Related-Party Transactions Reporting

About this update from Endesa S.a.

MADRID, May 07, 2025 --( BUSINESS WIRE )-- Borja Acha Besga Secretary of the Board of Directors Madrid, 6 May 2025 Pursuant to Article 227 of the Spanish Securities Market Act, Endesa, S.A. hereby reports the following relevant information: Related-Party Transactions Reporting Endesa reports related-party transactions entered into with its controlling shareholder Enel S.p.A., its corporate group and related counterparty of Enel, in accordance with the provisions of articles 529 unvicies and 529 tervicies of the Corporate Enterprises Act, which establishes the obligation of companies to publicly report, no later than the time they are entered into, the related-party transactions carried out by it or its subsidiaries with the same counterparty in the last twelve months, and which amount to or exceed: (a) 5 per cent of the total assets or (b) 2.5 per cent of the annual turnover. In meetings held June 2024, July 2024, October 2024, November 2024, Decembre 2024, January 2025 and May 2025 , , the Board of Directors approved the related-party transactions described below, exceeding the limit established in article 529 unvicies of 2.5% of annual turnover. I. LIST OF RELATED PARTY TRANSACTIONS CARRIED OUT WITH THE ENEL GROUP This English-language version has been translated from the original issued in Spanish by the entity itself and under its sole responsibility, and is not considered official or regulated financial information. In the event of discrepancy, the Spanish-language version prevails. II. CONCLUSION OF THE AUDIT AND COMPLIANCE COMMITTEE REPORTS The Audit and Compliance Committee has issued a report for each related party transaction in which it has concluded that the transactions entered into are fair and reasonable from the point of view of Endesa and the shareholders apart from the related party. In addition, for all related transactions there is at least one independent expert's report that has concluded that the transactions between Enel and Endesa are fair and reasonable from the point of view of Endesa and non-related party shareholders. III. CONCLUSION OF THE BOARD OF DIRECTORS Endesa's Board of Directors, following a favourable report from the Audit and Compliance Committee, has unanimously approved all transactions. REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE ON THE FAIRNESS AND REASONABLENESS OF THE NON-TERMINATING ADDENDUM TO THE GRID BLUE SKY PLATFORM SOFTWARE LICENSE AGREEMENT BETWEEN E-DISTRIBUCIÓN REDES DIGITALES S.L. AND ENEL GRIDS S.R.L. Report of the Audit and Compliance Committee on the fairness and reasonableness of the non-terminating addendum to the Grid Blue Sky platform software license agreement between E-Distribución Redes Digitales S.L. and Enel Grids S.r.l. I. INTRODUCTION AND REGULATORY FRAMEWORK In accordance with the provisions of paragraph 3 of article 529 duovicies of the amended and restated Spanish Capital Corporations Law, as approved by Royal Legislative Decree 1/2010, of 2 July, Endesa’s Audit and Compliance Committee hereby , issues this Report to assess whether the transaction is fair and reasonable from the standpoint of the company and, where appropriate, shareholders other than the related party, and indicate the assumptions on which the assessment is based and the methods used. In accordance with Article 529 unvicies, paragraph 3, the Report issued and, as the case may be, published by Endesa’s Audit and Compliance Committee, must at least include the following information: (a) information on the nature of the transaction and the relationship with the related party; (b) the identity of the related party; (c) the date and the value or amount of the consideration for the transaction; and (d) any other information required to assess whether this is fair and reasonable from the standpoint of the company and of shareholders who are not related parties. Furthermore, Endesa has developed its own internal regulatory framework in this area, which includes, inter alia, a Related-Party Transaction Regulations approved by the Board of Directors, as well as a Related-Party Transaction Operating Procedure approved by the Audit and Compliance Committee, implementing the guidelines set forth in the Regulations and defining the proceedings, functions and responsibilities relating to the general rules on requests for and the approval, publication and monitoring of related-party transactions. These regulations have been applied in this case. II. OVERVIEW OF THE TRANSACTION a) Background for the transaction: A significant feature of electricity distribution in Spain is that it is a regulated and asset-intensive activity. The main functions that distributors typically undertake include the following: (i) building, maintaining and operating installations; (ii) meeting new demands for electricity supply; (iii) ensuring supply and maintaining quality of service; and (iv) addressing access and connection requests. E-Distribución Redes Digitales, S.L. (EDRD) is the largest subsidiary of Endesa, S.A. in the Infrastructure and Grids business. EDRD distributes electricity through a grid of 315,000 km to upwards of 12 million customers. The Grid Blue Sky project came about in response to the challenges posed by the energy transition, in which the distribution grid manager plays a central role. To address these challenges, it was acknowledged that a technological change would be needed in order to unlock the efficiencies of emerging technologies, such as big data and artificial intelligence, as well as an operational and organizational change allowing for efficiency gains in the redesign and optimization of processes. In an era in which data is essential for sound strategic management, E-Distribución Redes Digitales, S.L. has faced the digital challenge of managing and leveraging this data to benefit society, considering the digital revolution that has been taking place in recent years, focusing on digital platforms that offer significant advantages. This challenge becomes even more pressing when we consider the speed with which companies must adapt to the continuous changes in this new environment. In response to this need for rapid change, E-Distribución Redes Digitales, S.L. targeted a strategy of migrating towards these new technologies. The Grid Blue Sky project was an example of digitalization based on the platform model, in that it would provide the necessary technological foundation from which to strengthen the processes of E-Distribución Redes Digitales, S.L. by making them more secure, flexible, efficient and robust. In this context, on 9 May 2022, Endesa’s Board of Directors approved the licensing, by E-Distribución Redes Digitales S.L. from Enel Grids S.r.l. (formerly Enel Global Infrastructure and Networks, S.r.l.), of use of the Grid Blue Sky platform, for the period running from 10 May 2022 to 31 December 2030, in exchange for €144.4 million. The parties agreed, within the first three years of validity of the initial agreement, to carry out a full review of the operation and effectiveness of the entire platform and of each of its solutions, with a view to, as the case may be, renegotiating the terms and conditions of the agreement based on the proposals put forward by Endesa Distribución. b) Purpose and amount of the transaction This transaction concerns an addendum amending the existing software license agreement under which Enel Grids S.r.l. authorizes E-Distribución Redes Digitales, S.L. to use the Grid Blue Sky platform. Among other amendments, the addendum reduces the number of solutions contracted from 35 to 21, and also reduces the amount of the consideration payable from €144.4 million to €102.6 million. This non-terminating addendum has been drawn up under the terms of the initial agreement, which provided that a review would be carried out within the first three years of the term, with the possibility of prioritizing and/or eliminating solutions that were found to be no longer applicable, thereby excluding their related costs from the license by means of a good faith agreement entered into between the parties. In this context, the parties have proposed and agreed to the following amendments to the Agreement, which will take effect, as applicable, through the inclusion of new Annexes 1, 2, 3 and 5 to the Agreement: The Addendum, once approved, will also amend Clause 7.4 of the Agreement, in order to extend the review period of the terms and conditions of the Agreement, such that the three-year period in which the parties may carry out such a review will begin to run from the effective date of the Addendum. The term of the Agreement will not be altered due to the execution of the Addendum, i.e. it will remain in effect until 31 December 2030, as will all other terms and conditions. III. IDENTIFICATION OF THE PARTY RELATED TO ENDESA: The company providing the services: Enel Grids S.r.l. ("EG") is a fully owned subsidiary of Enel S.p.A, and therefore a member company of the Enel Group. The company receiving the services: E-Distribución Redes Digitales, S.L., ("EDRD"), a fully owned subsidiary of Endesa SA. Enel SpA is the sole shareholder of Enel Iberia S.L, which is in turn a shareholder of Endesa S.A, with a 70.101% stake. Related-party transactions are those entered into by Endesa or its subsidiaries with shareholders of Endesa who hold 10% or more of the voting rights or who are represented on the Board of Directors, as well as with any other persons considered as parties related to Endesa, in accordance with International Accounting Standards. Therefore, all transactions entered into by Endesa or its subsidiaries and Enel or its subsidiaries (excluding the Endesa Group) shall be considered related-party transactions. Enel and its subsidiaries (excluding the Endesa Group) and Endesa and its subsidiaries are considered "the same counterparty" for the purposes of determining the thresholds for related-party transaction publication. In other words, the same counterparty is considered both the related person, whether natural or legal, as well as any other entity under their control and, in the case of natural persons, their close relatives, as defined in IAS 24. IV. ANALYSIS OF THE TRANSACTION FROM THE STANDPOINT OF THE INTEREST OF ENDESA AND OF SHAREHOLDERS OTHER THAN RELATED PARTIES a) Strategic and operational rationale of the transaction. The following points should be made in relation to the non-terminating addendum, which aligns the project more closely with the business and strategy of E-Distribución Redes Digitales: b) Economic rationale. Methods used The arm’s length price of the Related-Party Transaction has been analyzed as outlined below: 1. The economic reasonableness of the transaction as a whole with the non-terminating addendum has been considered: In order to determine the arm’s length consideration of a transaction carried out between related entities, it is necessary to first determine whether there is a sufficient commercial basis to justify the existence of the transaction, i.e. to assess whether, as two independent entities, they would have had a rational economic motivation for entering into the transaction and to establish its consideration (paragraph 1.123 of the OECD Guidelines). The transaction as a whole makes complete economic sense for Endesa. 2. The benefit obtained by EDRD from a license to use this platform has been examined. The platform will provide EDRD with both quantitative and qualitative benefits. As regards the quantitative benefits, following the amendments to the agreement, the business plan will allow for material economic benefits over the 2022-2030 period, stemming from the optimization of the development of grid assets, by shortening the execution period of the investments and bringing forward their entry into service. These benefits will yield a return more closely aligned with other investments that do not qualify as related-party transactions. A reduction in stock will also be achieved, thanks to better visibility and scheduling of material requirements, thus reducing the need for stockpiled materials. The qualitative benefits are as described previously. Therefore, the transaction as a whole makes economic sense for all the related parties and, if by modifying the Related-Party Transaction, a reduction in the cost to be incurred by taking part in the project is achieved, it is reasonable to conclude that such amendments have yielded a benefit for E-Distribución Redes Digitales and, more precisely, are "fair and reasonable" for E- Distribución Redes Digitales and, therefore, for Endesa and its shareholders who are not related parties. 3. The transfer pricing methodology used to determine the consideration of the Related-Party Transaction was reviewed. The transfer pricing method used to review compliance with the market value principle is the Transactional Net Margin Method ("TNMM"), with the Profit Level Indicator ("PLI") taken to be the mark-up on budgeted costs applied by EG as consideration for the granting of the software license. The non-terminating addendum to the agreement whereby Enel Grids S.r.l. grants a license to E-Distribución Redes Digitales, S.L. to use the Grid Blue Sky platform software sets the amount of the consideration at €102.6 M, this being the sum of two items: The base price plus a 10.7% mark-up. A benchmarking study has reliably shown that the mark-up determined is consistent with the mark­up that would have been obtained by independent entities under comparable terms and conditions. The Base Price is determined in accordance with the transfer pricing policy applied between EG and its related entities (including EDRD), i.e. invoicing the assignees a portion of EG’s estimated costs from developing and maintaining the asset. EG’s costs will be apportioned among Enel Group companies in proportion to the operating profits expected by each Enel Group company. The resulting percentage assigned to Endesa is lower than that which would result if other distribution criteria were applied, such as number of customers or EBITDA. Accordingly, it is reasonable to conclude that the transfer pricing methodology defined for this transaction is consistent with the market value principle. V. INDEPENDENT EXPERT REPORTS ISSUED AT THE REQUEST OF THE AUDIT AND COMPLIANCE COMMITTEE In analyzing the transaction, the Audit and Compliance Committee has taken into account the Report prepared by PricewaterhouseCoopers Tax and Legal S.L. and PricewaterhouseCoopers Asesores de Negocios, S.L. ("PwC") on the fairness and reasonableness of the non-terminating addendum to the Grid Blue Sky platform software license agreement between E-Distribución Redes Digitales S.L. and Enel Grids S.r.l. PwC issued its Report in its capacity as an independent expert. On the date the report was issued, PwC did not maintain any sort of commercial relationship with the Enel Group or with the Endesa Group that could compromise its capacity as an independent expert for the purposes of issuing its Report or that could give rise to a conflict of interest in conducting the analysis and drawing up the conclusions therein. The Report drawn up for Endesa’s Audit and Compliance Committee concludes that the non-terminating addendum to the Grid Blue Sky platform software license agreement between E-Distribución Redes Digitales S.L. and Enel Grids S.r.l. is fair and reasonable from the standpoint of Endesa and, in particular, of shareholders other than the related party, i.e. shareholders other than the Enel Group. VI. CONCLUSION OF THE AUDIT AND COMPLIANCE COMMITTEE: First, it should be noted that the Audit and Compliance Committee is made up of six non-executive members of the Board of Directors, five of whom (83.33%) are independent. Furthermore, the Audit and Compliance Committee has a Shareholder-Appointed Director representing the controlling shareholder Enel, who holds 70.10% of the share capital of Endesa. In accordance with Article 529 duovicies, paragraph 3, of the Capital Corporations Law, Mr. Stefano De Angelis, who is a shareholder-appointed director and representative of Enel, was not involved in the preparation of this Report. The other members of the Audit and Compliance Committee were involved in drawing up and agreed to the contents of this Report on the non-terminating addendum to the Grid Blue Sky platform software license agreement between E-Distribución Redes Digitales S.L. and Enel Grids S.r.l. Based on the background information discussed above, the Audit and Compliance Committee hereby concludes that: - The decision to amend the Agreement in order to align the Grid Blue Sky project to Endesa Distribución’s business and strategy is reasonable, as it allows Endesa Distribución to: (i) meet its own operational and technological needs; (ii) maximize the value of the Platform by making the project more profitable; (iii) increase automation and digitalization and streamline activities, thus reducing reliance on own and external resources; and (iv) optimize the development and execution of grid assets, thus reducing the investment execution period and bringing forward the commissioning of the assets. - Following the amendments made to the terms and conditions of the Agreement, a 29% reduction of the total license cost is obtained, as a result of: (i) a 43% reduction in the CAPEX component of the license and a 7% reduction in the OPEX component, mainly associated with the prioritization of 21 Solutions to be implemented and maintained over the term of the Agreement out of the 35 solutions envisaged under the initial Agreement. - As the amendments made to the Related-Party Transaction result from a reassessment of the benefits that Endesa Distribución expects to obtain from its use of the Platform, and given that such reassessment results in a reduction of the cost to be incurred due to its involvement in the project, it is reasonable to conclude that such amendments yield a benefit for Endesa Distribución. - The cost basis and allocation criteria defined for the purpose of determining the amount of the Related-Party Transaction are consistent with the recommendations set out in the OECD Guidelines, as well as with the contractual terms agreed by the parties and with the methodology employed under the initial agreement. - The inclusion of a mark-up by the entity assigning the asset (EG) is also considered reasonable. This mark-up is consistent with the levels that independent entities would be willing to agree on in comparable conditions. - In view of the legal and commercial terms and conditions under which the Related-Party Transaction is expected to be carried out through the execution of the Addendum, it can be concluded that the Related-Party Transaction has been reasonably articulated around contractual terms and conditions similar to those that could have been agreed by independent parties. Given that the terms were reached, in this case, by companies belonging to the same group, they generate benefits for Endesa Distribución, notwithstanding the fact that they may also create benefits for Enel’s subsidiary i.e., EG. Nevertheless, such benefits would be justified and would not be disproportionate with respect to those generated for Endesa Distribución. In conclusion, and in light of the considerations set out in the independent experts’ report, the Audit and Compliance Committee concludes that the non-terminating addendum to the Grid Blue Sky platform software license agreement between E-Distribución Redes Digitales S.L. and Enel Grids S.r.l. is fair and reasonable from the standpoint of Endesa and of shareholders other than the related party. VII. CONCLUSION OF THE BOARD OF DIRECTORS Endesa's Board of Directors, following a favourable report from the Audit and Compliance Committee, has unanimously approved all transactions. REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE ON THE FAIRNESS AND REASONABLENESS OF THE CONTRACT BETWEEN ENDESA INGENIERÍA AND E-DISTRIBUZIONE FOR THE PROVISION OF DIELECTRIC FLUID ANALYSIS SERVICES IN POWER TRANSFORMERS REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE ON THE FAIRNESS AND REASONABLENESS OF THE CONTRACT BETWEEN ENDESA INGENIERÍA AND E-DISTRIBUZIONE FOR THE PROVISION OF DIELECTRIC FLUID ANALYSIS SERVICES IN POWER TRANSFORMERS I. INTRODUCTION AND REGULATORY FRAMEWORK In accordance with the provisions of paragraph 3 of article 529 duovicies of the amended and restated Spanish Capital Corporations Law, as approved by Royal Legislative Decree 1/2010, of 2 July, Endesa's Audit and Compliance Committee hereby issues this Report to assess whether the transaction is fair and reasonable from the standpoint of the company and, where appropriate, shareholders other than the related party, and indicate the assumptions on which the assessment is based and the methods used. In accordance with Article 529 unvicies, paragraph 3, the Report issued and, as the case may be, published by Endesa’s Audit and Compliance Committee, must at least include the following information: (a) information on the nature of the transaction and the relationship with the related party; (b) the identity of the related party; (c) the date and the value or amount of the consideration for the transaction; and (d) any other information required to assess whether this is fair and reasonable from the standpoint of the company and of shareholders who are not related parties. Furthermore, Endesa has developed its own internal regulatory framework in this area, which includes, inter alia, a Related-Party Transaction Regulations approved by the Board of Directors, as well as a Related-Party Transaction Operating Procedure approved by the Audit and Compliance Committee, implementing the guidelines set forth in the Regulations and defining the proceedings, functions and responsibilities relating to the general rules on requests for and the approval, publication and monitoring of related-party transactions. These regulations have been applied in this case. II. OVERVIEW OF THE TRANSACTION a) Background To ensure the supply of electricity to end consumers, it is necessary to invest in new equipment and in the predictive maintenance of those assets already in operation, including power transformers at substations. These transformers play a key role in the supply of electricity by converting the grid voltage and, among other useful functions, ensuring operational safety and quality of supply. Transformers need to undergo regular maintenance work, such as fluid assessments and other inspections, to help prevent any unexpected issues that might lead to power outages or shorten the useful life of the equipment. This complex work calls for considerable expertise and electricity distributors have traditionally relied on the services of external suppliers for these purposes. However, due to the involvement of both Endesa Ingeniería, S.L. and E-Distribuzione, S.p.A. in the "Best Practice Sharing Distribution" project to share experiences in oil analysis, Endesa Ingeniería, S.L. now centralizes the analytical services at its laboratory, thus harmonizing costs and quality levels across the Group. Endesa Ingeniería, S.L. also provides these services on a recurring basis to various Group companies and third parties. Indeed, Endesa Ingeniería, S.L. has been providing these services to E-Distribuzione S.p.A. since 1 April 2012, having secured the relevant authorizations from Endesa’s Board of Directors. The parties have agreed to enter into a new contract for a period of seven months, subject to the same terms and conditions as the previous contract approved by Endesa’s Board of Directors in 2023 and expiring on 31 May 2024. b) Purpose and amount of the transaction. The purpose of the transaction is the provision of dielectric fluid analysis services in power transformers by Endesa Ingenieria, S.L. to E-Distribuzione, S.p.A. for the period running from 1 July 2024 to 31 January 2025, totaling €140 thousand. Specifically, Endesa Ingeniería shall perform the following activities for the benefit of E-Distribuzione: - Analysis of the dielectric oils of the transformers and load tap changers that E-Distribuzione has in its facilities. - Technical support in the actions required to lengthen the useful life of the power transformers, such as implementing diagnostic techniques, defining the refrigeration and insulation and protection requirements and recommending and controlling corrective measures for the dielectric fluids. - Providing advice on technical specifications relative to power transformers, dielectric fluids or processes in which these elements are involved and which E-Distribuzione must establish vis-à-vis third parties or for internal use within the Group. - Specific training for employees to be designated by E-Distribuzione. This assessment of the fluids makes it possible to issue predictive and preventive maintenance recommendations intended to reduce incidents and lengthen the useful life of those transformers. III. IDENTIFICATION OF THE PARTY RELATED TO ENDESA The company providing the service: Endesa Ingeniería, S.L. is wholly-owned subsidiary company of Endesa, S.A. The company receiving the service : E-Distribuzione S.p.A. is a company wholly controlled by Enel S.p.A. Enel SpA is the sole shareholder of Enel Iberia S.L, which is in turn a shareholder of Endesa S.A, with a 70.101% stake. Related-party transactions are those entered into by Endesa or its subsidiaries with shareholders of Endesa who hold 10% or more of the voting rights or who are represented on the Board of Directors, as well as with any other persons considered as parties related to Endesa, in accordance with International Accounting Standards. Therefore, all transactions entered into by Endesa or its subsidiaries and Enel or its subsidiaries (excluding the Endesa Group) shall be considered related-party transactions. Enel and its subsidiaries (excluding the Endesa Group) and Endesa and its subsidiaries are considered "the same counterparty" for the purposes of determining the thresholds for related-party transaction publication. In other words, the same counterparty is considered both the related person, whether natural or legal, as well as any other entity under their control and, in the case of natural persons, their close relatives, as defined in IAS 24. IV. ANALYSIS OF THE TRANSACTION FROM THE STANDPOINT OF THE INTEREST OF ENDESA AND OF SHAREHOLDERS OTHER THAN RELATED PARTIES 1. Operational, technical and commercial rationale. By providing these services to E-Distribuzione, Endesa Ingeniería can expand its database of transformer dielectric oil analysis in order to continually improve predictive studies and incident analysis. These improvements give rise to the possibility of expanding the client portfolio and improving the service provided to current clients. In addition, the services provided are significantly improved and processes are optimized through economies of scale. Notably, the Agreement helps Endesa Ingeniería obtain market prices, thus securing its margins. Under the contract, Endesa Ingeniería may continue to recoup a portion of the fixed costs incurred in running its laboratory, while also generating new business opportunities for Endesa Ingeniería and improving Endesa’s analytical and predictive capacity thanks to the broad sampling of dielectric oil states obtained as a result of the Related-Party Transaction, without compromising Endesa Ingeniería’s ongoing ability to continue providing similar services to third parties or other Group companies. 2. Economic reasonableness. Methods used To verify that the Related-Party Transaction is in line with the principle of free competition, firstly, the possibility of applying the Comparable Uncontrolled Price ("CUP") method was considered. The CUP method compares the price charged for property or services transferred in a controlled transaction to the price charged for property or services transferred in a comparable uncontrolled transaction in comparable circumstances. Furthermore, paragraph 2.15 of the OECD Guidelines provides that a transaction may be considered comparable to another if "reasonably accurate adjustments can be made to eliminate the material effects of such differences." Likewise, paragraph 2.15 provides that, where it is possible to locate comparable uncontrolled transactions, the CUP method is preferable. Endesa Ingeniería has carried out comparable transactions with independent third parties under arm’s length conditions, showing that the assumptions have been met in order to apply the CUP method for the purpose of determining the market value of the Related-Party Transaction through comparable uncontrolled transactions. Given the constraints that typically exist in terms of comparability, and following the comparability analysis carried out, it can be concluded that the rates charged for the Services provided to E-Distribuzione, for the purpose of determining the value of the Related-Party Transaction, are reasonably consistent with those charged to third parties under conditions similar to those envisaged for the Related-Party Transaction. 3. Legal reasonableness The Related-Party Transaction is legally executed by signing a contract whereby the provision of the Services by Endesa Ingeniería for the benefit of E-Distribuzione will be extended to cover the period running from 1 July 2024 through 31 January 2025, with terms identical to those of the previous contract. It can be concluded that the Related-Party Transaction’s legal and commercial terms are reasonably articulated around contractual terms and conditions that could have been agreed by independent parties. V. INDEPENDENT EXPERT REPORTS ISSUED AT THE REQUEST OF THE AUDIT AND COMPLIANCE COMMITTEE In analyzing the transaction, the Audit and Compliance Committee has taken into account a report from PricewaterhouseCoopers Tax and Legal S.L. ("PwC") on the fairness and reasonableness of the contract analyzed herein. PwC issued a Report in its capacity as independent expert, having been ascertained that at the date of issue of the Report PwC did not maintain any sort of commercial relationship with the Enel Group or with the Endesa Group that could compromise its condition as independent expert for the purposes of issuing this Report or that, in particular, could place it in a situation of conflict of interest to conduct the analysis and draw up the conclusions set out therein. In the Report it is concluded that the provision of dielectric fluid analysis services in power transformers by Endesa Ingenieria, S.L. to E-Distribuzione, S.p.A. as described herein is fair and reasonable from the standpoint of Endesa and shareholders who are not related parties. VI. CONCLUSION OF THE AUDIT AND COMPLIANCE COMMITTEE First, it should be noted that the Audit and Compliance Committee is made up of six non-executive members of the Board of Directors, five of whom (83.33%) are independent. Furthermore, the Committee has a Shareholder-Appointed Director representing the controlling shareholder Enel, who holds 70.10% of the share capital of Endesa. In accordance with Article 529 duovicies, paragraph 3, of the Capital Corporations Law, Mr. Stefano De Angelis, who is a shareholder-appointed director and representative of Enel, was not involved in the preparation of this Report. The rest of the members of the Audit and Compliance Committee took part in the preparation and unanimously agreed on the contents of this Report on the provision of dielectric fluid analysis services in power transformers by Endesa Ingenieria, S.L. to E-Distribuzione, S.p.A. In accordance with the information contained herein, the Audit and Compliance Committee concludes that the provision of the services described herein may provide a number of advantages for Endesa and consequently, to its shareholders, namely: The Audit and Compliance Committee concludes that the provision of dielectric fluid analysis services in power transformers by Endesa Ingenieria to E-Distribuzione is fair and reasonable from the standpoint of Endesa and of the shareholders other than the related party. VII. CONCLUSION OF THE BOARD OF DIRECTORS Endesa's Board of Directors, following a favourable report from the Audit and Compliance Committee, has unanimously approved all transactions. REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE ON THE FAIRNESS AND REASONABLENESS OF THE RELATED-PARTY TRANSACTIONS INVOLVED IN THE GAS SALES AND PURCHASES BETWEEN ENDESA ENERGÍA, S.A.U. AND ENI GLOBAL ENERGY MARKETS SPA REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE ON THE FAIRNESS AND REASONABLENESS OF THE RELATED-PARTY TRANSACTIONS INVOLVED IN THE GAS SALES AND PURCHASES BETWEEN ENDESA ENERGÍA, S.A.U. AND ENI GLOBAL ENERGY MARKETS SPA I. INTRODUCTION AND REGULATORY FRAMEWORK In accordance with the provisions of paragraph 3 of article 529 duovicies of the amended and restated Spanish Capital Corporations Law, as approved by Royal Legislative Decree 1/2010, of 2 July, Endesa’s Audit and Compliance Committee hereby , issues this Report to assess whether the transaction is fair and reasonable from the standpoint of the company and, where appropriate, shareholders other than the related party, and indicate the assumptions on which the assessment is based and the methods used. In accordance with Article 529 unvicies, paragraph 3, the Report issued and, as the case may be, published by Endesa’s Audit and Compliance Committee, must at least include the following information: (a) information on the nature of the transaction and the relationship with the related party; (b) the identity of the related party; (c) the date and the value or amount of the consideration for the transaction; and (d) any other information required to assess whether this is fair and reasonable from the standpoint of the company and of shareholders who are not related parties. Furthermore, Endesa has developed its own internal regulatory framework in this area, which includes, inter alia, a Related-Party Transaction Regulations approved by the Board of Directors, as well as a Related-Party Transaction Operating Procedure approved by the Audit and Compliance Committee, implementing the guidelines set forth in the Regulations and defining the proceedings, functions and responsibilities relating to the general rules on requests for and the approval, publication and monitoring of related-party transactions. These regulations have been applied in this case. II. OVERVIEW OF THE GENERAL TRANSACTION a) Background for the transaction Endesa Energía is the second largest gas retailer in Spain. The Spanish gas market in which Endesa Energía operates is marked by the high dependence on external gas sources and the need to import gas to cover almost 100% of the demand, due to the low availability of natural gas in Spain. In the gas marketing activity, it is essential to manage the physical balance of gas in a manner making it possible to continually achieve equilibrium while meeting customer demand at all times. Endesa stands to benefit considerably from being able to make natural gas (NG) or liquefied natural gas (LNG) sales and purchases between Endesa Energía and Eni Global Markets S.p.A., given that Eni Global Markets S.p.A. is active within both the LNG markets and the Spanish gas system, meaning that Endesa can make logistic swaps, perform tank operations at the PVB (Spanish Virtual Balancing Point) and with LNG carriers, thus giving it more operational flexibility. Therefore, the option to engage in purchase and sale transactions will make Endesa Energía more agile in responding to specific incidents, including any needs it may have to raise, lower or modify the amount of NG/LNG available. Effectively, this agreement provides the framework whereby Endesa may arrange gas with ENI and sets out the relevant criteria and parameters ensuring Endesa’s interests and bringing ENI within the portfolio of possible buyers or sellers of natural gas. There are two agreements in place governing these transactions between Endesa Energía S.A.U. and Eni Global Markets S.p.A. These agreements are complementary and provide the legal framework whereby the gas purchase and sale transactions will be carried out: > LNG Master Sale and Purchase Agreement ("MSPA"), executed between Eni Global Energy Markets Spa and Endesa Energía for an indefinite term, and which regulates the ship operations (on DES or FOB terms) covered by this Report, to be submitted before Endesa’s Board of Directors for approval. > EFET (European Federation of Energy Traders) Agreement: Eni Global Energy Markets Spa and Endesa Energia shall enter into an EFET Agreement, including PVB, TVB and PEG Appendixes, for the sale and purchase of natural gas or LNG in tank in Spain and France, valid for an indefinite term. In accordance with this legal framework, this Report will be submitted to the Board of Directors so that it may authorize natural gas or LNG purchase and sale transactions between Endesa Energía and Eni where such transactions are in the economic interests of Endesa Energía, subject to a maximum volume of 4 TWh, over the 2024-2025 period. Moreover, under the terms of the aforementioned MSPA for the supply of LNG, the sale to Eni Global Markets of 231 GWh of LNG at the El Musel terminal was authorized on 23 May 2024, in order to adjust the balance, make the long position at the terminal practicable and benefit from prevailing market conditions. This transaction is the subject of this Report and will be submitted to the Board of Directors for approval. On 31 July 2023, Endesa Energía initiated its activity as the company that was the successful bidder on the logistics services of the El Musel terminal, in Gijón. This was an important milestone given that this terminal provides flexibility at a time of congestion in European terminals. In addition, the LNG tanks provide storage capacity, and the exclusive use of the terminal creates a possibility for new business opportunities, all of which helps strengthen energy supply security in Europe. b) Purpose and amount of the transaction. In accordance with the foregoing, the subject matter of this Report extends to the following transactions: III. IDENTIFICATION OF THE PARTY RELATED TO ENDESA One party is Endesa Energía S.A.U. , a company fully owned by Endesa, S.A. Enel Iberia, a fully-owned subsidiary of Enel Spa, holds 70.101% of the share capital of Endesa. Therefore, Endesa Energía is controlled by Enel Spa. The other party is Eni Global Energy Markets S.p.A. , a company fully owned by Eni S.p.A ("Eni Group") and therefore a subsidiary thereof. For its part, the Eni Group is a 30.33% investee of the Italian government. Therefore, Eni is a related counterparty of Enel. Under accounting legislation (IAS 24, IAS 10 and IAS 28), given that the Italian government controls Enel, S.p.A. and Eni, S.p.A., the transaction between Endesa Energía S.A. and Eni Global Energy Markets S.p.A. is considered a related-party transaction. IV. ANALYSIS OF THE TRANSACTION FROM THE STANDPOINT OF THE INTEREST OF ENDESA AND OF SHAREHOLDERS OTHER THAN RELATED PARTIES 1. Operational and strategic rationale of the transaction Aside from the possibility of arranging the supply of products within the market, this arrangement with Eni allows Endesa Energía to take advantage of any market opportunities that may be beneficial to Endesa, as Eni is becoming an increasingly active player within the Spanish market, thus generating an added benefit under the Agreements. More precisely, Endesa stands to benefit considerably from being able to arrange sales and purchases of natural gas or LNG between Endesa Energía and Eni for up to 4 TWh between 2024 and 2025, given that Eni is active within both the LNG markets and the Spanish gas system, thus helping Endesa to make logistic swaps, operations in tank, at the PVB (Spanish Virtual Balancing Point) and with LNG carriers, and ultimately giving it more operational flexibility. Therefore, the purchase and sale transaction will make Endesa Energía more agile in responding to specific incidents, including any needs it may have to raise, lower or modify the amount of LNG available. As demand can fluctuate and conditions in the gas market can change, arranging the sale and purchase of gas from Eni Global Markets affords Endesa Energía greater operational flexibility and closer management of the physical balance, and allows it to take advantage of beneficial market conditions and opportunities. Therefore, the related-party transactions are aligned with Endesa’s strategic plan. In the current context of the energy markets, these transactions allow Endesa Energía to operate and to increase the number of options for the execution of natural gas/LNG sale transactions and to obtain additional commercial margins. It also provides further opportunities and allows for greater flexibility by increasing the security of supply and partially mitigating the economic risks associated with its activities by effectively increasing the number of available alternatives when it comes to the purchase and sale of natural gas and LNG. Therefore, the related-party transactions are aligned with Endesa's strategic plan, in that they afford it closer control over its physical balance and enable Endesa Energía to respond to fluctuations in the demand for gas within the retail market by allowing it to obtain the best market opportunities. Ultimately the arrangement makes it easier to carry out new transactions and obtain additional margins. Therefore, it is reasonable to conclude that the Related-Party Transactions can proceed, since they are operationally and strategically sound. 2. Economic reasonableness of the transaction. Methods used I. In accordance with Endesa's model, natural gas/LNG sale and purchase transactions between Endesa Energía and Eni are to be carried out according to the following principles: > Two alternative binding offers from independent third parties must be reliably obtained, effectively showing that Eni’s offer is the most favorable to Endesa Energía’s interests. > If it is not possible to obtain alternative offers from independent third parties, the transaction may go ahead if approved by Endesa’s Chief Executive Officer, provided that the following guarantees are met: - Endesa Energía shall use an indication of the estimated transaction price (applicable market benchmark indexes), supplemented with other internal price estimation methods, such as benchmarks from brokers, counterparties in similar transactions, official reports and publications (Icis Heren, Platts, Reuters...), internal price-forecasting models. - Eni’s offer must be comparable with the price estimate defined in the previous section, such that it is the most favorable to Endesa Energía’s interests. - Documentary records must be kept of unanswered requests for quotations and estimates. - Subsequently, an ex post validation exercise (outcome testing) will be carried out in order to validate the terms ultimately applied to the transactions and confirm that the pricing methodology was properly followed. This review will be carried out by independent experts appointed by Endesa S.A.’s Audit Committee. II. Analysis of compliance with the market value principle and election of transfer pricing method: The application of the at arm's length principle is generally based on the comparison of the terms and conditions for a related-party transaction with the terms and conditions for transactions between independent companies. For these comparisons to be useful, the relevant economic characteristics of the situations being compared should be sufficiently comparable. Therefore, the CUP method can be applied using internal (or, alternatively) external benchmarking to justify that the price set for the related-party natural gas/LNG purchase and sale transactions between Endesa Energía and Eni conforms to the principle of free competition. In this regard: > In the transaction to ratify the sale by Endesa Energía to Eni Global Markets of 231 GWh of liquefied natural gas at the El Musel terminal for an estimated amount of €8.2 M, as it is a non-standard transaction, and due to the immediacy of the opportunity, it was not possible to obtain two binding alternative offers. The price established for the LNG sale was benchmarked on the basis of the Mibgas market price quotes in VBP/tank, applying a discount on the market quote. The TTF index market price has been obtained from an independent financial information database and is therefore in line with the prices prevailing in the market, as they are agreed under terms and conditions that could be established with independent parties. Therefore, while the price would be at market value, it is necessary to evaluate whether the price determined for the sale of LNG in-tank ("TVB" - Spanish Virtual Balancing Tank) —the term according to which the Related-Party Transaction will be executed (including the mark-up to cover the logistic cost of regasification, entry to the transportation network and gas storage)— meets the market value principle. In this regard, the information relating to the price of the TVB discount with respect to the TTF (obtained from MIBGAS published data) has been analyzed and can be used as a benchmark to assess whether the Related-Party Transaction complies with the arm’s length principle. For this reason, it can be inferred that the methodology for determining the price of the Related-Party Transaction is reasonable from an economic standpoint for Endesa Energía, inasmuch as the application of this methodology yields a price higher than the market benchmarks published by brokers and by Mibgas (organized gas market). Lastly, in accordance with Endesa’s methodology for this type of related-party transactions, an ex post validation exercise (outcome testing) will be carried out in order to validate the terms ultimately applied to the transaction and confirm that the pricing methodology was properly followed.  In the purchase and/or sale transactions of natural gas between Endesa Energía, S.A.U. and Eni Global Energy Markets SpA, under the MSPA and EFET Agreements, for a total maximum volume of 4 TWh over the years 2024 and 2025 and for an estimated amount, at current market prices, of €137.2 million, the methodology described allows for the application of the CUP method to assess the economic reasonableness of the Related-Party Transaction and includes the ex post evaluation mechanisms provided for in the methodology of the OECD Guidelines. Therefore, the prices are consistent with what independent third parties would have agreed under free competition. Based on all of the above, it can be concluded that the methodology used to determine the price for the Related-Party Transaction conforms to Spanish tax legislation on transfer pricing and to OECD Guidelines, reflecting what independent parties would have agreed under similar circumstances. Lastly, in accordance with Endesa’s methodology for this type of related-party transactions, an ex post validation exercise (outcome testing) will be carried out in order to validate the terms ultimately applied to the transactions and confirm that the pricing methodology was properly followed. 3. Legal reasonableness The Related-Party Transactions have taken legal effect through the ratification of the LNG Supply Master Agreement (MSPA) entered into for an indefinite term, which regulates the LNG purchase and sale transactions through ships, on DES or FOB terms, and through the approval of the EFET (European Federation of Energy Traders) agreement, which governs the natural gas or LNG transactions through the tank system, on TVB, PVB or PEG terms, as entered into between Endesa Energía and Eni. In each individual case, the parties would formalize the relevant purchase or sale by means of a "Confirmation/Election Sheets" setting out the specific terms and conditions, in accordance with the said master agreements. First, the parties to the Master Agreement have determined a reasonable distribution of the risks associated with the sale and supply of gas, they have established an invoicing, payment and regulation system that can also be considered appropriate according to the nature of the purchase of LNG, as well as mechanisms for the management of cases of force majeure in generally-accepted terms, early termination events and appropriate schemes for liability and submission of disputes to international arbitration. Second, the EFET regulates the delivery and acceptance of natural gas between the parties, as specified in the relevant Election Sheets. In the said agreement, the parties have determined a reasonable distribution of risks; have established invoicing and payment systems that can be considered appropriate, as well as mechanisms for the management of cases of force majeure in generally-accepted terms, early termination events and appropriate schemes for liability and submission of disputes to international arbitration. As regards the applicable law and regulations, the parties shall determine in each of the Election Sheets whether they submit to English or German law, as the case may be. In the case of the related-party LNG sale and purchase transaction spanning the years 2024 and 2025, the parties have agreed to submit to English law. It should also be noted that the EFET agreement, drawn up by the European Federation of Energy Traders (an association of European energy traders in the wholesale electricity and gas markets that brings together more than 126 companies operating in the market), contains a set of standard terms and conditions governing the delivery and supply of LNG and is widely used within the European energy market. As regards ratification of the sale by Endesa Energía to Eni Global Markets of 231 GWh of liquefied natural gas at the El Musel terminal, the Confirmation provides, among other aspects, the quantity and quality of LNG to be sold, the formula for calculating the price, the delivery windows and the loading and unloading port, all on terms that can be considered reasonable. Moreover, the Confirmation has been drafted in accordance with the form attached to the Master Agreement, the terms and conditions of which shall regulate any matters not expressly covered by the Confirmation. Meanwhile, the specific terms governing the sale and purchase of natural gas and LNG throughout 2024 and 2025 will be as set out in the corresponding Confirmation/Election Sheets, under which the transactions will be formalized in accordance with the Master Agreement or the EFET, as applicable. In this sense, provided that the terms of the relevant Confirmation are similar to those of the Confirmations executed by the parties in previous natural gas sale and purchase transactions executed under the Master Agreement or EFET, they may be considered reasonable and customary in contracts of this nature. The remaining terms and conditions will not be included in the Confirmation or Election Sheets, as they are defined in the Master Agreement or the EFET, and it can be concluded that they have been arranged by the parties on terms customary for international contracts of this type. In view of the legal and commercial terms of the Master Agreement and the EFET, it is fair to conclude that the related-party transactions executed thereunder will take place on reasonable contractual terms that could have been agreed upon by independent parties and that, having being reached in this case by related parties, generate benefits for Endesa Energía. V. INDEPENDENT EXPERT REPORTS ISSUED AT THE REQUEST OF THE AUDIT AND COMPLIANCE COMMITTEE In analyzing the transaction, the Audit and Compliance Committee has taken into account the Reports of PricewaterhouseCoopers Tax and Legal S.L. and PricewaterhouseCoopers Asesores de Negocios, S.L. (hereinafter, ' 1 PwC' 1 ) on the fairness and reasonableness of the related-party transactions analyzed herein. PwC issued its Reports in its capacity as an independent expert. On the date the report was issued, PwC did not maintain any sort of commercial relationship with the Enel Group or the ENI Group or with the Endesa Group that could compromise its capacity as an independent expert for the purposes of issuing its Report or that could give rise to a conflict of interest in conducting the analysis and drawing up the conclusions therein. In the Reports issued to Endesa’s Audit and Compliance Committee, PWC remarks that the Related-Party Transactions analyzed —namely (i) the Master Agreement entered into between Endesa Energía and Eni for the sale and purchase of LNG delivered through ship on DES or FOB terms; (ii) the EFET General Agreement concerning the delivery and acceptance of natural gas entered into between Endesa Energía and Eni, for the purchase and sale of natural gas in the system or LNG in tank in Spain and France (PVB, TVB or PEG); (iii) the purchase and sale of natural gas or LNG between Endesa Energía and Eni, for a maximum volume of 4 TWh, over the period 2024–2025; and (iv) the sale of 231 GWh of liquefied natural gas at the El Musel terminal by Endesa Energía, S.A.U. to Eni Global Energy Markets SpA— all afford Endesa Energía the opportunity to engage in LNG/NG sales and purchases that are attractive to it in terms of price, quantity and time and other formal delivery conditions, and it can be concluded that the transactions are fair and reasonable from the standpoint of Endesa and, in particular, of shareholders other than the related party, i.e. shareholders other than the Enel Group. VI. CONCLUSION OF THE AUDIT AND COMPLIANCE COMMITTEE First, it should be noted that the Audit and Compliance Committee is made up of six non-executive members of the Board of Directors, five of whom (83.33%) are independent. Furthermore, the Committee has a Shareholder-Appointed Director representing the controlling shareholder Enel, who holds 70.10% of the share capital of Endesa. In accordance with Article 529 duovicies, paragraph 3, of the Capital Corporations Law, Mr. Stefano De Angelis, who is a shareholder-appointed director and representative of Enel, was not involved in the preparation of this Report. The rest of the members of the Audit and Compliance Committee took part in the preparation and agreed on the contents of this Report. Based on the background information discussed above, the Audit and Compliance Committee hereby concludes that: The Audit and Compliance Committee concludes that the related-party transactions —namely (i) the Master Agreement entered into between Endesa Energía and Eni for the sale and purchase of LNG delivered through ship on DES or FOB terms; (ii) the EFET General Agreement concerning the delivery and acceptance of natural gas entered into between Endesa Energía and Eni, for the purchase and sale of natural gas in the system or LNG in tank in Spain and France (PVB, TVB or PEG); (iii) the purchase and sale of natural gas or LNG between Endesa Energía and Eni, for a maximum volume of 4 TWh, over the period 2024–2025; and (iv) the sale of 231 GWh of liquefied natural gas at the El Musel terminal by Endesa Energía, S.A.U. to Eni Global Energy Markets SpA— are fair and reasonable from the standpoint of Endesa and of shareholders other than the related party. VII. CONCLUSION OF THE BOARD OF DIRECTORS Endesa's Board of Directors, following a favourable report from the Audit and Compliance Committee, has unanimously approved all transactions. REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE ON THE FAIRNESS AND REASONABLENESS OF A FRAMEWORK AGREEMENT BETWEEN EDISTRIBUCIÓN REDES DIGITALES, S.L.U. AND GRIDSPERTISE S.R.L. FOR THE SUPPLY OF METERS REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE ON THE FAIRNESS AND REASONABLENESS OF A FRAMEWORK AGREEMENT BETWEEN EDISTRIBUCIÓN REDES DIGITALES, S.L.U. AND GRIDSPERTISE S.R.L. FOR THE SUPPLY OF METERS I. INTRODUCTION AND REGULATORY FRAMEWORK In accordance with the provisions of Section 3 of Article 529 duovicies of the consolidated text of the Spanish Capital Companies Act approved by Royal Legislative Decree 1/2010 of 2 July, Endesa's Audit and Compliance Committee issues this Report to assess whether the transaction is fair and reasonable from the company's perspective and, where applicable, from the perspective of shareholders other than the related party. The Report also outlines the underlying assumptions for this assessment, as well as the methods employed. In accordance with Section 3 of Article 529 unvicies, the Report issued and, where applicable, published by Endesa's Audit and Compliance Committee must include at least the following information on: (a) information on the nature of the transaction and the relationship with the related party; (b) the identity of the related party; (c) the date and the value or amount of the consideration for the transaction; and (d) any other information required to assess whether this is fair and reasonable from the standpoint of the company and of shareholders who are not related parties. Additionally, Endesa has developed its own internal regulatory framework. This policy includes, among others, a related party transaction regulation approved by the Board of Directors and an operating procedure for related party transactions approved by the Audit and Compliance Committee. This procedure elaborates on the guidelines contained in the regulation, defining the operational framework, roles, and responsibilities in the standard request procedure, as well as the approval, publication, and supervision of related party transactions. This regulation has been applied in this case. II. BASIC DESCRIPTION OF THE GENERAL TRANSACTION a ) Background of the transaction E-Distribución Redes Digitales, S.L., is the leading electricity distributor in Spain in terms of coverage. Within the Endesa Group, it is responsible for distributing energy from generation units to supply points located primarily in Andalusia, Aragón, the Canary Islands, Castilla y León, Catalonia, Extremadura, and the Balearic Islands. Royal Decree 1955/2000 of 1 December, which regulates electricity transmission, distribution, commercialisation, supply, and the authorisation procedures for electricity facilities, along with Royal Decree 1110/2007 of 24 August, which approves the unified regulation of measurement points for the electrical system, outline key responsibilities for distribution activities. These include, among other obligations, the reading of energy received and delivered through distribution grids. Additionally, Royal Decree 1110/2007 specifies that: - Measurement equipment must allow for time-of-use discrimination of measurements and offer the ability to manage different programmable periods. - Measurement equipment must be integrated into a remote management and metering system implemented by the party responsible for the corresponding readings. - Type 4 measurement points must have six active energy registers, six reactive energy registers, and six power registers. Furthermore, the equipment must be capable of programming the parameters necessary for billing both comprehensive and access tariffs. - A piece of equipment is considered to be properly integrated into the remote management system when it is capable of reading active energy hourly registers remotely. Royal Decree 244/2016 of 3 June, implementing Law 32/2014 of 22 December on Metrology, along with Order ICT/155/2020 of 7 February, regulating the metrological control by the state of certain measuring instruments, mandate that all single-phase type V meters and three-phase type IV and type V meters be replaced no later than the end of the 15th year of their useful life. Therefore, the deployment of electronic meters in the field of electricity distribution has been part of the digital transformation process that the electricity sector in Spain has undergone over the past two decades. As a result, E-Distribución is required to regularly implement replacement plans for remote management meters. E-Distribución Redes Digitales, S.L., initiated a tender process in this regard in November 2023. Its aim was to procure energy meters with a dual communication protocol (to encourage participation by as many manufacturers as possible), including type V (single-phase and three-phase) and type IV (direct and semi-direct) meters. As a result of this tender process, Gridspertise, along with other suppliers, was awarded the contract, which resulted in the related-party transaction covered in this Report. Gridspertise (a subsidiary of the Enel Group) specialises in the development of: - Reliable, advanced, and interactive measuring technologies designed to meet the current and future needs of DSOs, with their smart meters serving as a first step in the digitisation of electrical grids. Gridspertise has installed and managed over 44 million meters up to date. - It has also provided remote control and automation solutions, including protection and restoration, outage management, and advanced sensors. Their aim is to digitise DSO grids in order to place them at the heart of the energy transition. - Moreover, it has used AI solutions and machine learning technologies for digital image processing. B) Purpose of the transaction The purpose of the transaction is to enter into a Framework Agreement between EDISTRIBUCIÓN Redes Digitales, S.L.U., and Gridspertise, S.R.L., for the supply of type V single-phase meters, effective from 1 January 2026 and with a term extending until 31 December 2030 (3 base years + 1 year + 1-year optional extension), for a maximum amount of €70.4M (base amount: €37.96M + Optional extension (1+1): €20.70M + 20% Tolerance: €11.73M). The agreement is non-exclusive, i.e., E-Distribución may continue to purchase meters from other suppliers. During the term of the Agreement (36 months, extendable for two additional one-year periods starting 1 January 2026), E-Distribución agrees to either (i) purchase products valued at no less than 100% of the agreed base amount, or alternatively, (ii) pay Gridspertise a fee equivalent to 10% of the difference between the base amount established in the Agreement and the cost associated with the volume of products actually purchased by the end of the contract term. Additionally, 20 business days before the expiration of the Agreement, E-Distribución may choose to: - Extend the term of the Agreement for two additional one-year periods. - Increase the total Agreement amount by up to €32.4M (covering the two optional years plus the 20% additional tolerance). For the supply of the products, a technical conformity assessment (TCA) will be conducted according to 'Technical Conformity Assessment GSCG002' Rev. 3, dated 16 March 2021. This ensures that Gridspertise meets the optimal technical conditions for the products supplied to E-Distribución. Furthermore, the products must undergo all tests outlined in the technical specification at Gridspertise's facilities before shipment. c) Transaction value As compensation for the supply of type V single-phase meters, E-Distribución will pay Gridspertise a maximum amount of €70.4M (base amount: €37.96M + Optional extension (1+1): €20.70M + 20% Tolerance: €11.73M). The tender process employed a batch-based strategy. Two batches were created, one for each type of meter: one for single-phase meters (Batch 1–Type V single-phase) and another for three-phase meters (Batch 2–Type V three-phase, Type IV direct three-phase, and Type IV semi-direct three-phase). The aim was to secure the most favourable economic terms for all devices, regardless of the volumes requested in the tender. The tender process involved a request for a technical proposal, followed by a request for an economic proposal from bidders who passed the technical phase. In line with previous practices, the tender required awarding contracts to at least two suppliers to ensure the availability of meters in the event of a supply failure. Additionally, to ensure that awarded suppliers have sufficient volume to establish a dedicated production line and, at the same time, sufficient value to cover potential failure by the other supplier, the tender required candidate companies to offer a minimum supply volume of 40% of the total meters. Ultimately, E-Distribución Redes Digitales, S.L., invited 12 entities to participate in the tender process. Bids were received from 7 suppliers, although all qualified suppliers, as well as those undergoing technical evaluation (29) in the FSCR04 goods category, were initially invited. However, 17 of them failed to sign the confidentiality agreement required to receive the technical documentation. Gridspertise passed the relevant technical evaluation and its price bid was the second most competitive for the single-phase meters. Therefore, as the second most competitive bidder, Gridspertise was awarded 40% of the volume of Batch 1 (single-phase meters) for a total amount of €70.4 million. Still, it was excluded from Batch 2, as it ranked fifth in the price ranking. The unit prices for all meters will be reviewed by the Procurement Unit every three months based on industrial production prices published by Eurostat and the EUR/USD exchange rate. This review does not affect the total contract amount, which remains unchanged. In addition to the tender process, E-Distribución contracted an independent third party to carry out a consulting study for a comparative market analysis of Type V meters (single-phase and three-phase) and Type IV meters (direct and semi-direct), focusing mainly on: - Functionalities covered by their rental, as well as a comparison of current and future functionalities. - Price references for equipment/breakdown of the price components. Availability of equipment for public sale with price references. - Determination of target pricing. This analysis indicates that these technological solutions and equipment are also being targeted for investment by other electricity distributors under similar functionality and pricing conditions. For Type V single-phase meters, the report by the independent expert established a higher target price range for the meter defined in the tender than the price awarded to Gridspertise. III. IDENTIFICATION OF THE PARTY RELATED TO ENDESA Recipient company of the products: E-Distribución Redes Digitales, S.L., (hereinafter 'E-Distribución') is a wholly owned subsidiary of Endesa, S.A.; therefore, it is a dependent company of this entity. Supplier company of the service: Gridspertise, S.R.L., (hereinafter 'Gridspertise') is an associate of the Enel Group, through Enel Grids S.r.l.'s 50% equity stake (owned by Enel, S.p.A.). Enel S.p.A. is the sole shareholder of Enel Iberia, S.L., which in turn holds a 70.101% stake in Endesa, S.A. In accordance with the provisions of Article 529 vicies of the Spanish Capital Companies Act and subsection (ii) of letter (b) under section 9 of International Accounting Standard 24, Gridspertise, as an associate entity of Enel, is considered a related party to Endesa. IV. ANALYSIS OF THE TRANSACTION FROM THE PERSPECTIVE OF ENDESA'S INTERESTS AND THOSE OF SHAREHOLDERS OTHER THAN THE RELATED PARTIES 1. Operational and strategic rationale of the transaction First and foremost, it should be noted that there is a need to ensure compliance with the legal obligations applicable to the distributor, particularly those arising from its role as the responsible party for meter readings. This compliance is achieved through the availability of meters with a useful life of 15 years according to regulations, in light of the expiration of previous contracts for the supply of remote management meters for the 2026–2030 period. The related party transaction for the supply of measurement equipment by Gridspertise allows E-Distribución to partially cover (40%) their need for the 2026–2030 period. Furthermore, it ensures compliance with the legal obligations applicable to the distributor, especially those derived from its role as the responsible party for meter readings. Additionally, Gridspertise passed the relevant technical evaluation for both batches, while its price bid was the second most competitive for Batch 1. Therefore, Gridspertise was awarded 40% of Batch 1 (€70.4M). Moreover, the unit prices offered by Gridspertise are below the target price ranges for equipment calculated by an independent expert. Finally, the risks associated with purchasing the products from a company associated with the Enel Group are substantially the same as those associated with purchasing from a third-party supplier external to the Enel Group. For all these reasons, the nature of the related party transaction is aligned with the purpose, values, and strategic plan of E-Distribución and the Endesa Group. 2. Economic rationality of the transaction. Methods used To verify that the related party transaction aligns with the principle of free competition, the possibility of applying the Comparable Uncontrolled Price (CUP) method was first analysed. In accordance with paragraph 2.14 and following of the OECD Guidelines, the CUP method consists of 'comparing the price charged for goods or services in a related-party transaction with the price charged for goods or services transferred or rendered in a comparable unrelated transaction under comparable circumstances.' Moreover, paragraph 2.15 of the OECD Guidelines states that a transaction may be considered comparable to another if 'sufficiently accurate adjustments can be made to eliminate the significant effects caused by those differences.' Additionally, paragraph 2.15 states that the CUP method is preferable to others when comparable unrelated transactions can be found. The awarding of the meter supply contract was carried out through a tender process, to which as many as 12 entities (11 of them independent of the Enel Group) were encouraged to participate. Given that E-Distribución has information on the prices offered by independent entities for the related party transaction, the CUP method was selected to evaluate the economic rationality of the transaction. The information from the tender process was used as a reference for the terms and conditions offered by independent entities. As outlined in this report, the terms and conditions applicable to the related party transaction were determined after a tender process. Gridspertise's offer was awarded the contract as the second most favourable among firm bids submitted by independent entities, in line with pre-established requirements. Therefore, it can be concluded that the price determined for the related party transaction is economically reasonable from E-Distribución's perspective. 3. Legal and commercial rationality of the transaction The aforementioned Framework Agreement will be signed under the terms and conditions outlined in the draft contract attached as an annex to the Tender Specifications. As a result, it will be established on the same terms as those agreed with any third party that may have been awarded the Tender. Additionally, the Agreement sets reasonable terms for E-Distribución as the recipient of the products. The scope and object of the Agreement are clearly defined in this regard. Gridspertise further commits to providing a 24-month warranty on the products from the time of delivery, replacing any defective products and compensating E-Distribución in the event that the defect rate exceeds 1% annually of the total delivered. The delivery conditions for the products are detailed in the Agreement, with Gridspertise taking on a series of obligations regarding these delivery conditions. These obligations aim to mitigate the inherent risks associated with such operations that could impact E-Distribución. Specifically, E-Distribución reserves the right to conduct an audit of Gridspertise during the production process to ensure the quality of the products. Furthermore, the Agreement explicitly stipulates penalties for delays in obtaining the TCA or in the delivery of equipment, as outlined in the Agreement and in accordance with Endesa's General Conditions of Contract. As for the economic terms of the Agreement, E-Distribución is obligated to place orders for at least the equivalent of the base price of the Agreement. Alternatively, it can pay a penalty equal to 10% of the difference between the base price of the Agreement and the amount actually purchased. Additionally, Gridspertise is required to provide a financial guarantee. Regarding Gridspertise's liability for failure to comply with any legal or contractual obligations directly or indirectly related to the Agreement, the liability is limited to an amount equivalent to 100% of the total value of the Agreement, except in cases of gross negligence, wilful misconduct, or fault. This approach is deemed reasonable and aligns with terms that independent parties could have agreed upon. As for the remaining contractual terms and conditions of the Agreement, upon review and analysis, these can be considered reasonable for E-Distribución given the nature of the Agreement and the fact that this is a transaction between related parties. In this regard, it is worth noting that these terms are similar to those agreed by E-Distribución with independent third parties in comparable transactions. Therefore, based on these legal and commercial terms, it can be concluded that the related party transaction is structured in a reasonable manner and under contractual terms and conditions similar to those that could have been agreed upon by independent parties. V. INDEPENDENT EXPERT REPORTS ISSUED AT THE REQUEST OF THE AUDIT AND COMPLIANCE COMMITTEE In its analysis of the transaction, the Audit and Compliance Committee has taken into account the Report by PricewaterhouseCoopers Tax and Legal S.L. and PricewaterhouseCoopers Asesores de Negocios, S.L. (hereinafter 'PwC') regarding the fairness and rationality of the approval of the contract under review. It has also considered the report issued by an independent third party aimed at identifying the target prices for the meters under review. PwC issued its Report in its capacity as an independent expert. As of the release date, PwC has no commercial relationship with the Enel Group or the Endesa Group that could compromise its status as an independent expert for the purposes of issuing this report or, in particular, place it in a situation of conflict of interest in carrying out the analysis and reaching the conclusions presented therein. The Report issued to Endesa's Audit and Compliance Committee concludes that entering into a Framework Agreement between EDISTRIBUCIÓN Redes Digitales, S.L.U., and Gridspertise, S.R.L., for the supply of Type V single-phase meters for the period from 1 January 2026 to 31 December 2030 (3 base years + 1 year + 1-year optional extension) as described in this document is fair and reasonable from the perspective of Endesa and shareholders other than related parties. VI. CONCLUSION OF THE AUDIT AND COMPLIANCE COMMITTEE First and foremost, it should be noted that the Audit and Compliance Committee is made up of six non-executive members of the Board of Directors, five of whom (83%) are independent. Additionally, the Committee includes one shareholder-appointed director representing the controlling shareholder, Enel, which owns 70.10% of Endesa's share capital. In accordance with Section 3 of Article 529 duovicies of the Spanish Capital Companies Act, Mr Stefano de Angelis, the shareholder-appointed director representing Enel, did not participate in the drafting of this report. The remaining members of the Audit and Compliance Committee have participated in and agreed on the content of this Report. In light of all the aforementioned background, the Audit and Compliance Committee concludes that: The Audit and Compliance Committee concludes that entering into a Framework Agreement between EDISTRIBUCIÓN Redes Digitales, S.L.U., and Gridspertise, S.R.L., for the supply of Type V single-phase meters for the period from 1 January 2026 to 31 December 2030 (3 base years + 1 year + 1-year optional extension) is fair and reasonable from the perspective of Endesa and shareholders other than related parties. VII. CONCLUSION OF THE BOARD OF DIRECTORS Endesa's Board of Directors, following a favourable report from the Audit and Compliance Committee, has unanimously approved all transactions. AUDIT AND COMPLIANCE COMMITTEE REPORT ON THE FAIRNESS AND REASONABLENESS OF THE RELATED-PARTY TRANSACTION CONSISTING OF THE PHYSICAL PURCHASE OF FUEL OIL BY ENDESA GENERACIÓN, S.A.U. FROM ENI TRADE & BIOFUELS, S.P.A. AUDIT AND COMPLIANCE COMMITTEE REPORT ON THE FAIRNESS AND REASONABLENESS OF THE RELATED-PARTY TRANSACTION CONSISTING OF THE PHYSICAL PURCHASE OF FUEL OIL BY ENDESA GENERACIÓN, S.A.U. FROM ENI TRADE & BIOFUELS, S.P.A. I. INTRODUCTION AND REGULATORY FRAMEWORK In accordance with the provisions of paragraph 3 of article 529 duovicies of the amended and restated Spanish Capital Corporations Law, as approved by Royal Legislative Decree 1/2010, of 2 July, Endesa’s Audit and Compliance Committee hereby , issues this Report to assess whether the transaction is fair and reasonable from the standpoint of the company and, where appropriate, shareholders other than the related party, and indicate the assumptions on which the assessment is based and the methods used. In accordance with Article 529 unvicies, paragraph 3, the Report issued and, as the case may be, published by Endesa’s Audit and Compliance Committee, must at least include the following information: (a) information on the nature of the transaction and the relationship with the related party; (b) the identity of the related party; (c) the date and the value or amount of the consideration for the transaction; and (d) any other information required to assess whether this is fair and reasonable from the standpoint of the company and of shareholders who are not related parties. Furthermore, Endesa has developed its own internal regulatory framework in this area, which includes, inter alia, a Related-Party Transaction Regulations approved by the Board of Directors, as well as a Related-Party Transaction Operating Procedure approved by the Audit and Compliance Committee, implementing the guidelines set forth in the Regulations and defining the proceedings, functions and responsibilities relating to the general rules on requests for and the approval, publication and monitoring of related-party transactions. This regulation has been applied in this case. II. OVERVIEW OF THE GENERAL TRANSACTION a) Background of the transaction Endesa Generación is one of the leading Spanish companies in terms of electricity generation, with a net installed capacity of 21,247 MW at the end of 2023. In Spain, Endesa Generación produces electric power both in the Iberian Peninsula and in Non-Peninsular Territories (Canary Islands, Balearic Islands, Ceuta and Melilla). Power generation in Non-Peninsular Territories has the following differentiating characteristics with respect to the system in mainland Spain: (i) lack of economies of scale; (ii) need for greater reserve margins; and (iii) use of a specific technology mix conditioned by resource availability, giving thermal generation a preponderant role in ensuring security of supply. In 2023, Endesa Generación's installed thermal power represented 97% of total installed power in the autonomous cities of Ceuta and Melilla. Ceuta and Melilla have an annual electricity demand of 0.2 terawatts-hour (Twh), almost all of which (100% in Ceuta and 94% in Melilla) is met with power generation based on liquid-fuel combustion, primarily fuel oil. All of this electricity is generated by Endesa Generación. Annual fuel oil consumption in the generation units in these autonomous cities is approximately 80,000-85,000 tons, with each location accounting for approximately half of this amount. Fuels for electricity generation in Ceuta and Melilla, as in the remaining Non-Peninsular Territories, are required to be supplied in accordance with Law 17/2013, Royal Decree 738/2015 and Order TED/1315/2022, through fuel auctions called by the Ministry for Ecological Transition and Demographic Challenge. Nevertheless, there is no certainty that the supply of fuels can be ensured after 1 January 2025 under the auction scheme. Therefore, Endesa must carry out the actions available to it in order to guarantee the supply of fuel until the auction. Given that current contracts to supply fuel oil for Ceuta and Melilla end on 31 December 2024, Endesa must ensure continuity in the electricity supply in those cities starting on 1 January 2025. For this reason, steps have been initiated to purchase fuel oil and transfer it both to Ceuta and Melilla through a competitive process. b) Purpose of the transaction. The purpose of the transaction is to enter into an agreement for the physical purchase of fuel oil by Endesa Generación, S.A.U. from Eni Trade & Biofuels SpA, so as to supply Endesa Generación’s generation plants in Ceuta and Melilla with a maximum of 90,000 tons (contractual minimum of 60,000 tons) at an estimated cost of €39M. This amount may vary in accordance with market prices. The delivery of the product will be Free On Board (FOB) at a domestic port in Spain. The contract will be in force from 1 January 2025 to 31 December 2025. c) Transaction amount The US dollar price per metric ton (USD/t) FOB Algeciras will be the average of the Platts European Marketscan average quotes for "fuel oil 1.0%", as published under the headings "CIF MED (GENOVA/LAVERA)," during the month of delivery (all dates inclusive), plus a premium per ton. Consequently, the maximum amount of the related-party transaction, assuming 90,000 tons, will be approximately €39 M, although this may vary depending on the market prices and actual consumption. III. IDENTIFICATION OF THE PARTY RELATED TO ENDESA One party is Endesa Generación, S.A.U. , a company fully owned by Endesa, S.A. Enel Iberia, a fully-owned subsidiary of Enel Spa, holds 70.101% of the share capital of Endesa. Therefore, Endesa Generación is controlled by Enel Spa. Enel Spa is a company in which the Italian state has a 23.59% stake. The other party is, Eni Trade & Biofuels, S.p.A. , a company fully owned by Eni, S.p.A. Eni, S.p.A, is in turn an investee company of the Italian government, through 4.67% direct and indirect holdings through Cassa Depositi and Prestiti, S.p.A., a company controlled by the Italian state with a 27.73% stake. Under accounting legislation (IAS 24, IAS 10 and IAS 28), given that the Italian government controls Enel, S.p.A. and Eni, S.p.A. the transaction between Endesa Generación SA and Eni Trade & Biofuels, S.p.A., is considered a related-party transaction. IV. ANALYSIS OF THE TRANSACTION FROM THE PERSPECTIVE OF ENDESA'S INTERESTS AND THOSE OF SHAREHOLDERS OTHER THAN THE RELATED PARTIES 1. Operational and strategic rationale of the transaction The Related-Party Transaction should be analysed in the context of the electricity generation needs of the non-peninsular autonomous cities of Ceuta and Melilla. As noted above, Endesa Generación has taken timely steps to purchase the required fuel and to transfer it to Ceuta and Melilla through a competitive (bidding) process. As a result of this process, Endesa Generación received offers from various suppliers, and selected the most competitive bid, i.e. the bid from Eni T&B, which is a leading supplier on the market. The conditions requested assume the provision of the supply during the period between 1 January 2025 and 31 December 2025. The supply must be delivered in batches of 5,000 tons, plus or minus up to 10%, at to be determined by Endesa Generación, to thereby allow the supply to be modulated according to actual consumption and allowing Endesa Generación to control fuel oil inventory. Therefore, it is concluded that through the physical purchase of fuel oil from Eni T&B, Endesa Generación has at its disposal a product with specific qualities and sufficient volume to provide the fuel required for the generation of electricity at Endesa Generación’s thermal power plants in Ceuta and Melilla — cities where Endesa Generación generates nearly all of the electricity and where the continuity of supply must be ensured — in 2025. 2. Economic rationality of the transaction. Methods used The reported related-party transaction stems from a competitive process through which Endesa Generación requested binding offers from various suppliers in order to supply fuel oil for the power plants in Ceuta and Melilla, under certain conditions in terms of quantity, quality, period and place, and conditions of delivery. Specifically, nine suppliers were invited to submit bids. Only two of them, Eni T&B and a third-party supplier, submitted bids in line with the requested terms. Eni T&B offered FOB delivery terms while the third party offered DES (Delivered Ex Ship). To compare the prices of the bid from Eni T&B with the bid received from the third party under equivalent delivery conditions, the equivalent cost per ton was calculated for the bid from Eni T&B (including the FOB terms) in DES terms for the cities of Ceuta and Melilla, given that the cost in the port of final destination is the decisive cost for choosing the most suitable bid for Endesa Generación. In this sense, to calculate the cost in the final port of destination, the premium of the third party supplies was added to the unit price per ton of the goods and, in the case of the Eni T&B bid the cost of transport from the loading port to Ceuta and Melilla was also added. Both Spanish transfer pricing regulations, as set forth primarily in Article 18 of the Spanish Corporate Income Tax Law, and the OECD Guidelines require valuing related-party transactions for tax purposes according to the arm's length principle. The arm's length principle requires related-party transactions to conform to market conditions that would prevail in a similar transaction between independent parties. The Guidelines recognise that when it is possible to identify comparable uncontrolled transactions, the Comparable Uncontrolled Price method is the most direct and reliable method for applying the arm's length principle. This method compares the price of property or services subject to a controlled transaction to the price of other property or services transferred in an uncontrolled transaction in comparable circumstances. With respect to the related-party transaction under analysis, various suppliers were asked to submit binding offers on the supply of fuel oil under the same conditions. Respect for the principles of equality, non-discrimination and transparency dictates that award criteria be objective, ensuring that offers be compared and evaluated objectively and, therefore, under conditions of effective competition. An assessment of the bids received shows that Eni T&B submitted the most competitive price, and in conditions comparable to those of the third-party supplier, considering the full cost of provisioning. Accordingly, we can conclude that the methodology is consistent with Spanish tax regulations and OECD Guidelines and that the prices of the transaction would reflect what independent parties would agree in similar circumstances. 3. Legal and commercial rationality of the transaction The draft agreement contains customary clauses for this type of contract that safeguard the Buyer's position, protecting Endesa Generación’s position, in terms similar to transactions between independent parties. V. INDEPENDENT EXPERT REPORTS ISSUED AT THE REQUEST OF THE AUDIT AND COMPLIANCE COMMITTEE The Audit and Compliance Committee’s analysis took into account Deloitte Legal, S.L.P's report ("Deloitte") on the fairness and reasonableness of Endesa Generación, S.A.U.’s physical purchase of fuel oil from Eni Trade & Biofuels, S.p.A. Deloitte issued its Report in its capacity as an independent expert. On the date the report was issued, Deloitte did not maintain any sort of commercial relationship with the Enel Group or with the Endesa Group that could compromise its capacity as an independent expert for the purposes of issuing its Report or that could give rise to a conflict of interest in conducting the analysis and drawing up the conclusions therein. In the report issued for Endesa’s Audit and Compliance Committee, the independent expert evidenced Endesa’s need to procure the fuel covered by the agreement. In addition, this third party analysed in depth the process of competitive bids requested by Endesa, and in a joint assessment of all the prevailing circumstances concluded that the most competitive bid is Eni T&B’s. Consequently, the independent expert concludes that the physical purchase of fuel oil by Endesa Generación, S.A.U. from Eni Trade & Biofuels, S.p.A. is fair and reasonable from the standpoint of Endesa and, in particular, its shareholders other than the related party, i.e. other than the Enel Group. VI. CONCLUSION OF THE AUDIT AND COMPLIANCE COMMITTEE First and foremost, it should be noted that the Audit and Compliance Committee is made up of six non-executive members of the Board of Directors, five of whom (83%) are independent. Additionally, the Committee includes one shareholder-appointed director representing the controlling shareholder, Enel, which owns 70.10% of Endesa's share capital. In accordance with Section 3 of Article 529 duovicies of the Spanish Capital Companies Act, Mr Stefano de Angelis, the shareholder-appointed director representing Enel, did not participate in the drafting of this report. The rest of the members of the Audit and Compliance Committee took part in preparing the Report and agreed on its contents relative to the physical purchase of fuel oil by Endesa Generación, S.A.U. from Eni Trade & Biofuels, S.p.A. to be supplied to ENDESA generation plants in Ceuta and Melilla. In light of all the aforementioned background, the Audit and Compliance Committee concludes that: The Audit and Compliance Committee concludes that the physical purchase of fuel oil by Endesa Generación, S.A.U. from Eni Trade & Biofuels, S.p.A. is fair and reasonable from the standpoint of Endesa and its shareholders other than the related party.. VII. CONCLUSION OF THE BOARD OF DIRECTORS Endesa's Board of Directors, following a favourable report from the Audit and Compliance Committee, has unanimously approved all transactions. REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE ON THE FAIRNESS AND REASONABLENESS OF THE CONTRACTS FOR THE PROVISION OF TECHNICAL AND MANAGEMENT SUPPORT SERVICES BETWEEN THE ENEL GROUP AND ENDESA FOR 2025 REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE ON THE FAIRNESS AND REASONABLENESS OF THE CONTRACTS FOR THE PROVISION OF TECHNICAL AND MANAGEMENT SUPPORT SERVICES BETWEEN THE ENEL GROUP AND ENDESA FOR 2024 I. INTRODUCTION AND REGULATORY FRAMEWORK In accordance with the provisions of paragraph 3 of article 529 duovicies of the amended and restated Spanish Capital Corporations Law, as approved by Royal Legislative Decree 1/2010, of 2 July, Endesa’s Audit and Compliance Committee hereby issues this Report to assess whether the transaction is fair and reasonable from the standpoint of the company and, where appropriate, shareholders other than the related party, and indicate the assumptions on which the assessment is based and the methods used. In accordance with Article 529 unvicies, paragraph 3, the Report issued and, as the case may be, published by Endesa’s Audit and Compliance Committee, must at least include the following information: (a) information on the nature of the transaction and the relationship with the related party; (b) the identity of the related party; (c) the date and the value or amount of the consideration for the transaction; and (d) any other information required to assess whether this is fair and reasonable from the standpoint of the company and of shareholders who are not related parties. Furthermore, Endesa has developed its own internal regulatory framework in this area, which includes, inter alia, a Related-Party Transaction Regulations approved by the Board of Directors, as well as a Related-Party Transaction Operating Procedure approved by the Audit and Compliance Committee, implementing the guidelines set forth in the Regulations and defining the proceedings, functions and responsibilities relating to the general rules on requests for and the approval, publication and monitoring of related-party transactions. This regulation has been applied in this case. II. OVERVIEW OF THE TRANSACTION a) Purpose of the transaction. Endesa and its subsidiaries have been receiving management support services and certain technical services from the Enel Group and its subsidiaries since the 2009 financial year. During this time, the service delivery model has adapted to the changes in the Group's organisational structure and technical improvements have been introduced. The purpose of the transaction " Contracts for the provision of technical and management support services between the Enel Group and Endesa for 2025" is the renewal of the support services provided by the Enel Group to the Corporate areas of the Endesa Group, as well as the provision of Technical Services to its Business areas. These may also be regarded as reciprocity contracts, i.e., the Endesa Group may also provide services to the Enel Group. It should be noted that the services proposed for the Corporate and Business areas are associated with procurement management activities and with maintenance and development of computer and telecommunications systems. The contracts are executed between each supplier company and each recipient company, and are comprised of the following documents: - Limited catalogue of services and activities to be performed, which are likely to create an advantage or benefit for the recipient, together with a pre-set list of documents (deliverables) aimed at evidencing the effective provision of services. - Quoted price of each service, established in accordance with the current Spanish transfer pricing regulations. In 2024, the catalogue included 337 services (80 management support services and 248 technical services). For the 2025 catalogue, 400 services are proposed (91 management support services and 309 technical services). Certain adjustments have also been proposed, which do not affect the service catalogue but rather concern the definition of the activities encompassed by some of the existing services, as well as the deliverables of such activities. The services are provided through the following contracts: - Management, Procurement and ICT Support Services , provided by Enel, SpA to Endesa, S.A. and its subsidiaries. The management support services are provided to the Group companies under the following main areas or categories: AFC (Administration, Finance and Insurance, Planning and Control, Risk Management and Strategy), Legal and Corporate Affairs, European Affairs, Innovation, Sustainability, Communication, People and Organisation. - Technical, Procurement and ICT Services for the Power Generation Business, provided by Enel Green Power SpA to Endesa Generación, S.A. and its subsidiaries: The services of the Power Generation business line are associated with (i) the production of conventional electricity, focusing on the operation of coal, combined cycle and fuel-gas thermal power plants; and (ii) renewable energy sector (hydroelectric, wind and solar plants). - Technical, Procurement and ICT Services for the Distribution Business , provided by Enel Grids SrL to Distribuidora Eléctrica del Puerto de la Cruz, S.A., E-Distribución Eléctrica, S.L., and Endesa Ingeniería, S.L. - Technical, Procurement and ICT Services for the Marketing Business , provided by Enel Global Services and Enel X to Endesa Energía S.A. and its subsidiaries. - Technical and ICT Services for the Energy Management Business , provided by Enel Global Trading, SpA to Endesa, S.A. (including a mandate for trading in commodities markets). - In addition, and transversally, Enel (and its subsidiaries) provides ICT services to the Endesa Group. In particular, each business line has an operational group that has been specifically appointed to address all cyber-security issues and matters, another operational group that provides technology and infrastructure services, as well as other services related to specific projects in each area. - Finally, and as in the previous case, in a cross-cutting manner Enel (and its subsidiaries) provides the Endesa Group with procurement services across all of Endesa's businesses, except for the Energy and Commodity Management business lines.  Contractual terms and conditions of the services: - The contract will have a one-year term that can be extended for successive periods of equal duration. The contracts shall be considered executed on the date they are approved by Endesa's Board of Directors, i.e. on 15 November 2024, but effective from 1 January 2025 to 31 December 2025. The contracts will be extended for one-year periods, unless prior notice of termination of at least one month is given by any of the parties and, in the case of Endesa, always based on a report issued by the Audit and Compliance Committee and the approval of its Board of Directors or General Shareholders' Meeting, as appropriate. The Audit and Compliance Committee has explicitly established the need for the contract extension to be reviewed every year by the Committee itself. To decide on the contract renewals, a specific mechanism has been established for any of the parties to request an update of the List of Services and in which the Supplier undertakes to deliver a proposal with new prices for those services. - The contracts may be terminated prior to the expiration of its term in the following cases: - Without prior notice, if one of the parties ceases to belong to the Enel Group. In this case, the parties shall negotiate the amounts due in good faith within one month. - In case of mutual agreement between the parties. - In case of non-compliance with the obligations provided in the agreement. b) Transaction amount  The contracts for the provision of Technical and Management Support Services by Enel, SpA and some of its subsidiaries to Endesa, S.A. and its subsidiaries amount to €127.47 million for 2025, according to the following breakdown. - Management, Procurement and ICT Support Services, provided by Enel, SpA to Endesa, S.A. and its subsidiaries: 19.69 million euros. - Technical, Procurement and ICT Services for the Power Generation Business, provided by Enel Green Power SpA to Endesa Generación, S.A. and its subsidiaries: 29.87 million euros. - Technical, Procurement and ICT Services for the Distribution Business, provided by Enel Grids SrL to Distribuidora Eléctrica del Puerto de la Cruz, S.A., E-Distribución Eléctrica, S.L., and Endesa Ingeniería, S.L.: 32.01 million euros. - Technical, Procurement and ICT Services for the Marketing Business, provided by Enel Global Services and Enel X to Endesa Energía S.A. and its subsidiaries: 31.69 million euros - Technical and ICT Services for the Energy Management Business, provided by Enel Global Trading, SpA to Endesa, S.A.: 14.21 mill...

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