Enagás Group

Code of Ethics

December 2014

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Index

1. Enagás Group Code of Ethics ...................................................... 4

2. The Enagás ethics and compliance model .................................. 5

3. Guiding principles in ethics and compliance at Enagás .............. 6

3.1. Knowledge and compliance ................................................................. 6

3.2. Due diligence .................................................................................... 7

3.3. Traceability of decisions ...................................................................... 8

3.4. Communication and response .............................................................. 9

3.5. Leading by example ........................................................................... 9

4. Standards of conduct at Enagás ............................................... 10

4.1. Be trustworthy and transparent ......................................................... 10

4.2. Express rejection of fraud, corruption and bribery ................................ 11

4.3. Use company assets responsibly ........................................................ 12

4.4. Be fiscally responsible ...................................................................... 12

4.5. Establish relationships with third parties in a clear manner ................... 13

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4.6. Identify, report and manage conflicts of interest .................................. 14

4.7. Manage the information diligently ...................................................... 15

4.8. Protect people ................................................................................. 16

4.9. Protect the environment ................................................................... 18

4.10. Generate a culture of innovation ..................................................... 18

5. Management of breaches ......................................................... 20

6. Procedure for the management of consultations and reporting

regarding irregularities or breaches of the Code of Ethics .............. 21

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1. Enagás Group Code of Ethics

The ethics and compliance model of the company has been formalised through the

approval of the Enagás Group Code of Ethics (hereinafter, “Code of Ethics” or

“Code”). In this Code, a description is given of the conduct expected of its

employees, managers and directors (hereinafter, the “persons”), irrespective of

their responsibilities and their geographic or functional location.

The Code of Ethics is a regulation emanating from Enagás' management body and

therefore compliance with the Code is obligatory for all persons at Enagás.

Compliance with the Code is also obligatory, in their respective spheres of relations

with the company, for contractors, suppliers, those who collaborate with the

company or who act in its name, and its business partners. Investees will have an

ethics and compliance model that is appropriate for the environment in which they

operate.

The Code of Ethics was approved in 2008 and revised in 2012. This review and

revision of the Code, which has taken into account best practices relating to ethics

and compliance, was approved by the Board of Directors of the Company at its

meeting on 15 December 2014.

The Code of Ethics envisages the Code being implemented through policies, rules,

processes or controls that fulfil the obligations of control and supervision attributed

to the Audit and Compliance Committee of the Board of Directors. It also reinforces

the functions of the Ethical Compliance Committee as the body responsible for this

area.

This Code will be reviewed and revised as frequently as is necessary to ensure the

effectiveness of the model and make sure that the content hereof conforms to the

ethical conduct and compliance issues that are most relevant for the company at

any given time.

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2. The Enagás ethics and compliance model

The ethics and compliance model, supervised by the Audit and Compliance

Committee of the Board of Directors and led by the Ethical Compliance Committee,

is geared towards preventing and detecting risks of non-compliance, including those

linked to unlawful criminal acts, and reducing or eradicating the undesired effects

thereof in the event they materialise.

Enagás ensures appropriate monitoring and management of its compliance model

through policies, processes and internal controls implemented in the different areas

referred to by this Code.

The company has the organisation and resources necessary to ensure effective

compliance with its ethics and compliance model. The Ethical Compliance

Committee is functionally dependent on and reports directly to the Audit and

Compliance Committee of the Board of Directors. It assumes the powers relating to

the ethics and compliance model (see point 6, The Enagás Ethical Compliance

Committee).

The Audit and Compliance Committee is responsible for ensuring that the Ethical

Compliance Committee has the appropriate resources and due autonomy and

independence in the performance of its duties. The Audit and Compliance

Committee is also entrusted with assessing, monitoring and, where appropriate,

periodically reviewing the ethics and compliance model.

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3. Guiding principles in ethics and compliance at Enagás

The Code of Ethics brings together the aspects concerning ethics and compliance

that are most significant or which constitute a greater risk for the company, as

generic principles on conduct applicable to the persons at Enagás when performing

their professional activities.

The company has adopted as basics guidelines the UN Framework and Guiding

Principles on Business and Human Rights, OECD Guidelines for Multinational

Enterprises and the United Nations Global Compact, among others.

3.1. Knowledge and compliance

Enagás requires its professionals to respect and comply with the internal and

external rules and standards applicable to their professional activities, in particular

those relating to preventing unlawful criminal acts, environmental damage and the

rights of individuals. This is also required, in their respective spheres, of those who

have a relationship with the company, of its contractors, of its suppliers and of

those who collaborate with the company or who act in its name, and its business

partners.

Therefore, they must know the rules and standards; in the event of any queries,

they have different channels and information repositories available to them, in

addition to the Ethical Compliance Committee.

The obligations of the persons at Enagás also include complying with and respecting

the ethical and compliance-related processes and controls that the company

approves, in particular, statements of acceptance or attendance at training courses,

and those related to preventing criminal risks. They must also watch over the ethics

and compliance climate in the company and periodically confirm, when so

requested, that their conduct is in line with the Code of Ethics or with any of the

rules and regulations that implement it.

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3.2. Due diligence

The company adopts the principle of due diligence to prevent, detect and eradicate

irregular conduct (both of a criminal nature and of any other nature) by the persons

at Enagás. In other words, the persons at Enagás share the obligation of

preventing, identifying and reporting the appearance of irregular conduct, including

unlawful criminal acts.

Enagás acts with due diligence to prevent, detect and eradicate irregular practices.

It undertakes to inform and train appropriately both the persons at Enagás and

third parties so that they are aware of and comply with this Code of Ethics, as well

as the regulations, commitments and procedures that implement it. All such

persons receive this Code and expressly confirm their commitment to knowing,

complying with and enforcing it.

The policies, processes and controls that Enagás has defined to prevent, detect and

eradicate irregular conduct means that the company:

Carries out a periodic analysis of the risks that the company assumes and

classifies them according to their nature. In particular, the risks of criminal

liability for those offences that are applicable to Enagás (e.g., corruption and

bribery) are monitored, as well as the risks of internal and external fraud it

faces in its different operating environments.

Defines and communicates expected conduct and responsibilities in this area.

Has delegated the responsibility of periodically supervising the ethics and

compliance model to the Audit and Compliance Committee of the Board of

Directors of Enagás, S.A.

Provides training for managers, employees and directors, and periodically

requires them to confirm their compliance.

Has a management body with the due independence and autonomy and

sufficient resources, which is responsible, among other functions, for executing

and developing the model.

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Has established a procedure which allows the persons at Enagás to report

confidentially and anonymously, where appropriate, irregular conduct and

permits it to respond swiftly and efficiently.

These policies, processes and controls are reviewed periodically, are properly

documented and are accessible to the persons at Enagás through the corporate

channels and information repositories.

Due diligence in ethics and compliance also comprises suitable selection and

monitoring of the third parties with which Enagás has a business relationship:

suppliers, contractors, partners in projects or those who may act on its behalf.

Enagás informs all such third parties of its commitments regarding ethics and

compliance, including those relating to corruption and bribery.

During counterparty analyses, Enagás takes into account not only technical matters

but also the suitability of the counterparty's ethics and compliance models and to

what extent they are in line with the Enagás ethics and compliance model. In

commercial transactions, the company communicates its most significant

commitments regarding ethics and compliance and, in particular, the legal

consequences of corruption and bribery. In cases involving more significant

counterparties, the analysis is broadened to check matters regarding the company's

reputation.

Enagás reserves the right to collaborate with those third parties whose compliance

model is consistent with its own.

3.3. Traceability of decisions

The persons at Enagás must ensure that their decisions are traceable. This means

that they must be able to reasonably demonstrate (keeping of records and minutes,

among other things) that in the performance of their professional activities they

have followed the company's policies, processes and controls, and the applicable

external rules and regulations.

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3.4. Communication and response

The persons at Enagás and third parties who have a relationship with the company

must use the procedure for managing consultations and reporting regarding

irregularities or breaches of the Code of Ethics, which is headed by the Ethical

Compliance Committee to make the company aware of any irregularities or

breaches of the Code of Ethics, or of the rules and regulations implementing and

underpinning the Code, that they are aware of.

The company has a formal procedure, led by the Ethical Compliance Committee,

which provides a swift response and minimises the consequences of the possible

incidences or breaches that it is aware of.

3.5. Leading by example

The conduct of the persons at Enagás, and especially of those who lead teams,

should be a model of diligence, honesty and professionalism. These values should

be transmitted to the environments in which the company carries out its activity.

The persons at Enagás are ambassadors for the company and protect its good

name and reputation.

The procedure for assessing the performance of the persons at Enagás allows an

assessment to be made of the fulfilment by each employee of the obligations

derived from the Code of Ethics.

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4. Standards of conduct at Enagás

This Code of Ethics is intended to be a guide to conduct, aimed at the persons at

Enagás, concerning guidelines on ethical conduct and compliance issues that are

most relevant or that constitute a major risk for the company. The code

contemplates the special features specific to Enagás in its capacity as a regulated

and listed company.

A description is given below, merely as an example, of the conduct expected of the

persons at Enagás and of those parties who have a relationship with the company.

It should be recalled that the persons at Enagás must make the company aware of

any irregularities or misconduct that they observe. The channels to be used to do

this are indicated in point 6 on the procedure for the management of consultations

and reporting regarding irregularities or breaches of the Code of Ethics.

4.1. Be trustworthy and transparent

The persons at Enagás must act clearly and transparently and ensure that none of

their actions could be capable of being interpreted as misleading.

The persons at Enagás ensure the reliability and rigour (they provide accurate,

complete, understandable and timely information) of the financial and non-financial

information both for internal use and provided to the market. The accounting

policies, control systems and supervisory mechanisms defined are applied so that

the relevant information is identified, prepared and communicated in due time and

form.

The Audit and Compliance Committee of the Board of Directors of the company is

the governing body responsible for ensuring the efficiency of the system of internal

control over financial reporting. No-one at Enagás knowingly provides incorrect,

inaccurate or vague information that might mislead the person receiving it and/or

might affect the stock market value of the company or of any other company or

marketable instrument.

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They also ensure that the conditions established in the contracts are met and that

the equipment to measure or assess the services provided is operating properly. In

this respect, irregular, misleading, fraudulent or malicious behaviours that lead the

company to gain unwarranted advantages over its customers or other parties must

be avoided.

The persons at Enagás are prohibited from disposing of, transferring, assigning or

concealing any assets owned by Enagás in order to avoid fulfilling the obligations

and commitments of the company vis-à-vis third parties.

The persons at Enagás comply with the regulations on free competition,

undertaking to compete honourably and fairly, and without carrying out practices

that may be deemed criminal, anti-competitive, misleading or unfair. Commercial

activities are carried out without discrediting third parties under any circumstances.

4.2. Express rejection of fraud, corruption and bribery

In their relationships with third parties, including public authorities, the persons at

Enagás can neither offer nor accept gifts or preferential treatment that is of more

than a purely symbolic nature or that could be interpreted as an attempt to gain

undue influence.

Any gifts that go beyond the merely symbolic must be reported to the Ethical

Compliance Committee, which will decide how to handle the issue in accordance

with the internal regulations. Any gifts that are delivered or accepted will be

recorded in accordance with the Enagás procedure for managing the acceptance

and offering of gifts.

It is not acceptable to provide, either directly or via third parties, gifts or

preferential treatment or advantages to public representatives to try to persuade

them to exercise their influence in Enagás' favour. In this respect, it should be

recalled that Enagás has expressly undertaken not to fund political parties. The

company periodically reviews its accounting and internal control processes to

ensure that they cannot conceal improper payments.

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4.3. Use company assets responsibly

The persons at Enagás use the resources that the company makes available to

them prudently and diligently. They limit their use, in general, to professional

purposes and their use is always in accordance with the rules of the company.

The persons at Enagás do not use company funds (corporate cards or

reimbursement of expenses, among others) to defray expenses that are not related

with their professional activity.

The persons at Enagás cannot use the technological means placed at their disposal

for unlawful purposes or for any other activity that may harm the image or

reputation of the company, the interests of its customers or third parties or

negatively affect their dedication to their work or the operation of the company's IT

systems.

Such persons are also not allowed to install in the company's equipment or use any

programmes or applications for which express authorisation has not been received.

In the same manner, downloading, viewing or distributing illegal material or

material that infringes upon the rights of third parties or that may be offensive due

to its violent or sexual nature is not permitted. Such persons also may not access

third-party applications or equipment without being expressly authorised to do so.

The persons at Enagás must be diligent in the performance of their professional

activities to ensure that they credit the sources and that the company has acquired

the corresponding licences or rights for the material that they use.

4.4. Be fiscally responsible

Enagás encourages practices directed at preventing and reducing fiscal risks and at

avoiding opacity. It undertakes to adopt as its own the practices aimed at

improving fiscal transparency.

Enagás adopts the commitments contained in the codes of best practices defined by

the tax authorities. In this respect, the company does not make use of structures

whose purpose is to conceal relevant information from the tax authorities. The

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persons at the company will avoid under all circumstances evading payments or

obtaining undue benefits for the company. Tax payments will be carried out in

accordance with the tax regulations in force.

The persons at Enagás will diligently provide the tax information that may be

requested by the competent authorities.

In its reporting to the markets and to society, the company undertakes to report its

tax contributions in a transparent manner.

4.5. Establish relationships with third parties in a clear manner

In relationships in the public sphere, the company expressly forbids the use of

misleading or distorted information in order to obtain subsidies, tax allowances or

other types of aid or advantages.

Any request received from a civil servant or public authority that breaches the

provisions of this Code of Ethics must be reported to the Ethical Compliance

Committee as quickly as possible. In the same manner, the government aid,

subsidies and other public funds of which the company is a beneficiary are allocated

exclusively and diligently to the purpose for which they were granted.

In its dialogue with the public administrations, Enagás will conduct itself in

accordance with the Code of Conduct of the EU Transparency Register.

Both in the public and private sphere, only persons of the company who are duly

authorised may negotiate contracts. The models used and their clauses may not be

different to those authorised by Enagás unless there is express authorisation to do

so.

In relationships with third parties, unless there is express authorisation in

document format, no cash payments are permitted.

Relations with public administrations and their representatives are the responsibility

of persons at the company formally authorised to undertake this responsibility, and

they are advised to keep the principle of traceability in mind. They will keep the

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information exchanged and will keep a record of the decisions made by preparing

minutes after the meetings. Preferably, at least two representatives of the

companies will attend the meetings.

4.6. Identify, report and manage conflicts of interest

The persons at Enagás must avoid becoming involved in situations or taking

decisions in which a conflict, whether direct or indirect, could be understood to exist

between their personal interests or those of people close to them, and the interests

of the company.

Conflicts of interest may arise when a decision taken by a person at Enagás could

mean a benefit for that person or for a person with whom they have a family,

emotional or business relationship.

The persons at Enagás act in the best interests of the company when performing

their duties and do not take into consideration their own interests or those of third

parties. They also abstain from participating in processes or decisions in which a

conflict of interest could be understood to exist and they do not take personal

advantage of opportunities of which they have become aware or information in the

performance of their professional duties.

The persons at Enagás will follow the rules and procedures established by the

company for this purpose on incompatibilities or the performance of other

professional activities.

The persons at Enagás must make the Ethical Compliance Committee aware of any

information or consultation regarding conflicts of interest in which they may be

involved or they may observe. This Committee is entrusted with proposing the best

solution.

The directors are subject to the rules on conflicts of interest that are laid down in

the Regulations of the Board of Directors and other applicable regulations.

In terms of the Technical Management of Spain's Gas System, the persons at

Enagás comply strictly and without exception with the conduct guidelines contained

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in the Code of Conduct of the Technical System Manager, which ensures

management that is neutral and independent from the rest of the activities of the

company and of all the operators in Spain's gas system. In addition, they apply the

internal processes and protocols that ensure the confidentiality of the information

they have access to and enable situations of conflicts of interest to be identified and

resolved.

The persons at Enagás with responsibilities in relations with suppliers, contractors

and collaborating companies must make sure that they act impartially, objectively

and transparently, that they follow the established procedures and that

commercially sensitive information is suitably protected and not shared with third

parties.

4.7. Manage the information diligently

In general, the information that the persons at Enagás have access to in the

performance of their professional activities is privileged or confidential and must be

treated as such.

The duty of confidentiality and privacy that applies to the persons at Enagás will

continue to apply indefinitely, even when the employment relationship with the

company has concluded.

In the information about the market, the persons at Enagás must not use

information that has been obtained in an inappropriate manner or information that

is confidential without having express authorisation for its use from its legitimate

owners, as in the case of information belonging to other natural or legal persons.

The persons at Enagás must be especially careful to avoid breaching company

secrets.

The management of the information also refers to the management of that

information which due to its nature may affect the personal sphere of the owner.

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Authorisations for use of personal data must be in response to express requests, be

concrete and specific, and have a fixed term of validity. The company keeps a

register regarding what data each person can access and for what purpose.

The persons at Enagás with access to inside information will abstain from using it to

their own benefit or to that of third parties, or from furnishing it to third parties

such that they are able to make undue use of it. In any case, the rules of conduct

established in the securities market legislation and those provided in the Internal

Code of Conduct in Matters Relating to the Securities Markets established for the

purpose must be complied with.

4.8. Protect people

Enagás and the persons at Enagás are diligent in protecting the rights of the

employees and third parties.

The company undertakes to protect the human rights of its employees, of those

who collaborate with the company and of those who are affected by its activity.

In this respect, the company safeguards compliance with the agreements and

recommendations ratified at national level of the ILO on multinational enterprises

and regarding employment, training, working conditions and professional

relationships.

In addition, following the recommendations contained in the UN Guiding Principles

on Business and Human Rights, Enagás exercises due control in these matters and

has policies, processes and controls, contained in its employment rules and

regulations, that enable it to prevent, detect and eradicate irregularities in this

area, including illegal employment, the hiring of underage workers and other issues

related to children's rights.

The persons at Enagás expressly reject abuse of authority and harassment of

whatever nature, as well as conduct that may generate an intimidating, offensive or

hostile work environment. The company also expressly rejects discrimination based

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on gender, race, disability, sexual orientation, religious beliefs, political opinions or

any other circumstance, such as age, that may be the cause of discrimination.

In addition, the company encourages equal opportunities and diversity through an

Equality Plan and initiatives in this area.

The selection and performance assessment processes are based on equal

opportunities, merit, and objective and transparent circumstances and evaluations

relating to the capacity of the people and the added value they contribute with their

work.

Enagás promotes work-life balance, so that the persons at Enagás are aware of and

have access to measures relating to work-life balance regarding the family, health,

development, safety or leisure, among others.

Enagás has adopted the principles regarding health and safety that can be found in

the Voluntary Principles on Security and Human Rights, which establish, among

other aspects, the need to offer training on human rights to the employees who

provide facility protection services.

Furthermore, the persons at Enagás are diligent in self-protection and the

protection of those who form part of their environment, including contractors and

suppliers, making sure they are alert to the detection of possible deficiencies and

the immediate correction thereof. They must report the existence of dangerous

situations that they are aware of, and of the possible inefficiency or

inappropriateness of the personal or collective protection equipment.

In the same manner, the persons at Enagás must avoid adopting behaviours, or

carrying out or collaborating in actions that may put their own safety or that of

third parties at risk, including the deactivation of personal or collective protection

equipment, or imposing working or safety conditions on third parties that are

detrimental to, suppress or restrict their rights.

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4.9. Protect the environment

The persons at Enagás are responsible for contributing to minimise the company's

environmental impact. In the case that environmental impacts occur, they ensure

that the protocols are activated quickly so that they can be corrected immediately.

In its relations with third parties, Enagás ensures that their performance on

environmental issues is consistent with that of the company.

The persons at Enagás, according to the scope of their responsibility, must be

sufficiently familiar with the laws and the policies, processes and controls of the

company in this area which form part of its environmental regulations. In

particular, and depending on their responsibilities, they must ensure that the

environmental information reported inside the company and outside it is correct.

Enagás promotes its commitment to the environment among its suppliers,

contractors and collaborating companies. The organisations contracted by and that

collaborate with Enagás must conduct their activities in accordance with the

environment protection guidelines and principles established by the company.

Building, demolition, remodelling or restoration works, among others, must be

carried out after having obtained the corresponding licences and authorisations.

The persons at Enagás treat possible environmental consultations or complaints

that they receive from the communities nearby its facilities diligently and swiftly

through the channels that the company has made available (ethics channel,

environmental email or Environmental Impact Study consultation processes, among

others) and make sure that they are made known to the company as quickly as

possible.

4.10. Generate a culture of innovation

The persons at Enagás collaborate and work together in teams to take best

advantage of the time and resources that Enagás makes available to them.

The persons at Enagás work efficiently, harnessing the knowledge, talent, abilities

and experience of those who are part of the company.

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The persons at Enagás utilise the means placed by the company at their disposal to

improve their abilities and skills, for the benefit of everyone and for their own

benefit.

In addition, they collaborate respectfully to generate a favourable work

environment in which to perform their activities and to generate ideas, avoiding

destructive criticism. In this respect, the leaders have a receptive attitude to the

ideas and suggestions of the Enagás employees.

The company supports and encourages the generation of ideas through specific

communication channels and an attitude of assuming controlled risks.

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5. Management of breaches

The Audit and Compliance Committee of the Board of Directors of Enagás, S.A. is

responsible for supervising due execution of the ethics and compliance model,

which includes supervision and control measures to prevent irregularities and

offences. Enagás has an Ethical Compliance Committee which reports directly to the

Audit and Compliance Committee and which will be responsible for supervising the

operation of the ethics and compliance model.

In cases where the application of the national legislation of any of the countries

where Enagás carries out its activity requires or makes it advisable to clarify,

supplement or develop any of the standards of professional conduct established in

the code, that clarification, supplement or development must be reported by the

Ethical Compliance Committee to the Audit and Compliance Committee of the

company's Board of Directors and will exclusively be applied to the country in

question.

No employee, manager or director is authorised to breach the provisions of this

Code of Ethics, not even in response to the order from a direct superior.

Possible breaches of the code and of the rules and regulations that implement it are

analysed by the Ethical Compliance Committee, with autonomous powers of

initiative and control that all the persons at Enagás must respect and whose

functions and basic rules governing organisation and operation are implemented in

the Procedure for the Operation of the Ethical Compliance Committee.

In the case that a director has generated a breach, the provisions of the

Regulations of the Board of Directors or other applicable regulations will apply.

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6. Procedure for the management of consultations and reporting

regarding irregularities or breaches of the Code of Ethics

Enagás has established the procedure for the management of consultations and

reporting regarding irregularities or breaches of the Code of Ethics with the aim of

fostering compliance with the Code of Ethics and with the rules and regulations that

implement it.

The company enables the persons at Enagás and its suppliers, contractors, those

who collaborate with the company or who act in its name, and its business

partners, to raise queries and report irregularities or breaches through the following

channels or through any other medium that the company may establish in the

future:

Electronic mailbox: canal.etico@enagas.es

A letter sent by post to any member of the Ethical Compliance Committee (see

members in the procedure for the operation of the Ethical Compliance

Committee).

Dedicated fax line. The communications are received personally by the

Chairman of the Ethical Compliance Committee. Fax: 91 709 60 96

Information and a communication channel on the corporate intranet.

The consultation or reporting should include the information necessary to identify

the person who reports the fact and a description of the consultation or report.

The Ethical Compliance Committee is responsible for the processing of consultations

and reporting through the ethics channel, in accordance with the protocol defined

by the company. The Committee may avail itself of the addresses or branches of

Enagás that it deems appropriate in each case.

Preferably, the person carrying out the consultation and reporting should give his or

her name, and all communications will be studied and treated confidentially. The

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personal data of any individuals involved will be handled in accordance with Spanish

Data Protection Law (Ley Orgánica 15/1999, de Protección de Datos).

Any retaliation taken against individuals who have used the ethics channel in good

faith to report possible misconduct will not be tolerated.

The existence of the ethics channel is understood to be without prejudice to any

other mechanisms that are deemed appropriate to create in order to allow the

reporting of irregularities with potentially serious implications.