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BUSINESS COMBINATION (Tables)
 12 Months Ended
Dec. 31, 2021
summarizes the price considered for accounting purposes:

In accordance with IFRS3, the purchase price is determined by the sum of the assets acquired, liabilities assumed, equity interests issued, non-controlling interest and the fair value of any interest held prior to the transaction. The table below summarizes the price considered for accounting purposes:

 

Item   Comment   Elizabeth Cimentos    Elizabeth Mineração    Reference
Assets transferred   A payment in the amount of R$201 milion is being carried out in the transaction.               77,768              123,947   (i)
Assets transferred   Refers to financial adjustment of working capital and debt.                (3,914)                (5,116)   (i)
Equity interests issued   Shares issued by Elizabeth Cimentos and acquired by CSN Cimentos.              526,037                             (ii)
Purchase price considered for the business combination                  599,891              118,831    

 

(i)The transaction included payments by CSN Cimentos of R$77.7 million and R$123.9 million on August 31, 2021 for each Elizabeth entity, and an adjustment receivable in the amount of R$3.9 million and R$5.1 million in December 2021 related to working capital adjustment provided for in the sale agreement.

 

(ii)In August 2021 the Elizabeth Cimentos performed a primary issuance of 2,382,758,512 new common shares, nominatives with no par value, which were fully acquired by CSN Cimentos.
Schedule of goodwill on acquisition

Item   Reference   Elizabeth Cimentos    Elizabeth Mineração 
 Purchase price considered     item (i) and (ii)               599,891                    118,831
 Fair value of the assets and liabilities acquired                   516,625                    118,831
 Goodwill for future profitability expected                    83,266                                 
Schedule of Fair value of assets acquired and liabilities assumed

The following table shows the fair value allocation of the assets acquired and liabilities assumed on August 31, 2021, considering the direct and indirect interests, calculated based on independent appraisers' reports.

 

                         
    Elizabeth Cimentos    Elizabeth Mineração 
     Carrying amounts    Fair value adjustments    Total fair value     Carrying amounts    Fair value adjustments    Total fair value 
Cash and cash equivalents                   52,570                                        52,570               2,197                                     2,197
 Trade receivables                    27,571                                        27,571               1,027                                     1,027
Receivables from related parties                   96,374                                        96,374               9,035                                     9,035
Inventories                   44,157                                        44,157               1,017                                     1,017
Recoverable taxes                    18,616                                        18,616                  931                                        931
Short-term investments                   14,689                                        14,689                                                                      
 Other assets                    17,734                                        17,734                  673                                        673
Investment                                                                                             40,653               24,845          65,498
 Property, plant and equipment                  373,574              161,367            534,941             15,092               77,089          92,181
 Intangíible assets                        798                59,456             60,254                  500             269,385        269,885
 Total assets acquired                  646,083              220,823            866,906             71,125             371,319        442,444
                                                                                                                                                       
Borrowings and financing                  198,778                                       198,778            182,402                                  182,402
Trade payables                   22,735                                        22,735                  446                                        446
 Taxes payable                    19,202                                        19,202             37,158                                    37,158
Debits with related parties                                                                                              96,350                                    96,350
 Other payables                    44,052                                        44,052               7,257                                     7,257
 Total liabilities assumed                  284,767                                       284,767            323,613                                  323,613
 Net equity acquired                  361,316              220,823            582,139           (252,488)             371,319        118,831
Indirect investiment                  (40,663)               (24,851)            (65,514)                                                                      
 Net equity acquired                  320,653              195,972            516,625           (252,488)             371,319        118,831

 

The fair value allocation resulted in a total gain of R$567.3 million, distributed among Elizabeth Cimentos and Elizabeth Mineração's main assets. The following table shows the composition of the allocated amounts and a summary of its measurement methodology.

 

 

Assets acquired      Valuation method     Carrying amounts     Fair value adjustment     Total fair value 
Property, plant and equipment   Valued using the "MARKET APPROACH" method, where the fair value of the asset is estimated by comparing it with similar or comparable assets that have been sold or listed for sale in the primary or secondary market.            388,666               238,456           627,122
Mining rights   Evaluated by the MPEEM method that measures the present value of future income to be generated during the remaining useful life of a given asset. Using the analysis of the company's projected results as a reference, the pre-tax cash flows directly attributable to the asset are calculated, as of the base date stipulated in the evaluation.                  500               269,385           269,885
Licenses   Valued using the WITH / WITHOUT method, which estimates the intangible value by the difference between discounted cash flow models with and without the asset.                  798                 59,456             60,254
                389,964               567,297           957,261

 

The subsidiary CSN Cimentos S.A. has hired an independent appraiser to prepare an appraisal report of the tangible and intangible assets and allocation of the excess price paid. As provided for in IFRS3, the Company has up to 12 months to adjust the measurement of amounts, due to unknown events at the acquisition date. After the conclusion of the appraisal report, the Company reclassified the amount of R$27,667 from goodwill to fair value the licenses and mining rights.