SEC Comment Letter for NATIONAL STEEL (SID) — Nov 30, 2016
NATIONAL STEEL CO
Date: Nov. 30, 2016 · CIK: 0001049659 · Accession: 0000000000-16-102878
AI Filing Summary & Sentiment
Referenced dates: June 22, 2016, November 14, 2016
Letter
November 30, 2016 Mail Stop 4631 Via E -mail David Moise Salama Executive Officer National Steel Company Av. Brigadeiro Faria Lima, 3,400 – 20th floor 04538 -132, São Paulo -SP, Brazil
Re: National Steel Company Form 20 -F for Fiscal Year Ended December 31, 201 5 Filed May 16, 2016 Respon se Letter Dated November 14, 2016 File No. 1 -14732
Dear Mr. Salama:
We have reviewed your November 14, 2016 response and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advising us w hen you will provide the requested response. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your filing and the information you provide in response to these comments, we may have additional comments.
Form 20 -F for Fiscal Year Ended December 31, 2015
Financial Statements
Note 3 - Business Combinations – Acquisition of control of Nacional Minerios (Namisa), pag e F-25
3.5 Summary of the accounting impacts, page F -31
1. We note your calculation of the “gain on the transaction between shareholders” of R$1,945. Please explain to us how you applied paragraph B96 of IFRS 10 in determining the amount by which non -controlling interests are adjusted.
David Moise Salama National Steel Company November 30, 2016 Page 2
In this regard, please ex plain why you did not adjust non -controlling interests to reflect the Asian Consortium’s proportionate share of Congonhas with any difference attributed to your equity.
Note 9 - Investments, page F -34
9.c Rollforward of investment balances in joint ventur es, associates and other investments, page F-35
2. We note from your response to prior comment 7, in our letter to you dated October 28, 2016, that you reduced the carrying value of your investment in Namisa as of November 30, 2015 by R$660,622 for dividends payable to you by Namisa. Please explain to us how reducing the carrying value for distributions to be received complies with paragraph 10 of IAS 28, which stipulates that carrying amounts of investments are reduced by distributions received. Furthermor e, we understand from your response to prior comment 11, in our letter dated June 22, 2016, that the dividend payable was eliminated along with the respective receivable previously recorded in the parent company balance sheet.
You may contact Tracie Mariner , Staff Accountant , at (202) 551 -3744 , or Jeanne Baker, Assistant Chief Accountant, at (202) 551 -3691 , if you have questions regarding comments on the financial s tatements and related matters . You may contact me at (2 02) 551 -3355 with any other questions.
Sincerely,
/s/ Terence O ’Brien
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November 30, 2016 Mail Stop 4631 Via E -mail David Moise Salama Executive Officer National Steel Company Av. Brigadeiro Faria Lima, 3,400 – 20th floor 04538 -132, São Paulo -SP, Brazil Re: National Steel Company Form 20 -F for Fiscal Year Ended December 31, 201 5 Filed May 16, 2016 Respon se Letter Dated November 14, 2016 File No. 1 -14732 Dear Mr. Salama: We have reviewed your November 14, 2016 response and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advising us w hen you will provide the requested response. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing any amendment to your filing and the information you provide in response to these comments, we may have additional comments. Form 20 -F for Fiscal Year Ended December 31, 2015 Financial Statements Note 3 - Business Combinations – Acquisition of control of Nacional Minerios (Namisa), pag e F-25 3.5 Summary of the accounting impacts, page F -31 1. We note your calculation of the “gain on the transaction between shareholders” of R$1,945. Please explain to us how you applied paragraph B96 of IFRS 10 in determining the amount by which non -controlling interests are adjusted. David Moise Salama National Steel Company November 30, 2016 Page 2 In this regard, please ex plain why you did not adjust non -controlling interests to reflect the Asian Consortium’s proportionate share of Congonhas with any difference attributed to your equity. Note 9 - Investments, page F -34 9.c Rollforward of investment balances in joint ventur es, associates and other investments, page F-35 2. We note from your response to prior comment 7, in our letter to you dated October 28, 2016, that you reduced the carrying value of your investment in Namisa as of November 30, 2015 by R$660,622 for dividends payable to you by Namisa. Please explain to us how reducing the carrying value for distributions to be received complies with paragraph 10 of IAS 28, which stipulates that carrying amounts of investments are reduced by distributions received. Furthermor e, we understand from your response to prior comment 11, in our letter dated June 22, 2016, that the dividend payable was eliminated along with the respective receivable previously recorded in the parent company balance sheet. You may contact Tracie Mariner , Staff Accountant , at (202) 551 -3744 , or Jeanne Baker, Assistant Chief Accountant, at (202) 551 -3691 , if you have questions regarding comments on the financial s tatements and related matters . You may contact me at (2 02) 551 -3355 with any other questions. Sincerely, /s/ Terence O ’Brien Terence O’Brien Branch Chief Office of Manufacturing and Construction