Select key audit issues. You can find them, in the Key Audit Matters paragraphs. For each one, explain auditors reasons of concern with that issue and how the described audit procedures being applied, can give response to them

pwc Acerinox, S.A. and subsidiaries Key audit matter Goodwill recovery How our audit addressed the key audit matter As indicated in Notes 2.8, 2.12 and 7.1 of the First, we have proceeded to understand the accompanying consolidated report, the Group relevant processes and controls related to the carnes out at least at the end of each fiscal evaluation of impairment in goodwill by the Group year, the estimate of the recoverable value of Management, including those related to the goodwill preparation of budgets and the analysis and monitoring of projections, which constitute the For calculations of recoverable value, the basis for the main judgments and estimates made Group uses cash flow projections based on financial budgets approved by the by the Group Management Management that require relevant judgments and estimates that include, among others, the With regard to cash flows, we have verified the operating result on sales and discount and calculations made and compared the projected growth rates in the long term, considering that annual flows, which are based on the plans and the projected flows are subject to uncertainty. budgets approved by the Group Management The most significant assumptions used by the with those actually achieved in the year 2019. Group are summarized in Note 7.1 of the attached consolidated report. Likewise, we question the key assumptions used by the Group Management, contrasting them with As mentioned in this Note 7.1, in the year 2019 historical comparable results available and other there was an impairment of 67,889 thousand external sources. For this we have relied on euros corresponding to the entire goodwill experts in valuations of our firm that have linked to the acquisition during 2002 of a evaluated the methodology and key assumptions controlling interest in the company Columbus used to calculate the current value of the flows Stainless, Ltd estimated by the Group Deviations in these variables and management estimates can determine important variations Additionally, we have assessed the in the calculations made and therefore, in the reasonableness of the sensitivity analysis broken goodwill recovery analysis down in the accompanying consolidated annual accounts report This fact, together with the relevance of the consequent deterioration recorded, motivates it As a result of the analysis performed, we consider to be a key issue for our audit that the conclusions of the Group Management on the estimates made and the consequent deterioration recorded, as well as the information disclosed in the attached consolidated annual accounts are adequately supported and consistent with the information currently available. Recovery of property, plant and equipment As indicated in Notes 2.12 and 8.1 of the As a starting point for our procedures, we have accompanying consolidated report, the Group understood the relevant processes and controls assesses at the end of each fiscal year if there related to the evaluation of impairments in are indications of impairment of assets. If there property, plant and equipment by the Group Management, including those related to the recoverable amount. Note 8.1 details the cash preparation of budgets and the analysis and Generating units (CGUS) that show signs of monitoring of projections, which constitute the deterioration basis for the main judgments and estimates made by the Group Management 2 pwc Acerinox, S.A. and subsidiaries Key audit matter Goodwill recovery How our audit addressed the key audit matter As indicated in Notes 2.8, 2.12 and 7.1 of the First, we have proceeded to understand the accompanying consolidated report, the Group relevant processes and controls related to the carnes out at least at the end of each fiscal evaluation of impairment in goodwill by the Group year, the estimate of the recoverable value of Management, including those related to the goodwill preparation of budgets and the analysis and monitoring of projections, which constitute the For calculations of recoverable value, the basis for the main judgments and estimates made Group uses cash flow projections based on financial budgets approved by the by the Group Management Management that require relevant judgments and estimates that include, among others, the With regard to cash flows, we have verified the operating result on sales and discount and calculations made and compared the projected growth rates in the long term, considering that annual flows, which are based on the plans and the projected flows are subject to uncertainty. budgets approved by the Group Management The most significant assumptions used by the with those actually achieved in the year 2019. Group are summarized in Note 7.1 of the attached consolidated report. Likewise, we question the key assumptions used by the Group Management, contrasting them with As mentioned in this Note 7.1, in the year 2019 historical comparable results available and other there was an impairment of 67,889 thousand external sources. For this we have relied on euros corresponding to the entire goodwill experts in valuations of our firm that have linked to the acquisition during 2002 of a evaluated the methodology and key assumptions controlling interest in the company Columbus used to calculate the current value of the flows Stainless, Ltd estimated by the Group Deviations in these variables and management estimates can determine important variations Additionally, we have assessed the in the calculations made and therefore, in the reasonableness of the sensitivity analysis broken goodwill recovery analysis down in the accompanying consolidated annual accounts report This fact, together with the relevance of the consequent deterioration recorded, motivates it As a result of the analysis performed, we consider to be a key issue for our audit that the conclusions of the Group Management on the estimates made and the consequent deterioration recorded, as well as the information disclosed in the attached consolidated annual accounts are adequately supported and consistent with the information currently available. Recovery of property, plant and equipment As indicated in Notes 2.12 and 8.1 of the As a starting point for our procedures, we have accompanying consolidated report, the Group understood the relevant processes and controls assesses at the end of each fiscal year if there related to the evaluation of impairments in are indications of impairment of assets. If there property, plant and equipment by the Group Management, including those related to the recoverable amount. Note 8.1 details the cash preparation of budgets and the analysis and Generating units (CGUS) that show signs of monitoring of projections, which constitute the deterioration basis for the main judgments and estimates made by the Group Management 2