SID Companhia Siderurgica Nacional

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Table of Contents

 

Company Information
Capital Breakdown	1
Parent Company Financial Statements
Balance Sheet – Assets	2
Balance Sheet – Liabilities	3
Statement of Income	4
Statement of Comprehensive Income	5
Statement of Cash Flows	6
Statement of Changes in Shareholders’ Equity
01/01/2021 to 03/31/2021	8
01/01/2020 to 03/31/2020	9
Statement of Value Added	10
Consolidated Financial Statements
Balance Sheet – Assets	11
Balance Sheet - Liabilities	12
Statement of Income	14
Statement of Comprehensive Income	15
Statement of Cash Flows	16
Statement of Changes in Shareholders’ Equity
01/01/2021 to 03/31/2021	18
01/01/2020 to 03/31/2020	19
Statement of Value Added	20
Comments on the Company’s Consolidated Performance
Notes to the quarterly financial information	21
Comments on the Performance of Business Projections
Reports and Statements
Unqualified Independent Auditors’ Review Report	68

 

 

 

Company Information / Capital Breakdown

 

Number of Shares (Units)	Current quarter 03/31/2021
Paid-in Capital
Common	1,387,524,047
Preferred	0
Total	1,387,524,047
Treasury Shares
Common	7,409,500
Preferred	0
Total	7,409,500

 

 

 

 

Parent Company Financial Statements / Balance Sheet - Assets
(R$ thousand)
Code	Description	Current Quarter 03/31/2021	Previous Year 12/31/2020
1	Total Assets	55,794,836	53,196,550
1.01	Current assets	15,965,807	14,879,594
1.01.01	Cash and cash equivalents	5,126,462	4,647,125
1.01.02	Financial investments	4,279,964	3,780,891
1.01.02.01	Financial investments measured a fair value through profit or loss	3,817,603	3,305,109
1.01.02.01.03	Financial investments measured a fair value through profit or loss – Usiminas’ shares	3,817,603	3,305,109
1.01.02.03	Financial investments at amortized cost	462,361	475,782
1.01.03	Trade receivables	1,699,363	1,549,703
1.01.04	Inventory	3,625,618	3,014,446
1.01.06	Recoverable taxes	959,735	1,381,853
1.01.08	Other current assets	274,665	505,576
1.01.08.03	Others	274,665	505,576
1.01.08.03.02	Prepaid expenses	116,588	94,782
1.01.08.03.03	Dividends receivable	28,156	329,413
1.01.08.03.04	Others	129,921	81,381
1.02	Non-current assets	39,829,029	38,316,956
1.02.01	Long-term assets	8,536,877	8,406,417
1.02.01.03	Financial investments at amortized cost	132,635	123,409
1.02.01.07	Deferred taxes assets	3,785,791	3,799,707
1.02.01.10	Other non-current assets	4,618,451	4,483,301
1.02.01.10.03	Recoverable taxes	762,776	738,431
1.02.01.10.04	Judicial deposits	224,675	221,016
1.02.01.10.05	Prepaid expenses	91,568	99,834
1.02.01.10.06	Receivable from related parties	2,019,900	1,907,877
1.02.01.10.07	Others	1,519,532	1,516,143
1.02.02	Investments	24,080,191	19,546,493
1.02.02.01	Equity interest	23,935,793	19,401,494
1.02.02.02	Investment Property	144,398	144,999
1.02.03	Property, plant and equipment	7,173,674	10,315,724
1.02.03.01	Property, plant and equipment in operation	6,210,917	8,598,597
1.02.03.02	Right of use in leases	21,769	64,659
1.02.03.03	Property, plant and equipment in progress	940,988	1,652,468
1.02.04	Intangible assets	38,287	48,322

 

 

 

 

 

 

 

Parent Company Financial Statements / Balance Sheet – Liabilities
(R$ thousand)
Code	Description	Current Quarter 03/31/2021	Previous Year 12/31/2020
2	Total Liabilities	55,794,836	53,196,550
2.01	Current liabilities	11,488,593	10,756,084
2.01.01	Payroll and related taxes	135,204	138,761
2.01.02	Trade payables	4,167,535	4,133,089
2.01.03	Tax payables	339,343	289,095
2.01.04	Borrowings and financing	3,547,956	3,858,493
2.01.05	Other payables	3,256,079	2,302,188
2.01.05.02	Others	3,256,079	2,302,188
2.01.05.02.04	Dividends and interests on shareholder´s equity	901,982	901,983
2.01.05.02.05	Advances from clients	169,877	196,595
2.01.05.02.06	Trade payables – Forfaiting and Drawee risk	1,469,209	623,861
2.01.05.02.07	Lease liabilities	7,829	26,546
2.01.05.02.08	Other payables	707,182	553,203
2.01.06	Provisions	42,476	34,458
2.01.06.01	Provision for tax, social security, labor and civil risks	42,476	34,458
2.02	Non-current liabilities	29,918,755	32,527,015
2.02.01	Borrowings and financing	21,320,194	24,423,753
2.02.02	Other payables	513,345	771,292
2.02.02.02	Others	513,345	771,292
2.02.02.02.03	Lease liabilities	15,771	40,561
2.02.02.02.04	Derivative financial instruments	119,306	97,535
2.02.02.02.05	Trade payables	145,301	376,753
2.02.02.02.06	Other payables	232,967	256,443
2.02.04	Provisions	8,085,216	7,331,970
2.02.04.01	Provision for tax, social security, labor and civil risks	359,211	401,157
2.02.04.02	Other provisions	7,726,005	6,930,813
2.02.04.02.03	Provision for environmental liabilities and decommissioning of assets	181,260	229,524
2.02.04.02.04	Pension and healthcare plan	758,426	758,426
2.02.04.02.05	Provision for losses on investments	6,786,319	5,942,863
2.03	Shareholders’ equity	14,387,488	9,913,451
2.03.01	Paid-up capital	6,040,000	6,040,000
2.03.02	Capital reserves	32,720	32,720
2.03.04	Earnings reserves	5,824,350	5,824,350
2.03.04.01	Legal reserve	468,291	468,291
2.03.04.02	Statutory reserve	5,414,323	5,414,323
2.03.04.09	Treasury shares	(58,264)	(58,264)
2.03.05	Accumulated earnings (losses)	5,240,015	-
2.03.08	Other comprehensive income	(2,749,597)	(1,983,619)

 

 

 

Parent Company Financial Statements / Statement of Income
(R$ thousand)
Code	Description	Year to date 01/01/2021 to 03/31/2021	YTD previous year  01/01/2020 to 03/31/2020
3.01	Revenues from sale of goods and rendering of services	5,373,279	3,031,309
3.02	Costs from sale of goods and rendering of services	(3,689,909)	(2,778,380)
3.03	Gross profit	1,683,370	252,929
3.04	Operating (expenses)/income	3,302,930	(1,262,912)
3.04.01	Selling expenses	(167,212)	(162,239)
3.04.02	General and administrative expenses	(57,691)	(50,192)
3.04.04	Other operating income	2,531,577	74,847
3.04.05	Other operating expenses	(393,647)	(534,638)
3.04.06	Equity in results of affiliated companies	1,389,903	(590,690)
3.05	Income before financial income (expenses) and taxes	4,986,300	(1,009,983)
3.06	Financial income (expenses)	409,488	(351,172)
3.06.01	Financial income	579,338	53,376
3.06.02	Financial expenses	(169,850)	(404,548)
3.06.02.01	Net exchange differences over financial instruments	172,004	931,016
3.06.02.02	Financial expenses	(341,854)	(1,335,564)
3.07	Income before income taxes	5,395,788	(1,361,155)
3.08	Income tax and social contribution	(155,773)	304
3.09	Net income  from continued operations	5,240,015	(1,360,851)
3.11	Net income for the year	5,240,015	(1,360,851)
3.99	Earnings per share – (Reais / Share)	-	-
3.99.01	Basic earnings per share	-	-
3.99.01.01	Common shares	3.7968	-                 0.9860
3.99.02	Diluted earnings per share	-	-
3.99.02.01	Common shares	3.7968	-                 0.9860

 

 

 

 

 

 

Parent Company Financial Statements / Statement of Comprehensive Income
(R$ thousand)
Code	Description	Year to date 01/01/2021 to 03/31/2021	YTD previous year  01/01/2020 to 03/31/2020
4.01	Net income for the year	5,240,015	(1,360,851)
4.02	Other comprehensive income	(765,978)	(4,643,683)
4.02.01	Actuarial gains/(losses) over pension plan of subsidiaries, net of taxes	20	31
4.02.02	Cumulative translation adjustments for the year	86,119	380,042
4.02.03	(Loss)/gain on the percentage change in investments	814,285	-
4.02.04	Losses in cash flow hedge	(1,919,129)	(5,390,043)
4.02.05	Cash flow hedge reclassified to income upon realization	252,250	364,818
4.02.06	(Loss)/gain cash flow hedge accounting  –  “Platts”, net taxes,  from investments in subsidiaries	477	-
4.02.07	(Loss)/ gain in cash flow hedge from investments in subsidiaries	-	1,469
4.03	Comprehensive income for the year	4,474,037	(6,004,534)

 

 

 

 

 

 

 

 

Parent Company Financial Statements / Statements of Cash Flows – Indirect Method
(R$ thousand)
Code	Description	Year to date 01/01/2021 to 03/31/2021	YTD previous year  01/01/2020 to 03/31/2020
6.01	Net cash from operating activities	2,702,452	(43,913)
6.01.01	Cash from operations	1,289,494	145,068
6.01.01.01	Net income for the year	5,240,015	(1,360,851)
6.01.01.02	Financial charges in borrowing and financing raised	190,877	276,982
6.01.01.03	Financial charges in borrowing and financing granted	(7,780)	(16,540)
6.01.01.04	Charges on lease liabilities	540	956
6.01.01.05	Equity in results of affiliated companies	(1,389,903)	590,690
6.01.01.06	Deferred taxes assets	13,916	(304)
6.01.01.07	Provision for tax, social security, labor, civil and environmental risks	(33,928)	(10,090)
6.01.01.08	Monetary and exchange variations, net	19,420	(547,893)
6.01.01.09	Write-off of property, plant and equipment right of use and Intangible assets	1,680	-
6.01.01.10	Provision for environmental liabilities and decommissioning of assets	19,094	11,411
6.01.01.11	Updated shares – Fair value through profit or loss	(543,498)	962,561
6.01.01.12	Depreciation, amortization and depletion	201,989	209,495
6.01.01.13	Accrued/(reversal) for consumption and services	25,072	21,527
6.01.01.14	Net gains on the sale of the shares of the CSN Mineração.	(2,472,497)	-
6.01.01.15	Receivables by indemnity	(4,428)	-
6.01.01.16	Other provisions	28,925	7,124
6.01.02	Changes in assets and liabilities	1,412,958	(188,981)
6.01.02.01	Trade receivables - third parties	(465,880)	(19,768)
6.01.02.02	Trade receivables - related parties	212,549	(394,990)
6.01.02.03	Inventory	(775,575)	266,412
6.01.02.04	Receivables - related parties/dividends	1,234,790	814
6.01.02.05	Tax assets	369,455	82,873
6.01.02.06	Judicial deposits	(9,643)	902
6.01.02.09	Trade payables	38,566	326,875
6.01.02.10	Trade payables – Forfaiting and Drawee risk	845,348	(183,736)
6.01.02.11	Payroll and related taxes	5,896	(14,616)
6.01.02.12	Tax payables	53,558	5,679
6.01.02.13	Payables to related parties	21,590	113,756
6.01.02.14	Advance with related parties	-	(20,289)
6.01.02.15	Interest paid	(208,835)	(268,170)
6.01.02.16	Interest received	-	198
6.01.02.19	Others	91,139	(84,921)

 

 

6.02	Net cash investment activities	2,863,731	(297,419)
6.02.01	Investments / AFAC / Acquisitions of Shares	(32,550)	(2,180)
6.02.02	Purchase of property, plant and equipment, intangible assets and  investment  property	(195,882)	(196,628)
6.02.05	Intercompany loans granted	(88,158)	(98,614)
6.02.06	Intercompany loans received	-	4,076
6.02.08	Financial Investments, net of redemption	15,709	(4,073)
6.02.09	Net cash received from sale of CSN Mineração's shares	3,164,612	-
6.03	Net cash used in financing activities	(5,086,846)	1,375,211
6.03.01	Borrowings and financing raised	40,903	80,744
6.03.02	Transactions cost - Borrowings and financing	(11,423)	(1,980)
6.03.03	Borrowings and financing – related parties	1,394,275	2,205,145
6.03.04	Amortization of borrowings and financing	(3,226,111)	(889,247)
6.03.05	Amortization of borrowings and financing - related parties	(3,282,109)	(13,053)
6.03.06	Amortization of leases	(2,381)	(6,262)
6.03.07	Dividends and interest on shareholder’s equity	-	(136)
6.05	Increase (decrease) in cash and cash equivalents	479,337	1,033,879
6.05.01	Cash and equivalents at the beginning of the year	4,647,125	392,107
6.05.02	Cash and equivalents at the end of the year	5,126,462	1,425,986

 

 

 

 

 

 

 

 

 

 

Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2021 to 03/31/2021
(R$ thousand)
Code	Description	Paid-up capital	Capital reserve, granted options and treasury shares	Earnings reserve	Retained earnings (accumulated losses)	Other comprehensive income	Shareholders’ equity
5.01	Opening balances	6,040,000	32,720	5,824,350	-	(1,983,619)	9,913,451
5.03	Adjusted opening balances	6,040,000	32,720	5,824,350	-	(1,983,619)	9,913,451
5.05	Total comprehensive income	-	-	-	5,240,015	(765,978)	4,474,037
5.05.01	Net income for the period	-	-	-	5,240,015	-	5,240,015
5.05.02	Other comprehensive income	-	-	-	-	(765,978)	(765,978)
5.05.02.04	Translation adjustments for the year	-	-	-	-	86,119	86,119
5.05.02.06	Actuarial gains/(losses) on pension plan, net of taxes	-	-	-	-	20	20
5.05.02.07	(Loss) / gain on the percentage change in investments	-	-	-	-	814,285	814,285
5.05.02.08	(Loss) / gain on cash flow hedge accounting	-	-	-	-	(1,666,402)	(1,666,402)
5.07	Closing balance	6,040,000	32,720	5,824,350	5,240,015	(2,749,597)	14,387,488

 

 

 

 

 

 

 

 

 

 

Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2020 to 03/31/2020
(R$ thousand)
Code	Description	Paid-up capital	Capital reserve, granted options and treasury shares	Earnings reserve	Retained earnings (accumulated losses)	Other comprehensive income	Shareholders’ equity
5.01	Opening balances	4,540,000	32,720	4,431,200	-	1,170,624	10,174,544
5.03	Adjusted opening balances	4,540,000	32,720	4,431,200	-	1,170,624	10,174,544
5.05	Total comprehensive income	-	-	-	(1,360,851)	(4,643,683)	(6,004,534)
5.05.01	Net income for the period	-	-	-	(1,360,851)	-	(1,360,851)
5.05.02	Other comprehensive income	-	-	-	-	(4,643,683)	(4,643,683)
5.05.02.04	Translation adjustments for the year	-	-	-	-	380,042	380,042
5.05.02.06	Actuarial gains/(losses) on pension plan, net of taxes	-	-	-	-	31	31
5.05.02.07	(Loss) / gain on cash flow hedge accounting, net of taxes	-	-	-	-	(5,025,225)	(5,025,225)
5.05.02.08	(Loss) / gain on hedge of net investment in foreign operations	-	-	-	-	1,469	1,469
5.07	Closing balance	4,540,000	32,720	4,431,200	(1,360,851)	(3,473,059)	4,170,010

 

 

 

 

Parent Company Financial Statements / Statement of Value Added
(R$ thousand)
Code	Description	Year to date 01/01/2021 to 03/31/2021	YTD previous year  01/01/2020 to 03/31/2020
7.01	Revenues	9,911,533	3,772,385
7.01.01	Sales of products and rendering of services	6,704,021	3,769,699
7.01.02	Other revenues	3,207,624	4,729
7.01.04	Allowance for (reversal of) doubtful debts	(112)	(2,043)
7.02	Raw materials acquired from third parties	(4,924,195)	(3,469,351)
7.02.01	Cost of sales and services	(3,794,821)	(2,878,256)
7.02.02	Materials, electric power, outsourcing and other	(1,094,613)	(585,281)
7.02.03	Impairment/recovery of assets	(34,761)	(5,814)
7.03	Gross value added	4,987,338	303,034
7.04	Retentions	(201,725)	(209,001)
7.04.01	Depreciation, amortization and depletion	(201,725)	(209,001)
7.05	Value added created	4,785,613	94,033
7.06	Value added received	2,017,352	(392,985)
7.06.01	Equity in results of affiliates companies	1,389,903	(590,690)
7.06.02	Financial income	579,338	53,376
7.06.03	Others	48,111	144,329
7.06.03.01	Others and exchange gains	48,111	144,329
7.07	Value added for distribution	6,802,965	(298,952)
7.08	Value added distributed	6,802,965	(298,952)
7.08.01	Personnel	290,648	335,379
7.08.01.01	Salaries and wages	217,406	249,708
7.08.01.02	Benefits	59,829	69,873
7.08.01.03	Severance payment (FGTS)	13,413	15,798
7.08.02	Taxes, fees and contributions	1,050,027	176,027
7.08.02.01	Federal	948,460	133,501
7.08.02.02	State	101,567	42,526
7.08.03	Remuneration on third-party capital	222,275	550,493
7.08.03.01	Interest	341,854	1,335,564
7.08.03.02	Rental	4,314	1,618
7.08.03.03	Others	(123,893)	(786,689)
7.08.03.03.01	Others and exchange losses	(123,893)	(786,689)
7.08.04	Remuneration on Shareholders' capital	5,240,015	(1,360,851)
7.08.04.03	Retained earnings (accumulated losses)	5,240,015	(1,360,851)

 

 

 

Consolidated Financial Statements / Balance Sheet – Assets
(R$ thousand)
Code	Description	Current Quarter 03/31/2021	Previous Year 12/31/2020
1	Total assets	69,678,932	63,002,149
1.01	Current assets	29,770,912	23,386,194
1.01.01	Cash and cash equivalents	13,908,238	9,944,586
1.01.02	Financial investments	4,282,151	3,783,362
1.01.02.01	Financial investments measured a fair value through profit or loss	3,817,603	3,305,109
1.01.02.01.03	Financial investments measured a fair value through profit or loss – Usiminas’ shares	3,817,603	3,305,109
1.01.02.03	Financial investments at amortized cost	464,548	478,253
1.01.03	Trade receivables	4,219,052	2,867,352
1.01.04	Inventory	5,673,189	4,817,586
1.01.06	Recoverable taxes	1,199,100	1,605,494
1.01.08	Other current assets	489,182	367,814
1.01.08.03	Others	489,182	367,814
1.01.08.03.02	Prepaid expenses	266,824	211,027
1.01.08.03.03	Dividends receivable	38,086	38,088
1.01.08.03.04	Derivative financial instruments	39,236	-
1.01.08.03.05	Others	145,036	118,699
1.02	Non-current assets	39,908,020	39,615,955
1.02.01	Long-term assets	9,080,505	8,887,158
1.02.01.03	Financial investments at amortized cost	132,635	123,409
1.02.01.05	Inventory	381,175	347,304
1.02.01.07	Deferred taxes assets	3,929,974	3,874,946
1.02.01.10	Other non-current assets	4,636,721	4,541,499
1.02.01.10.03	Recoverable taxes	946,792	938,452
1.02.01.10.04	Judicial deposits	338,890	325,117
1.02.01.10.05	Prepaid expenses	121,513	129,455
1.02.01.10.06	Receivable from related parties	1,707,780	1,630,070
1.02.01.10.07	Others	1,521,746	1,518,405
1.02.02	Investments	3,746,507	3,695,780
1.02.02.01	Equity interest	3,587,397	3,535,906
1.02.02.02	Investment Property	159,110	159,874
1.02.03	Property, plant and equipment	19,759,932	19,716,223
1.02.03.01	Property, plant and equipment in operation	15,485,037	15,519,233
1.02.03.02	Right of use in leases	523,436	516,668
1.02.03.03	Property, plant and equipment in progress	3,751,459	3,680,322
1.02.04	Intangible assets	7,321,076	7,316,794

 

 

 

 

Consolidated Financial Statements / Balance Sheet – Liabilities
(R$ thousand)
Code	Description	Current Quarter 03/31/2021	Previous Year 12/31/2020
2	Total Liabilities	69,678,932	63,002,149
2.01	Current liabilities	16,545,529	14,725,696
2.01.01	Payroll and related taxes	301,555	282,630
2.01.02	Trade payables	6,156,294	4,819,539
2.01.03	Tax payables	2,022,024	2,058,362
2.01.04	Borrowings and financing	3,617,910	4,126,453
2.01.05	Other payables	4,360,314	3,357,639
2.01.05.02	Others	4,360,314	3,357,639
2.01.05.02.04	Dividends and interests on shareholder´s equity	901,982	946,133
2.01.05.02.05	Advances from clients	1,145,238	1,100,772
2.01.05.02.06	Trade payables – Forfaiting and Drawee risk	1,469,209	623,861
2.01.05.02.07	Lease liabilities	95,287	93,626
2.01.05.02.08	Derivative financial instruments	-	8,722
2.01.05.02.09	Other payables	748,598	584,525
2.01.06	Provisions	87,432	81,073
2.01.06.01	Provision for tax, social security, labor and civil risks	87,432	81,073
2.02	Non-current liabilities	35,858,067	37,024,948
2.02.01	Borrowings and financing	30,521,280	31,144,200
2.02.02	Other payables	2,621,344	3,145,336
2.02.02.02	Others	2,621,344	3,145,336
2.02.02.02.03	Advances from clients	1,514,256	1,725,838
2.02.02.02.04	Lease liabilities	445,209	436,505
2.02.02.02.05	Derivative financial instruments	119,306	97,535
2.02.02.02.06	Trade payables	225,069	543,527
2.02.02.02.07	Other payables	317,504	341,931
2.02.03	Deferred taxes assets	602,209	618,836
2.02.04	Provisions	2,113,234	2,116,576
2.02.04.01	Provision for tax, social security, labor and civil risks	526,991	554,315
2.02.04.02	Other provisions	1,586,243	1,562,261
2.02.04.02.03	Provision for environmental liabilities and decommissioning of assets	827,817	803,835
2.02.04.02.04	Pension and healthcare plan	758,426	758,426
2.03	Shareholders’ equity	17,275,336	11,251,505
2.03.01	Paid-up capital	6,040,000	6,040,000
2.03.02	Capital reserves	32,720	32,720
2.03.04	Earnings reserves	5,824,350	5,824,350
2.03.04.01	Legal reserve	468,291	468,291
2.03.04.02	Statutory reserve	5,414,323	5,414,323
2.03.04.09	Treasury shares	(58,264)	(58,264)
2.03.05	Accumulated earnings (losses)	5,240,015	-
2.03.08	Other comprehensive income	(2,749,597)	(1,983,619)
2.03.09	Earnings attributable to the non-controlling interests	2,887,848	1,338,054

 

 

 

Consolidated Financial Statements / Statements of Income
(R$ thousand)
Code	Description	Year to date 01/01/2021 to 03/31/2021	YTD previous year  01/01/2020 to 03/31/2020
3.01	Revenues from sale of goods and rendering of services	11,913,328	5,334,653
3.02	Costs from sale of goods and rendering of services	(6,178,784)	(4,017,707)
3.03	Gross profit	5,734,544	1,316,946
3.04	Operating (expenses)/income	1,442,516	(1,221,313)
3.04.01	Selling expenses	(422,586)	(390,915)
3.04.02	General and administrative expenses	(134,463)	(119,055)
3.04.04	Other operating income	2,560,232	102,689
3.04.05	Other operating expenses	(574,112)	(768,924)
3.04.06	Equity in results of affiliated companies	13,445	(45,108)
3.05	Income before financial income (expenses) and taxes	7,177,060	95,633
3.06	Financial income (expenses)	(201,507)	(1,201,138)
3.06.01	Financial income	585,585	65,131
3.06.02	Financial expenses	(787,092)	(1,266,269)
3.06.02.01	Net exchange differences over financial instruments	(56,328)	364,882
3.06.02.02	Financial expenses	(730,764)	(1,631,151)
3.07	Income before income taxes	6,975,553	(1,105,505)
3.08	Income tax and social contribution	(1,278,240)	(206,204)
3.09	Net income from continued operations	5,697,313	(1,311,709)
3.11	Consolidated net income for the year	5,697,313	(1,311,709)
3.11.01	Earnings attributable to the controlling interests	5,240,015	(1,360,851)
3.11.02	Earnings it attributable to the non-controlling interests	457,298	49,142
3.99	Earnings per share – (Reais / Share)	-	-
3.99.01	Basic earnings per share	-	-
3.99.01.01	Common shares	3.79680	-  0.98604
3.99.02	Diluted earnings per share	-	-
3.99.02.01	Common shares	3.79680	-  0.98604

 

 

 

 

 

 

 

Consolidated Financial Statements / Statement of Comprehensive Income
(R$ thousand)
Code	Description	Year to date 01/01/2021 to 03/31/2021	YTD previous year  01/01/2020 to 03/31/2020
4.01	Consolidated net income for the year	5,697,313	(1,311,709)
4.02	Other comprehensive income	(716,987)	(4,643,681)
4.02.01	Actuarial gains/(losses) over pension plan of subsidiaries, net of taxes	371	33
4.02.02	Cumulative translation adjustments for the year	86,119	380,042
4.02.03	(Loss)/gain on the percentage change in investments	862,857	-
4.02.04	Losses in cash flow hedge	(1,919,129)	(5,390,043)
4.02.05	Cash flow hedge reclassified to income upon realization	252,250	364,818
4.02.06	Cash flow hedge accounting - "Platts" reclassified to income upon realization	38,650	-
4.02.07	Losses from cash flow hegde accounting - "Platts", net of taxes	(38,105)	-
4.02.08	(Loss)/gain on hedge of net investment in foreign operations.	-	1,469
4.03	Consolidated comprehensive income for the year	4,980,326	(5,955,390)
4.03.01	Earnings attributable to the controlling interests	4,474,037	(6,004,534)
4.03.02	Earnings it attributable to the non-controlling interests	506,289	49,144

 

 

 

 

 

 

 

Consolidated Financial Statements / Statements of Cash Flows – Indirect Method
(R$ thousand)
Code	Description	Year to date 01/01/2021 to 03/31/2021	YTD previous year 01/01/2020 to 03/31/2020
6.01	Net cash from operating activities	3,455,474	466,933
6.01.01	Cash from operations	4,262,039	1,166,186
6.01.01.01	Earnings attributable to the controlling interests	5,240,015	(1,360,851)
6.01.01.02	Earnings attributable to the non-controlling interests	457,298	49,142
6.01.01.03	Financial charges in borrowing and financing raised	471,147	470,990
6.01.01.04	Financial charges in borrowing and financing granted	(6,541)	(11,481)
6.01.01.05	Charges on lease liabilities	14,827	13,056
6.01.01.06	Equity in results of affiliated companies	(13,445)	45,108
6.01.01.07	Deferred taxes assets	(80,858)	(11,351)
6.01.01.08	Provision for tax, social security, labor, civil and environmental risks	(22,203)	(8,685)
6.01.01.09	Monetary and exchange variations, net	716,123	522,571
6.01.01.10	Write-off of property, plant and equipment right of use and Intangible assets	1,838	1,400
6.01.01.11	Provision for environmental liabilities and decommissioning of assets	23,982	20,640
6.01.01.12	Updated shares – Fair value through profit or loss	(543,498)	962,561
6.01.01.13	Depreciation, amortization and depletion	484,065	437,507
6.01.01.14	Accrued/(reversal) for consumption and services	17,039	37,158
6.01.01.15	Net gains on the sale of the shares of the CSN Mineração.	(2,472,497)	-
6.01.01.16	Receivables by indemnity	(4,428)	-
6.01.01.17	Other provisions	(20,825)	(1,579)
6.01.02	Changes in assets and liabilities	(806,565)	(699,253)
6.01.02.01	Trade receivables - third parties	(1,190,789)	(89,849)
6.01.02.02	Trade receivables - related party	(165,806)	(31,572)
6.01.02.03	Inventory	(813,705)	(13,512)
6.01.02.05	Recoverable taxes	398,054	57,227
6.01.02.06	Judicial deposits	(13,773)	(4,749)
6.01.02.08	Trade payables	996,084	341,567
6.01.02.09	Trade payables – Forfaiting and Drawee risk	845,348	(183,736)
6.01.02.10	Payroll and related taxes	17,498	(14,420)
6.01.02.11	Tax payables	(46,349)	(61,612)
6.01.02.12	Payables to related parties	(10,141)	(20,572)
6.01.02.13	Advances from clients	(149,884)	(130,568)
6.01.02.14	Interest paid	(639,045)	(511,242)
6.01.02.15	Cash flow hedge accounting	(76,150)	-
6.01.02.16	Others	42,093	(36,215)
6.02	Net cash investment activities	2,737,117	(404,851)
6.02.02	Purchase of property, plant and equipment, intangible assets and investment property	(373,094)	(353,698)
6.02.07	Intercompany loans granted	(70,394)	(82,089)
6.02.08	Intercompany loans received	-	3,022
6.02.09	Financial Investments, net of redemption	15,993	27,914
6.02.10	Net cash received from sale of CSN Mineração's shares	3,164,612	-

 

 

6.03	Net cash used in financing activities	(2,212,281)	2,157,127
6.03.01	Borrowings and financing raised	310,141	4,553,970
6.03.02	Transactions cost - Borrowings and financing	(11,423)	(9,131)
6.03.03	Amortization of borrowings and financing	(3,653,158)	(2,363,666)
6.03.04	Dividends and interest on shareholder’s equity	(176,217)	(136)
6.03.05	Amortization of leases	(29,486)	(23,910)
6.03.06	Issuance of new CSN Mineração's shares	1,347,862	-
6.04	Exchange rate on translating cash and cash equivalents	(16,658)	(27,026)
6.05	Increase (decrease) in cash and cash equivalents	3,963,652	2,192,183
6.05.01	Cash and equivalents at the beginning of the year	9,944,586	1,088,955
6.05.02	Cash and equivalents at the end of the year	13,908,238	3,281,138

 

 

 

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2021 to 03/31/2021
(R$ thousand)
Code	Description	Paid-up capital	Capital reserve, granted options and treasury shares	Earnings reserve	Retained earnings (accumulated losses)	Other comprehensive income	Shareholders’ equity	Non-controlling interests	Shareholders’ equity
5.01	Opening balances	6,040,000	32,720	5,824,350	-	(1,983,619)	9,913,451	1,338,054	11,251,505
5.03	Adjusted opening balances	6,040,000	32,720	5,824,350	-	(1,983,619)	9,913,451	1,338,054	11,251,505
5.04	Capital transaction with shareholders	-	-	-	-	-	-	863,694	863,694
5.04.01	Capital increase proposed	-	-	-	-	-	-	863,694	863,694
5.05	Total comprehensive income	-	-	-	5,240,015	(765,978)	4,474,037	536,230	5,010,267
5.05.01	Net income for the year	-	-	-	5,240,015	-	5,240,015	457,298	5,697,313
5.05.02	Other comprehensive income	-	-	-	-	(765,978)	(765,978)	78,932	(687,046)
5.05.02.04	Translation adjustments for the year	-	-	-	-	86,119	86,119	-	86,119
5.05.02.06	Actuarial (loss)/gain on pension plan, net of taxes	-	-	-	-	20	20	351	371
5.05.02.07	(Loss)/gain on the percentage change in investments	-	-	-	-	814,285	814,285	48,572	862,857
5.05.02.08	(Loss) / gain on cash flow hedge accounting, net of taxes	-	-	-	-	(1,666,402)	(1,666,402)	68	(1,666,334)
5.05.02.09	(Loss) / gain on business combination	-	-	-	-	-	-	29,941	29,941
5.06	Internal changes in shareholders’ equity	-	-	-	-	-	-	149,870	149,870
5.06.01	Constitution of reserves	-	-	-	-	-	-	149,870	149,870
5.07	Closing balance	6,040,000	32,720	5,824,350	5,240,015	(2,749,597)	14,387,488	2,887,848	17,275,336

 

 

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2020 to 03/31/2020
(R$ thousand)
Code	Description	Paid-up capital	Capital reserve, granted options and treasury shares	Earnings reserve	Retained earnings (accumulated losses)	Other comprehensive income	Shareholders’ equity	Non-controlling interests	Shareholders’ equity
5.01	Opening balances	4,540,000	32,720	4,431,200	-	1,170,624	10,174,544	1,187,388	11,361,932
5.03	Adjusted opening balances	4,540,000	32,720	4,431,200	-	1,170,624	10,174,544	1,187,388	11,361,932
5.05	Total comprehensive income	-	-	-	(1,360,851)	(4,643,683)	(6,004,534)	49,144	(5,955,390)
5.05.01	Net income for the year	-	-	-	(1,360,851)	-	(1,360,851)	49,142	(1,311,709)
5.05.02	Other comprehensive income	-	-	-	-	(4,643,683)	(4,643,683)	2	(4,643,681)
5.05.02.04	Translation adjustments for the year	-	-	-	-	380,042	380,042	-	380,042
5.05.02.06	Actuarial (loss)/gain on pension plan, net of taxes	-	-	-	-	31	31	2	33
5.05.02.07	(Loss) / gain on cash flow hedge accounting, net of taxes	-	-	-	-	(5,025,225)	(5,025,225)	-	(5,025,225)
5.05.02.08	(Loss) / gain on hedge of net investment in foreign operations	-	-	-	-	1,469	1,469	-	1,469
5.07	Closing balance	4,540,000	32,720	4,431,200	(1,360,851)	(3,473,059)	4,170,010	1,236,532	5,406,542

 

 

Consolidated Financial Statements / Statements of Value Added
(R$ thousand)
Code	Description	Year to date 01/01/2021 to 03/31/2021	YTD previous year  01/01/2020 to 03/31/2020
7.01	Revenues	16,636,667	6,143,475
7.01.01	Sales of products and rendering of services	13,425,060	6,137,834
7.01.02	Other revenues	3,211,130	6,962
7.01.04	Allowance for (reversal of) doubtful debts	477	(1,321)
7.02	Raw materials acquired from third parties	(7,270,931)	(4,758,610)
7.02.01	Cost of sales and services	(5,585,726)	(3,776,787)
7.02.02	Materials, electric power, outsourcing and other	(1,621,797)	(961,472)
7.02.03	Impairment/recovery of assets	(63,408)	(20,351)
7.03	Gross value added	9,365,736	1,384,865
7.04	Retentions	(482,517)	(436,293)
7.04.01	Depreciation, amortization and depletion	(482,517)	(436,293)
7.05	Value added created	8,883,219	948,572
7.06	Value added received	1,075,792	698,088
7.06.01	Equity in results of affiliated companies	13,445	(45,108)
7.06.02	Financial income	585,585	65,131
7.06.03	Others	476,762	678,065
7.06.03.01	Others and exchange gains	476,762	678,065
7.07	Value added for distribution	9,959,011	1,646,660
7.08	Value added distributed	9,959,011	1,646,660
7.08.01	Personnel	534,898	564,541
7.08.01.01	Salaries and wages	415,052	432,137
7.08.01.02	Benefits	99,200	108,569
7.08.01.03	Severance payment (FGTS)	20,646	23,835
7.08.02	Taxes, fees and contributions	2,456,730	444,051
7.08.02.01	Federal	2,248,015	372,011
7.08.02.02	State	198,595	63,146
7.08.02.03	Municipal	10,120	8,894
7.08.03	Remuneration on third-party capital	1,270,070	1,949,777
7.08.03.01	Interest	730,764	1,631,151
7.08.03.02	Rental	6,216	5,441
7.08.03.03	Others	533,090	313,185
7.08.03.03.01	Others and exchange losses	533,090	313,185
7.08.04	Remuneration on Shareholders' capital	5,697,313	(1,311,709)
7.08.04.03	Retained earnings (accumulated losses)	5,240,015	(1,360,851)
7.08.04.04	Non-controlling interests in retained earnings	457,298	49,142

 

 

1.

DESCRIPTION OF BUSINESS

 

Companhia Siderúrgica Nacional “CSN”, also referred to as the “Company”, is a publicly-held company incorporated on April 9, 1941, under the laws of the Federative Republic of Brazil (Companhia Siderúrgica Nacional, its subsidiaries, joint ventures, joint operations and associates are collectively referred to herein as the "Group”). The Company’s registered office is located in São Paulo, SP, Brazil.

 

CSN is listed on the São Paulo Stock Exchange (B3 S.A.- Brasil, Bolsa, Balcão) and on the New York Stock Exchange (NYSE).

 

The Group's main operating activities are divided into five (5) segments as follows:

 

·

Steel:

 

The Company’s main industrial facility is the Presidente Vargas steelworks (“UPV”), located in the city of Volta Redonda, State of Rio de Janeiro. This segment consolidates all operations related to the production, distribution and sale of flat steel, long steel, metallic containers and galvanized steel. In addition to the facilities in Brazil, CSN has commercial operations in the United States and operations in Portugal and Germany to achieve markets and providing excellent services for final consumers. Its steel is used in home appliances, civil construction and automobile industries.

 

·

Mining:

 

The production of iron ore is developed in the cities of Congonhas, Ouro Preto and Belo Vale, State of Minas Gerais – by subsidiary CSN Mineração.

Iron ore is sold basically in the international market, especially in Europe and Asia. The prices charged in these markets are historically cyclical and subject to significant fluctuations over short periods of time, driven by several factors related to global demand, strategies adopted by the major steel producers, and the foreign exchange rate. All these factors are beyond the Company’s control. The ore transportation is carried out through Terminal de Carvão e Minérios do Porto de Itaguai – (“TECAR”), a solid bulk terminal, one of the four terminals that comprise the Port of Itaguai, located in the State of Rio de Janeiro. Imports of coal and coke are also carried out through this terminal by provision of services by CSN Mineração to CSN. The Company´s mining activities also comprises tin exploitation, which is based in the State of Rondônia, to supply the needs of UPV. The excess of raw material is sold to subsidiaries and third parties.

 

As a pioneer in the use of technologies that result in the possibility of stacking the tailings generated in the iron ore production process, the Company has had its iron ore production since January 2020, 100% independent of tailings dams. After significant investments in recent years to raise the level of reliability, mischaracterization and dry stacking, the Company has moved on to a scenario in which 100% of its waste goes through a dry filtration process and is disposed of in geotechnically controlled batteries, areas exclusively destined for stacking. Approximately R$250 million was invested in the two tailings filtration plants that have a combined total filtration capacity of 9 million tons per year.

 

As a consequence of these measures, the decommissioning of the dams is the natural way of processing dry waste.

 

All of our mining dams are positively certified and comply with the environmental legislation in force.

 

·

Cements

 

CSN entered the cement production market, catapulted by the synergy between this activity and CSN's current business. Beside the UPV facilities, in Volta Redonda / RJ, the Company installed a new business unit, which produces CP-III type cement using the slag produced by the UPV’s own blast furnaces. It also explores limestone and dolomite at the Arcos / MG unit, to meet the needs of the UPV and the cement plant. Additionally, in Arcos / MG, the clinker production operation is located. As a result, the Company is self-sufficient in the production of cement, with an installed capacity of 4.7 million tons per year.

 

On January 31, 2021, the Company concluded the drop down of the cement segment and, accordingly, all assets and liabilities related to the cement business were transferred from CSN to its subsidiary recently incorporated CSN Cimentos S.A. (note 10.c).

 

 

·

Logistics:

 

Railroads:

 

CSN has interests in three railroad companies: MRS Logística S.A., which manages the former Southeast Railway System of Rede Ferroviária Federal S.A (“RFFSA”)., Transnordestina Logística S.A. (“TLSA”) and FTL - Ferrovia Transnordestina Logística S.A. (“FTL”), which the the latter two hold the concession to operate the former Northeast Railway System of RFFSA, in the States of Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas and Sergipe, with TLSA being responsible for the rail links of Eliseu Martins – Trindade, Trindade – Salgueiro, Salgueiro – Porto Suape, Salgueiro – Missão Velha and Missão Velha - Pecém (Railway System II), under construction, and FTL being responsible for the rail links of São Luis - Altos, Altos - Fortaleza, Fortaleza – Souza, Souza - Recife/Jorge Lins, Recife/Jorge Lins – Salgueiro, Jorge Lins – Propriá, Paula Cavalcanti – Cabedelo, Itabaiana - Macau (Railway System I).

 

Ports:

 

The Company operates in the State of Rio de Janeiro, by means of its subsidiary Sepetiba Tecon S.A., operates the Container Terminal (“TECON”) and by means of its subsidiary CSN Mineração, the TECAR, both located at the Itaguaí Port. Established in the harbor of Sepetiba, the mentioned port has a privileged highway, railroad and maritime access.

 

(“TECON”) is responsible for the shipments of CSN´s steel products, movement and storage of containers, vehicles, general cargo, among other products; and TECAR performs the operational activities of loading and unloading of solid bulk ships, storage and distribution (road and rail) of coal, coke, zinc concentrate, sulfur, iron ore and other bulk, intended for the seaborne market, for our own operation and for third parties.

 

·

Energy:

 

Since the energy supply is fundamental in CSN´s production process, the Company owns and operates facilities to generate electric power for guaranteeing its self-sufficiency.

 

 

·

GOING CONCERN

 

The Company permanently takes actions to reprofile portions of its debts. Those actions do not affect the Company’s ability to continue as a going concern and, additionally, there are no significant operating restructuring plans which could imply in changes to that ability. The assumptions adopted in the assessment of operating continuity included in the financial statements as of December 31, 2020 remain in place, having been those financial statements approved by the Board of Directors on February 22, 2021. The COVID-19 pandemic was a new important factor raised worldwide, assuming major relevance as from the end of the first quarter of 2020 and impacting the global economy. We perceived some impacts in our activities until the end of the first semester of 2020, especially in our steel operations, which did not prejudice our results and our financial position in 2020 and in the first quarter of 2021.

 

Although the pandemic effects continue dissipating by the vaccination campaign around the world, Brazil experiences a worsening of the COVID-19 pandemic and, accordingly, the Brazilian authorities have adopted new restriction measures. However, we did not identify any continuity risks and our major operating assumptions remain substantially unchanged.

 

 

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

2.a)

Declaration of conformity

 

The consolidated and parent company condensed interim financial information (“condensed quarterly information”) have been prepared and are being presented in accordance with accounting practices adopted in Brazil based on the provisions of the Brazilian Corporate Law, pronouncements, guidelines and interpretations issued (CPC), approved by CVM, besides the own standards issued by the Brazilian Securities and Exchange Commission (“CVM”) and International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standard Board (IASB) and highlight all the relevant information of the interim financial statements, and only this information, is being disclosed and corresponds to the information used by the Company's management in its activities.

 

2.b)

Basis of presentation

 

The interim financial information has been prepared using the historical cost as the basis of value, the net realizable value, the fair value or the recovery value, except when otherwise indicated.

 

The preparation of this interim financial information requires Management to use certain accounting estimates, judgments and assumptions that affect the application of Accounting Polices and the amounts reported on the balance sheet date of assets, liabilities, income and expenses may differ from actual future results. The assumptions used are based on history and other factors considered relevant and are reviewed by the Company’s management.

 

The interim financial information has been prepared and is being presented in accordance with CPC 21 (R1) - “Interim Financial Reporting” and IAS 34 - “Interim Financial Reporting”, consistently with the standards issued by the CVM.

 

This interim financial information does not include all requirements of annual or full financial statements and, accordingly, should be read in conjunction with the Company’s financial statements for the year ended December 31, 2020.The accounting policies and critical estimates, when applicable and relevant, are included in the respective explanatory notes and are consistent with the previous period presented.

 

Therefore, in this interim financial information the following notes are not repeated, either due to redundancy or to the materiality in relation to those already presented in the annual financial statements:

 

Note 10 – Consolidation and investment basis

Note 12 – Intangible assets

Note 18 – Income tax and social contributions

Note 19 – Taxes in installments

Note 20 – Provisions for tax, social security, labor, civil, environmental risks and judicial deposits

Note 30 – Employee benefits

Note 31 - Commitments

 

The interim financial information was approved by the Board of Directors on April 28, 2021.

 

2.c)

Functional currency and presentation currency

 

The accounting records included in the interim financial information of each of the Company’s subsidiaries are measured using the currency of the principal of the economic environment in which each subsidiary operates (“the functional currency”). The interim financial information is presented in R$ (reais), which is the Company’s functional and reporting currency.

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the transaction or valuation dates, in which the items are remeasured. The balances of the asset and liability accounts are translated using the exchange rate on the balance sheet date. As of March 31, 2021, US$1.00 is equivalent to R$5.6973 (R$5.1967 on December 31, 2020) and €1.00 is equivalent to R$6.6915 (R$6.3779 on December 31, 2020), according to the rates obtained from Central Bank of Brazil website

 

2.d)

Statement of value added

 

Pursuant to Law 11,638/07, the presentation of the statement of value added is required for all publicly-held companies. These statements were prepared in accordance with CPC 09 - Statement of Value Added, approved by CVM Resolution 557/08. The IFRS does not require the presentation of this statement and for IFRS purposes is presented as additional information.

 

 

3.

IMPACTS OF COVID-19

 

At the end of 2019, the COVID-19 virus spread worldwide, and in March 2020, the WHO (World Health Organization) declared a pandemic of this disease. Since the beginning of the pandemic, the Company has adopted several precautionary measures in all its areas to reduce the exposure of its employees and to guarantee the continuity of its business.

 

In this sense, in 2020 all employees in chronic conditions of vulnerability (risk group) were mapped and put on vacation together with most other employees in order to reduce their corporate staff by around 50%. In 2021, the most critical stage of the pandemic, the Brazilian authorities adopted more restrictive measures and the Company adopted home office to 80% of its employees who work in administrative roles in São Paulo. In addition, masks were provided in the beginning of the pandemic for all employees, hand sanitizer was made available in all company facilities, and we also released internal communications with preventive measures in order to reinforce the hygiene protocols recommended by the competent authorities.

 

The Company’s economic activity is directly linked to the demand for steel products in the automotive, domestic and civil construction sectors, as well as iron ore, both in the domestic and international markets. Any reduction in the activity of these sectors could affect the demand and the price of products and have significant impact to the Company’s financial position and results.

 

Our portfolio of investments and the nature of our industrial plants have long-term characteristics. The long-term operational and economic context to which the Company operates allows greater flexibility in the strategies and plans to mitigate the risks and effects of the pandemic on its business and, consequently, ensure the maintenance of the expected recoverability of its non-financial assets, whether investments, fixed assets and tax credits.

 

The Company did not experience any significant impact to its railway and maritime logistics. There was also no impact to the availability of supplies that could have interrupted its operational activities.

 

According to the guidelines of the Brazilian Securities and Exchange Commission (CVM), the Company assessed any effects that are related to business continuity and its accounting estimates. Despite some adverse effects perceived at the beginning of the pandemic, which over the rest of the year had already dissipated, such adverse effects did not bring risks of continuity or the need for adjustments to accounting estimates that produced significant effects on the Company’s business and consequently on its financial position.

 

The Company maintains all of its medium and long-term production and sales forecasts.

 

4.

CASH AND CASH EQUIVALENTS

 

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Cash and banks
In Brazil	94,224		245,185		58,528		238,509
Abroad	6,265,404		3,899,282		111,108		199,994
	6,359,628		4,144,467		169,636		438,503
Investments
In Brazil	7,498,424		5,800,119		4,956,826		4,208,622
Abroad	50,186
	7,548,610		5,800,119		4,956,826		4,208,622
	13,908,238		9,944,586		5,126,462		4,647,125

 

Our investments are basically in private and public securities with yields linked to the variation of Interbank Deposit Certificates (CDI) and repo operations backed by National Treasury Notes respectively. The Company invests part of the funds through exclusive investment funds which have been consolidated in these financial statements.

 

Our investments abroad are in private securities in top-rated banks and are remunerated at pre-fixed rates.

 

5.

FINANCIAL INVESTMENTS

 

		Consolidated								Parent Company
		Current				Non Current				Current				Non Current
		03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020
Investments (1)		464,548		478,253						462,361		475,782
Usiminas shares (2)		3,817,603		3,305,109						3,817,603		3,305,109
Bonds (3)						132,635		123,409						132,635		123,409
		4,282,151		3,783,362		132,635		123,409		4,279,964		3,780,891		132,635		123,409

(1)

These are restricted financial investments and linked to a Bank Deposit Certificate (CDB) to guarantee a letter of guarantee from financial institutions and financial investments in Public Securities (LFT - Letras Financeiras do Tesouro) managed by their exclusive funds.

 

(2)

Part of the shares guarantees a portion of the Company's debt.

 

(3)

Bonds with Fibra bank due in February 2028 (see note 21).

 

 

6.

TRADE RECEIVABLES

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Trade receivables
Third parties
Domestic market	1,422,054		910,657		1,028,802		680,340
Foreign market	2,740,206		2,063,867		92,675		65,379
	4,162,260		2,974,524		1,121,477		745,719
Allowance for doubtful debts	(230,190)		(228,348)		(140,299)		(143,735)
	3,932,070		2,746,176		981,178		601,984
Related parties (note 21 a)	286,982		121,176		718,185		947,719
	4,219,052		2,867,352		1,699,363		1,549,703

 

The composition of the gross balance of accounts receivable from third party customers is shown as follows:

 

 

		Consolidated				Parent Company
		03/31/2021		12/31/2020		03/31/2021		12/31/2020
Current		3,560,087		2,537,567		946,060		535,541
Past-due up to 30 days		378,747		222,972		11,011		72,890
Past-due up to 180 days		32,951		17,915		30,864		958
Past-due over 180 days		190,475		196,070		133,542		136,330
		4,162,260		2,974,524		1,121,477		745,719

 

The changes in expected credit losses are as follows:

 

		Consolidated				Parent Company
		03/31/2021		12/31/2020		03/31/2021		12/31/2020
Opening balance		(228,348)		(245,194)		(143,735)		(167,247)
(Loss)/Reversal estimated		(4,110)		7,513		(2,071)		22,347
Recovery and write-offs of receivables		2,268		9,333		1,959		1,165
Drop down of Cements (note 10.c)						3,548
Closing balance		(230,190)		(228,348)		(140,299)		(143,735)

 

7.

INVENTORIES

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Finished goods	1,451,251		1,627,676		594,973		748,918
Work in progress	1,726,453		1,358,905		1,088,489		836,128
Raw materials	1,942,227		1,289,653		1,433,206		876,168
Storeroom supplies	959,880		928,158		461,301		525,114
Advances to suppliers	92,319		69,536		80,414		63,950
Provision for losses	(117,766)		(109,038)		(32,765)		(35,832)
	6,054,364		5,164,890		3,625,618		3,014,446
Classified:
Current	5,673,189		4,817,586		3,625,618		3,014,446
Non-current (1)	381,175		347,304
	6,054,364		5,164,890		3,625,618		3,014,446

 

1.

Long-term iron ore inventories that will be used after the construction of the processing plant, which will produce pellet feed, In 2020, the Company defined the construction project for the new plant for processing Itabirito, which until then was considered as waste, and started to be incorporated into the long-term ore inventory.

.

 

The changes in estimated losses on inventories are as follows:

 

		Consolidated				Parent Company
		03/31/2021		12/31/2020		03/31/2021		12/31/2020
Opening balance		(109,038)		(134,553)		(35,832)		(41,201)
(Estimated losses) / Reversal of inventories with low turnover and obsolescence		(8,728)		25,515		(1,238)		5,369
Drop down of Cements (note 10.c)						4,305
Closing balance		(117,766)		(109,038)		(32,765)		(35,832)

 

 

 

 

 

 

 

 

8.

RECOVERABLE TAXES

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
State Value-Added Tax	994,783		1,002,926		808,848		822,717
Brazilian federal contributions (1)	1,053,486		1,417,081		831,648		1,192,919
Other taxes	97,623		123,939		82,015		104,648
	2,145,892		2,543,946		1,722,511		2,120,284
Classified:
Current	1,199,100		1,605,494		959,735		1,381,853
Non-current	946,792		938,452		762,776		738,431
	2,145,892		2,543,946		1,722,511		2,120,284

1.

Refers mainly to PIS / COFINS (VAT Federal) to be compensated against future payment of the contributions. In respect to PIS and COFINS to be recoverable on September 20, 2018, the writ of mandamus and special appeal filed in 2006, in which CSN and the Federal Union are parties, related to the discussion about the non-inclusion of ICMS in the PIS and COFINS calculation basis, was judged in final court decision, confirmed the right of CSN to offset the amounts unduly paid as a result of the PIS and COFINS base being increased by the inclusion of ICMS in the period from 2001 to 2014.

 

 

9.

OTHER CURRENT AND NON-CURRENT ASSETS

 

	Consolidated								Parent Company
	Current				Non-current				Current				Non-current
	03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020
Judicial deposits (note 19)					338,890		325,117						224,675		221,016
Prepaid expenses	157,499		136,527		107,694		115,636		116,588		94,782		91,568		98,031
Prepaid expenses with sea freight (1)	109,325		74,500
Actuarial asset (note 21 a)					13,819		13,819								1,803
Derivative financial instruments (note 14 I)	39,236
Securities held for trading (note 14 I)	14,977		5,065						14,854		4,927
Loans with related parties (nota 14 I and 21 a)					1,043,182		966,050		59,900		53,718		1,097,432		1,007,677
Other receivables from related parties (note 21 a)	5,176		6,242		664,598		664,020		19,705		5,717		922,468		900,200
Other receivables (note 14 I)					2,445		2,445						1,003		1,003
Eletrobrás compulsory loan (note 14 I) (2)					851,485		852,532						850,714		851,713
Dividends receivables (note 21 a)	38,086		38,088						28,156		329,413
Employee debts	50,244		28,054						34,965		16,600
Receivables by indemnity (3)					521,611		517,183						521,611		517,183
Others	74,639		79,338		146,205		146,245		497		419		146,204		146,244
	489,182		367,814		3,689,929		3,603,047		274,665		505,576		3,855,675		3,744,870

 

1.

Refers to payment of freight expenses and maritime insurance over performance obligations unfulfilled at the balance sheet date.

 

2.

This is a certain and due amount, arising from the res judicata favorable decision to the Company, which is irreversible and irrevocable, in order to apply the STJ's consolidated position on the subject, which culminated in the conviction of Eletrobrás to the payment of the correct interest and monetary adjustment of the Compulsory Loan. The res judicata decision, as well as the certainty about the amounts involved in the liquidation of the sentence (judicial procedure to request the satisfaction of the right), allowed the conclusion that the entry of this value is certain. In addition to this amount already recorded, the Company continues to seek alternatives for the recovery of additional credits and the estimate can reach an amount greater than R$350 million.

 

3.

This is a net, certain and enforceable amount, resulting from the final and unappealable decision of the Court in favor of the Company, due to losses and damages resulting from the sinking of the voltage in the supply of energy in the periods from January / 1991 to June / 2002.

 

10.

BASIS OF CONSOLIDATION AND INVESTMENTS

 

The information related to the activities of our joint-ventures, joint-operations, affiliated and other investments did not present changes in relation to that disclosed in the Company’s financial statements as of December 31, 2020. Accordingly, the management opted for not repeating the information in this condensed interim financial information as of March 31, 2021.

 

The significant events related to our subsidiaries CSN Cimentos S.A. and CSN Mineração S.A are disclosed in the Notes 10.c and 10.d, respectively.

 

The consolidated financial statements for the years ended Mach 31, 2021 and 2020 include the following direct and indirect subsidiaries, joint ventures and joint operations, as well as the exclusive funds, as follows:

 

	Number of shares held by CSN in units	Equity interests (%)
Companies		03/31/2021		12/31/2020		Core business
Direct interest in subsidiaries: full consolidation
CSN Islands VII Corp.	20,001,000	100.00		100.00		Financial transactions
CSN Inova Ventures	50,000	100.00		100.00		Financial transactions
CSN Islands XII Corp.	1,540	100.00		100.00		Financial transactions
CSN Steel S.L.U.	22,042,688	100.00		100.00		Equity interests and Financial transactions
TdBB S.A (*)		100.00		100.00		Equity interests
Sepetiba Tecon S.A.	254,015,052	99.99		99.99		Port services
Minérios Nacional  S.A.	141,719,295	99.99		99.99		Mining and Equity interests
Companhia Florestal do Brasil	66,354,391	99.99		99.99		Reforestation
Estanho de Rondônia S.A.	195,454,162	99.99		99.99		Tin Mining
Companhia Metalúrgica Prada	555,142,354	99.99		99.99		Manufacture of containers and distribution of steel products
CSN Mineração S.A. (1)	4,374,779,493	78.24		87.52		Mining
CSN Energia S.A.	43,149	99.99		99.99		Sale of electric power
FTL - Ferrovia Transnordestina Logística S.A. (2)	510,726,198	92.71		92.38		Railroad logistics
Nordeste Logística S.A.	99,999	99.99		99.99		Port services
CSN Inova Ltd.	10,000	100.00		100.00		Advisory and implementation of new development projec
CBSI - Companhia Brasileira de Serviços de Infraestrutura	4,669,986	99.99		99.99		Equity interests and product sales and iron ore
CSN Cimentos S.A. (3)	2,956,094,581	99.99		90.00		Manufacturing and sale of cement
Indirect interest in subsidiaries: full consolidation
Lusosider Projectos Siderúrgicos S.A.		100.00		100.00		Equity interests and product sales
Lusosider Aços Planos, S. A.		99.99		99.99		Steel and Equity interests
CSN Resources S.A.		100.00		100.00		Financial transactions and Equity interests
Companhia Brasileira de Latas		99.99		99.99		Sale of cans and containers in general and Equity interests
Companhia de Embalagens Metálicas MMSA		99.67		99.67		Production and sale of cans and related activities
Companhia de Embalagens Metálicas - MTM		99.67		99.67		Production and sale of cans and related activities
CSN Steel Holdings 1, S.L.U.		100.00		100.00		Financial transactions, product sales and Equity interests
CSN Productos Siderúrgicos S.L.		100.00		100.00		Financial transactions, product sales and Equity interests
Stalhwerk Thüringen GmbH		100.00		100.00		Production and sale of long steel and related activities
CSN Steel Sections Polska Sp.Z.o.o		100.00		100.00		Financial transactions, product sales and Equity interests
CSN Mining Holding, S.L		78.24		87.52		Financial transactions, product sales and Equity interests
CSN Mining GmbH		78.24		87.52		Financial transactions, product sales and Equity interests
CSN Mining Asia Limited		78.24		87.52		Commercial representation
Lusosider Ibérica S.A.		100.00		100.00		Steel, commercial and industrial activities and equity interests
CSN Mining Portugal, Unipessoal Lda.		78.24		87.52		Commercial and representation of products
Companhia Siderúrgica Nacional, LLC		100.00		100.00		Import and distribution/resale of products
CSN Cimentos S.A. (3)		-		10.00		Manufacturing and sale of cement
Direct interest in joint operations: proportionate consolidation
Itá Energética S.A.	253,606,846	48.75		48.75		Electric power generation
Consórcio da Usina Hidrelétrica de Igarapava		17.92		17.92		Electric power consortium
Direct interest in joint ventures: equity method
MRS Logística S.A. (4)	63,377,198	18.64		18.64		Railroad transportation
Aceros Del Orinoco S.A.		31.82		31.82		Dormant company
Transnordestina Logística S.A. (5)	24,670,093	47.26		47.26		Railroad logistics
Equimac S.A	1,117	50.00		50.00		Rental of commercial and industrial machinery and equipment
Indirect interest in joint ventures: equity method
MRS Logística S.A. (4)		14.58		16.30		Railroad transportation
Direct interest in associates: equity method
Arvedi Metalfer do Brasil S.A.	49,074,882	20.00		20.00		Metallurgy and Equity interests
Exclusive funds: full consolidation
Diplic II  - Fundo de investimento multimercado crédito privado		100.00		100.00		Investment fund
Caixa Vértice - Fundo de investimento multimercado crédito privado		100.00		100.00		Investment fund
VR1 - Fundo de investimento multimercado crédito privado		100.00		100.00		Investment fund

(*) Dormant companies.

 

1.

As of December 31, 2020, CSN held 158,419,480 shares of CSN Mineração S.A.. On February 17, 2021, it occurred a stock split of the shares, at a ratio of 1:30, by which the number of shares held by CSN changes to 4,752,584,400 shares. Subsequently, upon the public offering of the shares of CSN Mineração, CSN’s interest was diluted and the number of shares after the split changed to 4,374,779,493 shares.

2.

As of December 31,2020, the Company had 486.592.830 common shares in FTL - Ferrovia Transnordestina Logística S.A.

 

3.

As of December 31, 2020, CSN held 90 shares of CSN Cimentos S.A. On January 31, 2021, CSN subscribed capital in CSN Cimentos S.A., which was paid-up by transfer of assets and liabilities related to the operations of cement in CSN. Consequently, the number of shares held by CSN increased (see Note 10.c).

 

4.

As of March 31, 2021 and December 31, 2020 the Company directly held 63,377,198 shares, of which 26,611,282 common and 36,765,916 preferred, and its direct subsidiary, CSN Mineração S.A., held 63,338,872, of which 25,802,872 common shares and 37,536,000 preferred, of MRS Logística S.A.

 

5.

As of December 31, 2020, the Company had 24,168,304 common shares and 501,789 Class B preferred shares.

 

 

 

10.a)

Investments in joint ventures, joint operations, associates and other investments

 

The number of shares, the balances of assets and liabilities, shareholders’ equity and the profit / (loss) amounts for the period in those investees are as follows:

 

		03/31/2021								03/31/2020
Companies		Participation in								Participation in
		Assets		Liabilities		Shareholders’ equity		Profit /(Loss) for the period		Assets		Liabilities		Shareholders’ equity		Profit /(Loss) for the period
Investments under the equity method
Subsidiaries
CSN Islands VII Corp.		531,764		3,289,139		(2,757,375)		(258,952)		481,327		2,979,749		(2,498,422)		(574,487)
CSN Inova Ventures		9,591,849		10,519,332		(927,483)		(217,757)		9,534,299		10,244,025		(709,726)		(143,621)
CSN Islands XII Corp.		2,637,854		5,705,057		(3,067,203)		(360,600)		2,497,173		5,203,776		(2,706,603)		(617,535)
CSN Steel S.L.U.		4,847,452		25,551		4,821,901		241,834		4,522,589		28,642		4,493,947		452,147
Sepetiba Tecon S.A.		748,723		444,770		303,953		4,461		731,294		431,801		299,493		2,823
Minérios Nacional  S.A.		352,364		163,139		189,225		48,955		292,708		152,438		140,270		3,268
Valor Justo - Minérios Nacional S.A.		-		-		2,123,507		-		-		-		2,123,507		-
Estanho de Rondônia S.A.		103,888		138,146		(34,258)		(6,147)		103,484		131,596		(28,112)		(6,620)
Companhia Metalúrgica Prada		817,938		621,588		196,350		49,874		750,130		603,654		146,476		(14,630)
CSN Mineração S.A.		17,053,347		6,690,346		10,363,001		1,896,260		17,166,329		7,887,964		9,278,992		351,181
CSN Energia S.A.		118,641		72,004		46,637		(286)		130,642		83,718		46,924		202
FTL - Ferrovia Transnordestina Logística S.A.		467,350		254,292		213,058		(15,215)		471,952		254,510		217,442		(13,272)
Companhia Florestal do Brasil		51,872		3,106		48,766		(781)		52,073		2,526		49,547		(384)
Nordeste Logística S.A.		69		59		10		(4)		69		55		14		(4)
CBSI - Companhia Brasileira de Serviços de Infraestrutura		115,157		90,961		24,196		3,874		118,553		98,231		20,322		(2,778)
Ágio - CBSI - Companhia Brasileira de Serviços de Infraestrutura		-		-		15,225		-		-		-		15,225		-
CSN Cimentos S.A.		3,512,433		478,600		3,033,833		48,611		-		-		-		-
		40,950,701		28,496,090		14,593,343		1,434,127		36,852,622		28,102,685		10,889,296		(563,710)
Joint-venture and Joint-operation
Itá Energética S.A.		280,203		21,474		258,729		7,647		268,447		17,365		251,082		2,905
MRS Logística S.A.		1,974,636		1,156,665		817,971		14,072		2,088,151		1,284,265		803,886		(17,061)
Transnordestina Logística S.A.		4,717,847		3,562,305		1,155,542		(4,562)		4,657,691		3,497,587		1,160,104		(6,334)
Fair Value (*) - Transnordestina		-		-		271,116		-		-		-		271,116		-
Equimac S.A		7,553		413		7,140		(96)		7,536		301		7,235		-
		6,980,239		4,740,857		2,510,498		17,061		7,021,825		4,799,518		2,493,423		(20,490)
Associates
Arvedi Metalfer do Brasil S.A.		40,088		32,160		7,928		(110)		40,528		32,490		8,038		(712)
		40,088		32,160		7,928		(110)		40,528		32,490		8,038		(712)
Classified at fair value through profit or loss (note 14 II)
Panatlântica						90,883								59,879
						90,883								59,879
Other investments
Profits on subsidiaries' inventories						(116,714)		(61,171)						(55,543)		(5,588)
Investment property						144,398		-						144,999		-
Others						63,536		(4)						63,538		(190)
						91,220		(61,175)						152,994		(5,778)
Total investments						17,293,872		1,389,903						13,603,630		(590,690)
Classification of investments in the balance sheet
Investments in assets						23,935,793								19,401,494
Investments with negative equity						(6,786,319)								(5,942,863)
Investment property						144,398								144,999
						17,293,872								13,603,630

(*) As of March 31, 2021 and December 31, 2020, the net balance of R$271,116 refers to the Fair Value generated by the loss of control of Transnordestina Logística SA in the amount of R$659,105 and impairment of R$387,989.

 

 

 

 

10.b)

Changes in investments in subsidiaries, jointly controlled companies, joint operations, associates and other investments

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Opening balance of investments (assets)	3,535,906		3,482,974		19,401,494		17,316,463
Opening balance of loss provisions (liabilities)					(5,942,863)		(3,908,563)
Total	3,535,906		3,482,974		13,458,631		13,407,900
Capital increase/acquisition of shares (1)			3,400		2,996,083		60,361
Dividends (2)			(82,642)		(934,934)		(2,496,422)
Comprehensive income (3)	31		6,895		84,757		581,514
Update of shares measured at fair value through profit or loss (Note 14 II)	31,004		12,579		31,004		12,579
Sales of equity interest (note 10.d) (4)					(692,115)
Net gain due to increased capital and issued new shares in n investments (note 10.d) (5)					816,176
Equity in results of affiliated companies  (6)	23,368		124,324		1,389,903		1,892,686
Amortization of fair value - investment MRS	(2,937)		(11,747)
Others	25		123		(31)		13
Closing balance of investments (assets)	3,587,397		3,535,906		23,935,793		19,401,494
Balance of provision for investments with negative equity (liabilities)					(6,786,319)		(5,942,863)
Total	3,587,397		3,535,906		17,149,474		13,458,631

 

1.

In January 2021 there was an increase in capital of our subsidiary CSN Cimentos by CSN transfer of net assets (see Note 10.c).

 

2.

In 2021, it mainly refers to dividends of the subsidiary CSN Mineração SA in the amount of R$934,934 (R$2,437,482 on December 31, 2020).

 

3.

Refers to translation to the reporting currency of the foreign investments of which functional currency is not the Brazilian Reais, actuarial gain/loss and gain/loss on investment hedge from investments accounted for under the equity method.

 

4.

Refers to the cost of the shares sold in the Initial Public Offering of the subsidiary CSN Mineração S.A. (see Note 10.d)

 

5.

Refers to the gain in the sale of shares in the Initial Public Offering of the subsidiary CSN Mineração S.A., after the issuance of the shares in the amount of R$816,176.

 

6.

The table below shows the reconciliation of the equity in results of affiliated companies classified as joint venture and associates and the amount disclosed in the income statement and it is due to the elimination of the results of the CSN´s transactions with these companies.

 

	Consolidated
	03/31/2021		03/31/2020
Equity in results of affiliated companies
MRS Logística S.A.	28,136		(34,113)
Transnordestina Logística S.A.	(4,562)		(6,334)
Arvedi Metalfer do Brasil S.A.	(110)		(712)
Equimac S.A.	(96)
	23,368		(41,159)
Eliminations
To cost of sales	(10,576)		(1,243)
To taxes	3,596		423
Others
Amortizated at fair value - Investment in MRS	(2,937)		(2,937)
Others	(6)		(192)
Equity in results	13,445		(45,108)

 

 

10.c)

Drop down - Cement

 

Our cement operations began in May 2009 with a crushing unit in Volta Redonda/RJ, motivated by the sinergy between that activity and the generation of slag produced in our blast furnaces in the Presidente Vargas steel plant (“UPV”), a material used as raw material in the production of cement. Located within the UPV premises, in Volta Redonda/RJ, that business unit has an annual capacity of 2.4 million tons of cement type CP-III.

In 2011, our self-production of clinker was initiated after the installation of a furnace in Arcos/MG, with a daily capacity of 2,500 tons, using calcitic limestone extracted in the Bocaina mine, existing in the same location that also supplies steel limestone to UPV. The clinker produced is prioritarily cargoed by rail to our cement plant in Volta Redonda/RJ.

In 2015, the unit in Arcos/MG stared its production of cement with the installation of two vertical crushers with an annual capacity of 2.3 million tons, rising our annual installed capacity to 4.7 million tons. In 2016 a second production line of clinker was assembled, with a furnace for 6,500 tons per day reaching full independence for clinker in the production of cement.

The production in Arcos is primarily of cement type CP-II, basically composed of clinker, slag, limestone and plaster, and the composition of those materials varies depending on the final product intendend. Also, in Arcos, there is extraction of limestone and dolomite destined to UPV.

The cement activities were held by the parent company and, recently, the Company decided to drop down the net assets of cement to a subsidiary named CSN Cimentos. The drop down occurred on January 31, 2021 by an increase in capital of R$2,956,094, upon issuance of 2,956,094,491 common shares, subscribed and paid-up at the same date by CSN through the transfer of net assets related to the cement activities, as detailed described in the Valuation Report approved in the Extraordinary General Meeting.

 

Find below the breakdown of the net assets contributed:

 

		12/31/2020		01/31/2021
Assets		appraisal reports		Close balance
Trade receivables		37,171		54,684
Inventories		134,309		164,460
Other assets		29,186		30,228
Property, plant and equipment		3,151,349		3,129,161
Intangíible assets		8,086		8,086
Liabilities
Trade payables		(253,186)		(278,539)
Other payables current		(42,074)		(34,301)
Lease liabilities		(42,257)		(24,430)
Other provisions		(66,490)		(64,125)
Net assets		2,956,094		2,985,225

 

10.d)

Initial Public Offering of the subsidiary CSN Mineração

On February 17, 2021, the subsidiary CSN Mineração concluded its initial public offering at B3 – Brasil, Bolsa, Balcão. The final prospectus of the public offering consisted of: (i) primary distribution of 161,189,078 shares (“Primary Offering”); and (ii) secondary distribution of 422,961,066 shares, being initially 372,749,743 shares (“Secondary Offering”), increased by 50,211,323 supplementary shares held by CSN (“Supplementary Shares”).

The price per share (“Price per Share”) was fixed at R$8.50 after the collection of intention of investments collected from institutional buyers in Brasil and abroad.

Upon conclusion of the offering, the Company’s interest in the subsidiary CSN Mineração changed from 87.52% to 78.24%.

·

Primary Distribution of Shares

Upon the primary distribution, CSN Mineração issued 161,189,078 shares (“Primary Offering”) and capitalized the total amount of R$1,370,107 (R$1,347,862, net of transaction costs).

The issuance of 161,189,078 shares diluted the Company’s interest in the capital of CSN Mineração and, accordingly, the Company recognized in other comprehensive income a gain from the change of ownership percentage.

The impact of the transaction is presented below:

 

Gain on participation in the capital increase	1,054,613
Loss due to dilution of participation with issue of new shares	(231,044)
Equity adjustment by dilution of share percentage	(7,393)
Net gain from the transaction	816,176

 

·

Secondary Distribution of Shares

 

Upon the secondary distribution of shares, the Company sold 327,593,584 common shares and, additionally, in March 2021 sold supplementary 50,211,323 common shares, totaling 377,804,907 or 9.3% of shares previously held, in the total amount of R$3,211,342 (R$3,164,612, net of transaction costs). The gain for the sale was recognized as Other Operating Income.

The main impacts of the transaction are presented as follows:

 

Equity in the transaction		9,947,525
Number of share before initial public offering		5,430,057,060
Cost per share		R$             1.83
Number of shares sold by CSN		377,804,907
Price per share		R$             8.50
(+) Net cash generated in the transaction		3,211,342
(-) Transaction cost		(46,730)
(=) net cahs reveivable (a)		3,164,612
(-) Cost of shares  (b)		(692,115)
(=) Net gain from the transaction (a)+(b)		2,472,497

 

10.e)

Joint ventures and joint operations financial information

 

The balance sheet and income statement balances of the companies whose control is shared are shown below and refer to 100% of the companies’ results:

 

 

	03/31/2021								12/31/2020
		Joint-Venture						Joint-Operation		Joint-Venture						Joint-Operation
Equity interest (%)		MRS Logística		Transnordestina Logística		Equimac S.A.		Itá Energética		MRS Logística		Transnordestina Logística		Equimac S.A.		Itá Energética
		33.22%		47.26%		50.00%		48.75%		34.94%		47.26%		50.00%		48.75%
Balance sheet
Current Assets
Cash and cash equivalents		951,179		905		1,088		79,431		1,206,484		1,390		1,351		48,919
Advances to suppliers		27,997		1,830				595		27,312		1,948				742
Other current assets		488,141		52,095		2,975		90,395		823,204		51,793		2,356		89,521
Total current assets		1,467,317		54,830		4,063		170,421		2,057,000		55,131		3,707		139,182
Noncurrent Assets
Other non-current assets		648,302		224,273				20,592		608,878		225,492				20,807
Investments, PP&E and intangible assets		8,478,265		9,703,392		11,043		383,763		8,537,009		9,574,588		11,365		390,672
Total non-current assets		9,126,567		9,927,665		11,043		404,355		9,145,887		9,800,080		11,365		411,479
Total Assets		10,593,884		9,982,495		15,106		574,776		11,202,887		9,855,211		15,072		550,661
Current Liabilities
Borrowings and financing		806,745		247,212						828,439		241,029
Lease liabilities		304,093								317,526
Other current liabilities		688,575		129,993		826		27,312		1,117,975		125,794		602		19,721
Total current liabilities		1,799,413		377,205		826		27,312		2,263,940		366,823		602		19,721
Noncurrent Liabilities
Borrowings and financing		1,951,084		6,494,594						2,162,657		6,368,070
Lease liabilities		1,649,300								1,674,594
Other non-current liabilities		805,690		665,683				16,738		788,862		665,653				15,900
Total non-current liabilities		4,406,074		7,160,277				16,738		4,626,113		7,033,723				15,900
Shareholders’ equity		4,388,397		2,445,013		14,280		530,726		4,312,834		2,454,665		14,470		515,040
Total liabilities and shareholders’ equity		10,593,884		9,982,495		15,106		574,776		11,202,887		9,855,211		15,072		550,661

 

	01/01/2021 a 03/31/2021									01/01/2020 a 03/31/2020
		Joint-Venture						Joint-Operation				Joint-Venture		Joint-Operation
Equity interest (%)		MRS Logística		Transnordestina Logística		Equimac S.A.		Itá Energética		MRS Logística		Transnordestina Logística		Itá Energética
		33.22%		47.26%		50.00%		48.75%		34.94%		47.26%		48.75%
Statements of Income
Net revenue		965,022		143		1,107		59,470		674,725				40,991
Cost of sales and services		(661,441)				(1,092)		(18,749)		(624,148)				(15,659)
Gross profit		303,581		143		15		40,721		50,577		-		25,332
Operating (expenses) income		(88,723)		(4,617)		(204)		(16,237)		(72,015)		(8,065)		(16,639)
Financial income (expenses), net		(97,514)		(5,178)		(1)		(699)		(111,614)		(5,337)		330
Income before income tax and social contribution		117,344		(9,652)		(190)		23,785		(133,052)		(13,402)		9,023
Current and deferred income tax and social contribution		(41,850)				(1)		(8,099)		41,521				(3,064)
Profit / (loss) for the period		75,494		(9,652)		(191)		15,686		(91,531)		(13,402)		5,959

 

10.f)

TRANSNORDESTINA LOGÍSTICA SA (“TLSA”)

 

It is in the pre-operational phase and should remain so until the completion of Mesh II. The approved schedule, which provided for the completion of the work for January 2017, is currently under discussion with the responsible bodies. Its Management understands that new deadlines for the completion of the project will not substantially negatively imply the expected return on investment.

 

Management relies on resources from its shareholders and third parties to complete the work, which it expects to be available, based on previously concluded agreements and recent discussions between the parties involved. After evaluating this matter, The Management concluded that the use of the project’s business continuity accounting basis in the preparation of the interim financial information, was considered appropriate.

 

The assumptions used to evaluate the impairment test in December 2020 remain valid and there is no event to justify the recognition of impairment in the quarter.

 

10.g)

Investment properties:

 

The balance of investment properties as of March 31, 2021 is shown below:

 

 

		Consolidated						Parent Company
		Land		Buildings		Total		Land		Buildings		Total
Balance at December 31, 2020		97,610		62,264		159,874		94,431		50,568		144,999
Cost		97,610		86,548		184,158		94,431		74,260		168,691
Accumulated depreciation				(24,284)		(24,284)				(23,692)		(23,692)
Balance at December 31, 2020		97,610		62,264		159,874		94,431		50,568		144,999
Depreciation				(764)		(764)				(601)		(601)
Balance at March 31, 2021		97,610		61,500		159,110		94,431		49,967		144,398
Cost		97,610		86,548		184,158		94,431		74,261		168,692
Accumulated depreciation				(25,048)		(25,048)				(24,294)		(24,294)
Balance at March 31, 2021		97,610		61,500		159,110		94,431		49,967		144,398

 

The Company’s estimate of the fair value of investment properties was of R$1,863,563 at March 31, 2021 and December 31, 2020) in the consolidated and R$1,795,553 at the parent company.

 

The average estimated useful lives for the periods are as follows (in years):

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Buildings	27		27		28		28

 

 

 

 

 

11.

PROPERTY, PLANT AND EQUIPMENT

 

	Consolidated
	Land		Buildings and Infrastructure		Machinery, equipment and facilities		Furniture and fixtures		Construction in progress		Right of use (i)		Other (*)		Total
Balance at December 31, 2020	257,686		2,677,565		12,457,383		26,297		3,680,322		516,668		100,302		19,716,223
Cost	257,686		4,752,412		26,213,225		182,974		3,680,322		634,786		414,705		36,136,110
Accumulated depreciation			(2,074,847)		(13,755,842)		(156,677)				(118,118)		(314,403)		(16,419,887)
Balance at December 31, 2020	257,686		2,677,565		12,457,383		26,297		3,680,322		516,668		100,302		19,716,223
Effect of foreign exchange differences	5,139		9,714		32,339		314		2,491		625		104		50,726
Acquisitions					52,019		621		357,359		55,549		151		465,699
Capitalized interest (1) (notes 26 and 29)									15,133						15,133
Write-offs (note 25)					(31)				(2,286)		(38,017)		(130)		(40,464)
Depreciation (note 24)	(115)		(39,069)		(396,597)		(1,297)				(18,205)		(7,761)		(463,044)
Transfers to other asset categories	116		215		302,532		4		(310,626)				7,759
Right of use - Remesurement											6,816				6,816
Others					(18)				9,066				(205)		8,843
Balance at March 31, 2021	262,826		2,648,425		12,447,627		25,939		3,751,459		523,436		100,220		19,759,932
Cost	262,826		4,776,117		26,690,241		185,343		3,751,459		646,755		423,359		36,736,100
Accumulated depreciation			(2,127,692)		(14,242,614)		(159,404)				(123,319)		(323,139)		(16,976,168)
Balance at March 31, 2021	262,826		2,648,425		12,447,627		25,939		3,751,459		523,436		100,220		19,759,932

 

 

		Parent Company
		Land		Buildings and Infrastructure		Machinery, equipment and facilities		Furniture and fixtures		Construction in progress		Right of use (i)		Other (*)		Total
Balance at December 31, 2020		28,953		1,014,542		7,519,472		8,397		1,652,468		64,659		27,233		10,315,724
Cost		28,953		1,333,345		15,039,880		98,193		1,652,468		107,528		139,806		18,400,173
Accumulated depreciation				(318,803)		(7,520,408)		(89,796)				(42,869)		(112,573)		(8,084,449)
Balance at December 31, 2020		28,953		1,014,542		7,519,472		8,397		1,652,468		64,659		27,233		10,315,724
Acquisitions						26,259		417		169,206		570				196,452
Capitalized interest (1) (notes 26 and 29)										6,864						6,864
Write-offs (note 25)												(17,072)				(17,072)
Depreciation (note 24)				(5,499)		(188,997)		(440)				(2,997)		(1,506)		(199,439)
Drop down of Cements (note 10.c)		(3,350)		(720,068)		(1,643,144)		(687)		(733,706)		(23,697)		(4,509)		(3,129,161)
Transfers to other asset categories						153,739				(153,844)				105
Right of use - Remesurement												306				306
Balance at March 31, 2021		25,603		288,975		5,867,329		7,687		940,988		21,769		21,323		7,173,674
Cost		25,603		492,390		12,905,513		94,392		940,988		36,728		125,892		14,621,506
Accumulated depreciation				(203,415)		(7,038,184)		(86,705)				(14,959)		(104,569)		(7,447,832)
Balance at March 31, 2021		25,603		288,975		5,867,329		7,687		940,988		21,769		21,323		7,173,674

 

(*) Refer substantially to: i) in the consolidated picture: assets for railway use, such as yards, rails, mines and dormant;

(1) The cost of capitalized interest is calculated, basically, for Mining projects that substantially refer to the expansion of Casa de Pedra (MG) and TECAR (RJ) - see notes 26 and 29.

 

(i)

Right of use

 

Below the movements of the right of use recognized on March 31, 2021:

 

 

	Consolidated
	Land		Buildings and Infrastructure		Machinery, equipment and facilities		Others		Total
Balance at December 31, 2020	393,015		66,086		51,946		5,621		516,668
Cost	434,689		75,882		81,598		42,617		634,786
Accumulated depreciation	(41,674)		(9,796)		(29,652)		(36,996)		(118,118)
Balance at December 31, 2020	393,015		66,086		51,946		5,621		516,668
Effect of foreign exchange differences			129		412		84		625
Addition			145		52,563		2,841		55,549
Remesurement	395		(896)		7,317				6,816
Depreciation	(6,120)		(297)		(6,708)		(5,080)		(18,205)
Write-offs	(16,940)				(20,944)		(133)		(38,017)
Transfers to other asset categories			(7,882)		7,474		408
Balance at March 31, 2021	370,350		57,285		92,060		3,741		523,436
Cost	417,838		75,261		120,669		32,987		646,755
Accumulated depreciation	(47,488)		(17,976)		(28,609)		(29,246)		(123,319)
Balance at March 31, 2021	370,350		57,285		92,060		3,741		523,436

 

 

 

		Parent Company
		Land		Machinery, equipment and facilities		Others		Total
Balance at December 31, 2020		21,081		42,082		1,496		64,659
Cost		37,700		64,003		5,825		107,528
Accumulated depreciation		(16,619)		(21,921)		(4,329)		(42,869)
Balance at December 31, 2020		21,081		42,082		1,496		64,659
Addition						570		570
Drop down of Cements (note 10.c)		(1,808)		(21,497)		(392)		(23,697)
Remesurement		306						306
Depreciation		(1,709)		(951)		(337)		(2,997)
Write-offs		(16,940)				(132)		(17,072)
Transfers to other asset categories		2,685		(2,685)
Balance at March 31, 2021		3,615		16,949		1,205		21,769
Cost		16,798		17,034		2,896		36,728
Accumulated depreciation		(13,183)		(85)		(1,691)		(14,959)
Balance at March 31, 2021		3,615		16,949		1,205		21,769

 

The average estimated useful lives for the periods are as follows (in years):

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Buildings and Infrastructure(1)	34		34		31		42
Machinery, equipment and facilities	20		20		22		21
Furniture and fixtures	12		12		13		13
Others	10		10		12		12

(1) In the Parent Company the reduction is due to the Drop down of the cement assets from CSN to CSN Cimentos S.A..

 

 

 

 

 

12.

INTANGIBLE ASSETS

 

	Consolidated													Parent Company
	Goodwill		Customer relationships		Software		Trademarks and patents		Rights and licenses (*)		Others		Total		Software		Rights and licenses		Total
Balance at December 31, 2020	3,606,156		278,041		45,665		215,532		3,169,349		2,051		7,316,794		40,236		8,086		48,322
Cost	3,846,563		823,540		182,059		215,532		3,193,787		2,051		8,263,532		131,795		8,088		139,883
Accumulated amortization	(131,077)		(545,499)		(136,394)				(24,438)				(837,408)		(91,559)		(2)		(91,561)
Adjustment for accumulated recoverable value	(109,330)												(109,330)
Balance at December 31, 2020	3,606,156		278,041		45,665		215,532		3,169,349		2,051		7,316,794		40,236		8,086		48,322
Effect of foreign exchange differences			13,405		132		10,597				102		24,236
Acquisitions and expenditures					303								303
Drop down of Cements (note 10.c)																	(8,086)		(8,086)
Amortization (note 24)			(17,651)		(2,606)								(20,257)		(1,949)				(1,949)
Balance at March 31, 2021	3,606,156		273,795		43,494		226,129		3,169,349		2,153		7,321,076		38,287				38,287
Cost	3,846,563		863,963		172,007		226,129		3,193,787		2,153		8,304,602		131,795				131,795
Accumulated amortization	(131,077)		(590,168)		(128,513)				(24,438)				(874,196)		(93,508)				(93,508)
Adjustment for accumulated recoverable value	(109,330)												(109,330)
Balance at March 31, 2021	3,606,156		273,795		43,494		226,129		3,169,349		2,153		7,321,076		38,287				38,287

(*) Composed mainly of mining rights. Amortization is based on production volume.

 

The average useful life by nature is as follows (in years):

 

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Software	9		9		9		9
Customer relationships	13		13

 

12.a)

Goodwill impairment test

 

Goodwill arising from expected future profitability of acquired companies and intangible assets with indefinite useful lives (brands) were allocated to CSN’s cash generating units (CGUs) which represent the lowest level of assets or group of assets of the Company. According to CPC 01 (R1) / IAS36, when a CGU has an intangible asset with no defined useful life allocated, the Company must perform an impairment test.

 

The assumptions used in the calculation of the value in use on December 31, 2020, remain in force and it was not necessary to record impairment losses on the balances of these assets for the period ended March 31, 2021

 

13.

BORROWINGS AND FINANCING

 

The balances of loans, financing and debentures that are recorded at amortized cost are as follows:

 

		Consolidated								Parent Company
		Current Liabilities				Noncurrent Liabilities				Current Liabilities				Noncurrent Liabilities
		03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020
Foreign Debt
Floating Rates:
Prepayment		1,362,912		1,119,558		1,626,864		3,457,105		1,358,622		1,118,415		1,199,567		3,067,352
Fixed Rates:
Bonds, Perpetual bonds and Advance on Foreign Exchange Contract		285,167		426,676		21,840,393		19,898,213		-		31,969
Intercompany										436,924		475,035		12,673,717		12,971,249
Fixed interest in EUR
Intercompany										24,814		9,132		1,372,986		1,595,775
Facility		216,104		326,970		133,830		143,503
		1,864,183		1,873,204		23,601,087		23,498,821		1,820,360		1,634,551		15,246,270		17,634,376
Debt agreements in Brazil
Floating Rate Securities in R$:
BNDES/FINAME, Debentures, NCE and CCB		1,783,622		2,282,279		6,992,457		7,716,307		1,739,345		2,234,683		6,124,047		6,838,197
Fixed Rate Securities in R$:
Intercompany				-						18,280		18,423		0		0
		1,783,622		2,282,279		6,992,457		7,716,307		1,757,625		2,253,106		6,124,047		6,838,197
Total Borrowings and Financing		3,647,805		4,155,483		30,593,544		31,215,128		3,577,985		3,887,657		21,370,317		24,472,573
Transaction Costs and Issue Premiums		(29,895)		(29,030)		(72,264)		(70,928)		(30,029)		(29,164)		(50,123)		(48,820)
Total Borrowings and Financing + Transaction cost		3,617,910		4,126,453		30,521,280		31,144,200		3,547,956		3,858,493		21,320,194		24,423,753

 

13.a)

Borrowing and amortization, financing and debentures

 

The following table shows amortization and funding during the period:

 

		Consolidated				Parent Company
		03/31/2021		12/31/2020		03/31/2021		12/31/2020
Opening balance		35,270,653		27,967,036		28,282,246		24,099,460
New debts		347,500		8,116,247		1,435,178		2,502,457
Repayment		(3,653,158)		(6,448,658)		(6,508,220)		(2,907,845)
Payments of charges		(639,045)		(1,922,130)		(208,835)		(1,051,557)
Accrued charges (Note 26)		486,280		2,002,052		197,741		1,012,750
Others  (1)		2,326,960		5,556,106		1,670,040		4,626,981
Closing balance		34,139,190		35,270,653		24,868,150		28,282,246

 

1.

Including unrealized exchange and monetary variations and funding cost.

 

 

On March 31,2021, the Company entered into new debt agreements and amortized borrowings as shown below:

 

		Consolidated
						03/31/2021
Nature		New debts		Repayment		Interest payment
Prepayment (1)				(1,942,732)		(47,188)
Bonds, Perpetual bonds, ACC, CCE and Facility		306,597		(447,140)		(526,432)
BNDES/FINAME, Debentures, NCE and CCB (2)		40,903		(1,263,286)		(65,425)
		347,500		(3,653,158)		(639,045)

 

(1)

During the first quarter of 2021, the Company amortized debts initially scheduled for October 2021 and January 2022 in the amount of US$329 million, equivalent to R$1.9 billion.

 

(2)

The Company repurchased 450,000 debentures in the amount of R$391 million anticipating maturities scheduled from March 2021 to December 2023.

 

The following table shows the average interest rates:

 

		Consolidated				Parent Company
				03/31/2021				03/31/2021
		Average interest rate (i)		Total debt		Average interest rate (i)		Total debt
US$		6.73%		25,115,336		2.48%		15,668,830
EUR		1.50%		349,934		3.67%		1,397,800
R$		3.69%		8,776,079		3.67%		7,881,672
				34,241,349				24,948,302

 

(i)

To determine the average interest rate on debt contracts with floating rates, the Company used the rates applied on March 31, 2020. In the Parent Company, it considers the interest rate of the contracts intercompany.

 

13.b)

Maturities of loans, financing and debentures presented in current and non-current liabilities

 

						Consolidated						Parent Company
						03/31/2021						03/31/2021
						Principal						Principal
		Borrowings and financing in foreign currency		Borrowings and financing in national currency		Total		Borrowings and financing in foreign currency		Borrowings and financing in national currency		Total
2021		983,441		1,288,267		2,271,708		891,113		1,271,731		2,162,844
2022		1,644,902		2,750,256		4,395,158		2,791,573		2,422,127		5,213,700
2023		6,110,368		2,901,589		9,011,957		1,520,002		2,551,672		4,071,674
2024		204,389		1,245,143		1,449,532		4,442,773		1,045,326		5,488,099
2025				71,348		71,348		1,018,996		71,339		1,090,335
2026		3,418,380		71,339		3,489,719		1,784,077		71,339		1,855,416
After 2026		7,406,490		448,137		7,854,627		4,618,096		448,138		5,066,234
Perpetual bonds		5,697,300				5,697,300
		25,465,270		8,776,079		34,241,349		17,066,630		7,881,672		24,948,302

 

 

·      Covenants

 

The Company is compliant with its financial and non-financial obligations (covenants).

 

 

14.

FINANCIAL INSTRUMENTS

 

I - Identification and valuation of financial instruments

 

The Company may operate with several financial instruments, with emphasis on cash and cash equivalents, including financial investments, marketable securities, accounts receivable from customers, accounts payable to suppliers and borrowings and financing. Additionally, we may also operate with derivative financial instruments, such as swap exchange rate, swap interest and derivatives with commodities.

 

Considering the nature of the instruments, the fair value is basically determined by the use of quotations in the capital markets in Brazil and the Mercantile and Futures Exchange. The amounts recorded in current assets and liabilities have immediate liquidity. Considering the term and characteristics of these instruments, fair values do not differ from the recorded amounts.

 

·

Classification of financial instruments

 

 

		Consolidated
Consolidated								03/31/2021						12/31/2020
		Notes		Fair value through profit or loss		Measured at amortized cost		Balances		Fair value through profit or loss		Measured at amortized cost		Balances
Assets
Current
Cash and cash equivalents		4				13,908,238		13,908,238				9,944,586		9,944,586
Short-term investments		5		3,817,603		464,548		4,282,151		3,305,109		478,253		3,783,362
Trade receivables		6				4,219,052		4,219,052				2,867,352		2,867,352
Dividends and interest on equity		9				38,086		38,086				38,088		38,088
Derivative financial instruments		9		39,236				39,236
Trading securities		9		14,977				14,977		5,065				5,065
Total				3,871,816		18,629,924		22,501,740		3,310,174		13,328,279		16,638,453
Non-current
Investments		5				132,635		132,635				123,409		123,409
Other trade receivables		9				2,445		2,445				2,445		2,445
Eletrobrás compulsory loan		9				851,485		851,485				852,532		852,532
Receivables by indemnity		9				521,611		521,611				517,183		517,183
Loans - related parties		9				1,043,182		1,043,182				966,050		966,050
Investments		10		90,883				90,883		59,879				59,879
Total				90,883		2,551,358		2,642,241		59,879		2,461,619		2,521,498
Total Assets				3,962,699		21,181,282		25,143,981		3,370,053		15,789,898		19,159,951
Liabilities
Current
Borrowings and financing		13				3,647,805		3,647,805				4,155,483		4,155,483
Trade payables		17				6,156,294		6,156,294				4,819,539		4,819,539
Trade payables -  drawee risk		15				1,469,209		1,469,209				623,861		623,861
Dividends and interest on capital		15				901,982		901,982				946,133		946,133
Leases		16				95,287		95,287				93,626		93,626
Derivative financial instruments										8,722				8,722
Total						12,270,577		12,270,577		8,722		10,638,642		10,647,364
Non-current
Borrowings and financing		13				30,593,544		30,593,544				31,215,128		31,215,128
Trade payables		17				225,069		225,069				543,527		543,527
Derivative financial instruments				119,306				119,306		97,535				97,535
Leases		16				445,209		445,209				436,505		436,505
Total				119,306		31,263,822		31,383,128		97,535		32,195,160		32,292,695
Total Liabilities				119,306		43,534,399		43,653,705		106,257		42,833,802		42,940,059

 

 

		Parent Company
Parent Company								03/31/2021						12/31/2020
		Notes		Fair value through profit or loss		Measured at amortized cost		Balances		Fair value through profit or loss		Measured at amortized cost		Balances
Assets
Current
Cash and cash equivalents		4				5,126,462		5,126,462				4,647,125		4,647,125
Short-term investments		5		3,817,603		462,361		4,279,964		3,305,109		475,782		3,780,891
Trade receivables		6				1,699,363		1,699,363				1,549,703		1,549,703
Dividends and interest on equity		9				28,156		28,156				329,413		329,413
Trading securities		9		14,854				14,854		4,927				4,927
Loans - related parties		9				59,900		59,900				53,718		53,718
Total				3,832,457		7,376,242		11,208,699		3,310,036		7,055,741		10,365,777
Non-current
Investments		5				132,635		132,635				123,409		123,409
Other trade receivables		9				1,003		1,003				1,003		1,003
Eletrobrás compulsory loan		9				850,714		850,714				851,713		851,713
Receivables by indemnity		9				521,611		521,611				517,183		517,183
Loans - related parties		9				1,097,432		1,097,432				1,007,677		1,007,677
Investments		10		90,883		-		90,883		59,879		-		59,879
Total				90,883		2,603,395		2,694,278		59,879		2,500,985		2,560,864
Total Assets				3,923,340		9,979,637		13,902,977		3,369,915		9,556,726		12,926,641
Liabilities
Current
Borrowings and financing		13				3,577,985		3,577,985				3,887,657		3,887,657
Trade payables		17				4,167,535		4,167,535				4,133,089		4,133,089
Trade payables -  drawee risk		15				1,469,209		1,469,209				623,861		623,861
Dividends and interest on capital		15				901,982		901,982				901,983		901,983
Leases		16				7,829		7,829				26,546		26,546
Total						10,124,540		10,124,540				9,573,136		9,573,136
Non-current
Borrowings and financing		13				21,370,317		21,370,317				24,472,573		24,472,573
Trade payables		17				145,301		145,301				376,753		376,753
Derivative financial instruments				119,306				119,306		97,535				97,535
Leases		16				15,771		15,771				40,561		40,561
Total				119,306		21,531,389		21,650,695		97,535		24,889,887		24,987,422
Total Liabilities				119,306		31,655,929		31,775,235		R$ 97,535		34,463,023		34,560,558

 

·

Fair value measurement

 

The table below shows the financial instruments recorded at fair value through profit or loss, classifying them according to the fair value hierarchy:

 

 

Consolidated		03/31/2021						12/31/2020
		Level 1		Level 2		Balances		Level 1		Level 2		Balances
Assets
Current
Financial assets at fair value through profit or loss
Financial investments		3,817,603				3,817,603		3,305,109				3,305,109
Derivative financial instruments				39,236		39,236
Trading securities		14,977				14,977		5,065				5,065
Non-current
Financial assets at fair value through profit or loss
Investments		90,883				90,883		59,879				59,879
Total Assets		3,923,463		39,236		3,962,699		3,370,053				3,370,053
Liabilities
Current
Financial liabilities at fair value through profit or loss
Derivative financial instruments										8,722		8,722
Non-current
Financial liabilities at fair value through profit or loss
Derivative financial instruments				119,306		119,306				97,535		97,535
Total Liabilities				119,306		119,306				106,257		106,257

 

Level 1 - Data are prices quoted in an active market for items identical to the assets and liabilities being measured.

 

Level 2 - Consider inputs observable in the market, such as interest rates, exchange rates, etc., but are not prices negotiated in active markets.

 

There are no assets or liabilities classified as level 3.

 

II - Investments in securities valued at fair value through profit or loss

 

The Company has common shares (USIM3), preferred shares (USIM5) of Usiminas (“Usiminas shares”) and shares of Panatlântica SA (PATI3), which are designated as fair value through profit or loss.

 

Usiminas shares are classified as current assets in financial investments and Panatlântica shares are classified as non-current assets under the investment item. They are recorded at fair value (fair value), based on the market price quote in B3.

 

In accordance with the Company’s policy, the gains and losses arising from the variation in the share price are recorded directly in the income statement as financial result in the case of financial investments, or as other operating income and expenses in the case of long-term investments.

 

 

Class of shares		03/31/2021								12/31/2020								03/31/2021		03/31/2020
		Quantity		Equity interest (%)		Share price		Closing Balance		Quantity		Equity interest (%)		Share price		Closing Balance		Fair value adjustment recognized in profit or loss (note 25 and 26)
USIM3		107,156,651		15.19%		17.89		1,917,032		107,156,651		15.19%		15.69		1,681,288		235,744		(452,201)
USIM5		111,144,456		20.29%		17.10		1,900,571		111,144,456		20.29%		14.61		1,623,821		276,750		(510,153)
								3,817,603								3,305,109		512,494		(962,354)
PATI3		2,065,529		11.31%		44.00		90,883		2,065,529		11.31%		28.99		59,879		31,004		(207)
								3,908,486								3,364,988		543,498		(962,561)

 

III - Financial risk management:

 

The Company uses risk management strategies with guidance on the risks incurred by us. The nature and general position of financial risks are regularly monitored and managed in order to assess results and the financial impact on cash flow. Credit limits and hedge quality of counterparties are also reviewed periodically.

 

Market risks are hedged when we consider necessary to support the corporate strategy or when it is necessary to maintain the level of financial flexibility.

 

We are exposed to exchange rate, interest rate, market price and liquidity risks.

 

The Company may manage some of the risks through the use of derivative instruments not associated with any speculative trading or short selling.

 

14.a)

Exchange rate, market price and interest rate risk:

 

·

Exchange rate risk

 

The exposure arises from the existence of assets and liabilities denominated in Dollar or Euro, since the Company’s functional currency is substantially the Real and is called natural exchange exposure. The net exposure is the result of the offsetting of the natural exchange exposure by the instruments of hedge adopted by CSN.

 

The consolidated net exposure as of March 31, 2021 is shown below:

 

		03/31/2021
Foreign Exchange Exposure		(Amounts in US$’000)		(Amounts in €’000)
Cash and cash equivalents overseas		1,047,363		2,810
Trade receivables		414,755		1,991
Financial investments		23,280		-
Iron ore derivative		2,110
Other assets		9,267		4,581
Total Assets		1,496,776		9,382
Borrowings and financing		(4,408,288)		-
Trade payables		(282,234)		(8,859)
Other liabilities		(7,328)		(1,114)
Total Liabilities		(4,697,850)		(9,973)
Foreign exchange exposure		(3,201,074)		(591)
Cash flow hedge accounting		3,762,450		-
Dollar - to - real NDF		(100,000)
Exchange rate swap CDI x Dollar		(67,000)		-
Net foreign exchange exposure		394,376		(591)

 

CSN uses as a strategy the Hedge Accounting, as well as derivative financial instruments to protect future cash flows.

 

Sensitivity analysis of Derivative Financial Instruments and Consolidated Foreign Exchange Exposure

 

The Company considered scenarios 1 and 2 to be 25% and 50% deterioration for currency volatility, using the exchange rate closing rate as of March 31, 2021 as a reference.

 

The currencies used in the sensitivity analysis and their respective scenarios are shown below:

 

								03/31/2021
Currency		Exchange rate		Probable scenario		Scenario 1		Scenario 2
USD		5.6973		5.6445		7.1216		8.5460
EUR		6.6915		6.7158		8.3644		10.0373
USD x EUR		1.1725		1.1888		1.4656		1.7588

 

The effects on the result, considering scenarios 1 and 2 are shown below:

 

 

										03/31/2021
Instruments		Notional		Risk		Probable scenario (*) R$		Scenario 1 R$		Scenario 2 R$
Gross exchange position		(3,201,074)		Dollar		169,017		(4,559,370)		(9,118,739)
Cash flow hedge accounting		3,762,450		Dollar		(198,657)		5,358,952		10,717,903
Dollar - to - real NDF		(100,000)		Dollar		5,280		(142,433)		(284,865)
Exchange rate swap CDI x Dollar		(67,000)		Dollar		3,538		(95,430)		(190,860)
Net exchange position		394,376		Dollar		(20,822)		561,719		1,123,439
Net exchange position		(591)		Euro		(14)		(989)		(1,978)
Exchange rate swap Dollar x Euro		87,976		Dollar		2,542		(90,991)		(157,936)

 

(*) The probable scenarios were calculated considering the following variations for risks: Real x Dollar - appreciation of the Real by 0.93% / Real x Euro - devaluation of the Real by 0.36% / Euro x Dollar - devaluation of Euro by 1.39%. Source: Central Bank of Brazil and European Central Bank quotations on 04/09/2021.

 

·

Stock market price risks

 

The Company is exposed to the risk of changes in share prices due to investments valued at fair value through the result that are quoted based on the market price at B3.

 

Sensitivity analysis for stock price risks

 

We present below the sensitivity analysis for share price risks. The Company considered scenarios 1 and 2 to be 25% and 50% devaluation in the share price using the closing price on March 31, 2021 as a reference. The probable scenario considered a 5% devaluation in the share price.

 

The effects on the result, considering the probable scenarios, 1 and 2 are shown below:

 

				03/31/2021
Class of shares		Probable scenario		Scenario 1		Scenario 2
USIM3		(95,852)		(479,258)		(958,516)
USIM5		(95,029)		(475,143)		(950,285)
PATI3		(4,544)		(22,721)		(45,442)

 

·

Interest rate risk:

 

This risk arises from financial investments, borrowings and financing and debentures linked to the fixed and floating interest rates of the CDI, TJLP and Libor, exposing these financial assets and liabilities to interest rate fluctuations as shown in the sensitivity analysis table below.

 

Sensitivity analysis of changes in interest rates

 

We present below the sensitivity analysis for interest rate risks. The Company considered scenarios 1 and 2 to be 25% and 50% deterioration for interest rate volatility using the closing rate as of March 31, 2021 as a reference.

 

The interest rates used in the sensitivity analysis and their respective scenarios are shown below:

 

 

						03/31/2021
Interest		Interest rate		Scenario 1		Scenario 2
CDI		2.65%		3.31%		3.98%
TJLP		4.39%		5.49%		6.59%
LIBOR		0.21%		0.26%		0.31%

 

The effects on the result, considering scenarios 1 and 2 are shown below:

 

												Consolidated
										Impact on profit or loss
Changes in interest rates		% p.a		Assets		Liabilities		Probable scenario (*)		Scenario 1		Scenario 2
CDI		2.65		7,477,707		(7,865,137)		(10,681)		(2,567)		(5,134)
TJLP		4.39				(843,873)		(2,055)		(9,262)		(18,524)
Libor		0.21				(2,952,056)		(37,720)		(1,515)		(3,030)

(*) The sensitivity analysis is based on the premise of maintaining the market values as of March 31, 2021 as a probable scenario recorded in the company’s assets and liabilities.

 

·

Market price risk:

 

The Company is also exposed to market risks related to the volatility of commodity and input prices. In line with its risk management policy, risk mitigation strategies involving commodities can be used to reduce cash flow volatility. These mitigation strategies may incorporate derivative instruments, predominantly forward transactions, futures and options.

 

Sensitivity analysis for price risks “Platts index”

 

 

A operação de Hedge accounting de fluxo de caixa – índice “Platts” foi liquidada em 2 de abril de 2021 no montante de R$11,992 e não ocorreu variação.

 

14.b)

Instruments protection: Derivatives and Hedge accounting cash flow and net investment hedge in foreign subsidiaries

 

· Derivative financial instruments portfolio position

 

Swap exchange rate Dollar x Euro

 

The subsidiary Lusosider has derivative transactions to hedge its dollar exposure against the euro.

 

Swap exchange rate CDI x Dollar

 

The Company has derivative transactions with Banco Bradesco to protect its debt in NCE raised in September 2019 with maturity in October 2023 in the amount of US$67 million (equivalent to R $ 278 million) at a cost compatible with that usually practiced by the Company. Additionally, in 2021, the Company sold US$100 million in NDF (Non-Deliverable Forward) with maturity in June 2021.

 

 

														Consolidated
														03/31/2021
								Appreciation (R$)				Fair value (market)		Impact on financial income (expenses) in 2021
Counterparties		Maturity		Functional Currency		Notional amount		Asset position		Liability position		Amounts receivable / (payable)
Exchange rate swap Dollar x Real		06/01/2021		Dollar		(100,000)		583,340		(565,550)		17,790		6,758
Total dollar x real swap (NDF)						(100,000)		583,340		(565,550)		17,790		6,758
Exchange rate swap Dollar x Euro		04/26/2021 to 10/21/2021		Dollar		57,176		326,308		(320,671)		5,637		9,514
Exchange rate swap Dollar x Euro		05/04/2021 a 08/20/2021		Dollar		30,800		175,777		(171,988)		3,789		8,110
Total dollar-to-euro swap						87,976		502,085		(492,659)		9,426		17,624
Exchange rate swap CDI x Dollar		02/10/2023		Dollar		(67,000)		291,069		(410,375)		(119,306)		(27,444)
Total Swap CDI x dollar						(67,000)		291,069		(410,375)		(119,306)		(27,444)
								1,376,494		(1,468,584)		(92,090)		(3,062)

 

·

Cash flow hedge accounting

 

Foreign exchange hedge accounting

 

The table below presents a summary of the relations of foreign exchange hedge accounting as of March 31, 2021:

 

																		03/31/2021
Designation Date		Hedging Instrument		Hedged item		Type of hedged risk		Hedged period		Exchange rate on designation		Designated amounts (US$’000)		Amortizated part (USD'000)		Effect on Result (*) (R$'000)		Impact on Shareholders' equity (R$'000)
07/21/2015		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		July 2019 - March 2021		3.1813		60,000		(60,000)		(33,016)		-
07/23/2015		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		July 2019 - March 2021		3.285		100,000		(100,000)		(52,436)		-
07/23/2015		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		August 2018 - October 2022		3.285		30,000		(24,000)		-		(26,531)
07/24/2015		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		August 2018 - October 2022		3.3254		100,000		(100,000)		-		(78,764)
07/27/2015		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		August 2018 - October 2022		3.3557		25,000		(24,150)		-		(19,730)
07/27/2015		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		August 2018 - October 2022		3.3557		70,000		(56,000)		-		(59,925)
07/27/2015		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		August 2018 - October 2022		3.3557		30,000		(24,000)		-		(25,683)
07/28/2015		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		August 2018 - October 2022		3.3815		30,000		(24,000)		-		(25,373)
3/8/2015		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		July 2018 - October 2022		3.394		355,000		(343,000)		(108,874)		(50,446)
2/4/2018		Bonds		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		July 2018 - February 2023		3.3104		1,170,045		(820,045)		-		(835,415)
07/31/2019		Bonds and Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		January 2020 - April 2026		3.7649		1,342,761		(254,161)		(12,148)		(2,103,610)
10/1/2020		Bonds with no maturity date and Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		March 2020 - December 2050		4.0745		1,416,000		(137,000)		(45,776)		(2,075,560)
01/28/2020		Bonds		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		March 2017 - January 2028		4.2064		1,000,000		-		-		(1,490,900)
Total												5,728,806		(1,966,356)		(252,250)		(6,791,937)

(*) On March 31, 2021, the amount of (R$252.250) was recorded in Other Operating Expenses. As of March 31, 2020, (R$364.818).

 

In the hedging relationships described above, the amounts of the debt instruments were fully designated for equivalent iron ore export portions.

 

The changes in the hedge accounting amounts recognized in shareholders’ equity as of March 31, 2021 are as follows:

 

 

	Consolidated and Parent Company
	12/31/2020		Movement		Realization		03/31/2021
Cash flow hedge accounting	5,125,058		1,919,129		(252,250)		6,791,937

 

The realization of Hedge accounting cash flow is recognized in Other operating income and expenses, note 25.

 

As of March 31, 2021, the hedging relationships established by the Company were effective according to the retrospective and prospective tests performed. Thus, no reversal for hedge accounting ineffectiveness was recognized.

 

Cash flow hedge accounting - “Platts” index

 

The Company has iron ore derivative instruments, entered into by its subsidiary CSN Mineração S.A., in order to reduce the volatility of its exposure to the commodity, the transactions were fully paid on April 02, 2021.

 

The Company formally designated the hedge relationship and, consequently, applied the hedge accounting with the derivative instrument designated as hedging instrument and the Platts index applicable to a portion of its highly probable future sales of iron ore was designated as the hedged item. Accordingly, fluctuations of the “Platts” index will be initially recorded in theshareholders’ equity as Other Comprehensive Income and will be reclassified to the income statement when the referred sales occur.

 

The table below shows the result of the derivative instrument on March 31, 2021:

 

 

								03/31/2021				03/31/2021
				Appreciation (R$)				Fair value (market)		Other income and expenses		Exchange variation
Maturity		Notional		Asset position		Liability position		Amounts receivable / (payable)
02/02/2021 (Settled)		Platts								(36,405)		(2,690)
03/02/2021 (Settled)		Platts								(34,116)		(2,871)
2/4/2021		Platts		1,633,459		(1,621,439)		12,020		11,961		59
				1,633,459		(1,621,439)		12,020		(58,560)		(5,502)

 

The change in the amounts related to cash flow hedge accounting - “Platts” index recorded in shareholders’ equity on March 31, 2021 is shown as follows:

 

	12/31/2020		Movement		Realization		03/31/2021
Cash flow hedge accounting  –  “Platts”	825		57,735		(58,560)		-
Income tax and social contribution on cash flow hedge accounting	(280)		(19,630)		19,910		-
Fair Value of cash flow accounting - Platts, net	545		38,105		(38,650)		-

 

Cash flow hedge accounting - index “Platts” has been fully effective since the inception of the derivative instruments.

 

The Company prepares formal documentation indicating how the designation of the hedge accounting cash flow - “Platts” index is aligned with CSN’s risk management objective and strategy, identifying the hedging instruments used, the hedged item, the nature of the risk to be hedged and demonstrating the effectiveness of the hedge relationships, debt instruments and iron ore derivative instruments (index “Platts”) in amounts equivalent to the portion of future sales, comparing the designated amounts with the expected values in accordance with its budgets.

 

·

Net investment hedge in foreign subsidiaries

 

The information related to the net investment hedge did not change in relation to that disclosed in the Company's accounts as of December 31, 2020. The balance recorded on March 31, 2021 and December 31, 2020 is R$6,293.

 

 

·

Classification of derivatives in the balance sheet and income

 

																03/31/2021		03/31/2020
Instruments		Assets						Liabilities						Other operating income expenses		Financial income (expenses), net (note 26)
		Current		Non-current		Total		Current		Non-current		Total
Exchange rate swap Dollar x Real		17,790				17,790										6,758
Exchange rate swap Dollar x Euro								9,426				9,426				17,624		2,757
Exchange rate swap GBP x Euro																		168
Exchange rate swap CDI x Dollar										(119,306)		(119,306)				(27,444)		(99,113)
Iron ore derivative		12,020				12,020								(58,560)		(5,502)
		29,810				29,810		9,426		(119,306)		(109,880)		(58,560)		(8,564)		(96,188)

 

14.c)

Liquidity risk

 

It is the risk that the Company may not have sufficient net funds to settle its financial commitments, as a result of the mismatch of term or volume between expected receipts and payments.

 

Future receipt and payment premises are established to manage cash liquidity in domestic and foreign currencies, which are monitored on a day-to-day basis by the Treasury Department. The payment schedules for long-term installments of borrowings and financing and debentures are presented in note 13.

 

The following are the contractual maturities of financial liabilities including interest.

 

									Consolidated
At March 31, 2021	Less than one year		From one to two years		From two to five years		Over five years		Total
Borrowings, financing and debentures (note 13)	3,647,805		12,031,018		5,010,599		13,551,927		34,241,349
Lease Liabilities (note 16)	95,287		151,478		115,200		178,531		540,496
Derivative financial instruments (note 14 I)					119,306				119,306
Trade payables (note 17)	6,156,294		197,547		27,522				6,381,363
Trade payables – Drawee risk (note 14 I)	1,469,209								1,469,209
Dividends and interest on equity (note 15)	901,982								901,982
Total	12,270,577		12,380,043		5,272,627		13,730,458		43,653,705

 

IV – Fair values of assets and liabilities in relation to the book value

 

Financial assets and liabilities measured at fair value through profit or loss are recorded in current and non-current assets and liabilities and gains and losses are recorded as financial income and expenses, respectively.

 

The amounts are recorded in the financial statements at their amortized cost, which are substantially similar to those that would be obtained if they were traded on the market. The fair values of other long-term assets and liabilities do not differ significantly from their book values, except for the amounts below.

 

The estimated fair value for certain consolidated long-term borrowings and financing was calculated at current market rates, considering the nature, term and risks similar to those of the registered contracts, as follows:

 

			03/31/2021				12/31/2020
	Closing Balance		Fair value		Closing Balance		Fair value
Perpetual bonds	5,705,055		5,727,268		5,203,773		5,157,465
Fixed Rate Notes	16,351,452		16,974,264		15,067,341		15,744,067

Source: Bloomberg

 

14.d)

Credit risk

 

The exposure to credit risks of financial institutions complies with the parameters established in the financial policy. The Company practices a detailed analysis of the financial position of its customers and suppliers, the determination of a credit limit and the permanent monitoring of its outstanding balance.

 

With respect to financial investments, the Company only invests in institutions with low credit risk assessed by credit rating agencies. Since part of the funds is invested in repo operations that are backed by Brazilian government bonds, there is also exposure to the credit risk of the country.

 

As for the exposure to credit risk in accounts receivable and other receivables, the Company has a credit risk committee, in which each new customer is analyzed individually regarding their financial condition, before granting the credit limit and payment terms, and periodically reviewed based on procedures and circumstances of each business area.

 

14.e)

Capital management

 

The Company seeks to optimize its capital structure in order to reduce its financial costs and maximize the return to its shareholders. The table below shows the evolution of the Company’s consolidated capital structure, with financing by equity and third-party capital:

 

Thousands of reais		03/31/2021		12/31/2020
Shareholder's equity (equity)		17,275,336		11,251,505
Borrowings and Financing (Third-party capital)		34,139,190		35,270,653
Gross Debit/Shareholder's equity		1.98		3.13

 

 

15.

OTHER PAYABLES

 

The other obligations classified in current and non-current liabilities have the following composition:

 

	Consolidated								Parent Company
	Current				Non-current				Current				Non-current
	03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020
Payables to related parties (note 21 A)	79,296		70,458		59,917		78,083		270,460		250,330		200,511		222,834
Derivative financial instruments (note 14 I)			8,722		119,306		97,535						119,306		97,535
Dividends and interest on capital (note 14 I)	901,982		946,133						901,982		901,983
Advances from customers (1)	1,145,238		1,100,772		1,514,256		1,725,838		169,877		196,595
Taxes in installments	43,420		45,331		154,915		160,247		9,173		9,806				1,320
Profit sharing - employees	196,751		150,341						130,105		109,482
Taxes payable					37,174		38,493						32,456		32,289
Provision for consumption and services	192,281		175,242						115,217		97,221
Third party materials in our possession	185,204		84,832						158,092		55,334
Trade payables - Drawee Risk (note 17)	1,469,209		623,861						1,469,209		623,861
Trade payables (note 17)					225,069		543,527						145,301		376,753
Lease Liabilities (note 16)	95,287		93,626		445,209		436,505		7,829		26,546		15,771		40,561
Other payables	51,646		58,321		65,498		65,108		24,135		31,030
	4,360,314		3,357,639		2,621,344		3,145,336		3,256,079		2,302,188		513,345		771,292

 

1.     Advances from customers: During 2019, the Company received in advance, through its subsidiary CSN Mineração, the total amount of US$746 million (R$2,907 million) related to supply contracts for approximately 33 million tons of iron ore signed with an important international player, the term for the execution of the contracted volumes is 5 years. On July 16, 2020, the Company concluded the contract for the additional supply of approximately 4 million tons of iron ore, and the amount received in advance, on August 28, 2020, was US$ 115 million (R$629 million). The term for the execution of the contract is 3 years.

 

 

 

 

 

16.

LEASE LIABILITIES

 

Lease liabilities are shown below:

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Leases	1,627,783		1,623,523		27,268		76,333
Present value adjustment - Leases	(1,087,287)		(1,093,392)		(3,668)		(9,226)
	540,496		530,131		23,600		67,107
Classified:
Current	95,287		93,626		7,829		26,546
Non-current	445,209		436,505		15,771		40,561
	540,496		530,131		23,600		67,107

 

The Company has lease agreements for port terminals in Itaguaí, the Solid Bulk Terminal - TECAR, used for loading and unloading coal and iron ores and the Container Terminal - TECON, with remaining terms of 27 and 31 years, respectively , and lease agreement for railway operation using the Northeast network with a remaining term of 7 years.

 

Additionally, the Company has property lease agreements, used as operational facilities and administrative and sales offices, in several locations where the Company operates, with remaining terms of 2, 5 and 15 years.

 

CSN also has lease contracts for operating equipment, used in mining operations and in the steel industry, with terms of 2 to 5 years.

 

The present value of future obligations was measured using the implicit rate observed in the contracts and for contracts that did not have a rate, the Company applied the incremental rate of loans - IBR, both in nominal terms.

 

The movement of lease liabilities is shown in the table below:

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Opening balance	530,131		474,390		67,107		45,940
New leases	38,959		52,835		426		29,714
Present Value Adjustments - New leases	(3,031)		(6,511)		(5)		(3,822)
Contract review	27,223		63,250		304		21,503
Write-off	(38,626)		(7,757)		(15,392)		(4,465)
Payments	(29,486)		(103,648)		(2,381)		(25,732)
Interest appropriated	14,827		54,236		540		3,969
Drop down of Cements (note 10.c)	-		-		(26,999)		-
Exchange variation	499		3,336		-		-
Net balance	540,496		530,131		23,600		67,107

 

The estimated future minimum payments for the lease agreements include determinable variable payments, which are certain to occur, based on minimum performance and contractually fixed rates.

 

As of March 31, 2021, the expected minimum payments are the following:

 

	Consolidated
	Less than one year		Between one and five years		Over five years		Total
Leases	100,161		375,664		1,151,958		1,627,783
Present value adjustment - Leases	(4,874)		(108,986)		(973,427)		(1,087,287)
	95,287		266,678		178,531		540,496

 

·

Recoverable PIS / COFINS

 

Lease liabilities were measured at the amount of consideration with suppliers, that is, without considering the tax credits incurred after payment. The potential right of PIS and COFINS embedded in the lease liability is shown below.

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Leases	1,609,566		1,603,100		25,909		70,647
Present value adjustment - Leases	(1,085,805)		(1,091,275)		(3,486)		(8,136)
Potencial PIS and COFINS credit	148,885		148,287		2,397		6,535
Present value adjustment – Potential PIS and COFINS credit	(100,437)		(100,943)		(322)		(753)

 

·

Lease payments not recognized as a liability:

 

The Company chose not to recognize lease liabilities in contracts with a term of less than 12 months and for low value assets. Payments made for these contracts are recognized as expenses when incurred.

 

The Company has contracts for the right to use ports (TECAR) and railways (FTL) which, even if they establish minimum performance, it is not possible to determine its cash flow since these payments are fully variable and will only be known when they occur. In such cases, payments will be recognized as expenses when incurred.

 

The expenses related to payments not included in the measurement of the lease liability are:

 

	Consolidated				Parent Company
	03/31/2021		03/31/2021		03/31/2020		03/31/2020
Contract less than 12 months	-		159		-		3,244
Lower Assets value	460		1,934		40		2,019
Variable lease payments	118,253		45,900		1,300		39,675
	118,713		47,993		1,340		44,938

 

In accordance with the guidelines of CPC 06 (R2) / IFRS 16, the Company uses the discounted cash flow technique to measure and remeasurate liabilities and use rights, without considering the projected inflation in the flows to be discounted.

 

Considering Circular Letter / CVM / SNC / SEP No. 02/2019, the Company discloses below the comparative balances of lease liabilities, right to use, financial expenses and depreciation expenses with the use of rates in real terms to discount a present value of flows also in real terms.

 

 

17.

TRADE PAYABLES

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Trade payables	6,482,092		5,487,640		4,380,485		4,588,207
(-) Adjustment present value	(100,729)		(124,574)		(67,649)		(78,365)
	6,381,363		5,363,066		4,312,836		4,509,842
Classified:
Current	6,156,294		4,819,539		4,167,535		4,133,089
Non-current	225,069		543,527		145,301		376,753
	6,381,363		5,363,066		4,312,836		4,509,842

 

The Company classifies the drawee risk and forfaiting transactions with suppliers as other liabilities (see Note 15). Those are transactions with financial institutions by which the suppliers anticipate the receipt for their sale of goods to us, and we postpone the payment to the financial institutions. The transactions are not mandatory and are dependent upon the acceptance by the suppliers. The Company is not reimbursed and/or benefitted by the financial institutions with discounts for payments realized before maturity dates agreed with the suppliers. Also, in the case of judicial execution, there is no change in the degree of subordination of the invoices nor changes in the commercial conditions agreed between the Company and the suppliers.

 

18.

INCOME TAX AND SOCIAL CONTRIBUTION

 

18.a) Tax of income and social contribution recognized in profit or loss:

 

The income tax and social contribution recognized in net income for the year are as follows:

 

	Consolidated				Parent Company
	03/31/2021		03/31/2020		03/31/2021		03/31/2020
Income tax and social contribution income (expense)
Current	(1,359,098)		(217,555)		(141,857)
Deferred	80,858		11,351		(13,916)		304
	(1,278,240)		(206,204)		(155,773)		304

 

The reconciliation of income and social contribution expenses and income of the consolidated and parent company and the product of the current tax rate on income before income tax and social contribution are shown below:

 

	Consolidated				Parent Company
	03/31/2021		03/31/2020		03/31/2021		03/31/2020
Income before income tax and social contribution	6,975,553		(1,105,505)		5,395,788		(1,361,155)
Tax rate	34%		34%		34%		34%
Income tax and social contribution at combined statutory rate	(2,371,688)		375,872		(1,834,568)		462,793
Adjustment to reflect the effective rate:
Equity in results of affiliated companies	5,572		(14,338)		472,567		(200,835)
Profit with differentiated rates or untaxed	(205,998)		(291,828)		-		-
Tax loss carryforwards without recognizing deferred taxes	(3,775)		(11,199)		-		-
Indebtdness limit	(4,269)		(5,730)		(4,269)		(5,730)
Unrecorded deferred taxes on temporary differences	2,347		(451)		-		-
Reversal for deferred income tax and social contribution credit	1,212,345		(253,261)		1,212,345		(253,261)
Tax incentives	5,716		1,625		3,684		-
Other permanent deductions (additions)	81,510		(6,894)		(5,532)		(2,663)
Income tax and social contribution in net income for the period	(1,278,240)		(206,204)		(155,773)		304
Effective tax rate	18%		-19%		3%		0%

 

18.b)

Deferred income tax and social contribution

 

Deferred income tax and social contribution balances are as follows:

 

 

	Consolidated
	Opening balance		Movement				Closing balance
	12/31/2020		Shareholders' Equity		P&L		03/31/2021
Deferred
Income tax losses	1,848,999				(6,995)		1,842,004
Social contribution tax losses	688,208				(2,519)		685,689
Temporary differences	718,903		(9,203)		90,372		800,072
- Provision for tax. social security, labor, civil and environmental risks	279,149				(15,347)		263,802
- Asset impairment losses	161,016				4,479		165,495
- (Gains)/losses on financial instruments	5,027				(129,863)		(124,836)
- Actuarial liability (pension and healthcare plan)	262,457						262,457
- Accrued supplies and services	154,452				8,147		162,599
- Unrealized exchange variation (1)	1,152,326				(1,044,161)		108,165
- Gain upon loss of control in Transnordestina	(92,180)						(92,180)
- Cash flow hedge accounting	1,742,800		566,459				2,309,259
- Acquisition at fair value of SWT and CBL	(212,015)		(6,196)		3,225		(214,986)
- Deferred taxes not computed	(317,927)				(24,308)		(342,235)
- (Losses) estimated /reversals to deferred taxes credits	(1,347,468)		(566,739)		1,212,345		(701,862)
- Business Combination	(1,015,049)				2,030		(1,013,019)
- Others	(53,685)		(2,727)		73,825		17,413
Total	3,256,110		(9,203)		80,858		3,327,765
Total Deferred Assets	3,874,946						3,929,974
Total Deferred Liabilities	(618,836)						(602,209)
Total Deferred	3,256,110						3,327,765

(1) The Company taxes exchange variations on a cash basis to calculate income tax and social contribution on net income.

 

	Parent Company
	Opening balance		Movement				Closing balance
	12/31/2020		Shareholders' Equity		P&L		03/31/2021
Deferred tax assets
Income tax losses	1,680,700				(39,404)		1,641,296
Social contribution tax losses	627,382				(14,185)		613,197
Temporary differences	1,491,625				39,673		1,531,298
- Provision for tax. social security, labor, civil and environmental risks	202,467				(10,876)		191,591
- Asset impairment losses	100,005				(3,315)		96,690
- (Gains)/losses on financial instruments	5,026				(129,863)		(124,837)
- Actuarial liability (pension and healthcare plan)	264,192				-		264,192
- Accrued supplies and services	132,892				1,645		134,537
- Unrealized exchange variation (1)	1,152,325				(1,044,387)		107,938
- Gain) in control loss on Transnorderstina	(92,180)						(92,180)
- Cash flow hedge accounting	1,742,520		566,739				2,309,259
- (Losses) estimated /reversals to deferred taxes credits	(1,356,021)		(566,739)		1,212,345		(710,415)
- Business Combination	(721,992)				-		(721,992)
- Others	62,391				14,124		76,515
Total	3,799,707				(13,916)		3,785,791
Total Deferred Assets	4,627,332						4,627,332
Total Deferred Liabilities	(827,625)						(841,541)
Total Deferred	3,799,707						3,785,791

 

(1) The Company taxes exchange variations on a cash basis to calculate income tax and social contribution on net income.

 

The Company has in its corporate structure subsidiaries abroad, whose income are taxed by the income tax in the respective countries where they were constituted at rates lower than those in force in Brazil. In the period between 2015 and 2021, these subsidiaries generated income in the amount of R$1,032,621. If the Brazilian tax authorities understand that these profits are subject to additional taxation in Brazil for income tax and social contribution, these, if due, would reach approximately R$326,788. The Company, based on the position of its legal advisors, assessed only the likelihood of loss as possible in the event of possible tax questioning and, therefore, no provision was recognized in the financial statement.

 

In addition, management evaluated the precepts of IFRIC 23 - “Uncertainty Over Income Tax Treatments” and considers that there are no reasons for the tax authorities to differ from the tax positions adopted by the Company. Accordingly, no additional provisions for income tax and social contribution were recognized as a result of the assessment of the application of IFRIC 23 in the interim financial information at March 31, 2021.

 

A sensitivity analysis of consumption of tax credits was carried out considering a variation in macroeconomic assumptions, operating performance and liquidity events. Thus, considering the results of the study carried out, which indicates that it is probable the existence of taxable profit to use the balance of deferred income tax and social contribution.

 

The estimated recovery of deferred tax assets of IRPJ and CSLL are netted when referring to a single jurisdiction as shown in the table below:

 

		Consolidated		Parent Company
2021		1,017,921		1,017,921
2022		1,315,426		1,315,426
2023		1,257,266		1,257,266
2024		495,211		495,211
2025		685,691		541,508
Deferred asset		4,771,515		4,627,332
Deferred liabilities - Parent Company		(841,541)		(841,541)
Net deferred asset		3,929,974		3,785,791
Deferred liabilities - subsidiaries		(602,209)
Net deferred asset		3,327,765		3,785,791

 

18.c)

Income tax and social contribution recognized in equity:

 

Income tax and social contribution recognized directly in equity are shown below:

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Income tax and social contribution
Actuarial gains on defined benefit pension plan	170,617		170,604		172,520		172,520
Estimated losses for deferred income and social contribution tax credits - actuarial gains	(172,520)		(172,520)		(172,520)		(172,520)
Exchange differences on translating foreign operations	(325,350)		(325,350)		(325,350)		(325,350)
Cash flow hedge accounting	2,309,259		1,742,765		2,309,259		1,742,520
Estimated losses for deferred income and social contribution tax credits - cash flow hedge	(2,309,259)		(1,742,520)		(2,309,259)		(1,742,520)
	(327,253)		(327,021)		(325,350)		(325,350)

 

18.d)

Test of recoverability of income tax and social contribution of deferred assets

 

The Company’s management constantly evaluates the ability to use its tax credits. In this sense, CSN periodically updates the technical study of the projection of future taxable results to support the realization of tax credits and, consequently, to base the accounting recognition of the credits, the maintenance on the balance sheet or the constitution of a provision for loss in the realization of these credits.

 

The assumptions used to evaluate the impairment test in December 2020 remain valid and there is no event to justify the recognition of impairment in the quarter.

 

19.

PROVISIONS FOR TAX, SOCIAL SECURITY, LABOR, CIVIL, ENVIRONMENTAL RISKS AND JUDICIAL DEPOSITS

 

Claims of different nature are being challenged at the appropriate courts. Details of the accrued amounts and related judicial deposits are as follows :

 

 

		Consolidated								Parent Company
		Accrued liabilities				Judicial deposits				Accrued liabilities				Judicial deposits
		03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020
Tax		132,872		134,645		68,220		67,819		62,427		61,004		49,078		49,078
Social security		1,551		8,170						1,551		7,948
Labor		314,392		328,334		225,091		212,737		210,739		234,333		162,895		159,138
Civil		150,454		151,776		18,246		17,683		114,211		121,989		11,741		11,840
Environmental		15,154		12,463		2,444		2,444		12,759		10,341		961		960
Deposit of a guarantee						24,889		24,434
		614,423		635,388		338,890		325,117		401,687		435,615		224,675		221,016
Classified:
Current		87,432		81,073						42,476		34,458
Non-current		526,991		554,315		338,890		325,117		359,211		401,157		224,675		221,016
		614,423		635,388		338,890		325,117		401,687		435,615		224,675		221,016

 

The changes in tax, social security, labor, civil and environmental provisions in the year ended March 31, 2021 can be summarized as follows:

 

		Consolidated
		Current + Non-current
Nature		12/31/2020		Additions		Accrued charges		Net utilization of reversal		03/31/2021
Tax		134,645		1,016		2,600		(5,389)		132,872
Social security		8,170				2		(6,621)		1,551
Labor		328,334		7,563		11,586		(33,091)		314,392
Civil		151,776		323		8,973		(10,618)		150,454
Environmental		12,463		-		2,955		(264)		15,154
		635,388		8,902		26,116		(55,983)		614,423

 

		Parent Company
		Current + Non-current
Nature		12/31/2020		Additions		Accrued charges		Net utilization of reversal		Drop down of Cements (note 10.c)		03/31/2021
Tax		61,004		1,016		596		(189)				62,427
Social security		7,948				2		(6,399)				1,551
Labor		234,333		4,665		7,805		(24,730)		(11,334)		210,739
Civil		121,989		39		5,901		(12,012)		(1,706)		114,211
Environmental		10,341				2,876		(260)		(198)		12,759
		435,615		5,720		17,180		(43,590)		(13,238)		401,687

 

The provision for tax, social security, labor, civil and environmental risks was estimated by Management and is mainly based on the legal counsel’s assessment. Only lawsuits for which the risk is classified as probable loss are provisioned. Additionally, tax liability from actions initiated by the Company is included in this provision and is subject to SELIC (Central Bank’s policy rate).

 

§

Administrative and judicial proceedings

 

The Company does not make provisions for lawsuits, which Management’s expectation, based on the opinion of legal counsel, is a possible loss. The following table shows a summary of the balance of the main matters classified as possible risk compared to the balance at March 31, 2021 and December 31, 2020.

 

 

		Consolidated
		03/31/2021		12/31/2020
Assessment Notice and imposition of fine (AIIM) / Tax Enforcement - Income tax and social contribution - Capital gain on sale of NAMISA's shares		12,738,987		12,694,021
Assessment Notice and Imposition of fine (AIIM) - Income tax and Social contribution - Disallowance of deductions of goodwill generated in the reverse incorporation of Big Jump by NAMISA.		3,940,658		3,930,093
Assessment Notice and Imposition of fine (AIIM) / Tax Enforcement  - Income tax and Social contribution - Disallowance of interest on prepayment arising from supply contracts of iron ore and port services		1,965,378		1,956,898
Assessment Notice and imposition of fine (AIIM) - Income tax and social contribution due to profits from foreign subsidiaries for years 2008, 2010, 2011, 2012 and 2014		3,474,130		3,461,574
Tax foreclosures - ICMS - Electricity credits		845,050		841,401
Offset of taxes that were not approved by the Federal Revenue Service - IRPJ/CSLL, PIS/COFINS and IPI		1,652,859		1,845,379
Disallowance of the ICMS credits - Transfer of iron ore		602,033		624,645
ICMS - Refers to the transfer of imported raw material at an amount lower than the price disclosed in the import documentation		319,038		317,848
Disallowance of the tax loss and negative basis of social contribution arising from the adjustments in the SAPLI		585,911		583,478
Assessment Notice- IRRF- Capital Gain of CFM vendors located abroad		261,210		260,326
CFEM – difference of understanding between CSN and DNPM on the calculation basis		1,053,997		1,051,661
Assessment Notice- ICMS- questions about sales for incentive area		1,115,413		1,111,034
Other tax lawsuits (federal, state, and municipal)		4,007,450		3,886,976
Assessment Notice and imposition of fine (AIIM) -  Charge of IRRF- RFB  - Business combination (year 2015) between Namisa, Congonhas Minérios (current CSN Mineração) and consortium		866,075		862,324
Assessment Notice and imposition of fine (AIIM) - SEFAZ/RJ - ICMS on purchases of intermediate products		547,676		498,002
Assessment Notice and imposition of fine (AIIM) - RFB -  Disallowance of credits PIS/COFINS of inputs and freight		1,087,226		1,082,517
Social security lawsuits		222,263		233,116
Action to discuss the balance of the construction contract – Tebas		507,719		487,124
Action related to power supply payment’s charge - Light		307,071		288,390
Indemnity action due to the supply contract termination - Indumill		246,806		237,795
Enforcement action applied by Brazilian antitrust authorities (CADE)		96,239		95,833
Civil Public Action - Districts / School / Nursery relocation-CdP Dam		12,857		12,207
Other civil lawsuits		806,379		777,850
Labor and social security lawsuits		1,515,312		1,506,626
Tax foreclosures – Fine – Volta Redonda IV		99,957		94,304
ACP landfill Márcia		306,389		306,389
Other environmental lawsuits		268,425		257,965
		39,452,508		39,305,776

 

During the first quarter of 2021, the Company was notified of an arbitration procedure based on an alleged unfulfillment of iron ore supply contracts. The counterparty asks for approximately US$1 billion and the Company has no knowledge of the bases used in the allegations presented, as well as has no knowledge of the basis for the estimates of the amount asked. As opposed, the Company understands to be a creditor in the contracts. Finally, the Company informs that has responded the arbitration requirements in conjunction with its legal counselors and is currently at the initial stage of its defense. The Company expects the arbitration will be concluded in 2 to 3 years. The relevance of the arbitration to the Company is related to the amount attributed to the cause and its eventual financial impact.

 

The Company has been offering judicial guarantees (Guarantee Insurance / Letter of Guarantee) in the total and updated amount of R$4,566,451 as of March 31, 2021 (R$4,542,786 as of December 31,2020), as determined by the procedural legislation in force.

 

The assessments made by legal advisors define these administrative and judicial proceedings as a possible risk of loss and, consequently, no loss provisions have been recognized in accordance with Management’s judgment and with the Accounting Practices adopted in Brazil.

 

20.

PROVISION FOR ENVIRONMENTAL LIABILITIES AND ASSET RETIREMMENT OBLIGATIONS

 

The information related to the provisions for environmental liabilities and deactivation did not change in relation to those disclosed in the financial statements of December 31, 2020. Therefore, the Company decided not to repeat them in the condensed interim financial information as of March 31, 2021.

 

The balance of provisions for environmental liabilities and deactivation of assets can be shown as follows:

 

	Consolidated				Parent Company
	03/31/2021		12/31/2020		03/31/2021		12/31/2020
Environmental liabilities	196,205		192,830		181,260		178,638
Asset retirement obligations (1)	631,612		611,005				50,886
	827,817		803,835		181,260		229,524

 

(1) On January 31, 2021 The provision fot assets retirement obligation – ARO was transferred to the company CSN Cimentos S.A.

 

21.

RELATED-PARTY BALANCES AND TRANSACTIONS

 

The information related to transactions with related parties has not changed significantly in relation to the

disclosed in the financial statements of December 31, 2020.

 

21.a) Transactions with subsidiaries, joint ventures, associates, exclusive founds and other related parties

 

·

Consolidated

 

		Consolidated
		03/31/2021								12/31/2020
		Subsidiaries and associates		Joint-ventures e Joint Operation		Other related parties		Total		Subsidiaries and associates		Joint-ventures e Joint Operation		Other related parties		Total
Assets
Current Assets
Investments	(1)					4,128,923		4,128,923						3,763,603		3,763,603
Trade receivables (note 6)	(2)	12,979		13		273,990		286,982		7,686		8		113,482		121,176
Dividends receivable (note 9)	(3)			38,086				38,086				38,088				38,088
Other current assets (note 9)				3,347		1,829		5,176				4,413		1,829		6,242
		12,979		41,446		4,404,742		4,459,167		7,686		42,509		3,878,914		3,929,109
Noncurrent Assets
Investments	(1)					132,635		132,635						123,409		123,409
Loans (note 9)	(4)	3,423		1,039,759				1,043,182		3,375		962,675				966,050
Actuarial asset (note 9)						13,819		13,819						13,819		13,819
Other non-current assets (note 9)	(5)			664,598				664,598				664,020				664,020
		3,423		1,704,357		146,454		1,854,234		3,375		1,626,695		137,228		1,767,298
		16,402		1,745,803		4,551,196		6,313,401		11,061		1,669,204		4,016,142		5,696,407
Liabilities
Current Liabilities
Trade payables				48,446		12,035		60,481				106,946		9,455		116,401
Accounts payable (note 15)		12		21,191				21,203				23,555		2,437		25,992
Provision for consumption (note 15)				58,093				58,093				44,466				44,466
		12		127,730		12,035		139,777				174,967		11,892		186,859
Noncurrent Liabilities
Accounts payable (note 15)				59,917				59,917				78,083				78,083
Actuarial liability  (note 15)						79,546		79,546						79,546		79,546
				59,917		79,546		139,463				78,083		79,546		157,629
		12		187,647		91,581		279,240				253,050		91,438		344,488
		Consolidated
		03/31/2021								03/31/2020
		Subsidiaries and associates		Joint-ventures e Joint Operation		Other related parties		Total		Subsidiaries and associates		Joint-ventures e Joint Operation		Other related parties		Total
P&L
Sales		67,925		412		753,544		821,881		21,144		211		310,634		331,989
Cost and expenses		(121)		(298,690)		(23,382)		(322,193)				(145,365)		(26,875)		(172,240)
Financial income (expenses)
Interest (note 26)				3,721		4,999		8,720		65		11,416		6,338		17,819
Exchange rate variations and  monetary, net														26,864		26,864
Financial investments (note 26)						512,494		512,494						(962,354)		(962,354)
Other operating income and expenses												(3,402)				(3,402)
		67,804		(294,557)		1,247,655		1,020,902		21,209		(137,140)		(645,393)		(761,324)

 

 

 

 

 

·

Parent Company

 

		Parent Company
		03/31/2021								12/31/2020
		Subsidiaries and associates		Joint-ventures e Joint Operation		Other related parties and exclusive funds		Total		Controladas e Coligadas		Joint Venture e Joint Operation		Outras Partes Relacionadas e Fundos exclusivos		Total
Assets
Current Assets
Investments	(1)					4,173,978		4,173,978						3,801,985		3,801,985
Trade receivables (note 6)	(2)	445,478		13		272,694		718,185		835,489		8		112,222		947,719
Loans (note 9)		59,900						59,900		53,718						53,718
Dividends receivable (note 9)	(3)	6,753		21,403				28,156		308,009		21,404				329,413
Other current assets (note 9)		17,876				1,829		19,705		3,888				1,829		5,717
		530,007		21,416		4,448,501		4,999,924		1,201,104		21,412		3,916,036		5,138,552
Noncurrent Assets
Investments	(1)					132,635		132,635						123,409		123,409
Loans (note 9)	(4)	148,044		949,388				1,097,432		134,892		872,785				1,007,677
Actuarial asset (note 9)														1,803		1,803
Other non-current assets (note 9)	(5)	257,870		664,598				922,468		236,180		664,020				900,200
		405,914		1,613,986		132,635		2,152,535		371,072		1,536,805		125,212		2,033,089
		935,921		1,635,402		4,581,136		7,152,459		1,572,176		1,558,217		4,041,248		7,171,641
Liabilities
Current Liabilities
Intercompany Loans (note 13)	(6)	480,018						480,018		502,590						502,590
Trade payables		500,622		43,240		11,708		555,570		1,311,358		62,698		9,299		1,383,355
Accounts payable (note 15)		103,854						103,854		102,361				2,437		104,798
Provision for consumption (note 15)		154,289		12,317				166,606		133,215		12,317				145,532
		1,238,783		55,557		11,708		1,306,048		2,049,524		75,015		11,736		2,136,275
Noncurrent Liabilities
Intercompany Loans (note 13)	(6)	14,046,703						14,046,703		14,567,024						14,567,024
Accounts payable (note 15)		200,511						200,511		222,834						222,834
Actuarial liability  (note 15)						79,546		79,546						79,546		79,546
		14,247,214				79,546		14,326,760		14,789,858				79,546		14,869,404
		15,485,997		55,557		91,254		15,632,808		16,839,382		75,015		91,282		17,005,679
		Parent Company
		03/31/2021								03/31/2020
		Subsidiaries and associates		Joint-ventures e Joint Operation		Other related parties and exclusive funds		Total		Subsidiaries and associates		Joint-ventures e Joint Operation		Other related parties and exclusive funds		Total
Net revenue and cost
Sales		616,235				744,761		1,360,996		565,293				310,634		875,927
Cost and expenses		(1,047,356)		(104,540)		(22,931)		(1,174,827)		(357,947)		(59,015)		(26,641)		(443,603)
Financial income (expenses)
Interest (note 26)		(101,310)		6,258		4,837		(90,215)		(95,768)		10,287		5,984		(79,497)
Exclusive funds (note 26)						6,827		6,827						(30)		(30)
Financial investments (note 26)						512,494		512,494						(962,354)		(962,354)
Exchange rate variations and  monetary, net		(1,356,059)						(1,356,059)		(3,126,688)				26,864		(3,099,824)
		(1,888,490)		(98,282)		1,245,988		(740,784)		(3,015,110)		(48,728)		(645,543)		(3,709,381)

 

Consolidated and Parent Company Information:

 

1.

Financial investments

 

On March 31, 2020 the investments in Usiminas shares are R$3,817,603 (R$3,305,119 in December 2020) and cash and cash equivalents with Banco Fibra totaling R$311,321 (R$458,494 in December 2020) and no current as of March 31, 2021 the amount R$132,635 (R$123,409 in December 2020) from Bonds with an average rate of 98% to 115% of the CDI in the consolidated and holds in the parent company through exclusive funds’ investments in government bonds and CDBs in the amount of R$45,344 on March 31, 2021 (R$38,517 on December 31, 2020).

 

2.

Trade receivable mainly refers to operations of sales of steel products of the Parent Company to affiliates and companies joint venture and joint-operation.

 

3.

Dividends receivable from the MRS Logística R$38,086 (R$38,088 as of December 31, 2020) in the consolidated and parent company R$ 28,156 (R$329,413 as of December 31, 2020).

 

4.

Loans (Assets):

 

Consolidated refers mainly to loan agreements with an average rate of 125.0% to 130.0% of the CDI with Transnordestina Logística SA of R$1,043,182 (R$962,675 as of December 31, 2020).

 

In the Parent Company it refers to loan agreements with Transnordestina Logística SA of R$949,388 and with Ferrovia Transnordestina SA of R$125,307on March 31, 2021 and (R$872,785 and R$112,420 on December 31, 2020, respectively).

 

 

5.

Others (Assets): Advance for future capital increase with subsidiaries of R$664,598 with Transnordestina Logística SA (R$664,020 on December 31, 2020).

 

Controlling company

 

6.

Loans (Liabilities):

Foreign currency: Intercompany contracts in the amount of R$14,508,441 (R$15,051,191 on December 31, 2020).

National coin: Intercompany contracts in the amount of R$18,280 (R$18,423 on December 31, 2020).

 

21.b)

Key management personal

 

The key management personnel with authority and responsibility for planning, directing and controlling the Company’s activities include members of the Board of Directors and statutory officers. The following is information on the compensation of such personnel and the related balances as of March 31, 2021 and 2020.

 

		03/31/2021		03/31/2020
		P&L
Short-term benefits for employees and officers		3,404		6,581
Post-employment benefits		28		9
		3,432		6,590

 

21.c)

Guarantees

 

The Company is liable for guarantees of its subsidiaries and joint ventures as follows:

 

	Currency		Maturities		Borrowings				Tax foreclosure				Others				Total
					03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020		03/31/2021		12/31/2020
Transnordestina Logísitca	R$		Up to 09/19/2056 and Indefinite		2,481,851		2,478,105		35,291		35,496		3,314		3,298		2,520,456		2,516,899
Cia Metalurgica Prada	R$		Indefinite						197		196		244		244		441		440
CSN Energia	R$		Up to 11/26/2023 and indefinite										1,920		1,920		1,920		1,920
CSN Mineração	R$		Up to 12/21/2024		846,578		846,749										846,578		846,749
Estanho de Rondônia	R$		07/15/2022		966		1,154										966		1,154
Minérios Nacional S.A.	R$		Up to 09/10/2021		1,297		1,946										1,297		1,946
Total in R$					3,330,692		3,327,954		35,488		35,692		5,478		5,462		3,371,658		3,369,108
CSN Inova Ventures	US$		01/28/2028		1,300,000		1,300,000										1,300,000		1,300,000
CSN Islands XII	US$		Perpetual		1,000,000		1,000,000										1,000,000		1,000,000
CSN Resources	US$		Up to 04/17/2026		1,525,000		1,525,000										1,525,000		1,525,000
Total in US$					3,825,000		3,825,000										3,825,000		3,825,000
Total in R$					21,792,173		19,877,378										21,792,173		19,877,378
					25,122,865		23,205,332		35,488		35,692		5,478		5,462		25,163,831		23,246,486

 

22.

SHAREHOLDERS´ EQUITY

 

22.a)

Paid-in capital

 

The fully subscribed and paid-in capital on March 31, 2021 and December 31, 2020 is the R$6,040 million and divided into 1,387,524,047 common and book-entry shares, with no par value. Each common share entitles its holder to one vote in the resolutions of the General Meetings.

 

22.b)

Authorized capital

 

The Company’s bylaws in effect on March 31, 2021 define that the share capital may be increased to up to 2,400,000,000 shares, by decision of the Board of Directors.

 

 

22.c)

Legal Reserve

 

It is constituted at the rate of 5% of the net income calculated in each fiscal year pursuant to art. 193 of Law 6.404/76, up to a limit of 20% of the capital stock.

 

22.d)

Ownership structure

 

As of March 31, 2021, the Company’s ownership structure was as follows:

 

						03/31/2021						12/31/2020
		Number of common shares		% of total shares		% of voting capital		Number of common shares		% of total shares		% of voting capital
Vicunha Aços S.A. (*)		679,522,254		48.97%		49.24%		679,522,254		48.97%		49.24%
Rio Iaco Participações S.A. (*)		52,279,803		3.77%		3.79%		58,193,503		4.19%		4.22%
NYSE (ADRs)		248,763,533		17.93%		18.02%		248,763,533		18.90%		19.00%
Other shareholders		399,548,957		28.80%		28.95%		393,635,257		27.40%		27.55%
Outstanding shares		1,380,114,547		99.47%		100.00%		1,380,114,547		99.47%		100.00%
Treasury shares		7,409,500		0.53%				7,409,500		0.53%
Total shares		1,387,524,047		100.00%				1,387,524,047		100.00%

(*) Controlling group companies.

 

22.e)

Treasury shares

 

As of March 31, 2021, the position of treasury shares was as follows:

 

Program

Board’s Authorization

Authorized quantity

Program period

Average buyback price

Minimum and maximum buyback price

Sale of shares

Balance in treasury

04/20/2018

30,391,000

From 4/20/2018 to 4/30/2018

Not applicable

Not applicable

22,981,500

7,409,500

 

As of March 31, 2021, the position of treasury shares was as follows:

 

Quantity purchased (in units)		Amount paid for the shares		Share price						Share market price as of  03/31/2021 (*)
				Minimum		Maximum		Average
7,409,500		R$ 58,264		R$ 4.48		R$ 10.07		R$ 7.86		R$ 280,820

(*) The average share price on March 31, 2021 was used in the amount of R$37.90 per share.

 

 

 

22.f) Policy on investments and payment of interest on net equity and dividends

 

The Company adopts a profit distribution policy which, in compliance with the provisions of Law No. 6,404/76 as amended by Law No. 9,457/97, will imply the allocation of all net income to its shareholders, provided that the following priorities are preserved, regardless of its order: (i) business strategy; (ii) compliance with obligations; (iii) making the necessary investments; and (iv) the maintenance of a good financial situation for the Company.

 

22.g)

Earnings per share

 

The earnings per share are shown below:

 

 

	03/31/2021		03/31/2020
	Common Shares
Profit for the period	5,240,015		(1,360,851)
Weighted average number of shares	1,380,114,547		1,380,114,547
Basic and diluted earnings (loss) per share	3.79680		(0.98604)

 

23.

NET REVENUE FROM SALES

 

Net sales revenue is as follows:

 

		Consolidated				Parent Company
		03/31/2021		03/31/2020		03/31/2021		03/31/2020
Gross revenue
Domestic market		6,725,615		3,570,496		6,280,868		3,430,097
Foreign market		6,738,681		2,645,352		569,791		414,945
		13,464,296		6,215,848		6,850,659		3,845,042
Deductions
Sales returns, discounts and rebates		(39,236)		(78,014)		(146,638)		(75,343)
Taxes on sales		(1,511,732)		(803,181)		(1,330,742)		(738,390)
		(1,550,968)		(881,195)		(1,477,380)		(813,733)
Net revenue		11,913,328		5,334,653		5,373,279		3,031,309

 

24.

EXPENSES BY NATURE

 

		Consolidated				Parent Company
		03/31/2021		03/31/2020		03/31/2021		03/31/2020
Raw materials and inputs		(2,544,833)		(1,622,428)		(2,525,624)		(1,598,255)
Outsourcing material		(1,062,124)		(414,451)
Labor cost		(669,536)		(602,766)		(296,987)		(326,852)
Supplies		(530,911)		(460,455)		(373,608)		(390,627)
Maintenance cost (services and materials)		(297,455)		(204,277)		(148,742)		(135,578)
Outsourcing services		(466,064)		(422,820)		(205,140)		(231,771)
Freight		(12,042)		(48,268)		(6,152)		(12,601)
Distribution freight		(334,841)		(278,725)		(102,733)		(88,424)
Depreciation, amortization and depletion		(455,673)		(415,181)		(199,983)		(206,703)
Others		(362,354)		(58,306)		(55,843)
		(6,735,833)		(4,527,677)		(3,914,812)		(2,990,811)
Classified as:
Cost of sales		(6,178,784)		(4,017,707)		(3,689,909)		(2,778,380)
Selling expenses		(422,586)		(390,915)		(167,212)		(162,239)
General and administrative expenses		(134,463)		(119,055)		(57,691)		(50,192)
		(6,735,833)		(4,527,677)		(3,914,812)		(2,990,811)

 

The depreciation, amortization and depletion additions for the period were distributed as follows.

 

 

	Consolidated				Parent Company
	03/31/2021		03/31/2020		03/31/2021		03/31/2020
Production costs (1)	(445,658)		(403,600)		(194,740)		(200,458)
Selling expenses	(3,309)		(3,276)		(1,974)		(2,729)
General and administrative expenses	(6,706)		(8,305)		(3,269)		(3,516)
	(455,673)		(415,181)		(199,983)		(206,703)
Other operational (2)	(26,844)		(21,112)		(1,742)		(2,298)
	(482,517)		(436,293)		(201,725)		(209,001)

 

(1) - The cost of production includes PIS and COFINS credits on lease agreements on March 31, 2021, in the amount of R$1,549 (R$1.214 on March 31,2020) in the consolidated and R$267 (R$494 on March 31, 2020) in the parent company.

 

(1) They mainly refer to the depreciation of investment properties, paralyzed equipment and amortization of the SWT Client Portfolio, see note 25.

 

25.

OTHER OPERATING INCOME AND EXPENSES

 

		Consolidated				Parent Company
		03/31/2021		03/31/2020		03/31/2021		03/31/2020
Other operating income
Receivables by indemnity		765		1,156		756		983
Rentals and leases		3,283		2,462		3,170		2,393
PIS, COFINS and INSS to compensate (1)				88,390				65,092
Contractual fines		765		2,016		460		1,410
Updated shares – Fair value through profit or loss (Note 14 II)		31,004		(207)		31,004		(207)
Net gain in shares sale (note 10 d) (2)		2,472,497				2,472,497
Other revenues		51,918		8,872		23,690		5,176
		2,560,232		102,689		2,531,577		74,847
		-		-		-		-
Other operating expenses
Taxes and fees		(36,111)		(5,304)		(34,349)		(2,393)
Expenses with environmental liabilities, net		158		(15,922)		93		(2,209)
Write-off/(Provision) of judicial lawsuits		8,623		(7,157)		10,622		3,454
Depreciation of investment property, equipment paralyzed and amortization of intangible assets (note 24)		(26,844)		(21,112)		(1,742)		(2,298)
Write- off of PPE, intagible assests and investment property (note 11)		(40,464)		(1,400)		(17,072)
Estimated (Loss)/reversal in inventories		(63,478)		(20,351)		(34,758)		(5,814)
Idleness in stocks and paralyzed equipment (3)				(202,240)				(37,043)
Studies and project engineering expenses		(12,101)		(5,075)		(3,578)		(3,840)
Research and development expenses		(54)		(197)		(54)		(197)
Healthcare plan expenses		(28,916)		(28,829)		(28,611)		(28,693)
Cash flow hedge accounting realized (note 14) (4)		(310,810)		(364,818)		(252,250)		(364,818)
Other expenses		(64,115)		(96,519)		(31,948)		(90,787)
		(574,112)		(768,924)		(393,647)		(534,638)
Other operating income (expenses), net		1,986,120		(666,235)		2,137,930		(459,791)

 

1.

In 2020, consist of the recovery of INSS credit on benefits granted to employees that should not be considered in the contribution calculation basis.

 

2.

Refers to the public offering of shares of CSN Mineração S.A. (see note 10.d).

 

3.

In 2020 refers to the idle capacity arisen from production volumes lower than normal it was generated from the refurbishment of the blast furnace No.3 and in the iron ore mining operation due to delays in the release of environmental licenses, which postponed the start of new ore mining fronts, as well as new dry tailing processes still in ramp-up stage.

 

4.

As of March 31, 2021, foreign exchange cash flow hedge was realized and reclassified from Other Comprehensive Income to Other Operating Expenses (R$252,250) and cash flow hedge of PLATTS index (R$58,560), totaling R$310,810 in the consolidated and R$252,250 in the parent company, see note 14.

 

 

 

 

 

 

 

 

  

 

26.

FINANCIAL INCOME (EXPENSES)

 

		Consolidated				Parent Company
		03/31/2021		03/31/2020		03/31/2021		03/31/2020
Financial income
Related parties (note 21 a)		11,737		17,819		19,442		18,254
Income from financial investments		34,645		15,788		26,391		8,533
Updated shares – Fair value through profit or loss (Note 14 II)		512,494				512,494
Other income		26,709		31,524		21,011		26,589
		585,585		65,131		579,338		53,376
Financial expenses
Borrowings and financing - foreign currency (note 13)		(421,012)		(348,111)		(36,143)		(57,428)
Borrowings and financing - local currency (note 13)		(65,268)		(146,269)		(58,768)		(129,052)
Related parties		(3,017)				(102,830)		(97,782)
Lease liabilities		(13,794)		(12,100)		(660)		(891)
Capitalised interest (notes 11 and 29)		15,133		23,390		6,864		7,280
Interest and fines		(35,783)		(23,720)		(15,225)		(19,473)
(-) Adjustment present value of trade payables		(58,590)				(42,443)
Commission, bank fees, Guarantee and bank fees		(44,245)		(30,298)		(37,538)		(27,332)
PIS/COFINS over financial income		(7,071)		(6,233)		(1,682)		(3,431)
Updated shares – Fair value through profit or loss (Note 14 II)				(962,354)				(962,354)
Other financial expenses		(97,117)		(125,456)		(53,429)		(45,101)
		(730,764)		(1,631,151)		(341,854)		(1,335,564)
Others financial items, net
Foreign exchange and monetary variation, net		(53,266)		461,070		199,448		1,030,129
Gains and (losses) on exchange derivatives (*)		(3,062)		(96,188)		(27,444)		(99,113)
		(56,328)		364,882		172,004		931,016
		(787,092)		(1,266,269)		(169,850)		(404,548)
Financial income (expenses), net		(201,507)		(1,201,138)		409,488		(351,172)
(*) Statement of gains and (losses) on derivative transactions (note 14)
Dollar - to - real NDF		6,758
Exchange rate swap Dollar x Euro		17,624		2,757
Exchange rate swap GBP x Euro				168
Exchange rate swap CDI x Dollar		(27,444)		(99,113)		(27,444)		(99,113)
		(3,062)		(96,188)		(27,444)		(99,113)

 

27.

SEGMENT INFORMATION

 

The financial information related to the business segments did not change in relation was disclosed in the Company's financial statements on December 31, 2020. Therefore, Management decided not to repeat it in this condensed interim financial information.

 

·

Results by segment

 

For the purpose of preparing and presenting the information by business segment, Management decided to maintain the proportional consolidation of the joint ventures as historically presented. For purposes of reconciliation of the consolidated result, the amounts recorded by these companies are not included in the "Corporate expenses/elimination" column.

 

																03/31/2021
P&L		Steel		Mining		Logistics				Energy		Cement		Corporate expenses/elimination		Consolidated
						Port		Railroads
Metric tons (thou.)		1,316,938		8,224,928										(1,264,055)
Net revenues
Domestic market		4,876,219		791,745		83,516		400,590		54,281		277,423		(1,221,370)		5,262,404
Foreign market		1,796,655		4,689,221										165,048		6,650,924
Cost of sales and services (note 24)		(4,797,790)		(1,841,259)		(55,539)		(286,743)		(34,939)		(191,446)		1,028,932		(6,178,784)
Gross profit		1,875,084		3,639,707		27,977		113,847		19,342		85,977		(27,390)		5,734,544
General and administrative expenses (note 24)		(282,782)		(54,089)		(8,177)		(28,502)		(7,512)		(24,855)		(151,132)		(557,049)
Other operating (income) expenses, net (note 25)		(135,271)		(117,913)		(1,439)		(19,676)		(379)		(13,261)		2,274,059		1,986,120
Equity in results of affiliated companies (note 10)														13,445		13,445
Operating result before Financial Income and Taxes		1,457,031		3,467,705		18,361		65,669		11,451		47,861		2,108,982		7,177,060
Sales by geographic area
Asia				2,679,219										165,048		2,844,267
North America		306,230		2,010,002												2,316,232
Latin America		118,392														118,392
Europe		1,372,033														1,372,033
Foreign market		1,796,655		4,689,221										165,048		6,650,924
Domestic market		4,876,219		791,745		83,516		400,590		54,281		277,423		(1,221,370)		5,262,404
Total		6,672,874		5,480,966		83,516		400,590		54,281		277,423		(1,056,322)		11,913,328
																03/31/2020
P&L		Steel		Mining		Logistics				Energy		Cement		Corporate expenses/elimination		Consolidated
						Port		Railroads
Metric tons (thou.)		1,139,612		5,609,498										(1,085,951)
Net revenues
Domestic market		2,511,198		263,451		74,539		282,333		42,028		145,663		(581,268)		2,737,944
Foreign market		1,030,760		1,382,355										183,594		2,596,709
Cost of sales and services (note 24)		(3,237,409)		(822,810)		(49,253)		(270,492)		(29,350)		(145,069)		536,676		(4,017,707)
Gross profit		304,549		822,996		25,286		11,841		12,678		594		139,002		1,316,946
General and administrative expenses (note 24)		(214,338)		(46,374)		(9,757)		(25,510)		(7,723)		(22,912)		(183,356)		(509,970)
Other operating (income) expenses, net (note 25)		(113,609)		(183,836)		(1,712)		(6,755)		(373)		(5,420)		(354,530)		(666,235)
Equity in results of affiliated companies (note 10)														(45,108)		(45,108)
Operating result before Financial Income and Taxes		(23,398)		592,786		13,817		(20,424)		4,582		(27,738)		(443,992)		95,633
Sales by geographic area
Asia				941,833										183,594		1,125,427
North America		162,456														162,456
Latin America		34,915														34,915
Europe		833,200		440,522												1,273,722
Others		189														189
Foreign market		1,030,760		1,382,355										183,594		2,596,709
Domestic market		2,511,198		263,451		74,539		282,333		42,028		145,663		(581,268)		2,737,944
Total		3,541,958		1,645,806		74,539		282,333		42,028		145,663		(397,674)		5,334,653

 

 

28.

INSURANCE

 

In order to adequately mitigate risks and in view of the nature of its operations, the Company and its Subsidiaries contract several different types of insurance policy. The policies are taken out in line with the Risk Management policy and are similar to the insurance taken out by other companies in the same industry in which CSN and its subsidiaries operate. The coverage of these policies includes: National Transport, International Transport, Life and Personal Accident Insurance, Health, Vehicle Fleet, D&O (Administrators Liability Insurance), General Liability, Engineering Risks, Named Risks, Export Credit, Insurance Warranty and Civil Liability Port Operator.

 

In 2020, after negotiations with insurers and reinsurers in Brazil and abroad, an Operational Risk Insurance Policy for Property Damage and Business Interruption was issued, effective from June 30, 2020 to June 30, 2021. Under the policy, the Maximum Indemnity Limit is US$ 600 million and the deductible is US $ 385 million for material damages and 45 days for loss of profits, covering the following units and subsidiaries of the Company: Usina Presidente Vargas, CSN Mineração SA and Sepetiba Tecon.

 

The risk assumptions adopted, given their nature, are not part of the scope of an audit of the financial statements, and consequently were not examined by our independent auditors.

 

29.

ADDITIONAL INFORMATION TO CASH FLOWS

 

The following table presents additional information on transactions related to the statement of cash flows:

 

	Consolidated				Parent Company
	03/31/2021		03/31/2020		03/31/2021		03/31/2020
Income tax and social contribution paid	1,466,584		231,350
Addition to PP&E with interest capitalization (notes 11 and 26)	15,133		23,390		6,864		7,280
Remeasurement and addition – Right of use (note 11 a)	62,365		555		876		341
Addition to PP&E without adding cash	37,359
Capitalization in subsidiaries without cash							18,566
Addition to investment property without cash effect			61,597				61,597
	1,581,441		316,892		7,740		87,784

 

30.

COMPREHENSIVE INCOME STATEMENT

 

 

 

 

31.

SUBSEQUENT EVENTS

 

·

The Usiminas’ shares classified as financial investments (see note 4) are exposed to changes in the share price due to the securities adopted at fair value through profit or loss according to quotations on the Stock Exchange. On April 27, 2021, common and preferred shares appreciated in the global amount of R$1,319,411 since the balance sheet closing date.

 

·

In April 2021, the subsidiary CSN Mineração opted for a cash flow hedge accounting applied to a portion of its iron ore sales to mitigate the risk of volatility of the Platts index, for a limited amount of 1,9 million tons iron ore to be shipped from second quarter to 2021

 

 

 

 

Independent Auditor’s Report on the Financial Information

(Free translation from the original issued in Portuguese. In the event of any discrepancies, the Portuguese language version shall prevail.)

To the Shareholders, Directors and Management of

Companhia Siderurgica Nacional

São Paulo - SP

Introduction

We have reviewed the accompanying individual and consolidated interim financial information of Companhia Siderurgica Nacional (“Company”), identified as Parent and Consolidated, respectively, included in the Interim Financial Information Form (ITR) for the quarter ended March 31, 2021, which comprises the balance sheet as of March 31, 2021 and the related statement of profit and loss and statement of comprehensive income (loss) and the statement of changes in equity and statement of cash flows for the three-month period then ended, including a summary of significant accounting policies and other explanatory notes.

Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with Technical Pronouncement CPC 21 (R1) - Interim Financial Reporting and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the presentation of such information in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of Interim Financial Information (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and international standards on review of interim financial information (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the standards on auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the individual and consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the Interim Financial Information Form (ITR) referred to above is not prepared, in all material respects, in accordance with CPC 21 (R1) and IAS 34 applicable to the preparation of interim financial information and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM).

Emphasis of matter

Ability of the jointly controlled subsidiary Transnordestina Logística S.A. to continue as a going concern

We draw attention to note 10.f) to the individual and consolidated financial statements, which describes the percentage of completion of the new railway network by the jointly controlled subsidiary Transnordestina Logística S.A. (TLSA), currently under construction and originally scheduled to be completed by January 2017, is currently being revised and discussed by the relevant regulatory bodies. The completion of the work under the project (and consequent start of operations) is contingent upon receiving ongoing financial contribution from TLSA´s shareholders and third parties. These events and conditions, together with other issues described in said Note indicate the existence of significant uncertainty that may raise significant doubt as to TLSA´s ability to continue as a going concern. Our conclusion is not qualified regarding this matter.

67

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)
Quarterly Financial Information - March 31, 2021 – CIA SIDERURGICA NACIONAL	Version: 1

 

 

 

Other matters

Interim statement of value added

The quarterly information referred to above includes the individual and consolidated statements of value added for the period of nine months ended September 30, 2020, prepared under the responsibility of the Company's management and presented as supplementary information for the purposes of IAS 34. These statements were submitted to the same review procedures in conjunction with the review of the Company's interim financial information in the order to conclude they are reconciliated to the interim financial information and to the accounting records, as applicable, and whether the structure and content are in accordance with the criteria established in the NBC TG 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that the accompanying statements of value added were not prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.

 

 

São Paulo, April 28, 2021

 

Nelson Fernandes Barreto Filho

CT CRC 1SP-151.079/O-0

Grant Thornton Auditores Independentes

CRC 2SP-025.583/O-1

 

 

 

 

 

 

68

SIGNATURE

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 6, 2021

 

COMPANHIA SIDERÚRGICA NACIONAL
By:	/S/ Benjamin Steinbruch
	Benjamin Steinbruch Chief Executive Officer

 

By:	/S/ Marcelo Cunha Ribeiro
	Marcelo Cunha Ribeiro Chief Financial and Investor Relations Officer

 

 

 

 

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

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