Based on statutory provisions, the Board of Directors is proposing to the Annual Shareholders’ Meeting to be held on April 27, 2006, the payment of interests on the company’s own capital in substitution for the payment of mandatory minimum dividends for the year 2005, in the amount of R$348.2 million..

The amount corresponds to 40.2% of the net profit, equivalent to approximately R$ 12.23 per one thousand shares, providing a dividend yield of 7.8%, considering the quotation of R$ 157.00 per one thousand shares on December 29, last trading date of 2005. This amount is 69% higher than that of the mandatory minimum dividends.

To meet the investment requirements with the company’s own resources as provided in the capital budget, a proposition shall be made to transfer R$ 563.6 million to the investment reserve.