Previ

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The chart below presents the composition of the contingency provisions by program, which record the occurrence of facts that will deserve decisions that may or not generate disbursements.

a) Social Security Program

Based on a technical report issued by the legal area and in compliance with the appointed risk classification, PREVI constituted a provision to cover the legal proceedings filed by ex-participants, which amounted to R$ 240,630 thousand (R$ 340,167 thousand in 2005).

The reduction observed in the provisions related to lawsuits, at the amount of R$ 99,537 thousand, refers to the alteration of procedures concerning the segregation of the proceedings classified with probable risk from those related to the return of reserves in the phase of judicial execution, which have been transferred to the Operating Liabilities.

b) Investment Program

The following provisions are recorded in the segment of real estate investments:
(i) R$ 27,453 thousand for the "being" liabilities of fiscal, tax and labor debits related to the Umberto I Foundation (same amount of 2005) and (ii) R$ 21,900 thousand (R$ 16,160 thousand in 2005) for fiscal contingencies related to enterprises Paes Mendonça (R$ 17,600 thousand) and São Luiz Gonzaga Building (R$ 4,300 thousand).

The amount of R$ 271,569 thousand remains recorded in contingency to support the discounts of the negative balances of the real estate financing contracts for adhesion to Nova Carim.

c) Fiscal Contingencies

The Executive Board, protected by legal opinions that consider possible (not probable or remote) the chance of losing the filed appeals and based on the Brazilian and international accounting practices, decided to waiver the constitution of a provision for the filing of the Internal Revenue Service, related to the Social Contribution on Net Profit - CSLL, of the fiscal year 1997, at the amount of R$ 2,540,215 thousand (filing amount on 30/06/2004).