REN-Redes Energeticas Nacionais

Quarterly Report • Jun 9, 2021

Consolidated Financial Statements

31 March 2021

REN – Redes Energéticas Nacionais, SGPS, S.A.

INDEX

1.		FINANCIAL PERFORMANCE	2
	1.1 1.2	RESULTS FOR THE 1ST QUARTER OF 2021 AVERAGE RAB AND CAPEX	2 6
2.		CONSOLIDATED FINANCIAL STATEMENTS	7
3.		NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2021	12
	1	GENERAL INFORMATION	12
	2	BASIS OF PRESENTATION	15
	3	MAIN ACCOUNTING POLICIES	16
	4	SEGMENT REPORTING	18
	5	TANGIBLE AND INTANGIBLE ASSETS	20
	6	GOODWILL	23
	7	INVESTMENTS IN ASSOCIATES AND JOIN VENTURES	24
	8 9	INCOME TAX FINANCIAL ASSETS AND LIABILITIES	26 30
	10	INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE
		INCOME	32
	11	TRADE AND OTHER RECEIVABLES	34
	12	DERIVATIVE FINANCIAL INSTRUMENTS	35
	13	CASH AND CASH EQUIVALENTS	40
	14	EQUITY INSTRUMENTS	40
	15	RESERVES AND RETAINED EARNINGS	40
	16	BORROWINGS	41
	17	POS-EMPLOYMENT BENEFITS AND OTHERS BENEFITS	43
	18	PROVISIONS FOR OTHER RISKS AND CHARGES	44
	19	TRADE AND OTHER PAYABLES	45
	20	SALES AND SERVICES RENDERED	46
	21	REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES	46
	22	OTHER OPERATING INCOME	47
	23	EXTERNAL SUPPLIES AND SERVICES	47
	24 25	PERSONNEL COSTS OTHER OPERATING COSTS	48 48
	26	FINANCIAL COSTS AND FINANCIAL INCOME	49
	27	EXTRAORDINARY CONTRIBUTION OVER THE ENERGY SECTOR	49
	28	EARNINGS PER SHARE	50
	29	DIVIDENDS PER SHARE	50
	30	CONTINGENT ASSETS AND LIABILITIES	50
	31	RELATED PARTIES	51
	32	SUBSEQUENT EVENTS	54
	33	EXPLANATION ADDED FOR TRANSLATION	54

1. FINANCIAL PERFORMANCE

1.1 RESULTS FOR THE 1ST QUARTER OF 2021

In the first 3 months of 2021, net income reached 4.5 million Euros, a 0.2 million Euros increase (+4.4%) over the same period of the previous year. Net income increased reflecting mainly the following effects: (i) 2.9 million Euros increase in financial results (+21.0%), (ii) reduction of 1.1 million Euros of the Extraordinary Levy on the Energy Sector, (iii) reduction of 1.0 million Euros in income taxes (-7.4%), partially offset by (iv) the decreased 4.5 million Euros (-3.8%) in the Group EBITDA.

Similarly to the previous years, the results for 2021 reflect the continuation of the Extraordinary Levy on the Energy Sector (27.1 million Euros in 2021 and 28.2 million Euros in 2020¹ ).

Investment was 31.8 million Euros, a 17.9% y.o.y increase (+4.8 million Euros) and transfers to RAB increased 2.8 million Euros to 7.7 million Euros. Average RAB dropped by 173.0 million Euros (-4.7%), to 3,541.2 million Euros.

The average cost of debt was 1.6%, a 0.3 p.p. decrease y.o.y., and net debt reached 2,547.9 million Euros, a 7.4% decrease (-202.4 million Euros) over the same period of the previous year.

	March	March
MAIN INDICATORS (Millions of Euros)	2021	2020	Var.%
EBITDA	114.4	118.9	-3.8%
Financial results2	-10.8	-13.6	21.0%
Net income1	4.5	4.3	4.4%
Recurrent net income	31.6	32.5	-2.7%
Total Capex	31.8	27.0	17.9%
Transfers to RAB3 (at historic costs)	7.7	4.9	57.8%
Average RAB (at reference costs)	3 541.2	3 714.2	-4.7%
Net debt	2 547.9	2 750.3	-7.4%
Average cost of debt	1.6%	1.8%	-0.3p.p.

2 The net cost of 0.2 million Euros in March 2021 from electricity interconnection capacity auctions between Spain and Portugal – referred to as FTR (Financial Transaction Rights) was reclassified from financial income to Revenue.

3 Includes direct acquisitions (RAB related).

¹ The full amount of the levy was recorded in the 1st quarter of 2021 and 2020, according to the Portuguese Securities Market Commission (CMVM) recommendations.

Operational results – EBITDA

Domestic Power Transmission and Distribution Business

EBITDA for the domestic business reached 111.8 million Euros in the first 3 months of 2021, a 3.0% (-3.5 million Euros) drop over the same period of the previous year.

EBITDA - TRANSMISSION	March	March
(MILLIONS OF EUROS)	2021	2020	VAR.%
1) Revenues from assets	104.1	106.4	-2.1%
RAB remuneration	39.6	42.1	-5.9%
Lease revenues from hydro protection zone	0.2	0.2	-1.2%
Economic efficiency of investments	6.3	6.3	0.0%
Recovery of amortizations (net of investment subsidies)	53.4	53.4	0.0%
Amortização dos subsídios ao Investimento	4.7	4.5	5.1%
2) Revenues from opex	34.8	33.4	4.3%
3) Other revenues	3.3	3.4	-4.2%
4) Own works (capitalised in investment)	4.6	4.3	8.8%
5) Earnings on Construction (excl. own works capitalised in investment) – Concession assets	25.8	21.0	22.9%
6) OPEX	34.9	32.0	9.2%
Personnel costs1	13.6	13.6	0.3%
External costs	21.3	18.4	15.7%
7) Construction costs – Concession assets	25.8	21.0	22.9%
8) Provisions	0.0	0.0	n.m.
9) Impairments	0.1	0.1	0.0%
10) EBITDA (1+2+3+4+5-6-7-8-9)	111.8	115.3	-3.0%

The decrease in EBITDA resulted mainly from:

• The decrease of 2.5 million Euros in RAB remuneration (-5.9%) arising from:
  • o The 1.7 million Euros drop in the remuneration of electricity transmission regulated assets reflecting (i) the reduction in the base rate of return (RoR) from 4.6% in March 2020 to 4.5% in March 2021 – as a result of the negative evolution of the yields of the Portuguese Republic 10Y Treasury Bills, and (ii) the decrease of 113.7 million Euros (-5.5%)² in electricity transmission average RAB;
  • o Reduction of 0.7 million Euros in the remuneration of natural gas transmission regulated assets reflecting (i) the reduction in the rate of return from 4.6% in March 2020 to 4.5% in March 2021 – as a result of the negative evolution of the yields of the Portuguese Republic 10Y Treasury Bills; and (ii) the reduction of 42.3 million Euros (-4.4%) in natural gas transmission average RAB;
  • o Reduction of 0.1 million Euros in the remuneration of natural gas distribution regulated assets, reflecting (i) the reduction in the rate of return from 4.8% in March 2020 to 4.7% in March 2021 – as a result of the negative evolution of the yields of the Portuguese Republic 10Y Treasury Bills; and (ii) the reduction of 4.8 million Euros in natural gas distribution average RAB.

1 Includes training and seminars costs.

² Excludes hydroland (-12.3 million Euros).

Increase of 2.9 million Euros in Opex (+9.2%), explained by the increase of 2.9 million Euros in external costs, of which +1.1 million Euros in pass-through costs (costs accepted in the tariff) and +1.1 million Euros in forest clearing costs.

With respect to domestic business it is also important to note that the natural gas distribution business contributed with EBITDA of 11.2 million Euros.

International Business - Chile

The EBITDA for international businesses reached 2.6 million Euros in the first 3 months of 2021, a 1.0 million Euros (-27.9%) decrease over the same period of the previous year, resulting mainly from:

• EBITDA of Transemel an electrical power transmission company in Chile was 1.2 million Euros, a y.o.y. decrease of 0.4 million Euros (-25.1%) explained by the increase of 0.3 million Euros in opex;
• The decrease of 0.6 million Euros (-30.7%) in the recognized income from the 42.5% stake held by REN in the Chilean company Electrogas.

EBITDA - INTERNATIONAL (MILLIONS OF EUROS)	March 2021	March 2020	VAR.%
1) Revenues from the Transmission of Electrical Power	2.3	2.4	-6.5%
2) Other revenues	1.4	2.0	-30.7%
3) OPEX	1.1	0.8	28.7%
Personnel costs1	0.1	0.0	n.m.
External costs	1.0	0.8	19.6%
4) EBITDA (1+2-3)	2.6	3.6	-27.9%

Net income

Overall, the Group's net income for the first 3 months of 2021 reached 4.5 million Euros, a 0.2 million Euros y.o.y. increase (+4.4%).

This increase reflect mostly the following effects:

• i) increase of 2.9 million Euros in financial results (+21.0%) reflecting the decrease in the average cost of debt to 1.6% (- 0.3 p.p.) and the decrease in net debt to 2,547.9 million Euros (-202.4 million Euros; -7.4%);
• ii) reduction of 1.1 million Euros in the Extraordinary Levy on the Energy Sector (-3.8%) reflecting the decrease in the regulated asset base;
• iii) decrease of 1.0 million Euros in income taxes (-7.4%), reflecting mainly the decrease in EBT;
• iv) partially offset by the decrease of 4.5 million Euros (-3.8%) in the Group EBITDA, impacted by the decrease of 3.5 million Euros in the Domestic Power Transmission and Distribution business and the decrease of 1.0 million Euros in the contribution of international businesses.

1 Includes training and seminars costs.

Excluding non-recurring items, Net Income for the first 3 months of 2021 dropped 0.9 million Euros (-2.7%). Non-recurring items considered in the first 3 months of 2021 and 2020 are as follows:

• i) In 2021: i) Extraordinary Levy on the Energy Sector laid down in the State Budget for 2021 (27.1 million Euros);
• ii) In 2020: i) Extraordinary Levy on the Energy Sector laid down in the State Budget for 2020 (28.2 million Euros).

NET INCOME (MILLIONS OF EUROS)	March 2021	March 2020	VAR. %
EBITDA	114.4	118.9	-3.8%
Depreciations and amortizations	60.1	59.9	0.3%
Financial results	-10.8	-13.6	21.0%
Income tax expenses	11.9	12.9	-7.4%
Extraordinary levy on the energy sector 1	27.1	28.2	-3.8%
Net income	4.5	4.3	4.4%
Non-recurring items	27.1	28.2	-3.8%
Recurrent net income	31.6	32.5	-2.7%

¹ The full amount of the levy was recorded in the 1st quarter of 2021 and 2020, according to the Portuguese securities market commission (CMVM) recommendations.

1.2 AVERAGE RAB AND CAPEX

In the first 3 months of 2021, Capex reached 31.8 million Euros, a 17.9% y.o.y. increase (+4.8 million Euros), and transfers to RAB increased 2.8 million Euros (+57.8%) to 7.7 million Euros.

In electricity, investment was 24.3 million Euros, a 18.6% increase (+3.8 million Euros) over the same period of 2020, of which should be highlighted the projects of passage at 400 kV of the axis Falagueira-Estremoz-Divor-Pegões (5.7 million Euros) and the connection at 400 kV between Vieira do Minho - Ribeira de Pena - Feira (4.7 million Euros). Transfers to RAB were 3.0 million Euros, a y.o.y. increase of 2.0 million Euros.

In natural gas transmission, investment reached 2.5 million Euros, an increase of 72.0% (+1.1 million Euros) and transfers to RAB were 1.5 million Euros, an increase of 1.5 million Euros.

In natural gas distribution, investment was 3.6 million Euros, 37% for new supply points and 56% with the expansion of the distribution network, and transfers to RAB decreased 0.7 million Euros (-18.7%) to 3.2 million Euros.

Average RAB was 3,541.2 million Euros, a 173.0 million Euros (-4.7%) y.o.y decrease. In electricity, the average RAB (excluding lands) reached 1,940.4 million Euros (-113.7 million Euros, -5.5%), of which 1,027.1 million Euros in assets remunerated at a premium rate of return, while lands reached 210.2 million Euros (-12.3 million Euros, -5.5%). In natural gas transmission, the average RAB was 917.8 million Euros (-42.3 million Euros, -4.4%), while in natural gas distribution the average RAB reached 472.8 million Euros (-4.8 million Euros).

2. CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF 31 MARCH 2021 AND 31 DECEMBER 2020

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF 31 MARCH 2021 AND 31 DECEMBER 2020 (Amounts expressed in thousands of Euros – tEuros)
2. CONSOLIDATED FINANCIAL STATEMENTS
(Translation of statements of financial position originally issued in Portuguese - Note 33)
ASSETS	Notes	Mar 2021	Dec 2020
Non-current assets
Property, plant and equipment Intangible assets	5 5	131,479 4,103,292	127,119 4,130,562
Goodwill	6	5,337	5,367
Investments in associates and joint ventures	7	162,082	158,845
Investments in equity instruments at fair value through other comprehensive income Derivative financial instruments	9 and 10 9 and 12	141,780 19,632	150,850 25,685
Other financial assets	9	110	102
Trade and other receivables	9 and 11	47,335	45,507
Deferred tax assets	8	99,487 4,710,533	92,575 4,736,611
Current assets
Inventories		2,351	2,450
Trade and other receivables Cash and cash equivalents	9 and 11 9 and 13	396,383 236,221	448,099 61,499
		634,954	512,048
Total assets	4	5,345,488	5,248,658
EQUITY
Shareholders' equity
Share capital Own shares	14 14	667,191 (10,728)	667,191 (10,728)
Share premium		116,809	116,809
Reserves	15	296,014	289,887
Retained earnings Other changes in equity		350,148 (5,561)	240,853 (5,561)
Net profit for the period		4,491	109,249
Total equity		1,418,365	1,407,700
LIABILITIES Non-current liabilities
Borrowings	9 and 16	2,257,381	2,260,875
Liability for retirement benefits and others	17	99,306	100,507
Derivative financial instruments Provisions	9 and 12 18	26,684 8,508	29,215 8,508
Trade and other payables	19	419,351	371,886
Deferred tax liabilities	8	123,530	144,969
Current liabilities		2,934,760	2,915,960
Borrowings	9 and 16	542,886	562,557
Trade and other payables	9 and 19	403,977	353,800
Income tax payable	8 and 9	45,500 992,363	8,641 924,999
Total liabilities	4	3,927,123	3,840,958
Total equity and liabilities		5,345,488	5,248,658
	The accompanying notes form an integral part of the consolidated statement of financial position as of 31 March 2021.

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2021 AND 2020

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2021 AND 2020
(Amounts expressed in thousands of Euros – tEuros)
(Translation of statements of profit and loss originally issued in Portuguese - Note 33)
	Notes	Mar 2021	Mar 2020
Sales Services rendered	4 and 20 4 and 20	31 137,220	- 138,079
Revenue from construction of concession assets	4 and 21	30,476	25,288
Gains / (losses) from associates and joint ventures	7	1,473	2,046
Other operating income	22	7,323	7,440
Operating income		176,523	172,854
Cost of goods sold		(195)	(165)
Costs with construction of concession assets	21	(25,844)	(21,032)
External supplies and services	23	(17,568)	(13,211)
Personnel costs Depreciation and amortizations	24 5	(13,664) (60,087)	(13,493) (59,920)
Impairments	6	(94)	(94)
Other expenses	25	(4,584)	(5,970)
Operating costs		(122,038)	(113,884)
Operating results		54,485	58,969
Financial costs	26	(12,152)	(14,953)
Financial income	26	1,193	1,341
Financial results		(10,959)	(13,611)
Profit before income tax and ESEC		43,526	45,358
Income tax expense	8	(11,940)	(12,891)
Energy sector extraordinary contribution (ESEC)	27	(27,095)	(28,165)
Net profit for the period		4,491	4,302
Attributable to: Equity holders of the Company		4,491	4,302
Non-controlled interest		-	-
Consolidated profit for the period		4,491	4,302

The accompanying notes form an integral part of the consolidated statement of profit and loss for the three-month period ended 31 March 2021.

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2021 AND 2020

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2021 AND 2020
(Amounts expressed in thousands of Euros – tEuros)
(Translation of statements of other comprehensive income originally issued in Portuguese - Note 33)
	Notes	Mar 2021	Mar 2020
Consolidated Net Profit for the period		4,491	4,302
Items that will not be reclassified subsequently to profit or loss:
Actuarial gains / (losses) - gross of tax		67	(2,335)
Tax effect on actuarial gains / (losses)	8	(20)	700
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations	15	11,767	(2,132)
Increase / (decrease) in hedging reserves - cash flow derivatives	12	1,734	(2,045)
Tax effect on hedging reserves	8 and 12	(434)	512
Gain/(loss) in fair value reserve - Investments in equity instruments at fair
value through other comprehensive income	10	(9,070)	(8,447)
Tax effect on items recorded directly in equity	8 and 10	2,041	1,901
Other changes in equity	7	90	-
		10,666	(7,544)
Comprehensive income for the period
Attributable to:
Equity holders of the company Non-controlled interest		10,666 -	(7,544) -

The accompanying notes form an integral part of the consolidated statement of comprehensive income for the three-month period ended 31 March 2021.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2021 AND 2020

	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2021 AND 2020
						(Amounts expressed in thousands of Euros – tEuros)
	(Translation of statements of changes in equity originally issued in Portuguese - Note 33)
						Attributable to shareholders
		Own	Share	Legal	Fair Value reserve	Hedging reserve	Other	Other changes	Retained	Profit for the	Total
	Share capital		premium	Reserve	(Note 10)	(Note 12)	reserves	in equity	earnings	year
Changes in the year	Notes	shares
At 1 January 2020	667,191	(10,728)	116,809	118,828	51,966	(19,901)	165,787	(5,561)	242,853	118,899	1,446,144
Net profit of the period and other comprehensive income	-	-	-	-	(6,546)	(1,533)	(2,132)	-	(1,635)	4,302	(7,544)
Transfer to other reserves	-	-	-	-	-	-	-	-	118,899	(118,899)	-
At 31 March 2020	667,191	(10,728)	116,809	118,828	45,420	(21,434)	163,655	(5,561)	360,118	4,302	1,438,600
At 1 January 2021	667,191	(10,728)	116,809	125,075	48,905	(25,545)	141,452	(5,561)	240,853	109,249	1,407,700
Net profit of the period and other comprehensive income	-	-	-	-	(7,029)	1,300	11,857	-	47	4,491	10,666
Transfer to other reserves	-	-	-	-	-	-	-	-	109,249	(109,249)	-

The accompanying notes form an integral part of the consolidated statement of changes in equity for the three-month period ended 31 March 2021.

CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2021 AND 2020

(Amounts expressed in thousands of Euros – tEuros)

(Translation of statements of cash flow originally issued in Portuguese - Note 33)

	Notes	Mar 2021	Mar 2020
Cash flow from operating activities:
Cash receipts from customers		595,208 al	664,797 a)
Cash paid to suppliers		(348,498) a)	(508,520) a)
Cash paid to employees		(15,798)	(15,106)
Income tax received/paid		(2,109)	(2,195)
Other receipts / (payments) relating to operating activities		19,587	(8,079)
Net cash flows from operating activities (1)		248,391	130,896
Cash flow from investing activities:
Receipts related to:
Investment grants		1,286	184
Dividends	10	1,477	1,477
Payments related to:
Property, plant and equipment			(1,926)
Intangible assets - Concession assets		(47,242)	(42,567)
Net cash flow used in investing activities (2)		(44,480)	(42,833)
Cash flow from financing activities:
Receipts related to:
Borrowings		465,000	815,500
Payments related to:
Borrowings		(486,465)	(869,312)
Interests and other similar expense		(16,844)	(17,637)
Net cash from / (used in) financing activities (3)		(38,308)	(71,449)
Net (decrease) / increase in cash and cash equivalents (1)+(2)+(3)		165,603	16,614
Effect of exchange rates		264	(877)
Cash and cash equivalents at the beginning of the year	13	61,169	20,521
Cash and cash equivalents at the end of the period	13	227,037	36,259
Detail of cash and cash equivalents
Cash	13	24	28
Bank overdrafts	13	(9,185)	(1,610)
Bank deposits	13	236,197	37,841
		227,037	36,259

a) These amounts include payments and receipts relating to activities in which the Group acts as agent, income and costs being reversed in the consolidated statement of profit and loss.

The accompanying notes form an integral part of the consolidated statement of cash flow for the three-month period ended 31 March 2021.

3. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2021

(Translation of notes originally issued in Portuguese - Note 33)

1 GENERAL INFORMATION

REN – Redes Energéticas Nacionais, SGPS, S.A. (referred to in this document as "REN" or "the Company" together with its subsidiaries, referred to as "the Group" or "the REN Group"), with head office in Avenida Estados Unidos da América, 55 – Lisbon, resulted from the spin-off of the EDP Group, in accordance with Decree-Laws 7/91 of 8 January and 131/94 of 19 May, approved by the Shareholders' General Meeting held on 18 August 1994, with the objective of ensuring the overall management of the Public Electric Supply System (PES).

Up to 26 September 2006 the REN Group's operations were concentrated on the electricity business through REN – Rede Eléctrica Nacional, S.A. On 26 September 2006, as a result of the unbundling transaction of the gas business, the Group went through a significant change with the purchase of assets and financial participations relating to the transport, storage and regasification of gas activities, comprising a new business.

In the beginning of 2007, the Company was transformed into a holding company and, after the transfer of the electricity business to a new company incorporated on 26 September 2006, renamed REN – Serviços de Rede, S.A., changed its name to REN – Rede Eléctrica Nacional, S.A..

The Group presently has two main business segments, Electricity and Gas, and a secondary business of Telecommunications.

The Electricity business includes the following companies:

a) REN – Rede Eléctrica Nacional, S.A., incorporated on 26 September 2006, whose activities are carried out under a concession contract for a period of 50 years as from 2007 which establishes the overall management of the Public Electricity Supply System (Sistema Eléctrico de Abastecimento Público - SEP);

b) REN Trading, S.A., was incorporated on 13 June 2007, whose main function is the management of Power Purchase Agreements ("PPA") from Turbogás, S.A. and Tejo Energia, S.A., which did not terminate on 30 June 2007, date of the entry into force of the new Contracts for the Maintenance of the Contractual Equilibrium (Contratos para a Manutenção do Equilíbrio Contratual – CMEC). The operations of this company include the trading of electricity produced and of the installed production capacity, to domestic and international distributors;

c) Enondas, Energia das Ondas, S.A. was incorporated on 14 October 2010, its capital being fully owned by REN - Redes Energéticas Nacionais, SGPS, S.A., with the main activity being management of the concession to operate a pilot area for the production of electric energy from sea waves;

d) Empresa de Transmisión Eléctrica Transemel, S.A. ("Transemel"), was incorporated on 1 October 2019, following the expansion of the electricity business in Chile. The company's activity consists of providing electricity transmission and transformation services and the development, operation and commercialization of transmission systems, allowing free access to the different players in the electricity market in Chile.

The Gas business includes the following companies:

a) REN Gás, S.A. was incorporated on 29 March 2011, with the corporate purpose of promoting, developing and carrying out projects and developments in the gas sector, as well as defining the overall strategy and coordination of the companies in which it has direct interests;

b) REN Gasodutos, S.A., was incorporated on 26 September 2006, the capital of which was paid up through carve-in of the gas transport infrastructures (network, connections and compression);

c) REN Armazenagem, S.A., was incorporated on 26 September 2006, the capital of which was paid up through integration into the company of the gas underground storage assets;

d) REN Atlântico, Terminal de GNL, S.A., acquired under the acquisition of the gas business, previously designated "SGNL – Sociedade Portuguesa de Gás Natural Liquefeito". The operations of this company comprise the supply, reception, storage and re-gasification of liquefied gas through the GNL marine terminal, being responsible for the construction, utilization and maintenance of the necessary infrastructures;

e) REN Portgás Distribuição, S.A. ("REN Portgás"), acquired as part of the expansion of the gas business on 4 October 2017. The operations of this company comprise the distribution of gas in low and medium pressure, as well as production and distribution of other channelled fuel gases and other activities related, namely the production and sale of flaring equipment.

The operations of the companies indicated in b) to d) above are developed in accordance with the three concession contracts separately granted for periods of 40 years starting 2006. The company indicated in e) above develops its activities in accordance with one concession contract granted for 40 years starting 2008.

The telecommunications business is managed by RENTELECOM – Comunicações, S.A. whose activity is the establishment, management and operation of telecommunications infrastructures and systems, the rendering of telecommunications services and optimizing the optical fibre excess capacity of the installations owned by REN Group.

REN SGPS fully owns REN Serviços, S.A., a company whose purpose is the rendering of services in the energetic area and the general services of business development support to group companies and third parties, receiving a fee for the services rendered, as well as the management of financial participations in other companies.

On 10 May 2013 REN Finance, B.V., a company based in Netherlands and fully owned by REN SGPS, whose purpose is to participate, finance, collaborate and lead the management of group companies, was incorporated.

Additionally, on 24 May 2013, together with China Electric Power Research Institute, a State Grid Group company, Centro de Investigação em Energia REN – State Grid, S.A. ("Centro de Investigação") was incorporated under a Joint Venture Agreement on which REN holds 1,500,000 shares representing 50% of the total share capital.

The purpose of this company is to implement a Research and Development centre in Portugal, dedicated to the research, development, innovation and demonstration in the areas of electricity transmission and systems management, the rendering of advisory services and education and training services as part of these activities, as well as performing all related activities and complementary services to its object.

On 14 December 2016, Aério Chile SPA was incorporated, a company fully owned by REN Serviços, S.A., headquartered in Santiago, Chile, whose purpose is to realize investments in assets, shares and rights of companies and associations.

In addition, on November 21, 2018, REN PRO, S.A. was incorporated, a company fully owned by REN, headquartered in Lisbon, whose purpose is to provide support services, namely administrative, logistical, communication and development support of the business, as well as business consulting, in a remunerated manner, either to companies that are in a group relation or to any third party, and IT consulting.

On 17 July 2019, Apolo Chile SPA was incorporated, a company fully owned by REN Serviços, S.A., headquartered in Santiago, Chile, whose purpose is to realize investments in assets, shares and rights of companies and associations of entities essentially related to the electric transmission sector.

As of 31 March 2021, REN also holds:

a) 42.5% interest in the share capital of Electrogas, S.A., a provider of gas and other fuels transportation. The participation was acquired on 7 February 2017;

b) 40% interest in the share capital of OMIP - Operador do Mercado Ibérico (Portugal), SGPS, S.A. ("OMIP SGPS"), being its purpose the management of participations in other companies as an indirect way of exercising economic activities;

c) 10% interest in the share capital of OMEL - Operador do Mercado Ibérico de Energia, S.A., the Spanish pole of the Sole Operator;

d) 1% interest in the share capital of Red Eléctrica Corporación, S.A. ("REE"), entity in charge of the electricity network management in Spain;

e) 7.9% interest in the share capital of Coreso, S.A. ("Coreso"), entity that assists the European transmission system operators ("TSO"), in coordination and safety activities to ensure the reliability of Europe's electricity supply;

f) Participations in the share capital of: (i) Hidroeléctrica de Cahora Bassa, S.A. ("HCB"), participation of 7.5%; (ii) MIBGÁS, S.A., participation of 6.67%; and (iii) MIBGÁS Derivatives, S.A., participation of 9.7%.

1.1. Consolidation perimeter

	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
1.1.	Consolidation perimeter
	The following companies were included in the consolidation perimeter as of 31 March 2021 and 31 December 2020:
		Mar 2021		Dec 2020
Designation / adress	Activity	% Owned Group	Individual	% Owned Group	Individual
Parent company: REN - Redes Energéticas Nacionais, SGPS, S.A.	Holding company	-	-	-	-
Subsidiaries:
REN - Rede Eléctrica Nacional, S.A. Av. Estados Unidos da América, 55 - Lisboa	National electricity transmission network operator (high and very high tension)	100%	100%	100%	100%
REN Trading, S.A. Praça de Alvalade, nº7 - 12º Dto, Lisboa	Purchase and sale, import and export of electricity and natural gas	100%	100%	100%	100%
Enondas-Energia das Ondas, S.A. Mata do Urso - Guarda Norte - Carriço- Pombal	Management of the concession to operate a pilot area for the production of electric energy from ocean waves	100%	100%	100%	100%
RENTELECOM - Comunicações S.A. Av. Estados Unidos da América, 55 - Lisboa	Telecommunications network operation	100%	100%	100%	100%
REN - Serviços, S.A. Av. Estados Unidos da América, 55 - Lisboa	Back office and management of participations	100%	100%	100%	100%
REN Finance, B.V. De Cuserstraat, 93, 1081 CN Amsterdam, The Netherlands	Participate, finance, collaborate, conduct management of companies related to REN Group	100%	100%	100%	100%
REN PRO, S.A. Av. Estados Unidos da América, 55 - Lisboa	Communication and Sustainability, Marketing, Business Management, Business Development and Consulting and IT Projects	100%	100%	100%	100%
REN Atlântico , Terminal de GNL, S.A. Terminal de GNL - Sines	Liquified Natural Gas Terminal maintenance and regasification operation	100%	100%	100%	100%
Owned by REN Serviços, S.A.: REN Gás, S.A.	Management of projects and ventures in the natural gas sector	100%	-	100%	-
Av. Estados Unidos da América, 55 -12º - Lisboa Aério Chile SPA
Santiago do Chile	Investments in assets, shares, companies and associations	100%	-	100%	-
Apolo Chile SPA Santiago do Chile	Investments in assets, shares, companies and associations	100%	-	100%	-
Owned by REN Gás, S.A.: REN - Armazenagem, S.A. Mata do Urso - Guarda Norte - Carriço- Pombal	Underground storage developement, maintenance and operation	100%	-	100%	-
REN - Gasodutos, S.A. Estrada Nacional 116, km 32,25 - Vila de Rei - Bucelas	National Natural Gas Transport operator and natural gas overall manager	100%	-	100%	-
REN Portgás Distribuição, S.A. Rua Linhas de Torres, 41 - Porto	Distribution of natural gas	100%	-	100%	-
Owned by Apolo Chile SPA (99.99%) and Aerio Chile SPA (<0.001%): Empresa de Transmisión Eléctrica Transemel, S.A. Santiago do Chile	Transmission and transformation of electricity, allowing free access to different players in the electricity market in Chile	100%	-	100%	-

Changes in the consolidation perimeter

- 2021

There were no changes to the consolidation perimeter in 2021 compared to that reported on 31 December 2020.

• 2020

There were no changes to the consolidation perimeter in 2020 compared to that reported on 31 December 2019.

1.2. Approval of the consolidated financial statements

These interim consolidated financial statements were approved by the Board of Directors at a meeting held on 13 May 2021. The Board of Directors believes that the consolidated financial statements fairly present the financial position of the companies included in the consolidation, the consolidated results of their operations, their consolidated comprehensive income, the consolidated changes in their equity and their consolidated cash flows in accordance with the International Financial Reporting Standards for interim financial statements as endorsed by the European Union (IAS 34).

2 BASIS OF PRESENTATION

The consolidated financial statements for the three-month period ended 31 March 2021 were prepared in accordance with IAS 34 - Interim Financial Reporting Standards, therefore do not include all information required for annual financial statements so should be read in conjunction with the annual financial statements issued for the year ended 31 December 2020.

The Board of Directors evaluated the Group's going concern capability, based on all the relevant information, facts and circumstances, of financial, commercial and other natures, including subsequent events occurred after the financial statement report date. Particularly, as of 31 March 2021, current liabilities in the amount of 992,363 thousand Euros are greater than current assets, which total 634,954 thousand Euros.

However, in addition to the consolidated results and cash flows estimated for the following twelve months, the Group has, as of 31 March 2021, credit lines in the form of commercial paper available for use in the amount of 1,245,000 thousands Euros (Note 16). Additionally, the Group has, as of 31 March 2021, 80,000 thousand Euros in credit lines contracted and not used (Note 16).

In result of this assessment, the Board concludes that the Group has the adequate resources to proceed its activity, not intending to cease its operations in short term, and therefore considers adequate the use of a going concern basis in the preparation of the financial statements.

The consolidated financial statements are presented in thousands of Euros – tEuros, rounded to the thousand closer.

As a result of the pandemic corona virus (COVID-19), there was a general worsening of the global climate of uncertainty, with negative effects on the prospects for the world economy evolution and financial markets.

The REN Group is actively monitoring this situation, has activated all the necessary plans and, although the situation is unpredictable, REN Group does not have or estimate to have, as of this date, significant effects on its operability and regulatory duties. It should be noted that the REN Group operates, essentially, in two business areas, Electricity and Gas, according to concession contracts attributed to the Group. These concession contracts are regulated, which in a certain way minimizes the possible impacts of the pandemic.

Additionally, it should be noted, and although there are no significant impacts as mentioned, there was some delay in the execution of some investment projects, in the period from March to April 2020, coinciding with the moment of general confinement in the country, but we estimate a recovery of these delays until the end of the year 2021.

There were no significant changes in the long-term expectation of recovery of the Group's investments and financial holdings.

On the present date, and taking into account the above and Note 5 - Main Estimates and Judgments, disclosed in the annex to the 2020 consolidated financial statements, the Group does not foresee any changes in the most relevant estimates, in the case of Provisions, Assumptions Actuarial, Tangible and Intangible Fixed Assets, Impairment, Fair Value of Financial Instruments, Impairment of Goodwill and Tariff deviations.

3 MAIN ACCOUNTING POLICIES

The consolidated financial statements were prepared for interim financial reporting purposes (IAS 34), on a going concern basis from the books and accounting records of the companies included in the consolidation, maintained in accordance with the accounting standards in force in Portugal, adjusted in the consolidation process so that the financial statements are presented in accordance with interim Financial Reporting Standards as endorsed by the European Union in force for the years beginning as from 1 January 2021.

Such Financial Reporting standards include International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board ("IASB"), International Accounting Standards (IAS), issued by the International Accounting Standards Committee ("IASC") and respective IFRIC and SIC interpretations, issued by the International Financial Reporting Interpretation Committee ("IFRIC") and Standard Interpretation Committee ("SIC"), that have been endorsed by the European Union. The standards and interpretations are hereinafter referred generically to as IFRS.

The accounting policies used to prepare these consolidated financial statements are consistent, in all material respects, with the policies used to prepare the consolidated financial statements for the year ended 31 December 2020, as explained in the notes to the consolidated financial statements for 2020, except for the adoption of new effective standards for periods beginning on or after 1 January 2021.

The Group has not previously adopted any standard, interpretation or amendment that is not yet in force.

The estimates and assumptions with impact on REN's consolidated financial statements are continuously evaluated, representing at each reporting date the Board of Directors best estimates, considering historical performance, past accumulated experience and expectations about future events that, under the circumstances, are believed to be reasonable. There were no changes in the main estimates and judgments presented in relation to the three-month period ended on 31 March 2021 and compared to the year ended on 31 December 2020.

Adoption of new standards, interpretations, amendments and revisions

The following standards, interpretations, amendments and revisions have been endorsed by the European Union with mandatory application in effective for annual periods beginning on or after 1 January 2021:

Amendments to IFRS 4 - Insurance Contracts: Deferral of IFRS 9

These amendments are related to the previous insurance contracts Standard (IFRS 4), so that eligible insurers can still apply IFRS 9 - Financial Instruments alongside IFRS 17. The amendment provides some entities with a temporary exemption from application of IFRS 9 and gives all entities with insurance contracts the option, following full adoption of IFRS 9, to present changes in fair value on qualifying designated financial assets in other comprehensive income (OCI) instead of profit or loss (referred to as the "overlay approach"). The adoption of these amendments does not result in significant impacts on REN's consolidated financial statements.

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform – Phase 2

These amendments finalises the Board's response to the ongoing reform of inter-bank offered rates (IBOR) and other interest rate benchmarks. These amendments complement those issued in 2019 and focus on the effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform. The adoption of these amendments does not result in significant impacts on REN's consolidated financial statements.

There are no standards, interpretations, amendments and revisions endorsed by the European Union with mandatory application in future economic exercises at the date of approval of these financial statements.

Standards and interpretations, amended or revised, not endorsed by the European Union

The following standards, interpretations, amendments and revisions, with mandatory application in future years, have not, until the date of preparation of these consolidated financial statements, been endorsed by the European Union:

	Applicable for
Standard	financial years	Resume
	beginning
IFRS 17 -	01/jan/23	This standard is intended to replace IFRS 4 and requires that all insurance contracts to be
Insurance Contracts		accounted for consistently.
		These amendments aim to promote consistency in applying the requirements by helping companies
		determine whether, in the statement of financial position, debt and other liabilities with an
Amendments to IAS 1 -		uncertain settlement date should be classified as current (due or potentially due to be settled
Presentation of Financial Statements:		within one year) or non-current. The amendments include clarifying the classification requirements
Classification of Liabilities as Current or	01/jan/23	for debt a company might settle by converting it into equity. The amendments clarify, not change,
Non-current		existing requirements, and so are not expected to affect companies' financial statements
		significantly. However, they could result in companies reclassifying some liabilities from current to
		non-current, and vice versa.
		These amendments clarify the wording or correct minor consequences, oversights or conflits
	01/jan/22	between requirements in the Standards. Amendments to IFRS 3 update a reference in IFRS 3 to the
		Conceptual Framework for Financial Reporting without changing the accounting requirements for
		business combinations. Amendments to IAS 16 prohibit a company from deducting from the cost of
Amendments to IFRS 3, IAS 16, IAS 37 and		property, plant and equipment amounts received from selling items produced while the company is
Annual Improvements 2018-2020		preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and
		related cost in profit or loss. Amendments to IAS 37 specify which costs a company includes when
		assessing whether a contract will be loss-making. Annual Improvements make minor amendments to
		IFRS 1 - First-time Adoption of International Financial Reporting Standards, IFRS 9 - Financial
		Instruments, IAS 41 - Agriculture and the illustrative examples accompanying IFRS 16 - Leases.
		These amendments aim to change the requirements in IAS 1 with regard to disclosure of accounting
Amendments to IAS 1 and IFRS 2 -		policies. An entity discloses its material accounting policies, instead of its significant accounting
Disclosure of Accounting policies	01/jan/23	policies, so there are examples and explanations to identify a material accounting policy. The
		materiality concept is demonstrated in IFRS 2 through the "four-step materiality process".
		These amendments clarify the definition of accounting estimates. Under the new definition,
Amendments to IAS 8 -		accounting estimates are "monetary amounts in financial statements that are subject to
		measurement uncertainty". Entities develop accounting estimates if accounting policies require
Accounting policies, Changes in		items in financial statements to be measured in a way that involves measurement uncertainty. A
Accounting Estimates and Errors:	01/jan/23	change in accounting estimate that results from new information or new developments is not the
Definition of Accounting Estimates		correction of an error. In addition, the effects of a change of this type used to develop an
		accounting estimate are changes in accounting estimates if they do not result from the correction
		of prior period errors.

These standards and interpretations were not yet endorsed by the European Union and consequently REN has not adopted them on the 31 March 2021 consolidated financial statements.

4 SEGMENT REPORTING

	4 SEGMENT REPORTING
	The REN Group is organised in two main business segments, Electricity and Gas and one secondary segment. The electricity segment includes the transmission of electricity in very high voltage, overall management of the public electricity system and management of the power purchase agreements (PPA) not terminated at 30 June 2007, the pilot zone for electricity production from sea wave and the transmission and transportation of electricity in Chile. The gas segment includes high pressure gas transmission and overall management of the national natural gas supply system, as well as the operation of regasification at the LNG Terminal, the distribution of natural gas in low and medium pressure and the underground storage of natural gas.
	Although the activities of the LNG Terminal and underground storage can be seen as separate from the transport of gas and overall management of the national natural gas supply system, since these operations provide services to the same users and they are complementary services, it was considered that it is subject to the same risks and benefits.
	The telecommunications segment is presented separately although it does not qualify for disclosure.
	The results by segment for the three-month period ended 31 March 2021 were as follows:
		Electricity	Gas	Telecommunications	Others	Eliminations	Consolidated
Sales and services provided		87,795	49,707	1,777	8,826	(10,854)	137,251
Inter-segments		440	1,707	-	8,707	(10,854)	-
Revenues from external customers		87,355	48,000	1,777	119	-	137,251
	Revenue from construction of concession assets	24,316	6,160	-	-	-	30,476
Cost with construction of concession assets		(20,858)	(4,986)	-	-	-	(25,844)
Personnel costs	Gains / (losses) from associates and joint ventures	- (16,192)	- (10,475)	- (714)	1,473 (2,612)	- 12,424	1,473 (17,568)
Employee compensation and benefit expense		(4,354)	(3,125)	(75)	(6,110)	-	(13,664)
Other expenses and operating income		4,175	(8)	4	(57)	(1,570)	2,544
Operating cash flow		74,882	37,273	993	1,519	-	114,666
Non reimbursursable expenses
Depreciation and amortizations Impairments		(39,333) -	(20,706) -	(1) -	(47) (94)	- -	(60,087) (94)
Financial results
Financial income		173	1,153	2	28,521	(28,656)	1,193
Financial costs Profit before income tax and ESEC		(5,881) 29,842	(4,611) 13,108	- 994	(30,317) (418)	28,656 -	(12,152) 43,526
Income tax expense		(7,984)	(3,680)	(238)	(39)	-	(11,940)
Energy sector extraordinary contribution (ESEC) Profit for the period		(16,605) 5,253	(10,490) (1,061)	- 755	- (456)	- -	(27,095) 4,491

	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
The results by segment for the three-month period ended 31 March 2020 were as follows:
	Electricity	Gas	Telecommunications	Others	Eliminations	Consolidated
Sales and services provided	88,640	49,682	1,688	8,515	(10,446)	138,079
Inter-segments	493	1,521	-	8,432	(10,446)	-
Revenues from external customers	88,147	48,162	1,688	83	-	138,079
Revenue from construction of concession assets	20,494 (17,310)	4,794 (3,722)	- -	- -	- -	25,288 (21,032)
		-	-	2,046	-	2,046
Cost with construction of concession assets
Gains / (losses) from associates and joint ventures	-
Personnel costs	(12,653)	(9,179)	(691)	(2,761)	12,072	(13,211)
Employee compensation and benefit expense Other expenses and operating income	(4,493) 3,000	(3,045) (44)	(72) (3)	(5,883) (21)	- (1,626)	(13,493) 1,306
Operating cash flow	77,678	38,487	922	1,896	-	118,983
Non reimbursursable expenses
Depreciation and amortizations	(39,460)	(20,411)	(5)	(44)	-	(59,920)
Impairments	-	-	-	(94)	-	(94)
Financial results
Financial income	260	1,188	6	37,227	(37,340)	1,341
Financial costs Profit before income tax and ESEC	(10,523) 27,956	(4,789) 14,475	- 923	(36,980) 2,004	37,340 -	(14,953) 45,358
Income tax expense	(8,101)	(3,985)	(221)	(584)	-	(12,891)
Energy sector extraordinary contribution (ESEC)	(17,392)	(10,773)	-	-	-	(28,165)
Profit for the period	2,463	(283)	701	1,420	-	4,302

Revenue included in the segment "Others" is essentially related to the services provided by the management and back office to Group entities as well as third parties.

Assets and liabilities by segment as well as capital expenditures for the three-month period ended 31 March 2021 were as follows:

	Electricity	Gas	Telecommunications	Others	Eliminations	Consolidated
Segment assets
Group investments held	-	859,646	-	2,126,397	(2,986,043)	-
Property, plant and equipment and intangible assets	2,688,933	1,545,324	3	510	-	4,234,771
Other assets	491,203	397,275	8,946	6,373,453	(6,160,159)	1,110,717
Total assets	3,180,136	2,802,245	8,949	8,500,359	(9,146,202)	5,345,488
Total liabilities	2,336,252	1,311,397	6,099	6,433,534	(6,160,159)	3,927,123
Capital expenditure - total	25,545	6,160	-	90	-	31,795
Capital expenditure - property, plant and equipment (Note 5)	1,229	-	-	90	-	1,319
Capital expenditure - intangible assets (Note 5)	24,316	6,160	-	-	-	30,476
Investments in associates (Note 7)	-	-	-	159,365	-	159,365
Investments in joint ventures (Note 7)	-	-	-	2,716	-	2,716

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
Assets and liabilities by segment at 31 December 2020 as well as investments on tangible assets and intangible assets were
as follows:
	Electricity	Gas	Telecommunications	Others	Eliminations	Consolidated
Segment assets
Group investments held	-	891,981	-	2,220,494	(3,112,474)	-
Property, plant and equipment and intangible assets	2,697,339	1,559,871	5	467	-	4,257,681
Other assets	542,035	386,983	8,621	6,249,669	(6,196,330)	990,977
Total assets	3,239,374	2,838,834	8,625	8,470,629	(9,308,804)	5,248,658
Total liabilities	2,350,210	1,286,030	4,069	6,396,979	(6,196,330)	3,840,958
Capital expenditure - total	138,496	34,452	-	347	-	173,294
Capital expenditure - property, plant and equipment (Note 5)	12,091	-	-	347	-	12,438
Capital expenditure - intangible assets (Note 5)	126,405	34,452	-	-	-	160,856
Investments in associates (Note 7)	-	-	-	156,183	-	156,183

The liabilities included in the segment "Others" are essentially related to external borrowings obtained directly by REN SGPS, S.A. and REN Finance, BV for financing the several activities of the Group.

The captions of the statement of financial position and profit and loss for each segment result of the amounts considered directly in the individual financial statements of each company that belongs to the Group included in the perimeter of each segment, corrected with the eliminations of the inter-segment transactions.

5 TANGIBLE AND INTANGIBLE ASSETS

During the three-month period ended 31 March 2021, the changes in tangible and intangible assets were as follows:

				Property, plant and equipment				Intangible assets
	Transmission and electronic equipment	Transport equipment	Office equipment	Property, plant and equipment in progress	Assets in progress	Total	Concession assets	Concession assets in progress	Other intangible assets	Total	Total
Cost:
At 1 January 2021	97,396	958	712	1,231		32,260 132,557	8,377,108	176,374		60,587 8,614,069	8,746,626
Additions		- 90	-	-	1,229	1,319	258	30,218	-	30,476	31,795
Disposals, write-offs and impairments		- (28)	(4)	-	-	(32)	(9,436)	-	-	(9,436)	(9,468)
Transfers	-	-	-	-	-	-	7,543	(7,543)	-	-	-
Exchange rate differences	3,241	1	136	-	956	4,334	-	-	1,836	1,836	6,170
At 31 March 2021	100,637	1,021	844	1,231		34,445 138,178	8,375,473	199,049		62,423 8,636,945	8,775,123
Accumulated depreciation:
At 1 January 2021	(4,047)	(516)	(582)	(32)	(261)	(5,437)	(4,483,720)	-		212 (4,483,508) (4,488,946)
Depreciation charge	(834)	(49)	(12)	-	-	(895)	(59,190)	-	(2)	(59,192)	(60,087)
Depreciation of disposals and write-offs and other reclassifications	-	28	4	-	261	293	9,436	-	(15)	9,421	9,714
Exchange rate differences	(724)	(1)	66	-	-	(659)	-	-	(374)	(374)	(1,033)
At 31 March 2021	(5,605)	(538)	(524)	(32)		- (6,698)	(4,533,474)	-		(179) (4,533,653) (4,540,351)
Net book value:
At 1 January 2021	93,349	442	131	1,199		31,999 127,119	3,893,388	176,374		60,799 4,130,562	4,257,681
At 31 March 2021	95,032	483	321	1,199		34,445 131,479	3,841,999	199,049		62,244 4,103,292	4,234,771

								REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
								The changes in tangible and intangible assets in the in the year ended 31 December 2020 were as follows:
				Property, plant and equipment					Intangible assets
		Transmission and electronic	Transport	Office equipment	Property, plant	Assets in progress	Total	Concession assets	Concession assets	Other intangible assets	Total	Total
		equipment	equipment		and equipment in progress				in progress
Cost:
At 1 January 2020 Additions		103,937 -	944 312	685 35	1,270 -		20,743 127,579 12,091 12,438	8,356,669 4,807	97,606 156,049	-	66,581 8,520,856 160,856	8,648,435 173,294
Disposals, write-offs and impairments		-	(297)	-	-	-	(297)	(61,649)	-	-	(61,649)	(61,946)
Transfers		-	-	-	-	-	-	77,281	(77,281)	-	-	-
Exchange rate differences		(6,541)	(1)	(8)	(39)	(574)	(7,163)	-	-	(5,994)	(5,994)	(13,157)
At 31 December 2020		97,396	958	712	1,231		32,260 132,557	8,377,108	176,374		60,587 8,614,069	8,746,626
Accumulated depreciation: At 1 January 2020		(1,000)	(567)	(333)	(30)	-	(1,929)	(4,305,938)	-	(2)	(4,305,940)	(4,307,869)
Depreciation charge		(3,246)	(213)	(27)	(2)	-	(3,488)	(237,665)	-	(12)	(237,677)	(241,165)
Depreciation of disposals and write-offs and other reclassifications		199	264	(222)	-	(261)	(20)	59,883	-	225	60,108	60,088
Exchange rate differences		-	-	-	-	-	-	-	-	-	-	-
At 31 December 2020		(4,047)	(516)	(582)	(32)	(261)	(5,437)	(4,483,720)	-		212 (4,483,508)	(4,488,946)
Net book value:
At 1 January 2020		102,937	377	353	1,240		20,743 125,649	4,050,731	97,606		66,579 4,214,916	4,340,564
At 31 December 2020		93,349	442	131	1,199		31,999 127,119	3,893,388	176,374		60,799 4,130,562	4,257,681
								The main additions verified in the periods ended 31 March 2021 and 31 December 2020 are made up as follows:
									Mar 2021	Dec 2020
		Electricity segment:
				Power line construction (220 KV, 150 KV and others)					3,224	16,660
		Power line construction (400 KV)							10,457	48,811
		Construction of new substations							4,463	20,561
		Substation Expansion							3,461	21,249
		Other renovations in substations							714	3,419
									1,272	8,933
	Telecommunications and information system

					The main additions verified in the periods ended 31 March 2021 and 31 December 2020 are made up as follows:
	Electricity segment:
	Power line construction (220 KV, 150 KV and others)					3,224	16,660
	Power line construction (400 KV)					10,457	48,811
	Construction of new substations					4,463	20,561
	Substation Expansion					3,461	21,249
	Other renovations in substations					714	3,419
	Telecommunications and information system					1,272	8,933
	Pilot zone construction - wave energy					45	178
	Buildings related to concession					192	1,029
	Transmission and transformation of electricity in Chile					1,229	12,091
Other assets						490	5,564
Gas segment:
	Expansion and improvements to gas transmission network					1,366	6,442
	Construction project of cavity underground storage of natural gas in Pombal					821	2,200
	Construction project and operating upgrade - LNG facilities					342	3,224
	Natural gas distribution projects					3,631	22,586
	Others segments:
Other assets						90	347
				Total of additions		31,795	173,294

The main transfers that were concluded and began activity during the periods ended 31 March 2021 and 31 December 2020 are made up as follows:

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
The main transfers that were concluded and began activity during the periods ended 31 March 2021 and 31 December 2020
	Mar 2021	Dec 2020
Electricity segment:
Power line construction (220 KV, 150 KV and others)	-	3,856
Power line construction (400 KV)	-	8,896
Substation Expansion	2,656	12,516
Other renovations in substations	10	5,945
Telecommunications and information system	32	8,367
Buildings related to concession	-	1,973
Other assets under concession	-	1,863
Gas segment: Expansion and improvements to natural gas transmission network	1,073	5,484
Construction project of cavity underground storage of natural gas in Pombal	-	1,050
Construction project and operating upgrade - LNG facilities	429	5,323
Natural gas distribution and transmission projects	3,343	22,008
Total of transfers	7,543	77,281
The tangible and intangible assets in progress at 31 March 2021 and 31 December 2020 are as follows:
	Mar 2021	Dec 2020
Electricity segment:
Power line construction (400 KV, 220 KV, 150 KV and others)	117,728	104,047
Substation Expansion	24,214	22,773
New substations projects	34,355	29,892
Buildings related to concession	1,607	1,416
Transmission and transformation of electricity in Chile Other projects	34,445 3,329	31,999 1,719

The tangible and intangible assets in progress at 31 March 2021 and 31 December 2020 are as follows:

Gas segment:
The tangible and intangible assets in progress at 31 March 2021 and 31 December 2020 are as follows:
Electricity segment:
Power line construction (400 KV, 220 KV, 150 KV and others)	117,728	104,047
Substation Expansion	24,214	22,773
New substations projects	34,355	29,892
Buildings related to concession	1,607	1,416
Transmission and transformation of electricity in Chile Other projects	34,445 3,329	31,999 1,719
Gas segment:
Expansion and improvements to natural gas transmission network	7,968	7,700
Construction project of cavity underground storage of natural gas in Pombal	4,696	3,875
Construction project and operating upgrade - LNG facilities	461	548
Natural gas distribution projects	4,690	4,404

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
Borrowing costs capitalized on intangible assets in progress in the three-month period ended 31 March 2021 amounted to 683 thousand Euros (2,392 thousand Euros as of 31 December 2020), while overhead, management and other costs capitalized amounted to 3,948 thousand Euros (16,429 thousand Euros as of 31 December 2020) (Note 21). The net book value of the intangible assets acquired through finance lease contracts at 31 March 2021 and 31 December	Mar 2021	Dec 2020
Cost Accumulated depreciation and amortization	8,401 (4,186)	8,251 (3,705)

6 GOODWILL

Net book value 4,215 4,546 6 GOODWILL Goodwill represents the difference between the amount paid for the acquisition and the net assets fair value of the companies acquired, with reference to the acquisition date, and at 31 March 2021 and 31 December 2020 is detailed as follows: Year of Acquisition % Mar 2021 Dec 2020 Subsidiaries acquisition cost REN Atlântico, Terminal de GNL, S.A. 2006 32,580 100% 1,793 1,887 REN Portgás Distribuição, S.A. 2017 503,015 100% 1,235 1,235 Empresa de Transmisión Eléctrica Transemel, S.A. 2019 155,482 100% 2,310 2,245 5,337	2020 was as follows:		The net book value of the intangible assets acquired through finance lease contracts at 31 March 2021 and 31 December
					5,367
The movement in the Goodwill caption for the periods ended 31 March 2021 and 31 December 2020 was:
At 1 January 2020 Exchange rate differences At 31 December 2020 Exchange rate differences Subsidiaries Increases Decreases Increases Decreases At 31 March 2021
REN Atlântico, Terminal de GNL, S.A. 2,264 - (377) - 1,887 - (94) - 1,793 REN Portgás Distribuição, S.A. 1,235 - - - 1,235 - - - 1,235

Subsidiaries	At 1 January 2020

7 INVESTMENTS IN ASSOCIATES AND JOIN VENTURES

7	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
	INVESTMENTS IN ASSOCIATES AND JOIN VENTURES
	At 31 March 2021 and 31 December 2020, the financial information regarding the financial interest held is as follows:
					31 March 2021
	Activity	Head office	Share capital	Current assets	Non-current assets	Current liabilities	Non-current liabilities	Revenues	Net profit/(loss)	Share capital	%	Carrying amount	Group share of profit / (loss)
Equity method:
Associate: OMIP - Operador do Mercado			2,610	778	28,480	227	-	221	112	29,031	40	11,405	24
Ibérico (Portugal), SGPS, S.A.	Holding company	Lisbon
Electrogas, S.A.	Gas Transportation	Chile	18,137	12,755	34,168	14,921	7,592	6,466	3,279	24,410	42.5	147,960	1,394
Joint venture:												159,365	1,418
Centro de Investigação em Energia REN - STATE GRID, S.A.	Research & Development	Lisbon	3,000	6,699	87	1,347	-	464	110	5,439	50	2,716	55
												162,082	1,473
					31 December 2020		Non-current		Net	Share		Carrying	Group share of
								Revenues	profit/(loss)	capital	%	amount	profit / (loss)
	Activity	Head office	Share capital	Current assets	Non-current assets	Current liabilities	liabilities
Equity method:
Associate: OMIP - Operador do Mercado Ibérico (Portugal), SGPS, S.A.	Holding company	Lisbon	2,610	902	28,295	277	-	1,091	524	28,919	40	11,381	240
Electrogas, S.A.	Gas Transportation	Chile	17,330	8,843	33,619	3,652	7,425	31,247	17,016	31,385	42.5	144,802	7,232
												156,183	7,472
Joint venture: Centro de Investigação em Energia	Research &		3,000	6,486	98	1,251	3	1,549	51	5,329	50	2,662	26
REN - STATE GRID, S.A.	Development	Lisbon
												158,845	7,498

											162,082	1,473
				31 December 2020
		Share capital	Current assets	Non-current assets	Current liabilities	Non-current liabilities	Revenues	Net profit/(loss)	Share capital	%	Carrying amount	Group share of profit / (loss)
Equity method: Associate:
OMIP - Operador do Mercado
Joint venture:
Centro de Investigação em Energia
											158,845	7,498
Associates
	The changes in the caption "Investments in associates" during the periods ended at 31 March 2021 and 31 December 2020
was as follows:
	Investments in associates
	At 1 de january de 2020								169,642
	Effect of applying the equity method - Net Profit								7,472
	Currency Translation Reserves								(13,231)
	Dividends of Electrogas								(7,469)
	Receipt of Supplementary Obligations of OMIP								(220)
	Other changes in equity								(11)
	At 31 December 2020								156,183
	Effect of applying the equity method - Net Profit								1,418
	Currency Translation Reserves								6,781

Associates

158,845	7,498 The changes in the caption "Investments in associates" during the periods ended at 31 March 2021 and 31 December 2020 Investments in associates At 1 de january de 2020 169,642 Effect of applying the equity method - Net Profit 7,472 Currency Translation Reserves (13,231) Dividends of Electrogas (7,469) Receipt of Supplementary Obligations of OMIP (220) Other changes in equity (11) At 31 December 2020 156,183 Effect of applying the equity method - Net Profit 1,418 Currency Translation Reserves 6,781 Dividends of Electrogas (5,107) Other changes in equity 90 At 31 March 2021 159,365 The total amount of dividends recognized by associates was 5,107 thousand Euros, during the three-month period ended 31 The proportional value of the OMIP, SGPS includes the effect of the adjustment resulting of changes to the Financial							profit / (loss)

The total amount of dividends recognized by associates was 5,107 thousand Euros, during the three-month period ended 31 March 2021, relating to the distribution of 2020 results.

The proportional value of the OMIP, SGPS includes the effect of the adjustment resulting of changes to the Financial Statement of the previous year, made after the equity method application.

Joint ventures

The movement in the caption "Investments in joint ventures" during the periods ended 31 March 2021 and 31 December 2020 was as follows:

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
Investments in joint ventures
At 1 January 2020	2,636
Effect of applying the equity method	26
At 31 December 2020 Effect of applying the equity method	2,662 55

by the above mentioned two entities.	Following a joint agreement of technology partnership between REN – Redes Energéticas Nacionais and the State Grid International Development (SGID), in May 2013 an R&D centre in Portugal dedicated to power systems designed – Centro de Investigação em Energia REN – STATE GRID, S.A. ("Centro de Investigação") was incorporated, being jointly controlled
	The Research Centre aims to become a platform for international knowledge, a catalyst for innovative solutions and tools, applied to the planning and operation of transmission power.
	At 31 March 2021 and 31 December 2020, the financial information of the joint venture was as follows:
	Cash and cash Current financial equivalents liabilities	31 March 2021 Non-current financial Depreciations and liabilities amortizations	Financial costs	Income tax- (cost) / income
Centro de Investigação em Energia REN - STATE GRID, S.A.	5,524	5 -	(12) (1)	(1)
	Cash and cash Current financial equivalents liabilities	31 December 2020 Non-current financial Depreciations and liabilities amortizations	Financial costs	Income tax- (cost) / income
Joint venture: Joint venture: Centro de Investigação em Energia

		31 December 2020
		Non-current financial	Depreciations and		Income tax- (cost) /
	liabilities	liabilities	amortizations	Financial costs	income
Joint venture:
Centro de Investigação em Energia

8 INCOME TAX

REN is taxed based on the special regime for the taxation of group companies ("RETGS"), which includes all companies located in Portugal that REN detains directly or indirectly ate least 75% of the share capital, which should give at more than 50% of the voting rights, and comply with the conditions of the article 69º of the Corporate Income Tax law.

In accordance with current legislation, tax returns are subject to review and correction by the tax authorities for a period of four years (five years for social security), except when there are tax losses, tax benefits granted or tax inspections, claims or appeals in progress, in which case the period can be extended or suspended, depending on the circumstances. Consequently, the Company's tax returns for the years from 2018 to 2021 are still subject to review.

The Company's Board of Directors understands that possible corrections to the tax returns resulting from tax reviews /inspections carried out by the tax authorities will not have a significant effect on the financial statements as of 31 March 2021 and 31 December 2020.

In 2021, the Group is taxed in Corporate Income Tax rate of 21%, increased by a municipal surcharge up the maximum of 1.5% over the taxable profit; and a State surcharge of an additional (i) 3% of taxable profit between 1,500 thousand Euros and 7,500 thousand Euros; (ii) of 5% over the taxable profit in excess of 7,500 thousand Euros and up to 35,000 thousand Euros; and (iii) 9% for taxable profits in excess of 35,000 thousand Euros, which results in a maximum aggregate tax rate of 31.5%.

The tax rate used in the valuation of temporary taxable and deductible differences as of 31 March 2021, was updated for each Company included in the consolidation perimeter, using the average tax rate expected in accordance with future perspective of taxable profits of each company recoverable in the next periods.

Income tax registered in the periods ended 31 March 2021 and 2020 was as follows:

1.5% over the taxable profit; and a State surcharge of an additional (i) 3% of taxable profit between 1,500 thousand Euros
		In accordance with current legislation, tax returns are subject to review and correction by the tax authorities for a period of four years (five years for social security), except when there are tax losses, tax benefits granted or tax inspections, claims or appeals in progress, in which case the period can be extended or suspended, depending on the circumstances. Consequently, the Company's tax returns for the years from 2018 to 2021 are still subject to review. The Company's Board of Directors understands that possible corrections to the tax returns resulting from tax reviews /inspections carried out by the tax authorities will not have a significant effect on the financial statements as of 31 March 2021 In 2021, the Group is taxed in Corporate Income Tax rate of 21%, increased by a municipal surcharge up the maximum of
and 7,500 thousand Euros; (ii) of 5% over the taxable profit in excess of 7,500 thousand Euros and up to 35,000 thousand Euros; and (iii) 9% for taxable profits in excess of 35,000 thousand Euros, which results in a maximum aggregate tax rate of The tax rate used in the valuation of temporary taxable and deductible differences as of 31 March 2021, was updated for each Company included in the consolidation perimeter, using the average tax rate expected in accordance with future perspective of taxable profits of each company recoverable in the next periods. Income tax registered in the periods ended 31 March 2021 and 2020 was as follows:	Mar 2021	Mar 2020
Current income tax	39,092	11,130
Adjustaments of income tax from previous years	-	4
Deferred income tax	(27,152)	1,756

Reconciliation between tax calculated at the nominal tax rate and tax recorded in the consolidated statement of profit and loss is as follows:

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation between tax calculated at the nominal tax rate and tax recorded in the consolidated statement of profit and loss
	Mar 2021	Mar 2020
Consolidated profit before income tax	43,526	45,358
Permanent differences:
Non deductible/taxable Costs/Income	1,624	2,549
Timing differences:
Tariff deviations	108,816	(11,252)
Provisions and impairment	(33)	(15)
Revaluations	(815)	(810)
Pension, helthcare assistence and life insurance plans	(1,099)	(1,031)
Others Taxable income	441 152,460	(88) 34,711
Income tax	32,027	7,191
State surcharge tax	4,589	2,900
Municipal surcharge	2,290	831
Autonomous taxation	186	208
Current income tax	39,092	11,130
Deferred income tax	(27,152)	1,756
Adjustments of income tax from previous years	-	4
Income tax	11,940	12,891
Effective tax rate	27.4%	28.4%
The caption "Income tax" payable and/or receivable at 31 March 2021 and 31 December 2020 is made up as follows:
	Mar 2021	Dec 2020
Income tax:
Corporate income tax - estimated tax Corporate income tax - payments on account	(39,092) 1,947	(41,194) 30,759
Income withholding tax by third parties	298	1,576
	(8,652)	218
Income recoverable / (payable)

Income tax

The caption "Income tax" payable and/or receivable at 31 March 2021 and 31 December 2020 is made up as follows:

Deferred taxes

7,328 (3,648) 19,823 (6,458) 27,152 (10,105) (416) 2,556 1,616 3,263 1,200 5,818 28,352 (4,287) Provisions and Derivative financial Pensions Tariff deviations Impairments	Mar 2021 Dec 2020
Deferred tax assets Deferred tax liabilities Impact on equity: Deferred tax assets Deferred tax liabilities Net impact of deferred taxes	Impact on the statement of profit and loss:
				REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS

Change in deferred tax assets – March 2021

	Impact on the statement of profit and loss:
				27,152	(10,105)
	Impact on equity:
				1,200	5,818
	The changes in deferred tax by nature were as follows:
	Change in deferred tax assets – March 2021
	Provisions and	Pensions	Tariff deviations	Derivative financial	Revalued assets	Others	Total
	Impairments			instruments
At 1 January 2021	2,759	30,117	34,027	6,391	16,898	2,380	92,575
Increase/decrease through reserves	-	(20)	-	(434)	-	38	(416)
Reversal through profit and loss	-	(352)	-	(51)	(532)	-	(935)
Increase through profit and loss	-	-	8,264	-	-	-	8,264
Change in the period	-	(372)	8,264	(485)	(532)	38	6,912
At 31 March 2021	2,759	29,745	42,291	5,906	16,366	2,418	99,487
	Change in deferred tax assets – December 2020 Provisions and			Derivative financial
	Impairments	Pensions	Tariff deviations	instruments	Revalued assets	Others	Total
At 1 January 2020	2,705	30,953	33,967	4,659	19,264	2,116	93,666
Increase/decrease through reserves	-	524	-	1,881	-	150	2,556
Reversal through profit and loss	(102)	(1,360)	-	(161)	(2,366)	-	(3,990)
Increase through profit and loss	156	-	60	12	-	114	342
	54	(836)	60	1,732	(2,366)	264	(1,092)
Change in the period
At 31 December 2020	2,759	30,117	34,027	6,391	16,898	2,380	92,575

Change in deferred tax assets – December 2020

	Provisions and lmpairments	Pensions	Tariff deviations	Derivative financial instruments	Revalued assets	Others	Total
At 1 January 2020	2,705	30,953	33,967	4,659	19,264	2,116	93,666
Increase/decrease through reserves		524	-	1,881		150	2,556
Reversal through profit and loss	(102)	(1,360)		(161)	(2,366)		(3,990)
Increase through profit and loss	156		60	12		114	342
Change in the period	54	(836)	60	1,732	(2,366)	264	(1,092)
At 31 December 2020	2,759	30,117	34,027	6,391	16,898	2,380	92,575

Evolution of deferred tax liabilities – March 2021

	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
Evolution of deferred tax liabilities – March 2021	Tariff deviations	Revaluations	Fair value	Investments in equity instruments at fair value through other comprehensive income	Others	Total
At 1 January 2021	63,909	18,623	50,521	10,030	1,887	144,969
Increase/decrease through equity Reversal trough profit and loss Exchange rate differences Change in the period	- (18,685) - (18,685)	- (337) - (337)	- (463) - (463)	(2,041) - - (2,041)	(3) (338) 427 86	(2,043) (19,823) 427 (21,439)
At 31 March 2021 Evolution of deferred tax liabilities – December 2020	45,224	18,286	50,059	7,989	1,973	123,530
	Tariff deviations	Revaluations	Fair value	Investments in equity instruments at fair value through other comprehensive income	Others	Total
At 1 January 2020	53,526	19,981	52,357	11,795	4,115	141,774
Increase/decrease through equity Reversal trough profit and loss Increase through profit and loss	- - 10,383	- (1,358) -	- (1,836) -	(1,765) - -	(12) (731) -	(1,777) (3,925) 10,383
Exchange rate differences	-	-	-	-	(1,486)	(1,486)
Change in the period	10,383	(1,358)	(1,836)	(1,765)	(2,229)	3,195

Evolution of deferred tax liabilities – December 2020

				instruments at fair value through other comprehensive income
Evolution of deferred tax liabilities – December 2020
				Investments in equity
	Tariff deviations	Revaluations	Fair value	instruments at fair value through other comprehensive income	Others	Total
At 1 January 2020	53,526	19,981	52,357	11,795	4,115	141,774
Increase/decrease through equity	-	-	-	(1,765)	(12)	(1,777)
Reversal trough profit and loss	-	(1,358)	(1,836)	-	(731)	(3,925)
Increase through profit and loss	10,383	-	-	-	-	10,383
Exchange rate differences	-	-	-	-	(1,486)	(1,486)
Change in the period	10,383	(1,358)	(1,836)	(1,765)	(2,229)	3,195
At 31 December 2020	63,909	18,623	50,521	10,030	1,887	144,969
Deferred tax liabilities relating to revaluations result from revaluations made in preceding years under legislation. The effect of these deferred taxes reflects the non-tax deductibility of 40% of future depreciation of the revaluation component (included in the assets considered cost at the time of the transition to IFRS). The legal documents that establish these revaluations were the following:
		Legislation (Revaluation)
	Electricity segment		Natural gas segment
	Decree-Law nº 430/78		Decree-Law nº 140/2006
	Decree-Law nº 399-G/81		Decree-Law nº 66/2016
	Decree-Law nº 219/82
	Decree-Law nº 171/85
	Decree-Law nº 118-B/86
	Decree-Law nº 111/88
	Decree-Law nº 7/91

	Legislation (Revaluation)
Decree-Law nº 219/82
Decree-Law nº 171/85
Decree-Law nº 118-B/86
Decree-Law nº 111/88
Decree-Law nº 7/91
Decree-Law nº 49/91
Decree-Law nº 264/92

9 FINANCIAL ASSETS AND LIABILITIES

- March 2021

9
			FINANCIAL ASSETS AND LIABILITIES
The accounting policies for financial instruments in accordance with the IFRS 9 categories have been applied to the following financial assets and liabilities:
- March 2021
	Notes	Financial assets at amortized cost - Debt instruments	Financial assets at fair value - Equity instruments through other comprehensive income	Financial assets/liabilities at fair value - Profit for the year	Borrowing and other payables	Other financial assets/liabilities	Total carrying amount	Fair value
Assets Cash and cash equivalents Trade and other receivables Other financial assets	13 11	- 443,717 -	- - -	- - -	- - -	236,221 - 110	236,221 443,717 110	236,221 443,717 110
Investments in equity instruments at fair value through other comprehensive income	10	-	141,780	-	-	-	141,780	141,780
Derivative financial instruments Liabilities	12	- 443,717	19,632 161,412	- -	- -	- 236,331	19,632 841,460	19,632 841,460
Borrowings Trade and other payables Income tax payable	16 19 8	- - -	- - -	- - -	2,800,266 546,227 45,500	- - -	2,800,266 546,227 45,500	2,894,143 546,227 45,500
Drivative financial instruments	12	- -	23,597 23,597	3,087 3,087	- 3,391,993	- -	26,684 3,418,677	26,684 3,512,554
- December 2020
	Notes	Financial assets at amortized cost - Debt instruments	Financial assets at fair value - Equity instruments through other comprehensive income	Financial assets/liabilities at fair value - Profit for the year	Borrowing and other payables	Other financial assets/liabilities	Total carrying amount	Fair value
Assets Cash and cash equivalents	13	-	-	-	-	61,499	61,499	61,499
Trade and other receivables Other financial assets	11	493,606 -	- -	- -	- -	- 102	493,606 102	493,606 102
Investments in equity instruments at fair	10	-	150,850	-	-	-	150,850	150,850
value through other comprehensive income Derivative financial instruments	12	-	25,685	-	-	-	25,685	25,685
		493,606	176,534	-	-	61,601	731,741	731,741
Liabilities Borrowings	16	-	-	-	2,823,432	-	2,823,432	2,932,603
Trade and other payables	19	-	-	-	444,531	-	444,531	444,531
	8	- -	- 26,019	-	8,641	-	8,641	8,641
Income tax payable Drivative financial instruments	12			3,196	-	-	29,215	29,215

- December 2020

Investments in equity instruments at fair
value through other comprehensive income
		-	23,597	3,087	3,391,993	-	3,418,677	3,512,554
- December 2020
		Financial assets at amortized cost -	Financial assets at fair value -	Financial assets/liabilities at fair value -
	Notes	Debt instruments	Equity instruments through other comprehensive income	Profit for the year	Borrowing and other payables	Other financial assets/liabilities	Total carrying amount	Fair value
Investments in equity instruments at fair
value through other comprehensive income	10	-	150,850	-	-	-	150,850	150,850
Derivative financial instruments	12	-	25,685	-	-	-	25,685	25,685
		493,606	176,534	-	-	61,601	731,741	731,741
Liabilities
Borrowings	16	-	-	-	2,823,432	-	2,823,432	2,932,603
Trade and other payables	19	-	-	-	444,531	-	444,531	444,531
Income tax payable	8	-	-	-	8,641	-	8,641	8,641
Drivative financial instruments	12	-	26,019	3,196	-	-	29,215	29,215

Loans obtained, as referred to in Note 3.6 to the annual consolidated financial statements for the period ended December 31, 2020, are measured, initially at fair value and subsequently at amortized cost, except for those which it has been contracted derivative fair value hedges (Note 12) which are measured at fair value. Nevertheless, REN proceeds to the disclosure of the fair value of the caption Borrowings, based on a set of relevant observable data, which fall within Level 2 of the fair value hierarchy.

The fair value of borrowings and derivatives are calculated by the method of discounted cash flows, using the curve of interest rate on the date of the statement of financial position in accordance with the characteristics of each loan.

The range of market rates used to calculate the fair value ranges between -0.557% and 0.196% (maturities of one week and twelve years, respectively).

The fair value of borrowings contracted by the Group at 31 March 2021 is 2,894,143 thousand Euros (at 31 December 2020 was 2,932,603 thousand Euros), of which 312,035 thousand Euros are partially recorded at amortized cost and includes an element of fair value resulting from movements in interest rates (at 31 December 2020 was 313,831 thousand Euros).

Estimated fair value – assets measured at fair value

• Level 1: the fair value of financial instruments is based on net market prices as of the date of the statement of financial position;
• Level 2: the fair value of financial instruments is not determined based on active market quotes but using valuation models. The main inputs of the models are observable in the market, in relation to derivative finantial instruments;
• Level 3: the fair value of financial instruments is not determined based on active market quotes, but using valuation models, whose main inputs are not observable in the market.

	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
	Estimated fair value – assets measured at fair value
	The following table presents the Group's assets and liabilities measured at fair value at 31 March 2021 in accordance with the following hierarchy levels of fair value:
 position;	Level 1: the fair value of financial instruments is based on net market prices as of the date of the statement of financial
	Level 2: the fair value of financial instruments is not determined based on active market quotes but using valuation models. The main inputs of the models are observable in the market, in relation to derivative finantial instruments;
	Level 3: the fair value of financial instruments is not determined based on active market quotes, but using valuation
		models, whose main inputs are not observable in the market.
value hierarchy levels.	During the three-month period ended 31 March 2021, there was no transfer of financial assets and liabilities between fair
			Level 1	Mar 2021 Level 2	Level 3	Total	Level 1	Dec 2020 Level 2	Level 3	Total
Assets:
Investments in equity instruments at fair value through other comprehensive income		Shares	81,763	-	56,435	138,198	90,833	-	56,435	147,268
Financial assets at fair value		Cash flow hedge derivatives	-	7,135	-	7,135	-	9,755	-	9,755
Financial assets at fair value		Fair value hedge derivatives	-	12,497	-	12,497	-	15,930	-	15,930
			81,763	19,632	56,435	157,830	90,833	25,685	56,435	172,953
Liabilities: Financial liabilities at fair value		Loans	-	312,035	-	312,035	-	313,831	-	313,831
Financial liabilities at fair value		Cash flow hedge derivatives	-	23,597	-	23,597	-	26,019	-	26,019
Financial liabilities at fair value through profit and loss		Trading derivatives	-	3,087	-	3,087	-	3,196	-	3,196
			-	338,720	-	338,720	-	343,046	-	343,046
	During the three-month period ended 31 March 2021, REN proceeded to a valuation of the financial interests held
	Hidroeléctrica de Cahora Bassa, S.A., which is classified as Investments in equity instruments at fair value through other
	comprehensive income (Note 10). The fair value of this asset reflects the price at which the asset would be sold in an orderly

For this purpose, REN has opted for a revenue approach, which reflects current market expectations regarding future amounts. The fair value of the investment amounted to 56,435 thousand Euros for the three-month period ended on 31 March 2021.

With respect to the current receivables and payables balances, its carrying amount corresponds to a reasonable approximation of its fair value.

The non-current accounts receivable and accounts payable refers, essentially, to tariff deviations which amounts are communicated by ERSE, being its carrying amount a reasonable approximation of its fair value, given that they include the time value of money, being incorporated in the next two years tariffs.

Financial risk management

From the last annual report period until 31 March 2021, there were no significant changes in the financial risk management of the Company compared to the risks disclosed in the consolidated financial statements as of 31 December 2020. A description of the risks can be found in Section 4 - Financial Risk Management of the consolidated financial statements for the year ended 2020.

10 INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
	10 INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH
	OTHER COMPREHENSIVE INCOME
						The assets recognised in this caption at 31 March 2021 and 31 December 2020 corresponds to equity interests held on
	strategic entities for the Group, which can be detailed as follows:
				Head office		Book value
			City	Country	% owned	Mar 2021	Dec 2020
	OMEL - Operador del Mercado Ibérico de Energia (Pólo Espanhol)		Madrid	Spain	10.00%	3,167	3,167
	Red Eléctrica Corporación, S.A. ("REE")		Madrid	Spain	1.00%	81,763	90,833
	Hidroeléctrica de Cahora Bassa ("HCB")		Maputo	Mozambique	7.50%	56,435	56,435
Coreso, S.A.			Brussels	Belgium	7.90%	164	164
MIBGAS, S.A. MIBGÁS Derivatives, S.A.			Madrid Madrid	Spain Spain	6.67% 9.70%	202 48	202	48
						141,780	150,850
	The changes in this caption were as follows:
	OMEL	HCB	REE	Coreso	MIBGÁS	MIBGÁS Derivatives		Total

				OTHER COMPREHENSIVE INCOME
		The assets recognised in this caption at 31 March 2021 and 31 December 2020 corresponds to equity interests held on strategic entities for the Group, which can be detailed as follows:
		The changes in this caption were as follows:
At 1 January 2020		3,167	55,035	97,060	164	202		48	155,676
Fair value adjustments		-	1,400	(6,227)	-		-	-	(4,826)
At 31 December 2020		3,167	56,435	90,833	164	202		48	150,850
At 1 January 2021		3,167	56,435	90,833	164	202		48	150,850
	Fair value adjustments -		-	(9,070)	-		- -		(9,070)
									141,780

REN holds 2,060,661,943 shares representing 7.5% of the stock capital and voting rights of HCB, a company incorporated under Mozambican law, at the Hidroeléctrica de Cahora Bassa, SA ("HCB"), as a result of fulfilling the conditions of the contract entered into on April 9, 2012, between REN, Parpública - Participações Públicas, SGPS, SA, CEZA - Companhia Eléctrica do Zambeze, SA and EDM - Electricidade de Moçambique, EP. This participation was initially recorded at its acquisition cost (38,400 thousand Euros) and subsequently adjusted to its fair value (Note 9).

REN Company holds a financial stake in the Coreso's share capital, a Company which is also hold by other important European TSO's which, as initiative of the Coordination of Regional Security (CRS), assists the TSO's in the safely supply of electricity in Europe. In this context, Coreso develops and executes operational planning activities since several days before until near real time.

On 31 March 2021, REN also holds a 6.67% financial interest in the share capital of MIBGÁS, SA, acquired during the first half of 2016, a company in charge of the development of the natural gas wholesale market operator in the Iberian Peninsula.

As part of the process of creating the Single Operator of the Iberian Electricity Market (Operador Único do Mercado Ibérico de Eletricidade – OMI) in 2011 and in accordance with the provisions of the agreement between the Portuguese Republic and the Kingdom of Spain on the establishment of an Iberian electricity market, the Company acquired 10% of the capital stock of OMEL, Operador del Mercado Iberico de Energia, SA, a Spanish operator of the sole operator, for a total value of 3,167 thousand Euros.

On 31 March 2021, REN also holds a 9.7% financial interest, acquired for the amount of 48 thousand Euros, of the share capital of MIBGÁS Derivatives, SA, the management company of the organized futures market natural gas, spot products of liquefied natural gas and spot products in underground storage in the Iberian Peninsula.

These investments (OMEL, MIBGÁS, MIBGÁS Derivatives and Coreso) are recognised at fair value through other comprehensive income, however, as there are no available market price for these investments and as it is not possible to determine the fair value of the period using comparable transactions, these investments are recorded at acquisition deducted of impairment losses, as describe in Note 3.6 - Financial Assets and Liabilities of the consolidated financial statements for the year ended 2020.

REN understands that there is no evidence of impairment loss regarding the investments of OMEL, Coreso, MIBGÁS and MIBGÁS Derivatives at 31 March 2021.

REN Portgás holds other financial interests, which are recorded at the acquisition cost in the amount of 29 thousand Euros, deducted of impairment losses, with a net value of zero thousand Euros.

Name
PRIMUS MGV - Promoção e Desenv. Regional, S.A.
ADRAVE - Ag. Desenv. Reg-do Vale do Alve, S.A.
AREALIMA - Ag. Reg. Energia e Amb. Vale Lima
ADEPORTO - Agência de Energia do Porto

The adjustments to investments in equity instruments at fair value through other comprehensive are recognised in the equity caption "Fair value reserve". This caption at 31 March 2021 and 31 December 2020 is made up as follows:

Name
PRIMUS MGV - Promoção e Desenv. Regional, S.A.
ADRAVE - Ag. Desenv. Reg-do Vale do Alve, S.A.
AREALIMA - Ag. Reg. Energia e Amb. Vale Lima
ADEPORTO - Agência de Energia do Porto
	Fair value reserve (Note 15)
1 January 2020	51,966
Changes in fair value	(4,826)
Tax effect	1,765
31 December 2020	48,905
1 January 2021	48,905
Changes in fair value	(9,070)
Tax effect	2,041

There is no amount recognized in the consolidated statement of profit and loss for the three-month period ended 31 March 2021, referring to associated companies' dividends. However, the amount of 1,477 thousand Euros, received in the year of 2021, related to dividends recognized in the year of 2020, is reflected in the cash flow statement.

11 TRADE AND OTHER RECEIVABLES

			REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
		11 TRADE AND OTHER RECEIVABLES
			Trade and other receivables at 31 March 2021 and 31 December 2020 are made up as follows:
		Mar 2021			Dec 2020
	Current	Non-current	Total	Current	Non-current	Total
Trade receivables	230,330	576	230,906	226,542	576	227,118
Impairment of trade receivables	(2,951)	-	(2,951)	(2,951)	-	(2,951)
Trade receivables net	227,379	576	227,955	223,591	576	224,167
Tariff deviations	155,319	46,759	202,078	208,332	44,931	253,263
State and Other Public Entities	13,684	-	13,684	16,176	-	16,176
Trade and other receivables	396,383	47,335	443,718	448,099	45,507	493,606
			The most relevant balances included in the trade and other receivables caption as of 31 March 2021 are: (i) the receivable of EDP – Distribuição de Energia, SA in the amount of 88,155 thousand Euros (94,060 thousand Euros at 31 December 2020)
			and (ii) the receivable of Galp Gás Natural, S.A., in the amount of 8,843 thousand Euros (12,918 thousand Euros at 31
December 2020).
In the trade and other receivables also stands out the amounts not yet invoiced of the activity of the Market Manager (MIBEL
	– Mercado Ibérico de Electricidade), in the amount of 4 thousand Euros (4 thousand Euros at 31 December 2020) and the		amount to invoice to EDP – Distribuição de Energia, S.A., of 7,226 thousand Euros (104 thousand Euros at 31 December
			2020) regarding the CMEC, also reflected in the caption "Suppliers and other accounts payable" (Note 19).
			This transaction is set up as an "Agent" transaction, being off set in the consolidated income statement.
			Changes to the impairment losses for trade receivable and other accounts receivable are made up as follows:
			Mar 2021	Dec 2020
	Begining balance		(2,951)	(2,964)
	Increases		-	(17)
	Reversing		-	30

	Mar 2021	Dec 2020
Begining balance	(2,951)	(2,964)
Increases		(17)
Reversing		30
Ending balance	(2,951)	(2,951)

12 DERIVATIVE FINANCIAL INSTRUMENTS

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
12 DERIVATIVE FINANCIAL INSTRUMENTS
At 31 March 2021 and 31 December 2020, the REN Group had the following derivative financial instruments contracted:
		31 March 2021
		Assets		Liabilities
	Notional	Current	Non-current	Current	Non-current
Derivatives designated as cash flow hedges
Interest rate swaps	600,000 TEUR		- -	-	23,597
Currency swaps	72,899 TEUR		- 7,135	-	-
			- 7,135	-	23,597
Derivatives designated as fair value hedges
			- 12,497	-	-
Interest rate swaps	300,000 TEUR				-
			- 12,497	-
Trading derivatives
Trading derivatives	60,000 TEUR		- -	-	3,087
			- -	-	3,087
Derivative financial instruments			- 19,632	-	26,684
			31 December 2020
			Assets	Liabilities
	Notional	Current	Non-current	Current	Non-current
Derivatives designated as cash flow hedges
Interest rate swaps	600,000 TEUR		- -	-	26,019
Currency swaps	72,899 TEUR		- 9,755	-	-
			- 9,755	-	26,019
Derivatives designated as fair value hedges
Interest rate swaps	400,000 TEUR		- 15,930	-	-
			- 15,930	-	-
Trading derivatives

Derivatives designated as cash flow hedges
Currency swaps	72,899 TEUR	-	7,135	-	-
		-	7,135	-	23,597
Derivatives designated as fair value hedges
Trading derivatives
		-	-	-	3,087
		31 December 2020
Derivatives designated as cash flow hedges
Interest rate swaps	600,000 TEUR	-	-	-	26,019
Currency swaps	72,899 TEUR	-	9,755	-	-
		-	9,755	-	26,019
Derivatives designated as fair value hedges
Interest rate swaps	400,000 TEUR	-	15,930	-	-
		-	15,930	-	-
Trading derivatives
Trading derivatives	60,000 TEUR	-	-	-	3,196
		-	-	-	3,196
Derivative financial instruments		-	25,685	-	29,215

• seven interest rate swap contracts negotiated by REN SGPS to hedge the interest rate fluctuation risk;
• a cross currency swap contract negotiated by REN SGPS to hedge the exchange rate fluctuation risk.

Counterparties to derivative contracts are international financial institutions with a solid credit rating and first-rate national institutions.

For the purpose of the effectiveness tests of the designated hedging relationships, REN applies the "Dollar offset method" and the linear regression statistical method as methodologies. The effectiveness ratio is given by comparing the changes in fair value of the hedging instrument with the changes in fair value of the hedged item (or hypothetical derivative instrument simulating the conditions of the hedged item).

For the purpose of calculating ineffectiveness, the total change in fair value of the hedging instruments is considered.

	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
	The disclosed amount includes receivable or payable accrued interest, at 31 March 2021 related to these financial instruments, in the net amount receivable of 311 thousand Euros (at 31 December 2020 it was 1,960 thousand Euros
receivable).
follows:	The characteristics of the derivative financial instruments negotiated at 31 March 2021 and 31 December 2020 were as
	Notional	REN pays	REN receives	Maturity	Fair value at 31 March 2021	Fair value at 31 December 2020
Cash flow hedge: Interest rate swaps	600,000 TEuros	[0.75%;1.266%]	[Euribor 3m; Euribor 6m]	[dec-2024;feb-2025]	(23,597)	(26,019)
Currency swaps	72,899 Teuros	[Euribor 6m; + 1.9%]	[2.71%]	[jun-2024]	7,135 (16,462)	9,755 (16,264)
Fair value hedge: Interest rate swaps	300,000 TEuros	[Euribor 6m]	[0.611%; 0.6285%]	[feb-2025]	12,497	15,930
Trading:					12,497	15,930
Interest rate swaps	60,000 Teuros	[0.99%]	[Euribor 6m]	[jun-2024]	(3,087) (3,087)	(3,196) (3,196)
				Total	(7,052)	(3,530)
	The periodicity of the cash flows, paid and received, from the derivative financial instruments portfolio is quarterly, semiannual and annual for cash flow hedging contracts, semiannual and annual for fair value hedging contracts and semiannual for the
trading derivative.
	The breakdown of the notional of derivatives at 31 March 2021 and 31 December 2020 is presented in the following table:
		2021 2022	2023	2024	Following 2025 years	Total
Interest rate swap (cash flow hedge)		-	- -	300,000	300,000	- 600,000
Currency swap (cash flow hedge)		-	- -	72,899	-	- 72,899
Interest rate swap (fair value hedge)		-	- -	-	300,000	- 300,000
Interest rate swap (trading)		-	- -	60,000	-	- 60,000
	Total	-	- -	432,899	600,000	- 1,032,899
Swaps:

				Following years

Swaps:

Cash Flow Hedge - Interest Rate Swaps

The Group hedges the interest rate risk associated with the fluctuation of the market interest rate index (Euribor) on a portion of future debt interest payments through the designation of interest rate swaps, in order to transform floating rate payments into fixed rate payments.

At 31 March 2021, the Group has a total of four cash flow hedging interest rate swap contracts for a total amount of 600,000 thousand Euros (as of 31 December 2020 it was 600,000 thousand Euros). The hedged risk is the variable rate index associated to the interest payments of the loans Credit risk is not being hedged.

The fair value of the interest rate swaps, at 31 March 2021, is negative 23,597 thousand Euros (at 31 December 2020 it was negative 26,019 thousand Euros).

Of the derivatives described above, two contracts in a total amount of 300,000 thousand Euros (at 31 December 2020 it was 300,000 thousand Euros) are designated to hedge an aggregated exposure composed by the net effect of floating rate debt and interest rate swaps designated as fair value hedging instruments.

The amount recognised in reserves, relating to the cash flow hedges referred to above, was 23,414 thousand Euros (at 31 December 2020 it was 25,836 thousand Euros).

The hedged instruments of cash flow hedging relationships present the following conditions:

	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
The hedged instruments of cash flow hedging relationships present the following conditions:
	Maturity	Hedged notional	Interest rate	Hedged Carrying Amount	Note
Cash Flow Hedging Instruments
European Investment Bank (EIB) Loan	16/12/2024	300,000 TEuros	Euribor 3m	299,312	16
Bond Issue (Euro Medium Term Notes)1	12/02/2025	300,000 TEuros	2.5%	299,014	16

Cash Flow Hedge – Interest and Exchange Rate Swaps

The Group hedged the exchange rate risk of the 10,000 million yen bond issued through a cross currency swap with the main characteristics similar to the bond with regard to exchange rate risk. Credit risk is not hedged.

• the offsetting of the exchange rate effect of the spot revaluation of the hedged item (bond issue in yen) at each reference date, arising from the hedging of the exchange rate risk¹ ;
• the ineffective effect of the hedge arising from the accounting designation made (REN contracted a trading derivative to economically hedge this ineffectiveness - see Trading Derivative)² . This inefficiency is caused by the change in the interest profile of the hedging instrument, which pays a variable rate in the period from 2019 to 2024.

Integral Income:

- March 2021

	The fair value of the cross currency swap at 31 March 2021 is positive 7,135 thousand Euros (at 31 December 2020 it was positive 9,755 thousand Euros).
	Changes in the fair value of the hedging instrument are also being recognized in equity hedging reserves, with exception of:
	the offsetting of the exchange rate effect of the spot revaluation of the hedged item (bond issue in yen) at each reference date, arising from the hedging of the exchange rate risk1	;
	the ineffective effect of the hedge arising from the accounting designation made (REN contracted a trading derivative to economically hedge this ineffectiveness - see Trading Derivative)2 profile of the hedging instrument, which pays a variable rate in the period from 2019 to 2024.			. This inefficiency is caused by the change in the interest
	Integral Income:
	The movements recorded in the statement of comprehensive income through the application of cash flow hedges were as
	follows:
	- March 2021
	Cash Flow Hedging Instruments	Change in the Fair Value of Hedging Instruments	Of which: Effective amount recorded in Hedge Reserves	Hedging inefficiency recorded in Profit for the Year	Coverage Reserve reclassifications to Results for the Year
	Swaps of interest rate	2,422	2,422	-	-
	Swaps of exchange rate	(2,890)	(688)	(121)	(2,081)

¹ The currency effect of the underlying (loan), in the period ended 31 March 2021, was favorable in the amount of 2,081 thousand Euros, and was offset, in the same amount, by the unfavourable effect of the hedging instrument in the income statement for the year (as of 31 March 2020 was unfavorable in 2,097 thousand Euros).

² The ineffective cash flow hedge component of the exchange rate risk recognised in the income statement, was negative 121 thousand Euros which was offset by the effect of the trading derivative negotiated in positive 335 thousand Euros (as of 31 March 2020 it was positive 414 thousand Euros against negative 126 thousand Euros of the effect of the trading derivative). Therefore, the net effect on the income statement for the three-month period ended on 31 March 2021 amounted to positive 214 thousand Euros (as of 31 March 2020 was positive 288 thousand Euros).

- March 2020

	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
		Change in the Fair	Of which: Effective	Hedging inefficiency	Coverage Reserve
	Cash Flow Hedging Instruments	Value of Hedging	amount recorded in Hedge	recorded in Profit for	reclassifications to
		Instruments	Reserves	the Year	Results for the Year
- March 2020	Swaps of interest rate	(2,641)	(2,641)	-	-
	Swaps of exchange rate	3,107	596	414	2,097

Hedging Reserve:

The movements recognised in the hedging reserve (Note 15) were as follows:

Cash Flow Hedging Instruments	Change in the Fair Value of Hedging Instruments	Of which: Effective amount recorded in Hedge Reserves	Hedging inefficiency recorded in Profit for the Year	Coverage Reserve reclassifications to Results for the Year
	466	(2,045)	414	2,097
The movements recognised in the hedging reserve (Note 15) were as follows:
	Fair value	Deferred taxes impact	Hedging reserves (Note 15)
1 January 2020	(26,534)	6,634	(19,901)
Changes in fair value and ineffectiveness	(2,045)	512	(1,533)
31 March 2020	(28,579)	7,146	(21,434)
1 January 2021	(34,059)	8,515	(25,545)
Changes in fair value and ineffectiveness	1,734	(434)	1,300

Fair Value Hedge

-March 2021

Fair Value Hedge
The Group hedges the interest rate risk associated with the fluctuation of the market interest rate index (Euribor) on the fair value of interest payments on fixed-rate debt by negotiating interest rate swaps where it pays a variable rate and receives a fixed rate in order to convert fixed-rate debt payments into variable-rate payments.
At 31 March 2021, the Group has a total of two fair value hedging derivative contracts amounting to 300,000 thousand Euros (as of 31 December 2020 it was 300,000 thousand Euros). The hedged risk corresponds to the change in fair value of debt issues attributable to movements in the market interest rate index (Euribor). Credit risk is not being hedged. At 31 March 2021, the fair value of interest rate swaps designated as fair value hedging instruments was positive 12,497 thousand Euros (as of 31 December 2020 it was positive 15,930 thousand Euros). Changes in the fair value of hedged items arising from interest rate risk are recognised in the income statement in order to offset changes in the fair value of the hedging instrument, which are also recognised in the income statement. The hedged items of fair value hedging relationships have the following conditions:
-March 2021
	Maturity	Hedged notional	Interest rate	Carrying amount	Accumulated Fair value adjustment	Variation of the year-end 2021	Note
Fair value hedging instruments Bond Issue (Euro Medium Term Notes)	12/02/2025	300,000 TEuros	2.50%	286,978	(12,035)	1,796	16

- March 2020

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
- March 2020
		Hedged	Interest		Accumulated	Variation of the
	Maturity	notional	rate	Carrying amount	Fair value adjustment	year-end 2020	Note
Fair value hedging instruments
	16/10/2020
Bond Issue (Euro Medium Term Notes)	12/02/2025	100,000 TEuros	4.75%	94,637	475	339	16
Bond Issue (Euro Medium Term Notes)		300,000 TEuros	2.50%	286,194	(12,802) (12,326)	(1,403) (1,064)	16

Integral Income:

- March 2021

	Maturity	Hedged notional	Interest rate	Carrying amount	Fair value adjustment	Variation of the year-end 2020	Note
Fair value hedging instruments
Integral Income:	At 31 March 2021, the change in fair value of the debt related to interest rate risk recognized in the income statement was positive 1,796 thousand Euros (at 31 March 2020 it was negative 1,064 thousand Euros), resulting in an ineffective component, after considering the effect of the hedged items in the income statement, of approximately positive 55 thousand Euros (at 31 March 2020 it was negative 63 thousand Euros). The ineffectiveness recognized is related to the effect of the fixed leg spread of the hedging instruments that is not reflected in the hedged item.
follows:	The movements recorded in the statement of comprehensive income through the application of fair value hedges were as
- March 2021
				Hedging inefficiency
		Fair value Hedging instruments		recorded in Profit for
				the Year
	Swaps of interest rate				55
- March 2020
				Hedging inefficiency
		Fair value Hedging instruments		recorded in Profit for
				the Year

Trading Derivative

The Group negotiated an interest rate swap, with a starting date in 2019 and maturity in 2024, which pays fixed rate and receives variable rate. This instrument, although not designated as hedge accounting considering IFRS 9 criteria, is currently hedging the effect of the ineffectiveness of the cash flow hedge of the interest and exchange rate risks of the bond issue in Yen, relative to the fluctuation of interest rates for the hedging period (see Cash Flow Hedge – Interest and Exchange Rate Swaps).

The notional amount of this trading derivative is 60,000 thousand Euros as of 31 March 2021 (at 31 December 2020 it was 60,000 thousand Euros). Credit risk is not being hedged. The fair value of the trading derivative, on 31 March 2021, is negative 3,087 thousand Euros (on 31 December 2020 it was negative 3,196 thousand Euros).

Changes in the fair value of the trading derivative are recorded directly in the income statement. The impact in the income statement, as of 31 March 2021, related to the effect of the fair value of the trading derivative was positive 335 thousand Euros (as of 31 December 2020 it was 16 thousand Euros negative).

13 CASH AND CASH EQUIVALENTS

The amounts considered as cash and cash equivalents in the consolidated statements of cash flows for the periods ended 31 March 2021 and 31 December 2020 are made up as follows:

In the periods ended 31 March 2021 and 31 December 2020, there are no cash and cash equivalents that are not available for the group to use.

14 EQUITY INSTRUMENTS

As of 31 March 2021 and 31 December 2020, REN's subscribed and paid up share capital is made up of 667,191,262 shares of 1 euro each.

In the periods ended 31 March 2021 and 31 December 2020, there are no cash and cash equivalents that are not available
As of 31 March 2021 and 31 December 2020, REN's subscribed and paid up share capital is made up of 667,191,262 shares
At 31 March 2021 and 31 December 2020, REN SGPS had the following own shares:
		Number of shares	Proportion		Amount
	Own shares	3,881,374		0.6%	(10,728)
No own shares were acquired or sold in the three-month period ended 31 March 2021. In accordance with the Commercial Company Code (Código das Sociedades Comerciais) REN SGPS must at all times ensure

At 31 March 2021 and 31 December 2020, REN SGPS had the following own shares:

Number of

No own shares were acquired or sold in the three-month period ended 31 March 2021.

In accordance with the Commercial Company Code (Código das Sociedades Comerciais) REN SGPS must at all times ensure that there are sufficient Equity Reserves to cover the value of own shares, in order to limit the amount of reserves available for distribution.

15 RESERVES AND RETAINED EARNINGS

The caption "Reserves" in the amount of 296,014 thousand Euros includes:

• Legal reserve: The Commercial Company Code in place requires that at least 5% of the net profit must be transferred to this reserve until it has reached 20% of the share capital. This reserve can only be used to cover losses or to increase capital. At 31 March 2021 this caption amounts to 125,075 thousand Euros;
• Fair value reserve: includes changes in the fair value of available for sale financial assets (41,876 thousand Euros positive), as detailed in Note 10;
• Hedging reserve: includes changes in the fair value of hedging derivative financial instruments when cash flow hedge is effective (negative 24,245 thousand Euros) as detailed in Note 12; and

16 BORROWINGS

	153,308 thousand Euros.					Other reserves: This caption is changed by (i) application of the results of previous years, being available for distribution to shareholders; except for the limitation set by the Companies Code in respect of own shares (Note 14), (ii) exchange rate changes associated to the financial investment whose functional currency is Dollar; (iii) exchange variation of assets and liabilities of financial investments in subsidiaries, namely the exchange rate effect of converting Chilean Peso to Euro and (iv) changes in equity of associates recorded under the equity method. On 31 March 2021, this caption amounts to
			the equity method income and the amount of paid or deliberated dividends is equivalent to legal reserve.			In accordance with the Portuguese legislation: (i) increases in equity as a result of the incorporation of positive fair value (fair value reserves and hedging reserves) can only be distributed to shareholders when the correspondent assets have been sold, exercised, extinct, settled or used; and (ii) income and other positive equity changes recognized as a result of the equity method can only be distributed to shareholders when paid-up. Portuguese legislation establishes that the difference between
was as follows:	16 BORROWINGS					The segregation of borrowings between current and non-current and by nature, at 31 March 2021 and 31 December 2020
			Mar 2021			Dec 2020
		Current	Non-current	Total	Current	Non-current	Total
Bonds		-	1,439,012	1,439,012	-	1,442,889	1,442,889
Bank Borrowings		96,787	574,127	670,915	96,567	574,897	671,464
Commercial Paper		430,000	250,000	680,000	450,000	250,000	700,000
	Bank overdrafts (Note 13)	9,185	-	9,185	330	-	330
Leases		1,494	2,743	4,237	1,576	3,207	4,783
		537,466	2,265,882	2,803,348	548,473	2,270,992	2,819,465
Accrued interest		12,872	-	12,872	22,421	-	22,421
Prepaid interest		(7,453)	(8,501)	(15,954)	(8,337)	(10,117)	(18,454)
Borrowings		542,886	2,257,381	2,800,266	562,557	2,260,875	2,823,433
	The borrowings settlement plan was as follows:
	2021	2022	2023	2023	2024	Following years	Total
Debt - Non current	-	107,333	628,310	370,470	569,679	590,090	2,265,882
Debt - Current	536,697	769	-	-		-	- 537,466
	536,697	108,102	628,310 Detailed information regarding bond issues as of 31 March 2021 is as follows:	370,470	569,679	590,090	2,803,348
				31 March 2021
	Issue date	Maturity	Inicial amount	Outstanding amount	Interest rate	Periodicity of interest payment
	'Euro Medium Term Notes' programme emissions
	26/06/2009	26/06/2024	TEUR 72,899 (i) (ii)	TEUR 72,899	Fixed rate	Semi-Annual
	12/02/2015	12/02/2025	TEUR 300,000 (ii)	TEUR 500,000	Fixed rate EUR 2.50%	Annual
	01/06/2016	01/06/2023	TEUR 550,000	TEUR 550,000	Fixed rate EUR 1.75%	Annual

536,697	108,102	628,310	370,470	569,679	590,090	2,803,348

The borrowings settlement plan was as follows: 108,102 628,310 Detailed information regarding bond issues as of 31 March 2021 is as follows:	370,470	569,679	590,090	2,803,348
	31 March 2021
	Outstanding		Periodicity of
Maturity Inicial amount	amount	Interest rate		interest payment
'Euro Medium Term Notes' programme emissions
26/06/2024 TEUR 72,899 (i) (ii)	TEUR 72,899	Fixed rate	Semi-Annual
12/02/2025	TEUR 500,000		Annual
01/06/2023 TEUR 550,000	TEUR 550,000		Annual
18/01/2028 TEUR 300,000	TEUR 300,000		Annual
(i) These issues correspond to private placements.
		TEUR 300,000 (ii) (ii) These issues have interest currency rate swaps associated		Fixed rate EUR 2.50% Fixed rate EUR 1.75% Fixed rate EUR 1.75%

As of 31 March 2021, the Group has eight commercial paper programs in the amount of 1,925,000 thousand Euros, of which 1,245,000 thousand Euros are available for utilization. Of the total amount 500,000 thousand Euros have a guaranteed placement, of which 250,000 thousand Euros are available for utilization at 31 March 2021.

Bank loans are mostly composed of loans contracted with the European Investment Bank (EIB), which at 31 March 2021 amounted to 480,071 thousand Euros (at 31 December 2020 it was 480,840 thousand Euros).

The Group also has credit lines negotiated and not used in the amount of 80,000 thousand Euros, maturing up to one year, which are automatically renewable periodically (if they are not resigned in the contractually specified period for that purpose).

The balance of the caption Prepaid interest includes the amount of 10,632 thousand Euros (11,836 thousand Euros in 31 December 2020) related with the refinancing of bonds through an exchange offer completed in 2016.

As a result of the fair value hedge related to the debt emission in the amount of 300,000 thousand Euros, fair value changes concerning interest rate risk were recognized directly in statement of profit and loss, in an amount of 1,796 thousand Euros (positive) (at 31 March 2020 was 1,064 thousand Euros (negative)) (Note 12).

The Company's financial liabilities have the following main types of covenants: Cross default, Pari Passu, Negative Pledge and Gearing.

The bank loans with BEI include also covenants related with rating and other financial ratios in which the Group may be called upon to present an acceptable guarantee in the event of rating and financial ratios below the established values.

As of 31 March 2021, the REN Group complies with all covenants to which it is contractually bound.

REN and its subsidiaries are a part of certain financing agreements and debt issues, which include change in control clauses typical in this type of transactions (including, though not so expressed, changes in control as a result of takeover bids) and essential to the realization of such transactions on the appropriate market context. In any case, the practical application of these clauses is limited to considering the legal ownership of shares of REN restrictions.

Following the legal standards and usual market practices, contractual terms and free market competition, establish that neither REN nor its counterparts in borrowing agreements are authorized to disclose further information regarding the content of these financing agreements.

The effect of the foreign exchange rate exposure was not considered as this exposure is totally covered by hedge derivate in place.

The average interest rates for borrowings including commissions and other expenses were 1.58% in 31 March 2021 and 1.81% in 31 December 2020.

Leases

Minimal payments regarding lease contacts and the carrying amount of the finance lease liabilities as of 31 March 2021 and 31 December 2020 are made up as follows:

The bank loans with BEI include also covenants related with rating and other financial ratios in which the Group may be called upon to present an acceptable guarantee in the event of rating and financial ratios below the established values.
As of 31 March 2021, the REN Group complies with all covenants to which it is contractually bound.
REN and its subsidiaries are a part of certain financing agreements and debt issues, which include change in control clauses typical in this type of transactions (including, though not so expressed, changes in control as a result of takeover bids) and essential to the realization of such transactions on the appropriate market context. In any case, the practical application of these clauses is limited to considering the legal ownership of shares of REN restrictions.
Following the legal standards and usual market practices, contractual terms and free market competition, establish that neither REN nor its counterparts in borrowing agreements are authorized to disclose further information regarding the content of
The effect of the foreign exchange rate exposure was not considered as this exposure is totally covered by hedge derivate in
The average interest rates for borrowings including commissions and other expenses were 1.58% in 31 March 2021 and
	Mar 2021	Dec 2020
Lease liabilities - minimum lease payments
No later than 1 year	1,515	1,597
Later than 1 year and no later than 5 years	2,762	3,232
	4,277	4,829
Future finance charges on leases	(41)	(47)
Present value of lease liabilities	4,237	4,783
	Mar 2021	Dec 2020
The present value of lease liabilities is as follows
No later than 1 year	1,494	1,576
Later than 1 year and no later than 5 years	2,743 4,237	3,207 4,783
			42 55

17 POS-EMPLOYMENT BENEFITS AND OTHERS BENEFITS

REN – Rede Eléctrica Nacional, S.A. grants supplementary retirement, early-retirement and survivor pensions (hereinafter referred to as Pension Plan), provides its retirees and pensioners with a health care plan on a similar basis to that of its serving personnel, and grants other benefits such as long service award, retirement award and a death subsidy (referred to as "Other benefits"). The long service award is applicable to all Group companies. Mar 2021 Dec 2020

At 31 March 2021 and 31 December 2020, the Group had the following amounts recorded relating to liabilities for retirement and other benefits:

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
REN – Rede Eléctrica Nacional, S.A. grants supplementary retirement, early-retirement and survivor pensions (hereinafter referred to as Pension Plan), provides its retirees and pensioners with a health care plan on a similar basis to that of its serving personnel, and grants other benefits such as long service award, retirement award and a death subsidy (referred to as "Other
At 31 March 2021 and 31 December 2020, the Group had the following amounts recorded relating to liabilities for retirement
	Mar 2021	Dec 2020
Liability on statement of financial position
Pension plan	53,686	54,726
Healthcare plan and other benefits	45,620	45,781
	99,306	100,507

The reconciliation of the remeasurement of the net benefit liability is as follows:

During the three-month periods ended 31 March 2021 and 2020, the following operating expenses were recorded regarding benefit plans with employees:

Charges to the statement of profit and loss (Note 24)
	862	1,003

The amounts reported to 31 March 2021 and 2020 result from the projection of the actuarial valuation as of 31 December 2020 and 2019, for the three-month period ended 31 March 2021 and 2020, considering the estimated increase in salaries for 2021 and 2020, respectively.

	REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
	The actuarial assumptions used to calculate the post-employment benefits are considered by the REN Group and the entity
	specialized in the actuarial valuation reports to be those that best meet the commitments established in the Pension plan, and related retirement benefit liabilities, and are as follows:
				Dec 2020	Dec 2019
Annual discount rate				Full Yield Curve	1.00%
	Expected percentage of serving employees elegíble for early retirement			20.00%	20.00%
	(more than 60 years of age and 36 years in service) - by Collective work agreement Expected percentage of serving employees elegible for early retirement - by Management act			10.00%	10.00%
Rate of salary increase				2.50%	2.50%
Pension increase				1.50%	1.50%
	Future increases of Social Security Pension amount			1.30%	1.30%
Inflation rate				1.50%	1.50%
Medical trend				1.50%	1.50%
Management costs (per employee/year)				€297	€297
Expenses medical trend				1.50%	1.50%
Retirement age (number of years)				66	66
Mortality table				TV 88/90	TV 88/90
	18 PROVISIONS FOR OTHER RISKS AND CHARGES
	The changes in provisions for other risks and charges in the periods ended 31 March 2021 and 31 December 2020 were as
		Mar 2021	Dec 2020
		8,508	8,416
	Begining balance
	Increases	-	669
	Reversing	-	(484)
	Utilization	-	(93)
	Ending balance	8,508	8,508
	Non-current provision	8,508 8,508	8,508 8,508

18 PROVISIONS FOR OTHER RISKS AND CHARGES

Reversing	-	(484)
Utilization	-	(93)
	8,508	8,508
Ending balance Non-current provision	8,508	8,508

At 31 March 2021, the caption "Provisions" corresponds essentially to estimates of the payments to be made by REN resulting from legal processes in progress for damage caused to third parties.

19 TRADE AND OTHER PAYABLES

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
19 TRADE AND OTHER PAYABLES
The caption "Trade and other payables" at 31 March 2021 and 31 December 2020 was made up as follows:
		Mar 2021			Dec 2020
			Total	Current	Non current
	Current	Non current				Total
Trade payables
Current suppliers (Note 9)	176,473	-	176,473	164,595	-	164,595
Other creditors
Other creditors (Note 9)	109,273	46,851	156,124	52,976	51,650	104,626
Tariff deviations (Note 9)	46,705	115,213	161,918	45,252	59,035	104,287
Fixed assets suppliers (Note 9)	27,686	-	27,686	45,676	-	45,676
Tax payables (Note 9) (i)	17,052	-	17,052	19,927	-	19,927
Deferred income
Grants related to assets	19,814	257,287	277,101	19,954	261,201	281,155
Accrued costs
Holidays and holidays subsidies (Note 9)	6,974	-	6,974	5,420	-	5,420
Trade and other payables	403,977	419,351	823,328	353,800	371,886	725,686

The caption "Trade and other payables" includes: (i) the amount of 37,935 thousand Euros, regarding the management of CAEs from Turbogás and Tejo Energia (29,441 thousand Euros at 31 December 2020); (ii) the amount of 8,865 thousand Euros of investment projects not yet invoiced (9,994 thousand Euros at 31 December 2020); (iii) the amount of 4 thousand Euros (4 thousand Euros at 31 December 2020) from the activity of the Market Manager (MIBEL – Mercado Ibérico de Electricidade); and (iv) the amount of 7,226 thousand Euros of "CMEC – Custo para a Manutenção do Equilíbrio Contratual" to be invoiced by EDP – Gestão da Produção de Energia, S.A. (104 thousand Euros at 31 December 2020), also reflected in the caption "Trade receivables" (Note 11).

This transaction related to "CMEC" sets a pass-through in the consolidated income statement of REN, fact for which it is compensated in that statement.

The caption "Other creditors" includes: (i) the amount of 11,283 thousand Euros (11,813 thousand Euros at 31 December 2020) related with the Efficiency Promotion Plan on Energy Consumption ("PPEC"), which aims to financially support initiatives that promote efficiency and reduce electricity consumption, which should be used to finance energy efficiency projects, according to the evaluation metrics defined by ERSE and (ii) the responsibility for the extraordinary contribution on the energy sector in the amount of 27,095 thousand Euros (Note 27) (at 31 March 2020 was 28,347 thousand Euros).

20 SALES AND SERVICES RENDERED

Sales and services rendered recognized in the consolidated statement of profit and loss for the three-month periods ended 31 March 2021 and 2020 is made up as follows:

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
20 SALES AND SERVICES RENDERED
Sales and services rendered recognized in the consolidated statement of profit and loss for the three-month periods ended
	Mar 2021	Mar 2020
Goods:
Domestic market	31	-
	31	-
Services - Domestic market:
Electricity transmission and overall systems management	84,553	85,278
Natural gas transmission	19,564	19,811
Natural gas distribution	14,059	13,680
Regasification	8,858	10,304
Underground gas storage	5,519	4,367
Telecommunications network	1,746	1,688
Trading	521	432
Others	121	83
Services - External market (Chile):
Transmission and transformation of electricity	2,278	2,436
	137,220	138,079
Total sales and services rendered	137,251	138,079
21 REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES
As part of the concession contracts treated under IFRIC 12, the construction activity is subcontracted to specialized suppliers.
Therefore the Group obtains no margin in the construction of these assets. The detail of the revenue and expenses with the acquisition of concession assets for the three-month periods ended 31 March 2021 and 2020 were made up as follows:
	Mar 2021	Mar 2020
Revenue from construction of concession assets
Acquisitions	25,844	21,032
Own work capitalised :
Financial expenses (Note 5)	683	452
Overhead and management costs (Note 5)	3,948 30,476	3,804 25,288

21 REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES

As part of the concession contracts treated under IFRIC 12, the construction activity is subcontracted to specialized suppliers. Therefore the Group obtains no margin in the construction of these assets. The detail of the revenue and expenses with the acquisition of concession assets for the three-month periods ended 31 March 2021 and 2020 were made up as follows:

Services - External market (Chile):
Transmission and transformation of electricity	2,278	2,436
	137,220	138,079
21 REVENUE AND COSTS FOR CONSTRUCTION ACTIVITIES
	Mar 2021	Mar 2020
Revenue from construction of concession assets
Acquisitions	25,844	21,032
Own work capitalised :
As part of the concession contracts treated under IFRIC 12, the construction activity is subcontracted to specialized suppliers. Therefore the Group obtains no margin in the construction of these assets. The detail of the revenue and expenses with the acquisition of concession assets for the three-month periods ended 31 March 2021 and 2020 were made up as follows: Financial expenses (Note 5)	683	452
Overhead and management costs (Note 5)	3,948	3,804
	30,476	25,288
Cost of construction of concession assets Acquisitions	25,844	21,032

22 OTHER OPERATING INCOME

The caption "Other operating income" loss for the three-month periods ended 31 March 2021 and 2020 is made up as follows:

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
The caption "Other operating income" loss for the three-month periods ended 31 March 2021 and 2020 is made up as follows:
	Mar 2021	Mar 2020
	4,678	4,450
Recognition of investment subsidies in profit and loss
Underground occupancy tax	1,700
Supplementary income		357
Disposal of unused materials		349
Others		239
	7,323
The caption "External supplies and services" for the three-month periods ended 31 March 2021 and 2020 is made up as
		2,277 271 50 392 7,440
	Mar 2021	Mar 2020
Maintenance costs	5,038	3,597
Cross border interconnection costs ii)	3,304	1,458
Fees relating to external entities i) Electric energy costs	2,198 2,068	2,087 1,898

23 EXTERNAL SUPPLIES AND SERVICES

The caption "External supplies and services" for the three-month periods ended 31 March 2021 and 2020 is made up as follows:

Recognition of investment subsidies in profit and loss	4,678	4,450
	7,323	7,440
	Mar 2021	Mar 2020
The caption "External supplies and services" for the three-month periods ended 31 March 2021 and 2020 is made up as Maintenance costs	5,038	3,597
Cross border interconnection costs ii)	3,304	1,458
Fees relating to external entities i)	2,198	2,087
Electric energy costs	2,068	1,898
Gas transport subcontracts	1,721	1,221
Insurance costs	1,568	1,080
Security and surveillance	466	508
Advertising and communication costs	167	241
Travel and transportation costs	103	303
Other	936	817

i)The fees paid to external entities refer to specialized work and fees paid by REN for contracted services and specialized studies. ii)The cross border interconnection costs refer to the cost assumed on cross-border trade in electricity.

24 PERSONNEL COSTS

Personnel costs for the three-month periods ended 31 March 2021 and 2020 are made up as follows:

Personnel costs for the three-month periods ended 31 March 2021 and 2020 are made up as follows:
	Mar 2021	Mar 2020
Remuneration:
Board of directors	866	722
Personnel	9,385	9,209
	10,252	9,931
Social charges and other expenses:
Social security costs	2,021	2,000
Post-employement and other benefits cost (Note 17)	862	1,003
Social support costs	481	495
Other	49	63
	3,413	3,561
Total personnel costs	13,664	13,493
The Corporate bodies' remuneration includes remunerations paid to the Board of Directors as well as the General
	Mar 2021 Mar 2020
Other operating costs for the three-month periods ended 31 March 2021 and 2020 are made up as follows: ERSE operating costs i)	1,977	2,764
Underground occupancy tax	1,700	2,277
Donations and quotizations	451	708
Others	456	221

The Corporate bodies' remuneration includes remunerations paid to the Board of Directors as well as the General Shareholders meeting attendance.

25 OTHER OPERATING COSTS

Other operating costs for the three-month periods ended 31 March 2021 and 2020 are made up as follows:

4,584	5,970

i) The caption "ERSE operating costs" corresponds to ERSE's operating costs, to be recovered through electricity and gas tariffs.

26 FINANCIAL COSTS AND FINANCIAL INCOME

Financial costs and financial income for the three-month periods ended 31 March 2021 and 2020 are made up as follows:

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
Financial costs and financial income for the three-month periods ended 31 March 2021 and 2020 are made up as follows:
	Mar 2021	Mar 2020
Financial costs
Interest on bonds issued	7,764	10,997
Other borrowing interests	2,724	3,311
Interest on commercial paper issued	1,039	143
Derivative financial instruments	121	167
Other financing expenditure	505	334
	12,152	14,953
Financial income
Derivative financial instruments	173	822
Other financial investments	1,016	520
Interest income	5	-

27 EXTRAORDINARY CONTRIBUTION OVER THE ENERGY SECTOR

Law No. 83-C / 2013 of 31 December introduced a specific contribution of entities operating in the energy sector, called Extraordinary Contribution over the Energy Sector ("ECES"), that was extended by Law 82-B / 2014 , of 31 December, Law 7-A / 2016, of 30 March, Law 114/2017, of 29 December, Law 71/2018, 31 December, Law 2/2020, of 31 March and Law 75- B/2020, of 31 December.

The regime introduced is aimed at financing mechanisms that promote systemic sustainability of the sector through the setting up of a fund with the main objective of reducing the tariff deficit. The entities subject to this regime are, among others, entities that are dealers of transport activities or distribution of electricity and natural gas.

The calculation of the ECES is levied on the value of the assets with reference to the first day of the financial year 2021 (1 January 2021) that include cumulatively, the tangible fixed assets, intangible assets, with the exception of industrial property elements, and financial assets related with regulated activities. In the case of regulated activities, the ECES is levied on the value of regulated assets (i.e. the amount recognized by ERSE in the calculation of the allowed income with reference to 1 January 2021) if it is greater than the value of those assets, over which the rate of 0.85% is applied.

To the extent that it is a present obligation whose facts originating already occurred, with timing and amounts certain or ascertainable, REN recorded liabilities in the amount of 27,095 thousand Euros (Note 19) (for the three-month period ended 31 March 2020 was 28,347 thousand Euros) against a cost in the statement of profit and loss.

28 EARNINGS PER SHARE

Earnings per share were calculated as follows:

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
28 EARNINGS PER SHARE
Earnings per share were calculated as follows:
		Mar 2021	Mar 2020
Consolidated net profit used to calculate earnings per share	(1)	4,491	4,302
Number of ordinary shares outstanding during the period (note 14) Effect of treasury shares (note 14)	(2)	667,191,262 3,881,374	667,191,262 3,881,374
Number of shares in the period	(3)	663,309,888	663,309,888
Basic earnings per share (euro per share)	(1)/(3)	0.01	0.01

The basic earnings per share are the same as the diluted earnings as there are no situations that could origin dilution effects.

29 DIVIDENDS PER SHARE

During the Shareholders General Assembly meeting held on 7 May 2020, the Shareholders approved the distribution of dividends, with respect to the Net profit of 2019, in the amount of 114,090 thousand Euros (0.171 Euros per share). The dividends attributable to own shares amounted to 664 thousand Euros, being paid to the shareholders a total amount of 113,426 thousand of Euros.

30 CONTINGENT ASSETS AND LIABILITIES

30.1. Contingent liabilities

Tejo Energia - Produção e Distribuição de Energia Eléctrica, SA ("Tejo Energia") has announced to REN - Rede Eléctrica Nacional, SA ("REN Eléctrica") and REN Trading SA ("REN Trading") its intention to renegotiate the Energy Acquisition Agreement (CAE), in order to reflect in the amounts payable to this producer the costs, which in its opinion would be due, incurred with (i) financing of the social tariff and (ii) with the tax on petroleum products and energy and with the rate of carbon. Turbogás - Produtora Energética S.A. ("Turbogás") also stated its intention to renegotiate the CAE, in order to reflect in the amounts payable the costs incurred with the financing of the social tariff.

According to the CAE, Tejo Energia and Turbogás act as producers and sellers and REN Trading as purchaser of the energy produced in power plants. REN Eléctrica is jointly and severally liable with REN Trading, regarding the execution of the CAE with Tejo Energia and Turbogás. According to the information received, the total costs incurred by these companies until 31 March 2021 amounts to, approximately, 66 million Euros.

REN Trading and REN Elétrica consider that, with the existing legal framework, this possibility depends on the recognition that the associated charges can be considered as general costs of the national electricity system, the only way to guarantee the economic neutrality of REN Trading's contractual position .

All of these disputes have already been dealt with by the financial panels provided for in the PPAs, which rejected the requests made by the plaintiffs. The two disputes with Tejo Energia were subsequently the subject of arbitration requests submitted by it to the International Chamber of Commerce (ICC).

30.2. Guarantees given

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
30.2. Guarantees given
At 31 March 2021 and 31 December 2020, the REN Group had given the following bank guarantees:
Beneficiary		Scope			Mar 2021	Dec 2020
European Investment Bank (EIB)	To guarantee loans				276,901	277,693
Tax Authority and Customs		Ensure the suspension of tax enforcement proceedings			24,482	24,482
General Directorate of Energy and Geology Judge of District Court	Guarantee for expropriation processes	To guarantee compliance with the contract relating to the public service concession			23,788 5,549	23,788 5,549
Municipal Council of Seixal	Guarantee for litigation				3,133	3,133
Portuguese State	Guarantee for litigation				2,232	2,242
Municipal Council of Maia	Guarantee for litigation				1,564	1,564
Municipal Council of Odivelas	Guarantee for litigation				1,119	1,119
Mibgás EP - Estradas de Portugal	Guarantee for litigation	To guarantee the liabilities incurred from the participation in the natural gas organized market			540 537	- 555
Municipal Council of Porto	Guarantee for litigation				368	368
Municipal Council of Silves	Guarantee for expropriation processes				352	352
NORSCUT - Concessionária de Auto-estradas		To guarantee prompt payment of liabilities assumed by REN in the contract ceding utilization			200	200
District Court of Lisbon		Guarantee for suspension of continuation of pending enforcement proceedings			-	140
Others (loss then 100 thousand Euros)	Guarantee for litigation				109	109
					340,874	341,294
31 RELATED PARTIES
Main shareholders and shares held by corporate bodies
At 31 March 2021 and 31 December 2020, the shareholder structure of Group REN was as follows:
		Mar 2021		Dec 2020
		Number of		Number of
		shares	%	shares	%
State Grid Europe Limited (Group State Grid)		166,797,815	25.0%	166,797,815	25.0%
Mazoon B.V. (Group Oman Oil Company S.A.O.C.)		80,100,000	12.0%	80,100,000	12.0%
Lazard Asset Management LLC Fidelidade - Companhia de Seguros, S.A.		46,611,245 35,496,424	7.0% 5.3%	46,611,245 35,496,424	7.0% 5.3%

31 RELATED PARTIES

Main shareholders and shares held by corporate bodies

31 RELATED PARTIES Main shareholders and shares held by corporate bodies
At 31 March 2021 and 31 December 2020, the shareholder structure of Group REN was as follows:	Mar 2021		Dec 2020
	Number of		Number of
	shares	%
State Grid Europe Limited (Group State Grid)	166,797,815	25.0%	166,797,815	25.0%
Mazoon B.V. (Group Oman Oil Company S.A.O.C.) Lazard Asset Management LLC	80,100,000 46,611,245	12.0% 7.0%	80,100,000 46,611,245	12.0% 7.0%
Fidelidade - Companhia de Seguros, S.A.	35,496,424	5.3%	35,496,424	5.3%
Red Eléctrica Internacional, S.A.U.	33,359,563	5.0%	33,359,563	5.0%
Great-West Lifeco, Inc.	24,821,784	3.7%	18,225,165	2.7%
Own shares	3,881,374	0.6%	3,881,374	0.6%
Others	276,123,057	41.4%	282,719,676	42.4%
	667,191,262	100%	667,191,262	100%

Management remuneration

The Board of Directors of REN, SGPS was considered, in accordance with IAS 24, to be the only key members in the Management of the Group.

REN has not established any specific retirement benefit system for the Board of Directors.

Remuneration of the Board of Directors of REN, SGPS in the three-month period ended 31 March 2021 amounted to 776 thousand Euros (598 thousand Euros in 31 March 2020), as shown in the following table:

Transaction of shares by the members of the Board of Directors

During the three-month period ended 31 March 2021, there were no transactions carried out by members of the corporate bodies.

Transactions with group or dominated companies

In its activity, REN maintains transactions with Group entities or with dominated parties. The terms in which these transactions are held are substantially identical to those practiced between independent parties in similar operations.

In the consolidation process, the amounts related to such transactions or open balances are eliminated in the financial statements.

The main transactions held between Group companies were: (i) borrowings and shareholders loans; and (ii) shared services namely, legal services, administrative services and informatics.

Balances and transactions held with shareholders, associates and other related parties

During the three-month periods ended 31 March 2021 and 2020, Group REN carried out the following transactions with reference shareholders, qualified shareholders and related parties:

Revenue

Transaction of shares by the members of the Board of Directors
During the three-month period ended 31 March 2021, there were no transactions carried out by members of the corporate
Transactions with group or dominated companies
In its activity, REN maintains transactions with Group entities or with dominated parties. The terms in which these transactions are held are substantially identical to those practiced between independent parties in similar operations.
In the consolidation process, the amounts related to such transactions or open balances are eliminated in the financial
The main transactions held between Group companies were: (i) borrowings and shareholders loans; and (ii) shared services
namely, legal services, administrative services and informatics. Balances and transactions held with shareholders, associates and other related parties
During the three-month periods ended 31 March 2021 and 2020, Group REN carried out the following transactions with reference shareholders, qualified shareholders and related parties:
	Mar 2021	Mar 2020
Sales and services provided
Invoicing issued - REE	-	138
Invoicing issued - Centro de Investigação em Energia REN - State Grid	108	22
Dividends received
Electrogás (Note 7)	5,107	7,469

Expenses

REPORT & ACCOUNTS MARCH'21 CONSOLIDATED FINANCIAL STATEMENTS
	Mar 2021	Mar 2020
External supplies and services
Invoicing received - REE	17	1,177
Invoicing received - CMS Rui Pena & Arnaut1	33	11

Balance

The balances at 31 March 2021 and 31 December 2020 resulting from transactions with related parties were as follows:

	Mar 2021	Dec 2020
Trade and other receivables
REE - Dividends	-	1,477
Electrogás - Dividends	5,121	13
Centro de Investigação em Energia REN - State Grid - Other receivables	11	31
	5,132	1,521
Trade and other payables
Centro de Investigação em Energia REN - State Grid - Other payables	1	2
REE - Trade payables	-	7
CMS - Rui Pena & Arnaut - Trade payables 1	9	27
SPECO - Shandong Power Equipment CO 2	516	251
	526	287

¹ Entity related to the Administrator José Luís Arnaut. During 2021, the contract for the provision of legal services in the area of law and public procurement, awarded in 2017 to the law firm CMS Rui Pena and Arnaut, an entity related to the Director José Luís Arnaut, remained in force. The contract, under a waiver regime, was signed in 2017, for a period of three years. The procedure for awarding this contract took place through consultation with five entities, on a competitive basis and under the terms of REN's Operational Purchasing Manual, which establishes the general principles and relationships with suppliers that are based, namely, on the respect for the competition, transparency, accountability, equality and impatience.

² Subsidiary entity of the shareholder State Grid Europe Limited. The operations with this entity are related to acquisitions of concession assets in progress. Also, this entity presents guarantees amounting to 223 thousand Euros.

32 SUBSEQUENT EVENTS

At 9 April 2021, REN Finance B.V. (a company wholly owned by REN) has agreed the terms of an issue of notes in the Euro Bonds market in an amount of 300 million Euros, under the respective EMTN (European Medium Term Notes) programme from REN and REN Finance B.V., with a maturity of 8 years and an interest rate equal to 8 years' mid swap rate, accrued of 0.6%. This bond issue is part of REN´s regular funding policy and this is REN´s inaugural Green Bond and so, it reflects the alignment of the company´s funding and sustainability strategies.

33 EXPLANATION ADDED FOR TRANSLATION

These consolidated financial statements are a translation of financial statements originally issued in Portuguese in accordance with IAS 34 – Interim Financial Reporting. In the event of discrepancies, the Portuguese language version prevails.

The Accountant

Pedro Mateus

The Board of Directors

Rodrigo Costa

(Chairman of the Board of Directors and Chief Executive Officer)

João Faria Conceição

(Member of the Board of Directors and Chief Operational Officer)

Gonçalo Morais Soares

(Member of the Board of Directors and Chief Financial Officer)

Guangchao Zhu

(Vice-President of the Board of Directors designated by State Grid International Development Limited)

Mengrong Cheng

(Member of the Board of Directors)

Li Lequan

(Member of the Board of Directors)

Ana Pinho

(Member of the Board of Directors)

Omar Al Wahaibi

(Member of the Board of Directors)

Jorge Magalhães Correia

(Member of the Board of Directors)

Manuel Sebastião

(Member of the Board of Directors and Chairman of the Audit Committee)

Gonçalo Gil Mata

(Member of the Board of Directors and of the Audit Committee)

Rosa Freitas Soares (Member of the Board of Directors and of the Audit Committee)

Maria Estela Barbot (Member of the Board of Directors)

José Luis Arnaut

(Member of the Board of Directors)

Ana da Cunha Barros

(Member of the Board of Directors)

Note – The remaining pages of this Report & Accounts were initialled by the members of the Executive Committee and by the Certified Accountant, Pedro Mateus.