BALANCE SHEET - CAPEC


Capec does not accumulate reserves

It is always good to remember that, differently of two other benefit plans, the values paid to Capec are not accumulated in reserves for use of associates in future fiscal years. That means, each year associates make contributions that are used to pay for the savings of dead or disabled associates. So, there is no accumulation of reserve.

However, resources not used in the fiscal year remain in an account, a Fixed income investment called BB Capec Fund, in Banco do Brasil. This fund, which profitability reached 15,1 %, has around 80 % of its composition formed by Financial Treasury Bills (LFTs). This option results from the good liquidity of these instruments - which is necessary so that Capec commitments are always honored rapidly. This Fund is used to afford eventual deficits or to compensate for the collection of premiums.

Capec Plan obtained, in this fiscal year, profitability of 15.08 % in its investments assets, against 20.04 % in the previous year. The Plan reserves are applied in the exclusive BB Capec Fixed income fund, administered by BB-DTVM.

To afford expenses inherent to the Plan administration, for effect of funding sources, resources originating from the following programs were considered:

a) Social Security - 2.5% on normal contributions - R$ 3,048 mil ( R$ 1,664 thousand in 2005), already contemplated in Previ Administrative Program;

b) Investment - R$ 129 thousand (R$ 113 thousand in 2005)