(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1

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 06/30/2021 8
01/01/2020 to 06/30/2020 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 16
Statement of Cash Flows 17
Statement of Changes in Shareholders' Equity
01/01/2021 to 06/30/2021 19
01/01/2020 to 06/30/2020 20
Statement of Value Added 21
Comments on the Company's Consolidated Performance
Notes to the quarterly financial information 22
Comments on the Performance of Business Projections
Reports and Statements
Unqualified Independent Auditors' Review Report 74
Opinion of the Supervisory Board or Equivalent Body
Opinion or Summary Report, if any, of the Audit Committee (statutory or otherwise)
Officers Statement on the Financial Statements
Officers Statement on Auditor's Report

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1

Company Information / Capital Breakdown

Number of Shares

(Units)

Current quarter

06/30/2021

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

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1

Parent Company Financial Statements / Balance Sheet - Assets

(R$ thousand)

Code Description Current Quarter 06/30/2021 Previous Year 12/31/2020
1 Total Assets 56,580,993 53,196,550
1.01 Current assets 14,632,915 14,879,594
1.01.01 Cash and cash equivalents 3,611,770 4,647,125
1.01.02 Financial investments 3,561,255 3,780,891
1.01.02.01 Financial investments measured a fair value through profit or loss 3,159,021 3,305,109
1.01.02.01.03 Financial investments measured a fair value through profit or loss - Usiminas' shares 3,159,021 3,305,109
1.01.02.03 Financial investments at amortized cost 402,234 475,782
1.01.03 Trade receivables 1,855,694 1,549,703
1.01.04 Inventory 4,635,038 3,014,446
1.01.06 Recoverable taxes 478,974 1,381,853
1.01.08 Other current assets 490,184 505,576
1.01.08.03 Others 490,184 505,576
1.01.08.03.02 Prepaid expenses 139,163 94,782
1.01.08.03.03 Dividends receivable 253,814 329,413
1.01.08.03.04 Others 97,207 81,381
1.02 Non-current assets 41,948,078 38,316,956
1.02.01 Long-term assets 9,011,235 8,406,417
1.02.01.03 Financial investments at amortized cost 118,790 123,409
1.02.01.07 Deferred taxes assets 4,145,519 3,799,707
1.02.01.10 Other non-current assets 4,746,926 4,483,301
1.02.01.10.03 Recoverable taxes 712,063 738,431
1.02.01.10.04 Judicial deposits 228,396 221,016
1.02.01.10.05 Prepaid expenses 92,070 99,834
1.02.01.10.06 Receivable from related parties 2,177,521 1,907,877
1.02.01.10.07 Others 1,536,876 1,516,143
1.02.02 Investments 25,722,679 19,546,493
1.02.02.01 Equity interest 25,578,883 19,401,494
1.02.02.02 Investment Property 143,796 144,999
1.02.03 Property, plant and equipment 7,164,009 10,315,724
1.02.03.01 Property, plant and equipment in operation 6,435,850 8,598,597
1.02.03.02 Right of use in leases 18,181 64,659
1.02.03.03 Property, plant and equipment in progress 709,978 1,652,468
1.02.04 Intangible assets 50,155 48,322

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Parent Company Financial Statements / Balance Sheet - Liabilities
(R$ thousand)
Code Description Current Quarter 06/30/2021 Previous Year 12/31/2020
2 Total Liabilities 56,580,993 53,196,550
2.01 Current liabilities 11,692,055 10,756,084
2.01.01 Payroll and related taxes 171,868 138,761
2.01.02 Trade payables 4,445,459 4,133,089
2.01.03 Tax payables 321,151 289,095
2.01.04 Borrowings and financing 3,692,276 3,858,493
2.01.05 Other payables 3,016,957 2,302,188
2.01.05.02 Others 3,016,957 2,302,188
2.01.05.02.04 Dividends and interests on shareholder´s equity 1,423 901,983
2.01.05.02.05 Advances from clients 191,611 196,595
2.01.05.02.06 Trade payables - Forfaiting and Drawee risk 2,190,459 623,861
2.01.05.02.07 Lease liabilities 6,947 26,546
2.01.05.02.08 Other payables 626,517 553,203
2.01.06 Provisions 44,344 34,458
2.01.06.01 Provision for tax, social security, labor and civil risks 44,344 34,458
2.02 Non-current liabilities 23,172,245 32,527,015
2.02.01 Borrowings and financing 15,331,433 24,423,753
2.02.02 Other payables 340,480 771,292
2.02.02.02 Others 340,480 771,292
2.02.02.02.03 Lease liabilities 13,133 40,561
2.02.02.02.04 Derivative financial instruments 73,268 97,535
2.02.02.02.05 Trade payables 45,550 376,753
2.02.02.02.06 Other payables 208,529 256,443
2.02.04 Provisions 7,500,332 7,331,970
2.02.04.01 Provision for tax, social security, labor and civil risks 357,119 401,157
2.02.04.02 Other provisions 7,143,213 6,930,813
2.02.04.02.03 Provision for environmental liabilities and decommissioning of assets 185,640 229,524
2.02.04.02.04 Pension and healthcare plan 758,426 758,426
2.02.04.02.05 Provision for losses on investments 6,199,147 5,942,863
2.03 Shareholders' equity 21,716,693 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) 10,205,786 -
2.03.08 Other comprehensive income (386,163) (1,983,619)

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Parent Company Financial Statements / Statement of Income
(R$ thousand)
Code Description Current Quarter 04/01/2021 to 06/30/2021 Year to date 01/01/2021 to 06/30/2021 Same quarter previous year 04/01/2020 to 06/30/2020 YTD previous year01/01/2020 to 06/30/2020
3.01 Revenues from sale of goods and rendering of services 6,278,019 11,651,298 2,850,011 5,881,320
3.02 Costs from sale of goods and rendering of services (4,044,092) (7,734,001) (2,523,455) (5,301,835)
3.03 Gross profit 2,233,927 3,917,297 326,556 579,485
3.04 Operating (expenses)/income 2,344,866 5,647,796 (635,456) (1,898,368)
3.04.01 Selling expenses (139,576) (306,788) (163,923) (326,162)
3.04.02 General and administrative expenses (59,784) (117,475) (60,932) (111,124)
3.04.04 Other operating income 133,525 2,665,102 289,980 364,827
3.04.05 Other operating expenses (161,151) (554,798) (953,305) (1,487,943)
3.04.06 Equity in results of affiliated companies 2,571,852 3,961,755 252,724 (337,966)
3.05 Income before financial income (expenses) and taxes 4,578,793 9,565,093 (308,900) (1,318,883)
3.06 Financial income (expenses) 128,760 538,248 771,885 420,713
3.06.01 Financial income 796,765 1,376,103 91,596 144,972
3.06.02 Financial expenses (668,005) (837,855) 680,289 275,741
3.06.02.01 Net exchange differences over financial instruments (331,205) (159,201) 513,006 1,444,022
3.06.02.02 Financial expenses (336,800) (678,654) 167,283 (1,168,281)
3.07 Income before income taxes 4,707,553 10,103,341 462,985 (898,170)
3.08 Income tax and social contribution 258,218 102,445 (117,807) (117,503)
3.09 Net incomefrom continued operations 4,965,771 10,205,786 345,178 (1,015,673)
3.11 Net income for the year 4,965,771 10,205,786 345,178 (1,015,673)
3.99 Earnings per share - (Reais / Share) - - - -
3.99.01 Basic earnings per share - - - -
3.99.01.01 Common shares 3.5981 7.3949 0.2501 - 0.7359
3.99.02 Diluted earnings per share - - - -
3.99.02.01 Common shares 3.5981 7.3949 0.2501 - 0.7359

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Parent Company Financial Statements / Statement of Comprehensive Income
(R$ thousand)
Code Description Current Quarter 04/01/2021 to 06/30/2021 Year to date 01/01/2021 to 06/30/2021 Same quarter previous year 04/01/2020 to 06/30/2020 YTD previous year01/01/2020 to 06/30/2020
4.01 Net income for the year 4,965,771 10,205,786 345,178 (1,015,673)
4.02 Other comprehensive income 2,357,516 777,253 (361,973) (5,005,656)
4.02.01 Actuarial gains over pension plan of subsidiaries, net of taxes 29 49 30 61
4.02.04 Cumulative translation adjustments for the year (278,587) (192,468) 133,411 513,453
4.02.10 (Loss)/gain on the percentage change in investments - - 4,612 4,612
4.02.11 Losses in cash flow hedge 2,615,279 696,150 (1,274,889) (6,664,932)
4.02.13 Cash flow hedge reclassified to income upon realization - 252,250 774,863 1,139,681
4.02.14 (Loss)/ gain in cash flow hedge from investments in subsidiaries - - - 1,469
4.02.15 (Loss)/gain cash flow hedge accounting-'Platts', net taxes,from investments in subsidiaries 20,795 21,272 - -
4.03 Comprehensive income for the year 7,323,287 10,983,039 (16,795) (6,021,329)

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Parent Company Financial Statements / Statements of Cash Flows - Indirect Method
(R$ thousand)
Code Description Year to date 01/01/2021 to 06/30/2021 YTD previous year01/01/2020 to 06/30/2020
6.01 Net cash from operating activities 4,729,934 (87,202)
6.01.01 Cash from operations 3,368,586 314,681
6.01.01.01 Net income for the period 10,205,786 (1,015,673)
6.01.01.02 Financial charges in borrowing and financing raised 359,259 543,040
6.01.01.03 Financial charges in borrowing and financing granted (21,175) (26,301)
6.01.01.04 Depreciation, amortization and depletion 414,651 427,177
6.01.01.05 Equity in results of affiliated companies (3,961,755) 337,966
6.01.01.06 Deferred taxes assets (345,812) 1,303
6.01.01.08 Provision for tax, social security, labor, civil and environmental risks (34,152) 14,659
6.01.01.09 Monetary and exchange variations, net 499,646 86,711
6.01.01.10 Updated shares - Fair value through profit or loss (815,514) 435,364
6.01.01.11 Net gains on the sale of the shares of CSN Mineração. (2,472,497) -
6.01.01.12 Write-off and estimated losses net of reversal 1,680 (837)
6.01.01.13 Provision for environmental liabilities and decommissioning of assets 23,473 16,305
6.01.01.14 Charges on lease liabilities 1,016 1,856
6.01.01.15 Accrued for consumption and services 3,339 (14,313)
6.01.01.16 Net gains on the sale of the shares of Usiminas (505,844) -
6.01.01.17 Receivables by indemnity (8,857) (508,326)
6.01.01.18 Other provisions 25,342 15,750
6.01.02 Changes in assets and liabilities 1,361,348 (401,883)
6.01.02.01 Trade receivables - third parties (627,190) 49,404
6.01.02.02 Trade receivables - related party 212,985 (553,809)
6.01.02.03 Inventory (1,784,997) (150,661)
6.01.02.04 Receivables - related parties/dividends 1,236,190 3,351
6.01.02.05 Recoverable taxes 900,930 53,367
6.01.02.06 Judicial deposits (13,365) 3,296
6.01.02.09 Trade payables 216,739 794,172
6.01.02.10 Trade payables - Forfaiting and Drawee risk 1,566,598 (520,492)
6.01.02.11 Payroll and related taxes 42,560 45,395
6.01.02.12 Tax payables 33,063 177,899
6.01.02.14 Payables to related parties 3,595 156,086
6.01.02.16 Interest paid (434,194) (534,326)
6.01.02.17 Interest received - 198
6.01.02.19 Others 8,434 74,237
6.02 Net cash investment activities 3,923,617 (530,916)
6.02.01 Investments / AFAC / Acquisitions of Shares (89,943) (40,844)

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
6.02.02 Purchase of property, plant and equipment, intangible assets andinvestmentproperty (405,126) (362,868)
6.02.08 Intercompany loans granted (123,244) (121,043)
6.02.09 Intercompany loans received - 4,076
6.02.11 Financial Investments, net of redemption 1,377,318 (10,237)
6.02.12 Net cash received from sale of CSN Mineração's shares 3,164,612 -
6.03 Net cash used in financing activities (9,688,906) 1,396,280
6.03.01 Borrowings and financing raised 40,903 80,744
6.03.02 Transactions cost - Borrowings and financing (9,449) (11,886)
6.03.03 Borrowings and financing - related parties 1,394,275 2,421,713
6.03.04 Amortization of leases (4,345) (12,775)
6.03.05 Amortization of borrowings and financing (3,714,366) (976,898)
6.03.06 Amortization of borrowings and financing - related parties (6,495,364) (104,448)
6.03.07 Dividends and interest on shareholder's equity (900,560) (170)
6.05 Increase (decrease) in cash and cash equivalents (1,035,355) 778,162
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 3,611,770 1,170,269

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2021 to 06/30/2021
(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
5.04 Capital transaction with shareholders - - - - 820,203 820,203
5.04.10 Net gain of transaction primary and secondary distribution shares of CSN Mineração - - - - 829,486 829,486
5.04.11 (Loss) / gain on the percentage change in investments - - - - (9,283) (9,283)
5.05 Total comprehensive income - - - 10,205,786 777,253 10,983,039
5.05.01 Net income for the period - - - 10,205,786 - 10,205,786
5.05.02 Other comprehensive income - - - - 777,253 777,253
5.05.02.04 Translation adjustments for the year - - - - (192,468) (192,468)
5.05.02.08 Actuarial gains/(losses) on pension plan, net of taxes - - - - 49 49
5.05.02.11 (Loss) / gain hedge accounting, net of taxes - - - - 969,672 969,672
5.07 Closing balance 6,040,000 32,720 5,824,350 10,205,786 (386,163) 21,716,693

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2020 to 06/30/2020
(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 - - - (1,015,673) (5,005,656) (6,021,329)
5.05.01 Net income for the period - - - (1,015,673) - (1,015,673)
5.05.02 Other comprehensive income - - - - (5,005,656) (5,005,656)
5.05.02.04 Translation adjustments for the year - - - - 513,453 513,453
5.05.02.08 Actuarial gains/(losses) on pension plan, net of taxes - - - - 61 61
5.05.02.10 (Loss) / gain on the percentage change in investments - - - - 4,612 4,612
5.05.02.11 (Loss) / gain hedge accounting, net of taxes - - - - (5,525,251) (5,525,251)
5.05.02.13 (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 (1,015,673) (3,835,032) 4,153,215

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Parent Company Financial Statements / Statement of Value Added
(R$ thousand)
Code Description Year to date 01/01/2021 to 06/30/2021 YTD previous year01/01/2020 to 06/30/2020
7.01 Revenues 17,935,438 7,519,959
7.01.01 Sales of products and rendering of services 14,590,533 7,253,117
7.01.02 Other revenues 3,346,351 268,343
7.01.04 Allowance for (reversal of) doubtful debts (1,446) (1,501)
7.02 Raw materials acquired from third parties (10,843,054) (7,230,082)
7.02.01 Cost of sales and services (9,547,170) (5,568,151)
7.02.02 Materials, electric power, outsourcing and other (1,249,979) (1,623,144)
7.02.03 Impairment/recovery of assets (45,905) (38,787)
7.03 Gross value added 7,092,384 289,877
7.04 Retentions (414,250) (426,162)
7.04.01 Depreciation, amortization and depletion (414,250) (426,162)
7.05 Value added created 6,678,134 (136,285)
7.06 Value added received 5,293,435 370,210
7.06.01 Equity in results of affiliates companies 3,961,755 (337,966)
7.06.02 Financial income 1,376,103 505,686
7.06.03 Others (44,423) 202,490
7.06.03.01 Others and exchange gains (44,423) 202,490
7.07 Value added for distribution 11,971,569 233,925
7.08 Value added distributed 11,971,569 233,925
7.08.01 Personnel 627,278 658,317
7.08.01.01 Salaries and wages 464,881 495,820
7.08.01.02 Benefits 133,345 129,535
7.08.01.03 Severance payment (FGTS) 29,052 32,962
7.08.02 Taxes, fees and contributions 340,758 301,838
7.08.02.01 Federal 108,265 286,415
7.08.02.02 State 232,493 15,423
7.08.03 Remuneration on third-party capital 797,747 289,443
7.08.03.01 Interest 373,175 1,168,282
7.08.03.02 Rental 4,315 1,983
7.08.03.03 Others 420,257 (880,822)
7.08.04 Remuneration on Shareholders' capital 10,205,786 (1,015,673)
7.08.04.03 Retained earnings (accumulated losses) 10,205,786 (1,015,673)

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated Financial Statements / Balance Sheet - Assets
(R$ thousand)
Code Description Current Quarter 06/30/2021 Previous Year 12/31/2020
1 Total assets 79,440,123 63,002,149
1.01 Current assets 38,801,277 23,386,194
1.01.01 Cash and cash equivalents 21,756,753 9,944,586
1.01.02 Financial investments 3,564,127 3,783,362
1.01.02.01 Financial investments measured a fair value through profit or loss 3,159,021 3,305,109
1.01.02.01.03 Financial investments measured a fair value through profit or loss - Usiminas' shares 3,159,021 3,305,109
1.01.02.03 Financial investments at amortized cost 405,106 478,253
1.01.03 Trade receivables 5,308,206 2,867,352
1.01.04 Inventory 7,050,184 4,817,586
1.01.06 Recoverable taxes 730,542 1,605,494
1.01.08 Other current assets 391,465 367,814
1.01.08.03 Others 391,465 367,814
1.01.08.03.02 Prepaid expenses 182,842 211,027
1.01.08.03.03 Dividends receivable 38,086 38,088
1.01.08.03.04 Derivative financial instruments 5,679 -
1.01.08.03.05 Others 164,858 118,699
1.02 Non-current assets 40,638,846 39,615,955
1.02.01 Long-term assets 9,539,821 8,887,158
1.02.01.03 Financial investments at amortized cost 118,790 123,409
1.02.01.05 Inventory 428,434 347,304
1.02.01.07 Deferred taxes assets 4,253,337 3,874,946
1.02.01.10 Other non-current assets 4,739,260 4,541,499
1.02.01.10.03 Recoverable taxes 922,546 938,452
1.02.01.10.04 Judicial deposits 345,915 325,117
1.02.01.10.05 Prepaid expenses 121,036 129,455
1.02.01.10.06 Receivable from related parties 1,810,489 1,630,070
1.02.01.10.07 Others 1,539,274 1,518,405
1.02.02 Investments 3,942,510 3,695,780
1.02.02.01 Equity interest 3,784,110 3,535,906
1.02.02.02 Investment Property 158,400 159,874
1.02.03 Property, plant and equipment 19,905,158 19,716,223
1.02.03.01 Property, plant and equipment in operation 15,651,880 15,519,233
1.02.03.02 Right of use in leases 509,175 516,668
1.02.03.03 Property, plant and equipment in progress 3,744,103 3,680,322
1.02.04 Intangible assets 7,251,357 7,316,794

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated Financial Statements / Balance Sheet - Liabilities
(R$ thousand)
Code Description Current Quarter 06/30/2021 Previous Year 12/31/2020
2 Total Liabilities 79,440,123 63,002,149
2.01 Current liabilities 18,963,270 14,725,696
2.01.01 Payroll and related taxes 360,453 282,630
2.01.02 Trade payables 7,001,074 4,819,539
2.01.03 Tax payables 3,162,737 2,058,362
2.01.04 Borrowings and financing 4,093,782 4,126,453
2.01.05 Other payables 4,257,123 3,357,639
2.01.05.02 Others 4,257,123 3,357,639
2.01.05.02.04 Dividends and interests on shareholder´s equity 64,170 946,133
2.01.05.02.05 Advances from clients 1,174,901 1,100,772
2.01.05.02.06 Trade payables - Forfaiting and Drawee risk 2,190,459 623,861
2.01.05.02.07 Lease liabilities 93,501 93,626
2.01.05.02.08 Derivative financial instruments 32,155 8,722
2.01.05.02.09 Other payables 701,937 584,525
2.01.06 Provisions 88,101 81,073
2.01.06.01 Provision for tax, social security, labor and civil risks 88,101 81,073
2.02 Non-current liabilities 35,380,738 37,024,948
2.02.01 Borrowings and financing 30,504,498 31,144,200
2.02.02 Other payables 2,169,975 3,145,336
2.02.02.02 Others 2,169,975 3,145,336
2.02.02.02.03 Advances from clients 1,253,637 1,725,838
2.02.02.02.04 Lease liabilities 436,725 436,505
2.02.02.02.05 Derivative financial instruments 73,268 97,535
2.02.02.02.06 Trade payables 103,420 543,527
2.02.02.02.07 Other payables 302,925 341,931
2.02.03 Deferred taxes assets 574,492 618,836
2.02.04 Provisions 2,131,773 2,116,576
2.02.04.01 Provision for tax, social security, labor and civil risks 521,777 554,315
2.02.04.02 Other provisions 1,609,996 1,562,261
2.02.04.02.03 Provision for environmental liabilities and decommissioning of assets 851,570 803,835
2.02.04.02.04 Pension and healthcare plan 758,426 758,426
2.03 Shareholders' equity 25,096,115 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) 10,205,786 -

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2.03.08 Other comprehensive income (386,163) (1,983,619)
2.03.09 Earnings attributable to the non-controlling interests 3,379,422 1,338,054

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated Financial Statements / Statements of Income
(R$ thousand)
Code Description Current Quarter 04/01/2021 to 06/30/2021 Year to date 01/01/2021 to 06/30/2021 Same quarter previous year 04/01/2020 to 06/30/2020 YTD previous year01/01/2020 to 06/30/2020
3.01 Revenues from sale of goods and rendering of services 15,391,573 27,304,901 6,220,683 11,555,336
3.02 Costs from sale of goods and rendering of services (7,111,092) (13,289,876) (4,378,065) (8,395,772)
3.03 Gross profit 8,280,481 14,015,025 1,842,618 3,159,564
3.04 Operating (expenses)/income (1,171,899) 270,617 (1,289,349) (2,510,662)
3.04.01 Selling expenses (680,194) (1,102,780) (400,463) (791,378)
3.04.02 General and administrative expenses (145,440) (279,903) (126,446) (245,501)
3.04.04 Other operating income 135,965 2,696,197 304,268 406,957
3.04.05 Other operating expenses (537,351) (1,111,463) (1,095,062) (1,863,986)
3.04.06 Equity in results of affiliated companies 55,121 68,566 28,354 (16,754)
3.05 Income before financial income (expenses) and taxes 7,108,582 14,285,642 553,269 648,902
3.06 Financial income (expenses) (339,051) (540,558) 284,857 (916,281)
3.06.01 Financial income 791,755 1,377,340 95,956 161,087
3.06.02 Financial expenses (1,130,806) (1,917,898) 188,901 (1,077,368)
3.06.02.01 Net exchange differences over financial instruments (330,030) (386,358) 343,074 707,956
3.06.02.02 Financial expenses (800,776) (1,531,540) (154,173) (1,785,324)
3.07 Income before income taxes 6,769,531 13,745,084 838,126 (267,379)
3.08 Income tax and social contribution (1,256,871) (2,535,111) (392,226) (598,430)
3.09 Net income from continued operations 5,512,660 11,209,973 445,900 (865,809)
3.11 Consolidated net income for the year 5,512,660 11,209,973 445,900 (865,809)
3.11.01 Earnings attributable to the controlling interests 4,965,771 10,205,786 345,178 (1,015,673)
3.11.02 Earnings it attributable to the non-controlling interests 546,889 1,004,187 100,722 149,864
3.99 Earnings per share - (Reais / Share) - - - -
3.99.01 Basic earnings per share - - - -

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
3.99.01.01 Common shares 3.59809 7.39488 0.25011 - 0.73593
3.99.02 Diluted earnings per share - - - -
3.99.02.01 Common shares 3.59809 7.39488 0.25011 - 0.73593

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated Financial Statements / Statement of Comprehensive Income
(R$ thousand)
Code Description Current Quarter 04/01/2021 to 06/30/2021 Year to date 01/01/2021 to 06/30/2021 Same quarter previous year 04/01/2020 to 06/30/2020 YTD previous year01/01/2020 to 06/30/2020
4.01 Consolidated net income for the year 5,512,660 11,209,973 445,900 (865,809)
4.02 Other comprehensive income 2,363,301 783,109 (361,973) (5,005,654)
4.02.01 Actuarial gains over pension plan of subsidiaries, net of taxes 32 55 30 63
4.02.04 Cumulative translation adjustments for the year (278,587) (192,468) 133,411 513,453
4.02.09 (Loss)/gain on the percentage change in investments - - 4,612 4,612
4.02.10 Losses in cash flow hedge 2,615,279 696,150 (1,274,889) (6,664,932)
4.02.12 Cash flow hedge reclassified to income upon realization - 252,250 774,863 1,139,681
4.02.13 (Loss)/gain on hedge of net investment in foreign operations. - - - 1,469
4.02.14 (Loss)/gain cash flow hedge accounting-'Platts', net taxes,from investments in subsidiaries (157,508) (195,613) - -
4.02.15 Cash flow hedge accounting - 'Platts' reclassified to income upon realization 184,085 222,735 - -
4.03 Consolidated comprehensive income for the year 7,875,961 11,993,082 83,927 (5,871,463)
4.03.01 Earningsattributable to the controlling interests 7,323,287 10,983,039 (16,795) (6,021,329)
4.03.02 Earnings it attributable to the non-controlling interests 552,674 1,010,043 100,722 149,866

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated Financial Statements / Statements of Cash Flows - Indirect Method
(R$ thousand)
Code Description Year to date 01/01/2021 to 06/30/2021 YTD previous year01/01/2020 to 06/30/2020
6.01 Net cash from operating activities 8,247,905 1,967,243
6.01.01 Cash from operations 9,347,326 2,288,254
6.01.01.01 Earningsattributable to the controlling interests 10,205,786 (1,015,673)
6.01.01.02 Earnings attributable to the non-controlling interests 1,004,187 149,864
6.01.01.03 Financial charges in borrowing and financing raised 926,025 983,014
6.01.01.04 Financial charges in borrowing and financing granted (18,533) (20,495)
6.01.01.05 Depreciation, amortization and depletion 1,012,257 889,821
6.01.01.06 Equity in results of affiliated companies (68,566) 16,754
6.01.01.07 Deferred taxes assets (419,632) (114,532)
6.01.01.08 Provision for tax, social security, labor, civil and environmental risks (24,207) 2,910
6.01.01.09 Monetary and exchange variations, net 430,382 1,389,127
6.01.01.10 Net gains on the sale of the shares of Usiminas (505,844) -
6.01.01.12 Updated shares - Fair value through profit or loss (815,514) 435,364
6.01.01.13 Charges on lease liabilities 29,388 26,126
6.01.01.15 Accrued for consumption and services 36,854 35,949
6.01.01.16 Write-off and estimated losses net of reversal 3,816 2,329
6.01.01.17 Receivables by indemnity (8,857) (508,326)
6.01.01.18 Provision for environmental liabilities and decommissioning of assets 47,735 14,412
6.01.01.19 Net gains on the sale of the shares of CSN Mineração. (2,472,497) -
6.01.01.20 Other provisions (15,454) 1,610
6.01.02 Changes in assets and liabilities (1,099,421) (321,011)
6.01.02.01 Trade receivables - third parties (2,483,688) 286,563
6.01.02.02 Trade receivables - related party (56,342) 33,573
6.01.02.03 Inventory (2,385,574) (441,496)
6.01.02.05 Recoverable taxes 890,858 25,711
6.01.02.06 Judicial deposits (20,798) (13,502)
6.01.02.07 Trade payables 1,784,174 815,197
6.01.02.08 Trade payables - Forfaiting and Drawee risk 1,566,598 (520,492)
6.01.02.09 Payroll and related taxes 80,481 84,430
6.01.02.10 Tax payables 1,092,910 542,357
6.01.02.12 Payables to related parties (21,153) (24,900)
6.01.02.13 Advances from clients (344,575) (353,740)
6.01.02.14 Interest paid (1,008,722) (922,276)
6.01.02.15 Cash flow hedge accounting (252,394) -
6.01.02.17 Others 58,804 167,564
6.02 Net cash investment activities 3,266,218 (824,464)
6.02.02 Investments (62,520) (36,538)
6.02.03 Purchase of property, plant and equipment, intangible assets andinvestmentproperty (1,107,313) (720,564)

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
6.02.11 Intercompany loans granted (105,479) (101,631)
6.02.12 Intercompany loans received - 12,553
6.02.13 Financial Investments, net of redemption 1,376,918 21,716
6.02.14 Net cash received from sale of CSN Mineração's shares 3,164,612 -
6.03 Net cash used in financing activities 284,590 2,021,105
6.03.01 Borrowings and financing raised 6,895,202 5,064,688
6.03.03 Transactions cost - Borrowings (128,980) (19,172)
6.03.04 Issuance of new CSN Mineração's shares 1,347,862 -
6.03.05 Amortization of borrowings and financing (6,697,746) (2,973,767)
6.03.06 Amortization of leases (54,972) (50,474)
6.03.07 Dividends and interest on shareholder's equity (1,076,776) (170)
6.04 Exchange rate on translating cash and cash equivalents 13,454 (39,287)
6.05 Increase (decrease) in cash and cash equivalents 11,812,167 3,124,597
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 21,756,753 4,213,552

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2021 to 06/30/2021
(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 - - - - 820,203 820,203 1,031,325 1,851,528
5.04.01 Capital increase - - - - - - 294,900 294,900
5.04.06 Dividends - - - - - - (196,017) (196,017)
5.04.10 Net gain of transaction primary and secondary distribution shares of CSN Mineração - - - - 829,486 829,486 923,159 1,752,645
5.04.11 (Loss) / gain on the percentage change in investments - - - - (9,283) (9,283) 9,283 -
5.05 Total comprehensive income - - - 10,205,786 777,253 10,983,039 1,010,043 11,993,082
5.05.01 Net income for the year - - - 10,205,786 - 10,205,786 1,004,187 11,209,973
5.05.02 Other comprehensive income - - - - 777,253 777,253 5,856 783,109
5.05.02.04 Translation adjustments for the year - - - - (192,468) (192,468) - (192,468)
5.05.02.08 Actuarial gains/(losses) on pension plan, net of taxes - - - - 49 49 6 55
5.05.02.11 (Loss) / gain hedge accounting, net of taxes - - - - 969,672 969,672 5,850 975,522
5.07 Closing balance 6,040,000 32,720 5,824,350 10,205,786 (386,163) 21,716,693 3,379,422 25,096,115

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2020 to 06/30/2020
(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
5.04 Capital transaction with shareholders - - - - - - (27,902) (27,902)
5.04.07 Interest on equity - - - - - - (27,902) (27,902)
5.05 Total comprehensive income - - - (1,015,673) (5,005,656) (6,021,329) 149,866 (5,871,463)
5.05.01 Net income for the year - - - (1,015,673) - (1,015,673) 149,864 (865,809)
5.05.02 Other comprehensive income - - - - (5,005,656) (5,005,656) 2 (5,005,654)
5.05.02.04 Translation adjustments for the year - - - - 513,453 513,453 - 513,453
5.05.02.08 Actuarial gains/(losses) on pension plan, net of taxes - - - - 61 61 2 63
5.05.02.10 (Loss)/gain on the percentage change in investments - - - - 4,612 4,612 - 4,612
5.05.02.11 (Loss) / gain hedge accounting, net of taxes - - - - (5,525,251) (5,525,251) - (5,525,251)
5.05.02.13 (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 (1,015,673) (3,835,032) 4,153,215 1,309,352 5,462,567

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated Financial Statements / Statements of Value Added
(R$ thousand)
Code Description Year to date 01/01/2021 to 06/30/2021 YTD previous year01/01/2020 to 06/30/2020
7.01 Revenues 34,033,566 13,325,400
7.01.01 Sales of products and rendering of services 30,685,970 13,049,788
7.01.02 Other revenues 3,347,472 276,900
7.01.04 Allowance for (reversal of) doubtful debts 124 (1,288)
7.02 Raw materials acquired from third parties (16,565,222) (10,364,490)
7.02.01 Cost of sales and services (13,611,274) (7,820,371)
7.02.02 Materials, electric power, outsourcing and other (2,863,516) (2,436,167)
7.02.03 Impairment/recovery of assets (90,432) (107,952)
7.03 Gross value added 17,468,344 2,960,910
7.04 Retentions (1,009,505) (887,195)
7.04.01 Depreciation, amortization and depletion (1,009,505) (887,195)
7.05 Value added created 16,458,839 2,073,715
7.06 Value added received 851,837 1,303,723
7.06.01 Equity in results of affiliated companies 68,431 (16,754)
7.06.02 Financial income 1,377,340 521,801
7.06.03 Others (593,934) 798,676
7.07 Value added for distribution 17,310,676 3,377,438
7.08 Value added distributed 17,310,676 3,377,438
7.08.01 Personnel 1,146,537 1,117,467
7.08.01.01 Salaries and wages 880,646 863,532
7.08.01.02 Benefits 221,108 204,101
7.08.01.03 Severance payment (FGTS) 44,783 49,834
7.08.02 Taxes, fees and contributions 3,622,802 882,181
7.08.02.01 Federal 3,142,482 834,777
7.08.02.02 State 459,489 29,471
7.08.02.03 Municipal 20,831 17,933
7.08.03 Remuneration on third-party capital 1,331,364 2,243,599
7.08.03.01 Interest 968,893 1,785,324
7.08.03.02 Rental 7,400 6,845
7.08.03.03 Others 355,071 451,430
7.08.04 Remuneration on Shareholders' capital 11,209,973 (865,809)
7.08.04.03 Retained earnings (accumulated losses) 10,205,786 (1,015,673)
7.08.04.04 Non-controlling interests in retained earnings 1,004,187 149,864

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
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).

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
· 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 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. Additionally, in first quarter of 2021 management concluded the initial public offering of its subsidiary CSN Mineração S.A., which contributed significantly to the increase in liquidity, and also continues with the planning of the initial public offering of its cement segment. 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 semester of 2021.

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.

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
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 July 27, 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 June 30, 2021, US$1.00 is equivalent to R$5.0022 (R$5.1967 on December 31, 2020) and €1.00 is equivalent to R$5.9276 (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.

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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 and, since then, in a non-presential work regime (home office) 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, this being the current regime. 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.

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4. CASH AND CASH EQUIVALENTS
Consolidated Parent Company
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Cash and banks
In Brazil 296,231 245,185 272,463 238,509
Abroad 11,528,416 3,899,282 904,630 199,994
11,824,647 4,144,467 1,177,093 438,503
Investments
In Brazil 7,068,711 5,800,119 2,434,677 4,208,622
Abroad 2,863,395
9,932,106 5,800,119 2,434,677 4,208,622
21,756,753 9,944,586 3,611,770 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
06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020
Investments(1) 405,106 478,253 402,234 475,782
Usiminas shares(2) 3,159,021 3,305,109 3,159,021 3,305,109
Bonds (3) 118,790 123,409 118,790 123,409
3,564,127 3,783,362 118,790 123,409 3,561,255 3,780,891 118,790 123,409
(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
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Trade receivables
Third parties
Domestic market 1,631,063 910,657 1,201,760 680,340
Foreign market 3,725,373 2,063,867 104,075 65,379
5,356,436 2,974,524 1,305,835 745,719
Allowance for doubtful debts (225,748) (228,348) (141,633) (143,735)
5,130,688 2,746,176 1,164,202 601,984
Related parties (note 21 a) 177,518 121,176 691,492 947,719
5,308,206 2,867,352 1,855,694 1,549,703

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

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated Parent Company
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Current 4,950,953 2,537,567 1,126,023 535,541
Past-due up to 30 days 177,814 222,972 43,537 72,890
Past-due up to 180 days 35,644 17,915 6,724 958
Past-due over 180 days 192,025 196,070 129,551 136,330
5,356,436 2,974,524 1,305,835 745,719

The changes in expected credit losses are as follows:

Consolidated Parent Company
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Opening balance (228,348) (245,194) (143,735) (167,247)
(Loss)/Reversal estimated (992) 7,513 (4,209) 22,347
Recovery and write-offs of receivables 3,592 9,333 2,763 1,165
Drop down of Cements (note 10.c) 3,548
Closing balance (225,748) (228,348) (141,633) (143,735)
7. INVENTORIES
Consolidated Parent Company
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Finished goods 2,066,170 1,627,676 1,075,232 748,918
Work in progress 1,943,471 1,358,905 1,280,747 836,128
Raw materials 2,382,514 1,289,653 1,662,745 876,168
Storeroom supplies 1,071,309 928,158 530,862 525,114
Advances to suppliers 135,621 69,536 121,265 63,950
Provision for losses (120,467) (109,038) (35,813) (35,832)
7,478,618 5,164,890 4,635,038 3,014,446
Classified:
Current 7,050,184 4,817,586 4,635,038 3,014,446
Non-current (1) 428,434 347,304
7,478,618 5,164,890 4,635,038 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
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Opening balance (109,038) (134,553) (35,832) (41,201)
(Estimated losses) / Reversal of inventories with low turnover and obsolescence (11,429) 25,515 (4,286) 5,369
Drop down of Cements (note 10.c) 4305.00
Closing balance (120,467) (109,038) (35,813) (35,832)

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8. RECOVERABLE TAXES
Consolidated Parent Company
06/30/2021 12/31/2020 06/30/2021 12/31/2020
State Value-Added Tax 1,007,218 1,002,926 797,715 822,717
Brazilian federal contributions (1) 547,986 1,417,081 321,045 1,192,919
Other taxes 97,884 123,939 72,277 104,648
1,653,088 2,543,946 1,191,037 2,120,284
Classified:
Current 730,542 1,605,494 478,974 1,381,853
Non-current 922,546 938,452 712,063 738,431
1,653,088 2,543,946 1,191,037 2,120,284
(1) The accumulated tax credits arise basically from PIS and Cofins credits on purchases of raw materials used in production. The realization of these credits normally occurs through offsetting against domestic sales transactions and through offsetting against other federal taxes payable by the Company. As of June 30, 2021, the Company had fully offset the PIS and Cofins credit balances referring to the period from 2001 to 2014, resulting from the exclusion of ICMS from the PIS and COFINS calculation basis, whose Injunction and Special Appeal filed in 2006, became final and unappealable on September 20, 2018.
9. OTHER CURRENT AND NON-CURRENT ASSETS
Consolidated Parent Company
Current Non-current Current Non-current
06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020
Judicial deposits (note 19) 345,915 325,117 228,396 221,016
Prepaid expenses 164,240 136,527 107,217 115,636 139,163 94,782 92,070 98,031
Prepaid expenses with sea freight (1) 18,602 74,500
Actuarial asset (note 21 a) 13,819 13,819 1,803
Derivative financial instruments (note 14 I) 5,679
Securities held for trading (note 14 I) 23,255 5,065 23,124 4,927
Loans with related parties (nota 14 I and 21 a) 734 1,089,308 966,050 16,510 53,718 1,197,660 1,007,677
Other receivables from related parties (note 21 a) 3,200 6,242 721,181 664,020 29,710 5,717 979,861 900,200
Other receivables (note 14 I) 2,445 2,445 1,003 1,003
Eletrobrás compulsory loan (note 14 I) (2) 864,647 852,532 863,689 851,713
Dividends receivables (note 21 a) 38,086 38,088 253,814 329,413
Employee debts 42,894 28,054 26,921 16,600
Receivables by indemnity (3) 526,039 517,183 526,039 517,183
Others 94,775 79,338 146,143 146,245 942 419 146,145 146,244
391,465 367,814 3,816,714 3,603,047 490,184 505,576 4,034,863 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 June 30, 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 June 30, 2021 and 2020 include the following direct and indirect subsidiaries, joint ventures and joint operations, as well as the exclusive funds, as follows:

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Number of shares held by CSN in units Equity interests (%)
Companies 06/30/2021 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 Equity interests and 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 NacionalS.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) 333,333,332 99.99 90.00 Manufacturing and sale of cement
Berkeley Participações e Empreendimentos S.A. (4) 1,000 100.00 Electric power generation and equity interests
Fremont Empreendimento e Participações S.A. (4) 999 99.99 Equity interests
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. (5) 63,377,198 18.64 18.64 Railroad transportation
Aceros Del Orinoco S.A. 31.82 31.82 Dormant company
Transnordestina Logística S.A. (6) 24,670,093 47.26 47.26 Railroad logistics
Equimac S.A 1,395 50.00 50.00 Rental of commercial and industrial machinery and equipment
Indirect interest in joint ventures: equity method
MRS Logística S.A. (5) 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 June 30, 2021 and December 31,2020, the Company had 510.726.198 and 486.592.830 common shares in FTL - Ferrovia Transnordestina Logística S.A, respectively.
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 to a total of 2,956,094,581 common shares (see note 10.c). On May 14, 2021, CSN Cimentos S.A.'s shares were split into 5.912189182:1, and CSN now holds 333,333,332 common shares.
4. Berkeley Participações e Empreendimentos S.A. was acquired on May 10, 2021 and Fremont Empreendimentos e Participações S.A. was acquired on June 30, 2021, under a share purchase agreement signed on that same date.
5. As of June 30, 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.
6. As of June 30, 2021 and December 31, 2020, the Company had 24,168,304 common shares and 501,789 Class B preferred shares.

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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:

06/30/2021 12/31/2020 06/30/2020
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. 470,525 2,907,850 (2,437,325) 61,098 481,327 2,979,749 (2,498,422) (744,971)
CSN Inova Ventures 8,437,014 9,375,896 (938,882) (229,121) 9,534,299 10,244,025 (709,726) (264,678)
CSN Islands XII Corp. 3,979,231 6,764,359 (2,785,128) (78,526) 2,497,173 5,203,776 (2,706,603) (843,232)
CSN Steel S.L.U. 4,367,303 45,479 4,321,824 14,392 4,522,589 28,642 4,493,947 550,073
Sepetiba Tecon S.A. 749,410 440,978 308,432 3,450 731,294 431,801 299,493 3,953
Minérios NacionalS.A. 454,761 181,003 273,758 133,488 292,708 152,438 140,270 16,648
Valor Justo - Minérios Nacional S.A. 2,123,507 2,123,507
Estanho de Rondônia S.A. 104,311 142,122 (37,811) (9,700) 103,484 131,596 (28,112) (9,457)
Companhia Metalúrgica Prada 863,216 623,970 239,246 92,770 750,130 603,654 146,476 (38,942)
CSN Mineração S.A. 21,375,315 9,254,663 12,120,652 3,852,844 17,166,329 7,887,964 9,278,992 1,068,875
CSN Energia S.A. 122,283 73,751 48,532 1,608 130,642 83,718 46,924 (5,388)
FTL - Ferrovia Transnordestina Logística S.A. 466,406 252,160 214,246 (14,026) 471,952 254,510 217,442 (22,551)
Companhia Florestal do Brasil 51,733 3,902 47,831 (1,716) 52,073 2,526.0 49,547 (916)
Nordeste Logística S.A. 65 56 9 (4) 69 55 14 (3)
CBSI - Companhia Brasileira de Serviços de Infraestrutura 127,182 100,157 27,025 6,703 118,553 98,231 20,322 (572)
Goodwill - CBSI - Companhia Brasileira de Serviços de Infraestrutura 15,225 15,225
CSN Cimentos S.A. 3,618,619 541,308 3,077,311 92,088
45,187,374 30,707,654 16,618,452 3,925,348 36,852,622 28,102,685 10,889,296 (291,161)
Joint-venture and Joint-operation
Itá Energética S.A. 291,245 25,769 265,476 14,394 268,447 17,365 251,082 6,032
MRS Logística S.A. 2,014,000 1,158,291 855,709 51,793 2,088,151 1,284,265 803,886 10,226
Transnordestina Logística S.A. 4,774,593 3,633,711 1,140,882 (19,222) 4,657,691 3,497,587 1,160,104 (17,973)
Fair Value (*) - Transnordestina 271,116 271,116
Equimac S.A 8,774 504 8,270 135 7,536 301 7,235
7,088,612 4,818,275 2,541,453 47,100 7,021,825 4,799,518 2,493,423 (1,715)
Associates
Arvedi Metalfer do Brasil S.A. 42,682 31,118 11,564 1,438 40,528 32,490 8,038 (5,247)
42,682 31,118 11,564 1,438 40,528 32,490 8,038 (5,247)
Classified at fair value through profit or loss (note 14 II)
Panatlântica 219,979 59,879
219,979 59,879
Other investments
Profits on subsidiaries' inventories (75,248) (19,705) (55,543) (39,648)
Investment Property 143,796 144,999
Others 63,536 7,574 63,538 (195)
132,084 (12,131) 152,994 (39,843)
Total investments 19,523,532 3,961,755 13,603,630 (337,966)
Classification of investments in the balance sheet
Investments in assets 25,578,883 19,401,494
Investments with negative equity (6,199,147) (5,942,863)
Investment Property 143,796 144,999
19,523,532 13,603,630

(*) As of June 30, 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.

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10.b) Changes in investments in subsidiaries, jointly controlled companies, joint operations, associates and other investments
Consolidated Parent Company
06/30/2021 12/31/2020 06/30/2021 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) 5,938 3,400 2,996,983 60,361
Dividends (2) (82,642) (1,160,592) (2,496,422)
Comprehensive income (3) 28 6,895 (167,091) 581,514
Update of shares measured at fair value through profit or loss (Note 14 II) 160,100 12,579 160,100 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 (note2 10.d) (5) 822,093
Equity in results of affiliated companies(6) 88,000 124,324 3,961,755 1,892,686
Amortization of fair value - investment MRS (5,873) (11,747)
Others 11 123 (28) 13
Closing balance of investments (assets) 3,784,110 3,535,906 25,578,883 19,401,494
Balance of provision for investments with negative equity (liabilities) (6,199,147) (5,942,863)
Total 3,784,110 3,535,906 19,379,736 13,458,631
1. In June 2021, through CSN Inova Ventures, an investment was made in 2D Materials (2DM) in the amount of US$1,000, corresponding to R$5,037. 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$1,160,592 (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.
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
06/30/2021 06/30/2020
Equity in results of affiliated companies
MRS Logística S.A. 103,560 20,447
Transnordestina Logística S.A. (19,222) (17,973)
Arvedi Metalfer do Brasil S.A. 1,438 (5,247)
Equimac S.A. 135
Others 2,089
88,000 (2,773)
Eliminations
To cost of sales (28,852) (11,988)
To taxes 9,810 4,075
Others
Amortizated at fair value - Investment in MRS (5,873) (5,873)
Others 5,481 (195)
Equity in results 68,566 (16,754)
10.c) CSN Cimentos

Drop down - Cement

Our cement operations began in May 2009 with a crushing unit in Volta Redonda/RJ, motivated by the synergy 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.

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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:

31/12/2020 31/01/2021
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) (278,538)
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

·Acquisition Intention Elizabeth Companies

On June 29, 2021 a Purchase and Sale Agreement was signed for the acquisition of Elizabeth Cimentos S/A and Elizabeth Mineração Ltda. one of the most modern plants in the country, with relevant operations in the Northeast region, especially in Paraíba and Pernambuco. The acquisition of the aforementioned companies will add a production capacity for CSN Cimentos of 1.3 million tons per year. With the closing of the transaction, CSN Cimentos will have a total capacity of 6.0 million tons per year. The deal was valued at R$1.08 billion and involves cash payments, capital contributions and assumption of debt, the outcome of which is expected to occur after approval by the competition authorities.

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%.

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
· 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 1,060,530
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 822,093
· 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:

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
06/30/2021 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 951,829 854 3,556 107,480 1,206,484 1,390 1,351 48,919
Advances to suppliers 24,548 1,557 52 846 27,312 1,948 742
Other current assets 548,847 48,251 3,392 93,896 823,204 51,793 2,356 89,521
Total current assets 1,525,224 50,662 7,000 202,222 2,057,000 55,131 3,707 139,182
Noncurrent Assets
Other non-current assets 630,517 223,017 20,442 608,878 225,492 20,807
Investments, PP&E and intangible assets 8,649,328 9,828,884 10,548 374,761 8,537,009 9,574,588 11,365 390,672
Total non-current assets 9,279,845 10,051,901 10,548 395,203 9,145,887 9,800,080 11,365 411,479
Total Assets 10,805,069 10,102,563 17,548 597,425 11,202,887 9,855,211 15,072 550,661
Current Liabilities
Borrowings and financing 769,429 262,020 828,439 241,029
Lease liabilities 308,382 317,526
Other current liabilities 1,071,193 122,373 1,008 37,543 1,117,975 125,794 602 19,721
Total current liabilities 2,149,004 384,393 1,008 37,543 2,263,940 366,823 602 19,721
Noncurrent Liabilities
Borrowings and financing 1,738,838 6,581,886 2,162,657 6,368,070
Lease liabilities 1,571,910 1,674,594
Other non-current liabilities 754,458 722,291 15,316 788,862 665,653 15,900
Total non-current liabilities 4,065,206 7,304,177 15,316 4,626,113 7,033,723 15,900
Shareholders' equity 4,590,859 2,413,993 16,540 544,566 4,312,834 2,454,665 14,470 515,040
Total liabilities and shareholders'
equity 		10,805,069 10,102,563 17,548 597,425 11,202,887 9,855,211 15,072 550,661
01/01/2021 a 06/30/2021 01/01/2020 a 06/30/2020
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 2,128,326 138 4,116 116,169 1,603,235 82,080
Cost of sales and services (1,379,667) (3,241) (38,000) (1,223,492) (31,402)
Gross profit 748,659 138 875 78,169 379,743 50,678
Operating (expenses) income (133,500) (31,620) (612) (32,504) (139,966) (26,018) (32,429)
Financial income (expenses), net (194,988) (9,189) 7 (920) (152,989) (12,012) 484
Income before income tax and social
contribution 		420,171 (40,671) 270 44,745 86,788 (38,030) 18,733
Current and deferred income tax
and social contribution 		(142,301) (15,220) (31,926) (6,360)
Profit / (loss) for the period 277,870 (40,671) 270 29,525 54,862 (38,030) 12,373
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 second quarter of 2021.

10.g) Investment properties:

The balance of investment properties as of June 30, 2021 is shown below:

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
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 (note 24) (1,474) (1,474) (1,203) (1,203)
Transfers to other asset categories (132) 132 (132) 132
Balance at June 30, 2021 97,478 60,922 158,400 94,299 49,497 143,796
Cost 97,478 86,680 184,158 94,299 74,392 168,691
Accumulated depreciation (25,758) (25,758) (24,895) (24,895)
Balance at June 30, 2021 97,478 60,922 158,400 94,299 49,497 143,796

The Company's estimate of the fair value of investment properties was of R$1,863,563 at June 30, 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
06/30/2021 12/31/2020 06/30/2021 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 (7,377) (12,978) (36,974) (454) (4,148) (534) (7) (62,472)
Acquisitions 133,216 2,357 1,031,304 55,681 1,871 1,224,429
Capitalized interest (1) (notes 26 and 29) 36,833 36,833
Write-offs (note 25) (436) (159) (2,664) (38,017) (1,166) (42,442)
Depreciation (note 24) (229) (75,670) (835,692) (2,635) (32,488) (16,097) (962,811)
Transfers to other asset categories 229 20,441 945,270 162 (985,008) 18,906
Transfers to intangible assets (14,270) (14,270)
Right of use - Remesurement 7,865 7,865
Others (17) 1,734 86 1,803
Balance at June 30, 2021 250,309 2,609,358 12,662,750 25,568 3,744,103 509,175 103,895 19,905,158
Cost 250,309 4,742,253 27,104,795 180,986 3,744,103 645,855 420,266 37,088,567
Accumulated depreciation (2,132,895) (14,442,045) (155,418) (136,680) (316,371) (17,183,409)
Balance at June 30, 2021 250,309 2,609,358 12,662,750 25,568 3,744,103 509,175 103,895 19,905,158
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 13,939 1,886 389,294 570 7 405,696
Capitalized interest (1) (notes 26 and 29) 13,917 13,917
Write-offs (note 25) (17,072) (17,072)
Depreciation (note 24) (9,553) (391,579) (876) (4,551) (2,841) (409,400)
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 20 597,362 (598,028) 646
Transfers to intangible assets (13,967) (13,967)
Right of use - Remesurement (1,728) (1,728)
Balance at June 30, 2021 25,603 284,941 6,096,050 8,720 709,978 18,181 20,536 7,164,009
Cost 25,603 492,411 13,336,816 95,860 709,978 34,694 126,442 14,821,804
Accumulated depreciation (207,470) (7,240,766) (87,140) (16,513) (105,906) (7,657,795)
Balance at June 30, 2021 25,603 284,941 6,096,050 8,720 709,978 18,181 20,536 7,164,009

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

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1

(1) The costs of capitalized interest is calculated, basically, for Mining and Steel projects that substantially refer, substantially, to:

- Steel: echnological modernization and acquisition of new equipment for the maintenance of the production capacity of the Presidente Vargas Plant (RJ);

- Mining: 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 June 30, 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 52 (487) (99) (534)
Addition 145 52,695 2,841 55,681
Remesurement 1,821 (1,272) 7,316 7,865
Depreciation (11,060) (514) (13,637) (7,277) (32,488)
Write-offs (16,940) (20,944) (133) (38,017)
Transfers to other asset categories 5,935 (7,882) 1,539 408
Balance at June 30, 2021 372,771 56,615 78,428 1,361 509,175
Cost 419,264 74,807 119,138 32,646 645,855
Accumulated depreciation (46,493) (18,192) (40,710) (31,285) (136,680)
Balance at June 30, 2021 372,771 56,615 78,428 1,361 509,175
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 (1,728) (1,728)
Depreciation (3,255) (958) (338) (4,551)
Write-offs (16,940) (132) (17,072)
Transfers to other asset categories 5,935 (5,935)
Balance at June 30, 2021 3,285 13,692 1,204 18,181
Cost 14,764 17,034 2,896 34,694
Accumulated depreciation (11,479) (3,342) (1,692) (16,513)
Balance at June 30, 2021 3,285 13,692 1,204 18,181

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

Consolidated Parent Company
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Buildings and Infrastructure(1) 34 34 31 42
Machinery, equipment and facilities 19 20 21 21
Furniture and fixtures 13 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..

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
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 (16,617) (184) (15,217) (145) (32,163)
Acquisitions and expenditures 428 428
Transfer of property, plant and equipment 14,270 14,270 13,967 13,967
Drop down of Cements (note 10.c) (8,086) (8,086)
Amortization (note 24) (34,735) (5,306) (7,931) (47,972) (4,048) (4,048)
Balance at June 30, 2021 3,606,156 226,689 54,873 200,315 3,161,418 1,906 7,251,357 50,155 50,155
Cost 3,846,563 765,495 192,784 200,315 3,193,787 1,906 8,200,850 145,762 145,762
Accumulated amortization (131,077) (538,806) (137,911) (32,369) (840,163) (95,607) (95,607)
Adjustment for accumulated recoverable value (109,330) (109,330)
Balance at June 30, 2021 3,606,156 226,689 54,873 200,315 3,161,418 1,906 7,251,357 50,155 50,155

(*) 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
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Software 9 9 10 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 June 30, 2021

13. BORROWINGS AND FINANCING

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

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated Parent Company
Current Liabilities Noncurrent Liabilities Current Liabilities Noncurrent Liabilities
06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020
Foreign Debt
Floating Rates:
Prepayment 1,245,235 1,119,558 3,322,411 3,457,105 1,207,786 1,118,415 1,053,213 3,067,352
Fixed Rates:
Bonds, Perpetual bonds, Facility, CCE and ACC 362,062 426,676 21,317,458 19,898,213 31,969
Intercompany 329,056 475,035 7,877,058 12,971,249
Fixed interest in EUR
Intercompany 11,778 9,132 1,216,246 1,595,775
Facility 177,848 326,970 103,733 143,503
1,785,145 1,873,204 24,743,602 23,498,821 1,548,620 1,634,551 10,146,517 17,634,376
Debt agreements in Brazil
Floating Rate Securities in R$:
BNDES/FINAME, Debentures, NCE and CCB 2,344,953 2,282,279 5,936,465 7,716,307 2,153,064 2,234,683 5,227,360 6,838,197
Fixed Rate Securities in R$:
Intercompany 18,462 18,423
2,344,953 2,282,279 5,936,465 7,716,307 2,171,526 2,253,106 5,227,360 6,838,197
Total Borrowings and Financing 4,130,098 4,155,483 30,680,067 31,215,128 3,720,146 3,887,657 15,373,877 24,472,573
Transaction Costs and Issue Premiums (36,316) (29,030) (175,569) (70,928) (27,870) (29,164) (42,444) (48,820)
Total Borrowings and Financing + Transaction cost 4,093,782 4,126,453 30,504,498 31,144,200 3,692,276 3,858,493 15,331,433 24,423,753
13.a) Borrowing and amortization, financing and debentures

The following table shows amortization and funding during the period:

Consolidated Parent Company
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Opening balance 35,270,653 27,967,036 28,282,246 24,099,460
New debts 6,957,065 8,116,247 1,435,178 2,502,457
Repayment (6,697,746) (6,448,658) (10,209,730) (2,907,845)
Payments of charges (1,008,722) (1,922,130) (434,194) (1,051,557)
Accrued charges (Note 26) 962,858 2,002,052 373,175 1,012,750
Others(1) (885,828) 5,556,106 (422,966) 4,626,981
Closing balance 34,598,280 35,270,653 19,023,709 28,282,246
1. Including unrealized exchange and monetary variations and funding cost.

On June 30,2021, the Company entered into new debt agreements and amortized borrowings as shown below:

Consolidated
06/30/2021
Nature New debts Repayment Interest payment
Prepayment (1) 1,935,627 (1,942,732) (60,343)
Bonds, Perpetual bonds, ACC, CCE and Facility (2) 4,980,535 (2,991,371) (798,973)
BNDES/FINAME, Debentures, NCE and CCB (3) 40,903 (1,763,643) (149,406)
6,957,065 (6,697,746) (1,008,722)
(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. In June 2021, the Company raised Prepayments through its subsidiary CSN Mineração in the total amount of US$386 million, equivalent to R$1.9 billion. Payments are scheduled from 2021 to 2033
(2) In the second quarter of 2021 The Company issued debt securities in the foreign market ('Notes'), in the amount of US$850 million, equivalent to R$4.3 billion, through its subsidiary CSN Resources, maturing in 2031. Additionally, it used part of the funds in the amount of US$421 million in the 'Tender Offer' of Notes issued by CSN Resources S.A. maturing in 2023. All Notes mentioned above are unconditionally and irrevocably guaranteed by the Company.

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
(3) In the first quarter of 2021 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
06/30/2021 06/30/2021
Average interest rate (i) Total debt Average interest rate (i) Total debt
US$ 5.97% 26,247,166 1.51% 10,467,113
EUR 1.50% 281,581 3.89% 1,228,024
R$ 5.37% 8,281,418 5.34% 7,398,886
34,810,165 19,094,023
(i) To determine the average interest rate on debt contracts with floating rates, the Company used the rates applied on June 30, 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
06/30/2021 06/30/2021
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
2020 963,846 792,115 1,755,961 732,746 789,576 1,522,322
2022 1,094,837 2,748,292 3,843,129 1,033,970 2,418,333 3,452,303
2023 3,779,459 2,902,182 6,681,641 1,752,028 2,551,973 4,304,001
2024 390,476 1,245,444 1,635,920 3,199,183 1,045,628 4,244,811
2025 210,893 71,649 282,542 412,681 71,640 484,321
2026 3,194,305 71,640 3,265,945 587,780 71,640 659,420
After 2026 11,892,731 450,096 12,342,827 3,976,749 450,096 4,426,845
Perpetual bonds 5,002,200 5,002,200
26,528,747 8,281,418 34,810,165 11,695,137 7,398,886 19,094,023

·Covenants

The Company's borrowing agreements provide for the fulfillment of certain non-financial obligations, as well as the maintenance of certain parameters and performance indicators, such as the publication of its audited financial statements within the regulatory terms or payment of commission for assumption of risks if the indicator of net debt to EBITDA reaches the levels set out in such agreements. Until now, the Company is in compliance with all financial and non-financial obligations (covenants) of its current contracts.

At the moment, the Company is in compliance with the financial and non-financial obligations (covenants) of its agreements in force.

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.

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
· Classification of financial instruments
Consolidated
Consolidated 06/30/2021 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 21,756,753 21,756,753 9,944,586 9,944,586
Short-term investments 5 3,159,021 405,106 3,564,127 3,305,109 478,253 3,783,362
Trade receivables 6 5,308,206 5,308,206 2,867,352 2,867,352
Dividends and interest on equity 9 38,086 38,086 38,088 38,088
Derivative financial instruments 9 5,679 5,679
Trading securities 9 23,255 23,255 5,065 5,065
Loans - related parties 8 734 734
Total 3,187,955 27,508,885 30,696,840 3,310,174 13,328,279 16,638,453
Non-current
Investments 5 118,790 118,790 123,409 123,409
Other trade receivables 9 2,445 2,445 2,445 2,445
Eletrobrás compulsory loan 9 864,647 864,647 852,532 852,532
Receivables by indemnity 9 526,039 526,039 517,183 517,183
Loans - related parties 9 1,089,308 1,089,308 966,050 966,050
Investments 10 219,979 219,979 59,879 59,879
Total 219,979 2,601,229 2,821,208 59,879 2,461,619 2,521,498
Total Assets 3,407,934 30,110,114 33,518,048 3,370,053 15,789,898 19,159,951
Liabilities
Current
Borrowings and financing 13 4,130,098 4,130,098 4,155,483 4,155,483
Trade payables 17 7,001,074 7,001,074 4,819,539 4,819,539
Trade payables -drawee risk 15 2,190,459 2,190,459 623,861 623,861
Dividends and interest on capital 15 64,170 64,170 946,133 946,133
Leases 16 93,501 93,501 93,626 93,626
Derivative financial instruments 32,155 32,155 8,722 8,722
Total 32,155 13,479,302 13,511,457 8,722 10,638,642 10,647,364
Non-current
Borrowings and financing 13 30,680,067 30,680,067 31,215,128 31,215,128
Trade payables 17 103,420 103,420 543,527 543,527
Derivative financial instruments 73,268 73,268 97,535 97,535
Leases 16 436,725 436,725 436,505 436,505
Total 73,268 31,220,212 31,293,480 97,535 32,195,160 32,292,695
Total Liabilities 105,423 44,699,514 44,804,937 106,257 42,833,802 42,940,059

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Parent Company
Parent Company 06/30/2021 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 3,611,770 3,611,770 4,647,125 4,647,125
Short-term investments 5 3,159,021 402,234 3,561,255 3,305,109 475,782 3,780,891
Trade receivables 6 1,855,694 1,855,694 1,549,703 1,549,703
Dividends and interest on equity 9 253,814 253,814 329,413 329,413
Trading securities 9 23,124 23,124 4,927 4,927
Loans - related parties 8 16,510 16,510 53,718 53,718
Total 3,182,145 6,140,022 9,322,167 3,310,036 7,055,741 10,365,777
Non-current
Investments 5 118,790 118,790 123,409 123,409
Other trade receivables 9 1,003 1,003 1,003 1,003
Eletrobrás compulsory loan 9 863,689 863,689 851,713 851,713
Receivables by indemnity 9 526,039 526,039 517,183 517,183
Loans - related parties 9 1,197,660 1,197,660 1,007,677 1,007,677
Investments 10 219,979 219,979 59,879 59,879
Total 219,979 2,707,181 2,927,160 59,879 2,500,985 2,560,864
Total Assets 3,402,124 8,847,203 12,249,327 3,369,915 9,556,726 12,926,641
Liabilities
Current
Borrowings and financing 13 3,720,146 3,720,146 3,887,657 3,887,657
Trade payables 17 4,445,459 4,445,459 4,133,089 4,133,089
Trade payables -drawee risk 15 2,190,459 2,190,459 623,861 623,861
Dividends and interest on capital 15 1,423 1,423 901,983 901,983
Leases 16 6,947 6,947 26,546 26,546
Total 10,364,434 10,364,434 9,573,136 9,573,136
Non-current
Borrowings and financing 13 15,373,877 15,373,877 24,472,573 24,472,573
Trade payables 17 45,550 45,550 376,753 376,753
Derivative financial instruments 15 73,268 73,268 97,535 97,535
Leases 16 13,133 13,133 40,561 40,561
Total 73,268 15,432,560 15,505,828 97,535 24,889,887 24,987,422
Total Liabilities 73,268 25,796,994 25,870,262 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:

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated 06/30/2021 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 3,159,021 3,159,021 3,305,109 3,305,109
Derivative financial instruments 5,679 5,679
Trading securities 23,255 23,255 5,065 5,065
Non-current
Financial assets at fair value through profit or loss
Investments 219,979 219,979 59,879 59,879
Total Assets 3,402,255 5,679 3,407,934 3,370,053 3,370,053
Liabilities
Current
Financial liabilities at fair value through profit or loss
Derivative financial instruments 32,155 32,155 8,722 8,722
Non-current
Financial liabilities at fair value through profit or loss
Derivative financial instruments 73,268 73,268 97,535 97,535
Total Liabilities 105,423 105,423 106,257 106,257

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 06/30/2021 Sales of shares 12/31/2020 06/30/2021
Quantity Equity interest (%) Share price Closing Balance Quantity Share price Net cash received Net gain from the transaction Quantity Equity interest (%) Share price Closing Balance Profit or loss for the period in 2021 (notes 25 and 26)
USIM3 106,620,851 15.12% 19.75 2,105,762 (535,800) 23.57 12,627 3,569 107,156,651 15.19% 15.69 1,681,288 437,100
USIM5 55,144,456 10.07% 19.10 1,053,259 (56,000,000) 23.12 1,294,720 502,275 111,144,456 20.29% 14.61 1,623,821 724,159
3,159,021 1,307,347 505,844 3,305,109 1,161,259
PATI3 2,065,529 11.31% 106.50 219,979 2,065,529 11.31% 28.99 59,879 160,100
3,379,000 1,307,347 505,844 3,364,988 1,321,359

In May 2021 the Company sold 535,800 common shares (USIM3) in the amount of R$12,627 and sold 56,000,000 preferred shares (USIM5) in the amount of R$1,294,720, totaling R$1,307,347.

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.

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1

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 June 30, 2021 is shown below:

06/30/2021
Foreign Exchange Exposure (Amounts in US$'000) (Amounts in €'000)
Cash and cash equivalents overseas 2,682,634 99,558
Trade receivables 643,902 4,697
Financial investments 23,748
Other assets 17,141 4,528
Total Assets 3,367,425 108,783
Borrowings and financing (5,247,123)
Trade payables (387,134) (10,808)
Iron ore derivative (6,428)
Other liabilities (6,776) (1,386)
Total Liabilities (5,647,461) (12,194)
Foreign exchange exposure (2,280,036) 96,589
Cash flow hedge accounting 3,762,450
Exchange rate swap CDI x Dollar (67,000)
Net foreign exchange exposure 1,415,414 96,589

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 June 30, 2021 as a reference.

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

06/30/2021
Currency Exchange rate Probable scenario Scenario 1 Scenario 2
USD 5.0022 5.2239 6.2528 7.5033
EUR 5.9276 6.1955 7.4095 8.8914
USD x EUR 1.1884 1.1858 1.4855 1.7826

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

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
06/30/2021
Instruments Notional Risk Probable scenario (*) R$ Scenario 1 R$ Scenario 2 R$
Gross exchange position (2,280,036) Dollar (505,484) (2,851,299) (5,702,598)
Cash flow hedge accounting 3,762,450 Dollar 834,135 4,705,132 9,410,264
Exchange rate swap CDI x Dollar (67,000) Dollar (14,854) (83,787) (167,574)
Net exchange position 1,415,414 Dollar 313,797 1,770,046 3,540,092
Net exchange position 96,589 Euro 25,876 143,135 286,270
Exchange rate swap Dollar x Euro 88,350 Dollar 6,642 (82,158) (140,716)

(*) The probable scenarios were calculated considering the following variations for risks: Real x Dollar - devaluation of the Real by 4.43% / Real x Euro - devaluation of the Real by 4.52% / Euro x Dollar - appreciation of Euro by 0.22%. Source: Central Bank of Brazil and European Central Bank quotations on Jul 12,2021.

· 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 June 30, 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:

06/30/2021
Class of shares Probable scenario Scenario 1 Scenario 2
USIM3 (105,288) (526,440) (1,052,881)
USIM5 (52,663) (263,315) (526,630)
PATI3 (10,999) (54,995) (109,989)
· 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 June 30, 2021 as a reference.

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

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
06/30/2021
Interest Interest rate Scenario 1 Scenario 2
CDI 4.15% 5.19% 6.23%
TJLP 4.61% 5.76% 6.92%
LIBOR 0.16% 0.20% 0.24%

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 7,053,327 (7,388,628) (16,402) (3,479) (6,958)
TJLP 4.39 (825,561) (1,970) (9,561) (19,122)
Libor 0.21 (4,521,739) (45,907) (1,803) (3,606)

(*) The sensitivity analysis is based on the premise of maintaining the market values as of June 30, 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'

Below we present the sensitivity analysis for price risks. The Company considered scenarios 1 and 2 to be 25% and 50% increase in the index 'Platts' using the closing price as of June 30, 2020 as a reference.

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

06/30/2021
Maturity Probable scenario (*) R$
 Scenario 1 R$ Scenario 2 R$
8/2/2021 17,249 (332,377) (664,754)
9/2/2021 4,236 (111,466) (222,932)
10/2/2021 (447) (38,497) (76,994)
21,038 (482,340) (964,680)

(*) The probable scenario was calculated considering the quotation of ' Platts 'On Jul 7,2021 for the maturities of 8/2/2021, 9/2/2021 and 10/2/2021. Source: Bloomberg.

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.

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated
06/30/2021
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 06/01/21 Dollar 37,322
Total dollar x real swap (NDF) 37,322
Exchange rate swap Dollar x Euro 09/15/2021 a 11/26/2021 Dollar 71,750 356,384 (351,719) 4,665 8,098
Exchange rate swap Dollar x Euro 08/20/2021 Dollar 16,600 82,799 (81,785) 1,014 5,335
Total dollar-to-euro swap 88,350 439,183 (433,504) 5,679 13,433
Exchange rate swap CDI x Dollar 10/2/2021 Dollar (67,000) 293,147 (366,415) (73,268) 18,594
Total Swap CDI x dollar (67,000) 293,147 (366,415) (73,268) 18,594
732,330 (799,919) (67,589) 69,349
· Cash flow hedge accounting

Foreign exchange hedge accounting

The Company formally designates cash flow hedge relationships for the protection of highly probable future cash flows exposed to the dollar related to sales made in dollars.

In order to better reflect the accounting effects of the currency hedge strategy in the results, CSN has designated part of its dollar liabilities as a hedging instrument of its future exports. With this, the exchange variation arising from the designated liabilities will be temporarily recorded in the net equity and will be taken to the result when these exports occur, thus allowing the recognition of the dollar fluctuations on the liabilities and on the exports to be recorded at the same moment. It is noteworthy that the adoption of this hedge accounting does not imply the contracting of any financial instrument.

The table below presents a summary of the relations of foreign exchange hedge accounting as of June 30, 2021:

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
06/30/2021
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$'000)
7/21/2015 Export prepayments in US$ 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)
7/23/2015 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)
7/23/2015 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) (22,360)
7/24/2015 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)
7/27/2015 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) (19,140)
7/27/2015 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) (50,194)
7/27/2015 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) (21,512)
7/28/2015 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) (21,202)
8/3/2015 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) (42,104)
4/2/2018 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) (592,130)
7/31/2019 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) (1,346,925)
1/10/2020 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) (1,186,527)
1/28/2020 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 (795,800)
Total 5,728,806 (1,966,356) (252,250) (4,176,658)

(*) On June 30, 2021, the amount of (R$252,250) was recorded in Other Operating Expenses. As of June 30, 2020, (R$1,139,681).

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 June 30, 2021 are as follows:

Parent Company
12/31/2020 Movement Realization 06/30/2021
Cash flow hedge accounting 5,125,058 (696,150) (252,250) 4,176,658

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

As of June 30, 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 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 the shareholders' equity as Other Comprehensive Income and will be reclassified to the income statement when the referred sales occur.

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1

The table below shows the result of the derivative instrument on June 30, 2021:

06/30/2021 06/30/2021
Appreciation (R$) Fair value (market) Other income and expenses Other comprehensive income 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) (2,870)
04/02/2021 (Settled) Platts 11,961 59
05/04/2021 (Settled) Platts (30,226) 1,133
05/12/2021 (Settled) Platts (37,594) 2,308
06/02/2021 (Settled) Platts (134,768) 10,880
7/2/2021 Platts 1,013,262 (1,083,954) (70,692) (76,330) 5,638
8/2/2021 Platts 1,326,792 (1,315,236) 11,556 12,094 (538)
9/2/2021 Platts 445,198 (426,761) 18,437 19,248 (811)
10/2/2021 Platts 155,931 (147,387) 8,544 8,927 (383)
2,941,183 (2,973,338) (32,155) (337,478) 40,269 12,726

The change in the amounts related to cash flow hedge accounting - 'Platts' index recorded in shareholders' equity on June 30, 2021 is shown as follows:

12/31/2020 Movement Realization 06/30/2021
Cash flow hedge accounting-'Platts' 825 296,384 (337,478) (40,269)
Income tax and social contribution on cash flow hedge accounting (280) (100,771) 114,743 13,692
Fair Value of cash flow accounting - Platts, net 545 195,613 (222,735) (26,577)

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 June 30, 2021 and December 31, 2020 is R$6,293.

· Classification of derivatives in the balance sheet and income
06/30/2021 06/30/2020
Instruments Assets Liabilities Other operating income expenses Other comprehensive income Financial income (expenses), net (note 26)
Current Total Current Non-current Total
Exchange rate swap Dollar x Real 37,322
Exchange rate swap Dollar x Euro 5,679 5,679 13,433 231
Exchange rate swap GBP x Euro (602)
Exchange rate swap CDI x Dollar (73,268) (73,268) 18,594 (121,165)
Iron ore derivative (32,155) (32,155) (337,478) 40,269 12,726
5,679 5,679 (32,155) (73,268) (105,423) (337,478) 40,269 82,075 (121,536)

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
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 June 30, 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) 4,130,098 8,150,633 5,184,408 17,345,026 34,810,165
Lease Liabilities (note 16) 93,501 145,755 112,280 178,690 530,226
Derivative financial instruments (note 14 I) 32,155 73,268 105,423
Trade payables (note 17) 7,001,074 76,878 26,542 7,104,494
Trade payables - Drawee risk (note 14 I) 2,190,459 2,190,459
Dividends and interest on equity (note 15) 64,170 64,170
13,511,457 8,446,534 5,323,230 17,523,716 44,804,937

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:

06/30/2021 12/31/2020
Closing Balance Fair value Closing Balance Fair value
Perpetual bonds 5,009,009 5,056,174 5,203,773 5,157,465
Fixed Rate Notes 16,592,678 14,744,057 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

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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 06/30/2021 12/31/2020
Shareholder's equity (equity) 25,096,115 11,251,505
Borrowings and Financing (Third-party capital) 34,598,280 35,270,653
Gross Debit/Shareholder's equity 1.38 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
06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020
Payables to related parties (note 21 a) 64,228 70,458 62,147 78,083 250,791 250,330 175,910 222,834
Derivative financial instruments (note 14 I) 32,155 8,722 73,268 97,535 73,268 97,535
Dividends and interest on capital (note 14 I) 64,170 946,133 1,423 901,983
Advances from customers (1) 1,174,901 1,100,772 1,253,637 1,725,838 191,611 196,595
Taxes in installments 43,291 45,331 144,783 160,247 6,706 9,806 1,320
Profit sharing - employees 132,063 150,341 83,052 109,482
Taxes payable 37,337 38,493 32,619 32,289
Provision for consumption and services 212,096 175,242 93,483 97,221
Third party materials in our possession 213,914 84,832 181,556 55,334
Trade payables - Drawee Risk (note 17) 2,190,459 623,861 2,190,459 623,861
Trade payables (note 17) - - 103,420 543,527 45,550 376,753
Lease Liabilities (note 16) 93,501 93,626 436,725 436,505 6,947 26,546 13,133 40,561
Other payables 36,345 58,321 58,658 65,108 10,929 31,030
4,257,123 3,357,639 2,169,975 3,145,336 3,016,957 2,302,188 340,480 771,292
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
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Leases 1,606,189 1,623,523 22,964 76,333
Present value adjustment - Leases (1,075,963) (1,093,392) (2,884) (9,226)
530,226 530,131 20,080 67,107
Classified:
Current 93,501 93,626 6,947 26,546
Non-current 436,725 436,505 13,133 40,561
530,226 530,131 20,080 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.

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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
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Opening balance 530,131 474,390 67,107 45,940
New leases 39,093 52,835 426 29,714
Present Value Adjustments - New leases (3,033) (6,511) (5) (3,822)
Contract review 28,649 63,250 (1,728) 21,503
Write-off (38,626) (7,757) (15,392) (4,465)
Payments (54,972) (103,648) (4,345) (25,732)
Interest appropriated 29,388 54,236 1,016 3,969
Drop down of Cements (note 10.c) (26,999)
Exchange variation (404) 3,336
Net balance 530,226 530,131 20,080 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 June 30, 2021, the expected minimum payments are the following:

Consolidated
Less than one year Between one and five years Over five years Total
Leases 98,036 366,302 1,141,851 1,606,189
Present value adjustment - Leases (4,535) (108,267) (963,161) (1,075,963)
93,501 258,035 178,690 530,226
· 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
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Leases 1,591,887 1,603,100 21,581 70,647
Present value adjustment - Leases (1,074,879) (1,091,275) (2,711) (8,136)
Potencial PIS and COFINS credit 147,250 148,287 1,996 6,535
Present value adjustment - Potential PIS and COFINS credit (99,426) (100,943) (251) (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.

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

Consolidated
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Contract less than 12 months 549 390
Lower Assets value 1,178 3,140 718 1,244
Variable lease payments 280,146 118,776 161,893 72,876
281,324 122,465 162,611 74,510
Parent Company
Six months ended Three months ended
06/30/2021 06/30/2021 06/30/2020 06/30/2020
Lower Assets value 125 1,184 85 424
Variable lease payments 4,550 8,583 3,250 3,457
4,675 9,767 3,335 3,881

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
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Trade payables 7,187,921 5,487,640 4,544,614 4,588,207
(-) Adjustment present value (83,427) (124,574) (53,605) (78,365)
7,104,494 5,363,066 4,491,009 4,509,842
Classified:
Current 7,001,074 4,819,539 4,445,459 4,133,089
Non-current 103,420 543,527 45,550 376,753
7,104,494 5,363,066 4,491,009 4,509,842

The Company classifies the drawee risk and forfaiting transactions with suppliers as other liabilities (see Note 15).These transactions are negotiated with financial institutions by which the suppliers anticipate the receipt for their sale of goods to us, and, consequently, the postponement the payment of the Company's own obligations. 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:

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Consolidated
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Income tax and social contribution income (expense)
Current (2,954,743) (712,962) (1,595,645) (495,407)
Deferred 419,632 114,532 338,774 103,181
(2,535,111) (598,430) (1,256,871) (392,226)
Parent Company
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Income tax and social contribution income (expense)
Current (243,367) (116,200) (101,510) (116,200)
Deferred 345,812 (1,303) 359,728 (1,607)
102,445 (117,503) 258,218 (117,807)

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
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Profit/(Loss) before income tax and social contribution 13,745,084 (267,379) 6,769,531 838,126
Tax rate 34% 34% 34% 34%
Income tax and social contribution at combined statutory rate (4,673,329) 90,909 (2,301,641) (284,963)
Adjustment to reflect the effective rate:
Equity in results of affiliated companies 25,312 (3,699) 19,740 10,639
Difference Tax Rate in companies abroad (114,512) (429,790) 91,486 (137,961)
Tax loss carryforwards without recognizing deferred taxes 1,621 (22,066) 5,396 (10,867)
Indebtdness limit (5,623) (12,546) (1,354) (6,815)
Unrecorded deferred taxes on temporary differences 4,388 (70) 2,041 380
Reversal for deferred income tax and social contribution credit 2,214,721 (283,452) 1,002,376 (30,191)
Tax incentives 30,020 5,932 24,303 4,308
Interest on equity 76,039 76,039
Other permanent deductions (additions) (17,709) (19,687) (99,218) (12,795)
Income tax and social contribution in net income for the period (2,535,111) (598,430) (1,256,871) (392,226)
Effective tax rate 18% -224% 19% 47%
Parent Company
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Profit/(Loss) before income tax and social contribution 10,103,341 (898,170) 4,707,553 462,985
Tax rate 34% 34% 34% 34%
Income tax and social contribution at combined statutory rate (3,435,136) 305,378 (1,600,568) (157,415)
Adjustment to reflect the effective rate:
Equity in results of affiliated companies 1,346,997 (114,908) 874,430 85,926
Indebtdness limit (5,623) (12,546) (1,354) (6,815)
Reversal for deferred income tax and social contribution credit 2,214,721 (283,452) 1,002,376 (30,191)
Tax incentives 5,775 - 2,091 -
Other permanent deductions (additions) (24,289) (11,975) (18,757) (9,312)
Income tax and social contribution in net income for the period 102,445 (117,503) 258,218 (117,807)
Effective tax rate -1% -13% -5% 25%
18.b) Deferred income tax and social contribution

Deferred income tax and social contribution balances are as follows:

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Consolidated
Opening balance Movement Closing balance
12/31/2020 Shareholders'
Equity 		P&L Others 06/30/2021
Deferred
Income tax losses 1,848,999 (58,429) 1,790,570
Social contribution tax losses 688,208 (17,243) 670,965
Temporary differences 718,903 (1,065) 495,304 4,168 1,217,310
- Provision for tax. social security, labor, civil and environmental risks 279,149 (19,672) 259,477
- Asset impairment losses 161,016 62,442 223,458
- (Gains)/losses on financial instruments 5,027 (225,162) (220,135)
- Actuarial liability (pension and healthcare plan) 262,457 1,360 1 263,818
- Accrued supplies and services 154,452 (564) 153,888
- Unrealized exchange variation (1) 1,152,326 (357,859) 794,467
- Gain upon loss of control in Transnordestina (92,180) (92,180)
- Cash flow hedge accounting 1,742,800 (336,428) 1,406,372
- Acquisition at fair value of SWT and CBL (212,015) 7,929 13,183 (190,903)
- Deferred taxes not computed (317,927) (3,610) (321,537)
- (Losses) estimated /reversals to deferred taxes credits (1,347,468) 322,456 1,033,564 8,552
- Business Combination (1,015,049) (43,038) (1,058,087)
- Others (53,685) 3,618 36,019 4,168 (9,880)
Total 3,256,110 (1,065) 419,632 4,168 3,678,845
Total Deferred Assets 3,874,946 4,253,337
Total Deferred Liabilities (618,836) (574,492)
Total Deferred 3,256,110 3,678,845

(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 06/30/2021
Deferred tax assets
Income tax losses 1,680,700 (61,746) 1,618,954
Social contribution tax losses 627,382 (21,683) 605,699
Temporary differences 1,491,625 429,241 1,920,866
- Provision for tax. social security, labor, civil and environmental risks 202,467 (10,091) 192,376
- Asset impairment losses 100,005 (7,371) 92,634
- (Gains)/losses on financial instruments 5,026 (225,162) (220,136)
- Actuarial liability (pension and healthcare plan) 264,192 1 264,193
- Accrued supplies and services 132,892 (1,039) 131,853
- Unrealized exchange variation (1) 1,152,325 (358,053) 794,272
- Gain) in control loss on Transnorderstina (92,180) (92,180)
- Cash flow hedge accounting 1,742,520 (322,456) 1,420,064
- (Losses) estimated /reversals to deferred taxes credits (1,356,021) 322,456 1,033,565
- Business Combination (721,992) (721,992)
- Outras 62,391 (2,609) 59,782
Total 3,799,707 345,812 4,145,519
Total Deferred Assets 4,627,332 4,987,057
Total Deferred Liabilities (827,625) (841,538)
Total Deferred 3,799,707 4,145,519

(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 2016 and 2021, these subsidiaries generated income in the amount of R$1,032,780. 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$326,841. 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 interim financial statement.

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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 June 30, 2021.

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
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Income tax and social contribution
Actuarial gains on defined benefit pension plan 170,656 170,604 172,520 172,520
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 1,409,351 1,742,765 1,420,064 1,742,520
Estimated losses for deferred income and social contribution tax credits - cash flow hedge (1,420,064) (1,742,520) (1,420,064) (1,742,520)
(337,927) (327,021) (325,350) (325,350)
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
06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020
Tax 129,825 134,645 69,225 67,819 58,117 61,004 48,938 49,078
Social security 1,576 8,170 1,576 7,948
Labor 322,021 328,334 232,079 212,737 220,616 234,333 166,208 159,138
Civil 140,033 151,776 18,734 17,683 108,062 121,989 12,289 11,840
Environmental 16,423 12,463 2,444 2,444 13,092 10,341 961 960
Deposit of a guarantee 23,433 24,434
609,878 635,388 345,915 325,117 401,463 435,615 228,396 221,016
Classified:
Current 88,101 81,073 44,344 34,458
Non-current 521,777 554,315 345,915 325,117 357,119 401,157 228,396 221,016
609,878 635,388 345,915 325,117 401,463 435,615 228,396 221,016

The changes in tax, social security, labor, civil and environmental provisions in the year ended June 30, 2021 can be summarized as follows:

Consolidated
Current + Non-current
Nature 12/31/2020 Additions Accrued charges Net utilization of reversal 06/30/2021
Tax 134,645 1,923 4,334 (11,077) 129,825
Social security 8,170 49 (6,643) 1,576
Labor 328,334 27,366 18,684 (52,363) 322,021
Civil 151,776 1,263 14,428 (27,434) 140,033
Environmental 12,463 1,473 3,608 (1,121) 16,423
635,388 32,025 41,103 (98,638) 609,878

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Parent Company
Current + Non-current
Nature 12/31/2020 Additions Accrued charges Net utilization of reversal Drop down of Cements (note 10.c) 06/30/2021
Tax 61,004 1,843 1,717 (6,447) 58,117
Social security 7,948 49 (6,421) 1,576
Labor 234,333 21,770 12,408 (36,561) (11,334) 220,616
Civil 121,989 889 11,363 (24,473) (1,706) 108,062
Environmental 10,341 108 3,429 (588) (198) 13,092
435,615 24,610 28,966 (74,490) (13,238) 401,463

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 June 30, 2021 and December 31, 2020.

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Consolidated
06/30/2021 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 12,808,480 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. 3,956,984 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 1,978,482 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, 2014 and 2015 3,492,115 3,461,574
Tax foreclosures - ICMS - Electricity credits 850,688 841,401
Offset of taxes that were not approved by the Federal Revenue Service - IRPJ/CSLL, PIS/COFINS and IPI 1,635,246 1,845,379
Disallowance of the ICMS credits - Transfer of iron ore 605,168 624,645
ICMS - Refers to the transfer of imported raw material at an amount lower than the price disclosed in the import documentation 320,875 317,848
Disallowance of the tax loss and negative basis of social contribution arising from the adjustments in the SAPLI 589,671 583,478
Assessment Notice- IRRF- Capital Gain of CFM vendors located abroad 262,574 260,326
CFEM - difference of understanding between CSN and DNPM on the calculation basis 1,060,708 1,051,661
Assessment Notice- ICMS- questions about sales for incentive area 1,122,181 1,111,034
Other tax lawsuits (federal, state, and municipal) 3,880,317 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 871,872 862,324
Assessment Notice and imposition of fine (AIIM) - SEFAZ/RJ - ICMS on purchases of intermediate products 551,347 498,002
Assessment Notice and imposition of fine (AIIM) - RFB -Disallowance of credits PIS/COFINS of inputs and freight 1,094,503 1,082,517
Social security lawsuits 184,214 233,116
Action to discuss the balance of the construction contract - Tebas 507,719 487,124
Action related to power supply payment's charge - Light 311,396 288,390
Indemnity action due to the supply contract termination - Indumill 254,252 237,795
Enforcement action applied by Brazilian antitrust authorities (CADE) 96,867 95,833
Civil Public Action - Districts / School / Nursery relocation-CdP Dam 13,370 12,207
Other civil lawsuits 799,578 777,850
Labor and social security lawsuits 1,512,591 1,506,626
Tax foreclosures - Fine - Volta Redonda IV 101,068 94,304
ACP landfill Márcia 306,389 306,389
Other environmental lawsuits 294,695 257,965
39,463,350 39,305,776

In 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

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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$4,458,762 as of June 30, 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 June 30, 2021.

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

Consolidated Parent Company
06/30/2021 12/31/2020 06/30/2021 12/31/2020
Environmental liabilities 199,742 192,830 185,640 178,638
Asset retirement obligations (1) 651,828 611,005 50,886
851,570 803,835 185,640 229,524

(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

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Consolidated
06/30/2021 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) 3,682,646 3,682,646 3,763,603 3,763,603
Trade receivables (note 6) (2) 18,319 327 158,872 177,518 7,686 8 113,482 121,176
Dividends receivable (note 9) (3) 38,086 38,086 38,088 38,088
Loans (note 9) (4) 734 734
Other current assets (note 9) 1,371 1,829 3,200 4,413 1,829 6,242
18,319 40,518 3,843,347 3,902,184 7,686 42,509 3,878,914 3,929,109
Noncurrent Assets
Investments (1) 118,790 118,790 123,409 123,409
Loans (note 9) (4) 41,270 1,048,038 1,089,308 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) 721,181 721,181 664,020 664,020
41,270 1,769,219 132,609 1,943,098 3,375 1,626,695 137,228 1,767,298
59,589 1,809,737 3,975,956 5,845,282 11,061 1,669,204 4,016,142 5,696,407
Liabilities
Current Liabilities
Trade payables 107,272 13,112 120,384 106,946 9,455 116,401
Accounts payable (note 15) 1,425 21,979 23,404 23,555 2,437 25,992
Provision for consumption (note 15) 40,824 40,824 44,466 44,466
1,425 170,075 13,112 184,612 174,967 11,892 186,859
Noncurrent Liabilities
Accounts payable (note 15) 62,147 62,147 78,083 78,083
Actuarial liability(note 15) 79,546 79,546 79,546 79,546
62,147 79,546 141,693 78,083 79,546 157,629
1,425 232,222 92,658 326,305 253,050 91,438 344,488
Consolidated
06/30/2021 06/30/2020
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 133,536 519 1,701,673 1,835,728 33,107 422 575,615 609,144
Cost and expenses (121) (625,805) (53,057) (678,983) (501,129) (49,412) (550,541)
Financial income (expenses)
Interest (note 26) 12,477 12,355 24,832 121 20,394 10,224 30,739
Short-term investments 655,415 655,415 (439,702) (439,702)
Other operating income and expenses (6,804) (6,804)
133,415 (612,809) 2,316,386 1,836,992 33,228 (487,117) 96,725 (357,164)

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· Parent Company
Parent Company
06/30/2021 12/31/2020
Subsidiaries and associates Joint-ventures e Joint Operation Other related parties and exclusive funds Total Subsidiaries and associates Joint Venture e Joint Operation Other related parties and exclusive funds Total
Assets
Current Assets
Investments (1) 2 3,771,639 3,771,641 3,801,985 3,801,985
Trade receivables (note 6) (2) 532,915 13 158,564 691,492 835,489 8 112,222 947,719
Loans (note 9) (4) 15,776 734 16,510 53,718 53,718
Dividends receivable (note 9) (3) 232,411 21,403 253,814 308,009 21,404 329,413
Other current assets (note 9) 27,881 1,829 29,710 3,888 1,829 5,717
808,985 22,150 3,932,032 4,763,167 1,201,104 21,412 3,916,036 5,138,552
Noncurrent Assets
Investments (1) 118,790 118,790 123,409 123,409
Loans (note 9) (4) 240,775 956,885 1,197,660 134,892 872,785 1,007,677
Actuarial asset (note 9) 1,803 1,803
Other non-current assets (note 9) (5) 258,680 721,181 979,861 236,180 664,020 900,200
499,455 1,678,066 118,790 2,296,311 371,072 1,536,805 125,212 2,033,089
1,308,440 1,700,216 4,050,822 7,059,478 1,572,176 1,558,217 4,041,248 7,171,641
Liabilities
Current Liabilities
Intercompany Loans (note 13) (6) 359,296 359,296 502,590 502,590
Trade payables 484,768 25,449 12,422 522,639 1,311,358 62,698 9,299 1,383,355
Accounts payable (note 15) 101,664 101,664 102,361 2,437 104,798
Provision for consumption (note 15) 136,810 12,317 149,127 133,215 12,317 145,532
1,082,538 37,766 12,422 1,132,726 2,049,524 75,015 11,736 2,136,275
Noncurrent Liabilities
Intercompany Loans (note 13) (6) 9,093,304 9,093,304 14,567,024 14,567,024
Accounts payable (note 15) 175,910 175,910 222,834 222,834
Actuarial liability(note 15) 79,546 79,546 79,546 79,546
9,269,214 79,546 9,348,760 14,789,858 79,546 14,869,404
10,351,752 37,766 91,968 10,481,486 16,839,382 75,015 91,282 17,005,679
Parent Company
06/30/2021 06/30/2020
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 1,348,749 1,693,002 3,041,751 1,113,836 575,616 1,689,452
Cost and expenses (2,358,309) (201,693) (51,318) (2,611,320) (968,225) (190,905) (48,772) (1,207,902)
Financial income (expenses)
Interest (note 26) (171,061) 17,249 11,708 (142,104) (208,241) 18,487 9,867 (179,887)
Exclusive funds (note 26) 38,231 38,231 297 297
Short-term investments 655,415 655,415 (439,702) (439,702)
Exchange rate variations andmonetary, net 363,167 363,167 (3,913,377) (3,913,377)
(817,454) (184,444) 2,347,038 1,345,140 (3,976,007) (172,418) 97,306 (4,051,119)

Consolidated and Parent Company Information:

1. Financial investments

In consolidated refers to the investments in Usiminas shares are R$3,159,021 (R$3,305,119 in December 2020) and cash and cash equivalents with Banco Fibra totaling R$523,625 (R$458,494 in December 2020) and no current the amount R$118,790 (R$123,409 in December 2020) from Bonds with an average rate of 98% to 115% of the CDI.

In the parent company through exclusive funds' investments in government bonds and CDBs. in the amount of R$86,226 on June 30, 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$19,048 (R$329,413 as of December 31, 2020) and R$225,658 from the CSN Mineração.
4. Loans (Assets):

Consolidated

Short-term: refers mainly to loan agreements with Equimaq S.A. at a fixed rate of 4.0% + 100.00% of CDI of R$734.

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Long-term: refers mainly to loan agreements with Transnordestina Logística 1,045,187 (R$962,675 at December 31, 2020) with an average rate of 125.0% to 130.0% of the CDI

Parent company

Short-term: refers mainly to loan agreements with CBSI - Companhia Brasileira de Infraestrutura S.A. at a fixed rate of 6.80% of R$15,776 as of June 30, 2021 (R$15,263 as of December 31, 2020).

Long-term: refers especially to loan agreements with Transnordestina Logística S.A. of R$954,034 and with Ferrovia Transnordestina S.A of R$126,709 as of June 30, 2021 and (R$872,785 and R$112,420 as of December 31, 2020, respectively).

5. Others (Assets): Advance for future capital increase with subsidiaries of R$721,181 with Transnordestina Logística SA (R$664,020 on December 31, 2020).

Parent company

6. Loans (Liabilities):

Foreign currency: Intercompany contracts in the amount of R$9,434,138 (R$15,051,191 on December 31, 2020).

National coin: Intercompany contracts in the amount of R$18,462 (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 June 30, 2021 and 2020.

06/30/2021 06/30/2020
P&L
Short-term benefits for employees and officers 24,031 17,509
Post-employment benefits 67 27
24,098 17,536
21.c) Guarantees

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

Currency Maturities Borrowings Tax foreclosure Others Total
06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020 06/30/2021 12/31/2020
Transnordestina Logísitca R$ Up to 09/19/2056 and Indefinite 2,485,393 2,478,105 35,291 35,496 3,314 3,298 2,523,998 2,516,899
CSN Cimentos R$ Up to 11/26/2023 and indefinite 58 58
Cia Siderurgica Nacional R$ 05/31/2025 536 536
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 846,403 846,749 846,403 846,749
CBS R$ 06/30/2024 21 21
Estanho de Rondônia R$ 7/15/2022 771 1,154 771 1,154
Minérios Nacional S.A. R$ Up to 09/10/2021 646 1,946 646 1,946
Total in R$ 3,333,213 3,327,954 35,488 35,692 6,093 5,462 3,374,794 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 1,103,942 1,525,000 1,103,942 1,525,000
Total in US$ 3,403,942 3,825,000 3,403,942 3,825,000
Total in R$ 17,027,199 19,877,378 17,027,199 19,877,378
20,360,412 23,205,332 35,488 35,692 6,093 5,462 20,401,993 23,246,486
22. SHAREHOLDERS´ EQUITY
22.a) Paid-in capital

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The fully subscribed and paid-in capital on June 30, 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 June 30, 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 June 30, 2021, the Company's ownership structure was as follows:

06/30/2021 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. (*) 45,706,242 3.29% 3.31% 58,193,503 4.19% 4.22%
NYSE (ADRs) 248,764,538 17.93% 18.02% 248,763,533 18.90% 19.00%
Other shareholders 406,121,513 29.27% 29.43% 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 June 30, 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
06/21/2021 24,154,500 From 06/22/2021 to 12/22/2021 Not applicable Not applicable 7,409,500

As of June 30, 2021, the position of treasury shares was as follows:

Quantity purchased (in units) Amount paid for the shares Share price Share market price as of06/30/2021 (*)
Minimum Maximum Average
7,409,500 R$ 58,264 R$ 4.48 R$ 10.07 R$7.86 R$ 324,240

(*) The average share price on June 30, 2021 was used in the amount of R$43.76 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.

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22.g) Earnings per share

The earnings per share are shown below:

Parent Company
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Common Shares Common Shares
Profit / (loss) for the period 10,205,786 (1,015,673) 4,965,771 345,178
Weighted average number of shares 1,380,114,547 1,380,114,547 1,380,114,547 1,380,114,547
Basic and diluted earnings (loss) per share 7.39488 (0.73593) 3.59809 0.25011
23. NET REVENUE FROM SALES

Net sales revenue is as follows:

Consolidated
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Gross revenue
Domestic market 15,012,676 6,645,735 8,287,061 3,075,239
Foreign market 15,739,560 6,555,510 9,000,879 3,910,158
30,752,236 13,201,245 17,287,940 6,985,397
Deductions
Sales returns, discounts and rebates (66,266) (151,457) (27,030) (73,443)
Taxes on sales (3,381,069) (1,494,452) (1,869,337) (691,271)
(3,447,335) (1,645,909) (1,896,367) (764,714)
Net revenue 27,304,901 11,555,336 15,391,573 6,220,683
Parent Company
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Gross revenue
Domestic market 13,896,903 6,399,891 7,616,035 2,969,794
Foreign market 860,409 995,544 290,618 580,599
14,757,312 7,395,435 7,906,653 3,550,393
Deductions
Sales returns, discounts and rebates (166,779) (142,318) (20,141) (66,975)
Taxes on sales (2,939,235) (1,371,797) (1,608,493) (633,407)
(3,106,014) (1,514,115) (1,628,634) (700,382)
Net revenue 11,651,298 5,881,320 6,278,019 2,850,011
24. EXPENSES BY NATURE

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Raw materials and inputs (5,440,935) (3,135,525) (2,896,102) (1,513,097)
Outsourcing material (2,608,784) (1,048,086) (1,498,605) (633,635)
Labor cost (1,349,879) (1,281,758) (684,342) (678,992)
Supplies (1,077,038) (891,874) (554,188) (431,420)
Maintenance cost (services and materials) (584,764) (443,709) (293,429) (239,432)
Outsourcing services (976,176) (841,885) (515,557) (419,066)
Freight (120,704) (100,891) (108,833) (52,623)
Distribution freight (739,859) (567,590) (405,017) (288,865)
Depreciation, amortization and depletion (958,161) (842,763) (502,488) (427,582)
Others (816,259) (278,570) (478,165) (220,262)
(14,672,559) (9,432,651) (7,936,726) (4,904,974)
Classified as:
Cost of sales (13,289,876) (8,395,772) (7,111,092) (4,378,065)
Selling expenses (1,102,780) (791,378) (680,194) (400,463)
General and administrative expenses (279,903) (245,501) (145,440) (126,446)
(14,672,559) (9,432,651) (7,936,726) (4,904,974)
Parent Company
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Raw materials and inputs (5,395,563) (3,063,626) (2,869,939) (1,465,371)
Labor cost (601,376) (637,364) (304,389) (310,512)
Supplies (750,124) (715,036) (376,517) (324,409)
Maintenance cost (services and materials) (290,020) (230,252) (141,279) (94,674)
Outsourcing services (395,138) (419,509) (189,998) (187,739)
Freight (12,805) (19,394) (6,653) (6,793)
Distribution freight (193,577) (166,115) (90,844) (77,690)
Depreciation, amortization and depletion (410,834) (421,826) (210,851) (215,123)
Others (108,827) (65,999) (52,982) (65,999)
(8,158,264) (5,739,121) (4,243,452) (2,748,310)
Classified as:
Cost of sales (7,734,001) (5,301,835) (4,044,092) (2,523,455)
Selling expenses (306,788) (326,162) (139,576) (163,923)
General and administrative expenses (117,475) (111,124) (59,784) (60,932)
(8,158,264) (5,739,121) (4,243,452) (2,748,310)

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

Consolidated
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Production costs (1) (939,284) (818,826) (493,626) (415,226)
Selling expenses (5,732) (6,892) (2,423) (3,616)
General and administrative expenses (13,145) (17,045) (6,439) (8,740)
(958,161) (842,763) (502,488) (427,582)
Other operational (2) (51,344) (44,432) (24,500) (23,320)
(1,009,505) (887,195) (526,988) (450,902)

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Parent Company
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Production costs (1) (400,964) (408,976) (206,224) (208,518)
Selling expenses (3,417) (5,795) (1,443) (3,066)
General and administrative expenses (6,453) (7,055) (3,184) (3,539)
(410,834) (421,826) (210,851) (215,123)
Other operational (3,416) (4,336) (1,674) (2,038)
(414,250) (426,162) (212,525) (217,161)
(1) - The cost of production includes PIS and COFINS credits on lease agreements on June 30, 2021, in the amount of R$2,752 (R$2,626 on June 30,2020) in the consolidated and R$401 (R$1,015 on June 30, 2020) in the parent company.
(2) 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
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Other operating income
Receivables by indemnity 1,716 239,862 951 238,706
Rentals and leases 6,606 4,781 3,323 2,319
Dividends received 2 2,959 2 2,959
PIS, COFINS and INSS to compensate (1) 120,452 32,062
Contractual fines 905 3,507 140 1,491
Updated shares - Fair value through profit or loss (Note 14 II) 160,100 4,338 129,096 4,545
Net gain in shares sale (note 10 d) (2) 2,472,497
Other revenues 54,371 31,058 2,453 22,186
2,696,197 406,957 135,965 304,268
- - - -
Other operating expenses
Taxes and fees (41,714) (34,619) (5,603) (29,315)
Expenses with environmental liabilities, net (660) (20,711) (818) (4,789)
Write-off/(Provision) of judicial lawsuits 7,299 (1,298) (1,324) 5,859
Depreciation of investment property, equipment paralyzed and amortization of intangible assets (note 24) (51,344) (44,432) (24,500) (23,320)
Write- off of PPE, intagible assests and investment property (note 11) (42,442) (2,329) 259 (929)
Estimated (Loss)/reversal in inventories (93,818) (115,124) (30,340) (94,773)
Idleness in stocks and paralyzed equipment (3) (259,216) (56,976)
Studies and project engineering expenses (31,850) (9,620) (19,749) (4,545)
Research and development expenses (160) (352) (106) (155)
Healthcare plan expenses (64,212) (56,229) (35,296) (27,400)
Cash flow hedge accounting realized (note 14) (4) (589,728) (1,139,681) (278,918) (774,863)
Other expenses (202,834) (180,375) (140,956) (83,856)
(1,111,463) (1,863,986) (537,351) (1,095,062)
Other operating income (expenses), net 1,584,734 (1,457,029) (401,386) (790,794)

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Parent Company
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Other operating income
Receivables by indemnity 1,710 239,606 954 238,623
Rentals and leases 6,379 4,574 3,209 2,181
Dividends received 2,647 2,647
PIS, COFINS and INSS to compensate (1) 97,154 32,062
Contractual fines 462 2,371 2 961
Updated shares - Fair value through profit or loss (Note 14 II) 160,100 4,338 129,096 4,545
Net gain in shares sale (note 10 d) (2) 2,472,497
Other revenues 23,954 14,137 264 8,961
2,665,102 364,827 133,525 289,980
Other operating expenses
Taxes and fees (36,355) (28,198) (2,006) (25,805)
Expenses with environmental liabilities, net (490) 944 (583) 3,153
Write-off/(Provision) of judicial lawsuits 11,625 (8,690) 1,003 (12,144)
Depreciation of investment property, equipment paralyzed and amortization of intangible assets (note 24) (3,416) (4,336) (1,674) (2,038)
Write- off of PPE, intagible assests and investment property (note 11) (17,072) (455) (455)
Estimated (Loss)/reversal in inventories (46,029) (38,787) (11,271) (32,973)
Idleness in stocks and paralyzed equipment (3) (48,098) (11,055)
Studies and project engineering expenses (8,259) (7,363) (4,681) (3,523)
Research and development expenses (160) (352) (106) (155)
Healthcare plan expenses (63,747) (55,964) (35,136) (27,271)
Cash flow hedge accounting realized (note 14) (4) (252,250) (1,139,681) (774,863)
Other expenses (138,645) (156,963) (106,697) (66,176)
(554,798) (1,487,943) (161,151) (953,305)
Other operating income (expenses), net 2,110,304 (1,123,116) (27,626) (663,325)
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. These are the effects of the Exchange cash flow hedge (R$252,250) and cash flow hedge of the Platts index (R$337,478), totaling in the Consolidated (R$589,728) and (R$252,250) in the Parent Company, see note 14..
26. FINANCIAL INCOME (EXPENSES)

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Consolidated
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Financial income
Related parties (note 21 a) 30,867 30,739 19,130 12,920
Income from financial investments 105,288 30,057 70,643 14,269
Updated shares - Fair value through profit or loss (Note 14 II) 1,161,259 648,765
Other income 79,926 461,005 53,217 429,481
1,377,340 521,801 791,755 456,670
Financial expenses
Borrowings and financing - foreign currency (note 13) (807,939) (776,857) (386,927) (428,745)
Borrowings and financing - local currency (note 13) (154,919) (253,452) (89,651) (107,183)
Related parties (6,035) (3,018)
Lease liabilities (27,339) (24,349) (13,545) (12,249)
Capitalised interest (notes 11 and 29) 36,833 47,295 21,700 23,905
Interest and fines (63,049) (50,547) (27,266) (26,827)
(-) Adjustment present value of trade payables (116,080) (57,490)
Commission, bank fees, Guarantee and bank fees (77,381) (82,675) (33,136) (52,377)
PIS/COFINS over financial income (35,799) (31,104) (28,728) (24,871)
Updated shares - Fair value through profit or loss (Note 14 II) (439,702) 522,652
Other financial expenses (279,832) (173,933) (182,715) (48,478)
(1,531,540) (1,785,324) (800,776) (154,173)
Others financial items, net
Foreign exchange and monetary variation, net (455,707) 468,778 (402,441) 7,708
Gains and (losses) on exchange derivatives (*) 69,349 (121,536) 72,411 (25,348)
(386,358) 347,242 (330,030) (17,640)
(1,917,898) (1,438,082) (1,130,806) (171,813)
Financial income (expenses), net (540,558) (916,281) (339,051) 284,857
(*) Statement of gains and (losses) on derivative transactions (note 14)
Dollar - to - real NDF 37,322 30,564
Exchange rate swap Dollar x Euro 13,433 231 (4,191) (2,526)
Exchange rate swap GBP x Euro (602) (770)
Exchange rate swap CDI x Dollar 18,594 (121,165) 46,038 (22,052)
69,349 (121,536) 72,411 (25,348)

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Parent Company
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Financial income
Related parties (note 21 a) 71,113 32,227 51,671 13,973
Income from financial investments 70,124 19,611 43,733 11,078
Updated shares - Fair value through profit or loss (Note 14 II) 1,161,259 648,765
Other income 73,607 453,848 52,596 427,259
1,376,103 505,686 796,765 452,310
Financial expenses
Borrowings and financing - foreign currency (note 13) (59,548) (122,772) (23,405) (65,344)
Borrowings and financing - local currency (note 13) (138,641) (223,308) (79,873) (94,256)
Related parties(notes 13 and 21 a) (174,986) (211,817) (72,156) (114,035)
Lease liabilities (1,103) (1,722) (443) (831)
Capitalised interest (notes 11 and 29) 13,917 14,857 7,053 7,577
Interest and fines (38,125) (39,341) (22,900) (19,868)
(-) Adjustment present value of trade payables (86,631) (44,188)
Commission, bank fees, Guarantee and bank fees (64,071) (73,044) (26,533) (45,712)
PIS/COFINS over financial income (29,064) (24,788) (27,382) (21,357)
Updated shares - Fair value through profit or loss (Note 14 II) (439,702) 522,652
Other financial expenses (100,402) (46,644) (46,973) (1,543)
(678,654) (1,168,281) (336,800) 167,283
Others financial items, net
Foreign exchange and monetary variation, net (177,795) 1,204,473 (377,243) 174,344
Gains and (losses) on exchange derivatives (*) 18,594 (121,165) 46,038 (22,052)
(159,201) 1,083,308 (331,205) 152,292
Financial income (expenses), net 538,248 420,713 128,760 771,885
(*) Statement of gains and (losses) on derivative transactions (note 12)
Exchange rate swap CDI x Dollar 18,594 (121,165) 46,038 (22,052)
18,594 (121,165) 46,038 (22,052)
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.

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Six months ended
06/30/2021
P&L Steel Mining Logistics Energy Cement Corporate expenses/elimination Consolidated
Port Railroads
Metric tons (thou.) 2,597,975 17,334,911 (2,432,422)
Net revenues
Domestic market 10,926,008 1,695,650 155,538 887,313 109,688 620,201 (2,636,802) 11,757,596
Foreign market 3,891,005 11,142,634 513,666 15,547,305
Cost of sales and services (note 24) (10,249,398) (4,153,621) (107,501) (598,583) (69,567) (395,355) 2,284,149 (13,289,876)
Gross profit 4,567,615 8,684,663 48,037 288,730 40,121 224,846 161,013 14,015,025
General and administrative expenses (note 24) (532,702) (195,384) (19,633) (59,140) (15,043) (57,896) (502,885) (1,382,683)
Other operating (income) expenses, net (note 25) (308,934) (457,702) (2,759) (11,340) (940) (24,902) 2,391,311 1,584,734
Equity in results of affiliated companies (note 10) 68,566 68,566
Operating result before Financial Income and Taxes 3,725,979 8,031,577 25,645 218,250 24,138 142,048 2,118,005 14,285,642
Sales by geographic area
Asia 9,658,580 513,666 10,172,246
North America 712,647 712,647
Latin America 275,683 275,683
Europe 2,902,675 1,484,054 4,386,729
Foreign market 3,891,005 11,142,634 513,666 15,547,305
Domestic market 10,926,008 1,695,650 155,538 887,313 109,688 620,201 (2,636,802) 11,757,596
Total 14,817,013 12,838,284 155,538 887,313 109,688 620,201 (2,123,136) 27,304,901
Three months ended
06/30/2021
P&L Steel Mining Logistics Energy Cement Corporate expenses/elimination Consolidated
Port Railroads
Metric tons (thou.) 1,281,037 9,109,982 (1,168,367)
Net revenues
Domestic market 6,049,789 903,904 72,022 486,723 55,407 342,778 (1,415,431) 6,495,192
Foreign market 2,094,350 6,453,413 348,618 8,896,381
Cost of sales and services (5,451,608) (2,312,362) (51,961) (311,840) (34,628) (203,908) 1,255,215 (7,111,092)
Gross profit 2,692,531 5,044,955 20,061 174,883 20,779 138,870 188,402 8,280,481
General and administrative expenses (249,921) (141,296) (11,457) (30,638) (7,531) (33,041) (351,750) (825,634)
Other operating (income) expenses, net (note 25) (173,663) (339,789) (1,320) 8,336 (561) (11,641) 117,252 (401,386)
Equity in results of affiliated companies (note 10) 55,122 55,122
Operating result before Financial Income and Taxes 2,268,947 4,563,870 7,284 152,581 12,687 94,188 9,026 7,108,583
Sales by geographic area
Asia 5,659,557 348,618 6,008,175
North America 406,417 406,417
Latin America 157,290 157,290
Europe 1,530,643 793,856 2,324,499
Foreign market 2,094,350 6,453,413 348,618 8,896,381
Domestic market 6,049,789 903,904 72,022 486,723 55,407 342,778 (1,415,431) 6,495,192
Total 8,144,139 7,357,317 72,022 486,723 55,407 342,778 (1,066,813) 15,391,573

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Six months ended
06/30/2020
P&L Steel Mining Logistics Energy Cement Corporate expenses/elimination Consolidated
Port Railroads
Metric tons (thou.) 2,142,913 13,352,360 (2,169,726)
Net revenues
Domestic market 4,634,905 608,950 149,172 664,323 79,774 317,893 (1,359,013) 5,096,004
Foreign market 2,346,732 3,724,866 387,734 6,459,332
Cost of sales and services (note 24) (6,346,699) (2,190,095) (100,610) (530,646) (62,436) (305,955) 1,140,669 (8,395,772)
Gross profit 634,938 2,143,721 48,562 133,677 17,338 11,938 169,390 3,159,564
General and administrative expenses (note 24) (442,164) (90,316) (18,706) (53,065) (15,085) (43,801) (373,742) (1,036,879)
Other operating (income) expenses, net (note 25) (106,759) (271,098) (2,841) (11,839) (732) (11,461) (1,052,299) (1,457,029)
Equity in results of affiliated companies (note 10) (16,754) (16,754)
Operating result before Financial Income and Taxes 86,015 1,782,307 27,015 68,773 1,521 (43,324) (1,273,405) 648,902
Sales by geographic area
Asia 3,318,582 387,734 3,706,316
North America 497,433 497,433
Latin America 79,446 79,446
Europe 1,766,845 406,284 2,173,129
Others 3,008 3,008
Foreign market 2,346,732 3,724,866 387,734 6,459,332
Domestic market 4,634,905 608,950 149,172 664,323 79,774 317,893 (1,359,013) 5,096,004
Total 6,981,637 4,333,816 149,172 664,323 79,774 317,893 (971,279) 11,555,336
Three months ended
06/30/2020
Steel Mining Logistics Energy Cement Corporate expenses/elimination Consolidated
Port Railroads
Metric tons (thou.) 1,003,247 7,742,862 (1,083,775)
Net revenues
Domestic market 2,123,707 345,499 74,633 381,989 37,746 172,230 (777,744) 2,358,060
Foreign market 1,315,973 2,342,510 204,140 3,862,623
Cost of sales and services (3,109,289) (1,367,285) (51,357) (260,154) (33,086) (160,887) 603,993 (4,378,065)
Gross profit 330,391 1,320,724 23,276 121,835 4,660 11,343 30,389 1,842,618
General and administrative expenses (227,826) (43,941) (8,949) (27,555) (7,362) (20,889) (190,387) (526,909)
Other operating (income) expenses, net (note 25) 6,850 (87,263) (1,129) (5,084) (359) (6,041) (697,768) (790,794)
Equity in results of affiliated companies (note 10) 28,354 28,354
Operating result before Financial Income and Taxes 109,415 1,189,520 13,198 89,196 (3,061) (15,587) (829,412) 553,269
Sales by geographic area
Asia 2,039,404 204,140 2,243,544
North America 334,977 334,977
Latin America 44,531 44,531
Europe 933,645 303,106 1,236,751
Others 2,820 2,820
Foreign market 1,315,973 2,342,510 204,140 3,862,623
Domestic market 2,123,707 345,499 74,633 381,989 37,746 172,230 (777,744) 2,358,060
Total 3,439,680 2,688,009 74,633 381,989 37,746 172,230 (573,604) 6,220,683
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 2021, 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, 2021 to June 30, 2022. 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.

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1

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
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Income tax and social contribution paid 1,651,414 232,581
Addition to PP&E with interest capitalization (notes 11 and 26) 36,833 47,295 13,917 14,857
Remeasurement and addition - Right of use (note 11 a) 63,546 25,988 (1,158) 1,972
Addition to PP&E without adding cash 61,863
Capitalization in subsidiaries without cash 2,145 55,662
Addition to investment property without cash effect 61,597 61,597
1,813,656 369,606 12,759 134,088
30. COMPREHENSIVE INCOME STATEMENT
Consolidated
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Profit/(Loss) for the period 11,209,973 (865,809) 5,512,660 445,900
Other comprehensive income
Items that will not be subsequently reclassified to the statement of income
Actuarial gains/(losses) over pension plan of subsidiaries, net of taxes 55 63 32 30
55 63 32 30
Items that could be subsequently reclassified to the statement of income
Cumulative translation adjustments for the year (192,468) 513,453 (278,587) 133,411
(Loss)/gain on the percentage change in investments 4,612 4,612.00
(Loss)/gain on hedge of net investment in foreign operations. 1,469
(Loss)/gain cash flow hedge, net of taxes 696,150 (6,664,932) 2,615,279 (1,274,889)
Cash flow hedge reclassified to income upon realization, net of taxes 252,250 1,139,681 774,863
Cash flow hedge accounting - 'Platts' reclassified to income upon realization, net of taxes 222,735 184,085
(Loss)/gain cash flow hedge accounting-'Platts' (195,613) (157,508)
783,054 (5,005,717) 2,363,269 (362,003)
783,109 (5,005,654) 2,363,301 (361,973)
Comprehensive income for the year 11,993,082 (5,871,463) 7,875,961 83,927
Attributable to:
Controlling shareholders 10,983,039 (6,021,329) 7,323,287 (16,795)
Earnings attributable to the non-controlling interests 1,010,043 149,866 552,674 100,722
11,993,082 (5,871,463) 7,875,961 83,927

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1
Parent Company
Six months ended Three months ended
06/30/2021 06/30/2020 06/30/2021 06/30/2020
Profit/(Loss) for the period 10,205,786 (1,015,673) 4,965,771 345,178
Other comprehensive income
Items that will not be subsequently reclassified to the statement of income
Actuarial gains/(losses) over pension plan of subsidiaries, net of taxes 49 61 29 30
49 61 29 30
Items that could be subsequently reclassified to the statement of income
Cumulative translation adjustments for the year (192,468) 513,453 (278,587) 133,411
(Loss)/gain on the percentage change in investments 4,612 4,612
(Loss)/ gain in cash flow hedge from investments in subsidiaries 1,469
(Loss)/gain cash flow hedge, net of taxes 696,150 (6,664,932) 2,615,279 (1,274,889)
Cash flow hedge reclassified to income upon realization, net of taxes 252,250 1,139,681 774,863
(Loss)/gain cash flow hedge accounting-'Platts'in subsidiaries, net of taxes 21,272 20,795
777,204 (5,005,717) 2,357,487 (362,003)
777,253 (5,005,656) 2,357,516 (361,973)
Comprehensive income for the year 10,983,039 (6,021,329) 7,323,287 (16,795)
31. SUBSEQUENT EVENTS
· Parent company
· Anticipated redemption - Notes

On July 12, 2021 the Company repurchased debt securities in the foreign market ('Notes') ('Tender Offer') issued by the subsidiary CSN Resources S.A. in the amount of US$504 million in principal, early redeeming the residual of the Notes due in 2023.

On July 27, 2021, a Board of Directors' meeting approved the realization of a total optional early redemption of 7.00% guaranteed perpetual notes, of its foreign subsidiary CSN Islands XII S.A., outstanding in the international market, with a total amount of US$ 1,000 million. The Notes will be redeemed on September 23, 2021.

· Dividends

On July 27, 2021, the Company approved, in a Board of Directors Meeting, the distribution of dividends in the amount of R$1,750 million wil be paid on August 10, 2021.

· CSN Mineração
· Issuance of debentures

On July 15, 2021, the subsidiary CSN Mineração, approved its first issue of simple debentures, not convertible into shares, unsecured, in up to two (2) series, in the total amount of R$1.0 billion, which will be subject to a public offering, with restricted placement efforts. The maturity of the debentures will be 10 years for the first series and 15 years for the second series, adjusted according to the IPCA index. The remuneration of the debentures will be defined after the conclusion of the offer.

· Dividends

On July 27, 2021, the subsidiary CSN Mineração approved, in a Board of Directors Meeting, the distribution of dividends in the amount of R$1,848 million wil be paid until August 31, 2021.

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Quarterly Financial Information - June 30, 2021 - CIA SIDERURGICA NACIONAL Version: 1

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 Siderúrgica Nacional

São Paulo - SP

Introduction

We have reviewed the accompanying individual and consolidated interim financial information of Companhia Siderúrgica Nacional ('Company'), included in the Interim Financial Information Form (ITR) for the quarter ended June 30, 2021, which comprises the balance sheet as of June 30, 2021 and the related statement of profit and loss and statement of comprehensive income (loss) for the three and six-month periods then ended, and the changes in equity and statement of cash flows for the six-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 NBC TG 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 NBC TG 21 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 interim financial information, 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 note 10.f) to the interim financial information, 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.

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 six months ended June 30, 2021, 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, July 27, 2021

Nelson Fernandes Barreto Filho

CT CRC 1SP-151.079/O-0

Grant Thornton Auditores Independentes

CRC 2SP-025.583/O-1

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CSN - Companhia Siderúrgica Nacional published this content on 17 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 August 2021 11:53:05 UTC.