SECURITIES continued 2005 12 Full Audited Financial Statements w Notes

PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2005 and 2004 Expressed in millions of Rupiah, unless otherwise stated 38

6. SECURITIES continued

g. Movements of Allowance for Possible Losses on Securities: 2005 2004 Balance at beginning of year 1,144,501 1,100,641 Provision during the year Note 37 59,310 45,622 Recoveries 3,919 22,527 Write-offs - 17,102 Others 1,305 7,187 Balance at end of year 1,209,035 1,144,501 Includes effect of foreign exchange translation. Management believes that the allowance for possible losses on securities is adequate.

7. GOVERNMENT RECAPITALIZATION BONDS

Government Recapitalization Bonds consist of bonds issued by the Government in connection with its Recapitalization Program, acquired from primary and secondary markets with details as follows: 2005 2004 Trading, fair value 2,143,723 1,579,834 Available for sale, fair value 28,817,643 27,584,037 Held to maturity, at cost 61,094,598 63,917,150 92,055,964 93,081,021 Based on maturities, the Government Recapitalization Bonds are as follows: 2005 2004 Trading: Less than 1 year 1,370,217 1,891 1 - 5 years 164,377 1,406,695 5 - 10 years 609,129 171,248 2,143,723 1,579,834 PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2005 and 2004 Expressed in millions of Rupiah, unless otherwise stated 39

7. GOVERNMENT RECAPITALIZATION BONDS continued

Based on maturities, the Government Recapitalization Bonds are as follows: continued 2005 2004 Available for sale: Less than 1 year 19,953 - 1 - 5 years 1,496,628 1,543,673 5 - 10 years 11,111,957 4,581,286 Over 10 years 16,189,105 21,459,078 28,817,643 27,584,037 Held to maturity: Less than 1 year - 2,822,552 1 - 5 years 1,350,000 - 5 - 10 years 1,505,329 1,350,000 Over 10 years 58,239,269 59,744,598 61,094,598 63,917,150 92,055,964 93,081,021 The details of Government Recapitalization Bonds are as follows: 2005 Trading Interest Rates Maturity Frequency of Nominal per Annum Fair Value Dates Interest Payment Fixed rate bonds 572,306 12.13- 593,198 02152006- 6 months 14.28 12152013 Variable rate bonds 1,562,361 3-month SBI 1,550,525 03252006- 3 months 06252011 2,134,667 2,143,723 Available for sale Interest Rates Maturity Frequency of Nominal Per Annum Fair Value Dates Interest Payment Fixed rate bonds 1,829,634 14.00- 1,875,674 06152009- 6 months 15.58 12152013 Variable rate bonds 27,267,428 3-month SBI 26,941,969 03252006- 3 months 07252020 29,097,062 28,817,643