Red Electrica Corp. S.A. Annual Report 2023

FY2023 Annual Report · Red Electrica Corp. S.A.

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Audit Report on Financial Statements
issued by an Independent Auditor

REDEIA CORPORACIÓN, S.A.
Financial Statements and Management Report
for the year ended
December 31, 2023

Ernst & Young, S.L.
C/ Raimundo Fernández Villaverde, 65
28003 Madrid

Tel: 902 365 456
Fax: 915 727 238
ey.com

AUDIT REPORT ON FINANCIAL STATEMENTS ISSUED BY AN INDEPENDENT AUDITOR

Translation of a report and financial statements originally issued in Spanish. In the event of discrepancy, the
Spanish-language version prevails (See Note 30)

To the shareholders of REDEIA CORPORACIÓN, S.A.:

Report on the financial statements

Opinion

We have audited the financial statements of REDEIA CORPORACIÓN, S.A. (the Company), which
comprise the balance sheet as at December 31, 2023, the income statement, the statement of
changes in equity, the cash flow statement, and the notes thereto for the year then ended.

In our opinion, the accompanying financial statements give a true and fair view, in all material
respects, of the equity and financial position of the Company as at December 31, 2023 and of its
financial performance and its cash flows for the year then ended in accordance with the applicable
regulatory framework for financial information in Spain (identified in Note 2 to the accompanying
financial statements) and, specifically, the accounting principles and criteria contained therein.

Basis for opinion

We conducted our audit in accordance with prevailing audit regulations in Spain. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report.

We are independent of the Company in accordance with the ethical requirements, including those
related to independence, that are relevant to our audit of the financial statements in Spain as
required by prevailing audit regulations. In this regard, we have not provided non-audit services nor
have any situations or circumstances arisen that might have compromised our mandatory
independence in a manner prohibited by the aforementioned requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

Domicilio Social: Calle de Raimundo Fernández Villaverde, 65. 28003 Madrid - Inscrita en el Registro Mercantil de Madrid, tomo 9.364 general, 8.130 de la sección 3a del Libro de Sociedades,
folio 68, hoja nº 87.690-1, inscripción 1a. C.I.F. B-78970506.

A member firm of Ernst & Young Global Limited.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our audit opinion thereon,
and we do not provide a separate opinion on these matters.

Valuation of investments in group companies

Description As of December 31, 2023, the Company has recorded in the section " Non-current

Our
response

investments in group companies and associates" investments in group companies and
loans granted to group companies amounting to 2,849 and 611 million euros,
respectively. In the section " Current investments in group companies and associates
", the company recorded loans granted to group companies amounting to 817 million
euros.

The Company's Management evaluates, at least at the end of each fiscal year, the
existence of indications of impairment and makes the necessary valuation corrections
whenever there is objective evidence that the book value of an investment will not be
recoverable. The amount of the valuation correction is the difference between its
book value and the recoverable amount.

We have considered this area as a key audit matter because the determination of the
recoverable amount of the aforementioned investments requires the making of
estimations. This involves the application of significant judgments in establishing the
assumptions considered by the Company's Management in relation to these
estimations, as well as the relevance of the amounts involved.

Information on the applied valuation standards and corresponding breakdowns is
included in notes 4, 8, and 21 of the accompanying financial statements.

Our audit procedures in this regard included, among other, the following:



Understanding the process established by the Company's Management to
identify indications of impairment and determine the recoverable amount of
investments in group and associate companies. We evaluated the design and
implementation of relevant controls established in this process and verified the
operational effectiveness of these controls.

 We evaluated the analysis of the indicators of impairment of value of

investments in group and associate companies performed by the Company's
Management.

 We reviewed the model used by the Company's Management for the

determination of the recoverable amount in collaboration with our valuation
specialists. This particularly included the mathematical consistency of the
model and the reasonableness of projected cash flows and long-term discount
and growth rates.



In carrying out our review, we held interviews with those responsible for the
development of the model and used recognized external sources and other
available information to cross-check the data used.

 We reviewed the sensitivity analyses performed by the Company's Management
regarding the estimates made for the determination of the recoverable amount
considering changes in relevant assumptions.

A member firm of Ernst & Young Global Limited.

 We reviewed the breakdowns included in the report and assessed their

compliance with the applicable financial reporting regulatory framework.

Other matters

On February 27, 2023, other auditors issued their audit report on the annual accounts for fiscal year
2022 in which they expressed a favorable opinion.

Other information: management report

Other information refers exclusively to the 2023 management report, the preparation of which is the
responsibility of the Company’s directors and is not an integral part of the financial statements.

Our audit opinion on the financial statements does not cover the management report. Our
responsibility for the management report, in conformity with prevailing audit regulations in Spain,
entails:

Checking only that the non-financial statement and certain information included in the
Corporate Governance Report and in the Board Remuneration Report, to which the Audit Law
refers, was provided as stipulated by applicable regulations and, if not, disclose this fact.

Assessing and reporting on the consistency of the remaining information included in the
management report with the financial statements, based on the knowledge of the entity
obtained during the audit, in addition to evaluating and reporting on whether the content and
presentation of this part of the management report are in conformity with applicable
regulations. If, based on the work we have performed, we conclude that there are material
misstatements, we are required to disclose this fact.

Based on the work performed, as described above, we have verified that the information referred to
in paragraph a) above is provided as stipulated by applicable regulations and that the remaining
information contained in the management report is consistent with that provided in the 2023
financial statements and its content and presentation are in conformity with applicable regulations.

Responsibilities of the directors and the audit committee for the financial statements

The directors are responsible for the preparation of the accompanying financial statements so that
they give a true and fair view of the equity, financial position and results of the Company, in
accordance with the regulatory framework for financial information applicable to the Company in
Spain, identified in Note 2 to the accompanying financial statements, and for such internal control as
they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.

The audit committee is responsible for overseeing the Company’s financial reporting process.

A member firm of Ernst & Young Global Limited.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with prevailing audit regulations in Spain will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with prevailing audit regulations in Spain, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:



Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.

Conclude on the appropriateness of the director’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.



Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.

We communicate with the audit committee of the Company regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

We also provide the audit committee of the Company with a statement that we have complied with
relevant ethical requirements, including those related to independence, and to communicate with
them all matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.

From the matters communicated with the audit committee of the Company, we determine those
matters that were of most significance in the audit of the financial statements of the current period
and are therefore the key audit matters.

A member firm of Ernst & Young Global Limited.

We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter.

Report on other legal and regulatory requirements

European single electronic format

We have examined the digital file of the European single electronic format (ESEF) of REDEIA
CORPORACIÓN, S.A. for the 2023 financial year, consisting of an XHTML file containing the financial
statements for the year, which will form part of the annual financial report.

The directors of REDEIA CORPORACIÓN, S.A. are responsible for submitting the annual financial report
for the 2023 financial year, in accordance with the formatting requirements set out in Delegated
Regulation EU 2019/815 of 17 December 2018 of the European Commission (hereinafter referred to
as the ESEF Regulation).

Our responsibility consists of examining the digital file prepared by the directors of the Company, in
accordance with prevailing audit regulations in Spain. These standards require that we plan and
perform our audit procedures to obtain reasonable assurance about whether the contents of the
financial statements included in the aforementioned digital file correspond in their entirety to those
of the financial statements that we have audited, and whether the financial statements and the
aforementioned file have been formatted, in all material respects, in accordance with the ESEF
Regulation.

In our opinion, the digital file examined corresponds in its entirety to the audited financial
statements, which are presented, in all material respects, in accordance with the ESEF Regulation.

Additional report to the audit committee

The opinion expressed in this audit report is consistent with the additional report we issued to the
audit committee on February 27, 2024.

Term of engagement

The ordinary shareholders’ meeting held on June 7, 2022 appointed us as auditors for 3 years,
commencing on December 31, 2023.

ERNST & YOUNG, S.L.
(Registered in the Official Register of
Auditors under No. S0530)

(Signature on the original in Spanish)

_______________________________
David Ruiz-Roso Moyano
(Registered in the Official Register of
Auditors under No. 18336)

February 27, 2024

A member firm of Ernst & Young Global Limited.

Financial statements

2023

Redeia Corporación, S.A.

Redeia Corporación, S.A.
Balance sheet at 31 December 2023

Thousands of euros

Non-current assets
Intangible assets

Software

Property, plant and equipment

Land and buildings

Other fixtures, machinery, tools, furniture and other PP&E

PP&E under construction and advances

Investment properties

Land

Buildings

Non-current investments in group companies and associates

Equity instruments
Loans to companies

Non-current financial assets

Equity instruments

Loans to third parties
Derivatives
Other financial assets

Deferred tax assets
Current assets
Trade and other receivables

Trade receivables from group companies and associates
Other receivables

Receivable from employees

Current tax assets

Taxes receivable

Current investments in group companies and associates

Loans to companies

Current financial assets
Other financial assets

Prepayments for current assets

Cash and cash equivalents

Cash

Cash equivalents

Total assets

The accompanying notes 1 to 30 are an integral part of these financial statements.

Note

8
21
12

13
21

31 Dec. 2023
3,578,379
16,383
16,383
72,033
60,232

31 Dec. 2022
3,479,511
12,807
12,807
70,557
61,806

5,999

5,802
558
558

—

3,459,441
2,848,915
610,526
5,721
2,825

706
2,168
22
24,243
1,191,083
244,208
37,070
171

174

205,530

1,263
816,896
816,896
1,029
1,029

1,670

127,280

2,239

125,041

2,453

6,298
1,703
558

1,145

3,379,476
2,848,915
530,561
7,464
6,603

839
—
22
7,504
761,136
193,248
17,181
211

325

174,528

1,003
106,462
106,462
401,027
401,027

1,891

58,508

—

4,769,462

4,240,647

Redeia Corporación, S.A. | 2023 financial statements

Redeia Corporación, S.A.
Balance sheet at 31 December 2023

Thousands of euros
Equity
Capital and reserves

Capital

Reserves

(Own shares)

Profit for the year

(Interim dividend)

Other equity instruments

Valuation adjustments

Non-current liabilities
Non-current provisions
Non-current borrowings

Notes and other marketable securities

Bank borrowings
Derivatives
Other liabilities

Borrowings from group companies and associates
Deferred tax liabilities
Current liabilities
Current borrowings

Notes and other marketable securities

Bank borrowings

Other current borrowings

Borrowings from group companies and associates
Trade and other payables

Trade payables to group companies
Other payables

Receivable from employees

Other taxes payable

Total equity and liabilities

The accompanying notes 1 to 30 are an integral part of these financial statements.

Note
14

15
16

21
17

21
18
21

31 Dec. 2023
3,717,033
3,698,034

270,540

2,643,811

(19,496)

450,428

(147,249)

31 Dec. 2022
3,329,963
3,310,964

270,540

2,266,292

(26,296)

947,571

(147,143)

500,000

18,999

599,659
20,266
538,100
399,299

138,785
—
16
39,622
1,671
452,770
195,914
25,630

6,794

163,490
232,795
24,061
8
11,594

11,059

1,400

—

18,999

488,461
20,394
440,480
398,761

39,494
2,209
16
25,880
1,707
422,223
283,347
2,512

120,987

159,848
97,339
41,537
169
30,724

9,400

1,244

4,769,462

4,240,647

Redeia Corporación, S.A. | 2023 financial statements

Redeia Corporación, S.A.
Statement of profit or loss for the year ended 31 December 2023

Thousands of euros
Revenue

Provision of services

Finance income from investments in equity instruments

Group companies and associates

Finance income from investments in securities and other financial instruments of group
companies and associates

Self-constructed assets
Cost of sales

Raw materials and other consumables used

Other operating income

Non-trading and other operating income

Employee benefits expense

Wages and salaries

Employee benefits

Other items and employee benefits

Other operating expenses

External services

Taxes other than income tax
Amortisation and depreciation
Impairment of and gains/(losses) on disposal of fixed assets

Impairment and losses

Impairment of and gains/(losses) on disposal of financial assets

Gains/(losses) on disposals

Operating profit
Finance income

Marketable securities and other financial instruments

Of third parties

Finance costs

Borrowings from group companies and associates

Third-party borrowings

Unwinding of provision discounting

Change in fair value of financial instruments

Held-for-trading portfolio and other securities

Exchange differences

Net finance expense

Profit before tax
Income tax
Profit for the year from continuing operations

Profit for the year

The accompanying notes 1 to 30 are an integral part of these financial statements.

Note
20.a

20.b

5 & 6
20.d

20.e

20.c

2023
548,376
78,051

415,051

2022
89,499
74,306

—

55,274

15,193

331
(187)

(187)

563

563
(47,080)
(34,855)

(7,301)

(4,924)

(25,107)

(23,829)

(1,278)
(7,421)
1,279
1,279

—

470,754
7,645
7,645

7,645

(21,442)
(6,963)

(14,184)

(295)
(510)
(510)

(14,300)

456,454
(6,026)
450,428

450,428

252
(204)

(204)

355

355
(48,105)
(37,541)

(6,418)

(4,146)

(21,639)

(20,975)

(664)
(4,740)
5
5

969,909

985,332
4,631
4,631

4,631

(11,298)
(319)

(10,618)

(361)
(113)
(113)

(6,738)

978,594
(31,023)
947,571

947,571

Redeia Corporación, S.A. | 2023 financial statements

Redeia Corporación, S.A.

Statement of total changes in equity for the year ended 31 December 2023

Thousands of euros
Balance at 31 December 2021
Total recognised income and expense
Transactions with shareholders and owners

(-) Dividend distribution

Transactions with own shares (net)
Other changes in equity

Appropriation of prior-year profit

Balance at 31 December 2022
Total recognised income and expense

Transactions with shareholders and owners

(-) Dividend distribution

Transactions with own shares (net)
Other changes in equity

Appropriation of prior-year profit
Other equity instruments

Balance at 31 December 2023

Issued capital

Reserves (Own shares)

270,540
—

2,243,366
3,033

(31,618)
—

Profit for the
year
559,108
947,571

(Interim
dividend)
(147,061)
—

Other equity
instruments
—
—

Capital and
reserves
2,894,335
950,604

Valuation
adjustments
18,999
—

Total equity

2,913,334
950,604

—
—

1,312
61

—
5,322

(393,527)
—

(147,143)
—

—
270,540
—

18,520
2,266,292
611

—
(26,296)
—

(165,581)
947,571
450,428

147,061
(147,143)
—

—
—

1,091
(1,021)

—
6,800

(393,528)
—

(147,249)
—

—
—

(539,358)
5,383

—
3,310,964
451,039

(539,686)
5,779

—
—

(539,358)
5,383

—
18,999
—

—
3,329,963
451,039

—
—

(539,686)
5,779

—
—
270,540

406,900
(30,062)
2,643,811

—
—
(19,496)

(554,043)
—
450,428

147,143
—
(147,249)

—
500,000
500,000

—
469,938
3,698,034

—
—
18,999

—
469,938
3,717,033

The accompanying notes 1 to 30 are an integral part of these financial statements.

Redeia Corporación, S.A. | 2023 financial statements

Redeia Corporación, S.A.

Statement of recognised income and expense for the year ended 31 December 2023

Thousands of euros
Profit for the year

Actuarial gains and losses and other adjustments (note 15)
Tax effect

Income and expense recognised directly in equity
Amounts reclassified to profit or loss
Total recognised income and expense

2023
450,428
815
(204)
611
—
451,039

2022
947,571
4,044
(1,011)
3,033
—
950,604

The accompanying notes 1 to 30 are an integral part of these financial statements.

Redeia Corporación, S.A. | 2023 financial statements

Redeia Corporación, S.A.

Statement of cash flows for the year ended 31 December 2023

Thousands of euros
Net cash flows from/(used in) operating activities
Profit for the year before tax
Adjustments to reconcile profit before tax to net cash flows

Amortisation and depreciation
Change in provisions
Gains/losses on derecognition and disposal
Finance income
Finance costs

Exchange differences
Change in fair value of financial instruments

Changes in working capital

Trade and other receivables
Other current assets
Trade and other payables

Other cash from/(used in) operating activities

Interest paid
Dividends received
Interest received

Income tax received/(paid)
Other amounts received/(paid)

Net cash flows used in investing activities
Payments for investments

Group companies and associates
PP&E, intangible assets and investment properties
Other financial assets
Other assets

Proceeds from disposals

Group companies and associates
PP&E, intangible assets and investment properties
Other assets

Other financial assets

Net cash flows from/(used in) financing activities
Proceeds from and payments for equity instruments

Purchase and sale of own equity instruments
Issuance of equity instruments

Proceeds from and payments for financial liability instruments

Bank borrowings
Borrowings from group companies and associates
Repayment of other borrowings

Dividends and payments on other equity instruments

Dividends

Effect of changes in exchange rates on cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December

The accompanying notes 1 to 30 are an integral part of these financial statements.

2023
376,372
456,454
(448,089)
7,421
1,794
(1,279)

(477,970)
21,442
(7)
510
(38,694)
(20,109)
221

(18,806)
406,701
(25,933)
415,051
7,392
10,500
(309)
(365,630)
(803,185)
(776,627)
(12,175)

(14,314)
(69)
437,555
33,502

2,400
1,653
400,000
58,043
500,289
5,779
494,510
97,333
147,225
111,867
(161,759)
(539,579)
(539,579)
(13)
68,772
58,508
127,280

2022
(170,334)
978,594
(969,144)
4,740
4,485
(969,914)

(19,824)
11,298
(42)
113
(8,554)
(17,529)
(758)

9,733
(171,230)
(7,509)
—
3,809
(167,248)
(282)
(93,579)
(1,159,567)
(717,056)
(9,870)

(432,479)
(162)
1,065,988
1,063,967

41
1,980
—
(938,854)
5,383
5,383
—
(404,960)
(504,249)
99,289
—
(539,277)
(539,277)
10
(1,202,757)
1,261,265
58,508

Redeia Corporación, S.A. | 2023 financial statements

Contents

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

20
21
22
23
24
25
26
27
28
29
30

Company information
Basis of preparation
.............................................................................................................................................................
Proposed appropriation of profit
.............................................................................................................................................................
Significant accounting policies
.............................................................................................................................................................
Intangible assets and PP&E
Investment properties
Operating leases
Investments in group companies and associates
Financial risk management policy
.............................................................................................................................................................
Financial instrument analysis
.............................................................................................................................................................
Derivative financial instruments
Current and non-current financial investments
Trade and other receivables
Equity
Non-current provisions
Current and non-current borrowings
Tax matters
.............................................................................................................................................................
Trade and other payables
Disclosures regarding average supplier payment term. Additional Provision Three -
"Disclosure requirements" under Law 15/2010 of 5 July
.............................................................................................................................................................
Income and expenses
Transactions with group companies, associates and related parties and resulting year-end
Director remuneration
.............................................................................................................................................................
KPM remuneration
Segment information
.............................................................................................................................................................
Guarantees and other commitments extended to third parties and other contingent liabilities
.............................................................................................................................................................
Environmental disclosures
.............................................................................................................................................................
Other information
.............................................................................................................................................................
Share-based payments
Events after the reporting date
Explanation added for translation to English

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35
36
38

40
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49
49

Redeia Corporación, S.A. | 2023 financial statements

Company information

Redeia Corporación, S.A. (which changed its name from Red Eléctrica Corporación, S.A. on 13 June 2023),
hereinafter, the Company, was incorporated in 1985 and has its registered office in Alcobendas (Madrid). Its
main activities are:

(cid:127) Managing the corporate group, which comprises equity investments in group companies and their

investees.

(cid:127) Providing support services and other assistance to its investees.

(cid:127) Managing the Company’s properties.

Basis of preparation

True and fair view

The financial statements were authorised for issue by the Company's directors on 27 February 2024 to give
a true and fair view of the Company's equity and financial position at 31 December 2023, and its financial
performance and the changes in its equity and cash flows during the year then ended.

The financial statements are presented in thousands of euros, the Company’s functional and presentation
currency, rounded to the nearest thousand, and prepared from its accounting records in accordance with
prevailing legislation, Spain's General Accounting Plan, enacted by Royal Decree 1514/2007, as amended by
Royal Decree-Law 1159/2010 and Royal Decree 1/2021, and the Resolution issued by the ICAC (Spanish
Audit and Accounting Institute) on 10 February 2021.

The Company is the parent of a group of companies called Redeia (hereinafter, the Group). In accordance
with article 43.2 of Spain’s Code of Commerce, the Group prepares consolidated financial statements and
places them on file at the Madrid Companies Register. The consolidated financial statements will be
authorised for issue on 27 February 2024 with applicable legislation in accordance with the International
Financial Reporting Standards approved by the European Union.

The Company’s 2022 financial statements were approved at the Annual General Meeting held on 6 June
2023. The 2023 financial statements are pending ratification at the Annual General Meeting. However, the
Parent’s Board of Directors expects them to be approved without modification.

b) Mandatory accounting policies not applied

The Company has not omitted any mandatory accounting policy with a significant effect on the financial
statements.

c) Use of estimates and assumptions

Preparation of the financial statements requires the Company’s management to use judgement and make
estimates and assumptions that affect application of its accounting policies and the recognised amounts of
assets, liabilities, income and expenses. The estimates and assumptions made by the Company are based
on past experience and other factors considered reasonable under the circumstances. Actual results may
differ from these estimates.

The 2023 financial statements make occasional use of estimates made by the Company’s management,
which are later ratified by its directors, in order to quantify certain of the assets, liabilities, income, expenses
and obligations recognised therein. Essentially, those estimates refer to:

(cid:127)

The estimates and assumptions used to test asset recoverability (nota 4-g).

The estimated useful lives of the Company’s fixed assets (note 5).

The assumptions used in actuarial calculations (note 15).

The assumptions and estimates used to calculate the fair value of derivative financial instruments (note
11).

Redeia Corporación, S.A. | 2023 financial statements

Generally, liabilities are recognised when it is probable that the obligation will give rise to an indemnity or
payment. The Company assesses or estimates the amounts payable in the future, including those
corresponding to income tax, contractual obligations, the settlement of outstanding lawsuits or other liabilities.
These estimates require interpreting current events and circumstances, projecting future developments and
estimating what financial impacts those events will have.

For a better understanding of the financial statements, the various estimates and assumptions made are
outlined in each note.

The Company has insurance coverage against third-party claims that could arise in the ordinary course of its
business activities.

Although the estimates were made on the basis of the best information available at 31 December 2023
regarding the facts analysed, future events could make it necessary to revise them (upwards or downwards)
in coming years. Changes in accounting estimates would be applied prospectively in accordance with the
Spanish General Accounting Plan, recognising the effects of any change in estimates in the related statement
of profit or loss.

d) Comparative information

For comparative purposes, the Company has included the 2022 figures in addition to those of 2023 for each
item of the balance sheet, statement of profit or loss, statement of changes in equity, statement of cash flows
and the accompanying notes. The 2022 figures presented here formed part of the 2022 financial statements.

The accounting policies and measurement rules used to prepare these annual financial statements are
identical to those used to prepare the Company’s 2022 financial statements.

Proposed appropriation of profit

The directors propose the following appropriation of profit for 2023, subject to ratification by the Company’s
shareholders at the Annual General Meeting:

Thousands of euros

Profit for the year
Voluntary reserves

Total basis of appropriation

Appropriation to:

Dividends:

Interim dividend
Final dividend

Total appropriation

450,428
90,349
540,777

147,249
393,528

540,777

This motion implies a final dividend of 0.7273 euros per share for a total dividend for the year of 1 euro per
share, calculated for all outstanding shares.

The interim and final dividends for the year are detailed in note 14.

Significant accounting policies

The significant accounting policies used to prepare these annual financial statements are detailed below:

Intangible assets

Intangible assets are measured at acquisition or production cost, as appropriate, which is reviewed
periodically and adjusted for any decrease in value. The assets included under this heading relate to software,

Redeia Corporación, S.A. | 2023 financial statements

including user licences purchased, which are recognised at the cost incurred to acquire them and get them
ready for use.

Costs associated with maintaining computer software programmes are recognised as an expense as incurred.
Software is amortised on a straight-line basis over a period of between three and five years from when it is
put into use.

b) Property, plant and equipment

The main assets under this heading are land and buildings which have been measured at construction or
acquisition cost less accumulated depreciation and any accumulated impairment losses. Construction costs
can include the following items:

(cid:127)

The external borrowing costs accrued exclusively during the construction period.

The operating expenses related directly with the construction work for developments under the Company’s
control and management.

The Company transfers assets from work in progress to property, plant and equipment in use as soon as the
asset is ready for its intended use.

The costs incurred to extend or upgrade items of property, plant and equipment that entail an increase in the
asset’s productivity or capacity or an extension of its useful life, are capitalised.

Repair and maintenance costs that do not increase the assets’ productivity or capacity or lengthen their useful
lives are expensed as incurred.

Property, plant and equipment is depreciated by distributing the cost of the various items on a straight-line
basis over the estimated years of useful life, which is the period over which the Company expects to use the
asset, as follows:

Buildings
Other facilities

Annual rate

2% - 10%
4% - 25%

The Company periodically checks its depreciation rates as a function of its assets’ useful lives. There were no
significant changes in the asset depreciation criteria used in 2023 by comparison with those used in 2022.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

Investment properties

The Company measures its investment properties at their acquisition cost. The fair values of the Company’s
investment properties are disclosed in note 6.

The Company’s investment properties other than land are depreciated on a straight-line basis by distributing
the cost of the various items linearly over their estimated useful life, which is the period of time for which the
Company expects to use them (annual rate of 2%).

Leases

The Company classifies its leases as a function of whether or not it substantially transfers the risks and
rewards of ownership.

Specifically, it classifies arrangements in which it retains substantially all the risks and rewards incidental to
ownership of the leased assets as operating leases.

Financial assets and liabilities

(cid:127)

Financial assets

The Company classifies its financial assets for measurement purposes on the basis of the corresponding
business model and the characteristics of the contractual cash flows. A financial asset is only reclassified from
one category to another when there is a change in the business model used to manage them.

Redeia Corporación, S.A. | 2023 financial statements

Financial asset acquisitions and disposals are recognised on the date the Company undertakes to acquire or
sell the asset, classifying them into the following categories:

◦

Financial assets at amortised cost: In general, this category includes trade receivables, which are
financial assets arising on the sale of goods and rendering of services in the course of the Company's
trade operations with deferred payment, and non-trade receivables, which are financial assets that are
neither equity instruments nor derivatives not arising on trade transactions with fixed or determinable
payments arising from loans or credit transactions granted by the Company.

They are non-derivative financial assets held to collect contractual cash flows that are solely payments
of principal and interest. They are included under current assets, unless they mature more than 12
months after the reporting date, in which case they are classified as non-current assets.

They are initially recognised at fair value which, barring evidence to the contrary, is the transaction
price plus directly attributable transaction costs. These financial assets are subsequently measured at
amortised cost using the effective interest rate method. The effective interest rate is the rate that
exactly discounts estimated future cash flows through the expected life of a financial instrument to the
net carrying amount of that instrument based on its contractual terms. Interest income from these
financial assets is included in finance income. Any gain or loss arising from derecognition is recognised
directly in the Company’s profit or loss, while impairment losses are presented under a separate line
item in the statement of profit or loss for the year.

Financial assets at cost: These include equity investments in group companies, jointly controlled
entities and associates, and other equity investments whose fair value cannot be estimated reliably.

They are measured at cost, which is equivalent to the fair value of the consideration given plus directly
attributable transaction costs, net of accumulated impairment losses, if any. The asset's recoverable
value is the higher of the asset's fair value less costs to sell and the present value of the estimated
cash flows from the investment.

Financial assets at fair value through equity: These are investments in equity instruments which
the Company has opted to irrevocably designate into this category upon initial recognition.

They are measured at fair value and any gains or losses arising from changes in their fair value are
recognised in equity until the financial asset is derecognised or written down for impairment, at which
time the amount deferred in equity is reclassified to profit or loss. Dividends from these investments
are recognised in the statement of profit or loss for the period.

The criteria used by the Company to measure fair value are disclosed in section l) below.

In the event of a non-monetary contribution consisting of a portfolio of securities delivered when
subscribing for a capital increase undertaken by a subsidiary, if the securities contributed were
classified in the former financial asset category called ‘available-for-sale financial assets’, the
Company follows the Response to Consultation No. 1 published in the official journal of the ICAC (no.
77/2009), leaving any gains or losses arising from fair value changes as of the date of the non-
monetary contribution in equity. As stipulated in Recognition and Measurement Rule 9.2.4.3 of the
General Accounting Plan, in the event of an investment that is newly classified as an investment in a
subsidiary, joint venture or associate, if, prior to that reclassification, fair value changes had been
recognised on that investment directly in equity, those gains or losses are left in equity until the
investment is disposed of or derecognised, at which point they are reclassified to profit or loss.

◦

Financial assets at fair value through profit or loss: This category includes financial assets that do
not qualify for inclusion in any of the other categories.

These instruments are initially recognised and subsequently measured at fair value and any changes
in fair value and gains or losses on their disposal are recognised in profit or loss. They are initially
measured at fair value, which, unless there is evidence to the contrary, is the transaction price, which
is equivalent to the fair value of the consideration paid. Directly attributable transaction costs are
recognised in profit or loss for the year.

Redeia Corporación, S.A. | 2023 financial statements

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers substantially all the risks and rewards of ownership of the financial asset or it
neither transfers nor retains substantially all the risks and rewards of ownership and it has not retained control
of the transferred asset.

(cid:127)

Financial liabilities

The Company classifies all of its financial liabilities into the following category:

◦

Financial liabilities at amortised cost: In general, this category includes payables from trade
transactions, which are financial liabilities arising on the purchase of goods and services in the course
of the Company's trading operations with deferred payment, and payables from non-trade
transactions, which are financial liabilities that are not derivatives and have no commercial substance,
but arise from loans or credit received by the Company. Payables falling due within one year for which
there is no contractual interest rate expected to be settled in the short term are measured at their
nominal amount. Borrowings are classified under current liabilities unless they mature more than 12
months after the reporting date, in which case they are classified under non-current liabilities.

Borrowings are measured initially at fair value. In the absence of evidence to the contrary, this is the
transaction price, which is equivalent to the fair value of the consideration received net of attributable
transaction costs. These sources of finance are subsequently measured at amortised cost using the
effective interest method.

The Company derecognises a financial liability, or part of it, when it discharges the liability or is legally released
from primary responsibility for the liability either by process of law or by the creditor.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and demand deposits in financial institutions. Cash
equivalents also include other short-term, highly liquid investments that are readily convertible to known
amounts of cash and subject to an insignificant risk of changes in value. An investment normally qualifies as
a cash equivalent when it has a maturity of less than three months from the date of acquisition.

Impairment of assets

The Company assesses the recoverability of its assets at the end of each reporting period and whenever
events or changes in circumstances indicate that their carrying amount may not be recoverable. An asset is
impaired when its carrying amount exceeds its recoverable amount. Impairment losses must be recognised
immediately in profit or loss. An impairment loss is the amount by which the carrying amount of an asset
exceeds its recoverable amount.

The recoverable amount of an asset is the higher of:

(cid:127)

The fair value of an asset less costs to sell

The asset’s value in use

Recoverable amounts are calculated on the base of estimated cash flows. Impairment is calculated for
individual assets. Where it is not possible to estimate the fair value of an asset, the fair value of the cash-
generating unit (CGU) to which the asset belongs is determined. Any reversal of impairment is recognised in
the statement of profit or loss.

The impairment tests conducted by the Company in 2023 did not indicate any impairment of its investment
properties (note 6).

In the case of impaired financial assets at amortised cost, the impairment loss is the difference between the
carrying amount of the financial asset and the present value of the estimated future cash flows, excluding
future credit losses that have not been incurred, discounted at the asset's original effective interest rate. For
financial assets with floating interest rates, the effective interest rate at the measurement date, in accordance
with the contractual terms, is used.

Redeia Corporación, S.A. | 2023 financial statements

Impairment losses, and reversals thereof when there is a reduction in loss that can be objectively related to a
subsequent event, are recognised in profit or loss. The loss can only be reversed up to the limit of the
amortised cost of the asset that would have been recorded had the impairment loss not been recognised.

In the case of equity investments in group companies and associates, the recoverable amount is determined
as the higher of the asset's value in use or fair value less costs to sell and the present value of the estimated
cash flows from the investment. Unless better evidence of the recoverable amount is available, impairment is
based on the investee’s equity, corrected for any unrealised gains existing at the measurement date.

The Company’s impairment tests did not detect any indications of impairment in relation to its equity
instruments in or loans to group companies and associates.

h) Capital and reserves

The Company’s share capital is represented by ordinary shares.

Interim dividends are deducted from equity for the year to which the dividend relates on the basis of the
corresponding Board resolution. The final dividend is not deducted from equity until it is approved at the
corresponding Annual General Meeting.

Own shares are measured at acquisition cost and presented as a deduction from equity. Any gain or loss
arising on the purchase, sale, issuance or cancellation of own shares is recognised directly in equity.

Provisions

(cid:127) Employee benefits

◦ Pension obligations

◦

The Company has defined contribution plans, meaning plans that define the benefit an employee will
receive upon retirement as a function of one or more variables, such as age, fund performance, years
of service or pay. A defined contribution plan is a pension plan under which the Company pays fixed
contributions to a separate entity and has no legal or constructive obligation to pay further contributions
if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in
the current and prior periods.

◦ Other long-term employee benefits

These benefits include defined benefit plans other than pension plans, such as health insurance for
serving and former Company employees. The expected costs of these benefits are recognised over
the employees’ employment term. These obligations are measured each year by independent qualified
actuaries. The effects of changes in actuarial assumptions are recognised, net of tax, in reserves within
equity in the year they arise, while past service cost is recognised in the statement of profit or loss.

Defined benefit liabilities recognised in the balance sheet reflect the present value of obligations at the
reporting date, less the fair value at the date of plan assets and any past service cost not yet
recognised. The Company recognises actuarial gains and losses in recognised income and expense
for the year in which they arise.

Other long-term employee benefits also includes long-term remuneration plans and Structural
Management Plan (hereinafter the “Plan”), which are measured each year.

Redeia Corporación, S.A. | 2023 financial statements

(cid:127) Other provisions

The Company recognises provisions to cover present legal or constructive obligations as a result of past
events, so long as it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and the amount of the obligation can be reliably estimated. They are recognised when
the liability or obligation arises. No provision is recognised for proceedings where the probability that the event
will occur is less than 50% as the Company considers that the outcome of these proceedings will be
favourable.

Provisions are measured at the best estimate of the expenditure required to settle the obligation using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the liability. The increase in the carrying amount of a provision due to the passage of time is recognised as
interest expense.

Transactions in currencies other than the euro

Transactions in currencies other than the euro are recognised at the exchange rate prevailing at the
transaction date. During the year, the differences arising as a result of movements between the exchange rate
used for initial recognition purposes and that prevailing on the date of collection or payment are recognised in
profit or loss.

Fixed-income securities and credits and debits denominated in a currency other than the euro are translated
at the closing exchange rate each year. Any resulting measurement differences are recognised as exchange
gains or losses in the statement of profit or loss.

Financial derivative instruments and other instruments arranged in foreign currency to hedge the Company’s
exposure to exchange rate risk are accounting for as outlined in “Derivative financial instruments and hedging
transactions” below.

k) Derivative financial instruments and hedging transactions

Derivative financial instruments are initially recognised at fair value on the purchase date (acquisition cost)
and are subsequently remeasured to fair value at every reporting date. The treatment of the resulting gains
or losses depends on whether the financial derivative has been designated as a hedging instrument and, if
so, the nature of the hedged item.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique.

The Company formally documents the relationship between hedging instruments and the hedged assets or
liabilities at the inception of the transaction, along with the risk management objective and strategy for
undertaking the hedge. It also documents its evaluation, at the inception and on an ongoing basis, of whether
the derivative financial instruments used for hedging purposes are highly effective at offsetting the changes in
the fair value or cash flows of the hedged items.

The fair value of the derivative financial instruments used to manage exchange rate risk is disclosed in note
11.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is directly
observable or estimated using another valuation technique.

Financial asset and liability fair value measurements are classified using a hierarchy articulated around the
relevance of the inputs used to make the corresponding measurements. The hierarchy categorises the inputs
used in valuation techniques into three levels:

(cid:127)

Level 1: Fair value measurements based on quoted prices in active markets for identical instruments.

Level 2: Fair value measurements based on inputs that are observable for the asset or liability.

Redeia Corporación, S.A. | 2023 financial statements

(cid:127)

Level 3: Measurements based on inputs that are not underpinned by observable market data.

If there is no quoted price from an active market, the Company uses valuation techniques that maximise the
use of relevant observable inputs and minimise the use of unobservable inputs. More specifically, for the
various financial derivative financial instruments not traded on organised markets, the Company estimates
fair value using valuation techniques which include the use of recent arm’s length transactions between
knowledgeable, willing parties, reference to other instruments that are substantially the same, discounted
cash flow analysis discounted using the market interest and exchange rates prevailing at the reporting date
and options pricing models enhanced to reflect the issuer’s specific circumstances.

Income and expenses

Revenue from contracts with customers is recognised as the Company satisfies its performance obligations.

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognised so
as to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which it expects to be entitled in exchange for those goods or services.

Interest income is recognised using the effective interest method. Dividend income is recognised when the
right to receive payment is established. The Company, in its capacity as the parent of the Redeia Group,
applies the response provided by the ICAC to a consultation regarding the accounting treatment of income
and expenses in the separate financial statements of a holding company and the measurement of revenue
(Ref: 546/09) dated 23 July 2009. Specifically, it classifies dividends from equity investments in investees,
interest on loans extended to those same investees and any gains on the disposal of these investments within
revenue, unless they arise upon the disposal of a subsidiary, in which case, as likewise stipulated in that same
resolution, it creates a line item within operating income to reflect the change in the fair value of financial
instruments, impairment losses and disposal gains or losses.

Lastly, revenue also includes lease income and revenue from the provision of support services, as these form
part of the Company’s core activities.

Tax matters

Tax expense/(income) comprises current tax and deferred tax. Current and deferred tax is recognised as
income or an expense and included in profit or loss for the period, except to the extent that the tax arises from
(i) a transaction or event which is recognised, in the same or a different period, directly in equity or (ii) a
business combination.

Current tax is the amount expected to be paid, using enacted tax rates, in respect of the current year, as well
as any tax payable as a result of prior-year adjustments.

Income tax credit and other tax relief originating from transactions arising during the year are deducted from
accrued tax expense unless there is uncertainty about their utilisation.

Deferred tax and tax expense are calculated and accounted for using the liability method considering
temporary differences between the amounts recognised for financial reporting purposes and those used for
tax purposes. The liability method consists of determining deferred tax assets and liabilities as a function of
the differences between the carrying amount and tax bases of assets and liabilities, using the tax rates
objectively expected to be prevailing when the assets and liabilities are realised and incurred, respectively.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be
available against which the tax assets can be utilised.

The Company, as the parent of the Tax Group, recognises the total amount of consolidated income tax
payable/(receivable) with a charge/(credit) to loans to/(borrowings from) group companies and associates.

Redeia Corporación, S.A. | 2023 financial statements

Insurance

The Company has a number of insurance policies to cover the risks to which its activities expose it. The chief
risks are potential damage to the Company’s facilities and potential third-party claims arising in the course of
its activities. The cost of the related insurance premiums is accrued in the statement of profit or loss. The
income due from insurance companies as a result of claims is recognised in the statement of profit or loss in
keeping with the revenue and expense matching principle.

p) Share-based payments

The Company has implemented share purchase plans whereby employees can receive Company shares as
part of their annual pay packages. That remuneration is measured using the closing Company share price as
of the date of delivery. Expenses incurred under these plans are recognised within employee benefits expense
in the statement of profit or loss. All of the shares delivered to employees come from the Company’s treasury
stock.

Intragroup transactions

Transactions between group companies are recognised at the fair value of the consideration delivered or
received. Any difference between fair value and the amount agreed is recognised in accordance with the
underlying economic substance.

Intangible assets and PP&E

5.1

Intangible assets

The reconciliation of the carrying amounts of the various items of intangible assets and the related
accumulated amortisation at the beginning and end of 2023 and 2022 is as follows:

Thousands of euros
Cost
Software
Software in progress
Total cost
Accumulated amortisation
Software
Total accumulated amortisation
Carrying amount

31 Dec. 2021 Additions

Transfers

31 Dec. 2022 Additions

Transfers

31 Dec. 2023

5,541
5,640
11,181

(3,395)
(3,395)
7,786

–
7,394
7,394

(2,373)
(2,373)
5,021

5,648
(5,648)
–

–
–
–

11,189
7,386
18,575

(5,768)
(5,768)
12,807

–
7,939
7,939

12,038
(12,038)
–

(4,363)
(4,363)
3,576

–
–
–

23,227
3,287
26,514

(10,131)
(10,131)
16,383

The additions under software in progress in both years related to the development and purchase of corporate
software programmes from third parties.

At 31 December 2023, the original cost of fully-amortised intangible assets still in use was 3,303 thousand
euros (2022: 2,306 thousand euros).

In 2023 the Company capitalised 331 thousand euros of operating expenses directly related with internally
generated intangible assets (2022: 252 thousand euros).

Redeia Corporación, S.A. | 2023 financial statements

5.2 Property, plant and equipment

The reconciliation of the carrying amounts of the various items of property, plant and equipment and the related
accumulated depreciation at the beginning and end of 2023 and 2022 is as follows:

Thousands of euros
Cost
Land and buildings
Other fixtures, machinery, tools,
furniture and other PP&E
PP&E under construction and
advances

Total cost
Accumulated depreciation
Buildings
Other fixtures, machinery, tools,
furniture and other PP&E
Total accumulated depreciation
Carrying amount

31 Dec. 2021 Additions

Transfers

31 Dec. 2022 Additions

Transfers

31 Dec. 2023

88,144

17,568

–

6,561

2,055

112,273

2,055

(24,763)

(1,575)

(16,673)

(760)

(41,436)
70,837

(2,335)
(280)

–

2,318

(2,318)
–

–

–
–

88,144

19,886

–

5,005

88,144

24,891

6,298

4,509

(5,005)

5,802

114,328

4,509

(26,338)

(1,574)

(17,433)

(1,459)

(43,771)
70,557

(3,033)
1,476

–

–
–

118,837

(27,912)

(18,892)

(46,804)
72,033

Land and buildings relate to properties owned by the Company that are held for use in its main business
activities, as detailed in note 1. Of the total, 15,222 thousand euros relates to land and 72,922 thousand euros,
to buildings.

The additions recognised under PP&E under construction and transfers in 2023 and 2022 related mainly to
the purchase and assembly of equipment, and also the refurbishment of buildings owned by the Company.

At 31 December 2023, the original cost of fully-depreciated items of property plant and equipment still in use
was 17,266 thousand euros (2022: 17,266 thousand euros), of which 14,683 thousand euros (in both years)
related to other PP&E.

The Company did not capitalise any operating expenses related directly with self-constructed assets in either
2023 or 2022.

Spanish Law 16/2012 introduced a range of tax measures designed to consolidate Spain's public finances
and shore up economic activity, including the possibility of asset restatements using the coefficients stipulated
in the legislation itself, under which the Company revalued its property, plant and equipment and investment
properties with a credit to an equity line item named revaluation reserves. As stipulated in an ICAC resolution
dated 31 January 2013, the asset restatements, if availed of, had to be recognised in the financial statements
for 2013. Under the scope of that law, the Company restated its property, plant and equipment as of 1 January
2013, paying a one-time tax of 5% of the amount of the revaluation.

The amount of the restatement, net of the one-time tax of 5%, was credited to reserves (note 14). The assets
whose carrying amount was restated were land and buildings, in the amount of 6,304 thousand euros, and
other PP&E, in the amount of 60 thousand euros. The restatements did not affect the amount of accumulated
depreciation as of the restatement date.

The net increase in value resulting from this revaluation exercise is being depreciated during the remaining
years of useful life of the revalued assets. The asset restatements implied the recognition of an additional 176
thousand euros of depreciation charges in both 2023 and 2022.

Redeia Corporación, S.A. | 2023 financial statements

Investment properties

The reconciliation of the carrying amounts of the Company’s investment properties and the related
accumulated depreciation and impairment in 2023 and 2022 is as follows:

Thousands of euros

31 Dec. 2021 Additions Derecognitions

31 Dec. 2022 Additions Derecognitions

31 Dec. 2023

Land

Buildings

Total cost

Buildings

Total accumulated depreciation
Impairment of investment
properties
Total impairment

558

1,840

2,398

(541)

(84)

—

(32)

—

(161)

558

1,679

2,237

(534)

—
—

—

(25)

—

(1,679)

559

—

558

—

558

—

—
—

Carrying amount

1,773

(32)

(38)

1,703

(25)

(1,120)

558

The investment property derecognised in 2023 stemmed from the sale of a premises in a town in Valencia
(and in 2022 from the sale of a premises in Oviedo) (note 20-d).

On the basis of market appraisals at year-end 2023 and 2022, the Group concluded that its investment
properties were not impaired, as their recoverable amounts remained above their carrying amounts.

The market value of the Company’s investment properties, appraised by an independent expert, was
approximately 1.2 million euros at 31 December 2023 (2022: 2.7 million euros), not generating significant
income or operating expenses.

Operating leases

The Company leases certain assets from group companies. Specifically, it leases the following assets under
operating leases:

Thousands of euros

Cost

Land and buildings

Other fixtures, machinery, tools, furniture and other PP&E
Total cost
Accumulated depreciation

Buildings
Other fixtures, machinery, tools, furniture and other PP&E
Total accumulated depreciation
Carrying amount

31 Dec. 2023

31 Dec. 2022

86,358
24,891
111,249

(27,912)

(18,892)
(46,804)
64,445

86,358
19,886
106,244

(26,338)

(17,433)
(43,771)
62,473

The Company has agreements with certain group companies - Red Eléctrica de España, S.A.U., Redeia
Infraestructuras de Telecomunicación, S.A., Red Eléctrica Infraestructuras en Canarias, S.A.U., Elewit S.A.U.
and Hispasat, S.A. - under which it leases them space within the Company’s properties; they are classified as
operating leases.

These leases are rolled over periodically and in 2023 generated 10,986 thousand euros of lease income
(2022: 10,383 thousand euros), which is recognised under provision of services within revenue in the
accompanying statement of profit or loss. Of that total, approximately 86% came from Red Eléctrica de
España, S.A.U. and 14%, from the other group companies in both years.

Redeia Corporación, S.A. | 2023 financial statements

Investments in group companies and associates

None of the group companies in which the Company has investments was publicly listed at either year-end.
The reconciliation of the Company’s equity investments in these companies at the beginning and end of 2023
and 2022:

Thousands of euros

Equity instruments

31 Dec. 2021

Additions and
capital
increases

Derecognitions 31 Dec. 2022

Additions and
capital
increases

Derecognitions 31 Dec. 2023

2,152,488

711,127

(14,700)

2,848,915

–

2,848,915

The Company did not complete any corporate transactions in 2023.

The main transactions completed in 2022 were as follows:

(cid:127)

In 2022, Red Eléctrica increased its capital by 515 million euros by issuing one share with a par value of
2 euros and a share premium of 515,000 thousand euros. That share was purchased by the Company
and paid for by means of the partial forgiveness of the loan described in note 21.

In 2022, Red Eléctrica Internacional increased its share capital by 196.1 million euros in order to in turn
participate in the capital increase undertaken by its investee Argo Energia Empreendimentos e
Participações S.A. (Argo Energía). This capital increase was fully subscribed and paid in by the Company.
On 30 November 2022, Argo Energía completed the acquisition of 62.5% of the share capital of five power
transmission concessions (“Argo V, VI, VII, VIII and IX”). It made this investment by means of a joint
investment with Grupo de Energía Bogotá (GEB) (37.5%), under a co-governance regime. The acquisition
price attributable to the Group was BRL 1.05 billion (200.7 million euros).

(cid:127) On 29 June 2022, having obtained the pertinent approvals, the Company closed the sale of a 49% minority
interest in Redeia Infraestructuras de Telecomunicación, S.A. for 995,618 thousand euros, under the terms
of the agreement entered into between Redeia Corporación, S.A. and Kohlberg Kravis Roberts & Co. L.P.
(KKR) through a subsidiary of the latter, Rudolph Bidco S.À.R.L, on 16 December 2021. Following that
transaction, the Company retains a 51% interest in Redeia Infraestructuras de Telecomunicación, S.A.
This transaction generated a gain of 969,909 thousand euros (note 20-e).

The breakdown of the Company’s investments in group companies and associates at year-end 2023:

Redeia Corporación, S.A. | 2023 financial statements

Redeia Corporación, S.A. (formerly, Red Eléctrica Corporación S.A.)
Breakdown of equity investments at 31 Dec. 2023
- Company
- Registered office
- Core business

Thousands of euros
Red Eléctrica de España, S.A.U. (Red Eléctrica)
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Transmission and operation of the Spanish electricity system and management of the transmission network.
Red Eléctrica Internacional, S.A.U. (Redinter)
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).
- Acquisition and holding of international equity investments. Provision of advisory, engineering and construction
services. Performance of electricity activities outside the Spanish electricity system.
Redeia Infraestructuras de Telecomunicación, S.A. (formerly, Red Eléctrica Infraestructuras de
Telecomunicación, S.A.)
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Provision of advisory, engineering and construction services.
Red Eléctrica Infraestructuras en Canarias, S.A.U.
- Calle Juan de Quesada, 9. Las Palmas (Gran Canary Island) (Spain).

- Management of the construction of energy storage facilities and of the water cycle.
Redeia Financiaciones, S.L.U. (formerly, Red Eléctrica de España Finance, S.L.U.)
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Financing activities.
Red Eléctrica Financiaciones, S.A.U.
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Financing activities.
Redeia Sistemas de Telecomunicaciones, S.A.U. (formerly, Red Eléctrica Sistemas de
Telecomunicaciones, S.A.U.) (4)
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Acquisition, holding, management and administration of Spanish and foreign equity securities.
Elewit, S.A.U. (formerly, Red Eléctrica y Telecomunicaciones, Innovación y Tecnología, S.A.U.) (*)
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

Percentage
interest (1)

Direct

Indirect

Carrying
amount at
31 Dec.
2023

Equity of the investee (2)

Share capital
paid in

premium Reserves

Other
items

Profit for the
year (3)

Operating
profit/(loss)
(3)

100%

— 1,529,326

800,006

569,319 1,438,024 305,529

545,784

768,453

100%

— 738,669

186,037

552,632

50,045

(7,406)

28,329

33,064

51%

— 15,300

30,000

—

13,663

(3,328)

58,883

85,198

100%

—

5,000

—

204

100%

—

2,000

1,982

119

100%

—

17,849

—

514

513

(136)

2,720

(169)

100%

— 549,060

549,060

—

(6,514)

—

15,372

25,652

100%

—

5,000

1,000

4,000

(1,165)

—

370

629

- Activities geared towards driving and accelerating technological innovation.
ºRedcor Reaseguros, S.A.
- 26, Rue Louvigny. (Luxembourg)
- Reinsurance activities. Incorporated in 2010 in Luxembourg in order to reinsure the risks of the Group companies,
thereby guaranteeing better access to the international reinsurance markets.
(1) Equivalent to voting rights.
(2) According to audited financial statements after uniformity adjustments to align them with the accounting criteria used by the Company and measured in euros using closing exchange rates.
(3) According to audited financial statements after uniformity adjustments to align them with the accounting criteria used by the Company and measured in euros using average exchange rates. Profit for the year and operating profit from continuing operations.
(4) Parent of the Hispasat, S.A. subgroup

61,906

100%

4,500

—

12,434

12,040

(*) The annual financial statements of this company will be authorised for issue later by the Board of Directors of Redeia Corporación, S.A., so that the figures presented have yet to be audited.

Redeia Corporación, S.A. | 2023 financial statements

Redeia Corporación, S.A. (formerly, Red Eléctrica Corporación S.A.)
Breakdown of equity investments at 31 December 2022
- Company
- Registered office
- Core business

Thousands of euros

Red Eléctrica de España, S.A.U. (Red Eléctrica)
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Acquisition and holding of international equity investments. Provision of advisory, engineering and construction
services. Performance of electricity activities outside the Spanish electricity system.

Redeia Infraestructuras de Telecomunicación, S.A.

- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Provision of advisory, engineering and construction services.
Red Eléctrica Infraestructuras en Canarias, S.A.U.
- Calle Juan de Quesada, 9. Las Palmas (Gran Canary Island) (Spain).

- Management of the construction of energy storage facilities and of the water cycle.

Redeia Financiaciones, S.L.U.
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Financing activities.
Red Eléctrica Financiaciones, S.A.U.
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Financing activities.
Redeia Sistemas de Telecomunicaciones, S.A.U. (4)
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Acquisition, holding, management and administration of Spanish and foreign equity securities.

Elewit, S.A.U.
- Paseo Conde de los Gaitanes, 177. Alcobendas. Madrid. (Spain).

- Activities geared towards driving and accelerating technological innovation.

Redcor Reaseguros, S.A.

- 26, Rue Louvigny. (Luxembourg)
- Reinsurance activities. Incorporated in 2010 in Luxembourg in order to reinsure the risks of the Group companies,
thereby guaranteeing better access to the international reinsurance markets.

(1) Equivalent to voting rights.

Percentage
interest (1)

Direct

Indirect

Carrying
amount at
31 Dec.
2022

Equity of the investee (2)

Share capital
paid in

premium Reserves

Other
items

Profit for the
year (3)

Operating
profit/(loss)
(3)

100%

— 1,529,326

800,006

569,319

922,120 560,154

513,558

754,167

100%

— 738,669

186,037

552,632

44,487

(1,068)

5,528

4,657

51%

— 15,300

30,000

—

9,771

(59)

56,636

77,385

100%

—

5,000

—

185

100%

—

2,000

1,982

100%

—

15,434

100%

— 549,060

549,060

—

(3,595)

100%

—

5,000

1,000

4,000

(1,920)

100%

—

4,500

—

56,088

—

(126)

2,416

(184)

(2,919)

(705)

880

1,216

7,855

9,141

(2) According to audited financial statements after uniformity adjustments to align them with the accounting criteria used by the Company and measured in euros using closing exchange rates.

(3) According to audited financial statements after uniformity adjustments to align them with the accounting criteria used by the Company and measured in euros using average exchange rates. Profit for the year and operating profit from continuing operations

(4) Parent of the Hispasat, S.A. subgroup

Redeia Corporación, S.A. | 2023 financial statements

The Company holds direct interests in the following companies:

(cid:127) Red Eléctrica de España, the Spanish grid’s transmission and system operator (TSO), which is bound by
Spain’s Electricity Act (Law 24/2013) and subsequent legal provisions regarding the TSO. The Company
is not allowed to sell shares in this company, which carries out activities regulated in Spain, to third parties.

(cid:127)

Through its subsidiary Redeia Sistemas de Telecomunicaciones, it holds an 89.68% equity interest in
Hispasat, S.A., whose core business is the sale and provision of satellite telecommunications services.

(cid:127) Redeia Infraestructuras de Telecomunicación, which provides telecommunications services to third parties

in Spain, mainly through the lease of backbone dark optic fibre.

(cid:127) Red Eléctrica Internacional, which carries out the Group’s international activities, specifically in Peru, Chile

and Brazil.

(cid:127) Red Eléctrica Infraestructuras en Canarias, the company which manages the construction of energy

storage facilities and the water cycle.

(cid:127) Redeia Financiaciones and Red Eléctrica Financiaciones, the Group companies that perform its financing

activities.

(cid:127) Redcor Reaseguros, the company devoted to reinsurance activities.

(cid:127) Elewit, the subsidiary through which technological innovation is channelled.

In 2023 the Company received dividends from its investees (note 20-a), specifically, 388,123 thousand euros
from Red Eléctrica and 26,928 thousand euros from Redeia Infraestructuras de Telecomunicaciones. It did
not receive any dividends from its investees in 2022.

Annually, the Company carries out impairment tests to verify the recoverability of any equity investments for
which it has detected indications of potential impairment. The Company used projected cash flow analysis to
perform those tests. The tests revealed recoverable amounts in excess of the investments’ carrying amounts
in all instances in 2023 and 2022, so that no impairment losses were required.

Given the existence of indications of impairment, Redinter’s investments in international companies were
tested for impairment, without indicating the need to recognise any material impairment losses.

The key assumptions underpinning the businesses’ projections used to calculate value in use, which are
based on business forecasts and past experience, are:

(cid:127) Regulated remuneration: estimated based on the mechanisms stipulated in international regulations for

updating these amounts.

(cid:127) Capital expenditure: the best information available regarding plans to invest in assets and infrastructure

maintenance over the projection time horizon.

(cid:127) Operating and maintenance expenses: projected in line with the growth forecasts derived from the capital

expenditure plan.

(cid:127) Other costs: projected on the basis of sector knowledge, past experience and in line with the outlook

derived from the capital expenditure plan.

To calculate the present value of the projected cash flows, they were discounted using an after-tax rate that
reflects the weighted average cost of capital (WACC) of the business in question and country risk.

This exercise showed that the recoverable amount of Redinter’s international investments, including the loan
to Transmisora Eléctrica del Norte S.A., is above their carrying amount.

In 2023 the Company also tested Redeia Sistemas de Telecomunicaciones' investment in Hispasat for
impairment, concluding that the recoverable amount exceeds its carrying amount, so that Redeia Sistemas
de Telecomunicaciones’ equity investment plus the loan extended to this investee are not considered impaired.

Redeia Corporación, S.A. | 2023 financial statements

The main assumptions used to test the investment in Hispasat for impairment:

(cid:127)

The investment was measured at fair value less costs to sell, using the revenue approach, to estimate the
recoverable amount of the satellite business.

The revenue approach indicates the recoverable amount of a business using the present value of its
estimated cash flows, i.e., discounted cash flow (DCF) analysis. Specifically, the present value of the
future cash flows was arrived at by using a discount rate (the WACC) that reflects the time value of money
and the risks associated with the projected cash flows.

Costs to sell were estimated considering the costs incurred in previous transactions undertaken by the
Group.

The resulting fair value less costs to sell was then grossed up by the value of the equity-accounted
investments included in the Hispasat Subgroup.

(cid:127) Cash flows were projected for 2024-2040 for existing satellites, which is aligned with their useful lives, and
for the useful life of new satellite assets scheduled for launch in the coming years. The cash flow
projections also factor in the Hispasat subgroup's expected entry into new business models and
technologies.

The cash flow projections beyond year five are considered reliable on the basis of the Group’s experience
with investments with a significant technology component that imply long-term contracts and
commitments. Specifically, the satellite business materialises in long-term contractual commitments with
customers, which usually cover most of the satellites’ useful lives, with a view to locking in a minimum
return before launching new satellites. The idea is to attempt to lay solid foundations for earning the
estimated return from a satellite before embarking on the project.

The terminal value of traditional technology is zero as the infrastructure that underpins this business
ceases to generate income or expenses at the end of the satellites’ useful lives. For infrastructure that
uses new technology and the projected new businesses and services, the terminal value was estimated
assuming growth in perpetuity of 0% and 1.25%, respectively.

(cid:127)

The EBITDA margins modelled for the traditional business and the new technologies and new businesses
and services were similar to those used in 2022, yielding an average EBITDA margin of 59%.

The exchange rates used to translate the projected cash flows denominated in foreign currency were
based on forecasts for the US dollar (USD), Brazilian real (BRL) and Mexican peso (MXN).

The cash flows were discounted at a rate based on the weighted average cost of capital (WACC) taken
from a report prepared by an independent expert. Specifically, they were discounted at a pre-tax rate of
7.85% for the traditional satellite business and infrastructure based on new technology (2022: 8.58%) and
at a pre-tax rate of 13.99% in the case of the new businesses and services (2022: 12.3%).

Lastly, the fair value less costs to sell of the companies consolidated into the Hispasat Subgroup using the
equity method was reduced by the fair value of the Hispasat Subgroup’s net borrowings in order to derive the
equity value of Redeia Sistemas de Telecomunicaciones’ investment.

Financial risk management policy

The Company’s financial risk management policy establishes principles and guidelines to ensure that any
significant risks that could compromise its objectives and activities are identified, analysed, assessed,
managed and controlled, and that these processes are carried out systematically, framed by uniform criteria.

The main guidelines set down in those principles can be summed up as follows:

(cid:127) Risk management should be fundamentally proactive and directed towards the medium and long term,

taking into account possible scenarios in an increasingly global environment.

Redeia Corporación, S.A. | 2023 financial statements

(cid:127) Risk should generally be managed in accordance with consistent criteria, distinguishing between the

importance of the risk (probability/impact) and the investment and resources needed to mitigate it.

(cid:127)

Financial risk management should be designed to avoid undesirable movements in the Company’s
fundamental value, rather than generating extraordinary gains.

The Company’s finance management is responsible for managing financial risk, ensuring consistency with
the stated strategy and coordinated risk management, identifying the main financial risks and defining the
initiatives to be taken, based on different financial scenarios.

The methodology for identifying, measuring, monitoring and controlling financial risks, as well as the
performance indicators and measurement and control tools specific to each risk, are set down in the Group’s
Comprehensive Risk Management System and are formally documented in the Comprehensive Risk
Management Policy, the General Management Procedure and the internal risk control system.

The financial risks to which the Company is exposed are:

a) Market risk

The risk of movements in the financial markets with respect to prices, interest rates, exchange rates, lending
terms and conditions and other variables that could affect the Company’s borrowing costs in the short, medium
or long term.

These risks are managed by borrowing in specific currencies, at specific maturities and opting for specific
interest rate formulas, and by using financial hedging instruments that modify the characteristics of the
Company’s financial structure. The following risks stand out within market risks:

(cid:127)

Interest rate risk

At both year-ends, the Company’s was mainly exposed to interest rate risk through its statement of profit or
loss.

Movements in interest rates affect both the fair value of the assets and liabilities that carry interest at a fixed
rate and the future cash flows of assets and liabilities benchmarked to floating rates. A change of 0.10% in
either direction in interest rates in 2023 would have increased or decreased earnings by 922 thousand euros
(2022: 1,147 thousand euros).

(cid:127) Currency risk

Management of this financial risk addresses transaction risk derived from having to collect or pay cash in the
future in a currency other than the euro.

The Company has arranged cross currency swaps to eliminate the currency risk derived from the loans
extended to Red Eléctrica Chile, a Group company. These instruments swap floating-rate debt in euros for
fixed-rate debt in dollars, so hedging the collection of US dollars in the future.

(cid:127) Credit and liquidity risk

This is the Company's biggest financial risk as most of its borrowings are arranged by other Group companies,
which assume the related market and liquidity risk. Credit risk is managed through policies stipulating
requirements regarding counterparty creditworthiness and the provision of additional guarantees when
necessary. The Company believes there is no risk that it will not be able to collect its receivables at year-end
2023.

Moreover, there are no restrictions on the use of the cash balances presented in the Company’s balance
sheet.

Redeia Corporación, S.A. | 2023 financial statements

10 Financial instrument analysis

a) Analysis by category

The carrying amounts of the Company’s financial instruments, other than its equity investments in group
companies, by category at 31 December 2023 and 2022:

(cid:127)

Financial assets

Thousands of euros
Loans to third parties
Loans to group companies and associates
Equity instruments with special characteristics

Derivative financial instruments
Other financial assets
Non-current
Receivable from group companies and associates: trade
receivables and loans
Other financial assets
Trade and other receivables
Current

Financial instrument categories at 31 December 2023

Financial assets at
fair value through
profit or loss
–
–
2,825
–
–
2,825

–

–
–
–

Financial assets at
amortised cost

Hedging
derivatives

706
610,526
–
–
22
611,254

853,966

1,029
345
855,340

–
–
–
2,168
–
2,168

–

–
–
–

Total

2,825

1,466,594

2,168

Total

706
610,526
2,825

2,168
22
616,247

853,966
1,029

345
855,340
1,471,587

Financial instrument categories at 31 December 2022

Thousands of euros
Loans to third parties
Loans to group companies and associates
Equity instruments with special characteristics

Derivative financial instruments
Other financial assets
Non-current
Receivable from group companies and associates: trade
receivables and loans
Other financial assets
Trade and other receivables

Current
Total

Financial assets at
fair value through
profit or loss
–
–
6,603
–
–
6,603

–

–
–

–
6,603

Financial assets at
amortised cost

Hedging
derivatives

839
530,561
–
–
22
531,422

123,643

401,027
536

525,206
1,056,628

–
–
–
–
–
–

–

–
–

Total

839
530,561

6,603
–
22
538,025

123,643

401,027
536
525,206
1,063,231

Redeia Corporación, S.A. | 2023 financial statements

(cid:127)

Financial liabilities

Financial instrument categories at 31 December 2023

Thousands of euros
Notes and other marketable securities
Bank borrowings
Borrowings from group companies and associates
Derivative financial instruments

Other financial liabilities
Non-current
Notes and other marketable securities
Bank borrowings
Payable to group companies and associates: trade payables and
borrowings
Current borrowings

Trade and other payables
Current
Total

Financial liabilities at
amortised cost
399,299
138,785
39,622
–
16
577,722

25,630
6,794

232,803

163,490
22,653
451,370

1,029,092

Hedging derivatives

–
–
–
–
–
–

–
–

–

–
–
–

–

Total

399,299
138,785
39,622
–
16
577,722

25,630
6,794

232,803

163,490
22,653
451,370

1,029,092

Thousands of euros
Notes and other marketable securities
Bank borrowings
Borrowings from group companies and associates
Derivative financial instruments
Other financial liabilities

Non-current
Notes and other marketable securities
Bank borrowings
Payable to group companies and associates: trade payables and
borrowings
Current borrowings
Trade and other payables

Current
Total

b) Analysis by maturity

(cid:127)

Financial assets

Financial instrument categories at 31 December 2022

Financial liabilities at
amortised cost
398,761
39,494
25,880

–
16
464,151
2,512
120,987

97,508

159,848
40,124
420,979
885,130

Hedging derivatives

–
–
–

2,209
–
2,209
–
–

–

–
–
–
2,209

Total

398,761
39,494
25,880

2,209
16
466,360
2,512
120,987

97,508

159,848
40,124
420,979
887,339

31 Dec. 2023

Maturity of financial assets

Thousands of euros
Loans to third parties
Loans to group companies and
associates
Equity instruments with special
characteristics
Other financial assets
Trade and other receivables
Total

2024
–

853,966

–

1,029
345
855,340

2025
–

–

–
–
–

2026
–

192,084

–

–
–
192,084

2027
–

2028
–

Beyond
706

Total
706

–

–
–
–

106,942

311,500 1,464,492

–

2,825

–
–
106,942

22
–

1,051
345
315,053 1,469,419

Redeia Corporación, S.A. | 2023 financial statements

Thousands of euros
Loans to third parties
Loans to group companies and
associates
Equity instruments with special
characteristics
Other financial assets
Trade and other receivables
Total

(cid:127)

Financial liabilities

Thousands of euros

Notes and other marketable
securities
Bank borrowings - euros
Bank borrowings - foreign
currencies
Payable to group companies and
associates: trade payables and
borrowings
Trade and other payables
Other financial liabilities
Total

31 Dec. 2022

Maturity of financial assets

2023
–

2024
–

2025
–

123,643

345,000

–

401,027
536
525,206

–
–
345,000

–

–
–
–

2026
–

185,561

–

–
–
185,561

2027
–

Beyond
839

Total
839

–

–
–
–

–

654,204

6,603

22
–

401,049
536
7,464 1,063,231

31 Dec. 2023

Maturity of financial liabilities

2024

2025

2026

2027

2028

Beyond

Valuation
adjustments

Total

25,630 400,000

–

6,773

232,803

– 138,923

–

186,143
–

–
–
451,370 400,000 138,923

–
–

–

–
–
–

–

–
–
–

–

39,622

–
16
39,638

(701)

424,929

(138)

138,806

–

6,773

272,425

–
–

186,143
16
(839) 1,029,092

31 Dec. 2022

Maturity of financial liabilities

Thousands of euros
Notes and other marketable
securities

Bank borrowings - euros

Bank borrowings - foreign
currencies
Payable to group companies and
associates: trade payables and
borrowings
Trade and other payables
Other financial liabilities
Total

2023

2024

2025

2026

2027

Beyond

2,512

75,587

–

45,410

39,494

97,508

–

400,000

–

199,972
–
420,989

–
–
39,494

–
–
400,000

–

–
–
–

–

–
–
–

–

25,880

–
16
25,896

Valuation
adjustments

Total

(1,239)

401,273

(10)

75,577

–

–
–
(1,249)

84,904

123,388

199,972
16
885,130

The maturity analysis of the Company’s derivative financial instruments is provided in note 11.

Redeia Corporación, S.A. | 2023 financial statements

11 Derivative financial instruments

Framed by its financial risk management policy, the Company has arranged cross currency swaps as hedges.
These instruments swap floating-rate debt in euros for fixed-rate debt in dollars, so hedging the collection of
US dollars in the future. The Company has not formally designated the swaps as a hedge; rather, the gains
and losses derived from changes in the rate of exchange of the derivative financial instruments are offset in
its statement of profit or loss by the changes arising in the long-term loan extended to the Group company,
Red Eléctrica Chile (note 21). In contrast, that hedging relationship has been formally documented for the
purposes of the Group’s consolidated financial statements, qualifying as a hedge of a net investment in a
foreign operation in dollars.

The Company layers in adjustments for credit risk in order to reflect own credit risk and counterparty credit
risk in the estimated fair value of its derivative financial instruments, calculated using generally accepted
valuation models.

To determine the credit risk adjustment, it uses a technique based on the calculation, using simulations, of the
total expected exposure (which therefore includes current and potential exposure), adjusted for the probability
of default over time and the loss given default assigned to the Company and each of its counterparties.

The total expected exposure of derivative financial instruments is obtained using observable market inputs
such as yield, currency and volatility curves, factoring in market conditions at the measurement date.

The inputs used to determine own credit risk and counterparty credit risk (which in turn determine the
probability of default) are mainly based on own credit spreads and the spreads of comparable companies
currently traded on the market (CDS curves, yields on bond issues).

Also, to adjust fair value for credit risk, the Company factors in credit enhancements from guarantees and
collateral when determining the loss given default rate to apply to each position. Loss given default is
considered constant in time. If there are no credit enhancements from guarantees or collateral, a minimum
recovery rate of 40% was modelled.

The Company uses mid-market prices taken from external sources of information widely used in the financial
markets as observable inputs.

The breakdown of the Company’s derivative financial instruments by nature at year-end:

Thousands of euros
Foreign exchange hedges
- Hedge of a net investment:
Cross currency swap

31 Dec. 2023

Non-current

Current

Principal hedged

Maturity date

Assets

Liabilities

Assets

Liabilities

USD 150 million

Until 2026

2,168

–

31 Dec. 2022

Non-current

Current

Principal hedged

Maturity date

Assets

Liabilities

Assets

Liabilities

USD 150 million

Until 2026

–

2,209

–

The breakdown of these derivative financial instruments by maturity date:

Thousands of euros
Foreign exchange hedges
- Hedge of a net investment:
Cross currency swap

Principal hedged

Maturity date

2024

2025

2026

2027

2028 and
beyond

Total

31 Dec. 2023

USD 150 million

Until 2026

–

2,168

–

2,168

Redeia Corporación, S.A. | 2023 financial statements

Thousands of euros
Foreign exchange hedges
- Hedge of a net investment:
Cross currency swap

Principal hedged

Maturity date

2023

2024

2025

2026

2027 and
beyond

Total

31 Dec. 2022

USD 150 million

Until 2026

–

– (2,209)

The related expense recognised in the statement of profit or loss amounted to 510 thousand euros in 2023
(2022: 113 thousand euros).

12 Current and non-current financial investments

The breakdown of the Company’s financial investments at 31 December 2023 and 2022:

Thousands of euros
Equity instruments
Loans to third parties
Derivative financial instruments

Other financial assets
Total non-current financial investments

Thousands of euros
Other financial assets
Total current financial investments

31 Dec. 2023
2,825
706
2,168
22
5,721

31 Dec. 2022
6,603
839
–
22
7,464

31 Dec. 2023

31 Dec. 2022

1,029
1,029

401,027
401,027

Equity instruments in the table above presents investments in economic interest groupings (EIGs) which lease
assets that are managed by another company that is unrelated to the Company, which retains substantially
all the risks and rewards associated with the assets, with the Company simply availing of the tax incentives
provided for in Spanish legislation. The investments were carried at 2,825 thousand euros at year-end (2022:
6,603 thousand euros). The Company recognises the difference between the tax losses that are generated
and declared by the economic interest groupings and its investments in them as finance income (notes 17
and 20-c).

These investments are classified within Level 2 for fair value hierarchy purposes.

At both year-ends, loans to third parties reflects long-term loans extended by the Company to its staff. The
loans accrue interest at Euribor plus a spread, as stipulated in the corresponding collective bargaining
agreement.

At year-end 2023, the balance recognised under non-current derivative financial instruments reflects their
valuation, as outlined, along with their breakdown and maturity profile, in note 11.

Other current financial assets at 31 December 2023 relates to the interest accrued and outstanding on those
derivative financial instruments. At 31 December 2022 it also included short-term financial investments,
specifically time deposits and private repo securities.

Redeia Corporación, S.A. | 2023 financial statements

13 Trade and other receivables

The breakdown of this heading at year-end 2023 and 2022:

Thousands of euros
Trade receivables from group companies and associates
Other receivables
Receivable from employees
Current tax assets
Taxes receivable
Total

31 Dec. 2023
37,070
171
174
205,530
1,263
244,208

31 Dec. 2022
17,181
211
325
174,528
1,003
193,248

Trade receivables from group companies and associates at both year-ends reflect the balances due collection
in relation to the Company’s day-to-day activities managing its Group (note 1).

Other receivables at both reporting dates include balances due under property leases and other operating
income from services provided to third parties.

Receivable from employees at both year-ends mainly reflects the long-term loans extended by the Company
to its staff (note 12).

Current tax assets at both dates reflect the amount of income tax receivable that the Company has recognised
in its capacity as parent of the Tax Group.

Lastly, at 31 December 2023 and 2022 other taxes receivable reflect value-added tax (VAT) receivable by the
Company.

14 Equity

a) Capital risk management

The Group's capital management objectives are to safeguard its ability to continue as a going concern in order
to generate returns for its shareholders and maintain an optimum capital structure to reduce the cost of capital.

To maintain and adjust the capital structure, the Company can adjust the amount of dividends payable to
shareholders, reimburse capital or issue new shares.

Given the Company’s activity and its investees’ ability to generate cash, capital risk is not considered material.

b) Capital and reserves

(cid:127) Share capital

At 31 December 2023 and 2022, the Company’s share capital comprised 541,080,000 shares represented by
book entries, all subscribed and paid in, carrying the same voting and dividend rights (notwithstanding the
limits outlined in the paragraph below), with a unit par value of fifty euro cents. They are admitted to trading
on the four Spanish stock exchanges and are traded through the continuous market (SIBE for its acronym in
Spanish).

The Company is subject to the shareholder limitations stipulated in additional provision twenty-three of the
Spanish Law 54/1997 (27 November 1997) and article 30 of the Electricity Sector Act (Law 24/2023 of 26
December 2013).

Redeia Corporación, S.A. | 2023 financial statements

Specifically, any individual or entity may hold shares in the Company, provided that the sum of their direct or
indirect interests in its share capital does not exceed 5% and their voting rights do not surpass 3% of the total.
These share may not be syndicated for any purpose. Voting rights in the Company are limited to 1% in the
case of entities that carry out activities in the electricity sector, and individuals and entities that hold direct or
indirect interests exceeding 5% of the share capital of such companies, notwithstanding the limits applicable
to generators and agents under article 30 of the Electricity Sector Act. The above limits on shareholdings in
the Parent do not apply to the state industrial holding company, SEPI for its acronym in Spanish, which must
maintain a shareholding of at least 10%. At 31 December 2023 and 2022, SEPI held 20% of the Company’s
share capital.

(cid:127) Reserves

This heading includes:

◦

Legal reserve

Spanish companies must transfer 10% of profit for the year to a legal reserve until this reserve is equivalent
to at least 20% of share capital. This reserve cannot be distributed to shareholders until that threshold is met
and may only be used to offset losses, provided no other reserves are available. Under certain conditions,
this reserve may also be used to increase share capital. At 31 December 2023 and 2022, the legal reserve
was equal to 20% of share capital (54,199 thousand euros).

◦ Revaluation reserve (Law 16/2012 of 27 December 2012).

As allowed by Law 16/2012, introducing a range of tax measures designed to consolidate Spain's public
finances and shore up economic activity, the Company availed of the possibility of restating its property, plant
and equipment. The revaluation reserve amounts to 6,042 thousand euros, net of the one-time tax of 5% on
the revaluation gain. The revaluation reserve balance did not change in 2023.

That reserve can be used to offset losses or increase capital ever since the three-year tax inspection
prescription period (counting from presentation of the 2012 return) elapsed. Ten years after that same date it
will qualify as an unrestricted reserve. However, this balance may only be distributed, directly or indirectly,
when the restated assets have been fully depreciated, sold or derecognised.

◦ Other reserves

This line item mainly includes voluntary reserves and first-time application reserves in the amounts of
2,179,965 and 19,895 thousand euros, respectively, at 31 December 2023 (2022: 1,791,069 and 19,895
thousand euros, respectively). Both reserve accounts are freely distributable.

At both reporting dates, this heading also includes reserves set aside under legal requirements in the amount
of 264,547 thousand euros, mainly including the asset revaluation reserve generated at the Company in 1996
in the amount of 247,022 thousand euros. This reserve can be used, without becoming taxable, to offset
losses, increase capital or, 10 years after its creation and once the revalued assets have been fully
depreciated, as unrestricted reserves. However, this balance may only be distributed, directly or indirectly,
when the restated assets have been fully depreciated, sold or derecognised.

The spin-off in 2015 of the telecommunications business line from Red Eléctrica Internacional for transfer to
Redeia Infraestructuras de Telecomunicación generated a reserve in the amount of 74,407 thousand euros at
the difference between the value of the net assets spun off to that Group company, which was 74,417 thousand
euros, and the amount at which the Company carried its investment in that same business through Red
Eléctrica Internacional. This reserve balance did not change in 2023.

In 2023, the amount of reserves was reduced by the cost of issuing other equity instruments and the coupons
accrued on those same instruments in a total amount of 30,062 thousand euros, net of the related tax effect
(refer to other equity instruments below and note 16).

Redeia Corporación, S.A. | 2023 financial statements

Reserves also include the capitalisation reserve, in the amount of 74,818 thousand euros at 31 December
2023 (2022: 56,133 thousand euros) originated, with a charge against earnings, in 2016, 2017, 2018, 2020,
2021 and 2022. The capitalisation reserve corresponding to 2019 was recorded in 2020 at Red Eléctrica de
España S.A.U. The capitalisation reserve endowment for 2023 will be made at Red Eléctrica de España,
S.A.U., a subsidiary of the same Tax Group, in keeping with article 62.1 d) of Law 27/2014. This reserve will
be restricted for five years. Associated with this reserve, each Group company in the Tax Group has made the
corresponding adjustments to their annual income tax.

(cid:127) Own shares

At 31 December 2023, the Company held own shares representing 0.21% of its share capital; specifically, it
held 1,112,017 shares with an aggregate par value of 556 thousand euros, which it acquired at an average
price of 17.53 euros per share. At 31 December 2022, own shares represented 0.28% of its share capital;
specifically, 1,499,900 shares with an aggregate par value of 750 thousand euros, which it acquired at an
average price of 17.53 euros per share (note 28).

These shares are recognised as a reduction in equity and were carried at 19,496 thousand euros at 31
December 2023 (year-end 2022: 26,296 thousand euros).

The Company is compliant with all of its obligations under article 509 of the Corporate Enterprises Act which
stipulates that, other than in the exceptional cases itemised in company law, the par value of any own shares
acquired by listed companies, plus those already held directly or indirectly by the parent and its subsidiaries,
may not exceed 10% of share capital. The subsidiaries do not hold any own shares or any Company shares.

(cid:127) Profit for the year

The Company’s profit amounted to 450,428 thousand euros in 2023 (2022: 947,571 thousand euros).

(cid:127)

Interim dividend and motion for the distribution of dividends

The interim dividend approved by the Board of Directors in 2023 has been recognised by reducing equity by
147,249 thousand euros at 31 December 2023 (147,143 thousand euros at year-end 2022).

On 31 October 2023, the Board of Directors agreed to pay an interim dividend from 2023 earnings in the
amount of 0.2727 euros per share (before withholding tax), payable on 5 January 2024.

The cash flow forecast for the period elapsing between 30 September 2023 and 5 January 2024 showed the
existence of sufficient liquidity to substantiate its distribution. Moreover, the amount to be distributed did not
exceed the profit generated by the Company since its last year-end, net of the estimated income tax payable
on those earnings, as required under article 277 of the consolidated text of the Corporate Enterprises Act.

As required in article 277 a) of the Corporate Enterprises Act, the Board authorised the issuance of the
following liquidity statement:

Liquidity statement of Redeia Corporación, S.A.

Thousands of euros

Funds available at 30 September 2023:
Undrawn non-current loans
Undrawn current loans
Short-term financial investments and cash
Forecast inflows:
Operating transactions
Financing transactions
Forecast outflows:
Operating transactions
Financing transactions
Forecast fund availability at 5 January 2024:

165,889
69,915
17,802

–
224,419

(115,902)
(1,000)
361,123

The cash flow forecasts as of the date of the resolution did not - and do not - point to any restrictions on the
availability of funds. In addition, given the Company’s ability to generate cash and its undrawn credit facilities,
it expected to have sufficient liquidity during a period of one year from declaration of the interim dividend.

Redeia Corporación, S.A. | 2023 financial statements

Lastly, as shown in the financial statements and as contemplated at the time of the declaration, the profit
generated in 2023 was sufficient to permit the interim dividend payment.

As per the proposal for the appropriation of the Company’s profit for the year (note 3), the directors are
planning to submit a motion at the upcoming Annual General Meeting for the distribution of a final dividend,
which, together with the interim dividend, will imply a total distribution of 540,777 thousand euros, and a total
dividend for the year of one euro per share, calculated considering all shares.

(cid:127) Other equity instruments

On 24 January 2023, the Company issued 500 million euros of subordinated perpetual securities in a single
tranche. Those notes qualify as green financing. The par value of each security was 100 thousand euros and
they were issued at a price of 99.67% of par, with a 4.625% coupon.

Given that the repayment of the principal and payment of the coupon are entirely at the discretion of the
Company, these subordinated notes qualify as an equity instrument and are presented within other equity
instruments in the statement of total changes in equity for the year ended 31 December 2023.

Valuation adjustments

At both reporting dates, this heading reflects the fair value gains on the Company’s investment in Redes
Energéticas Nacionais, SGPS, S.A. (REN) until 2015, when it transferred the investment, by way of a non-
monetary contribution, as consideration for its participation in the capital increase undertaken by Red Eléctrica
Internacional S.A.U., another Group company.

These gains will be kept in equity under the investment is sold outside the Group or written down for
impairment, triggering its reclassification to profit or loss (note 4-e).

15 Non-current provisions

The reconciliation of the opening and year-end balances:

Thousands of euros

Provisions for employee
benefits
Other provisions

Total

31 Dec.
2021

14,491

5,385

19,876

Additions

Utilised

Actuarial
gains and
losses

31 Dec.
2022

Additions

Utilised

Actuarial
gains and
losses

Transfers
to current

31 Dec.
2023

4,730

115

4,845

(283)

(4,044)

14,894

—

5,500

(283)

(4,044)

20,394

1,964

125

2,089

(309)

—

(309)

(815)

(1,093)

14,641

—

5,625

(815)

(1,093)

20,266

Provisions for staff costs includes the future health insurance commitments assumed by the Company with its
staff upon retirement, calculated using actuarial assumptions made by an independent expert, specifically the
following assumptions for 2023 and 2022:

Discount rate
Growth in costs
Mortality table

Actuarial assumptions

2022
2.87%
3.00%
PER2020_Col_1er.orden PER2020_Col_1er.orden

2023
3.31%
3.00%

Redeia Corporación, S.A. | 2023 financial statements

The impact of a one-point increase and a one-point decrease in the health insurance costs would be as
follows:

Thousands of euros
Current service cost
Interest cost of the net post-employment health
insurance costs
Accumulated post-employment benefit
obligations for health insurance

2023

Health insurance cost
(+1%)

Sensitivity
analysis

Health insurance cost
(-1%)

Sensitivity
analysis

4%
272

296

3%
214

295

2%
170

295

3%
214

295

(44)

—

10,265

8,294

1,971

6,767

8,294

(1,527)

2022

Health insurance cost
(+1%)

Sensitivity
analysis

Health insurance cost
(-1%)

Sensitivity
analysis

4%
324

362

3%
252

361

2%
198

361

3%
252

361

(54)

—

11,217

8,946

2,271

7,206

8,946

(1,740)

Elsewhere, the impact of a half-point decrease in the discount rate used by way of actuarial assumption, from
3.31% to 2.81% in 2023, on the costs of the health cover are shown below:

Thousands of euros
Current service cost
Interest cost of the net post-employment health insurance
costs
Accumulated post-employment benefit obligations for
health insurance

2023

Discount rate

3.31%
214

295

2.81%
241

251

8,294

9,196

Sensitivity
analysis

(44)

902

2022

Discount rate

2.87%
252

361

2.37%
285

299

Sensitivity
analysis

(62)

8,946

9,988

1,042

The accrued amounts are recognised as employee benefits expense or as finance costs, depending on their
nature. The amounts of employee benefits expense and finance costs recognised in the statement of profit or
loss in 2023 were 214 thousand euros and 295 thousand euros, respectively (2022: 252 thousand euros and
361 thousand euros, respectively). Changes in the present value of these obligations resulting from actuarial
gains and losses are recognised within reserves in equity. The gross amount recognised in 2023 was a
negative 815 thousand euros (2022: a negative 4,044 thousand euros) and is shown under actuarial gains
and losses in the reconciliation above.

Provisions for employee benefits also include the commitments assumed by the Company under its long-term
employee remuneration programme, with the amounts falling due in the next 12 months reclassified to current
provisions.

Lastly, other provisions in the table above includes the amounts recognised by the Company annually to cover
potentially unfavourable rulings on third-party claims.

Redeia Corporación, S.A. | 2023 financial statements

16 Current and non-current borrowings

The breakdown of these headings at 31 December 2023 and 2022:

Thousands of euros
Notes and other marketable securities
Bank borrowings
Derivative financial instruments
Other liabilities
Non-current borrowings

Thousands of euros
Notes and other marketable securities
Bank borrowings
Other current borrowings
Current borrowings

31 Dec. 2023
399,299
138,785
–
16
538,100

31 Dec. 2023
25,630
6,794
163,490
195,914

31 Dec. 2022
398,761
39,494
2,209
16
440,480

31 Dec. 2022
2,512
120,987
159,848
283,347

At 31 December 2023 and 2022 notes and other marketable securities includes the 400 million euros of notes
issued by the Company in the euromarket in 2020 under a specific standalone shelf prospectus filed with the
Luxembourg stock exchange. The notes mature in 2025. The notes accrued interest at an average rate of
1.01% in 2023 (2022: 1.01%).

The interest accrued and unpaid on these notes stood at 2,505 thousand euros at year-end 2023 (2022: 2,512
thousand euros) and is included under current notes and other marketable securities. Current notes and other
marketable securities also includes the interest accrued and unpaid on the subordinated perpetual securities
issue detailed in note 14-b in the amount of 23,125 thousand euros.

Non-current bank borrowings includes 138,785 thousand euros drawn down under US dollar credit facilities
due 2026 at 31 December 2023 (2022: 39,494 thousand euros).

At year-end 2022, the balance recognised under non-current derivative financial instrumented reflects their
negative valuation. The instruments’ positive valuation at 31 December 2023 means they are recognised
within financial assets at that year-end (note 12). Their breakdown and maturity profile is disclosed in note 11.

At both reporting dates, other liabilities included 16 thousand euros corresponding to long-term security
deposits received.

Current bank borrowings at 31 December 2023 includes US dollar-denominated loans and credit facilities in
the amount of 1,746 thousand euros which fall due in 2024. In 2022, it included euro-denominated loans and
credit facilities totalling 74,990 thousand euros and the amounts drawn down under US dollar credit facilities
arranged by the Company in the amount of 43,128 thousand euros.

At 31 December 2023, the interest accrued and outstanding on those loans amounted to 1,515 thousand
euros (2022: 758 thousand euros) and is included under current bank borrowings. This heading also includes
the interest accrued and outstanding on the Company’s derivative financial instruments in the amount of 3,533
thousand euros at 31 December 2023 (2022: 2,111 thousand euros).

The average rate of interest on bank borrowings was 5.10% in 2023 (2022: 1.50%).

Other current borrowings break down as follows:

Thousands of euros
Dividends
Payable to fixed-asset suppliers and other borrowings
Total

31 Dec. 2023
147,249
16,241
163,490

31 Dec. 2022
147,144
12,704
159,848

Redeia Corporación, S.A. | 2023 financial statements

17 Tax matters

The Company files its taxes under the tax consolidation regime as part of Tax Group 57/2002, of which it is
the parent.

a) Reconciliation of accounting profit to taxable income

Accounting profit differs from taxable income due to the different treatment afforded certain transactions for
tax versus accounting purposes.

Below is a reconciliation of accounting profit for 2023 and 2022 and the taxable income the Company expects
to report when its annual financial statements have been approved:

Thousands of euros
Accounting profit for the year before tax
Permanent differences
Taxable income
Temporary differences:
Originating in the current year
Amounts reversed
Total
Losses of the economic interest groupings
Expenses recognised in equity
Taxable income/(tax loss)

2023
456,454
(431,986)
24,468

11,659
(4,365)
7,294
(100,035)
(40,083)
(108,356)

2022
978,594
(856,738)
121,856

7,051
(1,315)
5,736
(90,658)
—
36,934

Taxable income was deducted by the losses declared by the economic interest groupings in which the
Company has investments in the amount of 100,035 thousand euros in 2023 (90,658 thousand euros in 2022)
(note 12).

b) Effective income tax rate and reconciliation of accounting profit to tax expense/income

Income tax expense was calculated as follows:

Thousands of euros
Accounting profit for the year before tax
Permanent differences
Taxable income
Tax rate
Tax at the prevailing tax rate
Utilisation of tax credit
Tax expense for the year
Income tax on foreign earnings
Other adjustments
Income tax expense
Effective tax rate

Breakdown of income tax:
Current income tax
Deferred income tax
Other adjustments
Income tax expense

2023
456,454
(431,986)
24,468
25%
6,117
(39)
6,078
—
(52)
6,026
1.32%

7,898
(1,820)
(52)
6,026

2022
978,594
(856,738)
121,856
25%
30,464
(28)
30,436
31
556
31,023
3.17%

31,898
(1,431)
556
31,023

The effective income tax rate is shaped by permanent differences and tax credits. The difference between the
effective and statutory rates is primarily attributable to application of the double taxation relief for dividends
and gains from the disposal of significant interests in resident entities, as regulated in article 21 of Spain’s
Income Tax Act (Law 27/2014 of 27 November 2014) and the deduction for the capitalisation reserve derived
from the increase in equity, as allowed in article 25 of that same Act.

Redeia Corporación, S.A. | 2023 financial statements

In 2023, the permanent differences related mainly to application of the exemption arrangements aimed at
avoiding double taxation on the dividends received from the Company’s subsidiaries (specifically, from Red
Eléctrica de España and Redeia Infraestructuras de Telecomunicación). In 2022, they related mainly to
application of the exemption arrangements aimed at avoiding double taxation on the gain obtained on the sale
of a 49% interest in Redeia Infraestructuras de Telecomunicación, S.A.

Taxable income was also reduced by the capitalisation reserve in both years. The capitalisation reserve
endowment for 2023 will be made at Red Eléctrica de España, S.A.U., a subsidiary of the Tax Group, as
contemplated in article 62.1 d) of Law 27/2014 (note 14).

The tax credit utilised in 2023 derived from credit for donations and company contributions to pension
schemes. In 2022 it derived mainly from credit for donations.

c) Deferred tax assets and liabilities

Temporary differences in the recognition of expenses and income for accounting and tax purposes at 31
December 2023 and 2022, and their corresponding accumulated tax effect, were as follows:

Thousands of euros
Deferred tax assets:
Originated in prior years
Originated in the current year
Reversals in respect of prior years
Adjustments in respect of prior years
Other: tax losses additional provision 18 of
the Income Tax Act
Total deferred tax assets
Deferred tax liabilities:
Originated in prior years
Originated in the current year
Reversals in respect of prior years
Total deferred tax liabilities

2023

2022

Statement of profit
or loss

Income and expense
recognised directly in
equity

Statement of profit or
loss

Income and expense
recognised directly in
equity

4,902
2,925
(1,140)
130

15,028

21,845

(1,707)
(10)
46
(1,671)

2,602
—
(204)
—

—

2,398

—
—
—
—

3,397
1,763
(378)
120

—

4,902

(1,752)
—
45
(1,707)

3,613
—
(1,011)
—

—

2,602

—
—
—
—

In both 2023 and 2022, deferred tax assets featured reversals of taxes that were deferred in 2013 and 2014
as a result of application of the limit on the deduction of depreciation charges under article 7 of Law 16/2012
of 27 December 2012, introducing a range of tax measures designed to consolidate Spain's public finances
and shore up economic activity, and as a result of the start in 2015 of depreciation for tax purposes of the net
increase in value resulting from the asset revaluation exercise undertaken at 31 December 2012, as stipulated
in article 9 of that same piece of legislation, and also due to long-term employee benefit obligations.

Other in the table in 2023 above includes a deferred tax asset associated with the tax losses reported by
several Tax Group companies that could not be included in taxable income under application of additional
provision eighteen of Law 27/2014, introduced via Law 38/2022 of 27 December 2022. The deferred tax
liabilities derive from the accelerated depreciation of certain assets.

The notes to the Company’s financial statements for 2006 included the disclosures required under article 86
of Law 27/2014 regarding the merger between Red de Alta Tensión, S.A.U. (REDALTA) and Infraestructuras
de Alta Tensión S.A.U. (INALTA). The notes to the 2008 financial statements included the disclosures
regarding the contribution of the Spanish grid TSO business to Red Eléctrica de España and the notes to the
2015 financial statements included the disclosures regarding the spin-off and contribution of the
telecommunications business to Redeia Infraestructuras de Telecomunicación and the non-monetary
contribution to Red Eléctrica Internacional of the shares in REN.

d) Years open to inspection

In accordance with prevailing tax legislation, tax returns cannot be considered final until they have been
inspected by the tax authorities or until the applicable inspection period has elapsed.

Redeia Corporación, S.A. | 2023 financial statements

In 2022 the tax authorities initiated general inspection proceedings covering the period between February
2018 and December 2020 in respect of VAT, personal income tax withholdings and non-resident withholdings.
In 2023 the Company accepted the personal income tax and VAT assessments handed down, which did not
imply any penalties and did not have any impact on its earnings in 2023.

In March 2022 the authorities also initiated general inspection proceedings with respect to corporate income
tax (consolidated tax regime) covering 2017 to 2020 and partial verification proceedings covering 2012 and
2014. In 2023 they also began partial verification proceedings covering 2021 for other companies within the
Tax Group.

In 2023, the Company signed assessments, some of which it has challenged, without incurring any penalties
whatsoever and without having to make any restatements. The amounts are itemised and disclosed in the
Group’s consolidated financial statements. The matters subject to debate that are being contested are
currently pending ruling by the Tax Inspection’s Technical Office.

The court proceedings taken to challenge the above-mentioned partial verifications covering 2012 and 2014
concluded in 2022 with the National Appellate Court ruling in favour of the Tax Group. Following that ruling,
the inspections finalised in 2023, yielding net late payment interest payable to the Group.

The Company remains party to certain court proceedings related with its income tax from 2011 and 2015.

The Tax Group has also requested the rectification of the tax paid in instalments between 2016 and 2022. In
2020, the tax authorities ruled in favour of the rectification requested in respect of 2016 and 2017 and the
Company has appealed its decision regarding the other years requested.

In accordance with prevailing tax legislation, the tax returns presented for the various different taxes cannot
be considered final until they have been inspected by the tax authorities or until the applicable inspection
period has elapsed (four years).

Since existing tax law and regulations are subject to interpretation, tax inspections initiated in the future for
years open to inspection could give rise to tax liabilities that are currently not possible to quantify objectively.
However, the Company’s Board of Directors estimates that any liabilities that could arise as a result of any
such inspections would not have a material impact on its future earnings.

18 Trade and other payables

The breakdown of this heading at year-end 2023 and 2022:

Thousands of euros
Trade payables to group companies
Other payables
Payable to employees
Other taxes payable
Total

31 Dec. 2023
8
11,594
11,059
1,400
24,061

31 Dec. 2022
169
30,724
9,400
1,244
41,537

Trade payables at both year-ends include the balances pending payment in relation to the Company’s day-
to-day activities managing its Group.

Payable to employees relates to bonuses and other remuneration pending payment to Company employees
at 31 December 2023.

At both reporting dates, other taxes payable related primarily to personal income tax withholdings and social
security contributions payable by the Company.

Redeia Corporación, S.A. | 2023 financial statements

19 Disclosures regarding average supplier payment term. Additional
Provision Three - "Disclosure requirements" under Law 15/2010

One of the objectives of Law 18/2022 of 28 September 2022, on business creation and growth, is to reduce
late payments on trade debt and enhance access to financing.

Among other things, it amends Law 15/2010 of 5 July 2010, which in turn amended Law 3/2004 of 29
December 2004, establishing measures to tackle supplier non-payment, regulating the deadlines for settling
trade transactions between companies or between companies and the public sector, specifically in Additional
Provision Three thereof.

The amendments made to Additional Provision Three by Law 18/2022 require:

(cid:127) All corporate enterprises to expressly disclose in the notes to their annual financial statements their

average supplier payment terms.

(cid:127)

Listed companies and unlisted companies that do not present short-form financial statements are required
to publish, in addition to their average payment terms, the monetary value and number of invoices paid
within the legally stipulated deadline and their percentage shares of the corresponding totals. That
information must be included in their financial statement notes and on their corporate websites if they have
one.

In its official journal no. 132/2022, the ICAC writes that this new legislation expands the disclosures that
corporate enterprises must include in their financial statement notes and on their corporate website, to the
extent they have one. However, it does not modify the methodology used to calculate the average supplier
payment term and therefore does not modify its earlier resolution of 29 January 2016, which sought to clarify
and systematise the information companies are required to include in their separate and consolidated financial
statements for the purposes of complying with their disclosure requirements under Additional Provision Three
of Law 15/2010 of 5 July 2010, amending Law 3/2004 of 29 December 2004.

As required under these regulations, the disclosures regarding the Company’s average payment terms in
2023 and 2022 are provided below:

Days
Average supplier payment term
Paid transactions ratio
Outstanding transactions ratio

Thousands of euros
Total payments made
Total payments outstanding

Thousands of euros
Monetary amount of invoices paid within the legal deadline
Total payments made
Monetary amount of invoices paid within the legal deadline as a % of total payments made

No. of invoices paid within the legal deadline
Total no. of invoices paid
No. of invoices paid within the legal deadline as a % of total invoices paid

2023
36
37
24

2023
25,653
1,763

2023
23,725
25,653
92.5%

2023

1,748
1,847
94.6%

2022
35
35
30

2022
32,961
1,793

2022
29,293
32,961
88.9%

2022

1,623
1,889
85.9%

Redeia Corporación, S.A. | 2023 financial statements

Income and expenses

a) Revenue

The revenue breakdown for 2023 and 2022:

Thousands of euros
Provision of services
Finance income from investments in equity instruments of group companies and
associates
Finance income from investments in securities and other financial instruments of group
companies and associates

Total

31 Dec. 2023
78,051

31 Dec. 2022
74,306

415,051

55,274

548,376

–

15,193

89,499

Provision of services mainly includes the provision of management support services under agreements with
the following group companies: Red Eléctrica de España, Red Eléctrica Internacional, Redeia Infraestructuras
de Telecomunicación, Red Eléctrica Infraestructuras en Canarias, Redeia Financiaciones, Red Eléctrica
Financiaciones, Redeia Sistemas de Telecomunicaciones, Elewit, Hispasat and Inelfe; it also includes lease
income, likewise generated primarily by group companies (note 7).

In 2023 finance income from investments in equity instruments of group companies and associates includes
dividends collected from Red Eléctrica de España and Redeia Infraestructuras de Telecomunicación.

In both years, finance income from investments in securities and other financial instruments of group
companies and associates includes income under loan agreements and credit facilities arranged with Red
Eléctrica de España, Redeia Sistemas de Telecomunicaciones, Red Eléctrica Internacional, Red Eléctrica
Chile and Elewit (note 21).

The breakdown of revenue by geographical region in 2023 and 2022:

Thousands of euros
Spain
European Union
Other countries
Total

2023
535,091
404
12,881
548,376

2022
81,293
–
8,206
89,499

European Union in the table above includes services provided to the Group company, Interconexión Eléctrica
Francia-España, S.A.S., with registered office in Paris (France), starting from 2023.

Employee benefits expense

The breakdown of this heading in 2023 and 2022:

Thousands of euros
Wages and salaries
Social security
Contributions to pension funds and similar obligations
Other items and employee benefits
Total

2023
34,855
6,702
599
4,924
47,080

2022
37,541
5,994
424
4,146
48,105

Wages and salaries includes employee remuneration and termination benefits. The decrease from 2022
mainly reflects the provisions recognised in 2022 in relation with collective bargaining agreements that were
under negotiation.

Note that this heading includes director remuneration (note 22).

Redeia Corporación, S.A. | 2023 financial statements

Headcount

The Company’s average headcount by employee category in 2023 and 2022:

Management team
Senior technicians and middle managers
Technicians
Specialists and administrative staff
Total

2023
70
242
34
57
403

2022
68
226
34
60
388

The breakdown by gender and employee category of the Company’s headcount at 31 December 2023 and
2022:

Management team
Senior technicians and middle managers
Technicians
Specialists and administrative staff
Total

2023

2022

Men

Women

Total

Men

Women

Total

36
128
20
12
196

35
132
15
44
226

71
260
35
56
422

37
115
20
11
183

34
112
17
47
210

71
227
37
58
393

The breakdown of employees with a disability of a severity of 33% or higher at year-end:

Senior technicians and middle managers
Technicians
Specialists and administrative staff
Total

2023

2022

Men

Women

Total

Men

Women

Total

–
–
–
–

–
3
1
4

–
–
–
–

–
4
–
4

The Company had 12 directors, six men and six women, at both reporting dates.

Finance income and costs

Finance costs in both years primarily consisted of interest expense on notes and other marketable securities,
bank borrowings and derivative financial instruments.

Finance income, meanwhile, mainly included income from the Company’s investments in economic interest
groupings and from short-term financial investments (note 12).

Impairment of and gains/(losses) on disposal of fixed assets

This heading includes the gains generated in 2023 and 2022 on the sales detailed in note 6.

Impairment of and gains/(losses) on disposal of financial assets

In 2022 this heading included the gain recognised on the sale of a 49% interest in Redeia Infraestructuras de
Telecomunicación (note 8). The Company did not sell any financial instruments or write any down for
impairment in 2023.

Redeia Corporación, S.A. | 2023 financial statements

21 Transactions with group companies, associates and related parties
and resulting year-end balances

(cid:127)

Transactions with Group companies and associates and resulting year-end balances

All transactions with group companies and associates were arranged on an arm’s length basis.

The balances outstanding with group companies and associates at year-end were as follows:

Thousands of euros
Red Eléctrica de España, S.A.U.(1)
Red Eléctrica Internacional, S.A.U.(1)
Red Eléctrica Financiaciones, S.A.U. (1)
Redeia Infraestructuras de Telecomunicación,
S.A. (1)
Red Eléctrica Infraestructuras en Canarias,
S.A.U. (1)
Redeia Sistemas de Telecomunicaciones, S.A.U.
(1)

Elewit, S.A.U. (1)
Redcor Reaseguros, S.A. (1)
Redeia Financiaciones, S.L.U. (1)
Red Eléctrica Chile SpA (1)
Red Eléctrica Andina, S.A. (1)
Transmisora Eléctrica del Sur 4,
S.A.C. (1)
Red Eléctrica Brasil Holding Ltda. (1)
Red Eléctrica del Norte 2, S.A. (1)
Transmisora Eléctrica del Norte S.A. (2)
Hispasat, S.A. (1)
Hispamar Exterior S.L.U. (1)
Hispasat Canarias S.L.U. (1)
Axess Network Solutions, S.L. (1)
Axess Network Solutions Arabia Saudita, S.L. (1)
Interconexión Eléctrica Francia-España S.A.S. (3)
Total group companies
(1) Group companies.

(2) Associates.
(3) Joint ventures

Loans and
receivables

813,218
110,224
99

945

401

331,625

14,432
—
38
192,083
—

—

—
309
13
305
496
—
1
—
303
1,464,492

2023

Security
deposits
received
1,402
—
—

18
—
—
—
—

—

—
—
—
—
—
—
—
—
—
1,504

Borrowings

Loans and
receivables

9,513
27,476
19,808

38,386

4,781

54,796
50,810
38

580

140

2,023

351,914

—
129,640
2,001
2
6

—

—
—
—
2,053
—
35,195
—
37
—
270,921

9,859
—
24
185,561
—

—
76
60
281
4
—
—
—
—
654,204

2022

Security
deposits
received
1,401
—
—

—

18
—
—
—
—

—

—
—
—
—
—
—
—
—
—
1,501

Borrowings

10,335
418
—

24,517

396

23
75,167
1,595
—
5

—

6
—
—
11
—
9,411
—
—
—
121,887

The loans to Red Eléctrica de España mainly include the short-term credit facility arranged with that company
in the amount of 850 million euros, which was drawn down by 771,992 thousand euros at 31 December 2023
(2022: 38,311 thousand euros); the average rate of interest on the facility was 3.93% in 2023 (0.78% in 2022).
This heading also includes balances receivable and interest accrued and pending collection.

The loans to Red Eléctrica Internacional mainly include the short-term credit facility arranged with that
company in the amount of USD 215 million, which was drawn down by 106,942 thousand euros at 31
December 2023 (2022: 49,359 thousand euros); the average rate of interest on the facility was 6.02% in 2023
(2.77% in 2022). This heading also includes balances receivable and interest accrued and pending collection.

The loans to Redeia Sistemas de Telecomunicaciones include the credit facility arranged with that company
in 2019, due 2029 following an extension, in the amount of 435 million euros, which was drawn down by a
non-current balance of 311,500 thousand euros at 31 December 2023 (2022: 345,000 thousand euros) and a
current balance of 15,792 thousand euros (2022: 5,106 thousand euros); the average rate of interest on the
facility was 4.11% in 2023 (0.87% in 2022). This heading also includes interest accrued and pending collection.

Loans to Elewit include a credit facility arranged with that company in the amount of 25 million euros in 2019
which was drawn down by 13,628 thousand euros at 31 December 2023 (2022: 9,655 thousand euros). This
loan accrued interest at an average rate of 3.84% in 2023 (2022: 0.84%). This heading also includes balances
receivable and interest accrued and pending collection.

Redeia Corporación, S.A. | 2023 financial statements

Loans to Red Eléctrica Chile mainly include the loan arranged with that company in 2021 in the amount of
USD 185 million due 2026, which was fully drawn down at 31 December 2023 in the amount of 167,668
thousand euros (2022: 173,705 thousand euros) and accrued interest at an average rate of 7.62% in 2023
(2022: 2.98%). In order to mitigate foreign exchange risk on this dollar-denominated loan, the Company has
arranged cross currency swaps over the principal and interest (note 11). This heading also includes interest
accrued and pending collection.

Borrowings from Red Eléctrica de España reflect the tax owed to it by the Company in its capacity as parent
of the Tax Group (note 17).

Borrowings from Redeia Infraestructuras de Telecomunicación mainly include a credit facility arranged with
that company in the amount of 76 million euros in 2022 which was drawn down by 38,118 thousand euros at
31 December 2023 (2022: 24,378 thousand euros). This loan accrued interest at an average rate of 5.50% in
2023 (2022: 5.22%). This heading also includes interest accrued and pending payment.

Borrowings from Redcor Reaseguros include a credit facility arranged with that company in the amount of 150
million euros in 2022 which was drawn down by 128,203 thousand euros at 31 December 2023 (75,000
thousand at year-end 2022). This loan accrued interest at an average rate of 3.89% in 2023 (2022: 2.40%).
This heading also includes interest accrued and pending payment.

Borrowings from Redeia Financiaciones include a credit facility arranged with that company in the amount of
2 million euros in 2021 which was drawn down by 1,975 thousand euros at 31 December 2023 (2022: 1,579
thousand euros). This loan accrued interest at an average rate of 3.79% in 2023 (2022: 0.75%). This heading
also includes interest accrued and pending payment.

Borrowings from Red Eléctrica Internacional include a credit facility arranged with that company in the amount
of 50 million euros in 2023 which was drawn down by 25,220 thousand euros at 31 December 2023. This loan
accrued interest at an average rate of 4.33% in 2023. This heading also includes interest accrued and pending
payment.

Borrowings from Red Eléctrica Financiaciones include a credit facility arranged with that company in the
amount of 50 million euros in 2023 which was drawn down by 19,583 thousand euros at 31 December 2023.
This loan accrued interest at an average rate of 4.34% in 2023. This heading also includes interest accrued
and pending payment.

Borrowings from Red Eléctrica Infraestructuras en Canarias include a credit facility arranged with that
company in the amount of 25 million euros in 2023 which was drawn down by 4,723 thousand euros at 31
December 2023. This loan accrued interest at an average rate of 4.12% in 2023. This heading also includes
interest accrued and pending payment.

Lastly, the amounts payable to and from Hispasat, S.A., Hispamar Exterior S.L. and Hispasat Canarias S.L.
essentially reflect the Company’s tax credits and debits with those companies in its capacity as the parent of
the Tax Group.

Redeia Corporación, S.A. | 2023 financial statements

The Company performed the following transactions with group companies and associates:

Provision of
services

Finance
income

Operating
expenses

Finance
costs

Dividend
income

Provision of
services

Finance
income

Operating
expenses

Finance
costs

2023

2022

Thousands of
euros
Red Eléctrica de
España, S.A.U. (1)
Red Eléctrica
Internacional,
S.A.U.(1)
Redeia
Infraestructuras
de
Telecomunicación
, S.A. (1)
Redeia
Financiaciones,
S.L.U. (1)
Red Eléctrica
Infraestructuras
en Canarias,
S.A.U. (1)
Red Eléctrica
Financiaciones,
S.L.U. (1)
Redeia Sistemas
de
Telecomunicacion
es, S.A.U. (1)
Elewit, S.A.U. (1)
Redcor
Reaseguros, S.A.
(1)

Red Eléctrica del
Norte, S.A. (1)
Red Eléctrica del
Norte 2, S.A. (1)
Red Eléctrica
Chile SpA (1)
Red Eléctrica
Andina, S.A. (1)
Transmisora
Eléctrica del Sur
4,
S.A.C. (1)
Red Eléctrica
Brasil Holding
Ltda. (1)
Hispasat, S.A. (1)
Interconexión
Eléctrica Francia-
España S.A.S. (3)
Transmisora
Eléctrica del Norte
S.A. (2)
Total group
companies

(1) Group companies.
(2) Associates.
(3) Joint ventures

67,705

23,405

2,929

4,968

2,592

491

—

743

13,832

—

1,011

510

860

—

309

—

1,019

807

—

12,559

—

— 388,123

65,056

2,779

509

—

2,676

1,499

1,854

26,928

2,488

—

673

473

3,184

894

—

322

—

111

1,068

—

7,675

—

154

426

—

3,957

—

860

—

140

—

167

—

77,777

55,274

862

6,963

415,051

73,996

15,193

865

319

In both 2023 and 2022, provision of services essentially comprises the management support services provided
to Group companies.

This heading also includes the lease agreements with Red Eléctrica de España, Redeia Infraestructuras de
Telecomunicación, Red Eléctrica Infraestructuras en Canarias, Elewit and Hispasat (note 7).

Redeia Corporación, S.A. | 2023 financial statements

Finance income in 2023 and 2022 mainly reflects the interest accrued under the loan and credit agreements
in place with Red Eléctrica de España, Redeia Sistemas de Telecomunicaciones, Red Eléctrica Internacional,
Red Eléctrica Chile and Elewit.

In 2023 dividend income includes the dividends paid to the Company by Red Eléctrica de España and Redeia
Infraestructuras de Telecomunicación.

(cid:127)

Transactions with other related parties and resulting year-end balances

The Company did not perform any transactions with other related parties in 2023 or 2022.

22 Director remuneration

The Director Remuneration Policy for Redeia Corporación, S.A. for 2022 - 2024 was approved at the Annual
General Meeting held on 29 June 2021 (the former policy was approved in 2019 and covered 2019 to 2021).

At the Annual General Meeting held on 6 June 2023, and as stipulated in the Company’s bylaws, the Parent’s
shareholders ratified the motion presented by the Board of Directors for the approval of the Annual Report on
Director Remuneration, which included, among other matters, the proposal for director remuneration in 2023.

The remuneration approved, which covers the members of the Board of Directors, the Chairwoman and the
CEO, is unchanged from 2022.

The Chairwoman, in her capacity as non-executive chair, receives a fixed annual sum in addition to
remuneration in her capacity as member of the Board of Directors. She only receives fixed remuneration, i.e.,
she has not been allocated any variable remuneration (neither an annual bonus or participation in long-term
incentive schemes) and she is not entitled to any termination benefits.

The CEO, on the other hand, receives fixed and variable remuneration (an annual bonus and participation in
a long-term incentive scheme) for the performance of his executive duties, as well as remuneration in his
capacity as member of the Board of Directors. He also receives certain employee benefits. Some of both
components of his variable remuneration is settled via the delivery of Company shares.

In addition, the CEO is a beneficiary of a defined contribution pension scheme, covering retirement, death and
permanent disability. Redeia Corporación, S.A.’s obligation under this scheme is limited to making an annual
contribution equivalent to 20% of the CEO’s fixed compensation for his performance of executive duties.

The CEO’s annual variable remuneration is framed by predetermined and quantifiable objective criteria and
targets established by the Parent's Appointments and Remuneration Committee at the start of each year. The
targets are aligned with the strategies and initiatives laid down in the Group’s Strategic Plan and their delivery
is assessed by that same committee.

The CEO also participates in the Long-Term Incentive Plan (LTIP) for Promoting the Energy Transition,
Reducing the Digital Divide and Boosting Diversification. That Plan’s targets are likewise associated with those
set out in the Group’s Strategic Plan and are aligned with the key aspects of the Director Remuneration Policy.
The LTIP has a duration of six years and will end on 31 December 2025.

Under the Director Remuneration Policy, the CEO’s contract, in line with generally accepted market practice,
includes a termination benefit equivalent to one year's remuneration in the event his contract is terminated by
the Company or as a result of a change of control.

Likewise in line with market practices in these cases, following his appointment as CEO, his previous
employment contract was suspended. In the event of his termination, he would accrue, for severance
purposes, the remuneration in force at the date of suspension, taking into consideration his length of service
at the Group up until his appointment as CEO (15 years) plus the period during which he provides his services,
if any, following his discontinuation as CEO, all of which in keeping with prevailing labour legislation.

Redeia Corporación, S.A. | 2023 financial statements

As for the members of the Board of Directors, their remuneration consists of a fixed annual payment,
remuneration for attending board meetings, remuneration for membership of the board committees, as the
case may be, and specific annual remuneration for the chairs of those committees and for the position of lead
independent director. These remuneration concepts and the related amounts have not changed in 2023.

Lastly, the directors are compensated or reimbursed for reasonable and duly justified expenses incurred in
order to attend the meetings and perform other tasks directly related with their director duties, such as travel,
accommodation and meals.

The breakdown of the remuneration accrued by the members of the Company’s Board of Directors in 2023
and 2022 is provided below:

Thousands of euros
Total remuneration in their capacity as directors
Remuneration of certain directors in their capacity as executives (1)
Total
(1) Includes the fixed remuneration and the annual variable remuneration accrued during the year.

2023
2,503
743
3,246

2022
2,485
743
3,228

The year-on-year increase in total remuneration in their capacity as directors in the table above is due to the
fact that there was a vacancy on the Board of Directors for a spell in 2022.

The breakdown of director remuneration by class of director:

Thousands of euros
Executive directors

Proprietary directors
Independent external directors
Other external directors
Total director remuneration

2023
890
525
1,285

546
3,246

2022
890
507
1,285

546
3,228

The breakdown by item and individual director of the remuneration accrued by the members of the Company’s
Board of Directors in 2023 and 2022 is provided below:

Fixed
remuneration

Variable
remuneration

Board meeting
attendance fees

Committee
membership

Committee
chairs

Lead
Independent
Director

Other
remuneration
(3)

Total
2023

Total
2022

Thousands of euros

Beatriz Corredor Sierra

Roberto García Merino

Mercedes Real Rodrigálvarez (1)

Ricardo García Herrera

Esther María Rituerto Martínez

Carmen Gómez de Barreda Tous
de Monsalve

Socorro Fernández Larrea

Antonio Gómez Ciria

José Juan Ruiz Gómez

Marcos Vaquer Caballería

Elisenda Malaret García

José María Abad Hernández

Other Board members (2)

530

481

131

—

263

—

— 546

130

890
— 175
— 175
— 175
—

205

— 190
— 190
— 175
— 175
— 175
— 175
—

—

546

890

175

113

205

190

175

Total remuneration accrued

2,321

263

192

280

130 3,246 3,228

(1) Amounts received by SEPI.

(2) Members that stepped down from the Board in 2022.

(3) Includes the costs derived from the company benefits included in the CEO’s pay package.

Redeia Corporación, S.A. | 2023 financial statements

The Company did not recognise any loans, advances or guarantees extended to the members of its Board of
Directors on its balance sheet at either 31 December 2023 or 31 December 2022. Not did it have any pension
or life insurance obligations, other than as outlined above, on their behalf at either reporting date.

The Company had arranged director and officer liability insurance at both reporting dates. These policies
cover both the Company's directors and its key management personnel. The annual cost of the premiums in
2023 was 221 thousand euros, including tax (245 thousand euros in 2022). These premiums are calculated
based the nature of the Company’s activities and as a function of its financial metrics, so that it is not feasible
to apportion them between the directors and key management personnel or to allocate them to each individual.

The members of the Board of Directors did not perform any transactions with the Company, either directly or
through persons acting on their behalf, outside of the ordinary course of business or other than on an arm's
length basis in either reporting period.

23 KPM remuneration

The key management personnel who provided services to the Company in 2023 and 2022 and their positions
at year-end are as follows:

Name

Mariano Aparicio Bueno
Emilio Cerezo Diez
José Antonio Vernia Peris
Miryam Aguilar Muñoz
Eva Pagán Díaz
Laura de Rivera García de Leániz (1)
Silvia Bruno de la Cruz
Carlos Puente Pérez
Eva Rodicio González
Juan Majada Tortosa
(1) Laura de Rivera García de Leániz presented her resignation from the Company on 18 January 2024.

Position
Managing Director of Telecommunications
Chief Financial Officer
Chief Resources Officer
Chief Communications Officer
Chief Sustainability Officer
Director of Regulation and Legal Services
Director of Innovation and Technology
Director of Corporate Development
Director of Internal Audit and Risk Control
Managing Director of International Business

In 2023, the Company’s key management personnel accrued 2,371 thousand euros of remuneration, which
has been recognised under employee benefits expense in the accompanying statement of profit or loss (2022:
2,540 thousand euros). These amounts include the accrual of variable annual remuneration, on the
assumption that the objectives set each year will be met. After delivery of the corresponding targets has been
verified, these bonuses are paid out in the early months of the following year, adjusted for the definitive delivery
metrics.

Of the total remuneration accrued by key management personnel in 2023, 49 thousand euros represented
contributions to life insurance and pension plans (15 thousand euros in 2022).

The Group had not extended any advances or loans to these executives at either 31 December 2023 or 31
December 2022. At year-end 2023 and 2022 the Company had assumed life insurance commitments on
behalf of these executives; the premiums on those policies cost it approximately 14 thousand euros in 2023
(2022: 15 thousand euros).

The key management personnel also participate in the Long-Term Incentive Plan (LTIP) for Promoting the
Energy Transition, Reducing the Digital Divide and Boosting Diversification. That Plan’s targets are likewise
associated with those set out in the Group’s Strategic Plan and are aligned with the key aspects of the Director
Remuneration Policy. The LTIP has a duration of six years and will end on 31 December 2025.

The Company’s serving key management personnel do not enjoy any guarantees or golden parachute clauses
in the event of dismissal. In the event of the termination of their employment agreements, their severance
would be calculated in keeping with applicable labour legislation.

In 2015, the Company implemented a Structural Management Plan that applies to some of its key
management personnel. The beneficiaries of this Plan must comply with certain requirements and their
participation can be modified or revoked by the Group under certain circumstances.

Redeia Corporación, S.A. | 2023 financial statements

The Company had arranged director and officer liability insurance at both reporting dates. These policies
cover all of the Company’s key management personnel. The annual cost of the premiums amounted to 221
thousand euros, including tax in 2023 (245 thousand euros in 2022). These premiums are calculated based
the nature of the Group’s activities and as a function of its financial metrics, so that it is not feasible to apportion
them between the key management personnel and directors or to allocate them to each individual.

24 Segment information

The Company believes that the disclosure of its revenue by activity is not relevant financial information as the
various services provided by it to Group companies are not significantly different from each other. These
activities, ever since the business line spin-off completed in 2008, are not, according to Law 17/2007,
regulated electricity activities so that the Company is not required to provide the separate disclosures by
activity stipulated under Royal Decree 437/1998 of 20 March 1998, enacting the rules for adapting the General
Accounting Plan for electric sector enterprises.

25 Guarantees and other commitments extended to third parties and
other contingent liabilities
At both year-ends, the Company, together with Red Eléctrica de España, was a joint and several guarantor of
the USD 250 million private bond issue in the United States by Redeia Financiaciones and of Red Eléctrica
Financiaciones’ eurobond programme in the amount of up to 5 billion euros. A total of 2,990 million euros had
been issued under the latter at 31 December 2023 (2022: 3,290 million euros).

In addition, at both reporting dates, the Company, together with Red Eléctrica de España, was a joint and
several guarantor of the Euro Commercial Paper (ECP) Programme issued by Red Eléctrica Financiaciones
for up to 1 billion euros. There were no drawdowns under that programme at either year-end.

At 31 December 2023, the Company had extended bank sureties to third parties in a nominal amount of 3,537
thousand euros (2022: 3,537 thousand euros).

26 Environmental disclosures

The Company had no assets of an environmental nature at 31 December 2023 or 2022, nor did it incur any
environmental-related expenses in either year.

The Company is not party to any environmental lawsuits that could result in significant contingencies and did
not receive any environmental grants in 2023.

27 Other information

The fees for financial statement audit and other services provided by the Company’s auditor, Ernst & Young,
S.L. (EY), in 2023, and by its previous auditor, KPMG Auditores S.L., in 2022, are itemised below:

Thousands of euros
Audit services
Audit-related services
Other services
Total

Redeia Corporación, S.A. | 2023 financial statements

2023
138
99
73
310

2022
146
104
4
254

Audit services in the table above include the fees corresponding to the audit of the separate financial
statements of Redeia Corporación, S.A., in the amount of 16 thousand euros, and the Group's consolidated
financial statements, in the amount of 122 thousand euros.

Audit-related services mainly includes services provided to the Group, including a limited review of the Group’s
interim consolidated financial statements and the effectiveness of internal control over financial reporting
assurance report under ISAE 3000. Other services includes the fees for the assurance of the non-financial
information included in the consolidated financial statements; in 2022 this service was also provided by EY,
as it was not the Company’s lead auditor at the time.

The amounts presented in the table above include all of the fees related to the services rendered in 2023 and
2022, regardless of when they were invoiced.

No other fees were accrued by firms related directly or indirectly with the lead auditor for professional services
other than financial statement audit work in 2023 or 2022.

28 Share-based payments

In 2023 the Company delivered 83,107 shares to its employees with a fair value of 14.90 euros per share for
total expenditure during the year of 1,238 thousand euros. Of the total, 6,587 shares were delivered to key
management personnel.

In 2022 the Company delivered 62,993 shares to its employees with a fair value of 17.735 euros per share
for total expenditure during the year of 1,117 thousand euros. Of the total, 5,549 shares were delivered to key
management personnel.

The shares were valued at their quoted price on the day they were delivered.

The above share deliveries were carried out under the scope of authorisations given at the Company’s Annual
General Meetings and came from its treasury stock. The related expense was recognised under employee
benefits expense in the statement of profit or loss.

29 Events after the reporting date

On 3 January 2024, Redeia, through its subsidiary Red Eléctrica Financiaciones, S.A.U., and under the scope
of the Euro Medium Term Note (EMTN) Programme of the latter, issued 500 million euros of green bonds on
the euromarket that are secured by Redeia Corporación, S.A. and Red Eléctrica de España, S.A.U.

The proceeds will be used to finance and/or refinance eligible assets under the umbrella of Red Eléctrica de
España, S.A.U.’s green finance framework.

The notes, which were paid in on 17 January 2024, mature in 10 years and carry an annual coupon of 3.00%;
they were issued at a price of 99.405%, implying a yield of 3.07%.

30 Explanation added for translation to english

The abridged Financial Statement are presented on the basis of the regulatory financial reporting framework
applicable to the Company in Spain. Certain accounting practices applied by the Company that conform to
that regulatory framework may not conform to other generally accepted accounting principles and rules.

In the event of a discrepancy, the Spanish-language prevails for legal purposes.

Redeia Corporación, S.A. | 2023 financial statements

Management report
for the year ended 31 December
2023

Redeia Corporación, S.A.

Contents

1 Business performance. Significant developments

2 Key financial figures

3 Stock market performance and shareholder return

4 Own shares

5 Risk management

6 Environment

7 Research, development and innovation (RDI)

8 Our people

9 Excellence and corporate responsibility

Disclosures regarding average supplier payment term. Additional Provision Three - "Disclosure
requirements" under Law 15/2010 of 5 July
.....................................................................................................................................................................

11 Events after 31 December 2023

12 Dividend policy

13 Outlook

14 Non-financial statement in compliance with Law 11/2018 of 28 December 2018

15 Annual Corporate Governance Report

16 Annual Report on Director Remuneration

The various sections of this management report contain certain forward-looking information reflecting projections and estimates and
their underlying assumptions, statements referring to plans, objectives and expectations around future transactions, investments,
synergies, products and services, as well as statements concerning future earnings and dividends and estimates made by the
directors, based on assumptions they consider reasonable.

While the Company considers the expectations reflected in those statements to be reasonable, investors and holders of shares in
the Company are cautioned that the forward-looking information and statements are subject to risks and uncertainties, many of
which are difficult to foresee and generally beyond the Company's control. As a result of such risks, actual performance and
developments could differ significantly from those expressed, implied or forecast in the forward-looking information and statements.

The forward-looking statements are not guarantees of future performance and have not been reviewed by the Company’s external
auditors or by other independent third parties. Investors and holders of shares in the Company are cautioned not to take decisions
on the basis of forward-looking statements that refer exclusively to information available as at the date of this report. All of the
forward-looking statements contained in this report are expressly subject to this disclaimer. The forward-looking statements included
in this document are based on the information available as at the date of this management report. Unless required otherwise under
applicable law, the Company undertakes no obligation to publicly update any forward-looking statement or revise its forecasts,
whether as a result of new information, future events or otherwise.

In order to make it easier to understand the information provided in this document, certain alternative performance measures have
been included. The definition of those alternative performance measures can be retrieved from
https://www.redeia.com/es/accionistas-e-inversores/informacion-financiera/medidas-alternativas-rendimiento

Redeia Corporación S.A. | 2023 management report.

Business performance. Significant developments.

Since 2008, Redeia Corporación, S.A. (the Company) is the parent (the Parent) of a group companies called
Redeia (the Group). Its main activities are:

(cid:127) Managing the corporate group, which comprises equity investments in group companies and their

investees.

(cid:127) Providing support services and other assistance to its investees.

(cid:127) Managing the Company’s properties.

In line with the commitments undertaken by the Company in performing these activities, it strives to constantly
create value for all of its shareholders and stakeholders.

Key financial figures

Profit after tax was 450.4 million in 2023, down 52.5% from 2022. Underlying this performance:

Revenue amounted to 548.4 million euros, up 512.7% year-on-year thanks to the 415.1 million euros of
dividends received from Group companies. No dividends were received in 2022.
EBITDA1 amounted to 476.9 million euros, well above the 2022 figure thanks to these dividends.
EBIT2 plunged by 52.2% to 470.8 million euros, as the 2022 amount included the gain of 970 million euros on
the sale of a 49% stake in Redeia Infraestructuras de Telecomunicación, S.A.

The Company paid 539 million euros of dividends in 2023, the same as in 2022.

Equity at the year-end stood at 3,717.0 million euros, up 11.6% from year-end 2022, with the increase primarily
the result of the subordinated perpetual bond issue for 500 million euros.

Stock market performance and shareholder return

All of the shares of the Company, as the Group's listed company, are quoted on the four Spanish stock
exchanges and traded on the continuous market.

The Company is also part of the IBEX 35 index of blue chip stocks, with a weighting of 1.55% at year-end
2023.

At 31 December 2023 and 2022, the Company's share capital was represented by 541,080,000 shares, with
a unit par value of 0.50 euros, all of which were fully subscribed and paid.

At year-end, free float was 70.19%, of which 20% related to the state industrial holding company, SEPI for its
acronym in Spain, 5% to Pontegadea Inversiones, S.L.3, 4.60% to Blackrock (corresponding to the percentage
of voting rights attaching to the shares) and 0.21% to the stakes held by Board members and treasury stock.

EBITDA is calculated as the sum of revenue and self-constructed assets and other operating income less employee benefits expense, cost of sales

and other operating expenses.
2 EBIT is calculated as EBITDA plus non-financial grants recognised in profit or loss and impairment of and gains/(losses) on disposal of fixed assets
less amortisation and depreciation, change in fair value of financial instruments, and impairment of and gains/(losses) on disposal of equity

instruments.
3

Amancio Ortega Gaona directly holds 99.99% of the voting rights of Pontegadea Inversiones, S.L.

Redeia Corporación S.A. | 2023 management report.

The shareholder structure is as follows:

(cid:127)

68.29% of the shares are in the hands of foreign and domestic institutional investors. Of these investors,
11.5% are Spanish, while the remaining 88.5% of the institutional tranche is made up of foreign
investors, mainly located in the United States and the United Kingdom.

The state industrial holding company, SEPI for its acronym in Spain, holds 20% of the shares.

(cid:127) Non controlling investors account for 11.50% of share capital.

(cid:127)

The Company’s treasury stock and shares held by other members of the Board of Directors account for
0.21%.

Redeia's share price stood at 14.91 euros at close of trading on 31 December 2023. The share price was
down 8.3% in the year, due to the successive interest rate hikes that took place during the period and the
uncertainty surrounding the upcoming regulatory review of the electricity transmission business in the coming
months. The share price fluctuated between 17.13 euros, which was reached on 4 January, and 14.405 euros,
on 3 October 2023.

A total of 295.5 million shares were traded on the Spanish continuous market during the year as a whole,
which is equivalent to 54.6% of the number of shares comprising its share capital. Cash transactions
amounted to 4,625.1 million euros.

Own shares

At a meeting on 31 March 2020, the Company’s Board of Directors decided to suspend own share transactions
as of 14 April 2020, except where such transactions relate to employee remuneration.

Consequently, only one transaction took place in 2023, involving the sale of 303,533 own shares associated
with Group employee remuneration, with a par value of 0.19 million euros and a cash value of 5.8 million
euros.

At 31 December 2023, the Company held own shares representing 0.21% of its share capital; specifically it
held 1,112,017 shares with a unit par value of 0.50 euros per share and an aggregate par value of 0.56 million
euros, which it acquired at an average price of 17.53 euros per share (note 14 to the financial statements)
and a market value of 16.6 million euros.

The Company is in compliance with all of its obligations under article 506 of the Corporate Enterprises Act
which stipulates, in relation to shares listed on an official exchange, that the par value of any own shares
acquired, plus those already held by the Parent and its subsidiaries, may not exceed 10% of share capital.
The subsidiaries do not hold any own shares or any Parent shares.

Redeia Corporación S.A. | 2023 management report.

Risk management

Redeia Corporación is the Parent of the Group and has a Comprehensive Risk Management system in place
designed to ensure that the risks that could affect the achievement of the Group's strategies and objectives
are systematically identified, analysed, assessed, managed and controlled, framed by uniform criteria and
within the established tolerance level thresholds. The Comprehensive Risk Management Policy was approved
by the Board of Directors of the Company, as Parent of the Group, on 27 July 2021.

This Comprehensive Risk Management System, the Policy and the General Procedure regulating it are based
on the COSO ERM 2017 (Committee of Sponsoring Organizations of the Treadway Commission) Enterprise
Risk Management - Integrated Framework.

The Corporate Risk Map depicts the Group's, including the Company's, most significant risks and is prepared
on the basis of a bottom-up methodology, whereby the risks are identified, analysed and assessed by the
different organisational units before being escalated for validation by the executive officers, managing
directors and corporate heads, before they are ultimately presented to the Chair of the Group, the Executive
Committee, the Audit Committee and the Board of Directors.

The Board of Directors is charged with approving the Comprehensive Risk Management Policy and the
Group's accepted risk tolerance level, while the Audit Committee is tasked with overseeing the effectiveness
of the Comprehensive Risk Management system. The Executive Committee is responsible for ensuring that
the Group's relevant risks and action plans to mitigate them are adequately monitored.

The Comprehensive Risk Management Policy also covers financial risk management, as explained in the
"Financial risk management policy" note to the annual financial statements. The Company’s Sustainability
Report provides further details of the Group’s main risks at present, as well as risks which could emerge in
the future.

The main risks to which the Company and the Parent of the Group are exposed and which could affect the
achievement of their objectives are: regulatory risks (including tax risks), as the Group's main businesses are
closely regulated; operational risks, primarily through their activities in the electricity and telecommunications
businesses; financial risks; market risks; and environmental risks.

Environment

The Company had no assets of an environmental nature at 31 December 2023, nor did it incur any
environmental-related expenses in the year.

The Company is not party to any environmental lawsuits that could result in significant contingencies and did
not receive any environmental grants in 2023.

Research, development and innovation (RDI)

The Company is not involved in any research, development and innovation (RDI) activities.

Redeia Corporación S.A. | 2023 management report.

Our people

Work continued throughout 2023 on the sustainable management model of diverse and committed talent, an
essential part of the People and Culture Department’s Operational Plan, which uses a systematic approach
to attract, discover, develop, train, transform and retain talent and exchange knowledge. The model pursues
excellence to ensure that the Company remains a national and international benchmark. This is to be achieved
through six lines of action, with the first —transformational leadership— being key to the achievement of the
others: attracting talent, learning, development, knowledge management and differentiation.

Relying on digitalisation, technology, innovation, sustainability and diversity, the Company seeks to become
a leader in the transformation of talent and corporate culture while involving society in the organisation's
challenges, fostering actions that motivate and inspire both within the Company and beyond.

This ongoing transformation is driven and galvanised through leadership and people development through
our Leadership Model and Skills Model, which set out how to achieve the objectives and challenges set. The
aim of all this is to maintain high commitments that result in excellent employee contributions on the path to
achieving the objectives set out in the 2022-2025 Strategic Plan.
On this front, in 2023 efforts were made to:

(cid:127) Position the Company's leaders as the spearheads of the transformation so that they can promote and
develop self-leadership habits among others that foster responsibility, self-management and self-learning.
This is carried out through a 360 degree assessment process that identifies areas for improvement and
deploys resources and development programmes, such as the new Lidera programme, designed on the
basis of the leadership model.

(cid:127) Plan talent needs, by identifying new profiles and positions, treating diversity and inclusion as competitive
advantages that bring opportunities and benefits to both the organisation and the broader society through
the creation of specific programmes for the new profiles identified.

(cid:127) Develop talent within the organization through programmes such as Talentia for employees with
managerial potential, Gestores for those tasked with people management processes, and specific
programmes for data analysts and other business IT roles.

(cid:127)

Foster self-development, by offering a bespoke selection of initiatives that allow employees to manage
their own development, and by engaging leaders in the achievements of their teams. The new Redeia
Skills Model, first rolled out in 2022, continued to be implemented throughout the year, so as to align
growth with the Company’s objectives.

Implement the Development Recommendations so that employees can work, either autonomously or
accompanied, on the skills chosen in each case in response to the Skills Model. These recommendations
include internal mobility (through temporary placements, coverage of vacancies and international
mobility), postings to projects and training actions.

a) A stable, engaged and highly qualified team

At year-end 2023, the Company had a headcount of 422 employees. The Company's commitment to the
professional development of its personnel and to maintaining their employability during their tenure is reflected
in the high percentage of employees on permanent contracts (nearly 100%), with the focus on employability
and functional mobility as a lever for growth and professional development.

Redeia Corporación S.A. | 2023 management report.

b) Diversity

The Company's commitment to diversity, inclusion and non-discrimination is articulated in its new 2023-2025
Comprehensive Diversity Plan, which is aligned with both the Strategic Plan and the 2030 Sustainability
Commitment. The purpose of the plan is to inspire and be a benchmark, both within the organization itself and
the wider social, labour and human environment, through the commitment to talent diversity, social inclusion,
employment and non-discrimination, breaking down stereotypes and cultural barriers. The goals of the
Comprehensive Diversity Plan are to:

(cid:127) Embed diversity across all Redeia processes, especially people management, taking account of
everything that this implies (gender, age, disability, etc.) and thus instilling a culture of diversity, equal
opportunities, equity, inclusion and non-discrimination.

(cid:127) Extend the diversity, equity and inclusion strategy across the entire value chain.

(cid:127) Partner up with official organisations, academic institutions, stakeholders and other social agents in
campaigns, observatories and projects that will allow the Company to become a benchmark as a social
agent that helps to create a more diverse society.

(cid:127) Reduce any inequalities that may arise (corporate and wage or digital gaps).

(cid:127) Put mechanisms in place to prevent discriminatory bias.

(cid:127) Support the inclusion of socially excluded and/or vulnerable people within the job market.

Gender equality is a key topic under the new Comprehensive Diversity Plan and includes the principles of
equal employment opportunities, the promotion of women to positions of responsibility, equal pay between
men and women, the promotion of shared family responsibility, the prevention of harassment on moral, sexual
and gender grounds and the prevention of gender-based violence. Performance in these areas is monitored
using indicators to measure progress towards achieving stated objectives.

Talent management

In 2023, the Company continued to work on the talent management model, an essential part of the People
and Culture Department’s Operational Plan, which uses a systematic approach to attract, discover, develop,
train, transform and retain talent and exchange knowledge. The model pursues excellence to ensure that the
Company remains a national and international benchmark. This is to be achieved through five lines of action:

(cid:127) Attracting, selecting and integrating talent: commitment to the future.

(cid:127)

Identifying talent: engagement.

(cid:127) Professional training and development plans: virtual campus.

(cid:127) Knowledge management: transfer plan.

(cid:127)

Transformational leadership.

Learning is provided through Campus, which serves as a springboard for rolling out the organization's strategy,
values and culture. It is a meeting place and a space for learning and development, helping to manage
stakeholder knowledge and covering the various areas targeted for learning.

d) Management-employee relations

In 2023, the role of the management team as the main channel for internal communication with the teams
was further consolidated and specific leadership targets were added to improve matters further.

The Company also designed a methodology for listening to its employees by “taking pulses”. This method
allows the Company to gauge the opinions of various segments on specific and relevant issues that affect the
day-to-day work of the workforce. For example, employees were asked to assess the implementation of the
hybrid work model in the Company, which started up in February.

Redeia Corporación S.A. | 2023 management report.

On the subject of collective bargaining, the 1st Collective Bargaining Agreement, which was published in the
Official State Gazette, was signed, marking an end to the bargaining process that began in 2022.

Following the signing of this agreement, which was unanimously agreed by each negotiating committee, close
employer-employee dialogue was struck up through the various committees set up under the terms of the
agreements, comprising representatives of the employer and of the employees and which were called upon
to address working conditions.

e) Occupational health and safety

Through the engagement and leadership of the management team, the Company promotes best practices in
safety, health and wellness. Its healthy company management model has evolved with the new AENOR
standard towards a healthy organisation model and is fully aligned with the Strategic Plan, the People
Operational Plan and the 2030 Sustainability Commitment.

This system seeks to provide guidelines, not only for people in the organization to view working conditions in
a positive light, thereby fostering a safe and healthy workplace, but also so that the various groups of the
wider society (e.g. users, customers, suppliers, families) can share and reap these benefits, thereby giving
rise to a new wellness- and sustainability-driven leadership strategy.

Therefore, with the primary aim of building prevention into the Company's processes and culture on the path
to achieving the “zero accidents” objective, the new 2024-2025 Workplace Safety and Well-being Plan was
drawn up in 2023. The plan is divided into four main areas of action: culture and leadership, innovation and
digitalisation, well-being, and collaboration with stakeholders.

f) Work-life balance management
True to its commitment to ensuring a healthy work-life balance, the Company continues to build to a work-life
balance management model based on continuous improvement.

Achievement of the objectives set for 2023 came to 80%, with the work-life balance officer playing a key role
by delivering personalised responses to 100% of the personal situations raised by workers.

The work-life balance management model also happens to be one of the central pillars of the Healthy
Organisation model and the Diversity model, and includes over 70 work-life balance measures and related
actions.

Excellence

Redeia has a Policy of Excellence, which was updated in 2021. It sets out the Company’s principles and
commitment to excellence in management, which is focused on the creation of sustainable value that meets
or surpasses the requirements and expectations of the stakeholders present within Redeia’s ecosystem,
acting as a lever for achieving truly excellent results both now and down the line.

In 1999, the Company adopted the EFQM (European Foundation for Quality Management) excellence
management model as a tool to improve management, under which external assessments are performed on
a regular basis. In 2022, Redeia performed an assessment of the Company and Red Eléctrica de España,
S.A.U. in accordance with the EFQM 2020 model, obtaining a score of above 700 points and earning, in the
process, the EFQM 700+ Seal of Innovation and Sustainability Excellence. Following this assessment, the
model will be expanded to cover Redeia’s other business activities.

In 2023, Redeia earned the Ambassador of European Excellence award from Club de Excelencia en Gestión,
EFQM’s main partner in Spain, for scoring more than 700 points in the latest EFQM assessment and
demonstrating a firm commitment to excellent, innovative and sustainable management.

Redeia's commitment to excellence is evidenced by the external certifications awards from renowned
certification entities testifying that the organization implements certifiable management systems successfully
in carrying on its business. Redeia has quality assurance systems certified under ISO 9001 in place at the
Company and the main subsidiaries.

Redeia Corporación S.A. | 2023 management report.

Elsewhere, Redeia’s criminal and anti-bribery compliance system is also certified under the UNE 19601
criminal compliance management system and UNE 37001 anti-bribery management system standards.

10 Disclosures regarding average supplier payment term. Additional
Provision Three - "Disclosure requirements" under Law 15/2010 of 5 July.

In accordance with the Spanish Accounting and Auditing Institute (ICAC) resolution of 29 January 2016
regarding disclosures that must be included in the notes to financial statements regarding average supplier
payment period in commercial transactions, as amended by Law 18/2022 of 28 September, the average
supplier payment period in 2023 was 36 days.

The disclosures required by this resolution are provided in note 19 to the Company's 2023 financial
statements.

11 Events after the reporting date

The proceeds will be used to finance and/or refinance eligible assets under the umbrella of Red Eléctrica de
España, S.A.U.’s green finance framework.

The notes, which were paid in on 17 January 2024, mature in 10 years and carry an annual coupon of 3.00%;
they were issued at a price of 99.405%, implying a yield of 3.07%.

12 Dividend policy

Redeia will follow the dividend policy described in its 2021–2025 Strategic Plan, which initially envisioned a
dividend payment of 1 euro per share until 2022, and a floor of 0.80 euros per share as of 2023. The Group’s
stronger financial situation —largely due to the sale of the stake held in Redeia Infraestructuras de
Telecomunicación— allowed it to raise the shareholder return to 1 euro per share in 2023.

Dividend paid in 2023 out of prior-year profit amounted to 539.6 million euros.

The dividend paid out of 2023 earnings proposed by the Board of Directors and pending approval by the
shareholders at their Annual General Meeting amounts to 1 euro per share.

The dividend will be paid in two instalments – an interim dividend already paid in January 2024 and a final
dividend halfway through the year once the financial statements have been approved by shareholders at the
Annual General Meeting.

Redeia Corporación S.A. | 2023 management report.

13 Outlook

As regards the management of the different businesses, the Company, as the Parent of Redeia, will continue
to undertake its activities, implementing a model encompassing two major lines of action in equal proportion:
operations subject to market risk which offset the concentration of regulatory risk, and regulated operations
which offset market risk. Along these lines, it will continue to perform the role of Spanish TSO, helping to make
the energy transition in Spain a reality; continue to foster connectivity as a leading operator of both fibre optic
and satellite telecommunications infrastructure; consolidate its international business; and invest in
technological acceleration and innovation.

Executing the strategy, underpinned by efficiency, digital transformation and personnel development, will
enable the Redeia to adapt to the new, stricter regulatory and remuneration environment, and to generate
more ways of creating value.

The Company will work of guaranteeing electricity supply and connectivity and upholding its commitment to
maximising value for its shareholders, offering an attractive dividend yield and generating value through
efficient management of its activities, weighing up alternatives for growing the business and maintaining a
sound capital structure. To do so, it will continue to pursue long-term value creation, promoting a fair ecological
transition based on sustainability principles and contributing to social and regional cohesion.

The Company continues to make inroads on delivering its 2030 Sustainability Commitment and maximise its
contribution to the achievement of global targets, chief of which are the United Nations Sustainable
Development Goals (SDGs). It will increase its social and environmental contributions across all the
geographical and business areas in which it deploys its infrastructures, maximising the positive impact beyond
its investment projects and providing solutions to the structural challenges that perpetuate territorial,
generational, gender and digital inequality.

14 Non-financial statement in compliance with Law 11/2018 of 28
December 2018

Regarding Spanish Law 11/2018 of December 28, amending Spain's Code of Commerce, the consolidated
text of the Corporate Enterprises Act enacted by Royal Legislative Decree 1/2010 of July 2, and Spain's Audit
Act (Law 22/2015 of 20 July 2015) regarding non-financial and diversity information, this information is
included in the 2023 consolidated management report placed on file at the Madrid Companies Register.

15 Annual Corporate Governance Report

The annual corporate governance report is an integral part of the management report and is available at:

http://www.cnmv.es/Portal/consultas/EE/InformacionGobCorp.aspx?nif=A-78003662

16 Annual Report on Director Remuneration

The annual report on director remuneration is an integral part of the management report and is available at:

https://www.cnmv.es/Portal/Consultas/EE/InformacionGobCorp.aspx?TipoInforme=6&nif=A-78003662

Redeia Corporación S.A. | 2023 management report.