tax assets corresponds to the account receivable relating to the Corporate Income Tax Group for the financial year 2020 in the amount of 12,729 thousands of euros, as well as to the account receivable relating to the Corporate Income Tax Group for the financial year 2019 and which is final in the amount of 10,743 thousands of euros, which was collected on January 21, 2021).

Also, at December 31, 2021, the balance of the heading Current tax liabilities corresponds to the account payable for the Corporate Income Tax Group for 2021 in the amount of 630 thousands of euros (at December 31, 2020, there was no balance in this heading).

The deferred tax assets were recognised in the balance sheet as the Directors believe, based on the best estimate of future profits and reversals of deductible temporary differences, that it is probable that these assets will be recovered.

Additionally, Enagás, S.A. acts as the Parent Company of the Tax Group as indicated in Note 4.2.b. For these purposes, the Company has debit and credit balances for Corporate Income Tax with the different subsidiaries of the Tax Group. Accordingly, as indicated in Note 3.2.c during 2021 the Company settled the respective balances with the rest of the Tax Group companies for Corporate Tax 2020.

Specifically, it has collected the amount of 128,292 thousands of euros, an amount that was mainly part of the balance recorded at year-end 2020 under group companies and multi-group shortterm loans (Note 1.5) and paid the amount of 25,617 thousands of euros, an amount that was mainly part of the balances recorded at year-end 2020 under short-term debt to group companies and multi-group (Note 3.2.c).

b)

Enagás S.A. has been the parent company of the Tax Consolidation Group 493/12 for Corporate Income tax from January 1, 2013, comprising the following subsidiaries at December 31, 2021:

Enagás Transporte, S.A.U.
Enagás GTS, S.A.U.
Enagás Internacional, S.L.U.
Enagás Financiaciones, S.A.U.
Enagás Emprende S.L.U.
Scale Gas Solutions, S.L.
Efficiency for LNG Applications, S.L.
Infraestructuras del gas, S.A.
Enagás Services Solutions, S.L.
Enagás Holding USA, S.L.U.
Sercomgas Solutions, S.L.
Bioengás Renovables, S.L.
Enagás Renovable, S.L.U.
Roblasun 4, S.L.U.
Roblasun 5, S.L.U.
Roblasun 6, S.L.U.
Windmusel 1, S.L.U.
Windmusel 2, S.L.U.
Windmusel 3, S.L.U.
Cierzosun 1, S.L.U.
Cierzosun 2, S.L.U.
Cierzosun 3, S.L.U.

Cierzosun 4, S.L.U.
H2Greem Global Solutions, S.L.

well as the deductions and bonuses from the payment.

Furthermore, the corporate income tax is calculated on the basis ication of generally accepted accounting principles, which does not

			Income statement
	2021 2020
	Increases	Decreases	Total	Increases	Decreases	Total
Accounting profit before tax	445,405	-	445,405	421,015	-	421,015
Permanent differences:	574	(492,740)	(492,166)	9,288	(503,566)	(494,278)
Donations	360	-	360	2,568	-	2,568
Dividend exemption (1)	-	(490,555)	(490,555)	-	(503,442)	(503,442)
Impairment of investments	40	(2,151)	(2,111)	6,220	-	6,220
Other	174	(34)	140	500	(124)	376
Temporary differences:	11,672	(8,484)	3,188	12,448	(9,177)	3,271
With origin in the financial year:
Provision for personnel remuneration	4,765	-	4,765	4,663	-	4,663
Other	360	(55)	305	590	(38)	531
With origin in previous financial years:
Amortisation deduction limit R.D.L. 16/2012	-	(981)	(981)	-	(981)	(981)
Accelerated amortisation Law 4/2008, 13/2010	47	-	47	49	-	49
Provision for personnel remuneration	-	(616)	(616)	-	(1,120)	(1,120)
Other (2)	6,500	(6,832)	(332)	7,146	(7,038)	129
Taxable income	457,651	(501,224)	(43,573)	442,751	(512,743)	(69,992)

(1) In accordance with prevailing regulations, from January 1, 2021, the tax exemption for dividends and capital gains related to shareholdings in resident and nonresident companies will be only 95% of the amount of such shareholdings.

(2) This heading mainly includes the financial restatement of accounts receivable from GSP and the financial restatement of accounts payable to Enagás International (Note 3.3).

	2021		2020
Increases	Decreases	Total	Increases	Decreases	Total


-	(9)	(9)	-	-	-
-	-	-	210	-	210
-	(9)	(9)	210	-	210
-	(9)	(9)	210	-	210

	2021	2020
Accounting profit before tax	445,405	421,015
Rate at 25%	111,351	105,254
Impact of permanent differences	(123,042)	(123,570)
Deductions:	(297)	(1,291)
For amortisation deduction limit	(49)	(49)
For double taxation	(122)	(108)
For investment in R&D&i expenses	-	(235)
For donations	(126)	(899)
Adjustments to income tax rate	134	(8)
Total expense for tax recognised in the income statement	(11,854)	(19,615)

In conformity with current legislation, tax returns cannot be considered final until they have been inspected by the tax authorities or until the four-year inspection period has elapsed.

During 2021, Enagás, S.A. has been notified of the rejection of the Central Economic Administrative Court (hereinafter TEAC), in relation to the claims filed in relation to the assessments signed in disagreement of the Corporate Income Tax for 2012 to 2015.

A contentious-administrative appeal has been filed against these rulings of the TEAC before the National Court.

If the contentious-administrative appeal is dismissed, it would entail a payment of around 4.2 million euros (not including any late payment interest that may be applicable), in which case the corresponding expense would be recorded in the income statement. The appeal is expected to be resolved in more than one year.

Likewise, at 2021 year-end, the years 2017 to 2020 are pending audit for the taxes applicable to the company, with the exemption of corporate income tax, which is pending audit for the years 2016 to 2020

	2021	2020
Deferred tax assets:
Temporary differences (prepaid taxes):	10,820	10,427
Provision for remuneration (1)	6,579	5,542
Litigation provisions	22	138
Amortisation deduction limit R.D.L. 16/2012 (2)	736	981
Others (3)	3,483	3,766
Deductions pending and others (4)	147	196
Total deferred tax assets	10,967	10,623
Deferred tax liabilities:
Grants	(210)	(210)
Accelerated amortisation (5)	(184)	(196)
Engineering services margin	(965)	(980)
Others (3)	(1,867)	(2,243)
Total deferred tax liabilities	(3,226)	(3,629)

(1) These temporary differences include, inter alia, personnel expenses resulting from the Long-Term Incentive Plan, recorded in these financial years which, pursuant to Article 14 of the Corporate Income Tax Law, will be deductible at the time of their delivery or payment, so in 2021 they gave rise to a deferred tax asset.

(2) Arises from the limitation to tax deductible amortisation with respect to the Corporate Income Tax for the years 2013 and 2014. This amortisation is deductible from financial year 2015 following the straight method over a period of 10 years or optionally during the useful life of the asset. To this end, the Company decided to apply the deferred tax asset using the straight line method over a period of 10 years.

(3) Other items include timing differences arising from the recognition of the impairment of investment property which generates a deferred tax asset and the effect of the discounting to present value of accounts receivable and payable associated with GSP (Note 4.1) which generates a deferred tax asset and a deferred tax liability, respectively.

(4) In addition, it includes the deduction to be applied from 2015 in accordance with the thirty-seventh transitory provision of Law 27/2014, by virtue of which those contributors for whom limited amortisation was applicable in 2013 and 2014 will have the right to a 5% deduction of the tax base with respect to the amounts included in the taxable income for the corresponding period.
(5) Arising from application of accelerated amortisation of certain assets for tax purposes during the period 2009-2012.

The Company does not hold any deferred tax assets that are not recognised in the accompanying Balance Sheet.

In addition to subsidiaries, associates, and multigroup Directors and executives, along with their close relatives), and the entities over which key management personnel may exercise significant influence or control.
- The Company carries out all its transactions with related parties at market values and the corresponding remuneration in kind has been assigned. Transfer prices are adequately supported significant risks exist in this respect from which significant liabilities could arise in the future.

Income and expenses	Significant shareholders	Directors and Senior Managers Note 4.4	Group Personnel, Companies or Entities	Other related parties	Total
2021
Expenses:
Financial expenses		- -	65,467	-	65,467
Services received	-	-	2,830	220	3,050
Other expenses	174	8,697	-	-	8,871
Total expenses	174	8,697	68,297	220	77,388
Income:
Financial income		- -	10,007	-	10,007
Dividends received	-	-	516,374	-	516,374
Rendering of services		- -	65,215	-	65,215
Other income		- -	554	-	554
Total revenue	-	-	592,150	-	592,150
2020
Expenses:
Financial expenses		- -	68,046	2,736	70,782
Services received	-	-	2,432	201	2,633
Other expenses	146	8,638	-	7	8,791
Total Expenses	146	8,638	70,478	2,944	82,206
Income:
Financial income		- -	10,473	-	10,473
Dividends received	-	-	503,442	-	503,442
Rendering of services		- -	69,559	-	69,559
Other income		- -	504	-	504
Total revenue	-	-	583,978	-	583,978

Other transactions	Significant shareholders	Group Personnel, Companies or Entities	Other related parties	Total
2021
Guarantees for related parties debt	-	5,688,752	-	5,688,752
Guarantees and sureties granted - Other	-	112,267	-	112,267
Dividends and other earnings distributed	102,192	-	-	102,192
2020
Guarantees for related parties debt	-	5,288,568	-	5,288,568
Guarantees and sureties granted - Other	-	66,326	14,700	81,026
Dividends and other earnings distributed	96,353	-	-	96,353

criteria previously established by Order EHA/3050/2004, Banco Santander ceased to be a related party in 2021.

The balances with related-parties on the balance sheet is as follows:

	2021			2020
Balance	Group Personnel, Companies or Entities	Other related parties	Total	Group Personnel, Companies or Entities	Other related parties	Total
Long-term equity instruments	5,314,790	-	5,314,790	5,259,016	-	5,259,016
Financing agreements: loans and capital contributions (lender)
Long-term loans to companies	-	-	-	400,291	-	400,291
Other financial assets	-	431,227	431,227	-	390,266	390,266
Short-term loans to companies	407,557	-	407,557	7,266	-	7,266
Credit for corporate income tax Short-term Tax Consolidation Group	115,689	-	115,689	127,921	-	127,921
Dividends and other short-term earnings	129,832	-	129,832	27,100	-	27,100
Trade receivables	11,296	-	11,296	11,924	-	11,924
Cash (1)	-	-	-	-	166,532	166,532
Financing agreements: loans and capital contributions (borrower)
Long-term debts	2,771,377	-	2,771,377	3,461,394	186,763	3,648,158
Short-term debts	886,777	-	886,777	153,340	-	153,340
Debt for corporate income tax Short-term Tax Consolidation Group	30,889	-	30,889	25,460	-	25,460
Trade payables	559	-	559	6,895	-	6,895

(1) in 2021, when it ceased meeting this definition).

The Company classifies its share-based settlement plan for executive directors and senior management according to the manner of settling the transaction:
- With Company shares: Personnel expense is determined based on the fair value of the shares to be delivered at the grant date, taking into account the degree to which the objectives relating to said plan have been fulfilled. This expense is recognised over the stipulated period during which employee services are rendered with a credit to sheet.
- In cash: Personnel expense is determined based on the fair value of the liability at the date recognition requirements are met. Personnel expenses are registered as the services settled within less than one year, at which time the associated provision is reclassified to the Personnel heading

The liability is subsequently measured at fair value at each balance sheet date, up to and including the settlement date, with changes in fair value recognised in the income statement.

For the valuation of this programme, Enagás, S.A. used the Monte-Carlo model, widely used in financial practice for the valuation of options, in order to include the effect of market conditions in the valuation of the equity instruments granted. The fair value of the equity instruments at the granting date is adjusted to include the market conditions relating to this plan. Likewise, the Company takes into account the fact that the dividends accrued during the plan period are not paid to the beneficiaries as they do not become shareholders of the Company until the effective

The Regulation establishes a period of time required for the consolidation of the remuneration, which has been considered a condition of service, and therefore taken into account together with the target measurement period (January 1, 2019 to December 31, 2021) when estimating the fair value of the equity instruments granted. In this regard, the aforementioned service condition is based on the obligation for the beneficiaries to continue providing their services to the Company until the first payment date (set at four months from the end of the target measurement period to receive 50% of the incentive), and an additional period of one year from that last date to receive the remaining 50%).

In the case of the share-based payment plan component, the Company accrues the estimated fair value of the cash-settled amount over the term of the plan (January 1, 2019 to December 31, 2021) and the service conditions established for the period of time required for the consolidation of the remuneration.

At December 31, 2021, the estimate is made assuming that all the objectives relating to the plan have been 82.2% achieved, subject to the approval of delivering the shares assigned to said plan.

Remuneration received	Salaries	Per diems	Other items	Pension plans	Insurance premiums
2021
Board of Directors	2,382	2,453	191		57
Senior Management	3,353	-	158	59	44
Total	5,735	2,453	349	59	101
2020
Board of Directors	2,400	2,272	183	-	67
Senior Management	3,467	-	148	56	45
Total	5,867	2,272	331	56	112

The remuneration of the members of the Board of Directors for their membership of the Board and those corresponding to the Chairman and the Chief Executive Officer for the exercise of their executive functions during the year 2021 have been approved in m 7 of the Agenda.

The Company has outsourced its pension commitments with its Senior Managers by means of a mixed group insurance policy for pension commitments, including benefits in the event of survival, death and employment disability. The Executive Chairman and the Chief Executive Officer are part of the group covered by this policy and of the total premium paid for this during the year, 368 thousands of euros corresponded to them.

The members of the Senior Management also form part of the group insured under the mixed group insurance policy for pension commitments. The total premium paid for the same during the financial year amounts to 615 thousands of euros.

The two executive directors are beneficiaries of the 2019-2021 Long-Term Incentive Plan appr Meeting on March 29, 2019 under agenda item number 8. In said meeting, a total of 118,635 rights relating to shares were assigned.

These rights do not entail the acquisition of shares for the time being, since the termination of the programme and the right to accrue the final incentive, which depends on the degree of generated within thirty (30) days following the approval of the 2021 annual accounts by the General held in 2022.

Members of Senior Management (members of the Management Committee) are equally beneficiaries of the 2019-2021 Long-Term the Board has assigned them a total of 125,725 rights relating to shares as well as an incentive in cash amounting to 746 thousands of euros. These rights do not entail the acquisition of shares for the time being, since the termination of the programme and the right to accrue the final incentive, which depends on the degree of generated within thirty (30) days following the approval of the held in 2022.

The remuneration, broken down for each member of the Board of Directors, without taking into account insurance premiums, is as follows:

Board members	2021	2020
Mr Antonio Llardén Carratalá, (Executive Director) (1)	1,881	1,886
Mr Marcelino Oreja Arburúa (Chief Executive Officer) (2)	952	957
Sociedad Estatal de Participaciones Industriales (Proprietary Director) (4)	160	160
Mr Luis García del Río (Independent Director) (3) (4)	73	160
Mr Martí Parellada Sabata (External Director) (3) (4)	73	160
Mr José Blanco López (Independent Director) (4)	160	69
Ms Rosa Rodríguez Díaz (Independent Director) (3) (4)	73	160
Ms Ana Palacio Vallelersundi (Independent Leading Director) (4)	190	190
Ms Isabel Tocino Biscarolasaga (Independent Director) (3) (4)	168	175
Mr Antonio Hernández Mancha (Independent Director) (4)	160	160
Mr José Montilla Aguilera (Independent Director) (3) (4)	166	69
Mr Gonzalo Solana González (Independent Director) (4)	160	160
Mr Cristóbal José Gallego Castillo (Independent Director) (4)	160	69
Mr Ignacio Grangel Vicente (Independent Director) (4)	160	160
Ms Patricia Úrbez Sanz (Independent Director) (4)	160	160
Mr Santiago Ferrer i Costa (Proprietary Director) (4)	160	160
Ms Natalia Fabra Portela (Independent Director) (3) (4)	85	-
Ms María Teresa Arcos Sánchez (Independent Director) (3) (4)	85	-
Total		5,026 4,855

(1) The remuneration for the Executive Chairman in 2021 was approved in eceived fixed remuneration in the amount of 1,000 thousands of euros and variable remuneration in the amount of 588 thousands of euros (linked to the Board membership and other remuneration in kind amounting to 163 thousands of euros (the changes in remuneration in kind with respect to previous years are exclusively a result of measurement differences without there having been any additional items included in the remuneration). Thus, the combined amounts totalled 1,881 thousands of euros. In addition, he was also the beneficiary of a life insurance policy with a premium of 56 thousands of euros for the year. The Group has outsourced its pension commitments with respect to its Senior Managers through a mixed group insurance policy for pension commitments, including benefits in the event of survival, death, and employment disability. The Executive Chairman is one of the beneficiaries covered by this policy, and of the total premium paid during the year, 210 thousands of euros correspond to the Executive Chairman. The Executive Chairman is a beneficiary of the 2019-2021 Long-Term Incentive Plan approved at Agenda states that the Board assigned him a total of 79,090 performance shares. These rights do not entail the acquisition of shares for the time being, since the termination of the programme and the right to accrue the final incentive, which depends on the degree of achi within thirty (30) days following the approval of the 2021 annual fixed remuneration of the Executive Chairman remains unchanged from 2017.

(2) The remuneration for the Chief Executive Officer in 2021 was approved

2021, the CEO received fixed remuneration in the amount of 500 thousands of euros and variable remuneration in the amount of 294 thousands of euros; he also received 130 thousands of euros for Board membership and other remuneration in kind amounting to 28 thousands of euros (the changes in remuneration in kind with respect to previous years are exclusively a result of measurement differences without there having been any additional items included in the remuneration). Thus, the combined amounts totalled 952 thousands of euros. In addition, he was also the beneficiary of a life insurance policy with a premium of 0.8 thousands of euros for the year. The Chief Executive Officer is also beneficiary of the mixed group insurance policy for pension commitments, and the share of the premium corresponding to the Chief Executive Officer for this policy amounted to 159 thousands of euros for the year. The Chief Executive Officer is a beneficiary of the 2019-2021 Long-Term Incentive Plan approved at the General Sharehol states that the Board assigned him a total of 39,545 performance shares. These rights do not involve the acquisition of shares for the time being given that the right to accrue the final incentive, which depends on be generated within thirty (30) days following the approval of the 2021 2022. The fixed compensation of the Chief Executive Officer remains unchanged since 2018.

(3) On June 21, 2021, Mr José Montilla Aguilera was appointed Chairman of the Audit and Compliance Committee, and Ms Isabel Tocino Biscarolasaga stepped down from this position. On May 27, 2021, Mr Luis García del Rio, Mr Martí Parellada Sabata and Ms Rosa Rodríguez Díaz stepped down from their position and the following were appointed board members: Ms Natalia Fabra Portela and María Teresa Arcos Sánchez.
(4) The remuneration for these Directors relating to Board and committee

On March 29, 2019, the Enagás, S.A. General Meeting approved the second cycle of the Long-Term Incentive Plan (ILP) aimed at executive directors and senior management of the Company and its Group. The objective of the Plan is to (i) encourage the sustainable achievement of the objectives of the the creation of value with participants, (iii) foster a sense of belonging to the Company and shared destiny, (iv) be competitive, and (v) align with the requirements of institutional investors, proxy advisors, and best Good Corporate Governance practices and, especially, those resulting from the

The plan consists of an extraordinary mixed multi-year incentive which will permit the beneficiaries to receive, after a certain period of time, a bonus payable in (i) Enagás, S.A. shares and (ii) cash; provided that certain strategic objectives of the Enagás Group are met.

With respect to the portion payable in shares, a maximum of 501,946 shares are deliverable, all of which will come from the plan are not guaranteed any minimum value for the assigned shares. The cash part of the plan is limited to an estimated payment of approximately 3.5 million euros should all the objectives be fully met.

This plan is aimed at persons who, due to their level of responsibility on their position in the Enagás Group, contribute designated 48 beneficiaries, notwithstanding the possibility that new recruitments due to mobility or professional level changes may include new beneficiaries during the measurement period.

The objectives set for the evaluation of the achievement of the Plan consist of:

Accumulated results corresponding to the Funds for the financial soundness and net profit growth, which are the cornerstones of the Enagás Group Strategic Plan. This takes into account both the EBITDA of the regulated business and the dividends received from the subsidiaries that are not controlled by Enagás. It is a benchmark indicator for investors. Fulfilling this objective will satisfy the Company forecasts for the distribution of Group, investment and debt amortisation dividends. It accounts for 25% of the total objectives.
This shows the focus on international growth and a realistic and profitable investment plan as the cornerstones of the Strategic Plan. It measures the profitability of the international business compared with the annual remuneration objective accounts for 35% of the total objectives.
competitive shareholder remuneration. It takes into account share performance and the dividend policy. This objective comprises two components, each with a relative importance of 15% of the total objectives:
- a) The absolute TSR is measured as the acquisition of a target share price at the end of 2021. The target price has been established by investing estimated share dividends and is based on profitability and market parameters.
- b) Relative TSR: relative TSR shall be understood as the difference (expressed as a percentage) between the final value of an investment in ordinary shares and the initial value of that investment, bearing in mind that the calculation of said final value will consider dividends or other similar items (i.e. script dividends) received by the shareholder for said investment during the corresponding period. This metric shall be calculated against the Comparison Group formed by fifteen companies.
Compliance with the Sustainability Plan. It reflects the -term value responsibly in the social and environmental backdrop. Its weight in the objectives total will be 10%, and it will consist of three indicators:
- c) Average reduction in CO2 emissions in the 2019 2021 period vs. 2018;
- d) Increase in the percentage of women on the Board, in the management team and in the staff; and
- e) Investment associated with the increased presence of renewable gases in the energy mix.

initially Regarding the measurement period, although it occurs during the period from January 1, 2019 to December 31, 2021, its settlement will take place on the following dates:

a) The beneficiary will receive 50% of the incentive within thirty (30) days following approval of the 2021 annual accounts by

assets part of the incentive as well as the cash part of the incentive;

b) The beneficiary will receive the remaining 50% of the incentive once a period of one year has elapsed from the first payment date.

As established in BOICAC No. 75/2008, query No. 7, the part settled through shares of Enagás, S.A. is considered a shares based payment transaction that can be settled in equity instruments, and, accordingly, the fair value of the services received, as consideration for the equity instruments granted, is included in the Income Statement at December 31, 2020, under the Balance Sheet net equity at December 31, 2021.

The breakdown and fair value of the shares at the granting date of the ILP of the Enagás Group are as follows:

	ILP 2019- 2021
Total shares at the concession date (1)	501,946
Fair value of the equity instruments at the granting date (EUR)	25.94
Dividend yield	4.77%
Expected volatility	16.86%
Discount rate	0.62%

(1) This number of shares reflects the maximum number of shares to be delivered under the plan, and includes both the possibility of achieving the maximum degree of fulfilment of objectives established in the plan (125%), as well as the possibility that new hiring, staff mobility within the Group, or changes in professional levels, lead to the inclusion of new beneficiaries during the measurement period.

With respect to that part of the bonus payable in cash, the Company recognised the rendering of services corresponding to this plan as personnel expenses amounting to 424 thousands of -current liabilities in the accompanying Balance Sheet at December 31, 2020. As is the case for the equity-settled plan component. As of December 31, 50% of the balance has been reclassified as short-term personnel, in accordance with the established payment date.

In order to comply with the provisions of Article 229 ff. of the Corporate Enterprises Act, this report includes information on the shareholdings and performance of the roles of the members of the Board of Directors of Enagás, S.A. in other companies with activity of a similar or complementary type to that which it constitutes the corporate purpose. This information was prepared considering that they are companies with similar or complementary activities to those carried out by Enagás S.A., that is, natural gas transmission, regasification, distribution, and marketing activities regulated by Law 34/1998 of the Hydrocarbons Sector.

At December 31, 2021 and December 31, 2020, there were no holdings in the share capital of companies with the same, similar or complementary type of activity reported to the Company by the Directors.

other companies with the same, similar or complementary activities, as communicated to Enagás, S.A. at December 31, 2021 and 2020, are the following:

Director	Company	Positions
2021
Marcelino Oreja Arburúa	Mibgas Derivatives, S.A.	Director
Marcelino Oreja Arburúa	Enagás Emprende, S.L.U.	Joint Director
Marcelino Oreja Arburúa	Enagás Services Solutions, S.L.U	Joint Director
Marcelino Oreja Arburúa	Enagás Transporte del Norte, S.L.	Chairman
Marcelino Oreja Arburúa	Enagás Renovable, S.L.U.	Joint Director
Marcelino Oreja Arburúa	Tallgrass Energy G.P.	Director
Antonio Llardén Carratalá	Enagás GTS, S.A.U.	Representative of the Sole Director of Enagás, S.A.
Antonio Llardén Carratalá	Enagás Transporte, S.A.U.	Representative of the Sole Director of Enagás, S.A.

Director	Company	Positions
2020
Marcelino Oreja Arburúa	Mibgas Derivatives, S.A.	Director
Marcelino Oreja Arburúa	Enagás Emprende, S.L.U.	Joint Director
Marcelino Oreja Arburúa	Enagás Services Solutions, S.L.U	Joint Director
Marcelino Oreja Arburúa	Enagás Transporte del Norte, S.L.	Chairman
Marcelino Oreja Arburúa	Enagás Renovable, S.L.U.	Joint Director
Marcelino Oreja Arburúa	Tallgrass Energy G.P.	Director
Antonio Llardén Carratalá	Enagás GTS, S.A.U.	Representative of the Sole Director of Enagás, S.A.
Antonio Llardén Carratalá	Enagás Transporte, S.A.U.	Representative of the Sole Director of Enagás, S.A.

There are no activities of the same, similar or complementary nature to those carried out by Enagás which are performed by its Board members, on their own behalf or on behalf of third parties, not included in the above section.

The Company Enagás S.A., as head of the Enagás Group, carries out the activities for protection of the environment and biodiversity, energy efficiency, reduction in emissions, and the responsible consumption of resources as part of its environmental management in order to mitigate the impact of its activities. The Company has integrated protection of the environment into its policy and strategic programmes by implementing an Environmental Management System developed and certified in accordance with the requisites of standard UNE EN ISO 14001, which guarantees compliance with applicable environmental legislation and continuous improvement of its environmental behaviour.

corresponding audit report on the environmental management maturity and degree of development ensure continuous improvement for the company in this field.

Economy Pact, it obtained Zero Waste Certification, issued by AENOR, thus ensuring the organised management of waste generated at the facilities in order to reintroduce these into the value chain.

The Company Enagás S.A. makes ongoing efforts to identify, characterise, and minimise the environmental impact of its activities and facilities, evaluating the related risks and strengthening eco-efficiency, responsible management of waste and discharges, minimising the impact in terms of emissions and climate change.

The Company incorporates environmental criteria in its relationship with suppliers and contractors, as well as in connection with decision-making with respect to the awarding of contracts for the provision of services and products.

During 2021, Enagás S.A. carried out environmental actions in the amount of 42 thousands of euros, recognised as investments under assets in the balance sheet. During financial year 2020, this amount was 23 thousands of euros. The Company also assumed environmental expenses amounting to 294 thousands of euros in thousands of euros in 2020).

The company has arranged sufficient civil liability insurance to meet any possible contingencies, compensation and other risks of an environmental nature which it might incur.

(Note 3.1.f) within the framework of new renewable energy projects.

At 2021 year-end, neither the members of the Board of Directors of the Company nor any parties related to them, as defined in Article 229 of the Corporate Enterprises Act, had notified the remaining Board members of any conflicts of interest, direct or indirect, with those of the Company.

Enagás S.A. did not receive any grants or additional income in 2021 or 2020 as a result of its activities relating to the

environment. audit services provided by the auditor of the Company, Ernst & Young, S.L., or by a company belonging to the same group or related to the auditor, broken down as follows:

	2021	2020
Categories	Services rendered by the accounts auditor and related companies	Services rendered by the accounts auditor and related companies
Audit services (1)	751	811
Other assurance services (2)	144	144
Total audit and related services	895	955
Total professional services	895	955

(1) Audit services: This heading includes services rendered for the performance of statutory audits of the Enagás, S.A. Annual Accounts and the limited review work performed with respect to the Interim and Quarterly Financial Statements as well as the Certification of the Internal Control over Financial Reporting (ICFR) System.

(2) Other audit-related assurance services: This heading includes the engagements relating to the Annual Corporate Governance Report, and the review of non-financial information included in the Management Report, and also the report on agreed ICFR procedures.

Since January 1, 2022 until the date on which these Annual Accounts were drawn up, no events have occurred that would significantly affect the profit (loss) of the Company or its equity, in addition to those described in these Annual Accounts.

(see Note 1.2)

The wording provided by Law 11/2018, of December 28, to Article 262.5 of the consolidated text of the Corporate Enterprises Act, relating to the management report, indicates that a company dependent on a group will be exempt from the obligation established in this section if the company and its dependents, if any, are included in the consolidated management report of another company, prepared in accordance with the content established in this article.

Based on the above, Enagás, S.A. makes use of this exemption, including non-financial information in the consolidated management report of Enagás, S.A. and Dependent Companies prepared in accordance with said regulations and which will be filed with the Commercial Registry of Madrid.

Enagás, S.A., a midstream company with almost 50 years of experience and independent European TSO (Transmission System Operator) through Enagás GTS, S.A.U., is an international reference in the development and maintenance of gas infrastructure and in the operation and management of gas networks.

The company has built the main infrastructure for the Spanish Gas System, turning it into a model of security and diversification of supply.

Through our activities we strengthen and guarantee the security of energy supply, promoting the use of natural gas in preference to other more polluting alternative fuels such as oil or coal. In addition, natural gas is of great importance for improving competitiveness, as it allows for the introduction of efficient industrial technologies which improve the intensity of energy usage and competitiveness in the industry, generating direct and indirect employment.

In addition, Enagás is promoting the development of renewable gases as new key solutions for the energy transition. Non-electric renewable energies (hydrogen and biomethane) are indispensable energy vectors that contribute to the development of a circular economy and to the energy transition process, helping advance towards carbon-neutral economy. These non-electric renewable energies can be transported via the existing gas network infrastructure, maximising their use.

representing shareholders.

Enagás S.A. has a free float of 90%, one of the highest on the Spanish continuous market.

Enagás S.A. applies a proprietary separation model, which establishes the maximum limit of ownership by any shareholder at 5%, with a limitation on the voting rights of 1% for agents in the gas sector and 3% for the rest of shareholders. These limitations do not apply to direct or indirect interest held by the public corporate sector.

Enagás, S.A. has a percentage of Independent Directors (73.3%) higher than the average of the Spanish market and it has a Board of Directors of 15 members.

What is more, Enagás S.A. commitment to promote gender diversity on the Board is reflected in the significant increase in the ratio of female members, rising from 6% in 2007 to 33.3% in 2021. Accordingly, the company has met the 30% target of women on the Board included in the 2019-2021 Long-Term Incentive Plan. Looking ahead to the coming years, and with the aim of making further progress in this critical area for the company, Enagás has expanded its commitment by defining a new target in its new 2022-2024 Long-Term Incentive Plan, namely to achieve 35% female representation by 2024.

Enagás, S.A., as head of the Enagás Group, will guarantee the proper functioning of the Spanish Gas System, and will ensure security of supply by facilitating competition in a transparent and non-discriminatory manner. Likewise, it will optimise the operation of the Spanish Gas System by coordinating the different agents and proposing measures to improve its operation. It will continue to develop the transmission network and manage its infrastructures in a safe, efficient, profitable way with a commitment to protecting the environment. All this will be achieved in collaboration with the regulators, thus providing service quality to its customers, creating value for its shareholders and contributing to the sustainable development of the Company.

Natural gas is key to achieving a sustainable, safe and efficient energy in a low-carbon economy. It is the most efficient technicaleconomic solution compared to other conventional fuels, with the lowest cost for citizens and companies. Natural gas helps to make the industry more competitive and reduces the environmental impact. It is an essential energy source for many sectors because of its versatility and high calorific value. In addition, Enagás, S.A. is promoting the development of renewable gases, such as hydrogen and biomethane, as new key solutions for the energy transition. These non-electric renewable energies can be transported via the existing gas infrastructure, maximising their use and contributing to a fair energy transition and to decarbonisation.

In recent years the last pieces of regulation required to establish the new regulatory framework that applies to the Spanish Gas System, a stable and predictable framework developed by an Independent Regulator (National Commission on Markets and Competition (CNMC)) that supports the objectives of the energy transition. With regards to renewable gases, it is worth noting that

Enagás is one of the eleven European gas infrastructure companies driving the European Hydrogen Backbone plan for the development of a specific hydrogen transmission infrastructure. In 2021, gas demand increased by 5.1% to 378.4 TWh compared to 2020.

Enagás, S.A. has a Sustainability and Good Governance policy which reflects the importance of good governance for the generation of value by the company. At the 2021 General 2022-2024 was approved, following good governance recommendations and based on objectives aligned with the

higher than 2020. In 2021, investments worth 64.9 million euros were made.

The dividend per share in 2021 increased by 1% over the previous year, reaching 1.70 euros per share. Enagás, S.A. closed 2021 at 20.40 euros per share.

The share capital of Enagás, S.A. at December 31, 2021 was 392.9 million euros, with 261.9 million shares.

On December 29, 2021, the credit rating agency Fitch Ratings

with a stable outlook (Note 3.5). Enagás S.A. has been listed on the Dow Jones Sustainability Index since 2008, with a rating of 85 points. Moreover, Enagás has been the only company in the world in the Oil & Gas sector included on the CDP Climate Change A List, which means it has achieved the highest score in this annual ranking.

Enagás, S.A., as a certified Top Employer company, offers stable and quality employment with high percentages of permanent and full-time employment contracts, totalling (98.64%) and (96.74%), respectively. In addition, the commitments acquired by Enagás, S.A. in its Management of Human Resources policy, together with the measures and actions implemented, translate into high levels of employee satisfaction and motivation, as reflected in low staff turnover (1.65% voluntary turnover) and the results obtained in the workplace climate survey.

Enagás S.A. has an integrated talent management model to and plans through four principles: To attract the best talent to Enagás, to know our internal talent, to continuously train our professionals and to develop and retain internal talent.

Enagás S.A. commits itself, every day, to applying the principle of equal opportunities and non-discrimination. It is a staunch believer of diversity among its professionals through the Comprehensive Diversity Plan. To achieve this commitment, Enagás, S.A. has continued to implement different initiatives in 2021 in the different areas of its diversity and inclusion strategy: gender, functional, generational, cultural, thought and LGTB+.

In 2021 Enagás, S.A. launched three internal surveys with a sample of professionals to learn about the evolution of critical aspects within the framework of its Global Listening Strategy 2020-2021, and has defined an action plan that responds to the results of the surveys.

The global security approach of Enagás S.A. is based on the integration of the safety and health culture into the environment, people, facilities and information, through the involvement of leaders and the development of a model of health and security behaviours.

The Enagás Occupational Risk Prevention Management System, certified according to ISO 45001 (100% of activities), has procedures and standards for the identification and evaluation of risks, as well as for the notification of accidents.

Enagás, S.A. is also certified as a Healthy Company according to the protocol of the World Health Organisation.

As part of the management of the COVID-19 crisis, Enagás has obtained the AENOR COVID-19 Action Protocol certification, as well as the ISO 45005 certification for occupational health and safety management - general guidelines for safe work during the COVID-19 pandemic - -19 management model.

Enagás S.A. has a framework of policies, procedures and regulations that consists of: the Code of Ethics, corporate policies and guidelines, and the management and regulatory procedures necessary to ensure due diligence in related matters.

The Enagás S.A. Ethics Channel is a platform for consulting doubts and notifying irregularities or breaches of the Code of Ethics and is 2021, seven communications were received via the Ethics Channel:

Two internal notifications related to workplace harassment and bullying, respectively. These notifications gave continuity to situations previously reported by the same employees. Both notifications were re-analysed and finally dismissed.
An external notification from an employee of an affiliate company regarding the work environment, which has been dismissed as outside the scope of the Code of Ethics. However, this notification has been forwarded to the affiliate to which it referred through the corresponding channels, and the affiliate has handled it appropriately.

Four internal consultations regarding the following matters: the procurement bidding process; the policy for accepting gifts; the policy for accepting remuneration for participation in technical seminars on behalf of the company, and to thank the company for its ethical work. Enagás responded to all inquiries received.

The Enagás, S.A. compliance model is the main tool for ensuring This Model is being coordinated around the Compliance Policy and its associated standard. Furthermore, under the Compliance Model, Enagás, S.A. has a Crime Prevention Model that is the Corruption Prevention Model and Protection of Competition.

the socio-economic development of local communities, giving priority to those areas in which the company operates, through sustainable social action models. Through dialogue and collaboration with stakeholders, the positive social impact of the aligned with the United Nations Sustainable Development Goals (SDG).

In 2021, the total amount of this social investment reached 1.8 million euros, focusing efforts on the communities where the company is present and on informative actions related to renewable gases and energy transition.

Supply chain management is an increasingly critical point in the chain allows us to identify and manage regulatory, operational, and reputational risks, as well as take advantage of opportunities for collaboration and the creation of shared value.

In order to work with Enagás S.A., the suppliers must go through a rigorous approval process. They must meet, among others, the following approval requirements:

Have the capacity and resources to meet technical, quality, environmental and safety requirements, and upholding thereof over an extended period of time.
Respect the principles of the United Nations Global Compact and the Universal Declaration of Human Rights.
Acceptance of the Enagás Code of Ethics.
Hold certifications relating to quality, environmental matters, and occupational risk prevention for suppliers of certain product or service families.

iers is 44 days.

Activities for protection of the environment and biodiversity, energy efficiency, reduction in emissions, and the responsible consumption of resources are essential elements in the Enagás S.A. environmental management to mitigate the impact of its activities.

Managing natural capital and biodiversity is a key aspect for Enagás. The control and minimisation of our impacts on the environment also produces direct internal benefits by improving the use of resources, ensuring the sustainability of our business and generating confidence in our stakeholders.

Enagás S.A. undertakes its environmental commitments (as reflected in the Health & Safety, Environment and Quality Policy) through the Environmental Management System and 100% of its activity is certified in accordance with ISO 14001 standard.

Improved energy efficiency and reduced greenhouse gas emissions are major factors in reinforcing the vital role that natural gas will play in a low-carbon economy as a key element for achieving sustainable, safe and efficient energy.

gy is Enagás, S.A. is increasing its commitment to the fight against climate change every year through its management and continuous improvement model, based on public commitment and target setting, emission reduction and compensation measures as well as the reporting of our performance and results, following TCFD recommendations (Task Force on Climate-related Financial Disclosures).

Enagás S.A. is also committed to the use of gas as the least polluting fossil fuel and, therefore, key to the power generation mix for meeting emission reduction targets and allowing the development of more efficient renewable energies; as well as replacing other fossil fuels as we move towards more sustainable mobility in sea, rail and road transport.

In line with the science-based criteria for aligning emission emission reduction progress in recent years, in 2021 it has increased the ambition of its decarbonisation pathway targets towards carbon neutrality in 2040 and incorporates scope 3 emission reduction targets.

Enagás S.A. has adapted to the new circumstances arising out of the crisis, reducing its external financing through banks and resorting to other types of financing, such as bond issues, which has permitted the Company to achieve a more diversified ecember 31, 2021 amounted to 4,276,856 thousands of euros.

The Company Enagás, S.A. is exposed to various risks intrinsic to the sector, markets in which it operates and the activities it performs, which, should they materialise, could prevent it from achieving its objectives and executing its strategies successfully.

The Company Enagás S.A. has established a risk control and management system model aimed at ensuring the continuity of

the business and the achievement of the objectives of the company in a predictable manner and with a medium-low profile for all of its risks. This model allows it to adapt to the complexity of its business activity in a globalised competitive environment, in a complex economic context, where the materialisation of a risk is more rapid and with an evident contagion effect.

This model is based on the following aspects:

The consideration of some standard types of risk to which the Company is exposed.
The segregation and independence of the functions of risk control and management at the company, in three lines of
Governing bodies with responsibilities regarding supervision
Establishing a risk appetite framework which defines the risk levels considered acceptable and that is in line with established business objectives and the market environment
The transparency of information supplied to third parties, to guarantee its reliability and accuracy.

The integral analysis of all risks allows the appropriate control and management thereof, an understanding of the relationships between them and facilitates their joint assessment. This is accomplished by taking into account the differences of each type of risk in terms of its nature, handling capacity, risk measurement tools, etc.

The main risks associated with the business activities of Enagás S.A. are classified as follows:

1.

These are risks which are inherent to the gas sector and are linked to potential losses of value or results derived from external factors, strategic uncertainties, economic cycles, changes to the environment, changes to patterns of demand, competition and market structure or changes to the regulatory framework, as well as those derived from taking the incorrect decisions in relation to business plans and company strategies.

The activities carried out by the Company are notably affected by current regulations (local, regional, national and supranational). Any change in that legislation could negatively affect profits and the value of the company. Within this type of risk, regulatory risk is of special relevance, and is associated with the remuneration framework and, therefore, the regulated income from business activities.

Similarly, the new developments of infrastructures are subject to obtaining licences, permits and authorisation from governments, as well as legislation of various types, notably environmental regulations. These long-term and complex processes may give rise to delays or modifications to the designs initially projected due to: obtaining authorisation, the processes relating to environmental impact studies, public opposition in the affected communities, and changes in the political environment. All of these risks may increase costs or delay projected income.

The growth in demand may also bring negative effects that will have a different impact in the short-, medium- and long-term.

Growth may also depend on meteorological conditions or the competitiveness of natural gas compared to other energy sources, performance of the economy, etc.

In the short-term, the degree to which regasification plants are used may have a negative impact on the forecast operating costs, through greater internal consumption and greenhouse gas emissions.

In the medium- to long-term, the increase in the demand is a factor that creates opportunities for building new projects in transport, regasification and underground storage infrastructure for natural gas and its development may alter or delay decisions taken in dealing with these projects.

The results of the Company may also be affected by the legal risk arising from the uncertainties related with the different interpretation of contracts, laws or regulations which the company and third parties may have, as well as the results of any law suits undertaken.

The Company Enagás S.A. has implemented measures to control and manage its strategic and business risk within acceptable risk levels, consisting in the continuous supervision of risks in connection with regulatory changes, market conditions, competition, business plans, strategic decision-making, etc. as well as management measures to contain risk at acceptable levels.

2.

Operation of the Enagás S.A. infrastructures may give rise to losses of value or earnings resulting from inadequate processes, failures of physical equipment and computer systems, human error or other external factors. This type of risk can in turn be classified as an industrial infrastructure risk (related to the nature of the fluids under management), risks associated with infrastructure maintenance, logistical and commercial processes, as well as other risks associated with corporate processes.

The main operational and technological risks to which the Company is exposed are:

Industrial risk, relating to incidents during operation of transmission infrastructure, regasification plants, and underground storage facilities, which potentially involve great damage. They are very often conditioned by the nature of the fluid under management.
Internal and/or external fraud.
Cybersecurity, in the different guises it may present itself (economic fraud, espionage, activism and terrorism).

The Company Enagás S.A. identifies the activities relating to management and control which can provide an adequate and appropriate response to these risks. Among the control activities thus defined there are emergency plans, maintenance plans, control and alerting systems, training and skill upgrading for staff, application of certain internal policies and procedures, defining quality indicators, establishing limits, and quality certifications and audits, prevention and environment, etc. which allow the Group to minimise the probability of these risks occurring. To mitigate the negative economic impact that the materialisation of any of these risks may have on Enagás S.A., a series of insurance policies have been arranged.

Some of these risks could affect the reliability of the financial information prepared and reported by Enagás, S.A. An Internal Control over Financial Reporting (ICFR) system was implemented to control these types of risk, the details of which can be consulted in the Corporate Governance Report.

3.

Credit and counterparty risk relates to the possible losses arising from the non-compliance of monetary or quantifiable obligations of a counterparty to which the Company has granted net credit which is pending settlement or collection.

The counterparty risk includes the potential breach of obligations acquired by a counterparty in commercial agreements that are generally established in the long-term.

Enagás, S.A. monitors in detail this type of risk, which is particularly relevant in the current economic context. The activities carried out include analysing the risk level and monitoring the credit quality of counterparties, regulatory proposals to compensate Enagás S.A. for any possible failure to comply with payment obligations on the part of shippers (an activity that takes place in a regulated environment), request for guarantees, etc.

However, regulations have been developed establishing standards for managing guarantees in the Spanish gas system and which oblige shippers to provide guarantees for: (i) contracting capacity in infrastructure with regulated third-party access and international connections, (ii) settlement of imbalances; and (iii) participation in the organised gas market.

The measures for managing credit risk involving financial assets include the placement of cash at highly-solvent entities, based on the credit ratings provided by the agencies with the highest international prestige. Likewise, interest rate and exchange rate derivatives are contracted with financial entities with the same credit profile.

The regulated nature of Enagás S.A. business activity does not allow an active customer concentration risk management policy to be established.

Information concerning counterparty risk management is disclosed in Note 3.5 of the Annual Accounts.

4.

Enagás S.A. is subject to the risks deriving from the volatility of interest and exchange rates, as well as movements in other

Interest rate fluctuations affect the fair value of assets and liabilities that accrue interest at fixed rates, and the future cash flows from assets and liabilities that accrue interest at floating rates. The objective of interest rate risk management is to achieve a balanced debt structure that minimises the cost of debt over a multi-year horizon with low volatility in the income statement. The Enagás Group, of which the Company is the parent company, maintains a fixed or protected debt structure of more than 80% to limit this risk. Changes in exchange rates may affect debt exchange rate risk management is designed to balance the cash flows of assets and liabilities denominated in foreign currency in each of its subsidiaries.

Enagás S.A. maintains a liquidity policy that is consistent in terms of contracting credit facilities that are unconditionally available and temporary financial investments in an amount sufficient to cover the projected needs over a given period of time.

It should also be noted that the promotion of sustainable finance by regulators and investors (EU Taxonomy, EIB investment policy, conditions in the medium and long term. The company monitors sustainable finance regulations, maintains contact with investment entities, financing and rating agencies, among other measures, to mitigate the possible impact.

With respect to tax risk, the Company is exposed to possible modifications in tax regulatory frameworks and uncertainty relating to different possible interpretations of prevailing tax legislation, potentially leading to negative effects on results.

The financial risk management policy is described in Note 3.5 of the Annual Accounts.

5.

Reputational risk refers to any action, event or circumstance that its stakeholders.

Enagás, S.A. has implemented a self-assessment reputational risk procedure which uses qualitative measurement techniques. This process considers the potential reputational impact of any of the risks listed in the current inventory, as well as those strictly reputational events arising from the action, interest or judgement of a third party.

6.

The Company is exposed to compliance risks, which includes the cost associated with potential penalties for breaches of laws and legislation, or penalties resulting from the materialisation of operational events, the use of improper business practices or the breach of internal company policies and procedures.

Also, the Company may be affected by risks associated with the improper use of assessment models and/or risk measurement, and hypotheses that are outdated or do not have the necessary precisions to be able to correctly evaluate their results.

7.

The amendments made to Article 31 bis of the Criminal Code in 2010 and 2015 establish criminal liability on the part of legal entities. In this context, Enagás S.A., could be held liable in Spain for certain crimes committed by its directors, senior managers and employees in the course of their work and in the interest of the Company.

To prevent this risk from materialising, Enagás, S.A. has approved a Crime Prevention Model and has implemented the measures needed to prevent corporate crime and to avoid liability for the Company.

The company is also exposed to cross-cutting risks that do not correspond to a single risk category but may be correlated with several of them. These are the risks related to the three pillars of sustainability: environmental, social and governance (abbreviated as ESG, Environmental, Social and Governance). Regarding

In the field of technological innovation developed by Enagás, S.A. during 2021, the main actions have been to continue improving its present activity and to continue with the process initiated in 2019 of analysing and deepening the knowledge of other possible technologies that in the short and medium-term could add value -how.

Among the first highlighted is efficiency in a broad sense; gas measurement and analysis of its components; operational safety; the materials and equipment necessary for their activity. The latter include the production, analysis, certification and transport of synthetic natural gas, biogas, biomethane and hydrogen.

of new energies have been developed mainly by the Innovation Department of the Gas Assets Department.

1.

This section includes two distinct sections: energy efficiency and technical efficiency.

During 2021 Enagás, S.A. has continued its efforts, on the one hand, to reduce the energy consumption of its facilities and, on the other hand, to raise the level of energy it produces for selfconsumption or export.

The consumption reduction in its facilities is mainly focused on the optimisation of its processes, to minimise the energy needs of these processes, and in the modification or replacement of their equipment, to improve their unit performance.

The production of energy is based on the use of the residual energies of its processes to, in turn, produce electrical energy. The residual energy used is the heat that is lost through the exhaust gases of the gas turbines, the cold that is wasted during the vaporisation process of the liquefied natural gas (LNG) and the pressure that dissipates in the points regulated by needs of the gas transmission system or for the delivery of gas to other carriers or distributors. Currently, Enagás, S.A. has facilities for each of these three types.

During 2021, we commenced projects such as:

Detection of corrosion and mechanical pipe defects
Electrical Phase Monitoring for mechanical failure detection in cryogenic pumps.

As a result of the experience acquired in previous years, during 2021, analysis of the possible technical and economic convenience of self-producing certain inputs necessary for the operation of the facilities was continued. In this regard, the most noteworthy production is the expansion of the autonomous generation of nitrogen at the Huelva Plant, a chlorine dioxide reactor at the Barcelona Plant and, in part, the experience acquired in previous years.

2.

Enagás, S.A. continues to equip itself with the best available techniques to reduce the level of uncertainty in the measurement of the energy contained in natural gas, both in the liquid state (LNG) and in the gaseous state (NG), at the points at which it is received or delivered to third parties. During 2021, this innovative effort has led to different studies and actions.

3.

Throughout 2021, the Company continued with the research line on pipeline safety and other Enagás S.A. facilities. The work has focused on improving the mathematical models used. To this end, participation in different international joint projects has been maintained, which has also confirmed that the level of security of the Enagás S.A. facilities is adequate and is in line with that of other foreign companies with similar characteristics.

We have also continued to update the tools developed to meet the needs of different areas of the Company, both in the design of new facilities and in the operation of existing ones. Work continued on the development of a simulation tool for tracking the different qualities of gas injected into the network, including hydrogen.

All of the above has been carried out in accordance with the legislation in force in the matter.

During 2021, Enagás, S.A. has continued its activities to keep up to date a set of specifications and technical requirements, applicable to the materials and equipment with which it designs, builds and operates its facilities, which collects the state of the art at all times and ensures that the best alternatives are adopted in order to optimise the total cost (CAPEX + OPEX) of these facilities for the Company, without undermining security levels. For this purpose, the Company works actively with different national and international organisations and technological entities. It is worth noting the participation in normative organisations (ISO, AENOR, BEQUINOR) and in research and development groups and associations (GERG, EPRG).

Adaptations of plant jetties facilities are also being carried out for the small-scale, multi truck-to-ship (MTTS) project.

5.

Enagás S.A. is aware of the wide diversity of scenarios and solutions that the energy sector could develop in the future in a broad sense. As a consequence and independently of other actions that are carried out in various areas of the company to anticipate events and adapt to the profound changes that will arrive, the area of R&D remains in contact with technologies complementary and/or alternative to natural gas and which can also use part or all of the gas infrastructure in its hypothetical future development and implementation. In this sense, the following are considered as more plausible technologies: mixtures of hydrogen with natural gas in certain percentages; pure hydrogen; biogas and biomethane.

Enagás is committed to developing non-electric renewable energies, such as green hydrogen and biogas/biomethane, as new key energy solutions for the decarbonisation process, and in order to bring about a circular economy.

Renewable gases play a key role in the decarbonisation process, and accordingly it is necessary to provide new alternatives that allow a sustainable mobility, with the options of synthetic natural gas and hydrogen of renewable origin.

These are some of the biogas, biomethane and hydrogen projects on which the company worked during 2021, proving its ability to anticipate and adapt:

P2GH2: Mallorca Project (Enagás-Acciona): Obtaining H2 in an electrolyser from renewable electrical energy and subsequent storage, distribution and use in a fleet of H2 buses of EMT Mallorca.
LIFE CABEZO GREENH2: In the town of Muel, the development of a green hydrogen production plant is planned based on the installation of a 1 MW electrolyser and it will be connected to a 23.3 MW wind power plant. The plant will thus produce more than 100 tonnes/year of green hydrogen that will be used for the decarbonisation of local industry.
SUN2HY: Luxhor Project (Repsol-Enagás): Development of a Photoelectrolyser for H2 production.
UNUE PROJECT: The Project consists of the delivery by Biogasnalia of all the biogas that can be produced in the Plant. Enagás will use this biogas to produce biomethane through the

construction, operation and maintenance of the necessary upgrading module. The biomethane produced will be injected into the existing distribution pipeline network in the vicinity of the plant.

La Robla Project: (Enagás-Naturgy-Ignis). Production of up to 400 MWp in several PV parks near La Robla (León) for the production of green H2 and storage and transmission through the El Musel plant (Gijón).
Initial analysis of green H2 production projects with electrolysers from renewables (solar and wind) and alternative supply for other uses such as mobility or industry. Collaboration with various technology partners.
Biogas-Biomethane Upgrade Feasibility Studies: Design, construction and operation of biomethane upgrading plants for injection into the Enagás network or for vehicular use. Thirtytwo of the planned projects were launched throughout Spain in collaboration with several waste producing partners.
Zaragoza Laboratory (Biomethane+H2) To adapt the Enagás Analysis Laboratory in Zaragoza, providing it with the necessary analytical means and procedures for measuring the components of the biomethane and hydrogen, to guarantee its quality both for injection into the network and for use as a fuel.

No treasury shares were acquired or disposed of in 2021.

Annual Corporate Governance Report in accordance with the provisions of article 49.4 of the Code of Commerce. This report will also be available from the publication of these accounts both on the corporate website www.enagas.es and on the CNMV website www.cnmv.es.

On February 14, 2022, the Board of Directors of Enagás, S.A. prepared the Annual Accounts and Management Report for the year ended December 31, 2021, consisting of the accompanying documents attached hereto, in accordance with the provisions of Article 253 of the Corporate Enterprises Act and Article 37 of the Code of Commerce, and remaining applicable standards.

In accordance with the provisions of article 262.5 of the Consolidated Text of the Corporate Enterprises Act and the reference contained in the Management Report of the company Enagás, S.A. corresponding to the year ended December 31, 2021, Enagás, S.A., as the parent of the Enagás Group, includes the Non-Financial Information Statement in the Consolidated Management report of Enagás, pursuant to the provisions of Law 11/2018 governing non-financial and diversity reporting.

DECLARATION OF RESPONSIBILITY: For the purposes of Article 118.2 of the consolidated text of the Securities Market Act and Article 8.1.b) of Royal Decree 1362/2007, of October 19, the directors state that, to the best of their knowledge the Annual Accounts, prepared in accordance with applicable accounting principles, provide a true and fair view of the equity, financial position and results of the Company and that the Management Report includes a fair analysis of the performance and results of the businesses and the situation of the Company, together with the description of the main risks and uncertainties faced. They additionally state that, to the best of their knowledge, the directors not signing below did not express dissent with respect to the Annual Accounts or the Management Report.

Mr Antonio Llardén Carratalá Mr Marcelino Oreja Arburúa (Signed the original in Spanish) (Signed the original in Spanish)

Sociedad Estatal de Participaciones Industriales-SEPI Mr Antonio Hernández Mancha

Ms Eva Patricia Úrbez Sanz Ms Ana Palacio Vallelersundi (Signed the original in Spanish) (Signed the original in Spanish)

Ms Natalia Fabra Portela Mr Santiago Ferrer Costa (Signed the original in Spanish) (Signed the original in Spanish)

Ms María Teresa Arcos Sánchez Ms Isabel Tocino Biscarolasaga

Mr Gonzalo Solana González Mr José Blanco Lopez (Signed the original in Spanish) (Signed the original in Spanish)

Mr Ignacio Grangel Vicente Mr José Montilla Aguilera

(Signed the original in Spanish) (Signed the original in Spanish)

(Represented by Mr Bartolomé Lora Toro) (Signed the original in Spanish) (Signed the original in Spanish)

(Signed the original in Spanish) (Signed the original in Spanish)

Mr Cristóbal José Gallego Castillo

(Signed the original in Spanish)

DILIGENCE to record that, (i) due to the health crisis situation caused by COVID-19 and the restrictions derived from Law 2/2021, of March 29, on urgent measures of prevention, containment and coordination to face the health crisis caused by COVID-19 and from Order 1244/2021, of October 1, of the Department of Health, which establishes preventive measures to face the health crisis caused by COVID-19, the members of the Board of Directors have had the possibility of attending the Board meeting both by telematic means and physically at the registered office; (ii) the individual Annual Accounts and Management Report of Enagás, S. A. for the 2021 financial year have been prepared with the agreement of all the members of the Board of Directors, as accredited by the Secretary of the Board with their signature below, and with the signature of those Directors who have physically attended the Board of Directors.

Secretary to the Board of Directors

Mr Rafael Piqueras Bautista (Signed the original in Spanish)

AI Terminal

Enagas S.A.

1822_10-k-afs_2022-02-22_1d71675e-c084-4cd3-98fb-1080e6d036fa.pdf

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