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19. SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2017

19.a) Paid-in capital

Fully subscribed and paid-in capital as of December 31, 2017 and December 31, 2016 is R$4,540,000 comprising 1,387,524,047 book-entry common shares without par value. Each common share entitles its holder to one vote in Shareholders’ Meetings.

19.b) Authorized capital

The Company’s bylaws in effect as of December 31, 2017 determine that the capital can be raised to up to 2,400,000,000 shares by decision of the Board of Directors.

19.c) Legal reserve

This reserve is recognized at the rate of 5% of the profit for each period, as provided for by Article 193 of Law 6.404/76, up to the ceiling of 20% of share capital.

19.d) Ownership structure

As of December 31, 2017, the Company’s ownership structure was as follows:

			12/31/2017			12/31/2016
	Number of common shares	% of total shares	% of voting capital	Number of common shares	% of total shares	% of voting capital
Vicunha Aços S.A.	682,855,454	49.21%	50.32%	682,855,454	49.21%	50.32%
Rio Iaco Participações S.A. (*)	58,193,503	4.19%	4.29%	58,193,503	4.19%	4.29%
CFL Participações S.A. (*)	3,977,536	0.29%	0.29%	3,977,536	0.29%	0.29%
Vicunha Textil S.A. (*)	4,927,000	0.36%	0.36%	4,927,000	0.36%	0.36%
Caixa Beneficente dos Empregados da CSN - CBS	20,143,031	1.45%	1.48%	20,143,031	1.45%	1.48%
BNDES Participações S.A. – BNDESPAR	8,794,890	0.63%	0.65%	8,794,890	0.63%	0.65%
NYSE (ADRs)	303,590,364	21.88%	22.37%	323,546,664	23.32%	23.84%
BM&FBovespa	274,651,269	19.79%	20.24%	254,694,969	18.36%	18.77%
Total shares outstanding	1,357,133,047	97.81%	100.00%	1,357,133,047	97.81%	100.00%
Treasury shares	30,391,000	2.19%		30,391,000	2.19%
Total shares	1,387,524,047	100.00%		1,387,524,047	100.00%

(*) Controlling group companies.

19.e) Treasury shares

The Board of Directors authorized various share buyback programs in order to hold shares in treasury for subsequent disposal and/or cancelation with a view to maximizing the generation of value to the shareholder through an efficient capital structure management, as shown in the table below:

Program

Board’s Authorization

Authorized quantity

Program period

Average buyback price

Minimum and maximum buyback price

Number bought back

Share cancelation

Balance in treasury

1º

3/13/2014

70,205,661

From 3/14/2014 to 4/14/2014

R$ 9.34

R$ 9.22 and R$ 9.45

2,350,000

2º

4/15/2014

67,855,661

From 4/16/2014 to 5/23/2014

R$ 8.97

R$ 8.70 and R$ 9.48

9,529,500

11,879,500

3º

5/23/2014

58,326,161

From 5/26/2014 to 6/25/2014

R$ 9.21

R$ 8.61 e R$ 9.72

31,544,500

43,424,000

4º

6/26/2014

26,781,661

From 6/26/2014 to 7/17/2014

R$ 10.42

R$ 9.33 and R$ 11.54

26,781,661

70,205,661

7/18/2014

Not applicable

60,000,000

⁽¹⁾

10,205,661

5º

7/18/2014

64,205,661

From 7/18/2014 to 8/18/2014

R$ 11.40

240,400

10,446,061

8/19/2014

Not applicable

10,446,061

⁽¹⁾

6º

8/19/2014

63,161,055

From 8/19/2014 to 9/25/2014

R$ 9.82

R$ 9.47 and R$ 10.07

6,791,300

7º

9/29/2014

56,369,755

From 9/29/2014 to 2/29/2014

R$ 7.49

R$ 4.48 and R$ 9.16

21,758,600

28,549,900

8º

12/30/2014

34,611,155

From 12/31/2014 to 3/31/2015

R$ 5.10

R$ 4.90 and R$ 5.39

1,841,100

30,391,000

9º (*)

03/31/2015

32,770,055

From 4/01/2015 to 6/30/2015

(*) There were no share buyback in this program.

(1) In 2014 the Board of Directors approved the cancelation of 70,446,061 treasury shares without change in the Company’s share capital.

As of December 31, 2017, the position of the treasury shares was as follows:

Quantity purchased (in units)	Amount	Share price			Share
	paid for				market price
	the shares	Minimum	Maximum	Average	as of 12/31/2017(*)
30,391,000	R$ 238,976	R$ 4.48	R$ 10.07	R$ 7.86	R$ 253,765

(*) Using the last share average quotation on B3 S.A. - Brasil, Bolsa, Balcão (former BM&FBovespa) as of December 31, 2017 of R$8.35 per share.

19.f) Policy on investments and payment of interest on capital and dividends

At a meeting held on December 11, 2000, the Board of Directors decided to adopt a profit distribution policy which, after compliance with the provisions in Law 6.404/76, as amended by Law 9.457/97, will entail the allocation of all the profit to the Company’s shareholders, provided that the following priorities are observed, irrespective of their order: (i) carrying out the business strategy; (ii) fulfilling its obligations; (iii) making the required investments; and (iv) maintaining a healthy financial situation of the Company.

19.g) Earnings/(loss) per share:

Basic earnings per share were calculated based on the profit/(loss) attributable to the owners of CSN divided by the weighted average number of common shares outstanding during the year, excluding the common shares purchased and held as treasury shares, as follows:

	12/31/2017	12/31/2016	12/31/2015
	Common Shares
(Loss) profit for the year
Continued operations	10,272	(925,186)	(1,216,033)
Discontinued operations	-	(9,561)	1,911
	10,272	(934,747)	(1,214,122)
Weighted average number of shares	1,357,133,047	1,357,133,047	1,357,150,010
Basic and diluted EPS
Continued operations	0.00757	(0.68172)	(0.89602)
Discontinued operations	-	(0.00704)	0.00141
	0.00757	(0.68876)	(0.89461)

The Company does not hold potential dilutable outstanding ordinary shares that could result in dilution of earnings per share.